Costas Lapavitsas: If the left got its act together, things would change drastically

Costas Lapavitsas giving a lecture in Belgrade, 2017; Photo: Miloš Miletić / KURS

Syriza’s victory in the Greek parliamentary elections of 2015 has renewed debates, among both Greek and European left, about variety of issues regarding the European Union (EU), its Economic and Monetary Union (EMU) and alternative models of cooperation between European countries.

One of the most vocal promotors of leaving the Eurozone was Costas Lapavitsas, professor of Economics at the School of Oriental and African Studies at the University of London. Mr. Lapavitsas is a prominent critic of the European financial system, and has been working on issues related to the theory of money over many years. Additionally, he was an MP at the Greek parliament, elected on Syriza’s list and is a long-term columnist for the newspaper Guardian.

Mr Lapavitsas was invited by CPE to hold a lecture titled “For the socialist strategy in Europe” at Dom sindikata in Belgrade. For this occasion, we talked to him about contemporary political events.

You claim that the institutions of the EU and EMU are not neutral, but are benefitting someone. Can you tell us whose interests they serve and why?

I said they were not neutral in the sense of not being above class divisions and above ideological debates and struggles in European societies. Or, let me emphasize my point, the institutions of EU are clearly neoliberal in an embodied way, they are the institutions of neoliberalism in Europe. And this is logical. Because, if you are going to establish a single market which these institutions want to do, then you tend to follow neoliberal policies. That means that these institutions work in the interest of big business, big banks, and against the interests of the working people.

You stated that the EU is divided into core countries and two peripheries. Can you elaborate?

There are more than two peripheries. We can divide countries of the EU quite naturally into several groups, the Baltic countries are one, for example. Some countries in the Balkans like Romania and Bulgaria are quite different from others. And they are clearly peripheral. But there are two important and clear peripheries. The periphery within the Eurozone – the Southern periphery – and the Central European periphery.

The Southern European periphery consists of Spain, Portugal and Greece. These countries have weak industry, large but uncompetitive service sector and a large public sector which currently cannot create jobs, leading to persistently high unemployment. The Central European periphery is different. Some reindustrialization has taken place there, the service sector is not very strong, there is not very much unemployment when compared to the South, the public sector is weak, and industry is completely dependent on Germany. These countries’ economies are not forging their own investment and productive capacity. These different trajectories carve out different peripheries.

What is the impact of EMU on the economies of the non-EU Balkan peripheral countries?

Well, the EU is certainly a very important economic entity for Serbia. No matter what happens politically, Western Europe and Central Europe are geographically, economically and culturally very important for Serbia. Serbia will trade with these countries, the Serbian people will probably emigrate there and investment would come from there. It is a very old phenomenon in the Balkans, it is nothing new in this respect. But the EU has made a key difference in the sense that it is such a powerful bloc. It sets the broader conditions of trade for Serbia and creates a strong incentive to apply neoliberal policies in Serbia to comply with the requirements of the EU. Thus, it functions as a disciplining force on Serbia. On the other hand, the advantages it offers to Serbia are not clear to me. Serbia has a balance of trade deficit, it is not receiving much investment. I do not see any particular strong growth benefits, but mostly a strong disciplining pressure to apply neoliberalism.

What position should non-EU Balkan countries take regarding the EU integration?

It is very difficult to keep yourself separated and, in a sense, isolated as a small Balkan country. I can see the difficulty for a place like Albania, or a place like Serbia. Of course, Albania and Serbia are not of the same magnitude, but they are still quite small when compared to the whole of Europe. My advice would be to be very careful, not to believe the EU propaganda and to focus more on putting the country on a growth path through social change, social reform and social transformation. This is what the countries outside EU should really be looking for rather than desperately trying to enter the EU. The most important goal is to shift the balance of forces in favor of working people and to put the country on the path of growth. Trying to enter to EU is not a guarantee of that, not at all.

You think that all left political organizations in all European countries should pledge for leaving EMU and EU. Why?

The EMU is a failed monetary union in terms of what it promised to deliver. It has survived so far despite the crisis through imposing all of the costs on weaker countries and pushing them into a peripheral status, where they are going to stay. It is also a mechanism for neoliberal disciplining of countries, offering no growth prospects and no possibility of reform. It is actually a threat to the people of Europe. The sooner Europe gets rid of it, especially the smaller countries, the better for them. Peripheral countries should quite simply get out.

The EU, more broadly speaking, is a different and more complex issue, since with the EU we have a host of trade and investment relations and broad economic and social interactions. I would say that smaller countries need to devise industrial and trading policies that are good for them, which is different from belonging to a single market and acceptance of free trade of commodities and services. And even if that means clashing directly with the EU and having a separate treaty and separate trade regime, it still needs to be done. Finally, if no other solution is left, then a country should get out.

What is your opinion about Brexit?

Brexit is the result of great social tensions that have built up in the British society for four decades. The impoverished people of Britain, the working class, are very frustrated after a decade of continuous pressure on wages, bad jobs, housing difficulties, etc. They have come to realize that neoliberal policies have been disastrous, resulting in anger against the sections of society that support and apply neoliberalism. That’s the key to understanding Brexit. At the top of the British society there is also a division on what to do with the EU, where the most powerful interests want to stay in, but there are also sections that want to exit. Brexit has allowed the poor to express their anger against what has been happening in Britain and focus that anger against the European Union. This is a very important development because it creates the opportunity for rapid social change in Britain. When society cracks that way and the poor can express what they want then they must be considered. That becomes a time for social change, and that is exactly what is happening in Britain. Brexit brought the poor up and created a possibility for social change that has a name – the Labour party and Jeremy Corbyn.

Protest against austerity measures, Syntagma square in Athens; Photo: George Ampartzidis / Flickr

You are arguing for redefinition of popular sovereignty and national sovereignty. What is the role of democracy in this redefinition?

Democracy is fundamental. The left has always been in favor of democracy. For us democracy is a key concept, but democracy must be understood along the tradition of the left. Democracy must also have a class dimension, it is not a classless concept. Of course, we are in favor of class-based democratic practice, and what we see in the European Union in the last two decades is the systematic bypassing of democracy, very clearly during the crisis. It is also obvious why this is happening – when you defend the interests of big business the last thing you want is democracy that gives a strong say to working people and allows the poor to decide on policies. That creates risks for capital.

Big business wants to treat certain policies as technocratic and being above the democratic process, scientific, and so on. Thus, in practice, it is the neoliberalism and the EU that are bypassing democracy. The importance of popular sovereignty is clear in this respect – when democracy is bypassed people are being disempowered, they lose sovereignty. Democracy for the left is power to and for the ordinary people. Popular sovereignty is the ability to influence what happens at work, what happens where you live, the policies that the country follows. This is where the left should start from when it demands popular sovereignty. And that will feed into national sovereignty as well. Importantly, national sovereignty is just nationalism without popular sovereignty, poisonous ideas about opposing other nations, opposing other people, and so on. The left is not in favor of that. We want popular sovereignty and, obviously, national independence and the ability to stand up for ourselves, to defend our interests. That is the basis of internationalism.

Do institutions of liberal democracy need to be changed to some other type of democracy?

Yes, of course. For example, in the case of Greece particularly, but also elsewhere, parliamentary democracy failed as was manifest. The Parliament became a place for meaningless debates full of hot air and empty words. It is clearly necessary for Greece to have a constituent assembly that will start the process of restructuring the political system, allowing popular democracy to take shape. Currently, parliaments in most places in Europe are places where the poor do not have a voice. They are typically populated by lawyers, medical doctors, civil engineers, and so on, offering no opportunity to labor to voice its demands. We need new institutions, starting with a constituent assembly and then moving downwards, so that popular sovereignty could be realized through participatory democracy at the local level. That’s the current challenge.

In some European countries the poor and working class are voting for extreme right parties. Where seems to be a problem and what should the left do about it?

It is a big problem, but also a natural outcome of two factors. First, the working people in Europe have been subjected to sustained pressure by neoliberal forces and policies. This pressure has resulted in loss of a control, loss of a sovereignty. In the past the left was active explaining to working people the class nature of events and working for a better society. The left was an integral part of the poor strata of society. But that is no longer the case. Much of the left has been cut off from the working people, the link snapped, creating mistrust and lack of organic connections. Second, much of the left does not have the courage to take an anti-establishment position in this situation and call on the working people to overturn the existing institutions, overturn the establishment. The agenda of much of the left is about fixing things, tweaking institutions, improving things. The combination of being cut off from the working people and not being radical enough in dealing with their problems is deadly. As a result, the working people turn to the right. It is not that the right is wining, it is left that is absent, that is the real problem. If the left got its act together, things would change drastically.

What is your opinion about the so-called left populism, strategies used by Podemos in Spain and Jean Luc Melenchon in France?

I have an ambivalent feeling about these developments. I recognize that in both France and Spain the role of Melenchon and Podemos has been very important in mobilizing the spirit of radicalism. But both are also problematic, although in different ways. For one thing, both have evolved without reference to the historic forms of organization that we have known in the left. These forms of organization might have failed in important ways, but that does not mean that there is nothing to learn from them, or that there should not be any organization. Moreover, Podemos and even more Melenchon revolve around one person, it is almost a personality cult. This is very problematic and gives them a populist dimension. I can see problems emerging down the road, even political monsters. The left has always worked with forms of democratic organizations, we need them. They must have a horizontal dimension but also a vertical structure. The cult of personality is not part of the left, that is not how the left works. Moreover, the organization we need must be rooted in the poorest sections of the society and the working class.

Can you give us an update on the situation in Greece? Syriza is losing power.

Syriza is not losing power, although it has lost influence and it will not regain its old electoral strength. But it is still in power and it remain there until the next election. Syriza is now the establishment’s party, it is applying bailout policies, neoliberalism, austerity, everything. It is a very obedient party to the lenders, it has become integral to the Greek political system. There is nothing left-wing about Syriza, nothing radical about it. This development has had a tremendously negative impact on the left generally. The left has lost credibility and its moral standing in Greece, people have moved away. There is also a fragmentation of the parties to the left of Syriza. People want to oppose the policies that are currently applied but, since there is no coherent alternative on the left, they are looking to the right. The situation is very unstable, to use a mild term. I am very concerned that, when popular anger explodes again, we might see very deeply problematic phenomena.

May Day rally in Athens May 1, 2010.; Photo: Joanna / Flickr

You formed a new organization – Popular Unity. Can you tell us more about it?

Popular Unity emerged straight after the second election of 2015, following Syriza’s surrender. It had considerable prospects to begin with, but it has not really delivered because of internal problems, bureaucratic organization and the lack of ability to approach broader layers of people. Its influence has declined. What Greece needs right now is a new political presence, a new political agent, a new party that would be able to unite the anti-bailout radical currents of the left and offer something fresh to the Greek people. But it is a very difficult thing to do because of divisions, arguments and sectarianism within the left.

What are the policies that any left party should implement while it is in power, both in the core and peripheral countries?

Each country needs to develop its own strategy to fit its particular needs. There are 28 countries in the EU, you cannot have one policy for the left. Broadly speaking, peripheral countries face different tasks than core countries. Peripheral countries need to get out of the EMU and apply policies of industrial re-strengthening. They also need policies of income redistribution, nationalization of banks and redirection of their productive strength for growth, while changing the social balance in favor of labor, against capital.

Core countries must adopt the similar path, abandoning neoliberalism. But core countries must also play a leading role in the development of the international forms of economic and other interaction that we need in Europe. Offering such a proposal is a task for the leading parts of the European left in Germany, France, Italy, and so on. They should propose ways of replacing the EMU and the EU. What kind of monetary arrangements and trading arrangements should be installed between the countries of Europe as they regain sovereignty? How to control the movement of capital? How to control banks? The left is in favor of control since it is the basis of true internationalism. These are the issues that the leading parts of the left in Europe must face.

This interview was published in Serbian on January 19, 2018.



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