Greece and the European Union

This Newsnight piece paints a picture of the widespread breakdown of the Greek social compact:

What was no joke were the clashes between police and the hardline protesters.[…] Time and again, on the grounds of confronting the rioters, police made incursions into large masses of peaceful protesters. […]I can tell you from repeated experience, it feels like a process of collective punishment of a peaceful majority.

I think this week caught Greece on the proverbial brink of something. The anger could easily solidify into anti-German sentiment, but with the conservatives and Orthodox right implicated in the first bailout, anger can more easily flow to the left.

[…]in the three hours I spent at or close to the front of the rioting on Sunday night, I did not see a single other television crew. Ours was repeatedly harassed, verbally and physically, most harshly by a small group of right wingers who accused us of being German.

The article details the effects of austerity on public services combined with widespread tax and fee defiance. Higher taxes and fewer public goods will create a spiraling legitimacy crisis, all while European leaders demand that Greece postpone elections. That means less democracy and accountability to the Greek people when they need it most. It seems untenable, and indeed even Jürgen Habermas has tempered his Euro-optimism with this:

“Sometime after 2008, I understood that the process of expansion, integration and democratization doesn’t automatically move forward of its own accord, that it’s reversible, that for the first time in the history of the EU, we are actually experiencing a dismantling of democracy. I didn’t think this was possible. We’ve reached a crossroads.”

The right answer seems obvious: default on the loans. Even the Financial Times proclaims it: “Greece must default if it wants democracy.” But there are problems. For one thing, Greece isn’t just in debt from past expenditures: it’s currently spending more than it takes in taxes. So a default isn’t the end of its troubles: it’ll still have to make costly cuts and increase taxation. Debt forgiveness won’t be enough: the Greeks would immediately need to go back to borrowing, only now the rates would be even higher since they will have signaled that loans should be treated more like gifts.

That means that the Greek government will not be able to avoid austerity through default and inflation. So what’s left?

  • Institute technocratic rule and massive austerity enforced by the IMF and the Eurozone
This seems to be the plan dreamed up by Greece’s creditors. Send in the efficiency experts, raise taxes and improve tax collection while cutting the public sector. Given the unrest and the lack of hope, this is absurdly unsustainable. A corrupt public sector and uncontrolled (and largely untaxed) private sector don’t become more legitimate when they’re all managed by foreign eggheads. “Do the Greeks even have a word for democracy in their language?”
  • Leave the Eurozone and allow the new drachma to inflate faster than the European Central Bank is doing

This is the Communist Party’s answer. But it faces many of the same problems of a simple default, only now exacerbated by capital flight. Leaving the Eurozone will dissipate the wealth that Greece must tax: the wealthy have been waging a quiet run on Greek banks and the behavior has spread to the working-class. They’ll likely disseminate the cash to non-Greek banks in the form of Euros, to avoid the devaluation of a new drachma. This may well be their best hope, and if Greeks vote for it, we should support their efforts to go it alone. But I don’t think they’ll enjoy the same post-default bump that Argentina got, and this actually seems like the course of action with the greatest number of possible unintended consequences. The Communists could easily end up destroying the Greek public sector in order to save it.

  • Institute a military junta in Greece

This is obviously the scariest prospect: I include it only to make the others seem more palatable than they’d otherwise be. But there was a coup d’etat in 1967, and the Junta ruled until 1974, and that’s recent enough that such a solution is still imaginable. Right now, the far left in Greece holds more appeal than the far right, but that need not last. What will the Communists do after their plan to leave the Eurozone and default on the debt fails to end the spiral of service-cuts, tax rises, and the resulting illegitimacy? Historically, austerity and low growth seem to lead people to value the fantasies of security and strong leadership that characterize military rule.

  • Institute a federal fiscal union with regular interstate tax/spending transfers

Right now, there’s little financial incentive for Germany and France to continue to subsidize Greek debt, and there’s little financial incentive for Greece to remain in the Eurozone. True, German and French banks are massively exposed to the possibilities of default, and this may well preserve the union for a while; but more than a financial bailout or an economic stimulus to jumpstart their economies, I believe the whole EU needs the political stimulus that only closer federation can supply.

Where the financial incentives fail, Habermas and other Euro-optimists have always suggested that cultural commitment to the ideal of European Unity would have to suffice. The way to cement this is to create meaningful democracy at the EU level, along with the mechanisms for regular taxation and spending decisions to be made throughout the entire Union.

Currency union without political unification has always been dangerous, yet it’s common to resist a political union because sharing governance gives people outside of our communities a legal claim on our resources and rights. Still, there’s plenty of evidence that this interstate transfer is what makes the United States function. Much as we in the US hate Congress, especially the way that politicians representing values we don’t share can still govern us… we can’t be federalists without them. And as a bonus, the perpetual transfers lead to better infrastructure investments in currently low-productivity states that allow those states to remain productive rather than suffering from adverse selection.

“More Democracy!” Yes, that’s my final answer.

Refugee Life

“We must… build our political philosophy anew starting from the one and only figure of the refugee.” (Giorgio Agamben)

If the nation-state is in decline, it is principally because the nation-form, that coalition of fellow natives born of common blood and soil has given way to the denizen-foreigner: the resident-alien who through dint of illegal entry or barriers to naturalization inhabitants a land in which she is not granted the full rights of citizens. It has become popular to decry the 1789 Declaration of the Rights of Men and of Citizens for failing to differentiate between human rights in general and those guaranteed only by the state to which one belongs, and no one has done a better job of pinpointing this failure than Hannah Arendt, in her book on totalitarianism, in her essays, and in her self-identification as a refugee without a home or the possibility of return.

Yet if we are to take Agamben’s prescription to heart, we must go beyond the attempts to integrate the fluid populations of mobile workers and refugees of political turmoil into our already existing nation-states. Already, the EU begins to provide a model for a mobile citizenry, maintaining both national sovereignty and the right of transit for those lucky enough to have come from member-states rather than those pariah-states that supply Europe with cheap labor. Yet in size and in delimitation, the EU does nothing more than regionalize the state. It accomplishes no great advances in the science of regimes, it does nothing to reduce the problems of non-citizens or to replace or re-constitute politics around the figure of the refugee.

I find it interesting that the classic ‘civic republicans’ (Aristotle, Machiavelli, Rousseau) all conceive of law-giving (constitution-writing, really) as an act of either a god or a foreign wiseman. A stranger must give a place its laws because only a stranger can be trusted to do so fairly; anyone who expected to be ruled by the law would naturally write laws to benefit herself. As such, the stranger appears a divine figure; he (and it is invariably a male figure) necessarily comes from another world, because the world he is constituting is by definition not the world in which he was born. Even Moses got his nation’s laws from a non-Jew (his father-in-law) and his commandments from God. I would argue that we all appear as strangers to the world we would like to build for ourselves, and as such it is wholly consistent to give our neighbors an equal right to this self-rule.

The problem, here, goes beyond the practical question of the advantages sacrificed in order to share our democracy with strangers. In fact, we must really get rid of the notion of local self-governance if we are truly going to embrace the refugee; it is not simply a matter of naturalizing non-citizens who happen to inhabitant our space, but of remaking the juridical and political order so that fresh immigrants and unexpected guests are the equally empowered. This would be a democracy of those who have yet-to-arrive, which is my own version of Derrida’s famous “democracy a-venir,” the democracy-to-come or the future democracy.

And here I run into difficulties: what could it possibly mean to build a politics of those who are not present? I suspect it would involve a hearty embrace of the constitutional process, by which reconstitution was a regular activity rather than a hallowed moment in the dreary history books. Jefferson never thought the US Constitution would last: he figured we might have twenty years of peace before the slavery question, and the general orneriness of the states, drove us back to the bargaining table.

Yet the constitutional moment is also the most exciting indication of the human potential for political genius. It shows us the meaning of political novelty, since what the founders consituted were their own origins. They gave birth to themselves, which is what Arendt loves most about contrasting Heidegger’s being-towards-death with natality. And in so doing they supplied us a potent model, worthy of repetition rather than simply homage and obsequious self-abnegation. And in many ways, that’s exactly what’s at stake in the tradition that treats the US Constitution as a living document, capable of re-interpretation and re-parsing, available for amendation, dripping with infinite meanings, intertextuality, and all the rest of the Lit. Crit. jargon that does away with certainty and literalism.

Of course, new modes of reading won’t help us with the Swarzenegger problem, or the status of Latinos, or national language issues. But it tastes grand, doesn’t it?