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Conservative government in Athens? Wrong answer… next! June 18, 2012

Posted by WorldbyStorm in Economy, European Politics.
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European shares rose today following Greek election results that lessened the likelihood Greece would make a sudden exit from the euro zone…


Greece election fails to calm eurozone fears
LIVE Markets fall after brief rally following election results and Spanish bond yields hit 7%

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1. Pidge - June 18, 2012

I was having a chat with someone (Bulgarian, but grew up in Greece) a few nights back, who seemed frustrated that any choice of party in the Greek elections would lead to low market support (although, some worse than others). He was talking about how markets didn’t seem to want centrists, left or conservatives etc.

Struck me that he was completely missing the point, and people with an interest in politics tend to assume that all political actors (including markets) have political preferences. Markets couldn’t care less if a left, right or conservative government is in power. Just whether they can make money there.

Bit obvious, I know, but the way some people go on, you’d think markets were “punishing” voters for voting the wrong way, as if they give a shit about anything other than making money.

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WorldbyStorm - June 18, 2012

That’s true in many ways. And yet there’s little question that they’re more comfortable with right of centre governments. There’s a good piece in the Guardian on Saturday in the Comment part on this very issue.

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2. makedoanmend - June 18, 2012

If I might add tuppence worth (deflated, of course).

In a way I can see Pidge’s point. As long as a politician or her/his party delivers the conditions that capital wants or thinks it needs, capital doesn’t care what the party is called. Tory, Labour, Fianna Fail, Fine Gael, it doesn’t matter. Capital tolerates small differences within an accumulation favourable setting. Just don’t mess with structures favourable to capital, like allowing workers a say in their conditions or by societies demanding a more favourable national income distribution.

That’s why I can also see WBS’s point. Politicians or parties who might change structures are an anathema to their projects of accumulation.

In an era where large corporations largely rule the roost, we are seeing the displacement of risk. Contrary to the entrypenwhorial narrative, corporations don’t like risk. They figure they can mitigate risk by laying it off onto workers and the society at large. Deteriorating working conditions that make worker’s lives more uncertain add to the certainty of accumulation. There seems to be a direct trade-off.

The question with regard to Europe currently is what level of trade-offs will capitalism demand. It seems that the troika wish to demand as much risk as possible be loaded onto workers in all nations.

Politics, simply being the power relationships between different strata of society, cannot be divorced from the economy. Though I’m sure there is a growing coterie of capitalists who wish that politics as we know it would disappear. Any political party that may possibly form to suggest an alternative to austerity and make their policies work plausibly against the austerity doctrine is a threat to capital at this particular juncture in history.

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GM - June 19, 2012

It used to be the case that an ordinary person who got a job with a respectable employer in the private sector could gain access to a defined benefit pension scheme, safeguarding them from the risk of poverty and guaranteeing financial security for the rest of their lives. It’s close to impossible to get that now. I presume you think that if we had less capitalism and more socialism, this trend could be reversed? Or should everyone get their pensions from the government? Maybe everyone should work for the State.

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FergusD - June 19, 2012

Well everyone could get a pension from the state, indeed everyone in teh UK does get a basic state pension (if you pay National Insurance) and has dome some for a very long time.

Back in the 70s the UK govt introduced SERPS – State Earnings Related Pension Scheme. This was planned to give everyone in employment a chance to have a good pension, on top of the basic state pension, while still have the security of sate involvement. It still exits but I think in a much reduced form as many firms opted out and in teh 80s private pensions were pushed relentlessly. Most of those have failed to deliver.

Seems to me a SERPS like scheme is still a very good idea. It would provide the state with loads of dosh which could be invested to develop the economy in a useful way and provide a secure pension.

Just a thought. Of course the likes of the NUM use dto fight to get miner’s pesnion funds invest in socially useful ways that benefitted miners in the long run. I think that attempt failed.

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3. FergusD - June 19, 2012

On Newsnight on BBC2 last night there was a discussion about Greece. Mostly the usually conventional stuff but there was some interesting snippets in the studio discussion between someone linked to the govt in the US, a German “financial expert” and someone from a UK investment bank (I think). The UK banker made some good comments about how austerity was destroying the Greek economy so that they could never pay back the debt. He also mentioned (it was passed over) that when the euro was created it was an effective devaulation of the currency for Germany which made their goods and services cheaper, while it was a revaluation for Greece (and others) making their stuff more expensive, so German goods were sucked into Soutern Europe, to Germany’s benefit. The US guy echoed that, the German wasn’t having it. The US guy was also in favour of a “Marshall Plan” and a said a single currency needed essentially a single govt and in states such as teh US this necessitated huge flows of funds from rich to poor areas of the national economy to make a single currency work.

All this stuff comes out now. Did any of the experts think about this when the euro was created? Did they warn about this – I don’t remember.

So there are division in capitalism clearly. Also, the markets don’t know what they want – except their profit – but they don’t know what will secure it, so they serially panic. It seems to me that the ecomomic and political elites in Europe, and eslewhere, just don’t know what to do, except state cuts, privitise, force down wages and hope – despite teh fact it isn’t working.

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doctorfive - August 6, 2012

‘division in capitalism’

Soros is in the latest issue of Prospect laying responsibility on the architects of the euro rather then *entirely* on the likes of us where it has been. It’s not about the blame game but he compares this crisis to Latin American and Asia when global finance forced hardship on those countries to protect themselves and says the central ez economies are doing the same now. Shifting the entire burden of adjustment onto the periphery to avoid their own responsibility for the imbalances.

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4. Danial - August 26, 2012

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I will highly recommend this blog!

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5. cialis - September 11, 2012

cialis…

When I originally commented I clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I get four emails with the same comment. Is there any way you can remove me from that service? Thanks!…

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