Who am I, politically speaking?


I spent a lifetime thinking that I should belong somewhere, that I should align myself with some ideology, some belief.

The left, indeed it’s radical expression seemed a suitable place to begin an exploration of the political space. I attended Socialist Worker meetings shortly after joining Essex University in 1997. They looked typical, even to my young eyes. They dreamed of a better society. I asked them whether a nuclear apocalypse would actually be a good starting point for a societal redrafting. They said yes, I never went back.

In 1999 I was visiting Athens Law School. Leftists galore. I had a KNE friend (communist party youth). She did things because the party said to. I also had a DAP (New Democracy Youth) girlfriend. She did things so that the party would get her a job. I stopped seeing both.

Years after I was researching for my PhD under the supervision of a Marxist critical theorist. I am eternally grateful to him for keeping me safe from Foucault. Marxism is one thing, meta-ethics quite another. I was looking into Russian legal transformations in post-communism. I wrote a critique of neoliberalism. Surely that pigeonholes me as a leftist intellectual?

After finishing the PhD I got a job (at a uni of course) and met some German guy in a pub who accused me of hypocrisy. I was writing lefty things, yet I lived a bourgeois lifestyle. I struggled to reconcile my fiery anti-neoliberal rhetoric with my wealthy lifestyle (turns out one job at the uni cannot make you rich, but 3 simultaneously create at least the appearance of wealth).

I came to this. I do not write lefty things from the perspective of a fictional proletarian. I argue against an unsustainable, vicious and inhumane capitalism because I do not want things to end badly for the proletariat and my own privileged offspring. I want a nicer pragmatic and sustainable capitalism. I ended up at the rational shore of lefty pretence: social democracy.

Who can best express the desire for a better, more equal society that is still wealthy and prosperous? I thought Syriza was the means to the end of a better deal with Europe in January 2015. I was wrong.

In the intellectual war of the referendum in the summer of 2015 I felt compelled to choose a side. I chose NAI and I am now forever separated from those who ‘officially’ express the left in Greece.

If I am a critical social democrat who cares about the life of Greeks now and the future of my country, who should I support?

I am not sure who I should vote for on September 20, but I know who I would not support. Not Mr Tsipras who betrayed my trust and hope through stupidity, ignorance and incompetence. Not Mr Lafazanes and Madame Zoi who express the worst of lefty populism we have seen in a while. Not Mr Papandreou who despite his grand name would not be able to run a beach canteen. Not the fascists of ANEL, the Nazis of Golden Dawn. Not KKE in all its magnificent irrelevance. Not Mr Leventis, entertaining though he is. Not the fringe left in its ‘people’s front of judea’ infighting.

I will have to pinch my nose and pick one of the rest.



So Long Alexi: Why Mr Tsipras should lose this election


Greece is facing the second election in 2015 already. Mr Tsipras faced with the disintegration of Syriza after the signing of the third Greek Bailout decided to cause an election by resigning and by refusing to join a different coalition with his remaining Syriza MPs.

I have explained elsewhere in this blog why I believed an election to be necessary. In summary I can say here that Greece suffers from a rift between those who want to remain in the Euro (no matter what) and those who want a return to the Drachma (no matter what the consequences). An election that pits those forces against each other would hopefully allow the winner to deal with the consequences of the decision (Drachma or Euro).

The current election is a lost opportunity, as no coalitions have emerged in clear support of either position. The new Laiki Enotita ( you have to admire the people who name a party ‘unity’ after splitting from someplace else), KKE and Golden Dawn support the Drachma, but are nowhere near united. Now what separates Lafazanes from Koutsoumpas other than history isn’t clear, but I don’t have the energy to go into it.

Nea Dimokratia, Potami and the washouts of the centre (Pasok, Dimar, Papandreou) should have joined in a grand coalition of intent, if not parliamentary representation. By the way, a formal coalition is not possible as the first party cannot benefit from the 50 bonus seats if they are not on their own (clever system right?). A statement of intent to cooperate post election, to support a Euro path would be good though. Only Potami has clearly stated an intent to cooperate with this aim in mind.

What about Mr Tsipras? With half of Syriza gone home or to Lafazanes and with ANEL unlikely to make it into the Parliament, how does Tsipras intend to become PM again? And why should he? Even if we don’t discuss his abysmal record in office, is there any point voting for Syriza now? Their reason for re-election seems to be the suggestion that a ‘left’ government can implement the horrors of Bailout3 better than a pro-euro (pro-austerity supposedly) coalition. Even if this were the case, why not do it now in the current Parliament under a coalition with Potami and Pasok?

Tsipras electoral gamble serves no purpose for the country. He ought to lose badly.

So long Alexi


plus ça change, plus c’est la même chose

Greeks have not the slightest idea of how close they came to annihilation, neither do they appreciate how fast the chasm can open again.


I have argued on this blog that the country has failed and that to overcome this failure people need first to admit to it. There is no evidence that this is happening. I am currently in Greece and walking around town I see a lot of people having fun, a lot of conspicuous consumption and a very relaxed attitude.


This is not to say that one does not see evidence of crisis in closed shops and abandoned streets. The problem is that there are no signs of a change of mentality. No recognition that life as usual is not possible, no desire for adjustment.


OK, you could argue that I do not see it because I am rich, vacationing in a rich part of town surrounded by locals with money. Perhaps, but think about the way the election campaign is going.

I had argued that an election right now only makes sense if parties align themselves along Drachma vs Euro lines. This is not happening. The only party (KKE and Golden Dawn aside) to talk openly about a return to the Drachma is Lafazanes splinter group. I hope that once the election date is set, they will delight us with some detail on their Grexit plan.

Syriza is planning to ask for a renewed mandate devoid of content. Is Mr Tsipras asking for the vote as a better implementer of Bailout 3 than ND? Someone said on twitter that Lafazanes will run as Syriza from January and Syriza will run as Pasok from 2012.

ND has failed to lead the pro-euro group by joining with potami and other ‘cooperation prone’ parties. Pasok tries to form a ‘third pole’ (τρίτος κώλος a friend said) with other losers like Papandreou in order to keep their presence in Parliament. Potami is willing to deal with everyone in a Euro alliance, but increasingly lacks a defined character.

The consequence is this: a strong anti-euro message against a confused business as usual tone. An electorate that missed the gravity of what happened in June is likely to vote again for a proud OXI. This is not a good outcome.

Grexit needs to be the choice of an informed people, ready for the consequences. If Lafazanes and his merry band of Balkan Leninists take us down this route, there will be a very rude awakening to come.



Christ Re-Crucified and the modern refugee crisis


Christ Recrucified (Ο Χριστός Ξανασταυρώνεται) is a 1954 novel by Nikos Kazantzakis which narrates the plight of refugees arriving in a Greek village after being expelled from their native territories. It is a story of refugee horror and human anguish that everyone would do well to re-read against the background of the contemporary refugee crisis.

Watching the events of the last few days in the Greece-Macedonia (FYROM for the nationalists amongst you) border makes one wonder where our humanity has gone. There are thousands of desparate people, families, pregnant women, children left to starve in a barren piece of land on the border. They have no provisions, no shelter no help. The Macedonian police is blocking passage. These people of course are majority Syrian refugees who do not want to be in Greece, or Macedonia, or Serbia or anywhere else in the balkans. They are headed for Western Europe.

We are treating them (as Europeans, and as Greeks) in an unacceptable fashion. Where is our humanity? Consider this analogy.

If a town such as Ioannina in Western Greece was hit by a major earthquake that left about 120.000 people homeless, what would the state (and Europe) do?


Faced with a humanitarian crisis, a health emergency, disaster relief and recovery, would we let the people of Ioannina to fend for themselves? Would we barricade the roads to prevent them from going to the neighbouring towns? Would we try and arrest them when they got there? They would be desparate and in bad condition. They would spread disease, they might steal, or there may be criminal elements amongst them.

Would we ignore them?

No, we would not ignore them. The whole country would mobilise to help them. The army would be sent in to clear up the place and erect temporary accomodation. Money would be raised, provisions would be sent. Would we do this because they are Greeks? Because they are Christian? We would do this because it is a necessary human duty of solidarity.


Europe needs to take action and respond to this humanitarian catastrophe by first alleviating the plight of the refugees. They need to mobilise the earthquake response and built towns to house the 120.000 refugees who have landed in Greece this year (most still there). Europe needs to pay to feed and house these people and do it immediately, without arguing. Greece needs to accept to house these people immediately and without arguing.

Will this create towns of foreigners on Greek soil? Yes.

Did the 1 million refugees arriving in 1922 create towns of foreigners on Greek soil? Yes they did! The Syrians of today are as close to the Greeks as the Greeks from Asia Minor (now Turkey) were to the Greeks in 1922. They are not Christian, they are not ethnically Greek. It does not matter.

Read Kazantzakis. Rethink what it means to be human in the 21st Century. I am willing to pay more taxes to Mr Cameron to give money to Europe to deal with this crisis. I do not mind refugees being settled in Ioannina next to my summer house, as I would not mind homeless earthquake victims being settled there. It is part of being human. If you refuse the refugees now, think that next time it may be you knocking on some foreign door for assistance.

When Greeks were expelled by Ataturk, they sought refuge in Aleppo in Syria. Think!


If the left cannot win elections, what is the point of the left?

red dawn

The debate sparked by the Corbyn bid for the Labour leadership has focused on the electability of a left candidate. If Labour moves to the left, it is almost certain that it will not win the election in 2020 because the British electorate has moved (at least in 2015) to the right. If we accept this to be true (it probably is) what is the point of Labour being led by a leader so obviously to the left of ‘Red’ Ed?

We might as well ask ourselves, what is the point of the left in general, if it is not wrapped up in a ‘party of government’? Britain is not Greece. A fringe left party in the UK cannot take power under ‘normal’ circumstances like Syriza did in Greece. In any event Syriza wrapped itself around PASOK, the old left party of power and under extraordinary circumstances. Let us return to the key question therefore.

What is the point of the existence of a Corbyn Labour party that espouses views loved by the Greens and the SNP, but derided by the City, the establishment and the majority of the British public?

It is simple.

The role of the left is to speak the truth, or in any case to challenge orthodoxy. The point of a Corbyn Labour will not be to win a general election, but to raise awareness of different possible balances in the market-state relationship from a Cameron/Osborne ‘neoliberalism for the 21st century’.

How can this be done (enlightening the public) without actually being in government? Some support for the power of ideas to influence real-life outcomes comes from studies into the effects of what are called epistemic communities. An epistemic community can be defined as a knowledge-based group of experts and specialists who share common beliefs about the cause-and-effect relationships in the world and have common political values concerning the ends to which policies should be addressed. Epistemic communities can help popularise ideas and make them guides to change.

Epistemic communities are most important during periods of uncertainty when they are able to influence a key politician by providing a road-map to a politically salient solution.

It is important to note here that while epistemic communities are conduits of ideas to political formations that can put them to the electoral test, they are not the authors of policies themselves. An epistemic community therefore is not to be equated with a technocracy that directly determines issues of economic governance, something that this blog has argued against.

Ideas are most important during periods of uncertainty or in complex and technical areas. The reason for this is that fluid situations obscure the distributional effects of a given institutional arrangement or policy choice, making it difficult for interest groups to identify where their interests lie. When a policy cross-cuts prevailing material interests and party lines, interest groups find it difficult to adopt a position one way or the other. While uncertainty may obscure distributional effects, it provides politicians with greater room to manoeuvre due to the difficulty in monitoring policy results under these conditions. In these circumstances, ideas are important precisely because they reduce uncertainty, give content to interests, and make institutional construction possible. There are three distinct phases that allow ideas to shape events. First, a period of policy failure leads to the collapse of the old paradigm and the search for new solutions. While this policy failure may be accompanied by a crisis, the main feature is a period of greater uncertainty. Second, a new paradigm emerges offering a clear policy solution that is advocated by an epistemic community and implemented by politicians in a few states. Politicians in other states monitor the results of these test-cases to judge whether the policy is effective or not. Third, politicians in other states proceed to emulate this policy, embedding the new paradigm in their own institutional framework.

The economic crisis has created an environment of uncertainty, which still prevails. Austerity has failed significant proportions of the population and this failure calls for policy redesign.

There are contemporary examples of the power of epistemic communities to effect change. One such example are pension reforms in Sweden. There a significant change came about, not as a result of Sweden’s corporatist structures, but as a result of the penetration of ideas onto the policy space through the creation of an epistemic community comprised of academics and politicians. This epistemic community provided a pathway through a multitude of barriers to change. According to this analysis, barriers to the transition of ideas from academia to policy include entrenched interests and pre-existing institutional arrangements, a type of path-dependency in other words that results in national institutions being unwelcome to new ideas. Bureaucracies, for example, are inherently conservative with an entrenched organisational culture. For instance, the lack of substantive pension reform in Greece since the country’s entry to the EMU and prior to the policy reversals brought about by impending bankruptcy in 2010, illustrates these difficulties. In the case of Greece, the governing party had difficulty proposing reforms in an intelligible way, because, in part, it faced a complex and inefficient state apparatus and it could not circumvent powerful interests, which benefited greatly from the status quo.

Further, the technical nature of a policy problem also plays a key role in the level of influence an epistemic community is likely to have on domestic jurisdictions. This suggests that when a policy problem is highly technical (like the role of the Central Bank), experts tend to dominate the policy process making it difficult for political actors to play a potent role. However, regardless of the nature of policy issues, they ‘are seldom purely technical or purely political’ and ‘scientists’ -if one can call economists scientists- cannot really avoid the politicisation of ‘science’. It is a belief in the power of technocracy however that can lead epistemic communities to determine policy responses. A successful epistemic community is likely to integrate politicians if it wants to have tangible policy results.

Corbyn offers a unique opportunity as a political carrier of a well developed academic critique of financialised capitalism.

Even though I think, as I said before, that the time for a revolt against capitalism in the ballot box (Scotland aside) has passed and that Corbyn could never become PM, his leadership of Labour may be beneficial to country and party anyway.



The revolution that never was


What Corbyn is trying to do in the Labour party seems like a revolution 7 years out of date.

Let me explain what I mean by this. In September 2008 the British banking system came to the brink of implosion. If action had not been taken immediately to support the commercial banks, the Northern Rock scenario would have spread to RBS and beyond. In a country where everyone (almost) relies on plastic entirely, we would be stuck with the cash in our pockets which would probably buy us lunch and that is it. This humongous failure came at the back of the biggest financial meltdown in history and caused a global credit crunch. I have explained all this in detail elsewhere, so I do not want to rehash the facts here — See here for a summary of the global economic dynamics that led to the crisis of 2008 and its subsequent European contagion.

At that point (end of 2008, beginning 2009) we were faced with the single greatest failure of financialised capitalism (see Lapavitsas -of all people- on the term and its uses). Everything that was wrong with capitalism was laid out for everyone to see. The state had shrunk below the point where it could make sure the economy operated in accordance with a democratic determination of the public good. Inequality in the developed world was rising steeply, with those at the top earning absurd amounts, while those at the middle and lower end struggled. Politics had degenerated into a race to appear market-friendly. The sacred tenets of capitalism, the invisible hand, trickle down of wealth, had all been exposed as the fallacies they are.

Surely we thought, this was the beginning of the end of neoliberal domination!

It was not. The US elected Obama, who then sunk in deadlock over every single bit of reform that might chip away at the neoliberal monolith. Merkel tightened her grip over Germany and dictated an orthodox response to the European debt crisis. Gordon Brown was defeated and replaced by the Con-Lib abomination that offered gratuitous austerity as a lever for implementing an ideological agenda. France elected Hollande, fair enough, but he quickly moved to sideline anyone not in tune with the German status quo in Europe. And then, in 2015, Cameron emerged victorious in the UK with a mandate for further austerity and a referendum on Brexit.

The final nail in the coffin came from the failure of the left in Greece. This blog has been pretty much devoted to the Greek problem and has shown how hope for a sensible left alternative was first chocked by the Europeans, and then ruined by the incompetence, fanaticism and ideology of those who were supposed to save us.

Against this background, we now have Corbyn energising the left in the UK in an attempt to build resistance to austerity and challenge the dominant narrative of the Conservatives. This will not work electorally because he has come 7 years too late. Now that there is a semi-plausible economic success story, Labour cannot win an election, but can try to change the public mood slowly from the left. Electorally unfortunately, even if it wins back Scotland, it can never prevail in the South. The time to ride the wave of dissatisfaction with capitalism was 2008. The radical left has missed its chance. All that remains is to put forward ideas, hoping for a change in the public mood beyond 2020.

don quixote


*Updated 16.8.15

Corbyn and the attack on Central Bank Independence

bank of england

The ascendancy of Jeremy Corbyn in the Labour leadership race and discussions with Richard Murphy in the media have brought to public attention a debate about the purpose of central bank independence. This is something I have written about extensively, so this is a good opportunity to offer some context for the readers of this blog. Corbyn is right to raise this, as an integral part of the way the market-state relationship is balanced today is the idea of institutional independence from political control. How did however institutional independence come to be accepted as best practice in the design of regulatory frameworks?

Historically, attempts to depoliticise banking rested on distrust of the capacity both of politicians and of the public to behave in a way conducive to a nation’s best interests.

Thomas Hutchinson, an 18th century governor of Massachusetts, for instance, declared that ‘the great cause of paper money evil was democratic government. The ignorant majority, when unrestrained by a superior class, always sought to temper with sound money’. The very concept of central banking is, perhaps as a result of beliefs such as Hutchinson’s, associated with secrecy and intrigue. The idea of an American central bank was formulated in a secret meeting in 1910 on Jekyll island, where participants travelled pretending to be taking part in a duck hunt. As a result of processes starting at that meeting, the Federal Reserve was created in 1913 to implement banking and currency reforms with the aim to prevent periodic banking crises, such as the panic of 1907. Central bank authority focused on ensuring that the value of money was not undermined by inflation, an idea consistent with Hayek’s argument that mechanistic rules ought to limit the central bank’s discretion (and as a consequence the influence of political processes over central bank policies).

Focusing on the purported depoliticising effects of independence, we could see New Labour’s decision to give the Bank of England operational independence as a decision responding to a change of belief-system, not an economic one. It established New Labour’s anti-inflationary credentials and delivered on the party’s campaign promise to de-politicise the setting of interest rates. In fact, Bank of England independence forms part of a global trend during the 1990s, when more than 30 countries passed legislation increasing the legal independence of their central banks and represents one of the most dramatic changes in monetary frameworks since the collapse of the Bretton Woods regime. Bank of England reform came a decade after the start of the trend in central bank independence, which began with the 1989 reform of the Reserve Bank of New Zealand. The British decision, however, was not linked to changes in Britain’s exchange rate regime, the collapse of the former Soviet Union, the adoption of an IMF programme, the decision to join the Euro area – explanations that cover most cases of central bank reform in the 1990s, but it was motivated by the internalisation of the idea of independence by the labour leadership. A similar ideas-based explanation can be found for the German Bundesbank’s independent structure. The Bundesbank’s independence resulted from the balance of power politics in Western Germany that could only be maintained by detaching government from the setting of monetary policy.

The core of the intellectual case for central bank independence revolves around the assumption of a persistent inflationary bias built into politicians’ monetary policy preferences.

It is argued that this bias can only be negated by vesting authority in policy makers who can be trusted to choose a policy rule that is non-accommodating of inflationary tendencies; namely central bankers. Central bankers are assumed to be better placed than politicians to enforce such a rule, since there is no clear symmetry of interest between the central bank and the labour market in the way that there is between the government and the labour market. Put in a simpler way, there is an assumption that political control over monetary policy makes the business cycle dependant on the political-election timetable, with politicians trying to manipulate economic performance to gain short term political gain.

Research certainly finds that the conservative governments that preceded Labour prior to 1997 engaged actively in trying to manipulate economic indicators for political purposes. Accepting this argument as to the perverse incentives of politicians and their effects on distorting the economic cycle is a key precondition to allowing the idea of independence as a beneficial change to take root. The de-politicisation of central banking and the transfer of control over interest rates to independent central banks was also a key consequence of the success of the argument that Keynesian demand management was illegitimate. This was largely achieved by Friedman when he sought to demonstrate that a market economy would tend to gravitate towards a natural state of unemployment determined crucially by the cost of productivity and the distribution of labour. For this reason, governments, Friedman argued, could not affect the rate of unemployment in the long term, unless they increased spending and cut taxes, which would result in an expansion of the money supply, and thus inflation. Friedman’s imperative to maintain monetary and fiscal stability could only be sustained therefore if the economy was run on an ‘autopilot’ for regulating the quantity of money. This autopilot was achieved via the ploy of institutionally independent central banks and inadvertently led to a re-naturalisation of economic relations. Such re-naturalisation of economic relations suggests a return to the view that market processes need no state direction that last held sway prior to the Great Depression.

The orthodox account of economic justifications for central bank independence miss-specifies the whole nature of monetary relations within contemporary capitalism.

In examining justifications for central bank independence I remain unconvinced with the three foundations of this idea. The three foundations are the success of the Bundesbank and the German economy, the academic literature on the assumed inflationary bias of politicians, and the literature on the effects of central bank independence. Bundesbank’s unwavering inflation targeting has been very costly on German growth and sparked a number of serious recessions. Also inflation targeting, as a goal of monetary policy does not automatically require the independence for the central bank, and further that the causal relationship between strict monetary policies and independence is not one-directional. It could be for instance, that countries have independent banks because they have chosen monetarist policies and not the other way around as commonly assumed.

This presentation of the reasons for the proliferation of the idea that institutional independence (in general and central bank independence in particular) is beneficial, allows us to return to a consideration of the place of technocracy in modern economic governance.

The politics of macroeconomics is not so much the struggle for the authority to impose efficient institutions, as it is the struggle to legitimize self-appointed authority on the basis of technical expertise.

The most important question to ask about the process of central banking therefore is who defines the social welfare function that acts as the guide for central bank interventions in the economy? Yet, this question cannot be asked within an orthodox intellectual framework that essentially denies the constitutive role of politics in the economy. Within orthodox macroeconomic analyses, the social welfare function is said to approximate the policy preferences of the ‘representative’ individual within society. However, those models conceptualize the representative individual as one who adopts the same cognitive approach to the question of monetary policy-making as that of orthodox macro-economists.

By little more than a definitional trick, it seems, orthodox macro-economists are thus able to elevate themselves to the position of legitimate intellectual guardians of society’s concerns for the key settings of economic management.

Stiglitz offers a summary of his critique of the idea of the ‘rational’ individual in Freefall (2010) and concludes that homo-economicus is just a useful fiction that has been mistaken by economists as a description of reality. This fiction is then used to assess policy and to predict behaviour leading to patently unrealistic results. Such a result is similar to the one discussed above, of mistaking consumer choices with citizen choices, of a democracy of means with a democracy of votes.

The intellectual case for central bank independence is therefore less clear than its current political appeal would seem to suggest.

It is undeniable however that financial markets have a significant impact on the way in which society is organized, since the allocation of credit is the sine qua non of distributional politics. Consequently, when the decision to cede operational autonomy to central bankers is justified in terms of the need for market sensitive policies, it is equally clear that a particular way of organizing society is being simultaneously constructed and defended against possible redefinition. As a result, the social basis of financial trading has changed markedly in recent years in a way which is selective of a social structure of accumulation grounded in the monetary orthodoxy that central bank independence was designed to deliver.

Corbyn could therefore be right in seeking to expose the politics that lie beneath the Bank’s façade of independence.