Interview with Tariq Ali*
Following the recent credit crisis in the USA, some have said that we were witnessing the death of neo-liberalism. Would you say that this is the case, or that in fact recent events are leading to harsher neo liberal times?
The crisis that destabilized the Wall-Street system in 2008 required massive state intervention by the US government to the tune of trillions of dollars. A similar process took place in Britain. Tax-payers have paid for capitalism. The rich men’s panic is temporarily over. That alone should have been the death-knell for neo-liberal economics, but is it? Clearly not. They carry on as before. The state can bail-out the banks and the rich but is not allowed to help the poor, create jobs, return to a form of public-utility capitalism or social-democracy as in the first decades of the last century. Despite the fact that unemployment rose massively in the Northern hemisphere there was no attempt by Obama’s Democrats or his centre-left admirers in Europe to push through badly needed structural reforms and punish Wall Street and its equivalents elsewhere. This decision will affect the middle-classes and the poor for many years to come. The politicians, corrupt, lacking vision and unconcerned about the hollowing out of the democratic process itself, are carrying on as before. Punish the poor, save the rich is capitalism’s motto for this crisis. The Greek government follows the pattern instead of using this appalling crisis to remodel society in the interests of those who elected them.
As elementary as it may sound, who are, after all the people that so many nations around the world are indebted to? How would you explain the fact that, even the USA is indebted to its own banking system? How should in your opinion nations react in order to lessen the burden and prosper?
As I suggested above the politicians are in hock to those who fund them (in some cases personally) and their political campaigns. This process has reached new heights in the United States, but Britain is not so far behind and the EU is far too weak an entity to do anything decisive. The great American political scientist at Princeton, Sheldon S. Wollin, wrote a prescient book in 2008, before the crisis. It’s title explains the message: ‘Democracy Inc.: Managed Democracy and the Specter of Inverted Totalitarianism.’ That is the logic of contemporary capitalism. In the absence of domestic and global alternatives that could rally the workers, the unemployed and the poor against the system, the capitalist class (if you’ll pardon an old expression) feels it has nothing to fear.
How could austerity measures impose to countries such as Iceland, Ireland, Greece, help repay parts of the debt, when in effect they cripple any financial growth?
The rich in one country repaying the rich in another country from whom they borrowed money at the expense of ordinary citizens. That is what is happening. In Greece you had a clever Right party which decided to call an election it knew it would lose and then let Pasok handle the crisis. That is one reason why the protests have, trill now, been relatively restrained. And the plan is crazy. Cuts in social expenditure reduce the spending capacities of most people and further exacerbate the economic crisis. Its elementary as Keynes taught the bourgeoisie in the last century.
It is said that the IMF’s involvement has had mixed results over the years, both positive and negative, and that its involvement with Greece is quite different with its involvement with countries such as Argentina. What is your assessment?
I disagree. Argentina was an extreme but essentially where the IMF goes there the poor suffer. I can’t think of a single case that shows the opposite. And the IMF often gets its predictions wrong. In April 2007 it was predicting global growth! And this at a time when we could already see that credit booms, artificially raised real-estate prices, huge increase in personal indebtedness, was all building up to an implosion. The bubble duly burst, but the politicians who live in their own special bubble still refuse to understand the reasons.
Some have that the IMF’s involvement constitutes an “economic slavery” for Greeks, saying that the outmost goal of the international capital is to get its hands on valuable Greek assets. Would you say that this is an exaggeration?
Capitalism is rapacious. This is hardly a secret. It buys cheap to sell dear. Always has done. So when some Germans want a few Greek islands as security they aren’t completely joking. Its not only the IMF. The EU is not much better.
The Greek government has stated that the path it has followed was “the only way out” of the crisis. What sort of alternatives would you see? Would go on default be a better option, in your view?
In my opinion a serious and visionary Left government would have refused to accept any responsibility for a crisis produced by the politics and economics of the Washington Consensus. It then would have defaulted on the debt, told the IMF and the EU to go to hell (since it’s their policies that are the cause), nationalized its banking and financial institutions without compensation, sent its Finance Minister first to Beijing and then to Caracas to establish new deals and embarked on a plan of counter-cyclical spending. Within this context and with mass support it could have begun to restructure the Greek economy. If this meant leaving the EU then so be it…what good has it done. The ditching of the drachma and getting the Euro created massive illusions and fantasies and a minority became rich very quickly, but what now?
It is said that European capitals are uncomfortable over a possible social outburst in Greece, which could cause a similar domino effect in several other European nations. In your view, how should the European left respond in these times?
Were there to be a gigantic social upheaval in Greece that changed the political face of the country this would be very positive. A Greek gift to Europe but unlike the partisans inside a Trojan horse it would be in full public view, holding up a mirror to the rest of Europe. The European Left needs to convene an all-European Congress…..a Congress of the Defeated to discuss how to move forward in this new period. If it doesn’t the far-right, already on the ascendance in Italy, France, Britain, Hungary, etc—will rise further. The centre-left is incapable of any such initiatives since it has situated itself in the posterior of capitalism and the stench of its politics is driving many towards the Right.
* Unpublished interview – May 4 2010 by permission of the author
Tariq Ali is a writer and an editor of the New Left Review. He is one of the most well-known figures of the radical movements of the 1960s.