Recent capitalist history has thrown up sharper economic declines and higher levels of unemployment than the ones we are currently witnessing in Greece and Spain. It’s just that they haven’t occurred in nice Mediterranean countries that Britons visit for beach holidays and long weekends.
So while the latest estimates from the local central bank suggest that Greek GDP will fall 5% in 2012, marking a cumulative drop of 13% since 2008, it remains true that the Asian financial crisis of 15 years or so ago was far worse. GDP plunged 13% in Indonesia in 1998 alone, with reductions of 11% in Thailand and 7% in South Korea and Malaysia.
Yet Asia recovered relatively rapidly, and the official line from the European Central Bank (ECB) is that Greece will see stagnation next year, followed by the resumption of growth in 2014.
But given the sharp reductions in wages and public spending, collapsing consumer confidence, capital flight, an investment strike and — most important of all — the absence of export-oriented manufacturing industries, many observers regard that outcome as unlikely.
Meanwhile, unemployment in Spain has hit 24.4%, and twice that for young people. That puts a developed first world economy in the same ball park as Belize, Gabon and Bosnia Herzegovina. Indeed, Spain now has a higher proportion of joblessness than the most recent figure I have been able to find for Iraq, or Britain in 1932, come to that.
Marxist economists are divided in their assessment of the causes of all this, broadly between those who attribute explanatory primacy to a 40-year secular decline in the rate of profit and those who — more convincing, in my view — regard what is happening as the unravelling of the contradictions inherent in neoliberalism.
But what we clearly do have here is an immanent critique of the free market orthodoxy; textbook Friedmanite theory doesn’t work, even by its own lights.
Far from being self-regulating, in the manner that the political right has maintained for the last three decades, capitalism has shown itself utterly dependent on state intervention for its survival.
The clearest recent demonstration of this is the so-called long term refinancing operation mounted by the ECB, which pumped one trillion euros worth of ultra-cheap three year loans into the European banking system. Despite the name, the measure is likely to prove only a short term fix.
Ever since I first became politically active, and before even that, revolutionary socialists have shown themselves all too prone to describe whatever state the economy happens to find itself in as “a crisis “, and to link that analysis to a perspective of rapid radicalisation of the working class, on a scale that could catapult their particular sect to mass party standing more or less overnight.
Sometimes it really has been stated as crudely as that, as those of us old enough to remember the Workers’ Revolutionary Party will recall. Rather more often, the assumption has been unvoiced but obviously implicit.
We need to be that bit more nuanced. An occasional recession, tough as it is on those who find themselves on the dole queue, is no biggie in the wider scheme of things. Then again, what we are facing right now is shaping up to be rather more than yet another easily shrugged off downturn.
The prospect of some sort of rerun of the Great Depression is higher than any sane person would like them to be. Yet projects for socialist transformation have not so far enjoyed any breakthrough in either Greece or Spain, any more than they did in Asia in the late 1990s.
Overt fascist forces are now polling well above the 3% threshold needed to secure parliamentary representation in Greece, while the anti-capitalist left Antarsya remains below it.
In short, if socialists are going to make any progress, it will be by our own efforts in popularising our ideas, rather than sitting back and expecting things to fall into our laps.