His­tory’s zig-zag line runs through us

Obama, Tsakalo­tos and rock-bot­tom so­cial jus­tice rank­ing re­mind us Greece not im­mune to shift­ing pat­terns

Kathimerini English - - Focus - BY NICK MALKOUTZIS

ANAL­Y­SIS “His­tory doesn’t move in a straight line,” US Pres­i­dent Barack Obama said fol­low­ing his talks with Prime Min­is­ter Alexis Tsipras in Athens last week. He ex­panded on this theme dur­ing his speech at the Stavros Niar­chos Foun­da­tion Cul­tural Cen­ter, draw­ing at­ten­tion to the dis­con­nect that some vot­ers feel as a re­sult of eco­nomic poli­cies fail­ing to de­liver – an is­sue that has be­come hard to ig­nore in the wake of Brexit, Don­ald Trump’s vic­tory in the US and the rise of pop­ulism in Europe.

“The same forces of glob­al­iza­tion and tech­nol­ogy and in­te­gra­tion that have de­liv­ered so much progress, have cre­ated so much wealth, have also re­vealed deep fault lines,” said the out­go­ing Amer­i­can pres­i­dent.

Pro­vid­ing a suc­cinct anal­y­sis of how the break­down has oc­curred, he said: “Tech­nol­ogy and au­to­ma­tion mean that goods can be pro­duced with fewer work­ers. It means jobs and man­u­fac­tur­ing can move across borders where wages are lower or rights are less pro­tected. And that means that work­ers and unions of­ten­times have less lever­age to bar­gain for bet­ter wages, bet­ter ben­e­fits, have more dif­fi­culty com­pet­ing in the global mar­ket­place.”

Obama went on to stress that the in­equal­ity caused by the di­ver­gence in peo­ple’s eco­nomic for­tunes is “one of the great­est chal­lenges to our economies and to our democ­ra­cies.”

“An in­equal­ity that was once tol­er­ated be­cause peo­ple didn’t know how un­equal things were now won’t be tol­er­ated be­cause ev­ery­body has a cell­phone and can see how un­equal things are,” he ex­plained. “So not only is there in- creas­ing in­equal­ity, but also there is greater aware­ness of in­equal­ity. And that’s a volatile mix for our democ­ra­cies.”

The feel­ing of miss­ing out on the eco­nomic ben­e­fits oth­ers en­joy due to the spread of tech­nol­ogy, free trade and the fi­nan­cial dereg­u­la­tion that al­lowed large cross-bor­der cap­i­tal flows has jolted the po­lit­i­cal land­scape and shaken politi­cians and com­men­ta­tors. Over the last cou­ple of years, we have seen the elec­tion of a pre­vi­ously in­signif­i­cant rad­i­cal left party in Greece last year, the rise of the far-right in cen­tral and north­ern Europe, the adop­tion of au­thor­i­tar­ian rule in parts of eastern Europe, Bri­tons vot­ing to leave the Euro­pean Union and now a multi-mil­lion­aire with no gov­ern­ing ex­pe­ri­ence be­ing elected pres­i­dent of the US de­spite in­sult­ing all and sundry dur­ing his cam­paign.

“What elites have for­got­ten, or failed to com­mu­ni­cate, is that open­ness and free trade do not au­to­mat­i­cally raise all boats,” Univer­sity of Cal­i­for­nia pro­fes­sor Barry Eichen­green told Bloomberg TV ear­lier this month.

“There are win­ners and losers from glob­al­iza­tion. The losers are left be­hind and if they’re not helped, not com­pen­sated, if they’re not pro­vided with a ba­sic in­come or the ed­u­ca­tion and train­ing they need to com­pete in a glob­al­ized econ­omy they will, un­der­stand­ably, grow re­sent­ful. I think many of our pol­i­cy­mak­ers, start­ing with pro­po­nents of the sin­gle mar­ket in Europe, ex­tend­ing to the ad­vo­cates of the Trans-Pa­cific Part­ner­ship have for­got­ten and not ac­knowl­edged that there are losers as well as gain­ers and that we need to do some­thing for the losers.”

This seem­ingly seis­mic shock to our po­lit­i­cal nor­mal­ity has prompted a de­bate about whether we are wit­ness­ing the col­lapse of the lib­eral demo­cratic or­der, which has been un­der­pinned by the cap­i­tal­ist eco­nomic sys­tem. Greek Fi­nance Min­is­ter Eu­clid Tsakalo­tos was drawn into the dis­cus­sion last week, when he was asked by the Wall Street Jour­nal whether what is un­fold­ing be­fore our eyes is the be­gin­ning of the end for the West.

The Greek min­is­ter gave a san­guine re­sponse.

“If you think about the prom­ise of glob­al­iza­tion in the years of [Tony] Blair and [Bill] Clin­ton, it was that only peo­ple in old in­dus­tries like tex­tiles or steel have some­thing to worry about. But it be­came very ob­vi­ous that in fact many mid­dle­class peo­ple had a lot to worry about,” he said. “There is a threat to wages and pros­per­ity and se­cu­rity that is more wide­spread and I think that the cen­ter, the cen­ter­left, and the left have been ac­tu­ally rather poor in re­spond­ing to that.”

Tsakalo­tos also weaved this broader con­text into his com­ment on the cur­rent ne­go­ti­a­tions with Greece’s cred­i­tors. One of the key ob­sta­cles to con­clud­ing the sec­ond re­view of the ad­just­ment pro­gram are the de­mands from the lenders – pri­mar­ily the In­ter­na­tional Mone­tary Fund – to con­duct fur­ther re­forms to the la­bor mar­ket, such as in­creas­ing the ceil­ing on col­lec­tive dis­missals. Tsakalo­tos ar­gued that Greece has al­ready lib­er­al­ized the la­bor mar­ket enough and that any fur­ther steps in this di­rec­tion would risk leav­ing work­ers so ex­posed they would turn to ex­trem­ists for po­lit­i­cal suc­cour.

“This is a de­ci­sion about the power of cap­i­tal and la­bor in so­ci­ety, and you can­not weaken la­bor fur­ther, es­pe­cially when there is 25 per­cent un­em­ploy­ment,” he told the news­pa­per, ac­cord­ing to an an­no­tated tran­script of the in­ter­view.

“If the work­ers do not see that they are par­tic­i­pat­ing in the ben­e­fits of growth then we will get a lot more right-wing pop­ulists. If Greece is go­ing to sur­vive and come out of this cri­sis with some kind of so­cial con­sen­sus, then in the up­swing the work­ing class and mid­dle class must feel that they are par­tic­i­pat­ing. It can’t be that they have made sac­ri­fices and now all the ben­e­fits will be go­ing to cap­i­tal.”

It seemed good tim­ing that in the week this in­ter­na­tional de­bate about the dan­gers of in­equal­ity should land in Greece along with Air Force One that Ger­many’s Ber­tels­mann Foun­da­tion re­leased its an­nual So­cial Jus­tice In­dex. As in 2015, Greece came last out of the 28 Euro­pean Union coun­tries in terms of so­cial jus­tice, scor­ing 3.66 points against an EU av­er­age of 5.75 and a high of 7.51 in first-placed Swe­den.

The in­dex en­com­passes six cat­e­gories: Poverty preven­tion, eq­ui­table ed­u­ca­tion, la­bor mar­ket ac­cess, so­cial co­he­sion, health and in­ter­gen­er­a­tional jus­tice. Greece scored ex­tremely poorly in all cat­e­gories apart from ed­u­ca­tion. The re­port la­bels so­cial jus­tice lev­els in Greece “shock­ingly low.” The au­thors also point out that the gap with Ro­ma­nia (27th) and Bul­garia (26th) has widened since last year be­cause poverty rates in those coun­tries fell whereas the Greek one re­mained un­changed. In Greece, more than a third of the pop­u­la­tion is at risk of poverty or so­cial ex­clu­sion.

Maybe it is a timely re­minder, as we strug­gle to see beyond our small and in­tense uni­verse of bailouts and po­lit­i­cal clashes, that when his­tory changes di­rec­tion the line does not al­ways skirt us by; some­times it runs right through our cor­ner of the world.

Fi­nance Min­is­ter Eu­clid Tsakalo­tos gave a san­guine re­sponse to the ques­tion of whether we are wit­ness­ing be­gin­ning of the end of the West.

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