THE CRISIS AND ECONOMIC ALTERNATIVES

GREG ALBO

ince 2008, the world market has been wracked by a degree of economic Sturbulence unusual in its scope, depth and duration. Although uneven in its recessionary impacts, no corner of the global economy has been untouched by this. In the central economies of North America, Japan and Europe, this period has been universally demarcated as a ‘major crisis’, comparable to the ‘great depressions’ of the late nineteenth century and the 1930s and the of the 1970s. Even as the crisis now presses into its fifth year, economic prospects remain highly uncertain. In cataloguing obstacles to a renewal of economic growth in various parts of the world, the July 2012 IMF World Economic Outlook observes, with a tone of understatement, that ‘the global recovery, which was not so strong to begin with, has shown further signs of weakness’.1 As in other major turning points in the history of , powerful forces for restructuring the state and the economy have been set in motion. From both sides of the political spectrum, governments have been falling like dominos. In Italy and Greece, ‘technocratic governments’ were struck while in others something like a ‘common front’ formed between centre- right and social democratic parties to back the bailouts of the financial system and secure long-term policies of ‘fiscal consolidation’ (read austerity). This has kept even more interventionist economic policies within the parameters of ‘exceptional monetarism’ (along the lines advocated by Ben Bernanke of the US ), thereby seeking a balance between fiscal austerity and the ‘quantitative easing’ of and debt consolidation to stabilize the financial system. This has allowed governments to attempt to reconstruct their broader neoliberal policy frameworks and power structures on a new foundation. For some observers, this has marked a ‘return of the state’, after years of ‘free markets’. But it mainly reveals how important the state has always been in capitalist economies, even in the neoliberal era. Still, the politics of the crisis has renewed the critique of , 2 SOCIALIST REGISTER 2013 and even capitalism, and opened up new spaces of political opposition. An impressive array of struggles against austerity have erupted, and continue to emerge, from the global Occupy movement to the Indignados in Spain, UK Uncut, and Blockupy Frankfurt, demonstrating a tactical inventiveness that the left very much could use. The radical left has, moreover, managed to re-establish a degree of national prominence in the electoral arena and the broader field of political parties – Syriza in Greece, the Left Bloc in Portugal, the Left Front in France, the Socialist Party in the Netherlands, the Red- Green Alliance in Denmark, to name the most prominent examples – that it has not held in decades. Thinking about fundamental economic alternatives – something that had been declared as either utopian or improbable speculation even on the left – is again receiving attention. The theoretical and political questions of socialist strategy have returned, including how centrally a strategy for not just challenging but changing the state must figure in them. Renewed interest alone, however, does not make the metrics for assessing alternative economic programmes – from Keynesian reflationary policies to socialist transitional reforms – particularly transparent. When even Martin Wolf, the Financial Times commentator who is one of the more progressive voices in the mainstream media, says that no ‘credible alternative’ currently exists,2 it is well to bear in mind that this assessment pivots around whether ‘credible’ means only those alternatives that, as Istvan Meszaros has put it, ‘first acquire legitimacy as a capital asset’, so as to foreclose thinking ‘beyond capital’.3 But it is certainly true that the left is still sputtering in producing – never mind anti-capitalist projects – even such alternative economic policy proposals as might successfully sustain anti-neoliberal alliances in the current conjuncture, and thereby block the ways state power and economic policy are now being deployed in austerity exits to the crisis and forestall further attacks on the working classes. Yet even just a consistent politics of fighting austerity will open space for new and broader struggles, while debating economic alternatives, at this moment, can be important to the left’s regaining an organizational presence as a social force capable of advancing the organizational and programmatic basis for an anti-capitalist oppositional bloc, forwarding structural reforms capable of cracking open space in the state for struggles over the very definitions of democracy and needs, and thereby pointing the way not just to impeding but potentially transcending capitalist power. THE CRISIS AND ECONOMIC ALTERNATIVES 3

KEYNESIAN DEPARTURES Critics of the neoliberal rescue and exit strategies have become more numerous and more vocal as the crisis has worn on. Keynesian analyses have argued how bursting asset bubbles and financial meltdown led to flagging effective demand as individual market actors simultaneously slashed spending and de-leveraged debt loads, turning specific market failures into generalized recession, with an excess of labour and productive capacities in all parts of the world. In this setting, as in the 1930s, new gross investment, or net exports for individual states, cannot be expected to spur new growth. Consumers remain overextended and fearful for their jobs. Capitalists prefer to sit on ‘money hoards’. And the world market has a depressive configuration: the US is now exhausted as ‘consumer of last resort’; China’s imbalances have been exposed; and the EU remains locked in its banking and currency crisis. Uncoordinated strategies of currency realignment risk slipping into ‘beggar-thy-neighbour’ devaluation wars. Neoliberal policies of fiscal consolidation to reduce government debt mistake symptoms for causes and, in fact, reinforce the crisis. The economic authorities, according to the Keynesian dissidents, have failed to understand what is distinctive about this unique market failure and thus utterly lack a coherent strategy to move from emergency financial stabilization to steady growth and economic rebalancing. To counter the slide into further economic chaos, policies for exiting from the crisis need to abandon the short run fixation on austerity, adjust the policy mixture and timing of restraint and expand the scale of economic intervention. This perspective has informed the newly elected Socialist government of Francois Hollande, for instance, which campaigned on an anti-austerity (not anti- neoliberal) platform of reorienting the eurozone to ‘growth-led’ policies, while still promising to meet fiscal commitments, through increased use of the European Investment Bank, EU project bonds, issuance of eurobonds and an EU-wide financial transactions tax. The new government’s immediate move to increase taxation, notably via a 75 per cent tax on the richest brackets, and modestly increase public expenditures, with a half million new public housing units a priority, stands out against the withering conformity to the realpolitik of austerity elsewhere. A host of financial commentators – Nouriel Roubini, Martin Wolf, Wolfgang Munchau to name just three – have been more audacious in their proposals than such left-of-centre governments and parties. Proceeding from a pessimistic (bordering on alarmist) assessment of the rigidity of global imbalances and the adequacy of debt consolidation by moving it from the private banking system into the state sector, they insist that weak 4 SOCIALIST REGISTER 2013 global demand can only be compounded by government restraint. Any ‘fiscal compact’, as being proposed for Europe, needs to be a long-term objective, preceded not only by steps toward a banking and fiscal union, debt mutualization through the European Central Bank, and greater resort to the European Stability Mechanism for orderly default by sovereign debtors (including allowance for exit from the euro), but above all by a short-term ‘growth compact’, wherein governments need to undertake sustained fiscal borrowings to expand public infrastructure spending to offset private sector financial surpluses. But since, in many countries, the lack of effective demand is compounded by structural current account deficits and the US can no longer continue as a net importer in the same way, they argue that a fundamental rebalancing of the world market will be essential to any new phase of growth. As Wolf warns against the enticements of austerity for ruling elites, ‘this will be a lengthy and fragile recovery. A far greater danger exists of premature retrenchment than of excessive delay.’4 As weekly columnist for the New York Times, the Nobel laureate Paul Krugman has come to occupy the mantle as the foremost Keynesian critic of austerity. In innumerable columns and two recent books, he argues that the US and other core countries have been in a depression since 2008, following J.M. Keynes’s definition of a depression as a ‘chronic condition of subnormal activity’ that is self-sustaining. For Krugman, this calamity is ‘basically a technical problem, a problem of organization and coordination… Solve this technical problem, and the economy will roar back to life’.5 Deficit reduction needs to wait until the medium-term, he argues, and governments in the capitalist core countries instead need to soak up the excess savings from the private sector, and find ways to spend it, particularly as interest rates are low or negative, and financing is negligible. When governments do too little or turn to austerity too soon (as occurred in the US with the Obama stimulus and in the eurozone under German pressure), the slump is only reinforced. Notably, for all the emphasis Krugman places on growing inequality and financial deregulation in causing the crisis, proposals for dealing with these are not central to his agenda for solving it. Krugman’s schemes are technical and rather conventional: expand the scale of the fiscal stimulus and the necessary debt and deficit levels to fund it; develop a programme of mortgage relief; bump targeting up from 2 to 4 per cent; continue the monetary policy of quantitative easing by having the central bank purchase long-term bonds, private debts and government securities; set a long-term target of low interest rates on bonds; and, in the case of the US, devalue the currency. For all the heated commentary from Krugman and other Keynesians, what is offered is far from an alternate model of global development. It is THE CRISIS AND ECONOMIC ALTERNATIVES 5 possible to level a battery of targeted, if somewhat standard, ripostes to the Keynesian proposals: a monetary policy openly declared to be less concerned about inflation cannot induce investment; expansive fiscal policy will eventually cut into profit rates; and the pumping-up of demand to offset the economic shock in itself will do little to address the distributional inequities of neoliberalism. In more Marxist terms, one could say that the distribution of taxes, debt relief and public goods provision are not technical questions but the outcome of political struggles; that the realization of value cannot be separated from the conditions for production of value; interventionist policies need to be structured so as to support the restructuring of the capital stock through economic planning; and there is no technical policy matrix by which to transform a neoliberal state back into Keynesian .6 In fact, as this last point suggests, it is the ‘back to the future’ quality of the Krugmanite strategic conception that really stands out. As in the old Keynesian state, it would leave us, once quantitative easing and bank recapitalization have done their work, with financial institutions as private agents acting in a global market environment. Since this would only be modified via some separation of banking functions and greater transparency in regulation of secondary markets, there is little here that even sounds like Keynes on the ‘euthanasia of the rentier class’.7 In any case, policies that primarily address the scale of debt restructuring, and the timing of fiscal consolidation and debt management on the part of the finance ministries and central banks, cannot amount to a rupture with the era of neoliberal .8 These are emergency ‘national/international recovery plans’ to rescue capitalism from the crisis produced by the contradictions of neoliberalism. Certainly any strategy for getting ‘beyond capitalism’ is completely absent from their strategic field of vision. SOCIAL DEMOCRACY REBOOTED? Social democratic parties have offered little opposition to austerity in the way of programme and nothing in the way of political mobilization. All the way from Europe’s southern periphery to the Nordic social democratic heartland, governments have implemented austerity and, by and large, accepted the European Commission and ECB approach to the euro crisis, albeit with the Hollande government in France still to be really tested. They have even failed to unite behind a modest financial transaction tax, nor agreed to a campaign for a general ‘crisis tax’.9 Alternative proposals within the social democratic milieu have, instead, mainly come from union confederations, social movements and left policy groups and thinkers. In contrast to the Keynesians, who are agnostic on any number of features of global capitalism, 6 SOCIALIST REGISTER 2013 these seek to recreate social democratic strategies that would amount to a rupture with neoliberal global capitalism. Drawing on post-Keynesian theories, notably the financial instability thesis associated with Hyman Minsky, this approach more often stresses the inherent logic in financial markets that led the ‘regulated’ postwar system to give way to the ‘deregulated’ one in the neoliberal era.10 It is recognized that this was buffeted by new economic policy dogmas such as the ‘efficient market hypothesis’, ‘rational expectations’, ‘inflation targeting’, ‘risk dispersion’ and others – all encouraging a highly-leveraged, highly- speculative financial architecture. And that this was related to a larger political project of advancing competitiveness amidst via labour market flexibilization, liberalization of markets and commercialization of the state. All this had the effect of erasing national policy divergences and distributional bargains, while allowing reckless risk-taking on the part of credit institutions and speculators. It is the speculative logic inherent in financial markets and promoted by neoliberal policies, then, that is the central obstacle that alternative exits to the crisis must confront. It is not possible to track here all the progressive advocates or schemes to re-embed finance since the crisis exploded. Led by the ATTAC network in Europe, but also by the International Confederation, the demand from social movements for a financial transactions tax, varying in its rate, scope and country involvement, has long been front and centre. In the context of the crisis, greater emphasis has been placed on linking the refinancing of pension funds to government stimulus measures to rebuild public infrastructure. The financial reforms proposed by various progressive think tanks extend well beyond bank recapitalization to focus on reforming the bailout process to introduce distributional concerns; taking partial equity positions in financial institutions to extend public ownership; reforming the process for dumping ‘toxic assets’ into ‘bad banks’; reducing ‘moral hazard’ incentives to financial institutions; re-regulating financial institutions to restrict bank mandates and increase transparency in secondary markets; and forming new supranational mechanisms (especially in the eurozone) to restructure sovereign debt. In other words, the case is reinforced that the social democratic agenda must be to increase extra-market public governance over finance while scaling back the governance of finance over markets.11 There is a pivotal theoretical-strategic point to be noted here. For post-Keynesians, it is the collapse in credit markets and its impact on the creation of money that is central to the aggregate demand shock. The creation of money, apart from whatever stimulus central banks undertake, is fundamentally disrupted: credit is central to the monetary realization THE CRISIS AND ECONOMIC ALTERNATIVES 7 of profits. So, even if Keynesian policies to boost aggregate demand are important, it is the financial system that needs to be addressed. But not merely by debt mutualization and bank recapitalization, and modifications to the regulatory structures of secondary markets; this will merely provide a new foundation for the speculative casino to start up again. There is a need to re-embed firmly finance in a responsible system of pooling savings, spreading risk and financing the investments of the real economy. But there is another theoretical-strategic point at work here. The credit bubbles, particularly in sub-prime mortgage markets and consumer loans, are understood to have been based on the real stagnation of wages under neoliberalism, as workers resorted to credit to try to preserve living standards. Since the banks still needed customers and required new financial mechanisms – such as the myriad forms of securitized debt instruments – to compensate for riskier portfolios, rising asset prices allowed consumers increasing leverage further stoking credit markets and over-indebtedness, while the corporate sector followed a different, if parallel in its consequences, path of leverage through a short-term fixation on shareholder value. This was reinforced at the international level by structural trade imbalances with East Asian and Gulf state surpluses being recycled back to finance the US as ‘consumer of last resort’. The EU formed its own neo-mercantilist dynamic between ‘core’ Europe and its periphery. In light of this, the agenda offered for a social democratic alternative exit from the financial crisis is often presented as requiring an exit from neoliberal capitalism via an alternate distributional bargain inside states and the rebalancing of the world market and global effective demand between states. This can only be realized by re- establishing ‘golden age’ conditions of growing wages and the capital stock in line with productivity growth which, it is stressed, is the foremost means to provide stable effective demand. The progressive union and social movement proposals for a redistributional exit from the crisis stress new initiatives for a basic citizenship income, strengthened unions and workplaces, an attack on precarious work and a vital role for the state in controlling finance and governing markets. The overall brace of policies might be summed up as a ‘wage-led, high-road, finance-repressed’ alternate exit strategy to the crisis.12 This is not just an anti-austerity agenda, but also an anti-neoliberal course and, in this sense, it lies outside the parliamentary calculations of actually existing social democratic parties. Although taking its bearings from within historical social democratic political horizons, these proposals, and especially the strategic vision, have commanded little attention from social democratic parties in practice, 8 SOCIALIST REGISTER 2013 beyond looking to them for temporary and exceptional measures to reverse collapsing demand and little else. And it needs to be said that the strategic scope of the proposals coming from this milieu is itself limited in important ways. The proposals for constraining finance, for example, tend to idealize postwar regulatory regimes and project them forward into this new context. This follows from the way they pose a stark dichotomy between a predatory, unstable financial economy and a ‘real’ productive economy. Given the spatial and temporal differentiation in the production and realization of new value, capitalism is inconceivable without finance and speculative futures markets. Modern credit-money systems, within flexible exchange- rate regimes, expand directly the material interests of all capitalists in the monetary moments of accumulation. Financial capital occupies not just a speculative role, but also a dominant command and control role of allocating the surplus and adjudicating risk. This is an economic function performed with highly imperfect results; it is also a deeply political one of imposing social discipline and defending the general interest of capitalists in money as value. Those whose ambition it is to strike a compromise with industrial capital around the political terms of exit from the crisis will find finance cannot be politically isolated from the rest of the power bloc.13 The proposals to remake a social democratic alternative, then, not only lack support from the social democratic party leaderships but are in themselves problematic in terms of a coherent left strategy. Bank nationalization and socialization are pushed to the margins; industrial policy for restructuring relies on incentive subsidies and credit structures rather than beginning from new planning capacities; pension policies are left unduly reliant on private funds and financial markets. It is difficult not to locate these exit strategies in relation to the ‘competitive corporatism’ schemes of the 1990s. They do not offer – even as an all-purpose strategic objective – an anti-capitalist vision. Rather, they attempt to specify the institutional foundations for a ‘leashed capitalism’ where competition can be harnessed to work ‘better’ as the relationship between the state and the market is rebalanced. This is social democracy rebooted to defend the immediate interests of the against austerity. The practice of politics as part of a strategic vision of a democratic transition beyond capitalism has gone missing. RADICAL PROPOSALS To draw too sharp a distinction between the sorts of economic policy proposals discussed above and those coming from the radical left would be inaccurate. There is a common priority attached to anti-austerity struggles and new controls over finance. The relative weakness of the socialist THE CRISIS AND ECONOMIC ALTERNATIVES 9 movement as a political force, moreover, makes the advocacy of more radical interventions scattered and hard to pin down. The central difference resides in the Marxian insistence that instability and crises are recurrent, and indeed necessary, features of capitalist development. The origins of crisis always reside, in a general sense, in a process of overaccumulation as the limitless imperatives to accumulate capital runs up against the limited basis for producing and realizing value. But crises are always unique historical conjunctures, with the state as the decisive point of concentration of the contradictions exposed by the crisis. Following from this premise, radical alternatives need to be grounded in analysis that sees the neoliberal phase of expansion that started in the early 1980s as forming its own dynamic of accumulation through a massive restructuring of the social-spatial organization of production in the central economies. The ensuing destruction and renovation of the capital stock, alongside favourable conditions to raise the rate of exploitation, restored growth; but the overall accumulation regime amplified the contradictory relations between austerity, internationalization and financialization. Rather than being comparatively regulated in a national formation allowing a divergence in cost structures and distributional bargains (aided by currency valuations), international competitive imperatives placed increased pressure on wages and tax and expenditure regimes and continual rationalization of the capital stock and value chains. International export markets and an explosion of credit, both underpinned by a host of questionable financial innovations, compensated for aggregate demand weakness within an overall world market configuration that could be characterized as ‘competitive austerity’. The collapse in high-risk mortgage markets triggered the wider economic crisis, and exposed the overaccumulation occurring beyond the financial sector in steel, autos, construction and others. There has been any number of Marxian analyses offered on the crisis that takes up these themes, albeit in ways that involve considerable divergences in interpretation of the causes of the crisis.14 They vary in insight and emphasis across the spectrum of Marxist crisis theory – stagnationism, overinvestment, declining productivity of the capital stock, the centrality and volatility of finance to global capitalism, and so forth. Yet, for all the polemic, it is not so easy to identify radically divergent programmatic agendas. Indeed, the general demands that ‘workers should not pay for their crisis’ and to ‘occupy the banks’ are universally invoked. There is nothing as ambitious as a transitional programme that would mark an anti-capitalist intervention on the part of the radical left. This holds as much for (post-) Trotskyist formations like the Socialist Workers Party in Britain and the Fourth 10 SOCIALIST REGISTER 2013

International grouping of affiliates,15 as it does for the umbrella Party of the European Left at the EU level and the parallel annual EuroMemorandum project.16 The ‘broad left’ radical parties in Europe, such as Die Linke, Front de Gauche and Syriza do each present a programme of course.17 In the case of Die Linke, party-building has meant putting together an extensive programme, as well as a series of statements and studies, including on the means and goals of socializing finance in Germany. The Front de Gauche has a more scattergun approach to forming its planks reflecting its status as still largely an electoral alliance with little organizational or strategic depth. Syriza has the most comprehensive programme worked out over several years through broad internal and external consultations, which has guided its anti-austerity electoral platform centred on rejection of the Memorandum for structural adjustment of the Greek economy sponsored by the Troika of the European Central Bank, the European Commission and the IMF. In the capitalist core outside of Europe, in North America and Japan, the radical programmatic field is largely barren, reflecting the marginality of socialist political forces. There have been, however, a number of individual interventions, of varying political sympathies and analytical loci, which have provided a frame of reference for the radical left. A predominant theme has been the reassertion of the traditional critique from the left that financial instability and credit cycles and the private allocation of the social surplus require not just nationalization of the banks, but also their socialization. This has led several writers, such as and Robin Blackburn, as well as the late Peter Gowan, to invoke a ‘public utility’ conception of the banking system under democratic control, given the systemic tendencies internal to its operations to crisis and ‘moral hazard’ (taking the monetary gains from financial speculation but offloading the risks onto the public sector via bailouts), and the indispensible functions with respect to the production of money and credit.18 Similarly, researchers at the Research on Money and Finance Group (RMF) at the School of Oriental and African Studies and the Research Institute have been placing the socialization of finance in the context of quite detailed alternate outlines of strategies for debt default and restructuring, regulatory controls over finance and capital controls.19 The crisis has also revitalized a range of alternatives that combine the extension of public ownership of the financial system with popular planning initiatives to meet social need, as well as with work-time reduction, capital controls and community reinvestment and a radical democratization of the state and workplaces.20 This had already figured in the ‘new theory’ of the transition to ,21 and in a number of schemes directed at a ‘new deal’ from the climate justice and radical urban movements.22 THE CRISIS AND ECONOMIC ALTERNATIVES 11

None of these strategies can be said to cohere into a transitional programme held across the radical left, and certainly have not been taken up as a set of focused campaigning demands animating the movements. But it is possible to signal a few core positions coming to the fore as integral to a distinctive socialist contribution to struggles over an exit to the crisis.

Debt Audits and Default: The fight against austerity immediately confronts credit relations, the debt buildup and the distribution of losses. If the mountain of pseudo-values represented by credit is preserved, whether it is household or sovereign debtors, the political initiative will remain with financial capital. They will have the capacity to continue to insist on austerity. Shifting the debt on to central bank balance sheets stabilizes the banks, but just poses the same issue from a different vantage. In each state, the precise form of anti-austerity struggles varies between cases, say, where mortgage and student debt dominate and other cases where sovereign debt is at the forefront of political struggle. The key political question, however, concerns the distribution of losses from the fictitious credits still in circulation as obligations; and control over the reshaping of monetary policy and credit relations. At least as regards sovereign debt, there is a growing consensus on the radical left along these five dimensions: (1) debtor-led default to take the initiative away from financial capital, and to halt further cuts; (2) monetization and mutualization of debts by central banks as necessary, with an initial cessation of payments on specific tranches of debt; (3) systematic audit of debt to establish odious and illegitimate debt, the relationship of the debt to arms expenditures and corporate subsidies, who owns the debt and priorities for debt relief and restructuring; (4) the default, relief and restructuring of debt; and (5) extension of democratic controls over the central bank, state financial agencies and public finances.23

Bank Nationalization and Democratic Control: The banks have been at the centre of the economic crisis, and even with the shifting of private debt into sovereign debt they remain so. The measures taken have included partial nationalizations of financial institutions to sustain their solvency, with the plan to liquidate the public equity stake as soon as possible. A key anti- capitalist demand that has gained general favour on the radical left is the permanent nationalization of the banking system and other leading financial institutions. As socialists well-know, nationalization of the banking system in itself may solve nothing if state banks follow – as they often do – the same management models as privately owned capitalist banks. The position of financial capital within the neoliberal power bloc, however, makes 12 SOCIALIST REGISTER 2013 nationalization under political control a struggle of the first order. It is also an indispensible condition for reorienting the economy and financing an anti-austerity exit strategy to the crisis. New strategic directions being put forward are pushing beyond the old limits. As a consequence of the crisis, there is now a general understanding of the features of too-big-to-fail, moral hazard, gaming-the-system and public good features endemic to banking. These characteristics repeatedly propel the banking system into bailouts and scandal. This can lend broad public support to a ‘public utility’ conception of banking in particular. But the distinct socialist intervention must be that the banking system is a public resource to be brought under democratic control as a central component of breaking the power of financial capital. In a complex economy, whether thoroughly collectivized or mixed, this cannot be conceived as a giant single bank. This suggests the need for establishing a mix of general purpose banks with a range of public objectives and organizational structures with more specialized financial institutions dealing, for example, with housing, project funding for a ‘green transition’ and community and regional development. All these could be linked to various social fund and reinvigorated public pension plans, and all coming under the scrutiny of regulatory agencies which are both ‘red and expert’. These kinds of reforms, so long as they emerged organically out of the struggle over an alternative exit to the crisis, could potentially pose a rupture with capitalist control over investment and the capitalist form of the state.24

The Cuts and the Public Sector: For the radical left, the struggle against austerity amounts to more than the Keynesian case for stimulus to improve the conditions for private sector profits and employment. The radical case against the cuts begins from a defence of income transfers, employment, equity and non-market provision of needs. The alternate exit strategies advanced must be linked to the insistence for a long-term transition to a capital-financed expansion of public goods via democratic planning. Given the stagnation and mass in this phase of the crisis, there is the need for a planned determination of investment, supply and demand. This can be done in a way that radically expands ‘de-commodified’ and ‘de- carbonized’ public goods. Also, a programme of public works can address the systemic underfunding of public infrastructure, schools, hospitals, parks and so forth under neoliberalism. Further, the expansion of public goods and employment can target barriers located in processes of racialization and gender inequality. If the initial financing of a public sector expansion must come from deficit financing in the context of stagnation, there is a need from the start to reverse the neoliberal damage to public revenues, and THE CRISIS AND ECONOMIC ALTERNATIVES 13 expand all forms of the taxation of capital, with the initial demand being a ‘crisis tax’ on finance. The organizational form, participatory processes and composition of public sector output that constitute an alternate fiscal policy, even in narrow Keynesian terms, is a point where the socialist contribution to anti-austerity struggles can be decisive.25

Workers’ Plans and Green Transitions: Public ownership and the formation of workers’ plans and control have been central to the socialist economic intervention for decades. They have not figured as prominently in current debates, despite the massive restructuring in major manufacturing and resource sectors. The internationalization of value chains and the erosion of the political potency of the industrialized working class have set this back. But workers’ plans, in both the public and private sectors, remain important for fighting concessions and building capacities, as well as initial blueprints for agendas of workers’ control. Workers’ co-ops can play a similar role of defending employment, raising new dimensions of production and building capacities; and so can public ownership and social planning. In fact, both overlap with current concerns of union activists with framing sectoral strategies to leverage more endogenous development, occupational and wage upgrading and limiting precarious work.26 The most distinctive socialist contribution around exit strategies has linked climate justice and anti-austerity struggles by combining proposals for a ‘green new deal’ with alternative recovery plans which address climate change and ecologically- responsible production. This allows for: (1) a focus on climate jobs and industrial conversion rather than carbon emissions trading; (2) ‘green’ adjustment and retraining funds for workers in ecologically-destructive industries; (3) mass expansion of public transit with an extension of free access; and (4) reduction of work time as a central anti-carbon strategy.27

Confronting the World Market: The anti-capitalist struggles and demands identified here do not emerge abstractly at the level of the world market. They materialize in local workplace and community conflicts and struggles over the concentration of power in the state. But these struggles also have to be strategized in their global dimensions since they involve struggles against capitalist classes operating in the world market. Liberalized commodity and capital flows put pressure on ‘internal devaluation’ and export-led growth even with flexible exchange rates. This forms the world configuration of ‘competitive austerity’ that works against nationally initiated reflationary policies. Conversely, anti-austerity alternatives face immediate strategic questions about the capacity for reflation and endogenous development. 14 SOCIALIST REGISTER 2013

The kinds of policies required to deal with this are well-known – controlled trade, particularly over the transnationals; capital controls; greater autonomy and security of exchange rates in relation to a plurality of hub currencies; regional blocs reinforcing diversity of development paths; and symmetrical adjustment of trade balances. They cannot be avoided in any country or zone attempting an anti-austerity exit. The confrontation with the liberalized world trading system, dominated by the core capitalist powers, remains an integral part of the strategic calculation of any alternate economic programme.28 THE POLITICS OF RADICAL ECONOMIC ALTERNATIVES IN EUROPE Although these themes materialize in opposition to a crisis which is quite singular in its features, there is a clear antecedent in the various ‘alternate economic strategies’ proposed during the crisis of the 1970s. These programmes had diverse sources, such as the ‘Programme Commune’ of the French left, the Meidner Plan from left social democracy in Sweden and the various versions of the Alternative Economic Strategy (AES) from the Bennite and independent left in Britain.29 In a context where insurrectionary political movements emerging out of parallel networks outside parliaments had become historical relics as much as strategies relying exclusively on parliamentary gradualism legislating inroads into capitalist power via an expansion of a bureaucratic state, these programmes had in common some notion of ‘structural reform’. This was based on the recognition that the only possible means of getting ‘beyond capitalism’ in the core capitalist states where liberal democracy prevailed involved staging of a series of political ruptures via the combination of radical political parties committed to transforming the central state organs with extra-parliamentary struggles and workers’ plans at the base. The key strategic direction for alternate economic plans pivoted around new forms of coordinated planning at the centre of the state; the nationalization of core sectors of industry and the formation of planning agreements; constraints over the financial sector and over the allocation of investment and credit; tranches of capital and import controls over the traded sector; decentralization and popular participation in community and workplace planning; and a far-reaching democratization of the state. With the onset of neoliberal globalization and the setbacks of the left from the 1980s, strategies for structural reform were sent off to the political archives. In many quarters of the left, especially in the core countries of Europe, it was avowed that the weight of socialist strategies had to shift at least THE CRISIS AND ECONOMIC ALTERNATIVES 15 toward the regional if not the global level. All that could be accomplished at other scales was various supply-side measures to improve competitiveness via extending worker participation inside the labour process and over firm- level strategies, or by building up extra-market institutions that would fortify the relative ‘embeddedness’ of capital via a range of ‘stakeholder’ (as opposed to just ‘shareholder’) coordination mechanisms. For other sections of the left, these developments confirmed longstanding views on the impossibility of ‘socialism in one country’ and the need to widen the scope of insurgency and the scale of transitional programmes. These positions represented, on the one hand, the gathering of the radical left parties around the Party of the European Left, and, on the other, the case for a socialist of Europe.30 The struggle against neoliberalism in the ‘global south’ kept the debate about structural reforms an active concern of theory and struggle; and the crisis across Europe has further renewed it.31 The RMF group, and Costas Lapavitsas in particular, has provoked intense debate by arguing that staying in the eurozone is now a dead loss for the Greek working class as well as the rest of the countries in the European periphery. Launching a single currency across a heterogeneous group of states with radically diverged economic competitiveness and state capacities, they contend, was a terrible mistake. It was a project of European capital in the core states to launch a new ‘world money’ for imperial ambitions, while trade competiveness and labour mobility as well as untrammeled capital flows alongside an EU-wide system of transfers and industrial policies actually produced more uneven development than economic convergence between the European core and periphery. This accounts for the accumulation of debt in the periphery, whether by the private or state sector, and for the specific form of the European financial crisis, as banking sector insolvency and sovereign debt crises have interacted. The room for manoeuvre for the states of the European periphery was eroded by the single currency, without the possibility of devaluation as a necessary mechanism to adjust unit labour cost differentials. Rather than addressing these issues, RMF argues, the Troika of the EU, the ECB and the IMF compounded the problems: they address the symptom of liquidity problems through emergency loan facilities and austerity. But the former avoided the radical restructuring of the banking sector and the latter worsened the recession. The overall structural adjustment package (such as the two Memorandums adopted by Greece, or that taken up by Ireland), moreover, gutted state capacities. Hence, in any sober assessment, exit from the euro, as part of a ‘debtor-led default’ cannot be avoided if an anti-austerity strategy is to meet working-class needs in Greece and the 16 SOCIALIST REGISTER 2013

European periphery more generally.32 But there have also been numerous interventions, of varying scope and depth, which instead back the recasting of the EU project in response to the crisis. The appeal For Another Road for Europe, supported by a range of close to the Party of the European Left, for example, is largely calculated on what can be coordinated across the European political space to block the worst features of austerity and, in particular, the EU ‘fiscal compact treaty’ of January 2012 attempting to ‘constitutionalize’ further neoliberal policy norms.33 For Elmar Altvater, this has less to do with the feasible space for reflation, and more that ‘sovereign territories as spaces for regulation are no longer consistent’ with the economic reach of financial markets and corporations. The euro as a form of world money, moreover, is a component of building a multi-polar world where alternate developments will not be constrained by the hegemony of neoliberalism and the US. Exit from the euro is, from this vantage, a regressive step. This is so even for the EU periphery whose debt is denominated in euros and whose structural economic problems would remain whether the circulating currency is the euro or the drachma, escudo or lira. For Ozlem Onaran, the need for an EU strategy falls less on the functionality of the economic space given the scale of markets, and more on the potential political capacities to address the distributive sources of the crisis. In this sense, the wage and social policies of cohesion, and the industrial and tax policies for equalizing competitiveness, are the basis for a ‘progressive alliance for an alternate Europe’, routed through expanding EU institutional capabilities to reorient economic policy. Michel Husson accepts these parameters, but adopts a different strategic sensibility – a ‘strategy of extension’. It is struggles at the national level which are still crucial to push socialist reforms, but these have to be calibrated, from the outset, with respect to both their international consequences and support to avoid political isolation and setback. ‘Good policies’ – such as progressive debt restructuring; bank nationalizations; incomes policies which divide productivity increases into equal thirds of wages, public goods and work- time reduction; making all incomes subject to taxation – have to be backed by cooperative efforts at extension across the EU economic space. Failing that, nationally based capital controls, national protectionism, challenges to EU rules and even exit from the euro, should be reserved as counter- measures.34 These supra-national strategies work from the premise that the institutional framework that has been the central vehicle for enforcing neoliberal economic policy across the space of the EU can now enable a convergence to increasing differentiation of national distributional bargains THE CRISIS AND ECONOMIC ALTERNATIVES 17 and development models. If exit from the euro and devaluation (as, say, Greece returns to the drachma) carries no direct benefit to the working classes (with import costs rising, living standards will fall), neither does remaining inside the euro in itself. The pressures for internal devaluation will continue alongside the increased sums to support the financial system; and even with a default and restructuring of debt inside the eurozone, it is not clear how the divergences in economic capacity can be addressed without a European-wide development strategy and decisive change in the balance of political forces and approach to economic policy. Indeed, deeper integration may very well continue along the paths of neoliberalization in the case where budgetary policy and a federal fiscal union are more fully constituted at the EU level to provide the sovereignty to backup the space of the currency. The minimal programme of an EU-wide reflation may be quite as unrealistic in the short to medium run, given the severity of the crisis and the massive problems of the EU governance structure, as more ambitious programmes. In any case, neither economic events nor political struggles are likely to wait out any supra-national bargaining process. The unevenness of the crisis and political resistance means that some national class struggles will advance and force the contradictions over the crisis to a direct confrontation with the national ruling blocs, supported by the wider network of transnational political forces. Debt default and an alternate economic programme in the EU (or any other supra-national body for that matter) are more likely to be opposed than facilitated or even narrowly accommodated. It would be politically foolish for any left government pursuing anti-austerity strategies inside the eurozone not to leave exit from the euro as a plausible option. If Husson is right that confrontation with the capitalist classes still takes place primarily on a national basis, but the resistance and retaliation from the capitalist classes comes also in the form of international resistance, then the strategy of the left must always be one of extension of both programmatic intervention and political support. But if ‘good’ programmes to meet working-class needs cannot forever wait upon a ‘good’ Europe (or a good balance of international forces), then counter-measures must be allowed for. In an alternative economic strategy against austerity in this conjuncture, the default and restructuring of debt, the nationalization of the banks, the break with public sector cuts and a ‘green transition’ constitute the core of ‘good’ socialist demands. In Europe today, especially in the European periphery, exit from the euro cannot be assessed as a necessary prerequisite to pursue any of these projects. But exit cannot also be left out as a strategic consideration for the future. Political priorities cannot be set by a pre-given 18 SOCIALIST REGISTER 2013 stance toward certain scales of human relations, particularly in terms of the spaces formed by a common currency. Primacy given over to a certain scale of politics is one of the most debilitating strategic essentialisms on the left today. For socialist strategy, precedence must always be given to struggles.35 These strategic divisions on the European left, being foremost evinced over confronting the eurozone crisis of austerity, should not be dismissed as alternate ‘rescue strategies for capitalism’. The charges of left reformism or left nationalism or insurrectionism do not take us very far. Any of these radical demands today take the political form of a rupture from the prevailing forms of capitalism. There is a need to sharpen strategic debate over credible objectives and constructive plans for politically ‘moving on’.36 MOVING ON The left, in its broadest cast, initially greeted the financial crisis with confidence that the era of neoliberal economic policy was over. The critiques that had previously been leveled at ‘free market’ policies had been proven right. The forward march of labour could recommence with the extra- market institutions and policies for the repression of finance, stimulation of effective demand and increasing welfare compensation as re-establishing a social foundation to economic policy. While the critique of neoliberal policies preparing the ground for the crisis has many telling points, the corresponding political conclusions have been entirely too mechanical. Indeed, they have misread fundamentally the political transformations that the period of neoliberalism had wrought: the degree to which the ruling classes remained united behind neoliberal globalization; and the extent to which the oppositional bloc remained disorganized in its capacities of response in both mobilization and programme. The counter-offensive from the ruling bloc has focused on mobilizing state power to attempt to conserve the neoliberal modes of regulation of the capitalist sector. This has been done by reorganizing the state apparatuses and branches and adapting neoliberal economic policies – initially largely on an emergency basis – in an effort to settle the crisis.37 There is no guarantee that any of this will work; indeed, the strategy of permanent austerity is likely to be sustained well beyond the immediate conjuncture. In taking this course, there has been no fracturing of the class or institutional unity of the state. It is remarkable that even the mediations between the financial sector and their corresponding state apparatuses, although under considerable strain, have not broken down; indeed, they have deepened their inter-linkages and reworked their modes of operation. Moreover, the social democratic parties, and to a surprising extent even their associated unions, have THE CRISIS AND ECONOMIC ALTERNATIVES 19 remained incorporated within the efforts to conserve the existing economic regulation via wage restraint and social austerity. In short, the ideological discrediting of neoliberalism and the public antipathy toward the banks has not corresponded with major fissures in the state or power blocs. The citadels of power, and notably the fortresses protecting the banking sector, remain relatively unscathed. The resistances arising from the ‘movement of the squares’, from Tahrir Square to Syntagma to Zuccotti Park, have reinvigorated tactical debates in anti-austerity struggles. But there remains prominent on the left an appeal to economistic reasoning that every economic crisis erupts into a crisis of the state where political power is – or soon will be – at stake.38 This view has often formed quite distinct strategies and conclusions. On the one side, this has often led to strategies of ‘defensive consolidation’ to mobilize parliamentary opposition and wide fronts to block even more violent public sector austerity and right-wing politics in a moment of political turbulence; a series of tactical ‘wars of position’ is needed to establish an alternate coalitional bloc to recapture the state and put in place a more socially rational economic policy. On the other side, it is presumed that the crisis provides an opening for more ‘militant offensives’ of street protests and general strikes; this gives rise to expanding the scale of political actions in a ‘war of manoeuvre’ that can further seize political space from the state and capitalists via an emergent counter-power – or ‘anti-power’ created in the ‘flow of doing’. In strategic debates today, this is often framed as realistic parliamentary programmes of reform as opposed to extra-parliamentary struggles of resistance and vision. The juxtaposition of the two is utterly false. There is no linear passage from anti-austerity fightbacks to anti-capitalist movement to transitional post- capitalist programme on either an incrementalist or insurrectionist strategic point of departure. As for the maximalist assertion of the ‘communist hypothesis’ today, this is, in fact, a philosophical claim largely without reference to strategic issues and political programme. The capitalist state constitutes a specific political field of power and struggle; it cannot be evaded in strategizing alternative exits from the crisis. Indeed, the strategic guide must be the formation of a ‘different kind of state’ where the formal institutions of liberal democracy and modes of capitalist rule no longer constitute the limits of setting ‘economic policy’ in liberal democracies. The decisive strategic notion must be institutionalizing and collectivizing struggles while deepening democratic controls, consistent with a series of ruptures through a long revolution of developing workers’ capacities for self-management and control integral to democratic socialism.39 This is to insist that conjunctural struggles and tactics find their bearings 20 SOCIALIST REGISTER 2013 in longer-term socialist objectives and calculations.40 The socialist critique of neoliberalism and austerity, for instance, is indispensible to explain the linkages between capitalism, the financial crisis and the cuts; and also to insist that an anti-capitalist alternative to meeting social needs is viable and, indeed, necessary. This approach is also central to the formation of alliances and fronts. It should, for example, inform anti-austerity struggles. These start from different angles: public sector workers defending wages and jobs, users of services seeking to improve the level and quality of provision and communities seeking more capacity for input and control over administration. This suggests a potential convergence of producer-user-community alliances in anti-cuts struggles. An alternate socialist strategy and programme has a crucial role to play in identifying and connecting specific tactics of fighting austerity, to alliance-building and the imperative of a transformational rupture in the administration of the state from commercialization and privatization. The need to connect defensive measures with radical ambitions and programmes is also illustrated by struggles over ecological justice. The turn of green movements toward localist and market-based strategies led to a remarkable – and unexpected – convergence with neoliberalism, via promoting changing individual behaviour in response to prices, and/ or a self-regarding communal localism. This has locked the approach to climate change, in the most prominent example, almost entirely along the axis of ‘pricing carbon’ and incentives to shift technology from fossil fuel to renewable energy sources. The critical question of expanding non- commodified social relations as an ecological strategy through reduced work time, extending free public transit, continual learning through free education and so forth, was left out of the programmatic proposals and struggles over climate change. Such strategies do not just appear. They need to be built strategically through finding points of convergence between anti-austerity and climate change struggles. This can only occur in the explicit field of politics over programme and strategy. There is nothing inherent in the logics of economic crisis or global warming that takes the left to that point. The central economies have entered a period of protracted struggle over austerity. For many on the left, only the most minimal programme of financial re-regulation and Keynesian reflation are ‘feasible’. For others, every demonstration of resistance against existing powers is another rupture as the ‘multitude’ forms itself into an emergent anti-power. Both these approaches have long served as an excuse to leave key strategic questions to the side – these questions no longer matter, as the answers are already known. Tactics with respect to existing parliamentary forces or organizing the next demonstration take precedence. Yet what is really needed to move THE CRISIS AND ECONOMIC ALTERNATIVES 21 forward past defensive struggles and begin to think seriously about alternative strategies in the long battle against the austerity we now confront is the kind of socialist thinking, inspired by visions of possible futures, and developing strategies of critique and proposal as guides for realizing them. This is to insist on the primacy of politics – rather than letting the mechanics of falling profit rates and credit crises work out a strategy and programme – in establishing intermediate objectives and conjunctural tactics and proposals. The left is beginning to chart important new directions. Socialist strategies need to set an ambitious course – programmes that serve as a guide to action, an education about alternative ways of living and a practice through which people and movements themselves can develop the capacities to challenge and transcend capitalist power.

NOTES

1 International Monetary Fund, World Economic Outlook Update, 16 July 2012, at www.imf.org. 2 Martin Wolf, ‘Seeds of Its Own Destruction’, Financial Times, 8 March 2009. 3 Istvan Meszaros, The Challenge and Burden of Historical Time, New York: Monthly Review Press, 2009, pp. 188-9. 4 Martin Wolf, ‘After the Bonfire of the Verities’, Financial Times, 2 May 2012; Martin Wolf, Fixing Global Finance, Baltimore: John Hopkins University Press, 2010; Wolfgang Munchau, ‘The Only Possible Solution to the Eurozone Crisis’, Financial Times, 7 May 2012; Nouriel Roubini and Stephen Mihm, Crisis , New York: Penguin, 2010. 5 Paul Krugman, End This Depression Now!, New York: W.W. Norton, 2012, pp. X, 22; The Return to Depression Economics and the Crisis of 2008, New York: W.W. Norton, 2009. See also Paul Krugman, ‘Money for Nothing’, New York Times, 26 July 2012; Paul Krugman and Richard Layard, ‘Time to Speak Up: A Manifesto for Economic Sense’, Financial Times, 28 June 2012; Samuel Brittan, ‘You Don’t Need to be a Lefty to Support Krugman’, Financial Times, 8 June 2012. 6 Gugliemo Carchedi, ‘The Fallacies of Keynesian Policies’, Rethinking , 18(1), 2006; Simon Clarke, Keynesianism, Monetarism and the Crisis of the State, : Edward Elgar, 1988; Anwar Shaikh, ‘An Introduction to the History of Crisis Theories’, in U.S. Capitalism in Crisis, New York: URPE, 1978; and the sustained commentary by Michael Roberts at http://thenextrecession. wordpress.com. 7 J.M. Keynes, The General Theory of Employment, Interest and Money, New York: Harcourt, 1936, chapter 24. 8 This is so even in the case of Joseph Stiglitz who, in often penetrating critiques of the and financial markets, myopically calls for a ‘new capitalist order’ structured largely around , reassertion of the values of the welfare state and a new system of multilateral governance anchored 22 SOCIALIST REGISTER 2013

by a new global reserve system. See his Freefall, New York: W.W. Norton, 2010; and the so-called Stiglitz Commission Report (2009) prepared for the UN: Reforms of the International Monetary and Financial System, at http://www. un.org. 9 For a survey of national cases see: Steffen Lehndorff, A Triumph of Failed Ideas: European Models of Capitalism in the Crisis, Brussels: European Trade Union Institute, 2012. 10 Hyman Minsky, Stabilizing an Unstable Economy, New York: McGraw-Hill, 2008. 11 ATTAC-Germany, Manifesto on the Crisis of the Euro, March 2011, available at www.attac.org; ITUC, Global Unions’ Statement: Take Action on Jobs to Sustain the Recovery, June 2010, available at www.ituc-csi.org; A Progressive Program for Economic Recovery and Financial Reconstruction, Amherst: Political Economy Research Institute, January 2009; Center for Popular Economics, Economics for the 99%, New York: CPE, 2012. 12 International Labour Organization, Promoting Employment Recovery While Meeting Fiscal Goals, Geneva: ILO, 2010; United for a Fair Economy, State of the Dream 2011: Austerity for Whom?, Boston: UFE, 2011; European Trade Union Confederation, Why Europe Needs a Fairness Pact and Not a Competiveness Pact, Economic Discussion Paper N. 4, 2011; and the various issues of the Global Labour Column at http://column.global-labour-university.org. For other North American variants of the analysis that informs these see: Arthur MacEwan and John Miller, Economic Collapse, Economic Change: Getting to the Roots of the Crisis, Armonk: M.E. Sharpe, 2011; Kevin Phillips, Bad Money, New York: Penguin, 2009; Levy Economics Institute at www.levyinstitute. org. 13 See the insightful assessment of Wolfgang Streeck, ‘The Crises of Democratic Capitalism’, Review, 71(September/October), 2011. 14 See The Crisis This Time: Socialist Register 2011, Pontypool: Merlin, 2010; The Left and the Crisis: Socialist Register 2012, Pontypool: Merlin, 2011; John Bellamy Foster and Fred Magdoff, The Great Financial Crisis, New York: Monthly Review Press, 2009; David McNally, Global Slump, Oakland: PM Press, 2011. 15 Chris Harman, Zombie Capitalism, London: Bookmarks, 2009; Alex Callinicos, Bonfire of Illusions, Oxford: Polity, 2010; Laurent Carasso, ‘Report on the International Situation’, International Viewpoint Online, March 2010. In contrast see Alex Callinicos’s earlier contribution, An Anti-Capitalist Manifesto, Oxford: Polity, 2003. 16 Party of the European Left, ‘Crucial Times for Europe – Crucial Responsibilities for the Left’, Executive Board Declaration, 14-15 July 2012, at www.european- left.org; ‘EuroMemorandum 2012: European Integration at the Crossroads’, Transform!: European Journal for Alternative Thinking and Political Dialogue, January 2012. 17 For Die Linke see http://en.die-linke.de; and the Rosa Luxemburg Foundation at http://www.rosalux.de. For the Front de Gauche, see http://www. placeaupeuple2012.fr. For Syriza: http://www.left.gr; and ‘Syriza’s 40 Point THE CRISIS AND ECONOMIC ALTERNATIVES 23

Program’, is available at http://links.org.au. Developments can be followed via the Transform Europe Network at http://www.transform-network.net. 18 Leo Panitch, ‘The Financial Crisis and Democratic Public Finance’, The Bullet, N. 157, 25 November 2008, available at http://www.socialistproject.ca; Peter Gowan, ‘Crisis in the Heartland’, New Left Review, 55 (January/February), 2009; Robin Blackburn, ‘Crisis 2.0’, New Left Review, 72 (November/ December), 2011. 19 Research on Money and Finance, Breaking Up? A Route out of the Eurozone Crisis, Occasional Report N. 3, November 2011; Gerald Epstein, ‘Finance without Financiers: Prospects for Radical Change in Financial Governance’, Review of Radical Political Economics, 42(3), 2010. 20 See the Irish People Before Profit Alliance, An Alternative Economic Agenda, 2011, available at wwwpeoplebeforeprofit.ie; as well as Greg Albo, and Leo Panitch, In and Out of Crisis: The Global Financial Meltdown and Left Alternatives, Oakland: PM Press, 2010. 21 Pat Devine, Democracy and Economic Planning, Boulder: Westview, 1988; Robin Hahnel, Economic Justice and Democracy, New York: Routledge, 2005; Michael Lebowitz, The Socialist Alternative, New York: Monthly Review Press, 2010. 22 Ashley Dawson, ‘Why We Need a Global Green New Deal’, New Politics, 11(4), 2010; , The New , New York: Oxford University Press, 2003; David Harvey, ‘Organizing for the Anti-Capitalist Transition’, World Social Forum, 2010, at http://davidharvey.org. 23 Research on Money and Finance, The Eurozone between Austerity and Default, Occasional Report N. 2, September 2010; Eric Toussaint, ‘The Debt in the North: Some Alternate Paths’, Comité pour l’Annulation de la Dette du Tiers Monde, February 2011, at www.cadtm.org. 24 For this discussion see: Albo, Gindin and Panitch, In and Out of Crisis; and Gowan, ‘Crisis in the Heartland’; Blackburn, ‘Crisis 2.0’; Epstein, ‘Finance without Financiers’; Fred Moseley, ‘The U.S. Economic Crisis: Causes and Solutions’, International Socialist Review, March/April, 2009. 25 Riccardo Bellofiore and Joseph Halevi, ‘The Real Subsumption of Labour to Finance and the Changing Nature of Economic Policies in Contemporary Capitalism’, mimeo, 2010; Damien Cahill, ‘Beyond Neoliberalism? Crisis and the Prospects for Progressive Alternatives’, New Political Science, 33(4), 2011; Anwar Shaikh, ‘The First of the 21st Century’, Socialist Register 2011. 26 Hilary Wainwright, Reclaim the State, London: Seagull Books, 2009; Albo, Gindin and Panitch, In and Out of Crisis; Rick Wolff, Occupy the Economy, San Francisco: City Lights, 2012. 27 One Million Climate Jobs Now!, London: Campaign Against Climate Change, 2009; Michael Brie and Mario Candeias, Just Mobility: Postfossil Conversion and Free Public Transport, Berlin: Rosa Luxemburg Stiftung, 2012; Labor Network for Sustainability, at www.labor4sustainability.org. 28 Robert Wade, ‘From Global Imbalances to Global Reorganisations’, Cambridge Journal of Economics, 33(4), 2009; Duncan Foley, ‘The Political Economy of Postcrisis Global Capitalism’, The South Atlantic Quarterly, 111(2), 2012. 24 SOCIALIST REGISTER 2013

29 For recent assessments, see Ingo Schmidt, ‘There Were Alternatives: Lessons from Efforts to Advance Beyond Keynesian and Neoliberal Economic Policies in the 1970s’, Working USA: Journal of Labor and Society, 14, December 2011; Leo Panitch, Renewing Socialism: Transforming Democracy, Strategy and Imagination, Pontypool: Merlin, 2008. And for earlier ones see: Carl Boggs, The Socialist Tradition, New York: Routledge, 1995; Donald Sassoon, One Hundred Years of Socialism, New York: New Press, 1996; and Leo Panitch and Colin Leys, The End of Parliamentary Socialism: From New Left to New Labour, London: Verso, 1997. 30 Alain Lipietz, Towards A New Economic Order, Oxford: Oxford University Press, 1992; Ernest Mandel, Europe vs. America, New York: Monthly Review Press, 1970. 31 See Samir Amin, Delinking, London: Zed Books, 1990; Walden Bello, Deglobalization, London: Zed Books, 2002; Michael Lebowitz, Build It Now, New York: Monthly Review Press, 2006. The debate was also sustained across the annual volumes of the Socialist Register. 32 Costas Lapavitsas, et al., Crisis in the Eurozone, London: Verso, 2012; Riccardo Bellofiore, et al., ‘The Global Crisis and the Crisis of European Neomercantilism’, Socialist Register 2011. And for a rather technocratic approach to a Greek exit from the euro, see: Michel Aglietta, ‘The European Vortex’, New Left Review, 75(May/June), 2012. 33 Another Road for Europe, May 2012, at http://www.anotherroadforeurope. org; Rossana Rossanda, ‘Proposals for Another Europe’, Revolting Europe, 28 June 2012, at http://revolting-europe.com; Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, 31 January 2012, at http:// www.european-council.europa.eu. 34 Elmar Altvater, ‘From Subprime Farce to Greek Tragedy: The Crisis Dynamics of Financially Driven Capitalism’, Socialist Register 2012; Michel Husson, ‘Exit or Voice? A European Strategy of Rupture’, Socialist Register 2012; Ozlem Onaran, ‘Fiscal Crisis in Europe or a Crisis of Distribution?’, Research on Money and Finance, Discussion Paper, N. 18, 2010. 35 Husson, ‘Exit or Voice?’; Greg Albo, ‘The Limits of Eco-Localism: Scale, Strategy, Socialism’, Socialist Register 2007, Monmouth: Merlin, 2006; Alex Callinicos, ‘Austerity Politics’, International Socialism Journal, N. 128, 2010. 36 As suggested in the midst of the last great crisis: ‘Moving On’, in Socialist Register 1976, London: Merlin, 1976. 37 Greg Albo and Bryan Evans, ‘From Rescue Strategies to Exit Strategies: The Struggle over Public Sector Austerity’, Socialist Register 2011; Jamie Peck, Constructions of Neoliberal Reason, Oxford: Oxford University Press, 2010; Colin Crouch, The Strange Non-Death of Neoliberalism, Oxford: Polity, 2011. 38 This has two somewhat opposite sources. A range of radical Keynesians have always contended that neoliberal policies are inherently wrong in their understanding of capitalist markets and thus doomed economic policy. Numerous Marxists have had a parallel view of a long crisis – or ‘relative stagnation’ – of some 30 or 40 years in length. In both cases, a neoliberal economic expansion did not occur, the capitalist class is weak, resistance THE CRISIS AND ECONOMIC ALTERNATIVES 25

growing in strength and the state slipping into a deep crisis. In neither scenario is there much space devoted to rethinking political organization or advancing alternate economic strategies. In contrast, some have argued that the era of neoliberal expansion needs to be seen in relation to a crisis of the left. See Sam Gindin, ‘Turning Points and Starting Points: Brenner, Left Turbulence and Class Politics’, Socialist Register 2001, London: Merlin Press, 2000; Greg Albo, ‘Contesting the “New Capitalism”’, in David Coates, ed., Varieties of Capitalism, Varieties of Approaches, London: Palgrave, 2005. 39 Leo Panitch once referred to this as a strategy ‘of building the institutional forms of struggle and control which presage socialist democracy’. See his ‘The State and the Future of Socialism’, Capital and Class, 11, 1980. 40 Daniel Bensaïd, ‘On the Return of the Politico-Strategic Question’, International Viewpoint Online, February 2007; Marta Harnecker, Rebuilding the Left, London: Zed Books, 2007.