‘Crisis’ has been one of the most-used words in the English language – if not the most used – in the five years from 2008 to the time of writing this book in 2013. Ever since the financial crash of 2008 – and of course the outbreak of the so-called ‘euro crisis’ in 2010 – ‘the crisis’ has been blamed for an almost endless variety of social and economic ills: unemployment, poverty, recession, public debt, political instability, social strife and in more recent years, austerity.
In this age of Tweet-like, lightning-fast, bite-sized information, phrases like ‘the crisis eases up’ or ‘the crisis intensifies’ – rather than, say, the more accurate but also more cumbersome ‘policy makers fail to develop adequate tools to restore the flow of credit to private businesses and boost employment’ – have become commonplace. This is perhaps inevitable. In the months and years following the crash, though, this involuntary reification, or personification, of ‘the crisis’ ended up lending to it an almost god-like will of its own, and a force majeure-like sense of inevitability. The idea that the financial crisis of 2008 and subsequent first World recession, albeit triggered by the greediness of a few Wall Street bankers, actually reflected a deeper structural – economic, ecological, cultural, even spiritual – and thus inevitable – crisis, slowly sank into our collective consciousness.
There is certainly a lot of truth in this, and systemic, interdisciplinary critiques of our current socio-economic model are more needed now than ever. But the notion that the financial and economic crisis was the quasi-natural, end-of-history-style outcome of an unsustainable system – if not even the beginning of the ‘final crisis’ of capitalism – rather than a more mundane failure of policy making, overwhelmingly resulted in the opposite of radical critique: it resulted in complacency.
Like many (not all, of course) young radicals and environmentalists of my generation – I was 26 at the time of the subprime crisis – I too saw the crisis and subsequent recession as the necessary, albeit painful, slow-down and scale-down of Western consumerist turbo-capitalism that we had been advocating for so long. In a perversely naïve way, I believed that the system would self-correct itself, giving way to a better, fairer, greener world – not unlike what had happened in the United States after the Great Depression, and in Europe after the Second World War. As we all know, the exact opposite has happened, with Europe now facing its worst human, social and political crisis since the 1940s.
The left, I believe, bears a large responsibility. By contributing to the depoliticisation of ‘the crisis’, it has ingenuously helped the political-financial elites to transform it into a powerful ideology, in the Marxist sense of the word – a mystification of reality which ensures the continuous dominance of the ruling class, and one which came precisely at a time when the previous ideology of ‘permanent war on terror’ was starting to run out of steam – and to present the policy choices made since 2008 as neutral, structurally determined, inevitable (‘there is no alternative’) by-products of ‘the crisis’, rather than class-based, politically and ideologically motivated decisions.
I slowly and belatedly started to become aware of this after the outbreak of the so-called ‘euro crisis’, as I saw the blame for the crisis being shifted from the banks to the governments – and thus, more or less implicitly, to the ordinary citizens and workers – of Europe, who were accused of ‘living beyond their means’ for too long. ‘The party is over’, politicians and commentators almost unanimously declared. ‘Europe simply can’t afford to maintain the social and economic standards that its citizens have been accustomed to.’ The continent (and especially the supposedly ‘profligate’ countries of the periphery), they said, needed a drastic austerity cure to atone for years of ‘excesses’.
I – like many others, of course – sensed that something was deeply wrong, but found myself unable to articulate a critique much beyond a generic opposition to what I perceived as anti-social policies. More importantly, though, like many Europeans, especially those living in Mediterranean countries – I live in Rome – I felt myself vacillating under the weight of the post-2010 ideological onslaught, and to some extent even interiorising the blame for what was happening. ‘Could it be that Europe is really running out of money? Have Italians, Spanish and Greeks – admittedly not the most frugal of people – had it too easy all these years?’ I ashamedly asked myself. In more general terms, though, I failed to grasp what appeared to be a problem of overwhelming and daunting complexity, as rarely heard of terms started to appear on the news on a daily basis.
Thus, in early 2012, I went searching for answers: for a coherent explanation of what by then was known as the euro crisis. I hoped to find one that would offer a convincing rebuttal of the dominant narrative. Of course, I found a wealth of material – much of which confirmed my doubts about the official story. But all the works that I found seemed to take a compartmentalised, reductionist approach to the problem, focusing on individual issues – the financial crisis, public debt, the government bail-outs, the effects of austerity and so on – or specific countries. What was lacking, in my opinion, was a comprehensive, all-encompassing, critical, accessible explanation of what was happening, capable of linking together the various interconnected issues and crises.
This was also one of the main reasons, I concluded, that the policies imposed by the European political establishment, which would have been politically unthinkable just a few years earlier, were encountering relatively little resistance. Any attempt at resisting the ‘austerity regime’ would have to rest on solid theoretical grounds. Thus, I started slowly to put together the pieces of the puzzle. What I found as I went deeper and deeper down the rabbit hole exceeded even my wildest expectations. The yawning disconnect between the perception and the reality of the post-2010 ‘crisis management’ policies pursued across Europe, and the root causes of the crisis, was beyond anything I had imagined.
This drove me to the disquieting conclusion that the European Union’s insistence on pursuing austerity – despite the fact that it has proven to be a colossal failure of economic policy, not to mention a cause of immense human suffering – should not be viewed simply as a case of political and ideological short-sightedness. Rather, it represents as an attempt by the wealthy elite to do away with the last remnants of the welfare state and complete the neoliberal project. In other words, it is a classic case of economic shock doctrine – and the first instance in history where such ‘therapy’ has been applied to an entire continent.
Moreover, I came across ample evidence – presented in the book’s final chapter – that the left’s passive and defeatist attitude in the face of the current neoliberal onslaught, and its growing hostility towards the European Union and monetary union as such, are entirely unjustified. Not only is a radical, progressive overhaul of these institutions (in the direction of a genuine European supranational democracy and welfare state) technically feasible, it is arguably the best means to forward the interests of citizens and workers and tame the overwhelming powers of global financial and corporate leviathans.
Unfortunately, as far as the general public’s understanding of the current crisis goes, things have hardly changed since I started writing this book. If anything, they have got worse. This is for a number of reasons: the deepening social and economic crisis, which is leading to nationalistic and populist backlashes; the power of the dominant ideology; the lack of convincing alternative narratives; the fact that ‘the causes of the crisis are so complicated that they boggle the mind’, as even George Soros, perhaps the world’s most famous financier, admitted; but perhaps most fundamentally, the assumption that these problems are beyond the comprehension of non-professionals, especially non-economists. This is not true – and is actually one of the pillars of the ‘ideology of crisis’.
That is why most of the book is dedicated to an analysis of the true causes of the euro crisis which is intended to be in depth but comprehensible to everyone. To be able to pursue a different path, after all, we first have to understand what went wrong. As financial specialist David Marsh recently stated, Europe needs nothing less than a Truth and Reconciliation Commission on the model of the one established in South Africa in the 1990s after the abolition of apartheid, to establish the ‘crimes of negligence and incompetence’ in the ongoing management of the euro crisis. This book hopes to be a first step in that direction.