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An Ominous Dawn: Why Economics is Central to Politics

June 11, 2014

by J. Andrew Zalucky

Golden Dawn

See the animal in his cage that you built
Are you sure what side you’re on?

-“Right Where it Belongs”, Nine Inch Nails

In politics, there is only so much credit one should give to optics, to grandstanding and to simple theatrical posturing. This is why the President’s annual State of the Union address is such a waste of time, a non-event self-consciously hyped-up by the political class, who by now are even themselves aware of what nonsense it really is. However, there are exceptions to this rule, both in a positive sense (some SOTU addresses have been genuinely rousing to watch) and a negative sense. The negative tendency seems to have a firm grip on our friends in the eastern Mediterranean.

As The Guardian reported this weekend, there has been a harsh wave of neo-fascist unrest gripping Greece, with Golden Dawn demonstrators damning all discretion to sing a Greek rendition of the “Horst Wessel Lied.” This was of course the old anthem of the German national socialist party, written by Horst Wessel, a stormtrooper in the SA who was later canonized by Joseph Goebbels. Again, I realize this was mostly theater, but it is genuinely eye-opening to hear Greeks (a minority, mind you) attribute their plight to “all the faggots and the Jews, the wankers who control the banks, the foreigners who are behind them, who came in and fucked Greece.” Disgusting, reactionary, terrifying. Still, there was another terrible comment made by one of the businessmen interviewed by the newspaper that stuck with me long after I’d closed the article:

Who cares if six million Jews were exterminated?…I don’t care if they were turned into soap. What I care about is the salary I have lost, the never-ending taxes I am forced to pay, the criminals who rule this country, the anger I carry inside.

Horrifying though this sentiment is, the root cause of this sort of rage is something that would have been very familiar to Marx. One of the central tenets of Marxism (well, at least of historical materialism) is the concept of “the relations of production,” comprising the socioeconomic relations people must enter in a society in order to survive. In plainer English: how people make their living. As he explains in his critique of Proudhon in The Poverty of Philosophy:

Social relations are closely bound up with productive forces. In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning their living, they change all their social relations.

What does this mean for society when the relations of production grind to a halt? When conditions reach a crisis that leaves people unable to make a living? Well, society itself reaches a point of stasis, backsliding into corruption, black markets and the semi-serfdom inherent in the spread of poverty during an economic depression. This base of the relations of production underpins the superstructure that is the wider culture of institutions, rituals and power structures. Thus, times of economic crisis often lead to an uptick in political extremism, from the radical left-wing quality (i.e. aha! now is our chance!) and to the radical right, as the pillars of prosperity crumble leaving people to cling to old ideas of race, creed and nationhood (or “volk” to put it more in context).

Again, in plain English: when your life sucks, your anger can drive you think a certain way. You’ll either think, something must be done, or more ominously, someone has to pay!

Now, let’s not allow theory to trump day-to-day reality here, and let’s not forget about individual responsibility either. The businessman bears the lionshare of the responsibility for equivocating about the Holocaust. He cannot simply “appeal to the forces of history,” as there are millions of Greeks, furious about the decline in their life prospects, who have NOT chosen to kneel to the ghost of national socialism. One should be careful to uncritically buy into Marxist conclusions. As Alan Ryan points out in On Politics, the very policies inspired by Marx very often and in an almost ironic sense produce the economic and social stagnation it aims to cure:

What ended wishful thinking and abortive attempts to bring imagination to power was…two decades of high inflation, industrial unrest, and widespread resentment of the levels of taxation required to sustain the modern welfare state

However, Marx’s basic point about how economic conditions will generally guide social ones is still very compelling, even if his prescriptions ended up being woefully mistaken. Political change does not just occur in a vacuum, it requires a substantive change in people’s everyday economic situation. This is something many people tend to forget when they ask why certain elements of liberal democracy work better in some places (e.g. United States, the United Kingdom, The Netherlands) rather than elsewhere (e.g. Central Asia, much of Africa). Much of this is due to economic conditions and the culture they produce over the long-term. Likewise, it will take more than simple “awareness” and “outreach” to halt the rising tide of radicalism in Greece, especially with unemployment still topping 20%.

Consider what happened a few weeks ago in Ukraine, when the industrial workers in Mariupol took to the streets and effectively chased the separatists out of the city. This happened, not only due to their boss’ vocal condemnation of the separatist cause, but because they knew of the economic catastrophe that would hit the region should it separate from Ukraine (most of the coal and steel produced in Donbass is sold domestically and to the west, as Russia already as the Kuzbass region to supply itself and its customers). Success in Ukraine will take a combination of this direct action (“If there is hope, it lies in the proles”) and the willingness of mainstream parties to stand firm against extremists both of the separatist and neo-fascist variety.

In his excellent study of the rise of the Nazis in Germany,  The Coming of the Third Reich, Richard Evans details how the failure of catholic-centrist, liberal and left parties to unite for the sake of the Republic, along with their members’ unwillingness to unite on the streets against the Nazis (and their allies in the Steel Helmets and Nationalist movements) sealed the fate of the country as it descended into madness.

Let’s all hope the modern political parties of Europe, and the populations they represent, keep that lesson in their minds.

One Comment leave one →
  1. June 12, 2014 12:03 am

    Never mind Greece, look at our country! According to John Williams at, official unemployment in the USA would be over 20% right now if the jobless were still counted the way they were until 1994. The Free Trade policies right here at home have led to so much offshoring and outsourcing that since 1976 we have had growing, unsustainable trade deficits that averaged over $715 Billion annually over the last 10 years, almost 5% of our GDP!

    There is no other sector that compares to manufacturing in terms of creating real wealth in an economy and also in terms of the multiplier-effect it has that creates jobs in other sectors. And American manufacturing employment has fallen from a 1979 peak of over 19.5 million to just over 12 million in 2014.  This same period saw our population grow by over 90 million people!  Despite all the talk of rising productivity and declining percent of manufacturing employment among the developed countries, we see rising manufacturing employment in China, store shelves flooded with cheap imports, and idle American workers and factories.  Those who still have jobs find their wages have been stagnant and employment less secure.

    We think all these trends are connected.  American trade policy during the Nixon administration began moving away from protecting our industries to become the Free Trade seen in our membership in the WTO and in our FTAs on the NAFTA model.  What started as an attempt by American corporations to take advantage of growing markets in developing countries has turned into a large-scale offshoring and outsourcing of production for the American market.  This has contributed to high stock prices and high bonuses for executives but has had a devastating impact on the larger national interest, eliminating many millions of American jobs and dismantling substantial portions of our manufacturing base and larger industrial ecosystem.

    We don’t need Marx to tell us “relations of production” are getting pretty bad around here.

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