Nothing like an attention grabbing headline.
But there is a very serious issue here. In today’s FT, Gideon Rachman puts forward a very good argument as to why there is no alternative but austerity for Europe, see No Alternative to Austerity. Rachman paints a picture of the vice that now grips Europe, and it is a vice that some would say has been imposed by free market capitalism. One jaw of the vice is of course the need to reduce national debt. The interest rate ‘imposed’ by markets on Spanish bonds breached 6% in April and Italy’s touched 7% earlier this year. The other jaw of the vice that Rachman refers to is the competitiveness of the some European economies. These economies suffer from two problems – the first is cost – or red tape – that inhibits both new hirings and international competitiveness (think about all the new emerging economies queuing up to compete in the global market place). The second is one of economic structure where there are deep questions regarding the stability of economies with exposure to the services sector (especially, in the case of the UK, financial services).
So time, and a long time, is needed to ‘cure’ these problems and loosen the grip of the vice.
But factor in what we are starting to see across Europe. Matthew Campbell summaries the situation well in last Sunday’s issue of The Sunday Times – see Fears of anarchy as neo-Nazis recruit Greeks with food. I don’t have to detail the content of the article, the title says it all.
The problem is that capitalism needs time in Europe to effect its cure. And that’s what Europe may not have. The time factor may allow the rise of extremism and protectionism on a scale that we have not yet witnessed.
I am left with the closing lines of Slavoj Zizek’s book, First as Tragedy, Then as Farce ringing in my ears:
‘… do not be afraid, join us, come back! You’ve had your anti-communist fun, and you are pardoned for it-time to get serious once again!’ (p. 157)
The real question is ‘has capitalism signed its own death warrant in Europe?’