It isn’t the left’s job to enforce a creditor’s paradise in Europe

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Mark Blyth is the Eastman professor of political economy at Brown University and the author of Austerity: The History of a Dangerous Idea.

A recent article by him relates the speech he made to German Social Democrats on being awarded a prize in Germany for that book (which I admit I have not read). This, as he noted, presented him with a dilemma, because German Social Democrats have been as guilty as others of demanding austerity in Europe, and this, he thinks is the opposite of what they should have been doing.

As he noted in the acceptance speech for his prize:

What we have done over the past thirty years is to build a creditor’s paradise of positive real interest rates, low inflation, open markets, beaten-down unions, and a retreating state – all policed by unelected economic officials in central banks and other unelected institutions that have only one target: to keep such a creditor’s paradise going.

That's a remarkably accurate summary of the neoliberal experiment, its enforcement and, by default, the  consequent sidelining of politics.

And as he added:

Today it is a profound irony that European social democrats worry deeply, as they should, about the investor protection clauses embedded in the proposed Transatlantic Investment Treaty with the US, and yet they demand enforcement of exactly the same creditor protections on their fellow Europeans without pausing for breath for the money they “lent” to them to bail out their own banking systems’ errant lending decisions.

Something has gone badly wrong when social democracy thinks this is OK. It is not. Because it begs the fundamental question, “what are you for – if you are for this?” The German Social Democrats, for we are all the heirs of Rosa Luxemburg, today stand as the joint enforcers of a creditor’s paradise. Is that who you really want to be? Modern European history has turned many times on the choices of the SPD. This is one of those moments.

And he was, thankfully, unambiguous in his message:

It’s great that my book has helped remind you of the poverty of these ideas. But the point is to recover your voice, not just your historical memory. Your vote share isn’t going down because you are not shadowing the CDU enough. Its going down because if all you do is that, why should anyone vote for you at all?

I hope that reading my book reminds the SPD of one thing: that the reason they exist is to do more than simply to enforce a creditor’s paradise in Europe.

Substitute Labour for SPD and that speech could have been made here in the UK instead, and wholly appropriately.

It is not the left's job to enforce a creditor's paradise in Europe.

But when will the old social democratic parties take note?

Hat tip: Andrew Dickie