I. The Nonexistent Ethical Dilemma
The showdown between Greece and the EU is one of those events that brings out in stark contrast the dividing line between libertarians whose main concern is genuine economic freedom, and the sort of libertarian whose priority is the interests of big business and the propertied classes. In an exchange on Facebook with another writer at Center for a Stateless Society, a right-wing objectivist exemplified the latter position — denouncing the repudiation of debt as “theft.”
There are several things wrong with this. First of all, it ignores the lender’s assumption of risk, and the portion of interest that represents a risk premium against the risk of default. On an individual level, most personal bankruptcies are by those unexpectedly unemployed or with catastrophic medical debt, or women abandoned by their husbands. And the enormous interest rates you pay on unsecured credit card debt is the premium you pay to insure the lender against your default. If you think defaulting on debt and declaring bankruptcy in the face of unexpected economic hardship is “theft,” you probably think emancipating the slaves without compensating their “owners” was “theft.”
And it adds a whole new level of complication when a state borrows money and commits taxpayers to repay it. Here we encounter the principle of odious debt. Even in nominally representative governments — and no state in history has represented the producing majority, as opposed to economic ruling classes of propertied minorities — debt is frequently undertaken for “development” projects that benefit foreign capital, pursuant to decisions made by politically insulated bureaucracies with closer ties to World Bank technocrats than to the people they allegedly represent. Why on earth should ordinary wage earners be committed to pay taxes out of the money they need for food, housing and medicine in order to repay a debt to rich bankers and coupon clipping rentiers they never personally authorized?
We also need to consider the role debt serves in late capitalism. In recent decades consumer debt has been one of the main means for offsetting the loss of purchasing power from stagnating real wages. The stagnation of real wages is a direct effect of government’s real function: undermining the bargaining power of workers against employers, enforcing the monopolies and artificial property rights from which the propertied classes collect rents, propping up the kinds of cartels which enable oligopoly corporations to gouge their customers with administered pricing, taxing ordinary people to socialize the operating costs of big business, and otherwise transferring income by the trillions of dollars from the producing classes to the parasitic ruling class. And the proliferation of consumer debt has been an expedient for working class survival in the face of such policies; they are basically paying interest to the very same classes who, in collusion with the state, screwed them over and reduced their incomes in the first place.
The same principle holds true with state debt. Greece is a comparatively poor country, and a major source of its impoverishment is its adherence over the past several decades to neoliberal policies that benefit transnational corporations at the expense of ordinary people in Greece. So any increased spending and debt by the the Greek state to support a social safety net are, in effect, borrowing money from rich people at interest to clean up the mess that results from the state robbing the poor to give to the rich.
II. Debt Repudiation is Just the Beginning
You don’t think the Greek state’s main function over the years has been to benefit the rich at the expense of the poor? Well then, let’s take a look at all the things the Greek state is currently doing that have exactly that effect, whose repudiation along with the Greek debt would devastate the interests of global capital.
I hesitate to recommend Greece abandon the Euro and cut its ties with the European Central Bank, because I don’t live in Greece and I won’t suffer the consequences of that course of action. Hence any such recommendation from me would have more than a little “let’s you and them fight” quality to it.
But if Greece does decide to repudiate its debt and leave the European Union, here are some measures that would not only reduce the general level of state intervention in the economy or replace corporate-state functions with self-organized popular counter-institutions, but also raise the average standard of living by stopping enormous transfers of wealth from ordinary working people to transnational corporations and financiers.
1. Greece could withdraw from all “intellectual property” accords and repudiate the IP provisions of so-called “free trade agreements.” Henceforth it would be legal to freely reproduce any software, literature, music, movies, drugs, as well as manufactured goods like Nike sneakers and consumer electronics that are under copyright, patent or trademark, and to either consume them directly or sell them without the enormous price markups enabled by “intellectual property” monopolies.
2. It could cease to enforce all titles to vacant and unimproved land which has been engrossed by landed elites with the help of the state, as well as natural resources engrossed by foreign capital, and all cultivated land stolen from peasants in violation of their customary rights so it could be converted to cash-crop production for global agribusiness interests.
3. One of the harshest short-term effects of withdrawal from the Euro, for the Greek people, would be the collapse of liquidity and freezing of bank accounts, and the drying up of investment capital. Therefore…
3a. Although as an anarchist I do not advocate for any kind of state-issued monopoly currency, I will say that there are ways in which the Greek government could maintain a currency system and regulate the money supply that would be not only far less exploitative to working people, but also less statist in their economic effect than the current regime under the European Central Bank. Directly spending new money into existence in the amounts needed for maintaining purchasing power, or depositing it into people’s bank accounts interest-free as a Basic Income or Social Credit, cannot conceivably be any more arbitrary or statist than delegating to a banking cartel the right to lend money into existence at interest. And it will be less statist to the extent that it eliminates the payment of interest to a class of state-affiliated parasites who — far from abstaining from consumption or lending their “savings” as the right-wing libertarian myth has it — create it out of thin air at no cost to themselves.
3b. But more importantly, the people of Greece themselves can fill the void by creating new, grassroots currency systems of their own that operate on the basis of abundance rather than scarcity. I invite you to read about one such system in particular, the mutual credit-clearing networks advocated by E.C. Riegel and Thomas Greco.
3c. Technological developments have gone a long way towards eliminating the importance of investment capital as a bottleneck. Open-source, tabletop CNC machine tools can produce the kinds of goods that once required million-dollar factories, at something like a two orders of magnitude reduction in cost. This micromanufacturing revolution is a return — on a much more technologically sophisticated level — to the state of affairs when most production was carried out with craft tools affordable by the average skilled worker. Neighborhood Fab Labs, makerspaces and garage factories can gradually expand to replace the import of manufactured goods, starting with custom-machining replacement parts (and ignoring patents on such replacement parts) to keep people’s appliances running. Independent auto mechanics can run pirated versions of the big auto companies’ diagnostic software, on open-source versions of patented diagnostic machinery, and fix cars with parts pirated by neighborhood garage factories.
4. As with money, as a matter of principle I cannot endorse any form of taxation. But so long as taxation exists, some forms are less statist — and less onerous — than others. A shift of taxes off of income from labor, instead taxing the unimproved site value of land or imposing taxes on negative externalities like pollution and CO2 emissions, would be a giant step in the right direction. And of course, eliminating the kinds of illegitimate land title mentioned above in Point 2 would go a long way to reducing the amount of unearned land rent that was there to be taxed in the first place.