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Euro zone democracy: Market forces over people's power?

Friday November 25, 2011 11:50:13 AM, Rajiv Dogra, IANS

Democracy may be an unfinished project, but can its imperfections be an excuse for Euro zone oligarchs to dismiss two elected governments?

In the case of Greece, they added extra pressure to deny people their right to participate in a referendum. In Italy, at least, there was no reason for sudden panic. It was embattled, but a solvent country till speculation took over. Silvio Berlusconi may have erred in governance, but it was the bankers and capitalists who brought Italy to its knees. That gave the oligarchs a perfect excuse to push Berlusconi over.

Spain seems to have avoided the embarrassment of an external diktat by changing the government itself. Meanwhile, most other parts of Europe are suspended between stagnation and disbelief. How is it, the Europeans wonder, that they should have come to such a pass?

Consequently the only growth industry in Euro zone today is that of worry about its economy. Even more curiously, for a people who were zealous about their democratic rights, they have hardly noticed the triumph of market forces over people's power. The removal, under external pressure, of two democratically elected leaders has barely been commented upon. This is the kind of treatment that they were expected to mete out to third world potentates like Saddam Husein and Muammar Gaddafi, not to their own.

What has happened in Italy and Greece isn't merely a knock on the head for democracy. There is a more serious fallout. It may be the beginning of a new assertion by the rich against the rest; by one percent against 99 percent. At first, when Occupy Wall Street movement had just started, it seemed the era of street protests was once again upon us. For a brief Twitter like period there was hope that, as in the case of Arab spring, in the West too the social media would come into play to empower the 99 percent.

Although Occupy Wall Street protests haven't gathered sufficient traction, yet the movement has caught the attention of people; the debate of one percent versus 99 percent has been gaining strength. The youth specially are motivated. They have a reason to be: unemployment among the young in the US is bordering on 20 percent, that in the European Union at 20.9 percent. In Spain, it is 46.2 percent, meaning that one in almost every two Spaniards is unemployed. Unfortunately for the youth, there is no easy way out of the current morass: there is no possibility of an economic upturn in the foreseeable future, and the leadership is holding out neither hope nor the promise of an innovative new approach to create more jobs.

It is true that a part of the reason for the lack of fresh employment opportunities is the shift away from the West to a China of many industries. Under their present economic difficulties, when they are making pilgrimages to China to attract funds, a strong industrial revival in Europe is unlikely. Even if a concerted effort were to be made by Western governments to set up new industry in their countries, it might take up to a generation for the Europeans to recover lost ground. By then many of today's youth would have spent a lifetime doing nothing. Moreover this shift of industry to China wasn't an act of force, but that of greed by the one percent.

Some economists have tried to justify inequality by theories that associate higher income with greater productivity and a greater contribution to society. This may have been cherished by the rich, but the evidence of its validity is thin. Rather, people are questioning the reintroduction of fat compensation to bankers whose productivity and whose contribution to society are being seriously questioned.

Yet the oligarchs seem to have been motivated by other considerations. The new prime minister of Greece is a former banker. And the replacement for Berlusconi in Italy is an economist. In the US too, the treasury secretary is a former banker and many of his cabinet colleagues are from the private sector.

Let us assume that the new appointments in Italy and Greece somehow succeed in reversing the slide. After all there was a glimmer of hope in America too last year when it seemed that the worst effects of 2008 were behind it; that's when the executives rushed to declare fat incentives for themselves. So if a similar temporary mirage is seen in these two countries, will that be seen as an endorsement of this new experiment? Will it presage a situation where chief executives of private companies might begin to run governments?

This is not unlikely. The political history of the world is littered with the most improbable; East India Company did take over the running of a large country. Businessmen like Berlusconi have run their countries. Unlike Berlusconi, some other businessmen have been moderately successful in their political job. But a trend where market forces influence political decisions may be fatally flawed as a practice.

Bankers are by training people risk averse; their ivory towers do not prepare them for the rough and tumble of politics. It is necessary to be in tune with the mood of the people if a leader aims to judge and align himself with the temper of the times. Moreover, corporate people do not create job opportunities; it is the innovators and technology experts who do. Even more importantly a situation such as the one facing the Euro zone can best be tackled by collective action; society as a whole needs to get into the act.

As Benjamin Franklin had said once, "People willing to trade their freedom for temporary security deserve neither and will lose both."

Rajiv Dogra is a former ambassador to Italy. He can be reached at





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