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I thought we'd been through this already weeks ago but apparently not. Yes, Argentina -- and the extractivist pseudo-socialist regimes in Latin America today -- had and have advantages (ecologically and time-constrained though they may be) that Greece doesn't have. But ANY country in a state of complete or even partial dependence on richer ones will face economic blackmail and sabotage if it moves against capital before the revolution happens in the richer ones. The question is always: can it move quickly and broadly enough, and with sufficient worker involvement, to sustain itself before being attacked militarily? I mean for goodness' sake most of it's not rocket science; the billions which Greek capitalists want to take out of the country must be seized, their income taxed at confiscatory levels, the banks nationalized, etc. As for what sectors the everyday economy can be based on: yes, there's not much there, but neither was there in Nicaragua (or Albania or Yugoslavia for fucks sake). On Fri, Jun 26, 2015 at 11:05 AM, Louis Proyect via Marxism < marxism@lists.csbs.utah.edu> wrote: > ******************** POSTING RULES & NOTES ******************** > #1 YOU MUST clip all extraneous text when replying to a message. > #2 This mail-list, like most, is publicly & permanently archived. > #3 Subscribe and post under an alias if #2 is a concern. > ***************************************************************** > > (Can someone explain to me how a socialist Grexit will avoid an economic > catastrophe? Argentina was an export-oriented nation that took advantage of > a commodity boom while Greece relies on imports. I have yet to see an > answer to this, including from Left Platform luminaries--the KKE and Alex > Callinicos are hardly worth mentioning. Yanis Varoufakis understands this > but the ultraleft can't be bothered with what he says because he stays at > fancy hotels apparently. What a fucked up situation.) > > NY Times, June 26 2015 > If Greece Defaults, Imagine Argentina, but Much Worse > By JAMES B. STEWART > > There may be a one-word explanation for why Greece will ultimately > capitulate to European demands for more austerity: > > Argentina. > > Greece is hardly the first nation to face the prospect of defaulting on > its sovereign debt obligations. Argentina has defaulted on its external > debt no fewer than seven times since gaining independence in 1816, most > recently last year. But it’s Argentina’s 2001 default on nearly $100 > billion in sovereign debt, the largest at the time, that poses a cautionary > example for Greece. > > Should Greece default, “Argentina is an apt analogy,” said Arturo C. > Porzecanski, a specialist in international finance at American University > and author of numerous papers on Argentina’s default. But for Greece, “It > would likely be worse. Argentina was comparatively lucky.” > > Daniel Gros, director of the Center for European Policy Studies in > Brussels and the author of “A Tale of Two Defaults,” a paper comparing > Greece and Argentina, agreed. “Default would be much worse for Greece than > it was for Argentina,” he said. > > Like Greece today, Argentina had endured several years of hardship and > austerity by 2001. It borrowed heavily from the International Monetary > Fund, the World Bank and the United States, all of which demanded unpopular > spending cuts. The I.M.F. withheld payments when Argentina (like Greece) > failed to meet its deficit targets. A bank run led the government to freeze > deposits, which set off riots and street demonstrations. There were deadly > confrontations between police and demonstrators in the heart of Buenos > Aires, and the president at the time, Fernando de la Rúa, fled the country > by helicopter in December. In the last week of 2001, Argentina defaulted on > $93 billion in sovereign debt and subsequently sharply devalued the peso, > which had been pegged to the dollar. > > In addition to social unrest and a wave of political instability (at one > point, the country had three presidents in four days), Argentina’s economy > plunged into depression. Tens of thousands of the unemployed scavenged the > streets collecting cardboard, an enduring image that gave rise to the term > “cartoneros.” Dollar-denominated deposits were converted to pesos, wiping > out over half their purchasing power. > > The country became the epicenter of Europe’s debt crisis after Wall Street > imploded in 2008. Now, it is struggling to pay its debt, and its people and > creditors are growing restive. > > Despite this trauma, the Argentine economy stabilized in 2002. The country > was able to repay the I.M.F. in full by 2006. But the country has never > re-entered the international debt markets. It has refused to comply with a > ruling by a United States federal court judge that the country must repay > in full private creditors who did not participate in the country’s debt > restructuring. As a result, Argentina defaulted again last year, and the > standoff continues. > > Even without much external financing, Argentina’s economy has fared > relatively well since 2002, leading some economists, notably Mark Weisbrot > of the Center for Economic and Policy Research in Washington, to suggest > that Greece should default, suffer the short-term pain and follow > Argentina’s example. > > But even Yanis Varoufakis, Greece’s firebrand finance minister who > advocates standing up to the European Union’s demands, said the idea that > Greece could default and emulate Argentina was “profoundly wrong,” as he > put it in a recent blog post— a point he reiterated when we spoke a few > weeks ago. > > Argentina’s economic recovery was largely driven by a fortuitously timed > surge in commodity exports driven by demand from fast-growing Brazil and > China. (Although the commodity boom is long over, and Argentina’s economy > today is at best stagnating, those two countries still account for about 28 > percent of its exports.) Soybean meal, corn and soybean oil are the > country’s top three exports. Argentina had a population of over 41 million > and gross domestic product of $610 billion in 2013. Although it’s a net > importer of energy, it has vast shale oil and gas reserves that could make > it self-sufficient. > > Greece, by contrast, is heavily dependent on imports. Its top three are > crude oil, refined petroleum and pharmaceuticals, all necessities. While > its top export is also refined petroleum, it has to import crude oil for > its refineries. Its only major homegrown exports are fresh fish and cotton. > It would be hard to significantly increase sales of either product: The > European Union has strict quotas to prevent overfishing, while cotton > production is struggling from reduced demand for textiles and a lack of > bank financing. > > “Idle productive resources in Greece cannot produce much for which there > is increasing demand,” Mr. Varoufakis wrote. > > Mr. Gros noted, “Greece doesn’t export much.” If the country left the > European Union and brought back a sharply devalued drachma, “They’d gain > some from tourism,” he said. “But they’ve already cut prices and tourism > has gone up. But it hasn’t really helped because total revenue hasn’t gone > up.” > > And compared with Argentina, Greece is tiny, with a population of just > over 11 million and gross domestic product of $242 billion in 2013. > “Argentina is a resource-rich country that, if forced to, can live with its > own resources,” Mr. Porzecanski said. “The economic viability of Greece on > its own has never been tested” since 1981, when Greece joined the European > Union. > > From a small island to the capital in Athens, here is a glimpse into some > of the lives of Greeks as their country struggles to repay billions in debt. > > Everyone pretty much agrees that, if Greece could devalue its currency, as > did Argentina, its economy would benefit. But it was also relatively easy > for Argentina to devalue the peso by severing its link to the United States > dollar, a tie that was self-imposed. As Mr. Varoufakis put it, Greece > doesn’t have a currency that’s pegged to the euro: “It has the euro.” The > practical challenge of disseminating a new currency would be enormous. > Moreover, Greek savings now denominated in euros (and, in many cases, > deposited in European banks outside Greece) can’t be converted to drachmas, > as the Argentines converted savings into pesos. > > Converting to the drachma would also be a crushing blow to the private > sector, much of which finances its activities with euro-denominated loans > from non-Greek banks. “They wouldn’t be able to service the debt with > devalued drachmas,” Mr. Porzecanski said. Nor would Greek courts have the > final say in any ensuing litigation. > > In Argentina, “the government ruled that a corporation or bank that owed > debts denominated in dollars were payable in pesos at a one-to-one exchange > rate,” Mr. Porzecanski said. “They could do that with internal debt. But > Greek companies have a lot of cross-border obligations. The European > Central Bank has kept Greek banks alive. Its collateral would be worth only > a small fraction if Greece leaves the euro. The Greek banks would be > insolvent immediately.” > > In sum, he said, “It would be a royal mess.” > > But as game theorists point out, there’s no guarantee a rational outcome > will prevail. > > After surging early this week on optimism that Greece had come forward > with a workable proposal, markets gyrated on concerns that it still didn’t > go far enough to satisfy Greece’s major creditors. And Mr. Varoufakis, > while conceding that leaving the euro would be a disaster, still contends a > Greek default would be manageable and give Greece more leverage in > longer-term negotiations to keep Greece in the European Union and eurozone. > > No matter how much worse it might be for Greece than Argentina, “the > outcome will ultimately be determined by politics, not economics,” Mr. Gros > said. “Economists are terrible at predicting political outcomes.” > > Mr. Porzecanski put it another way: “Do the Greek people know they’re > playing with fire and might get burnt? It’s what they voted for, and they > seem to have voted with their eyes wide open. Not everyone values > prosperity the same way” as people in the United States and most of Europe > do. > > For others, which evidently includes many Greeks, ceding national > sovereignty to foreign lenders may be worse than economic chaos. As Mr. > Varoufakis wrote, “I salute the Argentinian people for having toppled a > regime, and more than one government, that tried so desperately to > sacrifice a proud people on the altar of I.M.F.-led austerity.” > > People in countries like Venezuela and Cuba have tolerated failed > economies and low standards of living for years, and the Russians seem all > too willing to follow President Vladimir Putin into recession. “Populism > and nationalism,” Mr. Porzecanski said, “are still potent forces.” > _________________________________________________________ > Full posting guidelines at: http://www.marxmail.org/sub.htm > Set your options at: > http://lists.csbs.utah.edu/options/marxism/acpollack2%40gmail.com _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: http://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
