Question and Answer Sessions

There was a Q&A session today on Público with economist Juan Torres López, whose work I have posted here before. A few questions are translated below. The last one is particularly relevant to these parts, I think. I was talking to a few people last night about how there is a debilitating dynamic in play when it comes to how discussions about economics, policy and power are conducted.

What is striking here in Ireland, to my mind, is how most discussions about economics are grounded in the idea that financial institutions, or other names for power -‘the markets’, ‘foreign investors’- are the bearers of insatiable and insuperable power, without any interrogation of what that power relation actually means. On the contrary, the function of news media discussions -which set the scene for other discussions too- is to generate an acceptance that ‘the markets’ are so über alles that their power does not even need to be discussed.

So to give one rather tame example – the alleged golden egg of corporation tax. Suppose you say to me, “So what is your position on corporation tax?” and I say, “Well, I think corporations ought to pay more tax. It is hardly right and proper that News International, which has immense power to influence the way people think, should also be subject to a tax rate of minus 46.1 percent, for instance (update, it isn’t)”, and then you put one finger on your nose and point the other one at me and say “Loser! But if we raised corporation tax, all the foreign investors in the country would turn their backs on us and the country would go down the pan even more quickly than it’s doing now!” and then I go “But no, Tesco is hardly going to leave Ireland just because it has to make more tax – their owners don’t call this place Treasure Island for nothing”.

By the time I start arguing on the specifics I am giving way to the general point: that corporations have a lot of power in Irish society, and by admitting this, even for the sake of demonstrating that the whole question of corporation tax is by no means as clear cut as business propaganda is going to have you believe, I am accepting the power of corporations as the legitimate backdrop against which the question is being posed. So it strikes me that a democratic platform has to entail a strengthening of people’s refusal to accept these premises, and of bringing the questions back to a basic level: one that questions the legitimacy of power: in whose interests do the corporations operate? What are we really saying when we say we need to serve their interests, and so on.

Q. Who governs in Greece, Portugal or Spain? The banks, the lobbies, the European Union, or the sovereign people of the country?
A. It’s a very pertinent question because what has become clear from this crisis is that the citizens do not govern. Were the adjustment programmes under implementation in any electoral programme? Did anyone vote for them? Not at all. When the governments in all of Europe recognise that they can’t do what they desire (and that it is technically possible) since they have to obey the markets, something is truly malfunctioning in this system. Those who govern at the end of the day are the financial institutions, that is, the banks and the investment funds they manage (which belong to very wealthy people in many cases) which always seek to create the most favourable conditions to make money out of money itself and in the shortest time frame possible. To be aware of this allows us to stand for a real democracy that does not forget that it must first be an economic democracy.

Q. It feels like all the remedies that have been put on the table are useless. Shouldn’t we conclude that the financial system rules politicians?

A. Precisely. All the measures that have been applied have been useless because they have not gone to the root of the problem, which is the excessive power of financial institutions. On the contrary, they have been given more and more assistance so as to enjoy more power and room for manoeuvre over States. The measures applied, the adjustment plans, will end up impoverishing the citizenry, who moreover will see how their labour and economic rights gradually disappear, but simultaneously these measures will serve to increase the financial power of banks and investment funds. There is no doubt that this configuration must be changed.

Q. If one country, unilaterally, decides to implement a left wing economic policy, what chances does it have of enduring the financial attacks of the present system and surviving? Is this viable or do they rip the country to bits in a few hours?

A. We have historical experiences of how they respond: thousands of dead in Argentina, in Chile, in Brazil, the recent coup in Honduras…But maybe we should ask a different question: are we condemned to suffer always the dictatorial power of those who have money and military power to defend themselves? They always say the same thing: there is no alternative. But the reality is that there are alternatives, but they silence them. If a country has dignity, strength, cohesion and strenthens itself in the defence of its interests and its real democracy it can become invincible. This, of course is why they avoid debate about authentic democracy, transparency..and concentrate all the power in their hands. It is possible that people who were slaves asked themselves the same question that you have asked. If a slave, unilaterally, decides to stop being one, what possibilities does he or she have to survive the attacks of his/her owners, of the existing system and survive? Is this viable or do they rip you to bits in a few hours? I think you know perfectly well what happened in this domain.