Remember this name: Julius Malema. He is the power-hungry leader of South Africa’s new Communist party, the “Economic Freedom Front”. I have written about Malema and EFF before, and I am sure we have not heard the last of them. Here is a glimpse of what kind of South Africa that awaits when he gets hold of power:
The ANC has reduced itself to a structure of corruption and incompetence. You would think that once their era is over more sensible people would come to power. Sadly, it looks like the ANC will be followed by the EFF, which is growing steadily, and that is about the worst that could happen to South Africa.
Back in July I wrote about the global socialist rebound, part of which involves the emergence of post-Chavez Venezuela. The new president, Nicolas Maduro, has doubled down on the socialist economic model that Chavez created. Back in November Maduro dictated “fair” pricing on electronics products, and then enforced those prices by sending the military in to the stores of a Daka, Venezuela’s equivalent to Best Buy. The company, of course, lost an enormous amount of money on this government-sanctioned theft, but perhaps we should not expect more from a country that ranks fourth from the bottom in the Heritage Foundation’s Index of Economic Freedom, which has the following to say about the rule of law in Venezuela:
The judiciary is dysfunctional and completely controlled by the executive. Politically inconvenient contracts are abrogated, and the legal system discriminates against or in favor of investors from certain foreign countries. The government expropriates land and other private holdings across the economy arbitrarily and without compensation. Corruption, exacerbated by cronyism and nepotism, is rampant at all level of government.
On a scale from 1 to 100 for property rights protection, with 100 being the best, Venezuela scores a whopping five (5). This is slightly behind Zimbabwe and its farm-seizing president Mugabe.
Add to this an inflation rate in excess of 60 percent, and you have a recipe for screaming shortages of practically everything and anything people need. Food rationing is a good example, where producers have long complained that the government’s mandatory “fair” prices make it impossible to cover production costs, let alone supply the market in sufficient quantities.
But socialists do not let such minute details get in the way of their grand ideological project. Therefore, it is hardly surprising that the Associated Press reports on a new, bizarre regulatory incursion by the government into the country’s shattered remains of a free market:
Venezuelans could soon have to scan their fingerprints to buy bread. President Nicolas Maduro says a mandatory fingerprinting system is being implemented at grocery stores to combat food shortages by keeping people from buying too much of a single item. He calls it an “anti-fraud system” like the fingerprint scan the country uses for voting.
Aside the fact that people who vote for the socialists will get a higher ration of bread, this system will of course not solve any shortage problems whatsoever. All it will do is drive more people over to the black market, where prices are high enough to make production profitable.
The AP again:
Critics … wondered if anything short of a systemic overhaul of the economy could help the socialist South American country’s chronically bare shelves. Venezuela has been grappling with shortages of basic goods like cooking oil and flour for more than a year. In the spring, the administration tried out a similar system in government-run supermarkets on a voluntary basis. Rigid currency controls and a shortage of U.S. dollars have made it increasingly difficult for Venezuelans to find imported products. Price controls don’t help either, with producers complaining that some goods are priced too low to make a profit and justify production.
Let’s keep in mind that Venezuela’s journey to 60 percent inflation, chronic food shortages, destroyed property rights and an infestation of corruption in government, started with an effort to build the perfect welfare state. In the beginning it was all about income redistribution, then it expanded into distribution of consumption by means of socialization of, e.g., utilities. Then came the seizure of natural resources and the expulsion of foreign oil companies. The combined government takeover of utilities and oil fields allowed incompetence to replace expertise as the management principle, predictably leading to brownouts. Costs of power skyrocketed, leading to a “fair price” dictate from now-defunct president Chavez. A similar chain of events led to government nearly destroying food production, all in the name of “fairness” and “income redistribution”.
In other words, one government invasion of the free economy has caused a problem that has led to another invasion, causing yet another problem that led to yet another invasion, etc. Regulations on food producers and prices and the constant threat of yet another arbitrary government property takeover has, as mentioned, caused chronic shortages around the country. And what is the Venezuelan government’s reaction to this? The AP story has the answer:
Last week, Venezuela began closing its border with Colombia at night in an effort to cut down on smuggling, which Maduro has said diverts nearly half of Venezuela’s food. As of January, more than a quarter of basic staples were out of stock in Venezuelan stores, according to the central bank’s scarcity index.
When socialist theory says a square peg can fit into a round hole, then the peg better damn well fit. When socialist economics says it costs a dime to produce a pound of rice, then the producer better damn well not say it costs a quarter.
There is no bigger threat to economic freedom than an authoritarian government. It destroys property rights and economic incentives. It crushes the pillars of entrepreneurship and makes it practically impossible for people to make an honorable living on their own. Gradually, an authoritarian government destroys free-market capitalism, and when the destruction has reached a critical point the most obvious economic result is the inevitable decline in the standard of living for all.
Misery replaces opportunity. Poverty replaces prosperity. Government dependency replaces self determination.
There is nothing new in this. The history of the 20th century is filled to the brim with evidence of the destructive effects of authoritarianism, including its devastating power to destroy well-functioning economies and the prosperity they produce. It would be logical to conclude that we have learned the lessons of the Soviet empire, of the collapse of collectivist economic projects in Latin America and of the slow but unrelenting stagnation of Europe’s welfare states.
You would expect that those lessons would be loud and clear, available to everyone.
Unfortunately, that is not the case. Socialism is on a worldwide rebound. It is not new: already eight years ago I warned about the resurrection of communism in Europe. At that time it was a topic that nobody really paid any attention to. This is understandable. The economy was in pretty good shape, both in the United States and in Europe – in other words there was no reason to worry about depression-driven support for extremism of the kind we can witness in Europe today. The terror attacks of 9/11 were in fresh memory, as were the attacks in London in the summer of 2005. The only extremism that made its way into the public debate had an islamist trademark.
Nevertheless, my warning was timely. Communism and its ideological affiliates have been on the rise for a long time. After a decade in disarray following the fall of the Soviet empire, socialists regained strength and confidence after 9/11. In addition to their support for Saddam Hussein’s regime and opposition to any efforts to topple it, they started lining up their political assets in parliamentary democracies to advance their ideology on democratic terms. In the mid-2000s, the global left was becoming politically savvy thanks in part to idolized authoritarians like Hugo Chavez in Venezuela.
Today, socialism has made dangerous inroads on several fronts around the world. The socialist power structure that Chavez put in place is still in charge of Venezuela, and perhaps even more radical now than under his reign. The “Chavista” version of Latin American socialism has spun off at least two other authoritarian leaders in the region, Evo Morales in Bolivia and Rafael Correa in Ecuador. In a separate but parallel advancement of socialism in Latin America, Cristina Kirchner has driven Argentina into the same ditch on the left side of the road as the gentlemen Chavez, Morales and Correa have done with their countries.
In Europe, the last few years of serious economic crisis has pushed large groups of voters into the arms of socialist parties. It is a remarkably broad phenomenon that has made Chavez-admiring Syriza one of the largest parties in Greece; it led to the sweeping French socialist election victories a couple of years ago; in September it will probably carry the surging left-wing coalition in Sweden to a strong election victory (on a message that the world’s highest taxes are not high enough!).
Even the nationalist movement in Europe is a form of socialism. Hungary’s Fidesz and Jobbik adhere to the same economic collectivism as do Golden Dawn in Greece, Front National in France and an assortment of smaller, nationalist parties in the Netherlands, Belgium, Germany, Denmark and Sweden. The difference between socialists and nationalists in Europe is, essentially, that the former want to expand the welfare state with no inhibitions while the latter want to reserve the services of the welfare state for the people of their individual countries, and not share them with immigrants from – primarily – Africa and the Middle East.
(Disclaimer: UKIP, Britain’s patriotic movement, is basically a libertarian party. They are opposed to the welfare state and to immigration aimed at living off it, but unlike continental and Scandinavian nationalist parties they also want to ultimately dismantle the welfare state. As such they are rather alone on the European political scene. Now back to our regular broadcast.)
The rebound of socialism is not limited to Europe and Latin America. The Obama administration was carried into office by a warped belief that government can take care of people from cradle to grave. Obama and his fervent supporters soon found that Americans still have a strong sense of individualism and skepticism toward government as a partner through life. It is fair to say that on a broad scale, Obama’s aggressive statist agenda has peaked and so has collectivism in America. The question is how we as a country will downsize government, and whether or not it will happen on fiscally sustainable terms.
Others are not so lucky. South Africa is a good example. After two decades of European-inspired welfare statism, South African voters have grown a bit weary of the ANC. Their hold on power is not yet in jeopardy, but it has weakened in recent years. As I have explained in numerous articles, the reasons for this weakened support for the ANC are obvious to any sober observer of the South African economy. Poverty is pandemic among black South Africans and has slowly but steadily spread to colored and white South Africans as well. Unemployment and crime have become permanent phenomena, especially – but not exclusively – in the large areas of the country that still live in abject poverty.
Despite 20 years of promises, the ANC has delivered precisely what socialism always delivers: decline, deprivation and despair. As a result, many South Africans are turning to alternative political movements, and one of the first to capitalize on this is Julius Malema. The former president of the ANC’s youth league has formed his own political movement, an outright communist party that pervertedly calls itself the “Economic Freedom Fighters”. Here is some of what they want to do to South Africa:
A supposition that the South African economy can be transformed to address the massive unemployment, poverty and inequality crisis without transfer of wealth from those who currently own it to the people as a whole is illusory. The transfer of wealth from the minority should fundamentally focus on the commanding heights of the economy. This should include minerals, metals, banks, energy production, and telecommunications and retain the ownership of central transport and logistics modes such as Transnet, Sasol, Mittal Steel, Eskom, Telkom and all harbours and airports.
They have similar plans for agricultural land, with the intent to redistribute it from current owners and users to others, ostensibly based on racial preferences. The miserable consequences of land expropriation in Zimbabwe have apparently not deterred them. Nor has the economic disaster created by Chavez in Venezuela, where government has gotten itself involved in everything from utilities to the production and distribution of food. Not surprisingly, Julius Malema, South Africa’s premier communist, wants to do the same.
A communist government is just about the last thing South Africa needs. By the same token, Europe is absolutely not in any need of more collectivist policies. Latin America’s socialist experiments must end now, so the continent can reap the harvests of its full economic potential under economic freedom.
Currently, much of the global socialist rebound is currently flying under the radar of freedom-minded scholars, activists and politicians. Let’s hope that changes.
The United States of America is a wonderful country to live in. Contrary to the laments of most of my conservative and libertarian friends, this country is still among the most free and opportunity-friendly places on Earth. Americans are strong individuals, they are friendly yet have a lot of integrity, they celebrate winners and have compassion for losers. There is less racism here than in Europe, and we are more prosperous than they are, and deep down in the fertile soil of Middle America, the roots of freedom and democracy stand firm even when the political storms rage viciously through the legislative hallways of our country. Our constitution, while twisted and tweaked and bent and stretched, is still working.
Our deeply rooted sense of individuality – as opposed to individualism – and freedom is currently helping America through one of the toughest periods in her almost 250-year long history. This country is the last place on Earth where totalitarianism would take over. But our freedom, prosperity and peace are at least to some degree dependent on what is going on in the rest of the world.
This is why in the 20th century the United States established itself as a global power. Throughout most of that time, Europe has been a major scene for our foreign policy and military engagements. A big reason is that Europe has long been, and still is, a central stage for the fight against totalitarianism.
With the rise of totalitarian nationalism in primarily Germany, Italy and Spain in the 1920s and ’30s, Europe became the world’s most important battle ground between freedom and tyranny. Freedom won the war, but once the bullets had stopped flying a more polished version of the values that drove Hitler, Mussolini and Franco to power began setting roots in Western Europe. The idea of collectivism, which is in the DNA of Naziism and fascism, is also prevalent deep into the segments of European politics that are generally considered democratic. The notion that government can and should shape a nation, socially, culturally and economically, has taken seemingly more palatable forms than the swastika.
Today, nationalists no longer use the sense of patriotism as their first and foremost voter recruitment tool. The new gateway to nationalism is the welfare state.
More on that in a moment. First, a quick look back at how nationalism – and totalitarianism – is once again able to rise to political prominence in Europe.
In 1960, in one of the most revealing books on the subject, titled Beyond the Welfare State, Swedish economist Gunnar Myrdal explains how the idea of central economic planning without political dictatorship has conquered Western Europe and is slowly but relentlessly replacing Capitalism as the prevailing economic model. The welfare state, for short, would soon spread its intellectual tentacles across the Atlantic and peacefully defeat the American free-enterprise system. Myrdal was partly right: with considerable help from John Kenneth Galbraith’s Economics and the Public Purpose and The New Industrial State the American left made a major effort during the 1960s and ’70s to establish the European notion of collectivism and indicative economic planning as the new normal for the New World.
They never quite succeeded. The Obama administration represents the last effort of the collectivist left to “fundamentally remake” America (as Obama put it during his campaign). But while the welfare state is finally reaching its peak as a socio-economic model here in the United States, the Europeans are holding on to it for dear life. The entire fiscal struggle during the Great Recession has been about saving Europe’s ailing welfare states with every means possible – even at the expense of years of declining GDP, at the cost of 30, 40, 50 and even 60 percent youth unemployment. Ill-designed austerity, motivated not by a desire to shrink big government but to save it, has taken more from people in the form of higher taxes and given less back.
Instead of conceding that the welfare state is a lost cause; instead of repealing the welfare state and giving economic freedom a chance; the political leadership in Europe has doubled – no, tripled – down in their defense of collectivism, high taxes, income redistribution, entitlements, socialized health care and deep, stifling regulations of the labor market.
In countries with the biggest, most intrusive governments this has resulted in a dangerous political backlash. When voters feel betrayed by the government that promised to take care of them cradle to grave, and there is no alternative there presenting a case for economic freedom, voters turn their back on the established political institutions that gave them the welfare state. Those institutions also happen to be parliamentary democracy. Feeling that parliamentary democracy has let them down and left them out to dry, both financially and politically, large groups of voters are now turning to another form of collectivist parties.
The modern totalitarians.
When the European welfare state swept through Western Europe in the ’50s and ’60s its collectivist principles appealed to people whose cultural background was a straight line from late Medieval collectivism through undemocratic monarchies to the nationalist movements of the early 20th century. Europe may have been the birthplace of the concept of the individual, but the continent never quite unleashed what they had discovered. Unlike America, the roots of Europe’s political culture are still firmly in the notions of nationalism, collectivism and – almost for a century now – the welfare state. It was a smooth transition for Europe to go from nationalism to the welfare state: instead of being part of an ethnically, racially or culturally defined group along nation-state lines, the Europeans became part of a mildly Marxist dichotomy between taxpayers and entitlement recipients.
While the technical difference is considerable, the cultural difference is minor. The individual shrinks and crawls in under the group banner, hoping that the group will care for him. By giving legislative power to political parties that promise more entitlements, Europe’s voters have reaffirmed and reinforced the collectivist principles that guide the welfare state.
Those collectivist principles, however, are easily transferrable, from the welfare state onto another collectivist vehicle. Now that the welfare state has proven, beyond a shred of a doubt, that it can no longer keep its entitlement promises, Europe’s voters have begun listening to the old nationalist tunes again.
The difference between today’s nationalists and those that ultimately paved the way for Naziism and fascism after World War I, is that today they know how to use the welfare state to appeal to people. Every nationalist party in Europe, from the Danish People’s Party and the Swedish Democrats to the far uglier Front National in France, Fidesz and Jobbik in Hungary and Golden Dawn in Greece, promises to preserve the welfare state in one form or another. They have learned to capitalize on people’s frustration with the failing welfare state. But instead of rightly pointing out that the statist economic model is flawed, the modern nationalists – and especially the totalitarians among them – have projected the blame onto centrist, social-democrat and liberal political parties. Ultimately, this blame falls on parliamentary democracy itself.
So far, only the outer rim of the modern nationalist surge has pointed finger squarely at parliamentary democracy. However, as Golden Dawn, Jobbik and similar parties gain ground, antipathy toward the parliamentary system will grow. France will be one of the key battle grounds between nationalism and parliamentarism: if Le Pen follows in the early footsteps of her father it is entirely possible that her rise to the presidency in 2017 could mark the beginning of the end of De Gaulle’s Fifth Republic. If the radicals in her movement set the tone, the new France that would emerge – the Sixth Republic – could become a catalyst for a new, broad nationalist surge across Europe.
There are already movements around the continent hard at work to create a fascist “Gross-Europa”. They are probably not going to gain more than marginal political influence, at least not in the near future. But it is important to remember that a decade ago, the idea of a President Le Pen in France was laughable. Furthermore, the idea of a resurrection of European communism was ridiculed. I know, because I warned about it in an article in Front Page Magazine back in 2006 and got more than a few sarcastic comments from more established “thinkers”. Even a cursory look at the results in the EU Parliament election in late May shows how frighteningly right I was back then.
And I did not even consider that nationalism would be a competing force. But with two competing, and growing, totalitarian movements now procreating in Europe’s political landscape, the continent is facing a dark future. Independently, these movements will reinforce Europe’s collectivist culture and cling to its dying welfare state for as long as they can, and then some. Most of all, they are going to use it to entice people into crossing the line, from parliamentary democracy into a totalitarian political system Europe has supposedly left behind it.
Using the welfare state as an economic gateway drug, the modern totalitarians are going to try to reshape the continent that, for a century, has been America’s most costly foreign-policy problem. Given that both the nationalists and the communists now rising to political prominence are negative, in some cases outright hostile, toward America, that foreign-policy problem may soon come back knocking on the doors of the U.S. State Department – and the Pentagon.
In a great article in the Wall Street Journal, former vice president Dick Cheney and his daughter, former senatorial candidate Liz Cheney, explain how Obama’s failures on the foreign-policy front are transforming the Middle East into a new major headache for America. They are correct, but it is crucial for America’s future that our foreign policy does not overlook the radical transformation taking place in Europe right now.
The political establishment in the EU is grasping for some positive news in the election fallout. It is still too early to say definitively what the consequences will be, but my first conclusion, namely that Euroepan democracy was dealt a blow, still stands. The anti-democratic flanks of the political spectrum gained ground at the cost of centrist parties. The one silver lining is that democratic, Euro-skeptic parties like the UKIP did very well and will increase their influence on the European scene.
As I also pointed out in my last article, the election has put Europe at a fork in the road: either the continent makes a turn toward a better future, with less EU-level government and a general move in the libertarian direction, or the anti-democratic collectivists – in the shape of communists, Nazis and aggressive nationalists – will gradually gain more power and push the EU in a very dangerous direction. If the EU political establishment is smart, they will extend an olive branch to democratic Euro skeptics like Nigel Farage from UKIP and Morten Messerschmidt from the Danish People’s Party.
Based on post-election media reports thus far, it is by no means certain that the Eurocracy will make the right choice here. As an example, consider this report from EUBusiness.com:
European Union leaders agreed Tuesday to take a fresh look at the bloc’s policy priorities, after a stinging vote setback across Europe that saw dramatic gains by radical anti-establishment parties. Meeting for a post-mortem summit in the wake of the dismal European Parliament election results, the bloc’s 28 national leaders gave European Council chairman Herman Van Rompuy a mandate to fine-tune policy goals on issues from jobs to energy. … He said that now that Europe was emerging from economic crisis, there was a need for an agenda of growth, jobs and competitiveness. He also stressed that “a strong response” was needed to the climate change challenge and “a push” towards energy union and to lessen energy dependency.
Not a word about the need to reconsider the growth of the Eurocracy. Not a word of self reflection over what the EU has become. To be blunt, if this is how the mainstream parties in the European Parliament are going to respond to last week’s elections, the chickens are going to come home to roost, marching in lines behind either a hammer and a sickle, or a swastika.
It is still unlikely that this will happen, but it definitely cannot be ruled out. The question is if the Europhile parties in the Parliament have it in them to slow down the EU project and be more reflective than Herman van Rompuy. The EU Business again:
Projections give the conserv ative European People’s Party (EPP) 213 seats out of 751, with the Socialists on 190 and the Liberals 64. That will give the centre-right, centre-left and Liberals a solid working majority. … The anti-EU camp will have about 140 seats though analysts say it will be difficult for the disparate groups to operate in a coherent fashion.
It would be foolish of the Europhile parties to use this arithmetic as a basis for their policies. Nevertheless, there is a great risk that this is how they choose to read the voter mandate from last week’s elections. A story from Euractiv concurs:
The Eurosceptic election victory, notably in France, the UK and Denmark, should not drastically affect the work of the European Parliament. With 140 MEPs in the next legislature, Eurosceptic parties will still represent a minority out of the 751 MEPs in the EP. “Their influence will be low. They will only have a slow-down effect on proceedings,” said Henri Weber, an outgoing French MEP. “They will obstruct more, and turn up to sessions with their national flags, as did Nigel Farage’s UKIP party during the last mandate,” he continued. Law-making should only be marginally affected by the increase of Eurosceptic MEPs, as most plenary session voting in Strasbourg is taken by absolute majority. With 751 MEPs from 28 EU member states, the Eurosceptic vote cannot reach the absolute majority alone (376 seats). “The National Front is definitely not the dominant political party in Europe. The party that came out on top in these elections was the EPP, followed by the PES and ALDE” stated Nathalie Griesbeck, French centrist MEP.
Yes, but they lost seats right and left. However, if there is one positive touch to this, it is that the Eurocracy will probably move ahead with some items that could actually help the European economy. One of those items is the proposed Transatlantic Trade and Investment Partnership, TTIP, which has strong support in the EU political leadership as well as in the European business community. Back in February, EU Observer reported:
The ‘honeymoon phase’ of talks aimed at brokering a landmark EU-US trade deal are over, business leaders have warned. Speaking at a meeting of business leaders in Athens to coincide with a meeting of EU trade ministers on Friday (28 February), Markus Behyrer, the director general of lobby group BusinessEurope, led calls for EU leaders and the business community to tighten their communications strategies to retain public support. “The honeymoon phase of the negotiations appears to be over,” said Behyrer. “Now the phase when negotiators will need our support and encouragement…we will have to prove that this is not a race to the bottom but a race to the top.” At a press conference later Karel de Gucht commented that “the debate should be based upon the facts – not just speculation and fear-mongering.”
There was one caveat in that article:
Finland’s Europe minister Alexander Stubb warned that “selling” the talks would be “a really tough case”. “We are grappling with people who are anti-free trade, anti-American, and anti-globalisation,” he said.
The anti-free trade, anti-American, anti-globalization crowd made big inroads into the European parliament this election. They will do what they can to stop or delay the TTIP. Fortunately, as the Daily Telegraph reports, the determination was strong as late as last week, on both sides of the Atlantic, to bring the trade negotiations to completion:
US and EU trade representatives have had a “productive” fifth round of talks, but hard work lies ahead, US trade representative Michael Froman says. “We’ve moved from discussing a conceptual framework to defining specific ideas for addressing the majority of the negotiating areas,” Froman said as the talks ended. He said there was “a lot of work ahead” but “steady progress” was being made and there was now “a firm understanding of the key issues that need to be resolved”. Froman’s chief negotiator in the Transatlantic Trade and Investment Partnership (TTIP), Dan Mullaney, called the week’s talks “challenging”. Completing the world’s largest free trade agreement “will require a lot of creativity and a lot of persistence,” he told reporters. Ignacio Garcia-Bercero, chief negotiator for the European Union, underlined that the overall goal was “highly ambitious” but that progress had been made through “intensive” discussions this week on labour, environment and sustainable development issues. The US and European Union aim to expand what is already the world’s biggest trade relationship by dismantling regulatory barriers that force companies to produce different products for the US and European markets.
This would be a huge boost for trans-Atlantic trade and have a cost-lowering effect on many consumer and industry products. Let’s hope the Eurocrats prioritize this as they move forward, but that they also learn to listen to Euro-skeptics when it comes to the relations between the EU and its member states. If they don’t, the authoritarian flanks of the European political scene will continue to grow at the expense of democracy, political stability – and economic freedom and prosperity.
As the dust settles on the elections to the European Parliament, a somewhat schizophrenic conclusion is emerging:
- on the one hand voters expressed their skepticism toward the EU project and rejected, overall, the notion of a continuous, business-as-usual expansion of the EU into a new, gigantic government bureaucracy;
- on the other hand the rejection of even bigger government was partly expressed in a form that, absurdly enough, may very well pave the way for another, even uglier form of government expansion.
The outcome of the election is more dramatic than most media outlets have yet realized. Put bluntly, this election was a loss for European parliamentary democracy and a gain for authoritarianism of a kind Europe has not suffered from for a quarter century now. But as painful as it is to acknowledge, the real winners of this election were communists and aggressive nationalists – also known as fascists.
There is no mistaking the outcome: voters spoke, and numbers changed in the European Parliament. Political parties with a traditional commitment to parliamentary democracy lost dramatically, with conservatives and liberals losing more than one fifth of their seats. At the same time, communists and radical socialists of assorted flavors increased their parliamentary presence by one third.
Add to those gains the big inroads made by aggressive nationalists and fascists.
Europe’s political elite may want to ignore this, but the most dangerous reaction to this election would be to turn a blind eye to what voters did: they passed power out from the democratic center to the outer rim of the political spectrum. There, communists and fascists stood ready to scoop up voters who are deeply dissatisfied with, well, just about everything from unemployment and economic stagnation to immigration and “inequality”.
Europe is now at a fork in the road, one that will decide the fate of a continent that is home to half-a-billion people. But before we get there, let us take a look at what actually happened in the election.
Communist parties did well, especially in southern Europe where the Great Recession has done its biggest damage. In Greece, the radical leftist party Syriza, which sees Hugo Chavez’ Venezuela as a political role model, took 26 percent of the vote and became the largest Greek party in the EU Parliament. In Italy, incumbent prime minister Renzi’s leftist Democratic Party got 40 percent of the vote. Portugal’s old communist party, rebranded as socialists, came in first with 31.5 percent of the vote. In Spain, a radical socialist coalition took ten percent of the votes, placing them third in the election.
But it was not just in southern Europe that communists, old or new, did well. Ireland’s scary-left and historically terrorist-affiliated Sinn Fein got a frighteningly large 17 percent of the votes.
Sweden is an example of how refurbished communists have shown remarkable resiliency in the past two decades. Their radical left is split among three parties, which taken together is more than the country’s traditionally dominant social democrats got. The three radical leftist parties are: the Greens (15.3 percent of the vote), the renovated-communist Leftist Party (6.3) and the new, aggressively socialist Feminist Initiative (5.3).
Altogether, the entire leftist spectrum – from vanilla-favored social democrats to hardline Chavista leftists – held their lines in the European Parliament, in the face of stiff competition. But as indicated by the above mentioned examples, the radical flank within the leftist block made big advancements. Their European Parliament group, called GUE/NGL, increased its number of seats by one third. This number could increase even more when some small, new parties from across the EU choose affiliation.
The underlying message in the shift toward the hard left is that Europe’s voters – already living under the biggest governments in the free world – have forgotten what happens when government grows beyond the boundaries traditionally respected in Western Europe. Perhaps the most conspicuous signal of Europe’s communist amnesia is embedded in the seven percent voter share that Die Linke got in Germany. They are the old Socialist Unity Party, in other words the party that ruled East Germany with an iron fist and back-up from Soviet tanks throughout the Cold War. Die Linke is fiercely anti-capitalist and shares Syriza’s adoration for what Hugo Chavez did to Venezuela.
The fact that Die Linke only got 7.4 percent should be considered in the context of the fact that Germany’s Green Party captured 10.7 percent of the votes. This puts the radical left in Germany at 18.1 percent, a share that grows even more in view of the fact that the SPD, the social democrats, are now parked at a lowly 27 percent voter share. If the social democrats in Germany continue to decline, the combined voter share of the Green Party and the old East German communists could easily exceed 25 percent in the next German national elections.
A surging radical left in the European Parliament will have profound consequences for European politics, but it will also affect Europe’s relations to the United States. More on that in a moment. First, let us take a look at the other flank of the authoritarian lowland.
Known under its less sophisticated label “fascism”, authoritarian nationalists made frightening advancements in the election. Most notorious, of course, is the victory in France for Front National under Marine Le Pen’s stewardship. Her polished version of the party her father founded won a stunning 25.4 percent of the vote, putting them decisively ahead of the nearest competition.
Ten years ago, Front National was little more than a punch line in a political joke. Yes, Jean-Marie Le Pen technically came in second in a presidential run-off against incumbent Jacques Chirac, but the entire campaign was of the same kind as if the Democrats had put up Ralph Nader against George W Bush in 2004. (No other comparison intended between Nader and Le Pen, of course.) Today, Front National is at a point where their leader can confidently demand that President Hollande dissolve the national parliament for new elections. That is not going to happen, but the demand sent shivers through the French political establishment.
It should. Marine Le Pen is no longer just a French political contender – she is in fact not just the leader of what is currently the largest political party in France. She is emerging as the leader of a new, bold, aggressive nationalist movement in Europe. Her party group in the European Parliament will incorporate outspoken fascists such as Hungarian Jobbik (which came in second in Hungary and apparently has its own uniformed party corps). Some media reports state that Front National and Jobbik are already in talks with each other on how to cooperate in the European Parliament.
Another of Le Pen’s new friends is Golden Dawn, which in the European election confirmed its position as Greece’s third largest party. Despite extensive legal challenges and elected officials of the party currently being incarcerated, Golden Dawn refuses to go away. More than likely, their strong support among police and the military will be enough to let them return, emboldened and empowered, to both the Greek and the European political scene.
With Front National, Jobbik and Golden Dawn as their pillars, the aggressive nationalist party group in the European Parliament could indeed turn out to be a vehicle for the rebirth of European fascism. The deciding factor will be where Europe’s rapidly rising patriotic parties will land. This is a different breed than the aggressive nationalists, consisting of Euro-skeptic parties, best exemplified by Britain’s UKIP. There is now a whole range of parties in Europe that fall into this category, such as PVV in the Netherlands, Danish People’s Party, Swedish Democrats, True Finns, Alternative for Germany and Austria’s People’s Party.
Some of these parties did remarkably well: both UKIP and the Danish People’s Party won their countries’ respective European Parliament elections. The Swedish Democrats scored almost ten percent of the votes, double what they got in the national elections in 2010. Alternative for Germany surprised many by capturing as much as seven percent of the votes, while there was disappointment among PVV supporters in the Netherlands as their party only got 13 percent and a third place.
It is not an exaggeration to say that this new group of patriotic parties holds Europe’s fate in their hands. Their ideological foundation spans from “basically libertarian” as Nigel Farage once called UKIP to welfare-statist Swedish Democrats. But they all have in common that they are committed to traditional, European parliamentary principles. This sets them apart from the aggressive nationalists whose political visions do not exclude a new full-scale fascist experiment.
If some of the patriotic parties are lured into cooperation with Front National, Jobbik and Syriza, there is a significant risk that Europe, within the next five years, will see a continent-wide fascist movement. There are other aggressive nationalist parties lurking in the political backwoods, ready to capitalize on voter disgruntlement with existing political options. Among those, Germany’s National Democratic Party, NDP, actually captured on seat in the European Parliament this time around.
With the history of Front National in mind, only imagination sets boundaries to what the NPD can accomplish.
Another example is the Party of the Swedes. Originally called the National Socialist Front and merged with violence-prone Swedish Resistance Movement, the Party of the Swedes is waiting for the patriotic, parliamentarian Swedish Democrats to fail to deliver on their voters’ Euro-skepticism. While waiting, Party of the Swedes is gaining parliamentary skills at the local level around Sweden. That experience can then be used in a run for national office – and eventually to reach for the European Parliament.
While fundamentally anti-democratic movements gained ground, the surge of democratic, patriotic parties is the only silver lining in this European Parliament election. This group is still small compared to the traditional center-right parties known under their acronyms EPP (center-right) and ALDE (center-liberal). But these democratic, patriotic parties hold the map in their hands to Europe’s future. If the EPP and ALDE choose to cooperate with them, then Europe will choose the stable, democratic road to the future.
If, on the other hand, the Europhiles in EPP and ALDE continue to ignore the growing, sound, democratic version of Euro-skepticism, and instead charge ahead with their project of a grand European Super-Union, the voter reaction will be fierce and potentially catastrophic. At that point, voters will seek other, much less palatable outlets for their skepticism or outright resistance to the European project.
If leaders of Europe’s conservatives, liberals and social democrats do not pay attention to what actually happened in this European election, they will do Golden Dawn, Jobbik, NPD and Front National a service they will regret for the rest of their lives.
It does not matter if Marine Le Pen is a fascist or an aggressive nationalist. Her surge to pan-European prominence has uncorked a bottle where black-shirted genies have been locked away for decades. History has shown how relentlessly those genies can intoxicate cadres of voters and how viciously they can tear down the institutions of parliamentary democracy.
Europe is playing with fire. The only thing that stands between the torch of fascism, lit up in this election, and a pan-European bonfire is the skill and insightfulness of a small group of Europhile politicians and bureaucrats in the hallways of power in Brussels. So far the leaders of EPP and ALDE, as well as the European Commission, have thoroughly ignored the rise of Euro-skepticism around the continent. So far they have been completely tone deaf to widespread popular frustration with the EU project.
Hopefully, they will come around and start listening to their critics. Hopefully they will let Nigel Farage be the recognized voice of Euro-criticism. But time is running out. If nothing decisively happens soon, the same trend that was set in this election will begin to show up in national elections.
In 2017, the Palais de l’Elysee could have a new tenant – Marine Le Pen.
The EU parliamentary elections have barely begun – they take place over a four-day stretch from Thursday to Sunday – before representatives of the European political establishment are out in media trying to explain away the surge in support for totalitarian parties. One of the most egregious examples is Wolfgang Schäuble, treasury secretary of the German government. The EU Business reports:
German Finance Minister Wolfgang Schaeuble denied in an interview Friday that the rise of eurosceptics expected in weekend elections was due to austerity policies championed by Berlin. He was asked by The Wall Street Journal whether anticipated gains by populist and anti-EU parties in the European Parliament vote until Sunday would be the price to pay for years of belt-tightening. “Some will interpret it that way,” Schaeuble replied. “I think that’s wrong. You can see that our policy to stabilise the eurozone was successful.”
The reason why he can say this with a straight face is that his definition of “successful” is strictly limited to the fact that the EU, the ECB and the IMF – the Troika – forcefully backed by the German government, prevented a break-up of the euro zone. The Troika’s purpose with the 2012 wave of austerity policies that swept through primarily – but not exclusively – the southern rim of the European continent, was not to restore, or even open a path back to growth and full employment. The purpose was instead to end the surge in expectations that Greece and Italy were going to leave the euro zone. Policy makers and analysts in the inner circles of the Troika assumed that if they could put a leash on runaway government deficits the speculators waiting for the return of the Drakhma and the Lira would be convinced that nobody was about to exit the currency union.
In the short run, they were correct. In Greece, interest rates dropped almost as dramatically as they increased:
However, this decline could just as well be the result of the ECB’s highly irresponsible pledge to buy any amount of treasury bonds from any country within its jurisdiction. But more importantly, even if the austerity measures calmed down speculations about a currency secession, those measures did not solve the underlying macroeconomic crisis. Greece still suffers from 55-percent youth unemployment; the economy still is not growing but actually shrinking; improvements in the Greek government budget over the past year are entirely due to one-time measures related to austerity. Once these one-time effects have worked their way through the budget, there will be no lasting improvement left.
This also means that the long-term threat to the unity of the euro zone still remains. It has just fallen under the media radar for now.
Greece’s only long-term chance is that the Troika will declare austerity cease-fire. If that happens, the Greek economy will be granted some time to catch its breath and re-structure itself to function under the combination of eroded entitlements and higher taxes. Only then can the private sector begin to create jobs again – and only then will the long-term threat of a Greek secession from the euro go away permanently.
This is all common sense, founded in a sound, solid understanding of macroeconomics. Such understanding is, however, a scarce resource among political leaders, especially in Europe. As the EU Business article continues, Mr. Shäuble continues his ignorant rant:
[Schaeuble] also rejected that the tough fiscal medicine and economic restructuring [that] Germany promoted were the causes of high unemployment and recession in much of the single currency area, declaring “that is false”. “The long recession is the consequence of a financial crisis whose origin wasn’t in the eurozone,” he said, adding in a stab at the United States: “Remind me where Lehman Brothers was based.” The 2008 collapse of the US investment bank was the biggest bankruptcy in US history and sparked the global financial crisis from which the world economy is still recovering.
Yes, the myth that this was a financial crisis… If a financial crisis is going to cause a general economic recession, it needs to transmit the negative consequences of credit losses into the real sector of the economy. Consumers and businesses must be directly impacted by the credit losses in the financial system.
The problem is that there is really no evidence of such a transmission mechanism at work in 2008-2009. Put bluntly: if that transmission mechanism existed, one of its main effects would be a rise in interest rates on loans from banks to non-financial businesses. But no such increase took place. Quite the contrary, in fact, as I have explained at length: just as the financial crisis was supposed to cause a surge in interest rates, a wipe-out of credit available even to highly qualified borrowers, interest rates on business credit actually began declining.
Available evidence (which I plan to collect and thoroughly explain in a future publication; first, let’s get my book Industrial Poverty out on the market) clearly shows that there was a recession looming independently of the financial credit crunch. That crisis was already under way when the Lehman Brothers crash happened – and without that real-sector, independent downturn we would not be able to explain why the central bank policies to save the financial sector had no visible impact on the economic crisis.
In short: businesses and consumers stopped demanding credit because of a general sense of pessimism that emerges in all recessions. The problem with the Great Recession was that once growth slowed or turned negative, once unemployment rose, an entire cadre of policy makers, from the EU to the ECB to the German government, decided to make a bad macroeconomic situation even worse by raising taxes and cutting government spending.
In Greece, austerity made a bad situation worse. It does not matter how much Wolfgang Schäuble denies it – his opinion cannot change facts and solid macroeconomic analysis. In fact, even the IMF has come around on this issue.
Of course, Schäuble tries on last trick to save the unsalvageable:
Schaeuble added that “the unemployment that we have in all advanced countries, not just in the eurozone, has to do with the dramatic transformation of labour markets through technology”. “You no longer need the same number of employees to produce goods. You have different needs for skills and qualifications of young people.”
Of course. At no point in time since the first, primitive forms of manufacturing were invented back in the late Middle Ages, has there ever been any improvement in productivity. Only in the past five years has there been a spurt in productivity in European manufacturing…
Wolfgang Schäuble is either completely incompetent – which I doubt – or politically reckless. By defending austerity as a means to somehow improve people’s lives, he aligns his political views with those who believe that “higher goals” are more important in politics than the opportunity of private citizens to build their lives and carve out a path to prosperity for themselves and their families.
There is a name for such priorities. It is arrogance. When politicians ignore the fact that millions upon millions of people suffer as a result of their policies, those politicians have forfeited their credibility as participants in a democratic government.
It is understandable that Schäuble, somewhere, somehow, is trying to fend off the challenge that he and other pro-EU politicians face from the surging totalitarian movements across Europe. But you don’t defeat aggressive government expansionists by becoming one yourself. That is exactly what Schäuble can become if he sticks to his arrogant denial of facts and continues to believe that anti-democratic austerity policies can both save democracy and people’s jobs.
On Monday I warned of how totalitarians were making big gains in the Greek local elections. Tomorrow the entire European Union begins a four-day vote for the European Parliament, and the same thing may very well happen there. The risk for totalitarian advancement is not confined to Greece either – it could turn out to be a continent-wide trend.
Although the parliament does not have full legislative powers, its role is gradually increasing in shaping Europe’s future. It has gained a bit more formal power over the years, and as is normal for parliamentary systems it has the final word on who becomes leader of the executive branch, in this case president of the EU Commission. Therefore, it matters a great deal what ideological composition the EU Parliament has. A growing presence in the EU Parliament of totalitarian parties is inevitably going to have repercussions for Europe’s social, political and economic future.
The threat from radical movements, both on the traditional right and the traditional left, is not new. I have warned on several occasions about the gathering storm of communism and fascism on Europe’s political horizon. This rising trend has been visible both in the polls and in the bureaucracy itself. So far, Greece has proven to be more of a bellwether nation for Europe’s politics than an aberration, which lends extra importance to the Greek elections this past weekend. Greek voters did not exactly improve the forecast for European politics, especially since those elections were held so close to the EU election.
As if to confirm the seriousness of the threat from anti-democratic movements across Europe, the last election forecast from PollWatch predicts that totalitarian parties are going to make their strongest showing in Europe since before World War II. In Greece, Syriza is forecasted to win with almost 30 percent of the votes. This is a party that sees former Venezuelan president Hugo Chavez as a role model. Venezuela is perhaps the only industrialized nation in the Post Cold War era that has had an even more devastating encounter with big government than Greece has had under the Great Recession. So, obviously, more is better…
To add insult to injury, openly Nazi Golden Dawn is predicted to be the third largest party in the Greek EU elections. This actually under-estimates their support among voters: since Golden Dawn is strongly opposed to the EU as it is constructed today, their voters are not predisposed to go and vote in the EU parliamentary election. The real test of their long-term strength will come in the next Greek national elections, which are still a few years out.
Another troubling message from PollWatch concerns France, where aggressively nationalist Front National is predicted to win the EU elections. The Financial Times has described the Front National as having an undeniable fascist touch and strong ties to brown-shirt British National Party and aggressively nationalist Jobbik in Hungary. While the current leader of Front National, Marine Le Pen, has been trying to steer her party in toward the political center line, her efforts have thus far not washed away the dark legacy of her father and the party’s founder, Jean-Marie Le Pen.
As for Hungary, there are two parties that compete for the position as most aggressively nationalist. Jobbik edges out Fidesz on the ideological front and is, according to the aforementioned Financial Times article, “really thuggish: it has a uniformed militia, and specialises in stirring up antagonisms towards the Roma.” PollWatch predicts that Jobbik will capture more than 17 percent of the Hungarian EU votes and thus come in second. Fidesz, the predicted winner, is a somewhat more traditional European nationalist party, but its ideological foundation accords more with Jobbik than with mild-mannered social democrats or liberals.
In Portugal the radically leftist Socialist Party is predicted to win with almost 40 percent of the votes. This party has historically been one of Europe’s most successful communist parties. It has capitalized mercilessly on the Great Depression, making political promises similar to those of Syriza in Greece, namely to restore the welfare state to its old glory and then expand government from there. (Clearly, the world’s largest government is not enough for Europe’s increasingly aggressive socialists and communists.)
Overall, then, the picture is pretty grim for Europe’s immediate political future. However, there are some mitigating predictions in the poll. Britain’s BNP and equally fascist National Democrats in Germany seem to be confined to one or two percent of the votes. This is good news, but it is also important to keep in mind that only a few years ago people were laughing at the thought of Front National winning a nationwide election in France. If Front National, Jobbik, Golden Dawn and others like them do well in this election, it could pave the way for stronger showings by Germany’s National Democrats and even British BNP.
Hopefully, the rise of patriotic, democratic parties across Europe can serve as a firewall against fascism. Democratic, patriotic parties like British UKIP, Denmark’s Danish People’s Party or Party for Freedom in the Netherlands have nothing in common with fascist parties other than a belief that the nation state should be strengthened vs. the EU. Before democratic patriots came onto the European political scene, European voters who were patriotic in the traditional American sense – you believe in your country and want it to be free, open, peaceful and democratic – had nowhere to go but to ugly fascists like the BNP in Britain. Fascists capitalized on this, of course, and for a while it looked like the BNP and even the ND in Germany could become credible political players.
Fortunately, democratic patriots in Britain now have somewhere to go where they can love their country without supporting totalitarianism. That somewhere is the UKIP, which wants Britain out of the EU, that Britain regains sovereignty over its own legal jurisdiction, that government is scaled back and taxes come down. Under its relentless leader Nigel Farage, UKIP is predicted to win the British EU elections.
Party for Freedom, led by Geert Wilders, will probably come in second in the Netherlands while Denmark’s democratic patriots in the Danish People’s Party look like winners.
Again, hopefully this will keep fascism from once again becoming a dominant force in European politics. But we must also remember that fascism is only one form of totalitarianism; socialism is the other. With both fascism and socialism advancing in the EU elections, the stage will be set for more turbulence in European politics, more social unrest – and more economic stagnation.
And when times got tough, there was just about enough
But we saw it through without complaining
For deep inside was a burning pride
In the town I loved so well
The current economic crisis in Europe is not the first. Mankind has experienced good and bad economic times for as long as organized economic activity has been around. If we had the proper documentation we could probably study business cycles as far back in time as ten thousand years. While we cannot say for certain how people far back in history handled economic recessions and depressions, we do know from recent history (the past few hundred years) that we as a civilized, intelligent species are able to go through tough times without resorting to revolutionary measures.
Yet today, when Western Civilization is supposed to be at the very height of its sophistication, the gut reaction from people living under serious economic conditions seems to be to embrace political extremism. The emerging results from the local elections in Greece is a case in point. From the EU Observer:
The radical-left Syriza party is ahead in the first round of voting in Greek local elections on Sunday (18 May), while exit polls suggest a boost for the neo-Nazi Golden Dawn in some areas. Syriza is set to take Athens and the surrounding Attica region away from the ruling coalition of the conservative New Democracy and its socialist partner, Pasok.
Syriza is ideologically affiliated with the Venezuelan socialist party. Their ideal economic system is Chavista socialism, with widespread government ownership, radical redistribution measures, and both fiscal and monetary policy that completely ignore the laws of economics. Their ambitions do not stop at simply restoring the (failed) European welfare state – they want to make Greece the first European country to limp along in the left footsteps of Hugo Chavez.
The fact that they make progress in the Greek elections is troubling, but hardly surprising. They have made steady advancements in Greek elections for the past couple of years. Together with other radical leftist parties in Europe they are likely going to gain significantly in the European Parliament elections later this month.
Equally troubling is the fact that Greek voters also allowed the openly Nazi Golden Dawn to advance. They are the first Nazis to set foot in a European parliament since the 1930s, they have made a name for themselves as openly racist and nationalist, and they want to socialize large sectors of the Greek economy. On top of that, they are part of a growing radically nationalist movement across Europe, one that has not yet gained the same momentum as the Communist surge that Syriza is part of. However, it is only a matter of time before the two are equally powerful – and equally threatening to Europe’s future political stability.
Again, the gasoline that is fueling that rise of totalitarianism in Europe is – yes – the ongoing economic crisis. Back to the EU Observer article:
Prime Minister Antonis Samaras’ conservative-led coalition came to power two years ago to steer Greece out of its debt-ridden crisis. But austerity measures imposed by the troika of international creditors on Greece, and then implemented by Samaras, led to rocketing unemployment and a 40 percent drop in purchasing power since the start of the crisis four years ago. Jobless rates published earlier last month show more Greeks are out of work compared to last year.
As I noted back in April, the Greek economic crisis is stabilizing, not going away. This, again, explains why extremism is on the march in Greece – instead of “seeing it through” and relying on “a burning pride” to carry the day, Greek voters rush to those who promise revolutionary solutions. The EU Observer again:
The Wall Street Journal reports it will be the first time in almost 40 years that a [center-right] New Democracy candidate will not be in the second [election] round in Athens. … In a further blow to Prime Minister Samaras, the Guardian newspaper reports neo-Nazi Golden Dawn candidate for Athens’ mayor could come in third with 15.5 percent of the votes. Their candidate for prefect in Attica obtained around 10 percent of the votes. Despite being under investigation for its criminal activities, Golden Dawn attracts voters because it is seen as reaching out to those most affected by the crisis. “Everyone I know is voting for Golden Dawn because they are starving and jobless,” a Greek voter told the Guardian.
Greece is the most extreme example in Europe, but it is far from the only case of dangerous political radicalization. Again, keep a watchful eye on the European Parliamentary elections, which take place in the window of May 22 – May 25. As current opinion polls show, there is a clear risk that totalitarian nationalists (not to be confused with libertarian-leaning patriots like UKIP in Britain) and equally totalitarian communists (not to be confused with traditional European social democrats) will be the biggest winners. That would be thoroughly bad for Europe, and the repercussions should echo all the way into the State Department in Washington, DC.
Click on Page 7 about Sweden for an article on how Nazis in Sweden are consolidating and gaining strength. A scary story, but very important.