Crisis in Greece Only the Tip of the Iceberg

The following is a special post on the current crisis in Greece. I hope now to return to the regular monthly schedule of the blog, subject of course to further developments in Greece or elsewhere. —Sam Williams

On Sunday, July 5, the Greek people gave their answer to the blackmail of the “troika” of the European Commission, European Central Bank and International Monetary Fund. It was the answer workers and oppressed throughout the world wanted to hear. Oxi! In Greek, no!

The financial markets, so convinced they would have their way, were shocked by the no vote and fell sharply in pre-opening trading. Later, markets were calmed somewhat when Greek Finance Minister Yanis Varoufakis, who had become a symbol of resistance to the troika demands, announced he was resigning in order to smooth the way for renewed negotiations with the troika.

However, the price of oil, which had gradually recovered from its crash late last year, reaching over $60 a barrel, fell sharply on news of the Greek vote, closing at $52.53 on July 6. This indicates fears of a near-term recession and consequent drop in demand for oil. If the price of oil were to remain down, it would increase pressure on the oil-producing countries, especially Russia and Venezuela. The recession in the U.S. oil industry would also deepen.

As is usually the case in a crisis, the interest rate on U.S. government bonds fell as money took refugee in the relative safety of U.S. Treasuries. We can be sure the central banks, led by the U.S. Federal Reserve, have plans to step in if panicky reactions develop in the markets and things seem to be getting out of hand.

The capitalists had figured that with Greek banks closed for a week the threat of starvation—not through lack of food but of money—would teach the Greek people a lesson once and for all. Wall Street and the other big capitalists had been having things go their way at least since the 1980s. (1) But they were not to have their way on July 5.

What brought things to this climax? The immediate crisis broke out when the IMF, the EC, and the ECB (which issues euro notes) refused to “roll over” debts due to the IMF on July 30 unless additional austerity measures were implemented. The Greek left-wing Syriza government instead of knuckling under scheduled the July 5 referendum with a recommendation for a no vote.

Syriza hoped that the vote would strengthen its hand in negotiations with the troika and force a retreat on the troika’s demands for ever more austerity and labor market “reforms” designed to strengthen the hands of the bosses against the workers. Syriza has made it clear that it wants to remain within the Eurozone and won’t attempt to carry out a socialist revolution in Greece.

When Syriza announced the referendum, prices plunged on world stock markets, but the markets began to recover within a day. Wall Street stockbrokers quickly assured their clients that there was nothing to worry about. Faced with starvation and responding to a huge propaganda campaign for a “yes” vote by the privately owned Greek media, the Greek people would surely “democratically” vote to accept the troika terms. Discredited, the pesky Syriza government would then be forced to call new elections that would return the old line “pro-European” parties like Pasok and New Democracy to power.

This is the way democracy is supposed to work, isn’t it? And indeed under capitalism that’s the way it usually does. But not this time.

Arguments of the supporters of the troika within Greece

The Greek crisis has technical, economic and, above all, political aspects. Let’s start with the technical.

Under the euro system, the Greek government and central bank lack one of the most basic elements of political sovereignty, the right to issue paper money declared legal tender for all debts private and public. When the U.S. banking system was on the point of collapse in September 2008, the Federal Reserve System “ran its printing presses” to prevent a massive run on the banks. Strangely enough, there was no “troika” demanding that the Fed stop the operation and instead force the U.S banks to accept the consequences of their reckless, often predatory lending. But what is allowed for the “great” United States is not allowed for “little” Greece.

Greece’s monetary crisis

Monetary crises can take two forms. One involves a sudden decline of the price
of a paper currency against other paper currencies or gold, usually both. The other type involves the lack of convertibility of credit money—bank deposits—into legal-tender paper money and coins. Starting with the announcement that the IMF loans (2) would not be renewed until still more austerity was agreed to, Greece was confronted with a monetary crisis of the second type.

To prevent a massive run on the Greek banks that would force them into bankruptcy, the Greek government was forced to close the banks last week allowing only very limited cash withdrawals. It also imposed capital controls in order to keep as many euros within Greece as possible. As a result, the normal convertibility of bank deposits—the main type of credit money—into legal-tender cash broke down.

Back in the time of Marx and Engels, British banking legislation requiring that the Bank of England back any newly issued banknotes with gold was suspended on three occasions (1847, 1857 and 1866) in order to halt runs on the British banking system. Again, there was no troika to stop them from doing so.

In 1933, the government of Franklin D. Roosevelt issued Federal Reserve Bank Notes (3) to halt a run on the U.S. banks. Again, a troika, or its 1933 equivalent, was missing from action.

Will the Greek government, in order to end the banking crisis, reissue its old drachma currency now that the Greek people have said no? Presumably, in that case the debts within Greece now denominated in euros would be re-dominated in drachmas—those international debts denominated in euros or dollars would still be payable in those currencies and not in drachmas—and banks would be reopened paying out drachmas instead of euros. The Syriza government insisted, however, that it had no such plans.

According to AFP, Yanis Varoufakis told the Australian Broadcasting Company, We don’t have the capacity. … one of the things we had to do was get rid of all our printing presses.” This is the financial equivalent of the U.N. disarmers forcing the Iraqi government to get rid of all weapons that might slow down a U.S.-British invasion so the planned operation could then go ahead with minimum casualties for the invaders.

Of course, the Greek government presumably can obtain new printing presses (4) somewhat more easily then Iraq could have obtained weapons sufficient to deter the U.S.-British attack in 2003. But financial crises, particularly in these days of the Internet and computer-controlled trading, move with lightening speed. Clearly, the troika was hoping that the extreme internal monetary crisis within Greece they created by refusing to roll over the debt would force the Greek people to vote “yes” on the referendum. But it didn’t turn that way.

Hence, the acute monetary and political crisis that the troika thought would end
with a yes vote and the defeat of Syriza continues. So much for the technical side of the Greek monetary and banking crisis, but what about the long-term underlying economic and political factors behind the crisis?

Long-term factors behind the crisis

Most of the articles that have appeared in recent days have centered on the troika and Greece. In my opinion, they take far too narrow a view. We need to look at the world economy and the dollar system as a whole if we are to get to the root of the suddenly acute Greek crisis.

As I mentioned, the U.S. Federal Reserve System responded to the crisis of 2008 by an unparalleled expansion of the U.S. dollar-denominated monetary base. This prevented the kind of bank closures in the U.S. that have occurred in Greece. Even at the height of the panic, the basic convertibility of credit money—U.S. dollar-denominated bank deposits—into paper dollars was never in much doubt.

What would have happened in the U.S. and in the world as a whole if the bank closures in Greece had happened in the U.S. in September 2008? Would it have been a repeat of the super-crisis of 1933, which ended in a four-day U.S. bank holiday as Franklin Roosevelt assumed office in March 1933? No. It would have been far worse!

In the world of 1933, there were no debit and credit cards. Commercial bank-created credit money played little or no role in the retail economy in the Depression-era U.S. As far as the retail economy was concerned, payments were made in old-fashioned cash—banknotes issued by the Federal Reserve System or the U.S. Treasury and coins made of base metals—token money backed up by the full credit of the U.S. government.

While U.S. green dollar bills were a form of credit money before Roosevelt assumed office—they could be cashed in for gold coins made of real money material, gold bullion—Roosevelt wasted little time in converting them into legal-tender paper money, at least as far as U.S. residents were concerned. The U.S. monetary crisis involving the convertibility of bank deposits into green paper dollars ended without new austerity measures imposed on the U.S. or its Depression-weary people.

While there have been monetary crises involving the U.S. dollar since 1933, they have so far all involved the convertibility of the dollar into gold, or sharp rises in the dollar price of gold, not the convertibility of U.S. bank deposits into legal-tender paper dollars. Recently, however, the U.S. dollar has been rising in value against both gold and the euro. The reason is that the U.S. Federal Reserve System has virtually halted the growth in the U.S. dollar monetary base. In response, the rate of interest on U.S. 30-year government bonds has risen from under 2 percent to nearly 2.5 percent in recent weeks.

The Fed has been signaling that it will soon raise short-term interest rates as well. Indeed, it was widely expected to raise interest rates last month, but a series of surprisingly weak GDP and industrial production reports caused the Fed to postpone the move. But at least before the crisis in Greece became acute, the Fed still planned to raise the federal funds rate before the end of the year, perhaps as early as September. The still historically low but recently rising U.S. interest rates have attracted money from other currencies including the euro into U.S. dollars.

In contrast, the European central bank has been increasing its issue of euro notes in a bid to end Europe’s economic stagnation. As a result, the euro has fallen from about $1.30 to around $1.10. But the ability of the ECB to continue to ease—create more euro-denominated paper money and bank reserves—is limited by the Fed’s current tightening.

There are a lot of capitalists with assets in euros but debts in U.S. dollars. If the current falling dollar price of the euro were to accelerate, a lot of capitalists would have trouble purchasing enough dollars to pay off their debts due in U.S. dollars.

But why is the Federal Reserve carrying out a tightening that is in turn pressuring the European Central Bank and the rest of the troika to behave so unreasonably toward the Greeks? The reason is that if the Federal Reserve System continues to expand its dollar-denominated monetary base—in effect print paper dollars—at the rate it has been doing since the crisis of 2008, sooner or later there will be a run on the dollar that will take the form of a sharp rise in the dollar price of gold. In other words, the U.S. and the entire international monetary system would suffer a monetary crisis involving a sharp fall in the rate of exchange between the U.S. dollar—the world reserve currency—and the money commodity gold. The result would be a wave of global inflation followed by soaring interest rates that could only end in a new global “Great Recession”—or worse.

In order to prevent such a dollar-gold monetary crisis, the Fed has been frantically signaling that it will soon start raising short-term interest rate and has frozen the rise of its dollar-denominated monetary base. It even claims it will reduce the size of the global U.S. dollar monetary base as “normal” financial conditions return.

It is better, the leaders of the Federal Reserve System figure, to have a limited rise in interest rates now than a panic-driven much bigger rise a few years from now. This might well make the difference between an “ordinary” recession that is due over the next few years and something a whole lot worse. However, the Fed’s moves away from the quantitative easing of the post-Great Recession years is already straining the chain of payments in many places. The Greek example—at the moment—is only the most dramatic case. (5)

The fall of the euro against the dollar and the move away from “quantitative easing” by the Federal Reserve System has already created problems for the U.S. economy. The sudden cheapening of European commodities for the U.S. brought about by the devaluation of the euro against the dollar is putting new pressure on the U.S. trade balance and is believed to have played a role, along with the harsh winter, in the poor U.S. economic performance during the first quarter of this year. A further substantial devaluation of the euro against the dollar would likely lead very quickly to a new U.S. recession.

These are the immediate financial pressures driving the troika to respond to the Greek crisis in the way they have. Though the euro seems mighty from the point of view of Greece, in the wider scheme of things it is only a satellite of the U.S. dollar. But why does the Fed have to tighten at this time, since the dollar has generally been strong against gold and other currencies since 2011? (For a detailed answer, see here.)

The more “progressive” Keynesian economists like Paul Krugman and Joseph Stiglitz point out correctly that there are still plenty of potential workers that would re-enter the work force if they had any real prospects of finding jobs, as shown by the very low participation rate of the U.S. population in the work force. And there is still a considerable degree of excess industry capacity as well. These economists—a minority within the profession—believe world capitalism needs more, not less, monetary and fiscal stimulation. Paul Krugman and Joseph Stiglitz, have generally supported the stand of the Syriza government against further austerity.

These economists argue that the U.S. Federal Reserve Board should back off from its current tightening stance and that the U.S. government should allow its budget deficit to grow. A weaker dollar against the euro, this reasoning goes, will allow the European Central Bank to print more euros without fear of a major devaluation against the dollar. The more dollars there are, the more euros there can be as well. And the more euros there are, the easier it will be to come to some sort of deal with the Greeks that does not involve still more austerity.

The Greek crisis and the current industrial cycle

The Greeks had one potential bargaining chip, and driven against the wall they decided to use it. Syriza, backed by the democratic vote of the Greek people, is saying that it is now the troika’s turn to back down, or at least give a little. If it doesn’t, it may well precipitate a break somewhere else in the vast complex chain that is the global credit system—if not immediately, perhaps in the near future.

The closing of the banks has turned Greece into a gigantic monetary vacuum. The history of capitalist monetary and banking crises shows that money abhors a vacuum. Sooner or later, money will return to Greece if only to take advantage of sky-high interest rates, dirt-cheap asset prices, and not least low wages.

When money capital floods back into Greece, it will tug on the global chain of payments in a thousand in one other places. There is always the chance that the chain will break somewhere else—perhaps in an unexpected place far from Greece and even Europe–precipitating a much bigger panic with all the consequences. This should give the troika and their masters at the Federal Reserve System and U.S. Treasury and on Wall Street something to think about as they engage in their emergency meetings and plan their next moves in this fast unfolding crisis.

As the Greek crisis reached a fever pitch last week, the U.S. financial press was still confident things would go their way and went on a big campaign explaining to their concerned clients that the Greek crisis was no threat to their portfolios. No need to panic, Schwab is saying, and sell their stocks.

An example of this capitalist optimism is an “Update” sent out by stock brokerage giant Charles Schwab explaining that the Greek crisis has not changed the positive outlook for stocks. “The current crisis in Greece,” state Schwab experts Kathy A. Jones, Michelle Gilbley and Jeffrey Kleintop, “may not turn out to be a major market event.” And why not? “Global growth is stronger and more balanced than it’s been for the last five years, with all of the world’s major economies growing. This means the global economy may be more resilient to shocks, such as a possible Greek default.”

In fact, the opposite “may” very well be the case. It is quite possible that the financial fallout from the current Greek crisis, along with the fallout from last year’s crisis in Russia and the crash of the oil market that caused it, will end the current world economic upturn within a few months or even weeks. But let’s take the optimistic point of view and assume that the Greek crisis is “contained” and the world economy keeps improving as Schwab’s experts assume.

The boom phase of the industrial cycle is certainly due soon considering that the last crisis broke out almost eight years ago. (6) Economic booms, however, always put extra strains on the credit system as demand for credit increases on the part of businesses and consumers. Indeed, these strains always end in a more or less severe recession.

The history of recessions and more severe crises show that they as a rule break out not in periods of stagnation or depression but rather after a period of improving business and boom much like Schwab reports is the case today. Let’s take an example from European history, the German debt crisis of the 1920s.

The German debt crisis was different from the present Greek debt crisis in many ways. Unlike the Greek debt crisis, which arose due to the normal workings of the capitalist system, the German debt crisis of the 1920s was a product of Germany’s defeat in World War I. The imperialist victors attempted to put the full burden of paying for the war on their German competitors. Germany financed its debt payments by borrowing money from the United States. The German hyper-inflation of 1923 by effectively destroying Germany’s money supply turned Germany into a monetary vacuum somewhat like the vacuum Greece is today. (7) The resulting extremely high interest rates in Germany compared to the rest of the world caused Wall Street money lenders on the hunt for the highest return to begin loaning Germany huge amounts of money as soon as the mark was stabilized.

During the mid-1920s, with its so-so business conditions in both the United States and Europe, the Germany debt problems appeared manageable as money kept flowing into cash-starved Germany from the (relatively) cash-rich United States. Then came the economic boom of 1928-1929. This was not only a boom of the stock market, as stock market-minded historians paint it, but a boom in industrial production and wholesale and retail trade as well. Suddenly, the U.S. economy—and to a lesser extent the world economy—was “hot.” And that’s exactly when the German debt problem got out of hand.

As the demand for credit soared in the United States, the flow of credit to Germany was cut off. Suddenly, Germany couldn’t borrow any more from the United States, not because of a crisis but because of an economic boom! The chain of credit broke in a thousand and one pieces, the U.S. boom soon gave way to crisis and then super-crisis, and Germany and Europe began their descent into Depression, fascism and finally the Second World War. (8)

The lesson is that assuming the current crisis doesn’t directly lead to a devastating world economic crisis but the world economy gains some momentum over the next few years, the resulting strains on the world financial system will only be aggravated, not lessened Perhaps the bulls at Charles Schwab should be careful in what they wish for.

Is a new world monetary system the answer?

There have been many complaints from economists about the present U.S. dollar-centered world monetary system—especially from non-imperialist countries. Economists from the Peoples Republic of China have been especially outspoken about this. They propose that a global bank of issue replace the U.S. Federal Reserve System as the de facto world central bank. On its board would be representatives from developing countries such as China and not just the United States like is the case with the current Open Market Committee of the U.S. Federal Reserve System.

This indeed would be vastly more democratic than the current dollar system. The world capitalist economy has reached a stage where a worldwide currency is necessary. Why should its issue be controlled by only one country? Shouldn’t all countries have a voice in deciding exactly how much the global currency is issued?

Not surprisingly, the U.S. has reacted very negatively to the suggestions of Chinese economists. Washington has no intention of abandoning its monopoly on issuing what is in effect the only real global paper currency in which most international debts are denominated, any more than it is eager to give up its one-sided military power. But even if such a democratic reform of the international monetary system were possible, it still would not be able to overcome the most basic contradictions of any capitalist monetary system.

The notes of such a global bank would still represent weights of gold—or whatever commodity would serve as money—in circulation. And such a bank would be no more immune from runs against its currency in the form of suddenly rising prices of gold bullion in terms of its currency than the Federal Reserve System is. If our hypothetical democratic world central bank were to prevent the value of its notes from collapsing, it would have to periodically tighten their supply, precipitating the inevitable crises of generalized overproduction of commodities. (9) Indeed, such a monetary system would enable such crises to unfold in the purist way and perhaps in the long run with the most devastating consequences.

Another possible monetary reform would be a return to some kind of gold standard. Perhaps a worldwide central bank as described above could be created, but the new bank would have to redeem its banknotes in gold—whether in bullion or coin—on demand. That would eliminate the danger of runs in the form of soaring gold prices in terms of the bank’s notes leading to inflation and exploding interest rates ending in a general crash. But the bank would be all the more prone to classic bank runs on its gold reserves.

The truth is that no monetary reform, no matter how democratic, can eliminate or in the long run curb the increasingly devastating scope and consequences of the periodic outbreak of crises of generalized overproduction of commodities. To eliminate these crises, it is necessary to eliminate the contradiction between today’s thoroughly globally socialized system of production and the private appropriation of the product by a few billionaires and multi-millionaires. That is one of the reasons—though not the only reason—why we have to end the capitalist system of wage slavery and replace it with socialism.

Greece is only the most extreme example—at the moment—of the relentless capitalist drive toward austerity and take-backs that seek to roll back the historical gains made by the working class since the modern class struggle began around the turn of the 19th century. The argument of the capitalists is that the stalling engines of capitalist expanded reproduction can only be restarted at full force through more austerity. Indeed, the capitalists themselves—or at least the more intelligent ones—are afraid of the consequences. But as a class, the capitalists feel that they have no choice.

A strong argument can be made that from the viewpoint of the “health” of capitalism in 2008 the Federal Reserve System should have allowed the U.S. banking system to crash. The resulting super-Depression would not have only wiped out debts, more importantly it would have destroyed decades of overproduction, especially in the form of “surplus” means of production. If this had happened and capitalism survived, then for a few decades the engines of capitalist (re)production would have re-energized like they last were in the wake of the 1930s Depression and World War II.

The capitalists themselves fear the consequences of the unprecedented orgy of destruction that they are being driven toward. It is only through such destruction that the conditions of not only producing but realizing surplus value can be temporarily restored to allow a return to healthy growth. The current crisis in Greece is only the tip of the iceberg towards which the “Titanic”—our world—is sailing. Only the working class has the power to turn the ship away from the iceberg. The current captain—the capitalist ruling class—can at best slow or accelerate the ship but cannot change its fatal direction.

The people of Greece and indeed throughout the world are being asked to make sacrifices that though are harmful in the short run are positively disastrous in the long run. They are being asked to accept poverty so that a handful of billionaires and multi-millionaires can continue to live off their unpaid labor—until they crash into the iceberg and the ship of our civilization sinks for good.

The real essence of the Greek crisis—the class struggle

That is why on one side we have the rich Wall Streeters, the media owned by the rich, the official bought-and-paid-for “opinion makers” and their economists who explain that the “irresponsible” Greeks must be taught a lesson. On the other side, the trade unions and the popular organizations, both old and new, that are solidly on the side of the Greeks. They hope that the Greeks will stand firm and force the troika to back down, not only for the sake of the Greeks but for their own sakes. A victory against austerity in Greece, no matter how partial and temporary, will strengthen the fight against austerity elsewhere. A defeat will set it back.

In essence, the Greek crisis is not really just a crisis involving Greece and the troika. It is not a struggle over whether Greece will stay “within” or somehow “leave” the European Union. Nor is it a matter of the euro versus a possible revived drachma, or even about world monetary reform.

What we are seeing is a class struggle between the workers and their potential quite numerous middle-class allies on one side and the capitalist ruling class, ever more unfit to continue to manage the affairs of society, on the other. The question involved is not whether the workers will work 60 percent of the workday for their bosses and only 40 percent for themselves versus 80 percent for their bosses and only 20 percent for themselves, though reformists in Syriza and perhaps the majority of the Greek workers still see it that way.

Rather, it involves the question of whether the productive forces, science and technology created by generations of workers of both brawn and brain will be used to confront the massive problems the world now faces beginning with global warming and climate change. Or will these questions be subordinated to the drive of a tiny minority of super-rich stock owners and bondholders to accumulate still more profits up until the time they finally destroy our civilization? Saying no to such subordination is the only way we can stop the destruction of civilization.

Victory to the Greek people!


1 Starting in the late 1970s, a series of right-wing governments came to power in Britain (Margaret Thatcher), China (Deng Xiaoping), the United States (Ronald Reagan), and the Soviet Union (Mikhail Gorbachev). Though these new governments differed in many ways, what they had in common was a drive to roll back the gains made by workers in the previous era. During the 1980s, the very meaning of the word “reform” changed from concessions made by the capitalists to the workers to the withdrawal of concessions in the interest of the capitalists. The most extreme case was the Gorbachev government’s dismantling of the Soviet planned economy, which was not a “reform” but a full-scale political and social counterrevolution presented initially as a program of “radical economic reform” of the Soviet socialist economy. (back)

2 About 90 percent of the IMF loans to Greece were used to pay off Greece’s capitalist creditors. However, until last week they pumped just enough cash into Greece to prevent a full-scale banking/monetary crisis from erupting. (back)

3 Technically, Federal Reserve Bank Notes, which are no longer issued, were slightly different from Federal Reserve Notes, but the effect of issuing extra of the former was identical to issuing extra of the latter. With the issuance of the Federal Reserve Bank Notes, the run on the U.S. banks was halted, and hoarded cash began to return to the banking system. (back)

4 Another technical solution to the immediate monetary crisis would be for the Greek government to issue script. Script is a special emergency form of credit money. In this case, the script would be a promise to pay the bearer in euro notes as soon as the immediate monetary crisis passes. If Greece, however, does leave or is expelled from the Eurozone, the script might be paid in drachmas instead of euros. (back)

5 It has been announced that U.S. colony Puerto Rico is experiencing a major debt crisis. Like Greece, Puerto Rico as a so-called Commonwealth of the United States is not allowed to issue its own currency. China has been experiencing a a stock market crisis in recent days combined with slowing growth. Brazil is on the verge of recession, and last year Russia experienced a major drop in the ruble associated with the crash in the price of oil. There is no lack of places where the chain of payments that make up the international credit system could break producing a crisis that would dwarf the current Greek crisis. (back)

6 The timing of the industrial cycle is not entirely arbitrary but is tied into the need of the industrial capitalists to periodically replace machines that are either wearing out or are rendered obsolete by advances in technology. Since there has been relatively little new investment in machinery since the last general crisis broke out in 2007-2008, the capitalists are under growing pressure to purchase new machinery for their factories or build new factories employing the latest technology. This should increase investment and whip up a cyclical economic boom. (back)

7 In 1923, faced by France’s occupation of Ruhr, the industrial heartland of defeated Germany, the German government began to print paper marks without restraint. The mark fell to what was for all practical purposes zero, effectively contracting the real money supply in Germany towards zero. Though the causes are different and Greece has had no recent inflationary crisis, the closing of the Greek banks has in effect dramatically reduced the Greek money supply. If the Greek banks remain closed or go bankrupt due to a run, the effective Greek money supply will shrink towards zero. Money capital tends to flow from areas of abundant money with relatively low interest rates to areas where money is scarce and interest rates are high. (back)

8 If the worst happens economically, like it did in Germany in the early 1930s, socialist revolution would increasingly become the only alternative to fascism. In that case, the worst outcome would be the failure of the reformist but by no means revolutionary Syriza government and its replacement by the fascist Golden Dawn, perhaps through a series of intermediate governments. Even this would not produce a new Hitler, because a fascist Greece would lack the industrial and therefore the military power to launch wars of conquest like Hitler did. Greece, therefore, no matter how tyrannical domestically its government might become, will not turn into a new Third Reich. However, the victory of Greek fascism would be equivalent to a new Mussolini. And like the old Mussolini did, it might well inspire the real potential new Hitlers in the United States and Germany. (back)

9 The tightening of the “money supply” by the central bank(s) precipitates crises, but we must never forget that the crises are caused by the general overproduction of commodities relative to the money commodity and not the policies of the central banks. The point that has to be kept in mind is that no central banking policy under the capitalist mode of production can prevent such crises from breaking out at periodic intervals and the credit and monetary crises that accompany them. It can at most and then within serious limitations change their form somewhat. (back)

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