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Not me - it was the workers, communists and socialists that did it.
When was the last you read that a country's economic problems were the result of capitalists demanding too much profit? This question occurred to me when I discovered from Phillip Inman (The Guardian 5 November 2011) that the Italian debt crisis is occurring because, "…Italian workers have paid themselves more than their German equivalents over the past 10 years for doing less work, less productively…".
One should note in passing that Mr Inman has identified a previously undiscovered characteristic of Italy that is certainly unique in the capitalist world. For the last ten years workers there have paid themselves, rather than being paid by their employers as in all other countries. Setting aside the discovery of this revolutionary remuneration arrangement, the message is still clear. You may have thought that Italy's economic problems result from 1) an irresponsible Prime Minister under criminal indictment, 2) a corrupt fiscal system in which the rich pay taxes at their pleasure, 3) a political system resolutely rightwing thanks to the power of neo-fascism, wealth and criminal gangs (the you-know-who that controls Sicily), 4) banks in which money laundering is standard business, 5) the perennial weakness of the Left, or all of the foregoing.
Wrong on all counts. Italy is in trouble because of greedy, lazy and over-paid workers, and the pay they have been awarding themselves ill suits their southernly station in life (and the European Union). In the context of this feckless working class behavior, one would expect to go to the statistics and discover that wage costs in Italy have "over the past 10 years" been rising faster and above those in Germany, the home of hard work and employee discipline.
Alas, one would be disappointed, as the table below shows. In 1997 unit labor costs in Italy stood at about eighty percent of those in Germany, and ten years later, they were, well, about eighty percent. Through the late 1990s and early 2000s the ratio actually declined, before returning to slightly above four-fifths.
But, of course, even if Italians were not paid more, they should not have been because they were "doing less work". Again, the statistics disappoint, because Eurostat (the EU database) reports that in 2009-2011 Italians in full time employment, public and private, worked a lazy average of 38 hours per week, compared to a robust 35.7 for the industrious Germans (see bottom of table).
In the context of the information in the table, one can ask, how is it possible for a journalist with a respectable, left-of-center newspaper to make such a blatantly fallacious argument about Italian workers? To some extent it can be explained by national stereotypes: northern Europeans are disciplined and industrious, while those Mediterranean types lack the work ethic and love to sit in tavernas and drink when they should be on the job. This argument was made last year for Greek workers, who, like their Italian counterparts, have longer hours and lower pay than in Germany (see Eurostat).
But more than national prejudices are at work. The problems of the Euro, including the probable crisis of the Italian debt, are the direct result of the international financial crisis of 2007-2008. That crisis resulted from the reckless behavior of private financial institutions in the United States after almost three decades of irresponsible deregulation by Republican and Democratic governments. In other words, Italy's debt problems result from bank behavior and the failure of European leaders to do their job to control that behavior. The obvious remedy is strict control of the European private financial sector, to impose upon it a discipline it will not enforce on itself.
To prevent this obvious solution, the banks and their sympathizers in governments, the media and the academe generate an alternative narrative: the problems we face result from greedy and lazy workers who are paid too much and work too little. Therefore, cut wages and benefits and use the "saving" to pay interest to bankers.
It is a potentially powerful narrative, because believing it implies that we, the non-rich of Europe, the 99% as the occupiers on Wall Street and elsewhere identify us, should reject any feeling or responsibility for cross-border solidarity. The source of the debt crisis is the Greek people, not banks. This implication is quite specific in the case of Germany, where the government assures the working and middle classes that it will not waste their hard-earned income on the lazy Greeks (Italians, Spaniards, Irish, Portuguese, etc, etc).
A less vulgar and more pernicious version of this narrative can be found in a New York Times article (8 November, "In Turmoil, Greece and Italy Deepen Euro Crisis"), where we read, "In both [Italy and Greece], it is not only the economy that is on trial, but also the ability of democratic government to make highly unpopular choices". This isbackwards. On trial is the ability of democratic government to make popular choices, such as the short-lived proposal for a popular referendum in Greece, or a financial transaction tax in Italy and elsewhere to pay for the debts generated by irresponsible private finance and banking. It is the power of financial interests that allow the savage austerity measures to be contemplated, much less adopted.
Austerity and so-called labor market reform come from a false narrative that blames the victims and rewards the perpetrators. We, the Europeans of the 99%, must embrace the valid narrative, the narrative of bank culpability and cross-border solidarity in response to it. The valid narrative produces a comprehensive solution to the burdens of debt for all the European countries that requires no bailouts. That solution is strict control of banking and finance, perhaps including an emergency system of public oversight in anticipation of fundamental reform of the entire financial system. Bad policies in the United States and Europe "broke" finance, and the 99% can force new policies to fix it.
To re-phrase the challenge in the New York Times, will democratic governments implement policies to benefit the 1% or of the 99%?
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