“Pure democracy” is the mendacious phrase of a liberal who wants to fool the workers. History knows of bourgeois democracy which takes the place of feudalism, and of proletarian democracy which takes the place of bourgeois democracy…

“Take the bourgeois parliament. Can it be that the learned Kautsky has never heard that the more highly democracy is developed, the more the bourgeois parliaments are subjected by the stock exchange and the bankers? This does not mean that we must not make use of bourgeois parliament…. But it does mean that only a liberal can forget the historical limitations and conventional nature of the bourgeois parliamentary system as Kautsky does. Even in the most democratic bourgeois state the oppressed people at every step encounter the crying contradiction between the formal equality proclaimed by the ‘democracy’ of the capitalists and the thousands of real limitations and subterfuges which turn the proletarians into wage-slaves. It is precisely this contradiction that is opening the eyes of the people to the rottenness, mendacity and hypocrisy of capitalism. It is this contradiction that the agitators and propagandists of socialism are constantly exposing to the people, in order to prepare them for revolution!”

(V.I. Lenin, The Proletarian Revolution and the Renegade Kautsky, 1918)

The bankers rule

Europe’s economic crisis is being transformed by the day into a deep political crisis. Italy and Greece both have new governments – governments of “national unity”, pledged to solve the economic and financial crisis that has rocked Europe to its foundations. What are these so-called technocratic governments and what do they represent?

The Independent (Sunday 20 November) writes:

“Political power in Europe has passed to a tiny elite of technocrats. Two days after the economist Lucas Papademos was sworn in as Prime Minister of Greece, another technocrat, Mario Monti, was asked to lead a new unity government in Italy.”

Isn’t this perfectly clear? In Italy and Greece, political power does not reside in the governments, and still less with the electorate. It is in the hands of a tiny elite of unelected technocrats. It is not democratically elected governments but the faceless technocrats in the German finance ministry, European Central Bank, the IMF and the European Commission, who will decide the future living conditions of the people of Greece, Italy and the whole of Europe. But whose interests do these “technocrats” act? The same article explains:

“Technocrat here is a euphemism for someone who has worked at or with the investment bank Goldman Sachs, nicknamed in financial circles ‘the vampire squid’. Mr Monti was a member of Goldman’s board of international advisers. Mario Draghi, the new president of the European Central Bank which controls eurozone monetary policy, is a Goldman man. So is Antonio Borges who, until Wednesday, was running the International Monetary Fund’s European division. Mr Papademos is a former vice-president of that same European Central Bank; he is also the man who was running the Central Bank of Greece at the time when that country, like Italy, used complex derivatives to slim down the apparent size of its government debts in order to qualify to join the euro. The rules of the euro mandated that such debts shouldn’t be above 60 per cent of the size of the economy. Who was behind that clever idea? The financial wizards of Goldman Sachs.”

In the Europe of the banks and big monopolies, democracy is a convenient fiction. In the EU neither the Council of Ministers nor the Commission are directly elected, while the European Parliament is a mere talking shop with no real say in the big decisions. The markets rule, which is to say, the boards of directors of a handful of big banks and monopolies decide everything. They decide what happens to the savings, investments, insurance policies and pensions of millions of people. They have their fingers in every pie. They buy civil servants as easily as one would buy a pound of potatoes in the market – only the price is somewhat higher.

The bankers’ coup

Already in the pages of The Communist Manifesto Karl Marx explained that the executive of the modern state “is but a committee for managing the common affairs of the whole bourgeoisie”.

In a capitalist a society the rule of law, human rights, the freedom of the press and everything else are subjugated to the economic imperatives of the market. In a bourgeois democracy everybody can say (more or less) what they want, as long as the bankers and capitalists decide what actually happens.

In the epoch of imperialism and monopoly capitalism, this is even truer than in the past. The bourgeoisie has finally cast aside the fig leaf of democracy that hitherto served to conceal the reality of the hidden dictatorship of the banks and monopolies. The banks and big monopolies are completely entangled with the state. Politicians are bought and sold like any other commodity. Governments are the obedient servants of big business.

On Friday, Nov. 11, Time magazine published an article by Stephan Faris with the title: Regime Change in Europe: Do Greece and Italy Amount to a Bankers’ Coup? It says the following:

“The voice of the people isn’t something the markets seem to want to hear these days. First there was Greece, the cradle of democracy itself, where early this month, the merest mention of a referendum offering its citizens a say in a series of severe austerity measures was enough to send the markets into a tailspin. The ultimate result: the collapse of Prime Minister George Papandreou’s ruling coalition, the rejection of any notion of bringing the proposal before the people, and the installation of a caretaker government under the leadership of Lucas Papademos, a former vice president of the European Central Bank and, until earlier this week, a visiting professor at Harvard.

“Then came Italy. As Athens threatened to go under, Rome found itself under pressure not so much for its level of debt — which though high is generally considered within the limits of sustainability — as much as for the erratic behaviour of its flamboyant prime minister, Silvio Berlusconi. On Monday [Nov. 7], investors seemed to make the collective decision that he could no longer be trusted at the helm of the euro zone’s third largest economy and sent Italy’s cost of borrowing up towards crisis levels. By the end of the week, not only was Berlusconi finished, so was the very idea of holding a vote to replace him. The markets had spoken, and they didn’t like the idea of going to the electorate. ‘The country needs reforms, not elections,’ said Herman Van Rompuy, president of the European Council on a visit to Rome Friday.”

The rumour is whispered in corners of the Rome parliament that Berlusconi’s removal amounts to a banker’s coup. “Yesterday, in the chamber of deputies we were bitterly joking that we were going to get a Goldman Sachs government,” Time quoted a parliamentarian from Berlusconi’s government, who asked to remain anonymous citing political sensitivity. The government of Silvio Berlusconi finally sank under the weight of its own rottenness, mired in scandal and reeking of corruption from every pore. Berlusconi engaged in the most scandalous manipulation of the legislative process to promote the interests of his personal business empire. Although Berlusconi was formally elected by millions of votes, he did not represent the people who elected him. As a matter of fact, he did not really represent the Italian bourgeoisie, or rather; he did not represent them adequately. He represented mainly himself and his most earnest desire to stay out of jail.

For two decades Italy’s corrupt and degenerate political class allowed this farce to continue, while simultaneously allowing Italy to sink ever deeper into debt. Now history has caught up with them. But what have the people of Italy got in its place? The imposition of Mario Monti as Italian prime minister amounted to a “market coup”, which has suspended the normal workings of parliamentary democracy in Greece and Italy. Unelected bureaucrats in Brussels decide who is in charge of a major Western nation. Italy is now ruled by a man who has never been elected to any public office, a senior adviser at Goldman Sachs and former European Commissioner.

Monti is one of Italy’s most eminent economists, but he has never been elected by anybody. The Italian President Napolitano called him into his office and made him a senator – for life. He then asked him to form a new government to rule Italy. Nobody thought it worth the trouble of asking the people of Italy for their opinion about all this. What is interesting was the ease with which the markets were able to kick Berlusconi out of office. Even more significant was what they replaced him with.

“Democracy has very serious limitations” says Roberto D’Alimonte, a professor of political science at Rome’s LUISS University. “It has the ability to kill itself, to self-destruct. [Bringing in a technocratic government] is not good or bad. It’s necessary.”

In these weasel words are contained the distilled essence of all the treachery, hypocrisy and cowardice of the “liberal” bourgeois intelligentsia. It is the servile, bootlicking mentality of the professors who bowed low before Hitler and Mussolini, Napoleon and Cavignac.

The most remarkable thing of all is that such a monstrous aberration is taken as something perfectly normal and acceptable. In fact, it is indeed perfectly normal, but people did not see it.

The Greek referendum crisis

The euro zone put tremendous pressure on Papandreou to force him to implement a savage programme of cuts in the teeth of massive opposition. But when George Papandreou announced he would hold a referendum to allow the people to endorse or reject the latest euro zone bailout, there was a horrified reaction in European capitals. “What’s this? The Greeks are going to be asked their opinion? What a monstrous suggestion! Beggars cannot be choosers! Let them pay up and shut their mouths!” What if the Greeks actually voted no?

Papandreou’s referendum proposal was not made out of any fervent commitment to the principles of democracy but as a cynical political gamble. However, it is not necessary to support Papandreou’s policies or tactics to understand that the people of Greece had every right to express an opinion over a plan that signified a drastic cut in their living standards. But the bankers and capitalists believe in democracy only to the extent that it does not conflict with their interests or harm their bank balances.

The French Premier Sarkozy expressed the attitude of the bourgeois to democracy very well when he said: “Giving people a voice is always legitimate but the solidarity of all eurozone countries is not possible unless each one agrees to measures deemed necessary”. In other words, the interests of the eurozone (that is to say, the eurozone bankers and capitalists) must take precedence over democracy.

Thereafter events moved swiftly. Berlin and Paris moved to topple the Greek Premier. Merkel and Sarkozy demanded Athens prove its commitment to the monetary union. This was crude blackmail and a blatant interference in the internal affairs of a supposedly sovereign state. In the eyes of Angela Merkel and Nicolas Sarkozy the crime of both Papandreou and Berlusconi was that they did not do enough to uphold the interests of the European bankers – in particular the French and German bankers. The displeasure of the leaders of France and Germany was enough to bring about the fall of both men – with a little prompting from the bond markets.

Papademos, an economist like Monti, is a former Vice President of the European Central bank. He therefore enjoys the confidence of the markets as a man who is likely to push the austerity programme through. For now the two main political parties have agreed to support him. But when things begin to hot up, they can renounce responsibility.

The bourgeoisie calculates that a so-called technocratic government will be able to manoeuvre between the parties to pass unpopular legislation. It claims to stand above politics, above classes and above party and factional interests. Neither Monti in Italy nor Papademos are accountable to the public in their respective nations. This isn’t a problem. Indeed, it is the very reason they were called in. Their masters in the EU are demanding deep cuts in public spending, sharp tax increases and other painful measures. No politician in his right mind would wish to face the electorate after doing all that. So the poisoned chalice has been passed to a government of unelected technocrats.

Who really holds the power?

On the very same day that Time magazine wrote about “regime change in Europe”, The Independent had this to say about the Italian affair and the crisis in Europe: “The European Central Bank is under ex-Goldman management, and the investment bank’s alumni hold sway in the corridors of power in almost every European nation.”

It is worth while pondering over these lines and what they mean. The article continues:

“Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as ‘the Vampire Squid’, and now that its tentacles reach to the very top of the eurozone, sceptical voices are raising questions over its influence. The political decisions taken in the coming weeks will determine if the eurozone can and will pay its debts – and Goldman’s interests are intricately tied up with the answer.”

Simon Johnson, former International Monetary Fund economist, in his book 13 Bankers, writing about the political influence of Goldman Sachs, says. “What you have in Europe is a shared world-view among the policy elite and the bankers, a shared set of goals and mutual reinforcement of illusions”.

This is a very polite way of putting it. It would be more correct to say: Goldman Sachs has its tentacles everywhere and has governments in its pocket. In theory, Goldman is there to “provide advice” and financing for governments, but in practice, it issues orders.

By a combination of skilful lobbying, bribery, infiltrating its people into public service and incorporating former politicians into lucrative jobs, it entangles governments in a spider’s web, where the dividing line between public and private interests is abolished.

From this fact we can see who really holds the political power. Governments do not rule the world: Goldman Sachs rules the world. A handful of super rich individual he board of directors of an investment bank that one might have thought was politically toxic holds in its hands more power than 60.6 million Italian citizens.

Let us take Monti as an example. He was appointed to the European Commission in 1995 by Berlusconi. As commissioner for competition, he was supposed to exercise control over the takeover and merger deals – the kind of deals that Goldman Sachs was involved in. Later he chaired the Italian Treasury’s committee on the banking and financial system.

Naturally Goldman invited him to join its board of “international advisers”, who act as informal lobbyists for Goldman’s interests with governments and politicians. These include Otmar Issing, a board member of the German Bundesbank and then the European Central Bank, and one of the architects of the euro.

The Goldman Sachs Project specialises in recruiting well-connected former politicians. Among the prominent ex-politician inside the bank is Peter Sutherland, attorney general of Ireland in the 1980s and another former EU Competition Commissioner. He is now non-executive chairman Goldman’s UK-based broker-dealer arm, Goldman Sachs International.

That is one half of the equation. The other half consists of sending Goldman agents into government itself. Like Mario Monti, Mario Draghi, who took over as president of the ECB on 1 November, has alternated spells in government and in Goldman. An economist by training, he was a member of the World Bank and managing director of the Italian Treasury before spending three years working as managing director of Goldman Sachs International between 2002 and 2005. He now returns to government as president of the Italian central bank.

Monopoly capitalism and democracy

When the Greek colonels took power in 1967, Phillips Talbot, the US ambassador in Athens, lamented it as “a rape of democracy”. His cynical CIA chief of station replied: “How can you rape a whore?” The junta took away all democratic rights and condemned thousands to imprisonment and torture. This shows the real attitude of the capitalist class to democracy.

The bankers and capitalists of Europe support democracy because it is the most economical way to defend their interests. But when it ceases to do so, they can pass from democracy to dictatorship with the same ease as a man passing from one railway carriage to another.

The same politicians who are always making grandiloquent speeches about democracy in Iraq, Afghanistan, Libya, Syria and Burma conveniently overlook the systematic erosion of those democratic rights that were conquered through struggle by the working class of Europe and the United States.

Their interests are upheld by politicians and bureaucrats who act strictly in accordance with the rules of the “free-market economy”, which nowadays is free only insofar as it is free to plunder the coffers of national states. National sovereignty thus becomes a hollow phrase, as meaningless as “private enterprise” and “democracy” in the epoch of monopoly capitalism and imperialism.

The so-called rescue funds from the IMF and the largely German-backed European Financial Stability Facility are designed, not to rescue Greece or Ireland, but to rescue the banks. Who are these creditors whom are demanding to be paid? They are Europe’s big banks, and it is their health that is the primary concern of policymakers. The brutal austerity measures that will be imposed by the unelected “technocratic” governments in Athens and Rome have been dictated by the banks.

The argument that “we are all in this together”, which is supposed to be the theoretical justification for governments of “national unity” is false to the core. While millions of ordinary people suffer brutal cuts in their living standards, the same bankers who caused the financial collapse in 2008 award themselves lavish bonuses. Smart traders with inside information make huge fortunes whether the markets go up or down. Millions lose their employment, their home, their future, but the bankers win all the time.

It is often stated that the profits of the bankers are justified because of the risks they take when lending money. But in fact there is no risk at all. The financial elite are very sure that the banks will be bailed out with public money, and some of them are even now placing wagers on just such an outcome. “My former colleagues at the IMF are running around trying to justify bailouts of €1.5trn-€4trn, but what does that mean?” says Simon Johnson. “It means bailing out the creditors 100 per cent. It is another bank bailout, like in 2008.” That puts matters very neatly.

European governments must find billions of Euros, not to rescue the people of Greece or any other country, but in reality to arrange yet another bailouts of the banks. And to pay for this the masses are expected to shoulder the heavy burden of austerity, cuts in living standards and unemployment. All this is to protect the interests of Goldman Sachs and the other parasitic financial entities that have attached themselves to the living body of society and are draining it of its life’s blood.

The whole of society is being held to ransom by a handful of wealthy bankers. They say: “either give us the money we demand, or else we will plunge the world into the abyss of a new financial crisis, a terrible economic collapse that will be worse than the last one.” These methods are substantially the same as those of the Mafia who demand money with menaces. The only difference is that the Mafia issues threats to individuals or single businesses, whereas the bankers threaten entire nations and their governments.

Class struggle

The governments of Italy and Greece are effectively in the hands of the banks. And this is not only the case in Italy and Greece but in every single “democratic” capitalist country. In Britain, Germany, France and the United States it is the same story: democracy has become a meaningless expression. It has been emptied of any real content it may once have had, and all that is left is an empty husk. The forms of parliamentary democracy remain, but the content is: government of the bankers, by the bankers and for the bankers.

In the short term an excuse has been provided by the threat of a market meltdown and a subsequent economic collapse. The appointment of Mario Monti was designed to exercise a calming effect on the markets. It appears to have succeeded – for now. Doctor Johnson once famously remarked: “Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.”In Italy the political class looked into the abyss and it concentrated their minds immediately. Mario Monti was greeted with applause in the Senate when taking his new Senate seat on 11 November. The same day country’s stock exchange gained 3.68% as the new Saviour of capitalism seemed to be at hand.

Initially, at least in Italy, the protests have been muted. The reason is not difficult to understand. After the Berlusconi government, anything would seem better. But this tolerance will not last long. In the end neither Papademos nor Monti will be able to push anything through if there is no solid consensus on what must be done. And the lack of consensus will soon be exposed, leading to a new explosion of popular dissent and anger. Already there have been demonstrations of the students. This is just the beginning.

For a time it is possible that the public might be willing to accept the new impositions and austerity packages. But this fragile arrangement will not last. All the manipulations of Angela Merkel and Nicolas Sarkozy and all the bankers in the world will not prevent an explosion of the class struggle. The social turbulence on the streets of Athens will return and will be replicated on the streets of Italy.

In Greece, after almost two years of constant struggles, there may be an element of tiredness and confusion. Nobody believes in the political class any more. The vast majority of the people are against the austerity measures, but see no alternative. They fear the prospect of a precipitate exit from the euro, with further chaos and turmoil. But when the people see that the “national unity” government is carrying out an even worse austerity programe than that of Papandreou, they will be on the streets once more.

The idea of “national unity” is the emptiest of all empty political slogans. The “unity” they have in mind is the unity between the horse and the rider who jumps on the horse’s back and digs his spurs into its side. There can be no question of unity between rich and poor, exploited and exploiter, workers and capitalists. In order to solve the problems of society it is necessary to put an end to the bankers’ dictatorship once and for all.

Everywhere the bourgeois is attempting to take away all the conquests that the working class has won in struggle over the past fifty years. In Britain the Tories and Lib Dems are threatening to limit the right to strike, which has already been severely circumscribed. But such measures will not halt the class struggle. What is written in working class organization cannot be abolished by the stroke of a lawyer’s pen.

Naturally, the working class must fight to defend its gains. We will fight for democratic rights insofar as those rights retain even the slightest progressive content. We do so, not because we are slavish worshippers of formal democracy, but because we understand that bourgeois democracy provides the workers with a more favourable terrain on which to develop the class struggle.

The imposition of an unelected government of so-called technocrats will not halt the class struggle. The bourgeois will soon discover that they are leaning on a broken reed. These governments will not be stronger than the ones based on political parties and elected politicians but infinitely weaker. They will soon be swept aside by the movement of the masses.

If the road of parliamentary democracy is blocked, the working class will find other means of expressing itself. It will express itself through the mechanisms of direct action and the class struggle: strikes, general strikes and mass demonstrations. The workers and youth will come to understand that they represent a colossal power that no state, army or police can halt. They will come to realise the truth of the words of the great French revolutionary leader Camille Desmoulins:

“Les grands ne sont grands que parce que nous sommes à genoux: Levons-nous.”

“They only seem so mighty to our eyes
because we kneel before them: let us rise!”

-London, 2nd December 2011