Tuesday, 5 July 2011

Greece Should Default

David Harvey: Greece should call Europe's bluff

A world-class academic gives his analysis of where Greece is headed, why, and what to do about it. Essentially, his advice is to default on the loans now, and to deal with the problems of reconstruction of the economy as soon as possible.

Please watch this short video interview (less than ten minutes) with Professor David Harvey, in which he explores the current phase of the crisis that Greece is facing, and the option to default on the loans.

Below the links to the video we present a short biographical note about the author, a summary of the positions he embraces in the video and a little his other significant work. There is also a short statement on the situation from the broader view, ie. outside of the parameters of Capitalism. Here is David Harvey:

The interview is also available at:

In this interview, Professor David Harvey argues that Greece should default on the loans now, and proceeds on the idea that if there is no default at this present juncture, most likely the same dilemma will re-appear again as a necessity, ten or fifteen years from now.

He also touches on the fact the Germany is one of the two countries whose banks are involved in the loans owed by the Greek State (the other one is France). Germany is the European country that has already defaulted more times than any other on its own loans, and was financially and politically rescued by the United States - allowed to default, and then rebuilt (especially after World War II) with infusions of tremendous amounts of financial aid from the US.

Professor Harvey goes on to discuss the fact that the reasons for the "crisis" are artificially generated by a political agenda and NOT by financial or economic realities.

Economists know that when there is a real crisis within capitalism the usual cure is to increase employment and wages which leads to increased activity on the markets. This enables manufacturers to realize profits on the commodities that were previously left unsold. It also increases the Gross National Product and that leads to more solvency and also to more confidence for investments, all of which together in turn re-start the economic cycles (until the next crisis). Whereas economists know all this, the "cure" that is being pushed now by politicians and the banks is to squeeze more assets out of the working people of Greece, an agenda of expropriation by the capitalists aimed at amassing more riches for a section of the ruling class.

Austerity measures and increased loans to pay back other delayed loans is NOT a cure for an economic crisis; these are mass thievery on a large social scale. And so the suggestion to default on the loans instead of stealing money from the people is both scientifically valid, morally sound, and politically appropriate.

The only obstacle is that there is no one in power in Greece who has a conscience and a sense of patriotism or sense of justice strong enough to do the right thing. If the popular mobilizations against the austerity measures succeed, politicians might be forced to do the right thing. Or, if the mobilizations go even further and the movement actually seizes power, the historical moment may open up the possibility for even bolder steps: abolition of Capitalism and a Socialist reconstruction of the country's political economy.

A post-Capitalist economy based on collective public ownership and control of the means of production and natural resources based on people's power, plus direct democracy at the workplace, the neighbourhood, schools and services, will ensure that we can rebuild the country with an economy that will be immune to the kinds of crises that we are facing now.

All power to the people!

Cyprus IndyMedia Collective


Many thanks to Paul Jay, of The Real News Network for conducting this interview.

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David Harvey is a Distinguished Professor at the City University of New York (CUNY). He holds honorary degrees from the universities of Buenos Aires, Roskilde in Denmark, Uppsala in Sweden, and Ohio State University.

He has published highly influential books that include The New Imperialism; Paris, Capital of Modernity; Social Justice and the City; Limits to Capital; The Urbanization of Capital; The Condition of Postmodernity; Justice, Nature, and the Geography of Difference; Spaces of Hope; and Spaces of Capital: Towards a Critical Geography.

Professor Harvey has been teaching for more than 40 years now the infamous book by Karl Marx titled Das Kapital (known in english as Capital), a fact that makes him uniquely qualified to speak with validity about the workings of Capitalism.

He has a graceful and dignified appearance in his presentations that makes for very pleasant discourse. His course on Capital is offered online for free in a series of thirteen video lectures under the title:
Reading Marx’s Capital with David Harvey

Strongly recommended!

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  1. No recent defaults by Germany, though. Right?

    One of the conditions on Europe by the Marshall Plan was to switch away from using coal from the Ruhr Valley and to [move to] oil, controlled by the U.S. by ARAMCO in the Middle East.

    Michael Tanzer has written about this quite well.

    The point is that the Marshall Plan -- the "bail out" of Europe after World War 2 -- was no give away to Europe, but was actually (not so indirectly) a give away to U.S. petroleum giant corporations, and Europeans receiving Marshall Plan funds had no choice. (Similar but much stronger than the IMF's stricture in many countries that those receiving IMF assistance have to accept Genetically Engineered seeds and crops.)


  2. Nice one! David Harvey is great! I saw him speak last year when I was at university. Social control of surplus!

    Hope all is well back on the island.

    all my best,


  3. I agree but den afinoun oi poulimenoi tis igesias. Ta dromologisan ola auta kai den dehomai that they had no choice!!

    We are neither in the Sahara or any other desert. This land is very rich (minerals, oil etc) and could provide everything for its inhabitants and even export but no, who cared all the time the country was being sold off?? As long as we made a quick 'euro'. Now that 'our ass is on fire', or as my friend says, "twra pou tsouzei to kolaraki to diko mas, mas noiazei". Otan tou allou dipla kaigotan, pera vrehei...