George Papandreou the former Greek Prime Minister was sent packing by the financial markets when he proposed putting the EU’s financial bailout package to a referendum vote. The Bailout package will impose severe budgetary cuts that will require enormous sacrifices from the Greeks and inflict painful social dislocation for years to come. It therefore makes sense that in a democracy the people should have a voice on such important matters, right?
Silvio Berlusconi the longest-serving post war Prime Minister of Italy has been ousted by the markets. This is Berlusconi we are talking about; the man who had survived numerous corruption, sex and prostitution scandals. He appeared indestructible, but he too bowed to the pressures of the markets …quitting after accepting and imposing hard austerity measures.
In Greece, Papandreou has been replaced by Lucas Papademos, a former vice-president of the European Central Bank and Governor of the Bank of Greece. In Italy Mario Monti, an economist and former European commissioner for Internal market, services, Customs and Taxation is replacing Berlusconi. These men are called technocrats (bankers), unelected, but imposed by the markets to serve the interest of capital.
Flush with power, capital is now turning it eyes on Spain, the cost of government borrowing is rising and this is always the opening salvo, Ireland, Portugal and even France are in the firing line. As the media trumpets economic Armageddon, capital and markets grab power; democracy has always been expendable in a state of emergency.
For decades the conventional wisdom has been that democracy and capitalism go hand in hand. This is what the IMF, the World Bank, the EU and the American congress trumpeted for years and tried to impose worldwide. However as we enter the second decade of the 21st century, China which is the modern behemoth of capitalism with the second largest economy in the world and the great hope for global capital expansion and growth, is administered by an undemocratic political system.
Capitalism is finding out that it does not need Democracy and maybe it never did.