Blog post

Greece, Cradle of “Debtocracy”

Richard Dienst 6 July 2011

Richard Dienst is the author of Still Life in Real Time: Theory after Television and The Bonds of Debt, and a co-editor of Reading the Shape of the World. He teaches in the Department of English at Rutgers University. Here, in a special guest post for the Verso blog, Dienst comments on the film Debtocracy.

Soon after the 17 June 1953 workers' uprising in the DDR, Bertolt Brecht wrote a poem called "The Solution." He wanted to mock the official response to popular discontent: the Secretary of the Writer's Union had declared that the people had lost the confidence of the government and that they must earn it back by working twice as hard. "Wouldn't it be easier," Brecht suggested with pitch-perfect irony, "for the government to dissolve the people and elect another?"

Faced with nationwide general strikes, street riots in Athens, and jittery global markets, it is likely that Greek politicians are not the only ones who wish they could opt for such a solution. There must be presidents and legislators across the EU (not to mention bankers and investors around the world) who wish they could somehow dissolve the Greek people and replace them with a more docile, less demanding bunch, willing to work twice as hard for half as much.

World-historical anxieties about Greece reached a fever pitch on Wednesday, June 29, the second day of the latest general strike and the first day of parliamentary voting on the austerity package. A glance at the front page of the Financial Times offered a full menu of dark threats and bleak forecasts. A large color photograph showed a protestor in a gas mask standing in front of a burning van which had been ominously spraypainted "HUNG SOME BANKERS." A banner advertising Martin Wolf's column glumly suggested "‘Enjoy your slump’: Austerity alone risks disaster." Below, the main headline declared that "Greece faces ‘suicide’ vote." The headline rang true because it covered opposing poles of Greek opinion: while the Governor of the Bank of Greece warned that it would be national suicide to reject the austerity plan, people in the street clearly thought that it was suicide to pass it. On one hand, the ruling party insisted that failure to comply with the demands of the Troika (the European Commission, the European Central Bank, and the IMF) would result in a swift and messy economic collapse. On the other hand, protestors saw the acceptance of austerity and the capitulation to European pressure as a fatal loss of political sovereignty. Even though (or precisely because) the legislation passed, Greece remains on an official suicide watch: the economic medicine might not work, and the political order might fall apart.

All this talk of national self-destruction, however, is too neat and convenient. A recent Greek documentary, Debtocracy [1], argues forcefully that the troubles in Greece have nothing to do with suicidal tendencies or congenital weaknesses. The film, written and directed by Katerina Kitidi and Aris Chatzistefanou, refuses to accept the logic—which is built into the austerity plan—that Greek society must bear collective guilt for the current debt crisis. Instead, it outlines a widening circle of responsibility that reaches from the corrupt "czars of the local economy" to the missionaries and enforcers of global neoliberalism. Somewhere in between, the filmmakers cast doubt on the viability of the Eurozone itself, hobbled by the weakness of its political structure and the hypocrisy of its heavyweight members. But assigning blame, even when it is couched in a far-reaching historical and structural explanation, does not necessarily lead to a political strategy. Here, Debtocracy moves beyond the rhetoric of victimhood and proves itself to be an exemplary intervention, far more useful than the rash of recent US films about the ongoing economic disaster.

Building on interviews with Costas Lapavitsas, David Harvey, Samir Amin, Gerard Duménil, Éric Toussaint, and others, the film goes in search of historical lessons that might inspire and guide Greek resistance. In particular, it examines the cases of Argentina and Ecuador, both of which invented new political movements to survive debt default in the past decade. The Argentine example is presented as a demonstration of the power of popular dissent to force a government to defy international lenders and bargain for a favorable debt restructuring. It is the case of Ecuador, however, that attracts much more attention here, largely because President Correa based his repudiation of the country's debt on the argument that it was "odious," that is to say illegal, immoral, and thus unenforceable. As the film acknowledges, the concept of "odious debt"[2] is not without its problems, including its deployment by the US to erase Iraq's debt before installing a new financial regime. At the very least, its effectiveness as a legal strategy available to all debtors has yet to be truly tested. Nevertheless, the filmmakers present a convincing case that it provides a useful tool in the current situation, if only to expose the financial etiology of the present distress and thus to embarrass the ruling parties. Indeed Lapavitsas and Toussaint have proposed the formation of an independent Audit Committee (modelled on an Ecuadorian precedent) to decide which portions of Greece's debt might be dismissed. But even if all the debt is declared legitimate, Lapavitsas argues, it cannot all be paid.

Thus the film ends with five statements supporting a refusal to pay the Greek debt. It should be stressed that this collective position has nothing to do with those who argue that a restructuring of Greek debt is, as Martin Wolf has put it, a "necessary, but not a sufficient, condition for a return to economic health." (FT, June 22). There are many mainstream economists who oppose last week's deal on the grounds that it will provide a merely temporary fix, not going far enough to break the power of entrenched elites. To be sure, there is corruption to uproot and injustice to punish, but Debtocracy has something more revolutionary in mind. Lapavitsas sets the tone with his observation about the corrosive effects of austerity: "If honoring the debt and making it sustainable involves dismantling health care, dismantling education, dismantling the transport system, then the debt is socially unsustainable." Harvey adds that the PASOK deputies cannot honor the debt without losing their democratic legitimacy: "the government is saying in effect that they are going to default in relation to the Greek people." Duménil is more categorical: "There is only one single option in the coming decade. It is not to pay this debt, because it was based on neoliberalism, and the neoliberal endeavor was a crime against humanity." Amin echoes this view: "Nobody is obliged to pay this debt, since it was accrued by the vicious workings of the financial markets." Toussaint is even more blunt: "It is immoral to pay an immoral debt."

Mixing the pragmatic with the implacable, such attitudes—bedrock demands for social provision, terrible feelings of betrayal, and enduring outrage at the cruelty of contemporary capitalism—are animating new coalitions of the indebted around the world. It is not clear whether any political body within Greece will be able to promise a "sustainable" scheme of universal welfare, just as it is unclear whether any collective audience or addressee will be able to judge the economic crimes of recent history. In any case the events in Greece this week have not resolved the basic contradiction facing all of us between showing obedience to the dictates of the financial markets and taking responsibility for the common good. If anything, we have seen how far a government will go—eviscerating the public sector, levying punishing taxes across the board, selling off state assets, not to mention crushing dissent—to appear creditworthy to banks and bondholders. We have also seen how far indebted people will have to go—if long months of rational arguments, mass protests, and street confrontations aren't enough, what would be?—to change an unsustainable, illegitimate, and immoral system.

For now, everything still hangs in the balance. There is one shot in Debtocracy that captures the present mood: we see an old dog sitting on the sidewalk across from the Greek Parliament building. The building in the distance is brightly lit up, traffic hurtles past, and the dog stays put, apparently unconcerned. Then, sensing an opening, the dog gets up and starts to walk away. We gasp. How on earth could it possibly make it across the road without getting run over? The shot ends before we find out.

[1] Visit to see the film. Press the Closed Captioning button for subtitles. Quotations from the film, when spoken in languages other than English, are taken from the subtitles. To read Aditya Chakrabortty's response to the film for the Guardian, see "Debtocracy: the samizdat of Greek debt."

[2] For a discussion of "odious debt," see Éric Toussaint and Damien Millet, Debt, the IMF, and the World Bank (Monthly Review, 2010), 248-52.