The coronavirus crisis

This blog has been sadly neglected in recent years, as all my blogging time and energy have been taken up with my Brexit Blog. But the current coronavirus crisis prompts me to return to it, because so much of what is happening in this crisis has an organizational dimension, and some of it relates directly to the themes of the book which this blog accompanies. In this post, I’ll discuss some of them, with the focus on what is happening in the UK but no doubt at least some of it has a wider relevance.

Overall, it’s possible to see many of the chickens of contemporary organization coming home to roost. This is most obvious in the National Health Service where spending as a percentage of GDP effectively flatlined between 2011 and 2019, and per capita is well below that of most other highly developed countries (e.g. France, Germany, Japan, Australia). Crucially, this is against the background of a rapidly ageing population and – as has also been laid bare by the coronavirus pandemic – a social care system that was already in crisis and has been for at least half a decade (as discussed on this blog in May 2016).

The issues here go well beyond those of funding, though. They also relate to managerial apprehensions of the ‘efficient’ use of that funding. In the book (p. 142) I use the specific example of the NHS to discuss this, writing that “one way this has been done is to reduce spare capacity in the system. This in turn has the effect that unusual peaks in demand, such as a major incident or a flu epidemic, swamp the system … the question still remains: efficient for whom? Is spare capacity inefficient from the point of a view of a patient caught up in a demand peak?”

This seems almost prophetic now, as the NHS faces a desperate struggle to obtain the machinery and protective equipment needed to deal with coronavirus, whilst old people dying in care homes are not even included in the official coronavirus mortality statistics. Of course, it would be absurd to argue that any health system could permanently maintain all of the spare capacity needed to deal with so unprecedented crisis. But running a system for years without any spare capacity at all was always bound to lead to disaster.

Similarly, we are now seeing the consequences of the endless restructurings and in particular the dynamic of centralization-localization as the supposedly inefficient bureaucracy of the NHS is subjected to almost yearly reforms. It was such an analysis which led to the fragmentation of the NHS into Clinical Commissioning Groups (CCGs), to break down the ‘monolith’ of the NHS. This was happening even as it was being reported that the problem with NHS procurement was lack of centralization, but under the dogma of ‘post-bureaucracy’ this was ignored (discussed on p. 87 of the book). Fast-forward to the coronavirus crisis and what do we fine? That very quietly the government has taken back central control of procurement from the CCGs to deal with it.

Nor is it only in health care that we see the consequences of the ill-judged managerial reforms and budget cuts of the last decade or more. I wrote on this blog in October 2016 about the crisis that was already underway in prisons. No surprise, then, that coronavirus is sweeping through them now, and there are calls for the early release of at least low-risk offenders and prisoners on remand.

Beyond public service issues, the coronavirus crisis has laid bare the inequalities and insecurities associated with the new capitalism and its associated ‘precariat’ (discussed on p. 118-120 of my book). The supposedly self-employed ‘entrepreneurs’ and zero hours workers of Uberfied business models are by the far the most economically vulnerable to the lockdown of the economy. The gap between this precariat and the salariat (like me) who have continued security as they work from home is more obvious than ever. It falls to government, at least partially, to bear the costs of this – in effect bailing out the employers who have for years benefitted from this ‘flexible’ workforce. As with the financial crisis, what we see is a privatization of profits and a socialization of costs and risks.

Meanwhile, hundreds of thousands who had never expected to now turn to the welfare system and find that it is very far from the generous safety net they had imagined, let alone the scroungers’ paradise that the tabloid press had led them to believe (see also p.120 of book). This is not just a matter of a one-off crisis. Rather, it comes against the background of the middle-calls insecurity which has been underway for some time, and is intimately linked to the demise of middle management and the white-collar underclass that has characterized the new capitalist model (p.123 of book; see also this blog post from February 2015).

Intimately linked to precarious employment is the use of foodbanks (blog post from September 2016) and here, too, coronavirus has had an impact. On the one hand, they face mounting demand as people’s incomes dry up. On the other, staffing and donations are both impacted by the illness, and some foodbanks are having to close down just as they are most needed.

No doubt there are many more examples of how coronavirus is exposing underlying issues within the organization of public services, of work, and of society more generally. The key words are ‘exposing’ and ‘underlying’. In this post I have made frequent reference to what I wrote in my book or on this, accompanying, blog. The message is not meant to be a self-congratulatory ‘I told you so’. Rather, it is intended to show how so much of what is happening grows directly out of things we already knew, or which were already happening.

This is absolutely crucial for otherwise they would just be regarded as ‘crisis’ events and, as such, unusual or short-lived. This in turn would support the idea that once the crisis is over we can and should return to ‘business as usual’. To an extent, this is what happened after the financial crisis. Although many expected that it would lead to a wholesale re-evaluation of how – at the most generic level – we organize, that didn’t really happen. Instead, we saw what Colin Crouch aptly dubbed the strange non-death of neo-liberalism.

Perhaps this time things will be different. The neo-liberal or new capitalist model has been much more challenged by the coronavirus in that it has led to the mobilization of state resources in a way not seen since the Second World War. That ought, at least for a while, to put paid to the innumerable paeans to the superiority of the market for any and every political and economic question. It feels, at least at the moment, as if something quite fundamental has ruptured – although one should be wary in assuming that any such rupture will have predictable, let alone positive, effects. And even should they be positive, it is a tragedy that it will have taken the deaths of so many to demonstrate what was, in so many ways, already obvious.

Justice for some

In this post I want to draw the links between two current UK news stories. The first concerns the report today that forensic science services are operating in a risky way. These services, which are crucial to the criminal justice system, were largely privatised in 2012 in a move that was heavily criticised at the time. Since then, repeated concerns have been raised about it. It is a story with many affinities with the horsemeat scandal of 2013 that I posted about at the time, and with several other examples of privatization.

However, it is not this aspect I am going to discuss, but something more specific: that within today’s report one thing highlighted was that cuts in the legal aid budget meant that defence lawyers were unable to commission adequate forensic science. This is linked to the wider issue because it arises from there being a private market in forensic science, but results from a different political decision, that to restrict legal aid.

This brings me to the second news story from this week. Because legal aid is no longer available in the vast majority of family law cases, there has been a huge rise in people representing themselves (in 80% of cases only one party has legal representation, in 60% of cases neither party has legal representation). This means that abusive ex-partners can get to cross-examine their victims in court (something that cannot happen in criminal cases of abuse) causing massive distress.

The issue of the consequences of cuts to the legal aid budget has been highlighted for some time but inevitably it has taken a while before they begin to bite in a widespread way. Lack of legal aid in immigration courts has led to children having to represent themselves. Even where legal aid is available, the cuts have led to a shortage of legal aid lawyers (whose fees have been cut), impacting on housing disputes and causing homelessness.

These are amongst many of the (presumably) unintended consequences of the reform of legal aid provision and serve as an illustration of that concept, discussed in my book (pp. 26-31). But they are of a particular sort. As with the organization of prisons, discussed in another post, or in the superficially very different but in this respect similar case of the organization of dental services, they impact primarily upon the marginal and/or demonized: the poor (obviously), immigrants and asylum seekers, those accused of crimes, those on the edge of homelessness, the (largely) women who suffer domestic abuse. In fact, it is perhaps because the latter group is not confined to the socially marginal that the government have now launched an emergency review of the problem?

It doesn’t seem an outrageous proposition that justice should be available to all. It’s not even particularly expensive to provide it. Although the cuts to the legal aid budget have been large in percentage terms, the absolute amount (£200-£300M a year) is quite trivial in the context of overall government spending. The effects are huge, not just on the individuals affected but on the wider sense of a civil society to which law and justice are both fundamental and paramount.

Prisoners of austerity

A couple of years ago I had some spare money and decided to donate it to a charity. There are so many charities that command out attention – all of them worthy, but some more fashionable than others. So I thought that I would try to seek out as unpopular a cause as possible and did an internet search on just that. The result (and I wonder if you can guess it?) was a charity that supports ex-prisoners into work, for example by paying for training, or travel fares to job interviews. Whether this is truly the most unpopular charity I don’t know – it might come up on a search engine just by having those words somewhere on its website – but it seemed plausible and I donated accordingly.

I was thinking about this because of the news this week of a murder in Pentonville prison. Violence in prisons is getting worse and the connection with my charity search is that, I suppose, most of us don’t really care. Of all of the problems and injustices in the world somehow those that befall criminals bother us least. After all, they are the dregs of society so at best why should we care and at worst they probably deserve it, right?

Wrong, I think. We sentence criminals, quite properly, to the punishment decreed by the courts. That may include incarceration, but it doesn’t include being subject to violence up to an including murder. And as so often, the dictates of morality and those of practicality are linked: if our prisons are brutally violent not only is that morally repugnant it also makes the chances of rehabilitation remote.

Prison violence – including violence against staff - is rising for a simple reason: funding cuts and consequent understaffing. Austerity economics has a cheery make-do-and-mend, belt-tightening sound to it, but the reality after several years of cuts is stark and is happening right across the piece. Sometimes the consequences are direct: roads fall into disrepair, libraries close, the court system clogs up or the armed forces can’t fulfil the basic requirement of protecting the nation. Other times the consequences are indirect: social care provision disappears creating ‘bed-blocking’ in hospitals. In fact, the problems of prison violence are in part due to the inadequacy of (in particular mental) health services.

For years it has been a truism that you can’t solve public service problems by ‘throwing money at them’ – the alternative always being reorganization, subcontracting and privatization – which easily mutates into the absurdity that money doesn’t matter at all. The consequence is that, for a while, things hold together. Savings can be made, a bit; people working in services can work harder, a bit; cuts can be made, a bit. But, gradually, the public sphere breaks down. I think that that is where we are getting to now in the UK – a spreading paralysis and crisis in every area of public life.

At the root of all this is a dishonesty. The small-state political Right could say that the government should get out of huge swathes of public provision and cut public spending accordingly. Or the social democratic Left could say that government must deliver public provision and raise taxes accordingly. Instead, we have lived for decades with the pretence that we can both have extensive public provision and have spending and/or tax cuts. That pretence has now run out of steam, and the choice will have to be faced up to, unless slow decline and periodic scandal are to continue.

Tax but don't spend

Last February I wrote a post in which I peevishly listed various experiences of organizations not working very well. One item on the list concerned the problems of getting through the HMRC (the British tax office) on the telephone. So I was interested to see that this week the National Audit Office (NAO) published a report on HMRC’s quality of service. This identified a “collapse” in customer service over 18 months in 2014-15 with call waiting times tripling and some customers being kept on hold for up to an hour.

What lay behind this were massive cuts in staffing levels, which in personal tax fell from 26,000 to 15,000 between 2010-11 and 2014-15. This of course is just one of the many consequences emerging across all parts of the public sector as ‘austerity economics’ bites deep under the ideology that eliminating the government’s budget deficit is the sole aim of policy (what Nobel economist Joseph Stiglitz calls “deficit fetishism”). But there is more to it than that: associated with the cuts was the technocratic fantasy of paperless (on line) tax returns and automated telephony.

We’ll break here for another oldster rant: why does everything have to be done online, with endless passwords and usernames in hundreds of different formats? How I long for the days when you could just fill in a form and send a cheque in the post. There are still a few places you can do this and I would single out from my own experiences the insurance company NFU Mutual as particularly good not just for this but for that fact that they have an ordinary phone number that goes to the local office where I talk to a person I have met and who has been in post through all the years I have dealt with them. And, on the one occasion I’ve had to make a claim, they are excellent to deal with. Is it because they are a mutual organization?

Back to the HMRC and what is interesting is to note how this story illustrates some of the recurring – and linked - themes of my book, namely those of unintended consequences and of the ambiguity of efficiency. In terms of unintended consequences the issue is how cost savings in one budget show up as new costs somewhere else. This is especially obvious in relation to HMRC because an effective tax gathering system is vital to meet the costs of government spending departments. So to impinge on the first inevitably has consequences for the second.

The issue of efficiency is linked in that what may be efficient for the HMRC maybe inefficient for other departments but, beyond that, inefficient for the user – in this case the taxpayer or, as they are now called, with tragic inevitability, customers. And let’s just have another break here to remind ourselves how crass, how nonsensical, it is to describe people paying taxes as ‘customers’. The NAO Report is helpful in quantifying this by reference to the HMRC’s own costings of people’s time (£17 per hour, apparently). On this basis, the time spent waiting and talking, and the cost of the call, added up to £97M (of which £66M was the cost of waiting to be answered) in 2015-16. So HMRC’s efficiency savings become its “customers’” costs. According to the NAO and the HMRC things are now getting better, though I must say that this is not my personal experience and, anyway, we have been here before. A damning 2012 NAO Report on phone call waits was also met with promises of improved performance and assurances that this was beginning to happen.

There’s a bigger organizational story here. The HMRC is the result of a merger, in 2005, between what were previously the Inland Revenue and the Customs and Excise office. Culturally very different, many date the problems at HMRC from this archetypical example of reform through reorganization. Subsequently, there have been repeated high-profile scandals. Dave Hartnett, its boss until 2012 when he joined global accountancy firm Deloitte as a consultant, was accused of cutting lax ‘sweetheart deals’ with big corporates like Vodafone and Goldman Sachs, and called “a liar” by the chair of the Public Accounts Committee. His successor, Lin Homer – dubbed ‘Dame Disaster’ by satirists – was criticised for failures in relation to the HSBC tax scandal and also for claiming the HMRC to have had its best year ever in 2015 despite – yet again – massive problems with phone systems. She stood down in April 2016.

As for the future, who knows? HMRC have taken on more staff, but the ongoing closure of 137 local tax offices in favour of 13 regional centres does not bode well, and the latest NAO Report says that HMRC’s capacity to sustain planned cost reductions rest upon its Making Tax Digital initiative, another techno-fantasy, which has already been met with scepticism, if not outright derision, by tax accountants.

It’s tempting to ascribe all this to the well-attested failures of neo-liberal ideology in general and the effects of its application to the public sector in particular. But it’s more complex, and worse, than that. Even the most assiduous neo-liberal assumes, accepts and expects that the State will act as a ‘nightwatchman’, undertaking the basic functions of tax collection, law and policing. But cuts have “brought the court system close to breaking point” and are causing a crisis in policing and in the prison system. It used to be the leitmotif of anti-state ideologues that cuts could be achieved by getting rid of ‘five-a-say Czars’, ‘diversity officers’ and, of course, that perennial favourite ‘faceless bureaucrats’. Now it turns out that even the most basic functions of the state are up for grabs. If proof of that were needed, look no further than current plans to privatise the Land Registry, the body that administers that most basic feature of any capitalist economy, property ownership.

Required reading

Over Christmas I have been reading Jonathan Coe’s latest novel, Number 11. Like John Lanchester’s Capital, which I ‘reviewed’ on this blog, it can be read as a ‘state of the nation’ novel (Coe even makes a joke about this) and, via five interlocking sub-stories, it reprises some of the themes of his earlier books, especially What a Carve Up! and The Closed Circle. Overall, I would characterise these themes as being about the unwinding of the post-war welfare state and its accompanying collectivism, and the ongoing consequences of individualization, privatization and – a key one in Number 11 – monetization (in the sense of putting monetary value on things like education which might otherwise be regarded as valuable in themselves).

The title Number 11 carries several resonances: the address of Britain’s finance minister; the number of the circular bus route that a character rides so as to be warm without heating her home; the number of subterranean floors being dug below an uber-rich family’s London home to extend their already commodious residence. For it’s a satire – sometimes almost judderingly heavy-handed, other times almost painfully delicate – that often addresses some of the themes of this blog, especially those of inequality, tax avoidance, the pitfalls of choice, the politics of ‘austerity’ and, even, the perils of twitter.

The section that spoke most profoundly and personally to me is entitled ‘The Crystal Garden’ which tells of the doomed attempt of Roger, an Oxford academic of about my age, to track down a short film he had seen as a child:

“Roger was convinced … that life was better, simpler, easier, in the past … it wasn’t just a hankering for childhood. It was bigger than that. It was to do with what the country was like … in the sixties and seventies …. For Roger it was about welfarism, and having a safety net, and above all … not being weighed down by choice all the time … he loved the idea of trusting people to make decisions on his behalf. Not all of them. Just some. Just enough so that you were free to live other parts of your life the way that you wanted.” (Coe, 2015: 176)

It’s important to understand that this isn’t about nostalgia, or at least not just about nostalgia. It’s about a rupture that animates – in very different ways – the politics of both nationalists and socialists across, at least, Europe. In France, Les Trentes Glorieuses, Jean Fourastié’s term for the 1945-1975 period of economic growth and social security, captures the same sentiment that Coe expresses. This rupture is described in my book in terms of the shift in the 1970s to the new capitalism (pp. 104-120) and so, of course, present in the book I most heavily draw on in that section, Richard Sennett’s (2006) The Culture of the New Capitalism. And it’s no coincidence that at the heart of Roger’s memory was “waiting for his father to come home from work – from the same place he worked for forty years” (Coe, 2015: 176) because stable employment was at the heart of the economic and social security of those years. As I’ve argued elsewhere on this blog, the erosion of that security constitutes the most pressing political issue of the present time in Western societies, in ways well-captured (for all that it is startlingly inattentive to the ‘critical management’ literature that says much the same thing) by Boltanski and Chiapello’s (2007) The New Spirit of Capitalism.

We can understand this in conventional political terms: the social democratic consensus of North and West Europe and, to an extent, the USA in the post-war decades was about the best economic and social arrangement that has so far existed (even if it did not always seem so at the time). But perhaps it is better understood without thinking in terms of economic or political theory. Bill Bryson’s humorous memoir The Life and Times of the Thunderbolt Kid expresses it well as regards the United States; David Lodge’s novel Nice Work captures the beginning of it in the UK, especially as regards academic life. And Coe’s book is the latest example of the powerful way that art and humour can illuminate social science.

In a somewhat related vein, another Christmas read was Douglas Board’s novel MBA. This is not nearly so well-written (but, to be fair, whereas Coe is a well-established professional novelist Board is a coaching and leadership consultant who has turned his hand to fiction) and it’s a fairly clumsy satire, if not farce, of business schools. Still, it does hit what are for me some familiar targets in terms of the corporatization and even corruption of the contemporary business school, including the hubris of high-flying deans (see Parker, 2014 for a real world example). And there are some acute insights along the way about, for example, the enmeshment of business schools and politicians in the marketization of the public sector that also get a look-in in Coe’s book. MBA certainly isn’t a great or even a good novel, but it’s the first that I know of that tackles the business school. I feel sure that this setting is ripe for the attention of a latter-day Malcolm Bradbury or David Lodge campus novel.

Oxi and No

So Greece has voted 'Oxi'. The consequences are unclear, but the reaction so far from Germany, in particular, does not make my hope of a write-off and reconstruction very likely (I heard an interview on BBC radio this morning, that unfortunately I cannot track down to link to, in which a politician from Angela Merkel's party voiced this very forcefully). It is worth just pausing to reflect how extraordinary this is. If a major bank gets into difficulties through imprudent lending then it is deemed ‘too big to fail’ and is bailed out, as we saw several times during the financial crisis, although its sub-prime borrowers are left in debt. But when a state gets into difficulties through imprudent borrowing and its counterpart of imprudent lending, then bailout is deemed impossible. Or, to come at it from a different angle, lenders lend money on the basis that there is always a risk that it won’t be returned, and this is priced into the interest rate. So why, when a borrower cannot repay, is it deemed unacceptable for the debt to be written off? The general rule seems to be that under no circumstances can the lender lose out and under no circumstances can the borrower be let off the hook. So where's the risk, and the justification for the risk being priced in? Actually, the situation as regards Greece is even worse: not only can it not be forgiven but also it must be obliged to follow policies that will make it even less able to repay its loans.

But in this post I want to focus on the response on this end of the continent to events in Greece. They have been profoundly depressing. First, it has been seen as validating ‘austerity’* policies: 'look what happens if you don’t balance the books!'. The fact that it has been the pursuit of such policies in Greece since 2010 that has turned a crisis into a drama is completely forgotten. For that matter, the significant differences between Greece and Britain (principally, that Britain can print its own money and that its debt is completely differently structured) are never mentioned. By the way, we see today just how extreme austerity policies in the UK have now become, with it being reported that terminally ill benefits claimants are being questioned by welfare officials as to when they expect to die.

Second, and far more bizarre, is the spectacle of the anti-EU political Right lining up to cheer far-Left Syrizia, as in articles by veteran Tory Europhobe John Redwood and UKIP leader Nigel Farage, presumably on the usually dubious principle that ‘my enemy’s enemy is my friend’. What they miss (or presumably don’t care about) is that Syrizia, and the Greeks who voted 'oxi’ in yesterday’s referendum, are rejecting the rule of global financial elites and the ideology of neo-liberalism. Yet what the British Europhobes have in mind in exiting the EU is an even more intensive embrace of these.

Redwood and Farage make as their prime argument that the Greek crisis reveals the gap between democratic nation-states and an undemocratic and overbearing EU and Eurozone (EZ). What this neglects is that the lack of EU democracy (which is indeed a serious problem) is a consequence of the fact that Europhobes like them in the UK and elsewhere have always refused to countenance a democratic European polity, deriding it as a federal ‘super-state’. The consequence is precisely the lack of democracy they now bemoan and, moreover, the fact that the entire basis of the Eurozone crisis is (as both Right and Left agree) that it is a monetary union without a fiscal union. And why is there no fiscal union? Because that, too, would require the European polity to which Europhobes are implacably imposed.

I expect that the attempt to tie together the Greek crisis with the case for Brexit will intensify, especially if Greece were to end up leaving the EZ or even the EU. For some voters it will be as simple as feeling that given the turmoil in Greece, Brits should pull up the drawbridge (as if, somehow, the rest of the world would then disappear). But for political leaders to encourage that by making false connections is deplorable. There are precedents, of course, such as the way that the French vote against the EU Constitution in 2005 was hailed by British Europhobes as supporting their view when, in fact, it was in large part a vote against a more neo-liberal EU.

The present case is even more clear. The Greek ‘Oxi’ in their referendum was a rejection of neo-liberalism and a vote for a more fraternal, collective EU project. A British ‘No’ in the forthcoming referendum would be a rejection of a fraternal, collective EU project for a more intensive neo-liberalism. 'Oxi' and 'No' do not mean the same thing.


A minor footnote. Yanis Varoufakis, who resigned today as Greece’s Finance Minister, is, so far as I know, the only politician of any note to have an academic publication in the organization studies literature:

Varoufakis, Y. (2008), ‘Game Theory: Can it Unify the Social Sciences?’, Organization Studies 29, (8-9): 1255-1277.

For an analysis of the role that Varoufakis’ knowledge of game theory may have played in the negotiations, see this article by the always interesting journalist and blogger Neil Clark. The answer, by the way, to the question in the title of Varoufakis' article is both 'oxi' and 'no' (and 'nein' and 'non') - but that is another story.

* I put 'austerity' in scare quotes because it is not just a euphemism but an objectionable one, invoking as it does the collective sacrifices of the post-war austerity that laid the basis for the NHS and the welfare state in support of a drive to erase the last vestiges of the post-war collective project.

Greek tragedy

A large number of organization studies academics – not including me, as it happens – are currently gathering for their main European conference, the European Group for Organization Studies (EGOS) Colloquium. This year it is being held in Athens, and at a time when Greece is in turmoil. Following lengthy negotiations with the EU and IMF, Greece’s Syriza government has called a referendum to be held this coming Sunday. In the run up, the banking system has all but closed down, with Greeks being restricted to withdrawing 60 Euros a day from ATMs, queues building up at banks and further misery being experienced by an already immiserated population.

Organization studies academics should think about Greece, which I wrote about at several points in the current edition of my book in the context of the financial crisis and its effects. Since then, Greece has become the place, par excellence, where these have been played out. There is not much point in accrediting blame, but were we to do so there would be plenty to go around. As I pointed out in the book (p.112) Greece joined the Euro on a false prospectus, having falsified its accounts with the help of the global investment bank Goldman Sachs. Yet the EU accepted its entry, presumably having at least some knowledge of this, and was happy to continue to lend to it. Equally, there can be little doubt that decades of a failed and corrupted tax-gathering system have contributed to Greece’s woes. But, again, this proved no bar to Euro membership.

This complicity has now been supplanted, especially in Germany, by a narrative of Greek fecklessness. In the classic neo-liberal trope, Greece is a household that has maxed out its credit card. Allied to this is another neo-liberal trope, usually applied domestically to welfare, of scroungers versus strivers – with Greece being the ‘scrounger’. However, there is an obvious way in which this narrative fails, and it is something which explains much of the EU approach to Greece: the issue of ‘contagion’. The argument goes in two directions. First, that if Greece were to be given substantial debt relief then Italy, Spain and Portugal would ask for the same. Second, that if Greece were to leave the Eurozone, and re-establish the Drachma, then in due course so would those other countries re-instate their national currencies.

What this should tell us is that the issue is a systemic one of, as I argue in chapter 5 of my book, a debt-dependent neo-liberal ‘new capitalism’. As I point out there are numerous local variations – Greece is one, Iceland another, the UK a third – but to try to explain what happened by reference only to the local variations rather than the global system is absurd. An even more absurd variant of this argument is one which has gained traction amongst right-wing commentators to the effect that Greece’s problems are due to having a left-wing government, as if these problems did not date back for years, and had not dogged successive governments. Again, such arguments refuse to understand Greece’s situation in the context of the now 40 year old neo-liberal experiment.

Whilst the hallmark – no, the requirement – of neo-liberalism is debt, whenever it goes wrong the proposed solution is government fiscal balancing, colloquially nowadays known as ‘austerity’. It always fails, for reasons set out by Keynes many decades ago, and Greece has good reason to know this, having seen its economy deteriorate even as austerity was more and more harshly implemented. Which brings us to the referendum which is at one level a vote on whether to accept further austerity or to reject it. But of course the vote is much more complex than that since a ‘yes’ vote could also be a vote to stay with the Euro or even the EU, or could be a vote against Syriza, or a just to get the cash machines working again, quite a much as a vote to accept  the EU’s proposed financial deal (which in any case may no longer exist). Equally, a ‘no’ vote could be a vote against austerity, or a nationalist vote, or a vote for Syriza, or a vote to stay in the Eurozone but re-negotiate. Or many other things.

As an outsider, I struggle to know which way I would vote were I Greek and I certainly would not presume to advise anyone in Greece as to how they should vote. But, again as an outsider, two things stand out to me. One is how extraordinarily punitive the EU have been towards Greece, despite their own complicity in the situation. Angela Merkel is reported to have said in 2010 that the deal then being struck by Greece “had to hurt” and that she wanted to “make sure that no-one else will want this” (this, by the way, was the deal that was meant to lead to Greek economic growth. In fact it led to a 25% shrinkage of the economy 2010-2015). This kind of humiliating, exemplary lesson to be visited on the Greeks seems very much to have informed the recent negotiations, with Wolfgang Schäuble, the German Finance Minister, having been especially hardline, and almost contemptuous in his dismissal of the Greek negotiating team. All this briefing about how the Greek team were ‘amateurs’ was just a way of saying that they wouldn’t play by the rules of a nasty, vindictive, and wholly irresponsible game.

The second thing that strikes me is the most important thing about all this: the horrific degradation of huge swathes of ordinary Greek people (now even worse than described on p. 117 of my book) who have no involvement or responsibility for what has befallen them. Youth unemployment is now running at 60%, pensions have shrunk and may not be paid, there is no investment in the economy and the banks have run out of money. This is about as close to complete economic collapse as can be envisaged, and it is happening to a European Union member. Whatever the Greek people vote in this weekend’s referendum will not make much difference to this, because both outcomes are probably equally bad for ordinary people. That should matter to other Europeans both morally (we should not allow such suffering) and pragmatically (we really don’t want a failed state adjacent to both Russia and Turkey).

Nothing is easy here, nor perfect, but it is clear to me that if the EU is to mean anything as an ideal, and if it is to be effective as a geo-political bloc, then the only available answer is a massive debt write-off allied with a European ‘Marshall Aid’ type reconstruction of the Greek economy. Let’s be clear, this would be a relatively trivial task: the Greek economy is about 2% of the Eurozone. If the only argument against that is supposed ‘Greek profligacy’ then it is a weak one. For not only was that profligacy part and parcel of the global economic system and connived at by the EU, but also however ‘sinful’ it may have been it hardly compares with what brought Germany to its lowest point at which point it was the recipient of very substantial assistance to rebuild.

Europe made some terrible choices about blame and punishment after the First World War, and (with US help) some rather sensible ones after the Second World War. We are now living in a more complicated world, dealing with the fall-out of the failed neo-liberal experiment in economics and the failed neo-conservative experiment in global affairs. Greece is at the forefront of both (massive sovereign debt; dealing with the migrant crisis from Syria and Libya). One small way – but hugely important for the Greeks – that we could put right some of these mistakes would be to re-build Greece. Not as charity, not as a grudging favour, but from self-interest and generosity of spirit.