Greek Lessons: Democracy versus Debt-Bondage

It is a truism to say that democracy began with the Greeks – less so to say that it originated in popular rebellion against debt and debt-bondage. Yet, with the Greek people ensnared once more in the vice-grip of rich debt-holders, it may be useful to recall that fact. For the only hope today of reclaiming democracy in Greece (and elsewhere) resides in the prospect of a mass uprising against modern debt-bondage that extends the rule of the people into the economic sphere.

Across virtually all the ancient world, to fall into irretrievable debt was to enter into bondage to the rich. For millennia, the poor typically had no collateral for loans beyond their bodies and their labour. The result in ancient Greece, as Aristotle acknowledged, was that “the poor . . . were enslaved by the rich.”[1]

Beginning more than 2,600 years ago, a succession of upheavals by the Athenian poor – or the demos – broke the power of the aristocracy and began a drawn out democratic revolution. Squeezed by debts and the spread of debt-bondage the common people rendered their aristocratic society effectively ungovernable. In 594 BC, in an effort to restore stability, huge concessions were made to the demos: all debts were cancelled and debt-bondage abolished. For the first time, poor men acquired meaningful rights to political participation. And they used those rights to systematically curtail the unaccountable power of aristocrats, accomplished by elevating the popular Assembly and its direct democracy above all other institutions.[2] So interconnected were the principles of democracy and economic justice for the demos that Aristotle identified “the rule of the poor” as the essence of a democratic state. “In democracies,” he explained, “the poor have more sovereign power than the rich.”[3] For this reason, struggles by the rich to increase their social and economic power invariably took the form of struggles against democracy.

Notwithstanding enormous differences in social and historical context, a similar battle is wracking Greece today. To be sure, the ancient landed aristocracy has been replaced by a capitalist “financial aristocracy.”[4] Yet, war between the modern aristocracy of debt-holders and the forces of democracy once again grips Greek society.

From the earliest days of the recent “debt crisis” – caused, let us recall, by the global bank bailouts and the recessions that followed the financial crash of 2008 – international financial institutions have been on a collision course with democracy. Time and time again, the interests of global banks have over-ridden the will of the people. Consider just the following events of early November:

  • On November 3rd of last year European Union leaders browbeat and humiliated Greek Prime Minister George Papandreou for having pledged to hold a popular referendum on a proposed austerity deal. The confidence of financial markets being unable to abide consultation of the Greek people, Papandreou was quickly forced from office.[5]
  • One week later, the former head of the Bank of Greece and former vice-president of the European Central Bank, Lucas Papedemos, never having been elected to any public office, was installed as Greek PM.
  • Two days after that, a non-elected prime minister was appointed in Italy, in the form of  former Goldman Sachs executive, Mario Monti. Defending this end-run around basic liberal-democratic procedure, the country’s president explained that “Italy could not afford elections at a time of market crisis.”[6]

Speaking of elections, the people of Spain found themselves in the midst of one at the very time Greece and Italy were receiving non-elected prime ministers. Yet, as one perceptive journalist reported, the public displayed a distinct lack of interest. “If scarcely anyone is taking any interest in the election,” he noted, “it’s because the result is seen as largely irrelevant: it’s the markets that rule.”[7]

Since then, the recognition that “it’s the markets that rule” has grown, and with it the decline of even the most elementary forms of democracy. Nowhere has the assault on democracy been more brazen than in the negotiations leading to the most recent “bailout” of Greece – which, of course, is really just another bailout of Europe’s banks.[8] As the price of paying back the banks while impoverishing its people, the Greek government has been forced to accept nothing less than outright colonization by the European Central Bank and the International Monetary Fund. In fact, the “bailout” agreement states that:

  • Greece is required to rewrite its constitution to give priority to debt repayment. A political document meant to enshrine the rights of the people will now be amended to give priority to the rights of banks.
  • The “loans” bestowed on Greece will be placed in a special escrow account which can release funds only for the purpose of payments to banks. Spending these funds on pensions or healthcare is explicitly forbidden.
  • Foreign lenders will have the right to seize the gold reserves of the national Bank of Greece.
  • A task force created by the European Union will be given an “enhanced and permanent” presence in Athens, where it will monitor all financial and social policy activity of the Greek government.

Whatever semblance of democracy is possible in a capitalist society has now been shunted aside in Greece. The country’s elected institutions now function as little more than fig leafs for the power of global capital. And its people are being subjected to modern forms of debt-bondage in which the bodies of poor and working class people are sacrificed to debt payment.

Under the bailout package, for instance, the Greek minimum wage will be slashed by 22 per cent (and more for young workers); 150,000 public services jobs will be eliminated; pensions will be savaged. Living standards, which had already contracted on average by 30 per cent, will be pushed down a further 15 per cent. An economy that has been in recession for five years (and has shrunk by more than one-fifth) will be pushed into a further downward spiral. More than 60,000 small and medium-sized businesses will collapse, and a quarter of a million private sector jobs will evaporate. Youth unemployment will soar above 50 percent.[9] Homelessness and street begging, already rising alarmingly, will worsen.

How long this can continue is anyone’s guess. Since the economic crisis emerged in 2008-9, Greece has seen waves of general strikes, mass demonstrations, and fighting with riot police. Anger and frustration may well boil over. In the view of one trade unionist, “People are literally hungry and the number of homeless is growing every day . . . soon they won’t take anymore. There’ll be a popular revolt.” [10]

If it is to have any chance of success, such a revolt will have to reclaim the ancient connection between democracy and economic justice. It will have to revive the meaning of democracy as “the rule of the poor” – all of the poor exercising real sovereign power in popular assemblies. And such a project of radical democracy will have to break decisively with liberalism through the deepening and extension of popular power and control into the economic sphere.

Liberal-capitalist democracy, observes Ellen Meiksins Wood, “leaves untouched vast areas of our daily lives – in the workplace, in the distribution of labour and resources – which are not subject to democratic accountability but are governed by the powers of property and the laws of the market.”[11] Those powers of property and the market have now shown their utter incompatibility with any kind of genuine democracy.

It thus falls to the radical Left to reclaim the project of democracy and to once again link it to popular struggles against new forms of debt-bondage. Not only does this mean learning from the ancient example of “the great democracy of Athens,” as C.L.R. James urged.[12] It also requires attending to the new practices of assembly-style democracy that have emerged at the highest moments of recent struggles from Tahrir Square to Occupy Wall Street.[13] All of this means building a radical Left uncompromisingly committed to deepening the project of direct democracy as an indispensable part of all popular movements against austerity and injustice.

[1] Aristotle, The Constitution of Athens, Ch. 2. Scholars are uncertain as to whether this text was written by Aristotle or by one of his students.

[2] See W. G. Forrest, The Emergence of Greek Democracy, Ch. 6, and the monumental study by G.E.M. de Ste. Croix, The Class Struggle in the Ancient Greek World. It is true, of course, that the participatory democracy they created was profoundly limited by the exclusion of women and slaves. Yet, as C.L.R. James, one of the great advocates of ancient democracy, declared, typically “those who are prone to attack Greek Democracy on behalf of slavery are not so much interested in defending the slaves as they are in attacking the democracy.” See James, Every Cook Can Govern: A Study of Democracy in Ancient Greece (section, “Slavery and Women”) available at:

[3] Aristotle, The Politics, Book VI, Ch. 2.

[4] For the idea of a “financial aristocracy” in a capitalist society, see Karl Marx, “The Class Struggles in France, 1848 to 1850” in Marx, Surveys from Exile, pp. 36-38.

[5] Not that Papandreou was any friend of Greek workers. He was utterly committed to the austerity agenda, but concerned to preserve some public legitimacy.

[6] “Italy races to install Monti,” Financial Times, November 14, 2011.

[7] Stephen Burgen, “Protests pointed to new way forward,” Guardian, November 12, 2011.

[8] See my blog, “Follow the Money: Behind the European Debt Crisis Lie More Bank Bailouts,” available at:

[9] Eric Reguly, “Second bailout hasn’t stopped the Greek time bomb,” Globe and Mail, February 25, 2012.

[10] Ilias Iliopoulis, quoted by Helena Smith, “Greece lies bankrupt, humiliated and ablaze: is cradle of democracy finished?” Guardian, February 13, 2012.

[11] Ellen Meiksins Wood, Democracy Against Capitalism, p. 234.

[12] C.L.R. James, as in note 2 above.

[13] See my lecture, “Radical Democracy and Popular Power: Thinking About New Socialisms for the 21st Century,” available at:

Follow the Money: Behind the European Debt Crisis Lie More Bank Bailouts

While I was cursing the inane mainstream commentary on the global economy recently, I was reminded of a pivotal scene in the 1976 movie, All the President’s Men. As two young reporters investigate the burglary of Democratic Party offices in the Watergate Hotel, a disgruntled, high-ranking FBI agent, code-named Deep Throat, advises, “Follow the money. Always follow the money.”

They did. And, in the process, the real-life journalists, Bob Woodward and Carl Bernstein, blew the lid off one of the great scandals of 20th century politics. Since then, investigative reporting in the mainstream has gone the way of the dodo. As Bernstein noted twenty years after Watergate, “the media — weekly, daily, hourly — break new ground in getting it wrong.”

And nowhere are they getting it more wrong than in their coverage of the debt crises in Europe. Over and over again, we are treated to the most vacant banalities. “Greece lived beyond its means,” pundits intone, “and now it must pay its bills.” So too for Ireland, Portugal, Spain, Italy. . . all of which are said to be cases of out-of-control people who now must get their houses in order – by way of huge cuts to government programs.

Yet these cuts, known in the jargon as austerity measures, represent political crimes of equal if not greater magnitude to that burglary at the Watergate – though you would never know it by consulting the mainstream press, which long ago lost any inclination to follow the money.


But were journalists to heed Deep Throat’s counsel, they would be forced to draw an inescapable conclusion: The multi-trillion dollar rescue of the banks that started in 2008 has not ended. It continues today under the guise of sovereign debt bailouts. And the cutbacks – to pensions, education, welfare, and public sector jobs – that wreak havoc on the lives of millions are all about funnelling public wealth to banks, pure and simple.

Consider this. As of the middle of 2011, German banks had loaned out about 170 percent of their total equity capital to governments in Greece, Ireland, Portugal and Spain. French banks had about a 100 percent capital exposure to the same governments.[1] The number shoots significantly higher when Italy is added to the equation. U.S. banks meanwhile, hold about $700 billion of government debt from the five shakiest Eurozone economies.

While a virtually inevitable Greek default is unlikely to topple banks – outside of Greece, that is – it could well set off a series of debt crises and further defaults that will bring some down. . As sovereign debt defaults appear increasingly unavoidable, so do multi-billion dollar bank losses. That’s why the stock of French banks like BNP Paribas and Société Générale has been in freefall in recent months. It’s why large firms, banks, and hedge funds have been pulling their money out of Euro banks.

We are, in short, very close to seeing “World Financial Crisis: The Sequel,” a disaster with enormous implications. Yet, where is the investigative reporting about the underlying causes of this? Where are the stories explaining how it is that three years after the collapse of Lehman Brothers investment bank triggered an acute financial meltdown in 2008, so little has changed?

In the absence of serious analysis, we are repeatedly subject to thoroughly moronic reports blaming the people of indebted nations for the mess. Remember the scapegoating of poor people in the U.S. who took out subprime mortgages? It was all the fault of the poor, you see, rather than the banks that wheeled, dealed and conned them into borrowing – all in an effort to create toxic but highly profitable mortgage-backed securities that could be sold to investors. It was, in short, predatory lending to boost financial profits. Pretty much the same thing happened in Ireland, Spain and Britain. At the same time, banks in Germany and France sent their salespeople to sell loans to governments and banks in other parts of Europe. Now, those same banks are watching in horror as their loans turn sour, just as real estate loans did in the U.S. a few years earlier, and they too are blaming the borrowers.

Worse, just as they did in 2008-9, governments are rushing to rescue rickety banks with public funds. That’s why the European Central Bank, the IMF and Europe’s leading powers keep bailing out ailing states like Greece, Ireland and Portugal. Again: follow the money. When debt-strapped governments receive hundreds of billions in new loans, that money is immediately sent into the coffers of private banks as payments on past loans.  The whole situation, observes one writer in the Financial Times, “resembles a pyramid or Ponzi scheme” in which original lenders are paid back with new loans.[2] The difference is that the new loans are coming from public funds, which is another way of saying that private banks are being rescued once more by the people. Just as in the global bank crisis of 2008-9, bank profits are private, but their losses are public. Not exactly the free market. But it’s a nice deal for profligate bankers.

And the scale of this cozy deal is breathtaking. In July, the U.S. Government Accountability Office published a document detailing the the bank bailouts. Between December 2007 and July 2010, it shows, more than $16 trillion was channelled by the American government into U.S. and European banks.[3] Trillions more were spent to bail out U.S.-based auto corporations and to fund stimulus programs.  Additional trillions were dished out in bank rescues and stimulus programs in China, Latin America, Europe, and beyond.

At the time I released Global Slump (December 2010), my estimate for the combined global bank bailout and stimulus spending was in the range of $21 trillion, or more than one and one-half times U.S. gross domestic product.[4] It is now clear that my estimate, among the largest (and arguably most accurate) at the time, was many trillions shy of the real total.

That astounding bailout of global capital drove a massive build-up of government debt. Engaged in a world-wide intervention without precedent, states borrowed in debt markets (by selling government bonds). Now, in light of the scale of the accumulated debt, some lenders have grown gun shy. They doubt the capacity of many governments to repay. As a consequence, lending rates have soared: Italy and Spain can only borrow (for ten year bonds) at rates in excess of five percent. For Ireland, the rate is pushing toward nine percent; for Portugal it already exceeds 11 per cent; and for Greece it has hit a nightmarish 23 per cent. And when it comes to short-term borrowing, Greece has already been shut out of money markets, which are demanding an interest rate of 80 percent on its two-year bonds. In sum, Greece is broke and a default is almost certainly just a matter of time.

Extortionate borrowing rates on this scale mean that the debt crises just get worse. Barring a miracle – or our preferred option, default – each of these countries will be more indebted next year, and the year after that, notwithstanding slash-and-burn austerity programs. Meanwhile, those programs, with their massive cuts to government spending and huge public sector layoffs, invariably deepen the economic crisis. Already, the official unemployment rate in Ireland has catapulted above 14 percent (27 percent for youth), while in Spain it tops 21 percent (45 percent for youth). Greece, meanwhile, is in a full-fledged depression, its economy contracting by 5.5 percent this year with no sign of recovery for years to come.


And yet, as debt mounts, the cuts keep coming. Greece’s latest austerity package includes a two billion euro cut to healthcare spending and elimination of 30,000 more public sector jobs. On the heels of earlier measures, Ireland has slashed 20 per cent from the salaries of nurses and other public employees, while also reducing child and social welfare benefits. Everywhere, the most vulnerable are being sacrificed so that banks may prosper.

Even the odd central banker has been compelled to acknowledge that truth. Speaking to British Members of Parliament in May, Mervyn King, governor of the Bank of England, observed, “The price of this financial crisis is being paid by people who absolutely did not cause it.” Furthermore, he continued, “Now is the period when the cost is being paid, I’m surprised that the degree of public anger has not been greater than it has.”

Of course, there has been massive resistance: general strikes, youth occupations of city squares in Greece and Spain, popular uprisings in Tunisia, Egypt and beyond, a student-led upheaval in Chile.[5] But in much of the world, the degree of public anger has been surprisingly low – at least thus far. And part of the responsibility for that lies with a media culture that blames the victims and refuses to follow the money.

That is one reason we need radical political economy now more than ever. One of the secrets of capitalism, after all, is the way in which it obscures and conceals processes of economic exploitation. Wealth moves and accumulates along hidden circuits that tend to elude us. Serious economic analysis thus requires real detective work, investigative acts that uncover capitalism’s dirty secrets – sweatshops, child labour, migrants toiling in fields and on construction sites, and the fantastic wealth all of this makes possible for a few.

We need the same critical sensibilities when it comes to the debt crises that are rocking parts of Europe at the moment. In the face of the banal mainstream discourse of undisciplined borrowers, we need to demonstrate that, as one senior economic advisor at UBS bank puts it, we are dealing with “a once-in-a-generation crisis of capitalism.”[6] That crisis has ratcheted up the system’s crimes against the innocent. And there is a powerful way to expose that: Follow the money. Always follow the money.

David McNally teaches political science at York University, Toronto and blogs at His recent book on the world economy is Global Slump: The Economics and Politics of Crisis and Resistance.


[1] See the charts assembled by Martin Wolf, “The Eurozone after Strauss-Kahn,” Financial Times, May 17, 2011.

[2] Mario Blejer, “Europe is Running a Giant Ponzi Scheme,” Financial Times, May 5, 2011.

[3] United States Government Accountability Office, Federal Reserve System: Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance, (July 2011)., Table 8, p. 131. Important analysis of this report is provided by Petrino Dileo, “The $16 Trillion Bailout,”, September 7, 2011.

[4] David McNally, Global Slump: The Economics and Politics of Crisis and Resistance (Oakland: PM Press, 2011), pp. 2-3, 197n4.

[5] See my previous blogs, “Night in Tunisia: Riots, Strikes and a Spreading Insurgency,” January 18, 2011, available at:; and “Mubarak’s Folly: The Rising of Egypt’s Workers,” February 11, 2011, available at: On the student protests in Chile, see Manuel Larrabure and Carlos Torchia, “’Our future is not for sale’: The Chilean Student Movement Against Neoliberalism,” The Bullet, n. 542, September 6, 2011, available at:

[6] George Magnus, “Markets are Reacting to Crisis of Capitalism,” Financial Times, September 12, 2011.

And They Call This a Recovery?


By David McNally

The strut of confidence is gone and the jitters are back. A flurry of dreadful statistics at the end of April made sure of that.

On April 26 came the news that the British economy grew a mere 0.5 per cent in the first quarter of 2011. Coming on the heels of a contraction by that amount in the previous quarter, one commentator was prompted to declare that “the UK is teetering on the brink of a double dip recession.”[1] Forty-eight hours later the Commerce Department revealed that the U.S. economy had slowed to a crawl, recording a meagre 1.8 per cent growth rate in the first quarter, down from over three percent at the close of 2010.

A day later word arrived that the Canadian economy had shrunk in February, and that the official rate of unemployment in Spain had jumped to 21.3 percent – and the youth jobless rate to a staggering 40 percent.

Oh, and did I mention Greece? That country’s government, having imposed draconian cuts to public spending only to watch the economy shrivel by nearly five percent last year, discovered that it would have to offer a 23.5 per cent rate of interest on its two year bonds if it wanted to raise funds in money markets. Bond yields at such extraordinary rates can only mean that the financial sharks smell a Greek debt default coming, which seems an inescapable conclusion.

All of which returns us to an obvious deduction, even if it is resisted by most mainstream economists: this is no more a normal economic recovery than the Great Recession of 2008-9 was an ordinary downturn. Instead, we are in the midst of a much more complex period – one of deep recessions, shallow upturns, high unemployment, government debt crises, renewed recessions, and an ongoing era of austerity – which I have characterized as a global slump.[2]

Of course, there was no reason to expect a normal recovery in light of what preceded it. The Great Recession of 2008-9, after all, was the deepest and longest downturn experienced by global capitalism since the catastrophic slump of 1929-32. The 30 large economies that comprise the Organization for Economic Cooperation and Development (OECD) underwent a six percent contraction in Gross Domestic Product (GDP) with jobless rates jumping two-thirds higher on average. World industrial output fell 13 per cent; international trade dropped by 20 per cent; and global stock markets plunged 50 per cent. The largest wave of bank failures in 80 years shook the financial system. All of this should have indicated that, rather than an ordinary recession, we were dealing with a systemic crisis, one that announced the end of the neoliberal phase of capitalist expansion. And recovering from such an event will be very difficult indeed.

As of mid-2011, for instance, well into the “recovery,” annual economic growth in the U.S. and the more robust parts of Europe was in the 2.5 to three percent range – about half the rate we would expect based on past business cycles. Even during the revival in the middle of the Great Depression, the U.S. economy grew much more dramatically: by almost eight percent in both 1934 and 1935 and by a stunning 14 percent in 1936. Yet, so low are rates of expansion today that they are barely making a dent in unemployment. In fact in some part of Europe, like Ireland, Greece and Spain, joblessness is on the rise. In the United States, as the graph below shows, employment is still more than five percent short of its pre-recession level. Across the entire period since the Great Depression there has never been a “recovery” that produced jobs at so anaemic a rate as what we are seeing at the moment.


U.S. Job Growth After Recessions, 1974-2011

Source: Bureau of Labor Statistics. Chart by Amanda Cox, New York Times, April 1, 2011.


The big reason for the failure of jobs to return is that, while profits have recovered, business investment has not. In one major economy after another, corporations are hoarding cash rather than investing it. This is obviously true in European centers, like Germany and Britain, as it is in the U.S. But it is also the case in states like Canada, which escaped the worst effects of the financial crisis and whose economy has been buoyed by rising prices (and export demand) for raw materials. Business investment in new equipment and machinery in Canada was at just 5.5 per cent of GDP in early 2011, compared to 7.7 percent in 2000, or to just under seven percent in 2005.[3] As for the United States, business fixed investment remained about 15 per cent below pre-recession levels in late 2010, more than a year into “recovery.”[4] Put simply, the rise in profits is not translating into new capital accumulation on any meaningful scale. Instead, corporations in the U.S. and elsewhere are simply hoarding cash, holding on to it in larger amounts than at any time in the last 60 years. By the beginning of 2011, in fact, non-financial firms in the U.S. had at least $2 trillion in cash and checking deposits, an extremely sharp increase in their holdings of liquid assets, as the next figure illustrates.[5]

It does not take rocket science to discern why investment is so lacklustre. First, capacity utilization – the share of existing productive capacity used by business – remains well below historic averages. Secondly, businesses know that with depressed consumer spending, the withdrawal of stimulus, and the turn to austerity (deep cuts in public spending), economic demand will take big hits. Consumers and governments will be spending less, not more, in the months and years ahead. And so, rather than invest, businesses are holding on to their profits, or engaging in speculative activity (in oil, gold, food futures, etc.) unable to see what in the economic picture would justify large expenditures on new plants and equipment. Even in China, where some manufacturers are building plants, the economy is slowing down as the government there tries to deflate asset bubbles and bring down inflation.


Meanwhile, austerity measures – deep cuts to public spending and layoffs of public sector workers in order to rein in government debt – are driving a number of major economies back into recession or, what is effectively the same thing, into zero-growth scenarios. After having been hit by multi-billion dollar cuts, for instance, Ireland’s Department of Finance now estimates its economy will expand by a miniscule 0.75 percent this year, less than half the rate predicted only a few months ago. Unemployment, at just 4.4 percent prior to the crisis, continues to soar, having hit an official rate of 14.7 percent. The British economy, as we have seen, is limping along at a worse pace than Ireland.

Then there is ailing Greece, where unemployment figures have risen for seven straight months, topping 15 per cent officially, a huge jump from just a year ago. Big surprise that Greek retail sales have plummeted 10 per cent in the past year – during the “recovery” phase of the business cycle, let us recall. Meanwhile, Spain, also frantically implementing austerity, has seen the biggest drop in retail sales in two years, while four out of every ten young people cannot find work, according to official data that seriously understate the real scale of the jobs crisis.[6] In short, austerity is kicking the feet out from under an already feeble recovery.

This has prompted a variety of Keynesians to claim that austerity and the removal of stimulus are simply products of the delusional outlook of crazed right-wingers. To be sure, there is something crazed about the deficit-cutters. But, from a capitalist standpoint, they are not entirely wrong. Having to finance deficits by raising cash in financial markets, governments must pay a rate of interest determined by calculations as to the probability that they might default on their payments. That’s why Greece is paying nearly 25 percent on its two-year bonds. And that is something very real, a genuine financial reality, not just the ideological madness of right-wing nuts. Of course, the Right will attempt to exploit such moments to pursue an aggressive political program of attacks on unions and public spending, something I’ll return to in a future blog.

Very real pressure from global markets compels governments to implement austerity even though this is damaging to the economy.  Here we are reminded that capital’s primary concern is not, and has never been, with the “economy,” but with profits and the stability of the system. If those are best achieved in ways that damage jobs and incomes for the majority, so be it. This is why austerity fits the logic of capital even if it means economic stagnation and mounting unemployment. In addition to serving as a reminder that the interests of capital have nothing to do with economic growth and well-being, it also underlines why the only economics and politics capable of effectively resisting are anti-capitalist ones. Only sustained processes of political education, mobilization and resistance will determine whether this insight will become widespread in a context of austerity and global slump.

Meanwhile, in downtown Athens these days, as darkness descends, buses full of riot police take up positions near the city center. Knowing that austerity means suffering for the majority, our rulers rightly fear that this majority might at any time pour into the streets. Whether the mass protest they fear will reach the scale required to defeat the austerity agenda is the burning political question of our moment.

[1] Business economist John Hawksworth, quoted by Philip Aldrick, “Britain ‘on the edge of a double dip recession’,” Telegraph, April 27, 2011, available here.

[2] See my Global Slump: The Economics and Politics of Crisis and Resistance (Oakland: PM Press, 2011), available here.

[3] Karen Howlett, “Corporate Tax Cuts Don’t Spur Growth,” Globe and Mail, 6 April 2011.

[4] Robert Sadowski, “A Cash Buildup and Business Investment,” Federal Reserve Bank of Cleveland, January 10, 2011, available here.

[5] This figure is taken from Sadowski. See also Justin Lahart, “U.S. Companies Hoarding Cash,” Wall Street Journal, December 10, 2010.

[6] On Greece and Spain see Phillip Inman, “Greek and Spanish Economies Falter Ahead of Expected Rise in Interest Rates,” Guardian, April 29, 2011, available here.

Toronto Book Launch for Global Slump

On January 20, 2011 about 200 people gathered in Toronto’s Lula Lounge for the launch of Global Slump: the Economics and Politics of Crisis and Resistance. Emcees Liam McNally Faria Kamal (No One Is Illegal, Toronto) and Syed Hussan (No One Is Illegal, Toronto) introduced the event. Jesook Song (Department of Anthropology, University of Toronto and New Socialist Group) and John Clarke (Ontario Coalition Against Poverty) offered appreciations of the book. After brief opening remarks, David McNally did a short reading from the text. Music at the opening and conclusion is “Revolution” by Nina Simone.

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Mubarak’s Folly: The Rising of Egypt’s Workers

By David McNally

Rarely do our rulers look more absurd than when faced with a popular upheaval. As fear and apathy are broken, ordinary people – housewives, students, sanitation workers, the unemployed –remake themselves. Having been objects of history, they become its agents. Marching in their millions, reclaiming public space, attending meetings and debating their society’s future, they discover in themselves capacities for organization and action they had never imagined. They arrest secret police, defend their communities and their rallies, organize the distribution of food, water and medical supplies. Exhilarated by new solidarities and empowered by the understanding that they are making history, they shed old habits of deference and passivity.

It is this – the self-transformation of oppressed people – that elites can never grasp. That is what explains the truly delusional character of Egyptian President Hosni Mubarak’s speech on Thursday, February 10, where he prattled on in surreal disconnection from events. But while the aging dictator may be uniquely out of touch, he merely reflects the biases of his class. For it is a general characteristic of our rulers that they imagine those below them to be inherently stupid and deferential. They treat the downtrodden as laboring drones and cannon fodder for military adventures. They feed them lies and empty promises and send in the riot police when the subjugated get unruly. And most of the time they get away with it.

That is why popular revolutions are inexplicable to them. As ordinary people cast off resignation and obedience, as they take control of their communities and reclaim the streets, they become unrecognizable to their rulers. This is the real “intelligence failure” of the ruling class. Contrary to the terms of debate in security circles, it is not that they missed some indicators of institutional change; it is rather that all their models are based on the presumption of popular passivity. “Ordinary Egyptians have a reputation as fatalists,” pronounced a former Canadian diplomat to Egypt in the early days of the revolution, explaining that Egypt would not go the way of Tunisia, where dictator Ben Ali was toppled only weeks earlier.[1] In so doing, the diplomat revealed not only his own foolishness, but also the tone deaf incapacity of elites to comprehend people’s power.

After all, revolutions are not just about changing institutions. Most profoundly, they are about the dramatic remaking of the downtrodden. Revolutions are schools of profound self-education. They destroy submission and resignation, and they release long-repressed creative energies – intelligence, solidarity, invention, self-activity. In so doing, they reweave the fabric of everyday life. The horizons of possibility expand. The unthinkable – that ordinary people might control their lives – becomes both thinkable and practical.

All of this eludes bosses, bureaucrats, generals, politicians, and the vast majority of journalists because they do not understand the inner heart of a genuinely revolutionary process – that having taken to the stage of history, oppressed people are never again the same.

It is this error that explains the frantic tacking and turning of rulers confronted with mass insurgency. One moment they make concessions, the next moment they send in the goons – all in the belief that ordinary people can be beaten back into submission, or bribed with crumbs from the tables of the rich. But the longer they do this, the more they force the mass movement to broaden its base and deepen its struggles. President Ben Ali made this mistake in Tunisia; Mubarak keeps making it in Egypt. And by clinging to power in the face of mass opposition, they give the lowest layers of society the time and space to enter the political sphere. The result is that popular revolutions open the doors to great upsurges of working class struggle.

That has been Mubarak’s greatest folly. It is why Egyptian capitalists, parts of the Egyptian regime and the U.S. state have concluded that he has to go. But the genie of the Egyptian workers having now been awakened, it will be very hard to put it back in the bottle.


Philosopher Peter Hallward is among those few commentators who have grasped the inner workings of the Egyptian Revolution. Writing in the Guardian of London, he observes:

Every step of the way, the basic fact of the uprising has become more obvious and more explicit: with each new confrontation, the protestors have realised, and demonstrated, that they are more powerful than their oppressors. When they are prepared to act in sufficient numbers with sufficient determination, the people have proved that there’s no stopping them.

Again and again, elated protestors have marvelled at the sudden discovery of their own power.[2]

Participants repeatedly describe how their fear has lifted. “When we stopped being afraid we knew we would win,” Ahmad Mahmoud told a reporter. “What we have achieved,” proclaimed another, “is the revolution in our minds.” The significance of such a revolution in attitudes is inestimable. But such shifts do not happen at the level of consciousness alone; they are inextricably connected to a revolution in the relations of everyday life – by way of the birth of popular power. And these new forms of people’s power and radical democracy from below have emerged as steps necessary to preserve the Revolution and keep it moving it forward.

So, when violently attacked, as they were on February 2, 2011, by undercover police and goons of the ruling party wielding guns, knives, Molotov cocktails and more, the insurgents held their ground and fought back, holding Tahrir Square in downtown Cairo. In the process, they extended their grassroots self-organization. As reporters for the Washington Post noted, the rebels of Tahrir Square created popular prisons to hold undercover security forces, and people’s clinics to care for the wounded:

Refusing to end their 10-day old demonstration, protesters set up makeshift hospitals in alleyways off the square to treat their wounded, and fashioned a holding cell in a nearby travel office to detain those they suspected of inciting the violence. Organizers said they had captured more than 350 ‘thugs of the government’ among the pro-government demonstrators, some carrying police identification cards, and turned them over to the Egyptian army.[3]

In the same spirit, the movement has formed Peoples Protection forces, staffed by both women and men, to provide safety and security in neighbourhoods and in the mass marches and assemblies. In some towns, like El Arish, the biggest city in the northern Sinai, official police and security forces have melted away only to be replaced by armed Popular Committees, which have maintained the peace.[4]

Developing alongside these forms of popular self-organization are new practices of radical democracy. In Tahrir Square, the nerve center of the Revolution, the crowd engages in direct decision-making, sometimes in its hundreds of thousands. Organized into smaller groups, people discuss and debate, and then send elected delegates to consultations about the movement’s demands. As one journalist explains, “delegates from these mini-gatherings then come together to discuss the prevailing mood, before potential demands are read out over the square’s makeshift speaker system. The adoption of each proposal is based on the proportion of boos or cheers it receives from the crowd at large.”[5]

Tahrir Square and public spaces in Alexandria, Suez and dozens of smaller cities, are now sites of ongoing festivals of the oppressed.  Describing the popular security services and people’s “food supply chains,” demonstrator Karim Medhat Ennarah proclaims, “We have already created a liberated republic within the heart of Egypt.”[6]


Years of courageous struggle by Egypt’s workers were decisive in creating the conditions for the popular uprising. And now, mere weeks into the upsurge, tens of thousands of workers are mobilizing, raising both economic and political demands as part of a rising wave of strikes. The consequences could be momentous.

Social movements generally have been on the move recently in Egypt. The years 2002-3 saw important stirrings of political protest in solidarity with the Palestinian Intifada and in opposition to the U.S. invasion of Iraq. Shortly after this, the Kefaya (Enough) movement organized for democratic reform and the feminist group, We Are Watching You (Shayfenkom) came out in defence of women’s rights.

But by 2004 it was strike action, sit-ins and demonstrations by workers that comprised the most determined and persistent oppositional activity – most of it illegal under the emergency edicts and laws that deny workers the right to form independent unions. Over the past six years or so, more than two million workers engaged in thousands of direct actions. Most importantly, they regularly won significant concessions on wages and working conditions. The result was a growing confidence among workers – so much so that genuinely independent unions began to emerge in a society where the official unions are effectively extensions of the state.

In 2006-7 mass working class protest erupted in the Nile Delta, spearheaded by the militant action of 50,000 workers in textiles and the cement and poultry industries. This was followed by strikes of train drivers, journalists, truckers, miners and engineers. Then 2007-8 saw another labor explosion, with riots at the state-owned weaving factory in Al-Mahla Al-Kobra. The youth-based April 6th Movement emerged at this point in support of workers’ strikes. Meanwhile, workers began to address the general interests of all working people, particularly the poorest, by pressing the demand for a substantial increase in the minimum wage.

Now, workers are again throwing their collective power onto the scales of the political struggle in Egypt. And Mubarak and his cronies will live to regret it.

In the course of a few days during the week of February 7, tens of thousands of them stormed into action. Thousands of railworkers took strike action, blockading railway lines in the process. Six thousand workers at the Suez Canal Authority walked off the job, staging sit-ins at Suez and two other cities. In Mahalla, 1,500 workers at Abul Sebae Textiles struck and blockaded the highway. At the Kafr al-Zayyat hospital hundreds of nurses staged a sit-in and were joined by hundreds of other hospital employees.

Across Egypt, thousands of others – bus workers in Cairo, employees at Telecom Egypt, journalists at a number of newspapers, workers at pharmaceutical plants and steel mills – joined the strike wave. They demands improved wages, the firing of ruthless managers, back pay, better working conditions and independent unions. In many cases they also called for the resignation of President Mubarak. And in some cases, like that of the 2,000 workers at Helwan Silk Factory, they demanded the removal of their company’s Board of Directors. Then there were the thousands of faculty members at Cairo University who joined the protests, confronted security forces, and prevented Prime Minister Ahmed Shariq from getting to his government office.[7]

What we are seeing, in other words, is the rising of the Egyptian working class. Having been at the heart of the popular upsurge in the streets, tens of thousands of workers are now taking the revolutionary struggle back to their workplaces, extending and deepening the movement in the process. In so doing, they are proving the continuing relevance of the analysis developed by the great Polish-German socialist, Rosa Luxemburg. In her book, The Mass Strike, based on the experience of mass strikes of 1905 against the Tsarist dictatorship in Russia, Luxemburg argued that truly revolutionary movements develop by way of interacting waves of political and economic struggle, each enriching the other. In a passage that could have been inspired by the upheaval in Egypt, she explains,

Every new onset and every fresh victory of the political struggle is transformed into a powerful impetus for the economic struggle. . . After every foaming wave of political action a fructifying deposit remains behind from which a thousand stalks of economic struggle burst forth. And conversely. The workers condition of ceaseless economic struggle with the capitalists keeps their fighting spirit alive in every political interval . . .

And so it is in the Egyptian Revolution. Tens of millions of workers – in transportation, healthcare, textiles, education, heavy industry, the service sector – are being awakened and mobilized. They are fusing demands for economic justice to those for democracy, and they are among the hundreds of thousands building popular power and self-organization. Moreover, should the rising of the workers move toward mass strikes that paralyze the economy, the Egyptian Revolution would move to a new and more powerful level.

What the coming weeks will bring is still uncertain. But Mubarak’s folly has triggered an upsurge of workers’ struggle whose effects will endure. “The most precious, because lasting, thing in this ebb and flow of the [revolutionary] wave is . . . the intellectual, cultural growth of the working class,” wrote Rosa Luxemburg.

In Tahrir Square and elsewhere thousands of signs depict Mubarak accompanied by the words “Game Over.” For the workers of Egypt it is now, “Game On.”

David McNally teaches political science at York University, Toronto and is the author of the recently published, Global Slump: The Economics and Politics of Crisis and Resistance (PM Press), available here

[1] Michael Bell, “Will Egypt go Tunisia’s way?” Globe and Mail, January 27, 2011.

[2] Peter Hallward, “Egypt’s popular revolution will change the world,” Guardian, February 9, 2011. Available at:

[3] Leila Fadel, Will Englund and Debbi Wilgoren, “5 shot in 2nd day of bloody clashes; amid outcry Egyptian PM apologizes,” Washington Post, February 3, 2011.

[4] Tobias Buck, “Palestinians hope for change and resumption of border trade,” Financial Times, February 8, 2011.

[5] Jack Shenker, “Cairo’s biggest protest yet demands Mubarak’s immediate departure,” Guardian, February 5, 2011.

[6] Quoted in Hallward.

[7] My sources on workers’ protests include Aljazeera, Al-Masry Al-Youm, the Center for Trade Union and Workers Services,, and Special thanks to Jack Hicks for documents and reports.

Upcoming Events


  • “Global Slump, Revolt in North Africa and the Politics of Resistance.” Book launch for Global Slump in Winnipeg, Thursday, February 24, 7 PM, Millennium Library Buchwald Room, 251 Donald St., Winnipeg. For more info email:

March 2011

  • New York book launch for Global Slump, Bluestockings bookstore, March 17. Information forthcoming at:

April 2011

  • Opening keynote address on “Unity of the Diverse: Rethinking Universal History and the Problem of Emancipation” to the 25th Annual Strategies of Critique Conference, “Universal?” York University, April 7. Information available at:
  • Book launch for Global Slump and Capital and Its Discontents, April 13 at Moe’s Bookstore, Berkeley, California. Information here

May 2011

  • Presentation to a Roundtable on “Political Economy and a World in Crisis” at the meetings of the Canadian Political Science Association, University of Waterloo, May 16-18.
  • Plenary presentation to Global Studies Association meetings on “The Global Crisis through the Lens of Class, Nationality, and Gender,” Loyola University, Chicago, May 20-22. Information available at:

Night in Tunisia: Riots, Strikes and a Spreading Insurgency


Popular upheavals always carry a distinct sonic resonance. The cascading chants that reverberate through the streets, the roar of the crowd as it drives back the riot police and seizes the city square – all this and more produces an unmistakable acoustic effect. The rhythm of revolt pulsates through society, freedom music fills the air.

Ruminating about this as I watched rebellion flow from Tunisia to Algeria, Jordan and beyond, I was brought back to Dizzy Gillespie’s jazz anthem, Night in Tunisia. Gillespie’s tune emerged as part of a musical upheaval known as the bebop revolution. And its unique blend of Afro-Cuban rhythms and bebop idioms makes it an early experiment in “world music,” a border-crossing mixing of genres. And so it has been with the freedom music emanating from Tunisia. It too is hopping boundaries and echoing far and wide.

“The street has spoken,” is how one Tunisian protestor puts it. Indeed it has. And it shows no sign that it is about to stop its raucous agitation.

Riding a noisy wave of mobilizations, riots and strikes, on January 14 the people of Tunisia toppled the 23-year-long dictatorship of President Zine al-Abidine Ben Ali, sending their former head of state into exile and recording the first great popular victory of the new year.

What’s more, the voices of the street are growing louder, echoing across Algeria, Jordan and beyond in a wave of popular protest directly linked to the world economic crisis.

It is vital to insist on this last aspect of events – their connection to the global slump. Not only is this link especially ominous for the powerful and privileged of the world, foreshadowing revolts to come; it is also critical to countering the narrative running through the western press that Tunisia’s revolt is a product of corruption unique to politics in the Arab world.

The claim is a convenient mystification. For the Tunisian revolt grows out of the dialectic of the local and the global.

In many respects, the point is obvious. Tunisia’s riots and demonstrations began as a direct outburst of anger over unemployment and rising food prices. The spark was a police attack on a university-educated street vendor, Mohammed Bouazizi, on December 17 in the central town of Sidi Bouzid. Claiming Bouazizi did not have a permit, police confiscated his goods and assaulted him.

In and of itself, it was an ordinary event in the life of a poor man. But what came next was anything but ordinary. Using his remaining funds, the street vendor bought gasoline, marched to city hall, doused his clothing and set himself ablaze. He died in hospital less than three weeks later.


In a country where the official jobless rate is 14 per cent and the real rate, especially for the young, is considerably higher, this dramatic episode became a lightning rod for popular discontent. Daily protests erupted immediately after Bouazizi’s desperate act, spreading to cities and towns across the country. Unemployed teachers, bus drivers, high school students and street vendors joined the mobilizations. As the movement gained momentum, demonstrators became increasingly confident, torching police cars and trashing businesses linked to President Ben Ali and his family. Then, following Bouazizi’s death, marchers at his funeral filled the air with chants of “Farewell, Mohammed, we will avenge you. We weep for you today; we will make those who caused your death weep.” They more than made good on the pledge.

By this point, the protests had taken on an explicitly political character. Unemployment and food prices remained key issues, but the movement was now directly attacking the president and his government.

Ben Ali reacted with the tools that had worked for 23 years: a ban on demonstrations; arrests of leftists and trade union leaders; tear gas, truncheons and guns; police repression, including the killing of at least 66 protestors. But none of this was able to break the protests. Not only was the movement growing in size and militancy, but working class organizations were coming to life.

Trade unions, quiescent for years and their leaders initially hesitant to join the struggle, became key hubs of resistance thanks to pressure by rank and file members. Spurred into action and radicalized by events, the General Union of Tunisian Workers Days began organizing rallies and launched a general strike. It is difficult to overstate the potential significance of these developments. A revitalized trade unionism is critical to the development of the movement in the months ahead. If union activism surges forward and makes common cause with students, street vendors and the unemployed, the insurgency could acquire a vital organizational forum and an increasingly working class character. Moreover, an emboldened and dynamic workers’ movement might undercut the demobilizing effects of backroom deals between the old regime and moderate opposition parties.


Equally important will be the degree to which the insurgent wave continues to flow across borders.

In the early days of January, riots broke out in Algeria in response to announced increases in prices for food and other staples. Railway workers struck, as did students at five universities. Clearly emboldened by events in neighbouring Tunisia, demonstrators attacked banks, police stations and government offices. Police violence and mass arrests – at least 1,000 people were detained – failed to dent the movement. As in Tunisia, the struggle moved to a higher level as unions and student groups came together demanding democratization and an end to police violence. In a desperate effort to stave off a Tunisian scenario, Algeria’s government back-tracked, declaring a 41 per cent cut to taxes on food.

Yet the spirit of rebellion did not rest. One day after Tunisia’s president was toppled, mass demonstrations erupted in Jordan on January 15, as thousands of people poured through the streets of Amman, the capital, and other cities to protest rising food prices and to demand the government`s resignation. Dubbed “Jordan’s Days of Rage,” the protests included a sit-in outside parliament by the country’s 14 trade unions.

Two days after the start of the Jordanian demonstrations, a new round of food riots broke out in northern Sudan, where the government is pushing up prices by lifting subsidies on food and petroleum.

This escalating insurgency has clearly shaken the regions rulers. The Arab News warned for instance that “Those who see these disturbances as a local North African difficulty should think again. The hopelessness that drove this young Tunisian to his death, that has prompted several thousand of his compatriots to do the rare thing for Tunisia – take to the streets and riot – and that has seen young Algerians looting and rioting this week against price rises are a breakdown in law and order that was waiting to happen. It can happen elsewhere in the Arab world. It is not just in North Africa that the specter of unemployment looms.”

This is all true. There are indeed reasons specific to the region and the regimes involved that make these states particularly susceptible to rapid outbreaks of mass opposition. But in the West, this has given rise to a colonialist discourse that attributes all ills to the demonstrable brutality of corrupt regimes. This conveniently ignores the direct role of states like the U.S. and France in propping up and supporting Ben Ali’s dictatorship for more than two decades. It also ignores the way in which these are local expressions of revolt linked to global economic issues.


For the massive spike in food prices is directly connected to the turmoil in the world economy that has been raging since the outbreak of the financial crisis of 2008.

The first effect of the global economic slump was to dampen rising food prices. As layoffs and unemployment soared, demand slumped and food prices came down. But now, as the crisis changes form, they are on the rise once again and reaching unprecedented heights. Indeed, the UN’s Food and Agriculture Organization’s food price index has reached an all-time high, having risen a staggering 32 per cent in the last half of 2010. Food is now more expensive than ever, aggravating economic hardship across the Global South and throwing fuel on the fire of popular resentment.

One part of the story here has to do with new flows of “hot money” generated by the world-wide bank bailouts and economic stimulus programs. As banks melted down and the world financial system teetered in 2008-9, governments in the dominant capitalist nations poured something in the range of $20 trillion into propping up the system and pushed down interest rates. In the U.S. a further $600 billion is being injected into the system by the Federal Reserve.

With a growing money supply and record low interest rates, there is a huge incentive for investors and speculators to borrow on the cheap in order to buy commodities (and currencies) that look likely to appreciate. So, currencies like the Brazilian real have been soaring, as have prices for basic commodities like food and oil.

All of this is driving forward a wave of land grabs, particularly in Africa and Latin America, as global corporations and governments, like China’s, buy and lease millions of hectares of arable, drillable and water and mineral rich land. The result is yet further waves of accumulation by dispossession, to use David Harvey’s term, that displace indigenous peoples, peasants and farmers and deprive them of means of feeding themselves, thus exacerbating problems of displacement, hunger and poverty.

Add into the equation two further factors – the increasing use of arable land for the production of biofuels rather than food, and speculation by investors gambling that a poor Russian harvest or floods in Australia will damage food supplies and further drive up prices – and we have all the ingredients for huge price spikes and a new world food crisis. These are yet further ingredients for popular revolt.

This is why protests (some of them being manipulated by opportunists of the Right) are also building in India, where prices are soaring at a rate of more than 18 per cent – this in a country where the World Bank says 828 million live on less than $2 a day. In short, we are not dealing with a problem specific to the Arab world, even if movements there more readily become a direct challenge to authoritarian regimes. No, the problem has deep roots in the global economic system and the particular forms of its current crisis.

In my last blog I wrote that I would soon take up the question of resistance to the politics of austerity that characterize this period of global slump (“Like we said, it’s a global slump,” here). But the insurgents of Tunisia and beyond have beaten me to it. They are showing far better than any blogger what can be accomplished by spirited mass insurgency and revived working class activism.

David McNally teaches political science at York University, Toronto and is the author of the recently published book, Global Slump: The Economics and Politics of Crisis and Resistance (see here).

Like we said, it’s a global slump

slump picI have never accepted the postmodernist contention that contemporary capitalism is all about smoke and mirrors. The notion that ideology and illusion make the system go round strikes me as another mode of reductionism – this one based on culture rather than, say, economics. But it must be said that, at first blush, the mainstream business media certainly offers some sustenance for the smoke and mirrors thesis.

Consider, for instance, new data showing that as of November the slump in U.S. housing prices had surpassed that of the 1930s. For 53 consecutive months American home prices have fallen. What’s more, their 26 per cent drop on average since 2006 exceeds the home price meltdown of the first five years of the Great Depression (see here).

None of this seems to faze the vast majority of business commentators, who display a manic ability to shrug off such facts in favor of any uptick they can find in some economic indicator or other. This is then quickly trumpeted as proof that the long-awaited recovery is underway and that all will soon be right with global capitalism.

So it was that on Monday Jim O’Neill, chairman of Goldman Sachs Asset Management, proclaimed in the Financial Times that “This will be the year of the US comeback.” This followed on the heels of numerous claims in the same vein that dotted my daily newspaper last week, including one headed “The recovery is on.”

Then came the latest – and devastating – jobs data for the U.S. and the illusion was shattered (more on that below). On cue, the scramble for a new fix of “confidence” was promptly resumed.

It helps, of course, that the business media have no idea what really makes the economy tick. They slavishly report a hodgepodge of undigested data linked to declarations by economists and financial consultants who utterly failed to see either the financial crisis or the recession coming. What drives the operation is pure and simple feel-goodism. “The United States,” noted an insightful headline in the French daily Le Monde (December 30) “wants to believe in an economic upturn”. Indeed it does. But wishing don’t make it so.

So, let’s take a step back and look at a few facts. Then we’ll even entertain a bit of analysis.

Note that it’s not only the housing sector that refuses to exhibit signs of recovery. So does the all important job market.

The December job creation figures for the U.S. were dismal: 103,000 jobs generated, notwithstanding bold predictions mere days earlier of job growth at twice that rate. Now, let’s put this in some context.

Simply to restore the jobs lost during the recession (nearly nine million) and those required by population growth during the same period (nearly three million) would require a boom that produced jobs at twice the December rate for 142 months, or nearly 12 years. That, I repeat, is at twice the recent rate of job creation. If by some magic we were to more than triple the recent job creation rate (to 321,000 net new jobs per month), it would still take five years to get back to pre-recession levels (see here).

Of course, nothing like this is going to happen. The euro zone is drowning in waves of cuts to social spending (welcome to the new age of austerity) that drive up unemployment and dampen down economic activity. Japan remains mired in a slump that has persisted for 15 years. And China, on the heels of an extraordinary stimulus program in 2009-10, is now throttling back in order to subdue inflation and obvious bubbles in stock and real estate markets. In short, there is no dynamic engine capable of pulling the world economy behind it.

Expect, then, no major change in the official unemployment rate (9.4 per cent in the U.S.), which remains more than twice as high as it was in 2007. The real jobless rate, of course, is considerably higher. Include those who have become so discouraged that they didn’t look for a job last month, and those working part-time hours because they cannot find full-time work, and we get a combined unemployment and underemployment rate of 17 per cent, or about 27 million U.S. workers. For African-Americans and Latinos the real jobless rate is around 25 per cent, depression levels by any historical measure.

No amount of manic optimism is going to change this. Only real resistance to corporate power and corporate policies can do so – something I’ll return to in future blogs.

David McNally teaches political science at York University, Toronto and is the author of the recently published book, Global Slump: The Economics and Politics of Crisis and Resistance (see here).