Commentary: Economist Galbraith warns of fate like Yugoslavia’s
WASHINGTON (MarketWatch) — The brinksmanship being practiced by German Chancellor Angela Merkel and other leaders in the euro crisis carries considerable risk, not least of which is a downward spiral in countries like Greece that could end in an “explosion of violence.”
This was the grim warning delivered by economist James Galbraith during a visit to Germany earlier this month as he described the possible effect of current austerity policies in Europe.
“The dynamic has an end state for which there is a model, and that model is Yugoslavia,” Galbraith said in an interview with the online publication NachDenkSeiten. He went on to specify what he meant by that model: “A downward spiral leading to an explosion of violence.” Read the interview in English.
Galbraith, a professor at the University of Texas and son of legendary economist John Kenneth Galbraith, made similar remarks in a keynote speech at a conference hosted by labor union IG Metall in Berlin.
He cited his brother, Peter Galbraith, who was the first U.S. ambassador to Croatia in 1993, to the effect that the violent disintegration of Yugoslavia did not result from age-old ethnic conflict, but from new crimes committed for political and economic reasons.
“That’s what kicked off those wars,” James Galbraith told his Berlin audience. “And when the violence starts in an advanced, in a developed country, it moves quickly and the fractures are not clean. And I can assure you that if you talk to people in certain parts of Europe, and Greece particularly, you can hear already the anxieties that you could have heard in Yugoslavia in the early 1990s.” Read the transcript of Galbraith’s speech.
IG Metall, which represents workers in Germany’s vast auto industry and is the world’s largest labor union, held the conference under the motto “Changing Course — For a Good Life.”
The declaration issued by the union made it clear that the course they want to change is the neoliberal policy of austerity championed by Merkel and the European Union in resolving the euro crisis.
The declaration called for an end to the dominance of financial markets in European economic life through more “consistent” regulation and a financial transaction tax.
Regarding Europe, the union said: “We want a Europe based on solidarity, whose citizens stand by one another during crises in particular. We call for a Marshall Plan for the countries affected by crises.” Read the declaration.
The union developed this alternative stand over the past few months in the absence of any effective leadership from Germany’s opposition Social Democrats, who seem at this point to have as their highest hope in next year’s national elections to rejoin Merkel’s Christian Democrats in a grand coalition.
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