In Paul Krugman’s view, (1) Detroit is the new Greece. According to Krugman the Greek economy is only one and a half times the size of Metropolitan Detroit. They both share economic decline. They also share something else. Responsibility of the economic crisis is not greedy bankers, and greedy public employees. Regional economies will decline. In Free Market Capitalism stuff happens-get used to it. It’s the creative destructiveness of the market.That’s the way Capitalism works.
For Robert Reich, a public policy academic at the University of California, it’s an ethical or policy choice by the affluent and wealthy. (2) They have abandoned the poor blacks in Detroit City Centre. They have fled to the suburbs. So It’s an issue of lack of fair redistribution. The rise in income inequality and the under-consumptionism engendered by Neo Liberalism is the problem in Detroit and presumably Greece.
whichever way you look at it,the working class and the poor have to pay in Detroit and Greece : unemployment, decline in pensions,deterioration of the built environment, isolation of the poor. For Frank Hammer, former union official in Detroit, declaring the city bankrupt is an excuse to privatize everything and obliterate pensions and workers rights. (3) The city assets will be stripped and sold off cheap to the people who caused the economic crisis.
Although there may be similarities between Greece and Detroit,there is one huge difference. In Greece there is resistance. There have been 27 General strikes. The state television station ,ERT,has been under workers control for 1 month. Although mass discontent is likely to be channeled into Syriza as a national party of salvation. Alexis Tsipras has called for the unity of conservatives who value civilisation and bourgeois democracy as well as rebellious youth, in a party of national sovereignty. (4)
Many on the left in Britain view Syriza as a model for a broad party of the left. But in Greece the mainstream left party, PASOK, lost mass support when it attempted to drive through austerity measures in Government . The danger of Syriza is that outside Government, making itself fit to govern, will lead to attempts to hold back the class struggle, and in Government the logic of utilising the state will lead to managing capitalism. (5)
1 Paul Krugman, Detroit the new Greece, New York Times, July21,2013.
2 Robert Reich, Income inequality ruined Detroit, Salon, July 22, 2013.
3 Frank Hammer, Is Detroit’s Bankruptcy really a feeding frenzy for Privatisation? The Real news, July20,2013.
4 Alexis Tsipras, call for a United Party. Links international, July 13,2013
5 Alex Callinicos, Where is the British Left Going ?, IS 39 July 13,2013.