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Costas Lapavitsas speaks to an audience at The Real News about how finance controls the global economy

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COSTAS LAPAVITSAS, PROF. ECONOMICS, UNIV. OF LONDON: In terms of the social interests expressed through the political system, you see clearly great power of the financial elites. Clearly that is demonstrated in country after country. You look at a place like Greece, which has been devastated, the sector that has had its interests protected throughout are the banks. Whatever else might have happened to the country, the banks must be protected. And they were protected, alright, in a variety of ways. So, clearly the social interest that has managed to protect its well-being best, right, in the political system is the financial interest.

But the question you’re asking me is about politics and what has that meant for politics and for political ideology. Well, to me, the most important change and transformation over the last two decades, as financialization went into overdrive, is the collapse of all social democracy, the social democrats. I know in this country social democracy hasn’t had the same history, for reasons of how U.S. capitalism [crosstalk]

PAUL JAY, SENIOR EDITOR, TRNN: Well, sort of the New Deal.

LAPAVITSAS: Sort of. It’s the closest. Yeah.

JAY: The American version of it is the New Deal.

LAPAVITSAS: It’s the closest you get to it. But, obviously, in Europe and elsewhere, it has collapsed. And the reason it’s collapsed is because it basically accepted, lock, stock, and barrel, the arguments of neoliberalism, the idea of the market, the idea of financial growth, of financial expansion. It really believed in it. And the ones who argue most forcefully still for that are actually social democrats. It’s incredible. And, therefore, their influence, certainly in Europe, it’s just a vanishing. The social democratic party in Greece has disappeared. The social democratic party in Spain is disappearing nearly as fast. Social democrats in Portugal are nowhere to be seen. In country after country–in Germany, the social democracy is hobbled because of that, because they’ve accepted these–they’ve got nothing to propose which would be the equivalent of what they used to propose back in the ’50s and the ’60s and the ’70s, which was some kind of regulated capitalism within those confines mentioned before, some kind of–you know, let’s manage it. The scope for that has become much less.

In this context, there is room for the left, as in the non social democratic left. The tragedy there is that the left in Europe and elsewhere has been incredibly weak because of the events of the last two to three decades–the collapse of the Soviet Union, the massive defeats of the ’80s in terms of class struggle and so on. And the left hasn’t been able to take up the mantle. Not yet. There is life. It’s not a corpse yet. There is life. Things are happening, particularly because of the crisis. It took time for the left to comprehend what happened in the crisis, and they’re beginning to respond.

Who will fill the space left by the collapse of social democracy, by the ideological bankruptcy of social democracy, is a most interesting question for politics today. Who will fill that space? How will it be filled? It remains to be seen.

Now, when you look at the rest of the political spectrum–and, again, in Europe you see very important things happening there, too. The financial crisis has been resolved in the interests of the financial elite, clearly, and the cost has been passed on to working people, and often on to the poorest, clearly. This naked demonstration of class interests and class privilege has actually begun to bring changes on the right, too. The parties of the right are changing. We see a hardening, the emergence of the extreme right in a big way, reflecting social frustration as well and giving it that kind of very conservative, very backward outlook, but also the emergence of an authoritarian streak within the rest of the right.

Times are dangerous. The more class-based this society becomes and the more unstable it becomes, the harder the options. We know that from history. That’s why it’s unstable, as I said before. That’s why things are going to happen. And they’re going to happen sooner rather than later.

JAY: Thanks for joining us on The Real News Network, the first town hall from The Real News Media Center in Baltimore. Please join us for the next time.


DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.

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Paul Jay was the founder, CEO and senior editor of The Real News Network, where he oversaw the production of over 7,000 news stories. Previously, he was executive producer of CBC Newsworld's independent flagship debate show CounterSpin for its 10 years on air. He is an award-winning documentary filmmaker with over 20 films under his belt, including Hitman Hart: Wrestling with Shadows; Return to Kandahar; and Never-Endum-Referendum. He was the founding chair of Hot Docs!, the Canadian International Documentary Film Festival and now the largest such festival in North America.

Costas Lapavitsas is a professor of economics at the School of Oriental and African Studies, University of London