Europe is not just another geopolitical power block. Photo: Getty
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Slavoj Žižek: Only a radicalised left can save Europe

Austerity is not “too radical”, as some leftist critics claim, but, on the contrary, too superficial, an act of avoiding the true roots of the crisis, says Slavoj Žižek.

After the electoral triumph of the anti-immigrant eurosceptic parties in countries like France and UK, many liberals expressed their shock and worry. However, there was something of a feigned naivety in their surprise and indignation, in their wonder at how the victory of the populist right was possible. What one should wonder about is why it took the anti-immigrant right so long to make a decisive breakthrough.

When Jean-Marie Le Pen made a tasteless gas-chamber joke about a French Jewish pop singer – “we’ll do an oven load next time” (Le Pen denies this was intended to be anti-Semitic) – his daughter Marine Le Pen publicly criticised him, thereby promoting her image as her father’s human face. It is irrelevant if this family conflict is staged or real – the oscillation between the two faces, the brutal one and the civilised one, is what defines today’s populist right. Beneath the civilised public face, there lurks its obscene, brutal underside, and the difference concerns only the degree to which this underside is openly admitted. Even if this obscene underside remains totally out of sight, even if it there are no slips in which it breaks through, it is there as a silent presupposition, as an invisible point of reference. Without her father’s spectre, Marine Le Pen doesn’t exist.

There is no surprise in Le Pen’s message: the usual anti-elitist working class patriotism which targets trans-national financial powers and the alienated Bruxelles bureaucracy. And, effectively, Le Pen forms a clear contrast to the sterile European technocrats: addressing the worries of ordinary people, she brings passion back to politics. Even some disoriented leftists succumbed to the temptation to defend her: she rejects the non-elected Bruxelles financial technocrats who brutally enforce the interest of the international financial capital, prohibiting individual states prioritising the welfare of their own population; she thus advocates a politics that would be in contact with worries and cares of the ordinary working people – her party’s fascist outbursts are a thing of the past. . . What unites Le Pen and the European leftists who sympathise with her is their shared rejection of a strong Europe, and the return to the full sovereignty of nation states.

The problem with this shared rejection is that, as they say in a joke, Le Pen is not looking for the causes of the distresses in the dark corner where they really are, but under the light, because one sees better there. It begins with the right premise: the failure of the austerity politics practised by the Bruxelles experts. When the Romanian leftist writer Panait Istrati visited Soviet Union in the 1930s, the time of the big purges and show trials, a Soviet apologist tried to convince him of the need for violence against enemies, evoking the proverb “You can’t make an omelette without breaking eggs”, to which Istrati tersely replied: “All right. I can see the broken eggs. Where’s this omelette of yours?” We should say the same about the austerity measures imposed by the Bruxelles technocrats: “OK, you are breaking our eggs all around Europe, but where’s the omelette you are promising us?”

The least one can say is that the economic crisis of 2008 offers large proofs of how is it not the people but these experts themselves who, in their large majority, don’t know what they are doing. In western Europe, we are effectively witnessing a growing inability of the ruling elite – they know less and less how to rule. Look at how Europe is dealing with the Greek crisis: putting pressure on Greece to repay debts, but at the same time ruining its economy through imposed austerity measures and thereby making it sure the Greek debt will never be repaid. At the end of December 2012, the IMF itself released research showing that the economic damage from aggressive austerity measures may be as much as three times larger than previously assumed, thereby cancelling its own advice on austerity in the eurozone crisis. Now, the IMF admits that forcing Greece and other debt-burdened countries to reduce their deficits too quickly would be counterproductive… now, after hundreds of thousands of job have been lost because of such “miscalculations”.

It is as if the providers and caretakers of debt accuse the indebted countries of not feeling enough guilt – they are accused of feeling innocent. Recall the ongoing EU pressure on Greece to implement austerity measures – this pressure fits perfectly what psychoanalysis calls superego. Superego is not an ethical agency proper, but a sadistic agent which bombards the subject with impossible demands, obscenely enjoying the subject’s failure to comply with them; the paradox of the superego is that, as Freud saw it clearly, the more we obey its demands, the more we feel guilty. Imagine a vicious teacher who gives his pupils impossible tasks, and then sadistically jeers when he sees their anxiety and panic. This is what is so terribly wrong with the EU’s demands andcommands: they don’t even give a chance to Greece, because Greek failure is part of the game.

Therein resides the true message of the “irrational” popular protests all around Europe: the protesters know very well what they don’t know, they don’t pretend to have fast and easy answers, but what their instinct is telling them is nonetheless true – that those in power also don’t know it. In Europe today, the blind are leading the blind. Austerity politics is not really science, not even in a minimal sense; it is much closer to a contemporary form of superstition – a kind of gut reaction to an impenetrable complex situation, a blind common sense reaction of “things went wrong, we are somehow guilty, we have to pay the price and suffers, so let’s do something that hurts and spend less…”. Austerity is not “too radical”, as some leftist critics claim, but, on the contrary, too superficial, an act of avoiding the true roots of the crisis.

However, can the idea of a united Europe be reduced to the reign of the Bruxelles technocrats? The proof that this is not the case is that the US and Israel, two exemplary nation states obsessed with their sovereignty, at some deep and often obfuscated level perceive European Union as the enemy. This perception, kept under control in the public political discourse, explodes in its underground obscene double, the extreme right Christian fundamentalist political vision with its obsessive fear of the New World Order (Obama is in secret collusion with the United Nations, international forces will intervene in the US and put in concentration camps all true American patriots – a couple of years ago, there were already rumors that Latino American troupes are already in the Midwest planes, building concentration camps. . .). This vision is deployed in hard-line Christian fundamentalism, exemplarily in the works of Tim LaHaye et consortes – the title of one of LaHaye’s novels points in this direction: The Europa Conspiracy. The true enemy of the US are not Muslim terrorists, they are merely puppets secretly manipulated by the European secularists, the true forces of the anti-Christ who want to weaken the US and establish the New World Order under the domination of the United Nations… In a way, they are right in this perception: Europe is not just another geopolitical power block, but a global vision which is ultimately incompatible with nation-states, a vision of a transnational order that guarantees certain rights (welfare, freedom, etc). This dimension of the EU provides the key to the so-called European “weakness”: there is a surprising correlation between European unification and its loss of global military-political power.

So what is wrong with the Bruxelles technocrats? Not only their measures, their false expertise, but even more their modus operandi. The basic mode of politics today is a depoliticised expert administration and coordination of interests. The only way to introduce passion into this field, to actively mobilise people, is through fear: fear of immigrants, fear of crime, fear of godless sexual depravity, fear of the excessive state itself, with its burden of high taxation, fear of ecological catastrophe, fear of harassment (Political Correctness is the exemplary liberal form of the politics of fear). Progressive liberals are, of course, horrified by populist racism; however, a closer look soon reveals how their multicultural tolerance and respect for (ethnic, religious, sexual) others shares a basic premise with anti-immigrants: the fear of others clearly discernible in the liberals’ obsession with harassment. The other is fine, but only insofar as his presence is not intrusive, insofar as this other is not really other. . .

No wonder the topic of “toxic subjects” is gaining ground recently. While this notion originates from popular psychology that warns us against the emotional vampires who prey on us out there, this topic is expanding much further than immediate interpersonal relations: the predicate “toxic” covers a series properties which belong to totally different levels (natural, cultural, psychological, political). A “toxic subject” can be an immigrant with a deadly disease who should be quarantined; a terrorist whose deadly plans should be prevented and who belongs to Guantanamo, the empty zone exempted from the rule of law; a fundamentalist ideologue who should be silenced because he is spreading hatred; a parent, teacher or priest who abuses and corrupts children. What is toxic is ultimately the foreign neighbour as such, so that the ultimate aim of all rules governing interpersonal relations is to quarantine or at least neutralise and contain this toxic dimension.

On today’s market, we find a whole series of products deprived of their malignant property: coffee without caffeine, cream without fat, beer without alcohol. . . And the list goes on: what about virtual sex as sex without sex, the Colin Powell doctrine of warfare with no casualties (on our side, of course) as warfare without warfare, the contemporary redefinition of politics as the art of expert administration as politics without politics, up to today’s tolerant liberal multiculturalism as an experience of the other deprived of its otherness – the decaffeinated other who dances fascinating dances and has an ecologically sound holistic approach to reality, while features like wife beating remain out of sight. . .

Is this detoxification of the immigrant Other not the main point of Nigel Farage’s Ukip programme? Farage repeatedly emphasises that he is not against the presence of foreign workers in the UK, that he highly appreciates the hard-working Poles and their contribution to the British economy. When he was asked on LBC about why he said that people wouldn't like to have Romanians living in the appartment next to their own, the contrast was immediately drawn with German neighbours – what worried him, he said, were people with criminal records being allowed to enter the UK. This is the stance of the “civilised” anti-immigrant right: the politics of the detoxified neighbour – good Germans versus bad Romanians or Roma. This vision of the detoxification of the Neighbour presents a clear passage from direct barbarism to barbarism with a human face. In what conditions does it arise?

Walter Benjamin’s old thesis that behind every rise of fascism there is a failed revolution not only still holds today, but is perhaps more pertinent than ever. Rightist liberals like to point out similarities between left and right “extremisms”: Hitler’s terror and camps imitated Bolshevik terror, the Leninist party is today alive in al-Qaeda – does this not rather indicate how fascism replaces (takes the place of) a failed leftist revolution? Its rise is the left’s failure, but simultaneously a proof that there was a revolutionary potential, a dissatisfaction which the left was not able to mobilise. And does the same not hold for today’s so-called “islamo-fascism”? Is the rise of radical Islamism not correlative to the disappearance of the secular left in Muslim countries? Today, when Afghanistan is portrayed as the utmost Islamic fundamentalist country, who still remembers that, 30 years ago, it was a country with strong secular tradition, up to a powerful Communist party which took power there independently of the Soviet Union? As Thomas Frank has shown, the same goes for Kansas, the homegrown US version of Afghanistan: the very state which was till the 1970s the bedrock of radical leftist populism, is today the bedrock of Christian fundamentalism. And the same goes for Europe: the failure of the leftist alternative to global capitalism gives birth to anti-immigrant populism.

Even in the case of clearly fundamentalist movements, one should be careful not to miss the social component. The Taliban are regularly presented as a fundamentalist Islamist group enforcing its rule with terror – however, when, in the spring of 2009, they took over the Swat Valley in Pakistan, New York Times reported that they engineered “a class revolt that exploits profound fissures between a small group of wealthy landlords and their landless tenants”. If, by taking advantage of the farmers’ plight, the Taliban are “raising alarm about the risks to Pakistan, which remains largely feudal”, what stops liberal democrats in Pakistan as well as the US similarly “taking advantage” of this plight and trying to help the landless farmers? The sad implication of this fact is that the feudal forces in Pakistan are the “natural ally” of the liberal democracy. . . And, mutatis mutandis, the same goes for Farage and Le Pen: their rise is the obverse of the demise of the radical left.

The lesson that the frightened liberals should learn is thus: only a radicalised left can save what is worth saving from the liberal legacy. The sad prospect that lurks if this doesn’t happen is the unity of the two poles: the rule of nameless financial technocrats wearing a mask of populist pseudo-passions.

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Enough to educate 17 million children: the true cost of Brazil’s Car Wash scandal

As a new Netflix series dramatises one of the world’s largest corruption cases, Global Witness puts a figure on the cost of the scandal.

In the 1980s, Alberto Youssef was, alongside an older sister, smuggling whisky and electronic products from Paraguay to Brazil. Once, while being chased at a high-speed by police, VCRs kept falling out of the pick-up truck he was driving. Few would have guessed that this almost comical character would, one day, become a key player in what has been called the biggest corruption scandal in history. But then, the Car Wash, or as it’s known in Portuguese, Lava Jato, stretched far and wide across Brazil at a huge cost.

New research by Global Witness shows the damage caused by the Car Wash scandal far exceeds the sums stolen. The cost to the Brazilian treasury may be nearly eight times higher than the £1.4bn actually taken, enough to cover the salaries of more than a million nurses or provide a year’s education for over 17 million children.

Police only began to uncover the extent of the Car Wash scandal in 2013, when they became suspicious about the sheer quantity of cash churning through a bureau de change in a humble petrol station in the country's capital Brasilia. That led to the arrest of Youssef, which in turn led to further arrests. It soon became clear that this was no ordinary money laundering operation. Police had stumbled upon a racket that would involve at least 28 major corporations and 20 political parties, resulting in over 100 convictions. The list of those implicated reads like a Who’s Who of the Brazilian political elite, including two of the country's presidents.

Former Brazilian president Luiz Inacio Lula da Silva has been sentenced to more than 12 years, after it emerged he took bribes for helping a construction company win contracts with Petrobras. Lula says the case is politically motivated and remains free while appealing it. A ruling in a federal court on Monday, however, could send him behind bars, even as he takes the case to the Supreme Court.

Current president Michel Temer has also been at the centre of corruption investigations, most recently over allegations of bribery concerning a deal for operating services at the Port of Santos, Latin America’s largest container port. Congress has twice blocked Temer from standing trial on corruption charges while in office, and he denies the allegations.

The scandal has also inspired The Mechanism, a new Netflix drama from the director behind the biopic of Pablo Escobar, Narcos. The sums of money involved in Car Wash were almost at Escobar levels, but the billions lost to Brazil’s hard-pressed public services mean the scam might also have caused harm on a scale comparable to the druglord’s activities.

The fraud revolved around Petrobras, Brazil’s state-owned oil company. Instead of awarding huge contracts for construction projects, oil rigs, shipping and so on in the normal manner, the work was rotated around a cartel of companies in orderly fashion. Petrobras would over-pay the companies by at least 3 per cent, with the extra money forming a kickback to the directors responsible for awarding them the contracts. These directors would pocket some of the money, and hand the rest to the politicians who had appointed them to their lucrative posts. The money then went to the campaigns of Brazil’s political parties and provided backdoor funds that kept otherwise unstable governing coalitions together.

The result was a Byzantine racket of astonishing intricacy and scale in which everyone took a cut. Bribes came in the form of bricks of cash, expensive art works, aircraft and yachts; anonymously-owned companies in tax havens and foreign bank accounts helped launder the loot. One Petrobras director alone channelled €20m to banks in Monaco from accounts in the Bahamas, Panama and elsewhere.

“Once the mechanism is established, only the corrupt can take part,” says José Padilha, the Brazilian writer and director of The Mechanism. “If you’re an honest politician you’re doomed. The honest businessman will not get any contracts. There are only crooks.”

This “mechanism” had been running uninterrupted for at least 12 years.

Was this really the biggest corruption scandal of all time? Virtually every Car Wash explainer in the UK press poses the question – but none provides an answer. That’s probably because it’s notoriously hard to quantify value throughout history. In 193 AD, the Roman Praetorian Guard assassinated their emperor and held a fraudulent auction to appoint his successor, striking a deal worth 250 pieces of gold for each soldier in the army. (The empire was not theirs to sell). If not the earliest documented fraud, it was surely the most audacious – but trying to convert the ransom into modern currency is a fool’s errand.

But Padhila has no doubt. “It’s the biggest corruption scandal in the history of mankind,” he says. “It involves a mechanism which has been operating in Brazil in one form or another since at least the Eighties. Too many Brazilians fall into the trap of ideology, but the mechanism has no ideology. It is left wing and right wing. The whole political system is corrupted. Democracy has failed.”

Regardless of whether Car Wash is the biggest bribery case of all time, it certainly features in the ranks of the world’s corruption mega-scandals, sitting alongside mammoth state-thieving operations such as Malaysia’s recent “1MDB scandal” – US lawsuits claim an estimated $4.5bn has gone missing from a state development fund – and France’s Elf scandal, which shook the body politic and in which at least $400m was creamed off international oil contracts. All these scandals were linked to illicit political funding.

Taking a look at the cost of Car Wash to Brazil, first off there is the amount filched from the state oil company in improper payments. A Federal Police report seen by Global Witness conservatively estimates this at £1.4bn – all of which had to be laundered, sometimes moved physically. To put this logistical feat in context, if withdrawn in £10 notes the sum would make a stack eight miles high equivalent to almost 16 Burj Khalifas, the tallest building in the world (or, if you like, 343 Christ the Redeemers). The 119 tonnes of cash would take a fleet of 97 Ford Transit vans to deliver.

Then there is the £2.1bn fine Petrobras has agreed to settle a US investors’ class action, already bigger than the amount actually stolen. But both the theft and the losses are dwarfed by (and reflected in) the collapse in Petrobras’s share price. Before the scandal broke in September 2014, shares were at $19.33 but as of March 2018 they had dropped to $14.07. The government suffered a paper loss of £14.1bn for its 29 per cent stake in the company.

September 2014 was also the moment that global oil prices began a long decline, but the damage was too great for Petrobras to hide. “I would say 90 per cent of the fall in share price is due to Car Wash,” says Tiago Cavalcanti, a Brazilian economist at the University of Cambridge.

Petrobras’s 3.7 billion shares are supposed to furnish Brazil with a healthy income, and in the three years before Car Wash exploded, they provided Brazil with an average annual dividend of £360m. No dividend was paid in 2015, 2016 or 2017, costing the country £1.1bn.

Then comes the kicker. So vast was the upheaval  with billions slashed in investment   that some believe it helped bring about the worst recession in Brazil since records began. In March 2014, when the first Car Wash arrests were made, the Brazilian unemployment rate was 7.1 per cent. By last summer it was at 13 per cent. São Paulo consultancy GO Associados, headed by economist Gesner Oliveira, calculated that the fallout from Car Wash hit GDP by 2.5 per cent in each year the investigation was going on, from 2015 to 2017. The consultancy has now told Global Witness it has revised those figures up to an extraordinary 3.6 per cent — which would mean almost the entire drop in output during 2015 and 2016 was accounted for by Car Wash.

GO Associados said that would imply an annual $4.6bn (£3.3bn) in lost tax for each of the three years the fallout from Car Wash was at its most extreme £9.9bn. This figure would appear to be on the conservative side: it is based on the hit to the economy from Petrobras’s reduction in spending plans  but does not take into account the wider impact on Brazil’s giant construction companies, many of which lost contracts elsewhere in Latin America as a result of the scandal. Such firms were also banned from any public contracts in Brazil. The figure also fails to include the reduction in foreign investment in Brazil as a result of the political turmoil.

So even setting aside Brazil’s paper loss – Petrobras shares may well continue to rise  Lava Jato could have cost the government at least £11bn in revenue in lost tax and lost dividends from its stake in the company. That’s almost eight times the amount stolen from Petrobras in the first place.

“That number sounds very plausible and the calculation is logical,” says Cavalcanti, who has himself calculated that without Car Wash and other governmental policies Brazilian GDP would have grown by 1.2 per cent in 2015 and 2016 (as opposed to an actual fall of 3.8 per cent and 3.6 per cent). “Another reason for the recession was the falling price of commodities, but Peru and Chile did not have the fall Brazil had. Certainly Car Wash was a very big factor in the recession.”

Who knows the real difference that £11bn could have made in a country where universal healthcare is still some way off and about 7 per cent remain illiterate. The real price of Car Wash is incalculable.

“I feel disgust and exasperation,” says Padilha.

You might think that at such terrible cost, the Brazilian public would rather the fraud had never been exposed. But a recent poll suggests 94 per cent of Brazilians think the investigations should continue despite the current turmoil. For many, this is a golden opportunity to tackle the corruption that has afflicted the Brazilian body politic for decades before the mechanism started turning.

Because according to the filmmaker, Petrobras is the tip of the iceberg.

“There is no public contract in any village, town, city or state that is not affected, from the tiniest new road to the biggest government project,” he says. “All are corrupted - and none of this is exposed yet. In my country you can turn any stone and there will be cockroaches underneath.”

Ed Davey is an investigative journalist for Global Witness.