As Greece prepares to vote on the referendum on July 5, 2015, we are witnessing the direct confrontation between democracy and economics, bringing to the fore the threat to democracy embodied in elite-driven expertise-based decision making reflected in the decision making structures of the Troika, namely the European Commission, the European Central Bank and the International Monetary Fund.
As a condition for the debt bailout program, the Troika imposed on Greece the same policy conditions that have been carried out for the previous five years to be continued, a condition that would continue to have the greatest impact on the poorest segments of the population.
Prof Dutta on Democracy and Greek Referendum
Agreeing to the condition would mean that the popularly elected Syriza government that came to power on the mandate to offer an alternative to the austerity measures that have been carried out in Greece since 2010 would either need to radically shift its stance on austerity or would effectively need to step down in order to be consistent with its position on austerity in Greece. This would in either case suggest the victory of the neoliberal ideology imposed by the Troika. The hegemony of economics thus would ensure that the politics of democracy is subverted.
In both of these scenarios, the power of the Troika lies in establishing the terms of the bailout, which in turn would dictate the very character of economics and politics in Greece. The neoliberal structure of governance reflected in the communicative behavior of the Troika reflects the power of expertise-driven authoritarianism that is integral to how neoliberal reforms have been carried out globally. In the face of these top-down reforms imposed across the globe since the 1990s, there has been little room for citizens, communities, civil society actors and activists to participate in processes of economic decision-making.
Most of the decision-making has taken place within elite-driven structures, with recipient nation states having to adjust to the conditions of the bailout as a condition of the bailout. Historically, in the decades since the 1990s, these decisions have taken place amid elite circles of politicians and business leaders, with strong business influence exerted through lobbies that control the electoral processes.
How the bailout money will be spent is determined by the lending structures, often effectively ensuring the the lent money is channeled back to the lending banks. The cycle of indebtedness thus created continue to benefit the lending banks and the local political economic elite who benefit from the loan. The condition of restructuring thus, often couched in the garb of promoting economic growth, dictates the flow of money into the hands of the owners of capital, while simultaneously continuing to impose oppressive conditions on the low income and poorer segments of the population. Public programs, welfare schemes, and pensions are the first to go as bank-imposed reforms specifically target the poor.
The elite-driven, expertise-based, technocratic decision-making structures of the Troika take over the political decision-making processes within the debtor nation state. Citizens remain in the dark as their political economic fate is decided by elites within closed doors. Decisions to bailout packages, adjustment programs are often carried out within closed doors, with little to no transparency and with no democratic participation of the people.
In this backdrop of economic decision-making in neoliberal structures that constrain the democratic space, the referendum in Greece announced by the Greek Prime Minister Alexis Tsipras stands as a sign of hope. The very introduction of the referendum as the point of decision-making inverts the elite driven and opaque processes through which reforms have been carried out. The referendum is an opportunity to return the dignity, political capacity, and participatory power of citizens into their hands, thus offering a model of economic decision-making that challenges the authoritarianism and threats to democracy embodied in neoliberal structures.