At the Kreisky Forum: Why have Europe’s social democrats surrendered to the toxic logic of current policies?

On 5th December, I had the great pleasure of addressing a splendid audience at the Kreisky Forum, in Vienna. My theme was, surprise surprise, the European Crisis in its Global Context. Nevertheless, in view of the very special venue (dedicated to the late Chancellor Bruno Kreisky, and delivered in his former home), I was compelled to ask myself, and to address, the following question: Why has European social democracy abandoned the legacy of leaders like Kreisky, falling in line with a toxic economics and politics that thinkers like Kreisky would have dismissed in their sleep as pathetic claptrap? You can listen to my 40 min talk here, in full,   in which I answer the question above during the last 5 minutes. Additionally, read on for a brief, written answer to that same question:

In the 1980s and 1990s, Europe’s Left (the social democrats in particular) abandoned the notion that labour, financial and real estate markets are profoundly inefficient, with inequality being a mere byproduct of that inefficiency; a byproduct which, nonetheless, feeds back into, and exacerbates, the inefficiency and instability of a capitalist society that allows itself to rely on the ‘free’ operation of these three (problematic) markets. Europe’s Left, at the time of the Rise of the Global Minotaur (i.e. from the late 1970s till 2008), increasingly forgot that

- the more financialised capitalism becomes

- the more labour is being treated like any other commodity

- the more our societies rely on house price bubbles as a source of rents and debt

the more unstable, crisis-prone and, ultimately, uncivilised capitalism becomes.

Capitalism experienced its heyday under people like Kreisky: Politicians who understood the above; leaders who were intensely sceptical of capitalism; who understood the importance of keeping financialisation, labour exploitation and real estate bubbles on a tight leash. 

So, the question remains: How come Europe’s Left abandoned these cherished principles of a Bruno Kreisky, a Willy Brandt, and Olof Palme? Why has the Left fallen for the toxic economics and politics of our era? (E.g. the SPD today which is faithfully voting with Mrs Merkel come what may.)

My tentative answer is that Europe’s Left fell for the Global Minotaur’s old trick. They saw the rivers of privately minted money that the financial sector was printing (while labour was squeezed and real estate prices soared) and thought they could harness some of it in order to pursue social democratic policies! Rather than (as the social democrats of the previous, Kreisky era had to do) target the profits of industry, as a source of funding social programs, social democrats thought they could tap the rivers of cash produced in the context of financialisation. Let finance free to do as it pleased and then tap into some of its proceeds to fund the welfare state. That was their game and, at the time, it seemed to them a better idea, more fathomable, than having to be constantly in conflict with industrialists, seeking to tax them in order to redistribute. In contrast, bankers were quite easy going. As long as the ‘leftist’ politicians let them do as they pleased, they were happy to give them some crumbs off their gargantuan dinner table.

Indeed, some of these social democrats, for some time, were funded by the financial sector quite generously so as to run their welfare programs (e.g. the Blair government’s considerable boost in public spending, similar programs in Spain by the PSOE government, etc.). Alas, to be allowed that small portion of the financialisation torrent, for the purposes of social programs, social democrats had to swallow financialisation’s logic hook, line and sinker. They had to shed their distrust for unfettered financial, labour and real estate markets. They had to suspend their critical faculties. And so, when in 2008 the tsunamis of capital produced by Wall Street, the City and Frankfurt crashed and burnt, Europe’s Social Democratic side of politics did not have the mental tools, or moral values, with which to subject the collapsing system to critical scrutiny. They were, thus, ripe for acquiescence, for total capitulation, to the toxic remedies (e.g. the bailouts) whose purpose was to sacrifice working people, the unemployed and the weak for the benefit of the financiers. The rest is a very sad, never ending, history.

 

30 thoughts on “At the Kreisky Forum: Why have Europe’s social democrats surrendered to the toxic logic of current policies?

  1. Dear Yanni,

    As you will work out by my question, I am no economist.
    I followed the logical trail of thought in your talk and want to confirm that one of your key assumptions is correct, namely the statement that the US had a surplus until the 70s.

    Looking at e.g.
    http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php ,

    I observe that in the last half of last century, the US had a deficit every single year except (51,56,57,60,69,98,99,00). In other words, most of the time.

    Why are you saying that until the 70’s it had a surplus? Are you referring to a different economic quantity that what I am looking at?

    Thank you,
    Mihalis

    • Its overall balance of payments position was in surplus; that is, the sum of the private and the public sectors’ international position was in a large surplus till the late 60s.

  2. This deficit-surplus theory is relevant to government only. The only things with deficits are governments local or national. People/businesses, the vast majority, live in surplus ie they make money. People and businesses are productive. Government is never productive it only gets money from productive entities through compulsory taxation. In short, government is a massive ball chained to the neck of the population.

    The government can compel you to buy its products at the price is sets through taxation, how it cannot be in surplus given the power it has displays its utter incompetence and wastefulness.

    About deregulation. We have talked about this before on this blog. The only meaningful deregulation has been Glass-Steagall. Again, anyone working in the financial services industry over the past 20 years will tell you regulations have gone through the roof.

    About labour being squeezed. The only way this can happen if there are less jobs than there are people looking for work. The is getting more out of balance as regulations increase, I don’t need to highlight the unemployment rate in Greece/Europe.

    You talk about the CDOs etc. Capitalism wanted to put these guys out of business, governments/central banks saved them.

    Also, you insist on highlighting the 30s as free market, when history now recognises it was not. Hoover and Roosevelt were the same. If you want to attack capitalism look to pre Federal Reserve America. Bank runs yes but nothing that affected the US economy by more than 1% of GDP in 100 years. And what you saw during the pre Fed era was falling prices and therefore pensions and savings increasing in value year on year. I know of no one who does not want that instead of the inflation we have today.

    • Hi Richard,

      what you are presenting us is dumb and unproven ideology. It is founded in a complete misunderstanding what the public sector is and what the private and capitalistic sector strongly depends on. The public sector is about to organize a societies commonwealth. This commonwealth can only be organised through enforcing solidarity and cooperation. Cooperation is by far the strongest mean we have as humans to prosper. Even the private and capitalisitic sector depends strongly on cooperation since its entities, the (esp. the big ones) companies only function when it members/worker cooperate. If we would all compete every second in our life, we would have little more than nothing. Walk around in your house and ask yourself by each and every commodity you find, if it would exist without cooperation? The answer is almost ever “no”.

      Capitalism is only a mean or tool to organize a part of the society or better a way of not having to organize a part of society too. And it is really a very good way, if we really understand, that is a only a tool, which should be used with care. Like fire, it could bring a lot of benefits, if we control it, and a lot of harm and destruction, if we don’t. So it is completely dumb to favour capitalism as the only mean to organize a society and to put it into opposition to solidarity and cooperation. This looks to me as someone, who found a hammer and treats every problem he finds as a nail, like quite a few economists do. And these are the same economists, who seem not even to understand truely, how this hammer works at all.

    • tvws4r – “dumb and unproven” and then you go on to quite rightly sing the praises of capitalism.

      “The public sector is about to organize a societies commonwealth.” – Organise? You must be joking. They spend more than they take in even though they set their own prices and compel you to pay. They could not organise a you-know-what in a brewery. And to cap it all we have to pay for the debt they accumulate against our will.

      “This commonwealth can only be organised through enforcing solidarity and cooperation. ” – Enforcing? As long as people enter into it voluntarily I agree.

      “Cooperation is by far the strongest mean we have as humans to prosper.” – I 100% agree

      “Even the private and capitalistic sector depends strongly on cooperation since its entities” – Sorry what? The ONLY way capitalism operates is through co-operation.

      “So it is completely dumb to favour capitalism as the only mean to organize a society and to put it into opposition to solidarity and cooperation.” – Sorry, you contradicted yourself in a single sentence. Capitalism *IS* solidarity and cooperation. It cannot operate with out *100%* co-operation & solidarity between parties.

      ” And these are the same economists, who seem not even to understand truely, how this hammer works at all.” – I agree, most mainstream economists are clueless.

      Let me seem like this. Society should be based in co-operation and solidarity and co-coercion should be kept to an absolute minimum, lets say less than 5% of GDP

    • “This deficit-surplus theory is relevant to government only. The only things with deficits are governments local or national. People/businesses, the vast majority, live in surplus ie they make money.”

      You dont know what you are talking about.All economies can be considered as closed systems if you include the foreign sector.Thus in a closed system comprised by 3 sectors not all 3 of them can simultaneously run a surplus.If you have trouble coping with this here’s your proof:

      The GDP from the perspective of where it comes from is can be described through this model:

      Y = C + I + G + X – M
      Where C = Private Consumption, I = Investment, G = Government Purchases, X = Exports , M = Imports

      Another way to model the GDP is from the perspective of the uses
      Y = C + S + T

      where C = Consumption, S = Savings, T = Taxes

      Both identities depict the same thing so they have to be equal by definition thus
      C + I + G + X – M = C + S + T
      Re-arranged you get:
      S – I = (G – T) + )X – M )
      S – I is the private sector balance.When its positive (S > I ) thats when the private sector has net savings aka a financial surplus.

      Assuming that the economy has a balanced trade as you would love to thus (X – M ) = 0 this must mean that S – I = G – T or the private sector surplus is equal to the public sector deficit (G > T ).
      This is not a formula, its an identity which always stands.

      Now considering the fact that the government balance G – T is non discretionary and mostly reacts to the private sector balance movement i believe the following rearangement is more useful:

      G-T = (S-I) – (X – M)

      In other words the budget deficit is equal to the private sector surplus minus the trade surplus (or plus the trade deficit.)
      Given the fact that the private sector ALWAYS desires to net save, then either the government must run a deficit or the economy must have a trade surplus or a combination of the two (a smaller gvt deficit with a smaller trade surplus).

      This also means that only if the trade surplus is big enough to cover the private sector’s desire to net save, is the government able to run a surplus or at least a balanced budget.
      Whenever a government ran a surplus or a deficit too small in order to allow the prvt sector to net save there was recession:

      About time you stop with this nonsensical wisfhul thinking which is not even possible by definition to happen.Someone’s gain is someone else’s loss.Simple is that.

    • Crossover – Sorry to tell you this but you have misunderstood what GDP is. “Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.”

      In other words nothing to do with savings & taxes.

      The rest of your comment, Ill try to pick through it

      “In other words the budget deficit is equal to the private sector surplus minus the trade surplus (or plus the trade deficit.)” Okay, lets look at Greece.

      24 billion Euros budget defict, lets say an 18 billion Euro trade deficit. Your saying the private sector in Greece has a 42 billion Euros surplus? If so can you show me where I can find the data that would show this.

      “Given the fact that the private sector ALWAYS desires to net save, then either the government must run a deficit or the economy must have a trade surplus or a combination of the two” Why? Are you saying the private sector would suck all of the money out of the economy? If I can remind you the private sector also has a desire to invest either with savings or borrowing. Investment either in property or in labour.

      “This also means that only if the trade surplus is big enough to cover the private sector’s desire to net save, ” You are (in italics) saying the private sector will suck all the money out of the economy?

      “Whenever a government ran a surplus or a deficit too small in order to allow the prvt sector to net save there was recession:” – re the graph, your saying in a recession people built up their savings? Your saying in a recession Government spending increased hence the bigger budget deficit? Sounds like the opposite of your other points. If you can give me the link to the article and not an image on an article and I’ll see if I can understand where your coming from

      “About time you stop with this nonsensical wishful thinking which is not even possible by definition to happen.” Are you saying most of the people you know run a budget deficit? Or the people you know in Greece do they run budget surpluses?

      If your saying Greece can not run a trade surplus please explain to me why. What exactly do you think is the problem with the country and/or its people. Why is Greece inferior to Germany for example?

      Someone’s gain is someone else’s loss.Simple is that.” – In socialism/communism I agree. In capitalism both parties always win otherwise the transaction would not take place. Capitalism only happens when there is a win-win situation.

      Unless of course you voluntarily enter into arrangements which make you worse of financially/materially. Of course you do not.

      There is only one arrangement in your life which makes you worse off and you did not enter into it voluntarily.

    • Cross – ” Sorry to tell you this but you have misunderstood what GDP is. “Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.”

      In other words nothing to do with savings & taxes.” – I take this back although I agree with Kuznets in that measuring GDP is a gross oversimplification of reality. the rest of my comment I stand by.

    • @Richard

      Again you dont know what you are talking about.
      The GDP can be measured both from the point of view of where it comes from i.e. Consumption,Investment,Government Purchases,Net Exports AND from the point of view of where it is used which is either to pay taxes,or to consume or to save.And since both ways count the same thing they are equal.

      “24 billion Euros budget defict, lets say an 18 billion Euro trade deficit. Your saying the private sector in Greece has a 42 billion Euros surplus? If so can you show me where I can find the data that would show this.”

      “Why? Are you saying the private sector would suck all of the money out of the economy? If I can remind you the private sector also has a desire to invest either with savings or borrowing. Investment either in property or in labour.”
      I am saying that everybody ie people and businesses always want to put some money aside.When that money is not enough they increase their leverage.This helps the economic acticity to be kept at the same level in the short term but n the long term the prv sector will always try to deleverage and if there is no other source that can provide enough demand to maintain economic activity what you get is recession.Period.

      “You are (in italics) saying the private sector will suck all the money out of the economy?” I dont know where you saw me saying “all the money”.With that said net savings (= S-I) is a net financial drain for the economy and thus is a demand leakage.

      “re the graph, your saying in a recession people built up their savings? Your saying in a recession Government spending increased hence the bigger budget deficit? ”
      A recession is caused when any of the 3 sectors of the economy tries to withhold money and the remaining sector/sectors dont make up for the loss.When the private sector tries to deleverage it “spends” more money to reay loans than to consume or invest.Something has to give or else there will be recession.And yes the budget deficit increases AUTOMATICALLY right AFTER recession kicks in.Since recession means less output and more unemployment then you have decreased tax revenues and increased unemployment benefits or other types of welfare.Thus the deficit increases (or a surplus decreases).

      “Are you saying most of the people you know run a budget deficit? Or the people you know in Greece do they run budget surpluses?”All im saying is asking for budget surpluses while a trade deficit coexists is pure madness and an actual burder for people and busineses.Thats all im saying.If you want both budget surpluses and surpluses for the private sector in aggregate then there HAS to be a trade surplus by definition.

      “If your saying Greece can not run a trade surplus please explain to me why. What exactly do you think is the problem with the country and/or its people. Why is Greece inferior to Germany for example?”
      Im always looking at the bigger picture.If Greece had a trade surplus then some other country would have a trade deficit.In other words i see no point focusing just in Greece.Greece is not alone.Germany doesnt have a deficit and is gradually heading into recession.Greece could thus have a trade surplus and gradually be dragged into recession that started in a different trade deficit economy.What you advocate would simply change the roles of deficit and surplus economies.If it wasnt Greece it would be someone else and the outcome would be the same: recession for everyone.

    • Crossover – Thank you for taking the time.

      If I understood it correctly it is saying this.

      If the government is spending more than it takes in in taxes ie a deficit, this will bump up the GDP figure.

      If the government spends less than it takes in in taxes ie a surplus, this will hurt the GDP figure.

      I don’t think there is anything ground breaking here. Even I agree with it and I would go as far as to say Keynesians and Austrians would agree with this observation also.

      If Im not mistaken, the author then goes onto conclude that deficits are a good thing because of this elementary observation.

      If my interpretation of the authors conclusions it correct I find it extremely hard to believe this slideshow is complete.

      I cannot believe that such a basic observation would lead such an apparently well qualified person to draw this massive and erroneous conclusion. http://curb.kansas.gov/bio_kelton.htm

      Slide 7 is the obvious cherry on an already oversimplified cake.

    • @Richard

      re “24 billion Euros budget defict, lets say an 18 billion Euro trade deficit. Your saying the private sector in Greece has a 42 billion Euros surplus? If so can you show me where I can find the data that would show this.”
      I already gave you the link but dont expect to see a 42billion private sector surplus in the case of a 24billion budget deficit and a 18bill trade deficit.
      budget deficit = prv surplus + trade deficit =>
      24= 6 + 18

    • Crossover – The gov def and the trade def are on the same side of the equation. But anyway, show me the 18 billion Euro surplus, what statistic do I need to look at if you know what I mean?

    • “If the government is spending more than it takes in in taxes ie a deficit, this will bump up the GDP figure.
      If the government spends less than it takes in in taxes ie a surplus, this will hurt the GDP figure.

      The government must spend according to the needs of the economy.Not all economies need the same amount of gvt budget deficit, some even require a gvt surplus in order not to get overheated.But in nowadays supressed economies, theres hardly a need for governments to run surpluses.Governments should strive to achieve full employment (and before you go berzerk by full employment i mean an economy that produces the maximum output possible i.e. not wasting productive capacity by having idle capital and/or labor).Once they reach that point though its idiotic and irresponsible for them to either increase or decrease the level of spending.
      If they increase it they will cause inflation, if they decrease it they will cause a reduction in output.

      “Crossover – The gov def and the trade def are on the same side of the equation. ” You cant be that bad in algebra.

      Y = C + I + G + X – M
      Y = C + S + T
      thus
      C + I + G + X – M = C + S + T
      thus

      G – T + X – M = I -S

      Re-arranged you get G – T = (M – X) + (S – I)
      a gvt deficit means G > T.
      a trade deficit means M > X
      and a private sector surplus means S > I

      You said 24bil budget deficit and 18 bil trade deficit so:
      G – T = 24
      M – X = 18

      so 24 = 18 + (S – I) thus S – I = 24 – 18 = 6 thus S – I or the PRIVATE SECTOR SURPLUS is 6 bil.

      “But anyway, show me the 18 billion Euro surplus, what statistic do I need to look at if you know what I mean?”

      I already gave you this link:http://kkalev4economy.files.wordpress.com/2012/10/financial-balances.jpg

      It doesnt count absolute numbers but percentage of gdp but thats no problem.Just look up the gdp for whatever year and use the percentages to calculate the numbers.Theres no point though.Its evident on the graph that the budget balance mirrors the non government balance (private + foreign).For example if look closely between years 2010 and 11 you will see that the budget deficit was 10% of gdp the private sector balance was 0 and the external balance was -10%.Perfectly consistent with what im saying.

    • correction:
      I said: G – T + X – M = I -S

      while the correct way is G – T + X – M = S – I

  3. I’m very curious about why is it that you think that it is in the interest of the US ruling class to keep the Euro going. First of all, we have to distinguish between the US interests and Wall St interests, but given that policy is made by a Wall St friendly ruling elite, isn’t it in the interest of Wall St to breakup a currency union which is antagonistic to the flow of money from China, Japan, Russia etc to Wall St? Or at least to make the euro look bad so that the dollar looks good in comparison and thus keep capital (surpluses) flowing into Wall St to be recycled as you say? Or do you mean that it is in the interest of Frankfurt to breakup the euro in order for the D mark to “steal” these capital flows and save insolvent German banks (effectively destroying German industry)?

  4. Socialdemocrats (as we know them) have been class traitors since Bernstein. Most relevant maybe is how they quelled the German Revolution in 1919, murdering Luxemburg and Liebnecht, among others and joining the bourgeois foreces who paved the way for Hitler.

    They helped to make up Capitalism versus the threat of real Socialism (whatever its defects, it offered home, food and job to everybody) but once the Stalinist model collapsed (rigid, unable to reinvent itself, peripheral to global economics) Socialdemocracy is not anymore needed apparently and they are letting it fall.

    Let’s not deceive ourselves: Mussolini himself was a Socialdemocrat once. Socialdemocrats in Spain have set up and directed the death squads against Basques, etc.

    Also, against those who claim that the Keynesian model (what is what Socialdemocrats have applied actually) is viable today, it must be said that it already collapsed in 1971 (and was replaced by the Thatcherian bubble of cheap credit).

    You should not long for anti-worker murders Ebert or González. You should long for true Popular Power (i.e. Democracy) well beyond Capitalism, well beyond the undue privilege of private property.

    • maju00 – Democracy is not needed in a truly free society. A truly free society is one where the government does NOT have the power to put you in a cage or to kill you if you do not do as it says. Without that power everyone gets what they want and democracy becomes superfluous.

    • Yanis must just shake his head when he sees the level of the comments that you make! This last is beyond the pale – in case you haven´t noticed, is a SERIOUS site about ECONOMICS.

    • Barry – ” is a SERIOUS site about ECONOMICS.” So what are you doing here?

      But seriously

      If you have something to contribute, contribute.

    • Richard, what type of society do you think we will have, without democracy? Maybe there will be no government, which puts you in a cage, when not obeying the societies rules. But what makes you think, that I and my friends would not put you in a cage or kill you, if you do not obey my rules? Really, if I and my friends would not need to work to have a good living and to get that would be terrifying people like you, I would do it.

    • tvws4r – “But what makes you think, that I and my friends would not put you in a cage or kill you, if you do not obey my rules?” It sounds like you want to throw out the legal system if you take away the governments ability to initiate force. I am not. You initiated force against me so I am entitled to defend myself through the legal system or through other proportionate means which is accountable to the law. Don’t you agree?

  5. A comprehensive analysis should adopt an “Helicopter” perspective i,.e thinking locally and globally at a same time. The above text is, up to some point, rather local since it lacks the broader historical perspective, in that case omitting the most important single event of the XX century. The Soviet revolution and the USSR . Note: I personally NEVER agreed with the Soviet Regime and its oppressive methods.
    I will try to explain myself: The Soviet alternative was fought from the very beginning including white armies, economic boycott, later turned to Fascism and Nazism. Following WWII, the Capitalist world was forced to coexist with the USSR. The existence of a competing and powerful social alternative regime in the heart of Europe restrained Capitalism in Europe and gave labor (including trade unions, political parties and so on ) a powerful leverage to maintain a balance of power. The collapse of the USSR redesigned the global picture: Europe ceased to be a major peace of the containment strategy, unleashed the globalization era (i.e. the opening of new sources of cheap labor and markets, PRC included which added a new pressure on wages and welfare state and on the des industrialization process and more . We should never forget that broader perspective.

  6. Yanis, While this was an easy route to finance government funding needs, the only reasons they fell for this trap was that they harbor false ideas of where government money originates. One of the false ideas that still seem to permeate government circles is that taxation underwrites government spending. Now, this may be true of Eurozone countries that have surrendered their sovereign currency facilities, but it isn’t true of the UK or the US, as we both know. And governments like the UK don’t need to borrow to fund their programs either – another false idea. Robert Choate hinted at this very thing in an interview with Jeremy Paxman, but on being pressed said that we’d have to wait for his memoirs to find out what he really thinks of current government economic policies.

  7. Yanis, While this was an easy route to finance government funding needs, the only reasons they fell for this trap was that they harbor false ideas of where government money originates. One of the false ideas that still seems to permeate government circles is that taxation underwrites government spending. Now, this may be true of Eurozone countries that have surrendered their sovereign currency facilities, but it isn’t true of the UK or the US, as we both know. And governments like the UK don’t need to borrow to fund their programs either – another false idea. Robert Choate hinted at this very thing in an interview with Jeremy Paxman, but on being pressed said that we’d have to wait for his memoirs to find out what he really thinks of current government economic policies.

  8. As an Austrian, and being somewhat familiar with your thinking and value structures, I am surprised that you would think/speak so highly of Kreisky. After all, the man could only come to power because he agreed to form a coalition with a 5%-party (FPÖ) which was then (correctly) considered to be the refuge for former Nazis. The head of that party, Kreisky’s Vice-Chancellor, had been an SS-Obersturmführer assigned to units which had shot hundreds of thousands of Jews in Eastern Europe (n. b.: he never denied being there but insisted that he was always off-duty when massacres occurred). Five ministers in Kreisky’s first cabinet had a Nazi-past, one of them even a neo-Nazi record.

    When mad at Simon Wiesenthal for revealing the above, Kreisky had the nerve to insinuate publicly that Wiesenthal could only survive the Holocoust because he had been a Nazi-collaborator. In an interview with a Dutch journalist, Kreisky stated that “the Jews are no people, and if they are, they are a lousy people”. Incidentally, he didn’t have that problem with Palestinians and, most notably, Arafat.

    When the representative (a mature lady) of hundreds of thousands Austrians who opposed a nuclear power plant called on Kreisky, he sent her off saying in front of running cameras: “I don’t need to have this where a bunch of rascals treat me like this!”

    When Niki Lauda (by whom Kreisky loved to be driven around) got entangled in a tax-evasion situation, Kreisky said publicly that the authorities should back off. After all, Lauda had done so much for the prestige of the country.

    And last but not least, Kreisky managed to increase Austria’s debt from near-zero to over 50% of GDP. Experts, like I believe you also, insinuate these days that 120% is about the maximum sustainable debt. So Kreisky managed during a dozen years of government to eat up almost half of Austria’s debt capacity. He provided a Golden Age to this generation, something which the children of this generation will never ever see because of what Kreisky had started (and others of his party diligently continued).

    Having said all this, Kreisky was an enormously charismatic leader who caught the fantasies of many, many people. He certainly caught my fantasy at the time. It seems to me that he had something like a counterpart in Greece during his time. Similar political orientation and also very charismatic. And also a waster of the country’s debt capacity.

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