On Bruno Kreisky’s legacy: A reply by Klaus Kastner, with a rejoinder from me

In yesterday’s post, I asked the 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? My allusion to, and explicit endorsement of, Bruno Kreisky (the late Austrian social democratic chancellor) brought on the following critical response from Klaus Kastner, who obviously thinks that Kreisky is not as much of a shining example as I am making him out to be. I quote his comment in its entirety, and then provide a rejoinder to it.

Klaus Kastner: 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.

Yanis Varoufakis: As a Greek, let me first state for the record (as I did in my talk at the Kreisky Forum the other day), that Kreisky was a pillar for strength during our neofascist dictatorship, providing substantial support to Greeks on the run from that awful regime. (At the very same time, he provided similar refuge for Checks on the run after the Prague Spring, evidence of his commitment to supporting all victims of authoritarianism.) For this reason alone, my family and I owe him a debt of gratitude.

Beyond personal ‘bias’, I welcome Klaus’ response as an opportunity to re-investigate Kreisky’s legacy. Let me break down our ‘exchange’ to its three main parts: Kreisky’s economic and social policies, Kreisky on the Jewish Question, and Kreisky at large.

Economic and social policies

Kreisky will go down in history as the social democrat who exposed the fallacy behind the assumption that government can only combat social inequality at the expense of inefficiencies, waste and cronyism. Moreover, his period in office revealed that it is perfectly possible to combine a large state sector (including the nationalisation of key industries) with a buoyant private sector. His government built up a stupendously successful educational system that gave equal opportunities in life to Austria’s working class. At once, Austria not only became world famous for its low levels of inequality but also, remarkably, for its substantial increase in wealth. The notion that equality is to be bought at the expense of lower aggregate living standards was well and truly buried by the Kreisky administration.

As for the increase in debt to GDP ratio, it helps to bear in mind that the 1970s (Kreisky was Chancellor from 1970 to 1983) was a tumultuous period, following the collapse of the Bretton Woods system) during which world capitalism was buffeted by high unemployment, high inflation and increasing debt (due, to a large extent, to the energy/oil crisis). By comparison to all other European and non-European industrial societies, Kreisky’s Austria did magnificently well at weathering the storm and at protecting its citizens from a major global crisis. As a man who had experienced the awfulness of the 1930s in his bones, Kreisky rightly loathed unemployment and, famously, stated that “hundreds of thousands unemployed matter more than a few billion schillings of debt”. Hear, hear, I say. If only Europe today had the same prescience and wisdom we would have had less unemployment and less… debt. Regarding the charge that debt to GDP rose to 50% under his reign, thus “exhausting Austria’s debt potential”, my view is that it was a tiny price to pay for having managed to weather the 1970s crises with minimal social costs and with an Austrian working class which, unlike others, did not need to turn to private debt (i.e. credit cards) in the 1980s in order to finance life. The result was a total (private + public) debt that was and remains very, very manageable.

In short, Austria was and remains better off as a result of Kreisky’s policy choices. Indeed, if his vision had been alive today, Austria would have helped the Eurozone, and itself, much more effectively in our collective struggle against our present Crisis.

Kreisky on the Jewish Question

There is one fact about Bruno Kreisky that is conspicuously missing from Klaus Kastner’s tirade against him, especially in relation to his attitude to former members of the Nazi regime: that Kreisky was himself a Jew! As a Jew and a socialist, persecuted by the Nazis both for being a Jew and for being a socialist (nb. he had fled to Sweden during the war), Kreisky felt he had the capacity to heal divisions in a post-war Austria that had to come to terms with the fact that the vast majority of both its elites and its population at large had either actively collaborated or had at least tolerated the Nazis. The fact that he did not dismiss members of his government for having had a Nazi past was, of course, highly controversial. But Kreisky thought, to his credit I think, that barring selected individuals for the errors that they had committed in their youth (within a country that, in its crushing majority, had embraced the Nazis), was silly and hypocritical (provided they had not committed actual crimes). It was his duty as a Jew to address this hypocrisy and to help Austria deal with its historical reality.

Klaus mentioned the spat between two men that I admire immensely: Simon Wiesenthal, the celebrated Nazi hunter, and Bruno Kreisky. I wish the two of them had not exchanged such virulent phrases and insults. Wiesenthal kept us all on our toes, unearthing the way that Nazis were managing to slip into normal life in a bid to escape punishment and to render Nazism innocuous. Kreisky gave himself the task, mentioned in the previous paragraph, of using his Jewishness in order to heal Austrian society and to ensure that Nazism would never return (e.g. by eliminating mass unemployment). I believe that the clash between the two men stemmed from (a) the great difference in these roles that each had adopted, and, importantly, (b) another, deeper and more violent clash that was brewing in the postwar period amongst Europe’s Jews; namely, the clash between Zionist and anti-Zionist Jews.

This is, of course, not the place to delve deeply into the Zionist issue. Suffice to say that Wiesenthal was a Zionist and Kreisky was not. Unlike the Zionist movement, Kreisky believed strongly that European Jews should not seek refuge in the creation of a nation-state in Palestine, by treating its Arab population as a non-people to be expelled violently, but that they should seek safety and their rightful place within their own European societies. In this sense, Kreisky belonged to a group of internationalist, non-Zionist or even anti-Zionist Jews, which included Albert Einstein and Hanna Arendt. Their view of themselves, as Jews, was that Jewishness is not a racially based identity (of blood and land) but a cultural and spiritual one that does not need the full panoply of a state, with borders, armies etc., in order to preserve itself. So, when he sometimes said that Jews are not a nation, or even a well defined race of people, he was proclaiming his Jewishness as a cultural notion, in sharp contrast to the Nazi-leaning view of a people as constituted by blood and soil.

In short, the conflict between Wiesenthal and Kreisky had many of the hallmarks of a family feud. It reminds me of the clashes I have with fellow Greeks when I argue that it really matters not at all whether we modern Greeks are the true, blood descendants on Plato and Aristotle. That what makes me Greek is my language, culture and sense of self, identity etc. I can also imagine myself saying that we Greeks are not a race and that if we are we are a pretty lousy one. Only a fool would take this to mean that I am anti-Greek or racist toward Greeks!

Lastly, since Klaus mentions Arafat, his support for the Palestinian cause (on the grounds of fairness and justice) was exceptionally meaningful given his status as Austria’s first Jewish Chancellor. For that he will go down in history as a virtuous pioneer. I only wish we had more of them in our sad day and age.

Kreisky at large

Above all else, Bruno Kreisky was an internationalist. Even before the Third World debt crisis hit, he was advocating a Marshall Plan for Africa and Asia. His support for liberation movements, in the West, in the South and in the East, was steadfast and unswerving. His judgment was not always perfect (e.g. in response to the oil crisis, which was threatening to choke Austria’s economy, he embraced nuclear power) but he was a man known for his capacity to listen to the opposing arguments and change his mind. Moreover, unlike today’s politicians, he was not afraid to oppose majority opinion if he thought it right.

In conclusion, I stand by my enthusiasm for the man and by my claim that Europe is much the poorer for not having politicians like Bruno Kreisky in positions of power today.

26 thoughts on “On Bruno Kreisky’s legacy: A reply by Klaus Kastner, with a rejoinder from me

  1. Find a large canvas bag, and then printed on their small fingerprints, sign their name.
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  2. Pingback: Yanis Varoufakis: Why Europe Needs More Leaders Like Bruno Kreisky, Who Navigated 1970s Upheaval and Stagflation Well « naked capitalism

  3. I know my comment on this matter may be discarded since I hail from a country (the US) that has been thoroughly neoliberal my whole life, but I am really inclined to think the main drawback to corporatist systems like the one in Austria is that clever people find them inherently boring. Beyond this assumed problem for native talent, Austria performed superbly until the end of the Cold War from most points of view (financial – the debt level was not relatively exceptional, economic, social-egalitarian, productivity, and I would stress it was a peaceful society). I think its social cohesion has weakened due to mass immigration in the 1990s and Haider and globalisation have helped to erode its corporatism, but it is still a relative beacon of economic performance, low unemployment, and social concord in Central Europe.

    I fully understand the alienation of a system where you have to affiliate opportunistically with “the party” or “a party”, potentially losing good jobs and other opportunities to slimy folks who probably have no political ideology aside from their own self-interest. The eventual ascension to power of this class of people was surely an immediate catalyst in the sudden self-destruction of the Soviet Union, whatever fundamental problems it may have had. However, depoliticised neoliberal societies certainly have no fewer such opportunists (in fact liberal systems directly encourage such behaviour rather than promoting it by accident), they simply work less often via organised political networks. And do not think you cannot find similar inefficiencies in private bureaucracies in liberal economies as in an Austrian-style corporatist public sector.

    The boredom of a few, though I may sympathise, is a small price for long-term peace and prosperity.

    Secondly, concerning ex-Nazis, Varoufakis is right. I do not understand the attitude of some who insist if someone has had any contact with a group deemed far right even in teenage years, that that person might as well go jump in the ocean and drown, since he is unfit to have a job or be in anyone’s company. I do not think people who faced limited choices in their youth and joined military forces, rather than revolutionary anti-government resistance networks that they may have had no access to anyway and would have probably been killed for involvement in, are comparable to street thugs who assault people (re: the assumption Varoufakis should be wary of Kreisky because of his attitude towards Golden Dawn). Let us remember Lionel Jospin joined the Socialist Party as a Trot infiltrator – and Trotsky actually preached the value of terrorism. Lots of the leadership of the liberal right-wings of European socialist parties today (or Greens – as with the German Fischer and Trittin), and associated intellectuals and journalists, actually began as Trotskyites, revolutionary Maoists, and occasionally as mainstream Communists. On the other hand, the FPOe traditionally had a “national-liberal” ideology, virtually out of the 19th century, and was a refuge for ex-Nazi officers, not skinheads.

    National-liberalism is not my cup of tea, but Kreisky is no villain for allying with it for once rather than renewing old coalitions with the inheritors of homegrown Austrian Catholic fascism, which itself had no shortage of ex-Nazi officers.

    • Dear Reader, As you see your comment was not discarded. This is a libertarian blog run by a weird lefty who appreciates enormously civilsed views like yours, not just in spite of disagreeing but because a healthy amount of disagreement is the spice of intellectual life.

  4. I love very much the power of your Images. By the way, you are absolutely right, the animal is not a common grasshopper, which is silent, but a noisy cicada (Τέττιξ , righ?) (cigarre, cigarra, chicharra), and I think that is part of the moral.

  5. As much as i appreciate the response of such politicians as Kreisky for stability ,i do not appreciate the immediate stability hunt of him between the people and those that caused havoc and destruction. One can only give the latter step to gain power again. And that is exactly what has happened.

    Murderers are murderers in any country. Period.

    Socrates was asked who can be called a traitor of a country.
    His answer was that traitor is the politician who works for organised interests.

    And we all (yeah ,right) know now ,as history speaks clear and loud ,that especially the WWII was not a war but a banker mafia crime. And Nazis were the tools.
    Therefore immediate stability is not the answer. You do not let these people “occupy” positions of power.

    Justice is Justice. Period.

    Whlle internationalism for people is good we have to make some distinctions here.
    Otherwise we are being naive (too kind of a word).

    There is the globalization of power and control and then there is the globalization of good will and cooperation. For the people ,by the people etc. etc.
    One could argue that both kinds of globalization would use a similar system of governance.
    Well ofcourse they would. At the end it is always a matter of choosing the right people for the job and for the right interests. The interests of the whole.
    For this to happen ,one must have all the facts. The real facts. The real history. Otherwise proper decisions can not be taken.

    But why aren’t they?

    Sneaky use of notions is the key. Arbitrary criticizing and distorted notions. And ofcourse ideologies. Words that lose their meanings because people do not understand one of the greatest laws of nature. The law of the opposites.


    I am not being a nationalist or/and an anti-whatever for stating facts that some may not like.

    Having said that we need to understand that while it is good and honourable to accept that a culture has no and does not need borders and a specific geographical location to exist ,in a world where opinions and actions differ greatly ,a nation needs a “base” for its culture to survive anyway. Especially a culture that is being attacked constantly and has proven to be the only that balances opposite forces ,when that culture really uses own principles. A culture of the world.

    Some say that the powers-that-be need keep the world divided. Others that they need the world united. I would say it is both. They need the world to have their own kind of “unison” ,as long as they (people) always face local problems for mass control.

    It is in fact those that preach all about cooperation ,that they first make sure are covered in any way possible. Covered with unfair advantages. The idea of “nation” is not opposite of the idea of internationalism. On the contrary. Actually in a world where natural opposite forces complete one another ,the word “opposite” changes meaning and use in everyday human life. It doesn’t really. It is just that we do not use it correctly.

    Bipolarism is a fact in this world. Use of bipolarism on the other hand is known to a few.
    Two ways:
    1. Either one uses bipolarism to bring about the results for own interest by conrolling both sides. (Parties ,ideologies – sophistries. PASOK vs ND ,Republicans vs Democrats ,Capitalism vs Socialism etc. etc.).
    2. Or one uses natural (not fixed) bipolarism by balancing the opposite forces but without rigidness. Or in two words “True Democracy”. The same for “–multi-polarism–“.

    Every nation has its best. Every nation has its worst. Every culture ,every human. And it is acceptable as long as that culture ,nation ,human is left alone to express freely (using the correct notion of the word “free” and not disgusting rudiness and nerve ,occupation ,deception and the rest).
    Even a war can be honourable. A true war.
    What is not at all acceptable is when outside forces control and destroy a culture from within. Talking then about internationalism or cooperation must seem strange at least ,especially when the meaning of these words change to their (powers that be) liking.

    In Greece everytime someone speaks for Greece is considered extreme ethnicist. But it is only human in Greece to talk for the interests of others. BS.

    For hundreds of years Greece has been controlled by others. So ,as a Greek ,how do i know the potential of my people and the true characterisitcs of their culture so as to say that we too are not such a good race for this and that and the other?

    After the WWII and especially after the hunta we are controlled by American-Jewish and German-Jewish politicians. Am i being a bad nationalist to acknoweledge that fact? Their Greek names are a lie. I will refer to Kostas Simitis only by saying the name Aaron Avouris. Also in his first steps as a politician he was using the name “Ventura” abroad. The Papandreou family is now known to a lot. I will not say more.

    Is it really the Greek economy that sucks? No ,sir. There is nothing Greek about it.

    I am not a nationalist ,ethnicist ,fascist but i sure am an ethnist. At least for now. It is imperative.
    We could all just give up and say. Ok let “them” do what ever they want. So what. Everything eventually will become the same ,people will forget their past all over the world. We will all be one. Cool. History state otherwise. People forget the natural law of opposites and catastrophy follows.
    Or we could all fight for one good world ,for internationalism without knowing who the hell we are fighting. Good luck with that.

    If you were to choose one culture in the world what culture would you choose for “globalization” of good will and cooperation? Will it not be the only culture that ever succeeded in the past? The one that everybody tries to give a bad name to ,through lies and deception and blood?

    Forget that is Greek. It still is the only way because it balances opposite forces for everybody and not for the few that today have empires. And they have them not because of intelligence and creativity ,but because of theft ,murder and everything that is filth and worst.

    Greece and everything that is Greek vanishes from this earth. Then you use everything that “vanished” as your own. And there you are. You live happily everafter for good will and cooperation. Do you really?

    Kreisky was at the end just another one that got fooled. He was fighting for his people in a system that is controlled by others. A system that uses the opposites for own interests.
    So he was opposing a zionist (a mental construct that was created by a strategic mistake of the Macedonians around 126? BC ,a mistake paid by the Greeks and the world too many times to count) and a “Nazi hunter?”.

    As for Palestine ,just another Greek name and breed. Not so much today. But it was back then. As were the Philistines and everybody the Hebrews fought against ,stole culture ,transformed it to something else and then attacked it ,cooperated with other anti – Ellenes and almost succeeded.

    You want internationalism? Good. Me too. The past is the past for those that want a better world ,but it is not for those that control it.

    What i can say is that until everything is cleared ,forget true cooperation by those that know. Especially in Greece. And ofcourse not because of nationalism. If one is that naive then Greece and especially the culture is already dead (for good will and cooperation).


    P.S. This is for Skopjie. Since they so much want to be Macedonians let them take also the responsibility for the creation of the worst mental construct the world ever saw. Zionism. Isn’t this fun? The people that convinced them about their Macedonian heritage ,the same people hold them by the balls two times. So many things that can turn against them. This is what you get for not knowing history.

  6. “Experts, like I believe you also, insinuate these days that 120% is about the maximum sustainable debt.”

    As far as I can tell, the 120% came up just very recently. And it was not at all created by experts. The number is a purely political thing. In favour of Italy.

    During the discussions about the 3rd bailout for Greece (and for banks, as we all know) the political leaders just declared the current debt level of Italy (120.7%) plus a small margin as ‘sustainable’ (wich it isn’t, of course). If they would have set a lower target, Italy would suddenly per definition have had a non-sustainable debt level (which it has, of course), which then had caused a hell of fire from ‘the markets’ for Italian bonds…

  7. “Experts, like I believe you also, insinuate these days that 120% is about the maximum sustainable debt.”
    What the hell? Says who? Are there any papers that proof that ?

  8. Congrats on a very interesting article professor. Inspired by it I have a suggestion for you. Why don’t you do an objective politico-economical retrospective analysis on our post-junta political leaders (there are not many after all..)? Their policies (Or the absence of any) have shaped our economy and society since 1974. This period can safely be considered the most peaceful and prosperous in Greek modern history. Yet we are now fully aware that the end of this period came violently and unexpectedly with a state bankruptcy that is now slowly dragging Greece towards total collapse. As Greeks we know better than anyone that the signals of decay that could only lead to collapse were loud and clear to anyone that bothered to look for them in every aspect of our society, be it cultural, economical or political in the latter years leading to the bankruptcy of 2010. This decay, that I think has not yet run its course, is without a doubt the result of the choices the political and economical elite made that inevitably directly or indirectly shaped society. Unfortunately as you are probably well aware any public discussion of the critical decisions and policies of the past is either virtually nonexistent or full of bias and hate. The German finance minister recently made the very correct statement that the Greek elite failed the country completely. I could not agree more. We need to examine this failure, we need to study it and learn from it. The people responsible for this failure are as you are probably aware completely silent or engaged in a vulgar attempt to implicate Greek society in its entirety in order to escape their responsibilities and possibly hold on to what little power they still have. We need to stop this. A sober analysis of the politics of our socialist and conservative administrations, their leaders, their successes and their failures is a good start. We need to examine this legacy, accept it, lay blame (and credit, as there have been successes and things to hold on to) and move on.

  9. Mr. Kastner:

    “Experts, like I believe you also, insinuate these days that 120% is about the maximum sustainable debt.”

    Oh dear. I absolutely doubt Yanis shares such a view. And what “experts” say such a thing?

    Oh yeah, the Troika. With no clear explanation as to why 120%. Many “experts” actually suspect that they pulled that number only because that’s where the Italian government is at; in other words, to give you the impression that the Italian situation is sustainable.

    Look, there is no such magic number regarding the public debt. The debt-to-GDP ratio is just ONE of many factors. You could even go so far as to say it’s not even such a significant one, as whether it’s “sustainable” or not completely depends on the context. The Japanese government has issued bonds which amount to 220% of Japan’s GDP. Both France and Britain have experienced the debt-to-GDP ratio above 200%, not even such a long time ago.

    Meanwhile, the Spanish government bond is in such a horrible state even though its ratio is far below 120%.

    I think that sentence alone eloquently shows that there is something wrong with the way you understand public debt (and private debt too, for that matter). It’s so basic, beyond ideology.

  10. One thing I always appreciate about Dr. Varoufakis’ thinking is it’s internationalism. People with a voice are to eager to divide the world in the old, false way – into “Germans”, and “Greeks” and “Americans”. This is a world in which the process of globalization is completed among the elite, but not among the working classes. Since the late 1800’s, the idea that National constructs mean nothing – that we are a world of classes and not of nations – has been vilified despite its inherent truth because it benefits the elite to keep us divided into nationalities instead of the old dreams of workers as “one big union”.

    We should all be able to talk about the shortcomings of ourselves as a “nation” just as Kreisky did. We need to be able to criticize the actions of our countries (meaning the actions of the elites who run the countries) despite the fact that it opens us up to elite attacks of being “unpatriotic”.

    Patriotism is a construct that keeps us divided into “Germans” and “Greeks”, with all the policy failures that that drives. If more of the intellectual class would stand for internationalism – for seeing all of us as people, instead of nationalities – we could better work out our problems and take on the transnational elite who are hoarding the wealth of our world for themselves.

    The answer to the Brecht film “Who Owns the World” will not be answered into the people’s favor until we can all understand that we are bound more by circumstances than nation.

    Thank you Dr. V. for being one of the rare voices to stand up for this fact.

  11. “Kreisky rightly loathed unemployment and, famously, stated that “hundreds of thousands unemployed matter more than a few billion schillings of debt”. Hear, hear, I say.” – Given that there are always booms and busts, following this to its logical conclusion there will come a point, using Kreisky’s method, that Austria will become Greece with an unmanageable debt load. The question is how many slow downs/recessions it will take.

    ” unlike others, did not need to turn to private debt (i.e. credit cards) in the 1980s in order to finance life. The result was a total (private + public) debt that was and remains very, very manageable.” This is a fundamental misunderstanding of debt. The taxpayer is liable for all debts, public or private. The money the government has to pay the interest on its debts comes from the private sector through taxes. The only difference between Greece and the UK is that the UK government can also take the money from savers & pensioners in the form of inflation. The Greek government no longer has this ability hence its problems. That and the fraudulent of reporting of its number for over 12 years.

    • Richard,

      Show me any country with its own currency and I will show you how different they are from Greece’s predicament.

      Greece’s problem is the faulty architecture of the euro and the fact that Greece has become a poster child of averting a full scale destruction of the European banking system.

      Instead of worshipping Greece for her ultimate sacrifice of saving you and other Europeans from calamity, you got the nerve to call us cheats? or whatever term the Berlin propaganda is constantly baking 24/7?

      Come on fellow. Wake up and smell the coffee. You are way out left field some place.

      It used to be a time where I had reserves of politeness left in me. I don’t any more because some of your compatriots are deliberately rude. Check out my reply to this – frankly – blinded person of your own type of thinking. Please read my reply and understand what total debt for a country means and how Greece has much lower debt than Germany as a % of any meaningful metrics: (That was 1 year and a half ago and admire the biased and disgusting poison spilled by the author)


    • Dean – Screw the politeness, we dont have the time.

      Faulty architecture of the Euro? Rubbish. Im repeating other comments but the problem is the governments not the people. People run a balanced book governments dont despite setting their won prices and compelling you to pay.

      The goal in Greece and Europe is to indebt the people through government debt. Its not so much for money but to create differentiation between those in the system and those outside.

      Nerve to call Greeks cheats? I have been specifically saying the exact opposite.

      Dean, about government debt. It is meaningless. And lets be honest, its not really government debt its personal debt imposed on the private citizens against their will. It is illegitimate. If I did not personally sign to say I am responsible for a debt then I should not be asked to pay for it.

      Let me be clear. If a Greek did not sign on the dotted line to say they accepted responsibility for the debt taken out by Greek politicians they should not be held liable. And the same goes for everyone in every country.

    • Richard:

      Greece today, after the transfer of 44 Bil. euros will have more debt than ever before.

      So, where is the PSI German engineered savings of Greek debt by 110 Bil.? Vanished in thin air, this is where.

      You claim that it is the Greek government which is transferring debts onto innocent Greek people.Yet the record indicates that this is rather a German government plan and not a Greek plan at all. For starters a Greek government does not exist, other than in the context of executing German orders.

      And why is Germany is doing this? Plundering Greek assets to keep an incompetent Greek government alive? Answer: time delay and having a collaborator on the ground to execute the dirty plan.

      As a Greek citizen, I would like to ask you to ask your government to get off our backs while pretending that is saving us when in fact it is killing us.

  12. Here is a simple, back of napkin, test as a guide of settling such matters.

    Klaus raised some allegations that if true would have clouded the Kreisky legacy (such the Nazism irregularities which is the thrust of Klaus’ thesis). Yet Kreisky smells like a rose if this early version of history is to be believed (after all it’s the historical legacy that matters for dead people):


    • Kreisky = Socialist = Someone who justifies taking from some and giving to others just to ensure his position & income

    • You have just rendered yourself unfit to be part of this blog’s community. Socialists (like libertarians, Keynesians etc.) have many weaknesses that can be meaningfully criticised. Your criticism is low brow, idiotic and beyond the pale. From now on please do not bother posting comments here.

  13. May I be the first to thank Yanis for opening our eyes to this wider debate. Under the description he has set out herein; I too must be seen as anti-Zionist and, dare I say it, no one that knows me would ever call be anti-Semitic.

    I have come away today with a much better understanding of matters of historical fact, than I had before; that is quite something.

    Thank you Yanis.

  14. Yanis, perhaps you didn’t quite notice one small detail in my post — I was a great admirer of Kreisky at the time! I had left Austria in 1967 for studies in the US because I had gotten sick and tired of the totally (politically) controlled and archaic Austrian society. When I returned for a vacation after graduation in 1972, I heard that ‘Kreisky and his team’ were going to turn Austria into a modern society. And they indeed did!

    Not too long ago, there was another Kreisky-anniversary (I forget which one) and there were, of course, again the accolades about him. Interestingly, and probably to give the accolades more credibility, it was particularly Kreisky’s admirers in the media who pointed out the shadows in his career. And where there is so much light as with Kreisky, there obviously are also shadows.

    All I did was to cite the shadows which his admirers had cited recently to counterbalance the unavoidable (and justified) accolade forthcoming from you.

    There is no question that Kreisky was Austria’s greatest (perhaps the only?) statesman since WW2. Perhaps even a great statesman by international standards. There is also no question that ‘Kreisky and his team’ modernized Austria like no one has done since (and with effects lasting to this day). Even today when some of my youth’s enthusiasm has withered away, I would say that Austria was lucky to have had a Kreisky.

    There is one point, though, where even the most adamant Kreisky-followers would disagree with you, and that is his handling of the public sector. Due to post-WW2 ‘specialties’, Austria had an enormous public sector (basically all major banks and much of heavy industry). Today, there is hardly any of that left. This is because what Kreisky had started with the public sector was something like ‘irrational exuberance’. His famous quote about ‘hundreds of thousands of unemployed mattering more than a few billion Schillings of debt’ is generally being considered today as the death knell to Austria’s public sector. In the end, there was both – the debt AND the unemployed, and the public sector crashed under its own weight at enormous cost to tax payers and to (former) employees.

    In conclusion: if my post came across as a ‘tirade against Kreisky’, I apologize. How could I make a tirade against someone whom, on balance, I still regard highly today. All I am suggesting is that, before one elevates Kreisky into the role model for Social Democracy, one should also pay attention to what some of his greatest admirers see as his weaknesses/mistakes (so that they are not copied!). One case in point: Kreisky and his ‘crown prince’ Androsch were totally divided over Austria currency policy. Kreisky wanted a soft Schilling (to make life easier for the public sector in general and for his voters in particular) and Androsch insisted on a strong Schilling tied to the DM (to make Austria more competitive, even if that caused pain to Austrians). Androsch succeeded. Had he not, Austria would today not be triple-A rated but, instead, part of the ‘periphery’.

    • Excellent analysis done by Dr V about Kreisky’s legacy and socioeconomic policies. I respect Klaus’s positions, but it will not stop me to consider them as mainstream economics which are based on the wrong assumption, i.e. confusing people’s private debt with a nation’s debt. Klaus, Yanis is right about Chancellor Kreisky. The latter did the right thing, choosing to fight unemployment by creasing spending rather than to focus on useless austerity that sooner or later will end up in social pain (even for the surplus nations like Germany and Austria), unemployment, social unrest and the revival of a neo-Nazi movement. All the previous for what?? The private sector corruption and misdoing of some bankers? Yes, I would like to have Kreisky like leaders to take us out of our woes and misery by investing to public sector growth which will give an incentive to the private sector to follow up, rather than the short sighted and useless Merkel/Hollande leadership, pushing us at the extreme and pushing particularly the Greek society to a civil war. Last but not least, Yanis is right on the way that we should all view our origins. It is indeed Yanis, more a cultural phenomenon and no a per se territorial one. I grew up in Canada at a multicultural society and what differentiated me from my Canadian friends – of a Jewish, Italian, French, Ukrainian, German, Latin American, African, Chines or Carιbbean descent- was my mother tongue (Greek) and the cultural traditions (religion, traditional dances, songs). Not a territorial limited state called Greece. Finally, returning back to the currency policies and economic models, I would rather go back asap to the pre-crisis Greece and prefer it than the post-crisis one. And yes Klaus, it is better to fight unemployment at any cost rather than to use tax payers money to pay the bankers “bad investments”!

    • @Ioannis Filopolous

      Thank you for respecting my opinion. Let’s remember how this thread started. I had expressed surprise at Yanis’ speaking so highly of Kreisky because of what I had perceived as Yanis’ thinking and value structures. By the latter I had in mind Yanis’ frequent (and correct!) criticisms of representations of neo-Nazi mindsets in Greek politics and, particularly, in the Greek parliament. I pointed out that the Great Democrat Kreisky had no qualms to side with such people when it helped him to attain power. Had the Conservatives done that instead, the end of democracy would have been declared by many good people. The Conservatives did that in 2000, 30 years of Austrian democratic development later and with an FPÖ which had only minor similarities with the Nazi-bunch of 1970. And yet, not only masses of Austrian good people declared the end of democracy, even the EU found it necessary to declare sanctions against Austria.

      So I sensed a bit of hypocrisy here in the sense that one castigates faults of opponents but when these same faults appear with friends, one finds excuses for them (or, at best, one grudgingly admits that they exist). Thus, I put a couple of needles into that perceived hypocrisy and when such needles provoke strong reaction, one knows that one has hit a soft point.

      Still, it’s probably a fortuitous coincidence that this triggered a general discussion about Kreisky and his philosophy, because that is indeed quite relevant today for Europe. Virtually everyone agrees that of the many, many talents Kreisky had, an understanding of economics, finance, markets, etc. was not one of them. Virtually everyone says that Kreisky simply wasn’t interested in all that. For that, he had a Finance Minister, Hannes Androsch, the youngest minister Austria ever had and a prototype not of ‘old socialism’ but of the new and modern Austria. Arguably, one of the best Finance Minister that have been around in the last decades anywhere. In today’s language, many things which the Socialist Androsch did at the time would now be considered as ‘neoliberal’ (quote: “Social justice presupposes the ability and the willingness to perform, as well as competitiveness. One can only redistribute what one has earned before”). Had it not been for Androsch, Austria would be like Greece today after a dozen years of Kreisky. When the public sector mess which Kreisky had created later exploded, another Social Democratic Finance Minister, Ferdinand Lacina (elected as “Finance Minister of the Year” by Financial Times in 1993), had to clean it up at enormous costs to employees (losing their jobs) and to tax payers.

      You join many by praising Kreisky’s position vis-à-vis the public sector. I think his handling of the public sector is about the worst spot in his legacy. It’s also one of the best arguments against too large a public sector.

      If the state were a Plato-like state and only pursued the interests of ALL citizens, I would think differently. But in representative democracies, the state is ‘parties’ and parties are, to a large extent, interest groups. Over time, it’s not the noble state which controls the public sector but, instead, the self-interest of parties (of all sides!) which does. This can develop into something like a cancer on all public sector companies, and on society in general. In Austria, it did (mind you: in Austria, this began post-1945; Kreisky only developed it further). I have to insert a bit of history:

      Post-1945, Austria was afraid that the Russians might not buy into the carefully developed myth of ‘Austria’s having been the first victim of National Socialism’, and that the Russians would expropriate assets on the grounds that they were German assets. So Austria nationalized whatever it could to make sure that those assets were now ‘Austrian assets’. By the time Kreisky came around, just about everything that seemed industrially and financially relevant in the Austrian economy had already been nationalized for decades. Also, Austria had already become the prototype of a complete welfare state with full social security from cradle to grave. To somehow suggest that these social benefits were ‘invented’ by Kreisky is a distortion of history. Austria became modern through ‘Kreisky and his team’; it did not really become more social.

      Like Greece, Austrian politics had been dominated by 2 large parties (Blacks and Reds). Contrary to Greece, the 2 parties did not oppose each other. Instead, they realized that it was much easier to divide up much of the economy between themselves if the teamed up. The distribution of jobs in all public sector companies (as well as in public administration) followed the principle of ‘proporz’, i. e. jobs were assigned based on the proportionate results of the last election. The going saying was that ‘for every job in the public sector you need 3 people: one Black, one Red and one who does the job’. Even at the lowest level of a public sector company, one needed a party book (or at least party support) to get a job. The two large parties had pervaded all life in public sector companies (and much of society’s life in general). Kreisky’s successor as Chancellor, Fred Sinowatz, once coined that famous phrase: “Without the party I would be nothing!”

      Meritocracy went completely out the window. It only mattered which party one was aligned with. People like myself learned from a young age that it mattered less what one knew but rather whom and in which party one knew. It was smart to begin the political alignment already in High School (for example by joining the sports club of the party of choice; there was no unaffiliated sports club!). To get a cheap dormitory at university was virtually impossible without the recommendation of a party (some clever ones got recommendations from ALL parties…). There was no way that an academic could have landed a job in a public sector company without a party affiliation. Every time a career step came up, the party book mattered. The miracle word had become ‘protection’. If one had ‘protection’ (that is support of a party or of a prominent politician), nothing could go wrong.

      The most repulsive human reactions can be observed in situations where people have given up hope in fairness. In everyday-life, those reactions are envy, mistrust, cheating, etc. – in short, a negative attitude towards other members of society. And there are, of course, ‘losers’ who pay for all that luxury. The losers were those who refused to align themselves with one of the two parties. And if they were regular private sector employees with regular salaries and no ‘protection’, many of the joys of the welfare state went right past them. At first, they were only 10-20%, and they were passive. But then a pied piper came along in the form of Jörg Haider (Austria’s equivalent from the Right to what Alexis Tsipras is from the Left) who could become the largest political force not because he was so good but primarily because the others had performed so indecently throughout the public sector, and Haider exposed them with great skill.

      Now perhaps I am overreacting. Perhaps this bad example of public sector involvement was an Austrian specialty. Perhaps the Greek public sector is totally different. Perhaps party influence does not exist in the Greek public sector. Perhaps ‘knowing the right people’ makes no difference in the Greek public sector. Or perhaps the Greek public sector is all the same.

      I have to say something good about those Black and Red politicians: they were by and large decent people and meant well in terms of their respective ideologies. They did it ‘for God and the party’ instead of ‘for God and the country’ but they did not do it for their private bank accounts in Switzerland. Even without that, the damage caused by party dominance of public sector companies was huge.

    • Once again, thank you. As a British citizen, all this was out of sight and mind during my formative years; this is a history lesson that must be repeated, again and again; for it illustrates feudalism. That is good old fashioned feudalism and it always fails.

    • Klaus – Your last paragraphs. I think we all know the answer and it is not just Greece now or Austria then.

      The fact of the matter is that the vast majority politicians think they know better than the people they represent. They believe this automatically gives them the moral superiority over the serfs and the fact that the serfs vote for them and that most of the serfs believe their government is morally superior to them only reinforces the self-destructive dynamic.

    • Klaus

      “Or perhaps the Greek public sector is all the same.”

      Or perhaps it is worse. Much worse.

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