Why Europe can’t just “fix” youth unemployment

by Jerome Roos on May 14, 2013

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Our problems are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated in the hands of an elite of bankers.

For years already, the youth of Europe’s heavily indebted periphery has been facing mass unemployment. In Greece and Spain, a respective 59 and 56 percent of young people are now out of work, while youth unemployment in the EU as a whole currently stands at a troubling 24 percent, up from 22.5 percent last year. The “lucky” ones are those waiting tables with PhD degrees in their back pockets. Those who were forced to leave their families and friends behind to join the generational exodus to Germany or Angola don’t even show up in the statistics.

In recent weeks, European leaders somewhat belatedly seem to have become mightily interested in the issue. Italy’s new Prime Minister Enrico Letta called youth unemployment the most serious problem facing his country and called for an EU plan to “combat” it. German Chancellor Angela Merkel, flag-bearer of the European austerity movement, similarly considers youth unemployment to be “Europe’s biggest challenge.” Meanwhile, a new campaign by Big Think somewhat naively asks “what’s causing youth unemployment and what can fix it?”

Apart from the obvious hypocrisy of these concerns — coming from the lips of the same officials whose unrelenting insistence on austerity, neoliberal reforms and full debt repayment largely caused the unemployment crisis to begin with — this newfound sympathy for our generation’s plight hinges on a dangerous assumption that serves to ideologically re-construct youth unemployment as a “problem” that can somehow be “solved” with a magic fix or a continental master plan — without addressing the underlying causes of austerity, depression, and a fundamentally unsustainable debt load, let alone the internal contradictions of the eurozone and globalized financial capitalism more generally.

It should be clear to any intelligent person by now that youth unemployment is not a problem in the ordinary sense of the word; it is a symptom of a much more deep-seated disease that’s breaking down our society from within. Other symptoms include the rise of neo-Nazism and xenophobic violence in Greece; the wave of suicides across Southern Europe; the 400.000 families that have been evicted from their homes in Spain; the thousands of starving horses that have been abandoned by their owners in Ireland; the UK students who had their tuition fees tripled and now face the prospect of either dropping out, studying abroad, or accruing massive student debts; the eurozone record levels of mortgage debt held by Dutch households, etc., etc. — not to mention the thorough discrediting of democratic institutions and the massive riots that have rocked major European capitals like London, Athens, Madrid, Lisbon and Rome.

But European leaders seem blind to the metastasis of misery that has crept into the social fabric of our continent. Wouldn’t it be great, they now seem to tell us, if we could have crippling austerity, an increasing debt load, a devastating social crisis, starving pensioners, the return of fascism, a wave of suicides and mass deprivation — but without the youth unemployment? I’m not buying this story, and I don’t think any of us should. The attempt to cast the current crisis in generational terms serves to drive a wedge between us and our unemployed, indebted and/or retired (grand)parents. It serves to co-opt the youth in the ongoing wave of neoliberal reforms, making us believe it is in our best interest to crack down on the labor rights, jobs and pensions of our parents so we ourselves can better compete for the increasingly precarious jobs of the future.

The real reason European leaders are suddenly so concerned about youth unemployment — while they remain unmoved by the plight of Greek AIDS patients, for instance, who now can’t get their anti-retroviral drugs — is simply that they are terrified by the prospect of social unrest. As the New York Times reported today, “it is clear that policy makers are seriously worried that millions of frustrated young job seekers pose as much of a threat to the euro zone as excessive government debt or weak banks.” German Finance Minister Wolfgang Schäuble literally admitted that “We will have to speed up in fighting youth unemployment, because otherwise we will lose the support, in a democratic way, in some populations of the European Union.” What they fear, in other words, is a continent-wide youth uprising. At its worst, their plans to “fix” youth unemployment serve to distract us from the obvious class dimension at play, promoting the illusion that the social crisis we face is just a series of economic problems that can be fixed without radical changes to the political status quo.

The inconvenient truth is that unemployment is an integral element of the neoliberal policy response to the crisis pursued by the European Union and the IMF. This, in itself, is nothing new. IMF austerity programs in the developing world have long involved dramatic reductions in wages and rises in unemployment. Careful quantitative analysis of the Latin American debt crisis of the 1980s has shown that “the most consistent and statistically significant impact of Fund programs in Latin America … was the reduction in labor share of income.” Even official IMF studies recognize that its austerity programs “boost unemployment and lower paychecks.” Most importantly, the authors of a 2011 IMF report, Painful Medicine, conclude that austerity causes not just short-term but “particularly long-term unemployment.”

In other words, asking for austerity measures without youth unemployment is like insisting on the medieval practice of blood-letting without the blood-loss. It is not only brutal, but also practically impossible. Austerity and unemployment are like Siamese twins, conjoined at the hip, designed to strengthen and reinforce one another. As long as the EU and IMF keep imposing these highly destructive adjustment measures, unemployment will keep on rising. The only genuine “solution” to unemployment, therefore, would be to break free from the shackles of austerity and to default on the foreign debt. This is the reformist vision pursued by SYRIZA in Greece, and despite the lack of revolutionary imagination of this quasi-Keynesian approach, there is certainly something to be said for it from a humanitarian point of view.

At the same time, I have now written some 50,000 words on this question — why not default? – for my PhD thesis, showing precisely why the option of default is often so elusive. In a word, default would greatly harm the interests of foreign private creditors, who just happen to control virtually all the critical resources in the global economy, giving them a disproportionate ability to block the type of solutions that would favor the unemployed. So to get to the phase where we can even realistically start considering genuine “solutions” to the “problem” of youth unemployment, we first have to confront the financial power structures that obstruct the pursuit of such solutions to begin with. This requires much more than a continental master plan to combat youth unemployment. It requires a radical break with the status quo.

Our problems, in short, are not due to a lack of innovative ideas; they are due to an excess of financial power concentrated within the hands of a tiny elite of bankers. This means we have to dramatically reformulate our question. Rather than asking what innovative ideas can solve the problem of youth employment, we should be asking what type of strategies could upend the structural power of international creditors. This leads us away from economics and back into the realm of revolutionary theory and praxis. How could Europe’s downtrodden youth ever possibly conceive of shaking the global financial order? It is to this impossible question that I will turn in my next post.

{ 9 comments… read them below or add one }

pete May 15, 2013 at 13:33

1: the essence of the whole crisis: a positive interest based money system
2: no social, stable, balanced, sustainable system can be conceived with positive interest. writing 50.000 words does not help because the cause is simple: positive based interest.
3: alternative money systems are available, but can only come to fruition when this system collapses
4: our positive based interest system comes forth out of our ‘need’ to always experience more, have more, be more
5: so the true problem is a spiritual one
6: the money system is a collective reflection or our sense of self
7: so before writing, like millions do, and posting opinions, like billions do
8: focus on the ‘I’, ‘who am I’, and realise that the only solution is the realisation
that there never was a problem in the first place. Out of that state of consciousness, then act……or laugh.


Jerome Roos May 21, 2013 at 19:06

Do we always “need more”, or are we culturally and economically conditioned to always “want more”? Is this a spiritual crisis or a structural one? Is the money system a collective reflection of our sense of self or are “we” a collective reflection of the money system?

It seems to me that you should be asking yourself the same question: who am I? Am I a human being or simply a cog in an economic system called capitalism? It is only when you realize that you are, in fact, both of the above, that you obtain the state of consciousness required for transformative action. What we need to realize, in other words, is that the problem is not the ‘I’, as economists, policymakers and marketing gurus are quite fond of telling us, but the ‘it’ — namely a politico-economic and cultural system that seeks to rob us on a daily basis of the very essence of what it means to be human. There’s nothing Buddhist about this; it’s simply class consciousness. In fact, it seems to me that the various fashionable Westernized derivatives of Buddhism you outline above are actually perfectly capable of blending with and strengthening the ideological core that currently sustains the capitalist system: the idea that “there never was a problem in the first place”.

I suggest that rather than dropping high-minded, quasi-spiritual comments like these on activist websites, you go out and share that message with someone who is actually being deprived of his anti-retroviral drugs, or who has just lost her home and has been cast out onto the street with her children: “the problem is that you need too much; just focus on the ‘I’ and realize that the only solution is the realization that there never was a problem in the first place.” The reason your “advise” sounds so arrogant and ridiculous is precisely because it is. This, if anything, is the “let them eat cake!” mentality of the 21st century.


Michael Kenny May 15, 2013 at 16:50

Tiny elite of bankers, yes. But, don’t forget, an American-dominated elite of bankers. Once again, the fundamental problem is the American stranglehold on the world economy. The weapon that American elite has been using to destroy its EU rival has been to try to force a unilateral default in the hope that that will set off a stampede and thereby secure the American stranglehold for the foreseeable future. That’s why EU leaders have been resisting unilateral default, although we’ve already had several de facto agreed deafults and will no doubt have even more until almost all the sovereign debt has been written off. Arguing for unilateral default is thus like saying to someone who wants to shoot you in the head, “please don’t, just a wait a minute and I’ll shoot myself in the head”! Fine “alternative” that is!
As for youth protest movements, I’m old enough to remember the last one in 1967/68. Mr Roos needs to tells us, most of all, why, if my generation, in our downtrodden youth, failed to overthrow the the global financial order, he thinks his generation will succeed. Indeed, a guest article from Daniel Cohen-Bendit MEP might be very interesting on that subject. Why did Danny the Red of 1968 become Danny the Green of 2013?


Alfredo May 16, 2013 at 09:11

Hi, Jerome! Perhaps, this will help you in writing your next post (http://anticapitalists.org/2013/05/14/towards-revolutionary-unity/). It displays nothing new in terms of strategies for actions (for that, personally, I still find amazingly revealing “What has to be done” by Lenin) but it does give some good insights on recent anti-capitalist struggles in Britain linking them to broader issues.
Take care


Jerome Roos May 21, 2013 at 18:58

Thanks for the suggestions Alfredo! I’m on the road in Bolivia now so it might take some time until I get around to write the post :)


Black Cat May 17, 2013 at 01:01

Define global financial order / elite bankers > the article is good, as usual, but if this group is not defined > names etc. then we are just ‘beating around the bush’ as many other writers on this topic. Let’s be honest, we know who runs Goldman Sachs, JP Morgan, The Federal Reserve (who ‘bailed-out’ banks globaly) and many other ‘Banksters’ > love that word ! We need Experts to supply us (we the people) with factual information if we want to resolve ANY problem that is related to, or finds its origin in the evil actions of these parasitic criminals. Getting rid of this pest is Not an impossible question, .. but when the sollution is put in writing, it will place you (and others) on a terrorist watchlist, Ha ! We got a complex well-organized System working against us. Looking farward to your next post. Peace.


Jerome Roos May 21, 2013 at 19:33

Why would we need names if it is the structural roles that determine the outcomes? Naming and shaming individuals has little effect when the system itself is as shameless and well-organized as it is. Even if you shot or hung every single banker in the world, as long as the process of capital accumulation remains private and the financial sector remains the main engine of this accumulation process, the names of the bankers will be about as relevant as the brand of deodorant they use: the system will simply reproduce itself with new names and reinvigorated intensity.


Steven Frans May 28, 2013 at 20:31

You should even go further than that. As long the process of capital accumulation as such stays intact, we will never be able to reach “an association, in which the free development of each is the condition for the free development of all”. (E.g. the Soviet experience.)


JR June 2, 2013 at 03:34

“Apart from the obvious hypocrisy of these concerns — coming from the lips of the same officials whose unrelenting insistence on austerity, neoliberal reforms and full debt repayment largely caused the unemployment crisis to begin with”

Yes, somewhat hypocritical but not entirely unwarranted. Europeans have been living beyond their means for decades. Europe isn’t alone in its profligacy obviously, but cradle to grave socialism is costly and must generate returns in excess of it expenditures. Clearly it does not. Again, all countries are guilty of the same sins. In the US for example, we love us some wars and armaments but we just can’t afford them. We also love to spend prodigiously on illegal immigrants (sound familiar, Europe?), subsidize foreign tyrants and spend 20-30% more per student on sub par education.

I guess what I’m saying is this: yes, it’s hypocritical coming from robber barons but let’s not pretend that the peasantry didn’t enjoy access to free medical care, subsidized university educations and a whole host of other superfluous social programs that did little to advance society but gosh darn, they sure felt good.


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