Rabinovitch in Cyprus

By Slavoj Žižek.

Para a versão em português do artigo, clique aqui.

Recall the classic cartoon scene of a cat who simply continues to walk over the edge of the precipice, ignoring that she has no longer ground under her feet – she falls down only when she looks down and notices she is hanging in the abyss. Is this not how ordinary people in Cyprus must feel these days? They are aware that Cyprus will never be the same, that there is a catastrophic fall of the standard of living ahead, but the full impact of this fall is not yet properly felt, so for a short period they can afford to go on with their normal daily lives like the cat who calmly walks in the empty air. And we should not condemn them: such delaying of the full crash is also a surviving strategy – the real impact will come silently when the panic will be over. This is why it is now when the Cyprus crisis has largely disappeared from the media that one should think and write about it.

There is a well-known joke from the last decade of the Soviet Union about Rabinovitch, a Jew who wants to emigrate. The bureaucrat at the emigration office asks him why, and Rabinovitch answers: “There are two reasons why. The first is that I’m afraid that in the Soviet Union the Communists will lose power, and the new power will put all the blame for the Communist crimes on us, Jews – there will again be anti-Jewish pogroms…” “But”, interrupts him the bureaucrat, “this is pure nonsense, nothing can change in the Soviet Union, the power of the Communists will last forever!”. “Well,” responds Rabinovitch calmly, “that’s my second reason.”

It is easy to imagine a similar conversation between a European Union financial administrator and a Cypriote Rabinovitch today – Rabinovitch complains: “There are two reasons we are in a panic here. First, we are afraid that the EU will simply abandon Cyprus and let our economy collapse…” The EU administrator interrupts him: “But you can trust us, we will not abandon you, we will tightly control you and advise you what to do!” “Well,” responds Rabinovitch calmly, “that’s my second reason.”

Such a deadlock effectively renders the core of the sad predicament of Cyprus: they cannot survive in prosperity without Europe, but also not with Europe – both options are worse, as Stalin would have put it. Recall the cruel joke from Lubitch’s To Be Or Not to Be: when asked about the German concentration camps in the occupied Poland, the responsible Nazi officer “concentration camp Erhardt” snaps back: “We do the concentrating, and the Poles do the camping.” Does the same not hold for the ongoing financial crisis in Europe? The strong Northern Europe, focused in Germany, does the concentrating, while the weakened and vulnerable South does the camping. What is emerging on the horizon are thus the contours of a divided Europe: its Southern part will be more and more reduced to a zone with cheaper labor force, outside the safety network of the welfare state, a domain appropriate for outsourcing and tourism. In short, the gap between developed world and those lagging behind will now run within Europe itself.

This gap is reflected in the two main stories about Cyprus which resemble the two earlier stories about Greece. There is what can be called the German story: free spending, debts and money laundering cannot go on indefinitely, etc. And there is the Cyprus story: the brutal EU measures amount to a new German occupation which is depriving Cyprus of its sovereignty. Both stories are wrong, and the demands they imply are nonsensical: Cyprus by definition cannot repay its debt, while Germany and EU cannot simply go on throwing money to fill in the Cypriote financial hole. Both stories obfuscate the key fact: that there is something wrong with the entire system in which uncontrollable banking speculations can cause a whole country to go bankrupt. The Cyprus crisis is not a storm in the cup of a small marginal country, it is a symptom of what is wrong with the entire EU system.

This is why the solution is not just more regulation to prevent money laundering, etc., but (at least) a radical change in the entire banking system – to say the unsayable, some kind of socialization of banks. The lesson of crashes that accumulated worldwide from 2008 on is clear: the whole network of financial funds and transactions, from individual deposits and retirement funds up to the functioning of all kinds of derivatives, will have to be somehow put under social control, streamlined and regulated. This may sound utopian, but the true utopia is the notion that we can somehow survive with small cosmetic changes.

But there is a fatal trap to be avoided here: the socialization of banks that is needed is not a compromise between wage labor and productive capital against the power of finance. Financial meltdowns and crises are obvious reminders that the circulation of the Capital is not a closed loop which can fully sustain itself, i.e., that this circulation points towards the reality of producing and selling actual goods that satisfy actual people’s needs. However, the more subtle lesson of crises and meltdowns is that there is no return to this reality – all the rhetoric of “let us move from the virtual space of financial speculations back to real people who produce and consume” is deeply misleading, it is ideology at its purest. The paradox of capitalism is that you cannot throw out the dirty water of financial speculations and keep the healthy baby of real economy: the dirty water effectively is the “bloodline” of the healthy baby.

What this simply means is that the solution of the Cyprus crisis does not reside in Cyprus. For Cyprus to get a chance, something will have to change elsewhere.

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