Why we are so mean to Greeks and the entrapped poor



Last week I wrote about the modern technology of money, and how it depends on three practices that seem rather dubious: double-entry bookkeeping, fractional banking, and enlarged public debt. We are as coy about the conception of money (maybe more so) as we are about the conception of human life. So we look to simpler more superficial stories about the meanings of money and wealth.

Three weeks ago, I noted that we think of money as if it was a kind of magic resin that we make through the process of ‘work’. Further, we believe that such money, once made, accumulates as if it was infused with yeast. Once we have money, we may allow this yeast (which we call ‘compound interest’) to do its work. Such magic commodity money, which we can store indefinitely, is the imaginary economic equivalent of stem cells in biology. Freshly made resin-money is no different to resin made (and compounded) in the distant past. Either way, we can spend it at any time of our choosing (or never spend it if we prefer); whatever good or service we want becomes ours at the click of a mouse or the wave of a bank card.

We think of this process of spending, however, as a process of making us poorer. We think of our individual holdings of resin-money as our wealth, and we think of our collective holdings of resin-money as our national wealth. Therefore, we too easily believe, depletion of our money stocks is tantamount to impoverishment.

In the crudest version of this conceptualisation of economic life, economic success (indeed economic patriotism) depends crucially on two protestant virtues: work and thrift. If we don’t have money it’s because either we lacked a work ethic (we are lazy) or because we spent it rather than saving it (we are improvident). Thus, if we are poor it must be our own fault. And we are not contributing to the nation’s money mountain.

In this crude conception of economic life, all forms of thrift (non-spending) are wealth-enhancing. We conceive of the concept of saving as accumulation (of resin-like-money) rather than as lending (which is what saving actually is).

Under this preferred conception, saving has nothing to do with debt. In reality saving is one side of a part of a surplus-deficit relationship. In addition, under this resinous conception of economic life, economic growth (accumulation of resin-money) can only ever be good, the only real constraint to growth being the supply of labour. ‘Sloth’ becomes the one deadly sin to rule them all. Indolence begets indigence. (Sloth’s closest partner in sin is ‘gluttony’, understood here as improvidence or profligacy.)

We are so mean towards the poor because this cruel but wonderfully simple interpretation of money and wealth has at root just one explanation for poverty; an unwillingness to work. Further, those of us who are not poor can use this simple conception to claim that our growing stocks of unspent money reflect our virtue, not our complicity.

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There is a less unsophisticated version of this predominant paradigm of money and wealth. This version accepts the role of the market, though only in a strictly microeconomic sense. (It does not acknowledge that there can be a general glut of unsold goods and services.) Thus, in order to make resin-money we must first make something else, and then sell that good or service. (Or, as putative wage workers, we must sell our labour to employers who sell to the market goods and services as a means to acquire their monetary profit, supposedly the raison d’être of commerce.)

Here, the necessary virtue is called ‘competitiveness’. Thus, you can be poor either because you are lazy, because you are improvident, or because you are uncompetitive. The moral of the story here is that anyone can be competitive, if only they try hard enough. Aspiration.

One important problem with this ‘competitiveness’ story is that it is impossible for everyone to be competitive. ‘Competitiveness’ is a relativist concept; to be competitive only has meaning if somebody else is uncompetitive. When I try harder and become competitive, then I make that sale to Mr Market (who then issues me with money). To avoid being poor, I must be competitive and remain competitive; that’s a moral imperative. However, when I who was uncompetitive successfully sell my wares, somebody else who otherwise would have made those sales is rendered uncompetitive, and can no longer sell his or her wares. I can always console myself with the thought that that person did not try hard enough; their uncompetitiveness must have been their fault. Their resulting poverty is not my concern.

Competitiveness becomes intertwined with the marketing industry. The culture of resinomics is ‘hard-sell’. You make money by successfully marketing yourself and your wares.

As economics, this is all nonsense. But it’s how most people understand commerce; the accumulation of money-wealth though work, thrift, competitiveness and compound interest.

In economics, resources, not buyers, are scarce. Wealth is the goods and services that we enjoy, not the money that we make. Money is a circulating medium that only serves as societal wealth when it’s passed on to someone else through spending. Saving (non-spending) is good only to the extent that it allows others to borrow (including investing businesses and governments) or to redeem past saving.

What is applied, as resinomic policy, to individuals or households who have become poor is also applied to countries and governments. The European Commission treats the Greek government much as Work and Income treats its desperate customers. (Indeed these agencies do see their austere treatments as some kind of ‘wrap around’ tough love; what victims otherwise know as punitive micro-management and loss of autonomy. Unwillingness to take their prescribed Lanes Emulsion is interpreted as an absence of ‘trust’.)

The people and government of Greece have been labelled by others as lazy, corrupt, spendthrift, and uncompetitive. Believing in the veracity of these vices as explanation, the European technocrats (mostly from the dour north) assert, with a shocking degree of certainty, that Greek poverty is a simple consequence of these acquired national vices. Redemption and atonement can be achieved, they assure us, through a purgative process that we conveniently label ‘austerity’.

The reality is completely different. The problem is systemic. Were the principal victim of the Euro-rort not Greece then it would be some other country. For the word ‘competitive’ to be a meaningful national descriptor, some country has to be ‘uncompetitive’. In 2015 it just happens to be Greece.

The actual solution to Greece’s problems is for the mainly northern creditors to diminish their money-hoards by buying Greek-made goods and services, enabling Greeks to acquire the money they need to pay their taxes so that their government can service its debts by recycling that money back to those creditors. In this way the Greek economy can grow, thereby reducing the debt-to-GDP ratio of the government of Greece. Instead, these non-Greek creditors are looking to a solution that will allow them to extend rather than spend their hoards of unspent money, through foreign privatisation of Greek government assets.

Meanwhile, in New Zealand, the full apparatus of government is used to humiliate the poor, much as the Eurocrats and resinous Euro politicians seek to humiliate the Greeks (all for the Greeks’ own good of course; yeah right). The problem of the entrapped poor is a universal one. Those who would lecture those in need of help should reflect on the uncomfortable systemic realities, and disavow their simplistic and mean platitudes and assumptions.


  1. Just read Wake up New Zealand about the good news,BRICS have had more and more countries sign up to new alliance, it will mean an end to the elite money crowds draconian control,and maybe Greece can renege on the loans, after all Germany never paid back the loans from Greece and other countries to help them after the second world war. Edward Snowden explains the way things are playing out.
    Best news in a long time.

  2. Good one, Keith. Swiss Federal Institute of Technology study shows that indeed the BRICS are rapidly closing in on the banking Elite.

    Is it time to view Putin, and many other countries whose reputations were unfairly tarnished, in a new light now that Truth is a discerning click away?

  3. Up-date on Greece – Greece is no longer a sovereign nation. It is now being stripped bare piecemeal to pay its creditors. Check out the Ritchie Allen Show Episode No. 8 recorded 17/07.

  4. We will never escape the debt trap that Greece is now in until we get rid of the present system whereby the banks ‘own’ the money supply and charge interest for its use. Debt is not an intrinsic part of a properly functioning monetary system. It is a part of the present system only because it suits the purposes of the bankers very well.
    When mankind became subsistence farmers, there was no need of money until there were regular surpluses (of food mostly) so that simply giving away the surplus was no longer desirable and barter became common at meeting places (markets) intended for that purpose. However because the food was perishable, any remainder at the close of market had to be given away anyhow. But the market did achieve one purpose; it enabled relative values (prices) to be assigned to the various products (1bags of carrots = 2 pumpkins??).
    Some genius then saw that this could be rationalised if a set of tokens were given nominal values. They could then be used to facilitate exchange so long as users had faith that the tokens were not counterfeit. That problem was solved by using tokens that had a high intrinsic value (gold or silver) and also carried the symbol of the State.
    It was later realised that once faith had been established, paper tokens carrying the State imprint would work just as well. And it did. We know that because this is the basis of today’s note and coin legal tender system. It is regulated and issued by the State but the State doesn’t in any real sense ‘own’ it; the State merely confers authenticity on it. And its debt free … but it represents only 2% of the total money supply.
    So how did the banks manage to usurp the State’s authority for the remaining 98%? How can the banks ‘own’ what is effectively just a token or receipt? By what authority can the banks charge interest for the use of it?
    I feel so sorry for Greece. If what we have witnessed were not a Greek tragedy, it would be a French farce.

  5. I have always considered money an energy or a blood supply.

    In other words it has to be in circulation to be of any use.

    What the bankers, under the lure of the neolib paradigm, have done is to accentuate the accumulation as the ideal. This doesn’t work in the bloodstream (just imagine the right leg hogging all of the blood supply!) and the evidence before us all says it doesn’t work in the real world either.

    What we effectively have is a blockage and the unnecessary misery and poverty in the world comes from this blockage. It is absolutely meant to be in circulation not accumulation.

    Wasn’t it Ghandi who said “There is enough in the world for everyone’s need but not their greed.” Something along those lines.

    Money, like time, is just a concept. It has no reality. It is not a “thing” that exists. It is a purely abstract construct, so why in God’s name would you give all your power to twerps who deal in abstracts?

    • Thanks for your endorsement. Have you seen my 5 April blog Capitalist Perpetual Motion?
      I would take issue with your last question, however. You say: “Why in God’s name would you give all your power to twerps who deal in abstracts?” Modern money is and must be abstract, so should be understood as such by those people with power. Problems arise mainly because too many of your “twerps” understand money ‘as if’ it were a physical commodity that represents wealth, and not the social technology that it is.

  6. I see the whole neo-liberal paradigm as having one central political purpose with two aspects: (1) that socialism should not be allowed to exert influence again, and (2) that this state of affairs must be universalised. The problem is, their system offers no real conception of the public good. Seeing no need for such a standard, they rely instead on the oppression of those who might oppose them. This does not help their universalisation aim, especially as results become apparent to those who have not yet succumbed. So whole countries have to be oppressed as well. Their project relies on the sensibilities of the climber – the working class person who wants to be middle class, the middle class person who wants to be an elite – people with a narrow conception of “doing well” based on the increase of their personal wealth and social status. Through their allegiance to such attitudes they absolve themselves from responsibility for the wider public good, which leads to the pile of social and infrastructural wreckage following in their wake. Such a system cannot possibly last – the question is how much longer must we put up with it.

  7. 20 July 2015 : theguardian.com reports Greeks paying 23% VAT (GST) on basic foodstuffs. Stiff climb weighed down by a ball and chain for the unemployed to the ranks the reasonably fed. The Bilderberg strikes again at those they call “useless eaters”.

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