So, a real-life Noble economist has noticed what we at the Paltry Sapien have been banging the drums on for some time, that Europe’s economic policies are literally driving people to suicide.
Consider the state of affairs in Spain, which is now the epicenter of the crisis. Never mind talk of recession; Spain is in full-on depression, with the overall unemployment rate at 23.6 percent, comparable to America at the depths of the Great Depression, and the youth unemployment rate over 50 percent. This can’t go on — and the realization that it can’t go on is what is sending Spanish borrowing costs ever higher.–Paul Krugman, The New York Times
Yes, it is a full-on depression (as it is in Latvia, Greece, and Ireland–and soon Italy and probably Great Britain), and it is nice someone noticed. Of course, Krugman’s idea that this is somehow a “march of folly” like the increasingly insane attempt to maintain the gold standard in the 1930s is untenable. The epidemic of economically-induced suicides in Europe is clearly “collateral damage” in a plan, a fairly audacious one, to rejigger Europe’s political economy to serve its least responsible parties. Remember, Spain was a model citizen on debt and was running a surplus before the housing meltdown–said meltdown caused by a speculative bubble fueled by German banks. And yet the Germans imposed a ridiculous treaty on the rest of Europe in March to guarantee low inflation in the Eurozone (and therefore high profits for German banks and other rentier entities) despite the cost of insanely high unemployment. And this “hunger treaty,” which Krugman views as a suicide pact, is not fundamentally different in its economic prescriptions to the economic illiteracy driving policy in Great Britain, Canada and among the “centrists” and right-wingers in the Beltway.
At this point it’s increasingly difficult to be shocked by the naked class war expressed in these plans. It is almost as if the political classes (and yes, that would be the “ruling classes” since they make the rules and, no, not all of them are elected–see “Bernanke, Ben”) are intent on driving down the cost of labor to Chinese levels.
In fact, it is precisely like the ruling classes to want to drive down the cost of labor (and increase the power of the aptly named “plutocracy”). As Nick Salvatore and Jefferson Cowrie have pointed out, the welfare state brought about by the massive crisis of the Great Depression and part of the average American’s consciousness since the New Deal turns out to have been a “long exception“–a temporary aberration in the long progression from Gilded Age to Gilded Age. Russians in the age of Putin put it another way, that the Soviet Union was the bridge between capitalism and capitalism. As Crowe argues, even the term “liberal” gained its current meaning of pro-social welfare during the New Deal era and that world is so far receded that the term itself is now mostly meaningless. It seems to me that Salvatore and Crowe’s arguments work for Europe and other liberal democracies as well–only under the hammer blows of the rise of Communism and Fascism, and the worst blood-letting in human history, did the bankers and “statesmen” give up their bourgeois moralizing and embrace social welfare and consumption.
This is not their “steady-state.” The rise of bourgeois morality in the 19th century was not simply a cultural contingency but a trans-global phenomenon. And, to put it mildly, it was the smug moralism of Dickens’ worst characters aided and abetted by the cruel nostrums of Malthus and Ricardo. As Anatole France observed, “The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”
Indeed. And what recourse does the “law” (economic or otherwise) offer those not in the privileged circle of plutocracy. Why, suicide of course.