Paying for money with human lives

One of the paradoxes of the present economic situation is that despite a relatively high unemployment rate—much higher when one considers the very low labor force participation rate as reflecting a very high number of discouraged workers—and relatively low economic growth, there is, in truth, no relative shortage either of supply or demand. Rather, as I have pointed out in the past, there is a shortage of available money which is the medium of exchange between supply and demand:

Simply put, the economic and political elite of this country are not putting people back to work; and for the unemployed and poor, the coexistence of homelessness and vacant homes demonstrates that while money continues to facilitate the export of jobs they could be doing, it utterly fails to facilitate the exchange of goods and services that they depend upon for survival and for a dignified existence. Money amplifies the inherent injustice of any exchange system, which can only privilege those who have the most power to decline a deal, in the present case, those who already have plenty to eat, luxurious homes, and plenty of help from the government.[1]

Now, George Monbiot, responding to the crisis in Greece, recalls a history of local money systems that have arisen in hard economic times. Some of these systems were set up in such a way that the money would have to circulate or it would lose value, which is to say that this money was meant not to be hoarded or, more politely, “saved.” With such systems, towns have gotten their economies going again and needed work done.[2]

Let’s consider the larger picture here. In the towns that Monbiot speaks of, there was not a shortage of resources or the labor to produce. Nor was there a shortage of demand for that work. But by bypassing structures that served national elites, people found a way to survive, even to recover, from economic catastrophes.

The problem then, as now, was that national currencies were diverted to serve powerful interests at the expense of rather than in support of local economies. “The governments of Germany and Austria, profoundly threatened by the success of these projects, shut them down. Employment collapsed once more, and a twisted but charismatic Austrian painter [Adolf Hitler] found the opening he had been waiting for.”[3]

As I think about Greece’s dilemma, it is apparent that the conflict is between Greeks who can bear austerity no more and the largely Northern European countries who see only the money they are owed.

You can argue that Greece brought its problems on itself, although it had a lot of help from irresponsible lenders. At this point, however, the simple fact is that Greece cannot pay its debts in full. Austerity has devastated its economy as thoroughly as military defeat [in World War I] devastated Germany — real Greek G.D.P. per capita fell 26 percent from 2007 to 2013, compared with a German decline of 29 percent from 1913 to 1919. . . .

What would happen if Greece were to try to generate those huge surpluses [demanded by its creditors]? It would have to further slash government spending — but that wouldn’t be the end of the story. Spending cuts have already driven Greece into a deep depression, and further cuts would make that depression deeper. Falling incomes would, however, mean falling tax receipts, so that the deficit would decline by much less than the initial reduction in spending — probably less than half as much. To meet its target, then, Greece would have to do another round of cuts, and then another.

Furthermore, a shrinking economy would lead to falling private spending too — another, indirect cost of the austerity.

Put it all together, and attempting to cough up the extra 3 percent of G.D.P. the creditors are demanding would cost Greece not 3 percent, but something like 8 percent of G.D.P. And remember, this would come on top of one of the worst economic slumps in history.[4]

Money no longer serves people. People serve money, even at the cost of their lives, in Greece, in Italy, in Spain, in the U.S., in Britain, and indeed, pretty much wherever unemployment strikes.[5] This is the triumph of money over humanity and explicitly at the expense of humanity.

And for what? What those local currencies really demonstrate is that while money facilitates the rich and their hoarding, it is an obstacle for the rest of us. We have needs and we have abilities. Money exists only because we do not trust each other to contribute our fair share.

The financial crisis demonstrates that we pay a very high—some might say an insanely high—price for that distrust.

  1. [1]At the time I wrote this, I had not yet encountered Max Weber, “Class, Status, Party,” in Social Theory: The Multicultural and Classic Readings, ed. Charles Lemert, 4th ed. (Boulder, CO: Westview, 2010), 119-129. In that essay, Weber makes the point I made here, and goes on to point out that the privileges and disabilities that each transaction creates are cumulative. This passage is from David Benfell, “Cold buildings and hot air: the Main Street choice between empty and hateful words,” Not Housebroken, June 3, 2011,
  2. [2]George Monbiot, “Hope Among the Ruins,” February 17, 2015,
  3. [3]George Monbiot, “Hope Among the Ruins,” February 17, 2015,
  4. [4]Paul Krugman, “Weimar on the Aegean,” New York Times, February 16, 2015,
  5. [5]Nikolia Apostolou, “Athens suicide: a cry for dignity from downtrodden,” Christian Science Monitor, April 5, 2012,; Democracy Now! “General Strike Sweeps Europe as Millions Reject Austerity as Solution to Economic Crisis,” November 14, 2012,; Deutschewelle, “Pensioner’s suicide triggers Greek austerity protests,” April 5, 2012,; Teo Kermeliotis, “Austerity drives up suicide rate in debt-ridden Greece,” CNN, April 6, 2012,; Nigel Morris, “Spike in suicide rate in Europe and US linked to financial crisis,” Independent, September 18, 2013,; Barbie Latza Nadeau, “Debt Most Deadly: Recession and Austerity Fuel Suicide in Italy,” Newsweek, June 18, 2012,; Lynn Stuart Parramore, “Crisis to Suicide: How Many Have to Die Before We Kill the False Religion of Austerity?” Alternet, April 16, 2012,; David Stuckler and Sanjay Basu, “How Austerity Kills,” New York Times, May 12, 2013,; David Stuckler and Sanjay Basu, “Paul Krugman’s right: Austerity kills,” Salon, May 19, 2013,

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