And the Weak Suffer What They Must?

1. And the Weak Suffer What They Must

A simpler idea for a stricken Europe

D-Day had preceded the Bretton Woods conference by only three weeks [...] During the conference itself the Red Army liberated Minsk at great human cost, the US Air Force bombed Tokyo heavily for the first time since 1942, Siena fell to Algerian troops under General Charles De Gaulle's command and V-1 tickets pounded London mercilessly.

The Melians' reply

[In 1988], while looking through Keynes's papers and books at King's College, Cambridge, I noticed a copy of Thucydides' Peloponnesian Wars in the original ancient Greek. [...] There it was, underlined in pencil, the famous passage in which the powerful Athenian generals explained to the helpless Melians why ‘rights’ are only pertinent ‘between equals in power’ and, for this reason, they were about ‘to do as they pleased with them’. It was because ‘the strong actually do what they can and the weak suffer what they must’.

4. Trojan Horse

Cruel glidepath

So, unable to learn from history and unwilling to forget their petty agendas, Europe's ruling class set out to re-create the gold standard, demonstrating a grandiose failure to comprehend what they were doing.

6. The Reverse Alchemists

Denial

The results [of Hartz reforms] was that German workers, as their share of their employers' profits fell, could not afford the goods they produced. Deprived of domestic demand, surplus German products thus flowed to places like Ireland, Greece and Spain, where demand for them was supported by the loans Franz [see p. 148] and his Frankfurt banker colleagues [...] had shifted to Europe's periphery.

Mr Papandreou was pushed into accepting the largest loan in history, of which the bulk, more than 91 per cent, went to prop up the French and German banks by buying back from them at a hundred euros bonds whose market value had declined to less than twenty euros.

Ponzi austerity

Ponzi austerity is the inverse of Ponzi growth. Whereas Ponzi growth schemes are based on the lure of a growing fund, in the case of a Ponzi austerity the attraction is the promise of debt reduction for the purpose of defeating insolvency through a combination of austerity belt-tightening and new loans that provide the bankrupt with necessary funds to repay maturing debts, such as bonds.

Wickedness

[...] a colossal nominally technocratic bureaucracy that ensured democracy and solidarity were more honoured in the breach than in the observance [Hamlet].

7. Back to the Future

Lotus eaters

They forgot that unregulated labour and financial and property markets are profoundly inefficient. They ignored inequality created as a by-product of that inefficiency. They lost sight of the fact that inequality destabilizes financial markets and reinforces capitalism's tendency to fall on its face.

Schäuble's plan

But is there really no difference between a federation and an alliance of states or a Europe of nations? Of course there is. And it is the difference between democracy and despotism.

No sovereignty, no democracy

The critical error of such a defense [more sovereignty when pooling national sovereignties] is to confuse political authority with power.