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Christ the Redeemer
May. 27th, 2012 01:16 pmIf you type the noun "die Schuld" into the German-English translator Leo, the first five results are "debt", "fault", "blame", "delinquency" and "guilt".
I'm not always a great fan of national stereotypes, but I do think that the structure of a language tells us a lot about the way that people within a particular society think, and this inextricable association between debt and guilt in the German language perhaps tells us as much about the German attitude to the current "debt crisis" as does its reported intrinsic fear of inflation more than anything else.
The conventional wisdom on the German attitude to the current eurozone crisis, one in which its remaining allies are now just Austria (or "South Germany" as it's known in eurospeak), Finland and the Netherlands, is that the driving force is some kind of hard-wired memory of the hyperinflation of 1923. Overriding all consideration is the memory of what happens "when money fails". But if you think about this, it doesn't make a lot of sense. Sure, fear of hyperinflation might be a factor, but other countries have suffered hyperinflation without developing such an intrinsic fear of it in future (Hungary, Mexico, several South American countries).
Two other factors strike me as being at least equally as important, and perhaps more so.
One is pure self-interest. TBH, if I were a German manufacturer or employee, all I would see at the moment as a result of Germany standing fast would be a falling euro – something which helps exports outside Europe now that Greece and other peripherals aren't buying German goods. On the flip-side, to accept the idea of eurobonds, infrastructure investment and structural finance deficits might be good for Europe as a whole, but it's hard for the average German to see how it is good for them. At the moment the German bund can pay virtually zero interest and will still get buyers. In other words, the current euro-crisis is actually good for Germany. As soon as things calm down, money will leave German bunds again for elsewhere.
The second factor is tangentially linked to the previous one, and that is that the German people tend to associate debt with wrongdoing. And here we move beyond economics and into an underlying attitude to the way of the world.
Nietzche thought this about "original tribal cooperatives:
If we accept that Nietzche, like many philosophers and politicians, tends to describe things as how he wanted them to be rather than how they were/are, then this is a revealing sequence.
I think that what we are seeing in the German people at the moment is an unselfconscious attitude to the nature of debt. Not only do they not see why the Greeks (the "indebted" or "guilty" party) should be "forgiven" (note how moral words creep into financial transactions) their debt, but they also feel that for them to do so would be some kind of betrayal of themselves and, in an odd sense, their ancestors. Morality entails a debt to those who came before you in your tribe and to those who come after you. If you forgive an outsider his debt, then that is wealth that you will not be able to pass on, or it is a failure to claim an obligation that your ancestors gained through their own hard labour.
As Graeber observes in "Debt, The First 5,000 Years", the sequence of money/obligation owed follows a fairly well-trodden path. Commercial and consumer loans became a useful way for the thrifty to increase their wealth. In a sense this follows Gladwell's ideas that an "early break" (such as being the eldest in a class) can feed on itself. If I saved a year's wages as a youngster in Mesopotamia BC2,500, I could then lend it out to people who spent more than a year's wages. From that point on, even if I spend as much each year as the initial borrower I am going to get richer and the borrower is going to get poorer.
Eventually the debtor would become a "debt-peon" or, effectively, a slave.
You can see where this is heading. This kind of structure, no matter how much you might think the debtor deserves what he gets, eventually rips society apart. As such, it is in the interest of the ruler, every so often, to wipe the slate clean. Those who are owed money scream blue murder, while those who owe the money point out that they have been living thriftily for several years, but still end up owing their creditors more at the end of the year than they did at the beginning. Not for nothing did the song "You work 16 hours, and what do you get, another day older and deeper in debt", resonate with the "post-slave" cotton workers, who weren't really any less slaves than their parents and grandparents. it was just that the slavery was economic rather than legalized.
"Amnesties" remain a frequent aspect of some autocratic societies, although these days they tend to relate to people in prison rather than people who owe money. But if we look at the world in an askance way, and see the US as the equivalent of the French monarchy in the 17th and early 18th centuries, then some parallels appear. Like the French monarchy, they have the other parties interested in maintaining the status quo over a barrel when it comes to borrowing money. Like in France, there are other parts of society who desperately want debts to remain debts and not to be driven out by bad coin or royal edict.
How does this pan out? Well, in the end, Germany loses. In nearly all of the cases in history where an unsustainable and unrepayable debt has been built up, eventually that debt is wiped out, the slate is wiped clean. The only question here is "how" rather than "if". And the US debt will also, eventually, be wiped out. China, for all its US dollar holdings, will never actually get to claim its pound of flesh. Either the two parties will "agree" to wipe the slate clean, or the US political system will collapse, and China won't get paid anyway.
Once you realize that it's a question of "how" the debt gets eliminated, rather than "whether" or indeed (equally irrelevantly) "ought", it's possible to get something going. The problem is, the German leadership remains in denial because the German population (like all rentiers in history) deny the inevitability of the debt being written off, frequently citing "justice" and other moral factors that, in the end, will count for nothing. "Schuld" might be either "debt" or "guilt" in German, but in French the equivalences are "debt" and "culpability". Not the same at all.
What are our lessons from history here? Well, either the creditors accepted the new reality (and lived) or didn't (and died). Eventually the German people will be faced with a similar stark choice at the ballot box -- go with the newly emerged nationalists who stand as polar opposites to the newly elected Greek nationalists – one side saying "we will be paid" and the other side saying "like fuck you will", or the German people will see that compromise on debt, despite the moral hazard, might just about be the only way for their society to survive.
We live in interesting times.
____________________
I'm not always a great fan of national stereotypes, but I do think that the structure of a language tells us a lot about the way that people within a particular society think, and this inextricable association between debt and guilt in the German language perhaps tells us as much about the German attitude to the current "debt crisis" as does its reported intrinsic fear of inflation more than anything else.
The conventional wisdom on the German attitude to the current eurozone crisis, one in which its remaining allies are now just Austria (or "South Germany" as it's known in eurospeak), Finland and the Netherlands, is that the driving force is some kind of hard-wired memory of the hyperinflation of 1923. Overriding all consideration is the memory of what happens "when money fails". But if you think about this, it doesn't make a lot of sense. Sure, fear of hyperinflation might be a factor, but other countries have suffered hyperinflation without developing such an intrinsic fear of it in future (Hungary, Mexico, several South American countries).
Two other factors strike me as being at least equally as important, and perhaps more so.
One is pure self-interest. TBH, if I were a German manufacturer or employee, all I would see at the moment as a result of Germany standing fast would be a falling euro – something which helps exports outside Europe now that Greece and other peripherals aren't buying German goods. On the flip-side, to accept the idea of eurobonds, infrastructure investment and structural finance deficits might be good for Europe as a whole, but it's hard for the average German to see how it is good for them. At the moment the German bund can pay virtually zero interest and will still get buyers. In other words, the current euro-crisis is actually good for Germany. As soon as things calm down, money will leave German bunds again for elsewhere.
The second factor is tangentially linked to the previous one, and that is that the German people tend to associate debt with wrongdoing. And here we move beyond economics and into an underlying attitude to the way of the world.
Nietzche thought this about "original tribal cooperatives:
"... the living generation always acknowledged a legal obligation to the previous generations ... Here the reigning conviction is that the tribe only exists at all because of the sacrifices and achievements of its ancestors – and that people have to pay them back with sacrifices and achievements". (The Geneaolgy of Morals)
If we accept that Nietzche, like many philosophers and politicians, tends to describe things as how he wanted them to be rather than how they were/are, then this is a revealing sequence.
I think that what we are seeing in the German people at the moment is an unselfconscious attitude to the nature of debt. Not only do they not see why the Greeks (the "indebted" or "guilty" party) should be "forgiven" (note how moral words creep into financial transactions) their debt, but they also feel that for them to do so would be some kind of betrayal of themselves and, in an odd sense, their ancestors. Morality entails a debt to those who came before you in your tribe and to those who come after you. If you forgive an outsider his debt, then that is wealth that you will not be able to pass on, or it is a failure to claim an obligation that your ancestors gained through their own hard labour.
As Graeber observes in "Debt, The First 5,000 Years", the sequence of money/obligation owed follows a fairly well-trodden path. Commercial and consumer loans became a useful way for the thrifty to increase their wealth. In a sense this follows Gladwell's ideas that an "early break" (such as being the eldest in a class) can feed on itself. If I saved a year's wages as a youngster in Mesopotamia BC2,500, I could then lend it out to people who spent more than a year's wages. From that point on, even if I spend as much each year as the initial borrower I am going to get richer and the borrower is going to get poorer.
Eventually the debtor would become a "debt-peon" or, effectively, a slave.
You can see where this is heading. This kind of structure, no matter how much you might think the debtor deserves what he gets, eventually rips society apart. As such, it is in the interest of the ruler, every so often, to wipe the slate clean. Those who are owed money scream blue murder, while those who owe the money point out that they have been living thriftily for several years, but still end up owing their creditors more at the end of the year than they did at the beginning. Not for nothing did the song "You work 16 hours, and what do you get, another day older and deeper in debt", resonate with the "post-slave" cotton workers, who weren't really any less slaves than their parents and grandparents. it was just that the slavery was economic rather than legalized.
"Amnesties" remain a frequent aspect of some autocratic societies, although these days they tend to relate to people in prison rather than people who owe money. But if we look at the world in an askance way, and see the US as the equivalent of the French monarchy in the 17th and early 18th centuries, then some parallels appear. Like the French monarchy, they have the other parties interested in maintaining the status quo over a barrel when it comes to borrowing money. Like in France, there are other parts of society who desperately want debts to remain debts and not to be driven out by bad coin or royal edict.
How does this pan out? Well, in the end, Germany loses. In nearly all of the cases in history where an unsustainable and unrepayable debt has been built up, eventually that debt is wiped out, the slate is wiped clean. The only question here is "how" rather than "if". And the US debt will also, eventually, be wiped out. China, for all its US dollar holdings, will never actually get to claim its pound of flesh. Either the two parties will "agree" to wipe the slate clean, or the US political system will collapse, and China won't get paid anyway.
Once you realize that it's a question of "how" the debt gets eliminated, rather than "whether" or indeed (equally irrelevantly) "ought", it's possible to get something going. The problem is, the German leadership remains in denial because the German population (like all rentiers in history) deny the inevitability of the debt being written off, frequently citing "justice" and other moral factors that, in the end, will count for nothing. "Schuld" might be either "debt" or "guilt" in German, but in French the equivalences are "debt" and "culpability". Not the same at all.
What are our lessons from history here? Well, either the creditors accepted the new reality (and lived) or didn't (and died). Eventually the German people will be faced with a similar stark choice at the ballot box -- go with the newly emerged nationalists who stand as polar opposites to the newly elected Greek nationalists – one side saying "we will be paid" and the other side saying "like fuck you will", or the German people will see that compromise on debt, despite the moral hazard, might just about be the only way for their society to survive.
We live in interesting times.
____________________
