Monday, February 23, 2009
To better savor the meltdown of our economic system (I don't mean capitalism, necessarily; more the dogmatic form of capitalism the US has been foisting on the rest of the world, not to mention its own citizens, for a few decades now), I've been reading up on financial crises of the past.
The Great Depression, and FDR's response to it, is all well and interesting, but somehow I think our problems more closely resemble those of former ages. Outbreaks of financial chaos (which often, of course, leads to other kinds of chaos) caused by predatory lending, unpayable loans, and credit for non-existent money used as a hammer with which to beat the poor, the weak, and the exploited. Our problems might have more in common with the troubles of agrarian Greeks in the late 500s/early 600s B.C. than anything in the 20th century.
I'm talking, of course, about Athens before Solon's "shaking off of burdens."
The Athenian city-state was in a bad way in the sixth century B.C. Wealth and political power were the exclusive property of the wealthy families , who owned vast fields inhabited by small farmers who worked for 1/6 of the profit drawn from their crops. The other 5/6 went to the aristocrats lucky enough not to be born into the farming class. Obviously, farming families could hardly survive on such a meager wage, so many of them took out loans from the wealthy. The wealthy, of course, charged interest.
Working for very little money and piling up debt because of excessive interest, very few peasants could find any way to pay back their loans. The punishment for unpayable debt was slavery. No more 1/6.
This sytem led to disaster in commerce and trade, and plunged Athens into a hideous state of affairs where the gap between rich and poor had become abysmal, slavery and serfdom were rampant--freeborn men and their families became slaves every day, fields that had once been free were seized by the bankers--and, needless to say, no one could pay off their debts. The situation was so bad that the elected (freeborn, non-peasant) assembly called the city's best poet, Solon, to become archon.
Solon began what has subsequently been called the "shaking off of burdens" by cancelling all debts. No one was indebted to anyone, interest wasn't a problem, small farmers didn't have to sell their slave labor in return for loans, and their confiscated land was returned to them.
In addition to cancelling debts, Solon encouraged Athenian farmers to direct all of their energy towards cultivating olives so they could boast of a well-made, desirable product to trade with other city-states. He abolished extravagant dowries; he invited foreign tradesmen to settle in Athens, and granted them immediate citizenship. He closed the gap between rich and poor, slave and free by restricting the export of grain (all grain was to be given to the poor), creating a prosperous and non-oligarchic farming class, and revising weights and measures to create a new currency.
He also wrote a fair set of brand new laws to replace the rigid, inhuman code instituted years before by Draco (the adjective derivation of his name is a term with us still). Writing two centuries later, Aristotle claimed that Solon had intended a parliament to which any citizen of Athens could be elected.
These humane reforms were as common-sensical as they were imaginative. The prosperity and democratic privelege that flowered under Solon set the stage for the explosion of great art, architecture, theatre, poetry, and philosophy during Athens' Golden Age.
In his poetry Solon exorciated the unchecked greed and arrogance of Athens' aristocratic land-owning families, whose extravagant ways had led to the great fiasco. But he also acknowledged that "public evil enters the house of every man; his courtyard gate can't keep it out." Meaning that greed and wickedness in high places will eventually infect every area and aspect of society if left unexamined and free to pillage.
Is there a Solon today? Can you imagine a politician (forget about a poet, or any kind of writer; the divorce between literature and public life seems almost complete in these United States; we've never been farther away from a Solon, a Montaigne, a Milton, a Burke, a Hugo, a Paz or Havel or Vargas Llosa or Kamplinski of our own) coming forth and prosposing, say, an abolition of excessive interest on loans? Or a tax on banker's trafficking in money? Or demanding a return to focusing on real sources of wealth, actual production and creation (industry, farming, craftsmanship) instead of electronic money-managing? Please. Our rulers are mediocre, unimaginative bureaucrats who don't want to see a flexible, pragmatic, creative change to our financial system.
For all his talk of reform and "change," President Obama seems dedicated to continuing the same technocratic corporatism that got us in this mess in the first place. I hope I'm wrong, because I do think he's a far-sighted man. But it's also clear that far from a shaking off of burdens, our rulers and owners want the burdens to be re-instated. They only began to panic when their supply of credit dried up; they don't have the slightest qualms about letting other people enrich them with their labor, their tax dollars, and their lives in exchange for minimal wages.
Translation: freeze all sub-division/McMansion development, cancel mortgage debts, nationalize the insolvent banks, get them working properly again, sell them off, enforce low interest rates by fiat, and use the revenue generated by selling the banks to build glistening new public infrastructure (mass transit, comfortable high-speed trains, alternative energies, smaller schools, urban renewal projects). Why not?
Tomorrow: Another analogy, this time involving a Grank Duke of Tuscany.