The Eurozone needs a Solon, not a Soros
In times of crisis, who ya gonna call?
This isn’t the first economic crisis the Greeks have suffered. In 7th century BC, Athens was on the verge of bloody revolution. Like most city-states at the time, the Athenians had an agrarian economy, based on land ownership. As trade with the east increased, coined money was introduced and, over a relatively short period, the economic and social balance shifted. Whilst the development stimulated trade and turned the landed aristocracy into a plutocracy, it also imposed great hardship on those at the bottom of the pile. The small-holder could no longer barter; he was obliged to sell his produce and it was the rich plutocrats who fixed the prices. Very soon, this class who had previously never needed financial help were forced to take out loans from the plutocrats in order to survive. However, they could not offer land as a guarantee. They had to offer themselves and their families as collateral. Interest rates were high. Those who could not pay their debts were sold into slavery. The rich continued to prosper, using slaves to grow the crops on their lands and, as there were so few able to buy at home, selling their produce abroad.
By the end of the seventh century BC Athens had been driven to the brink of revolution and economic ruin. Then in 594BC, Solon was chosen to be Archon ( the elected leader ). He was from a middle class merchant family, with an aristocratic history, who appealed to both the plutocrats and the poor. Perhaps with a savvy that would have seen him successful today, he won favour on both sides with the phrase ” equality breeds no strife “. The rich interpreted this equality as based on merit and achievement, the poor on a more quantitative version.
He wiped out all existing debts and banned the practice of using the freedom of a man as security. He then freed all those who had become enslaved through debt, in some cases bringing them back from abroad. Although his actions caused resentment on both sides, ( the poor had wanted the land to be redistributed and the rich humiliated and the plutocrats naturally resented losing part of their income ), this single act put Athens back onto an even keel. Whilst Solon could not return the Greek economy to a system of barter and land dependence, he did recognise that the introduction of monetary wealth created vast inequality between those who had funds to speculate and those who couldn’t afford to eat. He recognised that that inequality had to be managed. His reforms allowed the introduction of democracy a century later.
Of course the beauty of our present speculative system is that the very rich don’t even need to live in the countries they are condemning to penury. Speculators can watch the economic destruction of a nation via satellite, as if it was a football match. The irony is that, whilst they are betting on destruction, they are also happy to offer advice to those who are desperately trying to survive. For example, while George Soros is advising the Euro leaders and advocating Eurobonds as the answer, he is still taking advantage of the situation by buying stock in troubled and deflated Greek companies. Of course Soros is not the only speculator on the prowl. Perhaps we flatter him by identifying him, but as New York Times columnist Paul Krugman says:
“[N]obody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is ‘Soroi.'”