Saturday, April 14, 2012

Austerity Kills

The NY Times reports an epidemic of suicides in European countries whose economies have been hard-hit by austerity:

“This is a social malaise, we’re inside a tunnel and there’s no light at any end,” said Mr. Federico, whose union is starting a new foundation to assist victims of the economic crisis. The daughters of Giovanni Schiavon and Antonio Tamiozzo are among the founding members.
“People don’t kill themselves just because they have debts,” Mr. Federico said, “it’s a combination of factors that lead to desperation.
“But what links all these situations ultimately is indifference, and lack of respect for the years of work that they’d done,” he said. “On some level, they must have felt that.”


Durando said...

Looking to the state as the first and last resort for everything engenders a weakened sense of personal responsibility and encourages overwrought cynicism. If only the welfare state would kill itself...

Dick Sindall said...

Ah yes, personal responsibility without social (shared) responsibility. Then hopelessness could return to being a birthright for many, and only those mean and clever enough to deal with it would survive. Then the few could get rich without having to concern themselves with the poverty of many. How about a king to top it off, and a religious system that calls it divine right? On this side of the Atlantic, conservatives call concern for the well-being of all "moral hazard." That's cynicism with a pious face and a full plate.

Durando said...

As yes, Dick, that's exactly what I said. I do not know what conservatives on your side of the Atlantic might be saying--I'm not one of them. Know that I have neither a pious face nor a full plate but rather live fairly far down on the scale here in France, a country with the lowest level of entrepreneurship in the world (aside from Japan) and have been doing so for the last decade. Still don't feel very suicidal. Conservative talking points (and liberal straw men) aside, it is depressing seeing people settle for being on the dole in the prime of their lives.

Dick Sindall said...

Okay, good. Conservative talking points and liberal straw men aside - I like that. I’ll gladly drop the baloney about a king and established religion. So, the people’s safety nets don’t have to be taken away but, maybe, modified? And business doesn’t have to be crushed but maybe kept from treating people as things or stuff to be tossed aside after being used on the cheap? It’s depressing here to see many in the younger generations, having prepared for careers, forced to scrape part time and temporary jobs that don’t pay enough for them to live independently and provide no benefits. Also depressing to see the middle aged cut loose after years of work and service - “Nothing personal, we just need to tighten the belt (and we don’t need you anymore).” Yes, I agree with you that it was also depressing for my wife, when she taught, to hear children talk about their future as no more than “getting a check” (welfare). Of course they did know they had entrepreneurial options, but the quick money in the drug gangs comes with a brief life expectancy. But having “the welfare state” commit suicide by austerity measures isn’t going to help anything. I’m glad you’re not feeling suicidal either.

Mitch Guthman said...


Your comment is neither here nor there as a response to the article in the New York Times because the social welfare state had absolutely nothing to do with the current crises or with the choice of murderous austerity as a response. The crashes England, Ireland, Spain and Portugal were caused not by excessive social spending but by overheated, under-regulated private markets that ran amok. The problem for Italy isn’t that its economy can’t support the social welfare state but that the system is so riddled with corruption that they are unable to collect even a small fraction of the taxes owed. Greece alone has overspent on pensions and so forth but here too the fact that the political system is so amazingly corrupt prevents both the collection of taxes and the modest reforms necessary to bring the expenditures into balance with potential revenues.

In every case except for that of the United Kingdom, the heedless rush to adopt the Euro combined with the idiotic decision to impose austerity in the midst of a recession has turned what could have been a very minor economic downturn into a depression likely to be every bit the equal of the Great Depression.

What’s more, the economic and social realities of the second “Gilded Age” which we are now suffering through belie your claims. The countries with the deepest commitment to the social welfare state and the strongest regulations of private economic activity (especially banking) have suffered the least during this crisis and seem best situated to have very strong recoveries as it abates. The American-English model of predatory capitalism has proven itself to be disastrous for the vast majority of people and ruinous for the liberal state.

Apropos of your reply to Dick Sindall, I would observe that it’s easy for one who lives in modern France to think how much better it would be to live in a state of nature. Yet those who currently live in places where a man possess only what he can personally defend do not seem to be particularly happy at living in a state of nature. I suspect that nearly every Somali who isn’t a warlord would trade places with you regardless of your place in French society.

Durando said...

@Mitch. I respectfully disagree. Krugman puts it as "doubling down on failed policies" here:

Also, since you brought it up, in modern France you don't have the right to defend yourself either, not in any meaningful way. In fact, when I was attacked in my own home I had to negotiate with the police for them to intervene at all. But that's far afield from my original point: the European welfare state has meaningfully diminished, perhaps even _vitiated_ notions of personal responsibility. As our friend Dick helpfully points out, it is hardly a choice between monarchy and pure communism. What I (and seemingly Krugman) would like to see is substantial reform.