Thursday, July 9, 2015

Piketty's salvo: What are you talking about? Germany generous? It is now profiting from loans to Greece!

"If we start kicking states out, then the crisis of confidence in which the Eurozone finds itself today will only worsen. Financial markets will immediately turn on the next country. This would be the beginning of a long, drawn-out period of agony, in whose grasp we risk sacrificing Europe’s social model, its democracy, indeed its civilization on the altar of a conservative, irrational austerity policy." - Thomas Piketty


This momentous interview with Piketty, the author of hugely acclaimed book 'Capital in the 21st century' was translated from the original German (in Die Zeit) by Gavin Schalliol and was published in English by The Wire. Excerpts:



ZEIT: So you’re telling us that the German Wirtschaftswunder [“economic miracle”] was based on the same kind of debt relief that we deny Greece today?

Piketty: Exactly. After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.

ZEIT: That happened because people recognised that the high reparations demanded of Germany after World War I were one of the causes of the Second World War. People wanted to forgive Germany’s sins this time!

Piketty: Nonsense! This had nothing to do with moral clarity; it was a rational political and economic decision. They correctly recognized that, after large crises that created huge debt loads, at some point people need to look toward the future. We cannot demand that new generations must pay for decades for the mistakes of their parents. The Greeks have, without a doubt, made big mistakes. Until 2009, the government in Athens forged its books. But despite this, the younger generation of Greeks carries no more responsibility for the mistakes of its elders than the younger generation of Germans did in the 1950s and 1960s. We need to look ahead. Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance. We need to remember this.

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Why I write...

I do not know why I often tend to view people rather grimly: they usually are not as benevolent, well-intentioned and capable or strong as they appear to be. This assumption is founded on my own self-assessment, though I don’t have a clue as to whether it is justifiable to generalize an observation made in one individual. This being the fact, my views of writers as ‘capable’ people are not that encouraging: I tend to see them as people who intend to create really great and world-changing writings but most of the times end up producing parochial pieces. Also, given the fact that the society where we grow and learn is full of dishonesty, treachery, deceit and above else, mundanity, it is rather unrealistic to expect an entirely reinvigorating work of writing from every other person who scribbles words in paper.


On life's challenges

Somebody has said: “I was born intelligent but education ruined me”. I was born a mere child, as everyone is, and grew up as an ordinary teenager eventually landing up in youth and then adulthood. The extent to which formal education helped me to learn about the world may be debatable but it definitely did not ruin me. There were, however, things that nearly ruined me. There came moments when I contemplated some difficult choices. And there came and passed periods when I underwent through an apparently everlasting spell of agony. There came bends in life from which it was very tempting to move straight ahead instead of following the zigzag course.


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