The Call, Column 38 – Lessons from the Greek Crisis

8 02 2016

(January 17, 2016)

The Urban Farmer

Lessons From the Greek Crisis

I am writing this from Greece. Most people in the United States know of the existence of the economic crisis here, but understand very little about what is actually happening. Today, I want to discuss the problems that they are facing in this country, and how they might be relevant to our own economy and agricultural system.

It is the fashionable thing, in ours and other countries in the industrial Global North, to blame the Greek people for the dire economic situation that has crippled their economy and left them with incomprehensible levels of unemployment. But the true causes are so much more complex and appear, at least in my assessment, to be a calculated and largely successful effort to destroy the once-thriving, agriculture- and tourism-based economy of Greece, and turn them into a nation of unwilling dependents to the European Union, and slaves to the global financial system.

If you recall, I wrote a column the last time that I was in Greece (the summer of 2014) in which I praised the country for their significant efforts in energy conservation, alternative energy generation, and small-scale and backyard agriculture. This has always been true of the country, and is even truer as I explore it today. But despite their judicious, conservative use of natural resources, and emphasis on producing their own food and other goods, they have found themselves susceptible to the harms of global capitalism. As I see it, here are some of the main issues that led to this crisis:

The Euro. This is the common currency used by a subgroup of countries in the European Union, and was adopted in 2002. The ostensible goal was to streamline free trade between member countries, but its adoption had the unforeseen consequence of damaging smaller agricultural economies in its membership. Because the exchange value and inflation of the Euro is largely driven by the giant, industrial economies of Germany and other Northern European countries, the use of this common currency subjects Greece and other small, stable, less-industrialized economies to unnatural fluctuations. This has majorly harmed the economic climate of the country, and I believe they would have been better off retaining their old currency, the Drachma.

Easy credit. For a few years prior to the start of the crisis, European banks had been giving easy, low-interest credit, mortgages, and loans to people in Europe. For the hard-working farmers and small-businesspeople in Greece, the availability of this extra capital in a time of plenty provided the opportunity to invest in new projects, and to grow their farms, businesses, and economy. But when the country’s economy crashed in 2010, and wages halved while interest rates rose precipitously, this growth opportunity quickly turned into a game of survival. And in the banks’ view, making your loan payments is more important than buying food.

Agricultural and other regulations. This is where I stop believing the common narrative of a benevolent European Union. In the recent years, the European Union has enacted legislation which had the effect of shrinking the agricultural base of Greece’s economy. Namely, they have begun to pay farmers to not grow food on their land. And they have enacted embargos and other regulations that make it impossible for Greek farmers to sell their crops to other countries, causing huge amounts of waste and, therefore, disincentivizing continued agricultural production. Can you think of any reason why they would do this, to pull a small country’s economic foundation out from under them?

Taxes! In response to the start of the economic downturn, the European Union began to enact “austerity measures” against the Greek people – forcing the government to levy very high taxes on everyone, regardless of income. Let’s take some hypothetical numbers, to better understand the problem.

As a point of reference, unemployment is about 25% across the board, and about 60% for people in their 20s. At this time, the Euro and the Dollar are roughly equal in value. Despite this, before taxes, a person in Greece makes 1/5 to 1/10 the salary of an equivalent position in the U.S. – from about 120 € per week for “minimum wage” to about 400 € per week for a medical doctor. And yet, products cost minimally half as much as they do in the U.S., and often only slightly less.

Across the board, there is a 23% income tax. And after high housing, automobile, utility, and gas taxes, they are left with some 30% of their original income. Thirty percent. Taking a minimum wage of 120 € per week (which is many of the jobs in Greece), this leaves 36 € after taxes. And now, for minimalist survival, they must buy food, water, heating, and (arguably) insurance and clothing. On 36 €, or 50 €, or even 100 € per week…when 1 in 4 are unemployed. Remember this, the next time some talking head blames them.

With all of this, note that Greece has one of the smaller external debts in the European Union and the Western World, around $360B. This is far behind those of Germany, France, and the United Kingdom, who are all in the trillions, and yet oddly enthusiastic about collecting from Greece, and pales in comparison to the United States’ nearly $19T debt. Greece is the subject of an experiment in heavy-handed financial asphyxiation, by the ruling nations of the European Union. It’s the 17th century all over again.

It’s also worth pointing out that some of these most austere countries have, in the past, been forgiven of very large reparation debts by Greece. I guess heinous crimes in global warfare are more forgivable than buying food and heating oil for your family.

Does any of this sound familiar? Whether we perceive it or not, the same things are happening in our country. The government is willing to sacrifice the health of small-scale, local economies, based on agriculture and other primary production, for the pipedream of endless industrial growth and the diminishment of distributed production systems. Multinational corporations have taken action, both in their own capacities and using their control of the federal government, to overtake small businesses and farms. Financial institutions have the insatiable desire to own everything and everyone, which is accomplished by easy credit and the resulting mass indebtedness.

All of this has the effect of the people and economy moving away from the land, away from small businesses and primary production. Our nation, like Greece’s to some level, is tending towards big farms, fewer farmers, and commodity crops (we’ve actually been at that last one for four or five decades already). If the situation in Greece is any indicator, these trends aren’t a good sign.

I’m not sure I can offer a good solution to Greece. Exiting the Euro and returning to the Drachma is one that I’ve thought about a lot. But this would leave the Greeks with a horribly devalued currency and, at least temporarily, even more difficulty in buying the necessities for survival. Similarly, bankruptcy would essentially tank their economy. The only solution that Europe and the Greek government seem to entertain is raising taxes further. This is makes people unable to afford food and heating oil, and is therefore literally causing starvation. That is unacceptable.

This is the effect of globalization and the loss of small-scale agriculture. I’m not sure what will happen in Greece. But as I see it, it isn’t too late for us to make changes at home, changes that would preserve our own primary production and might even protect the Greek people from further harm. They are, of course, deeply related to topics we have discussed in the past.

We have to insist on laws at every level of government that encourage sustainable, small-scale, local production – of food, fuel, fiber, and everything else we consume. And we have to fight against laws that harm these systems, laws that deprive us of the freedom to grow our own food (or raise chickens!) and make it more difficult to obtain local, sustainable products.

And then we actually have to grow our own food. And make our own value added products. And buy everything we can’t grow or make ourselves, from farmers and businesses in our localities. And keep ourselves alive without becoming dependents of any financial institution – no bank, investment firm, government, or multinational corporation should be capable of ruining our lives.

There is still hope – both for us and, I have to believe, for Greece. The solution to all economic woes is the most powerful word in the English language: resiliency. When we create production systems that are resilient and not dependent on global capitalism, we are sheltered from power structures with imperialistic tendencies. Individual resiliency is the best, and possibly the only, measure in order to avoid the same fate that is now befalling Greece – the nation where democracy, philosophy, and the Western World itself was born.

My column appears every other Sunday in The Woonsocket Call (also in areas where The Pawtucket Times is available). The above article is the property of The Woonsocket Call and The Pawtucket Times, and is reprinted here with permission from these publications. These are excellent newspapers, covering important local news topics with voices out of our own communities, and skillfully addressing statewide and national news. Click these links to subscribe to The Woonsocket Call or to The Pawtucket Times. To subscribe to the online editions, click here for The Call and here for The Times. They can also be found on Twitter, @WoonsocketCall and @Pawtuckettimes.