Wednesday, February 04, 2015

The Lesson of Greece: Only Collapse Makes Real Change Possible

When the illusion that the Status Quo can fulfill all its promises to everybody dies, the Status Quo starts the terminal slide to effective collapse.


Of the many lessons we can learn from Greece's difficult path to rejection of debt-serfdom, the most important is perhaps the most obvious: no real change is possible until the Status Quo can no longer fulfill its promises, i.e. it effectively collapses.

The collapse of the Status Quo has two distinct features: the process is highly variable, and the process affects the social classes in different ways.

The process of collapse is neither sudden nor smooth. Things do not necessarily cease to function overnight; rather, the decline to effective collapse operates much like energy states in physics: systems decay and then drop to a lower energy level, where they are stable until further decay causes the next drop to an even lower level.

Pension payments provide a ready example. The pension payment is reduced, and the recipient tightens his/her belt and gets by. The next reduction (either outright or via inflation) forces drastic changes in consumption, and subsequent reductions reduce the pension to a supplement that cannot possibly support a retiree, much less their family.

The pension is still issued, but the promise of a pension that could support a household at a modest level of consumption has collapsed. Though the system for issuing pensions still exists, it no longer fulfills the original purpose.

In this sense, the collapsed pension system becomes much like the phantom legions of the late Roman Empire: the paymasters and officers still received the legion's pay, but there were no real soldiers; the legion was a bookkeeping entry in a skimming operation, not a fighting unit.

The financial Aristocracy (i.e. the kleptocracy) in Greece avoided much of the pain of debt-serfdom. What's the point of running things if you can't distribute the pain to others? I addressed this is Greece at the Crossroads: the Oligarchs Blew It (January 27, 2015).

The powerless classes were stripmined first. Bamboozled into voting for the Kleptocracy in previous elections, the powerless lower classes felt the brunt of austerity for the simple reason the kleptocracy knew there would be no blowback, as long as a few shreds of swag were being distributed.

This highlights the critical role of complicity in maintaining a corrupt, venal and parasitic kleptocracy: the passivity and silence of recipients of social welfare are bought very cheaply, as these classes will fear the loss of the miserable coins tossed to them.

This fear is a potent form of financial terrorism: any resistance or protest might trigger the loss of the reduced social welfare benefits, and so the powerless choose to remain powerless rather than rise up and take the risk of bringing down the parasitic kleptocracy.

The statist bourgeoisie (a.k.a. state-funded upper middle class) were the last to lose faith in the kleptocracy, for the simple reason that their share of the swag was sufficient to maintain the facade of middle-class comfort. It was also enough to sustain the illusion that the kleptocracy's abject kow-towing to the Lords of the European Central Bank (ECB), the European Union (EU) and the International Monetary Fund (IMF) would magically become a winning strategy for Greece, rather than a one-way ticket to permanent debt-serfdom.

When the kleptocracy lost a significant percentage of this top 20%, they sealed their fate. When the state apparatchiks, institutional functionaries, professionals, small business owners, etc. finally lose faith in the the Status Quo, the Status Quo is doomed, though it can stage a rear-guard action by brutally suppressing this class (see Venezuela for an example of this doomed defense of a failed Status Quo).

In the U.S., the top 10% are doing very well, the next 10% are getting enough to sustain the illusion that they may yet recover their former status and wealth, and the bottom 80% have been bought off with social welfare or the promise of social welfare. Some variation of these percentages are in play in Europe, China, Japan and the emerging economies that haven't already imploded.

When the illusion that the Status Quo can fulfill all its promises to everybody dies, the Status Quo starts the terminal slide to effective collapse.

Unfortunately, no real change in the social order or power structure can occur until the effective collapse of the Status Quo has taken down everyone but the kleptocrats, their high-ranking apparatchiks and the piteously delusional.

Of related interest: Greece Just Blew Up the Empire's Death Star of Debt February 2, 2015 



Get a Job, Build a Real Career and Defy a Bewildering Economy(Kindle, $9.95)(print, $20)
go to Kindle editionAre you like me? Ever since my first summer job decades ago, I've been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.  And like most of you, the way I've moved toward my goal has always hinged not just on having a job but a career.

You don't have to be a financial blogger to know that "having a job" and "having a career" do not mean the same thing today as they did when I first started swinging a hammer for a paycheck.

Even the basic concept "getting a job" has changed so radically that jobs--getting and keeping them, and the perceived lack of them--is the number one financial topic among friends, family and for that matter, complete strangers.

So I sat down and wrote this book: Get a Job, Build a Real Career and Defy a Bewildering Economy.

It details everything I've verified about employment and the economy, and lays out an action plan to get you employed.

I am proud of this book. It is the culmination of both my practical work experiences and my financial analysis, and it is a useful, practical, and clarifying read.

Test drive the first section and see for yourself.     Kindle, $9.95     print, $20

"I want to thank you for creating your book Get a Job, Build a Real Career and Defy a Bewildering Economy. It is rare to find a person with a mind like yours, who can take a holistic systems view of things without being captured by specific perspectives or agendas. Your contribution to humanity is much appreciated."
Laura Y.

Gordon Long and I discuss The New Nature of Work: Jobs, Occupations & Careers(25 minutes, YouTube) 



NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, John H. ($60), for your stupendously generous contribution to this site-- I am greatly honored by your steadfast support and readership.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:
Correspondents' email is strictly confidential. The third-party advertising placed by Adsense, Investing Channel and/or other ad networks may collect information for ad targeting. Links for commercial sites are paid advertisements. Blog links on the site are posted at my discretion.


Our Commission Policy:
Though I earn a small commission on Amazon.com books and gift certificates purchased via links on my site, I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP