Wednesday, March 21, 2012

The Oracle Of Efficiency

The receptionist and sometime oracle at the hotel tells me the problem with me is that everyone likes me. They talk to me and give me their time and enjoy my company, but when it comes to real life I impair their efficiency. Words of a recognized oracle have to be taken seriously, at least given a chance.

So what about this:

Do the I-Ching throw of Internet reading, see what turns up. London Review Of Books: Greece: impending revolution. Search the author, an article 9 months earlier: European Union forces austerity upon Greece.

This is interesting. The article says there's no way Greece can pay back what they owe. The European Union can easily afford the loss, though for the moment are trying to squeeze as much money as possible out of Greece before they stop paying. At which time the EU's choice is pay the debt or risk economic disruption. Obviously the EU will pay, though no one is talking.

The European Union countries are supposed to like each other, and do like each other. They make and take out loans that can never be repaid, and both lender and borrower know it.

Like in my own life, the oracle whispers to me.

Austerity means obey the rules of the market and only those rules. Not the rule of not wanting to harm any one, not letting anyone harm anyone else if you can help it.

So then if some countries in a Union sell products to other countries, and make them loans they know cannot be paid back to buy the products, do we say that this is free market economics?

Efficiency in the market leads to failure of the market. In other words, the need for efficiency in the market that is behind austerity measures is a pretext. The failure of the market is not important because it can be managed.

What then is important? The demand for austerity itself. Or to put it personally, to make it clear that they like you, they will make you loans, but get it out of your head that there are rules such as not harming anyone, not letting anyone harm anyone else if you can help it: that's a fantasy world.

True, the free market is also a fantasy world where efficiency leads to bankruptcy. But the choice of fantasies is not up to you. The one asking for something is not the one who sets the terms.