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Originally Posted by funkydexter
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Originally Posted by funkydexter
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holy, what?! I had to look up 'austerity' again because, seriously....what!? This is what we refer to in the good ole' US as 'Drinking the Kool-Aid'.Quote:
Originally Posted by FunkyDexter
The word 'austerity' doesn't actually exist those who act responsibly and are responsible for others. Usually, before enough time has passed for some lame-brain, high-altitude, economist invents such a word, the corrective action takes place. In this case: STOP SPENDING MONEY YOU DON'T HAVE.
The EU is destined to break apart as the reality of debt starts to crumble the facade of a European economy.
European countries, over the decades, have had each other to hide their own failing government policies which have destroyed a sustainable economy, culminating in the transition to the Euro. As the failed economies were hidden - and supported by - more robust economic entities (read: productive) those failed mechanisms have continued and appeared to demonstrate a 'successful' social-economic structure.
It is baffling that so many hide behind the argument of a 'depressed world economy' for such a tragic failure [Greece]; they ignore the real reasons for failure. The tragedy being that Greece's very own people continue to gnaw away on the bones of the long-dead golden goose, mystified - and violently angry - that they don't get what they want.
World war? Not so much, but there are only so many body parts you can cut off to feed your starving children.
All that pent up anger... I felt the steam hiss out of the post and the monitor.
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In general I agree with you. Greece, Ireland, Spain, Portugal, Italy, Iceland... all these countries have spent the last two decades hiding their deficits and spending money they didn't have. And yes, it is irresponsible for a government to spend money it doesn't have. In that regard I'm definitely not a Keynesian. I don't believe spending money on public services purely in the name of growth is sensible because that growth will be illusory. (I do believe in high public services investment because I believe it's good for society but that's a whole 'nother argument)Quote:
STOP SPENDING MONEY YOU DON'T HAVE
However, with the situation as it is now is the reality and needs to be dealt with. The productive members of the Euro are faced with a choice of bank-rolling the poorer members or watching the system they built collapse. Thus far they've chosen to bank roll the poorer members but have said these nations must reduce their government deficit to the 3% of GDP level that was originally stipulated for entry into the Euro (and which, BTW, even Germany failed to achieve at least once in the last decade). And Greece has attempted to do just that. It's raised it's tax levels through the roof, it's selling off it's infrastructure (including it's road and rail networks) and it's reduced public spending as close to zero as makes no difference... and it still isn't enough. The truth is they're a tourist and agrarian economy and, while locked into the Euro and therefore into an unrealistic exchange rate parity with Germany, they simply have no mechanism to make those industries competitive. Normally they would reduce their exchange rate, therefore making those goods cheapper and more competitive, but the Euro removes that option. Simply put, their is simply nothing Greece can do in the present climate to reduce their deficit any further. They just don't have the means.
Now, I'm sure you'll argue that they shouldn't have got themselves into that situation in the first place and you're right, they shouldn't have. But that doesn't change the fact that they did and that's the reality that has to be dealt with now. You're saying that Greece should stop spending money it doesn't have and that's exactly what they've done... but the bills are still coming in and they simply don't have the money to pay them.
So where does that leave Germany? Well, they're going to continue to posture and demand further austerity (it's a real word by the way, it's in the dictionary and everything) measures because that's going to please their electorate but they already know that the Greeks can't actually meet those demands. So sooner or later they're going to be faced with a choice: 1. Back off the posturing and continue to bank roll Greece but without imposing conditions or 2. Refuse further finance at which point Greece WILL default on it's debts, crash out of the Euro, reduce it's exchange rates and finally have a shot at becoming competitive.
On the surface it might look like option 2 is the obvious one for Germany to take, why shackle yourself to a drowning man, right? The problem is those debts Greece is going to default on. The creditors are Germany and Britain. Option 2 will lead to a second banking lockup in those coutries and we'll all head into another massive recession.
The truth is neither option is attractive and either is going to lead to a bunch of pain. Option 1 will mean ongoing moderate pain for at least a decade, probably 2 or 3. Option 2 will lead to massive pain right now. Bankrolling greece is essentially just about deferring that pain and buying time. Which is Ghe right option really depends on whether you think we can buy enough time for growth to come back into the world economy. If we can then we will be able to take that pain during a period of growth when we're fairly well equipped to cope with it. If we can't then the pain will be even worse and we'll still be taking it in a time of recession when it's going to hurt most. I personally think we can buy enough time but I certainly wouldn't claim to know it. Anyone who claims to know what's going to happen is a liar.
And before you climb on your high horse you may want to look at this chart. The US and the UK are actually both in worse shape than Greece. The only difference is that the money markets believe we can handle it. If that belief changes, and it's ephemeral at best, then we face exactly the same situation that Greece is now.
I think Russia has long dropped out of running and I don't know if it really mattered economically. With the disintegration of the Soviet Union at least the truth is now bare. With the European Union it's difficult because as long as the union stands the individual members will never be scrutinized enough to know how bad off they are.
China is most likely in the place where it needs the US to survive because a lot of Chinese money is invested in the US, plus most factories there are being run for the US companies. So if the US goes down, it might drag China along too.
Looks like barter economy was better! We surely seem to be heading that way, maybe in the next fifty years or 100 years. Now if that prediction came true, FD will have proved a point!
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China is to the US what Germany is to Greece, just on a bigger scale. The one obvious difference is that in the German-Greek relationship the creditor is the more advance country while in the Sino-US relationship the creditor is the less developed economy.Quote:
China is most likely in the place where it needs the US to survive because a lot of Chinese money is invested in the US,
It's quite interesting to ponder how that will play out politically if the US economy did get into trouble and teh money markets started turning their backs in it. Internationally we can kind of understand Germany making political demands of Greece because we view Germany as more politically advance so we tend to assume they're demands will be just (which is a wholly fatuous assumption btw). I wonder how the world would look on China making political demands of the US.
edit>Definitely not! It's always tempting to take this view because it's simple and easy to understand. You know you're getting a fair shake. Economics is complex, obtuse and leaves you with the vague feeling that someone somewhere is taking you for a ride. But a barter economy simply could not sustain the world population today. The same is true of the gold standard. It feels solid and reliable but all it actually does is limit your options for no real benefit. Money is trust. As long as we trust each other money works. When the trust fails the economy fails. But neither barter or gold standards change that.Quote:
Looks like barter economy was better!
In barter I at least know what I am getting for my goods/services. With the currency values falling rapidly you never know the real worth of whatever you are getting.
Imagine this: I get salary at the end of the month. After that I spend it over the next month. If the currency were to decline in value during the month, I am incurring a loss. Though some might argue that I receive and spend in a single currency, whatever I spend on has been procured from other currencies at some point in time. So somewhere the floating currency hurts me. This effect is more obvious over a longer period of time or in very highly volatile currency market.
In case of Greece, the Greek currency may lose its value very soon (in case it breaks away from the Euro) or the Euro will suffer (if it stays on and the EU foots the bill for its economic problems). Either way residents of other EU members will be paying for what happened with Greece.
I have read reports of cash withdrawals from the Greek central bank which will trigger a collapse of the banking system there. This cash will be as good as useless if the economy collapses. What better than resorting to a barter system then?
The problem with barter is that it only works between two individuals and only if they each produce what the other wants. I paint fences, you raise chickens. I want a chicken and you need your fence painted. There's a pretty easy deal to be done there.
But what if I don't paint fences? What if I bring Joy. Dday's been feeling a little low but he does paint fences. He's not going to paint your fence because you can't make him happy. You're not going to give me a chicken because I can't paint your fence. And I'm not going to cheers Dday up because he can't give me a chicken. None of us get what we want even though everything we all want is available somewhere within the system. We could all win but instead we all lose.
The solution is quite obvious, of course, it's an extended barter system. Dday agrees to paint your fence in return for a chicken he doesn't actually want and then he exchanges that chicken with me for one of these: :bigyello:
What Dday just did was make an investment. He trusted that by the time he came to me with the chicken I would still want one. He trusted that the bottom wouldn't fall out of the chicken market while he was holding it. He also trusted that the chicken you gave him was going to live long enough for hiom to pass it on to me. He trusted it would retain it's value. And, as I said before trust is... money. Money is trust (or belief if you like). It's purpose is to move a resource from where it is to where it's wanted.
Barter does not remove these fundamental issues. It merely means you know you're getting a fair shake right now. But you still don't know that the deal you're getting is going to be fair tomorrow. And it doesn't guarantee that Dday's not going to use dodgy paint that runs off the first time it rains. There simply is no system that will guarantee those things.
Money's actually the best system we've ever come up with and the more abstracted it becomes from real resources the better. Because those real resources lead us into a false sense of security nad also add an external instability because the world can change and the suppply of that resource can go up or down, artificially pressuring the currency that's tied to it. If you want to see an example of this phenomenon the best one I know is the collapse of the Spanish Empire. It's quite bizarre that the Spanish Empire collapsed because it became too wealthy.
The nations of Europe made their currencies out of gold. When the conquistadors conquered the tribes of South America the volume of gold coming out of the region flooded the markets. The Spanish thought this was making them rich. After all, they now had all the gold so they had all the money, right? What was actually happening, of course, was that the real value of gold plumetted like a stone. All the other nations switched to printing money as paper promissary notes while the Spanish insisted on sticking to gold. The other nations got on just fine because it wasn't actually the gold they wanted anyway, it was what the gold would buy them. And the paper was happilliy fulfilling that role now. Meanwhile the Spanish got left with a worless resource and a worthless currency. Massive inflation, bye-bye empire.
I read the federal Treasury Statement every 8th business day of the month: it raises the blood pressure (interestingly, April gave a surplus of around $59 billion due to increased revenue - it was April, after all - not that it matters much. We are in the hole $719 billion since October. The debt ceiling will be hit AGAIN around September/October by my guess).Quote:
Originally Posted by honeybee
However, Greece is going to have to default. And it will be painful. while the government has attempted to reign in spending, the people that they represent continue to try to throw them out for doing what is their own best interests. This is the root problem - several generations that have grown accustomed to the government giving all that is both needed and wanted.
Oh, and I know what Austerity is - I was being quite facetious. it is one of those words/phrases designed to hide the reality of it's meaning (kind of like saying someone dies of lead poisoning).
The reality of accumulating debt is a double-whammy. For example, when you get paid, you have $100 cash. You also have a credit card which you spend an extra $100 [credit]. That's $200 [cash and credit] of stuff that you can buy (woohoo!). However, to pay off the debt - with that $100 cash - means that you have $200 less to spend and you only pay off $100. In effect, the 'spending loss' is far greater than the gain. This is why so many entities are in trouble (individuals to governments to whole countries).
Also, you have to understand: where does this credit come from? We cannot ignore the interest - The US paid (double checking the figures, here) $30 Billion in April. Someone is getting rich. It's not just the Chinese, but the UK has a big holding of our federal debt. It's the fact that the US individuals give [sic] approximately $200 billion every month that prompts people to lend money to the US: the ROI is pretty good. It's also a good reason to not piss off those taxpayers (note, I say again, Taxpayers, not people). The revenue stream is good for the lenders.
As far as barter goes, it's good for goods and services of almost equivalent value. as a world gets more technical and advanced, disparity of localized value in goods and services promotes a common currency. But an economy needs to be suitably advanced: the European nations are not advanced enough to adopt a inter-nation currency (this was, I guess in hindsight, the hubris of European governments and self professed enlightened thinking). I do have a lot to say why the US has succeeded in a common currency but that's a story for another time.
I know. So was I.Quote:
Oh, and I know what Austerity is - I was being quite facetious
It already has. It's creditors agreed to write off a portion of it's debt several months ago when the bail out was agreed - that's a default right there. The only question is whether it will be uncontrolled default called unilaterally by Greece or a controlled default agreed with the creditors in advance.Quote:
However, Greece is going to have to default.
I pretty much agree but the one point you seem to be missing is that the reality is what the reality is. And the reality is that, even with low public spending and high taxation, the interest on the loans Greece already has is larger than it's income. The answer to this isn't austerity measures, it's getting Greece out of the Euro so it can control it's own exchange rates and make itself competitive. The choice to be made is whether they leave now in a crisis or later in (hopefully) a controlled manner. A controlled manner would be less painful but does mean they'd have to be bank rolled in the meantime.Quote:
while the government has attempted to reign in spending, the people that they represent continue to try to throw them out for doing what is their own best interests. This is the root problem - several generations that have grown accustomed to the government giving all that is both needed and wanted.
Sorry, I didn't follow that. You seem to be saying you'd be $200 worse off for having spent spent the credit but that's not right. You're $100 worse off in cash but you're holding $100 worth of goods. You're not actually any better or worse off at all. The cost of credit is the interest accrued. I can't help feeling I've miss-understood you here though.Quote:
when you get paid, you have $100 cash. You also have a credit card which you spend an extra $100 [credit]. That's $200 [cash and credit] of stuff that you can buy (woohoo!). However, to pay off the debt - with that $100 cash - means that you have $200 less to spend and you only pay off $100.
Borrowing is not necessarily a bad thing (stupid and irresponsible borrowing is). To go back to my bartering analogy, suppose HoneyBee's chickens aren't laying because they find the current colour of the fence distressing and he can't afford to give away a chicken yet because he needs them to lay the next generation of eggs first. In that scenario it makes sense for him to agree to pay Dday 2 chickens in a years time to get his fence painted now because getting his chickens laying again now is worth more to him than the extra chicken it's ultimately going to cost him.
Of course, it's possible a fox'll get into the coop tomorrow and kill all his chickens anyway and then he'll be really stuffed He'll now owe two chickens and his nicely painted fence won't be doing him any good at all. That's the risk with all transactions. We don't know what tomorrow will bring so we can only go on the balance of probability.
Agreed but there's a tipping point and that's where Greece is now. To a creditor, a debt is an asset, it's a revenue stream exactly as you say. But only as long as it's actually getting paid. When a debtor becomes unable to pay (or just refuses) that asset becomes worthless. At that point the creditor is faced with a choice 1. Take the debtor to court to get as much of the debt as they can enforced (this is the equivalent of kicking Greece out of the Euro) in the knowledge that that's all they're ever going to get or 2. Agree more affordable terms with the debtor (this is the equivalent of continuing to bail Greece out) in the hope that the debtor will be able to pay more back over a longer period. That's a tricky judgement call to make.Quote:
The revenue stream is good for the lenders.
Here I'm afraid I really disagree with you. You cannot seriously be saying the dollar is somehow more advanced that the franc or deutschmark were or the pouns is. The differenc is nothing to do with advanced economies and everything to do with political unity. The US has it, europe doesn't.Quote:
But an economy needs to be suitably advanced: the European nations are not advanced enough to adopt a inter-nation currency
A currency cannot work if it's not controlled by single government. Interestingly the Euro was really an attempt at political rather than fiscal unity. The Franch and German governments have been pushing for a Europe wide super state since the end of the second world war. The Euro was basically a gamble that a fiscal union would force the hand of dissentors because a political union would be the only wasy to avoid the situation we're now facing. Unfortunately they underestimated the will of the constituants of the EU to avoid a federalised Europe and now find themselves hoist on their own petard.
To clarify, you are exactly correct: you cannot bring independent and diverse countries together with differing socio-political mechanisms and expect them to play nice under a unifying inter-government with a single currency. It is not just the economics that drives currency, as you noted.Quote:
Originally Posted by FunkyDexter
The US, on the other hand, was built from a single political framework - independent states are reserved full control under that framework, with a minority of control explicitly defined for that central government.
This has nothing to do with the individual nations currencies - except for the fact (lets face it) that no-one outside of the US liked the fact that everything was compared to or traded in US dollars. The US Dollar was the, undoubtedly, largest currency in the world by almost any measure. The Euro (perhaps necessarily) makes the dollar slightly less a dominant currency. A prime example of the folly of trying to unseat a dominant currency is the British pound: while not necessarily a minor currency, it isn't going to be challenging anything for dominance, except in the fact that it is a persistent and strong currency from a small but influential nation (even without the Empire!). Currency investors will take the Pound over the Euro in almost any world-wide economic situation, if the aim is long-term stability - the Euro is a good 'get rich quick' scheme. But as most schemes turn out, losers lose hard (sorry, Greece).
Most people I talk to don't understand this. until you start thinking about it dynamically, rather than statically. Also, play it out: get out a wad of $100 bills and start spending (use pennies, match sticks, or whatever, to physically represent the flow - dynamic - of money). You can get used to spending $200 every period. But when the time comes to start paying off the debt, instead of spending $200, how much are you putting towards paying off that debt? If you spend $200 less does that mean you can pay off $200 of debt? Obviously not. If you spend $200 less, you can only pay off $100 of debt.Quote:
Originally Posted by FunkyDexter
These are some of the simplest numbers to represent the dynamic of money flow with respect to debt, and it is surprising how few don't really get it. It gets more worrisome when you start to think about what is purchased with that debt. And that's the critical issue: there is almost nothing that someone or an entity buys with credit that is actually worth what they spent (and don't say 'property' as if this is a healthy and 100% safe investment opportunity...).
The 'cost of credit' being interest is, indeed, a cost. But the cost actually is quite small: and that's why people do borrow money, regardless of interest rate. That isn't what cripples them. It is the capitol - borrowed amount - that is the coffin: the interest determines whether you have gold fixings and satin or plain iron and cotton.
(Not much of a world war...but meh).
I couldn't agree more with this and obviously miss-understood where you were going with the previous post. I've thought the Euro was doomed from the start. The ERM failed because it was too constraining on the currencies involved so why anyone thought that developing a similar but even more constrained system was going to work is utterly beyond me.Quote:
To clarify, you are exactly correct: you cannot bring independent and diverse countries together with differing socio-political mechanisms and expect them to play nice under a unifying inter-government with a single currency. It is not just the economics that drives currency, as you noted.
The US, on the other hand, was built from a single political framework - independent states are reserved full control under that framework, with a minority of control explicitly defined for that central government.
This has nothing to do with the individual nations currencies - except for the fact (lets face it) that no-one outside of the US liked the fact that everything was compared to or traded in US dollars. The US Dollar was the, undoubtedly, largest currency in the world by almost any measure. The Euro (perhaps necessarily) makes the dollar slightly less a dominant currency. A prime example of the folly of trying to unseat a dominant currency is the British pound: while not necessarily a minor currency, it isn't going to be challenging anything for dominance, except in the fact that it is a persistent and strong currency from a small but influential nation (even without the Empire!). Currency investors will take the Pound over the Euro in almost any world-wide economic situation, if the aim is long-term stability - the Euro is a good 'get rich quick' scheme. But as most schemes turn out, losers lose hard (sorry, Greece).
I was actually working as a financial analyst at the AA when Black Wednesday happened and I'd managed to predict it using nothing more than a spreadsheet. My boss, who was the forecaster, had asked me to build a spreadsheet comparing the exchange rate limits the ERM specified with the interest rates from teh various member states. It looked fine at first but as the Germans started dropping their interest rates the whole thing turned into a sea of red. The first thing he said was "your spreadsheet's wrong". Sadly it wasn't.
Ah, I think I get where you're coming from. You're talking about the relative pain between the position you were in when you were spending vs the position you're in when you're trying to pay it back. I'm talking about the actual pain you're in at any given point in time. Both are useful measures and need considering. It's the actual pain that truly constrains how much the Greek government can pay back but it's the relative pain that the people will feel because that describes the drop in their living standards.Quote:
Most people I talk to don't understand this. until you start thinking about it dynamically, rather than statically. Also, play it out: get out a wad of $100 bills and start spending (use pennies, match sticks, or whatever, to physically represent the flow - dynamic - of money). You can get used to spending $200 every period. But when the time comes to start paying off the debt, instead of spending $200, how much are you putting towards paying off that debt? If you spend $200 less does that mean you can pay off $200 of debt? Obviously not. If you spend $200 less, you can only pay off $100 of debt.
Hah, I wouldn't. Property is widely recognised as one of the worst investments there is. It's no safer than anything else and and it's about a non-liquid as you can possibly get. I think it's popular mainly because it's an investment that's easy to understand. The only people who really make money on property are those who put work into the property to directly increase it's value.Quote:
don't say 'property' as if this is a healthy and 100% safe investment opportunity...
What is this 'work' of which you speak? Is that some olde-worlde thing? Sure beats answering 'my code no worky' questions...Quote:
Originally Posted by FunkyDexter
Couple this with your link to a rather interesting article regarding Deficit: it shows deficit as a measure of GDP. Since the UK and the US - two strong currencies - are in a similar position to Greece, why is Greece having a hard time? Obviously, we are taking these numbers at face value.Quote:
Originally Posted by FunkyDexter
This is part of the economists folly. There's a very small band in which economic indicators hold true. Once a divergence occurs, there are so many variables that it becomes hard to predict. The ability to determine the major influences at any given time is rare.
As an example, the US feds controlling base interest rates can, to a certain extent, steer economic activity. However, as we can see, it is doing nothing, currently (some argue that it'd be worse without it - but that just demonstrates ignorance). So, an economic rudder goes from a clear controller to completely and utterly broken.
At the end of the day, we are dealing with people, who, ultimately, are irrational. No matter how smart, well intentioned, or influential, there's no getting away from the Furby effect.
What do you mean, 'gone from'?
Religion...war.
Money...war.
C# vs VB...war.
Barter goes down to the purest basics: What you need and not what you can accumulate. It eliminates the perceived needs and focuses on the real ones. If I need rice and I know nobody has it around, I shall grow it. If someone has it around and if I have a gold bracelet, I won't have any grudge trading the gold for rice, because rice will keep me alive. The 'value' of things is directly related to the basic needs. Once we reduce the luxuries and other comforts and only focus on the basic needs, the problems introduced by money will disappear.
Today I can hoard money because it's not perishable (barring the exchange fluctuations) and I know I can buy any damn thing I want with it. So I focus on accumulating as much money as I can. Now the supply of money interestingly depends on the very goods/services which would participate in the barter, so in theory the supply is limited. When one person starts accumulating money, the others start losing it. If you printed additional money, only the value of the currency would fall, but the overall situation would remain the same.
If money were taken out of the equation, whenever I go to fill up gas in my car, I shall have to provide the gas station owner something of value, something of real value, like maybe painting his fence or repairing the plumbing or some other thing. This will cause me to acquire some real skills rather than just trying to spot trading opportunities.
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I've got rice, but I don't want your bracelet. What else do you have?
Oops, you NEED rice, but all you have is that bracelet which has very little value to me? Sucks to be you in a water economy.
@SJWhiteley:Frankly, I don't need any more demonstrations of that principle. I totally believe in it. On the other hand, I'm skeptical about whether intelligence exists. Perhaps that could be demonstrated a bit more often, maybe then I would find it more probable.Quote:
but that just demonstrates ignorance
Nothing wrong with that. Essentially it measures income vs expenditure, or in other words the solvency of your country. It's not a folly.Quote:
it shows deficit as a measure of GDP
Because the money markets no longer believe Greece will be able to meet its obligations. They still believe that the US and the UK will be able to - but that belief can slip away in a heart beat.Quote:
Since the UK and the US - two strong currencies - are in a similar position to Greece, why is Greece having a hard time?
Governments borrow money in the form of government bonds. These are essentially an agreement between a government and an investor where the government says "Buy this bond for X and I guarentee to buy it back after a fixed period time for Y". Investors will take up this deal if they believe the premium between X and Y is enough to offset the risk of the government failing to meet that obligation. Governments almost never fail to meet their obligations so bonds are normally low risk, low yield investment. However, Greece is at high risk of defaulting so Greek bonds are now a high risk, high yield investment.
Since Greece entered the EU it has been able to sell bonds at a very low premium (for which read interest rate) because it's success or failure was tied to Germany, the UK and France's in the form of the IMF... and everyone believed they were good for the cash. The trouble is that the recent crisis followed by talk of Greece leaving the Euro has crashed that confidence. The money markets are no longer confident that the IMF will be paying the bill for Greece's bonds.
That puts greece in a position where to attract continued investors it must offer a higher and higher premium on it's bonds. Essentially it's having to borrow at higher and higher rates of interest. And it has no choice in this. It sold bonds at reasonable rates previously but they're now coming due - they must be paid. The only way Greece can afford to pay the bonds already out there is to sell more bonds, essentially borrowing more money, but this time at exorbitant rates. It's that or default.
Re-borrowing like this is not unusual and, normally, isn't a problem. If the level of confidence remains high then a nation can just sell a second bond at the same preium they sold the original for. They pay off the original bond and effectively extend the debt. There's nothing wrong with that. It's only a problem for Greece now because we're in recession and Germany is declaring loudly that they're not going to help. If Germany were to turn round tomorrow and say "We'll bank roll any Greek bonds, no questions asked" the Greek economy would recover pretty much instantly. If course, that would mean the entire risk would be in Germany's hands and that's a risk they're increasingly unwilling to take.
And consider this. If Greece defaults, it will be UK investors who will take the hit. They will have massively reduced funds to buy bonds from other governments and credit for all of us, including the US, is going to dry up. If that happens we will head into the same death spiral greece is currently experiencing because who's going to buy a bond from us if they don't have the confidence that we'll be able to fulfill it when it comes due - and if we can't borrow, we cwon't be able to fulfill it. It becomes a self fulfilling prophecy.
Yes and No. Certainly people are an unpredictable element and the markets don't always behave as we expect them to. Indeed it was mostly the conceipt of bankers who felt they could reliably predict the markets (or actually computer programmers who thought they could build models which would do that) that led us into this state in the first place. It was started by corruption in the US martgage market, furthered by the UK's "I can predict anything" money market culture and then exopsed teh underlying problems that the eurozone has been hiding for the last two decades. The whole thing has been a perfect storm.Quote:
As an example, the US feds controlling base interest rates can, to a certain extent, steer economic activity. However, as we can see, it is doing nothing, currently (some argue that it'd be worse without it - but that just demonstrates ignorance). So, an economic rudder goes from a clear controller to completely and utterly broken.
At the end of the day, we are dealing with people, who, ultimately, are irrational. No matter how smart, well intentioned, or influential, there's no getting away from the Furby effect.
On the other hand governements can affect this system. It's all about giving confidcence to the money markets.
It can devalue it's currency by printing more money which, in turn, devalues it's debt and also puts cash directly into that government's coffers. In the short term this increases confidence because they can now meet their obligations. In the long term it's bad because, if you do it too often, many markets realise the government is simply going to devalue it's asset before paying it off so will demand a higher return.
If it's struggling because it's industries are non competitive in the international marketplace and therefore it's tax take is low it can drop it's exchange rate. the hope is that this makes the industries more competitive and increases the tax take. The problem here, though, is that the tax take is in the domestic currency and the borrowing is likely to be in an international currency. By dropping the exchange rate they actually increase the amount it must pay back in terms of it's own currency or leaves it constant in terms of the international currency. So if the industry doesn't manage to become more competitive because, for example, another major produccer of that commodity does the same thing at the same time, then the government will actually take a loss.
If like the UK and the US, it's economy is heavily based in the financial sector like the UK and US, it can offer to guarantee the investments that sector makes. In the short term this makes it's industry way more cometitive but shifts the risks from the private sector to the public. This in turn makes them a less attractive investment to those same money markets they're guarateeing, puching up the premiums they must offer.
The point of this is that there are a bunch of levers a government can use but each comes with a price. It's good that we have those levers because it does give us some control. While we cannot exactly predict the behaviour of the owrld and national economies we can predict it with a somewhat better than 50% chace of success. We can then pull the levers we think will give us the best outcome. We may get it wrong sometimes but we will get it right more often having a net positive effect.
@HB. I'm sorry but the barter system fails as soon as you have a situation where more than two parties are involved. And the system you're dscribing is, in fact, monetised. Rice is non perishable. And when you plant your field of rice you are making an invetment. You're hoping that the rice commodity will still be desirable by the time your srop come to maturity. You just turned rice into a currency.
It's real easy to look at the money markets as evil but that's really just naive. They serve a very real puropse: they move resources from where they are to where they are needed. That is what allows our industries to function. That is what allows our technologies to advance. That is why we all have a better standard of life than we did four centuries ago.
And this is coming from a lefty ex-communist. I hate half the stuff I'm saying here but I can't deny it. I think I need to go and take a shower and wash the stink of capitalism off.
(Grrr. posted a long reply and lost it - I guess someone will be relieved).
Suffice to say, all this money lending and borrowing....on and on and on. What is the money being spent on? While we can argue all day about the reasons for default (although I pretty much can see your argument) the money had to be going somewhere. While the immediate issue needs resolving, unless the root cause is addressed, it's going to happen again.
What is it ever spent on? Whether government, private business, or personal finance, so much of what we spend is not because of what we need, but because of habits we are in. We don't NEED most of that crap, but we are so used to it that it feels like a need. For that reason, it is going to be brutally hard for Greece to get out of this in real terms. It's often easier for our friends to see our financial situations in a MUCH different way than we see them ourselves. We think that latte is essential, they see it as profligate waste.
I think SJ's question was mainly on the government spendings.
In that respect even I wonder where the money is spent. Though I have a fair idea where 'exactly' it is spent.
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I hate it when that happens. I feel your pain, brother.Quote:
(Grrr. posted a long reply and lost it - I guess someone will be relieved).
Just to be clear, it's not my argument. I've merely explained how economies actually function, what money really is and I've laid out the choices that are available to us. It's all undeniable, if somewhat distasteful, fact. The only time I expressed an opinion was when I said that I thought we probably should bail out Greece in the short term but I qualified that by saying we cannot know whether it is the right choice or not - it's just the one that looks to me like it will have the best (or least worst) outcome.Quote:
although I pretty much can see your argument
Partly on public services, partly on acquiring the funds in the first place and, let's face it, partly on corruption and folly. But that doesn't change the way economies function.Quote:
Suffice to say, all this money lending and borrowing....on and on and on. What is the money being spent on?
Look, I'm no fan of the Euro. I said right at the beginning that you can't have fiscal union without political union. The Euro was an attempt by Germany and France to force a potlitcal union on the rest of Europe by creating a situation where it would be disasterous not to federalise. Where Germany and France got it wrong was that they didn't realise the constituents of Europe would rather have the disaster than the federalisation.
It also seems to have escaped Germany's attention that part of being one federalised super state is that the more productive parts will subsidise the less productive parts. We do it in our own nations already so why would that be any different if applied to a federalised Europe?
Indeed, As I may have noted elsewhere, I read the federal government budget every month.Quote:
Originally Posted by honeybee
Looking at the expenditures, while (armchair quarterbacking) I can wave my hand and say 'We don't need that!'. However, looking down the list with a neutral eye, it is very hard to say such a thing. We do 'need' all those things - but to what extent, and what is the collateral cost?
This, of course, is the US books. I can imagine the European books look very similar - indeed can an individual get such a thing? I'd be interested to see a comparison of expenditures.
Greece will survive - with their own currency. Of course, that may not happen, yet, as the media seems to be playing the 'on the brink!' for all its worth, and, similar to the US debt ceiling, there will be a last minute reprieve before 'war' really breaks out. But if Greece isn't bailed out and it goes it's separate way, there are other countries (Portugal?) who will then be the low contributor on the EU totem pole.
That is true, but generally, a subsidy of some sort must come with a benefit - generally in some other field. What would be the benefit? If the subsidy is a on-time deal, then it is probably fair to say that a benefit can be minimal. But a continuing subsidy with no benefit is sheer folly. But then, isn't that what has been going on for years?Quote:
Originally Posted by FunkyDexter
(Edit: incorrectly quoted and corrected).
SJW, that quote you have attributed to me, about Germany, isn't by me. :o I am usually not that profficient or fluent or lucid or coherent in expressing my thoughts by the time I am able to surf here.
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Sorry, not sure where the quote 'by you' came from: a cut-copy-pasta error. I'll edit that...Quote:
Originally Posted by honeybee
I'm not sure that's true. Or at least, I'm not sure it's that simple.Quote:
That is true, but generally, a subsidy of some sort must come with a benefit - generally in some other field
The analogy I'm thinking off are the various regions of England although I'm sure you can find similar example in any developed country. Over here we pretty much spent the last century systematically dismantling the industries and economies of various regions in England. We gave up on mining which left the Welsh with nothing to do but drink and engage in close harmony singing. We let the car industry go which left a large hole in the Midland (or left the Midlands as a large hole). The West country was never good for much except pasties and cream teas (they are very good cream teas mind). The North hasn't produced much since we let the weaving industries decline after you Americans got all uppity about self rule. And Scotland would pretty much be a wasteland if they hadn't got lucky and found Gas in the North Sea. The only exports from Liverpool and Manchester are crime, Men with perms and Women with too much fake tan.
I'm being deliberately flippant (because, at core I'm a very small and petty man) but the point is that the wealth generation of England is disproportionately centred in London and the South East. Us Southerners could fold our our arms and turn our back on the rest of the country. We could wag a finger at them and say they need to be more austere and live within their means. It's not like they really need shools and hospitals is it? And if they do want those things, well then, they'll just have to knuckle down and work harder. Obviously they're just all lazy ne'er do wells who are leeching of the taxes of the fine upstanding people of the South East.
But of course, we don't do that. We pool our tax intake as a nation and, on the whole, spend it for the good of all. We build hospitals in Wales and Scotland because we recognise that drug addicts and alcoholics are probably going to need them before too long. We build schools in Manchester because we recognise that even shell-suited men need an education (mostly in the hope that they'll learn to buy proper clothes). We build prisons in Liverpool because, well, it saves on transportation.
The point (which I hope I haven't completely buried under an avalanche of regional slurs) is that we recognise we're all one society and all in the same boat. That sentiment is still missing from Europe as a whole. It lacks the sense of shared identity that would allow them to operate as a cohesive society.
After all, but for an accident of birth we could have all been French:p!
Nah, leave it as it is. It's good to have some sensible post after your name in Chit Chat, although wrongly attributed. Keeps the sense of being intelligent alive.Quote:
Originally Posted by SJWhiteley
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In other words 'can't we all get along'? It is particularly tough for Europe because of the unique identities. Personally, I like Italy and Italians, Germany and Germans are an extremely interesting culture, but really have no kinship with France or the French (to put it mildly - I am originally a Brit after all).Quote:
Originally Posted by FunkyDexter
It is this strive for uniformity and 'shared identity' that is the problem. Which identity will one share? You mention Britain, and demonstrate the differences, but the identity is present under a single flag; the differences exist but an identity is shared. Expanding to Europe, one would have to impose an identity; this is an impossible task, so money generally substitutes - the meaning is to create a uniform Europe by taking from some Europeans and giving to others.
As a (now) US Citizen, having lived in Britain and the US, the whole structure is based on different cultural identities living together. I know many will disagree, but there is a lot of harmony with different cultures, here. I understand the disagreements, but they are based on false premises, and the imposition of one cultural identity on another. This is why we have the 'war on women', 'war on racism', 'war on gay marriage' and so on. The attempt to make everyone the same, inevitably means you will take away something from one to give to another. Don't be surprised when some fight back. We are all different, and will always be different.
Sadly, we are arguing - and making/breaking laws - based on media hyperbole, and there will always be a financial burden that must be paid in real currency. There is always an on-going cost to equality, quite simply because we are not 'equal'; the natural state is non-equality. We want to change y but it ends up changing x and z where there is no relationship between the two. Money and happiness are an obvious example, but a real example is money and poverty.
Needless to say, a 'shared identity' comes naturally - or not. It cannot be forced. I really don't think Europeans want a shared identity. I'm beginning to wonder how the Euro got put in place; what compelling reason would a country put forward to its populace to convince them to throw away a perfectly good currency?
Woah there, Nelly! I never said anything about a uniform Europe and, like you, I seriously doubt it would be possible.
A sense of shared identity, though, is entirely possible without turning us all into drones and we see it every day in every nation. That's what the regional examples in my post were meant to illustrate. We're different, we come from different backgrounds, we have different upbringings, we're informed by different cultural norms and yet, for the most part, we recognise as a Nation that we're all pulling in the same direction. We all call ourselves British and are proud to.
Even the anti-unionist movements that have gathered pace in the last couple of decades don't really want to change that. They want more self determination, sure, but they're mostly still proud to call themselves British. It's entirely possible to be a proud Scot and a proud Brit at the same time.
In fact you've summed up my point of view rather neatly with this simple quote:-
It's that sense of pride in being European that's missing. Maybe that could be nurtured over time but we're still a long way off it at the moment. And while it's missing the Germans are unlikely to want to keep helping out the Greeks because they don't see it as helping "us", they see it as helping "them".Quote:
the differences exist but an identity is shared
BTW I'm actually a Europhile and believe a European super state could be a very good thing... but only if it was properly answerable to it's constitutuents and was actually wanted by it's constituents. The current inception fails miserably on both those counts which leaves folks like me thoroughly dissillusioned. Any organisation that can have it's constitution refused by the referenda of various nations and then turn round and say "fine, we'll call it a treaty and push it through on the nod" is not an organisation I want governing me.
I absolutely agree with this. I actually think there's alot over here too, although you wouldn't know it from the media.Quote:
As a (now) US Citizen, having lived in Britain and the US, the whole structure is based on different cultural identities living together. I know many will disagree, but there is a lot of harmony with different cultures, here.
My somewhat cynical belief is that it was put into place to create more gravity for a fully federalised Europe. It was meant to make the political outcome inevitable. It failed.Quote:
I'm beginning to wonder how the Euro got put in place; what compelling reason would a country put forward to its populace to convince them to throw away a perfectly good currency?
The compelling reason given was increased trade opportunities and it does achieve that, at least in the short term. I'm just not sure the long term cost was worth it.
Still, it is what it is and we're stuck with it. We either allow it to collapse with all the inevitable ensuing pain, or we prop it up for a while longer and see if we can either make it work or dissmantle it in a controlled fashion.
This thread has gotten slightly moribund, but I was contemplating something last night as I was reading The Economist (doggone magazine shows up so often that you have no prayer getting through the current one before the new one arrives unless you are retired or unemployed).
The economic upheavels that Europe is experiencing is fairly unprecedented. The countries are tied together a bit more tightly than they thought, and yet they are not tied together quite tightly enough. Now they have a fairly painful decision to make. In the past, situations like this have given rise to ultra-nationalistic views, and that is also appearing in several countries.
While keeping in mind the horrible track record of people predicting major upheavals, does anybody see a pathway that could lead to armed conflict within Europe? Prior to WW I, lots of people felt that the countries were too closely tied together economically for them to ever go to war again. At the time that such statements were made, that belief was already absurd, as all countries had sizeable standing armies, and were planning for war. That doesn't seem to be the case, now, but then again, was starts over some of the stupidest reasons, so who knows? Once you get people truly agitated, large masses can come into conflict with other large masses. This has happened several times before in Europe, where some sector of the population became so enraged that they kind of went on a rampage (such as the first years of the French Revolution) before cooler heads prevailed (and lots of heads were cooler as a result of those first years of the French Revolution, since they no longer had blood flowing to them).
Is this crisis extreme enough to cause that level of anger in any sector of Europe?
I doubt if it would lead to armed conflict, because exiting the Euro is still viewed as one of the options. The pros and cons of it are yet to be seen, so I think the Euro members may want Greece to initiate the exit process and then watch if they can recover on their own, outside the Euro zone. After all Greece would then be free to print its own money and might be either able to survive or postpone the inevitable by a couple of years.
Then you do have the possibility of both sides coming to an agreement.
After all an armed conflict would bleed everyone even more.
I am not currently including the Al Qaeda and the likes taking advantage of the political/economic unrest, I am solely thinking of the various nations.
No, but they are related! You can trace what cause the Korean, etc wars back to a the aftermath of WWII which, itself started because of the aftermath of WWI. Would you like to go back further? :rolleyes:Quote:
Originally Posted by NeedSomeAnswers
Now that you want to go back further, why the heck did these conflicts start in the first place? There was just Adam and Eve and they couldn't have sired so many kids!Quote:
Originally Posted by Nightwalker83
Man, the history of mankind is sure crazy, if someone knows it accurately. I guess the powers that be must be busy laughing their royal arses off.
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Our being a cosmic joke is a pretty reasonable theology.
Some wars probably don't link in very well to the general sequence, but most of them do to some extent or another. The one that appears to be largely divorced from those that came after it would be the American Civil War. There may also have been a disconnect between the war of 1812 (whatever it is called across the pond) and wars after that. However, from the late 19th century to present, the wars are pretty tightly linked by either their immediate causes, the initial military moves of the belligerents, or the geopolitical causes. However, I do think that WWI was a more of a starting point than any of the subsequent wars. The connection between the Vietnam War, Korean War, and WWII are pretty clear, whereas the connection between WWII and WWI is so obvious that they are practically the same war.
I do. I don't think it's likely but it's definitely possible. Ultra right movements are on the rise all over Europe already, particularly in the East but also in France. Imagine Greece bombs out and starts blaming Germany and France (actually pretty likely so far). Continued lack of leadership in the Eurozone means a continued decline and Spain and Italy follow. The Euro at this point is almost certain to collapse enitirely at which point we could face MAJOR economic hardship throughout Europe. The right really thrives in climates like this and could well take control in some major nations of Europe. Admittedly it's unlikely to take hold in Germany (given the history) but France, Poland, Ukraine, Greece, Spain, Russia... definitely possible. And we've all seen what can happen when the right takes hold in a big way. Oddly enough, this time Germany could find it's role reversed from previous conflicts as it's likely to be doing best economically and would therefore be held up as the enemy by the ultra right movements in the struggling countries. And it's worth mentioning that you really would not want to be a Eurpean Muslim at this point.Quote:
does anybody see a pathway that could lead to armed conflict within Europe?
It's quite a convoluted chain of events and you'd like to think our memories are fresh enough that we'd spot it coming and find a way to prevent it so it's extremely unlikely, I think, but definitely possible.
Either the American War of Independence (which I guess you just call the War of Independence over there?) or the Napoleonic Wars, depending on which you're referring to.Quote:
the war of 1812 (whatever it is called across the pond)
The link in the chain you're missing between 1812 and 1914 is the Franco-Prussian War. It tends not to get taught in Europe (and I don't imagine it's taught at all in the States) which I think is a shame because it's actually hugely important in the history of Europe. It's roots can clearly be traced back to the Napoleonic Wars because it was Napoleon's repeated humiliations of Prussia and Prussia's pivotal role in his final defeat (both in 1812 and 1815) that created the conditions for a sense of nationalism to rise in Germany and brought up the possibility of unification. Bismark's strategy to expoit that possibility was to manufacture a war with France, a war which France was equally happy to have because they wanted to prevent unification. Bismark occupied Paris, Germany was unified and the formation of the Central Powers and the Entente Cordial was pretty much inevitable after that. Bingo, we've got WW1.
So from a European perspective there's defitely a continued chain. From an American one, less so. For you guys the Napoleonic Wars were just something that created a global political situation that made the War of Independence viable and the Franco Prussian War was a complete irrelevance. You were too busy fighting your own civil war to be concerned with what was happening in Europe.
edit>Thinking about it, there's probably a lesson in that last sentence for all of us. There's no such thing as a European problem, or an American problem, or an African, Middle Eastern or Asian problem. Sooner or later we're all likely to be affected. The butterfly flaps it's wings.
The effects of globalization. In the days of the cavemen, it would have taken millions of years for a conflict in the faraway lands to reach us.
I think it's happening!
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WW3, Humans vs Zombies.
/thread
The American War of Independence predates the Napoleonic conflict. The War of 1812 was a sub-theatre, at best, for England in the Napoleonic War, but was an independent war in the US. Various factions wanted various things, but there was a concerted, and incredibly inept, attempt to take Canada.
I was aware of the Franco-Prussian war, and that it had a real impact on the how and why of WW I, but I don't think it had the impact on that war that WW I had on the subsequent wars (WW II, Korea, and Vietnam). There is always a continuum, because people beget people, and ideas beget ideas, but I think that some wars are tied very tightly together, while others are not so much.
That actually kinda surprises me. Most French and German people I meet only know it in passing and Brits tend not too have heard of it at all so an American who knows about it is a rare treat indeed. :)Quote:
I was aware of the Franco-Prussian war
I guess it's all shades of grey really. I'd agree that the link from WW1 to WW2, for example, is far stronger than the Franco-Prussian to WW1 link but I'd still call FP to WW1 pretty causal. It led to the formation of Germany for a start.Quote:
I was aware of the Franco-Prussian war, and that it had a real impact on the how and why of WW I, but I don't think it had the impact on that war that WW I had on the subsequent wars (WW II, Korea, and Vietnam). There is always a continuum, because people beget people, and ideas beget ideas, but I think that some wars are tied very tightly together, while others are not so much.
The link I made between the Napoleonic conflicts and the Franco Prussian war was probably alot more tenuous.
The really interesting bit, though, was that the Franco Prussian war was largely a result of French fears about German status overtaking their own, which is exactly the same reason why they wanted the Euro and a federalised Europe. In fact pretty much every European war since 1815 onwards has been about the French and Germans vying for position. That's still going on only now the conflict's economic rather than military. And round and round we go...
It also directly led to the initial moves by both sides in WW I, and showed that the Germans had learned a bit more from the earlier war than the French had.Quote:
Originally Posted by FunkyDexter
The preview of WW I appeared towards the end of the US Civil War...but nobody learned the lessons.
I used to read everything I could find on WW II and the US Civil War. Eventually, I figured I ought to branch out, and started reading...pretty nearly any history that looked interesting. A fair amount of WW I, an oddly large amount of early and middle crusades, random time periods throughout the middle ages, and random minor conflicts here and there in other places. In all that, I have never seen a book that was directly focused on the Franco-Prussian War, and all that I know of it is from books dealing with the lead up to WW I.
A conflict I am particularly intrigued by, is the phoney war between the US and France around 1790. This may have been ended by, or started by, the French Revolution, but I have only been able to find oblique references to it. It was entirely naval, which is impressive, as the US pretty much had no navy prior to 1812, but I haven't found anything else about it. Considering that France had helped us so greatly only two decades prior, the fact that this conflict occurred was a surprise to me.
Are you sure it was a war and not a naval military exercise? :p
I guess now the thread can be renamed to "World Wars".
It would be interesting to see if the WW II caused the Indo-Pak wars, and whether the Indo-China war would have taken place had the British occupation of India continued. It's widely said that the WW II resulted in many commonwealth nations gaining independence from the British rule. However it also means these nations were more vulnerable to conflicts since they were at a very nascent stage of independence. So if Briton hadn't been weakened by the World Wars, or if the WW II hadn't taken place at all, the British occupation might have continued for another couple of decades, there would have been no partition and as a result both (or rather three) Indo-Pak wars might have not taken place.
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That pretty much describes how I learned about history too, except I started with Napoleonics. In fact I started with teh film "Waterloo". I think I was mostly impressed by the big explosions:rolleyes:Quote:
I used to read everything I could find on WW II and the US Civil War. Eventually, I figured I ought to branch out, and started reading...pretty nearly any history that looked interesting
These day's I'm pretty hot on the two world wars, very up on Napoleonics, very good on Alexander, fairly good on the Roman Empire from the Punic wars through to the the 2nd century AD (though with a few large gaps) and pretty good on English history from the 1400's through to the 1800s. I reckon that represents about 1 percent of human history so I'm still reading.
Me neither. I think because it was quite dull militarily. You've got the battle of Sedan followed by the French stubbornly refusing to admit defeat even though they had no army left. The interesting stuff about it is socio-political and that doesn't sell books. We like bangs.Quote:
I have never seen a book that was directly focused on the Franco-Prussian War
I've never heard of it but there's a few odd "conflicts" like this throughout history. Two nations declare war but can't actually get at each other to do anything about it. The French didn't have much of a fleet either at that point. We didn't give it a proper sinking until 1805 but it pretty much went to rack and ruin during the French Revolution because all their officers heads mysteriously fell off.Quote:
the phoney war between the US and France around 1790
It's an interesting thought and you're probably right. I can't help feeling those conflicts would still have happened but they'd just have been delayed. Actually they might have been worse for having the extra time to simmer.Quote:
It would be interesting to see if the WW II caused the Indo-Pak wars, and whether the Indo-China war would have taken place had the British occupation of India continued.
Pretty much! You just need to look into the first world war to find families fighting each other. For example Kiser Wilhelm of Germany and his Uncle King what's his name of England.Quote:
Originally Posted by honeybee
George.
In fact, Kaiser Wilhelm, Tsar Nicholas and King George were all cousins. They were all pretty close freinds too. The French must have felt quite left out.
Ah, so all those big bangs finally turn out to be family affairs! How disappointing!
I have read War And Peace by Tolstoy and I am pretty impressed by the theory he has put forward. Going by that theory it would be interesting to know what impact the WW I and the WW II had on the British occupation of India and other countries. Maybe if the British had continued to rule, they would have kept India undivided. Maybe if they spotted signs of having to relinquish the Indian reign, they sowed the seeds of separation. It's all pretty hypothetical but interesting nevertheless.
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What theory do you think Tolstoy was putting forward? For me I just took War and Peace as a story about the family life of the Russian nobility at the time of Napoleons invasions. The conflict was really just a backdrop.
I think Britain would have kept India undivided as long as they continued to rule but only because that's what suited them and because they had a well trained and armed army to make sure they could keep it that way. As soon as they left the break up was bound to happen and they certainly didn't encourage it. Mountbatten worked hard to prevent it happening but in the end had to accept it as an inevitability. He was basically faced with a choice of leaving one nation at civil war or two nations who would hate each other. He viewed partition as the lesser of two evils. The British certainly weren't sowing the seeds of discord and would have rather left a United India if they thought it was possible.
The British Empire was probably the most benign of the great victorian empires. There's no denying that we were in it for our own benefit and there are plenty of incidents of violent repression but, on the whole, the British Empire looked after it's colonial population pretty well. That's part of why they were so happy to serve in the world wars and why they went on to form a common wealth after the Empire dissolved. In fact, many of the ex colonies still serve in the British army today.
I think that's partly a function of how the British Empire formed, namely by accident. Generally we turned up somewhere to trade and only started sending the army in if that trade was threatened. Since that trade was good for the local populace as well as us they were usually quite hapy to have the red coats parked on there door step because they benefited from the protection they offered. We generally didn't set out to conquer our colonies, we just spent long enough protecting them to gradually become the de-facto rulers.
It also helped being an Island. We were able to sit outside of the European conflicts, join a side without having to really risk invasion ourselves and send the fleet off round the world to nick the colonies of whichever nations were on the opposing side. Since the other European power tended to be pretty repressive to their colonies we were usually seen as liberators and, again, protectors.
Tolstoy has (or had?) proposed that the events in the world aren't necessarily caused by what we think caused them. To give an example, he has depicted in the novel how Nepoleon was almost caught by the Russian army when the French walked into the middle of two Russian divisions flanking them. Historically it has been hailed as a smart tactical move, but Tolstoy has given an interesting twist: the commander of one of the divisions has been asked to work under the commander of the other division and been asked to join him. This commander does not like it and so moves his troops in such a way that joining his reporting boss will be delayed. This causes the French army to be trapped.
So his theory is that it wasn't any planned strategic/tactical movements on the part of the Russian army which led to the defeat of the French, but the personal enmity between the two commanders of the Russian divisions.
And it's a good theory. Decisions taken on the spur of the moment can turn the tide. Which is true and interesting too.
Extending the same theory we can say that if the world war hand't happened, the British might have extended their rule in India and then India might not have been divided. But please remember these are mere speculations.
So is your claim that Briton didn't want India divided. You will find enough instances where the British rulers did try to divide the Indian masses by religion. Now whether it was the common personal habit of some of the rulers of the time or whether it was a hidden strategy adopted from the higher-ups is open to debate. But we cannot necessarily claim that a particular event led to another event (or vice versa) if we accept Tolstoy's theory.
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Oh I see. I never picked up on that myself but that does ring a vague bell (I read war and peace about 15 years ago so the memory is pretty dim). In fact, doesn't he expound on that at some length?Quote:
And it's a good theory. Decisions taken on the spur of the moment can turn the tide.
Anyway, it's a pretty fair theory. The problem with it is that, taken to it's extreme, it dooms us to never learn anything. Essentially it's saying "I can't know for certain that X mistake caused Y tragedy so I will keep repeating X in the hope that the outcome will be different this time". It's the old correlation is not causation argument. That's fine as far as it gos but if we refuse to learn from correlation we are, in essence, refusing to learn because causation can never be empirically proved.
Where I stand would be somewhere in the middle. We can look at documented history and consider the sources in the round. If they overwhelmingly agree on a point then we're probably better off taking that point as true than disregarding it entirely. But, equally, to stick dogmatically to our belief in the truth of that point and dismiss any other possibility as false would be crazy. We need to learn from what we believe to be true but always accept that our premise could be false.
I certainly agree that the British probably wouldn't have left if WW2 hadn't happened and I agree that India wouldn't have been divided as long as the British remained.Quote:
Extending the same theory we can say that if the world war hand't happened, the British might have extended their rule in India and then India might not have been divided.
The only point I think we might be differing on is whether India would have divided if anfd when the British finally did leave. I believe it would have divided because of the religious differences that had grown up among the Inidan populace. I don't believe the English remaining there for another 50 years (or however long) would have removed those underlying tensions. If a figure as great as Ghandi couldn't unify the populace then nobody could.
Well, that was the official British position and I find it hard to believe that it wasn't sincere, at least at a governmental level, because the British had far more to gain by keeping Inida unified and stabe than by dividing it. Us Brits are shopkeepers. We trade. It's what we do. And a unifed stable India would be a far more profitable trading partner than a having Pakistan and India snapping at each others throats or a single India that was in a state of civil war - which were really the only two alternatives at the time. What we wanted was a single peaceful India that we could continue to do business with but that was impossible to achieve. Partition was, for us, the lesser of two evils.Quote:
So is your claim that Briton didn't want India divided
Of course, that was teh official position but that doesn't mean every member of the British Beuracracy from the bottom to the top agreed with it or that nobody on that beuracracy worked against it for their own ends. To believe that would be naive.
Of course. So are my responses. We're debating a "what if" and we can never really know for certain. That's what make the discussion interesting. All we can do is present our hypothesis and try to back it up with reasoned argument.Quote:
please remember these are mere speculations
History is written by the historians. The facts on the ground are often different, and generally show that we are a bunch of people, who can, as a group, appear to act in ways that not single individual would choose. There are generally millions of small incidents that conspire to produce every action in the world. Our minds can't comprehend that complexity, so we narrow it down to some manageable level and call it truth. Of course, it is not the truth. No two people who observe some event see the same thing, or see it happen in the same way. One classic example of this is the Titanic. Until the wreckage was found, historians were largely split as to whether the ship sank in one piece or two. A slight majority of the survivors reported that it sank as one piece, and that is how it was generally depicted. A large minority reported that it split in half, and that proved to be the truth. Events like this should lead us to doubt EVERY eyewitness account of everything, but we don't, because it would leave us paralyzed.
In my own experience, I witnessed a terrible car accident, and was the first person to reach one car, which was on fire. I dealt with that car until the fire trucks arrived and the pros took over. At that point, I stepped back from the car...and saw the other car. My first thought was that there had been a second accident while I had been at the first one. In my memory, the one car hits...nothing...flips up in the air, and rolls several times. The spot that it hit is like a blind spot in my memory. I know the car had to hit something, and that it is likely that it hit another car (as the blank spot is in the other lane of a two lane road), but my memory has just a gap. Not a car shaped gap, just a lack of anything. This was obviously a pretty good thing, as I was able to respond to the more immediate problem (where I missed a great opportunity for a prank, and otherwise was unable to do anything useful other than temporarily reduce the fire, but it was VERY entertaining). The scenario is pretty common. Our memories are what we need them to be, they are not a reflection of what we have actually experienced. Somehow, we still manage to live, and even convince ourselves that what we remember as having happened, really did happen, and happened the way we remember it.
As for war, what Tolstoy described has other, similar incidents throughout history. In the US Civil War, the Confederates broke the Federal line in one battle because the army commander had reprimanded a subordinate division commander, incorrectly, that morning. As a result, the division command was overly sensitive. In the heat of the battle, the army commander sent a mistaken message to the subordinate to make a move. The subordinate knew the army commander misunderstood the situation, but because of the earlier incident, he tried to comply, thereby taking his division out of the line just as the Confederates, who had been mauled up to that point, attacked at the very point where the division had been. That one rebuke cost several thousand lives, and cost the Federal army the battle.
I think more than learning from mistakes/history or whatever else, what we need to focus on is the application of the theory. Somewhere I believe it's comparable to the well-known debate on whether economics is a science and the classic (cliche?) line that all economic theories assume the consumer makes a rational choice, and in practice the consumer is anything but rational.
Similarly in a war, you have to make strategies and plans and not leave things to chance, but also remember that a small, seemingly inconsequential event could turn the tide in favour of or against you. I don't think Tolstoy meant his theory to be used to abandon all notions of learning, improvising or planning.
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