Ross Urquhart: Euro emergency raises hard questions for the 21st century
By Ross Urquhart
The European debt crisis, besides threatening to plunge the world into a depression, continues to exemplify challenges all nations face in the 21st century. The simple fact is that bringing people together with international treaties reduces barriers to co-operation and creates access to markets—and is thereby an important part of every government’s agenda. How else do you maintain growth in these highly competitive times? But the deeper the alignment forged, the greater the complexity—and probability of conflict at a later date. Sharing one economy and one currency among many nations ends up being more about political growth than economic growth.
Substantially devaluing currencies in individual euro countries, like Spain or Greece, that haven’t had the productivity of a Germany or France, ceases to be an option. Thus, the eurozone is left with, in effect, distributing a lesser devaluation over the whole zone. On the plus side, this allows the more productive countries to sell their goods at lower prices, increasing profitability and maintaining price stability. In theory if the productive countries keep growing and prospering at a faster rate than the less productive countries are falling backward, it is sustainable—but theory fails in the face of politics. People in the prosperous countries begin to chafe at the idea of supporting those who get paid the same while working less. It becomes a conflict of rationalities. It may be rational for the group to maintain overall stability, but is it rational for the individual to continue working harder to achieve the same level of benefit as someone who works less hard? How do you convince a worker in a productive country they must support the unproductive countries? Threatening dire consequences may stifle dissent in the short term, but not forever. Eventually they who pay the bills rebel.
Meanwhile, in the less productive countries an effort is being made to increase productivity by imposing austerity and that is a viable solution—in the long term—but it isn’t being done in the long term. It is happening all at once, and in a political reality where every nation on this planet devotes diligence and expertise to defining their individual greatness and superiority—and has done so for many generations—often infusing the population with a sense of entitlement beyond any country’s ability to provide. What results is that the citizenry, when confronted with sudden austerity, feels betrayed and angry at their apparent helplessness… so they rebel.
The spreading euro emergency brings pressure to bear on every stable economy to contribute expertise and resources, as they become convinced it is in their own best interests to do so. And every time a sovereign government is called on, and they follow through with a pledge of help, it amounts to printing more money. But how long can you keep printing money to maintain a growing imbalance? We are seeing incredible numbers, beyond our ability to grasp—hundreds of billions or trillions of dollars—being thrown around in the hope of solving a problem that no one truly understands and, therefore, no one can truly say will solve the problem. Yet, this newly created money is being spent and is disappearing into a range of financial instruments scattered all across the globe—spreading the problem along with it.
Where will this end? It’s a rhetorical question of course, because the range of variables precludes any answer—or at least one we can have confidence in. We have arrived at a point in our social evolution where the speed and complexity of our market systems overwhelm us. Capitalism opposes nationalism, divergent value systems collide, information overload befuddles, governments obfuscate and divide while trying to look strong, and our trusted experts add so many qualifications to their predictions they may as well be singing a lullaby. How can we make plans for the future? How can we set achievable goals based on such uncertainty? What happened to the simple, boring joy of predictability?
Technology is one culprit. It magnifies creativity and balloons it into a whirling vortex of change that swallows control mechanisms, traditional values, and natural barriers—and it isn’t going away because we like many of those changes. However, blaming the medium doesn’t put a light at the end of the tunnel.
The more relevant question becomes: is this a crisis of economics or leadership? Who can we trust, or believe in? Those we elect to govern us continually prove a disappointment for a variety of reasons, mostly concerned with promising far more than they can deliver. Who is there to tell us the truth—however harsh or embarrassing? Where are our visionaries? What happened to the concept of courage and principle as a foundation for leadership? Where are those who will dismantle the past gracefully in this rush to build a livable future? Obviously, whatever model we are using now is defunct in the face of 21st century realities. Many questions, but who can we rely on to provide answers?
Ross Urquhart served as chair of both a large and successful environmental coalition and of a business development centre located in a resource-based region. He spent nine years as a municipal politician and subsequently managed a failed campaign for higher office. More recently, he has authored an e-book entitled Being Reasonable: Plain Talk for Living in the Future. He may be contacted through his website at www.ofbandg.com.