Thursday, July 28, 2011

The middle class trapdoor

Άρθρο από τον Simon Kuper στην Financial Times, στις 9 Ιουλίου 2011:

In 2002 I visited Argentina during its freefall. The country had just devalued and defaulted, and the latest president, instead of merely resigning, had fled in a helicopter. Yet Buenos Aires – like Athens today – still looked like a middle-class city. People lived in apartment blocks with doormen and drove to restaurants in imported cars. At dinner one night, a photographer told me that just that day he had realised he’d dropped into the third world. When had it dawned? “When Amazon refused my credit card,” he said.

There are two basic ways to live: in the first world, or in the third. If the Greeks devalue and default, they might discover what it’s like when the trapdoor opens and you plunge from one world into the other. When you fall, your life changes in ways small and big, and so does your worldview.

Michela Wrong captured the divide between first and third worlds perfectly in her Graham-Greenesque book about the Congo, In the Footsteps of Mr Kurtz. Stepping off the boat into the insanity of Kinshasa, she experiences “that revelatory moment when white, middle-class Westerners finally understand what the rest of humanity has always known – that there are places in this world where the safety net … is suddenly whipped away, where the right accent, education, health insurance and a foreign passport – all the trappings that spell ‘It Can’t Happen to Me’ – no longer apply.”

In both Greece and Argentina, the middle class had always believed: “It can’t happen to me.” The Argentinian middle classes had lived better than Europeans. I remember a couple who ran a news agency in Buenos Aires. They were enthralled to discover that I lived in Paris. They gave me blow-by-blow accounts of their Parisian holidays. They knew they would never go back.

Every day in Buenos Aires I heard stories of middle-class people who had fallen through the trapdoor. There was the former architect who now sold eggs from her kitchen table. There was the British immigrant who regretted having chosen Argentina 40 years before. There was the 71-year-old once-rich businessman with a second home in the Uruguayan resort of Punta del Este who was now earning $120 a month as an exterminator. (He aimed to be financially self-sufficient again by age 80.) And there was my Argentine friend who lost her mother. The mother, a nurse, had fallen ill, deteriorated, and then died without ever being diagnosed. Afterwards, my friend deduced that she had had a brain trauma. Being a nurse, the mother had apparently diagnosed it herself, decided that treatment would be too expensive, and quietly died.

All these people felt disbelief. This couldn’t be happening to them. It turned out that there was no safety net, no benevolent state.

When you fall through the trapdoor you tend to lose your belief in capitalist values like hard work and saving. Many Americans still believe that if you work hard and save, by the age of 50 you could be a millionaire. But in Argentina if you worked hard and saved, then at 50 you could be destitute. In Congo, you could be dead of cholera.

Christabel Bielenberg, a Briton who lived in Hitler’s Germany, recounts in her memoir The Past is Myself the archetypal story of a man who dropped through that trapdoor. Her gardener, Herr Neisse, had come home from the Great War and then spent years saving enough money to marry his Hilde. He often half-starved himself, writes Bielenberg, “and thus miraculously after some years he had put enough by to consider applying for a little allotment plot”. But in 1923 hyperinflation wiped him out. “With my savings,” he later told Bielenberg, “I was able to buy just one cup and saucer, which I gave to Hilde.” After the crash of 1929 wiped him out again, he became a Nazi.

I’m not suggesting Argentines or Greeks might become Nazis. However, many people who get pushed through the trapdoor by some hidden force do become conspiracy theorists. Intellectually there are two sorts of people: those who don’t believe conspiracy theories (mostly white middle-class westerners) and those who do (mostly poor people). Thus most white middle-class westerners believe that the US killed Osama bin Laden, whereas most Pakistanis seem to believe his “death” was faked as part of some conspiracy. In 2002 most white middle-class westerners believed that Argentina had collapsed due to absurd economic policies, whereas many Argentines blamed a conspiracy led by the International Monetary Fund. Herr Neisse blamed the Jews.

Greece isn’t in the third world yet. But if it defaults, the Greek author Takis Michas told me, “then yes, we will end up in a third-world situation. In this kind of situation, the danger of violation of human rights and of property rights is paramount.”

Few Greeks can imagine the trapdoor opening. Let’s hope it doesn’t.

14 Comments:

At 28 July, 2011 13:03, Anonymous Anonymous said...

greeks have the eu to push them through the trap door and keep them in the 3rd world for as long as it takes for them to be forced to sell everything.
argentina didn't have an eu so it managed to save itself.
argentina isnt' greece and greece isn't argentina

 
At 28 July, 2011 14:06, Anonymous the Idiot Mouflon said...

Never had a credit card to begin with. Screw 'em.

 
At 28 July, 2011 14:15, Anonymous Anonymous said...

@ Agrino: pe mou oti valleis ton mistho sou kato pou stroma... :-)

 
At 28 July, 2011 15:11, Anonymous Anonymous said...

Superb!

 
At 28 July, 2011 22:22, Anonymous Anonymous said...

That trapdoor opened wide for hundreds of families a couple of times in recent Cypriot history: 1974 and the stock market fiasco.

It may happen yet again. Right wing politicos, the upper-class and the nationalists are united in their certainty: the government is incompetent and we will be ruined, unless...

They use Mari as evidence of the incompetence and endlessly quote technocrats voicing similar concerns about the economy. But I have some of my own. Did these economic gurus warn Mr A Neophytou about the stock market back when? If yes, why did he and the government not respond? How does he expect us to trust his judgment once more so soon after the last trapdoors?

The government’s position may be unattainable after Mari, but I hope Christofias can hang in there. I hope he can get together a decent team and pull through. History will judge him on the result. There is no credible alternative. All I see is DYSI and Nicolas. I know their agenda. No thanks, I'll take my chances...

Panos

 
At 29 July, 2011 11:36, Blogger CRITIC said...

Με μια τεράστια διαφορά την οποία δεν αναφέρει και είναι η πιο σημαντική.
Η Ελλάδα είναι στην Ευρωζώνη. Οι καταθέσεις της μεσαίας και υψηλής τάξης είναι σε Ευρώ. Άρα δεν θα δούμε ποτέ την εικόνα χιλιάδων κόσμου έξω από το κοινοβούλιο να καίει δραχμές όπως έκαναν οι Αργεντινοί με τα πέσος λόγω της κατρακύλας της αξίας του νομίσματος τους.
Επίσης έχοντας Ευρώ γλυτώνεις και κάποιο από το foreign direct investment και τις ξένες καταθέσεις της χώρας τα οποία εάν είχαν δραχμές θα είχαν κάνει μέχρι τώρα φτερά. Αυτά και άλλα πολλά.
Γενικά αντί να φτύνουμε την Ευρώπη για τα μέτρα ίσως θα έπρεπε να λέμε ευτυχώς που είμαστε στο Ευρώ (Κύπρος και Ελλάδα). Σίγουρα παίρνει περισσότερο χρόνο η ανάκαμψη εάν έχεις κοινό νόμισμα αλλά το καλό είναι ότι η κρίση σε χτυπάει σε μικρότερο βαθμό.

 
At 29 July, 2011 17:59, Anonymous Anonymous said...

"Right wing politicos, the upper-class and the nationalists are united in their certainty: the government is incompetent and we will be ruined, unless..."

I am center right, middle class and definately not a nationalist in the sense that you are using the term. My parents have been peacefully demonstrating outside the Palace and they are neither fascists not extremists. But im also well-educated, my analyses are as factual and non-emotional as possible and i have an above average understaning of international economics and politics; and i still think that this government and President are incompetent.

Sorry Panos, but im afraid that the prism of party-politics is tainting your analysis.

And mark my words - the fortcoming economic crisis(which could be averted by immediate bold measures) will be caused neither from the foreign imperialists nor from any right-wing extremesists in Cyprus.

It will be caused by us...

 
At 29 July, 2011 22:45, Anonymous Anonymous said...

@Anonymous 17:59
It's not an analysis, it's a gut reaction to the histeria ( on the economy ). You are right, it's informed by decades of observing ( experiencing?) partisan Cypriot politics.

For an analysis, I would need facts. And by facts, i don't mean that it costs 115 euro to fill the petrol tank of a 4x4 volvo. Hand on heart, have you seen any?

Panos

 
At 30 July, 2011 03:03, Anonymous Anonymous said...

Dear Panos, please find below an unpleasant reading list.

http://www.stockwatch.com.cy/nqcontent.cfm?a_name=news_view&ann_id=138245

http://econcyma.blogspot.com/2011/07/2nd-estimate-on-best-case-cost-estimate.html

http://www.cyprus-mail.com/economy/our-view-how-long-can-local-funds-meet-government-s-financial-needs/20110608

Add to the above CY's downgrading from S&P.

And today's very precise articles of the FT.

And the statement from government officials that we might end up in the EU's Support Mechanism.

And the absence of any government measures (which should have been implemented months ago).

And maybe also look into the government's borrowing since 2008 and juxtapose it with untargeted "social measures"


These are just initial suggestions.

I wouldnt know how much it would cost to fill up a volvo's petrol tank. I work abroad (which also distances my analyses from any gut reactions).

Hand on heart, the light at the end of the tunnel is not the exit but a speeding train! And if the government doesnt take any measures, we are screwed.

 
At 30 April, 2013 00:22, Anonymous Anonymous said...

Ανησυχητικά επίκαιρο!!

 
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