Piketty on the pointless cruelty of European austerity


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Regarding the Spiegel interviewers’ deficit-hawkishness: it seems plausible that this is a rhetorical strategy on Spiegel’s part, assuming the persona of a deficit hawk so Piketty can answer back to the hawks’ position.

Piketty’s right, of course – the current heel-digging on the part of the Germans is asinine from an economic standpoint (though understandable from a political self-preservation standpoint).

The EU leaders simply have to recognize and act on the fact that they serve the EU public as a whole, not the very small population of people who wield power from the banks and multinationals.


The phrase ‘pointless cruelty’ is like the phrase ‘pointless happiness’. Such things are never pointless. Sometimes they serve external objectives; but their most refined forms tend to be lived for their own sake.

I don’t think that this is a good thing; but we are talking about humans here.

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Interesting. I think they’re both pointless - both happiness and cruelty are their own reward.

Also interesting he holds up the US as an example of success, while job creation here is just enough to keep our nose above water. I’m grateful for what we have - but old enough to remember when we had much much more.


Of course, a lot of that past success was fueled by runaway deficit spending, mostly under Republican presidents, and most of the discretionary portion of which was spent on defense.


No, I think he was citing the modest recovery we’ve had under Obama, which still beats the situation in Europe. I’m not smart enough to explain it from start to finish, but I think the Congress has been hard at work trying to prevent any measures that would mitigate the disaster. That way they can blame the President. No, really.


It’s too bad the Germans retain a deeply held fear of inflation, but not of destabilizing societies through radical, externally imposed economic restrictions. That seems like a rather more important lesson of the Weimar Republic to me.


I was referring to the time period you referenced in saying “old enough to remember when we had much much more.”

Also, I agree with your interpretation of the current situation as well.

There is a fine line between forcing someone to pay a debt because they owe you and forcing them because they deserve to be punished. It is often the case that jubilee is the best option, ironically people understood that better centuries ago than they do today.

The problem here is the raging moralism in regards to Greece’s debts. The fact that Greece has debt problems implies (to these people) that Greece (and its people) are of poor character and must be punished and made to feel bad for their sins. Oddly, no one feels this way about the European banks which loaned Greece all this money.

These banks just need to eat it. They made a bad investment decision, they played the game and they lost this round, move on. An intelligent financial sector would be more interested in making Greece into a place which generates future investment opportunities rather than crushing them for decades.


And of course there is the lesson in pandering to vested capitalist interests at the detriment of any kind of people power in the form of socialism / communism. “Erst holten sie die Kommunisten…” Martin Niemöller http://veni.com/articles/firsttheycameforme.html.

Of course English Wiki has done a bit of revisionism and wrote the communists out of history equating them with the socialists http://veni.com/articles/firsttheycameforme.html. The moreI read into Wiki the worse it is in terms of intelectual bias-- and revisionism.

So yes dear Wiki it was first the communists then the socialistsand if the socialist would have considered working with the communists the whole Hitler disaster might have been prevented. But, ey why learn from history…

Rant over


Happiness is always “pointless”, in the sense that it’s just something you experience rather than an action. Cruelty, on the other hand, is something you do to someone else - perhaps to achieve some objective, or perhaps for no reason at all. “Pointless kindness” would be a better analogy.

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I like being told why everything is shit by Piketty. He seems to at least be cogently describing reality, which is something economics often struggles to do.


I don’t understand why Austerity is still a thing. It seems to be like creationism - the arguments for it seem really sensible and truthy at face value but were shot down years ago, we are swimming in the evidence of an ancient planet, and yet a subset of people still stubbornly clings to their blinkers and fairy tales.

I can only assume that these financial institutions have narrow deeply institutionalized assumptions about the world that makes it difficult for people of more diverse (real-world) political and economic learning to be hired or influential.

Krugman is right - these Very Serious People believe in fairies.


I think it’s because “austerity” is short-hand for “make the middle-class/poor pay for the mistakes of the wealthy/powerful.”


Personally, I think the grandstanding has actually had unintended good consequences to the economy. For too long, the American economy has been subject to wild swings in booms and busts because the booms are allowed to thrive unchecked.

By keeping expectations low through thwarting most of Obama’s stimulus programs, it’s had a dampening effect on creating another outlandish boom, allowing the economy to grow at a sustainable pace (in spite of GOP aspirations that it tank to make Obama look bad). The next depression should thus also be relatively mild and short lived as a result.

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Yeah, could we please let go of the “it’s all the fault of the germans”-idea. Austerity and the “heel-digging” is favored by a whole bloc of EU-Members (Netherlands, Finland, the Baltic countries). Germany is only the most visible proponent.

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It could be, but it’s worrying to see exactly how deeply the Austerian myth has burrowed its way into European political thought these days. Even the nominally centre-left have swung full force behind the consensus that deficit spending in a depressed economy is a Really Bad Thing, despite all the evidence to the contrary. In most European countries you have to go beyond the main parties to find any opposition to the Doctrine. I imagine that the narrative is even harder to shake in Germany, when the prevailing mood there seems to be “We’re doing well. Why can’t everyone just copy us” (The answer to that one being, you can’t have every country on earth gong through a cheap currency export boom at once, unless we find a few new planets to trade with)

The reason why it’s a thing is that it is very much like creationism.
With Creationism, the evidence doesn’t matter, no matter what the observation is- the answer is “God did it”
With Austerity, the evidence doesn’t matter either- It’s the same bundle of Chicago school shock therapy that the political right have been pushing for the past 40 years.
In both cases, the ideologically committed already know the answer, the only problem is how to get there.


Holy crap I thought you said “The Economist said…[austerity is pointless]”, which would have been huge news. But it was just the economist, with a little ‘e’.


The Economist saying anything surprising would be news. Well apart from the odd occasion that its Niall Ferguson style trolling goes too far like when they did that review of a history of slavery which complained that the book acted like slavery was a Bad Thing and didn’t give enough credit for the good sides of it.

But in general the magazine which is supposed to be proud of going against the current says nothing surprising any time I see it. It’s eminently predictable.


Which is why the right has been pushing Austerity, as it really is about dismantling the welfare state.