My 10 Year-Old Knows How to Solve the Euro Crisis – Or Why to Lend and to Borrow are the Same Word in German

I’m living in a country very proud of its social security system. A system, that our great-grandparents, shook by recession and poverty,  fought for. This social security system has been introduced in many European countries and survived two Wars as well as Margaret Thatcher.

In Germany, chancellor Bismarck introduced the public system of health, social, accident, unemployment and retirement insurance, and gave the people fighting for it what they wanted. Bismarck acted not cause of the sheer necessity or coz he was such a nice guy. No, Otto von Bismarck, you might know him from the Hering named after him, was scared of revolution and uprising, socialism and communism luring in front of the doors of his beloved Reich:

My thought was, to win the working classes over, or should I say bribe them, to see the State as a social institution, existing for their sake and wishing to look after their wellbeing.
(Otto von Bismarck: Gesammelte Werke 1924/1935, #9, p.195/196)

Needless to say that the social security systems are not exactly what started the current currency crisis in a semi-united Europe. What happened?

The European Union is a more or less loose political bond or rather interest group of 27 countries (as by 2012), that famously failed to give itself a constitution. It is the largest market on this planet. Within this Union, 17 countries chose to use one currency: the Euro. This decision freed us citizens living, working and studying in different countries, it freed merchants and markets, not to speak about the holiday season mixing up the Euro coins in your wallet each year. Most people complained a bit – you never like to lose what you know – but in general, everybody was pretty happy and content. – Three non EU members use the Euro with consent of the € countries, three other countries have the € in a non-official way as their official currency – without asking and without even being a member of the EU.

My kids grew up on the Euro, they love it, they calculate their “one scoop of ice cream” in Euros, they don’t know anything else. They also know nothing else than the border-control free European Union. Last summer it was, that they both waited for the first time in their lives at a border for a customs check. Waiting at borders was a sight and nuisance I came across each year several times as a child on our family trips to Italy or France. In Europe, it can happen easily to you that you’re driving only half an hour and – there’s the next border! So God bless the EU and the freedom that came with it upon its citizens! – But now we got a slight problem:

In Europe, there are some richer and some poorer countries. Most people from the poor countries do not come and seek work and future for their families in the richer countries. They stay were they are and are demanding a and working on a good life there. Coz migrating is no fun, learning a new language sucks and actually: poor countries can be very nice places as well. And I’m not talking about the picturesque rundown and falling apart architecture that the average Western/Northern European tourist takes some Instagram snaps of whilst pretending it’s still 1950. – I’m talking about people who are proud of their countries and regions, who are building on their own future and strive to create something great and larger than one person only. Yep: It’s what a state does. A state that is made out of it’s citizens. Now all this 17 states and millions of citizens got the same currency. Still:

Some countries have to borrow money for very high interest rates. Coz the people lending them money feel it’s risky and they worry if they will get their money back. So you get a bit more for handing your money over to this state, coz you’re talking a bit more of a risk. Other countries can refinance themselves for an interest rate next to nothing. Coz investors think it’s a sure thing they’ll have their money back. – You see: I don’t like the idea of interest rates too much. But when Popes and left winged economists already tried to abandon interest rates and failed, how should I manage to get rid of them?? – The interest as such is not a thing too evil. It’s the interest on the interest that really sucks.

Back to Europe and our fellow European countries: by having to pay more and more for the same money, by socializing debts of and privatizing wins of the country’s banks, some countries came close to being bankrupt. Many people are joking with a cynical fatalism “We can’t kick the Greek people out of Europe, they invented it.” or “A bank set on the wrong horse? The country will help! A country set on the wrong horse? Germany will help.” – In history, when countries went bankrupt, often a war and invading the countries on the list of creditors solved the problem. Not very beneficial for the citizens, such a war. But fixed the debt problem in the past! Works for oil supplies as well, by the way. – I mean: what can you do when you can not pay your hospitals and teachers any more?

My son, living without TV but still knowing all advertisement jingles, singing them by heart from 6am till late, he knows the magic fix:
Put advertisement in schools!  Teach – for a small fee – in front of toy-posters, paint those walls with Lego claims, or, even better: build them from Lego! Why do sports when we could let the kids do it at home ad lure them in with Wii ads at school! Nice side effect: more workplaces in the ever complaining advertisement industry!  School could be so much more fun like that! And pay itself!

Oh and: In German, we really only got one word for to lend and to borrow, did you know? Leihen meant to borrow as well as to lend. It describes the state of having something in the air, not possessed by you right now (coz you can not use it) and not possessed by me right now (coz it’s not mine). Nice way of making business, he?

I like the commons, as you saw. But go private, read more about the striving for a free market:
Chicago School of Economics or Chicago Boys
Milton Friedman

Or go social, read more about public sharing and joint responsibilities a society can take on together (not that I’m biased…)
Interesting that the German article on Soziale Marktwirtschaft speaks about an “ideal in social and economy politics” whilst the English Wikipedia article linked to it mentions it as a “economic system“. If you can, read both articles. It’s very interesting to compare: Social Market Economy / Soziale Marktwirtschaft.

Hans-Werner Sinn, a German Neoliberalist now asking for Keynes‘ tool box, in an interview in 2009.

Funny diagrams  on neoliberalism and social security systems.

Ingo Schule, a German writer and publisher, and his Capitalism needs no Democracy, published in Süddeutsche Zeitung January 2012.

9 thoughts on “My 10 Year-Old Knows How to Solve the Euro Crisis – Or Why to Lend and to Borrow are the Same Word in German

    • Hey, thanks for your comment. You’re base in England, right?
      My partner is (re-)learning German at the moment…funny how things coincide sometimes…
      We love “Tennisschläger” for racket…
      Mark Twain once said: “Some German words are so long, they got a perspective.”
      Did you know he moved to Munich to learn German?
      We DO have a lot of words with “teuer” – it means not only expensive, but also precious…that’s why I reckon🙂
      A German uni here is running a great online dictionary – check out if you find some fun there http://dict.leo.org/?lang=en

    • I did already hit follow. You’re writing just the things I love to read!
      See ya more often in future! – But careful: I’m not a regular writer / reader, since I got less than zero time when I’m busy in my “real” job🙂

  1. Socializing losses and privatizing gains is creating a lot of injustice but what infuriates me the most lately is those Instagrams snaps you mentioned, making anybody with an iPhone look like a film photography artist.

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