The anti-democratic and anti-social design foundations of the Euro

“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

Excerpted from an interview with Greg Palast:

“Mundell, who taught at Columbia University, won the Nobel Prize for his writings on currency, and what’s interesting is that he won the Nobel Prize for the theory of optimum currency areas, the theory that nations should join currency unions when they have similar economies. Therefore, agriculture economies should have a joint currency; he thought the US and Canada [should] have two different currencies, east-west, not Canadian-American, but the western US should have one currency with Canada, and eastern Canada and the eastern US should have one currency. In other words, he believed that a combination, like putting Germany in the same currency zone as France and Spain, would be ridiculous; it’s a violation of his core theory through which he won the Nobel Prize.

Why is this important? This is the very same guy who is the inventor, you could say, of the euro, which he called the “europa” – that there should be one single common currency for all of Europe, damn the optimum currency theory. Now why would someone suggest a currency that is exactly the opposite of everything he’s taught? I spoke to him about this, and he said that it has nothing to do with creating a good currency. It has everything to do with changing the politics of Europe. He was very, very right-wing. He is the creator of another economic theory, which wouldn’t get him the Nobel Prize; in fact, it’s called “voodoo economics,” supply-side economics. That is, the more you cut taxes, the more tax revenue you get. The more deregulation of business you get, the better your economy – and if you deregulated the banks, there would be less risk in the banking system. All of those supply-side systems, which we call “Thatcher economics,” “Reaganomics,” after Ronald Reagan, it’s all been discredited; it’s all called “voodoo economics,” and yet, that’s what the euro is. It’s an instrument of voodoo economics.

“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

By having one currency for Europe, and with it, a rule – remember, with the euro comes the rule that you cannot have more than a 3 percent deficit or 60 percent of debt compared to your gross domestic product. That means that no nation, because you don’t have your own currency, has any control over monetary policy or fiscal policy or currency exchange rates. Basically, you lose complete control of your financial system, and he said, “It gets rid of the meddling of parliaments and congresses and governments to fool around with fiscal and economic policy.” What he meant is that democracy gets in the way of good economics.

So, what happens when you get rid of democracy? He says, “That leaves government only one choice,” the only choice when there’s a crisis, as we have now. When there is a crisis, governments will eliminate labor union power, will eliminate government regulation, will privatize industry, power companies, water companies, because they’ll need to pay off their debts, and basically, the power of government and labor unions, the working class, those powers will be eliminated, and wages will fall. In order to maintain employment, governments will allow wages to fall and regulations to die.

In other words, this crisis, in Mundell’s terms, is what he had planned and what the creators of the euro had planned. Crisis is part of the euro plan, a crisis that would cause a realignment between business and labor in Europe, and that the welfare state of Europe will be destroyed, and that’s exactly what has happened. What you’re seeing now, with the collapse of the southern European economies, including Greece and Spain and Portugal, what’s happening here was part of the euro plan. This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state. By the way, the end of the European welfare state caused by a crisis is a quote from Mundell. That’s exactly what he told me and I have it on tape.”

1 Comment The anti-democratic and anti-social design foundations of the Euro

  1. Ant

    Hi Michel.
    First, the term “They” is important. A theory, coming from a study, says: “they” are really few people, coming from a really low number of families, who earn, when we cumulate all their revenues and patrimonies, an equivalent of the Europe GDP, a fortune build from the end of the second war – ie, their fortune comes from the input of money from goverments since the end of second war, and revenues of workers, which means, that they grab a huge part of the money input by governments, as a hole where you could pump easily and rapidly.

    Second, if the theory you relate has a probability to operate in the reality, then it joins what Mister Jean Monnet wrote in his memories, who said something like: if something would have to be redone, I would begin with the building of a strong multicultural Culture Europe, instead of building an Europe across the economy (ie: a eurozone, a euro-economical zone). That what he said at the end of his life, when he saw what was about to be done with the Europe he began to try to build with one other man before the First War. For him, he had the bad feeling that the economy was about to destroy the basic fondation of peacefull europe concept. And he thought that concentrating all the effort on a peacefull multicultural place, would have to be better to do for European people hapiness and way of life at the end, instead of using Economy. I must say, I’ve ever been desapointed this has never been related since the 80’s …
    Thanks a lot Michel and P2P Foundation for all the things you do.

Leave A Comment

Your email address will not be published. Required fields are marked *