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Sunday, January 13, 2013

Greek Austerity: Trees for Heating

“While patrolling on a recent cold night, environmentalist Grigoris Gourdomichalis caught a young man illegally chopping down a tree on public land in the mountains above Athens. When confronted, the man broke down in tears, saying he was unemployed and needed the wood to warm the home he shares with his wife and four small children, because he could no longer afford heating oil. ‘It was a tough choice, but I decided just to let him go’ with the wood, said Mr. Gourdomichalis, head of the locally financed Environmental Association of Municipalities of Athens, which works to protect forests around Egaleo, a western suburb of the capital.” Tens of thousands of trees had disappeared from parks and forests in Greece during the first half of the winter of 2013 alone as unemployed Greeks had to contend with the loss of the home heating-oil subsidy as part of the austerity program demanded by the state’s creditors. As impoverished residents too broke to pay for electricity or fuel turned to fireplaces and wood stoves for heat, smog was just one of the manifestations—the potential loss of forests being another. On Christmas Day, for example, pollution over Maroussi was more than two times the E.U.’s standard. Furthermore, many schools, especially in the north part of Greece, had to face hard choices for lack of money to heat classrooms.
                                  Greek forests were succumbing  in 2012 to the Greeks' need to heat their homes as austerity hit.   source: Getty Images
Essentially, austerity was bringing many people back to the pre-modern living. I would not be surprised to find that there had been resurgence in vegetable gardens during the preceding summer. At least in respect to the wood, the problem is that the population was too big—and too concentrated in Athens at least—for the primitive ways to cohere with the environment. To be sure, even in the Middle Ages, England had lost forests as the population (and royal plans) grew. In December 1953, many Londoners decided to use their fireplaces to burn wood, resulting in pollution blanketing the city. As a result, thousands died and the city outlawed the use of fireplaces. No one probably thought to ask whether the city had gotten too big—and too dense. No policy was enacted that would result in a shift in population out of the region.
In short, the population levels made possible by modern technology are simply too large for a return to pre-modern ways of life. The modern edifice of expanded population and huge cities is on tenuous ground when modern technology, which includes government subsidies, is suddenly pulled back and people are forced to fend for themselves to meet basic needs.  The efficiency of modern technology, including in regard to utilities and food distribution, is often hidden, so we are surprised at the impacts on the environment when masses of people “return to nature.” It is a shock to nature as well. Particularly in industrial countries, societies are reliant on modern technology because without it the bulging population is unsustainable. Put another way, we have distanced ourselves from nature, and our growth in numbers in the meantime has made it impossible for us to “get back to nature” all together. It is in this sense that governmental austerity programs that cut back on sustenance are dangerous for a society as a whole. Given the population levels made possible by modern technology, forcing even a portion of the Greek residents back to nature could be expected up front to impair the environment. Accordingly, by mid-January the Greek government was considering proposals to restore heating-oil subsidies. It is incredible that the financial interests of institutional creditors, including other governments, were even allowed to put the subsidies at risk.
In general terms, people’s sustenance takes priority ethically over a creditor’s “need” for interest. The sin of usury reasons back to the origins of lending as an instance of charity. When someone was in trouble financially, someone with a surplus would lend some extra with the expectation that only that extra would be returned. The demand for interest on top was viewed by the historical Church as adding insult to injury (i.e., the bastardization of charity into a money-making ruse). Then exceptions were made for commercial lending, wherein a creditor could legitimately demand a share of the profit made from the borrowed money in addition to the return of the principal. As commercial lending came to characterize lending, the demand for interest became the norm, even on consumption loans when no profit would ensue. The notion that interest is conditional on a borrower having enough funds was lost, causing much pain to many in the name of fidelity of contract, as if it or the creditor’s financial interest were an absolute. Put another way, the default has swung over from the borrowers to the lenders to such an extent that society may look the other way as people literally have to cut down trees to heat their homes because creditors have demanded and won austerity touching on sustenance programs.
The subtext is perhaps that modernity is not all that it is cracked up to be. It has enabled the danger of a population level too large were our modern conveniences to be suddenly yanked away. Secondly, modernity has been purchased, in effect, by creditors as enjoying the default presumption. That lending began in antiquity as a form of charity—helping someone out—only makes the modern default that much more untenable—the demand for interest being not only unconditional, but also the default to be satisfied even if much harm is incurred by borrowers. I am not suggesting that people should be profligate with borrowed funds. Rather, just as Adam Smith’s Wealth of Nations is bracketed by his Theory of Moral Sentiments, so too an economy (and financial system) functions best when it is lubricated normatively such that no extreme is permitted at another’s dire expense. Put another way, a sense of security can buttress a web of economic transactions such that preferences over all are optimized for the greatest number. In these utilitarian terms, more is not necessarily better—if that “more” refers to population without limit or interest regardless of the borrower’s ability to pay. Population would be more stable were it more closely tied to natural limits and the economy would not be so restricted, or “sticky,” were borrowers forced to lose heat or even their homes just because creditors are demanding interest.


Nektaria Stamouli and Stelios Bouras, “Greeks Raid Forests in Search of Wood to Heat Homes,” The New York Times, January 11, 2013.