Remember the board game Monopoly? It is based on our economic system and offers insight into these historic times.
Most players of the board game know that when one player begins to win, it is very seldom that any one else moves into the lead. Most people concede the game when a front-runner becomes obvious. According to the rules, however, the game is not over until all the properties that were acquired earlier by other players have been mortgaged and lost to the winner. When the winner has it all, then the game is over.
This end-game rule is problematic in the real life Global Monopoly Game.
Greece is a compelling example. Like most nations these days, their expenditures have been greater than receipts and they have had to borrow to make up the difference. Unfortunately, as the era of economic growth ran aground in 2008, they had to borrow still more just to make their payments. It is a vicious circle leading to unmanageable, expanding debt.
Once the crisis was under way, to keep getting loans, Greece was required to cut back on programs that spent money into their economy. After five years of such austerity, their economic activity dropped by almost 30%, and a quarter of the workforce became unemployed. Greece became a loser in the Global Monopoly Game.
Greece has lost, but that end-game rule remains. As long as they have assets that can be sold (mortgaged and lost to the winner), the Game continues. After cutting back on support programs, health care and education, they are told to give up pension funds and sell infrastructure, parks, monuments and anything else that can provide money to pay creditors.
From the depth of their Great Depression, Greece elected a government committed to another approach.
What other approach might there be? It is important that we find out because almost every nation on Earth is in serious debt. It isn't that there are no competent financial managers in the world. Big winners and many more losers is the nature of a debt-based economic system.
The system has worked, more or less, for centuries. Accumulating debts were managed by growth. When a country doubles its economic activity (GDP), its debt becomes half the size, relative to their ability to pay. The problem today is that humanity has grown to fill our beautiful planet. Limitations around fossil fuels and fresh water are evidence of humankind overwhelming the Earth, as well as the impacts of pollution. Few imagine that human activity can double even one more time, let alone every generation as it has in the past.
One place after another is finding that they cannot grow enough to pay off their loans (Puerto Rico, Ukraine, New Jersey, Detroit, Chicago and San Bernardino to name a few). If a jurisdiction makes a lot of money selling natural resources or from some other activity, creditors are more than happy to lend them enough to make payments, but total debt continues to grow. Sooner or later, to maintain payments, governments have to cut back on programs that serve their people and sell public assets. From there it is just a matter of time before those sources of funds are exhausted and . . .
This is where the Global Monopoly Game differs from the board game. When one loses at the board game normal life resumes. In the Global Game, societies fall apart and life becomes extremely difficult for more and more people.
It is time to recognize the winners of the Global Monopoly Game. We could congratulate them, perhaps pass out some prizes, then pack up the game and play something else. Our focus needs to turn away from making as much money as possible, regardless of consequences, and look more toward making the world work for everyone, today and into the future. Environmental well-being and fair play need to become our priorities.
There is an historic irony in the Greek story. Around 500 BC, Athens faced a similar fate where widespread debt bondage was destabilizing their society. The Athenians elected Solon to resolve their predicament. Solon established a policy called seisachteia the 'shaking off of burdens.' It included a cancellation of debts. The result was the Golden Age of Greece. Instead of working to pay off debts, citizens worked to advance society. Great strides were made in mathematics, architecture, literature, philosophy, and democracy. The Golden Age in Greece is said to be the origin of Western Civilization.
How long will it be before we recognize that our growth phase is over and we begin to fashion a mature, stable economy? The first steps may be in tomorrow's news.
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