Interrelationships among money, debt, and economic growth create a financial system that provides a steady stream of income to banks and private investors— the proverbial 1 percent. However, because economists obscure these interrelationships, threats to the maintenance of the monetary streams of the elite are underreported. Consequently, increasing shares of national incomes must be appropriated to maintain those streams. This article reexamines the nature of and relationships among money, debt, and economic growth to understand austerity programs and why rates of economic growth must decline and how governments and elites adjust to this reality. It then suggests alternative ways of addressing the creation of money and the problems arising from the division of society into net debtors and net creditors.
Hadrami Migratory Experience in Kuwait
Abdullah M. Alajmi
Studies of immigrants in Kuwait focus on structural aspects overlooking sociohistorical elements and meso-level relationships that develop through migration. This ethnography shows that the immigrant's perspective and the history of the relationship between the receiving society and the immigrant community are both essential for establishing broader and thicker analyses of reality. It argues that because Hadramis and Kuwaiti sponsors were historically linked in personal exchanges originating in the Kuwaiti domestic realm, the meaning and practices of sponsorship comprise a unique migratory and work experience. Normally the immigrant–sponsor relationship is conveyed in terms of pseudokinship, yet references to moral debts and dependency reveal forms of exploitation and dominance. Hadrami–Kuwaiti relationships do not produce significant economic outcomes for the sponsor. Rather, Hadramis are symbolically valued within local hierarchies. This symbolic value has sustained a solid Hadrami presence in Kuwait and secured an income for retiring immigrants at home.
Brigitte Young and Willi Semmler
Only a decade ago, slow growth and high unemployment plagued Germany, but the "sick man of Europe" has now moved to outperform the Eurozone average growth since the second quarter of 2010. This confirms Germany's recovery and its status as the growth engine of the continent. This surely is a success story. While Germany (also Austria and the Netherlands) is prospering, the peripheral countries in the Eurozone are confronted with a severe sovereign debt crisis. Starting in Greece, it soon spread to countries such as Ireland, Portugal, and Spain. In the course of the debate, Germany was blamed for the imbalances in Europe. In short, German export performance and the sustained pressure for moderate wage increases have provided German exporters with the competitive advantage to dominate trade and capital flows within the Eurozone. Thus, Germany is seen as the main beneficiary of the EURO. This argument, however, is vehemently disputed within Germany. Many economists and political leaders reject this argument and point to the flagrant lack of fiscal discipline in many of the peripheral countries. Some prominent economists, such as Hans-Werner Sinn, even disputes that Germany was the main beneficiary of the Eurozone. The paper analyzes the two sides of the controversy, and asks whether we are witnessing a more inwardlooking and Euroskeptic Germany. These issues will be analyzed by first focusing on the role of Germany in resolving the sovereign debt crisis in Greece, and the European Union negotiations for a permanent rescue mechanism. We conclude by discussing some possible explanations for Germany's more assertive and more Euroskeptic position during these negotiations.
The financial woes experienced by the Monte dei Paschi di Siena (MPS) and by a handful of other Italian banks in which foundations have played a prominent role offer an opportunity to reflect on three interrelated topics. The first issue is the evolution of the Italian banking system and banking legislation over the past decades to explain the rather distinctive governance structure of these banks. The second issue is the unfolding of the sovereign debt crisis in the euro area, which set the broader context in which the MPS scandal and the subsequent financial troubles of other banks took place. The third issue is the main response of the European Union and euro area to the sovereign debt crisis, namely, the proposal to create an EU banking union, which in turn triggered strong supervisory actions by the Bank of Italy in preparation for the handover of banking supervision to the European Central Bank.
Frontier Wars, Public Debt and the Cape’s Non-racial Constitution
This article seeks to enhance the historiography of the Eastern Cape frontier wars by adding war profiteering to land hunger as a motive for settler militancy. Equally important however was the extent to which the exorbitant military expenditure of the Eighth Frontier War (1850–3) aroused the concern of the British Treasury, and drew their attention to the corrupt practices of Colonial Secretary John Montagu, the de facto head of the Cape government. This was precisely the period during which the Cape franchise was under review at the Colonial office, and the article concludes by showing that imperial intervention in favour of a broader more inclusive franchise was due less to democratic concerns than to its desire to put a brake on the Cape’s burgeoning public debt.
On a Finite Economy in Bosnia
This article outlines how the good life and a decent death in contemporary Bosnia are underwritten and undermined by informal forms of debt. Such debts finance pursuit of a pleasurable life in a post-conflict, post-socialist economy but inspire daily anxieties, not least about dying indebted. The article runs through household budgeting, everyday splurges, bodily discomforts, ordinary death and a funeral marketplace, suggesting a 'finite economy' of vernacular practice incited and limited by an habitual fixation on existential finitude.
Storm Jameson's Debt to France
This essay has a double purpose. The first is to set out the function of France, as the place of salvation, in Storm Jameson’s writing in and about the 1930s. The second is to suggest that her familiarity with French culture – specifically, French writing – provided key models for some of the most important formal innovations she embarked on in that time. Jameson’s was one of the voices most consistently raised against the low, dishonest decade. She devoted herself to conducting two interconnected salvage operations on the social wreck: in the one, recovering a sense of human values (for her, those of a socialism that foregrounds respect for individual needs and dignity), and in the other, looking for that honest and politically effective way of writing about them which was the elusive goal of all her contemporaries on the Left. The success of both was linked for her to the French connection. In the mid-1930s, her Mirror in Darkness trilogy, planned as a five- or six-volume series novel, ran into sand. In the last volume, the heroine, Hervey, who is and is not Jameson, seems to have come to a dead end. Ten years later, however, she is back, in the Journal of Mary Hervey Russell (1945), speaking with a new voice. That Journal is written from France, and it breathes out, at every turn of the page, Hervey’s sense of a personal debt to the country for having redeemed her vision and her writing.
Small-scale producers and the Plan Chontalpa in Tabasco, Mexico
Gisela Lanzas and Matthew Whittle
This article examines the evolution of the credit market for small-scale sugarcane producers in the Plan Chontalpa development program in Tabasco, Mexico. The plan promoted neoliberal policies that transformed the existing credit market available to small-scale producers. The availability of credit was supposed to lead to increased efficiency. However, making credit available to low-income farmers can result in unintended outcomes. We found that many households had high discount rates and used the credit to supplement their household income. Thus, farmers are getting caught in a cycle of debt that often culminates in losing their land. We use a life history to consider the strategies the program has adopted to control credit as well as the counterstrategies the families have developed.
The bond markets turned on Italy during the first weekend of July 2011
as part of a wider loss of confidence in European efforts to manage the
sovereign debt crisis. On Friday, 1 July, the difference—or “spread”—
between Italian and German 10-year government bond yields was 178
basis points or 1.78 percent. The following Monday, 4 July, it was up
to 183 basis points and rising. By Friday, 8 July, the spread was 237
basis points. It remained above that level to the end of the year.1 The
center-right government led by Silvio Berlusconi attempted to head
off this change in sentiment by pushing through successive reform
packages to promote fiscal consolidation and stimulate growth. Bond
traders consistently shrugged off these actions as too little, too late.
Ultimately, the pressure became so great that the center-right coalition
fractured and President Giorgio Napolitano replaced Berlusconi’s
Cabinet with a technocratic government headed by Mario Monti. Even
this, however, was not enough to appease the markets, and the year
ended with Italian bond yields again rising..
Kinship, Microfinance, and Mortuary Practice on the Paraguayan Frontier
Caroline E. Schuster
Microcredit loans—most famously systems of group-based borrowing—are a key tool in global economic development frameworks. Building outward from microcredit programs in Paraguay, I explore the discontinuous materialities of both kin- and debt-based obligations, especially at their intersection. I argue that borrowers feel the life span of debts most acutely when mortuary practices anchored in kinship ties are bound up with the task of taking on the financial obligations of the dead. This analysis shows how the bonds between kinship, death, and indebtedness go beyond analogy, for collective debt is not ‘like’ a kinship relationship. Instead, microcredit social collateral provides a means for people to deal with the broader issues affecting the life span of individuals, objects, and commitments, as well as the human stakes involved with obligation.