Most comment articles being written at the moment on the subject of our present European financial turmoil seem to fall foul of Godwin’s law of Nazi analogies. For those unfamiliar to this concept made popular in internet chatrooms, the law states that:

“As a [...] discussion grows longer, the probability of a comparison involving
Nazis or Hitler approaches 1”.

There are many pieces being written that fall into the reductio ad Hitlerum trap: it seems that even those who try to emphasise the complex history of Europe, (usually as a means of arguing against the European project of greater fiscal and perhaps political union), still underestimate our long history, and fail to look back beyond the last half of the twentieth century.

It may seem strange to begin a current affairs piece with a small history lesson, but this sense of the past has been noticeably absent from discussions of our present time. In 1720, France’s first national bank collapsed. A Scotsman named John Law who had run the Banque Royale since its creation had used its resources to invest heavily in a bubble based on overvalued American properties. This and a series of expensive wars led the country’s finances to the point of disaster. By 1764, French debt was so great that servicing the interest took up 60% of the budget. The crisis of sovereign debt is not a new occurrence.

Britain was also in trouble, having mostly been on the other side of those expensive wars, and it was spending a significantly greater 70% of its budget on debt service. Yet Revolution only came to France.

One of the main reasons for this was the difference of public perceptions of debt between the two countries. In France, the budget was largely sustained by further loans, while in Britain, Pitt was raising taxes. The nobility of France was fiercely protective of its exemptions from various taxes, and so when the Finance minister Étienne de Silhouette tried to tax luxury items, he was ridiculed as a penny-pincher to the extent that his name became synonymous with the cheap shadow profiles that were popular at the time, and he lost his office.

The parallels do not need to be explained, but it is a valuable exercise to revive these largely forgotten events. There is once more a powerful group in society that has the ability to avoid taxation, and the impact this has is psychological more than it is fiscal. There is a groundswell of public opinion that recognizes this privilege and resents it, and it is this that creates revolutions, not the circumstances of economics.

Keynes, writing in 1936 about the Great Depression, noted that:

“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done”.

Unfettered speculation in the hope of favourable changes in the basis of valuation, as opposed to investment in the long-term growth of enterprises, creates the kind of bubble that brought down John Law, that ended the roaring twenties and has now caused the latest economic troubles.

What has been missing from investment practice is indicative of something that has been missing from public opinion for the last few decades. There has been a growing politics of apathy, based upon a misguided belief in the inadequacy of the individual for bringing about change. The lack of conscience displayed by speculators out for a quick buck mirrors a similar repression of that still small voice which is present in all of us. This voice has been ignored, as the commodity fetishism of the nineties and noughties seemed to replace, at least for a time, a deeper sense of wellbeing. This was not a total immersion in consumer culture; indeed, for many, it was lamentable but at the same time seen as unavoidable.

Participation in our capitalist and political systems was treated by many as the least bad option. Concerns over issues such as the environment were adopted by the mainstream, only to be added to the bucket of collective national worries that we could all discuss as if it were merely an extension of the mild British obsession with the weather. No one believed that they could change things, and no one was willing to try.

The ideology of the power of systems over individual action is being challenged in Europe right now. Financial institutions were willing to lend to some governments, despite knowing that they would not be able to repay them, because they made the assumption that Germany would eventually step in and pay up. This flawed assumption was based upon the belief in the inviolability of the laws of economics and politics, having excluded considerations of national history and identity as well as the sentiments of individuals. France wrote-down its debt by approximately two thirds in 1797, and forgetful of our own history, Europe believed it impossible for governments to do the same now.

The position of Greece, Italy and others is challenging centralised power and financial dictates that contradict the wishes of the people. The last year has seen a marked increase in the belief in the power of protest and possibility of mobilising large amounts of popular support. Although most comparisons between Tahrir Square and the Occupy movement seem to be crass generalisations, it is the case that the events of the Arab Spring have coincided with the awakening of our previously dormant sense of democratic power embedded within our own ancient political organisations.

There is an immense opportunity here to re-establish that still small voice into our own lives. The challenge that Greece and Italy present to the assumptions of finance demonstrates the possibility for us to rediscover the belief in the autonomy of the individual. Free will has been challenged, and we would do well to remember that we have always had choice:

“I have set before you life and death, blessing and cursing:
therefore choose life, that thou and thy seed may live”
(Deut. 30:19).