A sentence in the French newspaper Le Monde recently caught my eye: Il y aura toujours des talibans de l’austérité, there will always be the Talibans of austerity. It was uttered by the economist Jean Pisani-Ferry in an interview in the newspaper about the crisis in the Euro zone, and it made me think at once of the Confucian dictum in the Analects that the first task necessary in restoring a polity to health is the rectification of language. Words must be used correctly, for if they are not, moral collapse follows.
Some linguists might object that the meaning of words shifts and is never absolutely fixed: for example, if enough people use the word disinterested to mean uninterested, then the word disinterested actually comes to mean uninterested, and the fact that it thereafter becomes difficult to express succinctly what the word disinterested once meant is quite beside the point. Will disinterestedness itself disappear just because the word for it disappears? Reasonable people might disagree as to the answer.
But language has to be tethered to relatively fixed meanings in some way or other if words are not simply to be instruments of domination à la Humpty Dumpty. Let us then, consider the phrase “Talibans of austerity” and what it signifies.
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Austerity, according to one of the definitions in the Oxford English Dictionary (the others are similar), is “severe self-discipline or self-restraint; moral strictness, rigorous abstinence, asceticism.” But clearly this is only a part of what Prof. Pisani-Ferry means. In the professor’s usage the dictionary meaning of the word austerity is but his connotation; his denotation is the attempt, by means either of increased taxation or reduced expenditure (especially the latter, of course) to balance government budgets.
One may question the practical economic wisdom of reducing budget deficits too quickly, at least where the government accounts for so large a proportion of economic activity that drastic reductions in government expenditure might lead to a serious collapse of aggregate demand. (The fact that government expenditure should never play so important a role in any economy is not a valid objection: we always start off from where we are actually rather than where we would have been had we been wiser). The question of the speed with which a government budget deficit is reduced, therefore, and the means by which it is done, is another of those many questions about which reasonable men may and do disagree.
But to call the attempt to balance a budget “austerity,” in other words to say living within your means implies “rigorous abstinence, asceticism,” a kind of killjoy puritanism, is to suggest that it is both honest, just and decent to do otherwise. And this is indicative of a revolution in our sensibilities.
In fact, it is grossly dishonorable to live beyond your means, at least when you transfer the cost to others, as is inevitable when borrowing becomes an entire, chronic way of life—as it has in many countries. Then repayment becomes impossible and is known in advance to be impossible; you continue to borrow so that you may continue to live at a higher standard of living than your earnings justify, in the full knowledge that you will either eventually default or, metaphorically speaking, pay back in tin the weight of what you borrowed in gold. Perhaps those foolish enough to lend to you in these circumstances deserve to lose some or all their money; but there is no disguising the fact that, at least according to traditional standards of morality, your conduct has been dishonorable, immoral and fraudulent.
If an individual owes money, the honorable thing for him to do is to restrict his spending in order to repay it, and not to borrow more merely so that he may maintain his current standard of living until such time comes when he must declare his bankruptcy. And I am old enough to remember the time when poor people refrained from borrowing for fear of not being able to repay the debt, and thus lose their self-respect. Their self-respect was more important to them than their level of consumption of inessentials.
Of course, countries are not individuals. When a person working for the government receives a certain salary it never occurs to him that he is being paid more than is economically justified or sustainable, or that he is in effect living at the expense of creditors. It never occurred to me, working as a doctor for the British government, that I was overpaid by at least the amount that the government had to borrow in order to pay me, and that I too was therefore living to a considerable extent on credit—albeit not mine, but the government’s. It does not occur to me still, now that I am retired, that my pension similarly amounts to living on others’ credit, or that when I charge for the medico-legal work that I continue to do and is paid from public funds, I am in effect demanding that the government borrow money to pay me. Our individual sense of honor is not engaged when the borrowing is done by the government and the proceeds trickle down into our pockets.
It is in these circumstances that the moral corruption of living permanently on borrowed money that will never be paid back can be hidden from those who do so, though only vicariously. Their sense of responsibility is attenuated to the degree that they do not realize that they have any. The people in Greece, understandably but nevertheless wrongly, experience the lowering of their standard of living as unjust; they do not see it as a consequence of their undeservedly high previous standard of living, because that undeservedly high standard of living came to them via what for them was an abstraction, the government. In Spain, by contrast, it was private debt that was the culprit; but the population did not experience their high standard of living as economically unjustified either.
The idea that living within your means is a form of austerity, and not (other than in exceptional circumstances) the elementary moral duty of people of honor, shows that, underlying the economic crisis is a profound moral crisis in western society.
This essay first appeared Oct 10, 2012 in Liberty Law site sponsored by Liberty Fund and is reprinted with permission.