Hanging Together

What people don’t talk about, we all know, is sometimes the key to understanding what really happened – derelict relatives, failed businesses, dreams that just didn’t pan out.  One of those silent periods in American history is the 1780s era of the Articles of Confederation.  We learn the Articles existed, but as with an aging actress’s face, no close ups are permitted, and a mist blurs all details. Largely that is because it was a period of economic and political shambles, which later could only be remembered as failure.  The American quarter coin is known today as two bits because back then, the American monies were so worthless that merchants often accepted only Spanish pieces of eight, which, when “bitten” into fourths for smaller purchases, were called “two bits”.  The former colonies were so loaded with Revolutionary War debt that they were each essentially bankrupt.  No coherent domestic or foreign policy existed, for lack of any real central authority.  Pockets of poverty and suffering were everywhere.  Too painful to recall, it’s glossed over in our introductory history classes. 

But out of that failed era came a Constitution and a new country.  Three great leaders played key roles; and no, they didn’t include Washington and Jefferson.  Ben Franklin coined the phrase “The United States of America”, words that resonated in the hearts and minds of people throughout the loosely allied former colonies; his advocacy made the new country a vision to be achieved.  James Madison wheeled and dealed and presided over the convention convened from sheer desperation to piece together a Constitution acceptable, barely, to all.  And Alexander Hamilton sealed the deal by coming up with the idea of having the new country assume the war debts of its constituent states, relieving them of bankruptcy; then, as first Secretary of the Treasury, he made it work with a centralized currency and economic policies.  His proposal effectively transferred economic sovereignty from the individual states to the new country.  If we remembered all our history, they too might be on Mt. Rushmore.

I think of back then when I read the current news on Greece and the European debt crisis.  Greece has suffered by far the most throughout the crisis, but in yesterday’s election, evinced willingness, barely, to stay the course and work toward a healthy EU.  The vision is still alive, and that’s a start.  What comes next will be the difficult part.  John Lanchester, in the Comments section of this past week’s New Yorker, points out that the solution to the economic crisis is obvious, but no one wants to buy into it.  He includes federalizing Euro debt and spreading it across the whole Euro zone, creating Europe-wide institutions to supervise currency and debt, and adopting a Europe-wide strategy for economic growth that would include structural reforms and improved competition;  In other words, the Hamilton proposal.

Germany is opposed of course because doing so would eliminate what amounts to German economic hegemony over the rest of Europe, while having Germany also shouldering other nations’ debt in a major way. A growth plan for all Europe could entail Europe-wide deficits that could weigh on prosperous northern-European economies, and all the individual nations recognize it would entail a surrender of sovereignty to the EU. But all are recognizing now that the austerity program is not working and some other solution is required.  The task of getting agreement on such a solution would daunt even a Madison, since it would involve getting nations to rely on each other who have sometimes been enemies over the centuries, a problem even Madison did not face.  Just as in the 1780s, the only big things going for a solution are the vision, this time of a united Europe, and the sheer desperation of the parties involved.

One of Ben Franklin’s famous statements was “Gentlemen, let us all remember that if we do not all hang together, we shall all surely hang separately.”  The nation whose sovereignty and economic viability has been most obviously threatened so far is Greece, by what I characterize as corporate raids on its Treasury.  But if solutions are not reached, others, from Spain to Italy to Holland to Ireland and eventually to Germany, will surely follow one by one.  It is time for all parties to find accommodations with each other.  Out of that may rise a union that, like the United States, may cause us to forget the bitter era that went before.