Will All the Western Countries Go Bankrupt?

Recently Greece, Spain, Portugal and Ireland, otherwise known as the PIGS of Europe, lapsed into national debt crises, causing the world to recognize the powerful influence of national debt. In fact, almost every developed Western country has a large amount of national debt; the only difference is that some are more deeply in debt than others. Jacques Attali, chief advisor to former French President Francois Mitterand, described the origins of national debt in his book, State Bankruptcy, which was recently translated into Chinese. This scholar, once named one of the 100 Top Public Intellectuals in the World by Foreign Policy Magazine, believes that the West cannot keep conning others.

The Chinese people have a good habit: They try neither to lend money nor owe money. If they do lend money to others, they generally advocate “giving to those in dire need but not the poor.” However, this traditional Chinese notion does not fit with Europe and its use of government bonds. In State Bankruptcy, Attali says the original use of European government bonds was simply a method to accumulate wealth by dishonest means: “When the ruler…is unable or unwilling to increase the tributes or taxes of his subjects, he will borrow money in his own name.” This reveals that selling government bonds is the strong lending money to the weak, the rich lending money to the poor. The only goal is for the powerful to preserve their standard of living.

The difference between China and Europe is that China has a long history of being an egalitarian society where poor people and rich people have equal status under the law. The rich cannot force the poor to “voluntarily” lend their money. Europe, on the other hand, has been a society strictly governed by class, where rich people could use their power to force poor people to lend their money. A Chinese saying goes, “If you owe money to others, you have to pay.” In contrast, the kings of Europe often did not pay their debt back when they had borrowed money from the Jews, or they would find ways to repudiate the debt. The most common method was to expel the Jews from the country, which would write off all debt in one stroke.

But after dismissing debt time and again, it became difficult to borrow money the next time. Europe’s first public debts were not clear, peaceful investments; thus it was necessary to rely on wars to rob the riches of others and ensure that debt continued. When every country started to use this method to get profits from treasury bonds or government bonds, World War II became inevitable. When America became the world’s superpower following the two world wars, it continued the European tradition of investing in wars and gaining huge profits in interest from the war investment.

When the last country to profit from wars is the United States, what will Europe do? If the so-called “cultured” European countries cannot use wars to make profit, will they go completely bankrupt? According to Attali: “Ultimately, the day will come (sooner than we think) when it will be revealed that a country has no ability to maintain its most basic public services, such as schools, hospitals, the military, the police force and pension payments.”

Many people believe that the system in Western countries is more modernized than that of China, but the only reason they became modern in the first place is because there were still places in the world that the Western countries could rob. The system is similar to a pyramid scheme, in which one can accumulate a great mass of wealth in a very short time, but needs an endless number of contributors. When the contributors to the pyramid scheme reach their limit, this so-called modern scheme becomes a scam and a crime. Treasury bonds and other government bonds of Western countries use the same system. When there are no more places for Western countries to rob, the system with its generous benefits, happy life and human rights will all be over.

Today, America still enjoys its huge war profits. Since America has no new war gains and relies on profits from earlier wars, it will soon be in a similar predicament when it is unable to make ends meet. Thus America is using the same method that the European ruling class used: borrowing money from the poor. If one assumes that the American system is more advanced than the European system, it is simply because European powers used to borrow money from the poor in their own county and rely on profits from wars to repay its loans, while America borrows money from poor people all over the world, especially from the poor Chinese people.

Western culture, in essence, is a culture of expansion. Its existence rests on that fundamental requirement — constant expansion. War is the most effective method of expansion. When the expansion ends, Western culture will end. In contrast, Chinese culture is relatively isolated and self-sufficient. For this reason, when Western culture stops expanding, there will be only one option: returning to Chinese culture and entering a period where the world is relatively isolated. When both Europe and America are unable to continue to expand and face state bankruptcy, and the poor people in China give their money to the rich people in America, what will happen? If we look at Europe’s customs and practices, America will certainly reject its debt. America has the greatest war machine in the world today, which has become its main crutch for reneging on its debt, similarly to the special privileges granted by the class system of the past. People in China today have no idea of the method America will use to renounce the loans that the poor Chinese people gave them.

The author is a famous Beijing scholar.

*Translator’s Note: Attali’s book appears not to have been translated into English at the time of this publication.