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On Eurocrisis

Ulrich Hermanns


Hawa: ‘… I would be happy to read your analysis of the Eurocrisis experienced recently in the Euro zone.’[1]

Do you remember: your former question concerning the economic crisis caused an essay on Lacan’s understanding of Capitalist Discourse, so who knows what will be the result of these recent considerations on Eurocrisis?


Eurocrisis – the term refers as well to the currency called ‘Euro’, which has been adopted by 17 member states of the European Union since 1999 and 2008 with a population of more than 327 million people and which is used in a few more states as to the early Greek term ‘krisis’, denoting heavy and most often unforeseen changes in situations, e.g. in the course of a disease or in the plotline of a drama. Thus preliminarily indicates that a macroeconomic dimension of meaning is connected to a human trait and furthermore to a screenplay-like character.

       More closely, it is on the one hand about the fuzziness of currency – the monetary equivalent itself and also something like the plus de jouir[2] on the level of desire – and on the other hand about the institutions which form important parts of the states’ body: its financing system. In between them people’s expectations and promises from representatives of states’ institutions insofar as such states are debtors in the financial markets act as a symbolic chain, endorsing the value proposition.

       The financial markets in this environment mainly express themselves by claiming interest rates for public sector loans and by submitting credit ratings which are assessed by rating agencies. Such rating agencies are partly owned by publishing houses[3], which are well experienced in using their media power to dominate the rating discourse. Furthermore, ratings have to be paid by the issuer himself. Such practice showed extremely damaging result with regard to the crisis the US mortgage market 2007, when it was revealed that most of such ratings were incorrect. Banks who bundled and distributed such derivatives based on subprime and non-A loans could consistently present top ratings.

       After gigantic supports of states’ financial institutions in the Western world for their shaken up banking sectors in 2008 – based on an at least in an ethical understanding criminal game, in which the incorrect ratings played a major role – the international creditors now know exactly where the resources which they finally wish to capture are to be found: it are the national states’ budgets. A state is insofar in general a quite absolute secure debtor as it offers the future tax income from its citizens’ liabilities as securities – and those who have to deliver can’t escape.[4] Which stronger security and asset can be imagined then a nation’s financial slavery? And there are many states’ budgets, even those who are not from a public media view officially extremely critical at the moment, including thus of the United States, whose situation is even worse than those of several Euro-states.

From a psychoanalytic, post-structuralist perspective…

It is the states’ contribution and willingness to be submitted to the capital power – the power of a mad and excessive ‘god’: capital itself is as stupid as the master signifier. In failing to trust on other solutions, e.g. people’s social reason or something like that. The master – the capital – is incapable to act anyway reasonably, because it’s the slave[5] who has to do the work on behalf of his master. Divided from the initial source of the call of his or her super-ego, the slave takes over the task to work and thus prepare his command over nature by the extensive knowledge his experience generated, permanently producing surplus-value as well as surplus jouissance, a surplus which is the object of widespread common jealousy.

       If you look thoroughly to what Lacan identified as ‘Dicours capitaliste’ you see how it works: the subject leaves its traditional place of ancestral, but nevertheless phantasmatic truth and steps ahead to become the actor (agent), subdues the signifier to the position of truth and thus cutting the chain of the signifier and his – finally impossible – access to knowledge, which is coming from the place of the Other[6]: the knowledge we obtain instead is the inaccessibility to a fractal totality of ‘absolute nothingness’.

       The fearful vacuum is replaced by substitutes of knowledge, indirect offspring from the constraint to deliver surplus-value[7]: goods – beyond a common ‘commodity fetish’[8] this process requires all sorts of economic macro devices, including finance, which is borrowing from future desire. ‘Since they lost sight of their objective, they doubled their efforts’, as saying goes. It’s about the lost object of desire which reappears as goods in an unfolded economy of displaced desire: what else do you think we human beings can deliver than externalization – ‘sich entäußern’, a philosophical term? And mustn’t there be also a big portion of aggression in it, embodying all our destructive energies? What we deliver to become the social body of and also in the outside world is heavily affected with our personal fears and our search for help – help from that what makes us fear? From the absent, repressed aggressor? ‘Don’t kill me, I’ll surrender myself completely to you if you keep me alive’ – the famous initial structure of ‘Herrschaft und Knechtschaft’[9]; the second step is that the squire is doing the work for and on behalf of the master and learning from that – leaning how to control and rule the outside world. And thus becoming the true master replacing the former one – who still remains as an internalized imperative of acting – which is the erection of the super-ego: we have organized a body of desire and rejection in the outside world, established reality principle. So, what else the outside world can be than a projection of the incapability of the subject to be on his or her own?

Empirical overview

I think that is just the general outline, it does not explain the ‘Eurocrisis’ in detail – but: whatever this crisis is – the term is just used as a metaphor! –, it can’t be distinguished from these basic structures. And the devils which are driving the capital markets surely have greatest pleasure and good reasons, too, to haunt the states, who owe them money – and to squeeze out as much interests as they can. In fact, that game only works if the states share that pattern – and what people fear most, I believe, is that the state would give up such traditional patterns – that’s why the crisis can gain relevance, enter people’s unconscious minds and souls: hit me and squeeze me but don’t expel me from what I know and don’t let any others take control.

       Again a general structure, sorry. What is actually happening is that some Euro states have problems to repay their debts and interests to the capital markets: Greece, Spain, Portugal, Cyprus. The first of them officially was Ireland. They now search for support and no other state wants to help unless basic failure structures[10] are corrected. But theses former failures were no mistakes: the Greek state, e.g., could borrow money at a much lower rate when it entered the Euro-zone with financially healthier states in the year 2000. At that time the crediting banks and the other member states did not look closely at what the Greek government was doing with the loans they obtained: the Greek just wasted that money: inefficient administration procedures, corruption, subsidizing those who already had more than enough – years later, when the repay was to be continued on higher levels, they found, that the state’s revenues were too low to keep the given promise. Furthermore, statistics given by Greek institutions to the EU institutions were faked.[11]

       That’s the reason why they ran into such problems: creditors as well as potential supporters put enormous pressure on them to cut state’s expenses for social affairs, just to be able to repay the former loans and so the income of those working in the public sector is declining, public spending for schools, health services and much more is getting poorer and poorer – the Greek people suffer. On top of that, taxes and duties for the private economy rose. Those who formerly benefitted from the wasted money meanwhile have privatized it: ship-owners, who are free form taxpaying and many, many others. The Greek state is incapable to obtain loans directly from capital markets. It is depending on support from a trinomial body, consisting on International Monetary Fund, European Central Bank and European Commission. These three institutions claim for extreme austerity policies to cut Greek state’s deficit rate, causing further social foreclusion[12]. What is missing?

       Many specialists believe that an accompanying master program to raise economic development is required. Me, too. But there is little knowledge in the economic world about the foundations, functioning and success factors of social, economical and sustainable growth. Such programs would require reconsidering the basics of traditional economy – and even more facing alternatives. The general functioning was described above, is there any alternative?[13]

       The origins of the phenomena of Eurocrisis in Spain are similar but a little different: the Spanish economy had cultivated a huge bubble in the national construction sector for years. People bought houses, took mortgages under the promise that the rising value of their properties will count for the interests they’ll later have to pay. Millions followed on that track, which in the long run can only be a mistake, as there is finally no one left to buy their houses if all those who are willing and able have one themselves… Same like in the US mortgage crisis, which led to the banking crisis etc. The intra-economic triggering mechanism was based on just slight increases in mortgage interest rates. The system collapsed like a sandcastle.

       Ireland: they had offered low company income taxes to attract firms to invest in that country, even when many companies just needed offices and little numbers of staff. Jobs were created most often mainly in the lower skilled sectors like warehouse and on the other hand in the banking sector. Irish banks offered high interest rates for the money they collected from investors, even if the banks themselves had only weak basis of securities: a snowball system, too, which failed due to the US-induced banking crisis – the state had to stabilize the banks from failing completely and so the public sector became liable for private debts after these private companies had pocketed huge profits – like in most Western countries, but the amount of liabilities the Irish state had to secure was significantly higher. Ireland had to retire from public capital markets and borrowed from the EU, the European Central bank and the International Monetary Fund.

       We should not believe that this situation is already solved in those countries which are not just actually the most blamed ones: it’s still a huge general problem: the public sector takes big loans and the citizens have to pay the interests with their taxes and duties.

       Where does the money go to? Those, who can provide – the capitalists –, obtain the interests, those who have nothing must repay with their work for decades, destroying essential basics of social life. It surely started with neo-liberalism politics in the US and the UK in the mid Eighties, benefitting later from the fall of the iron curtain and the opening of new production and consumption areas like first in the East Asian tiger states and soon after the realm of PR China’s state capitalism.

Common self-repression and deficient ethics

Why do people accept that system? Why do they look for their suppression as if it is their benefit?[14] Firstly because it is a common pattern, and it takes long to understand how it works – especially in the developing countries due to the inaccessibility to public media, among other reasons. Secondly because of the intrinsic nature of externalized desire, even if there are different forms how to cope with such ‘incapabilities’ and ‘impossibilities’, which are the basis of the process of culture[15].

So, genug für’s erste! Surely it’s a very rough and coarse model. Help me, please, to make it more precise, if you can!

       We could also translate these issues into more moral based terms, e.g. that human beings are depending on each other, but can’t help to be misled, that there is a kind of god – the master signifier – required, who gives the law which is to be followed and much more.

       If I had time, I would surely write another book, because there are (!) alternatives and we should face and promote them.

Thriving on bad news

A final statement: isn’t Eurocrisis a quite efficient story for the media juggernaut? They don’t have to investigate – it’s us who do instead – just have to report isolated details and make believe that the true enemy and the real misery is somewhere else!

       Not present here, luckily, no, it’s the others who suffer, who must be guilty and surely deserve what they get – which is just a form of self defending protection.

       That seems to be the meaning of ‘crisis’ as a stylistic device. But the media copes well with all that, as the social tie is broken long ago. Otherwise they would discuss things like those written here in public and help to re-erect an access to ancient, but forgotten understanding of ‘truth’ – which always exists only in-between subjects who trust each other, even if also this may finally be just resonances from lost paradise.


- Written in October 2012 -

[1]    E-mail of 2012, 19 Oct.

[2]    Cf. that aforementioned essay

[3]    E.g. Moody’s was spun off in 2000 from Dun & Bradstreet and Standard & Poor’s was absorbed by MCGraw Hill in 1996. The trademark ‘Dow Jones’ is part of the News Corporation, headquartered in New York and owned by Rupert Murdoch. None of them is independent all are – beside their economic rating or index functions – essential parts of the media business.

[4]    A main reason for advanced Eurocrisis is that e.g. the Greek state has partly lost that genuine function of guaranteed stability since around early 2010.

[5]    According to Hegel’s paradigm of ‘Herrschaft und Knechtschaft’ in his ‘Phenomenology of Spirit’ (1807); but the German ’Knecht’is more like a squire in English; Hegel himself had replaced the term ‘Sklave’ (slave) in his early considerations by ‘Knecht’ which he used in the printed version.

[6]    Cf. my essay on Discours capitaliste, p. 48ff.

[7]    There is also another trace: delivering surplus jouissance (Plus-de-jouir) on the level of desire. This is the initially motivating trait, ‘forcing’ us to express ourselves.

[8]    Cf. Karl Marx, Capital I, first chapter.

[9]    Surely, further research on this structure is required from a more differentiated point of view with regard to basic sexual positions: as master and slave in the Hegelian model seem to be men – what are the appropriate female or mixed positions?

[10] E.g. level of public debts or heavily declining – instead growing – GDP rates.

[11] Details are quite commonly to be found e.g. on Wikipedia.

[12] Foreclusion = Verwerfung (German), Forclusion (French).

[13] My personal considerations on that issue came to the conclusion that a bundle of activities may be helpful to reach the goal; but as economy today is truly global, the main question is: where to begin in each given situation? The action set may comprise among others: broad availability of education, improved public health sectors, increased electro mobility, energy-efficient building management systems, intensified use of renewable energies, increased establishment of charitable trusts (to usefully absorb the endlessly growing amount of money, based on Central Banks’ policies and concentration of ‘wealth’ i.e. financial means in the hand of just a few), intensified use of remanufactured goods, lower taxes on work, low income and consumption taxes and much higher taxes on investment income, compelling nature of ecological activities, further development of well-working, fair industrial patterns.
           Some global implications in this respect are: Controlling a fair use of agricultural resources, controlling a sustainable and fair development of urban structures of cohabitation, interstate agreements on the strengthening of individual rights versus those of institutions of exploitation, controlling of fair social practices, climate protection support, public health services in developing countries, micro credit activities on a fair basis, as Mohamad Yunus’ Grameen Bank  showed in Bangladesh, support of small businesses and increased fair trade, anti corruption programs, prohibition of child labor, etc . This list is not clearly structured, also enhancements, implications or reverse effects are not yet considered.

[14] Like Deleuze and Guattari wrote: ‘Pourquoi les hommes combattent-ils pour leur servitude comme s’il s’agissait de leur salut?’. German: ‘Warum kämpfen die Menschen für ihre Knechtschaft, als ginge es um ihr Heil?‘ Anti-Ödipus, S. 39.

[15] Cf. Herbert Marcuse, Eros and civilization. A philosophical inquiry into Freud, 1955. Whereas Freud’s essay of 1930 ‘Culture and its discontents’ is a highly important basis.

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