- July 2, 2015
- Posted by: Madrigal Admin
- Category: Word of the Week Blog
There is (2015) widespread fear that the world economy is going to have another downturn because Greece has defaulted on its IMF loan (the first developed country to ever do so according to the world’s media). This may lead to Greece leaving the EU which has become known as Grexit.
Now as a etymologist, rather than an economist, my sympathies are completely with Greece (and therefore my perspective and understanding may not be all that relevant to the international banking community).
Greeks invented economy
Firstly, the Greeks invented the word economy and they are entitled to have some fun with theirs. Also, having given economy to the world, they should be allowed some sympathy if it is not working out for them.
One American commentator suggests that a sense of perspective should be maintained. From the US perspective the failure of the Greek economy should be compared to what would happen if the economy of Connecticut failed. Connecticut’s economy is the 24th largest of the USA states and is a similar size to Greece’s (based on GDP). Its failure would be unpleasant but not catastrophic.
Economy is frugality
Secondly, the Greeks are also being criticised for not accepting the austerity measures that the IMF and the European Community are asking for in exchange for additional bailout money. The original Greek word, oikonomia, meant “household management” and carried an implication of thrift, so again we should not be too harsh on the Greeks. The word was derived from oikonomos which was constructed from oikos meaning “house, abode, dwelling” (which has also given English village and villa) and nomos for “managing”.
We also should be aware that, in English, economy has had the sense of “frugality and the judicious use of resources” as long as it has had the sense of “the wealth and resources of a country” (that is political economy) which is for about 250 years.
Some Euro-scepticism is needed
Now thirdly, and in comparison, Britain has been strongly criticised ever since it joined the European Community (EC) for not joining the Eurozone (countries using the Euro as their currency). Britain argued that they should not give away the control of their currency to Brussels (HQ of the EU). (Since this article was written Britain has left the EU dubbed Brexit but Grexit has not yet occurred as of 2022).
For this stance Britain has been accused of zenophobia and mistrust of Germany and France. However in the aftermath of the 2007 GFC (global financial crisis) the British control of their own currency allowed them to devalue the pound, and therefore manage and minimise the stress on their economy. Britain’s stance has been vindicated. It is argued that Greece would be far better off with the same sort of control.
The big fear for the Eurozone is that Greece will exit the Euro and the Greeks will have to resurrect the drachma, their previous currency. This event has been dubbed the Grexit, and I would simply love to see it happen so we can use this delightful new word.