Notes from an unforgiving land

Part 1

Setting the tone

Willem Barentsz

In 1596, the Dutch explorer Willem Barentsz sailed from Amsterdam in search of a northern trade route between Europe and the Orient. On 17 June, far in the arctic above Europe, Barentsz's expedition discovered new land, which he named Spitzbergen after the pointed mountains on its northwest coast.

Instead of finding the Northeast Passage, however, Barentsz's vessel was surrounded and then captured by the arctic ice. The 16 crewmen were forced to overwinter in this far-away land of extreme cold and dark.

Barentsz's ship stuck in the polar ice

Barentsz and his crew began to ration their supplies and proved successful at hunting. The marooned sailors repurposed lumber from their ship to build a cabin and fashioned much-needed extra clothes from the merchant fabrics that had been destined for the eastern markets.

Such was the winter freeze at the 78th parallel that, when huddling up to the fire place, the crew's socks would catch fire before they managed to warm up their feet. It must have been a blow to morale when, early on, their beer froze, bursting the casks. Still (or perhaps because of this blessing in disguise), Barentsz and his men managed to survive in the frozen northern wasteland.

The following summer, on 13 June, the ice finally eased its vice-like grip and Barentsz's men, riddled with scurvy, set course for home.

Unfortunately for Willem, the damage had been done, and he died just seven days into the journey home.

This story of discovery and daring ending in hardship and tragedy would be repeated time and again on the Svalbard archipelago in the far north, just 1300 kilometres from the North Pole.

First impressions

On the descent to Svalbard's capital Longyearbyen, the first and only things one can see are mountains, sea and ice. From above, the mountain range looks nothing out of the ordinary, but having landed at Longyearbyen airport, the first things that struck me was how arid this place is. Not a tree or bush in sight, just lifeless, slate-coloured peaks rising up some 500-800 metres from the green glacial waters of Isfojrden.

The palette of the landscape could be described as what's left after all the colours we might associate with life – the greens of trees, yellows of flowers, reds and blues of berries – have been removed. The word moonscape comes to mind, and this impression is accentuated by the town itself.

The buildings fit neatly into two categories: warehouses and bunkers. The beachfront and port have the former, the town the latter. 

Everything is built to be robust and functional. Although the houses display the familiar bright Norwegian colours, they are much smaller, stockier and lacking the elegant touches of large balconies and outside decorative features one sees on the mainland. In Svalbard, form follows the primary function: to survive against the unforgiving elements.

Unfortunately, though, even these houses aren't impervious to the extreme environment. On 14 December 2015, for example, an avalanche destroyed 10 homes in the town after four metres of snow fell during the worst storm in 30 years. 

Our guide, Mårten, told us of the night and how the town rallied to help. Some 100 people tried to dig out the snow as fast as humanly possible in 5-minute shifts, with dozens more waiting to step in the moment anyone's strength started to flag. 

Many were saved thanks to their neighbours' hard work, but a 40-year old man lost his life as it had taken some 36 hours for the rescue workers to dig him out, and five children and four adults were injured, three of them seriously.  

The houses were destroyed beyond repair, so they were removed. Today, 10 months later, the footprint of tragedy has been turned into a place of joy, a childrens' playground.

The empty plots left by the destroyed houses are visible on the bottom left 

Longyearbyen's pedestrianised main street has a few cafes and restaurants, many of which could well be found in larger cities on the mainland. The hipster cafe influence has reached the 78th parallel, but it has become enmeshed with the sensibilities of miners, meaning even more repurposed wood and metal. 

In addition to the main grocery store, there are sports equipment stores (all of which have large selections of guns on display), a few gift shops, a childrens' school and hospital.

In  contrast to the typical Nordic main street, Longyearbyen has a much more no-time-for-nonsense feel to it. It is clearly a frontier town. Snow bikes, bits of machinery, tractors, metal forms of all kinds lay strewn across the town.



A quote from Peter Adams at the Svalbard Museum in the University Centre put it well, "the streets of Longyearbyen have no names, they have numbers - grown men do not build houses in streets that are named Blueberry Road or Teddy Bear Yard".

From light to dark

The season of the midnight sun ends tonight and the days will start getting shorter after four months of uninterrupted sunlight. Within two months, the polar night will have taken hold and the sun not rise at all between October 28th and February 14th.

The constant pitch-black darkness during winter plays havoc on the inhabitants. In addition to vitamin D deficiency, the dark season causes Polar T3 syndrome. Its symptoms include forgetfulness, cognitive impairment and mood disturbances.

Mårten told us of how, last winter, he went to the shop to buy eggs and milk, but on returning home he must have put his clothes back on and gone to the shop again to buy eggs and milk, ending up with two sets of both, but with no recollection of the first trip.

Although the temperatures are relatively mild considering its latitude, rarely going under -30ºC thanks to the Gulf Stream, the constant night slows down everything and everyone. (Finnish and Swedish Lapland, by comparison, some 800km south of Svalbard, often experience deep freezes of -50ºC and below.) People walk slower, work slower, do less – like the bodily functions in hibernating animals, life remains on hold.

A timeless landscape

The name Svalbard comes from 12th century Norse accounts of "Svalbarð", or cold shores. It's disputed whether the reference was to Svalbard or Greenland, but either way the archipelago is far older than ancient.

This barren and northernmost collection of islands we see today between 74 and 81 north latitude and 10 to 35 east longitude began its journey toward the north pole some 400 million years ago, from somewhere south of  the Equator. 

Since then, the islands have travelled through tropical climates; they've been sun-scorched deserts; submerged under water... you name it, Svalbard's done it, making it a honey hole for geologists.

Distinct layers of sediment and rock are clearly visible in most places, and the darker mountains surrounding Longyearbyen make for a menacing backdrop.

Four types of trees are found on these isles, but you wouldn't know it. The tiny leaves of the Polar Willow just about manage to provide patches of rusty patina to the otherwise monochrome mountains. 

The bits of green grass dotted around the hills are evidence of nesting birds above, fertilising the soil just enough to introduce a bit of colour to the landscape.

Waking up on the second morning, the overnight snow has dusted the mountains with a white icing, evenly across every peak, almost as if by design.

The futuristic University Centre mimics the surrounding mountains

Even though the land is desolate, inhospitable and unwelcoming, the seas are bursting with life. Various sea currents meet around the polar region, giving rise to a smorgasbord of plankton, krill and other small sea life, which in turn feed enormous amounts of fish and the very largest of animals, whales.

The king of the north

Perhaps the most famous inhabitant of these islands (and the waters between) is the polar bear. It's often said there are more polar bears in Svalbard than there are people; in 2012, some 3000 bears to 2642 people.

Inquisitive by nature, polar bears perceive pretty much everything as potential food. Their tracks have been spotted everywhere around the archipelago, from the villages to the highest peaks at some 1700 metres. For this reason, when venturing outside Longyearbyen's perimeter, rifles and the ability to use them are a must.

The rules are clear though: should humans and bears ever interact in a way that results in harm to either, the bear is always considered the victim. To kill one even in self-defence results in a legal and bureaucratic process almost on par with a murder investigation.

There have been many cases of people being attacked, maimed or killed only for them (or their families) to receive a fine afterwards because they failed to follow the protocol of, first, trying to avoid the bear, second, attempting to scare it away, and only then engaging it with a rifle if in immediate mortal danger. 

But people are coming into contact with with these beautiful yet deadly creatures increasingly regularly as a result of the retreating polar ice caps. 

Year-on-year there is less ice from which to hunt seals, so the bears are forced to move about more to find alternative sources of food.

With the exception of the arctic fox and reindeer, the land animals are dependent on the sea. The polar bear, ringed seal, walrus and the majority of the birds spend their lives either hunting in the sea or eating and resting above the sea ice or within its vicinity. 

So closely connected is Svalbard's life with the sea, that evolution has even kitted the fulmar with the ability to drink sea water, using a unique salt-filtering cavity in its beak.

In stark contrast to the seemingly dead landscape, the ecosystem in the sea is thriving, even after centuries of whaling and fishing by an adventurous and hardy bunch of often foolhardy of people.

Part 2

Extracting abundant resources

Beginning with Barentsz's ill-fated expedition, Svalbard's economy has seen three distinct phases. First, whaling, then trapping, followed by mining. Each stage seems to have followed the same cycle of abundant resources leading to optimistic efforts to extract them, only to end in destitution or tragedy, or both.

Whaling

After Barentsz's discovery of Svalbard, the abundance of whales in and around the archipelago sparked a wave of Europeans hunting in the arctic. In the 16th and 17th century, whale blubber was melted down to be used as lamp oil, soap, lubrication, and such. The pickings were so easy that, according to another guide called Kristen, a whaler was quoted as saying: "you could walk from one side of the fjord to the other on the backs of whales".

Initially, only the Basque whalers had the expertise to hunt, catch and process the powerful leviathans, but over time their northern European colleagues learnt the tricks of the trade. 

Upon finding its prey, the whaling boat would sneak up behind its catch and harpoon it, which would usually prompt the enormous beast to dive into the depths of the icy cold water. If the harpoon string tightened too much or their boat wasn't facing the same direction as the prey, the boat would capsize, leading to an almost certain death. (Indeed, this happened so frequently that the whalers would bring their own funeral equipment on their northern expeditions.) Once the whale had been tired out, it was beached intentionally and the blubber would be diced into manageable chunks and melted down for transport.

The whalers would move their camps to follow their prey, but gradually small permanent bases, consisting of a few huts and boiling ovens, began to form around the archipelago. 

Skirmishes between whaling ships from England, Denmark-Norway, the Netherlands and France became more regular with each country attempting to lay claim to parts of the sea and land.

The English were the first to assert sovereignty over the Spitsbergen Archipelago, as it was known until the 1920's. The Dutch and French, meanwhile, argued the mare liberum principle, which gave everyone equal right of access to its resources, and Svalbard remained terra nullius, a land without sovereignty, until the 18th century.

After two centuries of intensive whaling, the stocks had been depleted to such an extent that the risky voyages and losses of ships and crewmen no longer made the business profitable, so the whalers left for other pastures.

Trapping

As the whaling towns were left to decay slowly in the arctic desert, Russian hunters and trappers known as Pomors arrived in the early 18th century, having heard of the land animals roaming the archipelago. Risking the dangerous journey so far north, they hunted and trapped polar bears, foxes, seals, walruses and birds. Hunters from other countries soon got in on the action, yet again sparking disputes about ownership of lands.

During the summer, the trappers had 24 hours of daylight and relatively mild weather, but the risk of getting stuck in the ice and having to overwinter were ever present.

A. E. Nordenskiöld

The Swedish House tragedy

The renowned Swedish-Finnish polar explorer Adolf Erik Nordenskiöld wanted to spend a winter in Svalbard and set about building a house that would be the most luxurious Svalbard had ever seen. Trappers had been living in lodges built from Siberian timber because it was the only suitable wood available and easily found as driftwood on the coastlines of the archipelago. Their cabins were small and cramped, with a single room that included bunks, a table and fireplace for warmth, and a small antechamber to insulate the room from the biting cold outside.

A traditional trappers cabin

This wasn't quite good enough for Nordenskiöld, though. He first built a two-storey house in Gothenburg from the best timbers and materials, adding thickly insulated walls and devising a central heating system consisting of a large fireplace and chimney routed through each room in the house in order to heat them separately. The house was then flat-packed IKEA-style and shipped to Spitsbergen, the largest island in Svalbard, along with enough rations and materials for several winters.

Nordenskiöld's Swedish House in Spitsbergen

Meanwhile, in September 1872, a Norwegian trapping expedition had got into trouble in North West Spitsbergen. Having outstayed their welcome, the sea ice took hold of their ship. In terms of getting help this late in the season, they were as good as being stranded on the moon. Thankfully, though, some of the group had heard about Nordenskiöld and his attempt to reach the North Pole before they had left Tromsø.

A small party was dispatched to find his camp, believed to lie some 70km away, and they managed to locate the famed polar explorer. On hearing about their plight, Nordenskiöld gave the trappers some rations and materials for the winter. His camp couldn't accommodate all of the stranded Norwegians, but Nordenskiöld told them about his newly built house, which could easily provide the group with shelter and enough food for a winter. 

Returning to their stricken vessel, the trappers debated the best course of action: either wait and spend winter on their ship, hoping that the ice would at some point give way, or attempt the risky voyage across the ice and sea to the safety of Nordenskiöld's house.

Seventeen of the younger men in the group decided that the long march to a proper house was less risky than staying in the vessel that didn't have enough rations and could be crushed by the tightening grip of the ice. So they left the their crewmates on the ship and dragged a few life boats over the ice for hundreds of kilometers before reaching open water. The journey was over 350 kilometres and, at this point in October, a few of the men had to constantly scrape and smash the ice forming on the boat, as they would sink if the ice was allowed to build up. Nevertheless, the men made it to safety and, relieved beyond measure, set up home in the comfort of Nordenskiöld's luxurious house.

The groups colleagues at the ship were also in luck. The ice had unexpectedly shifted, allowing them to escape its grip and sail home to Tromsø. The authorities were immediately notified about the stranded 17 crewmen, and a rescue party was sent for them as soon as spring arrived. 

When the captain of the rescue party arrived at Nordenskiöld's house, the first things he noticed were two fresh graves. Worse was to follow. Upon entering the house, he found the other 15 men dead in their bunks, on chairs, lying on the floor.

There were no signs of violence – so the question became, what could have killed 17 young and able seamen in a seemingly peaceful way? The captain's men searched the house for clues and found in the journals of the deceased references to bleeding gums, aching joints and overwhelming fatigue.

Of course, scurvy, that well-known foe of seafarers, became the prime suspect, but the men's friends and relatives in Tromsø didn't buy this explanation. These men had been brought up in and around nature and the sea and were well aware of how to avoid scurvy by eating berries and drinking the blood of prey, for example. Moreover, Nordenskiöld's rations included food designed to keep scurvy at bay.

The mystery remained until 2008, when Dr Ulf Aasebø and historian Kjell Kjærwas were allowed to dig up some of the graves and found that it was lead poison which killed the men. 

Back in those days, the ration tins and cans had all been sealed using lead. Nordenskiöld had used the same types of rations and suffered no ill-effects, but his team heated up the food correctly in separate containers. The young men in the Swedish House, however, boiled the food within the tins they found, thereby releasing the poison into their foods. The more sick they became, the more they tried to eat to regain their strength, hastening their dark and lonely deaths in Spitsbergen.

Mining

Around the time of the Swedish House tragedy, the first mining ventures began popping up in Svalbard. Due to its unique geology, all types of resources were found there, and many a prospector arrived in search of his fortune.

John Monroe Longyear

The American John Munro Longyear arrived on Spitsbergen as a tourist and straight away thought that there were fortunes to be made here. In 1906, he founded the Arctic Coal Company and Longyer City, known today as Svalbard's capital, Longyearbyen. 

His venture proved successful and is today continued by the Store Norske Spitsbergen Kulkompani, one of only two companies to succeed in not going under in this arctic wasteland. Other prospectors tried to do the same but failed.

For example, the British entrepreneur Ernest Mansfield had invested his fortune and his investors' money in a marble mine in Blomstrandhalvøya. The necessary infrastructure, housing and machinery were all built from scratch, but when the extraction finally began, the marble fell apart during the voyage to Britain, dashing any hopes of a profit or even breaking even. The reason the marble seemed so fine in the arctic was the permafrost keeping its structure together – it was, alas, treasure only for as long as it stayed in Svalbard.

The ghost town of Pyramiden

The Russian mining town of Pyramiden is perhaps Svalbard's most famous example of economic, geological and geographic realities killing off the dreams of mining executives. The state-owned company Arktikugol began work here in 1946 and the town became to the Russian mining community what Silicon Valley is to techies in the US.

Its population expanded rapidly to over 1,000, and at one point Arktikugol received some 10,000 applications for every 100 that were successful. Not only were Pyramiden miners the best of the Soviet best, the same high standards were required of anyone and everyone who worked there.

Soon enough, the town grew to contain a school, a hospital kitted out for complex surgery, a cultural house for events, ice hockey rinks for the winter and football pitches for the summer, and the inhabitants had access to all manner of vehicles for exploring their arctic surroundings. According to the town's photographer, Alexandr Ivanovic Naumkin, living there was the happiest time of his life and the town had "everything a young man needed".

The Cultural Palace and Lenin overlooking the main street

Contrary to the majority of coal mines that are dug deep underground, most mines in Svalbard are cut into mountains, with funiculars transporting the workers up, and carts and conveyor belts bringing the coal down. Even with innovations enabling the miners to extract the coal which is of excellent quality, the quantities available in Svalbard were tiny compared to most profit-making mines in the world. In addition, the coal lay in such narrow horizontal strips that the workers were forced to either lie on their backs while drilling above their faces, or lie on their stomachs and drill forward. A strenuous job if there ever was one.

Pyramiden main street

After the fall of the Soviet Union, the subsidies that had kept the mine operational dried up, forcing its closure and, ultimately, the evacuation of the whole town in 1998. Naumkin commented about when he left the town with the last of the evacuees, "we all knew something beautiful had come to an end".

Today, Pyramiden is a tourist destination complete with a hotel and eight staff, including our guide Sacha, countless fulmar and seagulls that have taken over the buildings and a lone polar bear which roams the town.

 

As mentioned above, just two mining companies have ever been successful in Svalbard, the Norske Spitsbergen Kulkompani and Arktikugol. And they only managed to survive as a result of being heavily subsidised by their respective states.

Legislation for preserving the cultural and natural heritage of Svalbard prevents anything pre-1946 from being removed or cleaned up and, as a result, deserted mines and towns like Pyramiden remain dotted around the landscape, slowly falling apart in the unforgiving but also preserving arctic climate.

Some companies prefer to mothball their operations indefinitely because, in Svalbard, that which is left unattended for twenty years is up for grabs for anyone. Having invested so heavily, a few miners still hope that one day their operations might be resumed.

The rusty remains, like the ones we saw in Pyramiden, provide eerie reminders of human hope and endeavour giving way to economic realities and failure.  Time, the great leveller, is ever-present in Svalbard.

The decaying remains of the Soviet mining settlement of Grumant, abandoned in 1965

Part 3

A unique form of sovereignty

Ever since whalers and trappers began using the resources of the archipelago, questions arose about sovereignty, legitimacy and, most of all, property. Norway, Denmark, Russia, Britain, the Netherlands, Spain and the USA were the foremost countries involved in the rush for Svalbard, and all tried at some point to claim the land.

In 1871, Nordenskiöld began work to establish a local administration for the Spitsbergen Archipelago, as it was known then. The mining companies required enforceable property rights and formalised procedures for resolving conflicts between companies and also between each company's management and workers. The Norwegian government took the lead on the issue, and negotiations for an official framework began in earnest in 1907. This resulted in the Svalbard Treaty, which was negotiated during the Paris Peace Conference.

Due to geographical proximity and having been the most active in the region, Norway and Russia held the most persuasive claims to the area, even though other countries maintained that their operations in the archipelago belonged to them by virtue of terra nullius. 

Luckily for Norway, though, Russia had been excluded from the negotiations in Paris, which were held between representatives of the Allied Powers (Great Britain, France, Italy and the USA). The 'Big Four', as they were sometimes called, preferred giving control of the archipelago to the neutral and, in their view, harmless Norway rather than to Russia, which had been a great power and was in the throes of a revolution that would lead to the formation of the Soviet Union.

However, the agreement also specified that Norway only would only control the administration of the archipelago, its natural resources and conflict resolution. The treaty forbids any country, Norway included, from pursuing warlike activities in the archipelago. 

When it comes to economic activities, the treaty stipulated that Norway is not allowed to discriminate between countries. Uniquely, therefore, Svalbard is an entirely visa-free destination. It is open for business, studies and leisure for each and every citizen and company of the world, regardless of their nationality.

Norway's gift

After so many architectural and economic ruins in Svalbard, the Global Seed Vault (GSV) provides a more optimistic project, one which will hopefully last longer than the purely-for-profit operations dotting the lands like scars.

Opened in 2008, the high-tech vault provides free storage for duplicates of agricultural seeds from any of the other 1700 seed banks in the world. There are currently some 860,000 samples housed in the GSV, which was built into a mountainside some 130 metres above Longyearbyen airport to protect it from sea-level rises. The vaults are kept at a cool constant of  -18ºC, and the surrounding permafrost acts as a natural fridge and back-up freezer should the seed bank ever lose power.

The project, often referred to as the Doomsday Vault, aims to preserve biodiversity in case of any accident, war, mismanagement or natural disaster that might destroy samples in a local seed bank. 

The Russian Nikolai Vavilov founded the first seed bank in Leningrad in the 1930's and referred to it as a tool box. We cannot foresee which tools we might need in the future, the thinking goes, and it's therefore important to preserve as many as we can. For example, seeds that are today considered sub-standard might turn out to be priceless later due to immunity to future illnesses or providing a higher yield in a different climate than the one we have today.

The people working at Vavilov's seed bank valued his botanic tool box so highly that, during the horrors of the Siege of Leningrad, they refused to eat or use any of the 250,000 seeds they looked after even though by the end of the siege nine of the scientists had died of starvation.

Protecting biodiversity from globalisation

Biodiversity has suffered greatly over the last century as a result of large-scale farming and globalisation. Countless varieties of agricultural plants have been lost as small-scale farmers have been put out of business or been forced to adopt the prevailing higher-yield varieties in order to compete with industrialised farming. 

Moreover, many of the standardised seeds we farm today have been patented by big companies, as a result of which the practices of sharing and saving seeds, both of which helped maintain and produce distinct plant varieties, is now mainly a thing of the past.

In the USA, for example, some 7000 varieties of apple were farmed at the beginning of the 20th century. Today, only 1000 of those remain – the others we have lost forever. Overall, some 75% of the agricultural crops we farmed 100 years ago have disappeared.

The GSV doesn't accept any flower or other types of seeds, but to deposit duplicates of agricultural seeds, banks are simply required to use the standardised documentation and pay for the transportation to the vault. The depositor can then withdraw their seeds at any point.

Although developing countries were at first suspicious of the project, virtually every country has now deposited seeds here. (Apparently the US ambassador was none-too-impressed on a recent visit, finding US boxes held together with duct tape sitting beside the neat and ever-so tidy North Korean boxes.)

This grand project is entirely managed by Norway as its gift to the international community.

Going home

After our few days in this northernmost outpost, I leave with mixed  feelings. On the one hand, as a tourist destination, Svalbard would be difficult to beat in terms of extreme wilderness, majestic animals and otherworldly landscapes.

Like hiking on another planet

But there seems to be an almost menacing nature to this archipelago. The lifeless, ageless, ruthless landscape acts, in my mind at least, like a constant reminder of our mortality and the futility of battling against time. It's almost like the land was constantly whispering "you are but a mere blip in time in comparison to me; I was here long before you, and will continue to be here long after all of you have gone".


Perhaps my perception of Svalbard has been coloured by having previously read fictional accounts like Dark Matter and having watched shows like Fortitude, both of which focus on the dark side of life in the extreme arctic. But the feeling has certainly been entrenched by the tragic stories the locals seemed to revel in telling.

In any case, the days here were long and filled with once-in-a-lifetime experiences, like seeing polar bears and blue whales in the wild, hiking in the most alien of landscapes and spending time among the ghosts of Pyramiden. Still, I am still relieved to leave, to escape the clutches of a land that became the final resting place of so many other travellers. 

A quote I saw at the Svalbard Museum seems to best describe my feelings about what I've seen: "This place is abandoned by God and ought to have been abandoned a long time ago by mankind as well". A harsh truth perhaps, but one that makes me admire the friendly, hardy and entrepreneurial people here even more.

All that said, I am looking forward to seeing flowers and trees again.

A brief history of excess

While Britain's media and politicians were busy naval gazing and lynching the Murdoch media empire, more important news lay elsewhere. To begin with, America was busy grappling with a 14 trillion dollar question of what to do about its national debt: increase the overdraft limit and borrow more, or fail to keep up with payments, default and thereby crash the economy? In other words, "hair of the dog or cold turkey?" - that was the question.


After a lot of grandstanding and partisan wrangling, Capitol Hill answered at the eleventh hour on August 2nd. The federal debt cap was to be raised by some 2.4 trillion greenbacks. This would, they promised, be paid back over the next 10 years, by cutting public spending to the tune of $2.4 trillion. Harmonious numbers, yes. But did it do anything to address the real problem? No - because the underlying debt remains untouched. The whole hullabaloo was, therefore, nothing more than a protracted exercise in posturing, followed by kicking the debt can far down the road and, most importantly, well beyond the next election.

The Land of the Indebted

It's no great surprise, then, that the ratings agency Standard & Poor's downgraded US debt by one (profound) notch, from the coveted top rating AAA to AA+ for the first time in the country's history. It could be argued, however, that even this lower rating is generous because, if the federal government were subject to the same standards as, say, Joe the Plumber, then it's safe to say that its credits would have run out a long time ago - so obvious is the fact that  Uncle Sam has already teetered dangerously close to the point of no return, of never being able to pay back its debts in full.

Now, I'm no economist (and please correct me here if I'm wrong), but it would seem to me somewhat optimistic to say that a country in debt to the tune of $14.5 trillion (and counting) that has a current labour force of about 181 million people (current census figures multiplied by the current employment population ratio of 58.1%), whose average earnings are some $49,800 per annum, then by my calculations it would take just over a year and a half for America to pay off their debt mountain. That is, assuming that every single penny of income is used for this purpose alone, as opposed to buying food, gasoline, electricity, Predator drones and such - the usual stuff America spends its moolah on. Or, another way of looking at it is that every tax payer is $110,000 in the red - an amount most certainly not to be sneezed at.

As Christopher Cadwell sums up neatly in this week's Spectator, Republicans and Democrats alike are still convinced of their "God given right to receive $5 in government services for every $3 they pay in taxes." So, today's version of the American Dream is clearly a way of life based on a fiscal fantasy, in a galaxy far, far away from reality.

1 billion in $100 notes

And just to put the types of numbers we're dealing with here into perspective, say Joe Plumber earns the average annual wage of $49k. Well, it would take him some 21,000 years to earn $1 billion, and America owes well over 14 thousand of these smackaroos. Now that's a lot of work - and, to my mind at least, this also highlights how there's something seriously askew with the modern world when the number of people earning billions is going up, while the vast majority can't find jobs or are getting poorer by the day as a result of frozen wages and inflation.


Europe's fiscal tale of two regions

But I digress. Let's turn to the Old World, then. Well, we ain't doing much better. The Eurozone countries are in deep, deep trouble, mainly due to disparities between the currency union's northern and southern members. The north (read Germany) have been bankrolling southern debt, while the Med countries and Ireland have kept themselves busy buying up BMW's and other sweet gizmos made in Germany. So, while the so called PIIGS are more than often portrayed as lazy leeches, bringing the Euro down by their insatiable profligacy, the other side of this coin should also be taken into consideration, namely that Germany has done exceedingly well as a result of the artificially low exchange rate it gets from the Euro, making its exports more affordable, which in turn fuels its economy nicely. 

It almost sounds like a win-win situation, doesn't it? However, now that the tap of cheap credit has been turned off as a result of the financial crisis, the PIIGS governments are unable to sustain the levels of spending they've made their people accustomed to. So, layoffs, redundancies, 30% wage cuts in the public sector... and that's just the start of it.


The Irish government, for example, in an act of recklessness or desparation (or both) passed all the debts accrued by its banks onto the backs of its citizens, while foreign bond holders, the ones who had willingly made the bets that had now turned sour, were let off the hook unscathed.


The Irish government didn't even contemplate "doing an Iceland", basically telling foreign creditors to go stuff themselves - which actually doesn't look like too bad a deal considering that the economy of this tiny country has been growing in strides ever since. Ireland's leaders chose to instead throw their electorate to the wolves, effectively yoking their citizens into servitude to their new paymasters in Brussels and the IMF, so enthralled were they of their banking buddies abroad.


And what does Ireland have to show for this decade of overindulgence? An unemployment rate of 14.3%, wage reductions and mass emigration. Not to mention the grand but empty shopping malls in small villages and decaying ghost towns that litter the country, all built by developers who took advantage of the generous tax breaks offered by the government, using money borrowed from banks, and becoming very wealthy in the process. The politicians, in turn, were all too happy to spend and spend the tax money coming in from the financial and construction sectors, without leaving anything for a rainy day.


Meanwhile, in the Med, the Greek government and its citizens were a tad too enthusiastic in using up their newly acquired credit facilities and they splashed out on construction, swimming pools and champers galore. On becoming members of the Euroclub, Greece's politicians were indeed swift to take advantage of its perks - in particular, the low interest rates as a result of their country being linked to the economies of the stronger Eurozone members - and took out huge loans, swelled up the public sector, promised retirement at 56 and more than generous employee benefits, while their tax revenues never came close to matching these outgoings, and wouldn't have even if the majority of people - the well-off in particular - paid their taxes, which they didn't.

The result? Like Ireland, being bailed out by the EU and the IMF with loans worth hundreds of billions, spiced up with punitive interest rates. In return, Greece has had to slash public spending, and the cradle of European civilization is also being forced into selling off some €50 billion worth of infrastructure, services and land. This fire sale unlike any other, due to take place in September, will guarantee that those who can afford to bid - China and those nouveau billionaires - are guaranteed a pretty island or public road or useful port at a knock down price.


Closer to home, despite what MiliBalls and Labour proclaim, the UK's accounts haven't been in balance since 2002. Always quick to quote Keynes on the solution to today's recession - that to spend in a downturn is good, to cut is bad - Miliband, Balls and Brown consistently fail to acknowledge that, when in government, they completely ignored the first pillar of Keynesian economics: to save up a surplus when the going is good. Instead, they chose to do the opposite and rack up a deficit even before the going got tough.


Moreover, since the 80's the UK economy had been propped up by Northern Sea oil, which by now is pretty much gone, and by Gordon Brown's great idea to sell off 400 tons of the UK's gold reserves at the bottom of the market in 1999 (telling everyone about it in advance certainly didn't help him get a better price either). And, like Ireland, the third major source of income was tax receipts from the banking, finance and the real estate sectors. So growth prior to the housing bubble of the  naughties was a fiction, based on that oh so finite black gold and Brown flogging off the national heirlooms and the world of sub-prime loans.


It was thus unsustainable all along, and when the Coalition government took over from Labour in May 2010, the new Chief Secretary of the Treasury, David Laws, was greeted by a cheerful note from his predeccor, Liam Byrne, helpfully informing him that "there's no money left." At least he was honest, I suppose.

Politicians thinking they're bankers


So, how did we in the West get here and how did we let this happen? People are usually quick to blame bankers when discussing the predicament we find ourselves in. In this popular narrative, it was they who crashed the system in 2007/2008: they shouldn't have lent all that money to governments, nor should they have offered all those 110% mortgages, equity release deals, credit cards and 0% finance on purchases. They acted irresponsibly, made huge bonuses, and should've kept their houses in order so we wouldn't have had to bail them out.


Well, to an extent. The fact that banks were totally out of cash and it was their own fault but they were still not allowed to fail was a diabolical farse to say the least, albeit a somewhat necessary one to avoid an even worse situation. They bet, and they lost, but still managed to keep alive that Lombard Street saying, "heads I win, tails you lose". But the market in this case did work - it demolished their castle in the clouds - even if it would've been nice to have it done a bit sooner, and with a lot less collateral damage.


A more fundamental cause to this catastrophe - also the reason why our politicians had to bail the banks out - can, however, be highlighted with the crash of the sub-prime mortgage market in the US, usually identified as the spark that set off the Credit Crunch. The crash of this market was foreseeable and a logical result of a US government policy, begun under Clinton and continued by the Bush administration, of trying to ensure that every US family can have a home of their own. Toward this end, Fannie May, Freddie Mac and the rest of the US mortgage providers were told by politicians in Washington D.C. to make sure that this would be made into a reality. An admirable thought, to be sure, but idealism tends to make bad policy. 


And, lo, mortgages were awarded to families who had no chance of paying them back. This risk was then supposedly offset by splicing up all these bad loans and disguising them in bundles with AAA quality debt. But when these new home owners couldn't keep up with their payments, there began a tidal wave of defaults, and that initial good intention began to metastasize into toxic debt that would poison the whole financial system.


Likewise, it was also the light touch regulation, so much promoted by New Labour and the Bush administration in particular, which allowed the bankers free reign to attempt their unique brand of alchemy - making money from thin air - while these governments were all too happy to let them, the UK in particular, having become hypnotized by the incessant sound of the Treasury coffers going ka-ching, ka-ching, ka-ching, as a result of all that tax income from all those bonuses.


And yet, no-one was forced to take on those mortgages - which is why bashing bankers is facile. It ignores the fact that everyone who overextended on a loan was all too willing to believe that they deserved something they couldn't afford. In the TV series Northern Exposure, the indefatigably stoic Holling Vincour has a dictum that "a man shouldn't own what he can't afford" - and this surely has some truth in it. So everyone who is still in the red (Yours Truly included), government and citizen alike, is at fault here - just as junkies are responsible for getting themselves hooked on the drugs they buy.


Après moi, le déluge

A good friend observed the other week - and it makes a lot of sense, I think - that what's actually transpired is that our politicians have been selling us out to the bankers,  in order to offer us higher living standards than we could otherwise afford and thus get re-elected by keeping us comfortable and satiated.


The last decades have indeed seen America, the UK, PIIGS - most Western countries in fact - binging on public debt like there was no tomorrow. The US has already raised its debt cap 79 times since 1960 - a good indication as any that America's problem of living beyond its means is no recent development, nor  is their predicament the result of the Credit Crunch alone.

Likewise, Ireland's great economic boom from the 90's to 2007, the much admired "Celtic Tiger", turned out to be far from a powerful animal, and more like a giant St Patrick's Day parade balloon. It had been inflated by the construction sector, but once the loans from the financial sector dried up, so did the tax receipts the government depended on. The result of this was a punctured tiger and deflation in spectacular fashion, ultimately leaving the country mired in debt of tens of thousands of Euros per Irishman and -woman.


Greece, Portugal, Italy, the UK too; the common denominator in all these scenarios was a government spending not just the money they had - our taxes - but consistently splurging much, much more for our so called benefit. All those new roads, nice parks, improved public services; that fancy new town hall and generous public sector pensions, welfare benefits and the lot. They would all of course need to be paid for at some point, but that didn't bother the people making these commitments on our behalf because the "investment" sound bite proved more powerful an incentive than prudence. To be seen doing great things would be useful now and good for re-election, they rationalized, while paying for it would only follow after the next election, possibly not even being their party's problem anymore. (An admittedly extreme example of this mindset came when Alistair Darling signed the UK into the European Stability Fund a week after his government had been voted out of office, forcing upon the UK taxpayer yet another €15 billion liability.)


Growth or bust

There was and still is, however, a basic error in their strategy. Our so called leaders assume that we can consistently borrow more today than is coming in because a growing economy will make up for it in the future. For a long time this had seemed to be the case, but, actually, most if not all of this wonderstuff called growth had been fuelled by fossils. For the last two hundred years our industry, economy, society - our civilization, basically - has become based on deriving more and more "wealth" from scarce and finite natural resources. Refining extraction methods, finding new deposits and using those more effectively in novel ways, this created the economic system that underpins the society we live in today.


But now that the fuel deposits have begun to dry up, while manufacturing and huge chunks of the truly useful parts of our Western economies have been outsourced to developing countries, who's citizens also happen to understand the meaning of living within one's means, and who are not subsidized by their governments should they prefer a life of idleness to working for their daily bread; well, now the metaphorical fat woman has indeed begun her song, and all this expected growth required to drive and sustain our system is disappearing faster than we can say yeah but, no but.

17th century big spender

Another historical development that allowed our politicians to go on these spending sprees was that pride and joy of our Western civilization, democracy. Since the birth of modern banking in 13th century Italy, states and kingdoms did of course run up deficits. (Indeed, a good example of bringing down an empire by wastefulness and overzealous optimisms would be that of Spain's Phillip IV [1605-1670], who was convinced that all the silver and gold from the Americas - the oil of his day - would pay for ever more expansion. Well, it didn't because it ran out - and so his vast empire began to crumble.) But up until around the First World War bankers were a lot more careful when lending to countries. They had to be, because should the government (i.e. the king or queen) die, then the debts they owed would disappear up into the heavens with them.

The arrival of representative government changed all that. Ever since, the liability for a state's debt no longer rested with one person however powerful, but with a population, a nation - a thing that's usually not at sudden risk of being stabbed in the back or of expiring unexpectedly after falling off a horse that had been frightened by a mole. As a result, bankers became ever more liberal in how much credit they could give, knowing that if it's not this government that pays it back, it'll be the one after that, or the one after that...

21st century big spender

And so, our elected representatives began to max out our national credit cards, and those of our children, and even our children's children, while the bankers were all too happy to let them do so, safe in the knowledge that they'd get their cash back sooner or later. All along, we were too busy to notice as we lapped up those nice things our politicians promised us - and sometimes delivered, too - just like many were all too eager to furnish their homes with the help of that magic plastic, even if they weren't sure how they'd pay for it.


The mother of all hangovers

Now that the music has stopped and the tab's run out, however, if we were able to look around us with a clear head, we would realise that our politicians got us rip-roaringly drunk on cheap credit to further their own careers, and they, along with the bankers who made huge personal fortunes from this ruse, have now left the building in the comfort of their limos and helicopters. Meanwhile, we, for our part, became so enamored by our by pensions, welfare benefits and luxury holidays, that we spurred them on, demanding more and more. But in the process we became addicts: our high being a standard of living far outstripping that which we contribute to society; our drug of choice being living on credit. 


Indeed, when talking about this "recession", people tend to forget that they are comparing today's economy - "bad" - to the life that preceded, when we were in a bubble unlike any other - "which was good". Politicians and people alike seem to expect that we should somehow get back to where we were in 2007, before things went sour, but since when, though, has the top of a gigantic credit bubble been the marker for what an economy should be like, or for how much wealth there should be? 


To hanker after life as we lived it prior to the financial meltdown is as crazy as if the Dutch had just substituted tulips for roses in the 17th century, in the hope that it would somehow bring back the good days. They didn't - they learnt from their great mistake even if it cost them dearly. Back to 2011, with interest rates at 0.5% - rewarding debtors at the expense of savers - and our politicians telling us to go out and spend, spend, spend - well, we, today, seem to bordering on the insane, wanting to do the same thing twice but expecting different results.

It's often said that civilization sprung from our capacity to plan forward, to act now so that we can reap the benefits later. It would seem, unfortunately, that our civilization has taken this sound advise a good bit too far. As a result, we've become as spoilt as Vicky Pollard, and the first thing we need to do now is to suffer our hangover. And, then, we should get real, and go on a much needed diet.