Greek austerity: Change can only come from the Greeks not from the troika

This post is archived. Opinions expressed herein may no longer represent my current views. Links, images and other media might not work as intended. Information may be out of date. For further questions contact me.

The Parthenon in Athens. Picture credit: Wikipedia

There has been a plethora of information concerning the Greek crisis in particular and Greek political life in general, over the last 2-3 years. There is no real added-value in me attempting to reproduce the ‘facts’ and the ‘data’ on the subject. Besides at the Euronomist blog there is an interesting view on Greek austerity which I would recommend to anyone reading this post (and in general follow that blog). By now most people are well aware of the following on Greece:

  • the graft and corruption inherent in the Greek state,
  • the rentocracy, nepotism and clientelism of the political system at all levels of authority,
  • the inefficiency of the Greek state and the maladministration of whatever funds are available to it,
  • the structural flaws of the Greek economy,
  • the impossibility of addressing all these issues in the midst of an economic depression, for the sake of forwarding a broader agenda on the radical redesign of the Euro area.

In my view it is not at all an apologetic to the indubitably corrupt, kleptocratic Greek state to suggest that tax hikes and troika-government bungling exert irresistible downward pressures on the economy, engender further speculation, produce ever more uncertainty which impedes investments (or more fully which exacerbates what unnecessary bureaucracy is already causing) and in general keep the society in suspended animation. To say that the troika measures are self-defeating and must be considered part of the problem, is simply to be honest and to separate good economics from allegedly ‘technocratic’ yet profoundly political/ideological machinations.

The patina of technocratic expertise that has been offered to the troika’s officials has to be refuted systematically and explicitly. It must be stressed that there is no coherent system of thought, or any workable precedent which proves the merits of a regime of measures that increase overall costs on the economy in the midst of an economic downfall, for the sake of meeting some arbitrary –and chimerical in my opinion– fiscal targets. No truly scientific economist, stranger to the political concerns or stratagems that underpin such measures, could ever genuinely approve of such schemes, nor could she ever consider them to be benign, not even over the medium-to-long term as we have been witnessing quite shockingly in Greece.

The troika’s “expertise”, or in general the technocratic, “objective” knowledge of the various bureaucrats that make crucial decisions on the citizens’ behalf (e.g. the preposterous proposal to have a Commissioner veto national budgets), is in effect nothing more than the facade which conceals an apocryphal desire or rather a specific strategy for the redesign of the Euro area along the lines of a corporatist-neoliberal economic system that will realize economies of scale for a selective corporate elite at the expense of suppressing the standard of living of most people across Europe; while also rendering any spontaneous entrepreneurial initiative practically unprofitable or near-impossible due to the complexity of legislation and entry criteria, which always operate as means of insulating big business from the powerful forces of real competition (neoliberalism should never be confused with genuine free markets – I strongly recommend the pdf book Markets not Capitalism). This is what the hypertrophic “austerity” is all about.

Coming back to the case of Greece, what has been implemented thus far is a series of measures featuring some of the following:

  • massive injections of capital to the Greek/domestic banking system to prevent it from succumbing to the pressures of the depression and the capital/savings flight – this has been done without any thorough plan of cleansing or radically reforming the system, effectively leading to the zombification of most (all) banks,
  • unprecedented tax increases, both on the tax rates and on the tax base, which have greatly increased the burdens on the lower and middle parts of the income distribution, especially in conjunction with the capacity of certain classes to either avoid paying taxes or rolling over the effective costs on to consumers/workers/society,
  • inconsistent efforts to redesign the state that all too often come down to the corporatist “privatization” of public services – what is falsely called liberalization, when in truth it is just sweetheart handouts to politically-connected big business.

Having stated the above I would like to point out that I always find myself quite unsettled by the blame game that has been going back and forth all these years; which in my humble opinion does not make things anyhow better, but rather fuels the fire. I find it wrong to put the brunt of the barbs on say “the Germans” (or on “the Greeks” for that matter) first because this is a simplistic and holistic way of lumping together the vastly diverse and conflicting interests which exist within Germany along the lines of some mystical national unity (an essentially nationalistic postulate); and second because all that this may do is to unwittingly but inevitably bring the discussion at the level where populistic nationalists are at their best: the level of stereotypical “we-they” syndromes, which inevitably strengthen the position of the misanthropists.

Whether this rhetorical race to the bottom can now be halted or controlled is not quite clear to me, especially since the powerful forces of age-old prejudices were unleashed and shrewdly manipulated by politicians and governments at the early stages of the crisis, in a typical Hobbesian ‘war of all against all’ for the purpose of gaining the upper hand in whatever balance of power would have emerged at the time.

I much fear that whatever cultural and political fissions may have been reproduced during this crisis are the end products of narrow-nindedness from all sides involved and that only active grassroots vigilantism may now be our last resort against the vicissitudes of banal racism; otherwise there will be no happy ending to this tragedy.

There is no cloud of doubt in my mind that Greece must undergo thoroughgoing reforms on political, economic, legal, educational and any other field. Nevertheless change may only come from within the Greek society and not as a perfect ‘model’ that was designed in some ivory tower and is being implemented with the use of coercion by an ostensibly illuminated, value-free technocratic elite. Towards that end the troika constitutes an obstacle and a source of trouble.

If Greece is to change it will be –and must be– from the Greeks seeking change. Exogenous coercion may only provide grist to the mill of right-to-left nationalists who will obfuscate the internal malignancies by turning the attention and the accumulated indignation to some perceived foreign foe. Many plans to force societies into radical reform were concocted in ages past by foreign powers seeking to draw the world as per their caprice – and in all cases such schemes ended in blood, tears and the entropy of society.

UPDATE – November 2, 2012 12:07 CET. I also find this speech of prolific brand strategist, Mr Peter Economides on Rebranding Greece, quite relevant to the above-mentioned (thanks to Horatiu Ferchiu on twitter @hferchiu for inspiring me):