A high school classmate of mine who has been living in Greece for a number of years--she will always be young in my mind!--sent me an article
from the Carnegie Foundation Europe from two Greek guys (Stratos Pourzitakis and Elias Kirgidis) from the Foreign Ministry in Greece who are clearly out of step with the new government. It is one of those classic articles showing both the failure of those who are Economics majors and those who have a perspective drenched in a financier worldview. The unstated assumptions, the ahistoricism and the hostility toward anything emanating from the public sector make the article as much propaganda as anything else. For these two fellows, the golden age of Greece was during the military junta which existed from 1967-1974 and perhaps the center-right coalition that held most power following the Greek Civil War of the late 1940s. These two fellows also have a disdain of their fellow Greek citizens that is based upon classic cultural explanations that attempt to justify economic power of the powerful over the rest of the population. Such cultural explanations go back to the early Industrial Revolution era in Great Britain in the early 19th Century.
But let's explore these matters with specifics from the Pourzitakis and Kirgidis article. A foundational paragraph from the Pourzitakis and Kirgidis article is as follows:
The real problem for Greece does not lie in tax evasion or in the country’s soaring national debt. These are merely the results of deepening social decay in Greece during the last forty years. To get to the heart of the issue, one needs to go back to the fall of the military junta, which ruled from 1967 to 1974, and examine how Greek society was reformed.
As we will see in the rest of the article, these two fellows are going to talk about corruption, evading taxes, public debt and public sector employee workers. But these same issues existed within Greek society after the post-WWII Civil War under a center-right and often fascist oriented series of governments and then the full on military junta from 1967-1974. For example, the public sector has been a problem in terms of growth for most of a century. See this
article from the Christian Science Monitor newspaper about the public sector in Greece. Second, Wikipedia informs us about how the military junta operated
during its full control of Greece:
Cases of non-transparent public deals and corruption allegedly occurred at the time, given the lack of democratic checks and balances and the absence of a free press. One such event is associated with the regime's tourism minister, Ioannis Ladas (Greek: Ιωάννης Λαδάς). During his administration, several low-interest loans, amortized over a twenty-year period, were issued for tourist development. This fostered the erection of a multitude of hotels, sometimes in non-tourist areas, and with no underlying business rationale. Several such hotels were abandoned unfinished as soon as the loans were secured, and their remains still dot the Greek countryside. These questionable loans are referred to as Thalassodaneia (Greek: θαλασσοδάνεια), or "loans of the sea", to indicate the loose terms under which they were granted.
Another contested policy of the regime was the writing-off of agricultural loans, up to a value of 100,000 drachmas, to farmers. This has been attributed to an attempt by Papadopoulos to gain public support for his regime.
And that is not all one received with the military junta. The political repression was fairly horrific
if one reads the Wiki entry.
But here comes some real propaganda from the two Finance Ministry guys. After a short summary of how bad the left government economic policies were after the defeat of the military junta in 1974, they write:
Gradually, Greeks changed their mind-set. Instead of adhering to virtues such as meritocracy and social justice, they began to pursue easy money. From the early 1980s until the eruption of the 2010 crisis, Greeks were living their myth, as cheap EU money was flowing, corruption was socially acceptable, and consumption and tax evasion were driving the economy.
"(A)dhering to virtues such as meritocracy and social justice..." Since when did "meritocracy" exist in Greek society before 1974? In ancient Athenian society? In ancient Sparta? Meritocracy is a term that we Americans coined. It goes back to James Conant, president of Harvard in the 1930s when he wanted to have more academically talented students than legacies enter Harvard. See here
for a summary of a book about the SAT and the rise of the meritocracy--and how it is often a mixed blessing and how the cultural biases tend to reenforce racism and inequality more than its boosters may think.
And really now, "Social justice" did not begin to exist in modern Greece until after
the military junta was overthrown in 1974.
The two finance ministry guys talk throughout the article about "easy money," which is just their way of saying they don't like a deviation from their belief in the gold standard. See here
for a nice juxtaposition of democratic values embraced in so-called "easy money" vs. the gold standard.
The two ministry guys also write "...economic elites were replaced by corrupt businessmen with close ties to government..." despite the fact Wikipedia already informs us how business folks worked hand in fisted glove with the military junta. And really, have any of us ever heard of a nation in the past 300 years which did not have businesspeople who worked with the government and received benefits from that relationship? Ever?
These guys also use the phrase "middle class" in their article in a manner American readers may misunderstand. Here is an example:
"Papandreou (The left Prime Minister from different periods in the 1980s and mid-1990s), in his attempt to reintegrate groups that had been marginalized because of their political beliefs, eventually dismantled the middle class, which normally serves as the spearhead of economic and social development."
In other words, significant social justice for marginalized groups occurred after the military junta was overthrown. But what of the phrase "eventually dismantled the middle class?" What are these guys talking about? First, they are not referring to the "working class" but the merchant class
known as the "bourgeoisie"
. So what they are saying is the merchant class was dismantled, but we know that Greece threw its lot into two industries since the 1950s and 1960s: Tourism and shipping. And when the western economies cratered in 2008, should we be surprised tourism and shipping suffered--and there were ripple effects throughout the Greek economy?
What these guys don't want readers to know is workers did pretty well with the left oriented governments of Papandreou, which is why so many voted for him. But for these guys, having a government responsive to workers is, in their words, "pandering" and "corrupt" and promoting insolence.
We have heard this language before right? Here
is Mr. Potter to explain it to us. Note how he attacks George Bailey's "corruption" in having his co-op oriented savings and loan make a home loan to Bailey's friend, the taxi driver Ernie Bishop, after Mr. Potter's bank turned down the taxi driver's loan, and his rhetoric about how loose money will ruin the working class. George Bailey answers him in a classic New Deal oriented manner in the same link from the film "It's A Wonderful Life."
I also loved this passage from two finance ministry guys as the passage exposes their pro-banker worldview hidden in "objective" analytic words:
"The majority of Greeks sought public-sector jobs in which unreasonably high salaries and a lack of accountability were common practices, as labor unions dominated public administration."
Unreasonably high salaries? Says who? Financiers? Ministers at the top levels of government? Also, "lack of accountability" goes hand in hand with "labor union dominated public administration" because the two fellas get frustrated when their bosses have to negotiate from a management perspective with a union of workers. When these two finance ministry guys demand "accountability," they mean they want their bosses to have no accountability demanded of them from their employees (except perhaps these two fellows who agree with the bosses). That is the plaintive cry of employers everywhere.
Overall, this is not to say these two fellas are completely wrong. They are not. Perhaps Greece, particularly with its national business model being tourism (instead of say consumer electronics building and engineering) combined with its beautiful climate has led to a "beach" or laid back culture. But the decision to rely on tourism goes back to the 1950s and 1960s, before any "leftist" governments were in power and accelerated under the military junta. It is sorta silly, isn't it, to blame the left governments for that reason.
But Italy, a nearby culture with a beach or laid back atmosphere is not quite as bad off, perhaps because Italy's economy is built on more than tourism and shipping. And to re-enter America, let's go back to the writings of late 19th Century civil service reformers in America, where one smells the disdain for the common people who were arriving from Ireland, southern Europe (Greece, Italy, Romania, Crete, etc.) and then Eastern Europe who had begun securing "spoils" civil service jobs--just as the WASP oriented civil service people had received starting in the Jacksonian era. One saw such disdain in the respectable newspapers in the US in the 1930s, including the New York Times and Los Angeles Times, among other newspapers, as FDR cut deals with business leaders who played along with the New Deal, pushed for increased salaries and less work hours for workers--and just happened to rebuild and develop the infrastructure that made the US a monument to working class prosperity after WWII.
Maybe what Greece needs from these just elected lefty guys is a Greek version of FDR's New Deal where they pass laws regulating business behavior such as the Glass-Stegall Act of 1933, the first SEC laws in 1933 and 1934, etc. and maybe get that money from the Swiss bank accounts of Greek politicians and businessmen from the previous center-right administration
, which accounts the IMF located several years ago and which that government did little to nothing to pursue
(but they did arrest
the editor of the newspaper which published the list). Maybe if the government leaders show they want to set up fair rules of behavior in business, it will percolate more deeply into Greek society. Societies can change their legislative policies which can have a cultural reaction as we saw how business ethics improved from the wild 1920s to the 1930s and post-WWII period as a result of New Deal legislative policies regulating investments.
My high school classmate thinks it is vital to have lived in a nation to discuss it. But somehow, that does not stop us from speaking about Iran, Saudi Arabia, Israel, Vietnam, China, etc. Lots of people travel regularly to those nations and yet may still lack an essential perspective as to what is happening in a given nation. We often see this with pro-Likud American Jews who have been to Israel 10 times but have never experienced a West Bank or Gaza Israeli controlled checkpoint wearing a Palestinian's style of clothing. Or perhaps someone may have asked the late Paul Robeson
back in the day how he could have gone to the Soviet Union so many times and not seen the gulags or the political repression. Or let's ask the people in Greece today who long for the monarchy
from before WWII, or the earlier mentioned military junta or the Socialist governments of Papandreou. It's all a matter of perspective isn't it, and visiting or living there doesn't necessarily make one know the correct answer as far as policy making goes.
And really, when one studies as many nations' histories as I have over the decades, one finds patterns of human behavior and also patterns of political divisions that persist. But those patterns, particularly cultural ones, may be changed at least temporarily in special moments when particular government leaders effectuate policies that make a positive difference in that society. Even if the change in the culture is fleeting, sometimes a public policy changes can ameliorate future negative patterns. Think, for example, of what life would be like today for American seniors if there was never anything known as Social Security available to American senior citizens.
I know this is a long post already, but let's not be fooled into thinking the article dissected here is in any way "objective." The ministry employees have a world view on display that is screaming at us as much as Mr. Potter blustering on about the lazy rabble who should not be given a break.*
* And yes, my dissection is not "objective" either.