Monday, February 13, 2012

On passionate - but misguided - mindsets

I came across this article by Marshall Auerback titled Greece and the rape by rentiers. Well...

The former Soviet Communists had a term for those "Westener's" who were quite gullible and who could be used to spread disinformation. They called them "useful idiots". Quite a few learned graduates from Oxford and Cambridge found out later that life in Moscow was not God's answer to happiness.

I had a similar gut feeling when I read Auerback's article, which is why I commented on it as below.

This is a very biased article which ignores the roots of the problem and uses the incompetence of EU-elites in order to classify them as scapegoats for the Greek crisis.

Yes, Greece has been raped by rentiers but it was Greek rentiers who were the rapists. In the last 2 years, EU-incompetence has allowed other rapists to jump on the bandwagon. A bad symptom but far from the root of the problem.

The root of the problem is so obviously 3-4 decades of utter mismanagement – if not intentional “rape” – by Greek elites. Mostly the main power centers in Greece — political parties, business leaders, professional guilds, public sector unions and the media — which are now fighting to preserve their privileges, blocking structural changes that could make the economy more functional.

This began with Greece’s joining the EU which set loose the flow of grants (according to one source: about 75 BN EUR to date). It was accelerated by Greece’s joining the Eurozone for which she was not fit. This mistake accelerated a trend but did not cause it. What happened up to 2008/09 goes exclusively on the account of Greek responsibility.

Had Greece not received the EU grants nor the cheap Euro-loans, the country’s standard of living would today be like in the 1970s.  It could well be that Greeks would still be happier today because not having something is one thing and losing something one got accustomed to is quite another. The point, however, is that much of the country went through a sensational increase in living standards without realizing that this had nothing to do with increased productivity and/or value creation but, instead, it was exclusively a function of money flowing into the Greek economy from the outside.

The unemployed who hits a jackpot may live well for, say, 10 years if he decides to spend it all on consumption. When the money is gone, he has to return to the standard of living of 10 years ago. Much worse for the Greeks because they didn’t hit a jackpot but, for the most part, took on debt which is still there.

In the last 2 years, Greece has shown little if any initiative to help herself. Greece’s focus has been on lamenting how she got into trouble and pointing out to others (EU, etc.) how they could solve the Greek problem (i. e. Eurobonds). Other than that, the Greek government – beginning with Mr. Papandreou – handed over from the start the responsibility for solving Greece’s problems to the EU, IMF, Troika, etc.

If there ever was a plan from the Greek side how they could get out of the self-created mess, I have overlooked it. Complying with Troika commands is not a plan; that’s a job for cost-cutting bookkeepers. How to get the Greek economy going again, that would require a plan. It’s not going to happen by itself!

And why should other nations worry about a plan for the Greek economy which plan Greeks could make just as well on their own? Help for Greece? Of course, but it depends on what is meant by help.

Any society which has been through the period of Enlightenment knows that "help to help yourself" is the only help which leads to sustainable results.

Central Europe had the Period of Enlightenment only a couple of centuries ago. Greece had her own Period of Enlightenment over 2,000 years ago. The philosophers of Enlightenment in Central Europe derived their thinking from Greek philosophers over 2,000 years ago.

Should Central Europeans now "educate" Greeks how to help themselves? No way; that would be an insult to Greeks! Central Europeans should tell Greeks that it's up to them to help themselves. If they need support in that, Central Europeans should definitely grant it!


  1. I fail to understand how this mess is related to selfhelp...

    in all relationships, including borrower & lender there are two needed to tango. Could Greeks borrow if no one lend them? No, and why did they lend them? ...but to make money of course! and where did the borrowed money go? Italian clothes, French supermarkets, German cars tanks & submarines, American fridges & films... (that made many CEOs happy back then)

    Yes, there were a few corrupt ones, just like the ones that exist all over the world (don't forget that the Siemens case started to unfold in US...), Greeks are not so good in hiding it... in other countries corruption is institutionalized!

    Please, lets stop pretend about the bad Greeks and the innocence of the EU!

    1. Please don't interprete this as though it were addressed to you personally because it might offend you and I don’t want to offend you.

      The normal reaction to a sentiment which you also display is: grow up! Don’t look for excuses elsewhere even if there were good such excuses! Teenagers may lament to their therapists how they are helpless products of their parents’ mistakes. That’s fine. But at some point, everyone needs to start assuming responsibility for oneself, otherwise we have to trace the line of guilt back to Adam & Eve.

      I am not saying that all Greeks are bad and that all the EU is innocent. If you browse through my blog, you will find that I am actually saying the opposite for the most part.

      But what I definitely would say to all Greeks is: please stop putting yourselves into the victim’s role! I mean, you have got to have much more of a feeling of self-worth than to do that all of the time. Putting oneself into the victim’s role automatically means that someone else is put into the usurper’s role. And I really don’t know who in the world would be out to intentionally usurp Greeks. If you have an idea who that could be, please let me know. If you tell me it’s the Germans, I will explain to you with facts why you are wrong.

      Since my wife is Greek, I have some understanding of what 400 years of foreign occupation can mean to the feelings of self-confidence and self-worth of a people. During those 400 years, other European “people” went through almost uninterrupted wars while Greeks had to be “subservient”. Those European “people” who survived those battles obviously came away with a greater feeling of self-confidence and self-worth than others who did not have to go through that process.

      I have met many Greeks when I lived in the world’s 3rd largest Greek city (Chicago) and through my wife I have met many former Greek guest-workers in Germany. None of them were cry-babies. They were of the mold that they wanted to do everything possible so that their children would have a better future. They didn’t strike for that (because it wouldn’t have worked); they worked for that!

      And that is the mold which I personally would require of Greeks when I am asked to send tax money to Greece instead of using that tax money in Austrian universities.

  2. You are totally right, but unfortunately the likes of Mr Auerback will never be convinced.