The news from Greece continues to get worse. As protests and demonstrations against the new austerity measures break out across the country, the euro was shaken yet again as investors worried about Greece.
This time, though, investors aren’t worried about the math; the Greek cabinet has agreed to the latest round of spending cuts and the IMF and the major European economies, including the foot-dragging Germans, are all committed to the multi-year, multi-billion euro bailout.
What worries investors now is whether the Greeks will stand for it. Will Greek society resist the imposition of savage cuts in salaries and public services, and will the government’s efforts to reform the public administration and improve tax collection (while raising taxes) actually work?
The answer at this point is that nobody knows. On the plus side, the current Greek government is led by the left-wing PASOK party. The trade unions and civil service unions not only support PASOK; in a very real way they are the party. Although the party’s leader George Papandreou is something of a Tony Blair style ‘third way’ politician who is more comfortable at Davos than in a union hall, the party itself is one of Europe’s more old fashioned left wing political groups, where chain-smoking dependency theorists debate the shifting fortunes of the international class war. The protesters are protesting decisions made by their own political leadership; this may help keep a lid on things. If a conservative government had proposed these cuts, Greece would be much nearer to some kind of explosion.
On the minus side, the cuts are genuinely harsh, with pay cuts for civil servants of about 15% and the total package of government spending cuts set at 10 percent of GDP. (In the United States, that would amount to federal and state budget cuts totaling more than $1.4 trillion, almost one quarter of the total spending of all state and local governments plus the federal government combined.) The impact on Greek lifestyles will be even more severe; spending cuts that severe will almost certainly deepen Greece’s recession. Many Greeks stand to lose their jobs and, as credit conditions tighten, may face losing their homes and businesses as well.
The Greeks are a highly cultured people; the most popular slogan at the rallies was “The Croesuses should pay.” Croesus was, of course, the extremely wealthy king of Lydia whose story appears in Herodotus. The point of the protesters is that the rich should pay the costs of the economic crisis not the ‘blameless’ ordinary people whose only sin is to have voted for generations of demagogic politicians who promised to give them the moon and pay for it with other people’s money.
They have a point, of course, but in Greece the global economy is a highly mythologized place. The vicious IMF is the arm of American imperialism; the EU’s failure to defend Greece from the monster is a strategic victory for American power. Greece is one of those countries like Argentina where conspiracy theories are widely seen as important intellectual breakthroughs. As in Egypt and Russia, in Greece only a fool believes anything that authorities say; it must all be deconstructed to reveal the plots within.
In all these cases, belief in hidden forces manipulating reality in the service of cleverly diabolical plots reflects the experience of history and, in some cases, the realities of contemporary life. Greece was under Ottoman rule for four centuries and for many centuries before that the real politics of the Byzantine Empire took place in the tightly closed world of the imperial court in Constantinople. In the Ottoman Empire, grand viziers who fell out of favor were strangled by silken bowstrings; sultans were made and unmade by harem intrigues as mothers plotted with eunuchs to place their sons on the throne. Since Greece gained independence in 1830, the fate of the country has often been decided by foreigners — and they often haven’t acted much more transparently than the Ottomans. In the nineteenth century, Greece’s kings were chosen by the European powers from among non-Greek royal houses. The first king, Otto, was a member of the Bavarian royal house; the next dynasty came from Denmark.
Encouraged by some of the Allies after World War One, the Greeks attempted to conquer western Turkey where large numbers of Greeks had lived since ancient times; Allied policy changed as Mustafa Kemal rallied Turkish nationalists against the Treaty of Sevres that granted Ionia and East Thrace to Greece; the ensuing war led to the deaths of hundreds of thousands and the expulsion of hundreds of thousands more Greeks and Turks from their ancestral homes. In World War Two Greece first drove back an attack from Mussolini, but was occupied in particularly brutal fashion by the Nazis and many Greeks starved to death during the war.
The end of the war brought a new period of civil strife; communists backed by Yugoslavia and, for a time, Stalin fought royalists backed first by Britain and then by the United States. (The British withdrawal from Greece and Turkey led to the crisis that caused the Truman administration to take up the cause of containing communism in Europe.) In 1967 a military coup overthrew the civilian government and the military dictatorship enjoyed good relations with the United States; American interventions in both the Greek civil war and the military era have left a bad taste in the mouths of many Greeks, especially although by no means entirely on the left.
Greece’s finances have been as turbulent and chaotic as much of its political history, with defaults on the national debt bringing foreigners into control of the country’s finances on repeated occasions. More often than not, such interventions resulted in deals between wealthy Greeks and foreign investors that were neither democratically debated nor particularly fair.
It is this long history and not just the specter of savage budget cuts that hangs over Greece (and therefore over Europe and the world) today.
I wrote about this problem in God and Gold. The three countries who did the most to build the modern global, liberal, capitalist and democratic world order (the Netherlands, Britain and the United States) were blessed by both the geography fairy and the culture fairy. Geographically they were placed where they were relatively free to develop on their own without being the playthings of foreign interests. Culturally they were the products of a history which gave them a set of attitudes and values that promoted their success as capitalist countries. The combination of favorably geography and success in capitalism helped to propel each of these countries to global power in their day, and further gave them the power to reshape the world to their liking.
Other countries and cultures like capitalism less and for a variety of reasons are not as good at it. Some, like China and India, gradually get the hang of it and start to gain power and influence in the world system. Others, like Egypt, have a harder time.
For many Greeks, capitalism still feels wrong. The substitution of market forces for traditional social relations undermines aspects of Greek life that are very dear to many people; the inequality that so often results from capitalism offends deeply held social ideas about fairness. More, since the rising powers whose policies and interventions have done so much to shape Greek history have been capitalist, Greeks associate institutions like the IMF and the ECB (European Central Bank) with foreign meddling and unjust usurpation. And the successful capitalist countries (and the foreign multinational corporations who come with it) have never scrupled to press their advantages in less developed or weaker countries like Greece.
In many parts of the world it is easy to spot a vicious cycle at work. Because a country or a culture missed the visit of either or both of the two modernization good fairies (geography and culture) it starts out handicapped in the race to master capitalism and control their own destiny. As a result, they fall behind, and lose power and control to other, faster rivals. Capitalism becomes ever less popular, ever more associated in the public mind with a world system felt to be wrong and unfair. Those feelings of alienation make it steadily harder for the country to adopt and follow the policies that could reverse the cycle and bring it success. And so it goes.
On a global scale, the Greeks are not doing so badly. They belong to three of the rich world’s most exclusive clubs: the OECD, the European Union, and NATO. Their per capita GDP, while low by west European standards, puts them ahead of places like Hong Kong, Israel and South Korea. Yet the feeling of being victims, manipulated by powerful interests who do not have their best interests at heart, and locked into an economic system that violates some of their most deeply felt values is very real.
Greece has a history of muddling through, if not always very happily. It is likely though not certain that this crisis too will pass, leaving Greece still in the eurozone, still linked to a prosperous EU and still relatively well placed in the global order. This is certainly what I hope, and given the debt of gratitude the whole world owes Greece for its extraordinary and unparalleled contributions to global culture it is the outcome that we all ought to seek.
But whatever happens in Greece, we need to remember that its problems are not unique, and the clash between those who like the world that capitalism has made and those who hate it is not going away. The global capitalist revolution offers the best and indeed the only hope that I see for the relief of poverty, the advance of human rights and the protection of the environment worldwide. Like all great revolutionary movements, however, it creates divisions, inequalities and resistance. Revolts against the liberal capitalist world system — fascism and communism above all — shaped the history of the twentieth century and inflicted unprecedented misery and harm until they were defeated. The radical terrorist movement led by Islamic renegades has more recently inflicted grave harm in many places and its violent course has not yet come to an end; we are likely to see more crises and conflict in the twenty first century as the anti-capitalist counter-revolution finds new forms and new allies.
The Greek tragedy now taking place offers us an opportunity to study the forces at work in our world, reflect on the human dilemmas and difficulties that lead to social and economic strife, and perhaps think more wisely about how we can advance the capitalist revolution in ways that make this global transformation a little easier to bear for those who are caught up in it and who feel that their lives are being overturned by hostile and immoral hidden hands.
But it is not a good time to be Greek.
[ Photo courtesy of World Economic Forum ]