Fukuyama: Greek Euro Exit Likely, Consequences Grave
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  • Kenny

    1. You guys are something else. “Frank makes the important point that Greece’s membership in the euro required deep political and social changes in Greece that lacked (and lack) the necessary support in Greek society.”

    Monday morning quarterbacking is easy. Where was ‘Frank’ when the euro was expanding? Back then, those who criticize the inclusion of a country like Greece into the prosperous European family were vilified by the wagging tongues of the thought police.

    It was the same way all you elitists were banging the drums to let Islamic Turkey into the EU, least Europe be accused of racism or whatever. Imagine what a [mess] that would have been.

    2. Maybe it is true that “culture is mysterious and hard to analyze,” but it is certainly true that culture is easy to observe. And anyone without any concern over political correctness could have seen that the Greeks do not belong in the euro nor probably the EU, either.

  • So Francis Fukuyama is the author. Whose Frank, the barrista?

    I really like the blend of conservatism and liberalism – my brain runs pretty good on it too. And then there is the unexpected inclusion of Gad and faith and the life of the spirit which goes a long way to curing the impoverishment of much modern discourse.

  • dearieme

    If I may put it briefly (as I have been putting it for many a year): a European Union that includes Greece but not Norway is a European Union that no sensible chap would want to be a member of.

  • thibaud

    Hubris indeed. The Greeks’ tragic flaw was to submit themselves to the procrustean bed of the euro, which has plunged them into a dilemma framed by OTOH the scylla of default and OTOH the charybdis of an austerity which the hoi polloi deems anathema.

  • Luís

    Yes, cultures are molded. Over centuries and usually under very hard blows.
    Portugal has been fighting the phenomenon of clientelism (we call it caciquismo) since the Constitutional Monarchy stabilised in the mid 1800s.
    Clientelism has been winning all the time.
    It beat the monarchy because it kept the countryside quiet.
    It beat the First Republic because it was a regime with narrow, almost exclusively urban support that needed any lever it could get.
    It beat Salazar’s New State for much the same reason it beat the monarchy.
    It infiltrated completely the party system in the current democracy. Took less than 20 years.
    You know, I don’t think I want to see the kind of hard blows that are necessary to shatter such a pervasive system.
    Unfortunately, events care very little for people’s feelings.

  • thibaud

    re Kenny’s point, Greece’s economic prospects in the 20c weren’t significantly worse, or different, than Ireland’s, or Portugal’s, or Spain’s prior to 1990. The joke about Ireland was always that it had “Jamaica’s economy and Holland’s credit rating.”

    So there was always an element of, shall we say, “Burkean” cultural predilections trumping rational analysis when it came to their fellow Europeans’ views of these countries’ financial health. As Burke said, “manners are more important than laws.”

    Also, if anything, Greece had many more world-class companies, notably in shipping, than any of those other European nations whose past contributions to European culture and greatness have all far outweighed their population size. So if Ireland and Spain could be admitted to the eurozone, there would be no solid reason for denying entry to Greece.

  • vanderleun

    “…our conservative side responds to the Burkean argument about the need for growth and change to proceed organically on the basis of what has gone before, while our liberal side looks to a future in which human reason as applied through the sciences and social reflection in a pluralistic, market-friendly society gradually opens the door to a richer and more fully human life for more and more people around the world….”

    Conclusion? Sooner or later, one way or another, you’ll have to shoot yourself. As will Europe and all others who try to sustain this kind of bizarre fence straddling. The upshot is… one tries to put off the day of reckoning as long as possible. Which only ensures it will be violent and disastrous when it finally arrives…. as it will…. and does… like the force of gravity.

    You’d think that somebody with a dash of “Niebuhrian Christian realism” would in some deep recess recognize that the old rules have not been repealed. But nooooooo…..

    Ah well, live in hope, die in despair.

  • thibaud

    Re manners and laws, however, there’s been precious little respect for law in Greece of late. The distinction that matters here is not the degree of state intervention but the kind: what you could call “manners” or mores and habits of public administration and cultural attitudes toward regulation, transparency, etc.

    It’s the “well-mannered” northern nations – the ones with long traditions of high competence and relatively high integrity among their public officials – that have avoided the debacle.

    Countries that are badly-governed by hacks and corrupt politicos aligned with banksters and other rent-seekers are in a world of pain now.

    Ditto for US states: compare the free-for-all in two states as regards regulation of mortgage lenders and banks since the S&L crisis of the 1980s/early 1990s. State A*, we’ll call it, intervened quickly and thoroughly to impose tight regulation of lenders in the wake of the crisis; State B ** resisted greater regulation and left it up to the private sector to manage itself.

    State A took the “blue” approach per the WRM lexcion.

    State B took that innovative, creative, market-oriented approach that WRM dreams of.

    Results? State A now has the healthiest real estate market in the nation.

    State B has 6 out of the 10 worst real estate markets in the nation and has seen its construction employment collapse, its unemployment rate soar, and many of its municipalities and the state itself either hover on the edge of bankruptcy or actually declare bankruptcy.

    Irony or ironies, the “blue” state described above, the tightly- and well-regulated one, is Texas.

    The anti-regulation “red” state described above is the home of that poster child for everything broken about our housing market, countrywide: California.

    Complicated, isn’t it?

  • Andrew Allison

    I think that the important point Fukuyama makes is, “This is why the whole project of deepening Europe into a fiscal union seems to me like such a fairy tale. Outside pressure will never succeed in bringing about change by itself unless it can be allied to internal forces that themselves want reform. In Italy, these forces at least potentially exist, but in Greece they seem altogether absent.”
    The Greeks lied their way into the Eurozone to access low-interest credit — a perfectly pragmatic choice. The lesson that has been endlessly discussed is that you can’t have a monetary union without a common fiscal policy — and that’s obviously not going to happen.

  • I disagree that FF’s argument was about culture at all. Seems more like a straight-up poli-sci argument, which could be grafted onto almost any culture you can think of.

    But, seriously off-topic, that’s not what caught my interest here:

    “…our conservative side responds to the Burkean argument about the need for growth and change to proceed organically on the basis of what has gone before, while our liberal side looks to a future in which human reason as applied through the sciences and social reflection in a pluralistic, market-friendly society gradually opens the door to a richer and more fully human life for more and more people around the world.”

    So here’s the question: Does the point exist where evolutionary or “organic” growth becomes inferior to engineered “human reason as applied through the sciences”? I have this argument with myself all the time, and I can’t say that I’ve made much progress.

    There’s a natural tendency for humans to believe that reason ought to beat out a particularly interesting statistical process. That tendency crops up over and over and, as we have recently seen, almost always ends badly. No surprise there.

    But you could certainly envision a time when we knew enough and had enough computational resources that central planning and engineering actually produced a better outcome than laissez faire. Of course, if you know enough centrally, then there’s potentially still more knowledge and computational resources distributed throughout the market, and it might continue to outperform the planned version forever.

    For planning to win out, there has to be some law of diminishing returns on the efficiency of laissez faire. The other problem with planning is that the problem of corrupt planners is almost impossible to solve, while laissez faire is self-correcting.

    Which one wins out?

  • Jim.

    You could usea whole lot more of Christianity than just “a dash of Niehbur” — you might as well turn to cynicism and be done with it.

    No, you need to draw more from your Christianity, WRM– more than you or the “incurably Lutheran” (but curiously asymptomatic) Peter Berger tend to show.

    We are fallen… that has more implications than just skepticism of our best-laid plans.

    We are fallen… therefore we need the Law, not a jot of which is to be changed, no matter how fashionable (or even “organic”) anyone can rationalize the changes to be.

    We are fallen, and subject to the Law, and therefore we need the Gospel and Grace. Those are granted by God, for Christ’s sake, to repentant sinners.

    The existence of forgiveness (perhaps reflected in our behavior as a bailout) in the Christian formulation is preceeded by REPENTANCE, (theoretically reflected in Greece’s behavior by acceptance of austerity.)

    This is a stable, self-correcting system. That is what we need– not simply cynicism, not simply ignoring the Law and declaring plenary indulgence for the sake of fashion, not ignoring the natural consequences of peoples’ actions, not cynically giving up on peoples’ ability to be renewed if they pledge to be reborn.

    Pushing ever upwards to what is Right, up to the (unreachable) goals of the Law, preaching that this world is one of suffering, and Grace and repentance can lead our souls to paradise not in this world but the next…. that is what we have to keep firmly in mind. This world cannot be made perfect by our actions, but it can be vastly improved by our striving for what God has showed us (through the Law) is Right.

  • Jim.

    Add to last paragraph: “…setting our feet and ever urging our neighbors to set their feet back towards the Right when we stumble…”

  • Matthew Brotchie

    WHEN will WRM and Fukuyama do an hour long podcast together? I will pay extra for that if I have to. I don’t Via Media understands how powerful a medium podcasting has become.

  • Jacksonian Libertarian

    “Greece’s membership in the euro required deep political and social changes in Greece that lacked (and lack) the necessary support in Greek society. It was an act of technocratic hubris, leading to blind folly and now to the usual nemesis at the end of the drama.”

    Greece isn’t the only nation where the Political Elites have forced their nation into the EU and the Euro before they were culturally ready. As we have seen from the failure to ratify a EU constitution, most of the people don’t want what the Political Elites are selling.

    Not only don’t the Germans want to bailout the Greeks, they don’t want to bailout any countries. Now that France has elected a Socialist that wants to spend spend spend, the Germans will be completely justified to say no no no.

  • Anthony

    In line with his writings and presentations on “Governance” as well as presentations on European identities, Francis Fukuyama attempts to make sense out of Greece’s present finanicial/social dilemma. He provides readers with baseline conceptualization vis-a-vis Euro and Creece.

    WRM infers as much when he says: “Greece’s membership in the Euro required deep political and social changes in Greece that lacked (and lacks) the necessary support in Greek society.”

    On a related matter, was not Edmund Burke father of intellectual secular conservatism (a society is an organic system that acquires civilized norms)?

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