Thursday, 2 July 2015

Greek tragedy

A large number of organization studies academics – not including me, as it happens – are currently gathering for their main European conference, the European Group for Organization Studies (EGOS) Colloquium. This year it is being held in Athens, and at a time when Greece is in turmoil. Following lengthy negotiations with the EU and IMF, Greece’s Syriza government has called a referendum to be held this coming Sunday. In the run up, the banking system has all but closed down, with Greeks being restricted to withdrawing 60 Euros a day from ATMs, queues building up at banks and further misery being experienced by an already immiserated population.
Organization studies academics should think about Greece, which I wrote about at several points in the current edition of my book in the context of the financial crisis and its effects. Since then, Greece has become the place, par excellence, where these have been played out. There is not much point in accrediting blame, but were we to do so there would be plenty to go around. As I pointed out in the book (p.112) Greece joined the Euro on a false prospectus, having falsified its accounts with the help of the global investment bank Goldman Sachs. Yet the EU accepted its entry, presumably having at least some knowledge of this, and was happy to continue to lend to it. Equally, there can be little doubt that decades of a failed and corrupted tax-gathering system have contributed to Greece’s woes. But, again, this proved no bar to Euro membership.
This complicity has now been supplanted, especially in Germany, by a narrative of Greek fecklessness. In the classic neo-liberal trope, Greece is a household that has maxed out its credit card. Allied to this is another neo-liberal trope, usually applied domestically to welfare, of scroungers versus strivers – with Greece being the ‘scrounger’. However, there is an obvious way in which this narrative fails, and it is something which explains much of the EU approach to Greece: the issue of ‘contagion’. The argument goes in two directions. First, that if Greece were to be given substantial debt relief then Italy, Spain and Portugal would ask for the same. Second, that if Greece were to leave the Eurozone, and re-establish the Drachma, then in due course so would those other countries re-instate their national currencies.
What this should tell us is that the issue is a systemic one of, as I argue in chapter 5 of my book, a debt-dependent neo-liberal ‘new capitalism’. As I point out there are numerous local variations – Greece is one, Iceland another, the UK a third – but to try to explain what happened by reference only to the local variations rather than the global system is absurd. An even more absurd variant of this argument is one which has gained traction amongst right-wing commentators to the effect that Greece’s problems are due to having a left-wing government, as if these problems did not date back for years, and had not dogged successive governments. Again, such arguments refuse to understand Greece’s situation in the context of the now 40 year old neo-liberal experiment.
Whilst the hallmark – no, the requirement – of neo-liberalism is debt, whenever it goes wrong the proposed solution is government fiscal balancing, colloquially nowadays known as ‘austerity’. It always fails, for reasons set out by Keynes many decades ago, and Greece has good reason to know this, having seen its economy deteriorate even as austerity was more and more harshly implemented. Which brings us to the referendum which is at one level a vote on whether to accept further austerity or to reject it. But of course the vote is much more complex than that since a ‘yes’ vote could also be a vote to stay with the Euro or even the EU, or could be a vote against Syriza, or a just to get the cash machines working again, quite a much as a vote to accept  the EU’s proposed financial deal (which in any case may no longer exist). Equally, a ‘no’ vote could be a vote against austerity, or a nationalist vote, or a vote for Syriza, or a vote to stay in the Eurozone but re-negotiate. Or many other things.
As an outsider, I struggle to know which way I would vote were I Greek and I certainly would not presume to advise anyone in Greece as to how they should vote. But, again as an outsider, two things stand out to me. One is how extraordinarily punitive the EU have been towards Greece, despite their own complicity in the situation. Angela Merkel is reported to have said in 2010 that the deal then being struck by Greece “had to hurt” and that she wanted to “make sure that no-one else will want this” (this, by the way, was the deal that was meant to lead to Greek economic growth. In fact it led to a 25% shrinkage of the economy 2010-2015). This kind of humiliating, exemplary lesson to be visited on the Greeks seems very much to have informed the recent negotiations, with Wolfgang Schäuble, the German Finance Minister, having been especially hardline, and almost contemptuous in his dismissal of the Greek negotiating team. All this briefing about how the Greek team were ‘amateurs’ was just a way of saying that they wouldn’t play by the rules of a nasty, vindictive, and wholly irresponsible game.
The second thing that strikes me is the most important thing about all this: the horrific degradation of huge swathes of ordinary Greek people (now even worse than described on p. 117 of my book) who have no involvement or responsibility for what has befallen them. Youth unemployment is now running at 60%, pensions have shrunk and may not be paid, there is no investment in the economy and the banks have run out of money. This is about as close to complete economic collapse as can be envisaged, and it is happening to a European Union member. Whatever the Greek people vote in this weekend’s referendum will not make much difference to this, because both outcomes are probably equally bad for ordinary people. That should matter to other Europeans both morally (we should not allow such suffering) and pragmatically (we really don’t want a failed state adjacent to both Russia and Turkey).
Nothing is easy here, nor perfect, but it is clear to me that if the EU is to mean anything as an ideal, and if it is to be effective as a geo-political bloc, then the only available answer is a massive debt write-off allied with a European ‘Marshall Aid’ type reconstruction of the Greek economy. Let’s be clear, this would be a relatively trivial task: the Greek economy is about 2% of the Eurozone. If the only argument against that is supposed ‘Greek profligacy’ then it is a weak one. For not only was that profligacy part and parcel of the global economic system and connived at by the EU, but also however ‘sinful’ it may have been it hardly compares with what brought Germany to its lowest point at which point it was the recipient of very substantial assistance to rebuild.

Europe made some terrible choices about blame and punishment after the First World War, and (with US help) some rather sensible ones after the Second World War. We are now living in a more complicated world, dealing with the fall-out of the failed neo-liberal experiment in economics and the failed neo-conservative experiment in global affairs. Greece is at the forefront of both (massive sovereign debt; dealing with the migrant crisis from Syria and Libya). One small way – but hugely important for the Greeks – that we could put right some of these mistakes would be to re-build Greece. Not as charity, not as a grudging favour, but from self-interest and generosity of spirit.


  1. Thank you Chris. this is a remarkably clear-headed and well-argued account in the midst of oceans of drivel being written on the topic. I attended EGOS, visited bothe Yes and No rallies on the Saturday (the OXI rally infinitely bigger and better orgnized) debated long and hard with my conscience, forst on whether to vote and then what to vote, and eventually voted. I got what I voted for but on far worse terms. No more is needed. The tragedy continues. It seems that when we think we have hit rock bottom, we find that there are still lower depths to be reached.

  2. The leftist commentary on Greece has been depressingly predictable and naive. 'Capitalism = bad; Greeks = good' is the general thrust repeated in this article.

    1. The absolution of blame of both the Greek people and Syriza defies even a cursory glance at the evidence on public sector jobs, tax avoidance, endemic corruption, and bad politics.

    2. The recommended write-off is not only naive, but also has no democratic mandate from the creditor countries, and would prompt Syriza equivalents in the other PI(G)S.

    3. Greece is a result of bad politics leading bad economics rather than the other way around. Just because debt is involved does not mean the cause is neoliberalism ! Much more to blame are the integrationist politics of Germany and France (that until very recently the left was so keen on supporting).

    None of this comment is to defend the mistakes by Germany et al., but simply to say that to be taken seriously, leftist critique should acknowledge that the answer isn't as simple as capitalism = bad & poor = good.

    1. Although I'm grateful for your comment, I do wonder if you read the post, because nowhere does it say or imply "capitalism=bad, Greeks=good". To be honest, it seems that in your desire to lambast 'predictable and naïve leftism' you have just created a strawman, reducing an argument to an absurdity that - surprise, surprise - you dismiss as absurd.