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Greece, the Eurozone and the Predatory Market

The deepening fiscal crisis devouring the sovereign nation of Greece, whose collapse or withdrawal from the Eurozone currency union might threaten the financial health of other weaker EU economies as well, is an issue with a certain weight and importance. It attracts the sober attentions of many but the knowledgeable and productive observations of relatively few. Everyone seems to have an opinion on Greece’s crippling debt, crushing austerity measures, and the potential solutions to the problems available to Eurozone’s financial overseers (controlled from the European Central Bank in Frankfurt, with strong ties to the German government of Andrea Merkel). Here are some fairly direct ones to catch up the tardy, edited by Matthew Yglesias at Vox, that remain opinions even while achieving the trick of appearing as bedrock information. Not everyone’s opinion draws the same weight or is based on expertise, reasoned analysis, and evidence rather than pre-set ideology, however.

I’m not especially prepared to pretend to be one of those whose opinions displaces more discursive water than most. Economics is a complex and slippery discipline that has a habit of escaping your grasp precisely when you feel like you’ve got a firm hold of it. Part of the problem (perhaps most of it) is that even the world’s most educated, experienced, and renowned economists will harshly disagree about what any particular economic or fiscal development might indicate, and have or will be proven disastrously wrong in some element of their economic theorizing at one point or another.

Photographer: Angelos Tzortzinis/Bloomberg via Getty ImagesMore than any other branch of theoretical epistemology, economics might be most bound for inevitable failure. The financial self-interest of billions of individual agents, from workers to bosses to consumers to financiers to regulators to ministers, tends to be assumed to be essentially, almost magically, harmonized. Such is the enduring myth of the market, a self-monitoring, self-correcting corpus of mingled money and commodities and transactions (firm and potential, existing and to exist in the future) that is supposed to operate on some rational, measurable, predictable metric. Adam Smith’s invisible hand is, under this aegis, ever connected to some non-corporeal, non-denominational rational being that constitutes a substitute deity. It’s a collective hive mind of beneficent profit motive, a grinning Buddha of generous trickle-down.

Of course, this kind of market doesn’t exist and never did. The market is much more primal and Darwinian, a pre-set dichotomy of hunters and hunted wherein the hunters are equipped with heatmap radar and homing missiles and the hunted have a 50-pound backpack and a twisted ankle. In our intractable version of capitalism, profit motive cannot be constrained by moral considerations or fanciful notions of collective betterment if it will lead to ever-waxing growth, and the most successful players in the worldwide casino of finance and corporate enterprise assume the role of predator lest they be made to be prey. Little wonder that the market assumes similarly predatory tendencies when those whose transactions drive its fluctuations are out for fresh meat wherever it might be found.

A decade and a half ago, Greece was one of the freshest butcher shops in the world financial market. Money was lent to the Greek state liberally, much of it by fellow EU member nations, the largest creditor being Germany. The fundamentals of the Greek economy being what they were, it was not a sustainable investment and the bill was heavy when the world financial crisis swept through the European market and left Greece especially vulnerable. But the structurally high value of the common currency prevented the predictable (and, in the sociopathic terms of capitalism, healthy) boom and bust cycle from setting in and renewing Greece’s economic prospects with devaluation and lowered prices on goods. The Euro did not lose value in Greece or anywhere else, and the deficit grew until, catastrophically, it was larger than Greece could possibly hope to pay back.

There are (or were) ways forward that do not involve the brutal, blood-from-a-stone treatment of the Greek people and the whittling away of their welfare state and labour rights under the pernicious Orwellian concept of “austerity” (call it what it is: enforced poverty). Greece could have, and still might conceivably, leave the Euro and return to its own national currency. No one can really tell you what will happen if that happens, and those who claim to know are almost certainly salespeople for the intentions of some interested party or other (most likely the international bankers who will not relinquish a cent of their ill-gotten gains). The ECB could also forgive or at least restructure Greece’s debts, which would be the most diplomatic and liberally-minded solution, considering that even the harshest austerity measures imposed upon Greece will fail to put a serious dent in what is owed. Of course, this fairest of solutions has been completely dismissed by Greece’s cabal of creditors, lead by Germany, who have had their massive national debts forgiven three times since World War II (under distinct but not entirely non-analogous circumstances).

It might be difficult to understand the wish of the Eurozone to treat Greece’s debt crisis as a moral transgression demanding punitive action. It may well be that, as some commentators have suggested, Germany in particular but other member nations want Greece trundled out of the common market and see a golden opportunity to force that particular hand with minimized political fallout. But the entire situation becomes much clearer when considered in light of the predatory market. Imprudent loans were made years ago, but when they went bad, the lenders piled blame on the borrowers, accepting none themselves. Punishment followed suit. Despite the German position, there is ultimately no moral principle at play here: they simply don’t want to lose money, and see a chance to to continue bleeding the Hellenic Republic for something, anything, while making an example to instruct nations such as Ireland, Portugal, Spain, or even Italy that may face similar fiscal issues in the future not to step out of line. The hunter does not simply catch and release their prey in international finance: they devour it, if not in whole then in methodical pieces. And Europe does like the taste of Greek food.

  1. July 14, 2015 at 7:13 pm

    Let’s face it getting nations into debt is a means of getting them under your power. We saw this at the start of the 1980s when the sovereign debt crisis was used as a way of foisting one size fits all liberal economic prescriptions on developing economies in different stages of development. countries were broken open to penetration by foreign capital where their doors had been shut. Suddenly becoming ’emerging markets’, i.e. a chance to get rich. The same principle applies to Greece, the country was always too commie by far to be acceptable to the ‘know it alls’ who claim to have all the answers. Again one of the main prescriptions is to sell state monopolies to private interests so they can become private monopolies. A chance to get rich easy.

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