Mancur Olson explained the post-war stagnation of England compared to Germany in terms of political stability leading to various interest groups milking the public in general (see “How Rich Countries Die”). A big disruption, such as a war, can make a country wealthier in the long run because, e.g., it prevents air traffic controllers from helping themselves to $1.2 million per year (see Spain). Journalists write about the short-term pain that Greece might suffer from departing the Eurozone but I’m wondering if they are ignoring the long-term potential benefits. If Greece were to hit the wall in 2015 the country might be much better off in 2035 than if Greece tries to muddle through, leaving all existing interest groups protected to the maximum extent possible. If Greece hits the wall the country can come up with a new political consensus about how to regulate business, how much to pay public employees, at what age people should be eligible for full pensions, etc. It also gives Greeks who don’t like and/or can’t prosper under that consensus a chance to emigrate and start fresh in a country whose politics suit them better.
What do readers think? Should Greeks with an eye toward their country’s long-term wealth fear a radical restructuring or welcome it?
Olson’s analysis fits Greece spot on. On NPR yesterday, they had a Greek commentator on and his take was that Greeks, as ex-Ottomans, see the government as “the other” and not their own. Greeks perceive themselves to be members of a family or a political party or a union, etc. but when it comes to their relationship with the central government, they scheme without any feelings of guilt in order to extract the maximum benefits and to pay the minimum taxes. And they feel even LESS guilt about stealing from the Germans, who they perceive as having damaged their country in WWII.
This victim mentality is deeply rooted in the Greek character and I don’t think it is possible to change it. The NPR guy noted that Greece has been an independent country now for over 150 years, longer than many other European countries including Germany and Italy, so they have had plenty of time to come to see the government as their “own”, so that they would feel guilty about shamelessly milking the system. The Greek replied that as far as ex-Ottoman countries go, the Greeks were actually doing better than the others.
As we can see from this week’s vote, I can’t conceive of ANYTHING that will get the Greeks to change their national character. Once you have such an entrenched corrupt system in place, even people who want to do the right thing feel as if they are suckers if they do so – unless you cheat at at least the national average level of cheating, you are penalized for being honest.
The best bet for the Greeks is for them to have their own currency (and for no foreigners to give them credit). That was they way they did it in the past before Goldman Sachs gave them expert help in cooking their books. They can cheat each other using their own Monopoly play money that will inflate as they keep printing it but the only foreigners they will be able to cheat will be tourists and even they won’t mind because the currency will be so cheap that even if the taxi driver charges them double the meter it will still be cheap when they pay with real money – that’s how it was in the old days.
Pretty much spot on. This is why the real Very Serious position on what the Greeks should do is not that they should do what their creditors want to get additional credit, which with variations is what is being pushed by commentators throughout the ideological spectrum, but the KKE (Communist) position that it would be best for everyone if they just default and leave the EU entirely. It fixes a series of mistakes starting in the 1970s driven by Cold War politics and sentimentality, stops the rest of the EU from throwing more money down a rathole, and gives the Greeks a chance for a fresh start.