Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

[dcarrigg]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Yes DC to some extent, but you must expect reforms and the Greeks don't seem to want to make changes.

You can't blame the Germans for this:

"Especially relevant to the Hellenic Republic's current difficulties in paying back its creditors is the fact that, as measured by Reinhart and Rogoff, Greece spent 87 of the 181 years - or 48% - between 1929 and 2010 in a state of external debt crisis. Running into problems paying back foreign debt is nothing new for Greece."

Except Reinhart and Rogoff's data was all bunk.

[astonas]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

The German fault is in thinking that austerity can improve the chances of debt payback.

Let's not conflate our troika here. "The Germans" don't really expect debt payback at all, not ultimately. You're thinking of the Anglo Saxons. They are the chief mercantile banking influence in this game, the US is their chief lobbyist (acting in defense of US-style banks everywhere), and Christine Lagarde has been their most prominent hired playing piece of late. The Germanic states see with distaste the fact that this philosophy has become as prominent an influence in the world as it has, even encroaching to within their own borders, and corrupting their own banks. They would be perfectly happy to see it vanish entirely, even at a considerable financial cost to themselves.

The germanic-monetary-culture states want first and foremost to institute a set of uniform operating rules for the economy. To them, a Europe with such rules is worthwhile, and any Europe without them is not. (That's why the real "germanics" have no problem at all with Grexit, or for that matter Brexit.)

They are for the most part willing to trade debt payback to get get such structures and rules implemented uniformly throughout Europe. They just believe that the point at which it makes sense to relieve this debt is AFTER the debt has been used to force rules that minimize corruption and level the market's playing field. (If it happens before, all leverage to drive reform is lost.)

They base this ordering directly on the Wirtshaftswunder model, in which large foreign obligations were in fact waived - but only well after the German economy was up and running again, due to domestic policy reforms. If debt were a fundamental obstacle to growth, they reason, Germany could never have recovered at all! The Keynesian explanation, in their minds, has been proven incorrect by their own history. They feel they understand this history better than the anglo-saxons who must rely on factually incorrect arguments and chronologically impossible timelines to assert that Keynesian fiscal stimulus played a role in the German recovery. So to germanic ordoliberals, real barriers to growth are not restricted fiscal spending, but instead the long list of inefficiencies to be found in many nations, which must sadly be wrung out under the threat of debt, since history has shown they will not be dealt with otherwise. If such reforms really are impossible, than the best path forward is for the disagreeing parties to go their separate ways, and not share a common currency. It is fully understood that this means that they will not see a cent of their debt paid back. That is an acceptable price to pay for being freed from Greece.

The reason the anglo-saxon and germanic perspectives get mixed up so much is that everyone seems insistent on reading only the English-language news and commentary. This implicitly passes all information through the Anglo-Saxon reporter's filter, which generally attributes anglo-saxon thinking to all parties, warranted or not. For those really interested, germanic monetary philosophy (ordoliberalism) is generally best understood through reading the economics journal ORDO — Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, which (judging by the commentary) few US economists, and even fewer economics reporters, have heard of.

So one can debate all day long whether Germany is being unreasonable. They might well be. But if so, they are being unreasonable about the universal applicability of ordoliberalism, not unreasonable about the repayment of debt.

That charge is most appropriately laid at the feet of the modern (post Glass-Steagall Act) US-style banking system, grown to it's fullest incarnation in the City of London, and vehemently defended by the US, as the way all banking in Europe should be conducted.

"The Germans" hate that as much as you do, if not more.

[vt]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Understood, but that doesn't change the fact that Greece has had major problems with creditors for 48% of the time since 1929.

[vt]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Well stated and informative as to real story.

[Southernguy]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

"Especially relevant to the Hellenic Republic's current difficulties in paying back its creditors is the fact that, as measured by Reinhart and Rogoff, Greece spent 87 of the 181 years - or 48% - between 1929 and 2010 in a state of external debt crisis. Running into problems paying back foreign debt is nothing new for Greece."

Well; if they taught me arithmetic correctly at primary school......there are't 181 years between 1929 and 2010...only 81. So Greece, miraculously spent 107% of the time "in a state of external debt crisis" certainly a record. If all of R&R research is as sound as this.....

[gnk]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

They are for the most part willing to trade debt payback to get get such structures and rules implemented uniformly throughout Europe. They just believe that the point at which it makes sense to relieve this debt is AFTER the debt has been used to force rules that minimize corruption and level the market's playing field. (If it happens before, all leverage to drive reform is lost.)

Exactly. As I mentioned in another thread, the debt is being used as a "sword of damocles" to ensure reform. Greece can never self reform, but with a debt overhang of sorts, there is light at the end of the tunnel.

If Greece goes drachma, it will be a failed state run by oligarchs. Economists such as Stiglitz and Krugman don't realize that there will not only be an initial collapse of prices and high inflation, but that will be followed by a return of (laundered) money that was sent abroad years ago. Meet the new boss, same as the old boss. It will be a failed state similar to post USSR with oligarchs buying everything on the cheap, owning everything.

Unfortunately, Keynesians, MMT'ers, and other economists are too stuck on their theories and don't grasp the political nuances that every country has.

Greece is not Sweden.

The issues here are very unique to Greece. Bankers didn't hire lobbyists in Greece to change laws and "casinofy" its economy. No, it was the other way around. Greece hired bankers to see if it could continue with its system of patronage, corruption, and clientelism. To keep its own unique game going.

I'm very surprised at how many people here don't "get it." They are projecting their AFC knowledge bias onto the Greek/Euro crisis.

[astonas]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Exactly. As I mentioned in another thread, the debt is being used as a "sword of damocles" to ensure reform. Greece can never self reform, but with a debt overhang of sorts, there is light at the end of the tunnel.

If Greece goes drachma, it will be a failed state run by oligarchs. Economists such as Stiglitz and Krugman don't realize that there will not only be an initial collapse of prices and high inflation, but that will be followed by a return of (laundered) money that was sent abroad years ago. Meet the new boss, same as the old boss. It will be a failed state similar to post USSR with oligarchs buying everything on the cheap, owning everything.

Unfortunately, Keynesians, MMT'ers, and other economists are too stuck on their theories and don't grasp the political nuances that every country has.

Greece is not Sweden.

The issues here are very unique to Greece. Bankers didn't hire lobbyists in Greece to change laws and "casinofy" its economy. No, it was the other way around. Greece hired bankers to see if it could continue with its system of patronage, corruption, and clientelism. To keep its own unique game going.

I'm very surprised at how many people here don't "get it." They are projecting their AFC knowledge bias onto the Greek/Euro crisis.

You are right about who hired whom, and perhaps even about the unworkability of Swedish-style Social Market economics in Greece. You know that part better than I. But you are perhaps a bit too harsh on those with different perspectives.

To be fair to them, the factors that triggered the AFC are indeed fully present in Europe as well. It just isn't the entirety of the story, the way it was here. There ARE bankers who are using insider-dealing within institutions like the IMF and ECB to force repayment of their loans, if not directly by Greece, then indirectly through "bailouts" that transfer risk from the private to the public sphere. And those HAVE made it far more difficult to implement more meaningful reforms, like building viable taxation and assessment structures, instead of simply selling off assets and similar travesties against the Greek people. I'd even predict that Lagarde's and Trichet's records will be a distinct embarrassment to them in the future, as more information comes to light. Bankers are a major driving force in this crisis, and diminishing those who point that out as "just not getting it" is going too far.

But you are right that banks aren't the whole of the story in Europe. Culture does matter, and economic/monetary culture is no exception.

It's important to remember that the liberal Northern European Social Market states like Sweden are not, in general, particularly compatible with either Keynesianism or neoliberalism. They are instead founded and built on the philosophy of ordoliberalism, which strives to be less ideological, and more pragmatic. Keynesian fiscal stimulus is thus not the justification for their generally strong social spending. Instead the "socialist" understanding that such spending has a net positive impact on the societies' economy -- even without the assumption of a Keynesian multiplier -- is the deciding factor. In other words, to the extent they are socialists, they are socialists for pragmatic reasons (it works!) not idealistic ones. This plays a large role in why the talks between Greece and the rest of the Eurozone have broken down so badly.


But let me back up a bit, since I'm getting ahead of my own argument:

Greece is in some ways caught between the two currently dominant factions in Europe (I've referred to them numerous times as anglo-saxon and germanic, but I'm beginning to think Keynesian and Ordoliberal might be more accurate labels, since those correctly identify philosophies, rather than simplistic geographical regions).

In the first, the bankers are dominant, and are not really interested in helping, only getting paid, and if not by Greece, then by their home countries. They justify such intervention, rightly or wrongly, as "Keynesian stimulus" a term used to validate just about any government outlay these days.

On the other side are the rule-makers who sincerely believe that the reforms they are advocating might eventually turn Greece into a "Sweden", if only they could be implemented. That it is these rules -- and only these rules -- that differentiate successful nations from failed states. Whether such a transformation can be more than a pipe dream is still anyone's guess. It certainly hasn't been attempted by Greece in any way complete enough to justify either conclusion at this point, and it likely never will.

Incidentally, this is why charges against Germany of "racism" are specious. It is precisely the idea that ANYONE can succeed if given the proper structures that is motivating the ordoliberals. If these had bought into racist ideas, they would instead have never allowed the Greeks to participate in the first place, since that would be the only response compatible with believing Greece to be intrinsically inferior or unredeemable. More likely is that they were brow-beaten into accepting Greece into the EMU under the threat of appearing racist if they didn't. Remember, after all, that joining in Europe was the price Germany had to pay to assuage fears of its neighbors regarding unification, and this has continued to overshadow current events. It has many times been the cudgel that has caused Germany to reluctantly concede. But that is yet another story.

The problem is that any policies these two factions ("keynesian" and ordoliberal) want to implement have to be agreed on by both. And only then presented to Greece in negotiations. Both those sides, in other words, are sitting on the same side of the negotiating table, across from Greece. They therefore have to plan their negotiating positions, united only by their status as "creditors" and their mutual disdain for one anothers' philosophies.

That's why Tsipras was so confident he could get a deal made with Merkel if only he could sit down alone with her over a dinner. Why he tried to insist on meeting with national leaders, instead of the Troika. I think he, and many others in Greece, actually wouldn't mind having a more efficient government, emulating Sweden. It certainly sounds like the more reasonable request of the two dominant factions. And I think he (or at least Varoufakis) probably has studied just enough Ordoliberalism to genuinely believe that the path towards a Northern-European style Social Market Democracy is way better than anything they could get from the anglo-saxon faction. That's why they kept insisting they wanted Merkel to be the contact. They wanted a mediterranean/germanic alignment against the anglo-saxons. And if they had pulled that off, things might indeed have worked out better.

But I suspect Tsipras' challenge was that he and Varoufakis didn't understand ordoliberalism quite well enough to sell their sincerity for reform, either as desirable to their constituents at home, or as a credible promise in the north. Varoufakis' recent speech made it clear that while he may like the idea of an efficiency transformation in general terms, he still doesn't understand what it would actually mean to undertake it. (His description of a "Marshall plan for Greece" for example, which is precisely what an ordoliberal would understand to be entirely ineffective, made it clear that he still wrongly believed Merkel could be swayed by Keynesian arguments. Nothing could be further from the truth.) Furthermore, the recipe the ordoliberals would prescribe could also never be made compatible with vague promises of general change. One of the essential elements of that pragmatic philosophy is a need to be heavily data-driven in decision-making, and to allow politics to flow from that. If a social program doesn't have a positive ROI for the country, it gets cut. If it does, it might be justifiably expanded. That's sort of the point. As I opened by pointing out, Liberal/Socialist Northern European Social Market Democracies did not start out by saying "let's be all of those adjectives". They figured out what specific rules worked best for them, and those evolved into something that was socialist in nature.


So in spite of the fact that there is an apparent agreement on certain socialist views, walking in with a list of benefits that can't be defended in ROI terms, but claiming that they are untouchable for socialist political reasons, could never have been a compelling case. That sort of thinking is precisely what the ordoliberal framework seeks to extinguish. You can't do that, if you want to be credible in saying you will be driving toward reforms that make you more compatible with the north. Thus, the technocratic answer is not separable from the political one. This is the bit that Zizek doesn't understand either. The Greek negotiating team acted not only as though details and principles could be separable, but that the political must always be paramount. Consequently, the one constant in the negotiations was a demand for more details from the Greek team, which were only ever provided in the sparsest measure, and at the last moment possible. From the ordoliberal standpoint, there simply was never anything there substantial enough to even discuss yet.

And that meant that Merkel could not be productive in a meeting with Tsipras. He wanted a meeting to discuss political abstractions, while to the ordoliberal mind, those are outcomes of, not inputs to, a detailed plan, which has first been evaluated point-by-point for efficiency of action. Wherever the most efficient solution is found, that becomes the normative center for future discussions of political abstraction. Essentially, the problem is a reversal in understanding of what is the cause, and the effect, driving economic decision-making. Greece said it had to start with principles, and agree on those first, but ordoliberalism sees those principles as emergent properties of the realities on the ground; what works, and what doesn't.

So there was no mediterannean/germanic alliance. And the anglo-saxon influence remained strong. At this point, I think it is even fair to say that it is the most dominant influence, at least in the IMF.

Clearly the communication gap was vast. It was monetary. It was economic. It was financial. It was cultural. And so talks never once progressed beyond the framework that should be used to even have the real discussion, of a solution.

And it couldn't be bridged. Not yet. And I would be very surprised if 5 days could be enough to meaningfully change that.

There might be some grasping at straws so an agreement can be claimed, but I don't really see anything coming that could possibly hold up, in the long term.



(I'll just end with a quick note asking all participants in this thread to please remain civil, even if there is a strong difference of opinion. It isn't necessary to either disparage other views or resort to profanity, and that sort of thing dampens what possibility there is of a sensible debate.)

[jpatter666]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Hey gnk, heard this one?

Greece should follow the Irish model: Optimise the economy for a big foreign investor. Ireland targeted America, Greece should target China and adopt the renminbi. “The Chinese get a foothold into Europe. They invest billions into Greece, where they reassemble Chinese goods into Europe with no tariffs or hassle. They gradually move up the value curve, making ever more sophisticated goods in Greece”

http://www.davidmcwilliams.ie/2015/0...the-last-laugh

[astonas]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Hey gnk, heard this one?

Greece should follow the Irish model: Optimise the economy for a big foreign investor. Ireland targeted America, Greece should target China and adopt the renminbi. “The Chinese get a foothold into Europe. They invest billions into Greece, where they reassemble Chinese goods into Europe with no tariffs or hassle. They gradually move up the value curve, making ever more sophisticated goods in Greece”

http://www.davidmcwilliams.ie/2015/0...the-last-laugh

I've certainly heard crazier ideas...

[dcarrigg]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

I am actually very sympathetic to this line of thinking, astonas. I read German media, and have lived in Germany. In fact, I have posted about ordoliberalism here before.

The only thing is, I haven't caught even the slightest whiff of social market economy in the institutional/structural demands of Greece's creditors. Please correct me if I'm wrong. But it stands to reason that basic ordoliberal ideals require some substantial restructuring of Greece's corporate legal framework (and truth-be-told probably the breakup of the large family-held private companies that operate in Greece to do it right). None of this was ever requested.

Meanwhile, the true Keynesian prescription is absolutely not austerity into the brink. That's the opposite. It really is. You won't meet a Keynesian who says "cut fiscal spending and raise taxes into a depression." Not a one.

The actual Troika prescriptions for Greece smell more Austrian to me than Keynesian or Ordo. Slash everything. End pensions. Power through the pain. That's Von Hayek, Von Mises, and the rest of the Vienna Nobility.

There are 5 fingers in the fist of ordoliberalism. Growth, Inflation, Employment, Labor, Welfare. Each of these must be balanced.

The Troika has essentially said, "We do not care about Employment. We do not care about Labor. And we do not care about Welfare." And the debate goes on about austerity and growth, I suppose, so I'll leave it out. But this is not a very ordoliberal thing to do. The Germans are very proud they are not Anglos with their crazy Laissez Faire ideas. They do not see the state and the private sector competing. Just like they do not see labor and private ownership competing. Everything's a more cooperative venture.

But I really don't see any of that in the Troika's demands. Not the 19 demands of last year. Not the demands now.

Maybe I'm missing something. And you can let me know. But it seems to me the actual demands have been much more laissez faire than either ordoliberals or Keynesians would normally promote.

Don't get me wrong. I understand the ordoliberal aversion to debt. Schuld means both debt and guilt. It's built into the language. And I know what Hans-Werner Sinn has been going on about down in Munich.

I believe ordoliberal ideals probably drove the lack of common debt issuance in the Maastricht Treaty. And there are still some in the CDU who would be happy to use these crises to enact institutional reforms that they feel are the prerequisite to a common Eurobond market.

But I just don't see any of the 'soft side' of ordoliberal demands coming from Germany or the Troika. And they should be there too. I only see the 'hard side.' Which makes the whole project of blaming ordoliberal thinking for the current crisis not feel entirely right to me.

[astonas]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

I am actually very sympathetic to this line of thinking, astonas. I read German media, and have lived in Germany. In fact, I have posted about ordoliberalism here before.

The only thing is, I haven't caught even the slightest whiff of social market economy in the institutional/structural demands of Greece's creditors. Please correct me if I'm wrong. But it stands to reason that basic ordoliberal ideals require some substantial restructuring of Greece's corporate legal framework (and truth-be-told probably the breakup of the large family-held private companies that operate in Greece to do it right). None of this was ever requested.

I can easily see where that impression comes from, but I'm afraid that a (fairly small) factual correction is indeed in order here.

It is true that ordoliberal principles weren't emphasized in the summaries that the aggregate Troika wound up putting out recently. Those were mostly meant to assuage investors, and that meant telling the anglo-saxon story. But it's also important to note that those demands have evolved considerably over time. And that compromises may not have been distributed uniformly among all creditors.

From the very beginning, structural change was the heart of the discussion east of the Rhine. And it was certainly more prominent in earlier talks, at the beginning of the European Crisis. The problem is that of the very long list of conditions the Troika had, it was the structural ones that wound up being bargained away, and the fiscal transfer ones that were left in play.

Let's take as an example what might be the most clear-cut case, that of the Cadastre, or land registry. I've written about this before, but just to summarize, Greece's lack of a meaningful land registry means that a fair property tax is essentially impossible. No one can definitively prove who owns what parcel, and that gray area makes for fertile ground for bribes to replace any fair tax system.

This was in the english press in 2013. But that doesn't mean that an effort wasn't made, and followed up on, long before by the germanic states. Here's how that one ended:

As an MEP, in 2011, Eppink asked the Commission for more information about Greek plans to register 3.6 million property titles. He found that only 17% of property titles and 6% of land had been registered.And under Syriza?
Under the new Syriza-government, Greece has reiterated its pledge to finalise the Land Registry “around 2020″. Nevertheless, on 20 January this year, Greek daily Kathimerini reported that the whole project “may go on hold,”
[...]
As Eppink concludes: “Promises aren’t worth a lot. As soon as Eurogroup president Jeroen Dijsselbloem hears the word “Cadastre,” alarm bells should ring. Greece’s biggest ally is the Greek calendar.” In Dutch, to “send something to the Greek calendar” means “to postpone indefinitely.” Indeed, that seems to be what’s going on with attempts to create a land registry, something which is generally perceived as necessary to boost legal certainty of property owners and to combat corruption, one of Syriza’s stated goals.

This has been one of many headaches for ordoliberals since the very beginning of the crisis. It's not that Ordoliberals never asked for reform. They did ask, very insistently, on many items, and in many ways, but they just never got anything. Even when they paid cash up front to do such work, the money was not spent doing it.

The Anglo's demands, however, were easy for both sides to "meet" with extend-and-pretend, which simultaneously and conveniently met all the Anglo's hidden demands of achieving a private-to-public risk transfer. In contrast, the Ordo priorities all involved actual, immediate, economic pain for specific interest groups. That included all the people who were accustomed to working around, rather than within, government systems (i.e., a very large fraction). And that means they also come with considerable loss of votes for the politicians that failed to protect that work-around ability. These reforms couldn't be faked the way extend-and-pretend could. (And, it may be added, that fact was entirely by design, on the part of the ordoliberals. Trust is never considered a viable way forward, to that mindset.)

Simply put, the Ordo path was by design the hard way. Actual, real, change. The Anglo path was the "easy" way (at least, in the very short term. It winds up being harder in the long run.). So the Ordo way, point by point, was most strongly resisted in Greece.

And that, I think, is part of the story. I suspect that gnk would agree so far, since he, tends to place a heavy load of blame on Greece. And that part isn't wrong, per se. But there is more to this, as well. There is also good reason to think that there may have been some unfair play on the "creditor" side of the negotiating table as well.

Lagarde (and earlier, Trichet) have been successfully outmaneuvering Merkel from early on in the crisis, when it comes to getting ordoliberal priorities pushed through to the end. If a truly unified front had been presented (a genuine Anglo-Ordo alliance) the ordoliberal medicine could have been forced through. There would have been no alternative. But the Washington-based IMF, and Trichet/Draghi in the ECB, were NOT providing a uniform front, were they? And when the maneuvering happened, it was really uncanny. It's almost as if the representatives of the bankers knew exactly what Merkel and her ministers were saying in their private conversations! Oh that's right. They could well have. The germanic parties were all being spied on by the NSA. What end could that means have been meant to serve?

Maybe this is my personal bias (and do let me know if you sincerely think it can only be that!) but it's really starting to look as if this might be a case of economic sabotage of the European experiment by the US and UK, to favor their banking systems, their monetary approach, their IMF-instituted lending methods, and their currency. Not by manufacturing the full crisis, of course, I don't think they'd be that bold. But to push hard, at the tipping point of crucial conversations? I'd have a hard time ruling that out.

Meanwhile, the true Keynesian prescription is absolutely not austerity into the brink. That's the opposite. It really is. You won't meet a Keynesian who says "cut fiscal spending and raise taxes into a depression." Not a one.

The actual Troika prescriptions for Greece smell more Austrian to me than Keynesian or Ordo. Slash everything. End pensions. Power through the pain. That's Von Hayek, Von Mises, and the rest of the Vienna Nobility.

You're right, in that. My nod to Keynes was meant to point to the idea that generalized stimulus, rather than narrowly targeted stimulus (the idea that he is most widely known for) is the characteristic of both the keynesian and austrian branches. This was meant to highlight the exclusively narrow targeting characteristic of ordoliberalism, which I've discussed before. I was hesitant to switch to that term for the Anglo perspective, and in hindsight should not have done so, sticking instead to my earlier term "anglo-saxon". Correction taken.

The older phrase is better anyway, as it allows for the inclusion of both the keynesian thinkers, and their austrian reactionaries, in the US, UK, and increasingly now in France. I will, however, note that the bankers did enlist devout Keynesians like Krugman to argue their case for nationalizing private risks, so I don't think it is fair to let that philosophy off the hook here at all. The corrupt can and do play both sides of the Keynes/Hayek debate like a fiddle. That's why it's such a mug's game, after all. So let's go back to the more inclusive "anglo", or "anglo-saxon", for now.

I also want to point out, since we're getting into terminology, and since you mention "Austrian", that I agree that the latest proposals have been increasingly "Austrian". But I'm sure you also know that's a reference to a philosophy that may have originated in Austria, but doesn't really exist in mainstream Austria itself anymore. That ideology only really "lives" in the US and UK today. Austria (the nation) is by now firmly ordoliberal, and rejects what we now call "Austrian" economics. Like I say, I'm sure you're aware of that, but I include it for completeness, and for the benefit of other readers. So often these names confuse more than they clarify, and in Europe, it seems to be an even more common problem.

Similarly, I suppose, with "austerity". Two very different definitions are used. When Germany was using the term internally to restructure itself in accommodation of reunification, it meant ordoliberal structural change. And so they continue to use it in that sense, which to them has very positive connotations. To a Keynesian, it means "Austrian"-style spending restrictions, rather than restructuring. Selling off assets to "privatize" what was once socialized. That definition is not at all what is meant within Germany! So both Anglo-Saxons and Germanics sit on the same side, at the same table, and both ask for "austerity". The problem in Europe is that only the Anglos got what they wanted. To my mind, the real question is whether that happened because of an unbridgeable cultural gap (a long-understood possibility) or something more underhanded.

Think it through with me for a moment. Isn't it more logical that the problem here is that the anglo-saxon perspective is the faction that has dominated the "creditor" side of the negotiating table, and increasingly so with time? In other words, that it is a consequence not of Germany's excessive strength at the table, but of its growing weakness relative to entrenched banking interests, against which it has been battling unsuccessfully domestically as well. (After Glass-Steagal fell, the German banking industry saw massive consolidation to remain competitive in the newly-shaped market, pushing the anglo banking philosophy and practices to be exported there as well. The German government failed to act quickly enough to staunch the flow.)

The Anglos (through their influence in the IMF and ECB) are getting the priority in these negotiations, not the ordoliberals. And since Merkel is being pushed out in front to be the one with Hitler mustaches drawn on her face, she has been getting less and less assertive over time, even while the plan resembles her own philosophy and those of the germanic states less and less.

There are 5 fingers in the fist of ordoliberalism. Growth, Inflation, Employment, Labor, Welfare. Each of these must be balanced.

The Troika has essentially said, "We do not care about Employment. We do not care about Labor. And we do not care about Welfare." And the debate goes on about austerity and growth, I suppose, so I'll leave it out. But this is not a very ordoliberal thing to do. The Germans are very proud they are not Anglos with their crazy Laissez Faire ideas. They do not see the state and the private sector competing. Just like they do not see labor and private ownership competing. Everything's a more cooperative venture.

But I really don't see any of that in the Troika's demands. Not the 19 demands of last year. Not the demands now.

Maybe I'm missing something. And you can let me know. But it seems to me the actual demands have been much more laissez faire than either ordoliberals or Keynesians would normally promote.

Don't get me wrong. I understand the ordoliberal aversion to debt. Schuld means both debt and guilt. It's built into the language. And I know what Hans-Werner Sinn has been going on about down in Munich.

I believe ordoliberal ideals probably drove the lack of common debt issuance in the Maastricht Treaty. And there are still some in the CDU who would be happy to use these crises to enact institutional reforms that they feel are the prerequisite to a common Eurobond market.

I'm not sure you're missing very much, but I hope I've explained what I think it might be. The latest situation is very much as you describe. But it is important, when assessing what has happened, to know who it was that fought FOR it to happen, and who fought AGAINST it happening. I feel it is entirely fair to blame Germany for trying to transfer its philosophy to a state that may not have been ready or able to absorb it. That is certainly a debate that will be played out in the remaining mediterranean states in the near future, to great consequence.

But I really do think that enough evidence has already emerged (though more will likely continue to come out) that the Anglo side was the driving force in arguing for the interests of Goldman Sachs et al. THAT picture does make some sense to me.

But I just don't see any of the 'soft side' of ordoliberal demands coming from Germany or the Troika. And they should be there too. I only see the 'hard side.' Which makes the whole project of blaming ordoliberal thinking for the current crisis not feel entirely right to me.

I hope I've now clarified that I don't believe that ordoliberal thinking is to blame, in itself. What you call the "soft side" was in fact there, but it was not seen as "soft" by the recipients. I also clearly agree that the 'hard side' (which was once the "easy way out") bears considerable blame. Extend-and-pretend was ALWAYS a mistake. But it was the one "solution" that allowed the negotiators to stand up and declare a victory. And so, when no real reforms could be made to work, they eventually did.

I led, in a previous piece, by saying we shouldn't conflate the Troika. It isn't a uniform set of interests, led by one country or person. It contains at least two competing factions, and the one that is easiest to point to naively, may not be the most justified recipient of that blame.

At least in the English press, the banking cartel has succeeded in making it look like one subset of their victims (ordoliberals) are the perpetrators of the fraud they themselves created against another (mediterraneans).

I find that somewhat disturbing. It is not one more, but two more bankster victories, being both the deed itself, and the successful spinning of that deed to blame another party which is also resisting the cartel.

[astonas]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Lagarde (and earlier, Trichet) have been successfully outmaneuvering Merkel from early on in the crisis, when it comes to getting ordoliberal priorities pushed through to the end. If a truly unified front had been presented (a genuine Anglo-Ordo alliance) the ordoliberal medicine could have been forced through. There would have been no alternative. But the Washington-based IMF, and Draghi in the ECB, were NOT providing a uniform front, were they? And when the maneuvering happened, it was really uncanny. It's almost as if the representatives of the bankers knew exactly what Merkel and her ministers were saying in their private conversations! Oh that's right. They could well have. The germanic parties were all being spied on by the NSA. What end could that means have been meant to serve?

Maybe this is my personal bias (and do let me know if you sincerely think it can only be that!) but it's really starting to look as if this might be a case of economic sabotage of the European experiment by the US and UK, to favor their banking systems, their monetary approach, their IMF-instituted lending methods, and their currency. Not by manufacturing the full crisis, of course, I don't think they'd be that bold. But to push hard, at the tipping point of crucial conversations? I'd have a hard time ruling that out.

I just thought of something, which is probably too far out there to credit fully. And it's late here, and I'm both tired and ill, so please forgive the rambling... But think back to the time when US debt was in trouble. When the buck was broken. When people were starting to worry about the dollar's hegemony. What was it that suddenly started driving investors back to Treasuries in droves, as the lesser of the available evils?

Oh, that's right... The Eurozone crisis.

Am I just getting way too cynical here, or is the boldface speculation worth looking in to, this time in greater depth? I am really not a fan of conspiracy theories, and the last thing I'd want to do is start one. But I have to ask: Is this level of economic warfare possible, with a sufficiently closely-linked banking system and government, at the peak panic of the American Financial Crisis, when EVERYTHING was on the table? Is this a crazy thought, or is it not so crazy, given where revelations have been taking us since?

Exactly which statement did trigger the "sudden" revelation that the PIGS were not exactly as stable as they seemed, at exactly the moment the US system was so shaky? And where did that revelation originate?

I'll probably feel more sane in the morning...

[gnk]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

You are right about who hired whom, and perhaps even about the unworkability of Swedish-style Social Market economics in Greece. You know that part better than I. But you are perhaps a bit too harsh on those with different perspectives.

astonas, of all the posters here that have tried to diagnose the Greek issue, you have the best well written, and well researched posts. Not only I and many other like minded in Greeks would agree, but many on the left would agree as well with your points. Thank you.

I had just written a long post detailing the corruption I have seen and experienced firsthand. I deleted it because even though I am an anonymous poster - the details were just too specific. So I'll just say this, even though it will never sink in for many. The corruption in Greece is extreme, and ubiquitous. A lot of what I wrote dealt with the land registry issue you post several posts down. Working in real estate in Greece, whether its sales, or estates, clearing up titlework, or trying to get just compensation from an eminent domain action, is enough to drive anyone insane. The level of corruption and mismanagement and incompetence is mind boggling. And it is not just in real estate matters. Even licensing for just about anything.

Thus, when I see posts about banksters or evil Brussels, or dry economic theories, I can't help but be harsh. I have been a victim of corruption and government disfunctionality. It is not Brussels that affects me. I actually want Brussels to have more power over Greek matters because no Greek government has ever addressed the issues. Ever.

And now it has been confirmed that Tsipras has capitulated. I mentioned in another thread that the election was unnecessary. And others here thought I was being undemocratic. Let me explain. The election was not scheduled, it was a snap election because Samaras was incompetent and Tsipras was unrelenting in his Parliamentary attacks.

A complete waste of time, energy, and now, lots of money, including a tanking economy. Only if Tsipras becomes a true reformer will it have been worth it.

I live with the corruption, I live with the government disfunctionality, I live with the capital controls and threats of dwindling supplies including medicines. So when I see people from thousands of miles away posting the same recycled BS explaining this Greek episode as only a two dimensional bankster v. poor people story, I lose it. Sorry if I offended anyone, but it's different when you live it.

In the beginning I had two theories about Tsipras. One - he is incompetent as a negotiator and we will get essentially the same agreement after killing our economy unnecessarily. Two - the marxist element of his party will somehow pull off a drachma plan that lays the blame on the EU.

It looks like the incompetent theory prevailed. But then again, until the ink is dry, we will not know until Sunday.

The fireworks in Greece will begin shortly. Many will feel betrayed by Tsipras. His marxist base is going to lose it.

[Thailandnotes]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

I had just written a long post detailing the corruption I have seen and experienced firsthand.

I wonder if you have lived anywhere else besides Greece and the US.

I doubt Greece is more corrupt than Thailand, India, Cambodia, Vietnam, Sri Lanka, Indonesia, Malaysia, Myanmar, the Dominican Republic, Honduras, Morocco, Panama, The Philippines, or Mexico. They make the list because I've either lived there or visited friends who have lived there for a long time (often marrying) and who know what's up.

Although corruption takes on some amusing idiosyncrasies in different cultures, it pretty much reflects global human nature. When the cops, custom officials, school administrators, ambulance drivers, and blind lottery ticket sales people are all on the take, you doubt everything's authenticity and all politics are a joke.

There is real hope in the Honduras video I posted.

"Which side are you on?" screams out in that video and it's a no brainer.

Wish it were so in Greece.

[gnk]

Re: Slavoj Zizek on Greece's 'No', and Greece's idealism vs EU's technocrats

Only US and now Greece. So yes, I can only honestly compare to the US. However, the US does have its own corruption in my view - much of it though, transparent in the form of lobbying. Also, the US does enforce its laws much more than Greece does.

According to transparency.org, Greece is ranked 69/175 (similar to Italy)

Thailand 85/175
India 85/175

But, I think one needs to compare Greece to other EU countries.

Also in terms of ease of doing business, Greece is between Tunisia and Russia. I'm surprised to see Luxembourg so low on the list though.

Those two factors combined - corruption and ease of doing business, I think represent a huge drag on an economy. Unfortunately, we can't quantify the impact.