“The mortgage-stones that covered her, by me Removed, — the land that was a slave is free;
that some who had been seized for their debts he had brought back from other countries, where
– so far their lot to roam, They had forgot the language of their home;
and some he had set at liberty, – Who here in shameful servitude were held.”
Solon, Plutarch’s Lives
When the history of the conflict between the market and democracy is someday written, the events in Greece this Sunday will almost certainly be seen as a major victory for market forces. There, the Greek parliament, under enormous pressure from the financial markets along with Germany and France committed what may amount to political suicide in the upcoming Greek elections. Members of the Greek parliament are willfully taking the country into what is in effect a deflationary induced depression in order to avoid the default and exit of Greece from the Euro-based economies.
Opposition to the draconian cuts necessary to secure funding support by bond holders, European governments and the ECB quite literally set Greece ablaze.
As in the ancient myth, Greek society is caught between Scylla and Charybdis. Their only choices seem to be that of the chaos that would likely be the result of a default, and a self-induced economic depression. The latter might prove preferable if it were likely to work in the long-run to restore, and therefore secure the long term prosperity of Greece. Such an outcome, is sadly unlikely.
The democratic process is now dictated by the electric speed of the international markets. Greek politicians were in a race against the clock before markets opened on Monday.
Despite the German’s ridicule of the Greeks’ spendthrift ways, the Greek social system has its origins in the history of the country, which for decades endured brutal right-wing rule opposed only by a defiant left. The social-rights of Greeks were in effect the price to be paid for the left’s acceptance of the fact that Greece was to be a normal rather than a revolutionary country. Dismantling this system is a denial of history, and on par with the most utopian of top-down social transformations. Here the market is at war not just with democracy, but with history itself.
The German view of “lazy” Greeks also fails to take into account the very structural imbalances between Germany as an export economy and almost everybody else in Europe as playing a major contributing role in the crisis. German exporters are greatly helped by the weakness of a currency they share with backward countries such as Greece. The Greeks get no such benefit, suffering a much stronger currency than would otherwise be the case. The real gain of Greece sharing a currency with mighty Germany has been Greek access to cheap debt. That is over now, and turned out to be not such a good thing, after all.
Rather than being isolated, the Greek crisis is symptomatic of the current state of capitalism, both globally and in Europe. As Robert D. Kaplan pointed out way back in 2009, as Greek riots were already starting to occur before the Arab Spring or Occupy Wall Street movements had even been imagined:
It’s tempting to dismiss this as a purely Greek affair that carries little significance to the outside world. But the global economic crisis will take different forms in different places in the way that it ignites political unrest. Yes, youth alienation in Greece is influenced by a particular local history that I’ve very briefly outlined here. But it is also influenced by sweeping international trends of uneven development, in which the uncontrolled surges and declines of capitalism have left haves and bitter have-nots, who, in Europe, often tend to be young people. And these young people now have the ability to instantaneously organize themselves through text messages and other new media, without waiting passively to be informed by traditional newspapers and television. Technology has empowered the crowd—or the mob if you will.
Likewise, a European Union that could have served to shelter the European social system from the relentless leveling of market forces has shown itself instead to be the most powerful instrument in the hands of such forces able to bring, despite the resistance of history, whole governments, and the societies upon which they rest to heel.