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Someone, somewhere is responsible for the Greek tragedy

The economic approach of Athens has resembled Becky Sharp in Vanity Fair

By on Monday, 18 June 2012

Riot police use tear gas as protesters stand in front of the Greek Parliament in Athens, Sunday, Feb. 12, 2012. Riots engulfed central Athens and at least 10 buildings went up in flames in mass protests late Sunday as lawmakers prepared for a historic parliamentary vote on harsh austerity measures demanded to keep the country solvent and within the eurozone. (AP Photo/Petros Giannakouris)

Riot police use tear gas as protesters stand in front of the Greek Parliament in Athens, Sunday, Feb. 12, 2012. Riots engulfed central Athens and at least 10 buildings went up in flames in mass protests late Sunday as lawmakers prepared for a historic parliamentary vote on harsh austerity measures demanded to keep the country solvent and within the eurozone. (AP Photo/Petros Giannakouris)

Have you noticed that the whole world has now become an expert on Greece and the Greek economy? Moreover, quite a lot of people in this country, who work in the financial and legal worlds, are having to face a possible Greek exit from the Euro, not knowing whether it will happen or not – the odds keep on changing – and not knowing what it will entail if it does, as this has never really happened before now. (In my humble opinion, it has, more or less happened before: a reasonably close parallel is provided by Argentina’s ignominious abandonment of dollar parity back in 2002 – though even that is rather more complex than it first appears.) 

Economics is not an exact science, though one feels it should be. One needs a guide through this murky world of distorting mirrors. There are quite a few good commentators over at Telegraph blogs that I follow, and I am also hanging on the words of the very clever Faisal Islam, a man who is so brilliant he makes it all intelligible for people like me.

But as a theologian who knows precious little about economics, what can one say? Is there anything theological to be said as we watch the slow-motion Greek car crash? Well, yes, there is.

Someone, somewhere is responsible for this mess. It is not nobody’s fault. Somebody at some point made a bad decision that led to a cascade of bad decisions, that resulted in the present situation. I am not saying that this someone was an individual: it could have been several people, it could have been a whole class of people, and the original decision could have been made many decades ago. I am not even saying that this original bad decision was a sin – it may have only been a mistake. The difference would lie in the degree of knowledge and deliberation that the decision involved.

I am not sure what form this original mistake took, in other words, what was the substance of the mistake. Was it the decision to fudge the criteria for entry into the Euro, to let Greece in even though we can now see that Greece should never have been let in? Was it something anterior to all that, namely the inability or unwillingness of Greek governments to govern, and to enforce the rule of law, especially when it came to taxation? Did all this start centuries ago with some minor official with his hand in the cookie jar, and his co-workers all pretending they saw nothing?

Moral theologians would certainly point to the chief sin at work here being a lack of responsibility, coupled with the fatalistic idea that none of us can do anything about economic mismanagement, as it is all out of our hands. And one notices now that everyone is blaming everyone else and no one is really admitting they were at fault. The most outrageous form this takes is the idea that somehow or another the Germans must pay for Greek debts, or that it is all the fault of Mrs Merkel. How could it be? If the Greek government had been run by sensible hausfrauen, you can be damn sure none of this would have happened.

In the end the moral point is a very simple one: if you want to spend money then you have to face the bill. Each one of us knows this every time we go into a bar or restaurant. The Becky Sharp approach to debt is an immoral one. She, you remember, is the adventuress who is the anti-heroine of Thackeray’s Vanity Fair. She sets up a grand house in Mayfair with her husband Rawdon Crawley, and spends, spends, spends, with no thought of ever repaying. And of course she does not pay; the tradesmen who are taken in by her suffer, and some go bankrupt. In the end someone always pays. This is how Wikipedia sums it up:

Becky and Rawdon appear to be financially successful, but their wealth and high standard of living are mostly smoke and mirrors. Rawdon gambles heavily and earns money as a billiards shark. The book also suggests he cheats at cards. Becky accepts trinkets and money from her many admirers and sells some for cash. She also borrows heavily from the people around her and seldom pays bills. The couple lives mostly on credit, and while Rawdon seems to be too dim-witted to be aware of the effect of his borrowing on the people around him, Becky is fully aware that her heavy borrowing and her failure to pay bills bankrupts at least two innocent people: her servant, Briggs, whose life savings Becky borrows and fritters away, and her landlord Raggles, who was formerly a butler to the Crawley family and who invested his life savings in the townhouse that Becky and Rawdon rent (and fail to pay for). She also cheats innkeepers, milliners, dress-makers, grocers, and others who do business on credit. She and Rawdon obtain credit by tricking everyone around them into believing they are receiving money from others.

Sounds familiar? The Greek crisis, which is a moral crisis, has a moral lesson to it that we could all learn. Only spend what you can afford, and do not expect others to settle your debts for you.

  • Cestius

    All very true, but I think there is a responsibility on lenders as well. It’s no use lending someone more than they can afford to pay back and that is what the lenders had been doing to Greece for years before the financial crash – not helped by the ratings agencies that dismally failed to spot the potential risk building up.  If someone is getting into trouble, you need to cut back on the lending or make it conditional on a realistic plan long before the situation gets dangerous – it is in both your interests.  It’s no use panicking, jacking up interest rates or begging for someone else to do a bailout once things have gone too far.

  • Laurence Target

    And if ye do good to them which do good to you, what thank have ye? for sinners also do even the same. And if ye lend to them of whom ye hope to receive, what thank have ye? for sinners also lend to sinners, to receive as much again.   But love ye your enemies, and do good, and lend, hoping for nothing again.

  • http://www.facebook.com/profile.php?id=658976755 Henry Law

    The responsibility is ultimately on those intellectually dishonest people who dominate the teaching of economics in schools and universities. They have propagated false ideas about the nature of political economy for the past 100 years.

    Unfortunately, those responsible for the encylical Rerum Novarum must take some of the blame by rejecting a body of sound theory when it was presented by Henry George in the 1880s. These ideas initially found strong support amongst Catholics but after Rerum Novarum they were sidelined. This drew the teeth of the Catholic working class movements and left the way clear for Marxists and Fascists. With the publication of Caritas in Veritate we can put the whole thing behind us. Catholic lay people have a responsibility to understand the nature of political economy. Our failure to do so makes us too responsible for the mess.

    http://www.masongaffney.org/publications/K18George_McGlynn_and_Leo_XIII.pdf

  • rjt1

    Don’t forget the responsibility of voters who elect politicians, themselves tempted to borrow too much to maintain the ‘prosperity’ which gets them re-elected.

  • paulpriest

     Forgive me but may I congratulate you on winning the prize – despite the most formidable competition – for writing the most damned foolish thing I’ve read this year – if not the past decade….

  • paulpriest

    Oh Please!
    Everything from the choice of one’s colour of socks to the way one eats a garibaldi biscuit potentially possesses a critical moral element…it’s how we apprehend, ascertain, appreciate and actuate which determines in what way it was morally conducive; or possibly far-from-it…

    Father you’ve determined that the Greeks – by being crooks, shysters, corrupt officials, black-marketeers, swindlers, non-taxpayers, fleecers, rogues, rapscallions and all-round scoundrels by using every trick in the book [some of which even Del-boy & Rodney Trotter haven't heard] just to keep a tight grip of their dissolving drachmae then evaporating euros……

    …are axiomatically responsible for the economic collapse of their country!

    Why?

    I don’t see the connection at all – and should love to know why they are to be blamed for the paper-shuffling and number-crunching of invisible extra-national forces of darkness that care little for any nation, any institution or any person or cause save the adding of zeroes to their bank balances whose avarice destroyed the global economy and ironically were too powerful to be the only ones who didn’t become its victim!

    The greeks were poor – so they acted as the poor do – they tried to be a little less poor!

    …and those in power knew it was practically the only way for the poor to make ends meet; and if their palms were greased with backhanders in the process? What’s the difference between that and Government fiscal incentives or tax-exemptions given to foreign big business? Mutual backs are scratched and all are a little crooked and moral disorderliness thrives…

    …while the grave moral evil at the heart of it all – giant superpowers that serve no flag or dominion are permitted to perform grand larceny across the globe…impoverishing and starving millions, dispossessing and disenfranchising the many.

    The law was ever thus – that the nets it cast trapped the small birds and the small fish…while the vultures & raptors  and sharks & leviathans could generally break free….

    PLEASE: For all our sakes – don’t pretend that the Divine moral law reflects our pitiable earthly man-made ones…

    A thief is tried as a thief – whether they be good or bad…

    If the Greeks – good or bad – became little thieves?
    There were always BIG BAD thieves behind the scenes who gave them little alternative…

    Please apportion blame where it is due…and any chance in all this we can remember that our Morality is grounded in the corporal & spiritual works of mercy?

    …or has that now gone the way – as the ludicrously ironic Henry ‘Law’ declares – of Rerum Novarum [& by default Quadragesima Anno] as that type of [commie nonsense] ‘Good Samaritan’ Christianity which we mature civilised ‘real-world dwelling’ westerners could well do without?

    You can defend the wolves all you want: I’ll prefer to side with the blemished lambs.

  • Sweetjae

    You just CAN NOT sustain the economic policy of “hand outs”! The reason why the USSR and communist blocs collapsed was DUE of this marxist-socialist monstrosity! A car bumper sticker we saw the other day sums it all: “Work harder, millions on welfare depend on you!”

  • rjt1

    That’s an important point about the responsibility of bankers, but then there was also the responsibility of politicians who failed to regulate. Another morally significant point was the decision to bail out the bankers for fear of a worse situation. I think there was some concern there for the ordinary person.

    Some argue that it would have been better to let the banks go bust rather than incurring massive sovereign debt as that would have been a quick and decisive way to wipe the slate clean and start again but, then, would we have had traumatic changes leading to social unrest (mass unemployment, poverty)?

  • paulpriest

     Ahhh – it’s our acedic underclass ‘scroungers’ to blame!

    Little revisionism there: You forget that 850,000 in this country were forcibly unemployed with ‘incapacity’ declarations to keep the unemployment figures down…

    Maybe you fail to realise that most benefits are actually housing benefits which go straight into the pockets of the modern-day highwaymen/usurers – the housing associations? And estimated benefit fraud of £1.3Bn is 65 times less than corporate fraud which continues unabated?

    Maybe you fail to realise that society is collapsing due to the break-up of families and communities – one of the most aggravating factors being Sunday trading – which forced people to work on Sundays in all spheres of the workforce – especially for women in retail and the millions in factories/warehouses/service industries – forced to adopt an intensive ‘continental shift’ pattern which resulted in no family cohesion at mealtime, marital break-ups and millions of latchkey children; also a fracturing of neighbourhood cohesion in that no longer were mothers at home sustaining a local social network – instead they’d all be working different shift patterns and thus it’s now a situation where most people don’t even know their next-door neighbours’ name!.
    Ever heard of Nepreryvka? It was Mrs Lenin’s aim to destroy the corrupting force of the family so in 1919 they abolished the weekend and each ‘worker’ was designated one of five colours upon which they could have their ‘colour’ rest day. Family members, having different colours, could no longer socialise and society began to fragment – which was the state’s aim! ironically Capitalism has performed the same function with not merely Sunday trading but normative abolition of Sunday as a day of rest. 

    Maybe you fail to realise the plight of those working for the vast array of employment agencies – never knowing whether they have a full shift of work from one day to the next? With secondary agency expenses they may well end up working for far below the minimum wage. A south African friend of mine caught pneumonia and after recovering ended up being forced  to work for over a month for an agency – for NOTHING – due to accrued accommodation & travel expenses [they'd been in hospital & travelled nowhere!]

    Two of my teenage children – full-time students with enough GCSEs to sink a battleship – have been attempting to gain part-time employment for years with no success – I myself have applied for well over 450 jobs over the past few years in a vainglorious attempt to escape a shelf-stacking job. My foster son only gained employment through nepotism.

    Why is Germany thriving? Maybe it’s because it still owns its companies [not selling them for a pittance to international behemoths] and actually has a manufacturing industry?
    Maybe it’s because it actually educates its children rather than having a form of politically correct soundbite childcare [seen an English  science exam paper recently? Not physics or chemical reactions but "science in the media" [??!] & a quarter of the biology course is taken up by gynaecology & contraception!].
    Maybe it’s because they built a decent infrastructure rather than dumping billions into profligate incompetent road-building & railway companies’ coffers?
    Maybe it’s because they built communities via social housing schemes – rather than seizing 80% of council house sales receipts and leaving the only people able to build were – yet again – the criminally larcenous housing associations – and the only people who could afford to live in them? Those on benefits – thus all the single mothers, ex-cons, the sick, the elderly the drug-abusers, the incapacitated..and yes I’ll concede the underclass who’ve for generations had no intentions of working via generic ‘scrapheap-mentality’ socio-cultural inductiuon – are all placed on the same new housing estate and ghetto chaos rapidly ensues….?

    Maybe it’s because they cared?
    And no – I don’t attribute German success to Mrs Merkel’s austerity – Germany succeeded because it wasn’t run by a bunch of reprobates who were consistently trying to make a fast-buck or carry out either ludicrous 1970′s polytechnic social engineering or the libertarian friedmanite family-silver-selling fascism of Ayn Rand!

    You can’t merely blame Marx for all this: He’s the Monkey – and capitalism is another monkey – Hegel is the organ-grinder!!!

    For God’s sake read Rerum Novarum, Quadragesima Anno & YES – Caritas in Veritate – through the eyes of Catholic Social teaching not the frosty lenses of Robert Nozick !

  • Benedict Carter

    Ultimately the Greeks are responsible for the mess they are in. As the British are responsible for the fact that Britain is bankrupt (though no-one seems to want to admit it). 

  • Jae

    You are justifying your pathetic pseudo hodge podge blabbering…..WORK, that is the solution, stop begging for hand outs to provide for you and your family and that is the Catholic social teaching. By this welfare state the populace have been brainwash that everything is free and provided by the government with their connivance of huge bureaucracy, greed and corruption brought forth DEBTS UPON DEBTS UPON DEBTS….this is nonstop sickness until you and your brothers in Europe realize that small government, less bureaucracy, less corruption, less free stuffs and start to dirty your hands with real work then it will turn for the better.

  • Jae

    Blabbering, that is all you have. Less government, less bureaucracy, less corruption, less free stuff, less dependent from the government, stop this mentality of welfare state it’s building DEBTS UPON DEBTS WITHOUT END. Until the people realize this and seek to change their nation and government, this cancer of debts will not heal. Work and get real work to provide for you and your family. STOP BEGGING!

  • Michael Petek

    Suppose we apply a Gospel principle or two.

    When asked whether it was lawful to pay taxes to Caesar, Jesus asked “Who’s name and inscription are these?” Answer: “Caesar’s”. “Well, then, give to Caesar what is Caesar’s, and to God what is God’s.”

    The moral here is that the authority to issue money into circulation and to levy taxes in the lawful tender must be in the same hands, namely the supreme legislative power. The Euro is a system in which governments levy taxes in money originated and lent into circulation by bankers for their own profit and upon interest. Of 355.6 billion Euros of debt owed by Greece only 85 billion is owed to the private sector. 145 billion is owed to the European Central Bank, which prints the Eurozone’s money out of nothing at its own will and discretion.

    Now, let’s look at moneylending upon interest. The Church’s canon law in force until 1983 stipulated that, when a quantity of a fungible good (eg money) is given to someone so that it becomes his to dispose of in return for its return in kind later on, no profit beyond the principal may be made on the ground of the loan itself. But it is not illicit to contract for interest if a just and adequate extrinsic title can be found.

    In contractual relations, a title to interest can be founded only a promise of payment supported by good consideration of economic value. This means that the moneylender may charge interest only in return for conferring a benefit, or bearing a detriment, which is different and separable from the principal itself. It follows that interest is not validly contracted for if expressed as a percentage of the principal or in relation to the term of the loan.

  • Jae

    So what are you going to do with this kinds of government and the people described in this article as as “spending and begging” freaks? Number one, peoples attitude should change and change it is, vote for less government, that will in turn less corrupt and definitely less red tape and therefore will not be a toot for people that would take advantage of the free stuff and easy loans that both are quilty of stealing monies that are collected from the whole population itself.Secondly, read number one.