Monday, 30 April 2012

DECONSTRUCTING A BANKRUPT NATION: GREECE

INTRODUCTION: TRAITS OF COUNTRIES

 In Persian Letters, French Enlightenment thinker Montesquieu  makes a case for cultural relativism rooted in a value system and traditions that become the norm as part of a societal construct, thus 'good' for society. In Persian Letters and The Spirit of the Laws, the French philosopher makes a case for writers (intelligentsia) of a society that manufactures a reality based on fragments of societal myths and empirical conditions. This manufactured reality reflects society as much as it shapes it and among the influences are everything from geography and climate to religion and music.

Given the interplay in society between religion and political regime, an ideology develops that accounts for most people in a given society accepting societal institutions as 'natural', products of the laws of nature and not human constructs. From ancient times to the era of the trans-Atlantic slave trade the master-slave relationship was regarded as 'natural', even by great philosophers and clergy, and not just slave owners. Besides political expediency, moral imperatives are attached to institutions that help shape the human mind in society that strives to distinguish itself from others.

Throughout history, some countries have become notorious for their 'Leviathan' regimes, invariably ruled under  personality cult - monarchs, or dictators of the extreme right or the left. Russia under the Peter the Great as well as Russia and Stalin fits the mold of the above description. Institutionally and culturally, such societies always carry remnants of the Leviathan regime, no matter how far they may attempt to remove themselves, as we can see in Russia under Putin's nationalist (quasi-statist) rule.

Some countries have become notorious for their obsession with warfare and aggressive foreign policies intended to help them reach great strength. Still others, most notably the Scandinavian countries in the second half of the 20th century, stood apart for their quest toward social justice despite the global tide in political economy that runs counter toward such trends.

In a world dominated by the Great Powers, it is difficult for a small country to catch global attention, unless something very serious is taking place, something like the case of Cuba that has defied the US for decades, or North Korea that opted for relative isolation with China as its major patron state. From 2010 until 2012, Greece became notorious for its sovereign debt, which had the potential of severe international consequences because the country is a eurozone member. That nations great and small feared emulating the 'Greek disaster' is indicative of the stigmatizing role Greece has had internationally.

It is simply irrational, at least it should be, that a country as tiny as Greece in terms of geographical size, population and GDP that is one-third the market cap of Apple Computers, has the ability to trigger EU monetary instability, global market shocks and a double-dip recession. Yet, the symbolic significance of Greece and what its sovereign debt problems mean for the capitalist system under the neoliberal model is significant.

Keeping in mind that human nature is the same, it is environment and within that cultural influences that play a catalytic role in differences between societies and communities, whether under the nation-state structure or under any other as have existed in the past. Modern open (pluralistic) societies under the same political economy of capitalism share similar structural traits from a hierarchical social structure to a multi-party system and basic freedoms of the individual as well as basic human rights.

Cultural heritage of a society steeped in 'traditionalism' (societal value system rooted in secular but especially religious traditions) differs from one that has undergone modernization through a political, cultural, technological and/or industrial revolution. Thus an open society like modern Turkey is very different from France, although both share in the same global economy that influences their institutions. Similarly, an open society like Japan is very different from Brazil. The degree to which Japan and to a large degree France look forward toward the future is not the same as the cases of Turkey and Brazil, both thriving economies, but immersed in the historical past. The nuances of each society as well as the degree to which they respond to the process of cultural diffusion and the degree to which they are prepared to subordinate the past for the sake of a more promising future is what sets open societies apart from each other. 

SYNOPTIC HISTORICAL PERSPECTIVE OF DEPENDENCY
With the help of Russia, France and England, Greece carried out a national independence movement from the Ottoman Empire in the 1820s. The creation of Greece as a nation-state owing to the efforts of the Great Powers entails political, military and economic dependence on the Great Powers, and especially industrialized England that would retain hegemonic role over Greece until the Second World War. Unlike the French Revolution that was a grassroots uprising intended to change the entire institutional structure, the Greek War of Independence was a movement carried out primarily by large landowners and merchants with the backing of the Orthodox Church.

To carry out the rebellion, rebels borrowed heavily throughout the 1820s from the House of Rothschild and from London financiers who had every intention of forcing their government into the conflict so they would not lose their money. Anglo-French loans continue pouring in throughout the 19th century until the country declared bankruptcy in 1893 when the deep recession swept across Europe and US. Sustaining the government and economy through inordinate foreign borrowing without using the resources to become more self-reliant was a prescription for perpetuating economic and political dependence indefinitely.

From the War of Independence until the present, Greek politicians as well as businesspeople looked West for political, economic and political integration. A comprador (middlemen and externally dependent) political class has always existed alongside the compador socioeconomic class whose fortunes rested with northwest Europe. Given that the country rests between three continents, it has always held geopolitical significance, something that became even more apparent after WWII when the US and its Western partners resolved to secure the energy sources of the Middle East. Whether in the early 19th century as a base of British naval operations in the Eastern Mediterranean, or in 2012 as a launching base for possible operations against any Middle Eastern country, Greece has value owing to its location on the map.

Greek politics under an external dependency and internal clientist structure has never been the process of a social contract that has as the ultimate goal the advancement of society as a whole with all social groups benefiting, or at least not creating extreme social polarization. Instead, politics was a matter of catering to the foreign patron power (s) under a patron-client relationship. Individual relationships based on private interests invariably against public welfare is at the core of externally dependent and clientist politics. The voter delivers the votes, and the politician delivers favors that range from securing a job for the client, to making sure that the client's relative secures priority in a hospital for a surgical procedure; a process that necessarily entails the rejection of rationalizing institutions and rejecting professionalism in bureaucracies of both the public and private sectors.

The patron-client system, which has existed in various forms since the Roman era and characterizes the political process in many less developed nations today, best served both the comprador bourgeoisie as well as the foreign businesses that were able to buy influence. The same system served the 'patron' country on which Greece was dependent, namely Great Britain from the mid-1830s until the Truman Doctrine, the US from Truman to Clinton, and Germany in the last fifteen years.The significant question is the degree to which it has contributed to the bankrupt nation.

CULTURE and ETHNIC IDENTITY
Ethnic identity is an issue for Greeks, only in so far as they are in denial about the true origins of the populations that lives in southeastern Europe and speaks a language that is a variation of classical Greek. It is no secret that people who live in Greece believe they are the direct descendants of classical Greeks whose creative accomplishments are the rich legacy to the Western World. That Greeks believe they are the 'other chosen people', namely, the gentiles that 'civilized the world', entails their cultural assumptions are an impediment to forward-looking thinking to progress. This mindset resting on the laurels of ancestors is an obstacle to societal progress in so far as it entails  that the entire nation is immersed in myths and illusions of grandeur of the distant past and fails to appreciate societal and individual (personal) limitations set by the structural perimeters of external dependency and clientist relations, to say nothing of the fact that when one swims in such myths and illusions, then there is less effort to be productive, creative and self-reliant.

After all, if I am carrying the legacy of classical Greece, why would I need anything more to prove my inner self-worth, and why would not arrogance to an extreme degree be my distinguishing trait that sets me apart from the 'Barbarian other' who is not carrying such a legacy as I do? This is to some degree a tragic reality with the Greeks who remain convinced that they are separate and distinct from the rest of (barbarian) humanity, an illusion that permits them to be content with the archaic and decadent status quo, which is itself rooted in Medieval Ottoman culture.

Added to the illusion of grandeur owing to the legacy of classical Greece, there are the illusions that the Orthodox Church contributes. An institution that has been intertwined with the political world from Independence to the present, the church inculcates the illusion of separateness, uniqueness on top of other-worldliness into the minds of the masses; myths that politicians use and exploit to engender sociopolitical conformity. That the church has a major role in the economy and society, is a reflection of adherence to 'traditionalism' and 'exceptionalism', both obstacles to assessing societal conditions objectively without the injections of illusions regarding uniqueness, other-worldliness and above all dogmatic thinking derived from religion but applied in all endeavors. If the church were a socially progressive and corrupt-free institution as some of the more radical Protestant sects that could have been a positive influence on society, but it is a Medieval institution perpetuating an archaic mindset on the broader masses of society.

Needless to say, Greek politicians are a reflection of some of the most decadent and archaic traits of a the culture of 'traditionalism' that is still influenced by aspects of the legacy of the classical world, the Orthodox Church, and the Ottoman Empire. At the surface level, society projects an image of modernity simply because of prevailing consumerist Western values, everything from dress mode, entertainment and lifestyle that are thin layers on top of the underlying 'traditionalism' substructure of society. In short, Greece is a society that never had a cultural/intellectual revolution endeavoring to modernize by simply copying the consumerist and lifestyle habits of the West.

POLITICAL ECONOMY
There are two parallel elites that exert power and influence in how society operates. The first is the political class and the second the socioeconomic class, both comprador - externally dependent - and both resting on the cultural foundations of 'traditionalism'. Without going into detailed historical analysis, suffice it to say that structurally those pyramids have been in place for the duration of modern Greece and remain so to this day, both constituting obstacles to socioeconomic progress rooted in social justice.

From the War of Independence to the present, there have always been a few thousand families that have owned most of the assets in the country and this group constitutes the dependent capitalist (comprador) class invariably linked to foreign capital and exerting hegemonic influence in the political arena. 
How does this class operate differently than the dominant sociopolitical class in a modern Western society?
My theory is that 'Baksheesh capitalism, a system rooted in clientist relationships between consumer and provider and a reward system to provider by the consumer to demonstrate appreciation for products/services rendered, is at the root of the political economy. There are endless examples of how the system operates, but let us consider a few.

The medical devices and pharmaceutical provider to hospital offers payoffs to various individuals starting with ministry of health officials all the way down to the doctor who orders the specific product for the hospital and takes a bribe. Similarly, defense contractors (Russian, US, French, German, etc.) offer millions in bribes to everyone from the defense minister all the way down to military officers and trade union officials whose shop will receive the product for services. Similar bribery schemes are across every sector, some very sophisticated involving offshore companies around the world that launder money and involve every sector in the public and private domains as well as segments of the Church/monasteries. This means that the cost of products/services is much higher owing to layers of bribes, and that the product or service not necessarily the best in the marketplace. The price for baksheesh capitalism is perpetual backwardness for the entire society and blatant social injustice.

Is it difficult to track down the web of baksheesh capitalism and go to its source if the entire society is immersed in it? The web begins with the political class and socioeconomic hierarchy. For example, the energy is a sector where the state loses billions of euros owing to black market operations starts with the two large refineries owned by two multi-billionaire families. The corruption scheme then filters down to distributors and truck drivers delivering the product.

The black market energy racket could not take place in the absence of bribes to everyone from top politicians, judges, police, customs officials, and a host of others whose assistance is essential to sell the product illegally.The ultimate goal of all parties in the web of baksheesh capitalism is to make as high a profit as possible by avoiding tax payments, a situation that necessarily leads the government to borrow heavily, and thus to higher debt that eventually must be paid under bankrupt or semi-bankrupt conditions.

The paradox of baksheesh capitalism web is that everyone involved from the gasoline station cheating with a computer chip inserted in the machine to government ministers has the following reactions to endemic corruption that contributes to perpetual external dependence and the current bankruptcy. First, everyone takes and gives bribes and/or is somehow involved in a corrupt scheme. Second, the 'other' is to blame because the 'other' offers or receives larger bribes than I do. Third, the problem is not baksheesh capitalism but the foreign enemy that offers bribes to domestic players (comprador bourgeoisie and politicians) and foreign banks and governments that do not offer 'cheap and endless credit'.

There is general agreement that the entire society is swimming in the system of baksheesh capitalism, but there is no agreement on a) who/what  is to blame; b) how to fix the system without impacting the personal interests of the few thousand families that own most of the wealth but evade paying fair share of taxes; c) how to end baksheesh capitalism without impacting the political class that uses the economy as a tool to perpetuate itself. For its part, the large segment of the labor force that works for the public sector as part of a clientist system does not wish to lose its privileged position where bribery is a component for everything from school teachers and university professors to clerks at social security offices.

Realizing that bankruptcy under a structured loan program from the European Union, European Central Bank and IMF entails impoverishment for at least one-third of the population and substantially low living standards for the middle one-third of the population, the political class and the socioeconomic elites have tried to convince the general public that the problem is to curb the 'bureaucratic state' and strengthen the private sector under a neo-liberal model that would permit foreign capital investment to absorb all the lucrative economic sectors. Naturally, the leftist political elements argue in favor of wealth redistribution primarily through fiscal and monetary policy. Environmentalists argue in favor of solar and other forms of renewable energy to replace fossil fuels. Ultra-nationalists, now popular among the young, argue in favor of closing the borders to foreigners and creating a more 'pure' society fit for the true 'Hellenic' descendants of Plato and Pericles, as though there are any.

Not one word about self-reflection without the myths that Montesquieu discussed in Persian Letters, nor a word about the need for a grassroots sociopolitical and cultural revolution that would give life to a new society looking toward a promising future with social justice at its core. Nor is there any self-reflection and self-criticism about the fact that the vast majority believe that the public sector is there to cater to the individual, namely, that society as a whole owes to the individual and it exists to buttress the individual who in turn has no responsibility to society in any respect from paying taxes to making sure that garbage is properly disposed and not scattered just anywhere. Given that we live in the age of self-indulgence, atomistic modes, consumerism and hedonism, in a culture of 'I am OK you are OK', thus there is no need for self-reflection or self-improvement, one can expect that the entire society from top politicians and businesspeople to the intelligentsia would continue to stroke themselves on the back as essentially the 'other chosen people' chased by a global structure that is the enemy.

This is not to suggest that global capitalism is not responsible for systemic fluctuations, including austerity policies, in smaller countries with public debt problems. On the contrary, capitalism as a world system prevails over nation-states. The issue remains how to manage the national political economy within the larger world-system, and in that respect we have many models from the social-democratic Norwegian to the nationalist Argentinian, from the corporate welfare US system to the quasi-statist Chinese system. The political economy and national institutions a society builds are a reflection of that society's values, aspirations and vision of the future as well as a reflection of the past. In the case of Greece amid a tumultuous period where bankruptcy is a reality, the elites remain steeped in myths of 'traditionalism' dragging with them most of the population, looking backwards instead of forward, because it serves their immediate interests and retains their privileges.

2 comments:

Anonymous said...

The physics of history transcends the country's Greek people today due to the fact that the contributions have been in areas requiring rational thinking. Traditions of this magnitude merit honor where honor is due. Greek individuals have translated for the world the convenant cut in blood where freewill is not an artform of dominant culture, but for the individual.

Today we find that London is hosting an exhibit from Greece and shows more local artist.

The exhibit shows topics that merit further investigation if one is to deconstruct the propaganda that the Greek people are bankrupt vs. dominated by citizens of the world worldview.

By supporting those who are supporting local endeavors of this nature for a Greek generation today, critiques and revised methods might shed light on other related factors that impact BOP.

Anonymous said...

What a waste of time! The article says nothing about HOW TO FIX GREECE..it only shows some useless knowledge of history..it is comon knowlegde that Grece and many other countries have some families owning much of country wealth and that corruption is spread all over, plus the fact that politicians are bribing the people using their own money

Now, how to solve this?
Democracy style one man one vote will never do it

Be honest and say HOW and WHAT should be done to restore freedom for investment to generate jobs
That is no other way..no investment, no jobs, no consumption, no tax, no social services,