Time to get a history lesson on this Greek mess

When discussing the Greek crisis, most point to Greece’s loose credit, easy spending, and government’s oversight (or inability) to collect taxes from its constituents over the past decades.  Many also mention the inflexible labour structure, its huge public sector, and fraudulent accounting in concealing its financial troubles for as long as it did.

All good and well.  But what most failed to mention are the following: outsized and outright ridiculous defense spending, as well as a price the Greek political leaders have paid, to essentially bribe social peace.

First off, Tomasz Wegrzanowski dug up some numbers on defense spending as a percentage of GDP, and Greece came up pretty high.  This is not a table that you necessarily want to come up on top of.  But here is is, Greece, relative to the other big boys.  A caveat that there are still far more countries that spend more extravagantly than Greece, and more often than not, ones that are least able to afford it.

Secondly, the issue of just exactly how Greece managed to transition from a dictatorship to a democratic society, and the kind of political bargain that had to be made for the country to achieve peace.

The late Andreas Papandreou’s strategy in the 1980s was to give the disenfranchised, who formed the bulk of PASOK’s voters, a shot at living like the middle class. If this meant throwing European assistance and subsidies around like political favors and giving pensions to people who had never contributed to social security (such as farmers), then so be it. At last, all those who had been shut out by the right-wing establishment which triumphed in the Civil War in 1946-49 – and which was thoroughly discredited by the dictatorship of 1967-74 – would get to share in the wealth of the nation.

The fact that this new middle class was founded on wealth that the country was not producing meant that the economy broke free from all logic and went into its own orbit. PASOK established the National Health System and poured money into education but it also undermined the gains by destroying any semblance of hierarchy, accountability and recognition of merit in the public sector.

And it is a sobering thought when the author asked the readers to consider Greek nepotism, clientelism, and perhaps today’s corruption, in that historical context.

Take the painful question of the huge public sector, and all those civil servants with jobs for life, and unusually generous retirement packages. The existence of those jobs for life is not a cultural quirk, in which Greek officials simply like coffee and backgammon too much to do any work. It is the end result of a brutal, multi-decade power struggle between the left and the right: a struggle that got people killed within living memory.

In Greece, plenty of grown-ups remember when the alternative to social peace was their neighbour, or their loved-one, vanishing in the night into a jail cell or worse. The current clientelist truce between right and left is the price (albeit a horrible, wasteful price) established for the current version of social peace enjoyed in Greece.

I also like A fistful of Euros’ comment that as much as we wish it so, all liberal democracies are not created equal.  Far from it.  In fact, histories behind the process of democratization carries far more weight than the end product at times, such as now, when the decade-long bill that paid for relative political peace is due, and the debtors come knocking on your door.

The idea that liberal democracy can fix broken societies is an essential part of the EU project. That is, on the whole, a good thing. But it encourages a certain sort of small-scale-map historical amnesia, where all liberal democracies are considered more or less equal, and ugly pasts are relegated to a sort of historical basement where they’re not supposed to be able to affect the clean democratic present.

This is an illusion. Maybe to some extent it’s a necessary illusion. But the EU is full of countries where the dead past isn’t really dead, or even past.

I second the hypothesis that there is a very strong link indeed, between the scale of economic problems now arising in certain countries, and their authoritarian past that is perhaps not past at all.

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    History drove Greeks to bankruptcy, because they didn't learn from their mistakes from the past.