“Crito, we owe a rooster to Asclepius. Please don’t forget to pay the debt,” were the final words of Socrates. He uttered them shortly after downing poison hemlock in 399 BC, in fulfillment of his death sentence for corrupting the youth.
Asclepius was the Greek god for curing illness. One interpretation of Socrates’ last words is that death is the cure – or freedom – of the soul from the body. Another is that Socrates viewed his death as a cure for Athens’ ailments…including its decline from the height of hegemony and defeat by Sparta in the Peloponnesian War.
By all accounts, Socrates’ followers were left searching for direction following the death of this profound gadfly. Plato, for example, went on to explore, broaden, and clarify Socrates ideas, making them lasting contributions to the world. However, many of Socrates’ other followers dissolved into various factions, and became nothing more than historical footnotes.
The Cynics, for instance, took Socrates’ teachings of the virtues of a simple life and extended them into loony land. Before long Diogenes of Sinope was begging for a living and stumbling around the marketplace with a lamp in full daylight, claiming to be looking for an honest man. Somehow he believed this poverty and behavior criticized the vanity, pretense, and self-deception of contemporary Athens.
Despite the absurdity of taking the virtues of simple living to their logical extremes, the Cynics were on to something their modern day descendants could use more of: Austerity.
Indeed, the Greeks may soon be living the Cynics’ lifestyle whether they want to or not…
The Money Doesn’t Exist
“Greece said Sunday that it won’t have the money it is due to repay to the International Monetary Fund next month unless it strikes a deal with international creditors over further rescue funding,” reported Stelios Bouras over the weekend.
“Interior Minister Nikos Voutsis told privately owned television station Mega that Greece is scheduled to repay EUR1.6 billion ($1.76 billion) to the IMF between June 5-19, but the payments cannot be met.
‘“This money will not be given,’ he said. ‘It does not exist.’
“A default on Greece’s obligations to the IMF could spark heavy deposit withdrawals from Greek banks and force capital controls, deepening the country’s economic crisis, economists say.”
Of course, a debt default is exactly what Greece needs. The IMF and the European Central Bank should have never extended so much credit in the first place. Did they really think the Greek populace would really be able to pay it back?
More accurately, the creditors didn’t bother to think at all. Rather, they chose to extend more credit and pretend everything would be okay. Such is the logic of attempting to solve a debt problem with more debt.
Cynics and the Big Fat Greek Default
Default and austerity is what Greece really needs. Prudence, hard work, and sacrifice is the path that will eventually take Greece back to a firmer financial footing. Yet no one wants to do this…for it will mean things will get worse for the Greeks before they get better.
Similarly, a Greek default may be the initial breach of the dike that’ll flood out the entire European Union. Should Greece default and exit the European Union, what other countries will follow a similar path?
Yet, as of today, “Greece is optimistic a reform deal with its international lenders will be sealed by the end of May, just in time for Athens to meet a €300 million payment to the International Monetary Fund on June 5,” reported MarketWatch.
Perhaps in the short term, if this deal is reached, Greece’s economy will continue to slumber along, under the crushing weight of its creditors. But this shouldn’t be the goal or objective of Greece’s leaders. Our modest proposal is to bite the bullet…like the Cynics would have done.
A big fat Greek default on its obligations with the IMF, and the ensuing capital flight, capital controls, and economic crisis that follows may ultimately be worth the cost. Particularly, if it allows Greece to rid itself of its debts and exit the European Union. In time, Greece will be all the better for it.
They’ll regain their sovereignty and autonomy and be free from technocratic rheostat out of Brussels.
for Economic Prism