“It is not good to have a rule of many.” – Homer
A New Greek Tragedy
A country with a burgeoning economy offers an intoxicating sensation. It warms the hearts and softens the minds of men to notions that would otherwise be impossible. Suddenly their best and brightest shine brighter than everywhere else, their military might’s the mightiest, and their system of government is the most high.
For a time this appears to be true. The evidence, for a while, shows no indication to the contrary. But, then, when everyone least expects it, the seemingly impossible happens. The money, the military, and the people’s dignity crash in rapid succession.
Athens, for example, lost its edge over 2,400 years ago. When the Peloponnesian War ended in 404 BC, after 27 long years, Athens had been reduced from the strongest city-state in Greece to a state of complete devastation. So, too, the Peloponnesian War closed the door on the golden age of Greece. Athens’ pre-war prosperity and preeminence were gone forever.
To this day the shattered psyche of Athens’ population has never fully been pieced back together. Despite every effort to try every mad idea – including early experiments in democracy, oligarchy, conquest and empire – they’ve yet to regain their former glory. Perhaps they never will.
But to really understand today’s Greek tragedy one must look back to the philosophy of Aristotle for edification…
Witnessing the Occurrence of the Impossible
Aristotle identified two modes of causation: proper (prior) causation and accidental (chance) causation. It is likely that Aristotle didn’t conceive of these two modes of causation happening in tandem. That would be impossible.
Yet one of the more fascinating things about living is getting to bear witness to the occurrence of the impossible. Last Sunday, if you can believe it, the impossible happened…
Proper and accidental causation happened in tandem. What we mean is, Greek voters of sound mind and body showed up at the poll booths and split their votes between the conservative New Democracy party and the anti-bailout radical left Syriza party. This must be, without a doubt, the impossible effect of both prior events and chance joining forces for a uniquely disastrous result.
While, technically, the New Democracy party garnered the most votes, the margin of victory over the Syriza party was so slim that neither party will have enough seats in the 300-member Parliament to form a government. Moreover, these parties are near polar opposites.
The New Democracy party wants Greece to keep the euro and renegotiate the austerity terms of the bailout. The Syriza party wants to rip up Greece’s bailout deal, default on its euro obligations, and return the nation to the drachma. What Greece ultimately gets is not entirely clear…but here at the Economic Prism we believe it will be more of what they’ve already gotten…
Give Democratic Socialism a Chance
This week will bring forth discussions of a coalition, power-sharing, government between the New Democracy party and the Socialist PASOK party, which, together, share a slim majority of 162 seats in parliament. While this puts to bed the possibility of an imminent Greek euro exit, this coalition will likely prove to be a marriage made in hell.
From what we gather, both parties of the new coalition government are in favor of remaining with the euro. But beyond that who knows what mischief they’ll pursue?
Quite frankly we don’t know much about either party. We know PASOK is socialist and that the New Democracy party includes the word democracy in its party name. Nonetheless, we find the prospect of a new democratic socialism to be profoundly absurd given that this is what’s responsible for getting Greece into its current fiscal predicament.
Alexander Tytler, a 16th century Scottish history professor at the University of Edinburgh, is often attributed to a quote on The Fall of the Athenian Republic. While there’s no confirmed record of Tytler having made this statement, we still offer it for its empirical accuracy…
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.”
There you have it. All the new Greek government must do is figure out how to get more credit extended to a country that already has too much debt. In other words, they must discount arithmetic.
“All we are saying,” chant the Greeks, “is give democratic socialism a chance.”
Sincerely,
MN Gordon
for Economic Prism
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