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65 responses to “‘Rational’ econocrats v. “hand waving Mediterraneans””

  1. Paul Norton

    Now all we need is some sectarian polemic on the comparative economic rationality and fiscal rectitude of Protestants, Catholics and Eastern Orthodox Christians.

  2. Jacques Chester

    Let me see if I have this straight.

    The Greeks run absolutely retarded budgets, run up a mind-boggling debt, can’t collect taxes and saddled themselves with impossible-to-service financial obligations … and it’s the fault of the economists who told them not to do this?

  3. Aidan

    Krugman has a go at this too.

    His point? Not only is this idea foolish, the technocrats are incompetent and not making good decisions. Lose-lose.

  4. Rob

    You would have to think it is the whole political class that is at fault or more precisely the political culture. A technocrat drawn from this milieu is just as likely to stuff it up.
    What is even more worrying is what happens next? It is all very well to stick a nonentity in as Prime Minister but his job will be to bed down unpopular and probably undemocratic reforms in the economy that will be impossible to dislodge once an election is held. You would have to rely on the reforms working astonishingly quickly and well before a massive electoral reaction takes place in a couple of years time.
    It will be a bumpy ride.

  5. Aidan

    The Greeks run absolutely retarded budgets, run up a mind-boggling debt, can’t collect taxes and saddled themselves with impossible-to-service financial obligations … and it’s the fault of the economists who told them not to do this

    I don’t think that is the point. Having done these things, it is not helpful to make them shut their economy down as some sort of “punishment”.

    Reforms need to occur when their (and the European economy) can handle it, which is not now.

  6. Guido

    One thing that this debate has unmasked, is the latent anglo/northern European feelings of superiority that were obviously suppressed but now can go out with impunity.
    Yes, finally the anglo/northern Europeans age old practice of looking down on those swarthy lazy dagos can be revised under the guise of economic discipline. What fun.

    As John Weeks writes in the Social Europe Journal one would expect to go to the statistics and discover that wage costs in Italy have “over the past 10 years” been rising faster and above those in Germany, the home of hard work and employee discipline. But in 1997 unit labor costs in Italy stood at about eighty percent of those in Germany, and ten years later, they were, well, about eighty percent. Through the late 1990s and early 2000s the ratio actually declined, before returning to slightly above four-fifths.

    Even if Italians were not paid more, they should not have been because they were “doing less work”. Again, the statistics disappoint, because Eurostat (the EU database) reports that in 2009-2011 Italians in full time employment, public and private, worked a lazy average of 38 hours per week, compared to a robust 35.7 for the industrious Germans.

    I am not saying that the policies of Italy, Greece etc (which of course the anglo/northern European supremacists have cheerfully dubbed ‘pigs’ what a fortuitous acronym) should not be criticised. But let’s go a bit deeper than easy cheap glib ethnic stereotypes.

  7. FDB

    Personally I think the Germans and Brits resent Italy’s ability to design and manufacture affordable, lightweight, efficient, serviceable and excellent-sounding public address speaker systems.

  8. Incurious & Unread

    Mark,

    I know you like to blame everything on “neoliberalism” but how, exactly, is the Euro project neoliberal in any sense? As a State-driven project to enforce centralised control on previously deregulated markets (ie floating currencies) it is surely the antithesis of neoliberalism.

  9. Fran Barlow

    What I find most stunning is the unremarked acceptance within the political classes of the world of the failure of democracy in Italy and Greece of anyone fit to run the two countries and the associated conclusion that only someone freed from accountability to anyone but the banks.

    There has been something of a trend in recent years for left-of-centre folk to distance themselves from “vulgar Marx|sm” — said to describe inter alia a highly deterministic view of the relationship between the capitalist class and its interests on the one hand and the capitalist state on the other. I’ve certainly been amongst those who are very critical of such views.

    On the other hand, the ostensible move from rule on behalf of the boss class by politicians to direct rule by functionaries of that class must surely give succour to any “vulgar marx|sts” assuming they exist.

    *Mario Monti senatore a vita (senator for life) is a position created for those possessing “outstanding patriotic merits in the social, scientific, artistic or literary field”. I doubt any of these were in Giorgio Napolitano’s mind when he was appointed.

    Lucas Papademos — the people’s priest … again, how apt …

  10. Katz

    JC:

    Let me see if I have this straight.

    The Greeks run absolutely retarded budgets, run up a mind-boggling debt, can’t collect taxes and saddled themselves with impossible-to-service financial obligations … and it’s the fault of the economists who told them not to do this?

    You’ve got it half right.

    There is no doubt that the Greek political elite must have known that they were borrowing beyond Greece’s capacity to service its debts.

    But you have not mentioned the fact that Greece’s creditors must have at some stage recognised that they were lending money to Greece beyond Greece’s capacity to service its debts.

    The salient point here appears to be that the Greeks worked this fact out long before Greece’s creditors.

    Who is the bigger bunny?

  11. Jacques Chester

    Democracy is a not a get-out-of-jail-free card, Fran.

    Without the rule of law, democracy is just mob rule. It ends in tears.

    Sticking to your contracts is part of the rule of law.

    Nobody forced the Greeks to borrow that money. Nobody went in with guns and dogs to make them pass bad budgets.

  12. Katz

    I&[email protected] makes an excellent point.

    The current Eurozone crisis is a consequence of belief in the security of state-sponsored dirigisme. Greece’s creditors were no doubt lulled into a false sense of security by the belief that the viable sovereign states of the Eurozone would be both willing and able to save creditors from the consequences of sovereign default.

    In other words Europe’s creditors shared with Europe’s governing classes a complacent statist consensus about the overarching potency of the state.

  13. Darryl Rosin

    [email protected] “But you have not mentioned the fact that Greece’s creditors must have at some stage recognised that they were lending money to Greece beyond Greece’s capacity to service its debts.”

    Recognised it?

    http://www.nytimes.com/2010/02/14/business/global/14debt.html

    ” In 2001, just after Greece was admitted to Europe’s monetary union, Goldman [Sachs] helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means….

    Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere….

    [Greece] had paid the [Goldman Sachs] bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.”

    d

  14. Katz

    Nice one DR. I didn’t know that.

    Yes, this is a conspiracy between debtor and creditor, both sides believing that they are too big to fail.

  15. Terry

    I can’t see why people on the left would want to let Berlusconi off the hook, and just yet again invoke the phantasm of neo-liberalism, which you can hold responsible for anything if you don’t want to have to think too much about the issue at hand.

    On conventional indicators, Italy should never have fallen as far behind Germany as it has over the last decade. The problems were governance – or, let’s be more blunt – corruption, pure and simple. I would have thought that the Italian socialist tradition would have pointed the finger at the corrupt nature of the state apparatuses, which worsened in very respect during the Berlusconi years.

    its certainly ironic when it is left to the Financial Times to do a Gramscian analysis of the Italian situation:

    http://www.businessspectator.com.au/bs.nsf/Article/Italy-eurozone-debt-crisis-GDP-growth-politics-gov-pd20111109-NF4AF?OpenDocument&src=srch

  16. Sam

    I like how Lucas Papademos, the man who engineered Greece’s entry into the Euro, is the man who will create a technocratic fix to Greece’s problems.

    Nobody forced the Greeks to borrow that money.

    True. And nobody forced the German and French banks to lend it to them, either.

    Guido, it’s PIIGS not PIGS, the second I standing for Ireland. It’s not just the southern Europeans that are copping a hiding over this.

  17. Sam

    the Italian socialist tradition would have pointed the finger at the corrupt nature of the state apparatuses

    Because, as we know, Italian socialists are not corrupt. Well, apart from this guy …

    http://en.wikipedia.org/wiki/Bettino_Craxi

  18. Terry

    Yeah well, Sam, Craxi was just a neo-liberal technocrat in socialist clothing. Ask Toni Negri.

  19. Tim Dymond

    Incurious and unread and Katz, neo-liberalism is fully relevant to the Eurozone. Just google ‘Growth and Stability Pact’. A treaty that tries to bind countries to no overall debt greater than 60% of GDP and no annual deficit over 3% is neo-liberalism using the state to achieve its actual objective (freedom for corporations) as opposed to its pretend objective (freedom for people). There is no state v market contradiction here.

  20. Katz

    A central tenet of neoliberalism is that no institution is too big to fail.

    Quite clearly, all in the governing and financial elite in the Eurozone believe believe that there are a plethora of institutions that are too big to fail.

    That is the definition of statism.

  21. Sam

    Hey, Terry, don’t you go dissing Negri.

  22. Occam's Blunt Razor

    They should all just pull an Iceland and get it over with.

    What concerns me is that so many continue to fail to see that this a problem in the credit markets caused by mispricing risk. Propping up failing debtors won’t solve the problems unless they truely have way of trading out of adminstration – that is clearly not the case here.

    A short sharp shock and a fresh start is much better than the death by a thousand cuts – look at the US – economic quagmire made by their own hand – they would have a lot lower deficit and their stimulus attempts might actually be working if they hadn’t wasted so much on bail outs.

  23. Sam

    Iceland was/is tiny and fairly isolated economically. It had its own currency. When their banks and economy went down, it only affected Icelanders.

    Unfortunately, the Europeans are big or interconnected or both. And they’re not just interconnected with each other. Europe could bring down the world’s financial system, as Lehmans came within the width of a bee’s dick of doing.

  24. Incurious & Unread

    So, Neoliberalism means:

    “have political decisions made through market mechanisms” or

    “no institution is too big to fail” or

    “using the State to achieve its actual objective as opposed to its pretend objective”

    Seems like it can mean whatever you want it to mean.

  25. Debbieanne

    Isn’t this just an example of “the shock doctrine/diaster capatalism” writ large? Which of course was only meant to happen to those ‘others’ not us.of the developed world.

  26. Katz

    Yes, Sam and OBR.

    These bailouts and state interventions look counterproductive until one considers the alternative.

    I don’t think we know what systemic collapse would look like and how it would be experienced by the world’s billions.

  27. Guido

    Just on a technicality. Mario Monti is not this sort of undemocratic technocrat despot. Berlusconi lost the the numbers in parliament. But no other party had the numbers to create a government. Then is up to the President to resolve the situation. Usually it would be a protracted process where a majority can be worked out, but considering the markets were tearing Italy apart, something had to be done quickly, and something to calm the markets. So Napolitano (the Italian president) appointed Monti as a non politician to resolve the situation. Let’s remember that Monti has become PM after a vote of a the parliament which was voted in the 2008 elections.

  28. Joe

    Henry Farrell also writes books. I’m getting one!

  29. Joe

    Skipping over a whole lot of comments, so hopefully not going to tread on anyone’s toes…

    But what I find so insane about this situation, being in Germany and not being one of those Germans that you read about in the Guardian, or elsewhere, is that, things aren’t great in Germany. There have been no real wage increases in Germany since almost 30 years! (Except if you’re in upper management of a STOXX company.) This was the headline in the Spiegel, before the latest neo-nazi terror campaign conquered the front page.

    I mean, it’s the most incredible pile-on, with respect to how things actually are here in Germany. And talk about alienating– most people here, just don’t want to know about it, other than investing in a few Swiss Francs for the worst case scenario. Because, most people here have struggled during the last 20 years– things haven’t gotten appreciably worse, but they also haven’t improved.

    And as Mark alludes to, this stereotype of the rational German?! How can people buy this crap? In fact, if we really have to generalise, I’d say that Germans are pretty irrational. German history is basically horrible and dark and the few rays of light which shine through here and there are clung to fervently– but even these giants of academia were rarely rational, wrt their private lives.

    It just seems the most incredible disservice to the reality of the financial crisis in Europe and the position of the German people to kind of try and lay the blame for the crisis at the feet of the Germans. I mean, the AIG Financial Products unit was based in London for crisesakes.

    Rant.
    STOP RUN.

  30. Joe

    Yeah, but Katz, who’d be responsible for the collapse?

    And, even more importantly: If Italy actually can’t pay back it’s debts (which would be like the invitation for Spain and the end of France), Germany, Finland, Sweden, Netherlands, etc. they can’t help. It would be like turning up to a raging electrical fire with a garden hose and a couple of blankies.

    Of course, people are concerned and panicking but you have to try and keep some sort of perspective on the thing, surely?

  31. Mercurius

    All together now…

    a-what’s-a-matter-you-HEY!

  32. Joe

    Yeah, Australia should chip in. Great Australian nation– if all the Greeks living in Australia would chip in $2.50 Greece would be saved. It’s that easy.

  33. Joe

    Sam,
    actually, when Iceland went down, friends of ours lost the money that they had been investing there for their kids’ education. That was a bit of a bummer and for months it was impossible to even find out, what was happening.

  34. patrickg

    Long time, no comment, Guido. Good to see you back.

  35. Katz

    Of course, people are concerned and panicking but you have to try and keep some sort of perspective on the thing, surely?

    But the question is what is the most appropriate perspective. The financial world has never faced a crisis of this magnitude before. The bubble in world asset prices dwarfs what happened in the run up to the 1930s Depression.

    Moreover, when the Titanic is sinking the most pressing question isn’t who steered the ship into the iceberg but whether the ship can be saved and if not who should be saved and who sacrificed.

  36. Joe

    Katz,

    I have the funny feeling that we’re already into the “who should be saved and who sacrificed” part of the catastrophe and Sarkozy is trying like hell to hold the whole thing together for as long he possibly can so that he can save the French financial system.

    The German government is also supporting this attempt, because common knowledge says that without both Germany and France there is no more EU.

    The EU as a political project has value above and beyond it’s economic importance. Unfortunately for the EU, global economics couldn’t care less about political projects.

    Don’t forget we have seen nothing from the US or the UK in terms of trying to force global finance back into it’s box. Some minor protesting, which seems to have no broader social support, is the only indication that there has been a catastrophe. More significantly, the political systems in the US and the UK don’t have a policy answer– there isn’t even a policy debate! They responded in a more active way to the crisis, but in the aftermath, there seems to be no real political response to the reasons for the financial crisis, or how to reform the system so as to avoid a repeat of the crisis in the future.

  37. Katz

    US and UK financial institutions are exposed to Eurozone debt.

    The governments of the US and the UK are already tapped out by their own domestic bailouts. I guess both governments are hoping that they will be able to afford to bail out any of their national financial corporations that may be embarrassed by Eurozone default.

    Financial oversight reform so far enacted is probably inadequate. But whatever legislation that may be enacted comes too late to clean up the present mess.

  38. Dr_Tad

    The Euro has always been an elite project, an attempt to create a new form of world money to compete with the US dollar by aggregating the economies of a number of advanced economies. It has always been connected to public spending and other financial rules that were intended to institute the kinds of reforms that are typically understood as “neoliberal”, such as a rundown of public services. It has been something else, too — an attempt by Germany and France in particular to use the Euro to further the ends of their own economic elites, whether industrial or financial. This has meant both on a world stage and within the EZ itself.

    Once the GFC erupted, the crisis exacerbated the already festering divergence between “core” and “periphery”. That divergence was in part driven by Germany’s success in holding down wages relative to the other EZ countries, but of course worsened as recession was experienced differentially by Germany (with its buoyant manufacturing exports to China leading the way) and the periphery. Even before 2007-8, the divergence also effectively led Germany to be the net creditor for the indebted nations.

    Importantly, the bailouts of the the post-Lehmann crisis meant that private debt was taken over as public debt, and this is why the sovereign debt crisis emerged. This combination of factors makes the single currency the main transmission belt for the current crisis, especially as individual nations cannot do the things that they would if they had their own currency to restore their competitiveness, and the central bank and financial mechanisms have no individual (unitary European) state to help solve the problems of constituent economies.

    All the racially-charged drivel about the peripheral countries reflects two logics: (1) A general ideological justification for forcing through the most socially destructive austerity measures the West has seen since the Great Depression, and (2) the deployment of a resurgent German and French “core” nationalism to justify the attempts of the ruling elites of those countries to carry out this truly monstrous attack on ordinary people across the Eurozone. I discuss some of the social effects of the crisis here: http://left-flank.blogspot.com/2011/11/left-flank-dispatch-from-europe-descent.html

    The logic of the EZ also means two further things. First that local economic elites have clung to the Eurozone out of fear that being “outside the tent” will be worse for them. Better to smash their own peoples with austerity than risk this. Second that the way the EZ works in a crisis leads to a direct subversion of democracy through the installation of ECB & IMF mandarins within state bureaucracies to monitor “compliance” with austerity measures, and the soft coups we’ve seen in Greece and Italy which have involved direct political interference from Berlin and Paris. In both Greece and Italy no elections were held and no votes of confidence lost, but in both democratic government has been replaced by banker-friendly technocratic administration. Naturally, this will do nothing to solve the deep crisis of authority faced by the political class of each country.

    I strongly recommend the latest RMF report by Costas Lapavitsas & co, available from their SOAS website here: http://www.researchonmoneyandfinance.org/

    I just saw Lapavitsas speak in a debate with other people in the European Left at the Historical Materialism conference here in London. He made a very clear case why the Left should not mourn the demise of the EZ, and indeed why the Greek Left should argue for popular-led default, exit, nationalisation of the banks and progressive economic measures to shift the balance from capital to labour.

  39. Sam

    Tad, your link is broken.

    But it inspire me to look up this Lapdance fellow. He is very impressive.

  40. Joe

    Dr Tad,

    I have to disagree with you there. Europe has the historical kind of baggage which has the potential to create the kind of “misunderstandings” which you see in the middle east and northern ireland. The EU is not primarily about power and there is little in it’s history, which would lead anyone to think that it is. It’s always been a bit of a muddle, it’s rarely considered efficiency to be something to aspire to, but has sought to increase communication– in a broader sense of the word, containing for example economic relations.

    The crisis just makes obvious that the EU isn’t primarily an economic union. It is an amorphous political body. It’s certainly not US, Russia, or China-like: lacking their armoured exoskeletons and their rabid aggressive economic agendas. It was nice. An example of soft power and its failure should not be seen as the result of something nasty in the EU. Much blame can be laid at the feet of the international context which has led it this in-pass.

  41. Guido

    Thank you PatrickG. I read LP regularly but I comment when I think I have something relatively original to contribute! 🙂

  42. Dr_Tad

    Joe @42, I didn’t say much about the EU. It’s the monetary union project I was critiquing. To say that project is not about power, however, would be weird.

  43. Sam

    And yet the British Tories have died in a ditch to stop Britain from joining the Euro. They must have a false consciousness about their class interests.

    Or, as Krugman said recently in the NYT, these matters defy easy ideological pigeon holing. There are both left and right arguments for and against having your own currency, and for and against being in a monetary union.

  44. Sam

    Joe 35, condolences to your friends, but my point was that Iceland was too small to be systemic, which it was.

    Indeed, so small and unimportant was Iceland, when it looked like British depositors would lose money they had in Icelandic banks ( and under the letter of banking law they should have), the British Government threatened to freeze the assets of the Icelandic Government, using anti-terrorist laws.

    The Icelanders caved and the depositors got their money.

    Now, that is power politics.

  45. Labouring the Point

    Katz, too big to fail is NOT neo-liberalism. most would let it fail but as that excellent book of the same name shows even the most ideological people soon realise systematic risk was a much greater potential problem than moral hazard.
    Indeed in hindsight it is the one GREAT lesson form the GFC.

    The problem in southern Europe is that Austerity makes the problems worse particualy since everyone looks at ratios.

    Both the deficit and debt grows because of savage spending cuts/ tax rises and GDP either falls or slows dramatically.

    You need growth to overcome debt. As Keynes pointed out in 1936 austerity is great economics when times are good but terrible economics when times are bad.

    The major problem with classical economics is that it is pro-cyclical.

  46. Fran Barlow

    Jacques [email protected] commenting on the secondment to the head of government of unelected banksters to the head of government, said:

    Democracy is a not a get-out-of-jail-free card, Fran. Without the rule of law, democracy is just mob rule. It ends in tears.

    This response demands an amended redux of that spech from the Holy Grail

    Listen, Gucci-laden spivs in Brussels distributing credit notes is no basis for a system of government. Supreme executive power derives from a mandate from the masses, not from some farcical financial ceremony.

    More seriously though, I could have written a lengthy piece discussing the the realtionship between democracy and capitalism and yet failed to convey as much as Jacques did above on what happens to the right-of-centre libertarian mind when one has to choose between democracy and the needs of capital. Sometimes, one just needs to allow the horse to speak for itself.

    Democracy for Jacques is a slippery slope to mob rule. Yes, he mentions “the rule of law” as a constraint, but this contextually vague figleaf seems like equivocation. Most of us know, or think we know, what “the rule of law” entails, but it’s far from clear that Jacques is using this sense here. We heard for example this morning on AM, that “the rule of law” was being utterly ignored by the corporate regulator in Ireland from about 2007 allowing the banks to depart radically from debt-raising rules. Next thing you know, they have their hand out for a bailout.

    That’s what a low tax and “light-touch regulation” system washes up. best of all, Jacques can then say that nobody forced the Irtish to borrow all this money and if some other corporate spiv has to be put in charge to enforce the required payments then this is at least not the path to ‘mob rule’. Democracy, is not, he reminds us “a get-out-of-jail-free card”. ‘Democracy’, suitably subject to ‘the rule of law’, is for Jacques, a guarantee that people will stay in jail or pay a very high price to exit from it. If they try a break out, then a warden such as Monti or Papademos must suspend so much of it as needed to collect the price of exit. Who needs democracy when rich folk can’t sleep at night knowing their ill-gotten assets are safe? Not rich folk that’s for sure.

    It does seem telling that for all the wailing and gnashing of teeth over “carbon credits” and the state of Al Gore’s waistline by the right, and the truly heart-rending complaints about Hamilton’s remarks about the ‘suspension of democracy’ we are hearing not a jot from the shockjocks about the suspension of democracy in Italy and Greece so that people who really do qualify as rent-seekers can get paid. Where are all those tradies and truckers? Buried under astroturf no doubt.

  47. Fran Barlow

    oops:

    Jacques [email protected] commenting on the secondment to the head of government of unelected banksters to the head of government

  48. Darryl Rosin

    [email protected]

    Thanks for the link to the Lapavitsas document. Two things I think it skips:
    1. The knock-on effect of Greek withdrawal from the EMU. The day after Greece leaves, every bank in Italy (and others) collapses. Which, at one level, is not the Greeks’ problem, but one of Lapavitsas’ unspoken assumptions (I think) is a functioning international finance system.
    2. I also think he glosses over the right-wing resistance that would appear in the face of his (quite sensible) left-wing proposals. He’s Greek (I assume) and lives in Europe, and I’m neither, but the Civil War and the Coup were not that long ago. (Speaking of which, the anniversary of the Athens Polytechnic massacre is in a couple of days. It’ll be interesting to see if that triggers anything).

    d

  49. Katz

    LTP, I don’t quite understand the point you are making:

    Katz, too big to fail is NOT neo-liberalism. most would let it fail but as that excellent book of the same name shows even the most ideological people soon realise systematic risk was a much greater potential problem than moral hazard.

    I thought that was the same argument as mine.

    A central tenet of neoliberalism is that no institution is too big to fail.

    When, as Sorkin shows in his book the high priests of neoliberalism following Bernanke’s dictum “There are no atheists in foxholes and no ideologues in financial crises”, these chaps have stopped behaving like neoliberals even though they might continue to pay lip service to neoliberal ideology.

  50. Robert Bollard

    So, democracy doesn’t work. Technocrats who know what’s best for us should be allowed to implement the necesary austerity. Are there any parallels from the sensible Germans? I can think of an obvious one from back in the day where, despite their aversion to hand-wringing, the Germans got the in a bit of a mess during the Great Depression.
    Heinrich Brüning was an academic economist of moderate technocratic persuasion.
    A member of the Catholic Centre Party, he was appointed by Hindenburg as Prime Minister in 1930 based on his possession of economic expertise, despite lacking support in the Reichstag to cobble together a majority. Elections were called in 1930 but, rather than resolve things, the Communists and Nazis both grew stronger and a working majority for anybody in the Reichstag was now impossible.
    The solution was for Hindenburg to dispense with democracy and rule by decree (making use of an obscure emergency provision in the Weimar constitution) while Brüning, doctoral graduate of LSE and technocrat par excellence managed.
    As we know, it all worked out well from that point on.

  51. Robert Bollard

    Apologies that should have read “aversion to hand-waving”. Gotta get the stereotypes right!

  52. Aidan

    Not only did Goldmann Sachs arrange the dodgy greek “loan disguised as currency deal”, they simultaneously shorted Greek bonds. Some my characterise this as prudent business practice.

    Prudent business practice is not necessarily morally sound.

  53. Tim Macknay

    Paul Norton @1:

    Now all we need is some sectarian polemic on the comparative economic rationality and fiscal rectitude of Protestants, Catholics and Eastern Orthodox Christians.

    Well, economic rationalism is just disguised Lutheranism. I thought everyone knew that. 🙂

  54. Darryl Rosin

    [email protected]

    I would have said Calvinism, meself.

    d

  55. Sam

    Lutherans, Calvinists … they all look the same to me.

  56. Labouring the Point

    no Katz,

    A genuine neo-liberal would allow the companies to fail and have a depression to purge the worst elements out of the economy.

    Robert,

    Even Hayek realised his advice to Bruning only brought on Hitler.

    Classical economics is pro-cyclical which is why it doesn’t wrok.

  57. Katz

    LTP, we appear to be in furious agreement.

  58. Tom R

    @1: “Now all we need is some sectarian polemic on the comparative economic rationality and fiscal rectitude of Protestants, Catholics and Eastern Orthodox Christians”

    This being Larvatus Prodeo, Paul, you’ll have to make do with “Calvinist” used as a swear word, and discourses on the essential authoritarian-ness of Lutheranism and its baneful influence on Noel Pearson. But Whiggish sectarian polemic about corrupt, reactionary Southern Europe vs progressive, liberal Northern Europe has no place on a left-of-centre blog.

  59. Tim Macknay

    But Whiggish sectarian polemic about corrupt, reactionary Southern Europe vs progressive, liberal Northern Europe has no place on a left-of-centre blog.

    Duly noted, Commissar Tom R.

  60. Katz

    Professors and theoreticians don’t take kindly to the suggestion that their lives’ work amounts to little more than a catch cry or a sop.

    But be that as it may, it is worth contemplating who gets to call an end to the pretence of true belief in an ideology and the conditions that recommend the good policy of this act of apostasy.

    And can apostates ever return to the status of true believers?

  61. Dr_Tad

    Darryl @ 50

    Lapavitsas is under no illusions about all that, but there is a living (although confused and divided) militant mass workers’ movement in Greece and it is fighting on a particular terrain. The question is how to unite and focus it against its enemies’ weakest link. And the Euro is very clearly at the centre of the political crisis, especially the question of its weakest member, Greece.

    So on (1) he is clear that exit is not just a policy for Greece but other non-core peripheral nations and he has policy proposals for them too. They are summarised (more briefly!) as part of a debate here: http://www.internationalviewpoint.org/spip.php?article2091

    On (2) the reality is that the attempts to save the Eurozone have already seen democracy subverted. That may well get worse in the absence of a clear struggle for a break from the Euro, also. The big question is along what coordinates the movement has the best chance of paralysing a ruling class response, and buying time for itself to work out next steps. Within the Eurozone-austerity axis this is immeasurably more difficult than if facing a weakened and humiliated national ruling class (and the rest of the EZ ruling classes in a worse crisis because of the breaking apart of their project through mass struggle).

  62. Adrien

    Instead, it is as if the crew of the Starship Enterprise had concluded that Captain Jean-Luc Picard is no longer the man for the job and that it is time to send for the Borg.

    Well perhaps it is handing over to the Borg but it is definitely not Jean Luc Picard who is giving up the reins of power. The people who have run Greece and Italy were not good captains.

    Europe has very real problems. Some of them have been caused by socialism some by liberalism. To ascribe rationalism entirely to one side of the spectrum is to inhibit the solution. They’re all technocrats!

    And one way in which this dominance of the technocratic elite is perpetuated is with this ideological war. Surely it’s a simple matter to see the extent to which Popper has a point and to absorb that into one’s considerations and to understand that his views like all other views have their limits.

    In the crisis of neo-liberalism, Davies suggests, “economics and sovereignty are merging”.

    Economics and sovereignty have been merging for over a hundred years.