Moralising about Greece

Much of the moralising about the crisis seems to miss a couple of points.

First, the parties to the struggle over resources (that’s all this is) are not single people.  But they are often discussed as though they were.  They are, in fact, coalitions of representatives of multitudes of individuals, looking out for themselves, constrained by the fact that the multitudes they represent are also looking out for themselves.  That is surely true on both sides.

And these coalitions of representatives know that the other party is trying to get all they can, and that neither can commit.  And that they are probably going to confront the same struggle again with the same adversary.  And possibly with others.  The representatives themselves are also locked in games with their electorates, struggling to convince that they can commit and deliver, and at the same time preserve as much room for discretion as possible.

Seen like this, moralising about the parties strikes me as highly inaccurate.  Not least, somewhat pointless.  What will it change?  Are the moralisers hoping to change a few million minds?  Or wave away all the interlocking struggles on either side of the negotiation?  Good luck with that.

[Added later:  Incidentally, this argument applies as much to those against Syriza as for it, who personify the complex systems that produce Greek political system, Greek tax collection/evasion, or inefficient Greek public services, and divine laziness or untrustworthiness.  And therefore see the crisis as comeuppance.  Not so.  These malfunctions are just uncooperative equilibria, nothing more.]

Second, suppose we adopt a moral position regarding the crisis.

The proposition seems to be that we would have a better world if the creditors made a large one-off transfer to the Greeks.  But, hang on.  If we could find some way to wrestle these resources from the hands of the creditors, would we really transfer money to the Greeks?  The Greek economy is suffering terribly.  But marginal utilities are probably a lot higher in the dozens of other countries with a lower GDP per head.  Why not forgive some debt elsewhere?

If the argument were about righting wrongs – adopting, for the moment, the lazy personification of complex multitudes of limited commitment games that such moral judgements require- I am sure we can find a few other financial wrongs that afflicted poorer nations.

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3 Responses to Moralising about Greece

  1. Dan Davies says:

    Well said. Romania, Bulgaria, Macedonia and Albania, the countries immediately bordering Greece, are all much poorer

  2. “First, the parties to the struggle over resources (that’s all this is) are not single people. But they are often discussed as though they were. They are, in fact, coalitions of representatives of multitudes of individuals, looking out for themselves, constrained by the fact that the multitudes they represent are also looking out for themselves.”

    Multitudes of Greek automobile drivers vs. multitudes of drivers in US, the rest of Europe and elsewhere (China). The struggle is about the cars and the Greeks will ultimately lose: there aren’t enough resources for all the cars. If the Greeks go to war to protect their driving prerogatives the country will turn into Syria. If the Greeks don’t go to war they cannot defend their interests and the country will be de-carred … the hard way.

    Greece should get rid of the cars and be done with it. No more fuel imports, no more borrowing euros from Frankfurt. Greece reduces its most vulnerable citizens to penury so that a relative handful might drive in aimless circles.

    After Greece comes the other countries. Syria is also being de-carred, so is Somalia, Yemen, Argentina, Venezuela … France, China and Japan. Conservation by other means. Coming to a suburb near you.

  3. Rhys says:

    I don’t buy it; the large one- off transfer according to you will create moral Hazard i.e other countries will ask for similar debt relief . This is a very dubious argument, we give out debt relief all the time limited corporation liability, the ability to file for bankruptcy are you saying we should get rid off this? Or that groups of people should be treated different to individuals or corporations?

    Second the marginal utility idea seems like you have just come to your own conclusion and are struggling to find any argument to back it up, if it really were about marginal utilities – then surely you would be for this; after all taking money from rich Germans to poor Greeks would still fit within these parameters, it may no be the largest gains but presumably it would be the easiest – (they are both in the Euro).

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