Athena leans upon her staff, her head bowed in mourning. Goddess of both wisdom and warfare, she has an Olympian existential dilemma. She is torn between two powerful forces, one derived from reason and experience, the other born of darker and more destructive impulses. The well-being of the democratic city-state she defends, depends on the effective balancing of contradictory needs of the human heart and mind (i.e. the desire for both liberty and security). So why does Athena mourn? Has hubris or some other human flaw overridden wisdom? Has the outcome been excessively and unnecessarily violent? The 5th century B.C. sculpture described here, reminds us, as Greece experiences its 6th year of grinding depression, that the legacy it represents makes us all children of Athens and her patron goddess. The shining city-state on a hill, and the Classical Age in general, constitute the wellsprings of so much that we revere and love in the western world. In this sense, we are all Greeks. Wisdom, derived from a brief examination of responses to past economic crises, and a balanced sense of equity indicate, that the conditions currently imposed on Greece are unwise, unsustainable, and unjust. Reason and decency indicate that these conditions must be alleviated and a real consensus found regarding the way forward.
Responses to 18th century crises provide some lessons regarding taxation. The pre-conditions of both the American and French Revolutions remind us that dramatic increases in taxes may not be a very effective way out of economic crisis, especially when the taxes are seen as excessive, unjust and not a reflection of the consent of the population. Taxes in both cases became major causes of mounting desperation and socio-political instability. Many Greeks today (including their current elected government) do not perceive the taxes insisted upon by Greece’s creditors (the “Troika” consists of the European Central Bank, the European Commision, and the International Monetary Fund) as progressive, bearable, and/or equitable. Powerful and wealthy elites will continue to avoid taxes by moving their money abroad. A country of 11 million people does not have the capacity to bail itself out and thus needs help from outside. Greece’s creditors, nonetheless, expect the working people of Greece (i.e. those lucky enough to still have jobs) to magically pay back what they didn’t have the capacity to pay for in the first place. Does Greece need to institute more effective reform of their system of taxation? Of course, but forcing such reform too quickly in the midst of a crisis (indeed as a response to crisis) is not likely to be successful, and is ethically objectionable.
The history of the Weimar Republic provides insights about imposed austerity during periods of economic crisis. Post-WWI Germany was caught in an inescapable economic trap consisting of harsh austerity and a massive unsustainable debt, exacerbated by the war reparations that Germany was required to pay under the more severe and punitive terms of the Treaty of Versailles. This period has been abundantly studied by historians as a cautionary tale. The impossible economic straits created in the war’s aftermath led to a weak, unstable, and divided democratic center; increasing radicalization on both extremes of the German political spectrum; and the ultimate ascendancy of the extreme right. The Weimar example should caution nations of the world to not kick members of the international community of nations when they are down and out, as Greece is today. At the same time, it should also give us some appreciation for the durability of modern Greek democracy. Despite a depression economy - 25% unemployment and well over 50% unemployment among the youth - the Greek democratic polity, under incredible strain, has remained viable. Multi-party elections continue followed by peaceful transitions of power (notwithstanding the Golden Dawn/neo-Nazi nationalist increases in electoral strength and representation in parliament). Indeed, in the midst of this crisis, the government called and successfully held a much publicized referendum. The issue on the referendum ballot could not have been more controversial and polarizing and there were massive demonstrations on both sides of the issue. These were, nonetheless, largely peaceful expressions of the rights of speech and assembly. Though there have certainly been violent clashes during this crisis, Greek democracy and civil society have remained remarkably durable and resilient. The Greek democracy should not, however, be expected to indefinitely endure the political strain of the economic vice that continues to pressure Greek society.
The inter-war period in the US is a study in contrasting approaches to economic crisis. The Great Depression was first met with a message of austerity. Americans were told to tighten their belts and pull themselves up by their bootstraps. But too many Americans had run out of holes in their belts and found themselves without boots to grasp. So ineffective was austerity under these dire conditions, that the President became a symbol of policy failure. The shantytowns of the homeless became “Hoovervilles” and discarded newspapers “Hoover blankets.” History has largely smiled upon Roosevelt’s New Deal policies. Roosevelt’s administration understood that the nation could not be squeezed out of the depression, and instead provided immediate steps to restore solvency and confidence in the banking system and provide relief and employment through an expansive set of government programs. Despite the lessons of history, austerity and more austerity has been insisted upon by Greece’s creditors. Slashing government spending, salaries, and pensions, as well as the privatization of state assets are standard on the “Troika’s” list of requirements. It’s almost as if the “Troika” sees Hoover as a tragically misunderstood figure.
Post-WWII Germany was a defeated and utterly destroyed nation. Responsibility for the war, mass murder, and incalculable destruction lay squarely at the feet of Germany and its erstwhile fascist and militarist allies. Yet, a number of nations - including Greece which had been occupied and brutalized by the Nazis - agreed to write off a huge portion of Germany’s debt, while massive amounts of foreign aid was sent by the US to rebuild war torn Europe, including West Germany. Why did nations do these apparently magnanimous things? Not out of altruism, but because leaders had learned from the past that forcing the citizens of an entire nation to suffer indefinitely for the sins of leaders is not only destabilizing to the the specific nation, but also contrary to the interests of the broader international community. The Nuremberg Trials held individual Nazi leaders to account for their crimes, but West Germany, the nation, was helped up on to its feet and assisted in recreating itself as a viable democratic state and an economic powerhouse.
It is nothing short of breathtaking how during the Greek crisis, history seems to have been forgotten and it’s lessons unlearned. It must be noted that this selective amnesia has been especially prevalent among some leaders of Germany, of all places. It took the failings of multiple powerful and/or wealthy elites to create the Greek crisis: political leaders in Greece, in other EU countries, and the leadership of banks and international financial institutions. Who among them is most responsible? It is hard to say, but we can be certain who was not primarily responsible: the Greek people. The elites, not surprisingly, have not rushed to assume ownership, nor have they really been held to account, beyond the fact that Greek voters made the two former leading political parties pay dearly at the ballot box, and pushed back courageously in the recent referendum.
A better way forward is possible, but finding it will require all of Athena’s wisdom, informed by the lessons of the past and the realities of the present. But most importantly, it will require that wisdom prevail over those darker and more violent impulses. Thus far this has not been the case. The wisdom of the past tells us not to punish a whole people for the catastrophic, even criminal, actions of elites, and that forgiveness, insofar as it alleviates suffering and desperation among the masses, ultimately makes us all stronger. This has not been the answer during this crisis, thus far. The Troika’s “program” has appeared to combine several of the least successful economic ideas in history - the excess and inequity of Ancien Regime taxation, the fiscal austerity of Hoover, and the insistence on the maintenance of crippling unsustainable debt a la Versailles. It must also be noted that these conditions are made much more difficult given that the Greek government has no control over monetary policy by virtue by its membership in the Eurozone. Make no mistake, though this program has not been delivered at the end of a gun, it is nonetheless an act of economic violence. This is so because it causes profound suffering among the Greek people evidenced by spikes in suicides, homelessness, 25% unemployment, and general despair. The Greek economy is not growing, it’s shrinking. The debt can’t be paid down if the economy doesn’t grow, and the economy can’t grow under the weight of debt, taxes, and austerity. It has not and cannot work. It is a recipe for interminable depression. Yet the “Troika” seems to want much more of the same prescription.
The noble experiment of the the EU is about establishing a new form of unity based on a notion of an extended European community. But the current situation has devolved into an acrimonious and divisive intracommunity feud. Anger and antipathy cause some to default to more isolated and atomized national identities, and forget the common roots of the European and Western community. We are all the children of Athens and her patron Goddess. Would we have our own mother languish indefinitely in debtors’ prison. Would that be wise? The debt is her ball and chain and the locked door to her cell. It is in the power of the great states and institutions of Europe and the US to free her. All it requires is the strength of forgiveness, and this, wisdom tells us, in not without historical precedent.