Archives for posts with tag: Democracy

People had walked the Earth ever since they had climbed down the tree. Or had been created, whatever scenario each of us prefers. And their walking had resulted in the existence of trails.
After a while, some of them had became more powerful than others. They called themselves ‘kings’, assumed the property of everything in their grasp and built roads. They actually needed them to administer their property… Their private property….
Hence all roads had started as being private. Since everything belonged to the king…
In time, kings learned it was far easier to hire somebody to do their work. To administer their property. From that moment on, the roads had no longer been built by the kings but by their governments. But continued to remain private!
Flash forward to modern times. People have realized – some of them, anyway, that democracies work far better than any authoritarian arrangement. Regardless of the state being organized as a republic or as a constitutional monarchy. But most roads were still being built by the government. ‘His majesty’s government’ – as they still call it in Great Britain or a government “of the people, by the people, for the people”.
In the last half century or so, private roads have made fresh inroads into our lives. Some people have started to build them and others to accept them as the new normal.
Are we headed back to the old normal? Where people had to defend themselves because there was no government to do it? Or didn’t care about the private citizens?

https://www.youtube.com/watch?v=CyfMYq8j6_s
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Last time I checked, for a rebellion to make sense, it had to be against some precise thing. Otherwise…

On the other hand, there are only two kinds of freedom.
‘Against all others’ – which starts as anarchy and very soon becomes atrocious dictatorship. Where the dictator is free to rule and the oppressed are free do obey. Or to attempt to climb into the dictator’s shoes…
Or ‘with all others’. Also known as ‘democracy’. The real thing, of course, not the ‘mob rule’ variety which is currently creeping upon us.

Hence the only sensible rebellion would be the one against any form of dictatorship and ‘executed’ in concert with the rest of the oppressed.

Democracy works. Authoritarianism works too.

Athens, the Ancient version, had become the dominant power of the Ancient Greece as a democracy. Only the Parthenon was build under Pericle’s rule. And Pericle was, for all intents and purposes, a dictator.
Rome, the Ancient version, had build a huge empire. As a democracy. Then enlarged it some more. As a growingly authoritarian and eventually discretionary regime.

England had started as the most democratic kingdom in Europe. Building upon the democratic traditions developed by the Vikings, the barons had forced King John to sign Magna Charta Libertatum. Way back in 1215.
Meanwhile, France – England’s neighbor and long time competitor, had become the dominant power in Medieval Europe. As an increasingly absolutist monarchy.

At some point, the people living in the future United States of America had decided that they had enough. That they wanted to enjoy the same privilege as their British counterparts. “No taxation without representation”.  George III would have no such a thing so the US had been established as the first democratic modern state. And the most successful to date. By almost every measure.
Following on America’s foot steps, the French had their Revolution. After a very short – and very tumultuous, democratic stint, they had reverted to authoritarianism. And conquered almost all Europe, under the command of Napoleon Bonaparte the First. Only to be eventually defeated by a coalition led by the more democratic British empire.

On the other side of Eur-Asia, things had been more linear.

The Russian Empire was developed in fits and starts. When the dictating ruler knew what he was doing – Peter the Great, for instance, things went forward. When not…
India had been, for all but the last 70 years or so, a melting pot of feuding dictatorships. Yet had developed a fascinating culture and much of what we currently call science and technology. The numbers our computers crunch had been invented there. And the steel we use to build our cars
The Chinese Middle Kingdom had once been the most civilized country on Earth. Then had crumbled under the assault of the marauding already democratic Europeans… only to revive, like the famous Phoenix… and all these while remaining submissive to a succession of authoritarian regimes.
Japan is a story by herself. Never fully authoritarian and yet still ‘imperative’ in many ways even today, she had somehow managed to put up a relatively good show. But for the period when she had succumbed to the ‘charms’ of hard core dictatorship, of course.

Coming back to Europe, I have to note that in the last century the inevitable tension between democracy and authoritarianism has produced immense tragedy.
WWI was the consequence of the inflexibility inherent to the authoritarian regimes. The leaders of the Keiserlich und Koniglich Habsburgic Empire, the Deutches Reich and the Russian Empire were not able to solve their disputes otherwise than dragging the whole continent into a huge mess.
Which, unsolved, had given birth to a second, and more horrible, one.
To complicate things even more, the battle was not fraught between the democratic regimes and the authoritarians.

The relatively flat layout of most parliamentary chambers has induced in us the idea that society is linear. From left to right and backwards.
Also, the current almost ubiquitous existence of parliaments drove us to forget that until recently – historically speaking, of course, most societies have been punctiform. The sovereign king was the only one able/entitled to make any significant decision…

Meanwhile we are told by the political scientists that long term political stability can be achieved only through ‘checks and balances’. Meaning that the state has to be organized in such a way that nobody can get amass too much power.
Actually most modern states have an executive, a legislative body and a judiciary. Each of them performing their specific tasks while keeping a jealous eye on the other two.

The problem with long term political stability being that it is a very abstract goal while most people just want to be happy. And are willing to go at considerable lengths in order to achieve their goals….

And it’s exactly here where ideologues start to argue among themselves

Some say that the individual is sacrosanct. That individual freedom is the most important value that is and the most fundamental ‘human right’.
Others say that society is more important than any individual. That all individuals should put themselves at the service of the society and that individual liberty pales when confronted with social necessity.
And a third category consider that democracy is a waste of time and of opportunity. That the best for any society is that a capable person/group of persons to be given absolute power over it. The rationale being that ‘the capable’ will take good care of their ‘property’. A far better kind of care than any group of bickering politicians would ever be able to offer….

On the practical side, those preoccupied with ‘freedom’ consider that the main duty of the state is to preserve/protect individual liberty. That people, once free, will know how to achieve their personal happiness.
The socially minded consider that individual happiness cannot exist before/outside the well being of the entire society. Hence the ‘rational citizen’ has to postpone (read forget) any personal goals and sublimate their own persona into the society.
‘The more capable than the rest’ consider that the ‘incapable’ cannot be trusted with defining their own goals and have to be told what to do. For their own good!

It is very easy to observe that none of the three ‘ideal types’ described above doesn’t work on its own. That each have been experimented and found to be ‘unpractical’, to say the least.

Individual absolute freedom exists. The Saan living in the Kalahari desert and the  Baka in the Cameroon don’t have any formal rules, no social hierarchy and are absolutely free to do as they please. Both have been easily overcome, their habitat is being encroached/destroyed by their ‘neighbors’ and have been able to survive only by going further and further away from anything.
Socially minded people have, time and time again, congregated. Only to witness their communities dissolve or develop malignantly. From the early christian settlements to the XiX-th century phalansters.
The ‘know better’ is, apparently at least, the most successful arrangement. All kingdoms and empires have been organized according to this principle.
And all of them eventually failed. Even Plato’s idea of ‘king priests’ has led to Alexander the Great’s ultimately disastrous campaign into the Middle East. Not to mention the fact that the erstwhile mighty Athens had fallen into anonymity just after starting to be governed by specially trained rulers.

Since the pure ideal types didn’t work, let’s see what we get if we combine them.

Since I’ve been experimenting it for the first 30 years of my life, I’ll start with the result of crossing ‘social minded’ with ‘know better’. Does ‘communism’ ring any bells with you?
Let’s cross ‘liberty’ with ‘know better’. Actually this has already been done. It was about liberty for those who knew better… Nazism, and its newer variants, are the first examples which come to mind.
And the most interesting result comes from crossing freedom with social minded. This has also been experimented. In the democratic Ancient Athens and in during the truly Republican phase of the Roman Empire. The same combination was used by the vikings and somehow perpetuated to this day. Its offshoots being the western style democracy.

Which democracy – just like the Roman Empire, will survive for only as long as it will conserve both individual freedom and social mindedness while allowing, but only when needed, the ‘know better’ to take over for the short periods of time when their presence at the helm is absolutely necessary.

At any given moment, things are the intersection between ‘what could have been’ and ‘what we wanted out of that situation’.

It’s obvious, for even the most careless observer, that something must be possible before our wishes might start shaping that something.

My point being that we are not necessary for nature to exist but we do bear the responsibility for what has happened since we started to wish.

Let’s consider a hydroelectric dam, for example.
For us to be able to build one, we first need a river. A big enough one, flowing through a certain configuration of terrain… but nevertheless, we need a river. Before everything else.
Yet it’s not the presence of the river which is responsible for the existence of the dam. We, the builders, have built it. We are responsible for it.

And this is valid for other things too, not only for the ‘material’ ones.

Democracy, for example.

War taught us that destruction is not inevitable. Wars have to be started before destruction begins.
After killing each-other for long enough we’ve learned that we’re not so different.
We bleed the same kind of blood and our mothers weep the same tears.
Eventually, we replaced war with sport.

History taught us that democracy works better, in the longer run, than authoritarianism.
That observing the world from multiple perspectives – and pooling the data, leads to way better results than meekly following orders.

Both war and sports are ample demonstrations that winning is temporary and surviving trumps everything else.
And, contrary to our ‘immediate urges’, that fair play goes a lot further towards survival than ‘winning at all costs’.

Similarly, both surviving and decaying/crumbled down democracies are compelling proof that democracy is based on mutual respect between the members of the democratically self governed community.
And that when ever that mutual respect starts to vanish, democracy – the real thing, starts to fade. Usually into ‘mob rule‘. And further, if the process is allowed to continue.

So.
What’s gonna be?
Are we going to allow our craving for ‘success’ to return sport to blood sport? A.k.a war?
And to demote functional democracy, oriented towards the survival of the community as a whole, to mob rule?
Declaratively geared – by the interested party, towards the putative survival of the ‘establishment’? Never, as yet, achieved even on the medium term… let alone the long one

We arise as human beings in the experience of observing ourselves observing.

Humberto Maturana, The origin and conservation of self-consciousness, 2005

Maturana’s essay is compelling.
Yet, like everything else done by us humans, it is not ‘complete’.
It doesn’t mention ‘memory’, nor ’empathy’.

A key difference between a psychopath and a sociopath is whether he has a conscience, the little voice inside that lets us know when we’re doing something wrong, says L. Michael Tompkins, EdD. He’s a psychologist at the Sacramento County Mental Health Treatment Center.

A psychopath doesn’t have a conscience. If he lies to you so he can steal your money, he won’t feel any moral qualms, though he may pretend to. He may observe others and then act the way they do so he’s not “found out,” Tompkins says.

A sociopath typically has a conscience, but it’s weak. He may know that taking your money is wrong, and he might feel some guilt or remorse, but that won’t stop his behavior.

Both lack empathy, the ability to stand in someone else’s shoes and understand how they feel. But a psychopath has less regard for others, says Aaron Kipnis, PhD, author of The Midas Complex. Someone with this personality type sees others as objects he can use for his own benefit.

Kara Mayer Robinson, Sociopath vs. Psychopath: What’s the Difference, WebMD

You see, both the psychopath and the sociopath are aware of their own doings. They are able to observe themselves observing. And doing whatever it is that they are doing.
They are aware of their goals.
And do what it takes to achieve them.

The problem with the psycho/sociopaths being that a quirk of their memory allows them to learn – to remember, through language, the information contained in past experiences, but denies them the ability to recollect/imagine the emotional consequences imposed by their actions upon those who happen to be affected.

That’s why the psycho/sociopaths don’t have a functional conscience.

Sometimes during their coming of age, something went wrong.

The interface which mediates some of the information traded between their brains and the rest of the world is flawed.

Our brain consists of three main sections. The reptilian, the limbic and the neocortex.
The reptilian part deals with the ‘mechanical’ aspects of our lives – breathing, heart rate, etc, the limbic deals with our emotional lives – and is the first which can store easily accessible ‘memories’, while the neocortex is the part where most of our ‘reasoning’ takes part.
Of course that these three parts are interconnected. That’s how we can influence our breathing and why we – well, most of us, are able to control our sexual urges.

My point being that self-awareness is not enough.
Both psycho and sociopaths are able to calibrate their actions in order to achieve their goals. Which is the functional definition of being aware of yourself.
By not being able to fully grasp the emotional consequences imposed by their actions upon those who are affected by them, the psycho/sociopaths can develop only a more ‘focused’ understanding of the world than the rest of us.
Which can sometimes be a lot deeper than usual. Some of the psycho-sociopaths have been notoriously proficient manipulators…

But no matter how deep that understanding may have been, its lack of breadth has proven fatal. Historically and statistically speaking, of course.

This being the reason for which having a functioning conscience is an evolutionary advantage for individuals.
And, maybe even more important, for the communities composed of those individuals.

Societies which have successfully identified and kept in check those who behaved improperly fared way better than those which had allowed the ‘bulls’ to take control over the ‘china shop’.

And what better example is there than the fact that democratic societies constitute a better medium for their members to live in than the authoritarian ones?

As long as democracy isn’t replaced by mob-rule, of course…

Authoritarianism, of all ‘flavors’, depends on the ‘father figure’ being absolutely convinced that he is well above the rest. And it is this height which enables him to despise the rest, to the tune of not caring, at all, about how they feel about things.

‘I’m calling the shots, because I can, and the rest of you would better suck it up!’

Democracy, on the other hand, depends on people relying on each other. Enough of them are convinced that none of them is above error. Regardless of their ideological convictions, people who are convinced that democracy works are willing to accept advice from their peers. Or, at least, they listen carefully to what their peers have to say about issues.

The key word here being ‘peers’.

Nobody pays real attention to ideas coming from below or from above. If from below, that idea has to be almost obvious to pass the filter while everything coming from above is interpreted as an order. And executed if there’s no alternative or stalled/ignored whenever possible.

Both authoritarianism and democracy have proved themselves useful.

No war has ever been won by a democratically led army and no authoritarian regime has ever resisted for long. Meanwhile no democracy has ever crumbled as long as it has retained enough of its democratic spirit.
Yes, there are many examples of democracies becoming corrupted and eventually failing. Only this had happened after the democratic spirit had vanished into the smoke of ‘politics’.

Let me remind you that Alexandre the Great, one of the most admired generals and state-men of the world, was educated by Aristotle. Who was the favorite pupil of Plato. The esteemed philosopher who had invented the concept of ‘priest-kings’ – specially educated individuals who were meant to rule the rest.
Needless to add that Plato had witnessed Pericles simultaneously building the Parthenon and burying the Athenian democracy.
While Aristotle (384-322 BC) had lived long enough to witness his pupil conquering the entire ‘civilized world’ and dying an abject drunkard.
Greece, one of the places which had nurtured an enormously important part of the human culture, never fully recovered from the consequences of Plato’s ideas being put in practice.

Are we going down the same chute?
Is this the proper manner in which to engage those ‘on the other side of the isle’?

giving birth to a democrat

If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all.

There’s plenty to criticize about the mass media, but they are the source of regular information about a wide range of topics. You can’t duplicate that on blogs.

The elections are run by the same industries that sell toothpaste on television.

Changes and progress very rarely are gifts from above. They come out of struggles from below.

There’s very little dislike of Americans in the world, shown by repeated polls, and the dissatisfaction – that is, the hatred and the anger – they come from acceptance of American values, not a rejection of them, and recognition that they’re rejected by the U.S. government and by U.S. elites, which does lead to hatred and anger.

It is easier to go to the Internet than to go to the library, undoubtedly. But the shift from no libraries to the existence of libraries was a much greater shift than what we’ve seen with the Internet’s development.

Romania, which had the worst dictator in Eastern Europe, Ceausescu, he was a darling of the West. The United States and Britain loved him. He was supported until the last minute.

Free speech has been used by the Supreme Court to give immense power to the wealthiest members of our society.

As a tactic, violence is absurd. No one can compete with the Government in violence, and the resort to violence, which will surely fail, will simply frighten and alienate some who can be reached, and will further encourage the ideologists and administrators of forceful repression.

Anarchism means all sort of things to different people, but the traditional anarchists’ movements assumed that there’d be a highly organized society, just one organized from below with direct participation and so on.

In ideal form of social control is an atomised collection of individuals focused on their own narrow concern, lacking the kinds of organisations in which they can gain information, develop and articulate their thoughts, and act constructively to achieve common ends.

Governments are not representative. They have their own power, serving segments of the population that are dominant and rich.

I remember at the age of five travelling on a trolley car with my mother past a group of women on a picket line at a textile plant, seeing them being viciously beaten by security people. So that kind of thing stayed with me.

State formation has been a brutal project, with many hideous consequences. But the results exist, and their pernicious aspects should be overcome.

In the literal sense, there has been no relevant evolution since the trek from Africa. But there has been substantial progress towards higher standards of rights, justice and freedom – along with all too many illustrations of how remote is the goal of a decent society.

If you ask the CEO of some major corporation what he does, he will say, in all honesty, that he is slaving 20 hours a day to provide his customers with the best goods or services he can and creating the best possible working conditions for his employees.

Occupying armies have responsibilities, not rights. Their primary responsibility is to withdraw as quickly and expeditiously as possible, in a manner determined by the occupied population.

It’s dangerous when people are willing to give up their privacy.

The doctrine that everything is fine as long as the population is quiet, that applies in the Middle East, applies in Central America, it applies in the United States.

In the United States, we can do almost anything we want. It’s not like Egypt, where you’re going to get murdered by the security forces.

Not all his ideas sound as outlandish as some want us to believe, do they?

“If democracy and open societies depend on constantly providing their citizens with more wealth tomorrow than today, then the Western world — and soon enough the whole world — is in for tough times.” (Zachary Karabell, Forget Dow 20,000 — the Boom Times Are Over. Is Democracy Next?, Foreign Policy, 2017/01/26)

Shouldn’t we ‘back track’ and try to identify what and when, if any, we’ve done wrong before attempting to go any further?

The author identifies, with surgical precision, the stepping stones that have led us to where we are now.

We, in the West, have grown to associate material affluence with capitalism, democracy and liberalism.
In the process, we got “addicted” to a special kind of ‘economic growth’,  the one measured in monetary terms.Lately, after people no longer had as many children as they used to – which, supposedly, is going to hinder and eventually halt ‘economic’ growth, things are no longer seen in the same light.
The economic boom in China and recent developments in Philippines, Turkey and a few other places which “have seen a surge in nationalism of late, a questioning of democracy and skepticism about liberalism even as economic growth has been strong and deep”  are adding to the confusion.
Even “more surprising is the erosion of support for democracy and the norms of liberalism — even of capitalism — in the United States, France, Spain, Greece, and elsewhere”.

He also identifies, with equal precision, some of the barriers that prevent us from seeing the wider picture.

That we haven’t yet developed a clearer understanding of what liberalism and democracy might be. In his own words they still are “adolescent concepts relative to the tenure of recorded history”.
Then there is the matter of how we understand ‘economic’ growth.
“Politicians and governments rise and fall based on how successfully they have been seen to address the problem of wealth and jobs — not the problem of food, shelter, health, and quality of life.”
“we know no other way to assess economic strength and societal success except by the metric of growth. Three hundred ago, the metric was armies and territory. Today, it is GDP, jobs, and wages. You could craft a lovely society with zero growth, but nobody would believe it if GDP, jobs, and wages were shrinking and the rewards remained unevenly dispersed.”
And it’s not only a matter of understanding but also one of perception. “How people react to inequality is hardly straightforward; the populist wave that elected Trump doesn’t yet mind a billionaire cabinet. But the perception that some are reaping rewards at the expense of the many is deep and strong; that, too, was a line almost verbatim in Trump’s inaugural address.”
Which perception leads to a certain way of seeing things. “We clearly are able to provide basic material needs to everyone. But in the developed world, we are failing to provide a sense of security even while most people’s lives are de facto more secure.
On top of this, there is “anger”. Produced by the “evidence that we have the ability to meet our collective needs and wants” corroborated with the “ample evidence that many countries lack the political will or social consensus to make that happen”.

So, what next?

In Mr. Karrabell’s terms, we need to brush off skepticism, fear and anger – since they “are not themselves barometers of the future” – and …

“The greatest questions for the coming years is whether material stability is enough to mitigate against political chaos and societal decay.”

I’m sorry but I really don’t like this kind of ‘wait and see’ attitude.
It doesn’t make much sense to bother about something that will happen outside your sphere of influence, does it?
Place a bet, if you are a betting guy, and go back to whatever you might be able to actually do!

How about rephrasing that question?

What is it that might bring about the “political chaos and societal decay” we are so afraid of?

Now is the moment for me to make a confession.
I’ve altered, just a little bit, the narrative.
While Mr. Karrabell did mention “anger”, he only said about it that it was “evident” – without providing any cause for it. It was I who associated that anger with the “ample evidence that many countries lack the political will or social consensus” to “meet our collective needs and wants”.
The way I see it there is no way that any country might ‘meet our collective needs and wants’, no matter what amount of ‘political will or social consensus’ might be involved in the process. Not in the longer run, anyway.
All communist regimes – which were, declaratively, trying to accomplish exactly that – have failed. Abysmally.  Not because, in reality, all of them did nothing but cater for their ruling elite but because all of them used to be run according to a ‘central plan’.

And stop calling China a ‘communist’ regime. Or Vietnam, for that manner. As long as the ‘means of production’ are more or less private, and their owners free(ish) to use them as they see fit, those countries are not ‘communist’. They might not be entirely free but they are not at all ‘communist’. Venezuela, for instance, is a lot more ‘communist’ than China.

But let’s return to the countries that might attempt to make it so that ‘our collective needs are met’.
How are they going to do that?
First of all, those in charge – the government, right? – would have to determine what those ‘needs and wants’ are and only then make the necessary arrangements for them to be met. But not more than that, because that would be wasteful.

Do I hear any chuckles? You figured out that those ‘willing’ countries would have to use the same ‘central planning’ system that has already led to the failure of the communist regimes?

How about re-framing the whole situation?
How about the “ample evidence” mentioned by Mr. Karrabell suggesting that too many countries – including the one that has recently inaugurated Mr. Trump as President – no longer have “the political will or social consensus” to allow their citizens enough real freedom and enough real opportunities to pursue their own “needs and wants”? As they see fit?

Then shouldn’t we next try to understand the process through which the erstwhile ample opportunities have been curtailed?

As I mentioned before, I’m going to use the ‘back-walking’ method.

First step, anger. We really need to loose that. Nothing good ever came out of it.

Specially when considering the next steps, perception and understanding. If we allow anger to cloud our thinking both perception and understanding will yield errors instead of knowledge.

Which brings us to our obsession with (monetary measured) growth. Could this obsession be explained by the fact that money is the easiest thing to distribute but also the easiest thing to hoard? Panem and circenses eventually failed… Why do we still see hoarding money as a legitimate goal (after amassing more than one could ever spend, with the entire family, in a hundred years)… beats me.
But explains what’s going on.
As long as enough of us see hoarding money as a legitimate past-time, more and more people will engage in it. More exactly ‘try to engage’ in it. And this is the very behavior which produces ‘bubbles’. As in ‘market bubbles’. And, eventually, crashes.

But not only crashes. Misconceptions also.

“There is little evidence that democracy and liberalism (and capitalism) in their current form are the best or only conduit for providing for economic needs and wants for all. If they were, there would be less roiling discontent.”
My point being that none of those, in any form, are ‘conduits’ for anybody to provide, through them, anything for anybody else.
Democracy, liberalism and capitalism, together, determine the three dimensional ‘space of opportunity’ where we, human individuals, try to provide for our own needs. If allowed to, of course.
It fact it is not the “politicians and governments” mission to “address the problem of wealth and jobs”. In a full-fledged liberal democracy the government does nothing but guards the freedom of the economic market  and the safety of the citizens – including their ‘human’ rights and private property.

As for capitalism… it doesn’t provide anything. Lest of all “incentives”. People provide incentives. Capitalists provide their employees with incentives to work and politicians provide the capitalists with incentives to engage in such or such enterprises or to refrain form others. And while the first kind of incentives, those provided by the capitalists themselves, work as intended – increase productivity, that is, if employed wisely, the latter end up curtailing the freedom of the market. Which can no longer work smoothly enough. This being the moment when opportunities disappear for the ‘man in the street’ and when those ‘connected’ to the government start to ‘flourish’.

You see, real capitalism is not as much about money as it is about trust.
Trust that your business partner – well, most of them – is going to fulfill his end of the bargain, not try to rip you off. Trust that if things go wrong – in the rare event that he does try to rip you off – the government will move swiftly on your behalf.

That’s all.
That’s what Deng Xiaoping meant by ‘I don’t care about the color of the cat, all I care is for it to catch the mouse’. That’s why the Chinese imported capitalism works. Because the Chinese government has learned that the market cannot do its job, in the longer time frame, without a certain dose of ‘liberty’.
The problem being that China is but an exception. Along with a few other examples, mostly in South Asia, they are the very few countries whose authoritarian governments have learned to refrain from interfering too much in their economies.

Looking back in time, ‘back-tracking’ that is, we’ll notice that capitalism has emerged in places where the entrepreneurs had both considerable individual liberty and enough wisdom to refrain themselves from trying to con their business partners. Otherwise the whole (budding) economic effervescence of the time would have very quickly been smothered by greed.
Think of the Medieval Venetians trading with the Arab merchants of the time. This being the reason for why the oldest surviving bank in the world, Monte dei Paschi di Siena, is based in Italy – the least centralized country in the Medieval Europe.
Or think about how a hand shake used to be enough to seal a deal between two Americans. Some time ago… nowadays you need an army of lawyers to buy a car… not to mention the flurry of official permits needed in most cases…

So, what we need to do, if we want to continue to be a source of inspiration for the rest of the world, is to restore democracy, liberalism and capitalism to what they used to be. Dimensions which described the space of opportunity that used to be open for all of us.

OK, hindsight is always 20-20… or so they say…
I’m afraid that what I just described was an idealized mental construction but I’m sure that you got my drift.
After-all, if the Chinese were able to learn it from us … we’ll surely be able to restore it to its old glory.
Or else…

http://foreignpolicy.com/2017/01/26/forget-dow-20k-the-boom-times-are-over-is-democracy-next/

“Why should the European taxpayers bail out the profligate Greeks?”

That’s the mantra I’ve been hearing for some time now, even though a way bigger, and darker, cloud slowly builds up on the other side of the world.

As almost all mantras there is a small nugget of truth in here, even if things are not at all as some want us to believe. wrote this almost prophetic article for Reuters, more than two years ago.

So?

First of all I’d like to quote the definition proposed by Investopedia.com for ‘moral hazard’:

“The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.
Moral hazard can be present any time two parties come into agreement with one another. Each party in a contract may have the opportunity to gain from acting contrary to the principles laid out by the agreement…..
.
.
.
Moral hazard can be somewhat reduced by the placing of responsibilities on both parties of a contract….”

The way I understand this definition is that it is the job of both parties who enter into a contract to perform every diligence they see fit before committing to that contract  and to assume the responsibility afterwards.
Let’s see if this definition sheds any light on today’s subject.
The Western World tends to act as if all countries were functioning as communities. If we don’t like what Putin does in Ukraine we impose sanctions that hurt the entire Russia in the hope that people will do something about the situation. That tactic works very rarely – see what happens in N. Korea and in Iran. Even more, sometimes it even backfires. Look at how popular Putin has become after the sanctions have been put in place.
Coming back to Greece we have become fed up with the shenanigans of the Greek politicians – right, left and middle – and now we insist on harsh ‘austerity measures’ in the hope that the Greek voters will somehow find among themselves an honest knight in a shinning armor that will appear from somewhere and teach them to pay their taxes – and by doing so they’ll dully repay the entire debt that has accrued over the time.
After all it’s their responsibility, isn’t it?
It was them, the Greek voters, that have elected the corrupt politicians in the first place. It was them, the Greek voters, that didn’t do anything when they noticed that their Government was corrupt. Even more, some of the ordinary Greeks must have helped the corrupt politicians – nobody can be corrupt by it’s own, somebody must be at the other side of the deal. On top of that dodging taxes was, and still is, a national sport in Greece – well, that’s actually a rational thing to do: ‘who in it’s right mind would willingly pay his taxes, knowing that most of the money would be squandered away’?
Does that mean that the Greeks should be made to reimburse, in integrum, what their creditors demand of them?
OK, lets forget for one moment that this not possible and that if Greece defaults not only the Greek people will have to endure harsh conditions for a while but also the creditors will loose a considerable amount of what they are due.
Let’s presume that a completely different Tsipras somehow convinces the Greek people to accept pension cuts, tax hikes and, lo and behold, to pay their taxes in an honest way.

Then we’ll still have a fine example of ‘moral hazard’.
We have just established that in a democracy the voters have the final responsibility for the actions of those elected/hired into meaningful positions.
And what did the elected officials, from Brussels as well as those from the rest of the EU capitals? Turned a blind eye when Greek politicians ‘cooked the books’ before Greece was admitted into the EU and, after that, into the Euro zone? Then, when the private banks that had unwisely extended credit to the profligate Greeks had troubles recouping their money, the same elected officials said nothing while Jean Claude Trichet, the then president of the ECB, helped transfer the entire burden – mind you, no ‘haircuts’, unto the ‘wider’ shoulders of the European tax-payer? Who said absolutely nothing!
Only now some of the elected politicians, afraid that their constituents might finally protest, have started to notice the irresponsible attitude of Greece, to demand harsh austerity measures and to refuse even the idea of any debt relief.
So how come we can speak of moral hazard when we describe what the Greeks (governments, tax dodgers and general public) did but never mention in this context the lack of financial responsibility displayed by the investment bankers that helped the Greek governments cover up their shenanigans, the European officials who turned a blind eye to what was going on and the wide European public who didn’t care about what was done with their money by those hired to take good care of the European finances?
What is going to happen from now on?
Before trying to gouge that we need to understand what sets Greece apart from the countries that have dragged themselves out of the worst phases of the latest crises – Ireland, Spain and Portugal: Greece is a country deeply divided by rampart corruption.
In most of Europe corruption is a cancer that reaches across the entire social organism, in Greece it divides the population in two almost equal parts: those who work for or do business with the Government and all the rest.
The situation is made worse by the fact that Greece has become independent rather lately, specially compared with the Western Europe. Furthermore, the process was a lengthy one, it started in 1821 and ended right after WWI, only to recommence during WWII. Add to that the long list of authoritarian leaders and you’ll understand the deep mistrust between the people and the Government – which is not at all ‘their’, despite Greece calling itself a democracy. I have a distinct impression that even those who work for or do business with the Government doesn’t really trust it – they know too much about what is going on there. Small wonder, in these conditions, that dodging taxes is a national sport…
What we have now is, on one side, some European leaders who were elected on a conservative/popular ticked and who have already introduced some austerity at home and, on the other side, a leader who has promised to end austerity.
For these people to reach an agreement both sides have to admit failure: the European leaders must accept the past errors and take responsibility for them and Tsipras must convince his constituents that they need to change their attitude. Completely.
Does any of this have any chance to come true?
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