Saturday, December 25, 2010

The Greek Collapse

No, not the financial collapse, but the moral collapse that preceded it. For your reading on what I am sure for many of you will be a slow Christmas afternoon, I suggest Michael Lewis' amazing essay "Beware of Greeks Bearing Bonds." David Brooks just gave this one of his annual awards for magazine writing, and it is heartily deserved. Lewis has a consummate storyteller's eye for the perfect detail. Here, he describes the fundraising prowess of the monks who have restored the Byzantine glories of the Vatopaidi Monastery on Mount Athos:
That changed in the early 1990s, when a group of energetic young Greek Cypriot monks from another part of Athos, led by Father Ephraim, saw a rebuilding opportunity: a fantastic natural asset that had been terribly mismanaged. Ephraim set about raising the money to restore Vatopaidi to its former glory. He dunned the European Union for cultural funds. He mingled with rich Greek businessmen in need of forgiveness. He cultivated friendships with important Greek politicians. In all of this he exhibited incredible chutzpah. For instance, after a famous Spanish singer visited and took an interest in Vatopaidi, he parlayed the interest into an audience with government officials from Spain. They were told a horrible injustice had occurred: in the 14th century a band of Catalan mercenaries, upset with the Byzantine emperor, had sacked Vatopaidi and caused much damage. The monastery received $240,000 from the government officials.
But the core of Lewis' essay examines the decay of Greek civil society. In Greece, nobody pays taxes if he can help it, and people who get caught cheating simply bribe the tax collector. But the lack or revenue hasn't kept the government from spending wildly. Consider the state railroad:
The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.”
What is the effect of all this corruption?
The Greek state was not just corrupt but also corrupting. Once you saw how it worked you could understand a phenomenon which otherwise made no sense at all: the difficulty Greek people have saying a kind word about one another. Individual Greeks are delightful: funny, warm, smart, and good company. I left two dozen interviews saying to myself, “What great people!” They do not share the sentiment about one another: the hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.
That any society functions at all is something of a mystery. Why don't we all just steal everything we can? If we all did it at once, the odds of getting caught or punished would be slim. Instead we all make a lifelong series of short-term sacrifices to keep the system going. I suppose we do this because we have internalized the belief that in the long run honesty works better. We believe that in some sense all of us are in this together, and that in cheating each other we are in some sense cheating ourselves. I believe that this is true, and that an honest and trusting society is a better and richer one. But how can such emotions be created in a society that lacks them?

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