New World Order under stress

November 16, 2016

New World Order under stress

by Chheang Vannarith

In a result that stunned the whole world, Donald Trump has been elected as the 45th President of the United States, defeating the more favored Democrat nominee Hillary Clinton.

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Mr. Trump’s victory signified rising nationalist populism, not only in the US, but also in other parts of the world. It also challenges the liberal world order based on democratic values, economic openness and the rules-based international economic system.

From Brexit to Mr. Trump’s victory, there is one thing in common, and that is the increasing frustration against the old establishment driven by political elites. Many wish to see a different type of leadership and are hoping for change.

We are living in a highly unpredictable and uncertain world. We need to think the unthinkable and be prepared to adapt to unexpected changes. Those who can grasp the opportunities deriving from a crisis and uncertainty will remain competitive.

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The bipolar world established after World War II was replaced by a unipolar world in which the US played a hegemonic power. However,  US power has been declining since the world economic crisis in 2008. Over the past decade, the rise of others such as China, India and Russia has challenged the global role of the US from economic to security domains.

We are now entering either a multipolar world or zero-polar world. Under the multipolar world, there are multiple actors and stakeholders working together to shape and construct global governance and order.In a zero-polar world, there will be no country taking a global leadership role. The major powers will become more nationalist and inward looking. Selfish national interests and zero-sum games will dominate international politics.

If this happens the world will become fragmented and chaotic. Global uncertainties and risks are going to rise. No country will be willing and able to take a global leadership role to maintain world peace and order.

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The US is great nation largely thanks to democratic pluralism, multiculturalism as well as an open and liberal globalization which has provided tremendous opportunities for Americans. It has successfully integrated itself into and largely benefited from the rest of the world.

Now it is different. Mr. Trump seems to be opting for a more nationalistic, protectionist and inward-looking foreign policy. His populist political rhetoric will adversely affect the liberal order created by the US seven decades ago.

Mr. Trump lacks a robust foreign policy. He seems to mainly focus on populist domestic social and economic issues. Global issues such as climate change will not be addressed effectively without a strong US leadership role.

It is predicted that the US’ global role will further decline, which in turn will create a global power vacuum and a deep hole in global governance.

China, Japan, India and Russia are expected to fill the gap and play a more proactive role in maintaining global peace and order. However, these countries are still struggling with their own domestic issues.

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Obama in Laos

In the Asia-Pacific region, the US has been the hub of regional peace and order. Since 2010, the US has introduced and implemented its “rebalance” or “pivot” to Asia in order to strengthen its alliance system, promote economic integration and deepen people-to-people

President Barack Obama has had a strong interest in promoting the US’ role in the Asia-Pacific. He has committed to strengthening an ASEAN-led regional architecture.

The US-led Trans-Pacific Partnership is a crucial US external economic policy towards Asia. However, it has an extremely low chance of ratification under the future Trump administration.
Under Mr. Trump’s leadership, the US will be less engaged in Asia.

In such a scenario, China will gain more strategic advantages in leveraging its regional influence.US allies in Asia will be forced to invest more in the defense sector in their collective deterrence strategy. Japan, South Korea and Australia will speed up their defense modernization.

The new world order as well as the Asia-Pacific order will go through critical tests, uncertain power diffusion and transition as well as a severe security environment.

As we live in a world with high uncertainty and risk, leaders need to be equipped with the capacity to think the unthinkable, have the courage to change and create a safe space for institutional innovation and transformative leadership.

It is a wake-up call for world leaders to reconstruct the world economy so it is more inclusive and sustainable. Unless fair and just industrialization, and social justice, are respected, the prospect of global disintegration and fragmentation will continue to haunt the world

The Future of Europe

August 21, 2016

Europe’s Troubled Future
By Giles Merritt
270 pp. Oxford University Press. $29.95.

The Destruction of Greece and the Future of Europe
By James K. Galbraith
213 pp. Yale University Press. $26.

Americans tend to struggle to grasp the ways of the European Union, which admittedly are complex and often arcane. It’s unhelpful that much of the writing on the continent’s seminal postwar project lapses into the same euro-jargon that the union’s technocrats and think tanks employ. Many Europeans can’t make sense of it either, which is one explanation for the triumphant Brexit vote and the historically low trust in the E.U. that Europeans everywhere express today. The community is indisputably mired in its most acute crisis since its founding in the 1950s.

Yet contemporary Europe is incomprehensible without it, so thoroughly does the E.U.’s existence suffuse the everyday lives of its 508 million citizens, the governance of the 28 member states and a $15 trillion economy. This is why the short­ish, lucid books of the Brussels-based journal editor Giles Merritt and the American economist James K. Galbraith deserve particular attention. In accessible prose flush with strong argument, they diagnose the E.U.’s problems — and offer prescriptions on how to deal with them. Though the community is currently preoccupied with Britain’s vote to leave, the influx of migrants, an economy still reeling from the financial crisis, the ascent of far-right parties and a declining global market share, both authors believe deeply in the E.U.

In order to get at the community’s core deficiencies, Merritt first punctures some of the myths that unfairly damage its credibility. A favorite of euro-skeptics is that the E.U. is a gigantic, autonomous “superstate” that runs Europe from Brussels. In fact, the E.U.’s largest body and its executive arm, the European Commission, has a staff of just 23,000, smaller than many national government ministries.

Moreover, most E.U. legislation is not in the form of written law, but rather “directives” to the states, whose legislatures then turn them into law. The heavy lifting is done by the member states. As for autonomy, it is the states that drive the E.U., whether through their national ministers in the Council of Ministers, one of the E.U.’s legislative bodies, or the commission, where state appointees deal with everything from agriculture to consumer protection. The governments call the shots, and it is therefore at their feet that Merritt lays most of the blame for the E.U.’s malaise.

In the same vein, the E.U. has come under fire for its policies guaranteeing workers’ freedom of movement within the union. In the Brexit campaign, anti-E.U. voices charged that its provisions enabled Central Europeans to swamp Britain. In fact, demographic analyses show that northern Europe needs many kinds of workers now and will increasingly require more in decades to come. Although European politicians know this too, many can’t sell this argument to their electorates, just one example of the dichotomy that pits the interests of elected national officials against those of the greater good, embodied in the E.U.

Merritt, despite his substantial respect for the E.U., argues that bold, sweeping reforms are imperative to meet the challenges of the 21st century. Global warming, terrorism, globalized markets, mass migration, militarized geopolitics and the digital revolution all require supranational attention. On their own, he argues, the individual nation states of Europe, Britain included, are doomed to irrelevance.

Yet there’s much more consensus on the union’s shortcomings than on how to address them. The so-called democratic deficit, for instance, refers to the lack of transparency and accountability in the E.U.’s decision-making process. The council, the “true legislative body,” meets behind closed doors. The European Parliament’s elected M.P.s exercise some power, yet no one is held responsible for failure. And then there are the unelected civil servants. No democratic state worth its salt would permit such basic transgressions of democratic procedure. But the E.U., Merritt charges, gets away with it.

Furthermore, the E.U.’s rigidity undermines its ability to promote innovation. Europe lags woefully behind the United States and China in turning digital technology into commercial success. Meager investment in R&D has hurt Europe’s productivity and thus global competitiveness, causing Europe’s share of the international market to stagnate while its rivals post gains. In more ways than one, Merritt argues convincingly, the E.U. is stuck in the 20th century.

Until the Brexit vote, the single greatest blow to the E.U. had been the post-2008 tribulations of the euro, called the euro crisis, which manifested itself as a devastating debt problem that upended the economies of southern Europe and Ireland. The threat of insolvency forced the wealthier northern Europeans, above all Germany, to bail out the troubled nations at high cost, both financially and in terms of good will.

James K. Galbraith, the son of the great Keynesian economist John Kenneth Galbraith, had, as an adviser to the left-wing Syriza government in Greece, a front-row seat at pivotal moments in the showdown between the E.U. (and the International Monetary Fund, too) and Greece, the hardest hit of the debtor nations. The E.U. erred egregiously, he writes, in making draconian austerity policies the price of Greece’s rescue while letting the continent’s banks off scot free. The wrongness of this prescription, he says, is borne out today, five years later, with Greece prostrate under the burden of the E.U.’s highest external debt (in relation to its economy’s size), the highest unemployment (29 percent) and grim social and psychological fallout. Deep budget cuts and higher taxes have cost Greece a quarter of its pre-crisis wealth, rendering a recovery impossible, according to Galbraith, perhaps forever. Greece’s withdrawal from the euro zone, he suggests, would have been preferable.

 Galbraith understands the eurocrisis largely as a byproduct of the global banking and financial disaster triggered in the United States in 2007, which the ­center-right governments in Germany and France exploited to crush the left-wing government in Greece and its allies elsewhere in southern Europe. Leftist governments, Galbraith says, won’t get relief from the punishment of austerity, slashed wages, reduced pensions and the fire sale of state assets until their politics return to the center. Until then, they will suffer and the wealth disparity between northern and southern Europe will widen.

Greece, Galbraith writes, could become something like “a Caribbean dependency of the United States. Its professional population will continue to leave, and its working classes will also either emigrate or sink into destitution. Or perhaps they will fight.”

Fighting, however, didn’t get Syriza or Galbraith’s friend, the controversial ­January-to-June-2015 Greek finance minister Yanis Varoufakis, very far. Even a national referendum rejecting the terms of a bailout didn’t manage to dilute the poison the Greeks had to swallow. The way out, argues Galbraith, ever the Keynesian, is a multi-pronged approach that includes a spending program like the postwar Marshall Plan.

For his part, Merritt presents the recipes of several research institutions, all of which call for rejuvenating the E.U.’s structures to make them more democratic, flexible and efficient. He, like Galbraith and other E.U. advocates, insists that deeper political and economic integration is the answer. Yet, he concedes, because Europe’s political spectrum is fractured as never before, with national interests regularly trumping common cause, the lesser evil at the moment may be smaller, tactical interventions to complete the single market, invest in research, modernize infrastructure and strengthen foreign policy mechanisms.

Doing nothing at all is the worst option, the authors agree, a conclusion dramatically reinforced by the Brexit vote. That would condemn the E.U. to muddle from crisis to crisis until finally one of those crises takes it down once and for all.

Paul Hockenos is a Berlin-based writer. His “Berlin Calling: Anarchy, Punk Rock, Techno, and the Birth of the New Berlin” will come out next year.

A version of this review appears in print on August 21, 2016, on page BR16 of the Sunday Book Review with the headline: Europe Is Falling . . . .

Philosophy Course 605 at The University of Cambodia–Readings on Plato and The Greeks

September 17, 2015

For Philosophy Course 605 at The University of Cambodia-Readings  on Plato and The Greeks –led by Adjunct Professor Din Merican, Tech Sen School

Socrates, Plato and Aristotle

 by Geoff Haselhurst, Karene Howie

This is the latest Plato introduction – based on two principles for writing on the internet – truth and simplicity!

Read the Plato quotes – Plato was brilliant, astute, charming, amusing, profound, practical, sensible, logical, enquiring, seeking, exploring by considering the simple and obvious.

Plato Quotes on Philosophy Truth and Reality

And isn’t it a bad thing to be deceived about the truth, and a good thing to know what the truth is? For I assume that by knowing the truth you mean knowing things as they really are. (Plato)

The philosopher is in love with truth, that is, not with the changing world of sensation, which is the object of opinion, but with the unchanging reality which is the object of knowledge. (Plato)

Truthfulness. He will never willingly tolerate an untruth, but will hate it as much as he loves truth. … And is there anything more closely connected with wisdom than truth? (Plato)

What is at issue is the conversion of the mind from the twilight of error to the truth, that climb up into the real world which we shall call true philosophy. (Plato)

The object of knowledge is what exists and its function to know about reality. (Plato)

One trait in the philosopher’s character we can assume is his love of the knowledge that reveals eternal reality, the realm unaffected by change and decay. He is in love with the whole of that reality, and will not willingly be deprived even of the most insignificant fragment of it – just like the lovers and men of ambition we described earlier on. (Plato)

Plato the Philosopher - And those whose hearts are fixed on Reality itself deserve the title of Philosophers. Plato the Philosopher

I have great affection for Plato, who is without doubt one of the greatest philosophers of the past 2,500 years. Thus it is unfortunate that many people imagine our post-modern society to have gained such knowledge that the Ancient Greek Philosophers are now irrelevant. In fact the opposite is true. As Bertrand Russell observed (History of Western Philosophy), it was the Ancient Greek Philosophers who first discovered and discussed the fundamental Principles of Philosophy, and most significantly, little has been added to their knowledge since. As Einstein wrote:

Somebody who only reads newspapers and at best books of contemporary authors looks to me like an extremely near-sighted person who scorns eyeglasses. He is completely dependent on the prejudices and fashions of his times, since he never gets to see or hear anything else. And what a person thinks on his own without being stimulated by the thoughts and experiences of other people is even in the best case rather paltry and monotonous. There are only a few enlightened people with a lucid mind and style and with good taste within a century. What has been preserved of their work belongs among the most precious possessions of mankind. We owe it to a few writers of antiquity (Plato, Aristotle, etc.) that the people in the Middle Ages could slowly extricate themselves from the superstitions and ignorance that had darkened life for more than half a millennium. Nothing is more needed to overcome the modernist’s snobbishness. (Albert Einstein, 1954)

It is therefore both interesting and important to consider the foundations which caused the blossoming of Ancient Greek Philosophy. First and foremost was the realisation that ALL IS ONE, as Nietzsche writes:

Greek philosophy seems to begin with a preposterous fancy, with the proposition that water is the origin and mother-womb of all things. Is it really necessary to stop there and become serious? Yes, and for three reasons: firstly, because the preposition does enunciate something about the origin of things; secondly, because it does so without figure and fable; thirdly and lastly, because it contained, although only in the chrysalis state, the idea :everything is one. … That which drove him (Thales) to this generalization was a metaphysical dogma, which had its origin in a mystic intuition and which together with the ever renewed endeavors to express it better, we find in all philosophies- the proposition: everything is one! (Friedrich Nietzsche, The Greeks)

Further, the Ancient Greeks realised that Motion (Flux / Activity / Change) was central to existence and reality, as Aristotle writes:

The first philosophy (Metaphysics) is universal and is exclusively concerned with primary substance. … And here we will have the science to study that which is just as that which is, both in its essence and in the properties which, just as a thing that is, it has. (Aristotle, 340BC)
The entire preoccupation of the physicist is with things that contain within themselves a principle of movement and rest. And to seek for this is to seek for the second kind of principle, that from which comes the beginning of the change. (Aristotle, 340BC)

Only recently (Wolff, 1986 – Haselhurst, 1997) has it been possible, with the discovery of the Metaphysics of Space and Motion and the Wave Structure of Matter (WSM), to unite these ideas with modern Physics, Philosophy and Metaphysics. And let me first say that it is ironic that the main problem for human knowledge also came from the Ancient Greeks, with their conception of matter as discrete Atoms (Democritus, Lucretius). Unfortunately, Physics took the path of the atomists (Newton, Faraday, Maxwell, Lorentz) and this led to the creation of ‘Forces / Fields’ (generated by particles) to explain how matter interacted with other discrete matter at-a-distance in Space.

It seems that many people believe that Reality / Physics is too complex for them to possibly understand (and I suspect that Physicists enjoy this reputation as being the ‘high priests’ who comprehend such complex things). In fact the opposite is true – Truth is ultimately simple because Truth comes from Reality (as Plato correctly realised) which must be founded on One thing. And there is nothing more simple than One Thing. (This explains why Philosophy is also known as the discovery of the obvious!)

When you read the quotes from Plato below, you will also find Plato’s ideas to be very simple. This reflects his greatness as a philosopher, and partly explains why his work has endured for thousands of years. To me, it is his realisation that philosophy is fundamentally important to humanity, that without philosophy, without truth, there can be no wisdom – which leaves humanity blind and the future treacherous. Reason tells me that Reality has been discovered, that the source of all truth and wisdom has finally been found. And in our currently troubled times there is no more important knowledge than true knowledge of reality – of what it truly means to ‘Know Thyself’ as the foundation for living wisely and ensuring survival.

Plato - I don't know anything that gives me greater pleasure, or profit either, than talking or listening to philosophy. Plato ‘The Republic’ Quotes

I don’t know anything that gives me greater pleasure, or profit either, than talking or listening to philosophy. But when it comes to ordinary conversation, such as the stuff you talk about financiers and the money market, well, I find it pretty tiresome personally, and I feel sorry that my friends should think they’re being very busy when they’re really doing absolutely nothing. Of course, I know your idea of me: you think I’m just a poor unfortunate, and I shouldn’t wonder if your right. But then I don’t THINK that you’re unfortunate – I know you are. (Plato)

Plato is an astute and important philosopher, who writes beautifully and with great power and elegance on Truth and Reality. His work is still profoundly important in today’s Postmodern world, and can be easily understood due to its simplicity of language and engaging style of dialogue. The following quotes are taken from Plato’s great work The Republic, and speak grandly for themselves, thus I largely leave them as they are, with little commentary or analysis (though I of course hope that you will read them with the Wave Structure of Matter in mind).

Ancient Greek Philosophy - Plato the philosopher Plato Quotes on the Understanding of New Ideas

We are like people looking for something they have in their hands all the time; we’re looking in all directions except at the thing we want, which is probably why we haven’t found it.(Plato, 380BC)

‘That is the story. Do you think there is any way of making them believe it?” Not in the first generation’, he said, ‘but you might succeed with the second and later generations.’ (Plato, 380BC)

‘We will ask the critics to be serious for once, and remind them that it was not so long ago that the Greeks thought – as most of the barbarians still think – that it was shocking and ridiculous for men to be seen naked. When the Cretans, and later the Spartans, first began to take exercise naked, wasn’t there plenty of material for the wit of the comedians of the day?’
‘There was indeed’

‘But when experience showed them that it was better to strip than wrap themselves up, what reason had proved best ceased to look absurd to the eye. Which shows how idle it is to think anything ridiculous except what is wrong.’ (Plato, 380BC)

Plato the Philosopher - And those whose hearts are fixed on Reality itself deserve the title of Philosophers. Plato on Truth and Reality

And isn’t it a bad thing to be deceived about the truth, and a good thing to know what the truth is? For I assume that by knowing the truth you mean knowing things as they really are. (Plato, 380BC)

The philosopher is in love with truth, that is, not with the changing world of sensation, which is the object of opinion, but with the unchanging reality which is the object of knowledge. (Plato, 380BC)

Truthfulness. He will never willingly tolerate an untruth, but will hate it as much as he loves truth… And is there anything more closely connected with wisdom than truth? (Plato, 380BC)

Then may we not fairly plead in reply that our true lover of knowledge naturally strives for truth, and is not content with common opinion, but soars with undimmed and unwearied passion till he grasps the essential nature of things with the mental faculty fitted to do so, that is, with the faculty which is akin to reality, and which approaches and unites with it, and begets intelligence and truth as children, and is only released from travail when it has thus reached knowledge and true life and satisfaction? (Plato, 380BC)

What is at issue is the conversion of the mind from the twilight of error to the truth, that climb up into the real world which we shall call true philosophy. (Plato, 380BC)

The object of knowledge is what exists and its function to know about reality. (Plato, 380BC)

And those whose hearts are fixed on Reality itself deserve the title of Philosophers. (Plato, 380BC)

When the mind’s eye rests on objects illuminated by truth and reality, it understands and comprehends them, and functions intelligently; but when it turns to the twilight world of change and decay, it can only form opinions, its vision is confused and its beliefs shifting, and it seems to lack intelligence. (Plato, 380BC)

‘But surely “blind” is just how you would describe men who have no true knowledge of reality, and no clear standard in their mind to refer to, as a painter refers to his model, and which they can study closely before they start laying down rules about what is fair or right or good where they are needed, or maintaining, as Guardians, any rules that already exist.’ ‘Yes, blind is just about what they are’ (Plato, 380BC)

One trait in the philosopher’s character we can assume is his love of the knowledge that reveals eternal reality, the realm unaffected by change and decay. He is in love with the whole of that reality, and will not willingly be deprived even of the most insignificant fragment of it – just like the lovers and men of ambition we described earlier on. (Plato, 380BC)

Ancient Greek Philosophy - Plato the philosopher Plato Education Quotes

…for the object of education is to teach us to love beauty. (Plato, 380BC)

And once we have given our community a good start, the process will be cumulative. By maintaining a sound system of education you produce citizens of good character, and citizens of sound character, with the advantage of a good education, produce in turn children better than themselves and better able to produce still better children in their turn, as can be seen with animals. (Plato, 380BC)

‘.. It is in education that bad discipline can most easily creep in unobserved,’ he replied.

‘Yes,’ I agreed, ‘ because people don’t treat it seriously there, and think no harm can come of it.’

‘It only does harm,’ he said, ‘because it makes itself at home and gradually undermines morals and manners; from them it invades business dealings generally, and then spreads into the laws and constitution without any restraint, until it has made complete havoc of private and public life.’

‘ And when men who aren’t fit to be educated get an education they don’t deserve, are not the thoughts and opinions they produce fairly called sophistry, without a legitimate idea or any trace of true wisdom among them?’

‘ The first thing our artist must do,’ I replied, ‘ – and it’s not easy – is to take human society and human habits and wipe them clean out, to give himself a clean canvas. For our philosophic artist differs from all others in being unwilling to start work on an individual or a city, or draw out laws, until he is given, or has made himself, a clean canvas.’ (Plato, 380BC)

‘ Because a free man ought not to learn anything under duress. Compulsory physical exercise does no harm to the body, but compulsory learning never sticks to the mind.’


‘Then don’t use compulsion,’ I said to him, ‘ but let your children’s lessons take the form of play. You will learn more about their natural abilities that way.’ (Plato, 380BC)

For we soon reap the fruits of literature in life, and prolonged indulgence in any form of literature in life leaves its mark on the moral nature of man, affecting not only the mind but physical poise and intonation. (p134 R)

‘It is not only to the poets therefore that we must issue orders requiring them to represent good character in their poems or not to write at all; we must issue similar orders to all artists and prevent them from portraying bad character, ill discipline, meanness, or ugliness in painting, sculpture, architecture, or any work of art, and if they are unable to comply they must be forbidden to practice their art. We shall thus prevent our guardians being brought up among representations of what is evil, and so day by day and little by little, by feeding as it were in an unhealthy pasture, insensibly doing themselves grave psychological damage. Our artists and craftsmen must be capable of perceiving the real nature of what is beautiful, and then our young men, living as it were in a good climate, will benefit because all the works of art they see and hear influence them for good, like the breezes from some healthy country with what is rational and right.’

‘That would indeed be the best way to bring them up.’

‘And that, my dear Glaucon,’ I said,’ is why this stage of education is crucial. For rhythm and harmony penetrate deeply into the mind and have a most powerful effect on it, and if education is good, bring balance and fairness, if it is bad, the reverse. (p142, 401 R)

‘Then I must surely be right in saying that we shall not be properly educated ourselves, nor will the guardians whom we are training, until we can recognise the qualities of discipline, courage, generosity, greatness of mind, and others akin to them, as well as their opposites in all their manifestations’. (p143, 402 R)

Plato - I don't know anything that gives me greater pleasure, or profit either, than talking or listening to philosophy. Plato on the Mind

Do we learn with one part of us, feel angry with another, and desire the pleasures of eating and sex with another? Or do we employ our mind as a whole when our energies are employed in any of these ways? (Plato, 380BC)

We can call the reflective element in the mind the reason, and the element with which it feels hunger and thirst, and the agitations of sex and other desires, the irrational appetite – an element closely connected with pleasure and satisfaction. (Plato, 380BC)

‘So the reason ought to rule, having the ability and foresight to act for the whole, and the spirit ought to obey and support it. And this concord between them is effected, as we said, by a combination of intellectual and physical training, which tunes up the reason by intellectual training and tones down the crudeness of natural high spirits by harmony and rhythm.’


‘When these two elements have been brought up and trained to their proper function, they must be put in charge of appetite, which forms the greater part of each man’s make-up and is naturally insatiable. They must prevent taking its fill of the so-called physical pleasures, for otherwise it will get too large and strong to mind its own business and will try to subject and control the other elements, which it has no right to do, and so wreck life entirely.’ (Plato, 380BC)

Then let us be content with the terms we used earlier on for the four divisions of our line – knowledge, reason, belief and illusion. The last two we class together as opinion, the first two as intelligence, opinion being concerned with the world of becoming, knowledge with the world of reality. Knowledge stands to opinion as the world of reality does to that of becoming, and intelligence stands to belief and reason to illusion as knowledge stands to opinion. (Plato, 380BC)

Plato the Philosopher - On Illusion Quotations from Plato on Illusion

In the analogy of The Cave, Plato shows the ascent of the mind from illusion to truth and pure philosophy, and the difficulties which accompany its progress.

‘Then think what would happen to them if they were released from their bonds and cured of their delusions. Suppose one of them were let loose, and suddenly compelled to stand up and turn his head and look and walk towards the fire; all actions would be painful and he would be too dazzled to see properly the objects of which he used to see the shadows. So if he was told that what he used to see was mere illusion and that he was now nearer reality and seeing more correctly, because he was turned towards objects that were more real, and if on top of that he were compelled to say what each of the passing objects was when it was pointed out to him, don’t you think he would be at a loss, and think that what he used to see was more real than the objects now being pointed out to him?’

‘ Because he would need to grow accustomed to the light before he could see things in the world outside the cave. First he would find it easiest to look at shadows, next at the reflections of men and other objects in water, and later on at the objects themselves. After that he would find it easier to observe the heavenly bodies and the sky at night than by day, and to look at the light of the moon and stars, rather than at the sun and its light.’

‘ But anyone with any sense,’ I said, ‘will remember that the eyes may be unsighted in two ways, by a transition either from light to darkness or from darkness to light, and that the same distinction applies to the mind. So when he sees a mind confused and unable to see clearly he will not laugh without thinking, but will ask himself whether it has come from a cleaner world and is confused by the unaccustomed darkness, or whether it is dazzled by the stronger light of the clearer world to which it has escaped from its previous ignorance.’

‘ If this is true,’ I continued, ‘ we must reject the conception of education professed by those who say that they can put into the mind knowledge that was not there before – rather as if they could put sight into blind eyes.’

‘It is a claim that is certainly made,’ he said

‘But our argument indicates that this is a capacity which is innate in each man’s mind, and that the faculty by which he learns is like an eye that cannot be turned from darkness to light unless the whole body is turned; in the same way the mind as a whole must be turned away from the world of change until its eyes can bear to look straight at reality, and at the brightest of all realities which we call the Good. Isn’t that so?’ (Plato, 380BC)

Ancient Greek Philosophy - Plato the philosopher Plato on the Importance of Philosophy

The society we have described can never grow into a reality or see the light of day, and there will be no end to the troubles of states, or indeed, my dear Glaucon, of humanity itself, till philosophers are kings in this world, or till those we now call kings and rulers really and truly become philosophers, and political power and philosophy thus come into the same hands, while the many natures now content to follow either to the exclusion of the other are forcibly debarred from doing so. This is what I have hesitated to say so long, knowing what a paradox it would sound; for it is not easy to see that there is no other road to happiness, either for society or the individual. (Plato, 380BC)

…there are some who are naturally fitted for philosophy and political leadership, while the rest should follow their lead and let philosophy alone. (Plato, 380BC)

‘But the man who is ready to taste every form of knowledge, is glad to learn and never satisfied – he’s the man who deserves to be called a philosopher, isn’t he?’ (Plato, 380BC)

‘Then who are the true philosophers?’, he asked

‘Those whose passion is to see the truth.’

‘Suppose the following to be the state of affairs on board a ship or ships. The captain is larger and stronger than any of the crew, but a bit deaf and short-sighted, and doesn’t know much about navigation. The crew is quarreling with each other about how to navigate the ship, each thinking he ought to be at the helm; they know no navigation and cannot say that anyone ever taught it them, or that they spent any time studying it; indeed they say it can’t be taught and are ready to murder any one who says it can. They spend all their time milling around the captain and trying to get him to give them the wheel. If one faction is more successful than another, their rivals may kill them and throw them overboard, lay out the honest captain with drugs and drink, take control of the ship, help themselves to what’s on board, and behave as if they were on a drunken pleasure-cruise. Finally, they reserve their admiration for the man who knows how to lend a hand in controlling the captain by force or fraud; they praise his seamanship and navigation and knowledge of the sea and condemn everyone else as useless. They have no idea that the true navigator must study the seasons of the year, the sky, the stars, the winds and other professional subjects, if he is really fit to control a ship; and they think that it’s quite impossible to acquire professional skill in navigation (quite apart from whether they want it exercised) and that there is no such thing as an art of navigation. In these circumstances aren’t the sailors on any ship bound to regard the true navigator as a gossip and a star-gazer, of no use to them at all?’

‘Yes, they are,’ Adeimantus agreed

‘I think you probably understand, without any explanation, that my illustration is intended to show the present attitude of society towards the true philosopher’ (Plato, 380BC)

And tell him it’s quite true that the best of the philosophers are of no use to their fellows; but that he should blame, not the philosophers, but those who fail to make use of them. (Plato, 380BC)

I feel like standing and applauding when I read Plato, for he is one of the true greats. The early Greeks were exceedingly smart and aware, and they created the system that then led to Aristotle, and his most profound work, ‘The Metaphysics’. Their knowledge lies at the very heart of the Metaphysics of Space and Motion and the Wave Structure of Matter.

Plato the Philosopher - And those whose hearts are fixed on Reality itself deserve the title of Philosophers. Links / Plato, Ancient Greek Philosophy, Philosophers

Metaphysics: Problem of One and the Many – Brief History of Metaphysics and Solutions to the Fundamental Problems of Uniting the; One and the Many, Infinite and the Finite, Eternal and the Temporal, Absolute and Relative, Continuous and Discrete, Simple and Complex, Matter and Universe.

Philosophy: Greek Philosophers – All is One (Space) and Active-Flux (Wave Motion). Thales, Anaximander, Anaximenes, Heraclitus, Parmenides, Atomists (Democritus, Lucretius), Socrates, Plato, Epicurus.

Aristotle – On Philosopher Aristotle’s Metaphysics and Physics (Motion). (Aristotle was one of the greatest of the famous philosophers and should be read by all people interested in philosophy and wisdom.)

Socrates – ‘Know Thyself’ – Condemned to death for educating the youth to Philosophy and arguing that people are ignorant of the Truth. Information, Biography – On the Life and Death of Socrates (The Last Days of Socrates by Plato).

From Malaysia back to Greece: No Free Lunch

July 30, 2015

Foreign Affairs

From Malaysia back to Greece: The Europe we don’t want

by Serge Halimi

The Eurozone and the International Monetary Fund have crushed the hopes of a youthful movement that sought to transform a nation and rouse a continent. Beyond the shock that events in Greece have given supporters of the European project, there are other noteworthy features. The EU is becoming increasingly authoritarian, as Germany imposes its wishes and obsessions unchecked. Though founded on a promise of peace, the EU seems incapable of drawing lessons from history, even when recent and violent; what matters most to it is sanctioning bad debtors, and the headstrong. This amnesiac authoritarianism is a challenge to those who saw the EU as the place to experiment with going beyond the framework of the nation-state, and achieving democratic renewal.

Alexis and AngelaNo Free Lunch for Greece

At the outset, European integration lavished material advantages on its citizens, against a backdrop of the East-West confrontation. In the immediate post-war period, the project was driven forward by the US, which sought a market for its goods and a buffer against Soviet expansion. The US recognised that if the “free world” wanted to compete effectively with the “democratic” republics of the Warsaw Pact, it had to win hearts and minds, which meant demonstrating its goodwill through social policies. Since this strategic lifeline disappeared, Europe has behaved like the board of directors of a bank.

Some participants in the cold war, such as NATO, survived the fall of the Berlin Wall by inventing new monsters to destroy on other continents. The EU’s institutions have also redefined their enemy. The peace and stability they claim as their objective now demand peoples be politically neutralised, and their remaining tools of national sovereignty destroyed. This means integration at the pace of a forced march, the burial of political questions in a one-size-fits-all treaty, a federal project. This venture is not new, but the Greek case illustrates the brutality with which it is now being pursued.

“How many divisions does the pope have?” was reportedly Joseph Stalin’s dismissive response to a French leader who urged him to deal tactfully with the Vatican. The states in the Eurozone now seem to be applying the same approach to Greece; reckoning that the government they find so exasperating would be unable to defend itself, they have destabilised it through enforced bank closures and import suspensions. Relations between members of the same union, who belong to the same institutions, return representatives to the same parliament and use the same currency, should preclude such machinations. Yet the Eurozone countries, with Germany at their head, safe in the knowledge of their superiority, imposed a diktat on a weakened Greece which everyone acknowledges will worsen most of its problems. This whole episode exposes just how deep the cracks in the EU go (1).

When Syriza won January’s election, it was right on almost every single count. Right to link the collapse of the Greek economy to the austerity programme administered for five years by both socialists and the right. Right to argue that no state with a crumbling manufacturing sector would be able to rebuild itself if it had to devote increasing sums to paying off its creditors. Right to point out that in a democracy sovereignty belongs to the people and that if a policy is imposed on them despite what they decide, it constitutes an act of dispossession.

Can’t pay, won’t pay

Syriza appeared to have an unbeatable hand, but success depends on who you are playing with. In the EU, Syriza’s aces were turned against it; Syriza was compared to southern Marxists, so out of touch with reality that they dared question the economic assumptions that underlie German ideology (see Germany’s iron cage). The weapons of “reason” and conviction are useless in such circumstances. What’s the good of pleading your case in front of a firing squad? During the months of “negotiations”, the Greek finance minister Yanis Varoufakis noticed his European counterparts stared at him as though they were thinking: “You’re right in what you are saying, but we are going to crush you anyway” (2) (see The defeat of Europe).

However, the success (for now) of Germany’s plan to relegate Greece to the status of a Eurozone protectorate is also the result of failed gambles by Greece’s leftwing majority, in the over-optimistic hope of changing Europe (3). The gamble that the leaders of France and Italy would help Greece overcome the German right’s monetarist taboos. The gamble that other European peoples, overwhelmed by austerity policies, would pressure their governments into a Keynesian reorientation (Greece thought it was the torchbearer for this). The gamble that this change would be conceivable within the eurozone; noexit scenario had been envisaged or prepared. And the gamble that intermittent hints of a “Russian option” would, for geopolitical reasons, contain Germany’s temptation to punish Greece and encourage the US to stay Germany’s hand. At no point did any of these gambles seem likely to pay off. It’s not possible to hold off a tank with violets and a catapult.

Greece’s leaders, guilty only of being too innocent, thought that creditors would heed the democratic will of the Greeks, especially the young. The legislative election of 25 January and the referendum of 5 July, however, provoked dumbfounded outrage among the Germans and their allies. They had only one remaining aim: to punish the rebels, and anyone who might be inspired by their bravery. Capitulation was no longer enough; there had to be apologies (Greece has admitted that its economic choices caused a breakdown in confidence with its partners) and even reparations: public assets, capable of being privatised, to a value equal to 25% of Greek GDP are to be pledged to the creditors. Everyone claims to be relieved: Greece will pay.

“Germany will pay” was the phrase French finance minister Louis Klotz whispered to President Clemenceau at the end of the first world war. It became the watchword of French savers who had lent to the Treasury during the conflict. They had not forgotten that in 1870 France paid the whole of the tribute demanded by Bismarck, though the sum was higher than Germany’s costs. This precedent inspired French Prime Minister Raymond Poincaré when, frustrated at not receiving the reparations stipulated in the Treaty of Versailles (4), he decided to occupy the Ruhr in 1923.

John  Maynard KeynesJohn Maynard Keynes

John Maynard Keynes had already grasped the vanity of such a policy of humiliation and seizure of securities: Germany did not pay because it could not pay, and the same goes for Greece now. Only through time, with a positive balance of payments, could Germany have paid off its massive debt. France refused to allow its rival’s economic rebirth, which would have enabled it to pay, but also to finance an army, risking the possibility of a third bloody conflict. The economic success of the Greek left would hardly have had such dramatic repercussions for Europeans, but it would have scotched eurozone leaders’ justifications for austerity.

A ‘totally non-viable debt’

After a year, Poincaré had to raise taxes by 20% to fund his occupation, a cruel paradox for a rightwing leader opposed to taxation who had insisted Germany would pay. He lost the next election and his successor evacuated the Ruhr. No one has yet imagined such consequences in any of the countries that have crushed Greece to make it settle a debt that even the IMF admits is “totally non-viable”. Yet the Eurozone countries’ fixation on punishment has already obliged them to commit three times the sum (around €86bn) required had funds been released five months earlier; in the meantime the Greek economy had collapsed through lack of liquidity (5). So the price of German finance minister Wolfgang Schäuble’s inflexibility will be almost as high as Poincaré’s. But Greece’s humiliation will serve as an example for other potential offenders. (Spain, Italy, France?) It will be a reminder of the “Juncker theorem” formulated by the European Commission president, Jean-Claude Juncker, four days after the Greek left’s electoral victory: “There can be no democratic choice that is counter to European treaties” (6).

One bed is too narrow to accommodate 19 different dreams. It was an almost imperial undertaking to impose the same currency on Austria and Cyprus, Luxembourg and Spain, on peoples who do not have a shared history, political culture or standard of living, the same alliances or languages. How can a state conceive an economic and social policy that is open to debate and democratic negotiation if all the mechanisms of monetary regulation are outside its control? How can peoples who may not even know each other accept a degree of solidarity comparable to the inhabitants of Florida and those of Montana? The whole thing rested on a hypothesis: that federalism at an accelerated pace would bring European peoples together. Yet 15 years after the creation of the euro, animosity has never been greater. So much so that, when Tsipras announced his referendum, he used language like a declaration of war — “a [Eurozone] proposition in the form of an ultimatum addressed to Greek democracy” — and accused some “partners” of seeking to “humiliate an entire people”. The Greeks massively backed their government and the Germans rallied behind the quite opposite demands of their government. Could their destinies be any more closely linked without risking domestic violence?

But the hostility is no longer just between Greece and Germany. “We do not want to be a German colony,” insisted Pablo Iglesias, leader of Podemos in Spain. Italy’s Prime Minister Matteo Renzi — whose reticence throughout has been noteworthy — let slip: “I say to Germany: that’s enough. Humiliating a European partner is unthinkable.” According to German sociologist Wolfgang Streeck, “in Mediterranean countries, and to some extent in France, Germany is more hated than at any time since 1945. … Economic and monetary union, which was supposed to consolidate European unity once and for all, now stands a good chance of shattering it” (7).

‘You’ve done too little, too slowly’

The Greeks are attracting hostility, too. Junker is said to have told Tsipras: “If the Eurogzone functioned like a parliamentary democracy, you would already be out, because that is what nearly all your partners want” (8). Using a well-known conservative mechanism, now deployed at nation-state level, poor states have been encouraged in their mutual suspicion that others, like the proverbial “welfare chiselers” of Ronald Reagan’s speeches, are living at their expense. The Estonian education minister castigated Greece: “You’ve done too little, too slowly, and much less than Estonia. We have suffered much more than Greece. But we didn’t stop to complain; we just got on with it” (9). The Slovaks were aggrieved at the level of pensions in Greece, which should be “finally declared bankrupt in order to clear the atmosphere,” as the Czech Finance Minister kindly suggested (10).

Pierre Moscovici, the French Socialist and EU Commissioner for Economic and Financial Affairs, eagerly repeated an anecdote to any listening journalist: “At a Eurogroup meeting, a Lithuanian socialist minister told Varoufakis, ‘It’s very nice that you want to raise the minimum wage by 40%, but your minimum wage is already twice ours. And you want to raise it with money you owe us, with debt.’ And that’s a pretty strong argument” (11). A strong argument indeed, especially coming from Moscovici whose party had announced only a year earlier: “We want a Europe which protects its workers. A Europe of social progress, not social roll-back.”

At a European Council meeting on 7 July, several EU leaders conveyed their exasperation to Tsipras: “We can’t take any more. Greece is all we’ve talked about for months. A decision needs to be taken. If you’re incapable of taking it, it will be taken for you” (12). Is that not already a rough and ready brand of federalism? “We must go forward,” Hollande concluded from this. In which direction? The same as always: “economic governance”, “a eurozone budget”, “convergence with Germany”. In Europe, when a medicine severely damages the economic or democratic health of a patient, the dose is doubled. Therefore, since, according Hollande, “the eurozone has been able to reaffirm its cohesion with Greece, the circumstances are leading us to speed up” (13).

To left wing activists and trade unionists, stopping and thinking seems a better option. Even for those who fear that an exit from the euro would encourage the break-up of the European project and the revival of nationalisms, the Greek crisis demonstrates that a single currency stands against popular sovereignty. Far from containing the far right, such an obvious realisation encourages it, since the far right mocks its enemies’ lectures on democracy. How can anyone imagine that the single currency could one day accommodate a progressive social policy, having seen the plans that the Eurozone states gave Tsipras to force this left wing Prime Minister to implement rigid neoliberalism?

Once Greece raised big, universal questions. Now it has revealed the true face of the Europe we no longer want.

Serge Halimi is President of Le Monde diplomatique.

(1) See Frédéric Lordon, La Malfaçon: Monnaie européenne et souveraineté démocratique (Production Defects: the European Currency and Democratic Sovereignty), Les Liens qui Libèrent, Paris, 2014.

(2) New Statesman, London, 13 July 2015.

(3) See Serge Halimi, “A modest and crazy dream”, Le Monde diplomatique, English edition, February 2015.

(4) See Serge Halimi, “A Versailles, la guerre a perdu la paix” (At Versailles, the war lost the peace), Manuel d’histoire critique, Editions Le Monde diplomatique, 2014.

(5) “Europe reaches rescue deal for Greece”, The Wall Street Journal, New York, 14 July 2015.

(6) Le Figaro, Paris, 29 January 2015.

(7) Wolfgang Streeck, “Germany can’t solve this alone,” Le Monde diplomatique, English edition, May 2015.

(8) Libération, Paris, 11-12 July 2015.

(9) The Wall Street Journal, 13 July 2015.

(10) Le Figaro, 3 July 2015.

(11) France Inter, 1 March 2015.

(12) Reported in Le Figaro, 9 July 2015.

(13) Le Journal du dimanche, Paris, 19 July 2015.


More on Greece’s Financial Debacle

July 21, 2015

Why Greece should QUIT the Eurozone

Shrey’s Finance Blog

A 15 year old’s thoughts about finance, economics and growing up as a trader!

Goldman's current CEO, Lloyd Blankfein.Taking Advantage of Greece

The debate over Greece leaving the Eurozone has been raging for a matter of years now. Some believe that Greece staying in the Eurozone is axiomatic, in that a Greek exit from the Euro would ravage the economy, perhaps causing hyperinflation. Others argue to look at the other side of the coin, and propagate the idea that a Greece exit would attenuate the suffering of the Greek people, as they might only have to suffer for the next 10 years, rather than the next 50. Personally, it is my firm belief; my avowal, if you will, that Greece should leave the eurozone, and start a new era, having ended the old era of economic pain.

Almost at the very command of Angela Merkel, the Greek Prime Minister Alexis Tsipras was forced to impose harsher austerity members than the previous weekend’s “No” vote had suggested. This paves the way for increased value added tax, increased privatisation of organisations previously owned by the state, and an increase in the retirement age, making the years that people have to work longer. The harsh austerity measures outlined in the plan forced on Tsipras make the deterioration of the economy an inevitability, which forces the Greeks to sell public assets. We can all agree on the fact that this is a malfeasance in itself, and that the Greek people should not be subjected to having the public assets sold in the interests of paying down Greece’s loans.

It can be clearly seen that Greece is in the midst of an economic depression. The latest measures imposed on Greece by Merkel will only make this worse, with the economy getting worse by the day. If Greece, however, exits the Euro and returns to the Drachma, they will have a substantially weaker currency on their hands, which will be a massive influence in helping Greece get themselves out of their deflation and debt. If Greece does get out of this negative spiral of deflation, they will be alleviated from the economic stagnation and high unemployment that currently pervades the country. This can only be a good thing, as more people can sustain a living due to an increase in jobs.

Moreover, it is arguable that the Greek economy will find it very hard to recover within the Eurozone. Greece needs a complete devaluation of its currency through a flexible exchange rate in order to make economic growth a likely scenario again. It is clear as a bell that the short term consequences would be quite damning for the Greek people, however this is a far better alternative than the other scenario, in which the people are suffering from hardship and poverty for the next half a century, potentially. This whole saga with Greece has affected other economies as well, which has led to fears of an Italian, or even a Spanish exit. If one of these two countries exits the eurozone, the ramifications of this would be irreversible for the euro and it would likely never bounce back.

Finally, it is a definite fact that this whole drama has caused deep political instability and rifts within the Eurozone, which means that the tension between the people in the Eurozone has never been higher. It was revealed earlier that a majority of German citizens want Greece to exit the Eurozone, and if this is the case, then there will be gargantuan pressure on Angela Merkel to force this to happen (some would argue that she is already exhibiting this). In order to put this tension within the Eurozone to rest, Greece needs to exit so we can have some semblance of peace in the Eurozone. All these factors combined show that it is in the best interests of all the countries involved that Greece does exit the Eurozone, and although this may have significant short-term impacts, it is definitely the best thing to do to secure long term economic prosperity for all involved.


Is Greece insolvent, and what would that mean for the euro?

Greece financial crisisAs the new Greek government tries to fumble its way through the business of running a struggling country, more and more questions are being asked about the future of Greece and of the Eurozone. As this column asks, we need to know if Greece is, actually insolvent, and if so, how that can be reconciled with its position within the Eurozone. – FD

By James Saft

Feb 3 (Reuters) – Much hangs on the interpretation of a word, and in the case of Greece and the euro zone that word is: insolvent.

New Greek Finance Minister Yanis Varoufakis has been unusually frank, likening his country’s case to that of a jobless person being advised to take out advances on her credit card to pay the mortgage.

“Would you advise them that they should continue to take these tranches of loans from the credit card in order to deal with what is essentially an insolvency problem?” Varoufakis said days after taking office under the new Syriza-party-led coalition.

“This is the trouble over the last five years with Greece. Our European partners and the previous Greek government have been extending and pretending.”

Keeping up the pretense that one can honor one’s debts if only given room to maneuver and time is an old if not glorious tradition among the deeply indebted. Coming straight out and coping to insolvency, on the other hand, is not.

That’s because certain things tend to follow from an admission of insolvency. Creditors decline new advances, existing loans, where possible, are called and the debts of the insolvent, Greece, are no longer acceptable as collateral.

Guntram Wolff, Director of the Bruegel think tank, argues that Varoufakis has set a rapid clock ticking, making its debts theoretically beyond the pale for the European Central Bank and creating a pressing need for a new deal.

“When a Finance Minister declares the insolvency of his country, then the quality of all the debt he has issued should fall below the relevant thresholds for Emergency Liquidity Assistance as well as standard monetary policy operations. While I do not believe the ECB will be so consequential as to do this immediately, I also cannot believe that it will just continue lending for a long time,” Wolff wrote in a Bruegel piece.

“By talking about insolvency, he has raised the funding needs for Greece’s banking system and made government fund-raising on capital markets impossible,” Wolff said.

Insolvency is a state,  Default is an event

Important to remember that extend and pretend as a strategy, while obviously unfair to many participants, can sometimes work as a means of keeping an entity ticking over. Many leading U.S. banks were very likely insolvent during the crisis.

Like all relationships, good and bad, extend and pretend requires the participation of two partners, the creditor and debtor. All true, but these things are never simple, and far less when, as in Greece, the insolvency includes a euro member state.

While Greece’s liabilities may shortly exceed its ability to repay, its creditors and partners maintain that with current low interest rates and a very long repayment schedule its ongoing debt maintenance burden is not out of line with that of France, for example.

Varoufakis sees the situation as a debt deflation spiral, in which the conditions imposed on Greece stifle demand, pushing prices and output lower and making the debt ultimately impossible to repay without ruin. There is some justice in this position.

Varoufakis’ slapping down of the insolvency card is best seen as a gambit to bring the other side more rapidly to the table and to extract better concessions.

As for the ECB, it seems to be standing on ceremony, maintaining its hands will be tied as for extending Greek banks more credit when the Greek program extension expires at the end of February.

“We (ECB) have our own legislation and we will act according to that,” ECB council member Erkki Liikanen said.

That angle, that the ECB will have to follow its rules and that Greek debt and its banks will be high and dry, is heavily overplayed, argues Karl Whelan, an economics professor at University College Dublin.

Whelan believes that even in March Greek access to ECB enabled credit will be based on discretionary decisions rather than mechanical outcomes. Greece and its negotiating partners can conceivably limp along together because both the ‘rules’ and the meaning of insolvency are such woolly concepts, offering insulation if not clarity.

Thus we have two sides, both seeking to pressure the other by creating what could be a false urgency to negotiate, and both hoping the other crumples and gives way. Meanwhile, capital, sensibly, flees Greece and the chance rises that an overplayed hand by either side leads to a bank run.

Asia’s View of the Greek Crisis–Project Syndicate

July 20, 2015

Asia’s View of the Greek Crisis–Project Syndicate

by Lee Jong-Wha

Lee Jong-Wha, Professor of Economics and Director of the Asiatic Research Institute at Korea University, served as Chief Economist and Head of the Office of Regional Economic Integration at the Asian Development Bank and was a senior adviser for international economic affairs to former President Lee Myung-bak of South Korea.


Jong Wha LeeAsian countries have been watching the Greek crisis unfold with a mixture of envy and schadenfreude. When they experienced their own financial crisis in 1997, they received far less aid, with far harsher conditions. But they also recovered much more strongly, suggesting that ever-growing bailouts may not be the best prescription for recovery.

Since the onset of the crisis, Greece has received massive financing from the so-called “troika”: the European Commission, the European Central Bank, and the International Monetary Fund. It received bailout packages in 2010 and 2012 totaling €240 billion ($266 billion), including €30 billion from the IMF, more than triple Greece’s cumulative limit for IMF borrowing. The latest deal promises up to another €86 billion.

By contrast, South Korea’s 1997 bailout package – which was larger than those received by Indonesia, Thailand, or the Philippines – totaled $57 billion, with $21 billion coming from the IMF. At the time, South Korea’s annual GDP was $560 billion; in 2014, Greek GDP amounted to less than $240 billion.

The IMF seems to have lent Greece such a large amount for political reasons. For starters, at the onset of the crisis, then-IMF Managing Director Dominique Strauss-Kahn was a leading candidate to become President of France. More generally, major IMF shareholders, the European Union, and the United States have a vital interest in stabilizing Greece to safeguard French and German banks and preserve NATO unity. Desmon Lachman, a former deputy director of the IMF’s policy department, has called the institution a slush fund, abused by its political masters during the Greek crisis.

To be sure, the economic mess created in Greece – the result of government profligacy, official corruption, and widespread tax evasion – merited some international assistance. And the IMF did impose conditions on its loans to Greece – including fiscal austerity, privatization, and structural reform of its pension and tax systems – most of which were necessary to address the country’s insolvency. The requirements of the latest rescue deal are the toughest yet – even tougher than those that Greek voters overwhelmingly rejected in a referendum earlier this month.

But the scale of the aid remains massive, especially when one considers how little progress Greece has made in implementing the reforms it promised in the past. This contrasts sharply with Asia’s experience in 1997.

Unlike Greece, Asia’s problem was not an insolvency crisis, but a liquidity crisis, caused by a sudden reversal of capital flows. In South Korea, net private-capital inflows of 4.8% of GDP in 1996 swung to net outflows of 3.4% of GDP in 1997. Though the accumulation of substantial short-term debts in the financial system and corporate sector did amplify the shocks, the primary factors fueling the crisis were the lack of international liquidity, panicked behavior by investors, and financial contagion.

Yet the IMF imposed even tougher conditions on Asia than it has on Greece, including fiscal austerity, monetary tightening, and financial restructuring. Some of these requirements were clearly unnecessary, as evidenced by Malaysia, which recovered quickly from the crisis without IMF assistance.

In any case, the actions were temporary. Once confidence began to recover and market conditions stabilized, the East Asian economies shifted their monetary and fiscal policies toward expansion and embraced large-scale exchange-rate depreciation – efforts that enhanced their export competitiveness. Structural reforms, including the immediate closing of financial institutions and the elimination of non-performing loans, also helped to bolster recovery.

In South Korea, for example, real GDP growth quickly rebounded from -6.7% in 1998 to 9.5% in 1999. By mid-2003, some 776 of the country’s financial institutions were closed. And the authorities’ strong commitment to reform restored investor confidence, reviving inflows of private capital and reactivating foreign trade.

Greece, by contrast, has utterly failed to engineer a recovery. Instead of dropping to 110% as planned, the public debt-to-GDP ratio has increased to 170%. Annual per capita real income contracted 4.8%, on average, over the last six years. Unemployment stands at 26%, and hovers around 50% among young people.

Against this background, it was not shocking that Greece, unable to come up with €1.5 billion at the end of June, became the first developed country to miss a payment to the IMF. Belatedly, the Fund acknowledged that its lending and policy advice had failed in Greece.

Greece’s government then demanded more financial support with less stringent conditions. But, as its creditors have now recognized, providing more money will not address Greece’s insolvency. That is why the new deal requires that the government immediately cut pensions, hike taxes (beginning with the value-added tax), liberalize the labor market, and adhere to severe spending constraints. At the same time, a write-down of official debt, like the “haircut” given to private creditors in 2012, will be necessary.

Many have questioned whether agonizing reforms are entirely necessary; if the country returned to the drachma, they suggest, it could implement interest-rate cuts and devalue its exchange rate, thereby engineering an export-led recovery. But, given Greece’s small export sector, not to mention the weakness of the global economy, such a recovery may be impossible. Greece’s best bet is reform.

So far, Greece has shown itself to be unwilling to implement a painful internal-wage adjustment and reform measures forced by outsiders. Perhaps the latest deal, which was reached with Greece on the brink, will prove to be a turning point, with Greece finally committing actively to economic and fiscal reform. Otherwise, Greece’s exit from the eurozone – with all the concomitant social and economic strife – seems all but inevitable.

Asians watch with sympathy the fall from grace of the birthplace of Western civilization. But perhaps Greece should look to Asia for proof that, by taking responsibility for its own destiny, a country can emerge stronger from even the most difficult trials.