On the solvability of the Euro Crisis and the mood in Germany: Concluding my debate with Kantoos Economics

22/07/2012 by

Kantoos Economics (KE) replied to my post on what constitutes a rational and decent critique of Germany’s stance during this Euro Crisis. After a series of exchanges between us, I think that this dialogue is now reaching its natural limits (click the following for a blow by blow perusal of our debate:  KE1 was KE’s original critique of the Modest ProposalYV1 (my response to KE1), then KE2, then YV2 and finally response YV3 to KE3).  The time has come to agree to disagree on two major issues:

  1. We must agree to disagree on my hypothesis that the Euro Crisis was always extremely easy to solve, as far as the technical, legal and macroeconomic dimension of it is concerned.
  2. We must agree to disagree on our assessment of the German public’s mood toward Greece (and, though less so, on the rest of the Periphery).

On the first point, my claim was never that the Crisis can be made to go away simply and easily. Only that the Euro Crisis could. Following 2008, as I have argued in my Global Minotaur, global capitalism has entered a nasty phase of long term tumult and crisis. This cannot be reversed easily, if at all. However, the particularities of the Euro Crisis (which turn Europe into the global economy’s sick man and a threat to the planet’s chances of recovery) can be dealt with very, very simply indeed (see our Modest Proposal, on which KE and I exchanged long tracts). The fact that our politicians cannot, or will not, see this does not mean that “things are genuinely complicated”. At best it shows that our leaders’ idiocy is deep and complex. 

On my second point, KE is incensed with my suggested thought experiment for discovering the true mood of the majority of Germans toward Greeks. (I asked my readers to imagine that there is a magic button that, if pressed by Mrs Merkel, would end the Crisis for Greeks and everyone else without any costs to anyone. The question was: Would the majority of Germans want Mrs Merkel to press it? Or would they prefer another button that allowed the Crisis to fester with higher costs for everyone and particularly high costs of the average Greek? I suggested that, in truth, the majority of German voters, given a chance, would vote for the latter.) KE’s reaction to my thought experiment surprised me. First, KE confused the question of whether a quick fix (like the imaginary magic button) exists with the utterly separate issue on whether the majority of Germans would want to push it if it existed. Secondly, KE claims that, if such a button existed, the majority of Germans would want their Chancellor to push it. In all honesty, I think that the mood is Germany toward the Greeks is such that the majority would be prepared to suffer a positive cost in order to see that the average Greek suffers a greater cost (convinced as they are that they are responsible for the Crisis and need to be taught a lesson – as opposed to being let off the hook). A very small minority would want Mrs Merkel to press my imaginary button. That KE is denying this surprises me. It also suggests to me that we have reached the limits of our dialogue. Either I am deeply ignorant of the true mood in Germany or KE is in the depths of denial. And since this is an empirical issue, we better leave it at that (unless some pollster in Germany wants to put my hypothesis to the test). 

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