after the Greek referendum

July 6th, 2015

Don’t expect changes, writes FT columnist Tony Barber.

August 1914 was a descent into hell. May 1945 was an escape from hell. July 2015, the month of a surreal Greek referendum that had no clear question and an answer whose meaning is disputable, will go down in history as a continuation of hell — for Greece, and for Europe. ….

Mr Tsipras and his ruling Syriza party were too cunning to phrase the referendum question as “in or out of the euro”, a wording that would have permitted Greeks to understand that what was really at stake was their modern European identity. As a result, the outcome does not resolve the fundamental conundrum: that most Greeks want to stay in the eurozone but detest the austerity that has bled them dry since 2010.
[Emphasis added.]

Tony Barber, “No vote widens fissures in society knocked senseless by slump“, Financial Times, 6 July 2015 (metered paywall).

Pope Francis and environmental protection

July 5th, 2015

Free market conservatives hate it, it fails to address the threat of overpopulation, and it dismisses carbon credits as a way to combat global warming. Nonetheless Pope Francis’s encyclical, Laudato Si’, will ultimately be recognised as one of the most significant events in the modern environmental movement. Above all, it takes a big step towards healing a breach between western religions and nature that dates back to the dawn of monotheism. ….

Arnold Toynbee, the British historian, … argued [long ago] in an essay on the origins of pollution that the arc of western religion has been to get the gods off our back so that humanity can do business. This started in ancient Greece, where moral space for exploiting nature was created by moving the gods out of the trees and exiling them to Mount Olympus.

The advent of monotheism took this further by bundling the deities into one God and placing Him in outer space. Throw in the Protestant revolution, which made material success virtuous, and it was but a short step to the throw­away consumer society Pope Francis rails against.

Eugene Linden, “A papal call to reconcile the natural, spiritual and industrial worlds“, Financial Times, 3 July 2015 (metered paywall).

American writer Eugene Linden (born 1947) has authored numerous books on environmental issues, most recently, The Ragged Edge of the World: Encounters at the Frontier Where Modernity, Wildlands, and Indigenous Peoples Meet (Viking, 2011).

For much, much more, see the 184-page encyclical letter of Pope Francis. It can be downloaded at the link below, which follows the opening paragraph of the encyclical.

“Laudato si’, mi’ Signore” – “Praise be to you, my Lord”. In the words of this beautiful canticle, Saint Francis of Assisi reminds us that our common home is like a sister with whom we share our life and a beautiful mother who opens her arms to embrace us. “Praise be to you, my Lord, through our Sister, Mother Earth, who sustains and governs us, and who produces various fruit with coloured flowers and herbs”



vision, Greece and the euro

July 3rd, 2015

FT columnist Simon Kuper reflects on Greece’s entry, in March 1998, into the European Exchange Rate Mechanism and, three years later, the euro. Here are the last two paragraphs of his skillfully crafted essay.

The euro was a visionary project. The key lesson for politicians: beware of vision. The future will probably mess up your vision. Instead of taking giant irreversible leaps, be backward-looking and evidence-based: what boring complex policy worked somewhere before? Given that Europe in 1989 was coming off the best 40 years in its blood-soaked history, the bias should have been to leave well alone instead of inventing a currency.

“Vision” is particularly dangerous at confusing emotional moments such as the fall of the Berlin Wall. The west’s next great confusing emotional moment, the attacks of 9/11, produced blunders including the Iraq war, limitless spying and Guantánamo. Quite likely the frantic weeks after Lehman Brothers’ collapse in 2008 spawned the next generation’s headaches. Much better when possible to wait out crises, as Angela Merkel tries to do. Today’s politicians take a lot of stick, but at least they don’t have any vision.

Simon Kuper, “How ‘vision’ messed up Europe“, Financial Times, 4 July 2015.

Krugman and Stiglitz on the Greek referendum

July 1st, 2015

FT columnist Martin Wolf is not sure how he would vote in the coming referendum, which in reality is a referendum on remaining in the euro (“yes”) or abandoning it (“no”). Two well-known American economists display no such hesitation. Paul Krugman comes down firmly in the “no” camp.

It’s easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years.

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week. ….

[I]t’s time to put an end to this unthinkability [by voting “no”]. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

Paul Krugman, “Greece Over the Brink“, New York Times, 29 June 2015.

Joseph Stiglitz, in a telephone interview with a reporter from Time magazine, recommends a “yes” vote, but he combines this with increased aid and a write-off of Greece’s debt. This is the “third way” – a path of “endless bailouts and few conditions” – that Martin Wolf dismisses as delusional.

Interestingly, Stiglitz believes that a “no” vote – abandoning the euro – would be a disaster regardless of the economic consequences. If the Greek economy performs well without the euro, this would encourage other countries to leave the euro. If the economy collapses, Greece would become a failed state, allowing Russia and China to “undermine Greece’s allegiance to the E.U. and its foreign policy decisions”.

“They have criminal responsibility,” he [Stiglitz] says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. “It’s a kind of criminal responsibility for causing a major recession,” Stiglitz tells TIME in a phone interview. ….

If the Greek economy recovers after abandoning the euro, it would “certainly increase the impetus for anti-euro politics,” encouraging other struggling economies to drop the common currency and go it alone. If the Greek economy collapses without the euro, “you have on the edge of Europe a failed state,” Stiglitz says. “That’s when the geopolitics become very ugly.” ….

“The creditors should admit that the policies that they put forward over the last five years are flawed,” says Stiglitz, a professor at Columbia University. “What they asked for caused a deep depression with long-standing effects, and I don’t think there is any way that Europe’s and Germany’s hands are clean. My own view is that they ought to recognize their complicity and say, ‘Look, the past is the past. We made mistakes. How do we go on from here?’”

The most reasonable solution Stiglitz sees is a write-off of Greece’s debt, or at least a deal that would not require any payments for the next ten or 15 years. In that time, Greece should be given additional aid to jumpstart its economy and return to growth. But the first step would be for the troika to make a painful yet obvious admission: “Austerity hasn’t worked,” Stiglitz says.

Simon Shuster, “Joseph Stiglitz to Greece’s Creditors: Abandon Austerity Or Face Global Fallout“, Time, 29 June 2015.


Greece’s referendum on the euro

June 30th, 2015

Supposedly this [the upcoming referendum] is going to be a vote on a “take-it-or-leave-it” proposal by Greece’s creditors — the EU, the European Central Bank and the International Monetary Fund.

But in fact this is going to be a referendum about whether Greece remains in the eurozone, the EU or even the west. …

A Yes vote will be a major defeat for Alexis Tsipras, the prime minister. He will have to resign and demand elections or a coalition government. ….

This [Mr Tsipras’ political group] is not a typical leftist party. It is a coalition of radicals, Maoists, former Stalinists and populists.

Their gut feelings are anti-European and anti-western. They feel more at home with their comrades in Caracas than in Brussels. They are thinking and deciding collectively, with a psychology which is a mix of delusion and fanaticism. [Emphasis added.]

Mr Tsipras is himself a product of this environment. He was raised and socialised in a climate of antiquated dogmatism, with no access to the real world.

Aristides Hatzis, “A ‘take-it-or-leave it’ vote is a recipe for disaster for Greece“, Financial Times, 29 June 2015 (metered paywall).

Professor Hatzis (born 1967) teaches law and economics at the University of Athens.

the Greek crisis and the coming referendum

June 30th, 2015

The intelligent, always sensible Martin Wolf sees no way out for Greece – at least no easy way out, given the choices available.

How would I vote in the referendum on the eurozone’s economic programme if I were Greek? The answer, alas, is that I am unsure. ….

In making my decision, I would bemoan both the idiotic leftism of my own government and the self-righteousness of the rest of the eurozone. Nobody comes out of this saga with credit. ….

The Syriza government has failed to put forward a credible programme of reform that might solve the multiple problems of the Greek economy and polity. It has instead made populist gestures. ….

Yet the eurozone, too, deserves substantial blame for the outcome. One would never guess from its rhetoric that Germany was a serial defaulter in the 20th century. Moreover, there is no democracy, including the UK, whose politics would survive such a huge depression unscathed. Remember, when Germany last suffered a depression of this magnitude, Hitler came to power. ….

So I, as a Greek voter, face a choice between the devil and the deep blue sea. The devil is familiar: the never-ending demands of the eurozone for further austerity against which my people voted in the last general election. The deep blue sea is sovereign default and monetary sovereignty. If I am Prime Minister Alexis Tsipras, I think there is a third way — endless bailouts and few conditions. But I am sure he is deluded. So which would I choose? Being cautious I would be tempted to stick with the devil I know. but I might well do better to risk the sea.

Martin Wolf, “The difficult choices facing the Greeks“, Financial Times, 1 July 2015 (metered paywall).

I would risk the deep blue sea, but this is a decision that Greeks themselves have to make. I agree with Martin; Greece realistically must choose between two paths: exit from the euro, or continued austerity.

our relationship with trees

June 29th, 2015

Most often, the best treatment for an infected wild forest is to leave it alone, writes beloved naturalist Richard Mabey.

An insidious anthropomorphism governs our relationships with trees, from beliefs about their conception to judgments on their health. We persist in regarding them as frail humanoids in need of intensive care, not as autonomous organisms. For at least two centuries trees have been rebranded as the products of human enterprise, and their existence predicated on our behaviour as surrogate parents. We must plant, stake, weed them, employ hygienic or cosmetic surgery if they are to survive, and put them out of their misery when they don’t pass our tests of worthiness. What we shut our eyes to is that this pattern of ubiquitous, regimented intervention is part of what makes them susceptible to trouble. ….

A wood without any diseases or parasites would be a lifeless cohort of leafy poles. No leaf-eating insects, therefore no insect-eating birds. No rot-holes for bats and owls. No timber recycled back into the soil. Trees are social organisms. They tend to live with other trees, in a complex network of mutual dependency. They are linked by chains of benign underground fungi that distribute nutrients and information about insect predation, and which one ecologist has nicknamed “the wood-wide web”. If one species of tree succumbs to stresses, other species take its place. In individual trees, reduced vitality prolongs life. What we regard as “diseases” are often just the intricate exchanges and workings of the forest food-chain.

Exotic diseases, to which these exquisite networks are not adapted, are the exception, and there is no conceivable argument against a total ban on imports of tree material from areas where non-native afflictions are rampant. But we should reflect on how the ways we manage trees and woods provides conditions as conducive to epidemics as an overcrowded hospital: battery-grown saplings with minimal genetic variety; dense block planting with single species, often in unsuitable sites; suppression of natural regeneration; ignorance of trees’ natural immune systems and survival mechanisms. At every point we are the cause and aggravator of malignant tree diseases, but it is natural woodland that is likely to be the remedy.

Richard Mabey, “Wildwoods don’t need our help to survive ‘apocalyptic’ diseases“, Financial Times, 27 June 2015 (metered paywall).

UK nature writer Richard Mabey (born 1941) is author of numerous books, including Weeds: In Defense of Nature’s Most Unloved Plants ( Ecco, 2011).

same sex marriage

June 29th, 2015

Gay marriage is now legal throughout the United States, thanks to a Supreme Court ruling. This was welcomed by a majority of Americans, but totally unexpected.

Sometimes change tiptoes up and surprises you. There could be no better illustration of America’s dramatic week than the White House lit up in rainbow colours as the confederate flag was lowered in the south. ….

The most durable changes usually come from below. That is the case with gay marriage. Opponents of last week’s Supreme Court ruling claim it amounted to “legislating from the bench”, much as in 1973 when the court legalised abortion in Roe v Wade. In fact, the Supreme Court was putting its seal on what has been a vertiginous shift in US society. A decade ago, more than two-thirds of Americans opposed same sex marriage. Now roughly 60 per cent support it. Even before last week’s ruling it was legal in 38 states. Only in 2012 did Mr Obama feel bold enough to add his own backing and then only because Joe Biden, the vice-president, let slip his support. Mr Obama has not played a big role in the gay rights revolution. But he has ridden the wave well.

Edward Luce, “Barack Obama’s presidential renaissance“, Financial Times, 29 June 2015.

Obama on history’s long shadow

June 27th, 2015

“In the midst of this terrible tragedy, God has visited grace upon us, because he has allowed us to see where we were blind,” the president said, to a rapturous reception [in Charleston, South Carolina]. “For too long we have been blind to how past injustices continue to shape the present.”

Demetri Sevastopulo and Megan Murphy, “Obama calls for end to blindness about race“, Financial Times, 27 June 2015 (metered paywall).


Thomas Piketty at lunch with the FT

June 26th, 2015

This is one of the best weekly “lunch with the FT” interviews that I have seen. French economist Thomas Piketty (born 1971) has achieved ‘rock-star’ status’ with the success of his 2013 bestseller Capital in the Twenty-First Century, so is a particularly appropriate choice for inclusion in this series.

“Too often, economists build very complex mathematical models to look scientific and impress people. I have nothing against mathematics — I initially trained as a mathematician — but it’s usually to hide a lack of ideas. What pleases me is that this book reaches ‘normal’ people, a rather wide public. My mother is one example,” he says, adding that she rarely reads big academic books yet understood everything in his. ….

Piketty says his interest in inequality crystallised after the collapse of the Berlin Wall and the first Gulf war. He recalls visiting Moscow in 1991 and being struck by “the lines in front of shops”. He came back vaccinated against communism — “I believe in capitalism, private property, the market” — but also with a question central to his work: “How come those people had been so afraid of inequality and capitalism in the 19th and 20th century that they created such a monstrosity? How can we tackle inequality without repeating this disaster?”

The first Gulf war, he believed, demonstrated the cynicism of the west: “We are told constantly that states can’t do anything, that it’s impossible to regulate the Cayman Islands and the other tax havens because they are too powerful, and all of a sudden we send a million soldiers 10,000km from home to allow the emir of Kuwait to keep his oil.”

Anne-Sylvaine Chassany, “Lunch with the FT: Thomas Piketty“, Financial Times, 27 June 2015 (metered paywall).

There is much, much more in the full interview.