[civil] "Greece moves closer to eurozone exit after delaying €300m repayment to IMF "

[C0ckney]

In my view Piketty's outlook on the world is fundamentally wrong, as is his reading of (economic, mostly) history. And I can't imagine how anyone can say that the article I linked to, which references actual research into post WW2 German economic affairs (a Germany destroyed, its undestroyed industry dismantled and shipped off, together with leading engineers and scientists, with several millions of refugees from East Germany to take care of etc), with unfounded bald assertions by a guy the left is idolising as if he's the second coming of Marx (but who instead is a champagne socialist pop icon), lacks breadth.

in my view his reading of history is broadly correct, as was marx's, and we're hardly likely to find much agreement there. but anyway, my point is not about ww2, which is a very unprofitable line of argument when discussing the greek crisis, but rather the view on the crisis itself that he presents, with all its attendant lies, myths and inaccuracies*. this seems to be based on slavish devotion to the god of the invisible hand - blessed be the usurers - and the belief that the recalcitrant greeks have sinned greatly against him, and thus - for he is a vengeful god - that they must be punished, disciplined and brought back onto the path of righteousness by having their economy destroyed, their social protections dismantled and their public assets sold off at fire sale discounts to foreign capitalists, amen.

* one of the things i like to do with articles about greece is play a game i call 'spot the inaccuracy' where i pick one lie, half-truth or misrepresentation from the article. today's inaccuracy is this:

After restoring democracy in 1974....[the greek government] started paying salaries to Orthodox priests

in fact this started in the 1920s as part of an agreement where by the church would give up some land in exchange for its clergy being paid by the state. a lot of these inaccuracies - and there are invariably many to choose from - are seemingly unimportant in themselves, but all play a role in constructing the mythologies that believers in the god of the invisible hand rely on to expound and justify their views on greece.

[Saras]

in my view his reading of history is broadly correct, as was marx's, and we're hardly likely to find much agreement there.

Actually, Marx was not wrong on everything, and was in some ways a great thinker for his time. He was wrong on almost if not completely all of his big predictions though, which kinda makes him a crappy economist (as are almost if not completely all of them ).

Anyway, I broadly agree with this critique of Piketty - you as a Christian may appreciate the arguments of this Episcopalian:

http://ejpe.org/pdf/7-2-art-4.pdf

but anyway, my point is not about ww2, which is a very unprofitable line of argument when discussing the greek crisis, but rather the view on the crisis itself that he presents, with all its attendant lies, myths and inaccuracies*. this seems to be based on slavish devotion to the god of the invisible hand - blessed be the usurers - and the belief that the recalcitrant greeks have sinned greatly against him, and thus - for he is a vengeful god - that they must be punished, disciplined and brought back onto the path of righteousness by having their economy destroyed, their social protections dismantled and their public assets sold off at fire sale discounts to foreign capitalists, amen.

Well no, no one is actually proposes an armageddon like you described, but the moral high ground the Greek politicos try to take stops looking so high when you consider who they request a bailout from, and with what arrogance! This crossed my FB feed:

Dear people of Greece!

We, the pensioners, the doctors, the police officers, the teachers and your other ordinary fellow european citizens of Latvia are so delighted to hear that you demand european solidarity!

We're sure that you'll be happy to discover, that you've finally found new allies - us! So let's change Europe together!

The average pension in Greece is €800. The average pension in Latvia is €300. The Average salary in Greece is €820 Netto, the average salary in Latvia is €600 Netto. And by the way, Latvia is a northern country, we have a thing called 'heating season' here, when temperatures fall below -10°C, and utility bills rise by €150 a month.

So, wouldn't it be wonderful, if you could kindly share 1/3 of your pensions, taxes and salaries with us? It's our democratic choice, so please respect it! We all want it. After all, we are one european family...

Except that we never borrowed the money that we couldn't pay back to blackmail our creditors with suicide later, and to blame them for failed policies of our national government that we voted for. Our debt to GDP ratio doesn't exceed 40%. During the financial crisis, we had managed to bail out our banks and return to pre-crisis levels after 4 years of "Troika-imposed" austerity, that helped us complete important structural reforms and get our economy grow faster than anywhere in Europe! And guess what, before we joined the European Union and the Euro, we were much poorer than we are today, because after 50 years of eastern european '"solidarity" in the USSR we forgot what it means to be competitive. We forgot how to manufacture anything that could compete in a free market, but we've learned. We've learned that you shouldn't spend more than you earn. And if you need to borrow money, at least have the decency to admit that it's not a gift and should be returned. We never lied about our public debt when we joined the Euro, and we never had the need to unpeg our national currency from the euro, before or after we joined it.

Get your act together. Have the decency to admit the mistakes of your democratically elected governments that they've been making for decades. Don't blame Europe for not giving you free cash (writing off the debt). Yes, it would have been better if some debt were written off, but it's not for the one who owes the debt to decide. And if you want your creditors to do more to help you - they will, if you'll respect them, if you'll recognize their free right to do so, and if you'll show the results and the political will to change Greece to make it competitive and growing again. Vote Yes.

Greece is Europe. Europe is Greece.

[regexcellent]

In terms of economic theory Marx was completely wrong about everything, and everyone knew it at the time. He appears to have either been unfamiliar with the marginal revolution, or otherwise unable to comprehend it. Marx's theories are unable to explain why it is that when you stick things on a train, and then drive that train in circles, they don't get more valuable.

Everything Marx ever wrote is totally worthless and should be ignored.

edit: in particular, believing in the labor theory of value is equivalent to believing in creationism in terms of scientific ignorance.

[giblets]

Marx's theories are unable to explain why it is that when you stick things on a train, and then drive that train in circles, they don't get more valuable.

You don't actually understand the theories you are trying to criticize.

edit:

The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. (Wealth of Nations Book 1, chapter V)

No one wants to acquire something that was put on a train and driven in circles.

[regexcellent]

Yes, that is Marx's way of avoiding saying that value is affected by supply and demand, by saying that it is affected by schmupply and schmemand. Which means that the value of an object is subjective and marginalist, and not related to the labor required to produce it.

This is why Marx didn't have an idea of how to explain the trains-driving-in-circles problem. If you accept the labor theory of value, then the obvious fact that not all labor is equally valuable--for instance, driving trains in circles being more valuable than farming, or a CEO managing a company being more valuable than a day laborer stacking boxes, poses a serious problem.

[N35t0r]

when you stick things on a train, and then drive that train in circles, they don't get more valuable.

Um, isn't this what De Beers does with diamonds, except it uses caves rather than trains?

[regexcellent]

Nope. De Beers restricts the supply.

Even better example, since you bring up diamonds: if I find a diamond sitting on the ground, it's just as valuable as one sitting in De Beers' vaults that 30 africans died mining.

[N35t0r]

Dude, it was a joke.

[C0ckney]

i would be surprised if reg has ever read any marx, but if he has then he certainly did not understand it.

[C0ckney]

Actually, Marx was not wrong on everything, and was in some ways a great thinker for his time. He was wrong on almost if not completely all of his big predictions though, which kinda makes him a crappy economist (as are almost if not completely all of them ).

yes i agree with you here, and find the works of all 'great economists' interesting to read, even if i strongly disagree with their opinions. there was a revival in interest in marx's economic ideas in wake of the crisis, even from some very surprising quarters; i remember zero hedge of all places publishing quite a bit of stuff about marx circa 2011. but marx's most lasting contributions are in the realms of history and the social sciences. marxism, as a critical framework, transformed the latter especially, and the effects of this are still being played out today.

Anyway, I broadly agree with this critique of Piketty - you as a Christian may appreciate the arguments of this Episcopalian:

http://ejpe.org/pdf/7-2-art-4.pdf

i'm a non-believer who retains an interest in the idea of god, but thank you for the link. i shall try to read it when i have the time.

Well no, no one is actually proposes an armageddon like you described, but the moral high ground the Greek politicos try to take stops looking so high when you consider who they request a bailout from, and with what arrogance! This crossed my FB feed:

it is not only being proposed but actually being done. my language may be a little more dramatic than the IMF's, but it is happening nonetheless. the same medicine is always prescribed and the prescription must always be followed, even, and perhaps especially, when it clearly doesn't work. as for the facebook post, well, i'll limit myself to saying that while i can understand the sentiment, the whole thing is based on the false premises that plague this debate and that i have talked about at length in this thread and others.

[self biased]

i don't have anything to contribute except this image:

[Imran Siddiqui]

Yes, that is Marx's way of avoiding saying that value is affected by supply and demand, by saying that it is affected by schmupply and schmemand. Which means that the value of an object is subjective and marginalist, and not related to the labor required to produce it.

You realize the quote you are responding too wasn't written by Marx, right? The Wealth of Nations was written by one Adam Smith (not the poster).

FWIW, I actually did read Piketty's Capital in the 21st Century (all the way through, even! ) and I found it to be very compelling stuff. It's not perfect, but then again, no work is. However, I found that his general points had merit and were well backed up. In many ways, even if you don't agree with his ideas for what to do about capital inequality (of course that part of the book is a very, very small part at the back which is his merely his opinion based on the studious work he did in the vast majority of the book), he makes a good case that there is something concerning going on.

[OneFootInTheGrave]

To check in and add this for Oerdin & co to ponder upon.

a snippet

For most of the debtors, for there are debtors and debtors. Not only Greece but also the US will not be able even theoretically to repay its debt, as it is now publicly recognised. So there are debtors who can blackmail their creditors because they cannot be allowed to fail (big banks), debtors who can control the conditions of their repayment (US government), and, finally, debtors who can be pushed around and humiliated (Greece).

.
Varoufakis personified this stance in his dealings with Brussels: he fully acknowledged the weight of the debt, and he argued quite rationally that, since the EU policy obviously didn’t work, another option should be found.

Paradoxically, the point Varoufakis and Tsipras are making repeatedly is that the Syriza government is the only chance for the debt providers to get at least part of their money back. Varoufakis himself wonders about the enigma of why banks were pouring money into Greece and collaborating with a clientelist state while knowing very well how things stood – Greece would never have got so heavily indebted without the connivance of the western establishment. The Syriza government is well aware that the main threat does not come from Brussels – it resides in Greece itself, a clientelist corrupted state if there ever was one. What the EU bureaucracy should be blamed for is that, while it criticized Greece for its corruption and inefficiency, it supported the very political force (the New Democracy party) that embodied this corruption and inefficiency.

Also congratulations & thanks are in order to 61% of Greeks for not only giving themselves the chance, but for giving the chance to the whole of Europe

[dannubis]

Yes, the rest of Europe should also organize referenda where they put the following question to their population: "Do you agree that large sums of your tax money are used to help the greek people while it could be used to alliveate austerity measures at home ?"

[OneFootInTheGrave]

Well that is Europe's problem. If we really are a union, you should be willing to support the Greeks as much as you are willing to support "home". Imagine if Flanders was saying that they are paying too much tax into the treasury and it is being spent to support Wallonia. How would that end?

Oh wait!?!

You may say that it is not the "same", but given the currency union this should also be a part of the bargain. Which the west clearly points out that "it is not", so really the Greeks can either take the scorched earth policies of central EU bureaucrats like you, and all move out physically to Germany.

Or on the other hand stay in Greece and move out of the EU as a country.

In this whole story there is also no light shed on the incompetent bankers who were making unsound loans to a clientelist state, and they want to get out on already almost non-existent Greek taxpayers backs. The Greek state has already been demolished, no NHS, national TV, current government can barely pay out 40% reduced pensions, after 5 years of austerity policies. The normal action here would be that the unsound entity goes bankrupt, restructure in a viable way, like Germany was restructured in 1950's and move on. Lenders taking as much of a hit as required to get Greece back on track to growth and stability, but having more sound lending rules applied to the Greek state in the future.

EU does not like it, so be it... will be interesting to see what happens next week.