Last Sunday, the Greek people voted overwhelmingly "no" to the proposals from the
European Commission for an austerity solution to their debt crisis. This reminded me
of a similar vote in the Hong Kong Legislative Council to the proposals for
constitutional reform from Beijing. From the Greek point of view, it was a victory for
democracy. From Brussels' point of view, the "no" vote solved nothing. The question
in everybody's mind now is – what's next?
A friend sent me a quote this week on U.S. historian Edith Hamilton's The Echo of
Greece, an instant classic when it was published in 1957, on the Greek mind and its
influence on Western thinking and development. Talking about Athens and its
downfall, she said that in the end, Athenians wanted security more than freedom. "Yet
they lost everything – security, comfort, and freedom. This was because they wanted
not to give to society, but for society to give to them. The freedom they were seeking
was freedom from responsibility. It is no wonder, then, that they ceased to be free. In
the modern world, we should recall the Athenians' dire fate whenever we confront
demands for increased state paternalism."
Famous last words.
Asians who think that democracy is the solution to all problems need to remind
themselves that, in the end, philosophers (politicians and the public alike) still need to
eat. Democracy is the means to an end, not an end in itself. Democratic politics, as it
tries to buy public popularity with instant promises, is a fiscal problem. Both sides of
the political spectrum try to outbid each other in popularity – the elite votes for lower
taxes and, to buy support from the electorate, increases welfare spending. The result
is what we have today, higher and higher debt, financed only by lower and lower
interest rates.
What did the Greek referendum or the Hong Kong vote prove? That the politicians
say they don't like something. But what is the alternative? My reading is that the
Greek public basically said to Brussels that "we are family, so you need to bail us
out". Brussels (or, more specifically, Berlin, since the Germans are more equal than
other Europeans on the push for austerity) says to the Greeks, who are only 1 per
cent of the family, "if we bail you out, what about the Italians, Irish, Spanish and
Portuguese?"
This is a larger problem than just Greece. Financially, the Europeans can easily bail
out Greece; geopolitically, Greece is important because it is part of the Balkans
region, historically the source of conflict in Europe.
To put this in perspective, Greece owes the rest of the world US$350 billion, of which
the International Monetary Fund provided US$35 billion. This was almost the amount
provided by the IMF in total to Thailand, Indonesia and South Korea during the Asian
crisis of 1997-1999, which together have 30 times the population of Greece. The per
capita income of Indonesia in 1998 was one twenty-eighth that of Greece in 2014. So
much for democratic fairness.
This is not the bailout of a poor country, but a pretty rich country helped by a group of
rich countries.
The dilemmas of democratic politics are not unique to Greece. As Moises Naim, a
former editor of the influential magazine Foreign Policy, pointed out in his book The
End of Power, "in many countries, the fragmentation of the political system is creating
a situation where gridlock and the propensity to adopt minimalist decisions at the last
minute are severely eroding the quality of public policy and the ability of governments
to meet voters' expectations or solve urgent problems".
This fragmentation is due to the rise of social media, which has connected people to
other people like themselves, making the political discourse and power beyond the
reach and comprehension of conventional politicians.
The masses know what they may not like, but given so many things changing at the
same time, the policy options and outcomes are much more difficult to articulate,
present and implement.
The real problem is that many hard truths, such as fiscal sustainability, are difficult to
convey to the voter. There is no free lunch, although democratic central banks are
opting to print money to make it appear that there is a free lunch.
Confucius was not wrong when he said that the stability of a country depended on
self-discipline, not just for politicians at the top of the heap, but the man or woman in
the street. Hamilton said it best in The Greek Way: "Liberty depends on self-
restraint. Freedom is freedom only when controlled and limited."
When politics promises heaven, it is likely that purgatory will follow. Greece will have
a dark period of pain to come. We will all do well to learn that lesson from Greece.
Andrew Sheng comments on global issues with an Asian perspective.
A version of this article appeared in South China Morning Post, 10 July 2015
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