The Price System versus the Balance of Power

The Nobel prize winning economist Friedrich von Hayek is mainly known for his influence on right-wing politicians like Margaret Thatcher. This politicization of Hayek is unfortunate because he was also an economist and philosopher who produced insightful academic work. Most notably in this regard is his identification of what he calls "The Knowledge Problem," the argument of which was published in the American Economic Review in 1948. The article is titled "The Use of Knowledge in Society," and it is worth reading because in it he highlights an important element in the economy that is relevant to all forms of social activity, including the area that interests me, international relations. 

The balance of power

My summary of his insight is the following. If all the dispersed information of economic actors could be known to one mind, that is, if it was aggregated and centralized, this mind would in principle be able to allocate the goods and services that we produce and consume in a way that would take account of all the dispersed knowledge of actors. If, for example, wood suddenly became scarce, this all-knowing mind would quantify and formulaically encode all the implications of the sudden scarcity of wood, namely, people's willingness to pay more for it, the search for, and production of, substitutes, the increase in the cost of all the products made with wood, and actors' changing preferences in response to these changes. With all this knowledge, the central mind would then allocate the goods that are affected by this change--houses, boats, chairs, tables, books, etc.--in a way that reflects a) the new scarcity, b) the changes in the value of wood and all the goods made with it, c) actors' subjective reactions to this change, including the desire for substitutes, and actors' responses to these substitutes, and d) the effect of the new substitute on all the goods that are implicated by this new resource.

Of course, there is no single mind that could aggregate all this knowledge. And even if computers could somehow statistically represent the data implied above, it is hard to see how even the most powerful ones could register and predict the subjective changes that determine the different valuations of substitutes, or the creative process whereby substitutes are imagined and produced. This is the meaning of what Hayek calls the "Knowledge Problem". He adds that, in the economic sphere, this problem is at least partially resolved by the price mechanism, and this can be illustrated by continuing the example in the previous paragraph. If there suddenly occurred a scarcity of wood while demand for it remained unchanged, the price for it and all the goods that are made of wood would increase. If this increase was significant, those who depend on wood would economize it, and search for substitutes. The price system registers all this information of economic change in the form of a price, which is a signaling device that encapsulates the relative values of all the goods and services that are implicated in the original change. Actors would adjust in response to the changes in this signaling device--that is, the price--in a way that would restore some sort of equilibrium. The important point here is that this would happen even though the actors are mostly ignorant of the original change (a sudden scarcity of wood), and are mostly unaware of how the millions affected by the change are acting. All they need to know is that wood is now more expensive, and that they will have to adjust in one of the ways mentioned above. Thus the price system, for Hayek, helps to solve the knowledge problem because it aggregates dispersed information and, by transforming it into a signaling device (the price), induces others to adjust even though the said actors are mostly unaware of the causes of the changing prices. No all-knowing mind, or all-powerful computer, can carry out this function because the information that is represented in the price is the aggregation of millions of subjective preferences which are dispersed, local, implicit, tacit, fluctuating, contradictory, and circumstantial. And yet the price system transforms these bits of data into a single number that helps to coordinate the activities of millions who are mostly unaware of each other. 

Even more remarkably, this is a form of organization that is the product of human action and not human design. It is a macro-structural mechanism that humans create without intention or purpose. In this sense, the price mechanism is similar to evolved forms in the natural world: both emerge spontaneously and through chance and are selected because of some adaptive value. The final outcome is a complex organization without an organizer.

The implications of this are huge for all sorts of human behaviour, but here I will focus on international politics. The knowledge problem that afflicts the economy that Hayek identified also characterizes the international system. In both there are actors pursuing their goals (although in the economy it is mainly producers and consumers, and in the international arena it is states). Both are complex systems of fluctuating parts, where the knowledge of the totality of dispersed knowledge cannot possibly be known to a single mind. According to Hayek, in the economy  the price system helps to solve this problem. This raises the question of whether there is any analogous mechanism in the international system that also solves the knowledge problem.

At first glance, it seems like there is no exact equivalent. The reason for this absence is the nature of the goods that actors pursue in each sphere of human action. In the economy, actors pursue economic gain of some sort--consumers want to consume, and producers want to profit. In the international system, actors pursue security and sovereignty. Since there is no open market where security and sovereignty are openly exchanged, there is no mechanism to determine their relative values. And yet actors still pursue these goods.

But further inquiry suggests that there is a macro-structural process in the international system which, like the price system, coordinates the activities of  actors by concentrating and signaling dispersed knowledge. The candidate for this is the balance of power, which, like the price system, might be a mechanism which is an adaptation to the absence of a central mind or authority. To see how, consider what the balance power is: the distribution and asymmetrical possession of military and economic force in the system. State actors observe the balance of power similarly to how economic actors observe the price. They look for movements, and adjust their behaviour in light of the changes. If the change is favourable--that is, if a rival experiences a real reduction in power--this represents an opportunity for the pursuit of advantage. In the economy, the corresponding behaviour would be the profit maximizing opportunity that would accrue to some actors if the price of an important resource suddenly declined. 

Thus both the price system and the balance of power are signaling devices that facilitate and coordinate decision making between actors pursuing some material advantage.  Both are spontaneous evolutionary adaptations to the absence of an all knowing mind which can value and allocate goods according  to their relative values. The main, and fundamental, difference, is the goods that are produced and exchanged. Despite this difference, the international system has a market-like quality, but rather than operating like a domestic economy, it more closely resembles a territory infested with gangs, as the following example will suggest.

Let us presume that there are 200 gangs in a city, and all are pursuing similar things like territory to pursue their illicit activities, like drug dealing and gambling. These gangs compete with each other for territory, and the security to control it. But they cannot all have the same areas. This is where force comes into the picture. In order for a gang to protect what it has, or to gain more, it needs instruments of violence. If it lacks this, it can ally with a stronger gang--for a price. The stronger party may demand some sort of payment, or some contribution to the alliance. The realization of the objectives of the gang's leaders depends on the amount of force it has, and is willing to use, and, most importantly, the extent to which it is constrained by the force possessed by other gangs. The relative distribution of forces is the main determinant of whether a gang achieves its objectives. If the gangs are roughly similar, there will be a regular shifting of constellations as they compete with each other. If, however, one gang is 20 times stronger than the rest, its objectives are not constrained by others, and it will obtain domination over most or all of the territory. Other gangs must submit or be crushed.

The similarity between gangs and states arises from the fact that both depend on instruments of violence which are used to procure goods that are exclusive: more territory and security for X means less of both for Y. Meanwhile, in the economy, actors use money to pursue goods that in principle are not exclusive: more computers for me does not mean there are fewer for you. Despite these differences, both are composed of actors pursuing material advantage in systems where the totality of the dispersed knowledge cannot be known to an all-knowing mind (the knowledge problem), and both have developed spontaneously generated adaptive mechanisms that help to turn the dispersed knowledge into a single value that is also a signaling device which coordinates the activities of actors. For the economy, it is the price; for the international system, it is the balance of power.

A Review of Leo Tolstoy's Anna Karenina

The hyper-specialization of academia in the past several decades has had many effects, one of which is that most scholarship is focused on very narrow and technical theoretical questions, such as whether subjective ideas or objective economic variables are more influential in causing very specific forms of human behaviour. These kinds of inquiries, although interesting, are, in the grand scheme of things, of relatively little value. Although important in helping to systematize thought and in sharpening our tools to understand some political events, they will not help one live a better life, or make much positive change in the world, or tackle some of the existential quandaries of being alive. The same cannot be said about the book that I will review here, Leo Tolstoy’s novel Anna Karenina. Unlike the vast majority of academic work, even the most prestigious, in this masterpiece Tolstoy tackles some of the big questions that all thinking people, at one time or another, must face and deal with, such as: what is the nature of love? What is the meaning of life? How should I live my life? In Anna Karenina, Tolstoy does not pretend to provide a solution to those puzzles. But in the development of the characters, and more importantly in the relationships between them, Tolstoy weaves together a story that contains an edifying mix of romance, history and philosophy that constitute a system of thought that gives some tentative and partial answers. Consequently, after reading Anna Karenina, one feels a bit more enlightened, entertained, matured, and enriched. For this, the book merits its place in the pantheon of history’s great novels.

 

All unhappy in their our own ways

 

As the book’s title suggests, a major character in the novel is Anna Karenina, and much of the text is organized around her tragic love affair with Oblonsky which transpires despite her marriage to Aleksey. The love triangle involving Anna, Oblonsky, and Aleksey is strategically juxtaposed with the courtship and marriage of Levin and Kitty. None of these characters are “bad”; in fact all of them are good in their own ways. And yet all, at one time or another, must suffer, although for the latter couple it leads to redemption, and for the former, to tragedy.

 

Kitty and Levin find lasting happiness, although not without difficulties. Kitty is initially infatuated with Oblonsky, and for good reason: his dashing good looks, enticing personality, and high status make him very desirable. At the same time, Levin is in love with Kitty, but as an average looking (although intelligent) landowner and farmer, he does not have Oblonsky’s appeal. At least partly for this, Kitty rejects his marriage proposal. Levin is wounded, but he finds meaning in his work and eventually moves on. Kitty’s hopes are also dashed when Oblonsky falls in love with Anna. This event has a traumatic effect on Kitty and causes a love-sickness that manifests itself as a serious physical illness. Her doctor prescribes travel abroad to a spa, where Kitty meets Varanka, who embodies the ideals that Tolstoy believes provides the ultimate meaning and guide to life: Christian self-sacrifice that puts ethics and the well-being of others before the interests of the egoistic self.

 

Levin, like Varenka, is a literary vehicle for Tolstoy’s philosophy. After Kitty initially rejects him, he goes back to his farm and lives a quiet and productive life even though his dream of building a family is crushed. The death of his consumptive brother, Nikolai, confronts Levin with the reality of the inevitability of death, which leads to an existential crisis. What is the point of life if we must die? In the end, does it matter whether we die tomorrow, next week, or 40 years from now? What kind of force would create us only to live briefly on this earth, to desire and conceive of eternity even while we inexorably must slide into eternal nothingness and oblivion? These are some of the questions that Levin, at the tender age of 30, is tortured with after seeing his brother die. He initially has no answer other than to distract himself through working on the land. All this changes when he encounters Kitty again after not seeing her for at least a year. By then, she has completely healed from the wound inflicted by Oblonsky, and has matured considerably as well, mainly because of the positive influence of Varanka. After a brief courtship, she accepts Levin’s second proposal, and they are happily married. Levin’s dedication to his work and his family provideshim with purpose and satisfaction, but the questions that tortured him remain unresolved, and are always in the background of his consciousness. Kitty’s pregnancy and experience of giving birth is a turning point. While she is in labour, sweating and shrieking in pain, Levin realizes his utter helplessness and inability to provide relief, and is terrorized by the fear that she might die. At that moment, he finds himself on his knees, pleading to God for help. He was an atheist his entire adult life, but this event involuntarily brings him back to the religion of his childhood.  In the process, Levin moves a small step towards discovering the answers to the questions that tortured him.

 

His spiritual journey is impacted by other factors. Levin finds insight on how to live meaningfully, not from history’s great writers and thinkers, but from the peasants who live and work on his farm. Levin is educated and well-read, and even wrote a book on the question of agricultural production in Russia. But he is suspicious of intellectuals like his brother Sergey, the type who can cite at will all the great philosophers and who express much concern about the plight of lower classes, and who personally endorse policies to help them, even while pursuing a life of comfort and prestige that his inferiors could never achieve. In marked contrast to his brother, Levin actually lives and works with peasants; he is intimately involved in the minutiae of their daily lives, and this personal experience nourishes his genuine affection for them. By his actions he treats them as equals and shows the hollowness of those, like his brother Sergey, who pretend to be compassionate by expressing the latest intellectual fads of social justice for the peasants.

 

Through his genuine intermingling and affection for those below him in socioeconomic status, Levin discovers their way of life, and realizes that it contains an answer to some of the questions that tortured him. It can summed up as: simplicity. The peasants are not disturbed by the inevitability of death because for them, life has a simple rhythm of work, family, and faith. Death, evidently, is just part of the natural rhythm of life, and hence it is pointless to philosophize about it. Here, Tolstoy reveals his anti-intellectualism even though he himself was a great writer and thinker. Levin (who is Tolstoy’s projection of himself) has a prodigious mind, and this produced a kind of intellectual pride that was shattered after witnessing the death of Nikolai. The ensuing crisis was  not resolved by reading theology or philosophy. Rather, a resolution occurred after observing the birth of his son, which, by reminding him of his essential helplessness, brings him to the faith of his childhood, and also from his intimate knowledge of the life of his peasants, where he discovers that the purpose of life is the simplicity that is etched in their rhythms of life.

 

Whereas Levin and Kitty discover marital happiness and spiritual fulfillment, the relationship between Anna and Oblonsky ends in tragedy, and Tolstoy is clearly using them as a warning about the destructiveness of egoistic love. As mentioned above, Anna is married to Aleksey, and together they produce a son who Anna adores. But their union is loveless, in part, because of the personality of Aleksey. He is the embodiment of the cold, efficient, rational, knowledgeable, rule-following, and ambitious official that arguably is the archetypical modern man. Although he is devoted to his wife and child, he is seemingly incapable of feeling or expressing genuine emotion. Anna is desperate for feeling, and at one point even says that she would prefer for Aleksey to kill her than the current state of affairs, as this would at least mean that he felt angry. For Anna, any emotion, it seems, is better than none. It was this loveless and robotic marriage that makes Anna ripe for an affair, and when the handsome, daring, and passionate Oblonsky enters the picture, and both instantly feel attracted to each other, it is only a matter of time before their desires are consummated even though Anna tried—she really did—to be a good wife and resist him. She eventually becomes pregnant with Oblonsky’s baby, and when Aleksey discovers this, he does his best salvage the marriage, not because he wants to become a loving husband, but rather because it would be humiliating in the eyes of his peers for him and Anna to get a divorce. In a moment which shows that even men like Aleksey, somewhere buried within them, have compassion and feeling, after Anna gives birth to Oblonsky’s baby and almost dies in the process, Aleksey forgives her and expresses delight towards the new baby even though it was not his. At this point, one gets the impression that to save his marriage, Aleksey would be willing to raise the little girl who was conceived illegitimately by Oblonsky. But it was not to be. Anna chooses to take the baby and travel abroad with Oblonsky, and they begin to build a life together full of the love and passion that Anna desired and that Aleksey could not provide.

 

But they do not live happily even after. The intensity of their passion is directly proportional, and even causes, the intensity of their suffering. With love comes vulnerability, and this takes an extreme form in Anna. She has become emotionally enslaved, so to speak, because her well-being is directly tied to how Oblonsky feels for her. And when she senses, sometimes accurately, that Oblonsky’s love for her has diminished, she suffers greatly. This also leads to petty jealousies that sometimes take the form of paranoid fantasies. Any little inconsistency on the part of Oblonsky is interpreted by her as evidence of a change of feeling or sexual betrayal. Even worse, she does not seem to love the baby that they produced. This is one of the odd ironies of the book: she feels a deep love for the son produced with the loveless Aleksey, while she does not feel the same for the daughter produced with Oblonsky, the man she was madly in love with. Anna deals with her misery in a number of ways, some helpful and others destructive. She adopts a poor English girl and makes an effort to raise her well. She reads voraciously, and is up to date on all the latest ideas. She also becomes addicted to morphine. Through these various ways of self-medicating, Anna deals with the suffering involved in her relationship with Oblonsky. But it could not be suppressed for long, and as the book proceeds, their quarrels become more and more intense, frequent, and maddening. Their last fight causes unspeakable emotional pain for Anna, and she subsequently commits suicide by throwing herself under a train.

 

 

And so we come back to the one of the puzzles mentioned above, namely, what is love? The not-coincidental comparison between, on the one hand Kitty and Levin and, on the other Anna and Oblonksy provides Tolstoy’s answer, and it is that there are several kinds of love. One is carnal and untethered to broader ethical and social considerations. It is based mainly on physical attraction and the need to satisfy our desire for the ecstasy that only sexual activity can produce. It is spontaneous, visceral, and capricious, and when it happens it can only be resisted by much effort, if at all. This is the love that was shared between Anna and Oblonsky, and it led to ruin. The other kind of love is embodied by Kitty and Levin. This kind does not exclude physical attraction, but it seems much less prominent (Kitty was gorgeous, but Levin was average looking). It is a kind of love that is embedded in a system of ethics that takes account of the reproduction and well-being of the community. It happens slowly, and requires the consent of the families of the parties. Most importantly, perhaps, is that it is sustained by spiritual maturity. Kitty’s moral transformation after befriending Varanka, and Levin’s discovering the ethics of self-sacrifice after his brother’s death, and from observing the peasants’ lives, are no coincidence; these events are catalysts in their spiritual growth that provides the bedrock of their marriage. It is this that will ultimately help them get through the difficult times, such as financial difficulty, or events that force one of them to choose whether to supress egoistic sexual impulses or infidelity. Levin is faced with such a dilemma when he is seduced by the unhappy Anna. Had he pursued his desires, Kitty would have been understandably devastated. But happily for them both, Levin does not.

 

Anna, it seems, was doomed from the start. Had she stayed with Aleksey, she would have conformed to broader societal expectations and obtained some happiness through the deep love she felt for her son, even while remaining in the unhappy marital union. She decides to follow her passions, and although this provides transient moments of happiness and ecstasy, she loses the son she loves and, ultimately, her life. Her first option, it seems, was the lesser evil and, from Tolstoy’s perspective, the most ethical. Kitty and Levin are perhaps Tolstoy’s way of saying that true happiness is possible in this life, even while all must face the inevitability of death. But it can only happen though a kind of spiritual development that places the interest of others before the satisfaction of egoistic desires. Through his characters, Tolstoy is also telling us that the life of the mind is overrated, and that we will ultimately not find real purpose and succor by reading the works of history’s great thinkers. Rather, the answer to the existential questions of life, the kinds that tortured Levin and that all thinking people must face, can be found in the simple and humble lives of the peasants. Tolstoy’s answer to life’s existential quandaries might not convince everyone. But he attempts to provide an answer while telling a compelling and memorable story. Most scholarly writing does not even come close to approaching such lofty heights.

 

A Review of Adolf Hitler's "Mein Kampf"

Adolf Hitler’s Mein Kampf is not for the faint hearted reader. The content, and the language that is used to express it, are an affront to basic decency and to the sensibilities of those who have been socialized in a cultural milieu that emphasizes, directly or indirectly, the moral framework of universal human rights.  A not-unusual sentence in Mein Kampf is the following: “The French people, who are becoming more and more obsessed by negroid ideas, represent a threatening menace to the white race in Europe, because they are bound up with the Jewish campaign for world-domination.”

Nonetheless, it is worthwhile to read this difficult text because it helps to answer several puzzles. The first is the question of how Hitler managed to seduce tens of millions of people, and not only Germans. It is worth recalling that he built his National Socialist party from scratch; at its first meeting in 1919, it attracted only seven men. By 1933, the Nazi’s won a plurality of votes in a democratic election, which paved the way for the creation of the dictatorship which perhaps represented history’s greatest menace to civilization. Mein Kampf provides clues that help to answer the question of Hitler’s smashing success, and in so doing helps to solve another puzzle: the main cause of World War 2. Scholars disagree on this topic, with some arguing that it was the injustice of the Versailles Treaty that created the conditions for the rise of the Nazi’s, while others point to Germany’s expansionary agenda. The book under review provides evidence for both explanations but it will be argued here that the second has more evidentiary weight. Lastly, it is valuable to read Mein Kampf because in the book Hitler, perhaps inadvertently, forces one to interrogate the basis of one’s moral framework and the civilization that produced it. Hitler’s system of thought contained many elements, but the main ones are racial supremacism and a kind of theological pantheism that equated nature with divinity and, in so doing, glorified the amoral aspects of natural selection. In this sense, it is a moral system derived from the laws of the natural world. As will be argued below, this framework is immoral precisely because the laws of nature are ruthless and do not conform to any observable standards of human decency.

Historical Background

Before assessing the content of Mein Kampf, the historical context of the book and its author are worth mentioning. Adolf Hitler grew up in a typical middle-class home, he adored his mother and respected his father, and often quarreled with the latter about his career choices. Against the wishes of his father who wanted him to become a bureaucrat, Hitler wanted to be an artist, and eventually left home to pursue this dream in cosmopolitan Vienna, which at the time was the capital of the Habsburg Empire. In that city he lived as what today might be called “a starving artist”, but quite literally, since he often did not make enough money to buy food. It was also here that his views on racial purity and his anti-Semitism began to develop. Hitler detested the social pathologies he observed in Vienna, including the co-existence of fabulous wealth and obscene levels of destitution. Economic exploitation, poverty, family breakdown, alcoholism, syphilis, ignorance, and other pathologies were all widespread in the city, and as time went by Hitler developed the idea that Vienna’s cosmopolitanism generally, and its racial mixing specifically, were the culprits. In addition, according to his own accounts at least, as a young man he did not feel any animosity towards Jews, and was even sympathetic to their plight, until he observed them in Vienna. Whereas previously he thought that they were mainly of European racial stock (but with a different religion), after living in Vienna he believed that they were a foreign and inferior race. Even worse, he blamed Jews for many of the cultural pathologies he observed, but his main accusation was that they were the authors and purveyors of Marxism, which Hitler equated with pure evil. This is rather ironic, because Hitler agreed with Marxists that industrial capitalism was exploitative and that the state should be an agent for the progressive empowerment and improvement of the working classes. However he fiercely objected to the cosmopolitanism and universalism of Marx’s ideas. Hitler believed in socialism, but one that was undergirded by the interests of the nation. Hence the name of his party: National Socialism.

Hitler detested the condition of the German people, divided as they were between different nation-states. He blamed many groups for this state of affairs, both domestic and international, and welcomed the First World War as a means to settle scores. He enthusiastically joined the front, where he engaged in close combat, and was wounded twice: the first time from conventional warfare, and the second time from poison gas, which almost took his life, blinded him for weeks, and ultimately led to a long period of convalescence that prevented his return to the battlefield. This was a source of grief for Hitler; he explains in vivid detail the sorrow he felt in the hospital because he could not fight with his comrades. His anguish reached a crescendo when Germany surrendered. For Hitler, this was unspeakably and unforgivably humiliating because it resulted, not from German weakness, but from the machinations of Jews and the betrayal of Marxists, bourgeoisie liberals, pacifists, and others who signed the terms of surrender which included the loss of German inhabited territories and the punitive measures of the Treaty of Versailles.

It was in the shadow of this perceived humiliation and betrayal that Hitler began his political career. He wrote the first volume of Mein Kampf while in a Bavarian jail cell, where he was imprisoned for his political activities. Another important background feature is that it was written when the French illegally occupied Germany’s industrial district, the Ruhr, in order to control and extract resources from it. These three elements—the humiliating loss of the First World War, his imprisonment, and the French occupation—go some length in explaining the rage and venom that suffuses much of the language of Mein Kampf. But this is insufficient to account for the content of the book. Equally important is the philosophical substance of his thought. It is to that which I now turn.

Hitler’s Theology

Throughout Mein Kampf, Adolf Hitler repeatedly refers to the “Almighty Lord” or the “Divine Creator” or, simply, “God”. This highlights that he was a theist in the sense that he believed in a creator god who governs the universe. However, his god would not be recognizable to any of the monotheisms even though he adopts their terminology. In particular, Hitler’s god would be alien to both Protestantism and Catholicism (I will focus on Christianity because it is the faith that I am most familiar with). Both major denominations rely on the belief that man is made in God’s image, which forms the ethical basis of human value that both ascribe to. To the extent that they follow the example of Christ, both denominations also valorize the sick, weak and the poor and make it a core mission to support them through acts of charity.  

Hitler’s theological worldview relies on a different paradigm: biology and the survival of the fittest. He begins with an observation that few biologists would disagree with, namely, that the natural world is characterized by struggle and violence, and through this process nature selects only those organisms which are stronger. On this basis, Hitler proceeds to assert that since Europeans (or those of Aryan stock) ruled the world and displayed unmatched technological and economic power, they were selected by nature to fulfill this function by virtue of their biological constitution. Hitler then makes a theological leap and sustains that these supposed natural and biological processes are a reflection of god’s will.

This biologically based moral system is also seen in the kinds of the metaphors that Hitler uses to make his case. In a typical sentence where he critiques the influence of the Jewish press, he complains that “this poison was allowed to enter the national bloodstream and infect public life.” Here, the nation is perceived as an organism that must be protected from disease. In a chapter called “Race and People”, Hitler defends the promotion of racial purity by appealing to analogies in the animal word: “Each animal mates only with one of its own species,” he says, and deviations will inevitably lead to inferior creatures. The same is true, according to Hitler, with inter-racial offspring. Hitler also anthropomorphizes nature (a tactic that is often used to ascribe moral agency to abstractions): “Nature is pleased with what happens” when the stronger defeat the weaker; and “Nature [his capitalization of nature is revealing] does not wish that weaker individuals should mate with the stronger, she wishes even less that a superior race should inter-mingle with an inferior one” (emphasis mine).

Whereas a Christian might explain the world’s evils, including inequality and disease, by positing the principle of original sin, Hitler presumed that they were the outcome of god’s will operating through the mechanisms of natural selection. It is a short leap from this to assert that the strong rule because they have a divine right to. Here we see a complete inversion of the example of Christ: it is the strong, rather than the meek, that are favoured by the divine. In a passage that reveals Hitler’s close reading of Nietzsche, he calls this “the aristocratic principle of nature.” The difference between Nietzsche and Hitler, of course, is that the former was an atheist, while the latter believed in a pantheistic god with the characteristics highlighted above. Despite this difference, both derived their moral systems from the logic of natural selection. Hitler’s whole political program rested on these metaphysical assumptions: for him only healthy Aryans are made in god’s image, while the rest are inferior. It is therefore their duty to rule the world, and to fight those who place obstacles in the path of this destiny. 

Readers might be shocked to learn that variants of these ideas were shared by many in the West who called themselves progressives. Those who supported eugenics may have opposed fascism and even Hitler, but the unpleasant truth is that eugenics is a moral system derived from the logic of natural selection and which asserts that the state should be an agent in the perfection of the human race by only allowing those deemed “fit” to breed. Those deemed “unfit” tended to be members of minority groups, or those with low-scores on IQ tests, prostitutes, alcoholics, and others deemed to be inferior. Prominent defenders included Tommy Douglas, founder of Canadian universal healthcare; Woodrow Wilson, 28^th President of the US and promoter of “self-determination” (self-determination for whom?), Margaret Sanger, founder of Planned Parenthood, and most major scientific organizations in the West. Eugenics became law in many Western states and Canadian provinces, and was only delegitimized after WW2, when it became associated with the genocidal crimes of the Nazi’s. The main difference between the National Socialists and Western eugenicists was that the former was willing to kill those they deemed inferior, while the latter wanted to prevent them from reproducing. 

This sad historical episode reveals an important point: that any moral system that rests on equal human dignity cannot flow from the scientific observations of biologists. In other words, universalist moral systems, like liberalism, socialism, or the United Nation Declaration of Human Rights (UDHR) rely on assumptions that are not scientific. The idea that all humans have equal worth is a statement of value that is not verifiable according to the standards of science. Rather, it rests on faith, but this does not make it less true. It means that a strictly scientific materialist worldview is insufficient for the belief in universal human equality. One could even assert that human decency is inversely proportionate to the distance that we create between ourselves and the dictates of nature. The natural world indeed operates in a hierarchical, predatory, and ruthless fashion that ensures the survival and reproduction of the strongest. Hitler not only recognized this, he celebrated and derived his morality from it, as did eugenicists. Universal moral systems like the ones mentioned above can accurately be characterized as attempts to use human agency to overcome these ruthless processes of the natural world. Therefore, attempts to derive moral systems from nature, or to ascribe some transcendental moral agency to the earth, should be taken with a grain of salt.

Hitler’s anti-Semitism

Another feature of Mein Kampf is Hitler’s rabid hatred of Jews. They are not the only group that he attacks; Slavs, blacks, aboriginals, and especially the French are all, at one time or another, targets of his animus. But the book reveals that he had a pathological obsession for Jews. Obsessions of any kind tend to distort reality, because they exaggerate the agency of the object, and lead to fantasies about its supposed actions, past and present. And, of course, an inordinate amount of thought is devoted to the object of the obsession. This characterizes some of Hitler’s ideas when he discusses Jewish people. He repeatedly mentions them when analyzing some social ill that has supposedly weakened Germany. His accusations are varied and many, from producing smutty literature and cinema, to “adulterating the blood of fair haired German girls,” to spreading democracy, propagating Marxism, promoting the interests of international finance, having designs for world domination, to “smelling bad,” secretly pulling the strings behind the French and Bolshevik revolutions; these are just the main indictments. In one of his flights of spiritual fancy, he claims that, in fighting them his “conduct is in accordance with the will of the Almighty Creator. In standing against the Jew [Hitler] is defending the handiwork of the Lord.”

It seems easy to draw a direct line between this obsessive and irrational hatred and the holocaust. But scholars actually disagree on whether the attempt to exterminate Jews was part of a grand design (Intentionalists), or whether it was more ad hoc (Functionalists). In my view, Mein Kampf does not conclusively answer this question, because nowhere in the book, despite the rabid hatred mentioned above, does he say that the entire Jewish race must be exterminated. Functionalists would point out that his hatred was compatible with any number of different policies, including subjugation, forced labour, or even expulsion from Europe. This interpretation is supported by a document that Hitler approved on May 25, 1940, titled “The Final Solution to the Jewish Question,” which stated that “the Bolshevik method of physical extermination of a people [is] un-German and impossible.” The document proceeds to endorse the “territorial solution” (i.e. forced population transfer). Intentionalists, on the other hand point to certain passages in Mein Kampf, such as the one stating that had 12000-15000 Jews been gassed during WW1, the sacrifice of millions of German soldiers would not have been in vain. This aspiration, it is argued, is evidence of a master plan to exterminate Jews. Perhaps, although it was written in 1926, and in the context of a war that Hitler believed Germany lost because of the machination of Jews. In any event, this debate is academic, since the Nazi war machine did create the industrial machinery for mass murder and used it. Their culpability for this crime is not lessoned by evidence that suggests that it was not the ultimate plan of the party’s leadership.

The Seduction of Hitler

In light of the dark vision outlined in the book, one cannot help but ask: how did Hitler manage to seduce millions of people? It is worth repeating that his National Socialist movement began in a dingy room with seven people, and would eventually capture the hearts of entire political communities and lead to a series of events that would overturn European politics and change the course of history. One of the popular explanations is that his success was the result of the Treaty of Versailles, which imposed punitive measures on Germany after World War 1. Exponents of this view often favourably cite John Maynard Keynes’s book The Economic Consequences of the Peace, where he presciently observed that the imposition of reparations and other punishments on Germany would have devastating economic and political ramifications for Europe. Mein Kampf provides some textual evidence for this view, as Hitler repeatedly rails against the injustice of the Treaty and emphasizes its importance as a propaganda tool.

I find this unconvincing for several reasons. First, the Treaty was hated across the board in Germany. Liberals, Marxists, and other German political groups also suffered from its provisions, and hence Germans who objected to it could have pursued other political parties. Second, a discursive analysis of Mein Kampf gives the impression that other motivations dominated the text. In particular, a close reading clearly shows that Hitler had an expansionary agenda that involved the destruction of many European states. In the conclusion he devotes an entire chapter to the need to conquer Eastern Europe and destroy the Russian state so that those of German racial stock could grow in numbers and feed themselves. At the time that the book was written, Germans numbered perhaps 70 million, and Hitler explicitly says that those numbers must increase to the hundreds of millions. This would fulfill Germany’s divine destiny, according to Hitler, to rule the world. In order for this to happen, he says, they needed more territory. These expansionist views take up much more space in Mein Kampf than the injustice of the Treaty of Versailles, and the subsequent savagery of the conflict in Eastern Europe and Russia supports the view that they were the main motivating force of Hitler’s regime.

Hitler’s talent for communication also mattered. In Mein Kampf he is revealed to be an astute observer of mass psychology. Evidently, the other ideological movements in Germany at the time, such as liberalism and socialism, did not have the rhetorical suave and emotional appeal of fascism. Hitler correctly states that the major problem with the bourgeoisie is that their rhetoric of economic liberty appeals mainly to learned professors, upper-class professionals, and other privileged groups. Marxism’s main weakness as a political movement, he correctly understood, was its cosmopolitanism: most oppressed workers have little time for the plight of their comrades in other countries. Fascism appeals to things that resonate among the masses, namely, nation, blood, and belonging, while it condemns the supposed commercial egoism of liberalism and the internationalism of the socialists. The last two ideological movements promise economic growth and/or social justice, while fascism satisfied the desire for blood lust and victory, both of which should not be underestimated as major motivating forces. As the usually perspicacious George Orwell observed after reading Mein Kampf, fascism was:

“psychologically far sounder than any hedonistic conception of life … Whereas Socialism, and even capitalism in a more grudging way, have said to people “I offer you a good time,” Hitler has said to them, “I offer you struggle, danger, and death,” and as a result a whole nation flings itself at his feet … We ought not to underrate its emotional appeal.”

The Final Lesson of Mein Kampf

Our current international system is characterized by liberal principles that are codified in the United Nations founding documents, and even though they are often not met in practice, they have changed the consciousness of political actors and constituted our aspirations. This was possible mainly because fascism lost WW2. At that point, the US entered history as the world’s hegemon, a position that it still holds. The international institutions that subsequently emerged, such as the UN, the protection of open seas, the principle of self-determination, all bear the stamp of the liberal values that emerged triumphant after WW2 and that reached their apotheosis after the collapse of the USSR. This shows that power precedes, and has causal influence over, value systems, whatever they may be. In light of this, one could not help but wonder: what would the world look like if fascism had won?

Mein Kampf provides some clues to that question. First, the notion of universal human rights would have remained academic; it would not have become codified in any treaties or international institutions. Second, and most shockingly, the values of racial hierarchy would have reigned supreme. Had Hitler achieved his dream of conquering all of Europe, he would have created a political unit where only Aryans had a right to citizenship and to marry and reproduce. Others, including minorities, the sick, or those of non-Aryan stock, would either be sterilized, subjugated, or expelled. Doing this, according to Hitler, would mean their extinction in about 600 years, and only healthy fair-haired Aryans would be left, at least in Europe. Other countries and regions would have to submit to the dictates, or the conquest, of this all-powerful entity; for Hitler, non-whites had no right to self-determination.  True freedom would be unthinkable in this political structure. Any group that threatened this order based on white supremacism, such as liberals, socialists, or Christians, would, in one form or another, be crushed. It is worth emphasizing the fact that this outcome was prevented not because of divine intervention or some historical destiny. Rather, it was the combined force of the US and the Soviet Union (but mainly the latter) that destroyed the Nazi’s and, with them, their designs for world domination. This should give pause to those who believe that societies organized around human decency are universal and natural. Rather, they are sustained by power relations that are historically contingent and ephemeral.

Summer in Italy

It is now over two weeks since I was in Greece to observe the tumultuous political events in that country. In this time I have been in my family's ancestral town in Salerno, Italy. I have been spending my summers regularly here since I was a kid, and this summer will be no different. While here I am staying in an ancient house that is livable because it was renovated in the mid-eighties. It is the house where my mom was born and where many of my ancestors lived. The view from the bedroom where I sleep is gorgeous, as the house sits on a hill over 300 meters above sea level and overlooks luscious green slopes and ridges and the Mediterranean shore. The house, in addition, does not have many of the modern amenities that we take for granted, like internet. 

This is more than just fine for me; it is an an ideal escape from my frenetic life in North America which is characterized by an utter dependence on technology.  I am not completely disconnected, since  I use the WiFi at my uncle's house, and my friendly neighbor Angelo (who I have been friends with since I was a kid) has given me his WiFi password just in case I need to go online. But I am now connected for only brief periods, around 15 to 20 minutes per day. This is helped by the conscious decision to not use a smartphone during my stay in Italy.  While here, I am using my Italian cell phone, which is an old device that I bought around 5 years ago for 20 euros. There is no internet access on it, and so I can only make local calls.

When in Rome, do as Romans do

This much-needed distance from internet has helped me to focus on things that are more valuable, like reading books in a sustained, focused, and uninterrupted manner. I am currently slogging through Hitler's Mein Kamph, which is a dense treatise that outlines his political philosophy; no, I am not becoming a Nazi. The text is on the list of a book club that I am a member of. Reading it will also enrich my lectures on the great wars  of the 20th century that are part of a course that I will be teaching in the winter of 2016. After finishing Mein Kamph, I plan on reading Tolstoy's Anna Karenina. Tolstoy is one of my favorite writers and  I am positively delighted to finally have a chance to be fully absorbed in that book. In Italy I am also doing a lot of academic writing; just the other day I finished a 9000 word paper on the politics of emotion that I intend to present at conferences this year and, eventually, submit to peer-reviewed journals.

Drastically reducing my internet use has also given me more time to reflect on this revolutionary technology, on what is lost and what is gained from always being connected. My age--37--allows me to compare the present time with the pre-internet age; I was a young adult when the web became ubiquitous, and so I have clear memories of what life was like before the internet. The benefits of the web are undoubtedly many, one of which is convenience. I remember very clearly what it was like to own a cell-phone in the mid-nineties (can't believe it's already 20 years). The service was shoddy, they were expensive, and I would have to go and pay my phone bills at the local bank. Now, the service is good, the costs are low, and I can pay online. Ditto for my other expenses, like my mortgage and electricity bills; all are now done online, in seconds, at the touch of a button. 

Another benefit of internet is connecting with others. On Facebook I have stayed in touch with people I have met at conferences in the US, and even developed deep bonds of friendship with them. I have also reconnected with friends from elementary school, some of whom I have not seen in almost 30 years. Social media has even allowed me to connect with long lost relatives whose ancestors emigrated to the US before my parents emigrated to Canada. But I have also come to realize that there is something faintly ridiculous about Facebook. Many of my friends post useful articles and updates, but much on my news feed has little value. Take the example of selfies. Why do some people constantly post pictures of themselves? Because it makes them feel good. The pic they are posting is one out of many, the one they feel is the prettiest. We will take many, perhaps dozens, of pictures, some with duck-lips, others with half-smiles that hide the unseemly creases, shadows, folds, and other imperfections of the human face, all with the purpose of capturing that perfect angle that makes us feel attractive. Then we will share it and hope that friends will like or comment on it. I myself sometimes engage in this process even while I recognize how artificial it is. 

Sometimes Facebook is used to boast; the most annoying in this category are those who feel the need to say "I love my life" or "I have the best boyfriend" or who post pictures of themselves in luxury cars, or flying first class. These status updates are the most mysterious to me. What exactly is the person trying to accomplish by posting these things? It seems to me that they are similar to childish ego-boosts, the kinds that happen on elementary school playgrounds, where some boys engage in forms of chest-thumping to display dominance and some girls brag about how pretty they are. Usually adults grow out of this, but evidently not all of them if some status updates are a guide.

Some posts are easier to understand. For example, those who constantly share inspirational quotes are probably troubled souls who find comfort in memes that give a higher or noble meaning to some source of emotional pain. People who share memes about heaven are likely mourning the loss of a loved on; people who share ones that proclaim how wonderful it is to be single usually are lonely, have just experienced a break-up, or are unable to form stable and loving relationships; and memes with some quote from the Dalai Lama or other spiritual leader are often shared by persons who are dissatisfied about the perceived moral decline of society. 

I am aware of the hypocrisy of sharing this blog post on Facebook while being harshly critical of the same. After all, what is my motive? Is this not a form of the very exhibitionism that I am condemning above? I will admit that it is, and that I feel very ambivalent whenever I post something precisely because I am conscious that, in one form or another, I am reproducing the very things that I find so artificial. On the other hand, the purpose of this blog post is to reflect on my distancing from social media. It is not about completely severing myself from it because I do not plan on doing such a thing. That would be extreme, and it would cut me off from the many benefits mentioned above.

Using social media much less than I usually do has been a salutary reminder of the ancient adage that moderation is important for well-being. In small amounts, Facebook is enjoyable and provides many benefits. In large amounts, it is a colossal waste of precious time that reinforces some of the childish elements of human nature, like the need for approval. Facebook is also often artificial, but not intrinsically so. Rather, it accentuates and reproduces those aspects of life that are artificial. People who reproach others for being "fake" perhaps are not aware of just how much we play roles and follow scripts of behaviour that are not "natural" or "genuine". We will always tell friends and relatives how cute their babies are, even if the opposite is true; when encountering someone attractive, we often act in ways that try to make ourselves more appealing; when trying to impress someone who is perceived to be important to our career, we almost always try to sell ourselves by hiding some things are emphasizing others; in "polite" society, there are too many unspoken codes of behaviour to list here. In other words, life itself it a series of performances that change according to context. In this sense, almost everyone is "fake" or artificial sometimes. Facebook, I would argue, incentivizes and promotes this tendency by encouraging us to share those posts, memes, and pics that we want others to see. This process, including receiving "likes" and comments, provides a kind of satisfaction, which is what makes Facebook so seductive.I am therefore very grateful for the opportunity to spend my summer in a sleepy little Southern Italian town while living in ancient house that allows me to disconnect from the web.

The Tortured Relationship Between Greece and Europe

The past few weeks have been a veritable roller-coaster ride in Greece, and more turbulence lies ahead. Pundits can disagree about the reasons for Greece’s mess—the rough outlines of the debate are that it is a victim of heartless German austerity or that its corrupt governance and sclerotic economy are to blame. Whatever the main cause, there can be little doubt that the election of Syriza was a game changer in the debt crisis afflicting the country, because it was the first time that a populist anti-austerity party took power in the euro zone. It almost took power in 2012; pre-election polls suggested it could win, but its message of rejecting austerity was interpreted by many Greeks as a recipe that would have led to the ejection from the euro, and at the last minute many voters changed their minds and selected mainstream parties that continued the same policies of the previous years. The subsequent two years saw a worsening of Greece’s condition and hence during the election campaign late last year many were willing to gamble Greece’s euro membership by voting for Syriza, which won a resounding victory in January 20015. Since then, the fears of many Greeks in 2012 have been shown to be true: creditor countries will not compromise and the cost of rejecting their demands of austerity is a return to the drachma.

No More Austerity Please

And so we now have the sad spectacle of a radical left wing government that, on July 15^th, voted for policies, such as lower social spending, higher taxes on the poor, and privatizations, that go against it raison d’etre. Even worse than this ideological volte-face is that it is continuing the policies of its predecessors which have been catastrophic for the country: under five years of austerity Greece's debt has ballooned, its unemployment has skyrocketed, and its economic output has plummeted. These confused policies are taking place because Greeks themselves are confused about the euro, displaying contradictory and fantastical preferences that are transmitted to the country’s leaders via the democratic process.

This was made clear by my recent stay in Greece. I arrived in the country on July 5^th, the day of the referendum, which was perceived to be historic because the stakes seemed to be so high: both Angela Merkel and Francois Holland declared that a “No” would mean an exit from the euro, and this threat was taken seriously because, as the leaders of Europe, the preferences of Germany and France matter most for the politics of the EU. Polls before the vote showed that the No side was slightly ahead, and that the Yes side was catching up. But the No side won with a resounding majority. This happened largely because many Greeks ignored, or wanted to challenge, the threats emanating from France and Germany. Also important was the fact that Prime Minister Tsipras told his electorate that voting No would only strengthen his hand in negotiations, not lead to Grexit. He said this because he knew that the majority of Greeks fear being ejected from the currency. And herein lies the source of much of the country’s confusion: they want to remain in the currency union even while they recognize that it has been harmful and humiliating for their country.

This mix of sentiments was clearly expressed to me by a prominent professor of political economy at the University of Athens. Like most other elites in the country, he voted Yes in the referendum and is in favour of the euro, and he told me with a tone of conviction that the currency is in the best interests of Greece. But a little probing reveals a more complicated picture. He concedes that the austerity policies of the past five years have been a disaster and created a lot of social pain, and knows that the third bailout being negotiated will likely cause more of the same. He also recognizes that the euro is a deeply flawed system: a currency union without the requisite political union that is a sine qua non for its proper functioning. I asked him how he reconciles these flaws with his pro-euro attitudes. He first told me that geographically Greece lives in an unstable neighborhood, and without the euro “it would be left alone”. He also said that initially the euro coincided with a mini golden age in which standards of living rose for most. On the question of the lack of political union, he said that it might take 100 years, but it will happen.

Thus the euro for him has meanings that are not monetary, or not rooted in the concrete features of the currency. Rather, they are based on geopolitical fears, on memories of years of economic growth which coincided with the adoption of the currency, and on a faith—faith—that a political union will happen in the next 100 years.

His views are by no means unique to him; they are common among the country’s elite. The masses views on the euro are not dissimilar. Polls say that the majority want to remain in the euro, and talking to many locals during my stay in Greece gave me the impression that those numbers are accurate. But the numbers obscure as much as they reveal. Many support the euro because of an idealistic attachment to the EU, while others prefer keeping the currency for similar reasons held by the professor mentioned above, namely, that without the euro, Greece will be “alone” in an unstable geopolitical neighbourhood. This belief is held even though it is basically untrue: Greece’s membership in NATO, as well as its strategically important location as a geographical bridge between the East and West would make any conflict with Turkey or in the Balkans a matter of crucial importance for European countries regardless of whether Greece is in the euro. For others, the euro is a symbol of their European identity in the sense of being “Western” and “modern”, and exclusion from the currency union would, in their minds, undermine their sense of being “European.” But this raises the question: is this identity really worth the years of humiliation and economic depression that the country has experienced? Or more pointedly, who has decreed that the euro is essential for the possession of a European identity? The UK, Sweden, and Denmark are European despite not having the euro. The Swiss and Norway are not even in the EU, and yet both, by any reasonable standard, are “European”.

This bizarre mix of sentiments reflects a trait that is common in Southern Europe that fundamentally reflects a sense—sometimes unspoken, but nonetheless present—of inferiority vis-à-vis Europe’s “virtuous” countries; for others, it is indicative of the belief that Greece cannot become successful without being part of an ostensibly more advanced social aggregation like the EU. In this scheme, belonging to Europe is essential for the country’s relative status and prestige, two elements that are highly valued for individuals as well as for nations. But this belief runs against a basic fact: euro membership has coincided with their country’s relative decline even as it has strengthened Germany, with the consequences before our eyes: the bailouts, and the austerity conditions attached to them, all have the stamp of German preferences. Meanwhile, as was seen in the sorry spectacle of the parliamentary vote on July 15, legislators accept these Teutonic preferences even while they themselves claim to oppose them. Why? Because the alternative, they say, is ejection from the euro, with all the psychological consequences that are implied above.

 I had the privilege of speaking with someone who goes against the grain of Greece’s establishment, even though he himself is part of their socioeconomic class. Like many other Greek elites, he was educated at universities in the English speaking world (McGill and the University of Chicago), and is a professor of finance and banking. Unlike most elites, he voted No in the referendum on July 5^th. Importantly, he unambiguously favours Grexit, and this makes him an iconoclast, since favouring a return to the drachma is—unfortunately—associated with the extremist parties like the Golden Dawn. His views are coherent because they are devoid of the idealistic attachments, or the unrealistic geopolitical fears, that most others in the country express. For him, the euro is a matter of costs and benefits, and on this score, few would seriously challenge the assertion that it has been an unmitigated disaster for Greece. What made my interlocutor a breath of fresh air in Greece’s confused political climate is his belief that the transition from the euro to the drachma would not be the Armageddon that many predict would happen. Rather, with a bit of planning and good leadership, the change-over could happen in a matter of weeks, and any difficulties encountered in that period would be minor compared to the alternative of being shackled to the currency union. 

This raises the question: why don’t the majority of Greeks feel like him? My interlocutor’s responses were instructive. Many Greeks, he said, suffer from a minor form of Stockholm Syndrome, or Battered Wife Syndrome, both of which entail a pathological attachment to an entity that has harmed them. This is reinforced by the propaganda that they are exposed to on a daily basis. Most of the establishment is in favour of the euro, and their views dominate most of the major media outlets, on air and in print. Before the referendum, the media—which generally reflects the views of the country’s socioeconomic and cultural elites—was unanimous in their support of Yes and said that voting No would mean leaving the euro. It is remarkable that 60% of Greeks voted No despite this deluge of misinformation, but most made this choice because they believed that they were voting against austerity, not the euro. Had Greeks been presented with a different question, such as “Do you support Greece’s membership in the euro?” most would have likely voted yes for the reasons outlined above.

Thus for now, Greece will precariously remain a member of the euro if only because most Greeks want it. But this state of affairs cannot last. Other events—such as a new financial crisis, or a new government, or another referendum—will eventually transpire that make Greece’s euro membership hang in the balance. When one or several of these events occur, at a minimum the Greek government should have a “plan B” ready that would ease the transition to the drachma if the need arises. This would strengthen Greece’s hand considerably, because it would signal to its creditors that it will not stay in the euro at any cost, and it would send a message to Greeks that the government was prepared for any eventuality (both were lacking in the most recent tortured negotiations, where it was the Germans, and not Greeks, who had a plan for Grexit). It would also send a message to the Greek people that the government would do its outmost to protect whatever savings Greeks had in the banks, and would ensure that the country had a sufficient stock of goods, like fuel and medicines, during the transition.

But more important than government plans is the need for a shift in the mentality that allows Greeks to see the euro for what it is: a mechanism for fixed exchange rates that, like the gold standard, constrains monetary policy and ensures that units of value are the same for those countries that are part of the system. A corollary of this is the fact that the euro, as a mechanism of ensuring exchange-rate values, is not a necessary feature of European identity, which at any rate is an amorphous and subjective idea. Some might say that being excluded from the euro would mean being outside the EU, but this is questionable. Although there is no formal legal mechanism for leaving the euro while remaining a member of the EU, policy is ultimately determined by its most powerful members (the bailouts, it is worth recalling, also had no legal basis, and yet they happened because Europe’s leaders deemed them necessary). This means that if the will is present to keep Greece in the EU even though it reverts to the drachma, it will happen. And the evidence shows that the will is indeed there, as demonstrated by Wolfgang Schauble’s policy document released on July 12 that said Greece could have a “time out” from the euro while remaining a member of the EU.

To prepare themselves psychologically for Grexit, Greeks must also begin to have faith in themselves as a people with the talents to solve their problems. This means getting rid of the belief they are not capable without the help of outsiders and discarding the widely held notion that it will become a third-world country outside the euro. Yes, many members of Greece’s political class are corrupt, and yes, they will probably mismanage the transition back to the drachma. But is that much worse than the alternative of an interminable toxic cycle of crises, bailouts, austerity, and economic decline?

Post-Referendum Diary of Athens

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When Greek Prime Minister Alexis Tsipras called a referendum on whether to accept austerity conditions being offered by the country’s creditors, both Francois Holland and Angela Merkel said that a victory of the No side would mean exclusion from the euro. Most pundits interpreted those words as a meaningful threat because France and Germany are Europe’s leaders, and their preferences usually determine the major policies of the EU. After the resounding victory of the No side on Sunday July 5th, Greece is still in the euro, although barely. Its banks are closed, its citizens can only withdrawal 60 euros a day from ATM's, and economic activity has taken a nose dive, with consumer spending down 70% and tourist bookings down 40% during the high season, when the industry is usually at its peak.

Running out of cash in Athens

 The hardship that the country has experienced, not only recently but in the last six years, is visible in many neighborhoods—shuttered windows, abandoned or crumbling buildings, graffiti-strewn walls, closed shops, and homeless people seem to be ubiquitous. But even people who on first appearance seem to be doing well, after a bit of probing, reveal themselves to be struggling. Typical is a man I befriended at the University of Athens, where he works precariously as an administrator. In the past two years, his pay has been cut 25%, and for five months he was placed on “availability”, which means being laid off while continuing to receive 25% of his paycheck. He is now expecting another 25% pay cut, on what has become a 900 euro a month salary, and he will have to live on that while sustaining an unemployed wife and nine year old child. Despite this hardship, he wants to Greece to stay in the euro.

Even though many credible sources said that a victory of the No side would mean being ejected from the currency, my friend voted No in the referendum. This reflects a strange and contradictory mix of sentiment that is widespread here: people recognize that the euro has brought hardship, but they are unwilling to give it up. The reason is the currency has extra-monetary meanings: exclusion from the euro would be perceived as being kicked out of Europe. This belief is often accepted uncritically; people are seemingly unable to imagine plausible alternatives, such as leaving the euro while staying in the EU, or even the possibility of prospering outside the euro.

Speaking to many locals one also gets the sense that Greeks are divided across many lines. One major division is between those who voted No and those who voted Yes on Sunday’s referendum. At the celebrations on Sunday July 5th, when thousands of people who voted No gathered at Syntagma square, I noticed that the crowd was composed mainly of youth, and the older folks present seemed to be mostly from the working class. Not coincidentally, these are the groups that have borne the brunt of the crisis. There were some radicals with Che Guevara T-Shirts, but they were a tiny minority. On Thursday July 9^th, I attended a pro-euro rally composed mainly of those who voted Yes in the referendum. Walking around, observing, and talking to participants one could not help but notice the significant differences between them and the crowd that voted No. The Yes crowd was mainly older. They also showed signs of being socioeconomic and cultural elites. There were many botoxed women with designer outfits, and many clean-shaven men wearing dapper suits and shiny shoes. These are the classes—not coincidentally—that still have a lot to lose if Greece leaves the euro.

But their attitudes cannot be reduced to concerns about economic losses; for them, the symbolic value of the euro is equally, or even more, important. One well-to-do woman I spoke to said that outside the euro, “Greece would become Pakistan”. For her, the euro is a symbol of European and Western identity, and the incarnation of "modernity", while exclusion would mean being part of the third world. I asked her why she felt that way even though in the past six years Greece’s euro membership has coincided with a high degree of economic decline. She replied that had the country been outside the euro, it would have been even worse. She also told me that Europe itself would not survive Grexit because "Greece is the origin of European civilization" (many others voiced this to me, highlighting that the belief is widely held). As the demonstration gathered momentum, the crowd chanted  “Greece, Europe, Democracy”. The association between those three elements is not surprising, since many here feel that Europe is the guarantor of Greece's fragile democracy.

Here in Athens I also sense that there is a strange mix of anxiety and resignation. People fear what will happen if the country leaves the currency union and hope that it does not even while there is a belief that sooner or later, it could transpire. These tensions and anxieties are being expressed everywhere. The euro, and Greece’s place in Europe, dominate conversation on TV, on the street, in bars and cafes, and many people have strong feelings about the subject. The debate is largely divided on the basis of class lines: those with something to lose are arguing vociferously that Greece must remain in the euro, while those who have borne the brunt of the crisis are upset at the austerity measures that have caused them so much grief. This latter group is willing to gamble Greece’s euro membership by demanding an end to austerity and a reduction of Greece’s mountainous debt even if the price of such inflexible demands is Grexit.

It looks like this latter group will be very disappointed in the coming days, because Tsipras has presented a proposal to creditors that would include 12 billion euros worth of austerity over the next few years in exchange for a third bailout, and evidently this is much more than the 8 billion euros in tax rises and spending cuts that the creditors were offering before the referendum was called. If a deal is made on the basis of this proposal, it will make a mockery of Sunday’s referendum, which supposedly was a signal that the majority of Greeks were no longer willing to accept more austerity. It would also mean much more of the same policy of the last 6 years that has brought the country to its knees: bailing out a bankrupt state with austerity conditions that worsen the economy and that only makes the state even more bankrupt which then creates the need for another bailout, all while Greece's economic decline continues. Even worse is the humiliation and loss of dignity that comes from the basic fact that elections don’t really matter, since whoever is elected will ultimately cave in to the demands of creditors in exchange for more bailout money. This is something that seems to have escaped the crowd that was chanting “Greece, Europe, Democracy” at the pro-euro demonstration on Thursday.

Greece's Triumph--Well, sort of

I am writing this from my hotel room in Athens. I just returned from Syntagma Square, where there is a party taking place as thousands of people celebrate the victory of the OXI (or "No", pronounced "oi-hee") side of the referendum. It was a resounding, thunderous rebuke to the policies of the last 6 years that have created or worsened Greece's economic despair. But more on that theme later. Now, I will recount my experiences of the last few days.

I was originally booked to arrive in Rome on July 19th, and I had planned on coming to Athens shortly after that date. Tsipras's announcement of a referendum on July 5th changed that itinerary. I knew it would be an event of historical importance, and that I could not miss it, not only because of my sympathy and affection for Greece, but also because I have devoted most of my professional life to studying the euro. I wrote my doctoral thesis on the interplay between national politics and the euro, and this year I signed a contract to publish a version of it with Routledge. For these and other reasons, I paid the not-so-economical fee to change the date of my flight, flew to Rome on Saturday July the 4th, and then Athens on Sunday July the 5th. To give a sense of the importance of the referendum, the pilot on my Aegean flight to Athens announced the results of the first exit polls which showed that OXI was in the lead. In all my decades of regularly flying across North America and Europe, and more recently around the Middle East, I have never heard a pilot announce, with barely disguised glee in his voice, the results of a referendum.

When I arrived in Athens, it was 8:40 pm, and although the final results were not yet in, already at that time there was a sense that there was little chance that the Yes side would win, and I knew that the party would be starting at Syntagma square. And so rather than going right to my hotel to drop of my luggage and shower after a long day of travel from Toronto to Rome, and then to Athens, and despite feeling tired, hungry, sweaty and with luggage in tow, I went to Syntagma. As the train approached the station, more and more Greeks entered the metro with Greek flags; I knew that they were going to the party too. When we reached Syntagma station, the trains emptied, and immediately one could hear the chanting and singing from the crowds outside. As the phalanx of people walked up the stairs towards the exit, there was a burst of spontaneous chanting of "OXI, OXI, OXI". It was electrifying, and when I exited the station and entered the square, I became part of a huge crowd of Greeks, many with Greek flags and huge grins on their faces, celebrating the momentous event that just transpired.

After bathing in this intoxicating atmosphere for about an hour, I decided I would go to my hotel, check in, drop off my luggage, and then return to the square. But to my surprise, I could not find a cab! I noticed that other tourists also could not find one, and that I was jostling with them to get any cab that would pass by. I found a guy, and he said to me, "no service", and I thought, "is this a sign that economic activity is collapsing?" After walking for about 30 minutes, passing by deserted and decaying streets and buses full of soldiers who were there to quash any signs of civil conflict, I found a cabbie who did not seem to speak a word of English, but luckily he spoke some Italian. When I told him that I was Italian, he immediately put his hand on his heart to signal his affection, which I found comforting and also not surprising, since I have traveled to Athens before and am well aware of the close historical, cultural, and personal ties between Greeks and Italians. He took me to my hotel, and the concierge informed me that he would like me to pay cash (I am booked at the hotel for a week). This was a visible sign of the financial crisis--with a collapsing banking system, credit cards become harder to use. I tried to negotiate--the euros in cash I had were needed to last the 10 days I would be in Greece, and using them to pay for my hotel would be problematic. We reached a compromise--I paid half in cash, and half with the credit card, and he proceeded to check me in.

After that I walked the 2 kilometer distance from my hotel to to Syntagma, and the huge crowds were still there. After eating delicious suvlaki that I purchased for only 1.50 euros, I participated in the celebrations, and the general sense of happiness and joy was contagious. I bought a flag, which I enthusiastically waved while periodically chanting OXI OXI OXI with the crowd. There were many from other European countries, especially Spain, Portugal, and Italy, and I even saw a man of Asian decent (perhaps Chinese), with a huge flag of Syriza (the current government), wearing a shirt with OXI written all over it, and enthusiastically participating. It is amazing, I thought, that even people of non-European origin are here participating in the celebration and expressing their solidarity with the Greek people. It was exciting and fun and I wanted to stay there all night, but although I am still a sprightly 37, I began to feel tired at about 1:30 AM. I subsequently went to my hotel to get some rest.

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The triumph of yesterday's referendum is already beginning to fade (I am writing this section the next day), in part because Greece's deep seated problems cannot be solved by a vote, although of course the outcome of yesterday's poll will certainly strengthen Tsipras's hand in the coming negotiations. Today I walked around Athens and spoke to many locals, and the reality here is quite depressing. The first thing one notices is the long lineups at ATM machines. Those waiting often have an expression of worry and frustration on their faces, perhaps because they know that at any moment, the ATM might run out of cash, and their waiting will have been in vain and they will have to look for another one; what a total waste of time! Another notable feature of the landscape here in Athens is that most of the shops are out of business. When I came to Athens in 2012, even then it seemed like a huge number of shops--are least a quarter--were not running. Now, that ratio seems to have been reversed: it looks like the majority are closed and only a quarter are open for business, and even these are mostly empty. This is a visible sign of an economic catastrophe that usually happens during a major conflict or war. All those closed and empty shops are the visible side of real flesh and blood people who cannot afford goods that many take for granted; they are the concrete manifestations of a generation of youth with few job prospects and who have little hope of ever having a normal life which includes a job and a family.

One therefore understands the rage that people feel, but there are no simple solutions that will magically create a level of economic activity that will be sufficient to reverse this degree of economic devastation. Even if Tsipras gets a better deal from its creditors, Greece will still have huge debts that will make it difficult to implement an expansionary fiscal policy. It will need huge investments in employment-generating productive activity, but it will be difficult to convince investors that Greece, in its current condition, represents a profitable bet. And then there is the euro, that currency that most sensible people now regret. Can Greece escape its economic predicament in a currency union where the rules are determined by the most powerful countries? This might--and I want to emphasize might--be possible if Europe had a real political and fiscal union that allowed the transfer of resources from rich to poor countries. In that scenario, Greece's recession would be offset by transfers that would preserve its standard of living, which is exactly what happens in normal currency unions like Canada and the US. But the odds of that happening in Europe are next to nill, and so what we will probably see is continuing crises punctuated by brief periods of stability.

Stay tuned for more commentary in the coming days.