Greeks Just Say No to Austerity

In reaction to fiscal austerity, Greeks have apparently decided on a campaign of grassroots sabotage:

They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can't pay. Even doctors are joining in, preventing patients from paying fees at state hospitals.
Some call it civil disobedience. Others a freeloading spirit. Either way, Greece's "I Won't Pay" movement has sparked heated debate in a nation reeling from a debt crisis that's forced the government to take drastic austerity measures -- including higher taxes, wage and pension cuts, and price spikes in public services.
What started as a small pressure group of residents outside Athens angered by higher highway tolls has grown into a movement affecting ever more sectors of society -- one that many say is being hijacked by left-wing parties keen to ride popular discontent.
A rash of political scandals in recent years, including a dubious land swap deal with a rich monastery and alleged bribes in state contracts -- has fueled the rebellious mood.
At dawn last Friday, about 100 bleary-eyed activists from a Communist Party-backed labor union covered ticket machines with plastic bags at Athens metro stations, preventing passengers from paying their fares, to protest public transport ticket price hikes.
Other activists have taped up ticket machines on buses and trams. And thousands of people simply don't bother validating their public transport tickets when they take the subway or the bus
"The people have paid already through their taxes, so they should be able to travel for free," said Konstantinos Thimianos, 36, an activist standing at the metro picket line in central Syntagma Square.

This is not really novel, of course; it's just a slightly more flamboyant variant on the tax-dodging and corruption which has for years characterized the interaction of Greeks with their government.  Which goes to show, I think, the folly of adding countries like Greece to the euro.

Tight fiscal integration with the euro zone temporarily gave the Greeks the aura of belonging to the French and German club.  But it didn't give them the institutions required to actually make that work.  Greek civil society is simply not yet ready to tolerate the kind of fiscal rectitude that membership in the euro zone demands--demands, I say, because monetary policy is no longer within the power of the central government.  That means that the Greeks have to be willing to pitch in and suffer when austerity is required.  And the level of trust and duty that this implies--in both the government and one's fellow citizens--clearly isn't present.

(That isn't to say that it is a good idea to undertake this sort of austerity for the good of the euro zone--as long-time readers know, I think that both Greece and Ireland should leave the currency.  But when push comes to shove, Irish taxpayers are (mostly) going to pay their taxes and accept their service cuts without cheating or rioting; they'll make their feelings known via the ballot box.  The Greeks clearly don't feel that way about their government, and never have.)

This is a mistake we make over and over:  thinking that we can create prosperity by imposing the forms of mature liberal democracies without the norms.  Making an advanced market economy work requires an enormous amount of cultural and institutional capital.  Pressure from outside forces can certainly help build up that capital.  But ultimately, it's not an order than can be imposed from outside; unless you first grow the institutions organically, neither markets nor democracy are going to work very well.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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