In 399 BC, Socrates famously declared, “Crito, we owe a rooster to Asclepius. Please don’t forget to pay the debt,” just before succumbing to poison hemlock. These words were spoken in the context of his death sentence for allegedly corrupting the youth of Athens.
Asclepius was revered as the Greek god of healing, leading to interpretations of Socrates’ parting words. One perspective suggests that he viewed death as liberation, the cure for the soul’s entrapment within the body. Alternatively, some believe Socrates considered his demise a remedy for the issues plaguing Athens, particularly following its significant decline and the defeat by Sparta in the Peloponnesian War.
In the aftermath of Socrates’ death, his followers sought guidance. Plato, for instance, expanded upon Socratic thought, creating lasting philosophical contributions. However, many of Socrates’ other disciples fragmented, becoming mere historical footnotes.
The Cynics emerged from this group, taking Socrates’ emphasis on a simple lifestyle to extreme and sometimes absurd lengths. Diogenes of Sinope, a prominent Cynic, famously wandered through the markets with a lamp during daylight, claiming to search for an honest man. His eccentric behavior was intended to critique the vanity and self-deception prevalent in Athenian society.
While their methods may seem outlandish, the Cynics hint at a relevant concept for our times: Austerity.
As it stands, the Greek populace may soon find themselves adopting the Cynics’ principles, whether they wish to or not…
The Money Doesn’t Exist
Reports surfaced over the weekend from Nikos Voutsis, Greece’s Interior Minister, indicating that Greece would be unable to repay its upcoming debt to the International Monetary Fund (IMF) unless a new agreement with international creditors was reached. The anticipated repayment of €1.6 billion ($1.76 billion) is due between June 5-19, but Voutsis declared simply, “This money will not be given; it does not exist,” as noted by Stelios Bouras.
Failure to meet these obligations could ignite significant withdrawals from Greek banks, prompting capital controls and exacerbating the economic turmoil, according to economists.
Interestingly, a debt default might actually serve Greece’s greater interests. The IMF and European Central Bank’s decision to extend excessive credit was misguided; they seemed overly optimistic about Greece’s ability to meet these obligations.
In truth, creditors displayed a troubling lack of foresight, opting to address evident debt issues with further debt rather than recognizing the inherent flaws in their approach.
Cynics and the Big Fat Greek Default
What Greece genuinely requires is a clear path toward default and austerity. Embracing hard work, prudence, and sacrifice is crucial for rebuilding a stable economy. However, this reality is difficult to swallow, as it implies short-term suffering before potential improvement.
A Greek default could also set off a domino effect across the European Union. If Greece were to exit the EU, might other nations follow suit?
As of now, optimism prevails in Greece, with reports stating that a reform agreement with international lenders may be finalized by the end of May, just in time for an impending €300 million payment due on June 5, as shared by MarketWatch.
If such a deal materializes, Greece’s economy might persist in a state of stagnation, burdened by its creditors. However, this outcome should not be the aspiration of Greece’s leaders. A more pragmatic approach would be to embrace challenges—much like the Cynics would advocate.
A substantial Greek default on IMF obligations, along with the subsequent effects such as capital flight and economic upheaval, might ultimately prove beneficial. This could enable Greece to shed its debts and possibly exit the European Union, leading to long-term advantages.
In reclaiming its sovereignty and autonomy, Greece can liberate itself from external control and decision-making dictated by technocrats in Brussels.
Sincerely,
MN Gordon
for Economic Prism
Return from Cynics and the Big Fat Greek Default to Economic Prism
