Greek Debt Crisis

Greek debt, a classical tragedy?

Kai Ryssdal Oct 24, 2011
Greek Debt Crisis

Greek debt, a classical tragedy?

Kai Ryssdal Oct 24, 2011

Kai Ryssdal: If you take as stroll through the University of Georgia campus here in Athens, like I did when I got here this morning, there’s no shortage of Greek references. Lots of Greek columns on buildings — that’d be Doric, Ionic and Corinthian. The debate club is known as the Demosthenian Society. Slightly less highbrow — there’s Fraternity Row and and Greek life, of course. And the cultural overtones have spilled over into the reporting of the debt crisis, too. How many times have you heard Greek words used to describe it? Hubris. Pathos. Tragedy.

That last one prompted us to ask whether the debt crisis isn’t a little like a Greek tragedy itself — the classical kind. Emily Allen-Hornblower is a professor of classics at Rutgers University. Bill Lastrapes teaches economics right here in Athens at the University of Georgia. Welcome to you both.

Bill Lastrapes:Good to be here.

Emily Allen-Hornblower: Good to be here.

Kai Ryssdal: Bill Lastrapes let me start with you and the premise that we have on the show today which is trying to find some narrative — some easy narrative to make all of this Greek stuff make sense. And maybe the first question is: Is there an easy narrative?

Lastrapes: Well, I suppose so. In some sense it’s pretty simple that the Greek government can’t pay its debt. It’s had many years of irresponsible fiscal policy where it spends a lot and does not collect taxes. One aspect of this is that Greece was able to join the eurozone to issue euro debt and take advantage of very low interest rates with the perception if they weren’t able to pay back the debt they would be bailed out. And indeed that seems to be happening. This is the idea of moral hazard — that if you can gain without paying any cost, that’s just going to induce more bad behavior. And I think that’s one of the lessons that we need to consider going forward.

Ryssdal: Well, speaking lessons — that’s what you call a perfect segue — Emily Allen Hornblower, to the idea of Greek tragedy, is there one that parallels what’s going on?

Allen-Hornblower: There’s a 6th century B.C. fable attributed to Aesop — we don’t know whether Aesop actually existed — but it’s a story of the ant and the grasshopper.

Ryssdal: Enlighten us because I’ve forgotten my fables.

Allen-Hornblower: The grasshopper spends all of his summers singing while the ant works away storing up food for the winter. And when the cold season comes the grasshopper comes up to the ant and asks for some help and some food and promises to reimburse interest and capital. And the ant asks, “So what have you been doing all this time? You were singing. That’s nice. Why don’t you dance now?” Basically, the grasshopper has it coming and it’s not going to end well or others have emphasized the nastiness of the ant in not lending and causing the death of the grasshopper.

Ryssdal: Wow, so I don’t want to draw this too far out but, Bill Lastrapes, we have the Greeks who have been borrowing and living fairly well and accumulating debt and the Germans now saying, “You know what? We’re not so sure about this bailout thing.”

Lastrapes: The parable does fit pretty well here. I don’t know if the Germans like to be called ants but they are hard workers. And the expectations of being protected lead to behavior that in the long run is going to be bad for everybody.

Ryssdal: Emily, you know, you think about the euro and it was supposed to be the savior of the European economy — now clearly not the case. Does mythology apply here?

Allen-Hornblower: Well, I’m thinking of Oedipus. I’m reminded by Oedipus as a kind of euro-zone. Oedipus, he marries the queen and becomes the king Thebes. Only what he doesn’t know is that back in a quarrel — when he killed a man — that was his father and the queen he has now married is his mother. And he’s cursed as a result. And because of that the entire city is plagued. And I think the idea of articulated there of one who seems to be a savior but actually turns out to be the cause of destruction is one way that the Greek myth resonates with the euro and it turns out to be — perhaps — a factor of destruction.

Ryssdal: The last question is the same one to both of you and Bill Lastrapes I’m going to go to you first. One of the key things about Greek tragedies and Greek mythology is that they endure and that thousands of years later we still draw lessons from it. Is this current debt crisis a thing that we will draw lessons from in the future? Will it endure?

Lastrapes: Well, I hope Greece can take lessons from this. I think the lesson that they should learn from this is that — bailout or no bailout, default or no default — that they do need to undergo some serious reform in terms of the role of government, what people are willing to pay for government spending and the government’s role in the economy.

Ryssdal: Emily, what do you think?

Allen-Hornblower: This applies to Oedipus and to all tragic heroes. There downfall is cause by a mistake. Do they display hubris? Absolutely. Imprudence? Sure. But there downfall and the misfortune they encounter is not due to some inherent wickedness. It’s due to that mistake and it’s also due to fate and the gods — the ancient Greeks believe. I think that makes the situation deeply tragic.

Ryssdal: Bill Lastrapes is an economist at the University of Georgia. Emily Allen Hornblower teaches classics at Rutgers. Thanks a lot you two.

Lastrapes: Thank you.

Allen-Hornblower: Thank you for having me.

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