Home > Uncategorized > Stiglitz and the “Greek morality tale”

Stiglitz and the “Greek morality tale”

from Ali Abdalla Ali and the current issue of RWER

It is worth reflecting on the developments in Greek economic and financial affairs and the recent change in its political leadership, because what is befalling Greece is very similar to what is happening in many member countries of the IMF, including my Sudan. What happened in Greece with its democratic turning to the left aroused negative feelings from most of Europe, especially in its rich countries. One of the most interesting contributions in support of the Greek’s case came from J. Stiglitz entitled “Greek Morality Tale”. In reading this valuable contribution I found myself strongly struck by its second paragraph:

We hardly needed another test [referring to the Greek situation]. Austerity had failed repeatedly, from its early use under President Herbert Hoover, which turned the stock-market crash into the Great Depression, to the IMF programs imposed on Eastern Asia and Latin America [and also Africa] in recent decades. And yet when Greece got into trouble, it was tried again.”

If we agree with Stiglitz that austerity has been a failure through the past decades, why is it that Europe showed so much hostility when Greece decided to stand against austerity? Is Greece alone in having this experience? Certainly not. What Greece had been through and continues to suffer has been the day-to-day business and worry in a number of countries in Asia, Africa and Latin America, and without anyone caring for the plight of the many millions of people in these unfortunate member countries who have been squeezed by austerity programmes into poverty and absolute decline in their welfare. In fact the failure of the IMF austerity programmes in the countries mentioned has a lot to do with their inability to achieve sustained development and real improvement in their way of life.  read more

  1. Peretz
    December 12, 2015 at 11:26 am

    This is a very interesting macroeconomics system analysis. Of course your question is : is there any possibility to have for any people the same behavior ? That is the same question answered by J.Stieglitz and by J.M. Keynes and…by Marx, but not quite. Of course Greece needs interest as a country which had invented the first democratic system. And because it became poor, since antiquity. They were rich when they make wars. The only way to manage its economy is to help it. But the financial world doesn’t want. Why ? Because they want to make an example for all countries that they have never to forget that money wins…in a liberal system. Is there a third way without fighting ? I think so, if the states want.

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