Tuesday, 14 August 2012

Invoking Luther

Tom Healy: Writing in today's Irish Times Steven Ozment claims that German Lutheranism explains and justifies the stance of the current German administration. 'According to polls', writes Steven Ozment, Germans 'hold tight to their belief, born of staunch Lutheran teachings, that human life cannot thrive in deadbeat towns and profligate lands'. I am not convinced and while not an expert in Lutheranism I am not convinced, either, that Brother Martin of Erfurt would see justification for what is sometimes inappropriately referred to as the 'German view' on Europe and the 'German approach' to European integration and co-responsibility.

Nat O'Connor has already posted about a statement by Peter Bofinger, Juergen Habermas and Julian Nida-Ruemelin. In truth there is no one German view or solution anymore than there is an Irish one. If the current European crisis has exposed deep inter-country tensions and rivalries it has also shown up the underlying social tensions within countries and across the entire continent.  There are many incidents of 'profligate lands' and 'deadbeat towns' (One hopes that this is not a reference to NAMA land only!).

The diagnosis of the European political-economic crisis and the appropriates solutions depends to some extent on how one sees the problem. If you see it as the cartoon image of the irresponsible Irish or Greeks living off the hard-working Germans then the solution is one involving pain and redemption for the indolent and misbehaving. We all know where that mind-set and thinking in the 1840s led the official response to the famine in Ireland (the age of self-reliance, market freedom and work ethic etc).

 If, alternatively, you see the problem as one of systemic failure in the private sector aided by systemic failure in public regulation and governance then the problem shifts from one of national or sectoral blame-shifting to one of how we overcome the neo-liberal world order. If you want to put it in biblical terms - the wages of neo-liberalism is death - death of social cohesion, death of social justice and in the end death of civilisation. Yes, individuals are responsible - but systems and structures are also part of the problem I suggest.

The problem and challenge is now to create a stronger European dynamic and solidarity while retaining the principle of subsidiarity so beloved by the early pioneers of the European project. We must avoid lazy stereotyping of national groups (the profligate peripherals versus the disciplined core etc) as well as enlisting the backing of this or that figure from the rich and diverse cultural tapestry of Europe. Scandinavian Lutheranism could arguably have some connection to the civic values and practices of our Nordic neighbours at least in terms of cultural history and economic conditions.

I will conclude with a quote from one of the greatest thinkers and heroes of the last century, Dietrich Bonhoeffer - a German and Lutheran who was martyred in 1945: '“We are not to simply bandage the wounds of victims beneath the wheels of injustice, we are to drive a spoke into the wheel itself.”


Paul Hunt said...

@Tom Healy,

"The problem and challenge is now to create a stronger European dynamic and solidarity while retaining the principle of subsidiarity so beloved by the early pioneers of the European project."

Oh, the attraction and simplicity of what 'should be'. Prof. Ozment, on the other hand, paints a convincing, but not comprehensive (it's only a short op-ed after all), picture of what is and what might be.

And he could have gone further. There is now a new generation of Germans who believe they have largely expugned their war guilt, who enjoy the fruits of more than 60 years of model modern democracy and sustainable economic structures. They have weathered the travails of unification and of futher economic restructuring in the decade from 1998.

Facilitating Greek, Spanish and Portuguese membership and being the dominant financier of significant subsequent net transfers addressed some residual WWII guilt. (Ireland had qualified previously by virtue of per capita income and backwardness, but without the overt dictatorship.)

But the quid pro quo for this 'hand-up' was the establishment of effective democratic governance. And that's where the PIGS failed abysmally and they will not get - nor are they getting - the indulgence that tends to be accorded to Italy and Belgium as founder members (and even they are now beginning to tackle issues of democratic governance).

German (and, indeed, Dutch, Austrian and Finnish - and, at a remove, Danish and Swedish) solidarity has a price. And it has a religious flavour - repent and resolve to reform. But, all too often, these countries have seen any increase in solidarity result in back-sliding. 'Fool me once, shame on you. Fool me twice, shame on me.'

Ireland, to a considerable extent, is off this radar, because, from the perspective of the creditor nations, governance is reasonably effective - even if it relies on considerable sullen and resentful consent. But appearances are deceptive and deep-seated changes in the process of democratic governance are required. But the Government seems to have convinced the Troika - and by extension, the cerditor nations - that pursuing these changes (or any other economic changes required - would prejudice compliance with conditions of the support programme.

The Troika seems happy to let sleeping dogs lie while the domestic economy sinks in to the more. Why should it bother to force the pace of change while Irish citizens are unethused.

Paul Hunt said...

Just to expand briefly on the previous comment, a frequent commenter at another place has opened an interesting new, well relatively new, perspective on Germany's overall policy stance:

His two following comments are also very relevant.

The rent-seeking aspect is fundamental and leads back to underlying and widespread dysfunction in democratic and economic governance. But it also highlights something I have raised in the past.

Germany's governing politicians and policy-makers are confronting a profound dilemma. On one side there is a strong desire to do what is needed to secure not only the Euro, but the EU project. But doing what needs to be done is confronting widespread popular opposition to what is perceived, rightly or worngly, as bailing out those who will not make the necessary effort to help themselves - and that if they get help they will, inevitably, backslide.

However, this is not the real other horn of the dilemma. This is the global strategic objective of Germany (and the economies in its orbit) to build and leverage the high value and high knowledge content of its goods and services (for as much of the EU as is possible) in trade with the rapidly emerging large economies. And the real dilemma is that doing what needs to be done to sustain the Euro runs counter to the achievement of this strategic objective.

If German policy shifts to re-balancing its economy away from this excessive focus on exports, clamps down on rent-seeking in other sectors, increases investment in the domestic economy and allows workers a larger share of total income it will benefit and the indebted peripheral countries will benefit. But such a policy shift would run totally counter to its global strategic objective.

That is the real dilemma governing politicians and policy-makers in Germany are confronting.

I have no idea how this will be resolved. But, for Ireland, a 'no regrets' policy would focus on profound changes in democratic and economic governance.