Citizen Action Monitor

European bailout: A classic example of human folly destined to fail says John Gray

No 255 Posted by fw, August 20, 2011

To err is human. To err in the face of losing all we care for is human folly.

“We humans will do anything to secure a meaning in our lives. We hold on to the projects that have given our lives shape even at the cost of losing all we care for. Confronted with intractable difficulties the most sensible thing to do may be to toss the past aside and improvise. But this involves casting off our beliefs and we’d rather be ruined than face facts. That’s the perverse persistence we call folly. And nothing is more human.” John Gray

The celebrated political philosopher John Gray delivers a penetrating reflection on the meaning of folly. Taking the myth of the Trojan horse as his starting point, he explores what he sees as the modern day folly unfolding in Europe. He calls on European leaders to reconsider the single European currency — a project he says was always doomed to fail.

You can listen to the original 10-minute show on the program’s website, A Point of View, or, if it is no longer available there, try the show’s podcast page. My transcript of Gray’s presentation follows, with added subheadings.

Greece and the Meaning of Folly by John Gray, August 19, 2011

The folly of the Trojan wooden horse legend was that leaders failed to heed warnings

John Gray

Greece’s minister of finance has declared that his government will make a super-human effort to fulfill the conditions of the recent bailout. The declaration has a slightly ominous ring, and I can’t help thinking back to one of the most ancient Greek legends. There are several versions of the myth of the Trojan, but the heart of the story is clear enough: the folly of the leaders of Troy in allowing an enormous wooden horse into the city when everything pointed to the fact that it was a stratagem devised by their enemies.

Seemingly a trophy signifying the end of the war, in which Troy has been deceived for 10 years, the horse was left outside the city by the Greeks. Troy’s leaders had heard, and rejected, many warnings against bringing the horse within their walls. More than anything else they wanted to believe the 10-year siege of the city was over. So they disregarded the warnings and brought the horse within the walls. The soldiers hidden inside stole out at night and opened the city gates to the Greek forces. As we all know, Troy was reduced to ruins.

The definition of ‘folly’ illuminates willful blindness to self-destructive consequences of one’s actions

In her book, The March of Folly, the American historian Barbara Tuchman, cited the Trojan horse story as showing that humankind, in the shape of the citizens of Troy, is addicted to pursuing policy contrary to self-interest. For Tuchman, the fall of Troy was only the first of many great acts of folly in history. Describing folly as “A perverse persistence in a policy that’s demonstrably unworkable or counterproductive”, she says a policy can be identified as folly if it meets 3 tests:

    • it must have been perceived as counterproductive at the time and not just be hindsight;
    • a feasible alternative must have been available; and
    • the policy must be that of a group and persist over a span of time, not the act of an individual rule.

America’s war in Vietnam, she argues, fits this definition of folly perfectly.

The story of the Trojan horse is an exception to the third of these rules – it didn’t persist over a span of time. But it illuminates the essential element of willful blindness to the self-destructive consequences of one’s actions.

To err is human. To err in the face of losing all we care for is human folly.

Folly is not error, not even error of an extreme kind. Error suggests the possibility of learning from mistakes; whereas folly is the pursuit of policies that are known to be harmful to those who pursue them.

The Iraq war was folly because its effects were self-defeating

The invasion of Iraq shows how wars can be fought for objectives that were never remotely realizable. Whether we went to war to promote democracy or make the world safe from terrorism, or to secure more material objectives, such as access to oil and resources, it was, I believe, at best doubtful that these objectives could be achieved by military action. Persisting in such wars, when their self-defeating effects are undeniable, can only be described as folly.

Call for ever-deeper union is folly based on failure to understand nature of eurozone problem

No doubt many examples can be found, but there’s probably nothing at present that exemplifies folly as clearly as the drama that’s unfolding in Europe. A single European currency of the kind that exists at present was never going to be workable. When it was first mooted [proposed] economists pointed out that a one-size-fits-all monetary policy would be counterproductive. Setting a single interest rate for countries with quite different economies would leave some over-stimulated and others mired in stagnation. Monetary union could work if it was combined with a fiscal union, a mechanism for reallocating tax and spending that would harmonize the different economies. European bureaucrats agree with the economists – ever-deeper union is the only solution to the euro’s problems.

But this solution is based on a failure to understand the nature of the problem that the eurozone faces, which is not economic but to do with political legitimacy. Eurozone economies can interact productively through trade and commerce as they did before the euro was invented. But they can’t be harmonized to the point where they’re a single economy. What enthusiasts for the European project want is a European government – something like a United States of Europe. But that’s never been more than a fantasy. Not only do the states that already exist in Europe have different histories, cultures and political systems, they also have different levels of economic development. And if a fiscal union were ever set up it would have to be permanent. But that assumes a kind of solidarity across the eurozone that can’t be created by fiat from Brussels.

There’s been a fiscal union in America at least since the time of Roosevelt, but it works because the U.S. is a modern nation-state which it became only after a devastating Civil War. There’s no way that national leaders can seek power through a transnational bureaucracy to do something similar across Europe. If they try to do so they soon become illegitimate themselves.

German people are generous but not to a fault; they’ll not risk collapsing their standard of living to prop up Greece indefinitely

This is what would surely happen in Germany if Angela Merkel were to accept a system of permanent economic transfers to the countries of the southern periphery. And something of the kind is already happening in Greece, which is on the receiving end of the transfer. No people in anything resembling a democracy will endure collapsing living standards for the sake of hypothetical benefits sometime in the remote future.

And Greeks won’t suffer humiliating austerity for long; sooner or later they’ll leave the euro and others will follow

Patients turned away, because they can’t pay, from hospitals that used to treat them without charge, graduates with no prospects of any kind of employment, and small business owners forced into sleeping rough when their businesses fail aren’t going to accept an indefinite period of poverty and despair. As the economy continues to shrink the political consensus on austerity will break down. Sooner or later leaders will emerge who accept that Greece will have to leave the euro even though the process is bound to be extremely traumatic. And I’m sure that once Greece breaks out of the trap other countries will follow. Better a finite period of agonizing readjustment under conditions of self-government than unending lack of hope under a government controlled by a distant European bureaucracy.

Moving to a European government isn’t just difficult, as applicants of the project will agree, it’s impossible. The project is demonstrably self-defeating, and pressing on with it can only inflame nationalism both in the countries that are bailed out at the cost of humiliating austerity and in those that are saddled with paying for the bailout.

European leaders will try to salvage the eurozone because that’s the nature of human folly

But this doesn’t mean enthusiasts for the project will abandon it. Quite the contrary. All it shows, they insist is we have to redouble our efforts. It’s hard to think of a better example of folly. When a scientific experiment fails we know we have to come up with a different theory. We don’t say: “We must try harder. If we make a super-human effort the experiment will succeed next time.” That’s what the European leaders are saying today. Rather than looking for constructive ways of enabling some countries to exit from the single currency, they have committed to preserving it in the form in which it exists now. The result can only be a process of disintegration in which the eurozone as we know it passes into history.

In politics, folly is normal because it’s hard for politicians to admit they’re wrong

This is where Tuchman comes in. Self-defeating policies of the kind she discusses aren’t exceptional in human affairs. In politics, folly is normal. What she doesn’t fully explain is why this is so. Some of the reasons are obvious. Politicians become identified with their policies and it’s hard for them to admit mistakes. Jobs and careers are on the line. And it may be more advantageous to press on with the project that’s guaranteed to fail than to struggle to come up with something new.

But these prosaic calculations aren’t the whole story. There’s something deeper going on that affects us all. Let’s go back to the wooden horse. The Trojans wanted to believe that the siege of their city was over. Having held out for so long they couldn’t bear the thought that their decade-long struggle had been for nothing.

“We humans will do anything to secure a meaning in our lives . . . . even at the cost of losing all we care for”

Today we’re no different. We humans will do anything to secure a meaning in our lives. We hold on to the projects that have given our lives shape even at the cost of losing all we care for. Confronted with intractable difficulties the most sensible thing to do may be to toss the past aside and improvise. But this involves casting off our beliefs and we’d rather be ruined than face facts. That’s the perverse persistence we call folly. And nothing is more human.

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This entry was posted on August 20, 2011 by in evidence based counterpower and tagged , , , .
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