Via Tim Worstall, this magnificent essay by Michael Lewis in Vanity Fair about the cultural and other problems which have led Greece far down the road of folly.

It’s quite long, but all the more devastating for that as the writer follows the mysteries of corruption and tax-cheating into almost unbelievable nooks and crannies.

Read the whole thing, and wonder quite what it means for the wider European Union. Could an eventual North v South split emerge in a formalised fashion in due course?

Two profound philosophical points came out.

First, how a society without the rule of law and cogent, reasonably honest government shrivels down to extended family machinations as there is so little wider social trust allowing people to get things done other than by connections. This is the core argument in my paper about Amazon Space. Michael Lewis describes it with unrelenting accuracy:

No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate.

And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.

The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse.

Astounding examples aplenty given.

Second, when things have drifted into such a miserable state is it in fact possible  for recovery to happen?

Can a body of people in effect get themselves into such collective fatigue/anxiety/uncertainty and mutual disappointment that there is no way to turn things round, short of an external power running the place for a few decades and so delivering the institutional backbone the place needs to function in the modern world? 

Michael Lewis wonders:

Even if it is technically possible for these people to repay their debts, live within their means, and return to good standing inside the European Union, do they have the inner resources to do it?

 

Or have they so lost their ability to feel connected to anything outside their small worlds that they would rather just shed themselves of the obligations? On the face of it, defaulting on their debts and walking away would seem a mad act: all Greek banks would instantly go bankrupt, the country would have no ability to pay for the many necessities it imports (oil, for instance), and the country would be punished for many years in the form of much higher interest rates, if and when it was allowed to borrow again.

 

But the place does not behave as a collective; it lacks the monks’ instincts. It behaves as a collection of atomized particles, each of which has grown accustomed to pursuing its own interest at the expense of the common good.

 

There’s no question that the government is resolved to at least try to re-create Greek civic life. The only question is: Can such a thing, once lost, ever be re-created?

Maybe in a yet unrecognised, objective way, some societies are unable to cope with the disciplines of what the rest of us call ‘modern life’.

NB that this does not make them ‘worse’ than us. Just different. They may have values of family support and other virtues which we would love to have. But be that as it may, they are unable to deliver the organisational discipline and collective integrity needed to make complex systems based on rules and trust work.

Development theory for Africa rests on all sorts of unhealthy assumptions about such questions – plus deep-rooted taboos against even mentioning them.

This is part of the deep problem across much of former Yugoslavia and elsewhere in the former communist world. Decades of banal oppression and lies and avoiding responsibility have taken their toll, the more so in Serbia/Kosovo, Bosnia and Herzegovina and Macedonia where all those problems have been compounded by different conflicts and their messy aftermaths.

We all intone that these territories need to move to ‘European standards’. But what if large parts of the EU start to move towards their standards instead?

Or if those territories are just not able to muster the social discipline needed to do that, not least because too many people do rather well from the current disorganisation and thwart progress?

Is everything negative in fact reversible on timescales we can cope with?