Tag Archives: loan agreements

Yanis Varoufakis, Adults in the Room. My Battle with Europe’s Deep Establishment (London: The Bodley Head, 2017)

Henry Kissinger, an academic turned politician, is said to have quipped that academic disputes are extremely bitter because the stakes at universities are painfully low. The book reviewed hereby is authored by Yannis Varoufakis, another academic turned politician, and it suggests, in an entirely unintentional manner, that political disputes are fairly polite and verbally restrained even if the stakes are incredibly high, such as the livelihood of millions, e.g. the common people of Greece as of 2010.

Varoufakis’ book chronicles his turbulent and short time qua finance minister of the Hellenic Republic in 2015 (chapters 6 through 17) while adding a number of reasoned observations about the world’s, Europe’s and Greece’s economic sorrows since the annus horribilis 2008 (chapters 1 through 5). Finally, it informs the reader about some of the latest developments in Varoufakis’ own recent career as a Greek MP (Epilogue), including the launch of a new political party, called “Democracy in Europe Movement” (or “DiEM25”). The idea of founding a new political party matured several months after Varoufakis left his post in the Hellenic cabinet headed by Alexis Tsipras, the young leader of the initially broad leftist alliance Syriza, which came to power during the most painful years of Greece’s economic collapse (chapter 5).

Tsipras and a now much ‘thinner’ Syriza have recently celebrated the formal end of the nation’s subjection to its creditors’ representatives—the so-called “troika” aka the European Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB)—and their notorious Memorandum of Understanding (cf. especially chapters 8 and 9). Therein, the socially chilling and economically contractionary conditionalities of the debtor country are cast black on white in the pursuit of three bailout agreements that future European scholars, politicians and activists ought to retrieve, peruse and reflect upon whenever contemplating how nations should deal with their creditors. Latin American and African ones are likely to be familiar with the score at issue. The conditionalities accepted by three different Greek governments included repeated rounds of cuts to old-age pensions and public expenditures on healthcare, culture and education; mass dismissals of public-sector workers; reduced funds to tax-monitoring bodies; loss of State control over public bodies that must thereafter respond directly to the creditors (cf. especially chapter 2).

It transpires from the book’s accumulated evidence that many experts, especially within the IMF, knew perfectly well that such conditionalities would strangle Greece’s economy and make it incapable of generating the revenue whereby to repay its creditors, and that only the most creative economic modelling could buttress the official position of the troika (cf. Appendix 2). Nevertheless, the creditors pressed all the same such conditionalities onto the Greek State and particularly, despite growing signs of snowballing deterioration, onto the government led by Syriza, which many eggheads in Europe’s governing elite feared qua resurgence of the political left, evidently to be snuffed out in its cradle (chapter 9).

The first and the second bailout agreements were required to salvage German and French banks that had invested in Greek bonds and were now unwilling to oblige to market discipline, which John Kenneth Galbraith had once claimed to be praised by all market sycophants as long as it applies to people other than oneself (Tout savoir, ou presque, sur l’économie, Paris: Editions du Seuil, 1978). The third one had a specific political mission to accomplish, whether the money involved in the process was going to be recovered by the creditors or not. Had the European authorities and the German leadership failed “to win Alexis [Tsipras] over to their side”, then they should “create such chaos that his government fell, allowing for its replacement with a compliant technocratic administration, just as they had in 2012.” (92).

Meeting by meeting, debate by debate, telephone call by telephone call, e-mail by e-mail, SMS by SMS, the actual exchanges between the protagonists of this intricate political saga come across as surprisingly civil under most circumstances and most carefully worded in public as well as in private conversations, even when great tension and palpable disagreement occur. Gallant propriety endures even when starkly opposed conceptions of the European unification project are voiced and debated, such as German conservative Wolfgang Schäuble’s plan to “ditch […Europe’s] welfare states” as no longer affordable vis-à-vis the competition of “places like India and China”, contra Varoufakis’ aspiration to the “globalization of welfare benefits and living wages” (212). Greece, in this debate, is revealed to be the starting point in Schäuble’s plan for the pauperisation of Europe’s middle class that also the IMF’s director, Christine Lagarde, seems de facto keen to facilitate, starting “with Greek pharmacies” (367).

Some nasty epithets did fly now and then, and the media’s recurrent, blatant and effective smearing campaigns are duly noted too, including a horrid “set up” scene in which an “irate businessman” attacked Varoufakis in July 2015 as the “former minister” who had ruined him (476). However, unlike the talks between Varoufakis and a long list of high-ranking European officials and politicians appearing in his book, these mucky incidents of character assassination are not worth being recalled with equal care and written all down for posterity to muse upon. Incidentally, we learn that “vulture fund” is regarded in high-level political circles as too crass a term, hence “hold-out” is preferred instead (508 n33). Apparently, strong language is not required in determining or merely discussing whether the wealthy creditors’ pecuniary concerns or the vulnerable people’s more immediate ones—shelter, food, health, survival—should be given precedence in a time of conspicuous recession. As the leading European institutions and the IMF are concerned, the former come obviously first.

Perhaps, as several passages of the book point to, the generally cautious politeness of the conversations can be explained by the way in which all these powerful individuals talking to each other seem generally aware, if not afraid, of being spied upon, recorded and/or leaked to the press. As a result, all these powerful individuals regularly hide their real meanings beneath layers of ambiguity and vagueness, which too blunt a language would impede. As an amusing account of a conversation between Varoufakis and the US economist Jeff Sachs discloses, some spies can show “no compunction whatsoever about revealing they were tapping [Varoufakis’] phone” (396).

Honest and constructive rational dialogue is thus one of the victims of the endless tactical games played by the powerful and frequently unscrupulous individuals paraded in the book. Lying is considered by many of them a sign of intelligence, deafness to argument a sensible stratagem, and the most political issues of all—who gets what, when and how—are couched dogmatically as technical matters. Time, energy, resources, decency and integrity, if not humanity itself, are sacrificed to strategies aimed at outsmarting and manipulating one another, until the point comes when a modicum of frank exchange is eventually permitted, almost as the last resort (cf. especially chapter 11).

As a scholar born and raised in Italy, this recurrent and over-intelligent lack of honesty reminds me of the (sub)culture of so-called furbizia (cunning), whereby each individual takes undue advantage of other people by way of selfish duplicity (e.g. skipping queues, double parking, giving backhanders, ignoring regulation). When this kind of seemingly smart individual behaviour is generalised, however, it results into inane collective inefficiency (e.g. delays, traffic jams, lost income, fire hazard). Game theory, in its neat complexity, confirms this simple realisation that so many southern Europeans, Greeks included, have to cope with on an almost daily basis (cf. Appendix 3).

Varoufakis’ chronicle is detailed, carefully reconstructed from personal diaries and, as a matter of fact, from recorded conversations (cf. the opening “Note on Quoted Speech”, ix). Also, it includes a substantial body of explanatory endnotes and appendixes, which remind the reader of its author’s background as a well-established university professor and an experienced economist who, in a Cassandra-like fashion, had foreseen the crisis to come because of “the bubble in American real estate and in the derivatives market” and feared a novel “Great Depression” (30).

Varoufakis’ declared and effectively “heroic” aim is to be nothing short than a “whistle-blower” and reveal the secretive workings of Europe’s top-level bureaucracy, the IMF, and the realm of transnational finance at large (12). The price to be paid for such a brazen act of defiance is quite straightforward. Varoufakis is bound to join the ranks of institutional “shooting stars” that will never again be allowed to be members of the international elite wishing—frequently in vain—to control world’s events, since in order to belong to this elite one must not let the outside know what goes on in the inside (12). Larry Summers, Jean-Claude Trichet and Mario Draghi would never write a book like the one reviewed hereby.

Once again in an unintentional manner, such a lengthy and sometimes fastidious chronicle of Euro-bureaucracy and cabinet meetings does more than what it sets itself to accomplish. Varoufakis’ book contains many informative elements allowing the reader to grasp the larger picture in which the Greek events have unfolded, namely “the myth of the ‘new economy’, popular around the turn of the millennium and centred on the claim that technological progress had made business cycles obsolete” (Jóhann P. Arnason, “Questioning Progress”, Social Imaginaries, 4(1): 180).

Specifically, the reader is reminded of how the deregulated and liberalised largest private banks and financial institutions of the world made a killing with the waves of privatisations, mergers and acquisitions kick-started by Thatcherite Britain and Reaganite US in the late 20thcentury (chapter 2). Unsupervised by State authorities and entrusted faithfully to the presumed providential invisible hand regulating the markets, these increasingly larger and larger private banks and financial institutions ended up believing themselves invincible, the true masters of the universe (chapter 1). Indeed, the best and brightest that they proudly employed thought themselves capable of such technical wizardry as to disperse risk once and for all in novel and most ingenious ways, securing at the same time further profits ad infinitum (chapter 1).

Alas, all this much-cherished and trumpeted financial genius—which John Kenneth Galbraith had famously claimed to be nothing but a rising market (The Economics of Innocent Fraud, Boston: Houghton Mifflin, 2004)—concocted bad products leading to bad investments, namely the now-forgotten “toxic American derivatives” monopolising the media’s attention in 2008 (31). This toxic kind of financial assets, which are still a threatening presence, annulled ten years ago the trust that the very same private banks and financial institutions had in themselves and in each other (cf. Michael Greenberger, “Too Big to Fail U.S. Banks’ Regulatory Alchemy“, Working Papwr No. 74, Institute for New Economic Thinking, 2018). Paralysed by the fear of massive losses, their lending came to a grinding halt and a global credit crunch took place. Money was no longer available to big- as well as to medium- and small banks, and to their customers too: from States themselves down to small businesses and individuals. The financial crisis became an economic crisis, causing enterprises to go bust, people to lose their jobs, demand to collapse, and the downward spiral of depression to materialise. Pace the widespread beliefs in the end of history and financial capitalism’s unstoppable triumph, 2008 was truly the new ominous “1929” and another Great Depression could not but ensue (125).

Libertarians, whom Varoufakis often compares himself with, would leave the spiral of depression free to destroy as much of the existing economic and social life as required before finding a new equilibrium, perhaps at a lower level of civilisation, in which creative new entrepreneurs could emerge and flourish; but such libertarians are a minority even in the US that, by and large, have been spawning them in great number (cf. chapters 7 and 13). Traditional socialists, whom Varoufakis collaborated with as finance minister, would seize the opportunity to skip the middle man, i.e. the private banks and financial institutions lending money that only the State can lawfully warrant, and replace them with public ones; but few such socialists can be found in the world after the end of the Cold War: not even within Syriza is the “Left Platform” at the helm (cf. chapters 10 and 17). Old and new Keynesians, whom Varoufakis is associated with, would let the State and its central banks step in and pour fresh money into the depressed economy by way of, inter alia, large-scale public works and public investments, but the ECB is prevented from doing so by its own charter and regulations, unlike, for example, “the Bank of England, which from the moment the City went through its 2008 credit convulsion had printed billions to refloat the banks and keep the economy ‘liquid’”. (35)

What happened in the European Union is that the governments of its member States, through the ECB, decided first of all to buy worthless paper belonging to the inept large private banks and financial institutions as though it was still the gods’ ambrosia. On both sides of the Atlantic Ocean, not just in America, there were bankrupt conglomerates that, albeit culpable for their own toxic mess, were deemed “systemic” or “too big to fail” (138). At the same time, these bankrupt but unsinkable banks would buy the new debt issued by those States to keep funding part of the latter’s activities, i.e. saving the very same banks and institutions, while cutting other expenditures in order to pay for the rescue itself and avoid the inflation that huge emissions of new debt could engender (chapter 2).

Told suddenly that they had been living beyond their means, the citizens of Europe were imposed “austerity” measures, and their tax money was used along so-called “quantitative easing” (and “credit lifelines”, “liquidity injections”, etc.) to salvage the incompetent institutions bearing prime responsibility for the crisis (92). The burden of this crisis was shifted intentionally from the private sector to the public one: “taxpayers” from a vast rainbow of countries “were actually paying for the mistakes of French and German bankers” (27).

Soon after 2008, in a climate of growing economic precariousness for millions of Europeans, “banksters” and the “1%” were quickly forgotten as the object of general opprobrium. As the crisis’ burden got shifted from the private to the public sector, “PIIGS” and “profligate” States became the new target for media-fuelled public anger. Later still, it was the turn of foreign migrants coming from countries that had already been squeezed in previous decades by unsustainable debt, the IMF’s heavy-handed technical advice, and the dubious wisdom of currency unions (e.g. the French-Franc-tied CFA currencies in Central and Western Africa). In an eerie recurrence of the 1930s, “the deepening crisis would produce a xenophobic, illiberal, anti-Europeanist nationalist” reaction (482). To add scorn to injury, “it is one of history’s cruel ironies that Nazism is rearing its ugly head in Greece” with the electoral success of the ultra-right Golden Dawn party (215).

As a scholar and a citizen of Iceland, which despite its geographic isolation and economic peculiarities (e.g. energy security by geothermal power) experienced a complete financial collapse immediately after the 2008 credit crunch, Varoufakis’ account of the recent “Greek tragedy” flags out significant differences that are worth thinking about (49; Iceland’s woes have been covered extensively in Nordicum-Mediterraneum, especially issues 6(1), 7(1) and 8(1)).

  • Iceland, after a failed attempt at rescuing its national banks, opted essentially for letting them go bankrupt. Greece and the whole European Union committed themselves to saving them at any cost, even if it meant letting Greek pensioners starve, Greek citizens die because of unaffordable healthcare, and Greek homelessness explode (i.e. the “humanitarian crisis” denounced by Varoufakis, 37).
  • “[C]apital controls” were reintroduced in Iceland “in the wake of its own financial collapse in 2008” and kept in place for a decade in order to prevent capital flight and allow the Icelandic State to have a manageable monetary mass whereby to restart and reorganise the national economy (121). The European Union did nothing of the sort, and actually allowed financial speculation between member countries to take place as well as the continued siphoning of large amounts of money into non-EU countries and tax havens (cf. the recent Panama Papers and Paradise Papers scandals).
  • A new Icelandic government not tainted by collusion with the banking sector came eventually into power in 2009. Their role was to clean up the mess left by the conservative parties that had always claimed to be the business-savvy ones. The new Icelandic government proved genuinely disposed and overall adept to serve the common good, even if it meant conflicting with the IMF or pushing for what Rachael Lorna Johnstone and Aðalheiður Ámundadóttir call “progressive regressive measures”, i.e. austerity for the better off so as to pay for the welfare needed by the worse off in times of dwindling resources (“Defending Economic, Social and Cultural Rights in Iceland’s Financial Crisis”, The Yearbook of Polar Law3, 2011: 454-77). Syriza’s new and largely untainted government in Greece, under its creditors’ enormous pressure, did much less to alter the regressive-regressive measures that the previous two governments had already enacted. Varoufakis regrets that his own achievements as finance minister were, in this respect, meaningful but scarce, given the extent of his country’s gruelling humanitarian crisis (e.g. the prepaid “plastic card[s]” providing for the needs of the poorest families, 476).
  • Iceland’s currency could be devaluated and was devaluated, first by sheer speculative pressure and then by central bank’s fiat, thus making the nation’s export goods and incoming tourism more attractive. Greece’s Euro, which is also the currency of its chief creditor countries with a very different set of post-2008 problems, could not and was not devaluated.
  • In Iceland, the new government, the central bank, the trade unions and the industrialists’ representatives participated in largely cooperative and constructive behaviour to keep unemployment in check and favour the nation’s recovery. In Greece, not to mention within the EU, bitter divisions affected all interest groups and prevented the same synergy from being firmly established. The pulverising atomism of selfish furbizia trumped comprehensive cooperation: the common good, consequently, agonised.
  • Debt bondage by foreign loan or so-called “rescue packages” became a likely outcome of the Icelandic crisis too. The international pressure towards this dubious solution was noteworthy, as epitomised by Gordon Brown’s Labour government invoking in 2008 the UK’s anti-terrorism legislation so as to freeze the assets of all Icelandic nationals and businesses based on British soil. Against all odds, the Icelandic nation rejected debt bondage, i.e. getting loans to repay other loans to repay other loans to repay other loans and so on ad nauseam (French economist Gérard de Bernis used to call it “the usury model” of State funding: cf. his 1999 essay “Globalization: History and Problems“). This refusal occurred via two referenda promoted by a president of the republic in search of lost popularity—this long-time president having been too vocal a cheerleader of the banks that, a mere five years after their privatisation, had brought the country to its knees. Only one allegedly ‘populist’ centre-right party supported the rejection of the “Icesave” agreement with the Dutch and British governments on both occasions (i.e. the Progressive Party), while the self-proclaimed “responsible” parties spoke favourably of it, on either occasion (e.g. the Left-Greens) or even on both occasions (e.g. the Independence Party). In 2015, the people of Greece voted by a sizeable majority against the third bailout agreement that the Syriza government had itself opposed but ended up accepting nonetheless—a U-turn that Varoufakis defines aptly as “the overthrowing of a people” (467).

Varoufakis’ new book is most interesting, well-written and, above all, it constitutes a political memoir that future scholars, politicians and activists should consult in order to be ready for the next major crisis that, sooner or later, will come to pass. On top of that, it is an apology, in at least two senses. First of all, it is a self-defence by a politician who, in the panic and confusion of the Greek depression, has been accused of all sorts of nasty schemes and treacherous actions, sometimes grotesquely. Secondly, it is a token of self-promotion, for Varoufakis has now a Europeanist party to sponsor, with the aim of making European institutions much more democratic and considerably less technocratic.

Apologetic partiality aside, there is no doubt that the conversations and the events reported in Varoufakis’ book did occur as we are told, or at least the vast majority of them, as the robust critical apparatus of the book can help confirm. Any person interested in current socio-political affairs should read them and meditate upon the astounding amount of deceitful cynicism, harmful cleverness and obtuse pride that they display. Every attempt at improving the world’s economic order and political praxes—and Varoufakis’ book spots good will, intelligent leadership and responsible policy too, in both Nordic and Mediterranean nations, as well as on both sides of the Atlantic Ocean—is bound to have to face and, hopefully, surmount such obstacles. Varoufakis, on his part, has been trying hard for years, but to no avail.

Cruelty and Austerity. Philip Hallie’s Categories of Ethical Thought and Today’s Greek Tragedy

Quels crimes ? Quelle faute ont commis ces enfants sur le sein maternel écrasés et sanglants ?

(Voltaire, Poème sur le désastre de Lisbonne, 1756)


As 20th-century scholarship about cruelty is concerned, Philip Hallie’s research is possibly the most extensive. Working for many years as an ethicist at Wesleyan University, Hallie wrote no less than three books on this largely neglected topic, the most famous of which being Lest Innocent Blood Be Shed, published in 1979. In this book, Hallie recounts and discusses how the inhabitants of Le-Chambon-sur-Lignon, a small village in South-eastern France, protected more than six thousand Jewish refugees from fascist persecution during the 1940s. The inhabitants were led by the local Protestant pastor, André Trocmé, who believed firmly that, albeit extremely risky, such a line of conduct was the only justifiable one, i.e. in line with the morals dictated by the Christian faith.

In his many works on cruelty, Hallie defines this term in somewhat different ways, such as “the infliction of ruin, whatever the motives” (1969: 14), “the slow crushing and grinding of a human being by other human beings” (1979/1985: 2) and “the activity of hurting sentient beings” (1992: 229). Besides, echoing Saint Augustine’s classical distinction between natural and human evil, Hallie distinguishes between the “fatal cruelties” caused by nature and the “violent cruelty” caused by humans (1969: 5-6). Violent human cruelty is distinguished further into “sadistic” and “practical”: the former is “self-gratifying”; the latter is instrumental, i.e. cruelty qua means to ulterior ends (1969: 22-24). Concerning “practical” cruelty, Hallie adds to the picture the subtler form of “implicit” or “indirect” cruelty, which arises because of sheer “indifference or distraction” to the pain that has been caused, rather than because ofanyexplicit violence or direct “intention to hurt” (1969: 13-14 & 29-31). “Implicit” and “indirect” cruelty can grow in time and mutate into “institutionalized cruelty” (1981/1989: 11), i.e. a persistent pattern of humiliation that can often endure over many years or generations, and yet is downplayed by the perpetrator as well as the victim, both of whom take it for granted and may even justify it by appealing to the laws of science, the natural order, or religiously sanctioned traditions.

In addition to these distinctions among different forms of cruelty, all of which would appear to be evil, Hallie (1969) offers a puzzling reflection on some types of cruelty that might be better not to avoid altogether, for their disappearance could generate more harm than their continuation. For one, the processes of individual “growth” and maturation can be horribly painful and, in all honesty, “cruel”, but Hallie (1969) thinks that they are a most valuable component of the long and tortuous road that leads to higher human fulfilment (55). Then he considers the artistic insights and particularly the disclosure of sorrowful truths that can be obtained through in terrorem techniques, as well as many other aesthetic forms of elation, including “sexual” ones, that cruelty is capable of bringing about (41). On top of that, Hallie (1969) admits that cruelty may be a necessary evil in the public sphere, since “responsive” cruelty is entailed by the national and international systems of law and order; although such a “responsive cruelty” can be mitigated, it cannot be avoided entirely (33). Finally, Hallie (1969) notes how cruelty can be brought about in the name of altruism, happiness and justice, since “substantial maiming” can derive from “wanting the best and doing the worst” (15-20). For all these reasons, he deems cruelty to constitute a “paradox” (1969: book title): we may well regard cruelty as one of the most horrible things in life, perhaps even the worst thing we can do, yet we cannot and may not want to rid ourselves of it completely.

Hallie (1969) offers us what is to date the richest philosophical study on the paradoxical character of cruelty. As I discussed years ago (cf. Baruchello 2010), this is one of the five broad conceptions of cruelty that can be retrieved in the history of Western thought, the other four being: (I) “Cruelty… as a quintessentially human vice affecting specific individuals” such as “persons involved in punitive contexts, e.g. courtrooms, schools, armies”, that show no propensity for “clemency” (172-73); (II) “Cruelty” as “sadism”, namely “a malaise of the soul”, possibly “the result of a poor, incompetent or broken mind, which reduces the humanity of its carrier and makes her closer to wild animals” (173-74; emphasis removed); (III) “cruelty as harm to be avoided”, as exemplified most notably by “[t]he champions of the European Enlightenment” and a long string of successive “political and legal reformers” (174-75; emphasis removed); and (IV) cruelty as something good, whether instrumentally or intrinsically, as exemplified respectively by Machiavelli’s acceptance of extremely evil means (e.g. war) for good ends (e.g. the State’s stability) and Sade’s glorification of our natural propensity to violence.

No univocal interpretation of “cruel” and “cruelty” applies to the five conceptions listed above, especially if we consider the fact that they are themselves only broad categories applicable to a large variety of more or less refined reflections on cruelty that started with Seneca’s De clementia and have continued up to Michael Trice’s 2011 theological work entitled Encountering Cruelty (the present paper is actually a preparatory work for a larger reflection on the unacceptable cruelty of austerity from a Christian perspective). In my past research (cf. Baruchello 2010), I identify seven frequent connoting elements for what is deemed “cruel”, which amount to little else than family resemblances among usages of a term that is deployed very frequently, defined very rarely and, even so, conceived of in different ways, as the five broad conceptions just mentioned bear witness to.

Still, taken together, these connoting elements and broad conceptions chart a vast realm of linguistic expressions located inter alia in the fields of philosophy, theology, politics, economics, social theory, psychology, jurisprudence and literature. Referring to my own 2010 work, the seven connoting elements are (171-72; emphases removed):

1.Pain: Whether only physical or also psychological, serious or minimal, justified or unjustified, cruelty implies pain

2.Excess: Whether of pain as such or of its usages to acceptable ends (e.g. penal sanctions), or of our hopes in a tolerable life, or of our abilities to understand reality, cruelty eventually steps “beyond”—acceptability, tolerability, comprehensibility

3.Roles: Whether directly or indirectly established, cruelty requires the roles of victim and perpetrator, even when the latter is institutional, impersonal or unknown

4.Power: It is only by means of power differential that the roles of victim and perpetrator can be established

5.Mens rea: Whether delighted in or indifferent to the pain inflicted, the perpetrator possesses a culpable mental attitude. Interestingly, when tackling impersonal and institutional perpetrators, several thinkers have personified the universe or the State

6.Evil: Cruelty is a species of evil. Even when conceived of as good, it is either an instrumental evil or an apparent evil, the goodness of which must be revealed and justified

7.Paradox: Cruelty horrifies and, at the same time, fascinates. This is just one of the many contradictions contained within cruelty, which can be aptly described as paradoxical. The array of diverse conceptions collected below further substantiates this point

Keeping cruelty’s shifting semantic area in mind, let us focus nonetheless upon Hallie’s (1969) claim that cruelty can be: (A) practical, in the sense of being a means to an end and not an end in itself; (B) implicit, in the sense that it is not a manifest attribute of the end being pursued; and (C) indirect, in the sense that it results from the choice of means by which the end at hand is pursued. As such, cruelty can inform complex forms of social agency in which much dread, destruction, deprivation, loss of dignity and life are visible, and yet in which no explicit violence, no patent intention to hurt, no delight in other people’s misery and no non-human constriction can be discerned.


The austerity policies that have been implemented in a number of countries since the collapse of deregulated private finance in the year 2008 can be regarded as contemporary examples of practical, implicit and indirect cruelty. I believe that this can be shown by addressing a representative case, namely that of Greece, where leading constitutional lawyer Giorgos Kasimatis (2010: Foreword, 2nd par.) writes:

“The Loan Agreements (the Loan Facility Agreement; the Memorandum of Understanding between Greece and the Euro-area Member States and the agreement with the IMF for the Participation of Greece in the European Financial Stabilization Mechanism to the purpose of obtaining the approval of a Stand-by arrangement by the International Monetary Fund) form a system of international treaties the likes of which… the cruelty of the terms and the extent of breach of fundamental legal rights and principles… have never been enacted in the heart of Europe and the European completion; not since the World War II.” (emphasis added)

Constitutional lawyers are not renowned for their rhetorical flamboyance or heated prose. So, where does Kasimatis’ “cruelty” come from? In the 100 pages of the Loan Agreements of May 2010, annexes included, no mention whatsoever is made of cruelty, pain or suffering as the stated aims of the signed agreement, not even as a salient characteristic of the chosen means of implementation. Any possible ruin, crushing, grinding and hurting of victims is nowhere remarked upon in the document, although it is conceded that provisions must be made to protect “the minimum earners” and compensate “the most vulnerable… for possible adverse impact of policies” that include, inter alia: layoffs of public employees; “pension” and “wage bill reductions”; decreased job security; and lessened provision of public services and “social security benefits” (54)—i.e. policies that, combined together, are liable to weaken “social cohesion”, cause “poverty” and shrink “employment” (54). The intermediate and ultimate aims stated in the agreements are the granting of loans “in conjunction with the funding from the International Monetary Fund” (3), to be duly repaid according to the schedule specified in the document, so as to “correct fiscal and external imbalances and [therefore] restore confidence” that alone is said to make “growth… buoyant” and let “the economy… emerge… in better shape than before [i.e.] with higher growth and employment.” (52; emphasis added)

These three ultimate aims—buoyant growth, an economy in better shape and a higher rate of employment—are said to be the expected and projected result of the “economic and financial policies” (51) listed in the agreements, which express grave concern for “the recent deterioration in market sentiment” (54) and recommend ways to re-hearten it, such as: “fiscal adjustment” by novel and “special taxes” (53-4); reducing “incomes and social security” provision—old-age pensions included—so as to make them “sustainable” vis-à-vis the new debt obligations of the State (53); increased supervision over the banking system during a forecast “period of lower growth” (53); reforming “ambitious[ly]” the Greek “public sector” to “modernize” it by reducing its size and funding though “oriented to providing better services to its citizens” (53-4); making local “labor markets more efficient and flexible” (53); withdrawing the public role “in domestic industries” (53) and managing or owning a large variety of “assets” (59); reforming the “health sector” (55); sustaining a “safety net for the financial system” (58); reducing “minimum entry level wages” and “employment protection” levels (58); and “facilitate greater use of part-time work” (59). The details for the implementation of these policies are spelled out qua “specific economic policy conditionality” (69) for the disbursement of funds and make it clear that “elderly people”, “workers in heavy and arduous professions”, recipients of “disability pensions”, “social security, hospitals”, “existing social programmes” (73-4) and the recipients of “unemployment benefits” (79) are to bear a share of the burden towards debt repayment.

Given the conditionality and the policies specified in the agreements, it does not take much to infer that much pain, both physical and psychological, has been bestowed upon the Greek population or a conspicuous portion of it. The signatories themselves admit in the documents that the immediate effects of the measures specified therein are likely to be a “growth” that is not “buoyant” (52) and that the expected and projected positive outcomes would take place in the “future” (54), though nowhere it is said when exactly that will take place. Similarly, it does not require much imagination to realise that all this pain has exceeded the pain that most Greek citizens would have been likely to encounter in their life under normal circumstances. In point of fact, these policies have been implemented within the context of considerable diplomatic and economic pressure both at the international level (e.g. public indictments of the Greek government and citizens at large by representatives of the French and German governments, the European Commission and the International Monetary Fund; cf. Alktenhead, 2012) and at the national level (e.g. street riots, general strikes and public demonstrations quenched by police force; cf. Smith, 2011). There have been, in other words, perpetrators, both at the national and international levels, who have used their power in order to have these policies and conditionality implemented despite popular protests and, above all, the visible ruin, crushing, grinding and hurting of victims leading to these protests. The perpetrators have intended to pursue the policies listed in the agreements in spite of all this ruin, crushing, grinding and hurting. Evidently, such a cruelty was either not their main concern, or not sufficient enough a concern to stop them in their pursuit.

It can be argued whether the ruin, crushing, grinding and hurting, in short, the cruelty of these policies was a necessary, bitter medicine; or a deserved punishment for prior errors (i.e. a form of “responsive” cruelty); or a failed attempt to do good. What cannot be argued, however, is that there was no cruelty. That is where Kasimatis’ “cruelty” comes from. As the italicised words in the comments above flag out, all the connoting elements are at play here, including that of paradox, for the declared ends of these policies have not only failed to materialise, but have been made more difficult to achieve, as the successive amendments to the loan agreements of 2010 have eventually revealed (cf. Blanchard & Leigh, 2013). Today, the Greek economy shows no sign of buoyancy, the shape of its economy is among the worst in the EU and the rate of unemployment among the highest (cf. IMF, 2013).

The bitter medicine has sorted no positive effect, at least as the declared aims of the May 2010 Loan Agreements are concerned. On the contrary, there has been a plethora of nefarious side-effects, such as: a sudden suicide spike, especially amongst men (Kentikelenis et al., 2011); a considerable increase in mental illnesses (Economou et al., 2012; Faresjö et al., 2013) and infectious diseases like HIV, TB and malaria (Stuckler & Basu, 2013); and higher infant mortality (Stuckler & Basu, 2013). If it ever was a form of “responsive” cruelty, the punishment has indeed reached “the most vulnerable”, i.e. children, who cannot be deemed responsible for any pre-crisis errors made by the adults, of whom only some could be regarded as legally, politically or morally guilty. In essence, were we even to admit the possibility of this cruelty being “responsive”, it would constitute nonetheless a case of collective punishment. In short, if any genuine good was ever intended as the main aim, such a good has become harder and harder to come by, to the point that leading IMF economists have admitted that, not unlike former experiences in the developing world (Stiglitz, 2002), the austerity policies originally recommended for Greece have failed the test of reality (Blanchard & Leigh, 2013).

Paradoxical is also the fact that, while such dramatic side-effects materialised, special credit lines and liquidity injections have been operated repeatedly by the European Central Bank (ECB) in order to safeguard the viability of the Continent’s largest private banks, while no special intervention of this kind has been made in order to sustain, say, healthcare provision to Greek children (cf. Reuters, 2013). As the language of the 2010 Loan Agreements would read, the ECB has provided funds for the “safety net of the financial system”, which feeds on money that is not spent on meeting genuine life needs (McMurtry, 2013), but has provided none earmarked for the safety net of the Greek children, whose life needs are being met less and less (Stuckler & Basu, 2013). “Lifelines”, as they are called in the financial world, have been thrown to private banks, their managers and shareholders; nothing comparable has been done for the Greek children, who needed them in no metaphorical way, i.e. in order to live (cf. McMurtry, 2013).


Given the evidence above, I believe that it can be reasonably stated that austerity policies like those witnessed in Greece constitute a token of cruelty in its social manifestation, as this can be conceived of thanks to Hallie’s categories of ethical thought. There have been the infliction of ruin, the slow crushing and grinding of human beings, the hurting of sentient beings—all as a means to an end that does not focus upon the ruin, the crushing, the grinding and the hurting as such, and yet brings them about inevitably and remains de facto indifferent to them, for the ruin, the crushing, the grinding and the hurting are allowed to continue and the original end is not abandoned nor are the employed means revised.




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