Question: Why can’t Greece repay its debts?
Answer: Because its economy is in shambles.
Question: Why is its economy so bad?
Answer: Because the EU destroyed it.

That’s the short answer. It’s not the answer you’ll read in most newspapers or hear on the TV – those will tell you that it’s all the Greeks’ own fault. Their incompetent politicians and low productivity are too blame, they’ll tell you, or something similar. While it is undoubtedly true that Greece – like most other countries, by the way – has had its share of incompetent politicians, the story the mainstream press is trying to sell you is lie nevertheless. Greece is poor because Europe destroyed it. Here is how.

European economic policy is focused on productivity growth. Productivity can grow either by increasing the value of products or by decreasing production costs. European countries are forced to choose the option from those two that best “fits” their situation. That means that countries with relatively little high-technological industry are forced to focus on decreasing production costs, which effectively means decreasing labor costs, but also taxes, for example. Countries like Germany with relatively much high-tech industry, on the other hand, can continue to focus on productivity growth by increasing the value of their products.

In practice this means that countries like Greece and Spain have been forced to lower labor costs by deregulating labor markets and lowering wages, have been forced to lower taxes, and have been forced (either directly or indirectly) to shut down what little high-tech industry they had. The effects thereof are decreasing wages and decreasing tax income for the state. Decreasing wages lead to decreasing spending, which lead to a further decrease in tax income, but also to a decrease of the profitability of industries producing for the domestic market, forcing them to either decrease their wages as well, or to fire workers. All this has lead to a vicious circle of economic destruction increasing poverty of both people and states. But because states cannot abruptly discontinue their spending on education, social security, healthcare, infrastructure and so forth they need to borrow money (from banks in rich countries) to pay for all of those. Unfortunately, the economic collapse also results in a further reduction of tax income (especially if foreign companies are effectively tax-exempt), which means that they cannot pay back those loans. This forces states to increase austerity measures, which further increases poverty, leading to a further deterioration of the economy, adding another vicious circle of economic destruction.

This is what has destroyed Greece, and Spain, and a number of other European countries that have not collapsed yet. Countries like Germany have been able to avoid this because their focus on high-tech industry means that they don’t have to compete by lowering labor costs. Furthermore, these countries have some other advantages. They’re also host to Europe’s financial sector, for example. And with the low-tech countries being forced to shut down their own high-tech industry, the high-tech countries increase their market because those low-tech countries (such as Greece and Spain) are now forced to buy their machines and so forth from high-tech countries (such as Germany).

This is not the full story, of course, but it is the most important factor in the current economic situation in Europe. And importantly, the troubles will not end with Greece. Spain may very well go down the same path, and after that other countries will follow. European economic policy is a race to the bottom at the expense of the people of Europe.

The root of the problem is mainstream economic doctrine. Mainstream economists dogmatically believe that free markets solve every problem, and that nothing should be allowed to hinder (big) business. That these views are political (or religious even) more than scientific has been pointed out very often. (For an accessible introduction, see the books by Cambridge economics professor Ha-Joon Chang, such as 23 Things They Don’t Tell you about Capitalism.) The 2008 worldwide financial crisis, the worldwide rise of inequality, and the European crisis can be directly blamed on mainstream economics. But it is much worse than that: economists and business ideologues destroy everything they touch. The environment continues to be sacrificed to economic growth, but in recent decades business ideology has also been allowed to ruin health care and (higher) education in a growing number of countries. Schools and hospitals have to be run as businesses, because according to mainstream economists, if you leave it to the market, products and services improve, but almost everyone knows better – invariably the results are that you have to pay more for less quality.

Mainstream economics is a cancer. A cancer that doesn’t just destroy the environment, schools, health care, and even countries, but that rots away what makes us human itself. Mainstream economists believe that human beings are essentially selfish, and even though there is abundant psychological evidence for a more balanced view of human nature, this dogma remains a cornerstone of economic doctrine. Perhaps, this is not so strange, however, if one considers that other psychological research has shown that economists – even economics students – are much more selfish than the general population. Studying economics makes one selfish, and often this takes extreme forms. According to experts of psychopathy and similar anti-social disorders, psychopathy is nowhere as common outside prison as it is in the finance sector. Not all economists, bankers, and so forth are psychopaths, of course, but even those that aren’t are awfully close. And what’s even worse is that they are trying to recreate the world in their image. Selfishness has become the norm, undermining social conscience and empathy, which have become associated with weakness.

These problems seem far removed from the Greek debt crisis, but they are part of the same problem. That problem is the hegemony of mainstream economic ideology, the hegemony of psychopathy.

In his Prison Notebooks, written in the 1920s and 30s, Antonio Gramsci argued that a state’s control over its population can rest on two – and only two – pillars. One is brute force. The other is hegemony. Hegemony in this sense is the people’s more or less spontaneous and uncritical consent to and adoption of the values, desires, ideas, beliefs, perspectives, knowledge claims and so forth that serve the interests of the state and/or the ruling elite. Hegemony is not a conspiracy, but an automatic social process in which the socially and politically dominant elites – through their dominance – gradually shape the values, beliefs, and so forth of a whole society.

Mainstream economics is hegemonic in this sense. It has an absolute hold over politicians and bureaucrats, social and economic elites, the press, and – however indirectly – over almost every citizen in most countries.

An implication of Gramsci’s insight that a state’s control can only be based on brute force or hegemony is that if one of the two is absent, the state will have to depend entirely on the other. Without a hegemony supporting it a state can only depend on brute force. Enforcing policy similarly depends on brute force and/or hegemony, and the same is true for changing policy (that is, for enforcing another policy than the current one). Since brute force is hardly a desirable option for changing European economic policy (and even less for fighting the hegemony of psychopathy in general) this means that real policy change is possible only by fighting hegemony. And winning that fight.

So here’s the hard question: How do we fight hegemony? How do we fight the dominance of mainstream economic ideology? How do we fight the hegemony of psychopathy? And how do we win that fight?

Unfortunately, I have no clue what the answer to could be (even though I spend much of my time thinking about it). A reign of terror against bankers and mainstream economics hardly seems the answer, not in the least because that would be a psychopathic method more than an anti-psychopathic one. (On the other hand, it might be useful to let economists know that someone holds them responsible for the massive destruction they have been causing.)
Back to Greece. What should the Greeks do?

They have to decide for themselves, of course, and even if any Greek would pay any attention to me, I don’t have much “wisdom” to offer. The options seem to be pretty straightforward: financial slavery to the EU resulting in further economic destruction, or leaving the EU also resulting in further economic destruction. Neither option is particularly attractive, but at least the second option opens the possibility of leaving the sphere of the hegemony of psychopathy and building a genuine alternative.

The current EU is good for business, but bad for people, if the Greeks value themselves over companies – and most of those are not even their companies – then it might be better off outside the EU than in it. And the same is true for any other European people.