The Euro Crisis and the Return of Culture

I well remember being almost persuaded by Francis Fukuyama’s wonderfully argued The End of History and the Last Man. The book suggested that the West and perhaps the world had reached an endpoint where democracies constrained by the rule of law and powered by market economies would dominate. If so, the future looked happy. The synthesis of the principles of democracy and economic liberty would lead to a peaceful prosperity where the chief excitement might come from the relentless doubling of computer power.

At least so far, however, The End of History has collided with history. Much of the Islamic world has not gotten the message. To be sure,  the fall of the Soviet Union has led to many ex-communist states with an admirable commitment to law and the kind of economics that gains long-term prosperity.   But there remains Russia, where democracy seems incapable of sustaining a loyal opposition, the state looms as leviathan, and the economy has large elements of a kleptocracy. Readers of Russian history should not be surprised. Richard Pipes has long argued that since the 15th century, Russian culture has been marked by disdain for rights of property and an enthusiasm for a patrimonial regime with little separation between state and economic and civic society.

But nothing better represents the failure of Fukuyama’s thesis than plight of Euro and the Greek crisis. The Euro was the monetary representation of history’s end in the birthplace of the West. Created by no single state, it was thought to advance markets by reducing commercial frictions in  the most cosmopolitan part of the world.  It was also part of a larger political project of deepening the union of European states.

But the currency union fatally assumed that the all cultures of European nations resembled those of the Last Man—market-oriented with accountable democratic government. But Greece does not share in the sober Protestant culture of the nation states of Northern Europe. Rather, Greece has been more shaped by the Balkans and the Ottoman Empire and still bears the scars of the civil war between Communists and non-Communists. The result was a patronage state with circumscribed markets and unsustainable handouts—a kind of political and economic structure that cannot be fit within the Euro.   And while Greece no doubt diverges more greatly from the Northern European culture than any other nation in the Euro, other Mediterranean nations, shaped by more communitarian Catholic views, also look very different.

Thus, culture is making a comeback, both as an obstacle to ending history and as an explanation of social reality. And we should not look for it only in crisis. A recent report suggests that poverty rates among Scandinavians in the United States with its limited social safety net are not that different from Scandinavian states with its more substantial support, raising the question of whether it is Scandinavian culture rather than economic policy that is the key to low poverty rates.

It is not clear that our intellectual class can easily accept culture as an explanation for social consequences.  Of course, our universities are committed to saying that nothing is more important than diversity, which one might think necessarily focuses on cultural differences and their effects. But we may have internalized the values of democracy and markets sufficiently that focusing on differential results inevitably leads to invidious comparisons. And that is something our diversity culture can probably not tolerate.

Reader Discussion

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on July 08, 2015 at 10:13:55 am

So, Greece is a better example of Fukuyama's failure than the Islamic State? Give me a break.

Culture has much less to do with Greece's failure than political institutions. In fact, culture is usually a placeholder for an explanation.

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on July 08, 2015 at 10:50:34 am

Greece's political institutions such as its patronage state are endogenous to its culture, just as is the patrimonial state to Russia. That is my point.

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John O. McGinnis
on July 08, 2015 at 12:20:03 pm

And my point is that I am skeptical. The Ku Klux Klan in the 1920s frequently attacked immigrant people of "Hellenic Origins" for not having a protestant culture and not being in accord with American political institutions, but I think we would agree that this was based on prejudice more than sound empirical evidence. Given this historical experience, I think that far from being an instinctive reaction of "diversity culture," skepticism of broad-based cultural explanations without an empirical foundation is in my view a healthy reaction to the spurious beliefs that have justified harmful acts in the past. If you do not think that past harms justify skepticism, you can be sure that a social thesis that sweeps so broadly and explains away the complex Greek situation is probably wrong, even beyond the problems of proving causality.

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on July 08, 2015 at 15:56:12 pm

To me McGinnis' discussion is straightforward and easy to understand.

This is like those little isolated islands of population where communism actually does work. There are communities where communism works. Those communities tend to be somewhat isolated from other communities, and sharing is part of their culture. It isn't that communism as a political economic system does or does not work, at least in small economic systems. Rather, the culture around it contributes substantially to its success or failure.

The KKK example also illustrates how culture affects people's general happiness. The children of the losers of the Civil War became rather resentful and violent, in keeping with their culture, until eventually the flames of peace loving American culture stamped out the worst of the Klan's antics. Today they are treated as objects of humor, or sometimes as cartoonish boogeymen, although I doubt they will ever go completely away.

I think it makes a lot of sense that the Greek culture contributes substantially to its current conditions. I read once that you can tell a lot about the state of affairs of a nation by examining its art. (Was this an old Chinese saying?) And I heard someone say a long time ago that a people are blessed or cursed according to their religious beliefs. I have never found a reason to disbelieve either of those arguments, and I constantly find anecdotes supporting them, as occurred in this discussion. The application of cultural values to the efficacy of the Euro is interesting and noteworthy.

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Scott Amorian
on July 09, 2015 at 11:35:34 am

[…] The Euro Crisis and the Return of Culture. […]

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