Greece: Creative Destruction

Samaras with associates - source PM FlickRWhen George Papandreou and Antonis Samaras were roomies at Amherst College’s Pratt Hall in 1970 and 1971, none of them could imagine that many years later, they would become part of a process that was about to change Greece forever.

They both assumed the leadership of their historic parties at the end of different political eras, thus both had the opportunity to enter the mainstream on their own pace and mark their way towards the top, i.e. the Premiership of the country. They both succeeded, through quite similar paths.

George Papandreou assumed the leadership of PASOK from his father’s adversary Costas Simitis who led a reformist movement that delivered much less than it promised. The latter’s landmark moment was Greece’s accession in the EMU, something that ten years later many Greeks considered a drag. Now it is clear that, although many euro area members may have doctored their statistics to fit the Eurozone dress, Greeks ended up embracing the scheme, building up our very own fallacy.

This is not of the last decade’s however. Systemic malfunctions were built back in the 1980s when Andreas Papandreou institutionalised budget deficit as a national policy. In the years that followed, all signs pointed towards a looming ending. Even the new FinMin Yannis Stournaras, when he was taught economics by legendary academic Constantine Drakatos, he already knew that there was not even a chance traditional Greek-style economic policy to prevent the national economy from taking a fall. Short periods during which the fundamentals of the economy were turning towards the positive, due to increased consumption and internal borrowing made nothing than deteriorating the misleading notion of progress.

During Karamanlis 2004-2009 governance, the countdown of this era began. Admittedly, it was the first real opportunity Greece had to change course and move away from the destructive path drawn by party politics, corruption and extreme clientelism. It was a period during which Greek economy’s tremor started; most importantly, it was a period during which Greeks lost the last remaining iota of trust towards Greek politicians.

This opportunity was lost. During the Karamanlis administration, Papandreou has been very difficult as an opposition leader, putting up strong fights against the then Prime Minister and the centre-right administration, who had adopted a minimum risk approach that turned it into a sitting duck. If Karamanlis government had a slim chance to produce tangible results, G. Papandreou’s populism killed it. That period will be recorded in Greek history as a period during which the country kept burning several billions of borrowed money, next to torched forests and Athens historical buildings that went ablaze in the 2008 riots.

Then, in October 2009 George Papandreou became Prime Minister and Antonis Samaras picked up the conservative party in ruins.

It was at that moment when the God of Greece turned George and Antonis into two sides of the same coin, in a process sometimes known as “Schumpeter’s gale.” Economic history tells us that Austrian-American economist Joseph Schumpeter adapted it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle. At its most basic, “creative destruction” describes the way in which capitalist economic development arises out of the destruction of some prior economic order.

Both stages are essential in order to reach the end game, which in the case of Greece has to do with the drastic transformation of they way we do things in the country; economic and business mentality, social interaction and development, individual and collective responsibility and accountability.

George came in for the destruction; to fight the past, impose the concept of change the hard way; widespread pain and horizontal austerity action that shocked Greeks and made them start thinking. He brought into surface all the things Greeks used to hide under the mattresses. Neo-Hellenic illnesses strongly embedded in the daily life of citizens, amongst them what Princeton’s professor Stathis Gourgouris called “a propensity for disorder.”

To fix the Greek economy and conclude the capitalist cycle, major distortions had to go. The destruction process began based on two parametres: 1) things in Greeks’ daily life will not be the same again, since the mother-State had nothing more to give and 2) old incomes and previous generations’ benefits had to fade away to save Greece’s youth.

The process was harsh and George died (politically) in the trenches. Interim procedures were activated with Lucas Papademos stabilizing the field and Panayiotis Pikrammenos neutralizing the political passion.

Then Antonis came in for the second phase, to orchestrate the creative part, stepping on a smoother pathway, after all the reactions, political juxtaposition and pathos were tamed.

Reconstructing Greece requires the ability to synthesise necessary policies through sound leadership. In the creative destruction process, his predecessor delivered the first part and history will have its say. We need Antonis to appear creative and finish the job.

Dr. Demetris Kamaras is the Editor of

Demetris Kamaras

Journalism Professor and journalist, primarily online. Political analyst and communications specialist. Previous studies in economics (BA), communications policy (MA) and journalism (PhD), mostly in London. Born in Hove, Brighton. Lives in Athens, Greece. Blogs when necessary. Founded and running Private Information Network and [The Greek]. Occasional articles of friends are published on Interested in political communication, next-gen web apps, digital R&D, internet ethics and social networks. He taught journalism and communication at University of Indianapolis Athens (1999-2013). Published numerous analyses and op-eds, online and in print and his first book was titled: Digital Communication (Zenon Publications, London, 2000 – co-authorship). Recent publications: Crisis Talk; Greece (2012) – iBook/Avaialble on iTunes. Elections and the Internet, Digerati Publications (Athens, 2014) (in Greek).

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