British people in the audience smiling
at me with confidence rain is their
thing we know for the people from the
Cote d’Azur rain that’s when there’s
water dropping from the sky now imagine
it rains and you go outside wearing
nothing but a paper head like this one
to protect you from the from the water
now you’ll get soaked the Brits can
confirm so when it wins against when it
rains against tomorrow
the one thing you would definitely not
be using is a paper head learning what a
certain action in history led to is what
academia calls an historical argument in
line with Albert Einstein who once said
insanity is doing the same thing over
and over again expecting different
results I would like to present to you
today I have found austerity as it is
pursued today right now in Greece as the
biggest insanity of the 21st century and
why I think it is the German language
that has driven Europe insane now that
was a bit too quick maybe so I’ll start
in the beginning I’m a university here
where we have quite an interdisciplinary
approach we study economics we study
sociology political science and it’s a
nice way icing on that educational cake
we studied the Middle East its languages
its societies and well why am I even
mentioning this it’s what one year ago
that we had like one of these terribly
long days that every university student
learns to hate at some point we first
had a long session of economics who
talked about the Greek austerity and the
theory behind it then we switch
classrooms to have a class class about
the modern history of the Middle East
and about half an hour into that class
it just hit me like a ton of bricks
literally I was sitting there and we
were talking about Egypt in the
nineteenth century but I felt like we
had never
even left the economics class literally
everything we were saying or had been
saying about Greece we’re now saying
about Egypt Egypt had massive debt in
the 18 detonate in the 1870s to whom the
European banks had given money to the
Egyptian government on let’s say
questionable terms that it was now no
longer able to be to repay Greece had
massive debt in 2010 to whom the
European banks had given money to the
Greek government on terms that were
let’s say questionable that Greece was
now no longer able to repay Egypt tried
to consolidate its debt because the
European politicians got scared for the
stability of their banks they said it
put in place a commission the rubella
Gershon Commission that would take over
politics in Egypt and run their
government to make sure that the money
from the Egyptian people or from the
Egyptian government would be paid back
to the European banks as quickly as
possible a little effect aside here the
first law that they introduced raised
taxes on tobacco because people
basically consumer at any price whether
it is important you’ll see in a second
Greece declared its budgetary deficit in
2010 the European politicians once again
afraid for the stability of their banks
put in place a commission this time they
called it the troika that would make
sure the Greek government would repay
its debt to the European banks and
governments now of course things had
gotten a bit more complicated now there
was this thing called democracy and a
constitution that was somehow dictating
how laws was supposed to be made made
but as the saying goes money rules the
world so they found a way to give the
troika a veto right over any law that
passes the Parliament in Greece and
finally this way the never elected
troika dictated the laws to the Greek
parliament and well you might actually
know now what the first law was or what
the first austerity package included it
was indeed a law that would increase
taxes on tobacco
because people consume it at any price
it was like the troika was playing by a
140 year old playbook now why I could I
could keep going at this pace for
another 20 minutes I could give you
another 20 minutes of details about the
parallels between Greece and Egypt but
it would bore you and it would bore me
too
so let’s just talk about the elephant in
the room the question mark I seen your
faces why is all of this even relevant
imagine austerity is our paper head and
the debt crisis is the rain indeed in
1876
no one could actually know if austerity
would one day lead to growth because
they’ve never tried it before it’s like
you’re the first person to leave your
house in the rain with nothing but a
paper head on
however if politicians today claimed the
same thing and say well we don’t know
but there’s a good chance in five years
Greece will be absolutely fine well then
they should look into the history books
let’s look into what lessons we can
possibly learn from the Egyptian case is
there something we can learn for Greece
from the Middle East from Egypt in the
19th century I tried to do some research
after that day last year and it’s a bit
difficult because obviously GDP per
capita data from 150 years ago kind of
difficult to find but there’s this
project which is called the medicine
project that uses historical data to
find GDP data for four days that well
are quite a long time ago now and that
least give you a trend they might not be
especially precise but we didn’t get an
idea of what the economic situation of
certain countries was like 140 50 years
ago so what we see here is that in the
1870s compared to countries around in
Egypt in the in the region for which we
can find data is that they were but
basically I’d like you to common the
common ground economically however then
Tunisia Algeria and Jordan kept having
economic growth well from 1910 on Egypt
did not develop any growth and was
stagnating now if we expect a similar
growth for Greece that would be
absolutely devastating increase would
soon be completely disconnected from all
other European economies the question
though is is there a way that we can
connect this development to the
austerity policies or is this just a
coincidence let’s say 70 years of bad
weather in Egypt we don’t know austerity
means cutting but on government spending
in infrastructure in education and by
lowering direct government consumption
always has a direct impact on GDP
furthermore there’s this other thing
that comes with cutting back that the
money that we put into infrastructure
and maintaining our streets and railways
as well as education imagine for a
second you’re a European investor a
businessman and you want to start a new
business or or widen your business to
the Arab world you don’t have any
affiliation to any country there you
don’t speak any Arabic dialect so you
don’t really mind we’re going where to
go now you can go to Tunisia or you can
go to Egypt however if in 1930 let’s say
you’d go to Egypt you’d have an
infrastructure that is bad and would
make it impossible or hard for you to
produce and transport your goods you’d
have people that are not especially
well-educated and finally you’d have a
country where there’s higher taxes
because they’re still paying money back
to the Europeans indeed until 1956
Egypt was doing that so the decision
that such an investor would make is
obvious and indeed that leads to like a
vicious cycle
which means that all the direct
investment foreign direct investment
would go to the countries around it and
Egypt would get more and more
disconnected in Greece can we expect a
similar kind of development in Greece
well one might say that collecting some
more Texas there won’t actually destroy
the economy and that’s true but other
parts of those both of those austerity
packages that were introduced in Greece
well I would suggest definitely can
destroy the economy infrastructure we’ve
already mentioned but something that is
even more dangerous for an economy and
something that affects me personally
when I think about it is education not
many people actually know this but the
University of Athens had to fire 25
percent of their staff during the
austerity due to austerity measures 25
percent of their staff that means one in
four classes is no longer helped that
means one in four students can no longer
actually pursue their degree might have
to wait a semester or two that is a year
that they won’t spend in the workforce
working force paying taxes even worse
many Greek student just left the country
because if there’s no classes to be held
if you can’t pursue your degree if you
can’t do what you want to do you’ll go
somewhere else right now those people
will study in France or in Germany or in
England for a couple of years but
there’s a good chance that they will
never return to Greece so the country of
the great thinkers in maybe 20 30 40
years will be lacking exactly that the
educational elite now if all of this is
actually known if we just have to read
in the history books to find this then
why is Greece still running around with
nothing but a paper heads in the rain to
keep itself dry why is do we still
impose this austerity on the Greece
speak on the Greek people Charlemagne
the great emperor of the Romans once
said to speak another language is to
possess another soul while doing my
research on this topic I realized that
there was certain countries that always
kept pushing for these austerity
measures where others were indifferent
sometimes suggested something else but
usually just went with it those
countries were Germany Austria the
Netherlands Sweden
now interestingly there’s one thing that
exists in all those four countries which
the term that translated to German and
to Dutch and it’s very similar in
Swedish gives you the word should now if
you go on Google Translate and you put
in the word guilt it will also give you
the word salt in German because there is
no distinction between those two those
two terms every Sunday millions of
Germans go to church where they pray
forgive us our trespasses
now Martin Luther when he translated the
Bible to German from Latin he translated
language defines the way we think how
does it do that let’s do a quick
experiment here could you all just
spontaneously point southeast please
give it a go I want to see some more
hands thank you interesting the person
that was pointing to the ceiling back
there I want to have a talk to you later
that’s interesting lay aboard it’s key
that the exact same thing with a group
of professors in a room and let’s say
well they messed up just like we just
did however then she did the same thing
again with a group of five year old
girls in northeastern Australia and
those kids always got it right no matter
at what time of the day no matter if
they knew the room they were in they
always got it right now why is that
those kids were from a native Australian
tribe and forgive me the pronunciation
if somebody is expert in the field
please teach me later this tribe is
called the
guru in Madeira I think and in their
language they don’t have terms like
rites left in front or behind but
instead they use south north west so on
so when I want to talk to you in that
language and I’m Eli can you move in I
want to squeeze into the Karbala can you
move southeast I got a squeeze in here
or oh I left the keys in your room there
on the north end of the table this way
the Guru a meteor generally conceived
the world in a different way because
their language works in that way so
cognitively when they have to process
information they will process it in a
way that is very different to how we do
it in the same way for a German to think
about financial debt always has this
connotation this idea that somebody who
is lent money which is a normal
financial transaction to anyone else
somehow is a little bit guilty there’s
something shady about it
now very practically imagine a German
politician leaving a meeting where they
were talking about the option of maybe
allowing a debt cut to the Greek
government he will have to stand in
front of the cameras and be like umm
yeah we know they were trespassing
they’re kind of bad people but we’re
gonna let him get away with it you know
that’s just how it is this kind of
arguing for the well-being of the
perpetrator has never been very popular
in democracy so for in the German
politics and it’s similar in the other
countries I mentioned earlier there’s no
real alternative policy because in the
way that people see this situation
there’s no way that they would think
about yeah maybe austerity is not the
only way maybe there is another way to
get the Greek government better
organised get them to impose taxes more
strictly but at the same time get their
got the economy to grow again give
people chances I just argued that it’s
not economic preferences or Germany
especially needing that money from
but just that language barrier the way
that we think that is imposed austerity
on to the Greek people this also
explains why does indeed Germany Austria
Sweden and the Netherlands that have
always been pushing for this policy but
then we need to think about what this
leads us to well what I want people to
take from this and that’s maybe a dream
but it would be so nice if just like the
great German linguists the great
professors of the German language could
sit together somewhere I don’t mean I
don’t mind it can be a conference maybe
just over a beer and a bar somewhere and
just kind of find a new term to finally
put an end to the unhealthy
intermingling of economics morals
religion and finance because those
things just don’t have anything to do
with each other and they shouldn’t
furthermore we’ve seen today that it
doesn’t necessarily mean need economists
to interpret economic studies models or
theories to understand that maybe
austerity is not the best way to go
maybe there’s another way that will help
the Greek economy get back on its feet
indeed history has a story to tell us
and that story is that yes indeed if we
look to the Middle East we see it
austerity has failed failed us before
the question that the following years
does have to show us or answer to us
give an answer to is if our policymakers
will finally be able to listen to that
language to the voice of history and
overcome the language barrier especially
in those German or foreign countries
because it has a strong message to tell
us that is when it comes to a debt
crisis austerity is like a paper
to keep you dry from the rain it simply
doesn’t do the job thank you very much [Applause]