Greece — Merkel Meets Thatcher

Flawed understandings

Are you an expert in macro-economics?

Probably not, and neither am I.

Do you know how the Eurozone will pan out if Greece leaves?

Of course you don’t, and neither do I.

Do experts in macroeconomics know what will happen over the coming days as the European Union tears itself apart trying to find a solution to the Greek problem?

No, they do not.


Because they’re no more expert than you are and they’re no more expert than I am, even though they might happen to be the Chancellor of this and the Prime Minister of that.  They simply do not know. The things these people believe in are simply not science.  Next time Wolfgang Schäuble appears in public, remind yourself of the following fact: this man is making it up. He doesn’t know anything.

merkel thatcher

These people have studied a fake science based on random beliefs instead of verifiable facts. That is how every single one of these European politicians achieved their questionable doctorates (apart from Angela Merkel, obviously), but remember this every time you see Angela Merkel on the TV looking certain about anything.  This woman does not know.  This woman is making it up.

Yes, Merkel is trained as a scientist, just like Margaret Thatcher, but we can hardly derive comfort from that, since neither of them showed the slightest evidence of scientific flexibility in their approach to the European economic problem.

Thatcher applied Milton Friedman’s sado-monetarism, with catastrophic consequences for the  British working class, Merkel is imposing a heartless austerity with the same motivation and both policies will end with exactly the same result: misery.

That, ultimately, is always the end result of certainty based on ignorance and most particularly the sort of ignorance based on a false understanding of science.

What a tragedy that modern Europe is in the grip of people with such a flawed understanding of what science really is.

What a shame that our future is in  the hands of fools.




10 thoughts on “Greece — Merkel Meets Thatcher

  1. This post is nonsensical. You claim that the subjects of your attacks are motivated by ideology, not science, but give every indication that this applies to you.

    Yes, it is true that economics is not considered a science by many. This is because it doesn’t make testable predictions.

    But the same thing about meteorology and nobody questions it’s status as a science.

    Nobody questions the underlying physics on which meteorology is based. However, forecasting is an entirely different story, because there are so many factors that can come together at a particular place and time, as in economics. We can say what will happen if a cold and dry air mass meets a warm and moisture-laden one, but can’t say with as much certainty that it will happen over a specific city at a specific time.

    There are laws to economics, in the sense we can broadly say what will happen if you put rent controls in place on residential properties in some city (e.g., supply will constrict) but it’s harder to talk about specifics because you are dealing with millions of individual agents acting purposefully.

    It may be that Thatcher created some ‘misery’ for some British working classes people, but stagflation, strikes, and waiting for months to get a telephone installed by the national monopoly was no picnic, either.

  2. Economic activity is essentially about human interaction; about producing food and useful things, and trading products and services. Macroeconomic statistical analysis tells us nothing about interpersonal activity in everyday life.

  3. What’s normally referred to as economics (as in the soubriquet ‘Economics is Fun’) should more accurately be referred to as capitalist economics. That is clear from comment # 1 above by Economics is Fun.

    (Capitalist) Economics is not a science. It’s an ideology.

  4. A lot depends on the wider institutional set-up.

    Greek debt comes from unsustainable welfare state debt. Debt “forgiveness” would achieve nothing in this case – as the Greek government remains committed to wild spending.

    If Tsipras thinks the Greek state should get the kind of debt forgiveness the Germans received in 1953, the terms should include a full-on military occupation to fundamentally remake the country’s institutions and force it maintain a trade and primary budget surplus, as we did then.

    This is only a joke, of course.

    But the EU finance ministers are calling on the Greek government to commit to an economic and fiscal reform programme as if it were just a run-of-the-mill policy move. The problem is that in Greece clientelism, tax evasion, patronage, and such are embedded. Addressing this requires a shift in the basic nature of the state and the political order, something well nigh impossible to achieve.

  5. ‘It may be that Thatcher created some ‘misery’ for some British working classes people, but stagflation, strikes, and waiting for months to get a telephone installed by the national monopoly was no picnic, either.’

    You are joking aren’t you. From the above remark I assume that you’ve never experienced real poverty and deep economic uncertainty on a personal level.


    The 1980s saw a return of mass unemployment – levels not seen since the 1930s.

    Two recessions were caused by deliberate policies.

    Although inflation needed controlling in 1980, arguably the government deflated economy too much – chasing money supply targets which were unreliable. The cost was unemployment and social disorder, which need not have been so deep.

    Growth in north – south divide and regional inequality.

    Unemployment particularly affected former industrial areas; the government were slow to help deal with problems of structural unemployment.

    The Lawson boom was a missed opportunity.

    The government deliberately allowed a boom and bust which caused an unnecessary and painful recession of 1991.

    For all Mrs Thatcher’s claims to see the importance of keeping inflation low. It was ironic, the government made such a mistake in allowing an inflationary bubble in the late 1980s. Part of the reason is that really felt they had created a supply side miracle – which hadn’t actually occurred.

    The rise in home-ownership was good for those who could buy, but has increased wealth inequality in the UK.
    The supply of council homes is limited because many have been sold off.

    Large rise in inequality during the 1980s.

    Financial deregulation of the 1980s laid framework for credit bubble of 2000s and subsequent credit crisis. For example, privatized building societies like Northern Rock, and Bradford & Bingley pursued risky growth strategies which eventually needed government bailouts in the aftermath of the 2008 recession. Financial deregulation was good for some, but arguably created greater financial instability in the long-term.

    Thatcher reduced the power of trades unions, but arguably at the cost of alienating many working class because of the fierce nature of her conflict.

    Privatisation involved selling off state assets at an undervalued price. Many who could afford to buy shares, saw immediate gains. This was politically popular, but another missed opportunity to use nations resources to invest in the future.

    Thatcher made little attempt to deal with environmental issues during a decade of increased concerns over global warming, pollution and environmental degradation.

    Economics is fun for some clearly, and that some tend to be the few.

  6. Mags, whose great-gran – Catherine Sullivan – hailed from Kerry, summed up Greece many years ago.

    “Eventually, socialists run out of other peoples’ money,” she said.

    Ah, wonderful London in the 1980s, with the IRA heavily involved in the demolition business – while people were still in the buildings.Strike, everyone out in sympathy. At one stage the electricity was on strike and the place was in darkness. Undertakers on the picket line with the living, while the dead remained unburied, while the rubbish was stacked six feet high on the streets because the binmen were on strike.

    And then there was Morrissey!

    Sooner or later a Thatcher was going to come along.

  7. @Bernard …Are you saying that viscously dismantling industry in the towns and cities of Northern England in particular and condemning generations of their unborn citizens to poverty and deprivation was an inevitable consequence of workers striking for a decent days wage for a decent days work. Apologies if I’ve misunderstood your post.

  8. Bernard In Greece it was the right wing governments, just like here that caused the mess. Was it the socialists who were responsible for the billions lost by the banks. I doubt if there was a single socialist with an account in Anglo. why are these people not being forced to face up to their losses like the Greeks and followed for every penny. All the banking scams over all the years, the millions if not billions lost in tax was not the doing of the socialist. the bags of cash passing from builders and developers didn’t find its way to socialists. When it comes to spending money which should be available to the state the socialists are well down the list.
    I have also had to go on strike to get an employer to comply with the laws of the land.

  9. Interesting that EIF uses the term “stagflation”, a name made up to describe a situation that Economic theory says cannot happen. Thatcher’s Big Bang and Reganomics directly resulted in the Great Depression we are living through, aided and abetted by Clinton’s Globalization policies, of course. Capitalist Economics, of the Neo-Liberal kind are utter anathema to Democracy and can only be forced on the general population by a non-democratic ruling elite such as the EU.

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