ATHENS — I
am writing this piece on the margins of a crucial negotiation with my country’s
creditors — a negotiation the result of which may mark a generation, and even
prove a turning point for Europe’s unfolding experiment with monetary union.
Game
theorists analyze negotiations as if they were split-a-pie games involving
selfish players. Because I spent many years during my previous life as an
academic researching game theory, some commentators rushed to presume that asGreece’s new finance minister I was busily devising
bluffs, stratagems and outside options, struggling to improve upon a weak hand.
Nothing
could be further from the truth.
If
anything, my game-theory background convinced me that it would be pure folly to
think of the current deliberations between Greece and our partners as a
bargaining game to be won or lost via bluffs and tactical subterfuge.
The trouble
with game theory, as I used to tell my students, is that it takes for granted
the players’ motives. In poker or blackjack this assumption is unproblematic.
But in the current deliberations between our European partners and Greece’s new
government, the whole point is to forge new motives. To fashion a fresh
mind-set that transcends national divides, dissolves the creditor-debtor
distinction in favor of a pan-European perspective, and places the common
European good above petty politics, dogma that proves toxic if universalized,
and an us-versus-them mind-set.
As finance
minister of a small, fiscally stressed nation lacking its own central bank and
seen by many of our partners as a problem debtor, I am convinced that we have
one option only: to shun any temptation to treat this pivotal moment as an
experiment in strategizing and, instead, to present honestly the facts
concerning Greece’s social economy, table our proposals for regrowing Greece,
explain why these are in Europe’s interest, and reveal the red lines beyond
which logic and duty prevent us from going.
The great
difference between this government and previous Greek governments is twofold:
We are determined to clash with mighty vested interests in order to reboot
Greece and gain our partners’ trust. We are also determined not to be treated
as a debt colony that should suffer what it must. The principle of the greatest
austerity for the most depressed economy would be quaint if it did not cause so
much unnecessary suffering.
I am often
asked: What if the only way you can secure funding is to cross your red lines
and accept measures that you consider to be part of the problem, rather than of
its solution? Faithful to the principle that I have no right to bluff, my
answer is: The lines that we have presented as red will not be crossed.
Otherwise, they would not be truly red, but merely a bluff.
But what if
this brings your people much pain? I am asked. Surely you must be bluffing.
The problem
with this line of argument is that it presumes, along with game theory, that we
live in a tyranny of consequences. That there are no circumstances when we must
do what is right not as a strategy but simply because it is ... right.
Against
such cynicism the new Greek government will innovate. We shall desist, whatever
the consequences, from deals that are wrong for Greece and wrong for Europe.
The “extend and pretend” game that began after Greece’s public debt became
unserviceable in 2010 will end. No more loans — not until we have a credible
plan for growing the economy in order to repay those loans, help the middle
class get back on its feet and address the hideous humanitarian crisis. No more
“reform” programs that target poor pensioners and family-owned pharmacies while
leaving large-scale corruption untouched.
Our
government is not asking our partners for a way out of repaying our debts. We
are asking for a few months of financial stability that will allow us to embark
upon the task of reforms that the broad Greek population can own and support,
so we can bring back growth and end our inability to pay our dues.
One may
think that this retreat from game theory is motivated by some radical-left
agenda. Not so. The major influence here is Immanuel Kant, the German
philosopher who taught us that the rational and the free escape the empire of
expediency by doing what is right.
How do we
know that our modest policy agenda, which constitutes our red line, is right in
Kant’s terms? We know by looking into the eyes of the hungry in the streets of
our cities or contemplating our stressed middle class, or considering the
interests of hard-working people in every European village and city within our
monetary union. After all, Europe will only regain its soul when it regains the
people’s trust by putting their interests center-stage.
Yanis
Varoufakis is the finance minister of Greece.