Return of Troika to Athens to Consummate Negotiations with Greek Government a Compulsion

By Con George-Kotzabasis November 19, 2014

The Greek Opposition and the media in general by demonizing The Memorandum with its austere measures that has been imposed upon Greece by the Troika, i.e., the European Commission, the ECB, and the IMF, as a condition for the flow of funds from the latter to the Greek Treasury for the purpose of saving the country from insolvency and gradually placing it on a trajectory of economic recovery, has made it impossible for anyone to reasonably argue, or even to imply, that this necessary austerity, after a mindless profligate spending by previous governments that sunk Greece into an unfathomable debt and debarred it from the financial markets and threw it into an unprecedented spin of economic crisis since the ending of World War II, would generate beneficent results and would pull the country eventually out of its economic crisis.

History has repeatedly shown that countries in critical situations, almost like a law of nature, give rise to extraordinary men/women of stupendous wisdom, mettle, and will power that saved their nations from destruction. Themistocles at the battle of Salamis that saved Greece from Xerxes’ despotism and his barbarian myrmidons, Lincoln in the American Civil War, and Churchill in World War II, are outstanding examples. Likewise in contemporary Greece from the ashes of its economic holocaust, a phoenix, in the figure of Antonis Samaras, had risen to salvage the country from its tragic economic mess. In the short space of two years the Samaras government accomplished an unprecedented feat, that no other government in the world was ever able to consummate, i.e., to draw the country from the edge of a precipitous calamity and place it by gradual firm steps on the solid ground of inchoate economic recovery. This was achieved by a series of structural reforms that made the country more competitive, and by painful cuts in the budget that generated for the first time a primary surplus in the current year, after many years of budget deficits that was the embedded malaise of the policies of previous governments and were the major cause that pushed Greece into bankruptcy. Also, for the first time after forgetting, but not forgiving, many years of negative growth, the country’s GDP in 2014 has increased by 0.7%, and unemployment has decreased from 28% to 25.9%, in the same year, and is estimated to decrease to 25% by the end of 2014.

It is because of these achievements of the Samaras government, that I believe that the TROIKA will be compelled to back down from its severe and apparently unyielding demands, in its impending negotiations with the Greek government in a few days, and will render a positive review of the policies implemented by the latter as stipulated in the Memorandum, which is the sine qua non of Greece’s exit from the strictures of the Memorandum by the end of 2014. It is inconceivable that the TROIKA will persevere with its hard position and put in jeopardy these successes of the Samaras government, that after all, emanated from its own austerity measures that were contained in its own directives as designated in the Memorandum. The TROIKA cannot be so foolish as to throw  a spanner in its own works! Hence, the nonsensical fear, that has been so gloomily and frivolously fanned by the Greek media that the TROIKA will continue its hard-line toward the government and place in predicament, and waste, all the sacrifices Greeks had made to turn their country into a modern economy and fecund with prosperity, will dissipate with the softening and compulsion of the TROIKA to withdraw its hard stand.

I rest on my oars: your turn now.


The Search of Neuroscience for the Quintessence of Economics

By Con George-Kotzabasis—October 03, 2014

A reply to “of markets and minds” –by professor Peter Bossaerts

Melbourne University Magazine

Economics is the application of scarce means for the attainment of countless abundant ends. Since all ends cannot be fulfilled because of the scarcity of resources, human choice selects those ends that are more needful or pleasurable to man than those that are less so. The attainment of those more needful ends is a result of human action. These ends, however, are the fruits of the future and the inevitable uncertainty that is riveted upon it. Therefore human action is always speculation based, however, not upon the throw of the dice but upon ratiocination. Furthermore, actions are determined by the value judgments of individuals i.e., the ends they are eager to attain. These valuations differ among individuals due to the different circumstances and living conditions of these individuals and to the variable desires and wishes that emanate from the plethora of their personalities. There is no constant relationship between these valuations, as they emanate from the different wishes, desires and caprices of an umpteenth of individuals, and are therefore beyond the bailiwick of science to measure them; what scientific method could measure with precision the capricious longings of man and the uncertainty that surrounds his existence?

Professor Bossaerts’ attempt therefore, to identify and control the ‘cells’ of the economy and finance and the complex interactions that determine their course by the scientific method of neuroscience for the purpose of rationally directing the process of the economy to a more beneficial path, is in vain and is bound to fail. Science measures constant relationships in the controlled experimental environment of the lab but cannot measure uncontrolled innumerable variants that determine, in our case, the process of a free market economy. The search, therefore, of finding the inexorably elusive quintessence of the economic process by the tools of the hard sciences, though a laudable task, is purblind, as it cannot see nor understand that science is incapable of measuring the measureless.

The endeavour to supplant and redress, on the one hand, the imperfections of the free market economy, and on the other, the failures of government dirigisme to regulate and direct the economic process of the free market to a more optimal state, by the powerful algorithmic tools of science, will be found to be another futile attempt to direct the economy from a central command post, this time by the methods of neuroscience and not by an omniscient cabal of socialist planners.

In an imperfect and uncertain world, the free market economy will proceed and move by trial and error and continue to spread its benefits to mankind. But the intervention of man’s reason and understanding will substantially diminish the errors by increasing their correction in time by the power of man’s imagination and ratiocination.