Calvin, Luther, & the Eurozone

By Rod Dreher • May 25, 2012, 1:19 AM

The president of Estonia says he’s sick and tired of southern European deadbeat countries taking advantage of the hard work and good will of northern European countries like his own, whose fed-up people are being denounced as “populists” by Eurocratic bien-pensants. Excerpt:

That I submit is a problem, a serious problem and a threat to Europe we have only begun to realize. When we still talk about new and old members, we still talk nonsense about “populism” in all the wrong ways. Indeed I believe that the “populism” and the “specter of the 30s” that all kinds of pundits unknowledgeably appeal to has nothing to do with the populism we see in Northern Europe. That is not a populism of the dispossessed, the unemployed. It is a populism more akin to what Calvin and Luther appealed to than what the fascists of the 1930s appealed to. It is, like most populism, based on resentment, and resentment at unfairness. But the unfairness is, as it was in the 16th Century, a resentment of those who flaunt their flouting the rules by which others abide. Resentment on the part of those who take commitments seriously regarding those who do not: Is that the “specter of the 30s”?

I cannot and will not accept any labels applied to Northern Europeans for being “populists” when they have been doing exactly what has been asked of them. The price of following the rules for a “poor” country like Estonia has been harsh.

25 Responses to Calvin, Luther, & the Eurozone

MattSwartz says:

May 25, 2012 at 2:00 am

Equality and fair play between strong nations and weak nations are impossible. That state of affairs didn’t exist before the Common Market treaty was signed, it doesn’t exist now, and it won’t exist in the future. Nations have competing interests, and they use treaties and alliances as vehicles to advance those interests.

I don’t think that this catchy take-off of Deep Blue Something’s hit Breakfast At Tiffany’s has changed the age-old principles that govern statecraft.

http://www.youtube.com/watch?v=zUMXsC3oTHk

Looking back, the EU was a bargain: countries with great economies got to set trade rules and regulations that suited them, and in exchange, countries with rotten economies got to print money backed by the rich countries. Each side under-estimated how eagerly their counterparts would exploit the deal, and consequently the thing cracked up.
Christopher Larsen says:

May 25, 2012 at 8:21 am

Lord this man is clueless. He is trying to impose a moral dimension on an economic problem. There is no connection between morals and economic problems resulting from attempting to integrate regions with very different business cycles and needs. The southern Europeans are supposed to do what!!? The property boom in Spain is not a moral issue. It was directly linked to he ECB’s decision to lower interest rates to help Germany’s struggling economy in the early 2000′s. Why??? Because Germany uber alles! and it needed lower interest rates. Cheap money flooded the European economy and Spain and Portugal and Italy benefited and private investors overbuilt in Spain for example. Then the bust came and the straitjacket of the Euro means that these countries can’t use monetary policy to escape. Why?? Because Germany uber alles! The current monetary situation suits Germany very well because the Euro devalues their goods relative to what the old Mark would have been. But the unemployment rate in southern Europe can’t be sustained. This economic crisis is the direct result of a currency union that can’t be sustained because the monetary needs of the various regions of Europe vary.
William says:

May 25, 2012 at 8:54 am

This really does boil down to “us responsible Protestant bourgeoisie vs. those irresponsible Catholic slobs” doesn’t it? Still, it’s nice to see that the speaker or his translator still understand the difference between “flaunt” and “flout.”
reflectionephemeral says:

May 25, 2012 at 11:02 am

Well, it’s nice to see that it’s not just American discourse that’s plagued by resentment-induced innumeracy.

That sociological point aside, though, the article doesn’t make any sense.

Ilves writes that the problem is about debtor nations that “have failed to follow the rules.”

But before the collapse, countries like Spain and Ireland were running surpluses.

As Kash Mansori wrote, “one of the perceived benefits of the euro was to make it easier for capital to flow from countries with abundant capital, and thus relatively low returns to investments, to countries that were relatively capital-poor, and that therefore offered high returns on investments. … Investors in the core were happy about the relatively high returns they were getting in the periphery, the periphery countries enjoyed an economic boom financed in part by this easier access to the abundant capital of the core, and exports from the core to the periphery surged. By 2004 there was virtually no difference in interest rates of the periphery countries and that of Germany. … The problem is that such surges in capital flows depend on the whims of international investors, and therefore have a notorious tendency to come to a sudden stop if investor sentiment changes. And when that happens, severe financial crisis often follows. … Crucially, sudden stops may happen even when a country is following all the right macroeconomic policies. The Mexican and East Asian financial crises of the 1990s are good examples of that. In the case of the eurozone, the sudden stop to capital flows in 2009 indiscriminately hit all of the periphery countries, regardless of how well they had managed their finances. Spain and Ireland, for example, were more fiscally responsible during the boom years than France or Germany, yet that wasn’t enough to inoculate them from the sudden end to the capital flow bonanza. So even if Greece and Portugal (which did run large budget deficits) had been paragons of fiscal prudence, it’s quite likely that they would still have been hit by the sudden stop to the capital flow bonanza. …”

One cannot engage with the data and cast this crisis as a tale of immoral spendthrift states. That’s why Ilves’s article doesn’t have any data.

That said, the rhyming German phrase about stolen bicycles does help me understand the East-West cultural divide a bit better.
Charles Cosimano says:

May 25, 2012 at 11:20 am

And next we will hear from the Duchess of Grand Fenwick. What is that idiot babbling about? Calvin, Luther? Estonia?
MontDLaw says:

May 25, 2012 at 11:24 am

Adopting the Euro benefited both the Protestant north and the Catholic south. Also the breakup of the Euro would have severe implications for both north and south. To quote the poet John Lydon – No one is innocent.

I also wonder how the religious traditionals in the US can be so quick to endorse these kinds of anti-Catholic sentiments. I mean this guy is effectively repeating the lazy, iresponsible, sun-loving Catholic trope that died in North America 30 years ago.
Mike says:

May 25, 2012 at 12:14 pm

OTOH, as we are repeatedly told when it comes to race, you can’t avoid certain facts.

The fact is that the failing countries in the Euro are all Catholic/Orthodox and the successful countries are Lutheran/Calvinist/Secularist. While the Irish and Italians and Spanish and Greeks went on a spending and building orgy during the boom, the Germans and Finns and Dutch remained responsible.The fact that the PIIGS all have ties to the Catholic and Orthodox church as a de-facto state religion does raise an interesting question about why those societies have been so irresponsible during the boom and so unwilling to sacrifice during the bust.
RodDreher says:

May 25, 2012 at 12:20 pm

You are substituting emotional cliche for thought here. Estonia, though historically Lutheran, is the least religious country in the Eurozone. Only 16 percent of its people believe in God. The Estonian president’s point in bringing up Calvin and Luther is to say that the Reformers, at least initially, objected not to the “rules” of the Roman Catholic Church, but to the fact that the Catholic hierarchy and clergy flagrantly disobeyed the rules they set up, and expected others to follow. He’s saying that the rule-following peoples were played for chumps by peoples who didn’t feel obligated to follow the rules. He’s not saying the southern Europeans are lazy; only that their institutions and politicians did not feel obligated to play honestly, and by the rules. It’s hardly news that the countries of southern Europe are more corrupt than the countries in northern Europe. Check out the work of Transparency International in this regard. For example:

http://cpi.transparency.org/cpi2011/results/
William says:

May 25, 2012 at 12:24 pm

You don’t actually have to believe in God to hold Protestant prejudices against Catholics, I assure you.
RodDreher says:

May 25, 2012 at 12:57 pm

I would phrase it somewhat differently, but basically I — a former Catholic turned Orthodox — would agree with you. Anybody who has spent any time in southern Europe and northern Europe can plainly see there are deep cultural mindsets at work here. I spent some time in Milan, and then took a train to Heidelberg. In Milan, it’s chaos (but a particularly vital, even beautiful, chaos); in Heidelberg, it’s rule-following and order above all (which is also beautiful, in its way). You can sense a difference simply by the way pedestrians behave on the street.

It’s not a question of “lazy” Catholics/Orthodox versus hardworking Protestants/secularists. I believe studies have shown Greeks actually work longer hours than their northern European counterparts. It has more to do with a culture that tolerates much higher levels of corruption, both in public and private life. I don’t think this is *caused* by religion, but the important question, at least as I see it, is why haven’t the Catholic faith and the Orthodox faith rolled back corruption? If Estonia, which is the most secular/atheist society in Europe (and that’s really saying something) has lower levels of corruption than the more religiously observant societies of southern Europe, what does that say about religion’s power to shape public morals? It could be the case that if not for religion, things would be even worse in Italy and Greece…
William says:

May 25, 2012 at 1:13 pm

Ah, the responsibiity of the Lutheran-secularist Icelanders!
TWylite says:

May 25, 2012 at 1:27 pm

I want to know how Calvin & Hobbes relate to the Eurozone crisis. Is Hobbes emblematic of the “Asian Tigers” that appear to threaten the West? Do Calvin’s parents represent the staid Scandinavian/Germanic nations that try to repress Calvin’s impulsiveness? Will Spaceman Spiff, representing some technological revolution, save the day and bring prosperity once again?
Raskolnik says:

May 25, 2012 at 1:59 pm

Ireland and Spain were running budget surpluses and had a debt/%GDP ratio lower than Germany’s on the eve of the crisis. Your theory fails the reality test.
Ethan_C says:

May 25, 2012 at 2:38 pm

Man, lotsa commentators reading stuff into a single analogy from a really long article.

His point in the analogy, as Rod said, has nothing to do with Protestant vs. Catholic cultures. It’s about the specific conditions of medieval Church corruption that precipitated the Reformers’ revolt. I find it to be a rather appropos historical analogy.

And as he mentions elsewhere in the article, his point about rule-breaking is based on a comparison between Estonia and Greece. He argues that Estonia was held to a much higher standard of fiscal scrutiny for its membership in the Eurozone merely because it was “Eastern” and “new,” while Greece was given a free pass because it was supposedly “Western” and therefore obviously more responsible.

His deeper point is that the Eurozone is based upon the assumption that everyone wants to follow the rules, but that assumption clearly doesn’t apply to some of its corrupt members, and everyone knows it. Pretending the rules are all-important, but not caring when people break them, is suicidal hypocrisy. If the Euro instead somehow made allowance for different levels of corruption in its membership, maybe it wouldn’t be in so much trouble right now.
connie says:

May 25, 2012 at 2:44 pm

As the Irish kid said to his dad, “But are we Protestant atheists or Catholic atheists?”
Mike says:

May 25, 2012 at 3:00 pm

A budget surplus aided by the Euro. Then they started building more housing then they had Polish /Tunisian workers to fill them and suddenly they were in the midst of a financial crisis. Ireland begrudgingly has accepted Austerity, but the Spanish are still acting as if they are the victims for their spending orgy and irresponsible economic policy and now facing 25% unemployment.
JonF311 says:

May 25, 2012 at 4:43 pm

Um, Iceland? Yes, I know: not EU: but it sure had one doozy of a bank flop when the whole mess hit the fan.
Difference was that Iceland was free to do as it pleased with its currency– and also to send the foreign bankers seeking to dictate terms a big pile of rotting lutefisk instead of the money they were demanding. The Icelanders even got to vote on that.
JonF311 says:

May 25, 2012 at 4:45 pm

When it comes to Europe these days the adverb “historically” needs to be appended to just about any country’s religious affiliations, because almost no European country is anything but highly secularized today.
Also, I’m surprised no one has observed that Germany happens to be partially Catholic (historically), and Austria is decidedly Catholic, by history.
William says:

May 25, 2012 at 4:56 pm

I’m sure austerity will bring that unemployment figure down!
JonF311 says:

May 25, 2012 at 5:11 pm

Why should it matter where the surplus came from for the matter at hand here? The fact is the government were practicing responsible budgeting, matching income and outgo. They are not to blame for lacking the powers or the Delphic Oracle and not foreseeing a much more catastrophic downturn than anyone predicted.
JonF311 says:

May 25, 2012 at 5:13 pm

The big difference bvetween this and the Reformation is that it’s northern European bankers and not Southern bishops and cardinals who have been benefiting from the arrangement known as the Euro. Germany, not Rome has been in the driver’s seat of this one.
Sean Nelson says:

May 26, 2012 at 2:59 am

why haven’t the Catholic faith and the Orthodox faith rolled back corruption?

Perhaps because they are hierarchical, bureaucratic organizations? My experience in the innards of large bureaucracies is that they provide a great many opportunities to bend the rules to your own benefit. Add the deference that subordinates in hierarchies must show to their superiors, and the opportunities for corruption increase. It seems to me that church hierarchies provide an especially fertile ground for those who would wish to enrich themselves by skimming off the top. That can’t help but seep into the culture around them.

Large bureaucracies don’t stop behaving like large bureaucracies simply because they claim a divine mission.
Sean Nelson says:

May 26, 2012 at 3:06 am

Yep. When Northern Europeans engage in corruption, they do it in an orderly way: by juicing the law to their benefit, behind the scenes. It’s the “American Way” as well, alas.

There’s a slight whiff of (relative) nobility to the clerk who openly skims off the top, compared to the plutocrat who pays a lobbyist to steer taxpayer-funded contracts his way.
Eric says:

May 26, 2012 at 12:33 pm

they have been doing exactly what has been asked of them.

Any narrative that casts this as simply as a contrast of maturity and moral fortitude between the responsible Protestant North and the profligate Catholic South just does not stand up to facts. Germany was violating Maastricht fiscal deficit limits in the 2000s while Spain and Ireland were running budget surpluses.

It’s hardly news that the countries of southern Europe are more corrupt
than the countries in northern Europe. Check out the work of
Transparency International in this regard.

Rod, the crises in Spain and Ireland were caused by property bubbles, and had little to do with political corruption and even less to do with Catholicism. Sweden experienced a severe recession in the early 1990s, and at the beginning of the current financial crisis, Iceland was in really bad shape. They, however, weren’t in the euro.
turmarion says:

May 26, 2012 at 7:40 pm

Of course, you also have the causation/correlation issue. Had the Reformation never happened, would the Germanic peoples (and the non-Germanic Estonians) still have been more efficient, rule-bound, etc.? Is it possible that rather than Protestantism or Catholicism or Orthodoxy “causing” a particular mindset, that particular mindsets resulted in the adoption of one of these? Remember, Protestantism started in Germany at a time when everyone was Catholic.

For that matter, the U. S. is historically Protestant in the North and the South, and yet many of the same stereotypes (industrious, thrifty Northerners, lazy, decadent Southerners) have been noted here as far back as DeTocqueville. Maybe there is something in the climate that affects people’s attitudes–who knows?