Autarky For One and All For Autarky!

‘Autarky’ is the Greek word describing an economy that is self sufficient. There is no trade, no sharing of technology or knowledge, no access to foreign capital for development. Autarky is used in economic theory as the ‘worst case’ scenario from which gigantic economic advances can be made by opening the borders to trade. Famous examples of autarkic economies are Robinson Crusoe’s simple lifestyle while marooned on a desert island and, of course, North Korea (though the leadership cheats). Put simply, autarky is not a condition that people aspire toward … that is unless you are one of the three musketeers heading Greek politics!!!

Oh no you think in disbelief! Oh yes indeed! The EU has made an offer to the Greek Government that amounts to a choice of either (a) continuing to operate in the international economy or (b) autarky. Moreover, as an added incentive, if the Government chooses (a) they receive a USD 260B bonus in terms of money and debt reduction. Which would you choose? This is a no-brainer, right? Nicholas Sarkozy hit the nail on the head yesterday when he said “…there is no choice”. So why are Greece’s political leaders baulking at the decision?

There is a clear breakdown in the Greek Government’s ability to act, and act responsibly. This is not new and was the catalyst for tapping the technocrat Papademos on the shoulder to take on the leadership. To date, Papademos has sought consensus from the political musketeers that supported the original decision but these gentleman are not cooperating. They argue that more austerity will damage the economy (relative to what, the North Korean solution?). The decision is not about austerity, it’s about economic efficiency. One way or another this economic adjustment will take place.

Papademos must rise to the occasion and act unilaterally to reject the autarkic choice that the politicians see as the easy out. After all, this is the reason he agreed to become Prime Minister.