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Let me recount a recent car breakdown melodrama with relevance, I hope, to the Greece-EU catastrophe and other economic nightmares.
My transmission failed on a rainy road in cottage country. I called CAA. In minutes Jason responded from Griffith Brothers towing service in South River saying he was on the way. Forty minutes later he arrived with a flatbed truck. Since it was Sunday, with mechanics unavailable, he drove me the 200-plus kilometres to Toronto. He was efficient and sociable.
So here’s my first point. An economy is about interdependence between actual people who exchange things like money and tows, not just econometric “factors” and formulas. They do it to be useful to each other and it all makes sense when they can see those useful exchanges happen. Jason wouldn’t have left his wife and little girl just to help me out unless I paid. But it happened in a larger human context that we all understood. The fact money was exchanged doesn’t cancel those other qualities — beyond sheer commerce. Only a dolt living in an abstract world would imagine it was purely financial or “economic.”
In Toronto, Jason dropped me at Guan’s garage on Harbord, leaving me on a lot next door, with “trespassers will be towed” signs. I hoped it was part of Guan’s but when I got home I fretted so I texted Derek (Guan). He texted back, “OK,” so I relaxed. Next day he told me he’d come down late at night and pushed my car off the lot (which wasn’t his) over to the garage himself.
Stocks lost ground for the week as fears about Greece and its financial troubles dominated trading.
Point two. Derek likes helping people. It gives him something separate from the living he makes. I’ve seen him smile, “No charge,” or say “Whatever you think.” This may jibe with some business model that factors in “good will” but you’d be insane to think that’s why he does it.
Frank Kovac, who ran the garage before Derek, was the same. It had almost a reverse logic; he made money so he could help people. It makes a different economic sense: you sell services that let you survive, while doing stuff you want to do. If either had to inflict serious pain on their customers to make money — they’d quit first. Yet that’s more or less the economic logic of the EU with Greece: we’re killing you (I’m thinking of the huge jump in Greek suicides) because it’s economically necessary. There’s no way anyone normal can make human sense of that.
Adam Smith, who founded modern economics, discovered the “invisible hand” operating in free markets by which, paradoxically, pursuing self-interest without concern for others, winds up benefitting everyone. That sounds pretty impersonal and inhuman. But Smith was also a moral philosopher who never lost sight (ahem) of moral, emotional, human elements in all behaviour. His The Wealth of Nations (1776) is riddled with scorn and suspicion for the motives of the rich and privileged. He admired invisibility but never trusted it utterly.
Within a century, the invisible hand of an unregulated, or self-regulated free market had created such human hell in Europe, visible to all, that child labour laws, government oversight, and unions began reining it in, successfully for a long while. Yet now in our own time, that ostensibly unregulated market has resurfaced, with Greece its signature victim.
EU headquarters in Brussels is a fine place to avoid seeing human impacts from. The Eurocrats there are as eyeless as Samson was in Gaza, about the effects of the policies they confidently impose, or the social and moral elements in economic activity that seem obvious to others. They deal mostly in financial abstractions — loans, deficits, etc. — that indeed affect prosperity. But if people can’t see the value of those policies from the ground — the cab of a tow truck or looking up at a broken clutch, as it were — then why should they trust that they’re working at all, much less working best.
Polls on Sunday’s Greek referendum are amazingly close, given the scariness of voting No. But people there at least have the advantage of being able to see the real human effects of policies they’re judging; and economic policies that make no observable human sense probably aren’t sensible.
This column was first published in the Toronto Star.
Photo: flickr/ fdecomite