History Repeats in the Greek Crisis

By Ian Morris

"Fair Greece! Sad relic of departed worth!" So said the poet Byron in the 1810s, little knowing that in the 2010s Greece's departed worth would be measured in the hundreds of billions of euros.

While I was in my 20s I spent well over a year in Greece, mostly on archaeological excavations. I then took a long break, but in December 2009 I found myself back in Athens to give a lecture. While I was there, Prime Minister George Papandreou publicly admitted that the previous government's lies about the size of Greece's debt had been much worse than anyone had realized. That year's deficit, he conceded, stood at 12.7 percent of gross domestic product, more than four times what the eurozone allowed. The Greek stock market fell by nearly 10 percent in the next two days; all the major ratings agencies downgraded Greek debt; and the long Greek nightmare began.

Even before Papandreou's confessions the country had been racked by strikes, with garbage piled in front of the upscale stores in Athens' fashionable Kolonaki district and protests blocking Syntagma Square. These disturbances, though, had been almost choreographed. Demonstrators would gather outside the flower shops at one corner of the square and police by the bus stops at another. At the appointed hour (or usually a little later) both sides would deploy. There would be tear gas, shoving, shouting and a few arrests, then everyone else would go home. But all this now changed. Scenes started to get ugly; people started to get seriously hurt.

Pundits professed outrage at the state of Greek finances, but the old Athens hands I was meeting were more cynical. Since Greece had joined the eurozone, its borrowing had been insane, inflating GDP per person from $12,400 in 2001 to $31,700 in 2008. But foreign lending had also been insane. The general feeling was that anyone who had spent time in Greece could have told the bankers how events would unfold, and yet despite having plenty of such advisers, the bankers had gone ahead and handed over billions of euros anyway, gambling that Greece was too big to fail. There was more than enough blame to go around.

That, I think, was a fair judgment. But if we want to know how the crisis will end, we first need to know what drove the collective madness of borrowers and lenders alike. Most analysts agree that both behaviors belong to broader patterns: reckless lending to the same tendency that put short-term gains ahead of long-term planning and created the subprime mortgage catastrophe, and reckless borrowing to the same failure of governance that has been revealed in all of Southern Europe's PIGS countries (Portugal, Italy, Greece and Spain).

What is Global Affairs?

But this is just the beginning of a proper explanation. Putting events since 2009 into a longer historical and broader geographical perspective reveals much more. First, we see that Greece's misfortunes, rather than being a function of political failures limited to the PIGS, are part of a single great wave of disruption that ties together the whole of Europe's periphery, including the northern shore of the Mediterranean and nations stretching from the Black Sea to the Baltic. Second, we also see that for all its peculiarities, this crisis is anything but unique. It is simply the latest iteration of a story that has been replayed dozens of times across thousands of years.

Exploring the Origins

I will begin by describing this process in rather abstract terms, then going on to look at some of its biggest examples, and finally turning to what the long-term history implies for the near future.

The motor driving upheavals like the current Greek crisis has always been innovation. There have been three innovations that have truly changed the course of history, and each began in a specific time and place: the invention of agriculture in the Middle East around 9500 B.C., the rise of states in the same region around 3500 B.C., and the exploitation of fossil fuels in Britain around A.D. 1800. Each innovation gave its adopters access to much more energy than their predecessors or neighbors. In every case, people converted this energy into more of themselves, setting off a population explosion. They then created more complex institutions to integrate their greater numbers. These required political and intellectual transformations, which gave the innovators not only hard economic and military power, but also the soft power of knowledge, sophistication and luxury.

In each case, the core area where the innovations began was surrounded by a periphery of communities that were similar to it in some ways but different in others. Looking out from the core, some people saw opportunities in the periphery. Whether by migrating out to the periphery and taking their innovations with them or by staying put and tempting people from the periphery to come into the core, they could gain wealth and power. Others in the core, however, looked at the periphery and saw danger. Marauders might plunder the core, and immigrants might dilute its culture, undermine its gods or bring disease.

People in the periphery looking in at the core had similar reactions. Some saw opportunities: By migrating into the core and taking advantage of its innovations or by staying in the periphery and emulating the new ways of doing things, they might prosper. Others saw danger, fearing that the core would corrupt, conquer, or otherwise crush their cultures.

Much of recorded history comes down to the interplay between these core-periphery relationships. Some people rushed to expand their world and embrace risk; others struggled to protect the old and keep chaos at bay. However the contest turned out, every example brought instability, upheaval and new waves of innovation along the borderlands between the two zones.

An Issue of Scale

The steadily expanding archaeological record suggests that this was exactly what happened after farming was invented round 9500 B.C. in the headwaters of the Jordan, Tigris and Euphrates rivers (a region that archaeologists call "the Hilly Flanks"). Population boomed. As farmers migrated into the periphery to find new fields and hunter-gatherers already in the periphery settled down and tilled the soil, agrarian life spread, reaching modern Pakistan by 7500 B.C. and the shores of the Atlantic by 4500. There is evidence that intense fighting took place as the agricultural frontier crept forward, but the long-term expansion of the core was inexorable.

The most important developments, though, came when people tried to establish farming in Mesopotamia and Egypt, the peripheries along the southern edge of the Hilly Flanks. Here would-be farmers could not rely on rainfall to fertilize their crops; only after about 5000 B.C., when they innovated and found ways to use the Nile, Tigris and Euphrates rivers to irrigate their fields, could farming be established.

Once established, though, irrigation farming turned out to be much more productive than the rainfall-based farming of the Hilly Flanks. Mesopotamia and Egypt went from being peripheries to being cores in their own right. Their populations exploded. By 3500 B.C., Mesopotamians and Egyptians were inventing cities, governments, writing, taxes and armies to manage their swelling numbers, and by 3000 the former peripheries had begun to dominate the old core in the Hilly Flanks.

Over the next millennium, state-level societies reran the old story. Egyptians and Mesopotamians conquered and colonized lands around them; their neighbors fought back and copied Egyptian and Mesopotamian institutions. By 2000 B.C. the whole region from Pakistan's Indus Valley to Greece was filling up with cities and states. Historians know quite a lot about how this happened, and in every case we see intense interactions along the borderlands of the expanding cores, with trading, raiding, competition and emulation accompanying the spread of state institutions. Around 2200 B.C., however, the process spun out of control on the frontiers of Old Kingdom Egypt and the Akkadian Empire that ruled Mesopotamia. It took just a few decades for contagion to leap from the wild margins to the rich cores, which collapsed in flames.

The process has been repeated again and again since then, each time on a larger scale than before. Greece played a key part in the first millennium B.C. version. First it was a periphery tempting the traders and administrators of the Persian Empire to draw it into the core in the sixth century. Instead, the Greeks held off the Persians and became a core in their own right in the fifth century, before conquering Persia in the fourth. By then, Greek traders and colonists had already turned the western Mediterranean into a new periphery (I spent my summers between 2000 and 2007 excavating an ancient village in Sicily to document just this process), and in the third century Rome converted this western periphery into yet another new core and conquered Greece.

The Dynamics of New Geography

The process always took centuries to play out, and the latest rerun is no exception. Before A.D. 1500, Western Europe was always peripheral to the richer, more developed Mediterranean world, but by 1600 it was turning into a core in its own right, thanks to its domination of the new economy that was forming around the North Atlantic. By 1800, responding to the challenges and opportunities created by this new economy, British entrepreneurs had learned to use fossil fuels to power machines, vastly increasing the energy, wealth and power at their disposal. Central and Eastern Europe and the old Mediterranean core quickly turned into peripheries of a new industrialized core in Northwest Europe.

For more than 200 years, the dynamics of this new geography have been working themselves out. For most of this period there was broad agreement within the Northwest European core on the advantages of engaging with the periphery. The forms this engagement took were constantly evolving, but finance and military might have often been at the center of the relationship.

In the 19th century, engagement with the periphery meant trading with, lending to and building railways across the Ottoman, Habsburg and Romanov empires, turning the PIGS into modern nation-states, while directly ruling the Mediterranean's southern shore. In the early 20th century it meant modernizing and financing the new states of Eastern Europe while extending direct rule to the Ottomans' Arab successor states. Between 1945 and 1989 it meant trying to roll back the Soviet Empire in Eastern Europe while simultaneously loaning it massive sums, cutting deals with odious (and often oil-rich) autocrats in the Near East and south Mediterranean, and welcoming the PIGS into NATO and the Common Market. Between 1989 and 2008 it meant extending the European Union into Eastern Europe and perhaps even Turkey, creating the eurozone, lending huge amounts of North European capital to the south and beginning the Barcelona Process to unite the Mediterranean. Since 2008, though, resistance to engagement and expansion has mounted. Euroskeptics are on the march, isolationism is increasing and, for the first time since the Treaty of Paris in 1951, there is a slim but real chance of the core itself coming apart.

The dynamics were rather different on the periphery, where 19th-century elites were often badly split. At one extreme were liberals eager to join the West European core and adopt its attitudes on markets, democracy, religion and gender. At the other were conservatives (often supported by the mass of peasants) who rejected all these things. In between were more moderate traditionalists, keen to match the wealth and power of predatory Western states but more interested in creating a rival core than in joining the Northwest European version. The details varied from Spain through Greece to Russia or Persia, but everywhere the outcomes involved revolutionary unrest.

World War I shattered this old regime, and in its wake communism and fascism emerged as new strategies to create rival cores independent of Western finance and markets. Both failed, but the Soviet-NATO standoff gave rulers all around the Mediterranean and Middle East new ways to manage not only the core but also indigenous liberals and conservatives (who, as the fall of the Shah of Iran showed in 1979, remained deadly rivals). On the whole, the PIGS, Turkey and particularly Israel moved toward the core between the 1940s and 1980s, while Arab countries were more cautious and the Soviet Union and its satellites kept their distance. When this balance broke down, Southern and most Eastern European countries positively rushed toward the core, liberalizing and taking out huge loans. Arab dictators found it harder and harder to keep their long-running juggling act going, and Islamism (and American interventionism) became much more serious threats.

Since 2008, though, core-periphery relations have gone into convulsions. First the imbalance of payments between Northwest European producers and consumers in the south and east broke down. Next, dictators from Tunisia to Syria were rocked or even overthrown by liberals. One country after another buckled under the strain of coups, civil wars and Islamist backlashes. Hundreds of thousands died. Turkey turned in illiberal directions, Israel looked for new friends outside the Western core, and Russia showed its willingness to wage war to keep the West at bay. And yet as I write these words Iran may be moving in the other direction, seemingly poised to strike a tentative deal on its nuclear weapons. Overall, the future has never looked less clear.

The Long View

Long-term history does not tell us what will happen next — whether the "aGreekment" struck July 13 will hold, whether Iran will give up its nukes, whether the Islamic State will be defeated, whether Russia will invade Ukraine — but it does suggest some broad probabilities at a more abstract level.

Overall, the big patterns of the past suggest a strong likelihood that the expansion of the Western European core will continue. Despite ups and downs, this has clearly been the trend since 1600. The odds are good that across the 21st century Southern and Eastern Europe will carry on becoming more like Northwestern Europe and that Russia and the Islamic world will liberalize. The euro will survive, European federalism will revive, and Europe's great crisis will turn out to have been its great opportunity too.

However, history also shows that other outcomes are possible. I already mentioned the case of Old Kingdom Egypt and the Akkadian Empire around 2200 B.C., when upheavals on expanding frontiers turned contagious and spread back to the core, bringing on collapse and massive mortality. Something similar might have happened in Pakistan's Indus Valley around 1900 B.C. and certainly happened in the east Mediterranean around 1200 B.C., when cities from Greece to Israel burned and a centuries-long dark age set in. From Britain to China, instability on the borders brought down great empires in the early first millennium A.D., and in the seventh century, economic, military and cultural crises on the frontier with the Arabian Desert caused the collapse of the Persian Empire and almost finished off the Byzantines.

Most likely some parts of the current crisis will end well and others badly, and the overall result will depend on which side of the balance weighs heaviest. On that score, the long-run trends and broad patterns certainly encourage optimism, but the risks remain very real, and the stakes enormous.