The Austerity Train Wreck

Mar 10, 2023 James K. Galbraith

If human error is to blame for the deadly train collision in Greece on February 28, the responsibility ultimately lies with those who devised, defended, and promoted the economic doctrines underpinning the austerity policies that were imposed on the country in the 2010s. Without those polices, this tragedy never would have happened.

AUSTIN – In a flash, the savage destruction of Greece foretold in 2015 (and before) is back in the news, owing to a grisly tragedy on one of Europe’s smallest railroad systems. On February 28, a passenger train collided head-on with a freight train traveling in the opposite direction on the same track, resulting in the obliteration of the lighter, faster passenger train.

According to The Guardian, “the trains were traveling on what appears to be a well-maintained stretch of electrified mainline.” Take a moment to let the irrelevance of that observation sink in. We are talking about a head-on collision. Of course it wasn’t the track.

Was it a “tragic human error,” then, as Greek Prime Minister Kyriakos Mitsotakis quickly announced? The stationmaster at Larissa has been arrested and faces a long prison term. How convenient that there is someone to blame.

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James K. Galbraith

Writing for PS since 2015
33 Commentaries

James K. Galbraith, Professor of Government and Chair in Government/Business Relations at the University of Texas at Austin, is a former staff economist for the House Banking Committee and a former executive director of the Joint Economic Committee of Congress. From 1993-97, he served as chief technical adviser for macroeconomic reform to China’s State Planning Commission. He is the author of Inequality: What Everyone Needs to Know (Oxford University Press, 2016) and Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe (Yale University Press, 2016).

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Ben Leet Mar 15, 2023

The war in Ukraine has a parallel history, the enormous financial powers over-riding the state's participation in and regulation of the economy. The IMF played a role and, with the assistance of the U.S., was an instrument of the anti-democratic, violent coup de tat of 2014 that overthrew president Yanukovych and started the civil war against the breakaway Donbas provinces, which had resulted in 14,000 mortalities by 2022. The Ukraine war began in 2014. An article by Indian economist Prabhat Patnaik at networkideas.org, March 2022, states, "Prior to 2014 when Viktor Yanukovych was the president of Ukraine, that country had been in negotiations with the IMF as part of its trade integration with the European Union. The IMF had asked Ukraine to undertake a number of “reforms”: to cut wages; to “reform” and “reduce” the health and education sectors, which in Ukraine were major employment-generating areas; and to cut the subsidy on natural gas that was provided by the State to all Ukrainian citizens which made energy affordable for them (Bryce Green, FAIR, February 24). President Yanukovych was reluctant to implement these “reforms” which would have imposed a heavy burden on the people; he stopped negotiating with the IMF and started negotiating with Russia instead." Private capital has only one goal, the acquisition of more capital, even at the destruction of the host population. Witness the extreme inequality of Mexico, for instance, that has been unable to ameliorate the suffering of over half of its population. Corruption, poverty and danger (with a homicide rate 28 times that of Europe) are the primary characteristics of Mexican society.
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alex Finch Mar 13, 2023

„The savage destruction of Greece“? Median net Wealth per adult 2022: Germany $60.600, Greece $55.000. If the free-market economy and heartless austerity are to blame for this train crash, what about the fact that today homeownership in Greece is 75%, while in Germany it’s barely 50%, and apartments in Athens are more expensive than in Hamburg or Frankfurt, not to mention all the multimillion dollar properties on the Greek islands? In 2016 over 30 people died in a head on train crash in Italy, in 2010 in Brussels 19 people died, in Spain 2013 death toll 80. Without capitalism there would today be a lot more train, plane and car crashes, not less!
- Ben Leet Mar 16, 2023
  
  Wealth per adult, Greece, in 2005 was $114K, in 2010 $144K, in 2022 $108.
  In Germany, in 2005 139K, in 2010 $181K, in 2022 $261K. German does not share its wealth. Portugal has higher median wealth per adult than Greece. Greece doesn't look so bad as Galbraith portrays it, but it lost wealth at the median 2005 to 2022. And between 2010 and 2015 lost 1/3 of its wealth. From Credit Suisse Bank's Global Wealth, Databook.
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- alex Finch Mar 13, 2023
  
  Austria has a fabulous railway system run by the government. The Austrian ÖBB employs 10x (yes ten times) as many railroad workers per capita than railways in America. Over 40.000 people work for the ÖBB, a powerful lobby group in a country of just 9 million. The ÖBB requires huge amounts of taxpayers money every year, invests billions of euros (a recent train station upgrade for a town of just 6.000 people cost €80-million, but exact costs are strictly confidential because Austria has no Freedom of Information Act). Oh, and by the way, there have been several head on train crashes in Austria, for example 2015 (driver error), and again in 2017….. pure luck that only few died.
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Frank Youell Mar 12, 2023

'Austerity' is a myth. Check the actual facts. 'Austerity' in Greece has never happened. Check the trade (goods and services) deficit statistics for Greece. In not one year (since 2000) has Greece run a surplus. Look are the World Bank data for Greece. See https://data.worldbank.org/indicator/BN.GSR.GNFS.CD?locations=GR

The budget deficit numbers are almost as bad. Greece has run a budget surplus in only 4 years since 2000. The surpluses were small. The deficits were huge. See https://countryeconomy.com/deficit/greece for some actual data.
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