Obviously, this kind of metaphor, based on the morality of the household and family (sloth versus work, the prodigal child versus the good father), is a classic trope of reactionary rhetoric. The rich have been stigmatizing the poor this way since time immemorial. There’s nothing new under the Greek sun. Except that today, faced with the complexities of twenty-first-century capitalism and its financial crises, such moralizing metaphors seem to be spreading beyond the usual circles. When you can’t seem to understand the way the world is going, it’s tempting to fall back on a few basic principles. Given the extreme rhetorical violence of the media’s attacks, it’s gotten to the point where the Greek prime minister declared on his visit to Berlin: “Greeks no more have laziness in their blood than Germans have Nazism in theirs.” [...]

The problem with these household metaphors is that at the level of a country—and for individuals as well—capitalism is not just about merit. Far from it. For two reasons that can be summarized simply: the arbitrary nature of the initial inheritance, and the arbitrary nature of certain prices, especially the return on capital.

When it comes to the initial inheritance, Greece is one of those countries that have always been possessions of other countries. For decades, what the rest of the world owns in Greece (firms, real estate, financial assets) has exceeded what the Greeks own in the rest of the world. The result is that the national income available to Greeks for consumption and saving has always been less than their domestic production (after deducting the interest and dividends they pay out to the rest of the world). And that makes it rather unlikely that they’ll consume more than they produce.

In the Greek case, the gap between domestic production and national income on the eve of the crisis was about 5 percent (twice the fiscal adjustment now being demanded of Greece). In countries that have gone all in on foreign investment (like Ireland), it can exceed 20 percent, and even more in certain countries of southern Europe. One might object that these interest and dividend flows are merely the result of past investments, so it’s good and right for Greek debtors and their children to pay out part of their production to foreign creditors. Sure. Just as it’s good and right for the children of tenants to pay rents indefinitely to the children of landlords.