Plato’s Ideas On Society Structure

Throughout this essay, I will discussing the nature of Plato’s thought in regards to who should rule an ordered society. I will do this by looking at the works of Plato in order to gather ideas, while investigating other key texts such as Jonathan Wolff, the Stanford Encyclopedia of Philosophy and other scholars in order to discuss, support and compare Plato’s hypothesis of a philosopher king rule.

The Republic deals with the idea of ‘justice’ throughout all the books, and mostly what makes a ‘just society’ as well as the question of: how can people act justly? In order to achieve this, Plato outlines various conversations throughout The Republic between characters including Socrates, to outline the definition of justice and how to achieve an ideal city society. Furthermore, Plato introduces the idea of a class system which I will be discussing in more depth throughout the essay. However a brief outline: Plato suggests that there are three classes that are represented by ‘bronze, silver and gold’, children born in the ideal polis will get an opportunity to move through classes on a social mobility scale. For instance, Plato says: “occasionally a silver child will be born of gold parents”. (Plato, 2007, P116). Judging by these views about class, it’s understandable why some believe Plato’s ideal ruling borders on a dictatorship due to structured classes in his version of an ideal society. Moreover, the social mobility scale aim was to organise citizens into having different careers and responsibilities in the city, so it would function smoothly, which does allude to the idea of Plato wanting to have control the city’s population when the philosopher kings have ultimate power.

Democracy is a political system that most of the Western world at least, are familiar with. However, one of the most notable points from Plato’s works is how he believed democracy simply causes corruption and would lead to inexperienced people making decisions. This is because; democracy allows people with limited knowledge on situations to contribute to decisions that affect lots of people using their limited knowledge. Although it could be considered a fair system, Plato viewed it as creating more problems than it solved, leading him on to make his famous ship analogy: “… a true captain must pay attention to the seasons of the year, the sky, the stars, the winds, and all that pertains to his craft, if he’s really to be the ruler of a ship.” (Plato, 2007, P204). By asking if the captain truly knows how to rule a ship by becoming aware of the environment around them, Plato is emphasising the need for a ruler of a society to have the most knowledge in order to be successful. Furthermore, Plato uses this analogy of the ship to convey why democracies don’t work; an inexperienced captrain with limited knowledge on how to run their own ship wouldn’t be successful.

As previously stated; Plato introduced the idea of everyone in an ideal society having different roles or classes in order for it to function correctly. For example, in Book 2, Socrates introduced the concept of ‘specialization’ which highlights this idea of different people exercising different roles that match their personal abilities. He explains this by: “the result… is that more plentiful and better quality goods are more easily produced if each person does one thing for which he is naturally suited, does it at the right time, as is released from having to do any of the others.” (Plato, 2007, Book 2). It was put forward that everyone would have their different roles in society, further alluding to the idea that philosopher kings would have their special role of being the leaders. Due to the knowledge and reason that philosopher kings possess, Plato suggested they would be the best rulers of the ideal society. According to Plato, democracy doesn’t work as inexperienced people have the opportunity to contribute to decisions that they might not be knowledgeable about, so putting philosopher kings in charge guarantees that decisions will be made by people with the knowledge of how to reason.

To describe the society in more detail; there are other classes and roles in Plato’s ideal society that would contribute to the city being ‘just’. For instance, Plato introduces the ideas of guardians, auxiliaries and producers who contribute to the ideal Polis through their own ways. For instance, the guardians were the philosopher kings who would rule and make decisions, auxiliaires were the warriors who protected the state from outside enemies and the producers would contribute to the state by farming or creating produce. (Plato, 2007, Part 4). Plato devised the city in a way that the philosopher kings would be at the top of the hierarchy and ultimately have control over what occurs inside of it. For example, Plato thought taking children away from their families and training them to fulfill their potential in one of the three roles would be the most beneficial way to run the state. There was also no rights of property to be exercised by any citizen, highlighting the control that the philosopher kings would have over everything.

As briefly mentioned; Plato focuses heavily on the idea of ‘the soul’ throughout The Republic, linking it to rulers and creating a parallel with the three parts that exist within a human soul and the three classes in society, it’s officially called the ‘tripartite soul theory’. The parts of the soul that were placed forward were: spirit, appetite and reason. (Lorenz, 2009) . Plato believed each part of the soul would ‘rule’ different things in a person, for example the spirit part of the soul could possibly encourage a ruler to love power too much, thus jeopardizing the state. Going back to the idea of the philosopher kings ruling, Plato thought that philosophers would be best suited as they hold more ability to use the rational part of their soul, thus giving them knowledge and not a craving for power that other rulers might have, asserting that philosopher kings would therefore be the most just rulers of the city.

Karl Popper is a scholar who has openly critiqued Plato in his work; ‘The Open Society and its Enemies’ for his ‘totalitarian views’. More specifically, Popper suggests that the idea of philosopher kings ruling was primarily for Plato to become an elitist ruler himself, thus sending the perfect city into a totalitarian dystopian world. In his works, Popper goes on to mention how Plato associates tyranny as something that follows on from a democratic way of ruling. In the Open Society, Popper paraphrases Plato by stating “tyranny is often brought around by a popular leader who knows how to exploit people” (Popper, 1945, P30), and emphasises how Plato truly looked down on tyranny. Nevertheless, Popper takes the way that Plato emphasises his love for the perfect city to have true freedom and counters it: “totalitarianism always professes a love for ‘true freedom’” (Popper, 1945, P150). As we can see, Popper is one of the most celebrated critiques of Plato’s ideas and his comparison between Plato’s idea of philosopher kings ruling and totalitarianism is something I can agree with as it seems like an opportunity for Plato to take power for himself.

To summarise Plato’s arguments; the belief he held about philosopher kings ruling was primarily due to his theory on the tripartite soul, his dislike of democracy and his goal of having a just city. Whether or not this belief is justified in itself or whether it was an attempt by Plato to take power for himself has been largely debated throughout history. Personally, I disagree with Plato’s ideas that philosopher kings should ultimately be the ones that rule on the basis that the situation with this type of ruling would most likely gradually worsen over time. Namely, the idea of a tyranny being created by a group of people who long for power is one that other philosophers have taken issue with while discussing Plato’s ideas. Moreover, one could say that Plato’s ideas are morally questionable, due to the fact that he likely wanted more power in his ideal Utopian society, outlining the reasons as to why he was so adamant about philosopher kings holding a sort of ‘ultimate ability to reason’ that regular citizens simply didn’t possess. Essentially, I disagree with this sort of society as it would also create a type of elite class system which could ultimately lead to a revolution, making Plato’s ideas unfeasible at best and precarious at worst. In this essay, I have successfully outlined what Plato’s philosopher king theory is, while showing my own opinions on the matter coupled with criticisms and explanations from famous scholars, such as Karl Popper, to assess the theory in whole and reach the conclusion that I disagree with the ideas that Plato has put forward.

Philosophical Ideas And Concepts Of Plato

Introduction

Plato is broadly viewed evenly one of the superlative and most operant philosophers in the western custom. His political school of thought is held in too difficult value, and is the originally comp political thought we believe. evenly with early immense figures, Plato’s political supposition was non alone section of his overall philosophic scheme just deep molded away his accessible and political destiny. Plato’s political receive was 1 of universal decompose and decrease. in his conception, the ancient polis, the briny subject of which was inculcating its right values, was below round from forces of republic, individuality, and imperialism. throughout his deeds Plato defended the ancient polis and argued off the demand to trace values of justness and the gleaming virtues instead than secular goods such equally abundance and repute.

Plato was ampere classic Greek philosopher born 428-7 B.C.E and died in 348-7 B.C.E at the age of 80-81. The threesome of Plato, Socrates (his instructor) and Aristotle (his scholar) they set the basics of Western school of thought. He was ampere mathematician and also a philosopher, founder of an school in Athens, which was primary academy which imparted higher stop training to students.

Socrates has a enormous performance of his thought and teachings. Plato’s family did have political connections they were not admirably. His uncle (Charmides) was a member of ‘thirty Tyrants’ who ruined the Athenian commonwealth in 404 B.C.E. people know him by the mention of Plato, his tending mention was Aristocles spell Plato was his byname inclined to him because of his enormous eyebrow. Plato began his philosophic vocation below the counselling of Socrates. When Socrates died he travelled to Egypt and Italy studied inwards Pythagoras and so remained equally an adviser off the rulers of Syracuse. When he returned to Athens around the age of forty he started his own academy, where he well-tried to reveal the Socratic mode of education to his students. The academy operated trough 529 A.D. later which it was closedin, thought it was a curse to Christianity.

Objectivity of values

Plato argued strongly in sustain of the objectiveness of values such equally nicety, excellent, and looker. honest values country those that live exterior of the mortal and are non composmentis subordinate abreast her/his insight or concept. … His hold accuracy contains his about noted averment; ‘humanity area the dispose of whole matters.’

Plato’s metaphysics dualism:

Plato’s divided world into two different realms.

  1. The intelligible ideas or reforms (being)
  2. The perceptual world we see around(becoming)

Theory of Forms:

The ‘Theory of Forms is Plato’s thought that the somatic world is non the suggestive true universe which we active in simply the suggest of it. Plato rundle of forms in formulating his result to the trouble of universals. These forms domain conceptual delineation of matters we look about us.

The highest form:

The create of the excellent (much taken equally Plato’s god), it is the final objective of cognition and it sheds moderate inside all alternative forms.

Plato compares the design of the superior to the sunlight which sheds its moderate to the matters in the perceptual universe and create them seeable.

Platonic ideas or reforms:

The perceptual creation and whole the matters in it country, immoral copies of its understandable forms and ideas that exists in an perfect or religious universe.

The forms and ideas country stable and complete and are only by the utilize of immoral(non acceptation insight and vision).

Platonic Scholarship:

Plato’s thoughts region much compared to his pupil, Aristotle’s views that absolutely sunless Plato in the middle Ages that everybody referred him evenly ‘The Philosopher’. still the look of Plato’s plant continued in twisty empire. The medieval platonistic philosophers did non contain entrance to the deeds of Plato nor did the western culture. They were frank Constantinople’s epoch when brought away George Gemistos Plethon.

Important Analogies:

Plato reinforced his place inside the connection of an mortal being. he believed that the virtues of an person and of the region were indistinguishable. he was of the thought that an somebody presented around the wish features and qualities inside a littler descale as fellowship on a larger plateful.

He compares the brain to a shuttle cagein where cognition is relish birds, flutter, where you resolve to approach off matchless belief and acquire the immoral one.

Plato’s Ideal State:

Plato’s philosophic politicaltheory had many accessible implications, specially on the thought of absolute location or administration. Plato declares societies hold a three-party class constitution matching the structure of the individual soul. The structure of the person soulfulness stands for unlike power of the personify.

“Until philosophers are kings or the kings and princes of this creation own the flavour and the ability of schoolofthought and political immensity and wiseness edge in one, cities exit never comply from their evils.” (Plato)

  • Productive: Which represents the belly. (Workers, citizenry)…. Because farmers, merchants and former people have moderated desires.
  • Protective: Which represents the breast. (Warriors, soldiers or Guardians)…. Because soldiers can show fearless actions.
  • Governing: which represents the hostile. (Rulers or Philosopher Kings)… because rulers can take fresh dicisions Rational Soul (thinking)

According to Plato a state is made of different kinds of souls, which will weaken form nobility (rule by the better) to timocracy (normal by the wonderful), so to oligarchy (normal by the few-floweredleek), then to state (formula by people) and lastly to absoluteness (formula by one person, a tyrant). He is trying to admonish us almost the unlike tender of rulers that canful pattern the location and which heady souls and better elect as advisors to the rulers.

The intellectual soul (brain or intellectual) is the thought section within each of us, which discerns what is real and not simply obvious, judges what is right and what is fake, and sagely makes the intellectual decisions in conformity with which human living is most decent lived.

The attractive person (will or willing), on the alternate hand, is the effective section; its concern is to effect out the dictates of close in accomplished life, bravely doing anymore the intellectual has compulsive to be better.

Finally, the appetitive soul (convulsion or concern) is the section of toeachone of us that wants and feels many matters, nearly of which moldiness be deferred in the scene of mental pursuits if we are to finish a useful measure of self-discipline.

In the Phaedrus, Plato presented this opportunity compensate more diagrammatically, comparison the mental person to a charioteer whose fomite is worn by deuce horses, one great but fierce (affect) and the alternate disciplined and obedient (will).

Plato presumed that future guardians will typically be the offspring of those who shortly hold allied positions of honor. If citizens express any dissatisfaction with the roles to which they are assigned, he proposed that they be told the ‘favorable untruth’ that human beings (like the metals gold, silver, and bronze) contain unlike natures that serve each of them to a especial matter inside the activity of the company as a entirely.

Justice itself is non the unusual obligation of any one course of citizens, but emerges from the harmonious interrelationship of each element of the company with every other. Next we’ll see how Plato applied this opinion of the virtues to the lives of single human beings.

In the context of his larger argument, Plato’s theory of human nature provides the foundation for another answer to the question of why justice is better than injustice. On the view developed here, true justice is a kind of good health, attainable only through the conformable conjunctive danger of the three souls. In an unfair person, on the other hand, the disparate parts are in eternal trouble, just coexistent with each other in an unwell, poorly-functioning, dis-integrated personality. Plato highly-developed this thought in greater particular in the last books of The republic.

Plato’s idea for government:

Platos government would have

  • Multiparty system
  • Periodic elections
  • Professional civil service(union)

Features of an Ideal State:

  1. Rule of Philosophy: Plato was of the idea that in an independent region the philosopher-ruler should be salient. He should has a diversify view of wholeness of cognition. Philosopher-kings are resistant from the victuals of jurisprudence and populace idea
  2. No unqualified absolutism: Although, neither, there is any control of law nor of world thought across philosopher-rulers but that is non an independent autocracy. It is not all positiveness, because formula of philosophical system is not free from the staple articles of the composition.
  3. Control over the education system: Philosopher rule should conduct the educational activity system in an independent region Philosopher.
  4. Justice in ideal state: Justice is the main feature of Plato’s Republic and it is also present in his ideal state. Justice is the adhere which binds every extremity of companionship unitedly. It forms a congruous union of individuals.
  5. Censorship of art and literature: In ideal state, there should be a absolute censoring of art and literature. It is important so that nil evil things might falls into the custody of the teen individuals.
  6. System of Communism: Plato was of the thought that protector class should live below the scheme of communism of misadventure and family. The rulers and soldiers do not possess any property of their own.
  7. Equality among men and women: According to Plato, suitable opportunities should be given to both men and women for their economical, social, intellectual and political liftup. We can say that Plato was the first feminist of his time.
  8. Principle of Functional Specialization: Plato was of the thought that due to multiple wants, an single could not accomplish all his desires by himself lonely due to lack of capacitance. Thus co-operation among individuals should be important to fulfil their common desires. some people are specialised in performance some distinct tasks.

Criticism:

  1. Plato reinforced his ideal state on the connection of single and this recognition leads to abashment. He failed to specialise ethics from government. His ideal state is based not simply on similarity but almost recognition betwixt the someone and the state, which is wholly immoral.
  2. Plato fails to sentence the instauration of slaveholding and value it as essential evil.
  3. Plato’s system of communism of women and temporary marriage is depraved and unethical.
  4. Plato is a disciplinarian quite than a political escapist. His supposition that the state should control the full lives of its citizens is fake and inimical to human indecency.
  5. By the system of operative specialisation, Plato tends to shadow the personality of the person. There is no hypothesis of any full developing of man personality in his ideal state.
  6. Plato actually ignores the abase class in his ideal state which forms the huge majority of universe. Such carelessness may distribute the bonton into two opposing groups.

Conclusion

Plato’s performance as a political philosopher may be seen in that he believed that there could be a organicstructure of cognition whose proficiency would make it proper to heal political problems, such as factionalism and the disgust of morality, which can confer a city to a extenuation. The philosophicalsystem of the privilege of interests, loveliness as the basis of the best political notify, the mixed composition, the rule of law, the differentiation between good and deviated forms of conduct, expert wiseness as the quality of good leaders, and the grandness of chastity and transcendency for politics are the political ideas that can justly be associated with Plato. They have deeply influenced subsequent political thinkers.

Should the Parthenon Marbles Be Returned to Greece? Essay

I strongly think that the Parthenon marbles taken by Lord Elgin form Greece should be returned back to Greece because Lord Elgin did not have permission to take the marbles. The Greeks couldn’t do anything to stop Elgin at the time as they were part of the Ottoman Empire. All the other museums are retiring stolen artefacts so why shouldn’t the British museum do the same thing to stop 2 centuries of bad feeling?

Lord Elgin did not have any permission to take the Parthenon marbles and so they should be returned because he only had permission to take pieces from the ground. And in fact, we are not even sure if he had permission, since the English translation of the 1801 document was found to be a forgery. But even if it was real, by royal decree, it basically gave Elgin permission ‘to examine and view’, so the Sultan of the Ottoman Empire probably never thought that Elgin would remove the paintings, sculptures or marbles. Due to the fact that Lord Elgin took the marble without permission and therefore technically stole the marble, and since the marble was stolen, the British Museum must return it.

The Greeks could not do anything to stop Lord Elgin, although they wanted to, they could not, since they were no longer an individual country and were united into part of the Ottoman Empire, and the Ottoman Empire did not allow the Greeks to express their opinions and feelings, or prevent Elgin from taking Parthenon marble. It should now be clear that now that the Greeks are no longer part of the Ottoman Empire, they immediately voiced their opinion and demanded that the Parthenon marble be returned to them, however, this was almost immediately denied. But now the British Museum must rectify the situation by accepting their demand and return the Parthenon marble to the Greeks once and for all.

“All cultural treasures from ancient civilizations belong in the place that they came from”. This was a famous quote that a lot of big and respectable museums such museum such as Sweden, Germany, America and the Vatican all have acknowledged and agreed upon this quote and returned all the artefacts back to the Acropolis. Since all other museums have seen the point in this, the British Museum should do the same, rip a leaf out of their book and return the marbles back to Greece, and finally put an end to all the grievances they have had against each other for the last 2 centuries because for possession of the Parthenon marble.

In conclusion, I strongly believe that the Parthenon marbles should be returned because, in the first place, Lord Elgin never had permission to take the Parthenon marbles, so formally Lord Elgin stole them. Then the Greeks were not an independent country, since they were part of the Ottoman Empire, so they could not take any action or express their opinion against Elgin due to the taking of the Parthenon marble. Last but not least, the quote “Cultural treasures from ancient civilizations belong in places where they came from” is a quote that many major museums, such as Sweden, Germany, America and the Vatican, have agreed to and returned the Parthenon marble, and the British should do the same.

The Fundamentals Of Plato’s Philosophy

This essay will discuss Plato’s conception of philosophy; his approach, thoughts, and influences in regards to the discipline of philosophy. Perhaps one of the most influential philosophers of all time, a lot of Plato’s work has influenced how we as human civilization think of ethics, epistemology, logic and mathematics. The primary concept that will be examined in this essay is Plato’s theory of Forms, which could be argued as his most substantial contributions to philosophy. Plato’s influence on western civilization can still be felt in this day as a backbone of Western philosophy. The traditional school of thought being that “essence” or “truth” is hidden behind the many phenomenon of the world that people see. This philosophical concept, credited to Plato, holds the view that the physical world is not as “real” or true as eternal, absolute, steadfast ideas.

The fundamental concept behind Plato’s theory of Forms is that the physical world which we see and experience is in fact not the “real” world and that an “ultimate reality” exists beyond the physical world that we live in. This could be understood as two different realms; the physical realm which we as humans experience and interact with on a day to day basis which is constantly changing and imperfect, as well as a spiritual realm which exists beyond the physical. Plato calls this “spiritual realm” the “realm of Forms” and asserts that the physical realm is only a “shadow” or “image” representing the true reality of Forms. The changes of the physical world include nearly every single aspect of it that we experience. From the world we live in; the changes of seasons, terrain and nature over time, to our individual senses; what we see, hear or taste, to the various objects which exist such as tables and chairs. The development of Plato’s theory of Forms asserts that our thinking involves a level which does not come from experience since it does not allow us to achieve or see the absolute ideas or truth. He identifies our knowledge of ideas as someone he calls “reminiscence”; according to Plato, our immortal souls lose the clear recollection of ideas when born (or reborn) into human bodies. Thus, the famous quote ‘I know that I know nothing ‘derived from Plato’s account of his mentor Socrates is understood by Plato’s theory as “I know I have forgotten”.

Plato contends that whilst the physical representation of all things exist in a constant state of change, it is their Forms which represent the “essence” of our various experiences and the objects that we are able to discern. Without these Forms or essences, we would be unable to comprehend what an object truly is and this is what Plato means when he refers to in his use of terminology of “Forms” which are his representation of abstract, perfect and unchanging concepts or ideals which transcend time and space. A rather simple illustration of this concept could be taken from the field of geometry. Take any shape, for example a perfect triangle as defined by a mathematician, and attempt to recreate it. Our attempts may fall short; perhaps due to a line that is not perfectly straight, an angle that was not quite right and so on, but the attempt made by people to recreate Form can only be understood by others since they themselves hold the intelligibility of the Form of a triangle which exists as it remains a universal truth over time even if we, the observers, age and pass away. This concept of course, applies not only to geometry, for an object such as a table or a chair it could be said that there are countless different variations in the world and over time, and thus it is their “Form” and “essence” which encompass all of them.

Plato’s theory of Forms is extremely difficult to comprehend and perhaps even more so when the issue of hypothetical Forms is brought into question. If, as he claims, there is a Form for everything that could possibly exist which is transcendent of space and time, a universal truth, must there exist a Form for any objects that do not yet exist? If it is true that there is a Form for everything that could ever come into existence then must that mean there is a Form for all things that we as humans will never think of or experience? Indeed, as we are limited in our civilization and existence, it must also be true that, at least for the human race, some Forms may never be realized and thus certain universal truths will continue to elude us. The complications that come with understanding this concept stems from the idea of considering physical objects in an abstract manner. According to this theory, there is no object that is a perfect representation of the idea that it represents and each object in the world is merely a flawed image of the perfect Forms that it attempts to represent. Since the Forms are the perfect versions of the corresponding objects in the physical realm, they are considered by Plato to be the most real things in all of existence.

Plato‘s theory of forms can be seen as a broad conception of philosophy which conveys his perception of reality and knowledge. It is commonly seen as a possible solution to the problem of universals which questions the existence of properties which two or more entities may hold in common and these assorted properties such as qualities and relations are summed up as universals. For example, three triangles will share certain common qualities of the shape such as internal angles, and a pair of biological siblings will share the common property of being the descendants of the same people. Whilst these properties may be, and are often, discussed, the debate over this problem arises over the question of whether these universals exist in reality, or simply in our thoughts. Taking a Platonic position using the theory of Forms, it is understood that true knowledge is transcendent of time and space and must be unfailing. As such knowledge of Forms would be “true” knowledge whilst it would be impossible to have knowledge of their physical imitations since the representations that we see in the physical world are subject to change. Since knowledge is unchanging, therefore we can at most hold opinions of the physical world and not true knowledge.

A simple example that could be raised is the color blue, and what it truly is. As we understand, it is often used in description of both water, and the sky. However, the color which we believe we often see when looking at either water or the sky is simply a characteristic of our human senses; our visual representation dependent on the wavelength of light that is reflected at the images presented before our eyes. Using Plato’s perspective, the world that is sensible or realistic to us is imperfect and only partially real, like a shadow imitating the real world, the realm of spirits. Indeed, in Plato’s own work “The Republic” he presents the Allegory of the Cave (514a–520a) which is also known as “Plato’s Cave”. In this story, the Cave is described as having a line of people chained within a cave for their entire lives facing a blank wall within and shadows are projected upon the wall using objects behind the people but also in front of a fire behind them. The people may look at the shadows of objects projected upon the wall and name them, however, having never truly seen those objects firsthand, they should have no way of knowing what they themselves are talking about. However, since the shadows are the reality for those prisoners, there is nothing more they could understand other than this false projection of reality.

Although the theory of Forms is often considered a possible answer to the problem of universals and provides much subject for reflection, it also holds its own issues or downfalls as attested by the “one over many” argument which remains unsolved and is noted by Plato himself in “Parmenides”. This refers to the failure in evaluating the exact relation between the existence of the true Form suggested by Plato and its many possible representations. The issues raised by the problem of “one over many” is two-fold; first from an ontological one and the second, a linguistic one.

In part of his dialogue of Parmenides, Plato attempts to explain the relationship between the forms and their representations in the physical world through the use of his participation metaphor which states that for example an object is beautiful because it participates in the Form of Beauty. However this raises the question of what is meant by “participation” in this case. This then leads to certain absurdities brought about by the combination of the theory of Forms and what is known as “the Pie Model” which is used to attempt to explain the relationship between a Form and its partaking relation in which the participants of a Form literally get a share of the Forms of which they partake, in a way that is similar to how those who partake in a pie literally get a share of that pie.

Macroeconomic View of the Greek Economy in the Period 2003–2019

Greece currently stands as the 51st largest economy in the world and are well known for their rocky economic history. Since joining the European Union (EU) in 1981, Greece had a steadily rising GDP, reaching its peak in 2008 at 354.5 billion USD (World Bank, 2019). However, in 2009 the country’s economy took a turn for the worst; declaring that 13.9 percent of its GDP would be deficit which is well over the EU’s maximum of 3%. From then onwards Greece has found it hard to run its economy and was bailed out by the International Monetary Fund, the European Commission and the European Central Bank on the premise that they would enforce strict austerity measures. This paper seeks to explore how changes to GDP, unemployment and inflation, over the past 15 years have shaped Greece’s economy and provide policy suggestions in order to improve economic growth in the future despite the turmoil they have face.

Gross Domestic Product

The downturn in Greece’s economic growth can be attributed to the debt accumulated as a result of the Great Recession in collusion with the Greek government’s financial profligacy. In 2009, Greece violated its growth and stability pact budget deficit criterion of no more than 3% with the EU, with a deficit of 15.4 percent (New York Times, 2010). There has been a decline in economic growth per capita since 2008, beginning at -7.4 percent growth year on year in 2009, by 2013 the economy had contracted by 26 percent (Dimireva, 2017), therefore people had less money to spend as taxes were increased and pensions were cut according to austerity measures.

The Greek government made economic decisions in a bid to keep their voters happy, “both parties (PASOK and the New Democracy Party) lavished liberal welfare policies on their electorates, creating a bloated, inefficient, and protectionist economy” (Picardo, 2018). Greece is a welfare state that provides its people with a number of services and a strong example of their poor fiscal etiquette would be salary increases for workers in the public sector. Wages were increased yearly but not on the basis of productivity and performance. This allowed many to retire early, redacting the labor force whilst also reducing incentive for workers to be productive as they assumed that wages will increase regardless. Workers were also offered extra payments during December and Easter to assist with holiday expenses, which was a political decision. Despite government expenditure and transfer payments increasing, consumer expenditure and taxes did not. This caused the government to fall further into debt as they are exceeding the amount of money consumers are spending in the economy. Additionally, consumers most likely knew about the economic downturn and are aware of being encouraged to spend in the economy however fears of this becoming worse stunts consumers from spending therefore they keep it instead. This discourages economic growth as they were running into deficit that they could not breakeven with consumer expenditure.

Greece also has an unfortunate history with tax evasion, a third of Greeks who are self-employed are grossly under-reporting their income, this is evident as more than 100% of the reported income of the self-employed in Greece’s profession classes is going towards paying off consumer debts (Artavanis, Morse, Tsoutsoura 2012). This indicates that the oligarchs are avoiding their tax payments however the government’s budget is accounting for each person to meet their appropriate tax payments, tax evasion prevents the government from generating the expected revenues in the budget hence increasing the deficit.

The lack of productivity, excessive tax evasion and poor expenditure management resulted in the government resorting to extensive loans in order to keep afloat, increasing their level of public debt and in turn reducing the capacity at which their GDP could grow. This is because government expenditure increases proportionately to the amount of debt that is taken up, as the government has to service the new debt hence why GDP growth is affected. As the economy shrunk due to the lack of economic growth, so did tax revenue as the economy is what the government taxes, which sets the cycle up for the years to come.

Unemployment

Greece’s unemployment is at its lowest in the past 6 years at 17% in June 2019 however it is still the highest rate in the EU which in contrast has an average of 6.3%. Despite its improvement, we still see a large rate of unemployment, a large underlying cause of this is youth employment.

As of April 2019, the youth unemployment rate was 33%, which meant that close to half of those ages 15-25 are unable to find employment. In Greece the minimum wage is calculated differently for those under the age of 25, often the youth are paid less for equal labor than their older counterparts. When this wage is set above the market clearing rate, it separates workers into those who get a job and those who don’t, this is similar to the situation in Greece. Youth unemployment is also boosted by the large delay in the transition from education to work. Individuals who have studied with the intention of receiving higher wages are often stuck without work for long periods of time. Austerity measures have also made it so that it is cost efficient to fire workers that have the least skills or experience (Tubadji, 2012), alongside lower wages the youth are discouraged from joining the labor market.

The largest consequence of youth unemployment is the loss of labor to emigration. When jobs aren’t available in the market, those who are motivated and skilled have incentive to find substantially higher wages elsewhere therefore they leave the country. For Greece, this means that those who are skilled and able to work are leaving and their supply of skilled workers for the present time as well as the future is reduced, loss of labor means lower production of capital which means prices of goods increase and people are less likely to spend, overall, negatively impacting the economy.

Inflation

Inflation is defined as being an increase in the price level of goods and services within an economy, this is measured through the consumer price index (CPI). Countries have the capability to experience a negative form of inflation, referred to as deflation, as is the decrease in the price level of goods and services within an economy, still being measured through the CPI. Countries such as Greece have experienced 5 recorded years of deflation, with the largest being during 2015 with a deflation level of -1.7%, in contrast inflation sits at 0.2% as of April 2019. Greece is characterized by a weak inflation rate that is due to both international factors such as the euro/dollar exchange rate as well as the drop and all passes and domestics ones such as cuts in the value added tax (Alpha Bank, 2019).

Joining the eurozone gave Greece the illusion of being a safe place to invest, missing the factors that have the potential to influence inflation levels are the lack of foreign investment, interest rates on sovereign debt as well an absence of competition in the product market. Greece has thus far been unable to successfully attract significant foreign investments, which is crucial to bridge the ever-growing investment gap with Greek funds (PWC, 2017) This gap arose from being dependent on domestic capital which adversely impacts competitiveness and growth. Greece not only had loans from other countries but also the Troika, who initially demanded high interest rates on these loans.

Greece was also experiencing a high cost of living with average food prices exceeding its EU counterparts, which is unexpected. Tagaris and Wheatley (Reuters, 2012) wrote “if costs and prices were lower, exporters would be more competitive and people’s shrinking pay packets would stretch farther”, this would assist in the large decline of consumption. Due to the lack of competition in Greece’s markets, corporate monopolies have taken advantage of Greece’s situation and raised prices in order to profit.

Policy Recommendations

Greece has the potential to rise above their poor economic history and improve for the future. It can be suggested that in order to improve its economy, Greece should invest in education. An Adults Skills Survey conducted by the OECD shows that despite high education attainment populations have low skill levels. This calls for a need to build a “nation-level consensus on what tertiary education is for”, as well as improving the quality of education and how this is reflected in the labor market. So far Greece has failed to successfully promote employment in young graduates which has encouraged emigration and increased unemployment, deepening their economic disposition. Bringing awareness and support to the education sector may improve the state of Greek’s labor market and promote discouraged graduates to enter the job market. Improving education will set in motion an overall incentive to create more jobs whilst overall “strengthening firms’ incentives to invest and innovate” (OECD, 2018) which is vital to raise wages which then in turn motivates the unemployed.

Greece’s economy could also benefit by improving both their fiscal and monetary policies. Greece, now without the burden of the bailout program, could lower tax rates in order to promote investment and social spending (IMF, 2019). Efforts must be made to create a more competitive market in order for prices in the market to more closely reflect wages rather than being bloated by monopolies. Buckling down on corruption will help minimize Greece’s battle with tax evasion which will in-turn benefit business and strengthen the governments’ fiscal ruling.

Conclusion

Greece has faced many adversities to their economy over the past 15 years, although they have scraped through and show an overall sign of improvement there are still improvements to be made in order to stabilize the economy and enhance its growth.

References

  1. https://www.weforum.org/agenda/2018/07/eu-unemployment-rate-falls-to-near-pre-recession-low/
  2. https://www.imf.org/en/News/Articles/2019/03/11/na031119-greece-economy-improves-key-reforms-still-needed
  3. https://www.oecd.org/economy/the-greek-economy-is-recovering-improving-debt-sustainability-tackling-poverty-and-boosting-investment-are-vital-to-sustaining-the-positive-momentum.htm
  4. http://www.ekathimerini.com/243540/article/ekathimerini/business/alpha-bank-why-inflation-remains-anemic
  5. https://www.pwc.com/gr/en/publications/greek-thought-leadership/investments-in-greece-recession-recovery.html
  6. https://www.independent.co.uk/news/world/europe/how-to-fix-greece-a-seven-point-plan-for-economic-salvation-10144753.html

Macroeconomic View of the Greek Economy in the Period 2003–2019

Greece currently stands as the 51st largest economy in the world and are well known for their rocky economic history. Since joining the European Union (EU) in 1981, Greece had a steadily rising GDP, reaching its peak in 2008 at 354.5 billion USD (World Bank, 2019). However, in 2009 the country’s economy took a turn for the worst; declaring that 13.9 percent of its GDP would be deficit which is well over the EU’s maximum of 3%. From then onwards Greece has found it hard to run its economy and was bailed out by the International Monetary Fund, the European Commission and the European Central Bank on the premise that they would enforce strict austerity measures. This paper seeks to explore how changes to GDP, unemployment and inflation, over the past 15 years have shaped Greece’s economy and provide policy suggestions in order to improve economic growth in the future despite the turmoil they have face.

Gross Domestic Product

The downturn in Greece’s economic growth can be attributed to the debt accumulated as a result of the Great Recession in collusion with the Greek government’s financial profligacy. In 2009, Greece violated its growth and stability pact budget deficit criterion of no more than 3% with the EU, with a deficit of 15.4 percent (New York Times, 2010). There has been a decline in economic growth per capita since 2008, beginning at -7.4 percent growth year on year in 2009, by 2013 the economy had contracted by 26 percent (Dimireva, 2017), therefore people had less money to spend as taxes were increased and pensions were cut according to austerity measures.

The Greek government made economic decisions in a bid to keep their voters happy, “both parties (PASOK and the New Democracy Party) lavished liberal welfare policies on their electorates, creating a bloated, inefficient, and protectionist economy” (Picardo, 2018). Greece is a welfare state that provides its people with a number of services and a strong example of their poor fiscal etiquette would be salary increases for workers in the public sector. Wages were increased yearly but not on the basis of productivity and performance. This allowed many to retire early, redacting the labor force whilst also reducing incentive for workers to be productive as they assumed that wages will increase regardless. Workers were also offered extra payments during December and Easter to assist with holiday expenses, which was a political decision. Despite government expenditure and transfer payments increasing, consumer expenditure and taxes did not. This caused the government to fall further into debt as they are exceeding the amount of money consumers are spending in the economy. Additionally, consumers most likely knew about the economic downturn and are aware of being encouraged to spend in the economy however fears of this becoming worse stunts consumers from spending therefore they keep it instead. This discourages economic growth as they were running into deficit that they could not breakeven with consumer expenditure.

Greece also has an unfortunate history with tax evasion, a third of Greeks who are self-employed are grossly under-reporting their income, this is evident as more than 100% of the reported income of the self-employed in Greece’s profession classes is going towards paying off consumer debts (Artavanis, Morse, Tsoutsoura 2012). This indicates that the oligarchs are avoiding their tax payments however the government’s budget is accounting for each person to meet their appropriate tax payments, tax evasion prevents the government from generating the expected revenues in the budget hence increasing the deficit.

The lack of productivity, excessive tax evasion and poor expenditure management resulted in the government resorting to extensive loans in order to keep afloat, increasing their level of public debt and in turn reducing the capacity at which their GDP could grow. This is because government expenditure increases proportionately to the amount of debt that is taken up, as the government has to service the new debt hence why GDP growth is affected. As the economy shrunk due to the lack of economic growth, so did tax revenue as the economy is what the government taxes, which sets the cycle up for the years to come.

Unemployment

Greece’s unemployment is at its lowest in the past 6 years at 17% in June 2019 however it is still the highest rate in the EU which in contrast has an average of 6.3%. Despite its improvement, we still see a large rate of unemployment, a large underlying cause of this is youth employment.

As of April 2019, the youth unemployment rate was 33%, which meant that close to half of those ages 15-25 are unable to find employment. In Greece the minimum wage is calculated differently for those under the age of 25, often the youth are paid less for equal labor than their older counterparts. When this wage is set above the market clearing rate, it separates workers into those who get a job and those who don’t, this is similar to the situation in Greece. Youth unemployment is also boosted by the large delay in the transition from education to work. Individuals who have studied with the intention of receiving higher wages are often stuck without work for long periods of time. Austerity measures have also made it so that it is cost efficient to fire workers that have the least skills or experience (Tubadji, 2012), alongside lower wages the youth are discouraged from joining the labor market.

The largest consequence of youth unemployment is the loss of labor to emigration. When jobs aren’t available in the market, those who are motivated and skilled have incentive to find substantially higher wages elsewhere therefore they leave the country. For Greece, this means that those who are skilled and able to work are leaving and their supply of skilled workers for the present time as well as the future is reduced, loss of labor means lower production of capital which means prices of goods increase and people are less likely to spend, overall, negatively impacting the economy.

Inflation

Inflation is defined as being an increase in the price level of goods and services within an economy, this is measured through the consumer price index (CPI). Countries have the capability to experience a negative form of inflation, referred to as deflation, as is the decrease in the price level of goods and services within an economy, still being measured through the CPI. Countries such as Greece have experienced 5 recorded years of deflation, with the largest being during 2015 with a deflation level of -1.7%, in contrast inflation sits at 0.2% as of April 2019. Greece is characterized by a weak inflation rate that is due to both international factors such as the euro/dollar exchange rate as well as the drop and all passes and domestics ones such as cuts in the value added tax (Alpha Bank, 2019).

Joining the eurozone gave Greece the illusion of being a safe place to invest, missing the factors that have the potential to influence inflation levels are the lack of foreign investment, interest rates on sovereign debt as well an absence of competition in the product market. Greece has thus far been unable to successfully attract significant foreign investments, which is crucial to bridge the ever-growing investment gap with Greek funds (PWC, 2017) This gap arose from being dependent on domestic capital which adversely impacts competitiveness and growth. Greece not only had loans from other countries but also the Troika, who initially demanded high interest rates on these loans.

Greece was also experiencing a high cost of living with average food prices exceeding its EU counterparts, which is unexpected. Tagaris and Wheatley (Reuters, 2012) wrote “if costs and prices were lower, exporters would be more competitive and people’s shrinking pay packets would stretch farther”, this would assist in the large decline of consumption. Due to the lack of competition in Greece’s markets, corporate monopolies have taken advantage of Greece’s situation and raised prices in order to profit.

Policy Recommendations

Greece has the potential to rise above their poor economic history and improve for the future. It can be suggested that in order to improve its economy, Greece should invest in education. An Adults Skills Survey conducted by the OECD shows that despite high education attainment populations have low skill levels. This calls for a need to build a “nation-level consensus on what tertiary education is for”, as well as improving the quality of education and how this is reflected in the labor market. So far Greece has failed to successfully promote employment in young graduates which has encouraged emigration and increased unemployment, deepening their economic disposition. Bringing awareness and support to the education sector may improve the state of Greek’s labor market and promote discouraged graduates to enter the job market. Improving education will set in motion an overall incentive to create more jobs whilst overall “strengthening firms’ incentives to invest and innovate” (OECD, 2018) which is vital to raise wages which then in turn motivates the unemployed.

Greece’s economy could also benefit by improving both their fiscal and monetary policies. Greece, now without the burden of the bailout program, could lower tax rates in order to promote investment and social spending (IMF, 2019). Efforts must be made to create a more competitive market in order for prices in the market to more closely reflect wages rather than being bloated by monopolies. Buckling down on corruption will help minimize Greece’s battle with tax evasion which will in-turn benefit business and strengthen the governments’ fiscal ruling.

Conclusion

Greece has faced many adversities to their economy over the past 15 years, although they have scraped through and show an overall sign of improvement there are still improvements to be made in order to stabilize the economy and enhance its growth.

References

  1. https://www.weforum.org/agenda/2018/07/eu-unemployment-rate-falls-to-near-pre-recession-low/
  2. https://www.imf.org/en/News/Articles/2019/03/11/na031119-greece-economy-improves-key-reforms-still-needed
  3. https://www.oecd.org/economy/the-greek-economy-is-recovering-improving-debt-sustainability-tackling-poverty-and-boosting-investment-are-vital-to-sustaining-the-positive-momentum.htm
  4. http://www.ekathimerini.com/243540/article/ekathimerini/business/alpha-bank-why-inflation-remains-anemic
  5. https://www.pwc.com/gr/en/publications/greek-thought-leadership/investments-in-greece-recession-recovery.html
  6. https://www.independent.co.uk/news/world/europe/how-to-fix-greece-a-seven-point-plan-for-economic-salvation-10144753.html

Factors Affecting the Running of a Multinational Corporation in Greece

A multinational corporation is defined as a company that operates in many countries (Skripak, 2013, p.87). Large companies are typically known to be multinational corporations. One example of a larger scale company well-known across the globe would be Amazon. Amazon is known for being an online marketplace which has mostly everything anyone could need, ranging from technology, to car parts, to decor. MNCs are popular due to the varying costs of labor and production, availability to resources, and cultural influence. Opening a multinational corporation introduces companies and countries to new cultures and ideas. This way, companies can get a new perspective they may not have thought of. Another perk of MNCs is to experiment in different countries and see where they are most successful.

Six different forces will be covered in this paper, ranging from natural forces to political forces. These are all different aspects of the country (Greece) that affect business dealings and play a part in the decision-making process of opening a MNC in any given country. The six types as mentioned previously are: cultural forces, economic forces, natural forces, demographic forces, political forces, and technological forces.

Cultural Forces in Greece

Greek culture is known to be open and inviting to strangers. As stated in this article funded by the European Commission (2013), the Greek word philoxenia can be defined as love of strangers. This leads to a heavy advantage in the business sector. Some countries have issues with companies from foreign countries coming in to set up shop, but Greece will welcome the new company with open arms. Philoxenia (European Commission, 2013) will allow for comprehensive business dealings between employees from the United States and employees from Greece. The love of strangers ideology also helps with introducing Americans to Greek culture, which will help them better understand their surroundings and be more comfortable in their new environment. Not only will this benefit relationships within the company, but also relationships with partners, suppliers, and anyone else the company comes in contact with.

Economic Forces in Greece

Greece’s economy thrives on the tourism and shipping industries (The Heritage Foundation, 2019). Greece’s unemployment rate is at 16.7%, which is an eight and a half year low (Trading Economics, 2019). This fairly high unemployment rate will also be a good factor in choosing Greece as a location for a MNC. According to an article in Time magazine, 30% of the Greek population are in poverty (Bremmer, 2019). Expanding there will give Greek people jobs and help fight the unemployment rate, which in turn will help the Greeks be even more inviting and open about the company opening a branch there. The high poverty rate will also be addressed and lowered by the opening of the MNC. High poverty and unemployment rates can cause citizens to be discouraged and afraid they will return to the economic recession they just crawled out of.

Natural Forces in Greece

Greece is prone to natural disasters. Some of which include wildfires, earthquakes, and floods. These things are obvious issues when owning a building in Greece. These things have the potential to completely destroy the building and even possibly harm or kill employees. A high level of natural disasters results in a high a high need for insurance for company property as well as insurance for the employees working there. A positive to the large number of natural disasters would be the country knows how to recover from them, and can recover quickly. Not many natural disasters happen in the United States, so if one were to happen, the company would most likely have a hard time coming back from it and knowing the next step in reopening operations.

Demographic Forces in Greece

Greek recently got out of a long economic hardship. In 2015, Greece attempted to get rid of its debt to the European Union by trading it for growth bonds (Lubben, 2015). The past economic problems in Greece raise red flags to begin business operations there. Although Greece is no longer having financial issues, there are still some worries regarding business dealings in the country. If the recession happens again, it will lead to the branch of the company to fail and most likely close up. This may cause the company to be discouraged about expanding to other countries again, and could cause potential loss in sales and customers. According to an article by Christian Bodewig and Wolfgang Fedler, 44% of 30-34-year-olds in Greece have received a degree from higher education (Bodewig, Fedler, 2019). This statistic doesn’t follow European standards which has an average rate of 40%.

Technological Forces in Greece

The information and communication technology market in Greece is doing better than it has in five years (Export.gov, 2019). This looks good for Greek’s economy. The better economy encourages companies to expand and get in Greece while the price is low and the economy is growing. Since many companies will be joining the Greek economy, competition will make operations more difficult. Greece is typically behind in the technological field, but has been lately integrating technology into typically manpowered jobs such as farming (Bodewig, et al., 2019). Integrating technology into the smaller jobs, like farming, will help slowly move it into the major business sector. Once the use of technology in business takes off, Greece’s economy will most likely start to benefit from it, and help get them far from their past economic struggles.

Political Forces in Greece

According to Time magazine previously mentioned, Prime Minister Kyriakos Mitsotakis will have a lot to do. Mitsotakis has a New Democracy plan that will greatly benefit the business sector (Bremmer, 2019). This plan will also help to keep Greece from repeating their past issues with their economy. This new leadership shows major potential for Greek moving forward. As the new prime minister works to better the unemployment and poverty rates adding new businesses would help him achieve this goal. Not only would opening a location in Greece be beneficial for Greek workers, but it would also give them a higher chance of obtaining a job in the United States as well. Offering jobs in both countries would help lower the poverty and unemployment rates greatly.

Conclusion

Greece has proven to be a great candidate for a MNC. While having some negative aspects, the positive ones outweigh and overcome them. The election of Prime Minister Mitsotakis will help push a growth in the business sector, not only for employees in Greece, but also employees in the United States. The small, certain integration of technology into farming will eventually spread into major corporations and businesses to help the economy grow more efficiently. Since Greece has made its way out of hard times, it has a promising future of not making the same mistakes twice and ensuring their country continues to move forward. The knowledge of recurring natural disasters will help the company prepare and adapt adequately to any unforeseeable challenges it may face from mother nature. Greece’s reputation for being open-hearted and kind to strangers will only benefit the company as a whole. Greece has been confirmed through its efforts to overcome and fight for a better future for itself and the Greek people.