The Greek Prime Minister George Papandreou surprised the world today by announcing that he will put the bailout plan for his country up to a public vote.
I find two conflicting principles at play here.
One the one side, people do not get a vote as to whether or not they will pay back money they have borrowed.
I can imagine somebody to whom I have lent money telling me, "I have taken a vote and I have decided against paying back the money I owe you."
Or, I can imagine my bank saying, "Our Board of Directors have taken a vote and decided against returning any of the money you have in your savings account."
Or my employer saying, “Our board of directors has voted to keep the money we would have otherwise paid you for the last month.”
When the Greek government borrowed this money, they gave others a claim on future Greek income. Perhaps they should not have done this. In fact, they should not have done this.
In doing so, they have given themselves an obligation to pay back that borrowed money according to the terms specified. If they cannot do so - or they cannot pay all of it - then they need to come to some sort of agreement with the people to whom they owe these obligations. They cannot simply say, "We have voted not to pay our debts."
On the other side - speaking in favor of such a referendum - it is good for people to take ownership of their obligations.
There should be no problem with giving the people of Greece a vote in whether or not to pay back their debts, and getting a resounding "Yes" in response.
It would be nice to get the Greek people on record as admitting, to themselves and the world, "Okay, we have these obligations. We have decided to honor and respect them."
The problem here is that - what if the Greek people are not willing to live up to their obligations?
The reason that this proposed referendum is causing so much turmoil is because the people of the world think the Greeks are dishonorable and immoral people who will simply refuse to pay what they owe.
This means that the people to whom Greece owes money will suffer. They, in turn, will be put in a position where they cannot pay off their debts unless they adopt austerity measures themselves - and perhaps not even then.
Imagine getting a telephone call from your boss at the end of the month saying, "We have decided not to pay anybody this week. I know you did the work and we owe you the money, but we have decided to keep it instead."
Putting aside the fact that they have no right to make such a claim, there is also the problem that you have rent or mortgage coming due, car payments to make, a power bill to pay, and other uses for that money. If you had known you would not get paid, you would have likely spent the last month finding some other source of income. However, now that you have done a month’s worth of work and it is time to get paid, you no longer have that option.
A referendum is a good idea when given to honorable people who respect their obligations. It is a less than good idea when offered to dishonorable people more than willing to inflict harms on others if they can obtain a financial benefit in the process.
In this sense, it is like giving the a community a vote on whether to institute slavery. Moral people would simply vote a unanimous "no" and be done with it. However, there is some reason to worry that even the idea of a vote gives the institution of slavery an illusion of legitimacy. It is something that moral people not only would refuse to adopt, but something people generally have no right to adopt.
And what should you do if you live in a community where there is a real sense that the people will end up voting FOR slavery? In this case, is it a good idea to suggest that the people have a right to vote on such an issue?
This is the type of situation that Greece faces with respect to this public referendum. There is a clear answer to what they should do. The question is, are they of a good enough moral character to do it. And, if not, should they be given the option of voting on something they have no right to do?