How country psychology interacts with national circumstance

The Russian "middle class" is certainly using Irish-style escape, pragmatic conciliation and defiant compliance to cope with its humiliation-- but in the longer term the coping mechanism could become more "pathological". If this were to happen, I suspect Putin's response would largely be determined by his personality.

The full Brooks article (which quotes psychoanalysts such as Karen Horney) and the full Tett article can be read below.

"Merkel & Co should look at the 'H' factor" by Gillian Tett

This month, the guessing game is intensifying in Spain. But the issue is not just the size of the Spanish banks' bad loans; the key uncertainty for investors is the mindset of the government of Mariano Rajoy. Will Madrid buckle under external pressure, and seek a bailout? Or will the domestic backlash be too great? In other words, what level of humiliation can the Spanish government, and people, bear?

For Dennis Smith, a prominent British historical sociologist, the question is a significant one across the eurozone. As he explained at a recent sociology conference, one way for policy makers and investors to make sense of the eurozone's trajectory is to look at how "humiliation" operates in a psychological and cultural sense. After all, Prof Smith argues, one defining feature of the postwar European experience was that the union "always presented itself as a post-humiliation regime". It was forged to heal the wounds of the second world war and thus, "liberty and equality [were] highly valued as well as the spirit of fraternity". But since the financial crisis erupted, "humiliation has returned to Europe on a large scale".

Inside nations, weak groups have suffered economic pain, and across the eurozone, weaker countries are being humiliated in a way that was taboo in the postwar post-humiliation period. Even more striking than this turnabout, Prof Smith argues, is the variety of responses from countries such as Greece and Ireland, as they reel from that humbling.

To understand this, it is worth noting that psychologists believe the process of "humiliation" has specific attributes, when it arises in people. Unlike shame, humiliation is not a phenomenon which is internally driven, that is, something that a person feels when they transgress a moral norm. Instead, the hallmark of humiliation is that it is done by somebody to someone else.

Typically, it occurs in three steps: first there is a loss of autonomy, or control; then there is a demotion of status; and last, a partial or complete exclusion from the group. This three-step process usually triggers short-term coping mechanisms, such as flight, rebellion or disassociation. There are longer-term responses also, most notably "acceptance" – via "escape" or "conciliation", to use the jargon – or "challenge" – via "revenge" and "resistance". Or, more usually, individuals react with a blend of those responses.

Such psychology jargon may sound irritatingly abstract. But, just as investors can sometimes make sense of market crises by thinking about the five-stage cycle for processing human grief (denial, anger, bargaining, depression and acceptance), looking at the psychology of humiliation can be revealing for the eurozone. Those periphery countries, after all, have experienced a loss of control, a demotion in relative status and exclusion from decision making processes (if not the actual euro, or not yet). And there are echoes of the classic humiliation coping strategies in the eurozone tale today.

National stereotypes are, of course controversial and dangerous. But Prof Smith believes, for example, that Ireland already has extensive cultural coping mechanisms to deal with humiliation, having lived with British dominance in decades past. This underdog habit was briefly interrupted by the credit boom, but too briefly to let the Irish forget those habits. Thus they have responded to the latest humiliation with escape (ie emigration), pragmatic conciliation (reform) and defiant compliance (laced with humour).

"This tactic parades the supposedly demeaning identity as a kind of banner, with amusement or contempt, showing that carrying this label is quite bearable," says Prof Smith. For example, he says, Irish fans about to fly off to the European football championship in June 2012 displayed an Irish flag with the words: "Angela Merkel Thinks We're At Work".

However, Greece has historically been marked by a high level of national pride. "During 25 years of prosperity, many Greek citizens had been rescued by the expansion of the public sector … they had buried the painful past in forgetfulness and become used to the more comfortable present (now the recent past)," Prof Smith argues.

Thus, the current humiliation, and squeeze on the public sector, has been a profound shock. Instead of pragmatic conciliation, "a desire for revenge is a much more prominent response than in Ireland", he says, noting that "politicians are physically attacked in the streets. Major public buildings are set on fire. German politicians are caricatured as Nazis in the press … the radical right and the radical left are both resurgent."

Prof Smith's research has not attempted to place Spain on the coach. But I suspect the nation is nearer to Greece in its instincts than Ireland; humiliation is not something Spain has had much experience of "coping" with in the past.

Whether the Spanish agree with this assessment or not, the key issue is this: if Angela Merkel or the other strong Eurozone leaders want to forge a workable solution to the crisis, they need to start thinking harder about that "H" word. Otherwise, the national psychologies could yet turn more pathological.