The Greek solution: endogenous social change
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While Greece’s financial issues, both domestic and international, are making any bailout package more difficult in deed than word, the social issues at stake are no less troubling.
Domestically, the situation has bred a population unwilling to recognise the problem for what it is – a clear case of a culture of entitlement created by the kindness of strangers. As Anita Acavalos has explained, in Greek culture using the wealth of others is not considered fundamentally immoral. Furthermore, seeking recourse against the productive elements of the country is popular as “the rich … are commonly perceived to be everything that is wrong with Greek society.”
A recent poll suggests that a majority of Greek citizens are against their government’s decision to accept a bailout from eurozone partners and the IMF. While the domestic government resists political unrest by only gently suggesting that spending restraint and wage reductions should occur, the foreigners who will foot the eventual bill are chastised for suggesting that the behaviour that got the nation into this mess should be curtailed.
Were Greek opposition to the bailout package based on a desire for independence and prudence, we could rest easy. Instead, international calls for austerity measures aimed at combating a bloated public sector rife with unfunded government obligations, drive fear into the eyes of many Greek public employees. These same employees have already been bailed out for years by other European nations, allowing an unsustainable situation to persist and, indeed, worsen.
One particularly troubling incident occurred recently when striking dock workers prohibited tourists from boarding their ship. For an economy dependent on tourism for a good part of its GDP and employment, discomforting tourists willing to bring their foreign money into the nation risks reducing future revenues. Without these revenues Greece will be even more reliant on foreign bailouts – with all the restrictions and concessions demanded.
Biting the hand that feeds you is never in one’s best interest. A failure to recognise the means available to bring prosperity to the Hellenic nation will prolong the spending imbalances central to today’s crisis.
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As Bastiat said “The state is that great fiction whereby everybody lives at the expense of everybody else” (The words may be slightly wrong but the spirit is conveyed). Yet, in a free economy you can only serve your own interests by doing something that serves the interests of others. When people talk about the market and selfishness, they should remember these things.
Welfare enthusiasts who romanticise state redistribution as institutionalised solidarity should watch the events in Greece with tears in their eyes. There could hardly be a cruder and more destructive form of egoism than latching onto entitlements in the face of your country’s near-bankruptcy.
I fear the British are about to rival the Greeks in their attitudes. We can, rightly, blame our politicians for not daring to explain the seriousness of the UK government’s financial difficlties just before a general election. But the politicians themselves may well be right to think the British public would not welcome hearing the bad news.
Rumour has it that many electors do not believe that any cuts in government spending are needed. When they discover the truth they are unlikely to be happy bunnies. If the Labour government fails to ’secure’ re-election, as now seems highly likely, the new government will probably enjoy only a very short honeymoon.