Politics and Economics

The Problem with the Greek Government’s Economic Policies.

Mr. Tsipras and his government are socialists. The basic philosophy of socialism is a strong sense of entitlement to other people’s wealth.

His logic will be the same as any other socialist, who has a strong social agenda but rarely a credible economic one:

i.e. “I need a certain amount of income to live a decent life therefore I am entitled to have it.

If I’m unable to earn this much myself then somebody else must make up the difference:

1.   My employer must pay me more for my efforts (minimum wage)….or……

2.…. my next-door neighbour (who earns more than me) must give me some of their income (intra-generational redistribution of wealth)….or

3.…The Government must borrow more money, give some to me and get my children and grandchildren to pay back the debt (inter-generational redistribution of wealth)…..or…..

4.….a combination of 1,2 and 3.”

As a country Greece cannot demand a salary increase from its employer, although this would doubtless appeal to Mr. Tsipras if it could.  So he is resorting to 2. Expecting his rich European neighbours, such as Germany, to give him money by writing off debt and 3. Taking on more Government debt and expecting his country’s current and future children to pay it back.

Socialism is often merely self-interest justified by ideology and in a normal socialist economy the sense of entitlement to other people’s wealth is legitimised by democracy.  i.e. to claim that most people in the country voted for redistribution of wealth so it is legitimate to implement it.  Mr. Tsipras is using democracy as justification for his current stand.  But he has forgotten that whilst Greece has democratically voted itself the right to more free money, that Germany, as a separate country, is equally democratically entitled to refuse to give it.

It reminds me of the worse days of the trade union excesses of the 1970s when they would decisively vote themselves a 40% wage increase and then were scandalised when their “democratic will” was not fulfilled by “management” or the prevailing government. They failed to understand that voting for something didn’t automatically mean it was practical or affordable.  All the Greeks have done in electing Syriza is to vote for an end to austerity. As did the French in 2012.  Look where it got them.

The concept of earning the money you want to spend does not compute in the socialist psyche.  So Greece has now reached the inevitable fatal flaw with socialism:  Eventually you run out of somebody else’s money to spend.


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