Posts tagged Greece

Column on Protesting Austerity Measures

Protesting Austerity Measures

Tibor R. Machan

Throughout Europe it is now routine–but it is not unfamiliar by now in the US either–for people to march and otherwise protest (sometimes with out and out reckless violence) austerity measures the government officials have decided to deploy so as to cope with the enormous debt they have amassed, mostly from committing to paying out huge entitlements that are not covered by funds either present or promised.

This is happening in Greece, Portugal, Spain, and other countries and only a few are somewhat prepared to handle them internally, without depending on getting funds from other countries. Of course, many in those other countries are themselves protesting these efforts to rectify profligacy by raiding the treasuries, with EU sanction, of the better managed ones. (Not that any of these welfare states have escaped completely their considerable financial malpractice!) But a substantial portion of the citizenry of Germany, for example, does not view this public wealth redistribution with enthusiasm. And while such welfare states as Germany may have numerous citizens who favor wealth redistribution within their societies, most stop at the border (which goes to show you what kind of “generosity” and “compassion” is involved in welfare statism).

The puzzle is that so many people seem to be aghast at the fact that when the politicians and bureaucrats, most often with substantial support from large segments of the citizenry, accumulate enormous debts, the country not only runs out of funds but looses its credit rating so that borrowing becomes more and more troublesome. Yes, and this is something the USA faces as do Greece, Portugal, Spain, etc.

But why are people protesting? Isn’t it a plain fact of public–not to mention private–finance that one cannot get blood out of a turnip? Aren’t people aware of all this form their own personal economic situations? When one maxes out one’s credit cards, is no longer able to refinance one’s home, and experiences all sorts of economic setbacks–caused, usually, by a smorgasbord of malpractice throughout the economy (which is nearly impossible to sort out so that it might be possible to tell the guilty from the innocent)–why is it that folks insist that somehow, anyhow, all this just get papered over or simply overlooked and that their hefty entitlements based on the fantasy of eternal welfare statism keep being undisturbed?

There can be numerous states of mind that may account for this. One of them is certainly the kind of political shenanigans perpetrated by the likes of those who insist that it is all the fault of the wealthy, who are soaking the treasury somehow–and if so, mostly with the complicity of the self-same politicians–and if only the rich could be soaked back, it would all get fixed. The idea that all this is a zero sum game–so that some are raking in huge gains at the expense of others and it would take but a bit of thorough investigation to sort it all out–is quite prominent in the minds of many, judging by the comments of prominent pundits and media figures on Op Ed pages and talk shows.

Yet there is also the plain delusion on the part of millions of people that one can indeed get blood out of a turnip, a delusion backed by some academic economists’ fancy idea that all it takes to remedy matters is to carry out some kind of magic–like deploying the famous Keynesian multiplier effect whereby the bureaucrats pump a bit of funny money into the economy via artificial money printing and public spending only to have it turn into massive wealth down the road (via the creation of employment based on such phony spending). Still, to make this credible one needs a large portion of the citizenry who all believe in magic to start with, that somehow debts can be wished away, not paid up, for example. That something can come from nothing (and idea that some philosophers actually propose)!

I am sure there are many other sources of the idea that when countries run out of funds, these can be made up by engaging in some imaginative accounting or something, so that there is no need for austerity, certainly for any austerity that will have an impact on the entitlements received by people to whom promises were made based on, well, sheer hope and wishful thinking.

So why aren’t politicians and bureaucrats–and their academic cheerleaders–coming out with some honest explanations, insisting that the citizenry face up to all this and stop throwing hysterical fits when finally the chicken come home to roost? Because most of these public servants are cowards and refuse to make any effort at genuine leadership, statesmanship. So much for their serving the public interest.

Column on Is Capitalism Cruel?

Is Capitalism Cruel?

Tibor R. Machan

Now this issues must always be dealt with comparatively–is capitalism cruel, harsh, heartless compared to what?

Some folks I know have maintained that compared to socialism, capitalism is indeed all these things but I just cannot buy it. Partly it’s because I have lived under at least one kind of socialism, the Soviet version, which, as only someone who has been living in a cave for a hundred years would deny, is brutal, never mind cruel, harsh, and heartless.

But let’s not focus on the worst case scenario of socialism. Let us take socialism “with a human face,” the sort that is usually associated with Sweden, France, Greece or some other country where the government manages much of the society’s economic affairs but doesn’t punish dissidents and ban freedom of speech. Are these bona fide socialist systems and are they gentle and kind to their population?

Again, compared to what? A fully free market, capitalist system in which everyone must live without resorting to extorting their support from others, without getting bailed out by the government with other people’s resources when they have mismanaged their financial affairs–is such a system more cruel than, say, democratic socialism?

Not really, not by a long shot. Any kind of socialism subjects the citizenry to coercive wealth redistribution and makes it impossible to accumulate wealth for oneself, one’s family, one’s enterprise thus impeding investment, savings and economic development. Instead people in socialist systems have to contend with being slowly bled to economic destitution unless they are savvy enough to circumvent all the damaging socialist practices (think here of George Soros). And, yes, there are quite a few people in socialist societies, even the harshest version of them, who manage to game the system. They may not openly attack their fellow citizens but because they game the system at the expense of these fellow citizens, those others are in fact–although sometimes not visibly–being seriously harmed.

These socialist systems with human faces manage to disguise their mistreatment of all those who are made to pay for the mistakes of many who become used to being taken care of, who feel they are entitled to endless help from the government, who don’t want to reach out to people and contend with the fact that generosity and charity must be voluntary whereas being on the dole is coercive but not easily noticed. Who is paying for those food stamps? The minimum wages one receives? The subsidies to farmers and all the rest of the costly welfare measures? No one can tell because it all goes through politicians and bureaucrats and they do not accept responsibility of how they treat the citizenry, for depriving Peter of what belongs to Peter and hand it to Paul (not before they skim a good deal off for themselves). (I develop this idea in my 1970 paper, “Justice and the Welfare State,” The Personalist.)

Moreover, many people judge socialism by the announced intentions of those who support the system, not by the actual consequences it produces throughout a society. All the unseen losses suffered because of the public mismanagement of the economy are overlooked and, instead, people often believe it is “the thought that counts.” But a little serious, disciplined thinking should soon reveal just what is going on and how what appears on superficial sight gentle and sweet becomes, instead, insidious and harmful.

Capitalism is up front about placing responsibility on free men and women and for this it gets a bad rep from those who are duped into thinking that one can tell the full content of a book by its fancy cover. Capitalism, unlike the welfare state, is more like parents who impose discipline and refuse to spoil their children however much they whine about it. Those who think the system is therefore a cruel one are comparable to teens who bellyache about their parents because they are more interested in justice than in mercy (which in exceptional cases is fine but not as a routine).

Because so many people have found free market capitalism too harsh, too cruel, or too mean, the system has never been allowed to function as it had been meant to by those who considered it best for a society’s economic well being, the likes of Adam Smith, Herbert Spencer, Ludwig von Mises, F. A. Hayek, Milton Friedman and Ayn Rand, among others. (Spencer, especially, got no end of grief because of sentiments like the following: “Sympathy with one in suffering suppresses, for the time being, remembrance of his transgressions….Those whose hardships are set forth in pamphlets and proclamations in sermons and speeches which echo throughout society, are assumed to be all worthy souls, grievously wronged; and none of them are thought of as bearing the penalties of their own misdeeds.” [Man versus the State, p.22].) Instead they followed the lead of John Maynard Keynes and insisted that people who mismanage their economic affairs are entitled to endless bailouts from the government.

Is this actually less cruel, less mean than the alternative, once all the results are considered? I seriously doubt it–just think of Greece, Portugal and, of course, the former Soviet colonies, as well of the members of America’s and many other nations’ future generations!