Posts tagged with: Neoliberalism

Blog author: jcouretas
Monday, January 26, 2015

It gets really interesting now in the wake of Syriza’s stunning victory in yesterday’s Greek elections, widely interpreted as a populist rejection of austerity programs that could spread to other indebted European Union basket cases. All eyes on are Alexis Tsipras, the newly-sworn in prime minister (in a highly unusual secular ceremony), with a lot of unanswered questions about how his party will govern. (Syriza is the transliterated Greek acronym for Coalition of the Radical Left). I’ve been following this story – indeed the long gut-wrenching meltdown of the Greek economy – in recent years with more than casual interest. I grew up in a Greek immigrant household and have retraced my grandparents’ steps back to the family villages (I’m what real Greeks refer to as a “two week Greek”).

On the Forbes site, Charles Calomiris paints a picture of what is in store for Greeks if Tsipras follows through on his promises to magically wish away debt (176 percent of GDP), go after “the rich” (Greek shipowners) and give away more free stuff (electrical power, health care, higher minimum wage, etc.) paid for with other people’s money:

… the likely consequences for Greece of Sunday’s election are a chaotic future of bank runs, devaluation, capital flight, and even more worrying, new radical leftist policies to respond to the economic collapse produced by the crisis (e.g., huge expansions of government spending, and nationalizations). Nothing can be ruled out when someone like Mr. Tsipras is in charge – a European version of Hugo Chavez.

Calomiris concludes by observing that “although it is likely that Mr. Tsipras’s victory will soon be regarded as a major electoral error by Greeks, it could be a helpful wake up call for the rest of Europe.” (more…)

On The American Spectator, Acton Research Director Samuel Gregg observes that, “as evidence for the European social model’s severe dysfunctionality continues to mount before our eyes, the American left is acutely aware how much it discredits its decades-old effort to take America down the same economic path.” Against this evidence, some liberals are pinning the blame on passing fiscal and currency imbalances. No, Gregg says, there’s “something even more fundamental” behind the meltdown of the post-war West European social model. (Thanks to RealClearWorld for linking).

… this reality is that the Social Democratic project is coming apart at the seams under the weight of the economic policies and priorities pursued by most Social Democrats (whatever their party-designation) — including the American variety.

From the beginning, post-war Social Democracy’s goal (to which much of Europe’s right also subscribes) was to use the state to realize as much economic security and equality as possible, without resorting to the outright collectivization pursued by the comrades in the East. In policy-terms, that meant extensive regulation, legal privileges for trade unions, “free” healthcare, subsidies and special breaks for politically-connected businesses, ever-growing social security programs, and legions of national and EU public sector workers to “manage” the regulatory-welfare state — all of which was presided over by an increasingly-inbred European political class (Europe’s real “1 percent”) with little-to-no experience of the private sector.

None of this was cost-free. It was financed by punishing taxation and, particularly in recent years, public and private debt. In terms of outcomes, it has produced some of the developed world’s worst long-term unemployment rates, steadily-declining productivity, and risk-averse private sectors.

Above all, it slowly strangled the living daylights out of economic freedom in much of Europe. Without Germany (which, incidentally, also engaged in welfare reform and considerable economic liberalization in the 2000s), it’s hard to avoid concluding that Social Democratic Europe would have imploded long ago.

Read “The American Left’s European Nightmare” by Samuel Gregg on The American Spectator.

Blog author: jcouretas
Tuesday, November 22, 2011

German Chancellor Angela Merkel is congratulated in late September after the German parliament ratified key reforms of the eurozone's bailout fund

At National Review Online, Acton Research Director Samuel Gregg observes that “much of Europe’s political class seems willing to go to almost any lengths to save the euro — including, it seems, beyond the bounds permitted by EU treaty law and national constitutions.” Excerpt:

“We must re-establish the primacy of politics over the market.” That sentence, spoken a little while ago by Germany’s Angela Merkel, sums up the startlingly unoriginal character of the approach adopted by most EU politicians as they seek to save the common currency from what even Paul Krugman seems to concede is its current trajectory towards immolation.

As every good European career politician (is there any other type?) knows, the euro project was never primarily about good economics, let alone a devious “neoliberal” conspiracy to let loose the dreaded market to wreck havoc upon unsuspecting Europeans. The euro was always essentially about the use of an economic tool to realize a political grand design: European unification. Major backers of the common currency back in the 1990s, such as Jacques Delors and Helmut Kohl, never hid the fact that this was their ultimate ambition. Nor did they trouble to hide their disdain of those who thought the whole enterprise would end in tears.

Read “Eurocracy Run Amuck” on NRO.