In an interview with Spiegel Online International, ex-Greek Prime Minister Giorgios Papandreou had this to say in response to Spiegel‘s question of where fault lies for the present crisis:
…we need strict budgetary discipline, and we have to reduce expenditures, but we also need growth strategies. And we cannot lose sight of the markets, either. It is unacceptable that they are the ones driving the countries…not giving their governments the time that democratic institutions need. This undermines our democratic foundation. That’s why we need strict regulation of the markets and more transparency, and why we have to contain the rating agencies. We, as socialists, have demanded this again and again, because we cannot do this alone as a single country. This is a mistake being made by the global political class and, in particular, by conservative Europe.
And this brief exchange:
SPIEGEL: They have dictated the strategies for some time now. The primacy of the political class seems to have been suspended.
Papandreou: That’s true, unfortunately. If we decide at 2 a.m. that we have to make a decision because the stock market in Japan is about to open, it’s an acknowledgement of the superior power of the markets.
What a breathtaking lack of understanding of economics, of free markets, even of democratic principles. With Europe as their role model, it’s no wonder our own Progressives have so damaged our economy and our government.
Papandreou wants growth strategies. What more powerful growth strategy can there be than to get government out of people’s and business’ way, to let labor go back to being mobile, to let citizens and businesses make their own decisions? How much more stimulative (to coin a phrase) can government be than to reduce the cost of doing business by reducing taxes on businesses, on citizens, on exchanges between citizens along with that “budget discipline” and those “reduced expenditures?”
A concern, expressed in complete seriousness, is that markets are driving the nations, and not the governments. Are not the people sovereign in Europe? Is government truly the Sovereign in the land of John Locke and Jean-Jacques Rousseau? People, in a free environment, are free to express their will over their government politically, but that’s not all. To have a truly free environment, they must be free, as well, to instruct their government economically in a free market. Every citizen in a free country gets two votes: one at the ballot box and one in his economic exchanges with his fellow citizens.
Another concern, expressed with the same lack of understanding, is that people, with their economic decisions, are not giving their governments the time that democratic institutions need in which to act. But this is to assume that governments must be in the business of governing citizens’ economic decisions in the first place. Since legitimate government has no such role, legitimate government needs much less time.
As if that’s not enough—or perhaps it’s deliberate (this would be consistent with the European attitude that government must decide for the people)—Papandreou wants to censor the information that people and businesses use in making their economic decisions: “contain the rating agencies.” Government will make better decisions with its information base than can the citizens for themselves. Hmm…. How’s that working out today in Greece and in the EU generally? Do the people or the government, even in Europe, have the better record over the last several decades?
“We cannot do this alone as a single country.” No closed economy—no economy that has no access to exogenous funding—can “do this alone,” since “this” is government making the decisions, government taxing everyone to pay for the welfare of everyone. However, expanding this to the euro zone, or all across Europe, begs the question. The expansion just expands the bounds on what is still a closed economy whose policies depend on outside financing to pay the difference between what the taxes can provide and what the government has promised. An expansion only ensures that everyone else is dragged into the pit, also. Making the thing be global changes the situation not a bit.
But in a huge misunderstanding that’s entirely consistent with the European view of “democracy,” of “freedom,” of “markets,” European government Progressives have completely missed the fact that their markets, at bottom, have very little freedom in economies so heavily laden with regulations and government “oversight.” The polities have only limited freedom in government-controlled societies that limit labor mobility, that limit business choice, and that discourage entrepreneurship (which is entirely consistent with the lack of market freedom). The Progressives have no understanding whatsoever of the concept of democracy and of individual liberty. Papandreou’s own government was brought down by the other governments of the EU for the unpardonable sin of asking the Greek people for their opinion of the latest round of bailouts. The wills of the French and Dutch citizens, when they rejected the European Union Constitution in their plebiscites, were blithely overruled by their governments signing the Treaty of Lisbon, which enacted that Constitution in all but name. But this failure to understand is not all on the elitists. In societies where tax evasion is a sport, where the rule of law is a thing of ridicule—this is not the stuff of freedom and democracy, either.
The failure of understanding can be summed up in Papandreou’s own lament: the superior power of the markets. How terrible it is that government should be subordinate to the will of its people as expressed in a truly free market.
Democracy, free markets, individual liberty demand that the sovereign people make their own decisions, and live with the outcomes and prosper from those outcomes, or recover from the outcomes and then prosper. These three—free markets, democracy, and individual freedom—are bound up tightly among each other. None can exist without the others also existing. Governments must accord citizens the respect of being responsible for their own actions, and the citizens must reassert this right for themselves.