Neo-liberalism, and the Greek tragedy.
The country that gave the world the three most important tragedians, Aeschylus, Sophocles and Euripides is facing a major economic tragedy. While economists the world over have differing views on the root cause of Greece’s economic problem, as a non economist, I have been immensely concerned with anarcho-capitalism, (an economic system that destroys government regulation of the economy, and creates economic anarchy within the global economic system).
The conscious deregulation of the economy that started during the Reagan administration in the U.S. reached its climax during President George W. Bush’s tenure and has brought the global economic chaos the world is in at the moment. Their bankrupt economic theory of the market policing itself, has proven to be as hollow as their dreams of making trillions of dollars without manufacturing anything. (Capitalism without ethics, June, 2009 PSS.WP).
Sadly, Greek is another glaring example of the failure of neo-liberalism. Developing countries beware neo-liberalism is here to destroy you, not to save you. And those politicians that still praise the virtues of neo-liberalism, as Ashley St.Claire would say, they are either dim-witted or have a personal agenda that would personally benefit them at the expense of the interest of their countries.
Neo-liberalism is what Susan Strange calls “Casino Capitalism”. She is one of the first to have for seen the dangers of anarcho-capitalism. She has linked “casino-capitalism”, in to a number of trends among which are: government’s deregulation of the economy, (based on the fallacy that, the market and the banks would regulate themselves), and commercial banks turning in to investment banks. Susan Strange’s work is an essential contribution in de bunking the dominant doctrine of neo-liberalism.
Recently, the EU and the IMF have agreed to extend $147 billion dollars rescue under a three year agreement. This “rescue” plan actually is intended to rescue French and German banks that are holding a large share of Greece’s bonds. Moreover, the “rescue” is meant to temporarily stop a widening debt crisis in Europe which might include Portugal, Spain and Italy. In all this, the Greeks will be burdened with more debt, and are required to take harsh budget cuts.
In order to comply with the EU and IMF’s “rescue” plan, the Greek government will cut public-sector workers’ pay by 20%, raise the retirement age, increase sales tax to 23%, increase the price of tobacco products, alcohol and gas by 10%, increase taxes on property and businesses, etc. etc. Even if all this drastic measures are instituted according to plan, the actions taken actually would increase Greece’s debt and shrink its economy by 4%. How about a big applause to neo-liberalism?
Focusing only on dollars and cents, what usually is left out is any discussion of the impact of neo-liberalism’s creation of political instabilities around the globe. The main crime of neo-liberalism is its unparalleled focus on greed some would say debauchery and social injustice.
I only hope, the violence in Greece would quickly recede before it destroys a country that is the root of European civilization.
Professor Mekonen Haddis.