The Moral Lesson Of the Greek Disaster
The collapse of the Greek welfare state is an ominous warning of where we're all headed-and also of why we're headed there.
Look at the Greek welfare state and tell me if any of it sounds familiar. There are generous unemployment benefits and a nationalized health care system, but by far the biggest part of the Greek welfare state is its pension system, swelled not only by an aging population but by an average retirement age of 61. This includes guaranteed early retirement as young as 50 for those in "hazardous" jobs-a category that includes hairdressers, television announcers, and musicians. Government employees can start getting their benefits at 58-and one out of every three workers is employed by the government, which offers lifetime job security. Well, I guess not for a "lifetime," but for those few years in a Greek civil servant's life during which he is actually asked to work. But just as in the US, few people actually bear the brunt of the taxes to pay for all of this, with high tax rates levied on a relatively small group of workers, which helps to push massive amounts of economic activity into the black market, estimated at more than 30 percent of the Greek economy.
The result is a government budget deficit spiraling toward 15 percent of GDP and a total debt at more than 115 percent of GDP. This was a kind of Ponzi scheme, in which massive borrowing was sustained by more borrowing-in the same way that GM "paid down" its debt to the federal government by drawing on a different federal loan. And the whole thing started to collapse, as it had to, the moment investors downgraded Greek debt and stopping loaning money on easy terms.
The general view is that the trouble in Greece and the other PIGS-Portugal, Italy, Greece, Spain-is the result of some kind of special corruption, the ingrained, spendthrift indolence of Southern Europe. Except that the PIGS have merely been doing what every other European welfare state was doing-and what President Obama has been doing here in America, with our deficits rising to about 10% of GDP and our total debt surging above 50% of GDP. The Greeks just went a little bit farther down the road all of us are traveling.
That's why the trillion-dollar European bailout of Greece has failed to reassure anyone. Investors must be asking themselves: who bails out the bailers? The European "rescue" of Greece is really an attempt to rescue their own evasion, to paper over the Greek failure and pretend that it has no significance for anyone else.
But Greece is not the result of some special local corruption. It is the consistent result of the basic principle behind the welfare state. It is the result of implementing a creed that virtually everyone today regards as noble and virtuous.
The Greek debacle is a result of implementing the altruist principle that one man's need creates a moral claim on the time, effort, and wealth of others. If you could sum up the cause of the Greek crisis in a single motto, it would be: "need, not greed."
Consider the meaning of this premise that your need creates a claim on the productive effort of others. It means: it is my right to charge up the credit card, and someone, somehow is obligated to pick up the tab later on. Living on credit with no heed for how to pay for it is a vice that is often attributed, with a sneer, to the "materialistic" "consumerism" of capitalism. But in reality, it is the standard practice-on a grand scale-of the altruist welfare state.
Imagine what would happen if everyone were to live by this altruist creed, if they all decide that their needs entitle them to demand benefits without consideration for how those benefits are going to be paid for. What happens if this attitude dominates all aspects of a society? Then a whole nation charges up the credit card and hopes that someone, somewhere-maybe in Berlin-will bail them out. If we are all our brothers' keepers, then the Greek labor unions and public employees and pensioners and every other interest group assumed that they could vote themselves lavish benefits, and then rely on their brothers-the rest of us-to keep them.
It's easy to blame the Greeks, but the problem is global, which is how it was possible for Greece to get so deep in debt to begin with. The code of need is so entrenched in the world that investors assumed a country like Greece would naturally get bailed out if it got into trouble-so they didn't bother asking hard questions about Greek finances earlier on. They just took for granted that the need of one nation would become a claim on the wealth of the world.
The Greek debacle is a warning, not just of the disastrous results of this creed, but of the method by which it is always enforced. The would-be beneficiaries of the altruist welfare state do not simply expect that others will provide for their needs. They demand it - and they're willing to enforce that demand, either through the coercive power of the state, or, as in Greece, through anarchic violence in the streets.
The leech's code of altruism hides under a cover of benevolence, presenting its demands for sacrifice as if this were merely the kind of charitable compassion that drives us to help others out of good will for our fellow man. But there is no illusion of good will here. The message of the Greek rioters is: it's your duty to show caring love and compassion - or I'll bash your face in, you rotten bastard.
The most powerful critic of the altruist creed-indeed, its only philosophical critic-was Ayn Rand. In making the crucial distinction between voluntary benevolence and altruism as a moral code, she once said that the issue isn't whether you give a dime to a beggar. The issue is whether you have a right to exist if you don't. The Greek rioters put us all on notice that as far as they're concerned, the shop owners whose windows they smashed, the bankers whose buildings they firebombed, the poor conscientious employees they burned to death - all of these people, the ones who pay the bills for everyone else's welfare benefits, have no right to exist.
But if this attitude takes over a whole society, it will soon run out of victims who can be terrorized into paying the bills. They leave, they retire, they shut down, they refuse to stick their necks out. They give up, go on welfare, and join the system of looting. And then the whole thing collapses.
As Ayn Rand pointed out, an altruist society is always fed on the blood of those who do not practice its creed. In this case, it is literal blood, extracted as punishment from the very people who are keeping everyone alive. The whole welfare state depends on those who don't believe that their needs create a claim on others, those who take responsibility for producing the wealth they need to sustain themselves. And it depends on giving these people no moral credit, allowing them no right to their wealth or their freedom, and mercilessly bleeding them dry. You tell me whether that's "compassionate" and benevolent.
That's why I say, in best "going Galt" fashion: let Greece crash. This would teach lenders to examine sovereign debt more carefully and take the fiscal suicide pact of the welfare state seriously. And it would show the leeches who live off of every one of the world's welfare states that the only man who has no right to exist is the man who refuses to work to support himself.
