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The Future of Europe is Where it Belongs: The Hearts of the Greek People

Monday, September 7, 2015

Greek Prime Minister Alex Tsipras has played the part of Volumnius and has fallen on his sword. Later this month the Greek people need to make sure they decide once and for all what dies and what lives. What should die is the fraud that is a Europe built on a foundation of 'sovereign debt'. What should live is a wholly new idea of Europe reborn where Europe was first born - in the hearts of the Greek people.

Polls show that Greeks overwhelmingly want to remain part of Europe.  But this will clearly come at the cost of their sovereignty if the terms of the 'deal' with their creditors stands.  In this upcoming election, the people of Greece need to look past that 'deal' and see the underlying fraud that is modern Europe for what it is - and then decide if this is really what they have in mind when they think of Europe.

The foundation of this fraud is the idea that economic prosperity can be delivered by political society.  Tsipras is partly to blame - and socialism as a political ideology shares the rest of the blame - for foisting this upon the people of Greece. By reckoning the State to be the most significant unit of society - which removes all natural restraints on the size and scope of government - Greece has spent a generation getting to where they are today. The ever-present, insufferable and stifling public sector has sucked dry the innovative spirit of the Greek people - exactly as it has done everywhere else government is allowed to grow unchecked and as it is doing here in America.  Greece has been left to the impotence of the public sector to generate economic growth.  That impotence should now be obvious.

This fraud is furthered by an obvious double-standard.  To start with, you cannot have irresponsible borrowing (Greek political society) without irresponsible lending (the ECB and Greece's other creditors).  If the idea of Europe in play here is the idea of a just society living at peace with one another then the risks involved in lending must be shared between both creditor and debtor. This can be best understood by looking at exactly what 'financial sovereignty' entails.

For the creditor (or the 'saver/lender' - mainly Germany) financial sovereignty is rooted in purchasing power.  The Germans are loath to see Euros printed to rescue debtor economies because each newly minted Euro subtracts from the purchasing power of the Euros they have saved. Debt forgiveness - the dreaded 'haircut' in the bond market - is an even worse outcome for the creditor because the value of the Euro is tied to the value of what it measures.  It does not measure anything of otherwise real value like gold or silver.  It does measure sovereign debt.  So if those debts are subject to haircuts, the value of that debt goes down and with it the value of the Euro.  The nature of the Euro as a currency union only magnifies this effect.  Sovereignty for the creditor means protecting the Euro at all costs.

For the debtor 'financial sovereignty' means being able to decide how much is spent on what public priorities.  The 'Troika' has utterly eviscerated any sense of financial sovereignty among the people of Greece. The creditor now enjoys all rewards and assumes no risks. Clearly, some are more sovereign than others.

The answer is conservatism as a political and economic philosophy.  But this is not a banker's conservatism demanding 'austerity'.  It is a conservatism rooted in community.  It is a philosophy that makes the distinction between political society and civil society, and believes that civil society will always be superior to political society when meeting social needs, and that economic prosperity is the result of the creativity and innovation of civil society.  Here is what I think a truly conservative plan for Greece might look like:

1) Repudiate the debt!  Yes, I just identified repudiation of debt as a conservative position.  Here is why: Conservative economics is rooted in human freedom. The fraud that is modern Europe has just exposed its moral nakedness for all to see in this so-called 'deal' between Greece and the 'Troika'.  It reveals to all that while the rewards of irresponsible lending are privatized among the financial sector, the risks are socialized among the people of Greece.  There is nothing moral nor conservative about Greece subjecting itself to this sort of theft.

2) Repudiate the public sector! The administrative nakedness of political society should now be obvious.  Conservative political philosophy starts with the conviction that the role of government is to do for the people only those things the people cannot do for themselves, and to otherwise leave civil society free to innovate and improve things in the real economy and to share the resulting wealth with those in need.  Far from everyone being on their own, repudiating the public sector means those who need help will enjoy the dignity of being lifted up by someone who knows their name. This, then, will mean lower taxes and more opportunity to innovate, improve things, and create real wealth.

3) Repudiate 'fiat money'! The mathematical nakedness of today's central bankers is increasingly on display as the Chinese bubble has burst - as their finance minister has said over and again this past weekend, much to the chagrin of other central bankers.  We are witnessing the death throes of this idea you can just print money 'hand over fist' - as we Americans like to say.  This money-printing and lending enterprise has brought the world to a cliff and no one really knows what the future will look like.

Until someone finally decides to lead and chart out a new path forward.  The people of Greece - once again - have the opportunity to lead the world away of this cliff and into a prosperous future where economies are organized around the creation of real wealth instead of the inflationary pretense of feeling wealthy.

Lastly, a call to all Greek cartoonists: How about Greece, in the person of Jesus, standing with his back to the reader, holding his whip, steaming mad over the σπήλαιον λῃστῶν ('den of thieves' - aka the Troika) that has become the temple of the free market.  (Read Matthew 21:13 for the reference.)  This is what it would look like if Jesus were to come to save Greece - and the rest of Europe from the fraud that is its political society and its money.

UPDATE: Huge thanks to Dino Deroukakis in Greece for the graphic above!  Better than a million likes on Facebook.

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