Observers of the spectacular economic debacle of Greece typically attribute it to two key causes: An excessive public spending burden and an equally excessively individualistic culture. We often think of the former as a classic symptom of a country having swung too far to the left -- having a bloated and unaccountable public sector while over-expanding and over-spending on social programs. And we often link excessive individualism with a country's swing too far to the right -- minimizing controls or oversights on consumer credit, under-taxing the wealthy and generally undermining the importance of the commons.
The financial shock of the past five years exposed a number of these imbalances and triggered some healthy, albeit moderate, corrections among wealthy and mature nations on both sides of the Atlantic: Most Western European countries are now struggling with austerity programs which will ultimately make them feel a little less "socialist," while the U.S. is coming to terms with the need to increase tax revenues and live with stronger financial market controls which will ultimately make it feel a little less "capitalist." Fortunately Canada was already right in the very healthy middle of that spectrum, with a well-balanced mix of regulation and taxation, and that's why we sailed right through the global financial crisis with so few scrapes and bruises.
But what about Greece? How could any country find itself in a scenario where it suffers the consequences of having been too socialist and too capitalist at the same time? How was it even possible to mix large doses of those two ingredients into one (apparently almost lethal) cocktail?
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I was listening to a former Greek Prime Minister recently at a global conference and I was struck by the number of times he referred to his country as a "young democracy." The implication, of course, was that it was an immature democracy -- and suddenly it all made sense. Greece only really stabilized itself as a truly democratic nation after it joined the European Community in the last quarter of the twentieth century; up until then it had been constantly bumping through wars, foreign occupations and dictatorships with only brief periods of democratic calm in-between. Its citizens only knew how to live and thrive in unstable and unpredictable conditions. They had not been raised to see themselves as architects of the rules that governed their broader society. There was little trust in their relationship with the state and they certainly didn't feel or behave as shareholders in their nation. They did not elect governments to task them with mandates; they treated elections simply as opportunities to reward, punish or, worse, take advantage of politicians.
And then, almost overnight, prosperity arrived; an awesome inflow of development funds from the EU boosted the state's ability to bloat and pamper; a rapid deregulation of the financial sector exploded consumer credit and triggered an artificial economic boom through a spike in consumerism; and political leaders learned how to surf the wave of this newfound illusionary wealth and simply prolonged or even enhanced their citizens' endemic mistrust of the system.
That's exactly how an immature democracy turned into a reckless adolescent, mixing that dangerous cocktail of extreme individualism with uncontrollable entitlement. Both as a nation and as individuals they spent their way to oblivion. By cheating their state on taxes, they cheated themselves. By looking at handouts as entitlements and by treating them as real income, they lost sight of how to create real value. They were misguided by opportunistic leaders and, for far too long, they were left alone by the rest of the world. Until their drunken party got so loud and so out of control that it almost wrecked the rest of the neighbourhood...
Hopefully Greece's painful hangover won't last nearly as long as its irresponsible party of the past three decades -- and hopefully we, as a global community, will have learned how to support, control and guide the many other adolescent democracies that are joining us in this century.