Published in The Sun Herald (Sydney), 6 November 2011
IF THE collapse of Lehman Brothers was a crisis of financial capitalism, the troubles of Europe mark the catastrophe of statism. Catastrophe is an appropriate word. After all, it is Greek and means downturn. Greece is, of course, the epicentre of the European disaster but make no mistake, about it: the problems it faces are also present in most European countries.
After World War II, Europe became a continent of great expectations and little ambitions. For decades, governments had promised their peoples a life free of worry. Free education and healthcare, good infrastructure, a social-security safety net, lifelong jobs in the public sector followed by generous pensions – that’s what Europeans expected from the state.
Over time, the once-proud citizens of Europe degenerated into spoilt customers in the self-service shop of government. But unlike good customers, they were unwilling to pay the bills for the goods and services they demanded.
Instead, they were passing them on to future generations by incurring giant government deficits. And while they were doing this, they became experts at milking even more out of the state. In Greece, it was revealed recently, long-deceased pensioners (orrather their surviving families) kept receiving pension payments worth €8billion ($10.6billion).
What we are witnessing now is the moment this system of big government comes to a crushing halt. Europeans suddenly realise that you need to produce first what you want to consume later. They now understand work must precede redistribution. They are faced with the simple truth that you cannot escape your debts forever.
The European catastrophe unfolding in front of our eyes is the endgame for big government. It is the logical conclusion of public spending that has created a false sense of security, thus sucking any kind of entrepreneurial spirit out of the population.
Europe once became the world’s dominant power by relying on private property rights, competition and entrepreneurship.
Europe of today needs to relearn these values if it wants to recover from the crisis caused by its over-reliance on the state.