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COMMENTARY
November 2, 2011
Below Olympus
Brilliant or crazy? That is not necessarily an either/or proposition, and George Papandreou's proposal to hold a Greek referendum on the European rescue package had aspects of both. It won't work, anyway: for under the Greek constitution a referendum requires a three-fifths majority in the Greek Parliament, and Papandreou has just lost his one-half majority from party defections.Nevertheless, it was an intriguing way to sign his own political death warrant; and the election that comes when his government falls will offer voters the same choice: Default, or accept the rescue package? Supposing it still exists when the election is over. Greece, the home of democracy, as we like to say - of that pioneering democracy that had Socrates put to death - is again offering "democratic vistas." The Economist cites a book entitled Golden Fetters, by Barry Eichengreen, which I have not read but should have. It appears to justify an argument that I have been making, both explicitly and implicitly, in these columns. For among other things, it explains why Western countries began to abandon the gold standard, after the First World War. The problem, you see, was democracy. The argument is so plain, that people avoid making it, searching for an explanation that is more subtle, complicated, and flattering to the masses. But the truth will out. In the 19th century, we had democracy in leading Western countries, but the franchise was restricted to grown men with property. They could live with the gold standard and what it enforced: certain natural austerities. For there was only so much gold. The franchise was extended, not only to women, but by increments to the entire "working class." And that was done, reasonably enough, to prevent revolutions. The alternative being, "mow them down to marmalade," which offended against aristocratic notions of good taste. But once everyone had the vote, austerities ceased to please. Demagogues could tell the relatively poor, that the solution to austerity is to eat the rich. This was, after all, what had aroused the blood lust of the peasantry during the French Revolution: why don't we just share out their wealth? Now, the problem with having the rich for dinner has always been, what will we have for breakfast? Suddenly, "inexplicably" (to the masses), it seems we have eaten all the capital. Socialism doesn't work, ultimately for the same reason cannibalism is not a good idea. Conrad Black, of all people, has been making a related argument in his recent books (especially his biography of F.D. Roosevelt), and free-ranging articles about modern history in the highbrow press. They are enthralling, and he has spent his time in prison well. But let me say, before inching forward, that he takes a liberal view of this history; I take a more pessimistic, conservative view. That is to say, he accepts Roosevelt and his kind as heroes of a sort, who saved the West from communism (or, full socialism), by creating the Nanny State as an alternative to it. He was, on this view, actually saving capitalism, through the dust bowl years. That is a very realistic argument, and a conservative habitually bows before reality. But in the end I find it a realistic argument against democracy itself (or "mobocracy," to translate the Greek more colloquially). We begin to understand why the founding fathers of both Canada, and the nation next door, feared democracy, and created constitutional roadblocks against its spread. By their nature, democracies vote for more than they can afford. Paper money gets them around the obstacle of gold, and then they vote to roll the printing presses faster: for debt, then inflation. And now, in this consummate act of crazy brilliance, the beleaguered socialist prime minister of Greece wants his people to vote on the consequences of their collective achievement: a slag-heap of debt that towers higher than Mount Olympus. Either they will take Europe's money, on Europe's terms, thus letting Europe (chiefly the more habitually tightwad Germans) dictate a cushioned austerity. Or they will vote to default, and leave euro and Europe behind. In other words, the alternative to their government's agreed austerity program is the breakfast austerity I mentioned above. Having eaten the rich, they must gnaw on dry bones. The referendum plan, had it a chance of working, was crazy brilliant. Make the people choose. Instead, their default is being chosen for them. And, Greece not only delivers the coup de grâce to herself. For Europe could barely bail the Greeks out; let alone the Italians, Spaniards, Portuguese, Irish, and so forth. The now-proved unwillingness of a democratic electorate to even try to pay even a written-down fraction of what they owe, blows a jet of Aeolian wind through the entire European house of cards. Gentle reader should not think this will be fun to watch. For to continue with this clichéd, but useful, metaphor, their house of cards was built high enough to knock our house of cards over. David Warren
© Ottawa Citizen
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