The Malaise of Greek Liberalism

These are dramatic times not only for Greece’s economy, but also for the political system. At the center of the drama stands Alexis Tsipras, leader of SYRIZA, the “Alliance of Radical Left.”

The group swept to power in January, pledging an end to highly unpopular austerity policies imposed by the creditors. Following a spectacular U-Turn, Tsipras is now fighting to find a majority in the Greek parliament to pass a new deal.

While a sizeable bloc of his party has abandoned him and may form a new party, Tsipras relies on the support of the opposition parties, the left leaning Panhellenic Socialist Movement (PASOK) and the conservative New Democracy, or Nea Dimokratia.

The year 1974 marks a watershed in Greece’s contemporary history. Following the return of democracy to Greece that year, after seven years dictatorship, these two parties have alternately governed (or: misgoverned) the country on the Southern tip of the Balkans.

It is fair to say that these parties carry a historical burden for the mess Greece finds herself in today.

While they differed in their programs and sociological composition, the two parties nurtured a system that liberal critics in Athens refer to as a combination of political clientelism and (socialist) statism.

Both have relied on patronage politics to come to power and remain there. In that process, they have expanded the state sector to satisfy the demands and expectations of their various clients.

Liberal principles such as the free market, competition, the rule of law, equal opportunity – to name but the most basic in this context – are not compatible with clientelism and statism.

While liberals strive for a small and efficient state, consecutive Greek governments have created a mega-state characterized by a lack of efficiency.

While I am not aware of opinion polls, anecdotal evidence and discussions with Greeks give me the impression that for a majority of them, statitst policies have far more appeal than liberal principles such as individual initiative and personal responsibility.

This is all the more surprising, as the widespread belief in the omnipotence of the state, combined with the benefits of public handouts, has had crippling effects on the economy.

Talent exported

Clientelism and patronage have a long tradition in Greece. Their pervasiveness is generally attributed to the dark years of foreign tutelage.

However, this is hard to square with the fact that Greece has always been a nation of traders. Even so, Greeks today on average have little understanding, let alone appreciation, for the benefits of (free) markets.

It is probably fair to say that for well over a century already, much of Greece’s inherent trading talent has sought careers and prosperity abroad.

In some sense, Greece’s liberal voter potential more or less “exported” itself, as considerable numbers of successful Greek business people in the United States, Australia and elsewhere can attest.

The result was – and is – the prevalence of a statist mindset at home. This has had a massive impact in the context of electoral democratic politics, determining both political party preferences and voting patterns.

Up to this day, many Greeks, mainly the so-called “non-privileged,” look back with nostalgia at the 1980s era, when Andreas Papandreou, a populist par excellence, engaged in his brand of patronage politics.

It was at that time of (presumed) public generosity, when the basis for the fiscal disaster now plaguing the country was cast into stone. Incurring pubic debt to finance current government and private consumption – not investment — became an unshakable habit.

Probably the most severe damage was inflicted on the collective mindset of the people.

The search for a viable alternative

When securing an undemanding (but always well-paid) job in the public sector becomes the highest aspiration of an entire nation, one cannot expect economic dynamism or a taste for liberal prescriptions for economic and social development.

True, in recent years, more and more Greeks became fed up with the two traditional old political parties and the way they managed the crisis.

However, the disenchanted and frustrated did not turn to a liberal alternative. Instead, they moved on to Syriza, a leftist party in the hope more socialism would lead to a better future.

Still, the past few years have seen various efforts to form liberal political parties. Typically, these efforts lacked coordination and strategy. A major weakness of liberal organizational efforts has been their elitism.

Ambitious political aspirants and a handful of followers meet in hotels or private houses and speak a language that rarely touches broader voter groups.

Another weakness of liberalism in Greece is the lack of patience of leaders. Typically, liberal parties are launched ahead of elections, which is not the best timing.

If they miss the single most important objective, that is to get the leader(s) elected, the party may soon disappear and fall into oblivion.

For Greek liberals, the preferred address of safety has been the New Democracy party. That big conservative party has always aspired to represent a wide ideological space. Therefore, it has always offered room for liberal rhetoric – and liberal politicians.

However, when in government, the party has failed to push Greece in a liberal direction. Structurally, this conservatism is determined by the reliance on clientelist and statist strategies.

Greece’s process political realignment is not over. One new party that made waves recently is called “To Potami” (Greek for “The River”). This grouping’s rhetoric is strongly pro-Europe and sounds liberal.

But confronted with the choice between joining the liberal or the socialist fraction in the European Parliament, “To Potami” opted for the latter.

Time for institutional changes

Whether within Greece itself or among its eurozone partners, the present debate focuses much on taxes and spending cuts. Both are detrimental to growth and development.

More important for a sustainable economic solution and a way forward for Greece are institutional changes. The creditors have demanded these from the outset.

Not surprisingly, the forces of the political status quo and the establishment have failed to implement most of them. The reason is simple: Following these demands would destroy the base of the crony capitalist and statist system they rely on for survival.

The admittedly draconian demands by Greece’s creditors are not all devils’ work, as the people are made to believe. They contain crucial elements that may provide a historic chance to modernize, even revolutionize the country’s socio-economic structures.

The evidence is clear enough: All countries that have followed a path to a market economy, implemented the rule of law along the way and based their electoral democracy on these core tenets have done well. Joining this path at long last offers a big opportunity to Greece.

A European and liberal Greece will be a better place to live in for all her people. Realizing this goal, which has so far proven elusive, is of utmost geostrategic importance not only for Greece but — in view of the turbulent geographic environment the country finds itself in once again – also for Europe as a whole.

Editor’s note: This article reflects the personal views of the author, not that of his employer.