How The Greek State Looted Greece

January 14th, 2015   Submitted by Nikos Sakkas

TyrantEvery anarchist understands the inherent incompetence, and corruption of the modern State. However, Greece is not a typical case. Greece is competing with Argentina for the most extreme failure of the State, and its many cronies, in the postwar period.

“With 300,000 to 400,000 such party men who have no qualifications to their credit other than the fact of having performed good services for their party, this state of affairs of course could not exist without enormous evils. A corruption and wastefulness second to none could be tolerated only by a country with as yet unlimited economic opportunities.” Max Weber – Politics as a Vocation

That is exactly what happened to Greece. Adjust the figures to reflect the size of Greece, take account that no “unlimited economic opportunities” are in place here, and you got yourself right at the middle of the recent economic and social collapse.

However, few realize that this tiny little country of 11 million has a maritime industry that ranks first in the world, with Japan as a distant second. How can people who are so competent on the global seas be so incompetent in their own home?

Of course, it is not a matter of incompetence. It is a striking case of a vampire State draining every drop of blood out of the society that sustains it. Shipping is so successful for one and only reason: because it is, by definition, far away from the death touch of the Greek mafia State.

The Past

Greece entered the EU in 1981, which began a period of stability, democracy, and peace, with a flood of funds flowing in from the EU. You have to go back 2,500 years, to the Golden Age, to find an era of similar opportunity. But it took the State only thirty years to ruin that opportunity. In 2009 Greece got the nervous attention of the international community when the public deficit was running as high as 15.4%. The Greek State initially reported this figure as only 3.7%. Cooking statistics was so common for the local State mafia that “Greek statistics” has become the EU slang for unreliable and fake numbers.

In January 2010 the government announced austerity measures that were meant to bring the deficit down to 2.8% in just two years. That sharp a deficit reduction in such a short time has never occurred anywhere in the world, and there was no reason to suspect that it was possible in Greece. The EU stepped in to prevent the Greek financial collapse from spilling over, but it stepped in too late, with no real concept how to resolve the crisis. A relatively small problem eventually rose serious concern about the strength of the whole Union. But that is another story.

Coming back to Greece, from 2000 to 2010 cheap and abundant Euros raised the private debt from 55% to 120%. In those days banks were pushing in many fancy ways to put their money in borrower’s pockets. However, to be fair, similar debt increase happened during the same period in many other EU states. Private debt in Spain rose from 120% to 220%. Irish debt went from 150% to 330%. What is important is that this debt did not contribute to the real economy. It did not result in investment. It resulted in sheer consumption. Real estate prices went up 15-20% when the development was around only 3%. The bubble was forming…

Obviously, a broad EU crisis contributed to the Greek collapse in 2010, but only partially. To a large extent the Greek crisis was native, and was engineered by the local State mafia rather than the adoption of the Euro.

In 1982 the sovereign debt in Greece was close to 28% of the GDP. Within thirty years it went up to 140%. In the same period Greece de-industrialized. Agricultural production remained stagnant and unimaginative. It gradually declined and survived only because of the funds from the EU agricultural policy. On the service side of the economy, nothing spectacular happened. In the 70’s a large number of wealthy students from the Middle East and Africa came to Greece to study. Some of them settled permanently after their studies. This trend has now completely stopped. In the same period, information technology opened a great spectrum of new, global, opportunities. Greek software engineers are among the best when they are abroad; not in Greece however!

There is hardly any business success to report from this period. Spain was establishing itself as a global leader in wind energy, Ireland was turning into a promising ICT hub. In Greece people were happily living on debt and EU allowances. Even worse, the political narrative of the period brought the people to believe that this was the natural way of things, that wealth was somehow automatically generated. The socialist jargon added to this myth, suggesting that we only needed keep the bad guys away from State assets. Nobody said who these bad guys were.

The education system in Greece remained completely under State control. It was held as a hostage, and used as an instrument for favoritism and clientelism. Creative people were seen as a threat, and chased away. Meritocracy was banned and labeled an ugly, unfair concept. Speaking favorably about entrepreneurship during this period was enough to have your access to universities and other institutions blocked. The most creative Greek people emigrated away throughout the 20th century for a variety of reasons (wars, poverty, etc.). In the 80’s and 90’s emigration continued due to the tight control of society by party militias, and the suffocating environment where creative and innovative people were forced to work and survive.
The State and its political parties were always in a very sensual love affair. Socialism was the driving ideology during this period. In fact there was no alternative. Even the so-called right wing parties were competing with the official socialists to be more socialist. The recent crisis created a new version of socialism. National Socialists, Nazis and Fascists got 8% in the election. Stalin loving communists got another 7%. Neither of these ideologies had such appeal anywhere else in the world. Ideologies that are long extinct everywhere else are alive and well In Greece.

Over the years an oligarchy has emerged, much resembling that of Putin’s. Party mafias, living-on-the-State businessmen, party controlled unions and mass media have been its main components and beneficiaries. They still control large parts of the economy. Greece is the only EU country where there is just 1 energy service provider. In Sweden there are 170, in Poland 188! This ruling mafia still holds on to power, and consistently pursues its own interests. Most of its financial assets are abroad which of course makes it largely indifferent to whether the country stays in the Euro zone or not.
Of course, just as the laws of physics are inevitable, the above socialist legacy resulted to a dramatically shrinking and uncompetitive private sector, wasting most of its time trying to trick a greedy State, and stay clear from its corrupt tax collectors.

Today, in a society of 11 million, after having practiced Soviet socialism fervently and by all ruling parties, left or right, for 30 years, we are left with 1.5 million unemployed, 0.8 million public employees, 2.8 million pensioners, 2.8 million below 18 age and 2.9 million heroes that have to take care of all the rest.

Now, guess what the political response has been to this utterly unsustainable mix! More socialism! Yes, more socialism!

The current coalition government has launched an aggressive tax campaign, again overlooking basic laws of physics, as you can’t get much out of those that don’t have any to give. Power is currently in the grip of the two major political parties, those whose socialist policies sky rocketed within 30 years the sovereign debt, ruined the economy and devastated the society. They have put aside their fake ideological differences, have subscribed to exactly the same policy. The only one they know. Overtaxation.

And the opposition, most certain to win the election next year, is a radical left party comprising a mix of all socialist versions, from light social democratic to Maoist. It promises to restore salaries to the previous levels, and refuses to pay off the huge debt of the 350 billion Euros, something that will most certainly result in the country being forced to leave the Euro zone. Just imagine a ruling, semi-communist party of relatively rich Greece issuing a debt write off request to poor Slovakia that has suffered under communist rule. What are the chances this grotesque initiative will ever be accepted? Maybe this is an extreme case, yet I seriously doubt the response from the German or the Dutch parliament would be much different. At least under the given, current, circumstances. There is little doubt that the EU, amidst the many problems of its own, has no more time and money to spend on ridiculous requests from a profligate State.

Under other conditions, moving out of the Euro might have been an option to consider. In the current shape of things this is certain to empower the oligarchs who have their funds parked safely abroad, while further impoverishing the people.

The Future

Friends question me often about the competitive advantage of Greece in a hyper competitive world. I do believe this exists; the main barrier is not there.

The country has many advantages that it has never seriously considered tapping into. It is not really the nature of Soviet States to tap into opportunities. This is only possible when delegated to human creativity, not to State exploitation. There is a 14,000 Km coastline, largely unexplored. The tourism model is still a dull, low cost, low quality one, and is not moving in the direction of small, quality, different, experience oriented, units. The notion of agrotourism is still largely unknown in the country. There is ample opportunity in the food sector. There are 130 species of wild flowers and herbs globally unique to Crete alone. What has been made out of this? Almost nothing. The powerful maritime industry would love to establish ship building facilities in Greece. This is not allowed by communist madmen, who look forward to the destruction of everything in order to establish their dictatorship of the proletariat. They openly say so. Have no doubt that they mean it! Until recently, they had literally succeeded in keeping Greece outside the sea cruising industry as it would endanger work positions, so they claimed. A brave man, Mr. Adonis Georgiades, managed to literally trick them out and cruise ships bring now several billions to the economy and create a lot of new work positions.

The real barrier is the 19th century mindset the Soviet Statism has imposed here. There is hardly any place on earth where the anarchist approach would make more sense. Less, close to zero, State, with a strong entrepreneurial spirit allowing the Greek creativity to flourish and compete globally. This is the only way out. But how can you ever get this message to people who have been brainwashed for decades by Soviet Socialism? Who have been systematically told that capitalism is about the fat man with the cigar, sucking the blood from the workers, and anarchism is about writing silly graffiti on the wall, and now and then bombing some police van?

The real problem is that time has stopped here. Socialists broke the clock. We are stuck in the 19th century.

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All financial data reported above have been taken from the book “Revolutions” of Matthieu Pigasse

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25 Responses to “How The Greek State Looted Greece”

  1. HReardenNo Gravatar says:

    Indeed a sad situation. I wonder if there are people in Greece who are Free Market Anarchists or at least favor Greece reverting back to city-state form of governance.

  2. Nikos SakkasNo Gravatar says:

    Very, very few. Libertarian thought of all variants is very marginal in Greece. Statism is what is dominant. And statism favors, by nature, centralization and opposes any idea of a “city state”.

    • Seth KingNo Gravatar says:

      Then I highly suggest you GET OUT and let those losers stew in their own juices. Come to New Hampshire and be surrounded by like minds! And don’t give me any crap about US immigration laws! There are 11 million “illegals” here. I’m sure the US could handle 1 more!!

      • Nikos SakkasNo Gravatar says:

        I guess its a matter of age Seth; I’ m 56… Three decades ago I would have followed your advice, no doubt. Also, our small company is quite export oriented I have the opportunity to travel and get away from the misery here. Not to mention that its built on a flat, non hierarchical and voluntary rather than command model. That’s very important for me

    • jeremyNo Gravatar says:

      i met a greek libertarian once, he thought it was cool we all had guns

  3. VanmindNo Gravatar says:

    Great stuff, Mr. Sakkas, thanks, although this avatar is pretty sure that no State can ever do anything.

    It’s a tedious but important distinction. This avatar tries without a complete lack of success to emphasize that it is the individuals comprising one or other crime syndicate who are the ones trying to get away with fraud, yet this avatar still ends up asserting things like “The NWO is behind such-and-such.”

    The more a given crime syndicate is one-world centralized, the more difficult it becomes to separate the individuals from the organization (e.g. try naming members of The Hexagon or The Octagon). Many people believe themselves to be awake because they’ve reached the erroneous conclusion that tools known as bankers are masterminds. Indeed, it is that very erroneous conclusion that the NWO (to be more accurate: the individuals who strive for a New World Order of their own personal preference by way of inherently immoral political activism) wants everyone else to reach, because that way lies a billion individuals screaming “Revolution!” and an eventual one-world democracy.

    After that, it’d become a strategy for continuity-of-government by way of electoral head-fakery and the “inclusionary” mind control of mandatory voting. Stumping theater featuring Zwangswirtschaft promises or Commonweal promises or Minarchism promises wouldn’t matter any more than they ever have.

    That said, the article offers many opportunities for contemplation. Aspiring one-world tyrants cry that philosopher kings have an obligation to bring certain parts of the world “out of the fourteenth century,” when meanwhile it is the nineteenth century dialectic that Mr. Sakkas mentions which represents a dangerous throwback mentality. The Silk Road was real, but it is impossible to breathe life into any New Socialist Man. Many will perish in a “guidestones” kind of way before the rest learn that lesson.

  4. Brantly UngerNo Gravatar says:

    I wonder if the problem of decline was exacerbated by the ousting of Constantine II in ’67, followed by the establishment of the Third Republic in ’74? It would be interesting to find any possible causations or even correlations involved. I am no fan of a monarchy, but I would choose one over a democracy, republic or not, any day.

  5. Nikos SakkasNo Gravatar says:

    In fact Constantine was ousted in 1974. What you say never crossed my mind, to be frank. The guy was sort of low intelligence and very arrogant. There have been far better kings here in the past.

    There has been a clear issue of leadership in the last 30 years but I very much doubt the specific royal family would have provided any better alternative.

    • Brantly UngerNo Gravatar says:

      You may very well be right that no better alternative would have been provided via a royal family. I suppose I know little about Greece’s past to have any really say in the matter. I once read an article where Taki Theodoracopulos mentioned Constantine II and it’s summation struck me as describing Constantine II as “The Sad King” somewhere in my mind. Perhaps I’m romanticizing it all, but it still strikes me when I think that that man can never see home ever again. For someone who feels “lost” anywhere, it’s hard for me to imagine not having a physical place to return to when the world is too much to handle. I suppose that’s neither here nor there. Anyway, I can’t argue your descriptors of him as arrogant and low intelligence, but I can say that intelligence is not an explicit requirement of great leadership and arrogance can help, at times, in such positions. (Food for thought.) Regardless of my ramblings, it was a pleasure to read your article. If I were Greek, I suppose I would carry some pride in my extremely interesting and far-reaching ancestry. Have a great day!

      • HReardenNo Gravatar says:

        Perhaps Greece’s past is Greek to you. This whole economic situation in Greece could be the subject of a theatrical Greek tragedy. It is indeed tragic just like what happened to Antigone was tragic.

  6. JohnNo Gravatar says:

    One of hypothesis: Greece used to be fed by the US as it helped to oppose the Soviets. Many of the citizens got used to the aid and became lazy. Simplification, of course. What do you make of this report – Geopolitics of Greece? https://www.youtube.com/watch?v=ZRgpWyi_jt0

    • VanmindNo Gravatar says:

      This avatar thinks that the video report presents a disappointing yet predictable thesis regarding the desirability of collectivism and a centralized pretense of authority. It seems that the videographer laments the terrain that makes Greece more difficult to bureaucratize, as though easier access to one’s neighbor makes it easier to assert artificial control over the neighborhood. There is even a complaint that Greece doesn’t have much arable land and can’t accumulate as much capital as other regions … as though that makes any difference whatsoever or could possibly impoverish Greeks in a world that embraces voluntary freedom of trade. The stuff about voting & elections is simpleminded blather. The stuff about “historical rivalries” is childish. The stuff about requiring a strong military to protect shipping is primitive barbarity. The mention of “leadership” was so insulting that it provoked this avatar to stop the video at the 7:15 mark.

      • JohnNo Gravatar says:

        This Avatar must have invented the jump to conclusions mat.
        Why is the kid wrong?
        Recent conflict is a factor that affects mentality. Europeans have had many wars and tend to remember them. For example, Greeks would Never sell an island to the Germans to cover their debt because … Hitler,

        • VanmindNo Gravatar says:

          Sure, it follows that when the John avatar jumps to conclusions the collectivist rhetoric of make-believe “leaders” becomes more enticing. This avatar chooses not to fall for such planted video disinfo.

          • JohnNo Gravatar says:

            All right, let’s start over. It is not obvious to me at all why the video is ridiculous. Would you enumerate his claims one by one like so:
            1. His claim / statement.
            2. What is wrong with it.
            3. Which correct statement would you replace his statement with?

      • JohnNo Gravatar says:

        This avatar finds little concrete arguments in the reply of your avatar, only several statements about how ridiculous the video and some of its points are. No explanation was given as to why the usage of the world “leadership” is a logic breaker, or why a hypothesis about protecting shipping lanes is a ridiculous one.

        It is very easy to state “this sucks”. It is much harder to do a detailed analysis and it is even harder to propose an alternative thesis.

        That would make you vulnerable to “this sucks” coming from others. Are you willing to take that risk and put in the work?

  7. JohnNo Gravatar says:

    Greece, Italy and Spain are not alone. Ukraine is joining the party. What cannot go on will not go on.

    US Taxpayers To Fund Ukraine Bailout With Bond Guarantee
    http://www.zerohedge.com/news/2015-03-20/us-taxpayers-fund-ukrain e-bailout-bond-guarantee

    CCC-rated Ukraine is preparing to issue more debt, debt with a Aa+/AAA rating because it will come with the explicit guarantee of the United States of America. In other words, after raiding Greek pensions with the IMF’s blessing, the Kiev puppet government is now going after the “full faith and credit” of the US… backed by its taxpayers. In yet other words, the latest Ukraine “bailout” is courtesy of you, dear US taxpaying reader.

  8. Fritz KneseNo Gravatar says:

    One thing to emphasize here is that most of the money was stolen by the ruling elite. Taking back their ill gotten gains would constitute restitution, much as we would do with a burglerer. Taxing to death the common man as Germany promotes simply adds fuel to the socialist’s arguments against the free market.

    • Nikos SakkasNo Gravatar says:

      Fritz, of course the elite was the first to benefit; but it was quite generous and did give out (indirect or direct bribery) to large segments of the society, a great part of what was wasted in these last thirty years; something around 300- 400 billion Euros. It was not so much the elite against the people; rather the past generation against the current one. Net losers are today’ s young. The 1.5 (25%) million of unemployed.

      As to Germany (which I guess you come from) I don’t think it was so keen about taxing. They have been pushing for other issues (work relations, pensions, etc.) far more than taxing. Taxing is the only money collecting policy known and practiced by the soviet socialists here, the previous and the new ones, the right or the left.

      They are the only responsible.

      • Fritz KneseNo Gravatar says:

        Nikos, thank you for your reply. My point is that no matter how much benefit the common man gets in situations like Greece or the USA for that matter, the ruling elite have the control and get the lion’s share of the benefits which are not always money but often power. By the way, I am only about half German and live in the US Ozark mountains.

        • Nikos SakkasNo Gravatar says:

          No doubt Fritz, the elite always profits quite a bit more than the rest. What is perhaps a bit unique to the case of Greece is that vast parts of the society also benefited, to a lesser of course extent.

          The main conflict was not between the corrupt elite and the struggling poor; it was between the productive people on the one side, who more and more chose to leave the country and the parasites on the other side. And the other major conflict of interest was between the profligate generation of the 80’s – 00’s and those born today, amidst a pile of debt.

          A case study of socialist/ populist policies. Peron is an amateur in comparison.

          Have a good day and a good month; spring must be beautiful where you are! So it is here also, no complaint on this matter!