So what am I anticipating, with all this gloomery? a reader wants to know. Another1973? Another 1929? Another A.D. 410?
Hey, I’m not an expert. I just try to keep up with the experts — the gloomy ones, of course. (No offense, Larry.)
From what I read and am told, as best I can understand it, the developed world will be much poorer, grubbier, and meaner four or five years from now, its ravaged by competitive inflation, its greatly reduced, entitlements meager.
The rest — what will follow; what the consequences for social order will be; what the consequences for international order will be; and what the path from here to there will actually look like — is guesswork. My guesses:
● What will follow? A long period of stagnation, life depressing & uncomfortable for most of us in the West (and made more so by nostalgia for the carefree, prosperous years), but not down at Dark Age standards.
● Social order? I foresee a great boost in popularity for the Second Amendment. (Because among the things government will no longer be able to afford will be law enforcement.) Multiculturalism, on the other hand, will lose market share, and ethnic disaggregation will accelerate. (Because social capital varies inversely with diversity, and with less government we shall need more social capital.) Representative government will probably survive, but there may be secessions from the U.S.A. Religion, or at least spirituality, will get a boost, following the Chinese maxim: “In normal times you don’t burn joss; when times are hard you hug Buddha’s foot.”
● International order? May actually improve. Hungry, working two jobs for a handful (or wheelbarrowful) of inflated-away dollars won’t be in a mood to fuss much about the human rights of detained terrorists, or of people in unfriendly nations, or of migrants violating our borders. Nor will they bother much about or spotted owls (yummy!) Smiting one’s enemies hip and thigh may even come back into fashion — a jolly good thing in my opinion.
● The path from here to there? Paved with good intentions, of course!
They were not an “anti-government” mob, but a government mob, a mob comprised largely of civil servants. That they are highly uncivil and disinclined to serve should come as no surprise: they’re paid more and they retire earlier, and that’s how they want to keep it. So they’re objecting to austerity measures that would end, for example, the tradition of 14 monthly paycheques per annum. You read that right: the Greek public sector cannot be bound by anything so humdrum as temporal reality. So, when it was mooted that the “workers” might henceforth receive a mere 12 monthly paycheques per annum, they rioted. Their hapless victims—a man and two women—were a trio of clerks trapped in a bank when the mob set it alight and then obstructed emergency crews attempting to rescue them.
... the Greek rioters are the logical end point of the advanced social democratic state: not an oppressed underclass, but a pampered overclass, rioting in defence of its privileges and insisting on more subsidy, more benefits, more featherbedding, more government.
In my “alarmist” book I put it this way:
“Projected public pensions liabilities are expected to rise by 2040 to about 6.8 per cent of GDP in the U.S. In Greece, the figure is 25 per cent—i.e., total societal collapse.”
Four years on, thanks to Obama in Washington and business as usual in Athens, the situation has worsened. Yet in a sense the comparison is academic: whereas America still has a choice, Greece isn’t going to have a 2040. The mob is rioting for the right to continue suspending reality until they’re all dead. After that, who cares?
Greece has run out of Greeks to stick it to. So it’s turned to Germany. But Germany too is in net population decline. The Chinese and other buyers of Western debt know that. If you’re an investor and you don’t, more fool you. Tracking GDP versus median age in the world’s major economies is the easiest way to figure out where this story’s heading.
Greece’s 2010 budget deficit is 12.2 per cent of GDP; Ireland’s is 14.7. Greece’s debt is 125 per cent of GDP; Italy’s is 117 per cent. Greece’s 65-plus population will increase from 18 per cent in 2005 to 25 per cent in 2030; Spain’s will increase from 17 per cent to 25 per cent. As lazy, feckless, squalid, corrupt and violent as Greece undoubtedly is, it’s not that untypical. It’s where the rest of Europe’s headed, and Japan and North America shortly thereafter. About half the global economy is living beyond not only its means but its diminished number of children’s means.
Instead of addressing that basic fact, countries with government debt of 125 per cent of GDP are being “rescued” by countries with government debt of 80 per cent of GDP. Good luck with that. Alas, the world has deemed Greece “too big to fail,” even though in (what’s the word?) reality it’s too big not to fail. And the rest of us are too big not to follow in its path:
Greece, wrote Theodore Dalrymple, is “a cradle not only of democracy but of democratic corruption”—of electorates who give their votes to leaders who bribe them with baubles purchased by borrowing against a future that can never pay it off. The future is now here, and the riots will spread.