“To stay in the euro-zone, Greece’s prime minister will have to jettison almost every promise he has made to his own voters” plus shackle his countrymen in a prolonged indentured service to a status quo that does not fit their temperament. Factors such as government bloat and dysfunctional politics will not resolve. Uki Goni editorial in the New York Times: “What Greece Would Face in a Default” is correct in drawing the similarity to Argentina renunciation of its debt in 2001 to the country’s indifference to reality. Greece joined the Euro currency and the European Union’s expensive administrative directives on a fiction. Its best to break off completely and develop a self organized truth from which to build on.
First lets recognize the Greek economy can’t service a debt that so in arrears it requires more resources than what it generates. An economy depends on the circulation of money, an economic lifeblood that nourishes and oxygenates the organs that produce. Austerity demands at this point to balance the books are similar to the old time remedy of blood letting. It will make the problem worse..
Greece and Argentina are similar in their misperception of the good of spontaneously organized markets. Various articles about Greece in the New York Times over years bring up a very meddlesome government hindering economic activity. One article from memory recounted the the travails of a Greek American trying to start a beer company in Greece only to be held back by a government bureaucrat beholden to Heineken of Holland. Another article detailed an online olive oil start up with company executives required to submit stool samples to a Greek health bureaucracy in order to sell third party oil never touched by any of these executives. And finally a railroad built for which their was no market demand but plenty of EU money to finance its building. These are decisions of a non-market entity, government, making wasteful asset allocations that are difficult to recover from even given a bountiful economic environment. Greece can’t afford a large meddlesome government similar to what prevails in the more developed regions of the European Community.
As long as Greece is part of the EU and its currency the meddlesome large government bureaucracy exists. Until a default there is no possibility of a dis-assembly of this uneconomic structure so that it can rebuild logically in a market manner. Bitcoin is a libertarian store of value that let markets win out by allowing citizens to disregard a dysfunctional government. As described in a May 2015 New York Times Magazine article, “Quick Change” vacationers in Argentina settle up with their hotelier using Bitcoins which then are traded for pesos on the street at the current rate market rate. This way the hotelier avoids dealing with a government unconcerned with private property and or the rule of law. Without Grexit there is no hope for Greece of breaking free of the yoke of Eurozone’s authoritarian uneconomic bureaucratic rule so that its citizens can self organize into something more responsive to it’s needs.
