The Greek Collapse Shows Millennials the Problems with Socialism

Millennials’ economic views are generally complicated, often contradictory, and certainly a product of their time. In spite of the myriad data points that confound any attempts at generalization, the media has latched onto one single piece of information: Young adults seeming affinity for socialism.

The media’s ears first began to perk up in 2011, when a Pew Research poll seemed to confirm the generational economic angst that bore the short-lived Occupy Wall Street movement. The poll found that among people 18 to 29 years old, 49 percent had a positive view of socialism while 43 percent had a negative view. Contrast that with those ages 65 and older, of whom only 13 percent have a positive view of socialism and 72 percent had a negative view.

But young adults’ complicated feelings towards socialism ended up running deeper than the Occupy Wall Street social movement. Just this year, a YouGov poll found that 36 percent had a positive view of socialism, which was just under the 39 percent who had a positive view of capitalism.

So what gives? Well for one thing, the poor economy has had a significant effects on the lives of young adults – pushing up unemployment rates, depressing their earnings potential, shuffling them in entry-level jobs unrelated to their studies, and keeping them at home with their parents. Taken together, it’s easy to understand our generation’s dampened enthusiasm for capitalism, which hasn’t seemed capable of producing the jobs or wealth we thought were part and parcel of the American Dream.

In that sense, our newfound affinity toward other economic theories is something akin to “the grass is always greener…” We didn’t grow up during the Cold War, in which the enemy was a socialist totalitarian state who brutally suppressed political opposition. We didn’t grow up during Maoist China, which believed that “one-tenth of the peasants” would “have to be destroyed” in order to implement government reform. And we didn’t grow up in the shadow of Stalin’s Red Terror and Great Purge or Lenin’s Hanging Order.

Instead, we came of political age when many democratic socialist economies seemed, at least on the surface, to be doing pretty well while our capitalist nation was struggling to provide for our generation. But now, Greece is providing a stunning example of the long-term failures of socialism, which is, to paraphrase Margaret Thatcher, that it always runs out of other people’s money.

Stephen Moore writes for Fox News:

Greece is now sitting on $350 billion of debt. . . Meanwhile the Greek citizens have come to the conclusion that fat pensions and cradle to grave welfare benefits are a human right that can never be taken away. That is what they declared in the referendum.  But those benefits are going to be taken away. Socialism has radically reduced the standard of living of the citizens. 

All of the conventional EU and IMF solutions – two of Greece’s top creditors – side step the root cause of the Greek tragi-comedy. The Greek citizens are simply living way, way beyond their means.  This is a nation with an average retirement age of 60.  This is a nation that has one in four adults unemployed and half of its young people out of work.  With such countrywide levels of idleness, who is there that is working to pay for these super-extravagant benefits?  Are the hard-working German citizens going to pay more taxes to pay for lavish benefits to Greek retirees? Almost certainly not.  And they would be fools to do so.  

The result has been an epic disaster. Greece’s attempts to reach an agreement with their creditors have failed, which has caused the nation’s financial system to spasm – deposits are being withdrawn, loan-activity has ceased and economic activity has ground to a halt. A frightened populace rushed to take out their money before the banks lost all liquidity, only to find the banks closed, their safe deposit boxes impounded, and a 60 euro limit placed on withdrawals.

In short, the end result of Greek voters saying “no” to restructuring their debt in return for further “austerity” measures is actually more and deeper austerity. Banks are already discussing drastic measures to remain solvent for a while longer, things like imposing a levy on the deposits they hold (with no say-so by the depositors) and seizing deposits on accounts of more than 100,000, which people are labeling a “bail-in.” Either option would be a disaster for Greece and its people, but, without knowing it, that’s what the Greeks voted for.

And without advertising it, that’s what socialism is all about: Trying to turn government largesse into widespread prosperity. Inevitably, it fails, and that’s when they come to take your money by force. Millennials would be wise to watch and remember, much like the generations who came before us.