Greece needs a crash course in capitalism 101

The Sicilian Expedition was conducted by Athens from 415 BC to 413 BC during the Peloponnesian War. The two main figures of this story were Alcibiades and Nicias. Alcibiades was the main proponent for the expedition and Nicias was totally against it.

Nicias argued that Athens would be off better served if it conserved troops, money and resources for the war with Sparta that was still ongoing. And even if Athens conquered Syracuse and all of Sicily, holding it was almost next to impossible.

Alcibiades on the other hand, being younger and more arrogant, argued that Athens was in the same situation when it was at war with Persia. The defeat of Persia led to Athenian glory and the foundation of the Delian League and this expedition would bring similar results.

On the day before the expedition set sail, someone destroyed many hermai in the city. The hermai were placed throughout the city to provide boundary markers at roads and borders.

The Athenians took the matter very seriously, for they considered this a bad omen for the expedition as well as evidence of a revolutionary conspiracy to overthrow the democracy.

Many political enemies of Alcibiades claimed he was responsible. Although there was no proof, Alcibiades volunteered to be put on trial under penalty of death in order to prove his innocence. However, Alcibiades was extremely popular and with the support of the army behind him, was not charged and the fleet set sail the next day.

After his departure however, his opponents continued to levy charges at him. As a result, the Athenians sent the Salaminis (the official Athenian messenger vessel and the fastest ship in the fleet) to bring him back to Athens to face charges.

Just before arriving in Syracuse, the Salaminis caught up with the Athenian fleet and informed Alcibiades that he was under arrest and that he would have to come to Athens to be put on trial. Alcibiades agreed, but on the way back he escaped and along with many of his colleges and found their way to Sparta. Alcibiades died of old age in the service of the Persian king, having always tried to help his countryman the best he could and never having betrayed his country in any way.

To make a long story short, Nicias who was against the war to begin with, didn't fight with his heart. He tried to do everything in his power not to confront the enemy and to avoid conflict. The result was a total devastation of the Athenian contingency and the final fall of Athens many years later.

The lesson to be learned from this story is this. If you don't believe in something, chances are that you will not succeed - even thought the odds might be on your side and even thought you might have the high ground.

What happened to Athens in antiquity is exactly what is happening to modern day Greek finances. The Greek political establishment simply does not believe in an open economic module. They do not believe in free market forces, world trade and above all, do not understand what a competitive economy means.

The IMF, the World Bank, the EU and just about every organization on earth has been telling Greece for many years now that it needs to open its economy to free market forces and get rid of the bureaucratic hurdles and restrictions. The reason however why successive Greek governments have done nothing to entertain such demands is that they don't believe in such reforms. It is simply against their beliefs and inner convictions.

They believe in central planing and centralized control. They believe that that hard core central government officials should make the rules and not the Parliament and certainly not the markets. In Greece the prime minister is the central legislative figure with dictatorial powers similar to that of Julius Caesar.

In Greece (as I like to joke around) even right wing politicians are communists. There is simply no understanding of market forces by Greek politicians anywhere across the spectrum. While there might be a few that have an understanding of market dynamics, they are too few to matter.

As a result, the people of Greece have never been tutored to understand free markets. The level of left wing thinking in Greece is beyond comprehension. The majority of Greeks believe that the country's problems are the product of some international conspiracy to enslave the county to “international capitalist” forces. The fact that the country in on the brink of going broke is simply not comprehended. Take the labor unions for example. They insist that Greece avoids the IMF and at the same time are demanding wage increases!

Whether the IMF and EU funding mechanism can help Greece is a matter of debate. In contrast to the problems of Ireland, which were a byproduct of excessive bank leverage, in Greece the problems are an uncompetitive economy that is the result of backward thinking. And the question is, how do you transform Greece to a competitive economy when the majority of the politicians don't believe in it?

Unless Greece undergoes a crash course in capitalism 101 and unless the IMF and the EU force the implementation of free market reforms, all the funding in the world will not do any good.

Having said this, I have to say that I am quit optimistic, because whenever free market forces were implemented, people embraced them and never looked back.