Politics and Economics: A Deadly Mixture

Terry Miller / May 06, 2010

The tragic events unfolding in Greece, where at least three people have died in political rioting protesting austerity measures being imposed as part of an EU and IMF financial bailout, is a vivid reminder of the danger when the line between government and commerce is blurred or destroyed.

In a free market economy, individual firms rise and fall, individual banks succeed or fail, and individual employees prosper or struggle, depending on their own effort and ingenuity. Individual failure, while painful, is not a threat to society, and a well functioning free market provides the kind of growth and opportunities that almost always renders such failure a temporary setback on a long-term path to prosperity.

By contrast, in a government controlled economy, every commercial decision can inspire a mass movement, every wage adjustment or hiring decision can cause a demonstration or protest, and every bankruptcy is an excuse for a government bailout. (more…)