Ed Morrissey writes today about the burning of Athens after the Greek parliament passed the austerity measures demanded for the EU bailout. He is quite correct that the Greeks need to reassess their own attitudes about a number of things, but I’m not sure we have all understood the most important thing the Greeks – and other Europeans, and Americans; in fact, the entire Western world – need to get over.
Most American pundits address the problem in terms of the Greeks (and undoubtedly some other Europeans) demanding “goodies” from the “government.” And they are not wrong about that, but the refrain is an incomplete depiction of what’s at work with the public-debt implosion of the West. The more fundamental problem is the vilification and punishment of work and individual initiative.
This is not just a matter of the Europeans imposing rules that look like rank sloth to Americans, such as the EU’s 35-hour work week, and the Greek designation of hairdressing as a hazardous occupation, meriting early retirement (at the age of 50).
It is a matter, more basically, of suspicion and hostility about “labor,” as if labor is an imposition on the human being, rather than our greatest opportunity, and requires constant amelioration and adjustment by the state.
This is a thoroughly Marxist view of labor. Marx’s original definition of the well-known term “excess value” related not to the profit the capitalist made on the workman’s labor, but to the excess productive work the capitalist extracted from him, over and above the amount necessary for the worker’s self-sustainment. Marx accepted that sustaining human life was more than mere brute survival, but his theory was that capitalism had distorted the connection of work with sustaining the individual in an appropriate level of consumption and comfort. Capitalism forced the worker to work harder than he would have to, if his work objective were sustaining his own life rather than meeting the goals of the capitalist boss.
Marx’s view was essentially negative: work could be appropriately scoped and properly rewarded only within certain limits. A work regime developed outside those limits was distorted, oppressive, and in need of correction.
Marx had no perspective on the tireless engine of the most powerful Western economies in the Enlightenment and modern eras: the entrepreneur. In Marx’s formulation, the entrepreneur did not exist in any form significant to broad social dynamics. Marx’s theory involved capital and labor, but ignored the entrepreneur and entrepreneurship.
This was a fatal error, because the entrepreneur is the entity that combines labor and capital. He overcomes – naturally, and without artificial intervention – the systemic clash of interests posited by Marx. The entrepreneur defines labor for himself, and he finds it good to do so. He sees his work as a tremendous opportunity, and most definitely not as an imposition of something defined against his interests from without. The existence of the entrepreneur is what makes it invalid to define labor narrowly, and in terms of conflict between socioeconomic roles.
In dismissing the entrepreneur, Marx left out the most important birthing mechanism of a dynamic economy. And so does Europe, with its laws designed to relieve its citizens of the “unjust” burdens of labor. The a priori assumption of the European political class is that labor is, in fact, an imposition – unless it is being regulated and adjusted by a compassionate state.
The problem here is not really that people tend to take advantage of that state posture and imagine themselves entitled to a utopian existence. The problem is that the initiative to work for a self-defined reward is the most powerful factor in human economic life – and the EU has been laboring diligently to shut it down.
The European political perspective doesn’t just encourage a languishing entitlement mentality; it actively discourages the only thing that could enlarge the pie and work off the absurd and dysfunctional debt regime of the European Union. It is not, for instance, because millions of young Europeans are lazy and stupid that their unemployment levels are so high. It is because their governments regulate the people’s lives so heavily, and impose such costs, that very few people of any age are free to define work for themselves, and get on with it.
Some of them do, of course, running what are effectively small businesses in an underground economy (especially in the south). But in much of Europe, the regulatory and tax environment is hostile to starting small businesses legally. If you make it effectively illegal to start with little – not enough for full regulatory compliance – and act as an entrepreneur, you shut down entrepreneurship in the official, above-board economy. Less entrepreneurship – less opportunity, less growth, less empowerment of the young and poor, less creative destruction and renewal.
It is quite true that not all of Europe is so steeped in self-imposed sclerosis. But that’s really the point: it only takes as much as there is today to produce the seemingly unsalvageable debt and unemployment situation in the “PIGS” – Portugal, Italy, Greece, and Spain – and to unsettle the rest of Europe and world markets.
America is headed down the same path. We haven’t reached the point of mandating a 35-hour work week yet, or retiring hairdressers on their public pensions at 50, but we are all but there in the spirit of our labor laws. If you heap suspicion on work that isn’t directly controlled or defined by government or a union; if you punish the rewards of independent, profitable, uniquely hard work; if you discourage the unguided, creative development of work – you get less work.
We can only tax what we produce. The epic economic error of the modern West lies in its determination to discourage production, whether by ruling out industry entirely with environmental ukases, by denigrating productive work in the culture, or by actively discouraging productive work with regulatory obstacles and punishments.
This model is unsustainable, and if we want to fix the problem, we have to let people work. We have to let them define work and rewards for themselves. If we insist on an intrusive supervision of other people’s work and production arrangements – if we insist, on an ever-growing list of points, that they be regulated or prevented, “for their own good,” by the state – then we have indeed consigned ourselves to a future like Athens’.