Libertarians, of course, do not profess to have answers to the many woes produced by statism. That certainly includes the many economic problems produced by Greece’s welfare-state, regulated-economy way of life.
But there are solid libertarian principles that the Greeks could adopt if they wish to build the foundation of a dynamic and prosperous society. Here are those principles:
- Leave people free to use whatever money they wish to. Don’t establish the drachma or any other state currency. Embrace Hayek’s notion of the denationalization of money. The state has no more role in monetary affairs than it does in religious affairs. Most likely, people would turn to gold coins and silver coins but it’s entirely possible that they would turn to other media of exchange, such as Bitcoins. What matters is to adopt a totally free-market monetary system, one with no central bank.
- Leave banks privately owned. If people choose the wrong bank and it happens to go under, they lose their money, just as when people invest in the wrong stock lose their money if it goes bust. Why should government protect people from their investment or banking choices?
- Abolish the dole entirely. No more government welfare for anyone. Separate charity and the state.
- Abolish all economic regulations, including licensure and the minimum wage, and all other barriers to starting new businesses. Separate economy and the state.
- Lay off at least 97 percent of government personnel, leaving government to go after violent criminals and to have a judiciary where people can resolve their disputes.
- Dismantle the standing army and discharge the soldiers.
- Declare bankruptcy.
- Prohibit the government from borrowing money.
- Abolish income tax, sales taxes, VAT taxes, property taxes, and all other taxes. Rely on voluntary contributions to fund the few, limited functions of government. See here and here.
If Greeks want a free and prosperous economic system, that’s the way to accomplish it.
What are the chances that Greeks will embrace libertarian principles? Not very high. The Greeks are as addicted to the dole, central planning, regulation, paternalism, and big government as Americans are.
But it’s important that we libertarians continue repeating the solution. Everyone once in a while, a person beating his head against the wall figures out what’s causing his headaches.