As the commuters filled Athens on the morning of April 4, a 77-year-old Greek pensioner shouted, “I don’t want to leave debts to my children” and shot himself. Unfortunately, such events have become increasingly common. In the first half of 2011, Greece’s suicide rate increased by 40 percent, leaving many Europeans wondering why. During a solidarity rally in Athens following the public suicide, one plumber pointed to Parliament and stated, “It’s those in there that killed him, and they’re killing us all.” One note pinned to a tree near the site of the suicide said, “Austerity kills.” And the Greeks are not alone. From Spain to France and the United Kingdom, protests blaming the government for economic plight have swelled. The protesters and workers of Europe are right to be frustrated, but they are frustrated for all of the wrong reasons.
Since World War II, the European continent and Western Europe in particular have been attempting to build a new society, one that would provide the institutions to solve the persistent problems of the past. With massive amounts of aid from the United States, the European recovery from the devastating war was a success. Industry grew, education was reformed and expanded, and with rapid economic growth, European governments could easily afford to provide generous benefits to their citizens and grow the state. Looking forward, it appeared that Europe was destined to converge with the United States. Instead, it diverged, falling away from its global rivals throughout the 1990s and collapsing in spectacular fashion during the Great Recession.
In their attempts to guarantee comfort and economic security for a lifetime, the European governments, with the support of the people, broke the foundations of their economies as they constructed their new society. With increasingly regulated labor markets to protect consumers and workers from economic misfortune, advancements and changes within the economy became increasingly harder to adapt to. The computer and internet revolutions presented more of a struggle than an opportunity, and European productivity continues to lag behind the United States as the continent attempts 20th century research and development in the 21st century world. With permanent contracts increasingly expensive and stringent, European firms during the 1990s began to rely on short-term contracts to allow them to adjust to fluctuations in economic conditions. The majority of the young workers in Europe were employed through these contracts, and without the ability to fire those on permanent contract, these same short-term positions disappeared in massive numbers during the current recession. In Spain, they’ve made up 90 percent of all jobs lost. As a result, 17 million young people are out of work in Europe today, and only 5.5 million of them are still searching for jobs. They not only lack an income; they also lack hope.
As protesters denounce austerity measures, those who are supposed to pay for the benefits find themselves falling through the crumbling welfare system, joining the exploding numbers of Europe’s poor. As things fall apart, they realize what they’ve lost. As the welfare state guaranteed economic comfort to everyone, charity and civil society receded. The individual moral responsibility to give had been fully delegated to the government. As government granted workers increasing power and placed heavier burdens upon employers, it effectively regulated those not yet employed out of work. Those young workers now find themselves without jobs, without economic security, and without the charity of civil society; the welfare state finds itself without much-needed revenue.
While the United States slowly recovers, Europe is left falling with a society stratified into two estates: the old and employed receive the benefits and protection of the government, while the young and poor face the consequences. To those left to dwell in the bottom tier, government regulations and economic reality leave them with no way to climb out. The inherent vice of the welfare state has been exposed: In guaranteeing economic comfort, it takes liberty and, with it, innovation and prosperity. Europeans were once supposed to show the United States how to solve inequality; now they find themselves wishing for the liberty to be able to pursue the American dream.
Derek J. Bekebrede ’13 is an economics concentrator in Winthrop House. His column appears on alternate Tuesdays.