Global Economy

Recorded at the Mises Institute in Auburn, Alabama, on 24 July 2015.

In this short interview, Carmen Elena Dorobăț, assistant professor of international business at Coventry University, discusses Austrian economics and her work as a summer Fellow at the Mises Institute.

Has the ECB failed as miserably in creating price stability?

Debt isn't the only problem Greece faces. Thanks to years of government spending and easy money, the Greek economy long ago turned away from true wealth generating activities and embraced a bubble economy instead.

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Mises had diagnosed these problems long before they became apparent.  In a series of essays written between the two World Wars—but also in Omnipotent Government published in 1944—, Mises showed that in a world where governments interfere in their domestic markets, and with the monetary system, and where (economic) nationalism prevails, it is pointless to hope for any political and economic resolution from supranational organizations. The best these institutions can do is prolong the disastrous effects of government policies, and postpone—though loans and bailouts—their inevitable collapse.

Like Argentina and Venezuela, Greece's economy is plagued not just by institutional problems, but by a pervasive anti-capitalism that continually cripples the ability of individual Greeks to build wealth and a solid economy.

European integration supposedly represented the end of nationalist tensions—and the dawn of a new era for a continent still deeply shaped by two wars. The Eurozone supposedly bolstered economic power and prosperity, harnessing the trading power of several nations into one competitive superstate. And the Euro supposedly created a currency that would rival the dollar as a global force.

The Greek government has spent freely for many years to enrich itself and its special interests at the expense of taxpayers. And now, it is not the Greek politicians who will suffer, but the taxpayers who face a future of unending debt payments.

The Greek crisis illustrates the latest failure in Europe's attempts to build a lasting prosperity through consumption and redistribution of wealth. It's been going on for 150 years, and it remains to be seen if Europe will learn anything from the present crisis.