London is the Athens of the North: not the Athens of Socrates, Praxiteles, or Pericles, be it understood, but that of Papandreou père et fils, Kostas Karamanlis, etc., which is to say the Athens of padded payrolls, corrupt politicians, crumbling infrastructure and disastrous public finances. The parallels, down to the long-term mortgage to pay for the fatuous honour of hosting the next Olympic Games, are striking but not altogether reassuring. Nor are the differences, such as they are, any more reassuring.
Britain’s government deficit is slightly larger than Greece’s, being 12.8 percent of GDP. Its national debt is for the moment only about two thirds, proportionately, of Greece’s, but it will rise to Greece’s current level in about three years’ time if the deficit continues at its current rate. Unlike Papandreou the Second, who has been obliged to make the right noises to appease the Germans (who are the only ones who can keep Greece afloat), Brown the First is still at the stage of denying the urgent necessity of cutting the deficit, for fear that the pullulating drones of the public sector might suffer and therefore not continue to vote for him. Three quarters of all jobs created in the British economy in the last 13 years have been in the public sector.
What depresses me most about the British situation by comparison with the Greek is that, whereas the latter was brought about by good old-fashioned Levantine crookedness, which at least has the merit of charm, the former was brought about with a good admixture of Anglo-Saxon evangelical self-righteousness, which is quite without charm.
Moreover, in Britain there is a high level of ideological support among the intelligentsia for massive deficits. For example, twenty professors of economic history, some of them very eminent, wrote a letter on March 3 to the Guardian newspaper as follows:
We are economic historians concerned at the recent tone of the debate as to the scale and scope of British public sector debt. History shows, first, that British public debt is not high by the standards of the last 200 years. It is rather low in comparison to the second half of the 18th century, the first three-quarters of the 19th century, and most of the interwar and post-second world war era in the 20th century. It is also low in the context of the developed world; only Germany’s and Canada’s are lower among the larger industrialised powers.
It is remarkable that economic historians, of all people, should view the matter so statically, as if the present moment were eternal, not taking into account the speed of the increase in the debt, the ageing of the population, the different place the country now occupies in the world, the uses to which all the borrowing was put, or indeed the crushing and impoverishing size of the debt after the Second World War. Never, it seems, have so many professors learnt so little from so much; sophisticated incompetence is now our national characteristic.
The moral of the story is clear. Beware of Greeks bearing economic statistics; and beware of Britons bearing bonds.
Join the conversation as a VIP Member