# Was the economic collapse in Europe the fault of Socialism or the fault of the bad economy **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 4, 2015, 7:11pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263 "2015-07-04T19:11:10Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 10:19pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/21 "2015-07-04T22:19:13Z")
> [@Baron\_Greenback](#): > > Well, that’s the thing isn’t it. It’s only slight differences. The US and Europe are both broadly social democratic entities, with some variance in the constituent states/countries, within an overarching capitalist consensus. True When I was in 3rd grade I was in China for a month, at that age it seemed like 3 months. This was in the early 80’s when China was still very very much a communist country. My father took me, he was a consultant on a building project there. Were were treated like diplomats, welcomed every where we went, met many many people both formally and informally. It was as different as you could possibly imagine from the early 80’s suburbs of the USA. But I played soccer with kids and played cops and robbers with kids (even though we did not speak each others language) we went into people’s homes and watched TV and ate and had coffee and chatted and relaxed. Most of them knew English, the adults, pretty well. At least the people we met. We went to banquets and toured schools and went into the jungle to look for raw materials. It was the most profound experience of my life. It left me with one unshakable lesson that I learned: people aren’t really that different after all. Back then this is what China looked like: Well back then the streets were full of bicycles and people were allways dinging their bells as they rode by, very politely. They didn’t want to run you over, it’s funny to think of ringing a bell politely. I tired to find pictures of that on google but I couldn’t. Back then everyone smoked and everyone loved Coca Cola. Everyone bowed and said please and thank you and hello. So incredibly courteous but not ostentatious or pretentious. Humble and friendly. Pretty much everyone wore a uniform like this: [http://www.womenofchina.cn/news/Updates\_on\_Women/Celebrities/images/pic1fh2yk85.jpg](http://www.womenofchina.cn/news/Updates_on_Women/Celebrities/images/pic1fh2yk85.jpg) Uniforms just like that, nearly everyone, Green or Blue Or Grey. And most people who weren’t married lived in dormitories. ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 10:22pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/22 "2015-07-04T22:22:25Z")
> [@Shagnasty](#): > > I asked a very similar question here once. I got back some hostile answers from Europeans that blamed the whole thing on banking failures but I am still not convinced. Money fundamentally only represents a share of resources and I truly believed that they over promised in the long term. That combined with low to negative population growth makes it inevitable that most European countries except the best run ones cannot live up to their promises of social welfare and generosity. Western Europe had a good run post WWII but is now fighting reality. Greece may be the canary in the coal mine. I don’t expect anything but future trouble from the PIG countries either in the mid to long term. Germany is now stable and competent enough that it can do whatever it needs to work. The UK has been wise to largely stay mostly out of the whole mess that has been created and they will continue to do fine as well. > > In the long view, Europe is about as stable as the Middle East and that is not a good thing. We happen to live in a time of unusual stability but that isn’t normal. Anything could trip a new standoff and the current Greece/Portugal/Italy/Ireland situation is approaching that. Umm… ok, well I know you don’t like me much, that’s ok, you’re not the first person to say they didn’t like my posting style on SDMB. But if you had to say what is the number one problem with socialism, or, the top 3, what would they be. It seems you are not a big fan of it, but, maybe I am wrong. ---
**Author:** ![Grim\_Render](https://avatars.discourse-cdn.com/v4/letter/g/a87d85/32.png) [@Grim\_Render](https://boards.straightdope.com/u/Grim_Render)\ **Post date:** [July 4, 2015, 10:26pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/23 "2015-07-04T22:26:45Z")
Well, first I’d ike cite that Europes economy has “collapsed”.From my perspective, as a European investing in a couple of European countries it seems to to be ticking along quite functionally. Beyond that, “socialism” is when the government owns all the stuff. Means of production. Its what you find in North Korea, Cuba and Venezuela. If your question is “Has the economic systems of North Korea, Venezuela, and Cuba harmed the econmy of Europe?”, I’d have to say no. What you get in Europe is social democracy. The name looks similar, but as economic systems there is not much resemblance. If you are asking about social democracy…The most social democratic countries in Europe are the Nordics, Germanics, and Benelux. Hardly the most economically distressed ones. While there were some individual variation, in the main the most distressed countries were the ones who were operating with low spending on their social security net, low taxes and deficit-fueled spending. > [@Robert163](#): > > But didn’t Iceland have problems and a few other countries as well, a few years ago? Yes, becuse they went on massive capitalist leveraged buying raids and ended up with a banking sector far larger than the countrys economy. A bad thing when the banks collapse and they country has guaranteed for deposits 10 x the countrys GDP. But seriously, _how on earth_ is this a socialist failing? ---
**Author:** ![Baron\_Greenback](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baron_greenback/32/48_2.png) [@Baron\_Greenback](https://boards.straightdope.com/u/Baron_Greenback)\ **Post date:** [July 4, 2015, 10:32pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/24 "2015-07-04T22:32:34Z")
> [@Fuzzy\_wuzzy](#): > > French public sector spending is around 56% of GDP. If not a “socialist” economy its probably the closest Europe has to having one. The French are willing to pay for stuff: the rail network, nuclear power, aerospace. That’s kinda-sorta subsidies to private enterprises these days, but that’s no different to the UK giving .mil contracts to BAE Systems, or the US subsidising Boeing and the other providers. That’s just strategic capacity retention. Like I said, there’s matters of degree. Not Socialism. ---
**Author:** ![Baron\_Greenback](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/baron_greenback/32/48_2.png) [@Baron\_Greenback](https://boards.straightdope.com/u/Baron_Greenback)\ **Post date:** [July 4, 2015, 10:35pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/25 "2015-07-04T22:35:35Z")
> [@Robert163](#): > > True > > When I was in 3rd grade I was in China for a month, at that age it seemed like 3 months. This was in the early 80’s when China was still very very much a communist country. My father took me, he was a consultant on a building project there. Were were treated like diplomats, welcomed every where we went, met many many people both formally and informally. It was as different as you could possibly imagine from the early 80’s suburbs of the USA. > > But > > I played soccer with kids and played cops and robbers with kids (even though we did not speak each others language) we went into people’s homes and watched TV and ate and had coffee and chatted and relaxed. Most of them knew English, the adults, pretty well. At least the people we met. We went to banquets and toured schools and went into the jungle to look for raw materials. It was the most profound experience of my life. It left me with one unshakable lesson that I learned: people aren’t really that different after all. > > Back then this is what China looked like: > > Well back then the streets were full of bicycles and people were allways dinging their bells as they rode by, very politely. They didn’t want to run you over, it’s funny to think of ringing a bell politely. I tired to find pictures of that on google but I couldn’t. Back then everyone smoked and everyone loved Coca Cola. Everyone bowed and said please and thank you and hello. So incredibly courteous but not ostentatious or pretentious. Humble and friendly. Pretty much everyone wore a uniform like this: > [http://www.womenofchina.cn/news/Updates\_on\_Women/Celebrities/images/pic1fh2yk85.jpg](http://www.womenofchina.cn/news/Updates_on_Women/Celebrities/images/pic1fh2yk85.jpg) > > Uniforms just like that, nearly everyone, Green or Blue Or Grey. And most people who weren’t married lived in dormitories. What does this have to do with Europe? ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 10:42pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/26 "2015-07-04T22:42:08Z")
> [@Baron\_Greenback](#): > > What does this have to do with Europe? Oh, well someone said, or agreed to my statement, that the USA and Europe are only slightly different. Which is true. But I found that China was totally totally different. And while I of course, 100% do not agree with communism, too much oppression and corruption, what I learned is in the most different of situations people are still pretty much the same, when you take away the politics/religion. ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 10:44pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/27 "2015-07-04T22:44:46Z")
> [@Grim\_Render](#): > > Yes, becuse they went on massive capitalist leveraged buying raids and ended up with a banking sector far larger than the countrys economy. A bad thing when the banks collapse and they country has guaranteed for deposits 10 x the countrys GDP. > > But seriously, _how on earth_ is this a socialist failing? IDK, I’m here, at least on this thread, to learn and ask questions. So, can you tell me more about how a capitalist method helped out Iceland??? Or, did it hurt? I’ve not slept in over 30 hours and my reading comprehension is not 100%. ---
**Author:** ![Grim\_Render](https://avatars.discourse-cdn.com/v4/letter/g/a87d85/32.png) [@Grim\_Render](https://boards.straightdope.com/u/Grim_Render)\ **Post date:** [July 4, 2015, 10:52pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/28 "2015-07-04T22:52:21Z")
> [@Robert163](#): > > IDK, I’m here, at least on this thread, to learn and ask questions. So, can you tell me more about how a capitalist method helped out Iceland??? Or, did it hurt? I’ve not slept in over 30 hours and my reading comprehension is not 100%. Iceland basically bought companies, and leveraged their value to buy more stuff. They ended up with a banking sector about 10 x the countrys gdp, and when all the toxic assets came home, they had absolutly no chance to cover the failing banks deposits like they were obliged to. Basic capitalism market loser. ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 11:00pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/29 "2015-07-04T23:00:04Z")
> [@Grim\_Render](#): > > Iceland basically bought companies, and leveraged their value to buy more stuff. They ended up with a banking sector about 10 x the countrys gdp, and when all the toxic assets came home, they had absolutly no chance to cover the failing banks deposits like they were obliged to. Basic capitalism market loser. 1- Didn’t several other counties in the EU help them out after that? 2- The economy in Iceland, I thought, was able to recover somewhat, when they got help. ---
**Author:** ![Staggerlee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/staggerlee/32/3134_2.png) [@Staggerlee](https://boards.straightdope.com/u/Staggerlee)\ **Post date:** [July 4, 2015, 11:01pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/30 "2015-07-04T23:01:38Z")
> [@Shagnasty](#): > > I asked a very similar question here once. I got back some hostile answers from Europeans that blamed the whole thing on banking failures but I am still not convinced. I don’t want to be ‘that guy’; but the OP seems to be asking about the global economic crisis of a few years ago rather than Greece specifically. If so, the problem’s surely much more the inability of financial institutions to ethically regulate themselves in the free market than some paranoid American conception of Socialism. ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 4, 2015, 11:15pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/31 "2015-07-04T23:15:45Z")
> [@Staggerlee](#): > > I don’t want to be ‘that guy’; but the OP seems to be asking about the global economic crisis of a few years ago rather than Greece specifically. If so, the problem’s surely much more the inability of financial institutions to ethically regulate themselves in the free market than some paranoid American conception of Socialism. Yes, I should of done a better job of explaining that I meant economic conditions in the last 10 years and not specifically/exclusively Greece. ---
**Author:** ![kopek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kopek/32/337_2.png) [@kopek](https://boards.straightdope.com/u/kopek)\ **Post date:** [July 5, 2015, 2:22am UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/32 "2015-07-05T02:22:36Z")
I went “some other”. The economy going bad was a big part but I would say communism/poorly applied socialism was the secondary. In broad terms, socialism is fine and practiced by most countries to some degree; even ours. But the application of parts, especially when combined with poorly constructed communistic societies/movements doesn’t have as good of a track record. ---
**Author:** ![Kropotkin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kropotkin/32/18045_2.png) [@Kropotkin](https://boards.straightdope.com/u/Kropotkin)\ **Post date:** [July 5, 2015, 2:40am UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/33 "2015-07-05T02:40:40Z")
Some useful thought on the definitions of socialism may be found here: [http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees](http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees) but the title says it all. The “social” in “socialism” is the clue. By this author’s reckoning, and Marx’s, there is no socialist country anywhere, and never has been. ---
**Author:** ![Robert163](https://avatars.discourse-cdn.com/v4/letter/r/4af34b/32.png) [@Robert163](https://boards.straightdope.com/u/Robert163)\ **Post date:** [July 5, 2015, 3:06am UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/34 "2015-07-05T03:06:43Z")
> [@Kropotkin](#): > > Some useful thought on the definitions of socialism may be found here: [http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees](http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees) but the title says it all. The “social” in “socialism” is the clue. By this author’s reckoning, and Marx’s, there is no socialist country anywhere, and never has been. Thank You ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [July 6, 2015, 3:19pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/35 "2015-07-06T15:19:49Z")
There are two separate issues. One is how it happened and the other is what to do about it. Both Greece and all the rest of Europe have nationalized some industries, so have some socialism, but cannot really be described as socialist. They do have wide social safety nets, but that is not socialism. From what I have read, Greece doesn’t collect all its taxes. I think it is mostly the capitalist oligarchs who don’t pay their taxes, but regardless if, instead of paying for your government from taxes you borrow the money, you will be in trouble. Then there is widespread corruption. I just read that there is a town in Greece in which 2% of its inhabitants are collecting a blind pension, certified by a corrupt ophthalmoligist. Corruption is the bane of bureacracy. Another obvious cause was the lack of due diligence on the part of the banks who lent the money. They saw big profits and lent them the money. The same thing happened in the US and led more-or-less directly to the meltdown. What’s to be done? Well Greece and Greece alone has to clean up the corruption and collect all its taxes. Raise them if need be. It is a delicate balance leaving enough money in the system not to send the economy into serious decline. The banks need to have a haircut. They sinned and they should pay a penalty. If for no other reason than it would inhibit them from doing it again. Making the US banks whole (while leaving the borrowers twisting in the wind) will only encourage them to do it again. More austerity will not rebuild the Greek economy. It has not and cannot. With 25% unemployment, there is no money, no demand and businesses are failing. I think it was Einstein who said that it is a sign of insanity to keep doing the same thing and expect a different result. It is interesting to compare this with Iceland. They underwent bankruptcy, told the creditors to take a hike, devalued the krone, and recovered rather quickly. Yes, it will be harder for them to borrow in the future, but that is also a discipline not to use borrowed money for current (as opposed to capital) expenses. ---
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [July 6, 2015, 3:52pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/36 "2015-07-06T15:52:05Z")
> [@Kropotkin](#): > > Some useful thought on the definitions of socialism may be found here: [http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees](http://www.truth-out.org/news/item/31567-socialism-means-abolishing-the-distinction-between-bosses-and-employees) but the title says it all. The “social” in “socialism” is the clue. By this author’s reckoning, and Marx’s, there is no socialist country anywhere, and never has been. The domain name alone disinclines me to even click the link. Although there’s probably some truth in the claim. I doubt there’s ever been a “pure,” even 99-44/100s so, version of of any political or social structure. Marx considered anything below a 100% implementation of his theories substandard. I’m sure the more rabid strain of French Socialists consider all vaguely socialist systems so far failures as well. Such views are used by those who think Socialism is some kind of invading enemy notion in US systems to prove that all the others are wrong. Especially those who put “truth” in their names. Just sayin’. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [July 6, 2015, 4:25pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/37 "2015-07-06T16:25:11Z")
THe European economy collapsed? Why doesn’t anyone tell me these things? Regards, Shodan ---
**Author:** ![Hector\_St\_Clare](https://avatars.discourse-cdn.com/v4/letter/h/b5ac83/32.png) [@Hector\_St\_Clare](https://boards.straightdope.com/u/Hector_St_Clare)\ **Post date:** [July 6, 2015, 4:45pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/38 "2015-07-06T16:45:31Z")
> [@Baron\_Greenback](#): > > Is there a socialist country in the EU, in the narrower Eurozone, or the wider Europe? I can’t think of one. > > In other words, OP, define your terms. Feel free to consider the ownership and/or control of the means of production. I’d call Belarus socialist. Or quasi-communist, perhaps. ---
**Author:** ![PatrickLondon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/patricklondon/32/4422_2.png) [@PatrickLondon](https://boards.straightdope.com/u/PatrickLondon)\ **Post date:** [July 6, 2015, 4:59pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/39 "2015-07-06T16:59:25Z")
What European economy? What failure? The euro has worked fine for some countries, notably Germany, less so for other member states. Not all of them kept up with the very tight fiscal rules that in most countries are matters of policy adjustable according to circumstances, but are written into international law with the euro. The core problem is that there is only a very limited political structure to cope with pressures on the system. Socialism doesn’t come into it: Greece has a whole complex of inherited problems that its political class (in all parties) kept brushing under the carpet rather than dealing with, compounded by the economic powers-that-be insisting on the kind of austerity measures that bear down most on those least responsible for the banking crisis (the root cause of which was old-fashioned capitalist over-enthusiasm), and make it less and less possible for the economy to grow enough to pay off the debts: policies which the US, for one, didn’t adopt. At the end, it was coming down to an attempt by the Germans (of all people) to tell the Greeks they shouldn’t have the government they chose, a stance undermined by the IMF revealing at the last minute a report agreeing that debt relief has to be part of the solution - just as it was for the German economy in 1955… ---
**Author:** ![Construct](https://avatars.discourse-cdn.com/v4/letter/c/50afbb/32.png) [@Construct](https://boards.straightdope.com/u/Construct)\ **Post date:** [July 6, 2015, 5:13pm UTC](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263/40 "2015-07-06T17:13:32Z")
> [@Robert163](#): > > I think your answers as a whole were very good but could you elaborate on the comments above, if possible? Sure. One of Greece’s biggest problems is their low retirement age. In America, say, the average person starts working at the age of 16 and works until they turn 67, for a total of 51 productive years. But in Greece, say, they start working at 25 (because high minimum wage laws make it unprofitable to higher low-skill workers, and because employment laws make it very difficult to fire bad workers) and then retire at the age of 55 or thereabouts. That’s a total of 30 years, 21 less than in America. So America simply has more people working longer than Greece does. And so Greece is in a situation where their pensioners are extremely poor, while their workers can barely afford to pay for the upkeep of the pensions. > [@Robert163](#): > > But didn’t Iceland and other countries have problems too? Iceland and some other very progressive countries had problems, but they were not as bad as Greece’s because the economies were not as corrupt. An example of Greek corruption would be that in Greece is socially acceptable to not pay taxes, while in Iceland that would be unacceptable. You could think of Greece’s problems as a combination of socialism + corruption. Either on its own would be manageable, but when combined, they are catastrophic. [Previous page](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263.md?page=1) [Next page](https://boards.straightdope.com/t/was-the-economic-collapse-in-europe-the-fault-of-socialism-or-the-fault-of-the-bad-economy/724263.md?page=3)