No! The resounding answer to the Greek Referendum where 61 percent voted against further austerity in exchange for financial help from Europe and the International Monetary Fund. The vote could lead to the country's exit from the eurozone within weeks. In light of recent events, Stefan Molyneux looks at an unspoken trend which has damaged Greece's economy and made any possible recovery even more difficult.
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| Hi everybody, this is Stefan Molyneux from Free Domain Radio. | |
| So Greece has just rejected austerity measures imposed by a variety of European Financial institutions and governmental agencies and is staging a potential Kate Moss style off the airplane stormy huff out of the European Union. | |
| They have also threatened to start printing their own euros. | |
| There's a variety of catastrophic exit scenarios now that Greece has smuggled the Trojan horse of debt into the European common market. | |
| But these issues go back very far and very deep, and there's something very important to understand as a whole, because once you get into these kinds of death cycles, it's very, very hard to get out. | |
| You kind of want to not jump out of the airplane and then try and angle yourself towards hitting a haystack. | |
| Good thing is to stay in the airplane to begin with, or only leave the ground with a parachute, or even better, don't leave the ground at all into these kinds of high-flying disaster scenarios. | |
| So let's take a little bit of a look back. | |
| The immediate issues that basically Greece had to sell its bonds at like 24% and change in the past, and then once they wed up with Germany's credit rating, they were able to crush that down, and then it erupted after 2010, back up in high numbers. | |
| That's the immediate cause of the situation. | |
| But like a heart attack that's preceded by 20 years' lack of diet and exercise, The cause that is avoidable is not the immediate one, but the one far back in time. | |
| So, as you're probably aware, Greece was ruled by a military junta up until 1974, so democracy is a little shaky in its roots, and the sense of legitimacy that Greeks give to their government is extraordinarily low. | |
| And we'll get into the reasons for that in terms of legality in a moment, but Going back even further, there were two giant waves of mass emigration that took place in Greece, which the modern Greek state was formed in the early 1830s. | |
| So in the late 19th to early 20th century, there was an economic crisis in 1893, which Followed, believe it or not, the rapid fall in the price of currants, raisins. | |
| It was a major export product, of course, so the grapes that can't go into wine go into hot cross buns. | |
| And in the period 1819 to 1914, almost one-sixth of the population of Greece emigrated and, of course, mostly went to the United States and Egypt. | |
| This emigration was encouraged by Greek authorities, not for the first time and not for the last time. | |
| See, and this is very similar to what's happening in America with Mexico, that corrupt and tyrannical governments Governments like it when people emigrate and go and make money elsewhere, because what they do is they send huge amounts of money back to the host country in the form of remittances. | |
| So you get a huge amount of money coming into the country from people who've emigrated from the country and are sending money back, but you don't have to Provide those people any services. | |
| Those services are being provided by the host country. | |
| So you just get this giant influx of money. | |
| It's a very short-term solution to the problem. | |
| You get this giant influx of money for the host government, which the politicians can use to buy the dispirited Donald Kruger remnants of high intelligence that have remained behind. | |
| And that is a huge problem, but it takes about a generation to play out. | |
| Now, between 1950 and 1974, more than a million Greeks emigrated to Western Europe, the US, Canada, and Australia. | |
| There was, of course, a 1946 to 1949 civil war that almost ended in a pure communist dictatorship from 1967 to 1974, a period of military junta rule that followed. | |
| And from 1955 to 1973, Germany absorbed 600,000 Greek immigrants, Australia 170,000, US 124,000, Canada 80,000 and change. | |
| And they came mostly from rural areas, and they sort of flooded out into national and international labor markets. | |
| Between the late 1950s and the 1960s, close to a million Greeks, which was 10% of the population, migrated to Germany. | |
| And in their 1982 peak, remittances from these immigrants reached $382 million a year, which was more than 1% of the country's gross income. | |
| Now, by the 80s, half of the Greeks had returned to the country because there were integration issues with the host countries and also more restrictive immigration policies as well. | |
| It's tough to adapt to a foreign culture if you don't have philosophy because it's just oil and water to mix. | |
| So, this is a very important aspect of Greece and, by extension, your country, to understand. | |
| I think it's fairly safe to say that the more intelligent people were the ones the most likely to leave. | |
| And this has been borne out by some studies, and certainly from my own personal anecdotal experience, that if you're willing to trade in the Aegean for, say, Winnipeg in 1965, where you are blinded by snow in the winter and choked by mosquitoes in the summer, it's because you desperately yearn for a bigger and a better life. | |
| So, the people with the most intellectual potential are the ones who tend to leave the most and the fastest. | |
| Now, this is very, very important because there is significant studies and data and correlation that show very close to beyond a shadow of a doubt. | |
| That it is the most intelligent people in a country who drive that country's economic growth. | |
| So the average IQ of a country is important, but it is the peak IQ, the intellectual elite, who drive the country's economic growth. | |
| And when you have a country that is hostile to achievement, to entrepreneurship, to invention, to business, to anything, you name it, Then those elites will leave and they will take your future economic growth with you. | |
| And that is really, really important to understand. | |
| We'll put the links to the studies here below the video. | |
| As always, you can check there. | |
| So, IQ is very important as a whole, and IQ is one of the most heritable traits a human being possesses. | |
| Estimates range from 50 to 70 percent of a person's IQ is inherited genetically. | |
| So, when you carve off the cream of the crop, when you take the most intelligent people and you take them out of a country, then you are crippling. | |
| That country's economic potential in the future. | |
| It works the other way around, too, that if you get low IQ populations coming in to your country, you get the same kind of dysgenics in the economy, in particular. | |
| So, there are various estimates. | |
| The data is imperfect, so take it for what it's worth. | |
| But that German IQ is around 100 to 102, and Greek IQ on average 91 to 93. | |
| And when we see this migration of a million of a very high IQ population going from Germany to Greece in the 1960s and 1970s, some came back, to be sure. | |
| And it's not the only migration that occurs that is relevant between the two countries, but You are taking some very, very intelligent people out of one culture and putting them into another culture, and that may have something to do with the fact that the German economy is doing relatively well, the Greek economy is doing relatively badly. | |
| These kinds of issues take a very long time to show up, but by the time they do show up, it is almost irreversible, and this is why it seems very likely that this is going to just have to play out and I don't know what the answer is going to be but these kinds of challenges are things to know and to really understand because not only have a lot of very intelligent people left Greece but they've also had a lot | |
| of immigrants From former Eastern Bloc countries, Albania, Bulgaria, Romania, and you can look up the IQs of these countries. | |
| And again, we don't say that this is any kind of absolute certainty, but it is really important. | |
| The 95th percentile, right, the top 5% of the intelligence of a population have a far greater effect on high STEM achievement, right? | |
| Science, technology, engineering, and mathematics. | |
| Than do the mean intelligence of the population as a whole. | |
| So the quotes from the study are, in modern society, the cognitive level of the intellectual class and its relative size are more important for economic development than are the mean cognitive level or the cognitive level and relative size of lower ability groups. | |
| So, to translate that into everyday speak, just have a look around you. | |
| And all the things that you use, the businesses that you go to, the cars that you drive, the technology that you consume, how much of it is created and brought to market and sold by people of average intelligence? | |
| Well, I would say virtually none. | |
| From the study again, quote, in concrete numbers, an increase of one IQ point in the intellectual class raises the average GDP by 468 US dollars. | |
| Whereas an increase of one IQ point in the cognitive ability of the mean raises average GDP by only 229 US dollars. | |
| So that is important. | |
| Now you might say, well, what does IQ have to do with income? | |
| Well, it's... | |
| About as close to a linear map as you can. | |
| Put these charts up and you can see just how linear it really is when it comes to increases on IQ resulting in increases in income. | |
| Charles Murray found that in sibling comparisons within families, one extra IQ point produced an extra $810. | |
| Per year by age 35. | |
| It takes a long time for this stuff to show up in terms of, you know, by the time you're 50 or 60, IQ has shown itself to be quite strong. | |
| And very high IQ people often see a dip in their 20s as they continue through their education. | |
| But very, very important. | |
| And it's a sort of a virtuous cycle because when you have more opportunity, when you have a freer market, when you have more openness in your economy and lower taxes, Then you have smart people staying. | |
| They create wealth. | |
| That wealth can be used to help raise the IQ of the country as a whole through a variety of mechanisms. | |
| So, that's important. | |
| The issue of IQ, general intelligence, what's sometimes called G, is really important because you have a system that drives out the high-intelligence people. | |
| And then they send remittances back, and who's left? | |
| Well, who's left are people who will believe Greek mythology like, hey, the government can just create money out of nothing, and that's the same as wealth. | |
| Or debt is the same as having an asset. | |
| Or you can, say, want more things from the government while refusing to pay or avoiding paying your taxes, and everything will be fine. | |
| This is lower IQ processing. | |
| This is... | |
| and also you get vanity, you get nationalism with lower IQ people as well because higher IQ people Just recognize that the achievements of others doesn't mean your achievement. | |
| It doesn't mean that at all. | |
| And so, lower IQ people always think that they're better at things. | |
| Like, if you're not good at anything, you'll think you're great at everything. | |
| And that's just called the Don and Kruger effect, which you can... | |
| We'll link to the title, to the name down below, so you can Google it for yourself. | |
| But this is why you get these ridiculous situations where there's this rapid Greek nationalism like spending 10 to 15 billion dollars on the 2004 Athens Olympics for a couple of weeks of orgiastic flag waving, followed by a decade of economic decline and Fiscal suicide, smarter people would not be that interested in this nonsense. | |
| They'd say, well, you know, okay, you get to wave some flags, but for heaven's sakes, I mean, it's not really worth that. | |
| Smarter people are harder to rule. | |
| They're more profitable. | |
| In terms of they create more wealth and you can tax them more. | |
| Smarter people are harder to rule, though, because they don't tend to respond to, like, rhyming couplets. | |
| "The power of the people cannot be denied, 2, 4, 6, 8, blah, blah, blah, blah, blah, blah." I mean, they just don't respond that well. | |
| They expect a little bit more intelligence. | |
| Also, smarter people You know, you get those Nigerian emails coming into your inbox and smarter people say, hmm, why would somebody halfway across the world be sending out random emails or want to contact me for a multi-million dollar transaction? | |
| It makes no sense at all. | |
| And lower IQ people are like, yeah, wow, sounds legit. | |
| In I go. | |
| Here's my bank account number. | |
| And this, again, is an important thing. | |
| So politicians have a tougher time Ruling smarter people, because smarter people are better at understanding that there's no such thing as a free lunch, and so it's tougher. | |
| So, the Greek people became easier to rule when the smart people left, and also because when you have a very generous welfare state, what you tend to do is because the poorer, they don't mind bigger government, because They don't have to pay for it, right? | |
| In fact, they receive benefits from the government. | |
| And so, they don't pay the taxes that go into it. | |
| They just say, free money, free stuff, and because you're poor, in general, not always explicitly and not universally, but if you're poor, in general, you tend to be less intelligent. | |
| So, when politicians offer you stuff for free, you're like, yeah, what could go wrong? | |
| Let's snort up all that finely ground up fiat currency until my eyeballs turn green and the bottom of the ocean falls away in a massive tsunami of debt. | |
| And so politicians like having less intelligent people around, particularly if the more intelligent people are sending in these remittances because they can just tell them... | |
| Stupid race-baiting or class-warfare-baiting slogans and everyone's going to cheer and wave their flags. | |
| But the end result, of course, is that you end up with this kind of mess that is going on in Greece. | |
| So, the solution, I mean, who knows what on earth it's going to be. | |
| I've got a video out previously, which we'll link to below, which is... | |
| Got some short-term solutions. | |
| But the long-term solution is just to recognize that you're an idiot. | |
| And I'm an idiot when it comes to expertise in a variety of things. | |
| I have no idea how to build a cell phone. | |
| I have only a vague idea of how things work. | |
| I do believe it's tiny cannons sending HTML pixies in a giant arc between us and some kind of tower where royal prisoners are kept. | |
| Again, I'm no expert on it, but we're all generally idiots when it comes to the technology. | |
| We've become so specialized and the brilliant people are producing so much great stuff that we all live as fundamental morons in an overcomplex world. | |
| This is one of the reasons why smart people who have any economic literacy tend to favor a free market because the free market is humility. | |
| The rational humility of saying, I have no idea how the economy of a vast This multi-million person industrialized economy should be run. | |
| I simply don't have the wisdom or the knowledge, and never will I, to order millions of people around to take their money, to lather it here and there, and think that I'm doing anything other than buying votes and appeasing my own sociopathic vanity. | |
| Having that humility of recognizing that we owe a lot to these smart people who give us all this great stuff. | |
| We really should recognize that they are a very valuable crop in society. | |
| To drive them elsewhere is to end up with this just kind of dumbed-down idiocracy that is going on in the Mediterranean at the moment. | |
| I certainly am appreciative of the Greeks who came here to Canada because they've produced some wonderful stuff and wonderful members of the community. | |
| But those they left behind are reaping the rewards such as they are of disliking the rich. | |
| And they now have this ridiculous, very high taxes, a very high regulatory environment and a... | |
| A system that is so corrupt that international agencies have ranked Greece not just as the most corrupt country in Europe, but one of the most corrupt countries around the world. | |
| Because corruption is one of these things that appeals to lower intelligence people, right? | |
| I mean, there was a guy who just... | |
| The top tax collector in Greece said that he had to quit because he was getting phone calls that said, hey man, it's only going to cost me 5,000 euros to have someone break your legs. | |
| And he had to have a police escort, he still does, because remember, gun control doesn't work. | |
| And so... | |
| Also, when you are a government and you pass laws that make it impossible to prosecute you for any crimes you commit in office, which were the socialists, there was a law, It went in in 1997 and was revised in 2001. | |
| It makes it practically impossible to prosecute a minister or even a member of parliament for any crimes committed whilst in the office. | |
| And that's because the conservative government, the prior conservative government, had prosecuted four socialist ministers and a socialist prime minister, Andreas Papendro, Between 1989 and 1992, and they were found guilty, and then when the socialists got back into power, They were granted parliamentary pardonence. | |
| And then making sure that this could never happen again. | |
| The socialists passed these laws that said you couldn't be prosecuted for any corruption that you did or you went through when you were in office. | |
| And so naturally then people say, okay, well, if these guys can't be prosecuted for corruption and they're not exempt from their own laws, then why on earth would I be that interested in paying my taxes? | |
| And as a result of all of this corruption, as a result of all of this misallocation of resources, right, I mean, massive amounts of money went to the Greek government, but the Greek government handed most of it, I think about 90% over to the banks that they owed money to, so it was just another bank bailout draped in a flag. | |
| This has resulted in Greeks becoming far less productive, also again with the lower IQ population, producing only $35 per hour compared to $55 in Central Europe. | |
| Of the 193 countries in the world, Greek ranks 61st in the ease of doing business index from the World Bank. | |
| And, of course, they were supposed to get tens of billions of dollars from privatizing things, but they have this multi-bankrupt OSC railway system, which is completely useless, runs nearly empty trains every day, pays workers five times the $18,000 annual salary of teachers, and has almost no value on the open market. | |
| So, when you hand Money to governments. | |
| Governments will buy the votes of dumb people. | |
| The dumb people will breed more than the smart people, who will generally leave, and you end up with this kind of death spiral, where you slip from the first world to the third world, seemingly in the blink of an eye. | |
| But, like an earthquake, it is a lot of pressure built up over a lot of time with a sudden catastrophe that swallows freedom. | |
| This is Stefan Molyneux for Freedom Aid Radio. |