Greece, Ancient and Modern, Offers Lessons in Democracy

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Byline: GUEST VIEWPOINT By Joe Stone

Ancient Greece brought more to the world than Homer's epic story of Troy and the Trojan horse - the story that is the origin of the dictum, "Beware of Greeks bearing gifts." Ancient Greece did no less than invent democracy.

Today, democratic governments around the world display their strengths: They are largely peaceful and prosperous peoples who are at peace with other neighboring democracies.

But recent events in modern Greece also demonstrate a fundamental weakness of electoral politics in modern democracies.

Thomas Sowell, prominent economist and scholar at Stanford University, writes that the "first rule" of economics is scarcity - there is never enough to satisfy all that people desire.

But Sowell further notes that the first rule of politics is to ignore the first rule of economics, and to promise plenty for everyone.

At the moment, we see these contradictions played out in Greek financial markets and the streets of Athens, but no democracy, including our own, should be smug.

We all face similarly vexing contradictions between the reality of scarcity emphasized by economists and the promise of plenty from politicians seeking election. The contradictions are particularly troublesome because they are so easily ignored in the near-sighted world of electoral politics.

Great and prosperous countries can and do borrow a great deal to finance a wide array of admirable, even necessary, programs, services and investments, but countries, just as households, have limits to the levels of borrowing and debt they can afford.

For large and prosperous countries, that limit is virtually imperceptible in the short run - the limit is typically revealed only by occasional crises arising from the ebbs and flows of confidence and liquidity of financial markets, as they interact with the steady accumulation of fiscal deficits and sovereign debt burdens.

Even so, limits to borrowing and debt are much clearer from a longer term perspective. …