What is the purpose of the government when it comes to making economic decisions?

The modern political landscape is entirely monolithic as it relates to its nearly religious dedication to free market capitalism. However, much of the justification for such economic policies is founded upon certain presuppositions that KTE does not subscribe to.

Before you can form economic policy, you must first define the roles of the state and outline its responsibilities. The idea of a state existing to uphold the rights of its people first became popular in the 20th century, especially after the fall of the British Empire and the defeat of Germany in World War II. All of the Western World was in agreement that “freedom” was of paramount importance, and the sole responsibility of the government was to ensure that the inalienable rights of the people were not infringed upon.

Thus, the dedication to free market capitalism was founded upon the belief that it is the most democratic system, and it prevented government intervention which would supposedly infringe – inevitably – on the rights of the people.

While KTE believes there are good economic arguments to be made for the preservation of free market capitalism, we do not believe that the state should remain fully dedicated to it when the market comes into conflict with the wellbeing of the people. We believe the true responsibility of the government is to promote the wellbeing of its people and uplift them at each and every opportunity.

Therefore, it is our position that government policy should be made in the interest of the people, and not upon an adherence to political or economic philosophy. Too many Western governments – including Greece – have allowed their people to suffer because of a worship of these same economic policies. When these interests conflict, the government should always choose what is best for the nation.

Greece’s economic crisis began in 2009 and brought hardship and suffering to the entire nation.

Likewise, if you believe the government’s sole responsibility is to increase the GDP, you probably don’t mind that foreign investors are profiting off of Greece’s natural resources, vital industries and inflicting a serious housing crisis upon Athens as we speak.

Subscribing to this line of thinking assumes that free market capitalism is the preferred, and most democratic, economic system. KTE does not see it this way. We believe the job of the government is to protect and uplift its people. Therefore, when it comes to concepts like free market capitalism, blind adherence to any economic philosophy is a flawed worldview that neglects what is best for the Greek people.

In serious cases, the government has a duty to intervene in some well thought-out capacity. This includes the nationalization of key industries currently under foreign control.

It must be emphasized from the jump that we are not advocating for local Greek businesses and entrepreneurs to have their businesses seized by the government. If anything, those entities should be deregulated.

However, because there are numerous foreign corporations – largely from China, Saudi Arabia and Israel – who are adding to the GDP but siphoning all profits made into their own economies, it must be said that those foreign enterprises are not adding value to Greece. Nationalizing these foreign-dominated industries would be implemented with the end goal of ending Greece’s national debt and then re-privatizing all vital businesses to native entrepreneurs, just as the Modi government did with Air India in 2021 to massive success.

Exploring the Economic Philosophy at Play

Many Western countries possess a devout loyalty to free market economics over the true interest of its citizens, led on the global stage by the United States. Greece, to its detriment, currently does the same.

Greece’s national debt was estimated to be $372 billion in 2023.

KTE believes this is a massively misplaced loyalty and that a better solution to improving the endless economic problem and national debt lies elsewhere. No lasting improvement will befall Greece so long as it is viewed by its politicians as a mere borderless economic zone. At present, there are greater solutions, and one of them is to nationalize vital industries in Greece.

There is no debate about whether a problem exists: the current tax rate in Greece is 45% for those earning less than €40,000 per year, and the average salary is approximately €15,335. Moreover, in practice the collection rate is very low, and Greece is struggling mightily to pay down its more than €400 billion national debt.

Despite this, the Greek government continues to place a greater emphasis on upholding misaligned free market values over the interests of its people, consequently failing to step in and assist them in any productive way. Nationalizing vital industries – a route taken by many countries in the past, especially in Latin America – can be a massive step forward for Greece, if handled properly.

What’s the current problem with the economy?

It must be understood that the Greek worker is currently being muscled out by foreigners, and citizens of the country are worse off for it. In Athens alone, there is a massive housing crisis because Israeli, Saudi and Chinese companies – among others – are buying up entire neighborhoods and inflating prices significantly.

As a direct result, working class Greeks are finding it harder and harder to live in Greece, because the wages are low and the price of housing continues to artificially rise due to foreign influence. These foreign companies are choosing to enter the Greek economy because housing is cheaper here than in their home country, so they can buy up entire neighborhoods, renovate them and hike up the prices.

All the while, hundreds of thousands of foreign workers from Pakistan, Bangladesh and the like are flooding to Greece, causing a simple supply and demand problem: the demand for housing outweighs the supply due to the sheer volume of non-native workers entering the country.

Considering the lack of infrastructure and resources available to compete with these factors, the Greek government remains steadfast in its allegiance to free market economics – an abstract economic theory that is getting the country nowhere on its own. A strong government would intervene with decisive and cleansing action and pull focus back to native-born Greeks, who are currently being undercut in the labor and housing markets.

How nationalizing vital industries would work:

KTE views the current situation as a serious problem, but we don’t have a defeatist attitude about the Greek economy like many do. In short, the Greek government needs to step in and realize that foreign companies are entering the market and overwhelming it – so much so that many elderly and working class Greeks simply cannot afford housing. Our elected officials must swiftly enact new policies that look after its people, as opposed to maintaining its blind obedience to the capitalistic system.

Oftentimes, large-scale problems require inventive solutions. For one, these foreign entities need tighter regulations, and those companies implementing massive infrastructure projects in urban neighborhoods need to be put in check. This can be accomplished by making vital industries state-owned.

In a nutshell, nationalizing vital industries means buying out foreign-owned companies for a fair price and employing exclusively Greek citizens under government leadership. As mentioned above, this has been done in many Latin American countries such as Brazil, Chile, Mexico, etc. For instance, the largest oil company in Brazil is state-owned, and it is one of the largest exporters of crude oil in the Western Hemisphere.

Greece currently places third in the world for debt-to-GDP ratio at 169.8%.

Of course, the entire point of nationalizing vital industries is to pay down the national debt by successfully running said businesses profitably in a manner that improves the employment rate and national debt reduction. To compare, the current method Greece employs to mitigate their massive debt is to tax at absurdly high rates, which mainly punishes small businesses.

Instead of focusing on taxation, the Greek government ought to nationalize foreign owned companies that produce vital resources. For example, foreign companies sourcing oil in the Aegean Sea would become state-owned, after which all profits made go directly toward paying down international loans and the national debt.

Is it fair to nationalize vital industries?

We believe it is. Fair appraisals will go a long way toward making this strategy a reality. And, of course, it depends which companies Greece decides to nationalize – no one is advocating for the nationalization of small businesses, or those owned by Greek entrepreneurs. However, businesses owned by foreign nationals, such as the Saudis or Chinese, are suffocating the Greek working class by pressuring the housing and labor markets. Moreover, for all of the profits they are making in Greece, they are siphoning them off into foreign economies.

Some economists disregard nationalization because in certain Latin American countries, the economy became too dependent on nationally owned companies. Many of these government-owned industries were commodities – oil, copper, beef and the like – and those governments did not manage them wisely. Eventually, once the nationalized companies stopped performing, some Latin American governments ended up incurring more debt because the companies it chose to nationalize became a money pit.

However, this is avoidable if the Greek government can ensure that its economy does not become overly dependent on any one industry. Greece can learn from what happened in Brazil in the 1970s, where the country’s oil crisis consisted of a complete implosion on the national debt and the government over-employing its citizens. In fact, if Greece can reprivatize its vital industries to native investors after an initial paying down of the debt, the economy will be all the better for it.

The Case Against Nationalizing Vital Industries in Greece

Some economists suggest that a hike in tariffs on foreign goods represents a more feasible solution, thereby making local products more competitively priced without running the risk of nationalizing key industries before the government is ready.

Others still claim that what Greece truly needs is a resurgence of private enterprise unburdened by the endless red tape of the current bureaucratic system, which could deepen further if the nationalization of vital industries is mishandled by an already inefficient government. Aspects of the nationalization concept might be applied without risking government mismanagement.

Additional alternative solutions include making vital industries more accessible to members of the Greek Diaspora with a greater effort made to deregulate those investors. This, in turn, keeps our industries within the Greek community – and out of the hands of foreign businesses who do not intend to reinvest their profits in the domestic economy – while also reaping the potential benefits of privatization.

It’s true that many are at odds with the idea of nationalization, especially in the current climate. Critics oftentimes advocate for a general protectionist approach instead, which would ensure Greece sees the massive growth and supposed benefits from free market capitalism while also ensuring enough of the profits stay in Greece. For example, Greece might ban any foreign nationals or governments from owning residential property in the country, because those foreigners are currently leveraging their oil wealth to move in and price Greek citizens out of their own homes.

Closing remarks

What is a nation? Moreover, what should the government of a nation do for its citizens? The job of the Greek government is not to uphold the abstract principles of free market economics at all costs – their job is to protect the Greek people and do what is best for them. Nationalizing vital industries is something Greece can do for its people that improves their collective economic futures and ensures they do not become foreigners in their own country.