In a globalized world, it is difficult to uphold international living standards when you are cut off from the rest of the globe. This is the situation facing Iceland following the collapse of the krona in 2008 and the resulting strict enforcement of capital controls.
Icelanders can no longer travel freely; we are restricted to roughly €2,000 ($2,570) for travel expenses on each trip. We are restricted in terms of how much support we can give relatives studying abroad and we are completely banned from investing internationally. With the exception of those over 40 who were born on the eastern side of the Iron Curtain, no European has ever experienced such a situation.That reminded me of an interesting post at Zerohedge about ancient Rome's nanny state:
Rome had its socialist interlude under Diocletian. Faced with increasing poverty and restlessness among the masses, and with the imminent danger of barbarian invasion, he issued... an edictum de pretiis, which denounced monopolists for keeping goods from the market to raise prices, and set maximum prices and wages for all important articles and services. Extensive public works were undertaken to put the unemployed to work, and food was distributed gratis, or at reduced prices, to the poor. The government – which already owned most mines, quarries, and salt deposits – brought nearly all major industries and guilds under detailed control. “In every large town,” we are told, “the state became a powerful employer, standing head and shoulders above the private industrialists, who were in any case crushed by taxation.” When businessmen predicted ruin, Diocletian explained that the barbarians were at the gate, and that individual liberty had to be shelved until collective liberty could be made secure. The socialism of Diocletian was a war economy, made possible by fear of foreign attack. Other factors equal, internal liberty varies inversely with external danger.
The task of controlling men in economic detail proved too much for Diocletian's expanding, expensive, and corrupt bureaucracy. To support this officialdom – the army, the courts, public works, and the dole – taxation rose to such heights that people lost the incentive to work or earn, and an erosive contest began between lawyers finding devices to evade taxes and lawyers formulating laws to prevent evasion. Thousands of Romans, to escape the tax gatherer, fled over the frontiers to seek refuge among the barbarians. Seeking to check this elusive mobility and to facilitate regulation and taxation, the government issued decrees binding the peasant to his field and the worker to his shop until all their debts and taxes had been paid. In this and other ways medieval serfdom began.Iceland is on the Road to Serfdom. Greece will soon join them as they exit the European Union. And, if we don't address our looming debt, we will too.