Communism meets Free Market Economics

The world just figured out that free market economics and capitalism are two different things.

http://www.businessinsider.in/GREECE-JUST-TAUGHT-CAPITALISTS-A-LESSON-ABOUT-WHAT-CAPITALISM-REALLY-MEANS/articleshow/47952397.cms

Greece has effectively voted to default on its debt to the IMF and the EU, and it is a massive defeat for Germany's Angela Merkel and the troika she led, which insisted there was no way out for Greece but to pay back its massive debts.

The vote is huge lesson for conservatives and anyone else who thinks this is about a dilettante government of left-wing idealists who think they can flout the law while staging some kind of Che Guevara-esque dream:

Wrong.

This is what capitalism is really about.

From the beginning, Merkel and the EU have operated from the position that because Greece took on debt, Greece now needs to pay it back. That position assumed - bizarrely, in hindsight - that debt only works one way: if you lend someone money, then they pay it back.

But that is NOT how free markets work.

Debt is not a guarantee of future payments in full. Rather, it is a risk that creditors take, in hopes of maybe being paid tomorrow.

The key word there is "risk."

If you're willing to take the risk, you'll get a premium - in the form of interest.

But the downside of that risk is that you lose your money. And Greece just called Germany's bluff.