Much ink has been spilled on the Greek crisis, deservedly so. Libertarians are quick to point out where our predicted demons have come home to roost. And, like so many others, I fear we’re only seeing the beginning of the consequences; particularly for the now shaky Euro.

But, alas, the lessons are not being learned. This should be somewhat unsurprising. If learning from history is an important intellectual goal, then libertarians should remember that politicians rarely listen to us. Libertarians and other economically-minded people often feel like we’re Phil from “Groundhog Day,” living the same events over and over while everyone else remains clueless. We beat our fists against human nature and the perpetual illusions of quick fixes, moral performance art, and the “necessity” of planning.

In this vein, the Greek PM has recently said that the crisis was partially the fault of evil “speculators” (always a thinly-veiled, anti-capitalist code word). Also, he has taken some pages from our own Planner-In-Chief and decided that the solution to this quagmire is a little bit of good ‘ol fashioned planning; specifically, (of course) green planning. Prime Minister Papandreou said that Greece needs,

to make sure that we have put in place the necessary steps so that we can then restructure our economy, make our economy a green economy, one which is also important for attracting investment, developing our tourist industry, developing our agriculture, our services, but also making our society more just and more transparent and more open.

As you can see, Papandreou is singing the same ol’ song.

One of Hayek’s (well, the Austrians all had a hand in this but, as usual, Hayek was the most effective communicator) most important observations was that a market economy is, essentially, an information aggregating system. Successfully negotiating the world requires information. For a market, this information can be reductively lumped into three categories: how the world is, what people want out of the world, and what the future will bring.

Each of these questions is fundamentally impenetrable for a given human mind, or, even, a group of human minds. However, most unknowable of all is what the future will bring. This includes simple events such as a slightly colder winter in California, to massive events such as the oil spill or the American Civil War. Each of these events would have (or did have) a profound effect on the market for certain goods.

A new business venture is a gamble that, hopefully, people will want what you are selling. Millions can be spent on market research and analysis but those tools grasp at straws; “indicators” and “predictors” that hopefully can give a picture of the future. Inevitably, many seemingly “sure bets” are still-born, never able to get a marketplace foothold before falling into bankruptcy. Beta-Max and VHS had to fight it out; as did HD-DVD and Blu-Ray. People placed bets on all sides but, eventually, you have to play the game.

Hayek, Mises and others pointed out that, essentially, the market throws ideas against the wall to see if they stick. This may seem like a horribly inefficient mechanism for separating the bad ideas from the good ones (and here, again, is often where the evils of “speculators” are railed against), but it is far better than the alternatives.

The “alternative” promoted by President Obama, Prime Minister Papandreou, and many others, is to use the apparatus of government to force the economy in a direction that is believed to be a future that holds innumerable opportunities for innovation and productivity. Of course, it also holds innumerable opportunities to loose your shirt and, in a free market, those would be the risks that counterbalance the reward.

Propping these companies up with government money–i.e. robbing Peter to ensure the success of Paul’s business–is a good way to buy votes and political support, but a terrible way to run an economy that is always racing to an unknown future. There is a very real danger (in fact, it is nearly a guarantee) that there will be a “bubble” created by governmental meddling in the economy. Tax breaks, subsidies and regulatory preference will be given to a business model or technology that is inefficient and, ultimately, incapable of delivering desirable goods more efficiently than competitors.

Critics immediately claim that, without government prodding, businesses do not have the incentive to come up with “green” innovations. They say this while, in the last few years, the free market has been flooded with 7th generation toilet paper, free range meat, organic products of all types, Priuses and other hybrids, and many many other “green” products and services. People are demanding environmentally conscious products and the market has responded in kind. Some of this has been assisted by government favoritism, but most has not.

Obama and Papandreou are prognosticators in this system like everyone else–hoping to predict the future and get in on the ground floor. Unfortunately, they gamble with other people’s money and thus sap the productive energies of the economy in the name of pet projects. It would be little different if this were 1990 and George H.W. Bush had decided to restructure the economy around home video rentals. By doing so, the money taken out of the economy (money that would have been used in some other capacity), and the regulatory preferences passed to favor the government’s chosen businesses would have ensured the delay, if not the destruction, of the groundbreaking businesses like Netflix.

And, it gets even more insidious than this. If the government-issued bubble is challenged, workers will make a fuss over the possible loss of their jobs–jobs that only exist because of government largesse and because, ultimately, the government has forcibly taken money from people to support a business that, otherwise, they would not voluntarily support. Government becomes so entangled in the new economy that it tried to bring about that, politically, it cannot extract itself.

Our world becomes poorer. Innovation and wealth are sapped. Moreover, politics becomes the messy world of corporatism and crony capitalism–horse-trading of preferential policies in smoke-filled back rooms becomes the primary business of government. And both Obama and Papandreou are pushing for more of this.

While they perform this workshop in crony capitalism, they simultaneously seek to sap the ability of financial markets to properly price risk and speculation in the name of exorcising the evil “speculators.” Angela Merkel’s idiotic ban on naked short selling is a perfect example of this attitude. And, while destroying a valuable method of ensuring that bubbles do not get too out-of-control, PM Merkel is using the state to prop up a bubble for electric cars. Sigh.

It’s business as usual in the Western world of crony capitalism.