So what are the factors that have led some socially liberal democracies to economic success while others, like Greece are in the tank?

My liberal friends point to how well some social democracies have fared in the last few decades – namely Germany, Norway, Canada, and Australia. But they rarely bring up Greece.

Sometimes they attribute the economic success to a big comfortable safety net for their citizens. Sometimes they point to the success of a high tax, big entitlement society. Just recently a friend tried to attribute the financial success to the 35 hour work week in Germany and France.

But let’s face it, the success of an economy has hundreds if not thousands of different factors. Many are pure luck, some aspects are systematic and some are cultural. To begin with if a country starts out relatively wealthy it has a better chance of doing well several decades later. If a country is landlocked in the middle of Africa, with poverty-stricken countries around it, the odds of the country breaking out economically are slim. How wealthy would Saudi Arabia be today without its oil?

But Greece may be example number one of a country with many substantial advantages that have been squandered. They borrowed to the hilt to support a huge entitlement system and now will be paying the price for decades to come.

Here are a few of the advantages that Greece has had since World War II: It was a beneficiary of the Marshall Plan. It has plenty of (Western World) coastline, has been a member of the EU since 1981, and is a top tourist destination (15% of the GDP) with a terrific climate. It is close to a huge and prosperous region and has a thriving maritime industry.

But Greece has obviously had its difficultiesl. In 2009, Greece had the EU’s second-lowest Index of Economic Freedom (after Poland). In other words it prefers unions to free markets. It also turns out that its government had been lying about the amount of its debt for years. The cost of living in Athens is about 90% of that of New York City. It has a recent history (and possibly longer than just recently) of political corruption and maybe one of the worst records in the Western world of citizens cheating on taxes. It is left-wing and still has an active Communist Party and another political party called "The Party of the Radical Left."   Trade unions are strong and pervasive. Along with Spain and Italy, Greece faces a flood of illegal immigrants.

So what are the factors that have led some socially liberal democracies to economic success while others, like Greece are in the tank (granted Greece has done better than poor countries in the heart of Africa)? To start with, Canada, Australia and Norway are incredibly rich in energy and other natural resources. And we all know where those prices have gone in the last decade. And these three plus Germany are near huge and prosperous markets. All of them have an advantage of many English speakers (my hypothesis is that a higher percentage of Norwegians speak English than those residing in California). It is hard to find German executives that don’t speak excellent English. And English is at least today a competitive advantage if one does not speak your customers’ native language. And all four countries have all spent relatively little on National Defense and policing the world compared to the US.

So my point is that is silly to attribute any country’s success to one factor. It is not even several factors that make the difference. It is hundreds of different forces combined with where a country starts that together lead a country to economic success or failure. Many times a country benefits from pure good fortune, for example being occupied by America rather than Russia after WWII. The US ended up with over half of the world’s manufacturing capacity immediately after WWII. Sometimes a country is simply unlucky because it has no natural resources, no wealthy neighbors and is in the middle of Africa. And if a country can borrow enough to support its life style and entitlement programs (like Greece did), sometimes economic troubles can be masked for years.