Machiavelli’s Relevance to the Euro Crisis

One of my favourite books is the Prince by Niccolò Machiavelli.  In case you haven’t read it, the Prince is a brilliant guide to how a leader should behave in order to hold and expand their power.  Whilst the book was written with the 16th Century Italian Prince in mind, its lessons are much more generally applicable.

Following the events in Europe recently, where the leaders have failed spectacularly to manage their finances, I remembered the great man’s advice on generosity and meanness.  From Chapter XVI: Liberality and Parsimony:

And there is nothing wastes so rapidly as generosity , for even whilst you exercise it you lose the power to do so, and so become either poor or despised, or else, in avoiding poverty, rapacious and hated. And a prince should guard himself, above all things, against being despised and hated; and generosity leads you to both. Therefore it is wiser to have a reputation for meanness which brings reproach without hatred, than to be compelled through seeking a reputation for generosity to incur a name for rapacity which begets reproach with hatred.

Basically, being lavish is great to begin with but eventually the money will run out and the Prince will have to heavily tax his people to pay for the running of the state.  They won’t thank you and will forget any past generosity.  Pretty obvious really but then this simple advice seem to have been lost on the political elite of Europe.