Drugs Sanatoria

(Not a full post: response to article in LabourHame): http://t.co/A7bBD1TCJW

Yes, it is time for new initiatives on drug misuse.

In former times, those suffering from communicable diseases (for example,Scarlet Fever and TB) were cared for in sanatoria, where they  recieved treatment for their illness and at the same time potential contagion was removed from their communities. This model could be adopted for drug abusers, whose addiction is a disease which is as intractable and as infectious as these earlier complaints.

Drug addiction sufferers could be required to live at comfortable locations with stimulating programmes they would receive clinical heroin or undertake rehab programmes according to their individual needs. They could be required and permitted to stay there until they could prove that their wellness was sufficient to permit them to re-enter society.

Drugs sanatoria would resemble luxury resorts, but would still be less expensive than the current failing system.

The current position removes addicts from communities, except that they are criminalised by imprisonment (instead of receiving sympathy as ill people), receive insufficient treatment and usually return to a life of dependency – not only on drugs but also on criminality.

What’s so great about being in the UK? This is.

Those who define themselves as on the left and argue in favour of Scottish Independence and  a ‘Yes’ vote in the forthcoming referendum depend upon two major planks to their argument. The first is that the UK is a rotten place to live, and the second is that its institutions are so ineffective or even corrupt as to be beyond reform (even when including devolution.)

In making the first of these assertions, nationalists also frequently use the argument that opposition to independence offers no positive case for staying in the UK. This is of course nonsense, as the following will hopefully show, by using a small measure of observation and reason plus some recent research. (The second assertion can be tackled in a later piece.)

The case based on observation and reason was emphasised by a young friend who went to study in Argentina for a year: he has since trained in a liberal law firm and works in human rights cases, so his lefty-liberal credentials are duly intact.

On his return he was quick to recognise the misapprehensions of the UK left for progressive movements in South America. The perception was that Chavez and his fellow socialists were decidedly more radical than they actually appear to be when seen close-up.

Above all, their ambitions – especially when these genuinely reflected the will of the people – were headed by such things as the rule of law; democratic control of the legislature and executive; full and equal human, political, and civil rights; adequate health care free at the point of delivery; and an adequate system of social welfare and pensions. In other words, what they are seeking to achieve is a society very much like the UK.

A complementary argument is to look at one of the countries most loved by the myopic left in the UK – Cuba. Frequently, those who have taken a holiday there return and tell us that the people are well-educated, with a great healthcare system, and that they are above all happy and supportive of the regime.

However, there are two big and rather obvious arguments which the returning holidaymakers do not like to hear as sceptical responses.

The first case is to recall the evidence of close inspection of statistics widely praised in the case of other dictatorships, for instance, of the eastern European Stalinist states. A great example is the former DDR, and Jonathan Steele’s Socialism With A German Face told us that East Germany was a high productivity workers’ paradise.  It is possible that Steele was reporting what he had found in the DDR as he found it, but common sense tells us that the statistical information held by a totalitarian society is not to be trusted. For example, if someone’s social privilege (or even their life) depends on a certain level of productivity, their return will be as liable to be falsified as it would be if they were bankers calculating their own bonus in a capitalist country.

As the old communist bloc joke went “our definition of a job is when someone pretends to work and the state pretends to pay them.” The same degree of falsehood is possible in health and literacy reporting: “statistics is when the state sets us a quota, and we pretend it has been met. Then the state pretends to the world that this is true.”

The second argument is to ask why, if Cuba is really wonderful, so many people wish to leave, and are willing to pay great amounts of money and take severe risks to do so. The question begged is: “why have people not tried to reach Cuba by sailing on li-los and bath-tubs, rather than to get away?”

This brings us back to the UK, because in contrast, people take the same kinds of risks and pay the same very high costs in cash and life to get to the UK as they do to get away from Cuba.

The vast majority of migrants entering the UK do so legally, but there are those who subject themselves to the same dangers, such as occasional tragic cases of people who are found in aircraft landing gear compartments, or fall to their death from them on the approach to our airports. Likewise, people will pay large sums to people-traffickers, with little chance of success, as shown by the many illegal immigrants who are detected at ports of entry.

When these are added to the many more legal immigrants to the UK, it is easy to see that we live in a popular country, which people from all over the world consider offers an outstanding standard of living.

The recent research findings which back this up, and which provide more detail, have been published by Professor Michael E. Porter of Harvard Business School. (Professor Porter is a global expert in economic competitiveness, whose work on clusters and supply chain relationships is used as the orthodox model for local economic development worldwide.[1])

Recently, Porter has concluded that “…The Arab Spring of 2011 and the challenges in Mexico over the last decade, have illustrated the shortcomings of economic growth as a proxy for social progress. … In both business and economic development, our understanding of success has been incomplete.[2]

In order to put this right, he has set up an integrated index which takes comparable data and rates countries according to three sets of measurement criteria, which are then aggregated into a Social Progress Index.[3] The three headings are fairly predictable and certainly elementary: Basic Human Needs; Foundations of Wellbeing; and Opportunity.

What may surprise many, and especially those who disparage the British state and its institutions (but not the UK’s immigrants and would-be immigrants) is that the UK is placed 2nd of 50 countries worldwide, including 11 in Europe plus the USA, Canada, Australia, Japan  and all of the BRIC countries, and only marginally behind Sweden.

In Basic Human Needs (Nutrition and Basic Medical Care; Air, Water and Sanitation; Shelter; and Personal Safety), the UK rates 6th. This is behind Japan, Germany, Canada, Switzerland and Sweden, but ahead of the USA (7th), France (9th), Australia (10th), and Spain (12th).

In Foundations of Wellbeing (Access to Basic Knowledge; Access to Information and Communications; Health and Wellness; and Ecosystem Sustainability) the UK rates 2nd, behind Switzerland alone, and notably above for example, Sweden (3rd), Japan (5th), Canada (11th), and Australia (16th).

In Opportunity (Personal Rights; Access to Higher Education; Personal Freedom and Choice; and Equity and Inclusion) the UK rates 5th, behind the USA, Sweden, Australia and Canada, but ahead of all of the other European countries in the survey, e.g., Switzerland (7th), Spain (6th), Germany (10th), and France (11th) plus Japan (15th).

The Social Progress Index shows that the UK is the top country in the world for Air, Water and Sanitation; Health and Wellness; and Personal Rights; and that in Europe, the UK is the leader in Access to Basic Knowledge, 2nd for Personal Rights and for Equity and Inclusion.

There is of course another message, which is that other countries have their advantages just as the UK has some weaknesses, notably in Nutrition and Basic Medical Care (11th), Shelter (9th), Ecosystem Sustainability (32nd), Access to Higher Education (12th) and Personal Freedom (9th).

In the context of the Scottish independence debate, it is interesting to note that each of these areas of comparative weakness are either wholly or largely devolved to the Holyrood parliament: if Scotland really wishes to be even an even better place than the UK, it has the responsibilities and powers in the critical areas already. It is the responsibility of those who seek change to show us that change it is needed: in this case, the Scottish government needs no further powers, just political will and effective policies and delivery.

Conversely, there is no room for complacency even in those areas where the UK excels, especially as a Conservative government will always go as far as it can to undermine and limit social progress – although such progressive achievements are so deeply ingrained in British life that even the Tories feel compelled to assure us (duplicitously, it transpires) that the NHS and pensioners are safe in their hands.

For social democrats and others on the left, it is essential to maintain their political will to preserve what is the best in Britain, and what is the envy of so many others.

These are aims of social justice and equality, which bear no relation to narrow or sectarian interests, for example nationalists who must talk down the UK, or the soi-disant left which must belittle the achievements made overwhelmingly by the Labour governments periodically elected by the British people.

The first step in doing so is to take heed of the evidence (including that presented by Professor Porter) that the UK has a high quality social and economic fabric which is worth protecting. The job in hand is to work hard to ensure that the Tories pay the electoral cost for those policies which threaten that fabric to any degree. And the ultimate step is to develop these conditions and benefits so that they are shared amongst the widest possible number and the greatest possible range of our fellow citizens.

 

Play Up Pompey – Sport and ritual drama.

The power of spectator sport is a phenomenon. However we get to support our team, or our tribe or an individual, there is no doubt about the power of partisanship to help us identify ourselves, and to lead us down certain paths. But its personal effects go still deeper in making in moulding our world and our relationship to it.

In the spring of 1966, two events occurred which would have life-changing effects in the Russell household. In March, I sat the 11 Plus exam. And in April, before the results came through (….”The Education Committee has decided that your child will benefit from a grammar school education. You are required to purchase the following…”) I visited Fratton Park for the first time.

At my primary school I had already identified myself as a Portsmouth supporter, possibly following the triumphalism shown by Southampton supporters following their heavy defeat of Pompey earlier in the season. But on 23nd April 1966, I was invited by my friend over the road to go with him and his father to see Pompey play.

Even from the Milton End, away from Fratton End diehards, the pure jubilation of scoring and winning was literally a revelation. From that point on, I was hooked, lined and sinkered.

The thrill of entering the space that is Fratton Park was amazing: I had always loved going to the pictures, and a football ground seemed to be a gigantic outdoor version: a self-contained and purpose-built space, opened at fixed times only, with a cash value for entry (1/9d for boys, I think.)

In sporting spectacles, we witness occasions when the crowd, competitors and stadium are so well matched that the theatrical effect reaches the status of dramatic art.  So we watch Mo Farah’s final lap at the London Olympics, with the crowd rising around the stadium to will and cheer him home, and as we do so, we feel the same exhilaration as, for example, when the lightning zings and the Valkyries set off on their fearsome ride, or when Don Giovanni plummets through the trapdoor of the ultimate relegation.

It is a commonplace that sport is used to go further, and to act as a proxy for other and wider ideas, with results which are both negative and positive.

On the one hand, there is the tedious Rangers-Celtic bipolar disorder. At a more sinister level, Hitler attempted to use the 1936 Olympics to demonstrate vile racial theories (and was stymied by the sublime Jesse Owens). On the other, the cause of African-American civil rights and opposition to the Vietnam War were the leitmotifs of Mohammed Ali’s career – to the extent that when he was defeated by the likes of Joe Frazier and Ken Norton, their white ringside supporters cheered that their man had “beaten the nigger.” Frazier and Norton were of course also black.

So sport can have a specific political purpose, either deliberately or as part of the baggage that it accumulates through being in the public realm.  At the same time, socio-biologists like Morris (in The Soccer Tribe, 1981) have sought to relate the group behaviour of football supporters to that of tribes of primates such as baboons. Their case is sound, for example, in the case of territorial disputes such as the demarcation of the home end or Kop and the ambition of away supporters to seize it by violence and weight of numbers.

For individuals, however, the function of sport may be different, and this is when its similarities with dramatic art are striking.

So what the opposing camps in the civil and human rights issues saw in the early 1970s for instance  were struggles between their values and those that they opposed, which affected some deeply as to strike them colour-blind, apparently. So, in this sense, spectator sport must be acknowledged as having the heightened capability to act as the medium to participate by proxy in those confrontations.

In this sense, the boxing ring, and in turn the football stadium, and the athletics track and other spectator sport venues can transcend their function, and become ritual spaces, in the same way as the theatre or the opera house. Such is our experience as we see sporting dramas enacted over 9.6 seconds in the 100 metres or over 5 days in a test match.

We do not need to run faster than anyone ever has before to know that the limitations of the body can be conquered – the thrill of our witness of Usain Bolt does it for us; we do not need to experience exile and refugee status redeemed by winning double gold – we live the moment and share our humanity with Mo Farah; we do not need to bat out a Test in South Africa for over 10 hours to know that obduracy and determination can defeat hostility – Michael Atherton does it for us.

(I fancy a later blog on great historical sport-as-drama moments.)

As long ago as 1949, Francis Fergusson described the ritual nature of Shakespearean and classical tragedy in The Idea of a Theater.

The public and participatory nature of that ritual was always clear from the design and social status of the great ancient Greek venues such as Epidaurus or the Theatre of Dionysus on the Acropolis. Likewise, while the social function of the early theatre in medieval Europe was realised by Barry Unsworth in Mystery Play (1995), Fergusson relates early modern Elizabethan theatre back to its ritual forebears of mummery at the parish church lych-gate.

In recent times, these participatory aspects of classic drama have amongst the revelations of Shakespeare’s Globe recreated by the late Sam Wanamaker on the South Bank.

So Lynn Gardner’s Guardian review of the 2012 tells us ‘Henry V put the Globe’s dynamics to such cunning use; I swear that if this Henry had strode off the stage and out of the theatre at the end, everyone would have followed him[1].’ In the popular press, Julie Carpenter of the Express agreed: ‘ When … Henry, in full war cry mode, speaks to the groundlings as if they are his soldier subjects, exhorting them to, “Cry, ‘God for Harry! England and Saint George!’’ some of the audience were so stirred up they joined in[2].’

At this point there appears to be a fusion of drama, spectacle and participatory ritual, which as a spectator experience coincides exactly at that spot where sport becomes drama. It may be no coincidence that football, cricket and classical and Elizabethan drama all share the same ‘wooden O’ – or Oval– design of premises for their ‘Theatre of Dreams’ to stage their events.

Even in the banal and frequently overblown context of a hometown football club, the same seems to apply.

Through the players’ flashes of skill (or incompetence) we can live the potential and limits of the individual, and over the longer duration of a game or a season, we can experience the vicissitudes of the battle and the campaign. This even includes a dilute version of the classic combination of war: long periods of boredom (waiting for Saturday to come) interspersed with action and fear (the matches themselves.)

Over a lifetime, our experience will inevitably vary from team to team, and we must always have sympathy for those whose experience is limited. This may be to eternal failure (the Hartlepools and Aldershots) or it may be eternal success (Manchester United and more recently City).

For the rest of us, there is a whole host of experience to glean – for example, our team may languish in the second tier for decades, make the top flight, win the FA Cup and for just one night best the mighty AC Milan, crash and burn in financial and sporting disaster, then be redeemed through becoming less of a business and more of community resource.

Our experience will then teach us: the victory of the underdog is always worth more than that of the dominant; success requires a mixture of talent, work and luck; do not live beyond your means and be careful about who you accept money from; to inflate a business (or any other economic unit) with no certainty that its real income can support it is not a sound proposition; success is fleeting so enjoy it while you can; and most of your fellow participants (fans) are soundly decent people from a wide range  of backgrounds, who will go to great efforts to preserve that which they value.

The nature of sport as dramatic ritual means that these have not just been observed but experienced; and the lesson is lived not learnt.

(On the negative side, you may emerge with prejudices reinforced, for example that good guys play in blue, and bad guys in red and white stripes.) Such is the journey of the Pompey fan.

My conclusion is that through this function, the ritual drama of sport can be a significant influence on societies as a whole. And, as in this instance, being a football supporter (at Fratton Park) can be as influential as formal education (passing the 11 Plus), in the development and social understanding of an individual.

Division 4 – Here we come…

from: http://www.pompeyonline.com/forums/index.php?threads/relegation-now-confirmed-so-relegation-chat-thread-please-discuss-here.63903/page-2#post-1003718

Division 4: it will be plenty of fun for those who expect more than technical excellence from their football.

Although there will be some flashes of that: Mike Neasom told the joke about a lower leagues player who turned on a stupendous piece of skill one week, and whose manager told him: “if I could get you to play like that every week, you would be playing for England.” Player’s reply: “if you could get me playing like that every week, you would be managing England.”

Div 4 had lots of “interesting” non-quite players like that, some of whom filled the gaps in their talent with effort and personality, so there might be more local hero figures around. But hopefully no-one as reprehensible as Robin Friday (“the best footballer you never saw”) – highly skilled but a drunk, a dope fiend and all round sociopath who played for Reading and Cardiff.

But we will see a lot of dross too: a stand-out memory is a truly dreadful match at FP (against Torquay, maybe?) – in the last minute, Garwood swung over a tremendous cross from the right and Showers powered home an unstoppable header into the Fratton End goal. We all went home happy, but had endured 89 minutes of complete crap for 10 seconds of brilliance. You have been warned.

Margaret Thatcher and the sham of her ‘ordinary’ background.

The Labour MP Ann Clwyd once used Prime Minister’s Question Time to ask whether Margaret Thatcher agreed that there should be more women in politics, and furthermore whether the PM agreed that the best way for a woman to succeed in politics would be to acquire a very rich husband. (The Guardian sketch writer reported that the Prime Minister responded with a certain look which can only be delivered by one woman to another. It is the look that says ‘You cow.’)

But Clwyd had hit the nail on the head. The biggest myth about Margaret Thatcher was that her origins were in any way ordinary – as in her ‘ordinary’ background and upbringing, or that she was an ‘ordinary’ housewife who had somehow ended up at the top of politics. She was really from a middle-class background, and was the product of privilege, bankrolled by a millionaire.

Margaret Hilda Roberts came from a very comfortable background. Her father Alfred was not a simple shopkeeper: in fact, he owned several shops in Grantham, which he sold in 1958, reportedly for the equivalent of over £1 million. He served at various times as president of the Chamber of Trade, President of Rotary, a director of the Grantham Building Society, a director of the Trustee Savings Bank, chairman of the local National Savings Movement, a governor of the Kings School and Kesteven and Grantham Girls School (Margaret’s alma mater) and (surprisingly) local chairman of the Workers’ Educational Association, as well as a Methodist lay preacher.

This set of offices, and especially his service as an Alderman and Mayor of Grantham, show a driven and ambitious individual, who acquired wealth and position constantly. None of which is reprehensible: but does give the lie to the myth of her humble origins which Margaret Thatcher attached to herself for political advantage.

The result of her father’s position in the forefront of the local middle class establishment was also witnessed in Margaret Thatcher’s education. In the days before the 1944 Education Act – she went to secondary school in 1937 – ordinary children in England went to elementary school which they left at 14. To attend secondary school was in itself a sign of privilege, as most children were required to go to work to support family incomes. Even before the age of 14, secondary school would also incur costs such as uniforms, sports equipment and travel, which most families could not afford.

Even in the privileged surroundings of her high school, Margaret Roberts acquired the nickname ‘Snobby Roberts.’ She later betrayed her detachment from working class people when she told an interviewer that she knew about the poor because she “… used to walk past their homes on the way home.”

It was even more of a sign of middle-class privilege in 1943 to go to university, and indeed to Oxford. Again, few families could afford to support their children as students, and even before that stage, no ordinary family would have considered university as an option for their children, no matter how talented.

Margaret Roberts graduated in 1947 with a second-class degree (from Somerville College) but noticeably with a knowledge of Hayek, which is a very long way from her main subject of chemistry. She had also been President of the Oxford University Conservative Association. All of this is again indicative of her membership of the British middle class establishment, as it can be argued that working class achievers are much more likely to strive mainly in their own subject.

Likewise, the very fact of knowledge of the political opportunities offered by Oxford (rather than its mere educational benefits) shows her assumption of her membership of the class that ruled the country almost exclusively in her youth.

At this point, it is useful to compare this trajectory with that of a genuine case of achievement from a humble background – Margaret Thatcher’s would-be (and unsuccessful) nemesis, Neil Kinnock. Kinnock’s parents had been a miner (later a labourer due to his dermatitis) and a district nurse. He himself was educated at the local grammar, Lewis School Pengham, followed by a degree from University College, Cardiff.

To pursue a political career, he supported himself as a WEA tutor and worked as a party activist, becoming Constituency Labour Party secretary for Bedwellty. His stroke of luck came when the sitting MP announced his retirement. Kinnock was on the spot to take advantage of the vacancy, and his radicalism and oratory carried the selection conference. There had been an element of good fortune in the timing, but Kinnock genuinely won the nomination and the seat through his own gifts.

Having graduated, it had took Margaret Roberts four years to achieve the next major step in her progress from privileged background to parliament. In the meantime, she worked as an industrial chemist, although in this respect too her myth is dimmed by the reality, as one of her main jobs was not in a vital strategic industry, but developing ice-cream textures for J. Lyons & Co.

Then she met Denis Thatcher. And it is without doubt that the wealth of her husband is the single most important privilege which Margaret Thatcher enjoyed in her career. This should knock on the head forever her myth of ‘ordinariness.’ Unlike Neil Kinnock, she did not succeed solely because of her gifts.

Immediate evidence of this was that Denis added his wealth to that of her father to finance her in two General Election campaigns in Dartford in 1950 and 1951, and after their marriage (also in 1951), Denis then funded her studies to qualify as a barrister, specialising in taxation (which frequently means evasion – no-one goes to court to pay more tax!)

His fortune had not been earned, but had been inherited through the family firm (Atlas Preservatives) founded in New Zealand, which had secured lucrative contracts for railway weedkillers. He was already a millionaire when he met Margaret Roberts, and increased his wealth still further afterwards. He did this through repeated sales of the company and its successors (Castrol, and later Burmah Oil) while maintaining his place on their boards. So the Thatchers in the 1950s were the perfect Tory couple: Denis made money as a gentleman rentier capitalist and Margaret helped people to avoid paying tax.

In this way, the family assumed the lifestyle and trappings akin to those of the Edwardian middle-classes. The family home was in Flood Street, Chelsea. When the children arrived (twins Mark and Carol) they were looked after by nannies out of J.M. Barrie, and then packed off to board at Harrow and Queenswood respectively soon after Margaret’s election as MP for Finchley in 1959.

The lack of ‘ordinariness’ in this family life is clear. Not only is it shown by the peculiar way in which they showed their affection for the children (they sent them away to residential institutions) but also by the fees payable for nannies and especially for the schools in question. Harrow currently charges £32,160 and Queenswood £26,979, a total of nearly £60,000 per annum; it is highly doubtful that the equivalent was lower at the time.

These details about Margaret Thatcher’s background may have been no more than a curiosity or footnote if was not for the lifelong pretence which she made of a normal background and an ordinary life. In fact, as the school fees above demonstrate, the public displays of hoarding food and balancing the house-keeping of which she made such a show in the 1970s were either charades or unnecessary penny-pinching.

There are three further political implications which arise from the Thatcher sham.

First, there is of course the sheer degree of deception which Margaret Thatcher displayed to get to her position. Far from showing a Methodist commitment to honesty and plain-dealing, her record is one of pretence and dissimulation. This should surely have made her credibility as a major politician doubtful, and possibly untenable.

Secondly, there is the complicity of the UK establishment – above all in the media – in the deception. The source of this may have been the narrow compass of those controlling business and the media, who themselves have been too frequently drawn from that same governing middle class as the Thatchers. They too sent their children to boarding school, inherited their fortunes, and used their Oxford degrees as a stepping stone to their ‘real’ careers as lawyers and television executives.

Incredible as it may be for the rest of us, they may well have genuinely believed that Margaret Roberts’ origins as the daughter of a prosperous businessman were ‘humble’, and that she had ‘struggled’ to attain her position. But it should also be borne in mind that the same establishment did not appreciate the totally genuine achievement of Neil Kinnock in becoming Leader of the Opposition, and in 1992 very nearly Prime Minister. Instead they belittled him and mocked his lack of an Oxford degree.

Finally, a life which has involved a real struggle and occasional set-backs is informed and broadened by the experience of its vicissitudes, but one where success is delivered through unearned privilege is likely to be narrow in scope, and unsympathetic to those less successful and fortunate than themselves. In this sense Margaret Thatcher was a genuine and identifiable member of Mathew Arnold’s Philistine middle classes: “a person deficient in liberal culture.” As such, her much-vaunted determination was in many cases little more than banal narrow-mindedness.

In short, she was Snobby Roberts, she was an imposter regarding her background, and the platform for her career owed much to her husband’s bank balance, as Ann Clwyd exposed.

Greece and Eurozone Crisis – What The Germans Don’t Tell Us.

Stelios works as a waiter in small resort on the south coast of Crete. At the end of the season he has plenty of time to use his excellent English with tourists – like ourselves. We explain that we have visited many parts of Greece, having spent holidays there every year since 1983, and witnessed its rise from a Balkan peasant economy to a deceptively prosperous European state and its subsequent decline to a Eurozone basket case.

Stelios listens carefully as we relate how it good it has been to witness, for example, the provision of local health centres by past PASOK governments, but then breaks in: “yes, this was good of course, but listen: our village has 600 people, but a health centre built for a population of 2000. It is full of the most modern equipment, mostly unused, all made by Siemens. In Germany.”

This brief snapshot picks out two of the three major issues behind the Greek crisis. The first is the lack of public service discipline in the country’s economy. As PASOK under Andreas Papandreou sought to transform a peasant state economy into a bourgeois economy in less than a single generation through the means of public expenditure, waste and corruption became endemic. The result was like watering a desiccated pot plant – what went in at the top poured straight out at the bottom with little sustainable benefit in between.

The second issue is just as important but less obvious: the way in which Euro membership has benefited Germany and will continue to do so. At the currency’s foundation, Germany was still suffering from its choice to reunify two contrasting economies (against the advice of the Social Democratic SPD  incidentally) which had resulted in extreme social stress and mass unemployment, especially in the former DDR.

The Euro was important to Germany’s recovery in two ways. Most obviously, it removed currency fluctuation and conversion as frictional factors from its export performance within much of Europe’s single market. But more importantly, it secured German goods on wider world market to a currency with a more stable and ultimately lower value than the old Deutschmark.  

Put simply, German goods were and are cheaper in large markets (notably the USA and the UK) and in growing markets like the BRIC countries because the Euro is weakened by Greece (and Ireland, Spain and Portugal.) In this way, it is arguable that Germany has very smartly outsourced economic failure to, and grown its domestic economy at the expense of, its Eurozone partners.

At same time, it also worth looking at the various causes of the weaknesses of those partner economies. Greece’s main problem is its unreformed economic and governmental  systems which have led to unrestrained overspending.  However, Spain and Ireland‘s problems have been caused by the cheap credit created by the guarantee of the Euro having driven massive property price bubbles. Most recently, the version of the crisis running in Cyprus has at its root in an inflated (and partially corrupt) banking sector.

In other words, there are different causes for crises in different countries. This is obvious, it seems , to everyone except those responsible for sorting out the mess that is the Eurozone, that is the Troika which seems to recommend the panacea of austerity alone. The proof of the folly of this approach is shown by the varying outcomes so far of the policy in different countries. On the one hand, Spain has paid a huge cost (50% youth unemployment and house price fall of up to 40%) but has been successful in raising business competitiveness  and has raised exports to a three-decade high.

In contrast, Greece has taken the same medicine, and shared the human cost (again to 50% youth unemployment, plus associated rises in crime and support for political extremism) but its economy has deteriorated still further. Three Greek economists (Costas Meghir, Dimitri Vayanos, Nikos Vettis[1]) point out that Greek debt has risen since from 129% in 2009 to 189%, despite restructuring of private debt and drastic austerity measures.  They describe that although the government’s primary deficit has been all but eliminated “… on its current course, Greece is headed for disaster: further declines in GDP, a possible chaotic default on its debt, extremist political parties in power, and isolation from Europe.” In the case of Greece, the medicine looks very much like snake-oil.

Their proposed solution is practical, simple and radical. The simple and practical part is that the Greek problem should be seen for what it is and addressed accordingly. The root cause is an unreformed institutional framework which resulted in corruption and waste, so these should be the focus of any solutions, including linking a 50% write off of Greece’s debt to institutional reforms. These could include improved efficiency in tax collection, public administration and acceleration of judicial processes, plus reduction of corruption and other white-collar crime. All these can be measured through the known methodologies of bodies such as the World Bank and IMF.

In this way, the symptoms of the crisis (debt) can be addressed at the same time as its cause (the unreformed institutions); the outcome would be to create growth, which is the only way to break the current tailspin of debt and despair.

The authors themselves do not allude to the radical part of their plan. This is that the actions of the Troika in Greece and its equivalents elsewhere have not only been dogmatic in their application of austerity as a panacea, but have been inflicted without the consent of those affected. This has led to widespread disillusion with the conventional political process, including the re-emergence of the fascist New Dawn movement in Greece. It has also denied local political inputs which might lead ultimately to more successful outcomes.

The growth of the Syriza as a new movement on the left is more encouraging, apparently presenting a departure from the Stalinist/Euro-Com clichés as well as from the tribalism, nepotism and cronyism of PASOK.  In fact, the movement away from the former mainstream parties possibly represents a surprisingly articulate and intelligent political and economic response.

On the political side, this is simply that the Greek people should have a democratic voice in the future of their country; on the economic side, they believe that it will be beneficial for Greece to stay in the Euro, but not on the terms offered. In fact, Syriza seems in these respects to be more social democrat than far-left. In addition, their approach suggests that they believe that this will also remain beneficial for the Eurozone (especially Germany), which needs Greece as much as Greece needs the Euro.

 

And they could be right, if the answer lies in those Greek (and Portuguese and Spanish) health centres and the market and economic relationships which they represent. Common sense suggests that Germans must grasp that to keep Eurozone in good condition is in their interest, not only for peace or goodwill reasons, but to maintain and grow its own prosperity.

And just as Syriza was able to make significant advances in putting the Greek case in last year’s Greek elections, there will be the opportunity for Germany’s politicians to put the case for Germany to promote a more stable, prosperous and democratic Europe in its own interest when they go the polls later this year.

It is likely that the cost of a chaotic Greek exit would cost the Eurozone including Germany at least as dearly than relaxation of the current bail-out terms. It will also be incumbent on the Social Democrats to counsel and present to their electorate not only a social Germany, but also a social Europe which offers support to working people within the Eurozone. It will be interesting to see whether Angela Merkel is able to offer the same through the Christian Democrats, albeit as a good business case rather than on grounds of solidarity.

The alternative to such a Europe would be very grim indeed. To return to the south coast of Crete, and another taverna, whose owner Vangeli  told us in June 2011 that he was not worried, as “business is like the sea, it goes up and down” By September 2012, he was deeply worried, as no upturn had happened: fewer customers and rising costs had largely eroded business confidence in one of the country’s strongest sectors.

The first two issues arising from Vangeli’s nearby colleague Stelios were Greece’s underperformance as a Eurozone member and the export advantages Germany has accrued from the common currency. The third issue is that although employed as a waiter, Stelios’s excellent English came from having gained an accountancy degree at a UK university, and he had recently been made redundant from his government post as part of the latest austerity package.

He had been a tax collector.

 

Comments welcome.

(Thanks to Eamon Fitzgerald for some technical advice. All views and any errors are mine alone.)


[1] Stop the Cuts and Fund the Reforms, C. Meghir, D. Vayanos, N. Vettas (Greek Public Policy Forum 2012) http://www.greekpublicpolicyforum.org/2012/11/stop-the-cuts-and-fund-the-reforms-meghir-vayanos-vettas/