nation: Greece

It seems certain that the political economy textbooks of the future will include a chapter on the experience of Greece in 2015.

On July 5, 2015, the people of Greece overwhelmingly voted “NO” to the austerity ultimatum demanded by what is colloquially being called the Troika, the three institutions that have the power to shape Greece’s future: the European Commission, the International Monetary Fund, and the European Central Bank.

The people of Greece have stood up for the rights of working people everywhere.

Background

Greece has experienced six consecutive years of recession and the social costs have been enormous.  The following charts provide only the barest glimpse into the human suffering:

While the Troika has been eager to blame this outcome on the bungling and dishonesty of successive Greek governments and even the Greek people, the fact is that it is Troika policies that are primarily responsible. In broad brush, Greece grew rapidly over the 2000s in large part thanks to government borrowing, especially from French and German banks.  When the global financial crisis hit in late 2008, Greece was quickly thrown into recession and the Greek government found its revenue in steep decline and its ability to borrow sharply limited. By 2010, without its own national currency, it faced bankruptcy.

Enter the Troika. In 2010, they penned the first bailout agreement with the Greek government. The Greek government received new loans in exchange for its acceptance of austerity policies and monitoring by the IMF. Most of the new money went back out of the country, largely to its bank creditors. And the massive cuts in public spending deepened the country’s recession.

By 2011 it had become clear that the Troika’s policies were self-defeating. The deeper recession further reduced tax revenues, making it harder for the Greek government to pay its debts. Thus in 2012 the Troika again extended loans to the Greek government as part of a second bailout which included . . . wait for it . . . yet new austerity measures.

Not surprisingly, the outcome was more of the same. By then, French and German banks were off the hook. It was now the European governments and the International Monetary Fund that worried about repayment. And the Greek economy continued its downward ascent.

Significantly, in 2012, IMF staff acknowledged that the its support for austerity in 2010 was a mistake. Simply put, if you ask a government to cut spending during a period of recession you will only worsen the recession. And a country in recession will not be able to pay its debts. It was a pretty clear and obvious conclusion.

But, significantly, this acknowledgement did little to change Troika policies toward Greece.

By the end of 2014, the Greek people were fed up. Their government had done most of what was demanded of it and yet the economy continued to worsen and the country was deeper in debt than it had been at the start of the bailouts. And, once again, the Greek government was unable to make its debt payments without access to new loans. So, in January 2015 they elected a left wing, radical party known as Syriza because of the party’s commitment to negotiate a new understanding with the Troika, one that would enable the country to return to growth, which meant an end to austerity and debt relief.

Syriza entered the negotiations hopeful that the lessons of the past had been learned. But no, the Troika refused all additional financial support unless Greece agreed to implement yet another round of austerity. What started out as negotiations quickly turned into a one way scolding. The Troika continued to demand significant cuts in public spending to boost Greek government revenue for debt repayment. Greece eventually won a compromise that limited the size of the primary surplus required, but when they proposed achieving it by tax increases on corporations and the wealthy rather than spending cuts, they were rebuffed, principally by the IMF.

The Troika demanded cuts in pensions, again to reduce government spending. When Greece countered with an offer to boost contributions rather than slash the benefits going to those at the bottom of the income distribution, they were again rebuffed. On and on it went. Even the previous head of the IMF penned an intervention warning that the IMF was in danger of repeating its past mistakes, but to no avail.

Finally on June 25, the Troika made its final offer. It would provide additional funds to Greece, enough to enable it to make its debt payments over the next five months in exchange for more austerity.  However, as the Greek government recognized, this would just be “kicking the can down the road.” In five months the country would again be forced to ask for more money and accept more austerity. No wonder the Greek Prime Minister announced he was done, that he would take this offer to the Greek people with a recommendation of a “NO” vote.

The Referendum

Almost immediately after the Greek government announced its plans for a referendum, the leaders of the Troika intervened in the Greek debate. For example, as the New York Times reported:

By long-established diplomatic tradition, leaders and international institutions do not meddle in the domestic politics of other countries. But under cover of a referendum in which the rest of Europe has a clear stake, European leaders who have found [Greece Prime Minister] Tsipras difficult to deal with have been clear about the outcome they prefer.

Many are openly opposing him on the referendum, which could very possibly make way for a new government and a new approach to finding a compromise. The situation in Greece, analysts said, is not the first time that European politics have crossed borders, but it is the most open instance and the one with the greatest potential effect so far on European unity…

Martin Schulz, a German who is president of the European Parliament, offered at one point to travel to Greece to campaign for the “yes” forces, those in favor of taking a deal along the lines offered by the
creditors.

On Thursday, Mr. Schulz was on television making clear that he had little regard for Mr. Tsipras and his government. “We will help the Greek people but most certainly not the government,” he said.

European leaders actively worked to distort the terms of the referendum. Greeks were voting on whether to accept or reject Troika austerity policies yet the Troika leaders falsely claimed the vote was on whether Greece should remain in the Eurozone. In fact, there is no mechanism for kicking a country out of the Eurozone and the Greek government was always clear that it was not seeking to leave the zone.

Having whipped up popular fears of an end to the euro, some Greeks began talking their money out of the banks. On June 28, the European Central Bank then took the aggressive step of limiting its support to the Greek financial system.

This was a very significant and highly political step. Eurozone governments do not print their own money or control their own monetary systems. The European Central Bank is in charge of regional monetary policy and is duty bound to support the stability of the region’s financial system. By limiting its support for Greek banks it forced the Greek government to limit withdrawals which only worsened economic conditions and heightened fears about an economic collapse. This was, as reported by the New York Times, a clear attempt to influence the vote, one might even say an act of economic terrorism:    

Some experts say the timing of the European Central Bank action in capping emergency funding to Greek banks this week appeared to be part of a campaign to influence voters.

“I don’t see how anybody can believe that the timing of this was coincidence,” said Mark Weisbrot, an economist and a co-director of the Center for Economic and Policy Research in Washington. “When you restrict the flow of cash enough to close the banks during the week of a referendum, this is a very deliberate move to scare people.”

Then on July 2, three days before the referendum, an IMF staff report on Greece was made public. Echos of 2010, the report made clear that Troika austerity demands were counterproductive. Greece needed massive new loans and debt forgiveness. The Bruegel Institute, a European think tank, offered a summary and analysis of the report, concluding that “the creditors negotiated with Greece in bad faith” and used “indefensible economic logic.”

The leaders of the Troika were insisting on policies that the IMF’s own staff viewed as misguided.  Moreover, as noted above, European leaders desperately but unsuccessfully tried to kill the report. Only one conclusion is possible: the negotiations were a sham.

The Troika’s goals were political: they wanted to destroy the leftist, radical Syriza because it represented a threat to a status quo in which working people suffer to generate profits for the region’s leading corporations. It apparently didn’t matter to them that what they were demanding was disastrous for the people of Greece. In fact, quite the opposite was likely true: punishing Greece was part of their plan to ensure that voters would reject insurgent movements in other countries, especially Spain.

The Vote

And despite, or perhaps because of all of the interventions and threats highlighted above, the Greek people stood firm. As the headlines of a Bloomberg news story proclaimed: “Varoufakis: Greeks Said ‘No’ to Five Years of Hypocrisy.”

The Greek vote was a huge victory for working people everywhere.

Now, we need to learn the lessons of this experience. Among the most important are: those who speak for dominant capitalist interests are not to be trusted. Our strength is in organization and collective action. Our efforts can shape alternatives.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

On average, U.S. workers with jobs put in more hours per year  than workers in most OECD countries. In 2012, only Greece, Hungary, Israel, Korea, and Turkey recorded a longer work year per employed person.

A long work year is nothing to celebrate. The following chart, from the same Economist article, shows there is a strong negative correlation between yearly hours worked and hourly productivity.

More importantly, the greater the number of hours worked per year, the greater the likelihood of premature death and poor quality of life.  This reality is highlighted in the following two charts taken from an article by Angus Chen titled “8 Charts to Show Your Boss to Prove That You Can Do More By Working Less.”

In sum, we need to pay far more attention to the organization and distribution of work, not to mention its remuneration and purpose, than we currently do.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Our favorite economist, Martin Hart-Landsberg, has written a detailed account of what is causing the rise of income inequality around the world.  Here I’d like to highlight just one of his really interesting observations.

While we usually think that rising income inequality is caused by the rich getting richer and the poor getting poorer, a more complex picture is emerging.  The graph below plots the hourly wages of the 90th percentile (Americans who make more than 89% of the population) relative to the wages of the 50th percentile (the purple line) and the wages of the 50th compared to the 10th percentile (the dotted blue line).

In English: it asks how quickly the richest people (90th) are pulling away from the average person (50th) and how quickly the average person is pulling away from the poorest (10th).  The answer?  Income inequality has been increasing since the 70s but, since the late ’80s, rich people have continued pulling ahead of the average American, but the average American has not been gaining on the poor.

Another indicator that the middle class is shrinking is changes in the share of jobs that are low-, middle-, or high-paid.  The next graph shows that, across a wide range of countries, high- and low-paying jobs are on the rise, but middle-paying jobs are on the decline.  So, middle income jobs are disappearing, but there are more of both high- and low-income jobs.

Hart-Landsberg suggests that the reason for this shift in the economy involves the globalization of production.  For more, visit Reports from the Economic Front.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Paraphrasing Donald Rumsfeld, there are things we know and things we don’t know, and things we know we don’t know, and things we don’t know we don’t know.

One thing many working people in American don’t know that they don’t know is how poor our social benefits are compare with those enjoyed by workers in other countries.  No doubt one reason is the general media blackout about worker experiences in other countries.  A case in point: vacation benefits.

The Center for Economic and Policy Research recently completed a study of vacation benefits in advanced capitalist economies.  Here is what the authors found:

The United States is the only advanced economy in the world that does not guarantee its workers paid vacation. European countries establish legal rights to at least 20 days of paid vacation per year, with legal requirements of 25 and even 30 or more days in some countries. Australia and New Zealand both require employers to grant at least 20 vacation days per year; Canada and Japan mandate at least 10 paid days off. The gap between paid time off in the United States and the rest of the world is even larger if we include legally mandated paid holidays, where the United States offers none, but most of the rest of the world’s rich countries offer at least six paid holidays per year.

Even though paid vacations and holidays are not legally required in the United States, some employers do provide them to their workers. The table below shows the paid vacations and paid holidays offered in the U.S. private sector based on data from the 2012 National Compensation Survey.  The first two columns show the percentage of private sector workers that receive paid leave, vacation and holidays.  The next two columns show the average number of paid vacation and paid holidays provided to those employees that receive the relevant benefit.  The last two columns show the average number of paid vacation and paid holidays for all private sector workers, meaning those that receive and those that do not receive the relevant benefits.

Thus, on average, private-sector workers in the United States receive ten days of paid vacation per year and six paid holidays.  This total still leaves U.S. workers last in the rankings even when compared with the legal minimums highlighted above.  And many employers in these other countries also offer more paid leave than legally required.

Moreover, several countries require additional paid leave for younger and older workers, additions that are also not included in the legal minimums highlighted above.  For example, “in Switzerland, workers under the age of 30 who do volunteer work with young people are entitled to an additional five days of annual leave. Norway offers an additional week of vacation to workers over the age of 60.”

And some countries provide additional leave for workers with difficult schedules.  For example, “Australia offers some shift workers an additional work week of leave. Austria offers workers with ‘heavy night work’ two to three extra days of leave, depending on how frequently they do this shift work, and an additional four days of leave after five years of shift work.”

Several countries offer additional paid leave for jury service, moving, getting married, or community or union work.  For example, “French law guarantees unpaid leave for community work, including nine work days for representing an association and six months for projects of ‘international solidarity’ abroad and leave with partial salary for ‘individual training’ that is less than one year. Sweden requires employers to provide paid leave for workers fulfilling union duties.”

Austria, Belgium, Denmark, Greece, and Sweden even require employers to pay workers at a premium rate while they are on vacation.

There is more to say, but the point should be clear.  Ignorance of experiences elsewhere has narrowed our own sense of possibilities.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

The Pew Research Global Attitudes Project recently released data on attitudes about homosexuality in 39 countries. Generally, those living in the Middle East and Africa were the least accepting, while those in the Americas, Europe, and parts of Asia (the Philippines, Australia, and to a lesser extent Japan) were most accepting:

Generally, the more religious a country, the less accepting its citizens are of homosexuality:

The proportion of people who support social acceptance of gays and lesbians ranged from a high of 88% in Spain to a low of 1% in Nigeria:

Attitudes about homosexuality vary widely by age. There is a pretty consistent global pattern of more positive attitudes among younger people, with a few exceptions:

Thus far, legalization of same-sex marriage has been largely confined to the Americas and Europe; New Zealand and South Africa are the two outliers:

The Pew Center points out that of the 15 nations that have fully extended marriage rights to same-sex couples, 8 have done so just since 2010. In the U.S., we’re currently awaiting a Supreme Court’s decision, which should arrive shortly, to know if we’ll be joining the list sooner rather than later.

Thanks to Peter Nardi at Pitzer College for the link!

Gwen Sharp is an associate professor of sociology at Nevada State College. You can follow her on Twitter at @gwensharpnv.

The phrase “social construction” refers to the fact that things, symbols, places, sounds — basically everything — is devoid of meaning until we, collectively, agree as to what something means.  Once that happens, it has been “socially constructed” and we can refer to it as a “social construct.”

The fact that gestures have any meaning at all, and that they can have different meanings in different places, is a simple example of this basic sociological concept.  Enjoy this one minute compilation of examples!

Via Blame It On The Voices.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

The  International Society of Aesthetic Plastic Surgeons has released new data on the incidence of invasive and non-invasive cosmetic procedures.  The U.S. leads in sheer numbers of procedures but, accounting for population, we fall into 4th place.  South Korea leads for the number of procedures per person, followed by Greece and Italy.

By far the most common kinds of surgical cosmetic procedures are lipoplasty and breast augmentation.  Along with fat, breasts seem to be a particular concern: breast lifts and breast reductions for both men and women are also in the top ten.  Abdominoplasty, nose jobs, eyelid surgeries, and facelifts are as well.

The incidence of these surgeries is strongly related to everything from the gender binary to global power dynamics.  In 2008 we reported that male breast reductions were the most common cosmetic surgery for 13-19 year olds (boys and girls combined). You would be shocked at what counts as excess breast tissue and how little the before and after photos look.  Boys and men getting breast reductions, alongside women getting augmentations, is obviously about our desire for men and women to be different, not naturally-occurring difference.  See The Story of My Man-Boobs for more.

Likewise, we’ve posted about surgeries that create an epithelial fold, a fold of skin in the eyelid more common in people with White than Asian ethnic backgrounds.  This surgery is a trend among Asians and Asian-Americans, as colonization has left us with an association between Whiteness, attractiveness, and power.

The Economist summarizes some other trends:

Breast augmentation, the second biggest surgical procedure, is most commonly performed in America and Brazil. Buttock implants are also a Brazilian specialty, as is vaginal rejuvenation. Asia is keen on nose jobs: China, Japan and South Korea are among the top five nations for rhinoplasty.

More on where and how many procedures are being performed, but nothing on why, at the ISAPS report.

Image at The Economist; via Global Sociology.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Cross-posted at Montclair SocioBlog.

The poverty rate in the US in the mid-2000s was about 17%.  In Sweden, the poverty rate was 5.3%; in Germany, 11%.   That was the rate after adding in government transfers.  In Germany, the poverty rate before those transfers was 33.6%, ten points higher than that in the US.  Sweden’s pre-transfer poverty rate was about the same as ours.

Jared Bernstein has this chart showing pre-transfer and post-transfer rates for the OECD countries (click to enlarge):

Three  points:

1.  Governments have the power to reduce poverty, and reduce it a lot.  European governments do far more towards this goal than does the US government.

2.  It’s unlikely that America’s poor people are twice as lazy or unskilled or dissolute as their European counterparts.  Individual factors may explain differences between individuals, but these explanations have little relevance for the problem of overall poverty.  The focus on individual qualities also has little use as a basis for policy.  European countries have fewer people living in poverty, but not because those countries exhort the poor to lead more virtuous lives and punish them for their improvident ways.  European countries have lower poverty rates because the governments provide money and services to those who need them.

3.  The amount of welfare governments provide does not appear to have a dampening effect on the overall economy.