The Crisis of the 2020s

China's population pyramid. The crisis of the 2020s will be triggered in part by the end of cheap imports from China and the return of inflation.

New Year's 2021. Little seems to have changed over the past three years. Technologically, there are more smart devices to entertain you or to help you with your work. Economically, things are supposed to be better, but that's not your impression. Politically? Not much either. Most of eastern and central Europe has gone nationalist, but they always were, weren't they? There's Italy, where Berlusconi governs with two nationalist parties, but isn't that a rerun of what he finagled two decades earlier? Finally, North Africa is in the news, but no one seems to know what's going on there.

Yet something is afoot. A friend makes a remark he never would have before. He of all people! At the health club you try to follow the news on TV, but it seems harder to follow than usual. You're thinking of traveling abroad, but it's more complicated, supposedly because of the terrorist threat ...

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The Crisis of the 2020s will not be readily apparent when the decade begins. Nationalist parties will be in power over most of Europe, but the Western European "core"—the United Kingdom, France, and Germany—will still be postnational. Yet even there nationalist parties will have made inroads at the regional and municipal levels. These electoral successes will be self-reinforcing, with one leading to another, especially in regions that are culturally and linguistically similar.

But this nationalist consensus will have to reckon with an opposing consensus that is already in place and likewise self-reinforcing. This postnational consensus took shape in the 1940s, when elites throughout the West blamed nationalism for the Second World War and the preceding depression. It grew stronger in the 1950s and 1960s with competition by the two superpowers for the hearts and minds of emerging nations in Asia and Africa. The Cold War had the perverse effect of making the United States and the Soviet Union mirror images of each other, each trying to preach its own universal gospel to the unconverted. 

This elite consensus entered a new phase with the end of the postwar boom in the 1970s and a slowdown in economic growth throughout the West. This slowdown has been attributed to several causes:

- The postwar boom was driven by low prices for raw materials, especially oil. In the 1970s oil prices spiked, as did prices for other key commodities.

- The postwar boom was also driven by population growth—the baby boom. Young adults spent more on housing, children's clothes, educational supplies, and other family-related purchases. They also became more willing to invest in the future, both personally and collectively, since they were literally investing in their children. During the 1960s fertility rates declined dramatically, and by the 1970s declines in school enrolment and household spending had become noticeable. 

- A backlog of technological innovation had piled up during the Great Depression and the Second World War. By the 1970s this backlog was largely gone.

- Thrift and saving had become ingrained during the depression and the war. By the 1970s the culture had shifted toward greater acceptance of living beyond one's means.

These causes should be viewed with some caution, since the slowdown happened across very different political and cultural contexts in North America, Western Europe, and Japan. It also happened in the Soviet Union and Eastern Europe. Slow growth may simply be the historic norm, and economies return to this norm as they mature. In any case, policy makers are less interested in causes than they are in solutions, and to find solutions to slow growth they have consciously or unconsciously turned to postnational thinking for inspiration. 

A slowly growing economy isn't necessarily bad for the average person. Because population growth has likewise slowed throughout the West, economic growth, however sluggish, translates into more wealth per capita. Because companies can no longer count on a growing market, they have to compete much more with each other for market share, thus improving the quality of the goods and services they offer. They also have to compete for a limited supply of labor, thus bidding up wages and raising productivity through automation and robotization. Japan has taken that path, and it isn't doing so badly despite the doom and gloom one hears. Labor scarcity means that 74% of Japanese aged 15 to 65 have a paid job—well above the OECD average of 67%. Only 1.2% of Japan's labor force has been without work for a year or longer—below the OECD average of 2%. Also, Japanese life expectancy at birth is 84 years—well above the OECD average of 80 years.

Slow growth may not be bad news for the average person, but it is for the rentier class—those whose income comes not from work but from dividends, interest, and speculation. When economic growth falls to 2 or 3% a year, this becomes their return on investment. It's not enough to live on, at least not in the style they're used to.

The rentier class has thus pushed Western governments to make the economy grow faster than it normally would. Since the 1970s, growth has been spurred through financial stimuli of one sort or another: tax cuts, deficit spending, lower interest rates, and monetary expansion. This is still a popular response, but the shortcomings are now well-known. The immediate one is inflation—in the 1970s inflation rose to double digits throughout the West. It has since been contained by a mix of money supply management and globalization, i.e., outsourcing jobs to low-wage countries and insourcing low-wage labor for jobs that cannot be outsourced (agriculture, construction, services). In the U.S., massive low-wage immigration began with the Reagan amnesty of 1986, although this outcome was emphatically denied at the time. Upward pressure on wages has further slackened with the decline in unionization, itself largely a result of globalization, particularly the loss of jobs in manufacturing and the shift to less easily unionized jobs in services. Finally, immigration itself has been seen as a way to stimulate the economy through increased aggregate demand, particularly for real estate and construction.

While these stimulus measures help to spur growth over the short term, the outcome seems more dubious over the long term. Today, interest rates are at record low levels throughout the West, and immigration is running at record high levels—in the U.S., legal immigration alone is over three times what it was in the 1960s. Yet year-to-year economic growth is much lower: 1.6 to 2.5% in the 2010s versus 2.3 to 6.5% in the 1960s.

The economy seems to habituate to these stimulus measures. We thus have the apparent paradox of more and more stimulus producing less and less growth. This paradox has three causes:

- People take further growth for granted, particularly in their willingness to go into debt. Growth becomes a Ponzi scheme.

- Uninterrupted growth leads to accumulation of inefficiency. Without periodic recessions to remove wasteful companies and work practices, the economy becomes less productive.

- Sources of immigration have shifted to cultures that are less oriented to the market economy and to the values that make it possible. Historically, most economic growth has been within two culture areas: Europe, especially northwest Europe, and East Asia. These cultures are characterized by high levels of trust, high future orientation, and low willingness to use violence for personal disputes (Clark 2007; Clark 2009; Frost 2015; Frost 2017; Frost & Harpending 2015). Most immigrants to the West no longer come from either culture area. As a result, trust is declining, fear of violence is increasing, and more resources are being earmarked for external behavioral controls (police, private security), which are replacing the internal behavioral controls that used to be enough. Transactions now have to be double-checked for evidence of fraud, theft, or counterfeiting, with the result that economic activity costs more and in some cases is no longer worth doing.

For the near future, Western policy makers will continue to follow the postnational consensus, not so much because they believe in it but rather because they are immersed in it and have little exposure to alternate views. This echo chamber will, in fact, cause the prevailing consensus to become more radical over time. One example is the recent call from Canada's council of economic advisers for a sharp rise in immigration:

The 14-member council was assembled by Finance Minister Bill Morneau to provide "bold" advice on how best to guide Canada's struggling economy out of its slow-growth rut. 

One of their first recommendations, released last week, called for a gradual increase in permanent immigration to 450,000 people a year by 2021 — with a focus on top business talent and international students. That would be a 50-per-cent hike from the current level of about 300,000.

The council members — along with many others, including Economic Development Minister Navdeep Bains — argue that opening Canada's doors to more newcomers is a crucial ingredient for expanding growth in the future. (Blatchford 2016)

This is the backdrop for the Crisis of the 2020s. On the one hand, the postnational consensus will continue to radicalize in the core countries of the Western world. On the other hand, a very different consensus will dominate most of central and eastern Europe, with inroads being made into France and Germany. These opposing consensuses will diverge more and more, if only because mutual antagonism will make dialogue impossible.

The crisis itself may be triggered by one or more factors:

- Inflation will return after a four decade absence. China's supply of cheap labor is drying up, and alternate sources, such as Africa, will prove unsuitable. Prices for certain commodities, especially food, may also rise. This will be pivotal because globalism has gone unchallenged among the elites largely because it has delivered on its promise of inflation-free growth.

- There will be a growing realization that the new migrants to Europe have a different work ethic. They will end up being tax consumers rather than, as hoped, tax payers. Forget about them paying for your pension and health care.

- The French presidential election of 2022 will be much closer than the one in 2017, the result being a narrow defeat or a narrow victory for the Front national. Either way, the country will become ungovernable. A similar situation may or may not develop in Germany after the 2021 federal election.

- NATO may try to intervene in one or more countries in eastern or central Europe.

The actual trigger will matter less than the instability of the world-system. This instability will cause even minor conflicts to escalate, either within the Western European core or, perhaps, in response to a failed intervention in Eastern Europe.

Such escalation will be demanded by those who support the postnational consensus, yet it will work to their detriment. A world-system is stable only if, as Wallerstein (1974) argued, it meets three conditions:

- Military strength is concentrated in core societies

- Ideological commitment to the system is pervasive, i.e., "the staff or cadres of the system (and I leave this term deliberately vague) feel that their own well-being is wrapped up in the survival of the system as such and the competence of its leaders. It is this staff which not only propagates the myths; it is they who believe them."

- Peripheral societies are unable to unite against core societies.

Conflict, especially armed conflict, will destroy the illusion that the postnational consensus is a consensus and thus the only sensible way of viewing reality. Uncertainty and disenchantment will spread even among "sensible" people. Furthermore, if military strength no longer remains concentrated in the core, being used, for example, to intervene in the periphery, there may not be enough people in uniform anymore to defend the entire world-system. Defeat in one country may lead to a chain reaction where one country after another defects to the other side.

References

Blatchford, A. (2016). Finance Minister's key advisers want 100M Canadians by 2100, Thestar.com October 23

https://www.thestar.com/business/2016/10/23/finance-ministers-key-advisers-want-100m-canadians-by-2100.html  

Clark, G. (2009).The Domestication of Man: The Social Implications of Darwin, ArtefaCToS, 2, 64-80

http://campus.usal.es/~revistas_trabajo/index.php/artefactos/article/view/5427 

Clark, G. (2007). A Farewell to Alms. A Brief Economic History of the World, Princeton University Press, Princeton and Oxford.

Frost, P. (2017). The Hajnal line and gene-culture coevolution in northwest Europe, Advances in Anthropology, 7, 154-174.

http://file.scirp.org/pdf/AA_2017082915090955.pdf

Frost, P. (2015). Two Paths, The Unz Review, January 24

http://www.unz.com/pfrost/two-paths/

Frost, P. and H. Harpending. (2015). Western Europe, state formation, and genetic pacification, Evolutionary Psychology, 13, 230-243.

http://evp.sagepub.com/content/13/1/147470491501300114.abstract

Wallerstein, I. (1974). The rise and future demise of the world capitalist system: concepts for comparative analysis, Comparative Studies in Society and History, 16(4), 387-415.

https://e-edu.nbu.bg/pluginfile.php/138807/mod_resource/content/0/pol-222Wallerstein.pdf

The unlikely domino

Ahmed Ouyahia, "The Eradicator" - Prime Minister of Algeria. (Wikicommons: Magharebia). "We are the kings of our home!"

When political change comes to a world-system, does it begin near the center and then spread outward? That seems to be the common view. Karl Marx predicted that communism would first triumph in the U.K., France, and Germany, yet he was proven wrong. In 17th century England the "Levellers" called for giving all men the right to vote, an aim first achieved in the United States and only much later in England. Similarly, the late 19th century saw women gain voting rights in Scandinavia, some Australian colonies, and some western U.S. states. Not until 1928 were the same rights recognized in the U.K. 

The center is an interesting place for new ideas, but it's terrible for getting them implemented. It’s the place where power is concentrated, where resistance to change is strongest, where the elite has been established the longest, and where the elite has diverged the most from ordinary people in terms of self-interest and social distance. So the center is where new ideas have the most trouble spreading through all social strata and gaining acceptance. 

The situation is different farther out on the periphery of a world-system. Social distances are generally shorter and the elites less entrenched. This is partly because peripheral societies tend to be more recent—often beginning as colonies of central societies—and partly because weaker control by the center and greater contact with other world-systems may make them the scene of war, rebellion, and social upheaval, which in turn means replacement of local elites. New ideas can thus percolate more easily throughout the whole of a peripheral society

These are tendencies to be sure and, as such, may not always hold true. The periphery may be a quiet backwater where elites stay put and become more distant from the people. Furthermore, a new idea may face hostility not only from the elite but also from ordinary people. Communism, for instance, was admired in the Muslim world for its opposition to Western imperialism, but its atheism made support impossible among the working people it targeted.

In writing this series I'm simply arguing that public sympathy isn't the only factor in the spread and acceptance of new ideas. There is also elite hostility, and that factor tends to be more formidable at the center than at the periphery.

The next two to three years

A nationalist bloc of European nations has formed on the periphery of the Western world—Poland, Czechia, Slovakia, Austria, and Hungary. This has happened not only because public sympathy for nationalism is stronger there but also because elite hostility is weaker. The elites are less differentiated from the rest of society; consequently, there is more social cohesion and commonality of purpose. Finally, the language of the Western world being above all English, the centre has trouble maintaining ideological conformity in those countries where English is poorly understood and where ideology, like culture in general, tends to be locally produced.

In my previous posts I’ve argued that the nationalist bloc will spread outward into culturally similar countries, as well as into countries where post-national elites are unpopular and weakly entrenched. By the year 2021 this bloc will cover a much larger area: almost all of central and eastern Europe, plus Italy. 

It will also include a seemingly unlikely area that isn't European at all, an area that is, in fact, African and Muslim.  

Background to the migrant crisis

Population pressure has been mounting in sub-Saharan Africa for some time. While fertility rates have fallen throughout most of the world, often dramatically, the picture is different in this world region. Fertility declines have at best been modest, and in some countries, like Somalia, fertility has actually risen. The current pace of population growth will continue even if fertility rates fall dramatically:

Rapid population growth in Africa is anticipated even assuming that there will be a substantial reduction of fertility levels in the near future. The medium-variant projection assumes that fertility in Africa will fall from around 4.7 births per woman in 2010-2015 to 3.1 in 2045-2050, reaching a level slightly above 2.1 in 2095-2100. After 2050, it is expected that Africa will be the only region still experiencing substantial population growth. As a result, Africa's share of global population, which is projected to grow from roughly 17 per cent in 2017 to around 26 per cent in 2050, could reach 40 per cent by 2100.

[...] It should be noted that the population of Africa will continue to increase in future decades even if the number of births per woman falls instantly to the level required for stabilization of population size in the long run, known also as "replacement-level fertility". Growth continues in that scenario thanks to the age structure of the population, which is currently quite youthful. The large numbers of children and youth in Africa today will reach adulthood in future decades. Because of their large numbers, their childbearing will contribute to a further increase of population even assuming that they will bear fewer children on average than their parents' generation. In all plausible scenarios of future trends, Africa will play a central role in shaping the size and distribution of the world's population over the next few decades. (United Nations, 2017, p. xxii)

Meanwhile, the inevitable has begun. When the slave trade ended in the early 19th century there began a long period when relatively few people left sub-Saharan Africa. Some did, but their numbers were relatively small—Senegalese riflemen, Somali seamen and, later, university students. This hiatus came to an end in the early 1970s. To fill insecure, low-paying jobs, French employers extended their zone of recruitment to sub-Saharan Africa, and this example was followed by employers elsewhere. Even Greece began to recruit African labor for jobs in construction, agriculture, and shipping (Pteroudis 1996).

The stream of migrants continued despite the economic slowdown that set in with the Oil Crisis of 1973 and the 1982-1983 recession. They came for the most part on temporary visas and then overstayed. Large-scale illegal entry did not begin until the early 2000s, via a route across the Sahara to Libya and then across the Mediterranean to Italy by boat (De Haas 2008). In 2008, Silvio Berlusconi, signed a treaty with Muammar Gaddafi to block this route, but enforcement collapsed with Gaddafi's overthrow and murder in 2011. The result was a surge in African migration.

Yet this surge is only the tip of the iceberg:

[...] it is a misconception that all or most migrants crossing the Sahara are "in transit" to Europe. There are possibly more sub-Saharan Africans living in the Maghreb than in Europe. An estimated 65,000 and 120,000 sub-Saharan Africans enter the Maghreb yearly overland, of which only 20 to 38 per cent are estimated to enter Europe. While Libya is an important destination country in its own right, many migrants failing or not venturing to enter Europe prefer to stay in North Africa as a second-best option (De Haas 2008).

African migrants currently take three routes to Europe: a western route via Morocco and Spain; a central one via Libya and Italy, and an eastern one via Egypt and Greece. Given the chaos in Libya, the central route is shifting to Algeria, and that country is increasingly becoming their final destination. "Our studies revealed that more than half of the migrants in Algeria actually live there," explains MDM. [Médecins du Monde]" Even if this was not their plan at the beginning, they end up finding a job and settling in one place." (Matarese 2016)

A changing response

Until recently, the official Algerian response has been similar to that of Western countries. Last July, the government announced plans to grant at least some of them residency rights and job permits. These measures were announced in a sympathetic tone:

"The presence of our African brothers in our country will be regulated and the Ministry of the Interior is using the police and the gendarmerie to take a census of all the displaced people," said Tebboune, who was replying to the concerns of deputies of the National Popular Assembly during debate over the government's action plan.

[...] "There are parties who wish to tarnish Algeria's image and label it as a racist country,' said Tebboune, who added: "We are not racists. We are African, Maghrebin, and Mediterranean."

"Africa and the Arab world are the natural extension of Algeria and the space in which it has evolved and developed," said Tebboune, underscoring "the moral and human duty that requires us to provide assistance to our brothers who are forced to flee their lands because of poverty and the torment of war." (Huffpost 2017)

Other members of the government, however, were less sympathetic. Also last July, the Minister of State, Ahmed Ouyahia, condemned the growing numbers of African migrants:

The African community that illegally resides in Algeria brings drugs, delinquency, and other scourges. One cannot say to the authorities: "Throw them into the sea" but one must live in Algeria legally.  [...] People will say to me "human rights!" but we are the kings of our home! (RT 2017)

Public opinion has also turned sour. In June of this year, an anti-migrant campaign was launched on the Algerian social media via the hashtag No to Africans in Algeria! This slogan may sound strange in a country that is, in fact, in Africa, but the reality is that the average Algerian feels more in common with Europe or the Middle East.

Anti-migrant discourse is summed up by this comment:

[...] these Africans from all over the Sahel think they're in conquered territory, being arrogant and threatening. They forcefully demand money and not food. They're everywhere and present a sorry picture of what a human being should be. Begging, nothing but begging from these hefty guys who are more athletic than Cristiano Ronaldo and who refuse to roll up their shirtsleeves and work. Now they're no longer content to be in southern Algeria; that's no longer their fine seigneury. They're moving into the coastal cities. There are hundreds of thousands of them, and more come every day. (RT 2017)

Threatening behavior might work in Europe, where the average citizen feels that only the police are entitled to respond to threats with violence. In Algeria, however, the police are a relatively recent institution, as is State authority in general, and every adult male feels entitled to use violence if threatened or even insulted. An exchange of insults can quickly escalate into fighting by both parties:

Kader, an Ivorian who has been in Algeria for six years, said there was a growing number of Guineans in Algiers. "They don't know the country, and they react very badly the minute an Algerian is rude to them or insults them. It ends up in a fight, and people get hurt." (Chenaoui 2017)

A single incident may become a riot. In March 2016 more than a hundred residents of a small town south of Algiers showed up at an abandoned shopping center where migrants were living and assaulted dozens of them in retaliation for an alleged rape (The Observers 2016). At about the same time in another town, some 300 local inhabitants surrounded and attacked a refugee reception center after a migrant from Niger murdered a local resident during a break-in (Huffpost 2016)

Last August, Ahmed Ouyahia was appointed Prime Minister, and migrant policy has grown increasingly hardline. Since August 25, more than 3,000 migrants have been summarily deported to Niger, including many from other African countries (HRW 2017). There is a striking similarity here to Israel’s response when African migrants began pouring into that country. It, too, initially responded like Western states but did an about-face partly because of the magnitude of the problem and partly because of pressure from public opinion. Whatever one thinks of either country, they are both fundamentally democratic, more so in fact than most Western countries. The elites cannot defy public opinion because they’re too close to the public and because they lack the firm ideological control that makes defiance possible.

Algeria, like Israel, will have to adopt harsher measures against the migrant influx. Unlike Israel, the migrant population is much larger and will continue to grow through natural increase alone. Meanwhile, public opinion is radicalizing. The situation may become like what we see in Greece, but without the external coercion that comes with being an EU member.

The migrant issue will loom large in Algeria's 2019 presidential election. Ahmed Ouyahia may run as a Trump-like populist candidate. He may even, à la Trump, call for construction of a fence along the southern border. And like Trump he has already been condemned by human rights groups, notably for his role in the "eradicator" faction that pushed for all-out war against the Islamist insurgency in the 1990s.

References

Chenaoui, Z. (2017). Adrift in Algiers: African migrants marooned in a new transit bottleneck, The Guardian, October 31

https://www.theguardian.com/world/2017/oct/31/algeria-african-migrants-libya-civil-war-europe

De Haas, H. (2008). Irregular Migration from West Africa to the Maghreb and the European Union: An Overview of Recent Trends, International Organization for Migration, Geneva

https://pdfs.semanticscholar.org/14f2/ff491b6e9e0f66ad69ab58444bf3f3330708.pdf

HRW (2017). Algeria: Surge in Deportations of Migrants. Apparent Racial Profiling, Summary Expulsion of Sub-Saharan Africans, Human Rights Watch, October 30

https://www.hrw.org/news/2017/10/30/algeria-surge-deportations-migrants

Huffpost (2016). Après les affrontements de Ouargla, 700 migrants subsahariens transférés à Tamanrasset (Wali), March 3

http://www.huffpostmaghreb.com/2016/03/03/affrontements-ouargla-migrants_n_9371888.html

Huffpost (2017). Abdelmadjid Tebboune : La présence des migrants subsahariens sur le territoire algérien sera réglementée, June 24

http://www.huffpostmaghreb.com/2017/06/24/tebboune-migrants-subsaha_n_17281390.html

Matarese, M. (2016). Migrants in Algeria struggle for acceptance, Middle East Eye, January 6

http://www.middleeasteye.net/news/taboo-migrants-algeria-707071868

Pteroudis, E. (1996). Emigrations et immigrations en Grèce, évolutions récentes et questions politiques, Revue européenne de migrations internationales, 12, 159-189 (Espagne, Portugal, Grèce, pays d'immigration).

RT (2017). L'Algérie raciste ? Une directive anti-migrants, finalement retirée, fait polémique dans le pays. RT en français, October 3

https://francais.rt.com/france/44118-algerie-raciste-politique-anti-migrants

The Observers (2016). Police watch as locals attack migrants in Algeria, March 29

http://observers.france24.com/en/20160329-video-algeria-migrants-attack-african

United Nations (2017). World Population Prospects. The 2017 Revision, Department of Economic and Social Affairs, Population Division, Volume 1, Comprehensive Tables

https://esa.un.org/unpd/wpp/Publications/Files/WPP2017_Volume-I_Comprehensive-Tables.pdf

The next two to three years

Election posters for the radical nationalist SRS (Srpska radikalna stranka), (Wikicommons: Micki)

A nationalist bloc of nations has come into being in eastern and central Europe—Poland, Czechia, Slovakia, Austria, and Hungary. This is a new development, and most commentators in North America and Western Europe are still digesting what has happened. So they are easy prey for three misconceptions:

This is right-wing nationalism, even far right. Actually, in denouncing the erosion of the welfare state and in rejecting military intervention abroad, it has more in common with Bernie Sanders than with Margaret Thatcher. It is, in fact, a sharp break with the thinking that has dominated the right since the days of Reagan and Thatcher in the 1980s.

This is a return to the belligerent nationalism of the early 20th century. Europe no longer has enough young men to sacrifice in needless wars—ironically, that's what postnational Western elites have been pushing. In the early 21st century, nationalism is about rejecting military adventurism abroad and defending what we have at home.

This is an Eastern European thing, a legacy of communism. True, in its initial stages. National identity is stronger in Eastern Europe, partly because the Iron Curtain hindered the inflow of Western culture and partly because these societies are less differentiated and more homogeneous. Because citizens share similar interests, consensus can be reached more easily and then spread elsewhere. And the new nationalist consensus has already spread west of the former Iron Curtain. 

Over the next two to three years, this consensus will spread into other small countries or regions where the elites are close to the people, where English isn't widely used, and where the culture is similar and tends to be locally produced. The next dominoes to fall will thus probably be Slovenia and Croatia to the south and Switzerland, Bavaria, and Saxony to the west. This political change will happen as much through ideological conversion of old parties as through electoral upsets by new parties.

The nationalist consensus will spread to other countries with the help of another factor: the relative weakness of the local elite and, conversely, the relative strength of public feeling that change is necessary. If we look at Europe as a whole, we can identify two zones where the elites are weak and the desire for change is correspondingly strong. One is Serbia/Macedonia/Bulgaria. The other is Italy.

Serbia

Although Serbia is next to Hungary, it has less in common with that country than does Austria or Czechia. As a state within Yugoslavia, it was never part of the Warsaw Pact and only an associate member of Comecon. It was communist, yes, but it remained nonaligned during the Cold War. In addition, its religious heritage is Orthodox and not Catholic. Like much of the Orthodox world, it had once lived under Muslim rule and thus views the Islamic world differently—as a former colonizing power and not as a former victim of colonialism.

Currently, Serbia is ruled by the SNS (Srpska napredna stranka), which won 48% of the vote in the 2016 parliamentary elections. The party originated in a group that broke away from the much more radical SRS (Srpska radikalna stranka), a nationalist party that opposes European integration and globalism. Internationally, the SNS cooperates with the FPO of Austria (Freedom Party) and Yedinaya Rossiya (United Russia). 

Nonetheless, Serbia’s governing party is acting more and more like postnational Western elites. In 2015, it gave 600,000 migrants free passage through the country, partly under pressure from the EU—as the foreign minister hinted in an interview with Deutsche Welle:

DW: Serbia is one of the main countries that refugees transit on the Balkan route to the European Union. What measures has your country adopted in response?

Ivica Dacic: Up to now we had a fair and constructive approach to this issue, and for this we were praised by the entire world and commended for our behavior from the European Union, the United Nations and all world powers. I have to note that in 2015 we had 600,000 migrants pass through Serbia. (Deutsche Welle 2016)

The government is in fact seeking EU membership:

Serbia's prime minister said Wednesday [June 28, 2017] her future government's goal is membership in the European Union along with modernization of the troubled Balkan country.

Ana Brnabic told Serbian parliament that the government will lead a "balanced" foreign policy, seeking good relations with Russia, China and the U.S.

Lawmakers are expected to vote her government into office later this week. If confirmed, Brnabic will become Serbia's first ever female and openly gay prime minister.

"The time before us will show how brave we are to move boundaries," Brnabic said in her speech. "Now is the moment to make a step forward and take our society, country and economy into the 21st century."

She warned that "if we don't take that chance, we can hardly count on another one again."

When President Aleksandar Vucic nominated the U.S.- and U.K.-educated Brnabic to succeed him as prime minister earlier this month, it was seen as an attempt to calm Western concerns that Serbia was getting too chose to Russia despite its proclaimed goal of joining the EU. (Gec 2017) 

This pro-EU attitude has been adopted in the name of realism. Unemployment hovers at 20% and, despite widespread privatization, the painful transition to a market economy is showing no signs of ending. For advocates of EU membership, the solution is to be patient and to work at becoming like Western Europe. This discourse has a strong element of faith:

There is a Serbia of lies, deceptions, myths, hatred, and death. It is a rural, patriarchal, collectivistic, clerical, anti-Western and anti-modern Serbia. It is also a Serbia manipulated by cynical leaders who exploit its primitiveness and stupidity. Whenever this Serbia had its say, it brought death onto others, and misery onto itself. But, there is another Serbia, urban, modern, pacifist, cosmopolitan, liberal, democratic and European! This is our Serbia! This other Serbia is the only possible future for all of us! We will work hard together with our neighbors and foreign friends to reform Serbia and make it worthy of the European future that awaits it. (Vetta 2009)

Neighboring Bulgaria, however, has been an EU member since 2007 and a NATO member since 2004, yet there too the "transition" shows no signs of ending. The unemployment rate is lower, around 10%, but this figure excludes the large numbers of young Bulgarians who have left the country. From almost nine million in 1988, the population has fallen to a little over seven million today. Serbia is likewise losing its young people, as is most of Eastern Europe.

The transition to a Western market economy has been problematic wherever one goes beyond the Hajnal Line—this imaginary line that runs from Trieste to St. Petersburg. Individualism is weaker and kinship correspondingly stronger, with the result that nepotism and familialism prevent the market from working optimally. We in the West call this "corruption," yet most people in the world think it's normal to favor your kin, just as it's normal to favor yourself. Kith and kin are an extension of the self.

To be sure, consumerism is making Serbian culture more individualistic and hence more accommodating to the market economy, but this cultural change is still incomplete and not without adverse effects. In Eastern Europe, like elsewhere, people buy prestigious consumer goods that they don't really need and, often, don't have the means to pay for. They go heavily into debt and decide to postpone having children. With the exception of Russia and Albania, the one-child family has become the norm throughout Eastern Europe. Economic change is thus linked to a demographic change that is ultimately more serious:

Serbia has been enduring a demographic crisis since the beginning of the 1990s, with a death rate that has continuously exceeded its birth rate, and a total fertility rate of 1.43 children per mother, one of the lowest in the world. Serbia subsequently has one of the oldest populations in the world, with the average age of 42.9 years, and its population is shrinking at one of the fastest rates in the world. A fifth of all households consist of only one person, and just one-fourth of four and more persons. (Wikipedia 2017)

Many Serbs are still hoping that stronger ties with the West will solve their problems. Yet, increasingly, this seems to be a vain hope. The Western model of economic and social development may not be equally applicable to all cultural settings. Indeed, it might not be applicable anywhere in its current form, given its promotion of individualism and its rejection of enduring collective identities like the family, the ethny, and the nation. 

Faith in the Western model is giving way to disillusionment throughout Eastern Europe, and a feeling of having reached a dead end, as Viktor Orban wrote in 2011:

[...] Europe now stands at a fateful juncture. For over twenty years I have been taking part in various European counsels and conferences, and at these gatherings one thing has been consistently clear: the participants have always agreed that there is a well-worn, time-tested path down which it is both worthwhile and indeed necessary to continue plodding. But over the course of the past year and a half the mood at these gatherings has changed fundamentally. Today all of Europe is compelled to face the unpleasant fact that we have run out of well-worn paths. At most the familiar paths will lead us back to the familiar past and its mistakes, setbacks, and failures. (Orban, 2011)

In itself, disillusionment does not cause political change. One must articulate an alternative to the status quo and make it known through mainstream or alternative media. This is one thing that defenders of the status quo fear the most, such as those in Serbia:

Traditional media outlets in Serbia see themselves constantly confronted with direct or indirect pressure. That pressure ranges from direct threats against public media journalists to economic pressure applied to private media companies, especially through mechanisms such as the control of paid advertising. The situation has caused many citizens to turn to Facebook to get their news. For a large portion of society, Facebook and Twitter have become people's main source of information. "It is a reaction to government control of traditional media outlets," says Zeljko Bodrozic, from the Independent Journalists' Association of Serbia (NUNS). "Besides a few other online portals, social media outlets have become the only source for independent news information."

[...] Television outlets, as well as radio and popular daily newspapers, continue to set the tone and influence opinion. "At the same time," says Bodrozic, "social media has been 'hijacked' by the governing Serbian Progressive Party (SNS). The government cannot forbid or limit internet use, but it can poison independent news sources or make them appear senseless by actively deploying internet trolls." (Deutsche Welle 2017)

Interestingly, Facebook is cooperating with Serbian authorities in this crackdown on alternative media. News sources will now have less prominence on Facebook unless they're willing to pay for placement in the main feed (Deutsche Welle 2017).

The SNS leadership has come a long way from its nationalist origins. Could this be a double game? Are they trying to get the perks that come with EU candidacy (loans, investment, visa liberalization) while having no real intention of joining? There is probably a mix of motives. Many party members have misgivings about EU membership but feel it's necessary to get Serbia back on its feet. Others are tired of being vilified in the Western media and even in Hollywood movies. For them, EU membership will be a ticket to international acceptance. Finally, others have fully internalized the worldview that prevails in the West, certainly at the U.S. and U.K. universities that the prime minister attended.

In any case, it doesn't matter what the governing party really thinks. All that matters is what it does, and that, in itself, has already caused irreparable harm.

Next week: Italy

References

Deutsche Welle (2016). 'In 2015 we had 600,000 migrants pass through Serbia' Date: 13/02/2016

http://www.dw.com/en/in-2015-we-had-600000-migrants-pass-through-serbia/a-19046668

Deutsche Welle (2017). Facebook dual feed experiment: Giving users what they want or enabling state censorship? Date: 03/11/2017

http://www.dw.com/en/facebook-dual-feed-experiment-giving-users-what-they-want-or-enabling-state-censorship/a-41230356

Gec, J. (2017). Serbia's next premier: EU membership, modernization priority, World Politics Review, June 28

https://www.worldpoliticsreview.com/articles/22580/serbia-s-next-premier-eu-membership-modernization-priority

Orban, V. (2011). The Year of European Renewal - The Prime Minister's Thoughts on the

Hungarian EU Presidency, Hungarian Review 1, 5-11.
https://www.ceeol.com/search/article-detail?id=28361

Vetta, T. (2009). Revived nationalism versus European democracy:

Class and "identity dilemmas" in contemporary Serbia, Focaal-European Journal of Anthropology 55, 74-89
https://www.berghahnjournals.com/view/journals/focaal/2009/55/focaal550106.xml?

Wikipedia (2017). Serbia

https://en.wikipedia.org/wiki/Serbia#Demographics

A look back over 2015

 

Marion-Maréchal Le Pen (Wikicommons - Remi JDN). This year, she received 45% of the popular vote in one of France's regions, as a Front National candidate.

 

We must act now to bring anti-globalist parties to power: the UKIP in Britain, the Front national in France, the Partij voor de Vrijheid in the Netherlands, the Alternative für Deutschland in Germany, and the Sverigedemokraterna in Sweden. How, you may ask? It's not too complicated. Just go into the voting booth and vote. You don't even have to talk about your dirty deed afterwards.

I wrote the above last January, fearing that Europe would see an acceleration of the massive demographic change already under away—the Great Replacement, to use a term coined by Renaud Camus:

Oh, the Great Replacement needs no definition. It isn't a concept. It's a phenomenon, as obvious as the nose on your face. To observe it, you need only go out into the street or just look out the window. A people used to be there, stable, occupying the same territory for fifteen or twenty centuries. And all of a sudden, very quickly, in one or two generations, one or more other peoples have substituted themselves for it. It's been replaced. It's no longer itself.  We should note that the tendency to consider individuals, things, objects, and peoples replaceable or interchangeable is fairly widespread and in line with a threefold movement whereby people have become industrialized, deprived of their spirituality, and dumbed down. Call it a later and more generalized stage of Taylorism. At first, we replace only the parts of manufactured goods. Then, we replace workers. Finally, we replace entire peoples. (Camus, 2012)

Two breaches have been made in the dike that used to hold back this process of replacement: one in Libya and the other in Syria. Through them is pouring the demographic overflow that has been building up in Africa and the Middle East. Meanwhile, there has been an incredible loss of will among Europe's leaders to do anything, other than hectoring recalcitrant nations like Hungary for not taking their "fair share."

I'm not using the word "incredible" lightly. This wave of immigrants won't be a one-time-only thing. It won't come to an end when conditions improve in their home countries. Indeed, once it gets under way it can only increase in magnitude, and spreading it over a wider area will do nothing to stop the increase. Instead of being confined to Western and Southern Europe, the Great Replacement will be extended to Eastern Europe. Swell. You call that a solution?

Instead of replacing native Europeans, why not replace their leaders? Why not vote them out of office? That was the solution I advocated back in January and still do. Political change is more certain when done by peaceful means at the ballot box, as opposed to being imposed by coercion and illegal acts. Unfortunately, this option faces a number of obstacles.

The obstacles are threefold:

Unwillingness to play by the rules

In this, the problem lies not so much with Europe's nationalist parties as with their opponents. It's the latter who are not willing to play by the rules.

This was the case in Belgium, where in 2004 a court ruling shut down the Vlaams Blok, a party that had won 24% of the popular vote for the Flemish parliament the same year.

In October 2000, the Centre for Equal Opportunities and Opposition to Racism, together with the Dutch-speaking Human Rights League in Belgium registered a complaint at the Correctional Court, in which they claimed that three non-profit organisations connected to the Vlaams Blok (its education and research office and the "National Broadcasting Corporation") had violated the 1981 anti-racism law. The publications which were referred to included its 1999 election agenda and 1997 party platform. The challenged passages included those where the party called for a separate education system for foreign children, a special tax for employers employing non-European foreigners, and a restriction of unemployment benefits and child allowances for non-European foreigners. (Wikipedia - Vlaams Blok, 2015)

Elsewhere, nationalist parties have faced a combination of judicial and extrajudicial harassment. Indeed, when antifas commit brazen acts of violence that go unpunished, one cannot help but wonder whether the correct term is "quasi-judicial." The antifas are functioning as a kind of secret police that is allowed to do what the regular police cannot do.

Even without the antifas, the level of harassment is considerable. In 2013, for example, the European Parliament stripped Marine Le Pen of her parliamentary immunity for having denounced the illegal blocking of French streets for Muslim prayers:

For those who want to talk a lot about World War II, if it's about occupation, then we could also talk about it (Muslim prayers in the streets), because that is occupation of territory. ...It is an occupation of sections of the territory, of districts in which religious laws apply. ... There are of course no tanks, there are no soldiers, but it is nevertheless an occupation and it weighs heavily on local residents (Wikipedia - Marine Le Pen, 2015)

For that comment, she was dragged before the courts, being finally acquitted this year. Compare that with the indulgence reserved for the magazine Le Nouvel Observateur when it featured a tweet on its twitter page that called for the mass rape of women who vote FN. The tweet was removed but there was no apology, and there certainly won't be any prosecution by the Minister of Justice—as was the case with Marine's comment.

This is the reality of political debate in Western Europe. One side can speak with impunity, whereas the other has to watch what it says.

Extremist image of nationalism

In 2015, the progress of nationalist parties was not uniform. In Greece, Chrysí Avgí (Golden Dawn) seems to have stalled at 7% of the popular vote. In Norway, Fremskrittspartiet (Progress Party) lost support in local elections, this being part of a decline that began in 2011 … with Breivik's terrorist attacks.

In Norway, it is now difficult to be a nationalist without being associated with Anders Breivik or church burnings by black metallists. In Greece, nationalism is tarred with Nazi-like rhetoric and imagery—this, in a country that Nazi Germany had occupied during the last war. It is a sign of just how bad things are that so many Greeks are still willing to vote for a party that revels in an extremist image.

This problem is inevitable with any movement that begins on the fringes among people who feel alienated. As nonconformists they tend to be lone wolves, and as lone wolves they tend to act without restraint, sometimes mindlessly. Such people are both a help and a hindrance for any new political movement.

Assimilation into the dominant political culture

There is also the reverse problem. In the Venice state election, the Liga Veneta received 41% of the popular vote. This might seem to be good news, since the Liga Veneta is part of the Lega Nord, which in turn is allied with the Front National in France.

Unfortunately, things are not as they might seem. When a new party comes closer to power, it tends to assimilate mainstream values because its leaders now have to navigate within that culture—daily encounters with the media, meetings with campaign donors, invitations to wine and cheese parties ... The result may be seen in the Liga Veneta’s political platform for 2010-2015:

The challenges that Veneto should face in the next decades, said the party, were to enhance "internationalization" in the era of globalization, to overcome the traditional Venetian policentrism and interpret Veneto as a united and cohesive region: a "European region in Italian land". The program stressed also concepts such as "Europe of the regions", "Europe of citizens", "global Veneto", "openness toward the world", "green economy", "urban planning" in respect of the environment, "respect for diversity" and "integration" of immigrants, along with the more traditional "think globally, act locally". (Wikipedia - Liga Veneta)

It is not enough for nationalist parties to gain power. They must also have confidence in their ideas and change the way other people think. Otherwise, they'll end up assimilating into the dominant political culture.

But there was progress in 2015

Despite these problems—harassment, lack of discipline, ideological assimilation—most nationalist parties are moving forward. In the first round of France's recent regional elections, the Front National took first place in six of the thirteen regions in Europe (four others are overseas). Yes, it was shut out in the second round, when left-wing parties threw their support behind the main right-wing party, but this defeat was only a partial one. While not securing the office of president in any region, the FN is now represented on all regional councils of European France, ranging from a high of 34% of council seats in Provence-Alpes-Côte d'Azur to a low of 8% in Corsica. Imagine a similar situation in the United States: a nationalist party with at least 8% of the seats in every state legislature.

This year saw gains for nationalist parties elsewhere. In Poland, Prawo i Sprawiedliwosc (Law and Justice) took power with 38% of the vote, in large part because of its opposition to immigration. In Switzerland, Schweizerische Volkspartei (Swiss People's Party) became the leading party, receiving 29% of the popular vote, up from 27%. In Denmark, Dansk Folkeparti (Danish People's Party) earned 21% of the popular vote, up from 12%.

Outside Europe, in other European-descended societies, the picture is more mixed. In the United States, Donald Trump has shattered the phoney consensus on massive demographic change, but even if elected he will face a long uphill battle against opposition from the bureaucracy and from entrenched factions in society at large, particularly the business community—which has long been a source of funding for the Republican Party.

In Canada, the Conservative Party lost power in Ottawa and the Parti Québécois lost power in Quebec City. To be honest, I feel little regret for either loss. In their earlier incarnation, as the Reform Party, the Conservatives were committed to a sharp reduction in immigration. But that promise fell by the wayside once they took power, and they instead chose a neo-con policy of "Invade the world! Invite the world!" They followed that recipe to the letter and—Surprise! Surprise!—it wasn’t what their own voters wanted, let alone the rest of the electorate. Well, good riddance.

As for the Parti Québécois, it began in the 1960s as an alliance of the traditional left and the traditional right. Over time, both factions withered away, being replaced by the new synthesis of globalism and post-nationalism. The PQ became an anti-nationalist nationalist party. They lost power largely because they could no longer energize their natural constituency while failing to make inroads into others. Well, good riddance.

*****************************************************

This will be my last column for 2015, and I wish all of you a very Merry Christmas! Although I no longer go to church, I still consider Christmas to be a very important time of year when we can spend more time with our loved ones and enjoy the traditions of this mid-winter celebration.

I don't know whether I will resume my column in the new year. The legal environment in Canada has changed over the past few months, especially with the adoption of Bill 59. If need be, I will concentrate on writing papers for academic journals.

References

 

Camus, R. (2012). " Renaud Camus à L'AF : " J'ai une conception lazaréenne de la patrie " ", L'Action française, no 2832,

http://www.actionfrancaise.net/craf/?Entretien-Renaud-Camus-a-L-AF-J-ai

 

Wikipedia - Liga Veneta. (2015)

https://en.wikipedia.org/wiki/Liga_Veneta

 

Wikipedia - Marine Le Pen (2005).

https://en.wikipedia.org/wiki/Marine_Le_Pen

 

Wikipedia - Vlaams Blok. (2015).

https://en.wikipedia.org/wiki/Vlaams_Blok#Court_of_Cassation_ruling_.282004.29

 

Greece at the crossroads

The Greek government's debt became unmanageable after autumn 2008, but the EU didn’t respond until over a year and a half later. (source)

In the post-national Greece that developed after 1974, the clear winners were the middle class.  Thanks to the strong purchasing power of other European currencies, and later the Euro, they could travel abroad and buy imported goods at little expense. Domestic goods and services likewise remained cheap thanks to outsourcing of jobs to lower-wage countries and insourcing of lower-priced labor for agriculture, shipping, domestic help, and construction.

The clear losers were the working class. Not only did they have to scramble for fewer and fewer jobs—those that could not be relocated to lower-wage countries— but they also faced growing competition from legal and illegal immigrants who would work for half the going market rate. This two-way movement of jobs and workers curbed the rise in wages of low-income earners and increased the rate of permanent “structural” unemployment.

And it has been the least skilled who bear the brunt of the effects of competition from clandestine immigrants on the job market. […]. In the functioning of the Greek economy, peripheral or marginal workers (women, unskilled young people, Roma, seasonal workers, etc.), who play a key role in the functioning of the parallel economy, have seen their status undermined by the mass entry of clandestine immigrants who offer their labor for even less. But this is also true for other categories of wage-earners such as construction workers, who are nonetheless among the most unionized and best protected of all workers. In this sector, clandestine foreign workers make up over 50% of the total workforce, and their wages reportedly do not even reach half the legal minimum.

The rise of unemployment in recent years more greatly affects unskilled workers whose traditional sectors of employment have today become the main ones where clandestine workers are most heavily concentrated. (Pteroudis, 1996, p. 178)

Native Greek workers thus became steadily impoverished, at first in comparison to other Greeks and, later, in absolute terms.

Responses of the Greek government

The Greek government was aware of the plight of the working poor and responded by greatly increasing social assistance, pensions, and public-sector employment. While this response provided displaced workers with more secure incomes, it also increased their dependence on the State. A kind of clientelism developed where recipients of government benefits supported the party in power as long as it maintained or increased their benefits. One example was the lowering of the retirement age to 55 for men and 50 for women in the case of arduous occupations. The definiton of "arduous" was then gradually broadened to cover even waiters and hairdressers. Early retirement became a way to create loyal voting blocs and also to thin the ranks of older unemployed people, thus making the unemployment rate seem lower than it really was.

The government did try to attack the root problem, i.e., the outsourcing of jobs to lower-wage countries and the insourcing of lower-priced labor. This two-way movement, however, benefited the middle class by providing cheaper goods and services, and it was this class that influenced public policy the most, either directly as politicians or civil servants or indirectly through the media and popular culture. For the middle class, it was too easy to portray the pauperized working class as losers in the new global economy.

As a result, protectionist measures were half-hearted. There was certainly an awareness that Greece was drifting into an uncompetitive dead zone: unable to compete against lower-wage countries for manufacturing jobs and also unable to compete against higher-wage countries for high-tech jobs:

The Greek sectoral structure consists mainly in low knowledge sectors. Many such sectors have lost their comparative advantage due both to the low labour costs of some less developed countries and to the high value added business strategies aiming at niche markets in more developed countries (Ministry of Development, 1997, p. 7)

For the Greek government, the solution was to specialize in “high technology and knowledge intensive sectors.” Such an industrial policy would evidently favor workers with high intellectual capacity, i.e., the upper third of the IQ distribution. But what about the other two-thirds?  To bring as many people as possible into the knowledge economy, there would be an expansion of technical education and “a policy to increase the mobility and to improve the quality of the labour supply” (Ministry of Development, 1997, p. 14).

This industrial policy was never really carried out. Part of the problem was lack of money. The main problem, however, was wishful thinking. Few of the structural unemployed were suitable for retraining as knowledge workers. It was even more naïve to see immigration as a way to meet this need. Finally, more should have been done to identify specific market niches where Greece could compete globally. It simply wasn’t enough to point to the knowledge economy as the wave of the future.

The government might have kept things from getting worse by halting the inflow of lower-wage migrants. It did make some attempts, which generally took three forms: 1) legalizing the existing illegal immigrants; 2) taking measures to prevent further illegal immigration; and 3) penalizing employers who hire illegal immigrants (Pteroudis, 1996, p. 179). Of the three, the first one was the easiest to put into practice. But it also made the other two even harder to implement. By raising hopes that future rounds of legalization would be in store, it encouraged even more immigrants to come. Employers responded similarly, seeing illegal status as only a temporary obstacle. Measures against employers were also difficult because lower-level inspectors could be bribed and higher-level functionaries pressured to water down enforcement.

The debt crisis

As Greece entered the new millennium, the pauperization of native Greek workers remained a worsening problem. More and more money had to be found to keep them at a First World level. For a time, this seemed possible, especially during the boom years of 2000 to 2007 when the economy was growing at an annual rate of 4.2% —one of the highest rates in the Euro zone.

Yet even during those boom years, with money pouring into the public coffers, the government not only continued to run deficits but also ran them at levels higher than what the EU officially allowed.

At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing. The purpose of these deals made by several successive Greek governments, was to enable them to continue spending, while hiding the actual deficit from the EU. 

 

[…] the revised statistics revealed that Greece at all years from 2000-2010 had exceeded the Euros stability criteria, with the yearly deficits exceeding the recommended maximum limit at 3.0% of GDP, and also the debt level clearly exceeding the recommended limit at 60% of GDP. (Wikipedia, 2012)

The boom ended in autumn 2008 as the subprime mortgage crisis spread to Europe. Greece’s main industries of shipping and tourism were badly hit, and by early 2010 the government was openly admitting that its debt level was no longer sustainable. In April, rating agencies downgraded this debt to “junk bond” status. In May, the EU finally responded by organizing a bailout loan with the IMF in exchange for austerity measures.

Why did the EU take so long—over a year and a half—to respond? One reason was that it had been repeatedly misinformed on the extent of the debt crisis.  Another reason was the ongoing effort to admit Turkey as a full EU member. Greece’s support was crucial, particularly given the continuing Turkish occupation of northern Cyprus, and there was some reluctance among EU leaders to come down too hard on the debt issue.

Greece at the crossroads

Today, Greece has two options. One is to remain in the EU, pay off its huge debt, and accept a package of austerity measures. The other is to leave the EU, cancel at least part of its debt, and let the value of its national currency depreciate to bring imports and exports into balance.

For now, Greece will remain in the EU. There is a strong element of national pride at stake here, and also a fear of the costs of moving back to a national economy with its own currency. But the status quo will also be costly, as seen in the measures of the latest austerity package (February 2012):

• 22% cut to the minimum wage from the current €750 per month

• Holiday wage bonuses to be permanently cancelled

• 150,000 jobs to be cut from the state sector by 2015

• Pensions to be cut by €300 million in 2012

• Laws to be changed to make lay-offs easier

• Spending cuts to health and defense

• Industry sectors to be given the right to negotiate lower wages

• Closed professions to be opened up to allow for more competition, particularly in the health, tourism, and real estate sectors

• Privatizations worth €15 billion by 2015, including Greek gas companies. Over the medium term, the goal will be €50 billion (Wikipedia, 2012)

There is nothing here to prevent further pauperization of native Greek workers. In fact, the business community will have an even freer hand to relocate jobs to lower-wage countries or bring in lower-priced migrant labor. The package will also scrap the remaining refuges from globalization by cutting back on public-sector employment, by lowering the minimum wage, and by opening up closed professions.

Staying in the EU is an option that lacks even the virtue of stability. It will probably worsen the existing class conflict in Greek society. To maintain their position of relative affluence, the post-national middle class may openly abandon the native working class and stigmatize them as bums who deserve to be replaced by hardworking immigrants.

In contrast, leaving the EU would shift the costs from the working class to the middle class. By going back to the drachma, and letting it devaluate, the country could stem the outflow of foreign exchange by making imports more costly and exports cheaper. Less money would be wasted on frivolous spending, especially trips abroad and imported luxury items, and more spent on Greek-made goods, thus creating local employment.

Rebuilding a national economy would not be easy, but the main stumbling block is not the transitional costs, however painful these costs may be. It’s the current post-national elite. Leaving the EU would severely undermine their legitimacy … and their lifestyle.

References

Ministry of Development. (1997). International competitiveness and a consensus-based industrial strategy for Greece: The main points of consensus, Project “The Future of Greek Industry”

http://www.cibam.jbs.cam.ac.uk/research/projects/futuregreekindustry/downloads/fgi003.pdf

Pteroudis, E. (1996). Emigrations et immigrations en Grèce, évolutions récentes et questions politiques, Revue européenne de migrations internationals, 12, 159-189 (Espagne, Portugal, Grèce, pays d'immigration).

http://www.persee.fr/web/revues/home/prescript/article/remi_0765-0752_1996_num_12_1_1503

Wikipedia (2012). Greek government-debt crisis

http://en.wikipedia.org/wiki/Greek_government-debt_crisis