New York Times
September 13, 2011
Culture doesn’t matter, Karl Marx orated; it is the “substructure,” the economy, that determines how society arranges its way of life. The tottering euro proves this great thinker wrong once more. It's the culture, stupid! The PIIGS – Portugal, Ireland, Italy, Greece and Spain – should never have been admitted to Europe’s common currency.
What did dour, disciplined Germany have in common with extravagant, happy-go-lucky Italy whose national debt is 120 percent of G.D.P.? What about Greece, a country rife with corruption and cronyism, that spends more on privileged groups like public-sector unions than its shoddy tax collection system could possibly generate?
In the first decade of the euro, unit labor costs among all the PIIGS, France included, rose steeply whereas in Germany that curve stayed pretty flat. Wages that rise faster than productivity are a nice shorthand for the culture gap. On one side stand the Northern Protestants with low deficits and debts as well as modest wage increases. On the other side are the “Club Med” members with short working weeks, early retirement, rigid labor markets, expanding state sectors and sheltered markets.
More
No comments:
Post a Comment