Eastern Utopia | 33 comments (33 topical, editorial, 0 hidden)

Re: Eastern Utopia (none / 0)

Nothing wrong with that: wages are lower there, so is the cost of living. That's fine. It's when the pressure is to reduce wages in a way that reduces the quality of life that there is a problem.

Ireland advertised our cheap well-educated work force for ages. Until we became more expensive than everybody else.

by Colman (colman at eurotrib.com) on Thu Mar 9th, 2006 at 05:51:41 AM EST
[ Parent ]

Re: Eastern Utopia (none / 1)

So it works, then?

Lower wages until demand for labor grows so much that the price of labor goes up again?

<yes, I'm joking>

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 9th, 2006 at 05:58:30 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Given that we started at a base wage of two crusts of soda bread and a pint of Guinness it worked, yes.

by Colman (colman at eurotrib.com) on Thu Mar 9th, 2006 at 06:01:42 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

So Ireland's competitive advantage is that it did not have to go through the bothersome and time-consuming phase or cutting wages and unravelling social benefits...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 9th, 2006 at 06:05:36 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Heh. Ireland's competitive advantage is that somebody pumped a gazillion euros into the economy over a period of thirty years to build infrastructure and so on. Can't remember where that money came from though. Must have been some free-market effect.

by Colman (colman at eurotrib.com) on Thu Mar 9th, 2006 at 06:06:49 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Nonono. Portugal and Greece got the same, and never prospered. It was the right policy mix (read 'lower taxes') wotdunnit

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 9th, 2006 at 06:16:27 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

What do you mean never prospered? They may not have gotten to the top of the GDP per capita list, but Portugal is way more prosperous now than in 1986. I don't know about Greece.

But, yes, spending EU moneys in the right way is very important. Apparently the Czech republic has gotten a warning from the EU that they are not proposing enough projects to take advantage of EU funds and as a result might be allocated less in the future.

I think your argument that policy matters (which underlies most of your economics writing) is the right counterpoint to the neo-liberal assault on government.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Mar 9th, 2006 at 06:21:24 AM EST
[ Parent ]

Re: Eastern Utopia (4.00 / 3)

on what relates to Portugal, there had been an slow, but continuous increase (a convergence) in personal wealth towards the wealthy western european level for at least 50 yrs, and possibly the entire 20th century. it stopped in 2002, because of - 1 - the bad politics of the previous 15 yrs [1], and - 2 - rampant comsumerism. all resulting from very low education levels - which, it must be said everytime although it is nothing original, was a deliberate policy, maintained only because benefited at short time a few.

[1] the delay factor or operator. it kills us - by giving merit to regressive politics or customs that follow progressive ones which were the actual responsible for the increase in the well-being of a society. it exists in systems theory and is applyed in electronics, but hardly in general economic theory, does it not?

by findmeaDoorIntoSummer on Thu Mar 9th, 2006 at 12:48:33 PM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Yup. Why, Ireland had a top tax rate of only 58% until into the late eighties or early 90s. Luckily, the free-market knew that the tax rates would drop rapidly from the mid 90s onwards and was able to react to that stimulus ten years in advance. That's why it's magic.

by Colman (colman at eurotrib.com) on Thu Mar 9th, 2006 at 06:25:44 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Is that a snark in the vein of A Modest Proposal?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Mar 9th, 2006 at 06:06:58 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

wages are lower there, so is the cost of living

The lower cost of living does not compensate for the lower wages: the purchasing power parity was still lower than in the west. Except that, recently, Czechia was ahead of Portugal in PPP even though at market exchange rates Portugal had the higher GDP per capita.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Mar 9th, 2006 at 05:58:53 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

Catch-up takes time. The danger is that the free-market reforms™ will prevent them catching up at all.

by Colman (colman at eurotrib.com) on Thu Mar 9th, 2006 at 06:00:40 AM EST
[ Parent ]

Re: Eastern Utopia (none / 0)

I think we'll probably catch down.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Thu Mar 9th, 2006 at 06:07:39 AM EST
[ Parent ]

Eastern Utopia | 33 comments (33 topical, 0 editorial, 0 hidden)

Top Diaries

2024 end of year review and the prospects for 2025

More Status Quo please - for now

Bethlehem Lies In Palestine

Full Circle from Baghdad to Damascus

The Really Hard Work Starts Now

Energy (and Other) Events Monthly - 2024

The Irish general election draws near

Recent Diaries

Reception Angela Merkel In Amsterdam: Freedom

M.A.D. -- Seconds Before Midnight

Leader of War Terrorists

Assembly: ICC The Hague Under Duress

2024 end of year review and the prospects for 2025

Ukrainian and Al Qaeda Terror Joined in Syria

Bethlehem Lies In Palestine

Full Circle from Baghdad to Damascus

Turks and Sauds to Install Sunni Terror in Damascus, Syria -...

More Back-Stabbing in the New Middle East

#WeAreNATO v Rest of the World

The Really Hard Work Starts Now

US Syrian Quagmire - A Second Life

More Status Quo please - for now

The Arab States Are Faced with Virulent Zionism in Israel

December 2024

Next Step An Integrated, Sovereign Europe

Making the Europe and BreXit Trump Proof ...

Energy (and Other) Events Monthly - 2024

Not A Permanent Ceasefire Lebanon-Israel

Occasional Series