Wednesday, December 29, 2010

Greece: A Political Economy

This remarkable analysis has appeared on Open Economy. If you have wondered how a country can get into such a deep, deep hole, take a look. Doxiadis discusses the rentier economy (a populist rentier economy), the breakdown of cooperation, the preference for a mix of income opportunities rather than specialization, and reason why unproductive small businesses dominate.

Just to give you a flavor, here is what he writes about populist rent-seeking:
[Rent] does not contribute to growth, it only shares in what is there. Therefore, it secured by militant claims, not by productive work. It breeds populism, whose fundamental strategy is to shift responsibility for the whole to the opposite pole, the enemy. In populist discourse citizens identify with the weakest groups, regardless of their actual position in society; so they feel entitled to demand more on grounds of fairness, or even on humanitarian grounds. They do not feel responsible about production of wealth, nor about setting priorities for redistribution to the truly weak. It is others who are responsible for the big picture. Populism differs radically in this from a socialist strategy which starts from the mode of production before the mode of distribution; as well as from a political program of solidarity towards the really poor and excluded.

Read the whole thing.

1 comment:

trucker said...

While the dude does a pretty good job on the word "rent", he fails miserably in the use of the word "populism". While it is true that populists seek a _FAIR_ distribution of rent, that is not the same thing as attempting to privatize and UNFAIR portion. And nowhere have I ever seen populism discussed or defined as an attempt "to shift responsibility for a whole to the opposite pole". Rent seekers are not attempting to shift anything but rent income into their pockets. The concept of "responsibility" is totally lacking. Populists demand a fair share of the rent. They do not attempt to _BLAME_ the rent on anything but government mal-enforcement of contrived property rights.

In the case of Greece as defined by this guy, the rent is produced by government through various means. Government then uses the created rents to reward and punish the people and the politicians. That is all well and good as far as I know. I have no clue about the government of Greece and the morality and culture of Greece and the Greek economy. No reason to doubt that he is painting a true picture of those things. But his redefinition of the word "populism" seems to be flat wrong.