Unemployment and poverty in Europe

Following up on mij post "More than 200 million unemployed in 2013" here are recent figures on unemployment in Europe as provided by Thomas Fazi in his article "How Austerity Has Crippled the European Economy – In Numbers", published on 31 March 2016 by Social Europe:

"In early 2016, the euro area’s unemployment rate stood at 10.5 per cent (17m people), while the youth unemployment rate was 21.5 per cent (3m) – up from 7 and 15 per cent respectively in 2008. The figures for the EU28 were respectively 10.6 per cent (22m) and 20 per cent (4.5m). Among the member states, the highest unemployment and youth unemployment rates were recorded in Greece (24.6 and 49.5 per cent) and Spain (21.4 and 47.5 per cent). This has been accompanied by a rise in the rates of long-term unemployment, implying that a large number of unemployed face increasing difficulty in finding a job, while the danger of their sliding into poverty and material deprivation correspondingly increases. This is complemented by a lack of public sector opportunities. On the contrary: cuts in public spending are accelerating this trend.
Moreover, poverty (including in-work poverty) and at-risk-of-poverty rates have increased significantly in all European countries since 2008, reflecting an overall decline in terms of social justice. In early 2016, nearly one-quarter of EU citizens (24.6 per cent) are regarded as being at-risk-of-poverty or social exclusion – an extremely high and worrisome value. Measured against today’s total EU population, this corresponds to approximately 122m. The gap between northern European and southern European countries remains enormous. In Greece, 36 percent of the total population is at-risk-of-poverty or social exclusion. In Spain, this figure was above 29 percent. For children and youths, these shares were even higher. In Portugal, the poverty rate within the total population is 27.5 percent. By contrast, Sweden, Denmark, Finland and the Netherlands stand at the top of the overall index. Various studies have concluded that the increase in poverty, at-risk-of-poverty and social exclusion rates is a direct result of the policies of fiscal austerity and internal devaluation pursued in recent years. Research has also shown that austerity has increased inequality by fattening the tail of the income distribution, implying a redistribution from workers to asset owners (i.e., from the bottom majority of the distribution to the top minority)."

Economic thoughts and music

Painting by Aafke Steenhuis

Rather than reading another 2-minute post on world economic affairs, you may prefer, on this Sunday, to listen to a one-minute piece of music played by me on guitar: Le bollard et la guitare.

Analytical thinking is one thing, playing music another. I could not do the one without the other.

I guess that for many of you music is important in your life. Tastes may differ but I hope you will enjoy this little, classical piece.

More than 200 million unemployed in 2013

Here an article about world unemployment of more than two years ago that I found in my archive while I was searching for articles stored in my computer for a book my wife and I are doing on ports and the world economy. As you can read below, in 2013 there were more than 200 million people unemployed. On the picture you see unemployed seeking a job in Miami. I will look for more recent articles about unemployment...

Des demandeurs d'emploi, à Miami.

La planète comptait 202 millions de chômeurs en 2013

• Par Anne Cheyvialle
  • Publié le 21/01/2014 à 06:01

Le nombre de demandeurs d'emploi dans le monde a augmenté de 5 millions par rapport à 2012, d'après l'Organisation internationale du travail. Le taux de chômage mondial est resté stable, à 6%.

Pas d'euphorie du côté de l'emploi pour l'Organisation internationale du travail (OIT). La courbe ne s'inverse toujours pas, malgré la reprise économique mondiale. Le nombre de chômeurs a presque atteint 202 millions en 2013, soit 5 millions de plus par rapport à 2012, selon le nouveau rapport annuel de l'OIT. Le taux est resté stable à 6%.

Dans le panorama géographique, le Moyen-Orient et l'Afrique du Nord enregistrent toujours les taux les plus élevés, à 10,9% et 12,2%, à l'inverse des pays d'Asie, entre 4% et 4,5% mais qui voient le chômage se dégrader. Dans les pays développés, le taux reste inchangé à 8,6% et il diminue légèrement dans la zone Amérique latine et Caraïbes (6,5% contre 6,6%).
Le point noir reste le chômage des jeunes, à 13% à l'échelle mondiale, qui se détériore dans presque toutes les régions, à l'exception de l'Amérique latine et de l'Afrique subsaharienne. Au total, 74,5 millions des moins de 25 ans sont privés d'emploi. Les taux sont particulièrement alarmants au Moyen-Orient - 27,2% - en Afrique du Nord - 29,4% - et dans les pays développés, à 18,3%.
Surtout, le nombre de jeunes chômeurs, qui ne sont ni à l'école ou en formation, ne cesse d'augmenter ainsi que le chômage de longue durée, au risque de perdre en compétences et d'avoir plus de difficultés à réintégrer le marché du travail. Dans plusieurs pays développés, notamment en Espagne et en Grèce, la durée du chômage a doublé comparé au niveau d'avant crise. Même aux États-Unis, où les signes de reprise économique sont plus marqués, le chômage de longue durée touche plus de 40% des demandeurs d'emploi. (...)

How to cure a sick world economy?

Unemployment, especially of young people, job insecurity and CO2 emissions are so high that one could rightfully say that they are the symptoms of a sick world economy. One could even say that they are the symptoms of a seriously ill world economy that urgently needs to be cured.

Unfortunately, the cure is mainly left to economists who either present their diagnosis and prescription as the sole medicine or, if they are modest and wise, suggest that it is only a possible treatment. The wiser economists will insist that their remedies should be complemented and discussed within a wider political, social and cultural context and that a more comprehensive approach is needed. 

That the cure is left to economists (who represent only one branche of the social sciences) is unfortunate for the people who are dependent on the health of the world economy, as well as for the economists themselves who are placed in an awkward position of doing a task for which they are not sufficiently equipped. Economists should refuse to fulfil any longer the unrealistic task of saying how the world economy (or a specific country) should become healthy.

The world economy needs a better doctor, or a team of better doctors. This team should consist of experts and laymen who each contribute their piece of wisdom so that a comprehesive approach emerges that can be discussed by a wider audience. Good economists should obviously be part of the team, but only a part, as the team needs to be complemented with the wisdom of other experts and laymen.

With the exception of reducing CO2 emissions -- see my post On the environment I support dictatorship -- democratic discussion should be stimulated about the various treatments that the team or teams of  'doctors' will suggest. Only then, we the people who constitute the world economy, will be able to participate in curing the diseases of our world community (of which failing economic policies is one aspect, and failing democracies another, as are the failing mass media and failing universities who promote too little critical, constructive thinking and too much conformist and box-thinking).

In a next post, I will make an effort to suggest what the agenda of the team(s) of doctors might be and how they might proceed in their diagnosis and prescription. If you would have any ideas about the agenda and workable procedure(s) to achieve useful diagnosis and prescription, please let me know: jj.teunissen@fondad.org

Post Scriptum

Discussing this post with my wife she expressed strong disagreement with the patient-doctor metaphor saying it has been abused by Hitler and others. I'll try to come up with a better metaphor.

Our economy needs dedicated fathers

Nieuwendammerdijk

This morning a father was walking with his children to the crèche in our street (Nieuwendammerdijk) completely absorbed by a mobile telephone conversation. A bit later another father walked to the crèche carefully looking and listening to his two children -- one standing still and observing something that he and I did not know what it was and the other, smaller child, sitting quietly in the pram (carrozzina, landau).

In my view, the second father is the kind of person we need for a better, healthier economy. Others may think that the first type of father is the better person for our economy: dedicated to his work and being efficient in his job of taking care of the kids.

Unfortunately, those in command of our economy do not share my preference for the second type of father but rather prefer the first type of father. And unfortunately, their view is shared and put in practice by many people. Unless you ask them... Then they may say that the second type of father is the better one.

Our economy needs fathers who are dedicated to their children when they are "in charge" of them. Because our economy needs sensitive, caring people. Otherwise, we will never improve our world society of which "the" economy is just one aspect.  

Obviously, you could change the word 'father' for 'mother' in this little, insignificant story, because many working mothers do the same: walking and talking with their mobile phones while they are taking "care" of the kids. 

Is this little story really insignificant?

Axel Munthe and Bernardo De Ferrante - doctors concerned with the poor

The economy is about the health of people and it is no wonder that doctors (physicians) who are concerned about the health of people have become presidents, like Salvador Allende and Michelle Bachelet in Chile.

My great-grandfather, Bernardo De Ferrante, was a doctor who was concerned about the health of the people of the village or area where he worked as a medico condotto, as a doctor for the poor, which was at Capri and in Naples.

Bernardo De Ferrante was friends with another doctor, Axel Munthe, who lived like him at Capri and worked in Naples during the cholera epidemic of 1884. Munthe came from Sweden and was equally concerned with poor people. He became famous because of a book he wrote about his experiences in Italy (and elsewhere): The Story of San Michele. It is an autobiographical account of his life and work.

Bernardo De Ferrante has not become famous. He is known to his relatives as the father, grandfather, great-grandfather or great-great-grandfather who died young, at age 38, and gave us this mysterious background of descending from the King of Naples.

Rather then following the footsteps of the King of Naples and his descendants I preferred to follow Bernardo de Ferrante's concern with the health of poor people. That's what I have done since I started working in agrarian reform in Chile during the Allende government in 1973, then for the Chile solidarity committee in the Netherlands (1974-78), subsequently for the Transnational Institute in Amsterdam (1979-86) and, finally, up till today, the Forum on Debt and Development (FONDAD).

All along this work for the poor (by focusing on international economic dynamics and power relations) during the past four decades, I have remained interested in the life of Bernardo De Ferrante. As he died in 1899 and there is very little known about his life, it's pretty difficult to get an idea of how he has lived and what he did as a physician. One of the last things I have done (yesterday) is making a short film about a meeting between Bernardo's daughter (my grandmother Nelly De Ferrante) and Axel Munthe, at Capri - Axel Munthe meets Nelly De Ferrante at Capri

Axel Munthe also became famous because of a film about his life -- see picture below.

For those of you who do not understand Spanish and German, in the illustration at the top Munthe is being quoted saying that a man can live without hope, friends, books, even music, but only if he can listen to his own thoughts. The flyer of the film here above simply says it is about "The doctor of San Michele".

Netherlands, country of the future

For those who read French, here's an intersting article about start-ups in the Netherlands, published by Swiss newspaper Le Temps. "Those for whom Netherlands rhymes with polders, tulips and great painters will have to review their image. The country is especially resolutely turned towards the future, thanks to a dense network of incubators of ideas and leading enterprises, incubated, particularly in the Delta ecosystem Startup," writes Le Temps.

Les Pays-Bas, l’autre contrée des start-up

Les villes d’Amsterdam, de Rotterdam et de Delft sont au cœur d’un dense réseau d’incubateurs d’idées et d’entreprises de pointe

Un pont en 3D, soudé par des robots, au cœur d’Amsterdam: c’est le projet de MX3D, une start-up néerlandaise. Il doit être inauguré en septembre 2017; il enjambera l’un des canaux de la ville. L’opération est soutenue par des pointures de l’industrie comme le sidérurgiste ArcelorMittal, la société de technologie Oerlikon ou le spécialiste de l’ingénierie ABB. Elle permettra de démontrer la supériorité de la soudure par arborescence (wire arc additive manufacturing, ou WAAM, inventée aux Etats-Unis) sur celle par laser (selective laser melting), qui suppose un moule.

Le rôle de la robotique

L’enjeu, explique Gijs van der Velden – l’un des deux fondateurs de MX3D –, est «la colonisation des planètes», au cours de laquelle «les robots joueront un grand rôle». Selon lui, WAAM permettra de fabriquer des infrastructures dans un milieu hostile. Sa start-up a d’ailleurs noué des contacts avec l’Agence spatiale européenne (ESA).
Ceux pour qui Pays-Bas riment avec polders, tulipes et grands peintres vont devoir revoir leur copie. Le pays est surtout résolument tourné vers le futur, grâce à un réseau très dense d’incubateurs d’idées et d’entreprises de pointe, couvés, notamment, au sein de l’écosystème Startup Delta. Neelie Krœs, l’ex-commissaire européenne à la Concurrence, puis à l’Economie numérique, est l’ambassadrice de ce projet, qui vise à faire de son pays le troisième meilleur écosystème sur le Vieux Continent pour les sociétés innovantes.
La visite d’Etat en France du couple royal néerlandais – le roi Willem-Alexander et son épouse, Maxima –, les 10 et 11 mars, est l’occasion de vanter la capacité des Pays-Bas à se muer en laboratoire du futur. Le pays a déjà attiré les «hubs» européens de stars américaines de l’économie numérique comme Tesla, Uber, Netflix et Cisco, ou Viacom.
Améliorer la mobilité urbaine, réduire le gaspillage, élargir les choix d’une population hyperconnectée destinée à consommer davantage de loisirs qu’elle n’aura d’emplois fixes sont au cœur des propositions de l’Amsterdam Institute for Advanced Metropolitan Solutions (AMS), un incubateur de projets innovants. On y travaille, notamment, sur un système de capteurs et de caméras qui permet de gérer en temps réel les mouvements de foule.

La «boussole touristique»

Autre idée: la «boussole touristique» Wander, pour inciter les voyageurs à s’aventurer hors des sentiers battus. Aussi, l’application Smartfiets (en anglo-néerlandais «vélos intelligents»), pour trouver un parking et signaler à la municipalité les bicyclettes abandonnées – 800 000 rien qu’à Amsterdam.
Hébergée au sein de l’AMS, la start-up Gamatec cherche à incorporer au ciment du biochar, le carbone récupéré lors de la combustion de déchets: 1% de biochar permettrait de réduire de 25% l’empreinte carbone de ce matériau, en attendant le béton capable de réparer lui-même ses fissures, développé par un chercheur de l’Université de technologie Delft (TU Delft).

Transformer le C02 en diamants

Cette dernière est au nombre des moteurs néerlandais de l’innovation grâce à son expertise dans la robotique. A deux pas du campus, Yes! Delft abrite 75 start-up, dont Kien («élégant» en néerlandais) du Français Florent Gatin, qui s’apprête à produire en Belgique des enceintes musicales sans fil, qui s’enclenchent quand on entre dans la pièce où elles se trouvent.
L’autre pôle futuriste est à Rotterdam, candidate pour accueillir l’Exposition universelle 2025. «Cette ville, c’est le monde tel qu’il sera», dit Daan Roosegaarde, dont le laboratoire de «design social» (il a aussi une succursale à Shanghai) a conçu une tour pour purifier l’air – elle transforme le CO2 compressé en diamant – et une piste cyclable qui devient lumineuse la nuit, dans le Brabant, la région natale de Van Gogh.

The end of Capitalism? A comment on Robert Misik

Two months ago I reported on this blog about an article by Austrian thinker Robert Misik, Will Capitalism Die? , in which he predicted the end of capitalism. That prompted me that same day, 12 January 2016, to write a draft comment on Misik.

Checking old posts, I found that draft comment. In the first part of it I raised two questions:

(1) Those who are supporting capitalism and those who have an interest in its survival (these two groups do not overlap fully, for instance I, as a pensioner, belong to the second group), will not just let it die. If they think Robert Misik is right that capitalism will die if current trends and policies continue, they will be busy preparing how it can survive.

Do you have an idea of what the supporters of capitalism may have in mind to rescue it?

(2) I have another question: can you imagine a non-capitalist system with pension funds investing in the small and cooperative economic initiatives that Robert Misik describes at the end of his article as a hopeful way out of the crisis of capitalism?

Obviously, I raise these two questions first of all to myself. But I would be grateful if you helped me finding answers.

How to rescue capitalism?

What answers could we give to the two questions I raised in my draft comment on Misik of two months ago?

On the first question of what defence lines the supporters of capitalism may be developing I can imagine they are working on the following three lines:

- promoting the image that businesses are taking important initiatives to fight climate change, or even that they are best suited to fight climate change (with their development of innovative technologies);

- promoting the image that capitalist democracies may not be ideal but still are the best option available to fight climate change and promote employment;

- promoting the image that governments and international institutions should continue to facilitate the 'proper' functioning of the capitalist system and that the state should not be 'overburdened' with fiscal deficits that young people will have to repay.

These may be three successful defense lines (don't you think so?) that may get wide support including from 'the left' when they are in government or share government responsibility. Small and cooperative businesses, as proposed by Robert Misik and others, are simply still a too small part of the global economy.

Do you agree?

On the second question of different pension funds, I think it is possible to change pension funds so that I need not 'necessarily' defend the current system with large, capitalist pension funds (like the one who is paying me every month) investing in the survival of current capitalism (if I think I really need the pension of about 1000 euros per month).

My 'vested' interest in maintaining current capitalism is only 'true' if it would be impossible to change current pension funds and the current dynamics and power relations in the global capitalist system (being upheld by all major powers including the Chinese and other BRICS governments).

Is a better global system 'unviable'? I don't think so.

Capitalism should and could be reformed, both in its dynamics, power relations (give power to the poor), and ideology (educate people properly and create proper mass media).

Will Greece leave the eurozone?

Barbara playing music on her island Thassos

I have a sister, Barbara, married to a Greek, who lives on a Greek island for almost thirty years. I asked her what she thought of my previous post in which I suggest that it might be better for the majority of the Greeks to leave the eurozone. Rather than saying what she thought herself (she works in tourism and has a clear vision on what's happening in her second fatherland) she suggested I should read what Costas Lapavitsas has to say about it.

On internet I found a recent interview with Lapavitsas, in the Spanish newspaper El Diario: "La cuestión del euro y la pertenencia de Grecia a la unión monetaria volverán a estar sobre la mesa".

I also asked my Czech / Chilean / British friend Stephany Griffith-Jones what she thought of my previous post. She answered immediately: "Yo pienso que hay que reformar el euro, pero no desarmarlo. Creo hay que cambiar Maastricht criterios, aumentar cap fiscal europea, etc." Later she added: "When I wrote EU fiscal cap, I meant EU fiscal capacity, the idea being that the EU budget should be much larger, eg 3% of EU GDP, very necessary to fund more intra EU public investment, and increase transfers to poorer regions and countries."

For those who do not understand Spanish, Stephany's initial answer was: "I think we have to reform the euro, but not disarm it (do away with it). I believe we have to change the Maastricht criteria, increase the European fiscal capacity, etcetera."

One of the things Costas Lapavitsas says in the interview with El Diario is:

La situación del país [Grecia] está otra vez convirtiéndose en crítica. Podría decirse que se encamina hacia una tormenta perfecta. La economía está otra vez en recesión y va a ir a peor este año. El mercado de valores se está comportando muy mal, el diferencial de la deuda griega frente a la alemana está incrementándose, el Gobierno no puede completar la revisión del programa [de asistencia financiera] porque no puede aprobar fácilmente la legislación... Y por encima de todo esto está la presión derivada de la cuestión migratoria y los refugiados, que supone un desafío directo a la soberanía nacional griega. La combinación de estas presiones es enorme: hay agricultores, ingenieros, abogados y otros que se han quedado en la calle. Es una situación muy tensa. Espero que la cuestión del euro y la pertenencia de Grecia a la unión monetaria vuelvan a estar sobre la mesa próximamente.

The Tsipras government should have prepared for exiting the euro

On internet I also found an assessment by Lapavitsas of the Tsipras government a year after it was elected, One year on, Syriza has sold its soul for power. He is very critical of both Tsipras and his former finance minister Varoufakis saying that their negotiating strategy implied that they should have prepared for leaving the euro. But they were not prepared at all, says Lapavitsas, with the dramatic result that Tsipras is now carrying out an austerity programme that 62 percent of the Greeks had rejected in a referendum.

Lapavitsas: "Tsipras had campaigned for a rejection but when the result [of the referendum] came in he realised that in practice, it meant exiting the euro, for which his government had made no serious preparations. To be sure there were back-of-the-envelope “plans” for a parallel currency, or a parallel banking system, but such amateurish ideas were of no use at one minute to midnight. Furthermore, the Greek people had not been prepared and Syriza as a political party barely functioned on the ground. Above all, Tsipras and his circle were personally committed to the euro. Confronted with the catastrophic results of his strategy, he surrendered abjectly to the lenders."

"Since then he [Tsipras] has adopted a harsh policy of budget surpluses, raised taxes and sold off Greek banks to speculative funds, privatised airports and ports, and is about to slash pensions. The new bailout has condemned a Greece mired in recession to long-term decline as growth prospects are poor, the educated youth is emigrating and national debt weighs heavily."

In Lapavitsas' view the result of Tsipras' (and Varoufakis') policy has been disastrous: "Syriza is the first example of a government of the left that has not simply failed to deliver on its promises but also adopted the programme of the opposition, wholesale. Its failure has strengthened the perception across Europe that austerity is the only way and nothing can ever change."

Lapavitsas has an important lesson for the European left:

"Syriza failed not because austerity is invincible, nor because radical change is impossible, but because, disastrously, it was unwilling and unprepared to put up a direct challenge to the euro. Radical change and the abandonment of austerity in Europe require direct confrontation with the monetary union itself. For smaller countries this means preparing to exit, for core countries it means accepting decisive changes to dysfunctional monetary arrangements. This is the task ahead for the European left and the only positive lesson from the Syriza debacle."