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System D

System D gets a feature in Foreign Policy:

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of "l'economie de la débrouillardise." Or, sweetened for street use, "Systeme D." This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy.
System D is the planetary unregulated black market, concentrated in the developing world. Excluding traditional criminal activities (robbery, illegal narcotics, extortion) but including small-scale entrepreneurial activities that don't bother with red tape or taxes or safety regulations, it employs up to 50% of the planet's work force (1.8 billion workers) and is estimated to be worth $10 trillion a year.

Oh, and the internet has done rather a lot to potentiate its growth. As is the case in conventional markets, the internet makes communication easier; this in turn tends to disintermediate supply chains, choking off rent-seeking and arbitrage except where local monopolies emerge.

(I'm blogging this because I think it's a useful reminder that, globally, the WEIRD is not the only way; and as nominal world GDP is around $64Tn, System D is already huge and growing bigger all the time — if it was a national economy, it would be the world's second-largest, after that of the USA. Also: the Greek black economy accounts for 25.4% of GDP (as of 2010). What are the implications if Greece defaults ...?)

161 Comments

1:

What are the implications if Greece defaults ...?)

Well you should ask PK about that :)

But in essence, Greece gets cut off from European funding in the short term and cannot sustain it's public spending. In return, the European banks get holed, and will plead for refunding via taxes. In the intermediate term, there is a possible domino effect as other countries in Europe default. Portugal is a good example. Eire and Spain might follow, and since they are decent economies without excessive public spending, might well benefit from defaulting. Italy might be a very interesting case.

Longer term, Greece gets ejected from Europe, which hits their funding from the CAP and potentially wider trade. On the plus side, they can float their currency again.

Internally, Greece's economy might become a lot more entrepreneurial. They were always a great tourist destination, so with a cheap currency (return to the Drachma?) I would expect to see a lot of tourist related business spring up.

2:

I think your raising of Greece is particularly apposite because trying to run a country on insufficient tax revenue seems to be what has broken them. If you want a public sector, it's got to be paid for. If Greece falls out of the € (and therefore the EU), then it looks to me like they're going to be unable to support their current system.

That may mean that they have to bite the bullet and crack down on that black economy, or they may end up in anarchy.

3:

Greece probably wouldn't be in nearly as great a danger of defaulting if that 25% were part of the real economy.

4:

Alex, you misunderstood my question. So let me re-phrase:

What are the implications for the Greek economy of over 25% of its economy being in System D even before it defaults? How does this change the picture for the post-default outcome? And is there anything the Greek government could do to leverage its black economy?

My gut feeling is that an austerity budget/tax crackdown -- which the Greek public look likely to rebel against -- isn't going to help in the long term and would, if enforced, impose a death spiral on the rules-compliant sector of the economy (subject to high taxation) while driving a massive shift towards System D (compensating for high structural unemployment and reductions in public services).

While we've seen economies go almost entirely black in the recent past (Russia after the breakup of the USSR, when everything devolved onto institutional barter between managers of surviving businesses, until they began to build back up) I don't think we've ever seen that happen to a modern capitalist economy, especially a semi-developed one (Greece per-capita GDP is around $28,000).

5:

I always wonder about these "estimates" of economies outside of the big business zone. Since they won't volunteer their data, you have to sample. The sampling would have to be model dependent --- and you don't have good theoretical reasons to assume a model.

So how can you possibly estimate this without assuming what is in question in the first place? There's lot's of ways to cover up that reality (see 50% of biology for examples), but it doesn't change the underlying problem that it's almost impossible to apply statistical measures to systems that aren't either transparent or theoretically constrained.

I'd bet that $10 trillion is a very low bound.

6:

Greek government borrowing is IIRC around 150% of income. Even a 25% increase in income wouldn't get them below 100%, and the System D side of the economy is mostly small, hence unlikely to be cost-effective to tax.

(Remember a chunk of the Greek problem is defense spending: they're at 4.3% of GDP per year. But they don't have a huge defense industry, so it's all foreign expenditure -- in 2004 they were the world's third-ranking arms importer. If they could resolve the Cyprus crisis with Turkey and reap a peace dividend, that alone would make a really big dent in the borrowing problem.)

7:

I maintain that the universally prevalent economic system on this planet is Communism. Not Communism™ in the V. I. Lenin sense, or Communism™ in the Chinese Communist Party model, but Communism as practised by almost every family on the planet -- communal pooling and deployment of income. (Only crazy rich folks who are paranoid enough to draft pre-nup agreements have opted out of this model.)

8:

Actually thinking in feedbacks, eh? You'll never be allowed to give lectures to economic schools that way!

Let's see -- we have a system where the more developed regions give loans to the less developed regions to buy consumer products, while citizens from that more developed region go in to buy the infrastructure cheap, which then pays back the loans temporarily. What happens if you don't continually subsidize infrastructure development until you've reached parity?

I'm just shocked that this hasn't worked out. Just shocked --- it's like this game has never been played before! Bad, bad Greeks for being part of a cybernetic loop with the virtuous Germans and French.

9:

In Greece, the issue appears to be that everyone was gaming the system. This links to the Michael Lewis article in Vanity Fair, which is worth reading. When few if any people are paying the taxes they owe (and tax collectors are pulled off their jobs prior to elections), when the government routinely pulls numbers out of random orifices for its budget (there being no equivalent of the Congressional Budget Office to keep them vaguely honest), and when the train system is so bloated that it would be cheaper if everyone in Greece took a cab...you get the picture.

As one example of many: Goldman Sachs took $300 million in fees to hide Greece's true financial situation and get them into the EU. Note that this is the government getting a subprime makeover, not the Greek Banks, which are vaguely honest and ineffectual.

I'm not sure whether Greece should stay in the EU or not. Many families have this relative anyway--you know, the gambler who's a charming liar--and they're always hard to deal with.

10:

Yes -- but it's most obscure to those who actually study and plan economies, because those are the very folks who opt out to the greatest extent of "being human" by belonging to a pack or band.

High-ranking academics, upper level managers, top political players --- they tend to be the folks who have declared independence from other human beings. It's a crucial element to super-success by climbing to the top of the technocratic sphere --- to not be bogged down by tribal debts, or to pay them off in cash rather than personal bond.

So the folks who plan the world are the very folks who can't possibly understand the rest of the human race, which is composed of women who raise children and care for elderly parents, men who build homes for relatives and their church folks and so on --- tribesfolk or "communists". Folks obligated to let you crash on their couch.

11:

We're entering the true post-colonial era. What worked for Imperial England in the 19th century got abstracted and turned into a "global free trade regime" by the USA in the 20th, but that dog don't run no more. I see the current trend towards stringent immigration restrictions throughout the developed world as an attempt to hold back labour mobility and force the poor folks to stay home, where the imbalance between their level of income and that of the rich can be exploited to power further concentration of wealth. But with China and India clearly developing, and Africa showing scary signs of taking off, the end is in sight for rent-seeking based on wealth flows between the developing and developed world ... unless we can create our own internal underdeveloped zones.

Hey, look! I just reinvented the Shock Doctrine. I wonder where I've seen that before ...

12:

Charlie, if "System D" grows at the expense of the legit / legal economy, then it will dominate political life more and more, and we'll end up with a country that resembles Russia beginning in the mid to late 1990's. The System D elite will become the nation's elite.

I suspect there will the same or worse problems with democratic accountability - to put it mildly.

13:

Système D was the nickname for the French early-war strategy in WWI, which may be the derivation - it was supposed to allow for local initiative, but turned out to be chaotic until Gallieni pulled things under central control at the Marne.

14:

You mean recreate our own internal undeveloped zones. Global rent-seeking payed for creating "opportunity societies" while keeping traditional rent-seekers in their positions.

The enlightenment game is played out.

15:

A non tax paying economy is incompatible with a welfare state if others are not willing to lend you the difference between your incoming and outgoing and so a nation ends up cutting the services the majority enjoy and expect to have.

Traditionally, eventually enough (young, male) people reject the current failing system that no longer provides for them and either the existing ruling group crushes those who rise against it or it is replaced a populist movement from either the left or the right. It itself is either forced to crush those who oppose it or is itself replaced.

16:

I used to subscribe to Foreign Policy printed magazine, but now I remember why I did not renew it. I don't like the article at all: it presents the black economy almost a success story, barely mentioning its dark side -domination by Mafia-like groups, the impossibility of having public services when so few contribute (see Greece), and the difficulty of escaping the trap and evolve to a rule-of-law state (I'm thinking of Southern Italy here).

Born, raised and living in a country (Spain) where the volume of System D is estimated also at around 25% of the economy, I am too conscious of the problem. Underfunded institutions, free riders everywhere -health services can't, and shall not, ask sick people for their tax papers- that are driving all of us back to poverty.

17:

Ok, I'm confused. Exactly why does "Greece can no longer remain a member of the European Single Currency System" equate to "Greece must leave the European Community entirely"?

18:

It's somewhere in the treaties (but don't ask me for the rationale behind it)

19:

Given #16, I'm convinced. It doesn't make logical sense, but when did international diplomacy ever make sense to anyone except diplomats?

20:

It doesn't. None of the primary treaties of the European Union stipulate or imply it. In fact, leaving the eurozone is not regulated at all. I'm guessing the dynamic duo pulled this interpretation out of thin air to pressure the Southern European economies to stay.

21:

Oh, great. Black market, not paying taxes but benefiting from the public infrastructure funded by taxes. I'm sure it will work in the long term.

/sarcasm off

22:

Actually, China and India developing _because of_ "rent-seeking based on wealth flows between the developing and developed world". To get the rent you have to invest, investments cause development. To prevent the development of Third World governments have to restrict capital mobility, not labor mobility (well, restricting both will do the job even better).

Also, how opening borders for the labor immigration can prevent concentration of wealth? Immigrants are preferred by employers because they agree to work for lower wages than local workers. These wages can be still bigger then those in China or India, but there is other benefits for in-place industry - better infrastructure, lower risks, shorter logistics paths. With borders completely transparent for both capital and labor movement profits from local and overseas investments will be balanced equal.

23:

I think Charlie belong to the school of "West only prospers because it plunders poor countries". So China must be getting money from the Martians.

24:

I think the honest answer is, no one knows.

Economics is, in my opinion, less a science, more like witchcraft. You take some conditions that you know imperfectly, mix with them a subset of assumptions that you may or may not make explicit and probably don't understand fully whether or not you make them explicit, and bingo, you have a prediction.

On that basis, you can make a case for (and read if you poke a little bit) everything from WWIII to a complete rebalancing of economic power through the world to the rise of a new political/economic model (post-Democratic rather than 'merely' post-Imperial), to the collapse of the 'weak' bits of the Euro (Greece then Italy then Spain seems to be the favourite domino chain) to... well basically nothing.

I'm sure one of the scenarios published is right, and for a year or two we have a new guru of economic prediction - until the next crisis, someone else guesses luckier and we get another new guru.

If I had to guess, I'd guess at Greece defaulting, the EU flanging a clause to keep Greece in the EU without being in the Euro. Politicians in at least one country saying "Fuck you" to the banks and watching them crash and burn to the applause of the #occupy movement and large parts of their electorate (right or wrong in the long term, it will be popular in the short term) - Sarkosi could do it and get re-elected next year for example. There will be a headless chicken phase and things will settle down. There will be a more or less global consensus on some significant changes to international banking and finance. A Tobin tax might be what becomes acceptable all of a sudden, or something more left-field.

In ten years time there will be a new system in place. It will have some familiar big players and some new ones. People will be just working out the wrinkles, and by 15 years from now we'll have the first really big scandal. Billions of dollars sized, Leeson-like, rather than penny-ante fraud.

If I'm right, I'll be famous for my Andy Warhol timeframe. If I'm wrong, I won't be surprised at that.

25:

In Quebec, the "Système D" idiom is also popular.

26:

Isn't System D the way the world always worked before, say, the 20th century?

27:

"In return, the European banks get holed, and will plead for refunding via taxes. "

Which is the root of our long-term problem - most Greeks get hosed (possibly even their elites). Most big European banks will get taken care of.

The end result is that the Big Banks get another lesson that they can do what they want and get away with it.

28:

So China must be getting money from the Martians.

Well, putting it in the Charlie's 'Invaders from Mars' post notation, this statement is true. :)

29:

Completely OT: I keep falsely mentally linking "Système D" and "Substance D", which produces interestingly blind alleys in the conversation...

30:

No, I belong to the school of "a subset of westerners are focussed on wealth concentration, rather than wealth creation; these people are therefore drawn to rent-seeking activities (e.g. banking and other industries with statutory regulation and barriers to entry), and because there's lots of money involved, they can capture the regulators and write themselves a meal ticket".

Right now, China is getting rich because they make stuff. Whereas folks in the west who are getting rich are mostly doing so because they have worked out how to pervert market regulatory systems and make wealth flow towards them. There are exceptions (see also Apple: making stuff people want to buy) but compare with, say, Goldman Sachs.

31:

I can't remember who (or exactly when) it was, but I remember hearing about some American industrialist being asked about what he thought of the idea of the UK moving to being a service economy early in the Thatcher years and replying "Waaall, you can't all wipe each other's windshields."

32:

"Traditionally, eventually enough (young, male) people reject the current failing system that no longer provides for them and either the existing ruling group crushes those who rise against it or it is replaced a populist movement from either the left or the right. It itself is either forced to crush those who oppose it or is itself replaced."

Another possibility is that a lot of talented, ambitious young people simply up sticks and move to somewhere a bit more congenial.

Anyone know what the figures are like for well educated young Greeks upping sticks and getting while the getting is good and the borders into "mainstream" Europe are open?

33:

I'm not impressed by this. I think it's, essentially, whistling past the graveyard of imposed recession. It's the Big Society on the global scale. I would predict that 70% odd of the people involved would take a "job" with "wages" and "hours" and a modicum of "security" in a fucking flash.

I mean, Chinese economic growth hasn't actually been characterised by anything more than massive industrial development and the emergence of a working class.

Also, yer man is too pasty to mention that Systéme D is usually derived from the verb "se démerder" - "to get yourself out of the shit".

34:

I first encountered "System D" in Anthony Bourdain's "Kitchen Confidential" to describe the sort of 'whatever's necessary' jerry-rigging and don't-ask-how-I-got-it-done methods of procuring provisions and repairing equipment.

_He_ got it from George Orwell's "Down and Out in Paris and London" which reveals that work conditions in restaurants really hasn't changed in 50 years.

35:

> lot of talented, ambitious young people

For every talented ambitious person there seems to be at least one angry, unskilled equal who is unable or unwilling to abandon ship. And if the former leave and the latter don't then the overall attitude of the country shifts towards the latter.

The West has befitted vastly from talented, ambitious running for better ground. The nations they've run from generally don't.


36:

Yup.

I'm fascinated by this for a couple of reasons aside from the obvious. For one thing, it's a beautiful piece of self-justifying bullshit: "the mainstream economy has been stolen out from under you, so why not become a hardscrabble tax evader small-scale entrepreneur instead? (Then when you're successful the Mafia or the government can move in and tax you.)" For another thing, it's a further iteration of the Market-uber-alles philosophy of the libertarian right: one that expresses a response to the current global recession ("markets are still cool; you're just doing it wrong").

37:

Markets are fine, as long as you trade in stuff that people want, has something underlying it, and only with money that you actually have and can afford to lose.

Where the banks went wrong was that they were trading in intangibles, underwritten by nothing more than a bubble market. When the bubble burst...

They've now repeated the mistake, or at least the ones who have significant positions in Southern European sovereign debt have done so!

38:

CHarlie
Fundamental mistake in your last sentence at the top.
It SHOULD have read:
"What are the implications WHEN Greece defaults?"

Because, one way or another, and it has been obvious for some months, at least, that a default is inevitable.

39:

You asked what happens in Greece if it defaults that we haven't seen before? The answer is nothing.

The labor productivity gap between Greece and the United States is a little under two-to-one. (Greece is 52% of the American level, but that level of precision is silly.)

In 1982, when its economy went off the rails, the labor productivity gap between Mexico and the United States was a little under two-to-one. (The specific figure was 51%.) When Argentina started to collapse in 1998, it's labor productivity was 47% of the U.S. level and exactly equal to Greece.

In both cases, what made the countries feel quite different from the United States (or similar places) was the oversized informal sector. The estimate for Argentina was coincidentally about the same 25% as Greece, although it spiked to 40% when everything fell apart and then dropped rapidly with recovery. In Mexico, it was 31% of urban employment.

While the internet has done a lot of things, one thing it hasn't done is give the informal sector an advantage. Greece's informal sector has steadily shrunk since people first started to measure it in the 1980s; in much of Latin America the relative size of the non-criminal informal sector has been in free fall.

The question is based on a set of stylized facts (informal economies are growing faster than formal ones; the world has never seen an economic collapse in a "developed" country; Greece has a uniquely-large informal sector for a country of its wealth) which are not correct.

40:

Oh, man. I just read the article. Charlie, read it again! It's terrible, really really awful, and in ways that no specialized knowledge is needed to see.

Frex, it's hard to call something the world's "fastest growing" anything without providing any evidence about growth rates, or indeed any sort of intertemporal comparison at all.

The piece is painfully stupid. Maybe it's correct, maybe it's not, but it's the sort of crap that causes people to believe things about the world on faith. This kind of thing actually makes me angry, and it should make you angry too.

41:

"I used to subscribe to Foreign Policy printed magazine, but now I remember why I did not renew it. I don't like the article at all: it presents the black economy almost a success story, barely mentioning its dark side -domination by Mafia-like groups, the impossibility of having public services when so few contribute (see Greece), and the difficulty of escaping the trap and evolve to a rule-of-law state (I'm thinking of Southern Italy here)."

Foreign Policy magazine should have been dissolved after the Iraq War, and the major contributors should have been imprisoned as war criminals.

And the MafiaState is probably their ideal state (especially since they don't have to live in it).

42:

Greek government borrowing is IIRC around 150% of income.

It's debt, not borrowing, that is that high (158% of GDP). That means a 25% increase in annual income would comfortably pay off the debt in less than a decade.

Even a halving of defence spending, to 2% of GDP/year, would make a substantial dent over time. One problem being that simply sacking the soldiers would probably drop GDP by a similar amount. The other is that if you try, they quite likely say 'no', and finger their rifles.

Best solution could be to redeploy the soldiers as tax collectors. Probably wise to restrict them to small arms before sending them out on a routine audit, though; don't want too much collateral damage.

43:

At school, we had to do a certain amount of stuff outside the confines of out A-level choices, so we got a special English Literature class. It was mostly Arnold Wesker, and we were told that he had worked in a hotel kitchen. One of the plays we read through was "Roots", set amongst Norfold farm workers.

I recall that we were asked why he wrote the plays. I suggested that it was easier money than pan scrubbing and farming. The teacher did not approve of that answer, it wasn't literary enough.

I'm inclined to think that the people in government who make the decisions are looking for answers that suit their mental model. It's the same problem as the American Psychologists. And there is nothing automatically wrong with an Old Etonian: their education gives them some useful mental characteristics, and it's not just about passing exams.

But they're not people like us, and too many people like them have messed up the world

44:

Oh, gosh, the underlying work is almost as shoddy. Schneider estimates large growth in the informal economy in most Western nations (Sweden supposedly goes from 2% to 16% between 1960 and 1995) by making the assumption that all unaccounted for increases in the demand for cash are due to the informal economy.

Uh ... maybe. Or maybe not! I haven't been able to find the underlying structural estimation. But I'm scratching my head at someone who claims with a straight face that 20% of the Swedish workforce is informal.

Anyway, to give you a sense of how ridiculous this field is (as if the Swedish number wasn't sufficient), estimates of the size of Mexico's informal economy in 1990 ranged from 27% up to 49% of GDP. For West Germany in 1970-75, you can get numbers as low as 3.6% (using household surveys) to 17.2% (using currency demand). Strangely, the latter method shows informality spiking up to 31% of GDP right before unification, at which point it plummets.

I suspect that the stylized fact of ever-growing informality is too cool to go away. It's cyberpunky, it's weird, it's neat and new. The only problem with the stylized fact is an astounding lack of evidence.

45:

Havent read the article. But, well, I've lived my life in countries where that is the norm or so common as to be part of the normal day.

And it sucks.

I think it is the success of failure. It shows that people in developing countries (or "the Mediterranean" another Spaniard here) are not the lazy idiots that the self-righteous "right" thinks they are and are resourceful enough to find ways to scrape by.

It also shows that they live in systems that are abject failures that requires them to deploy all that ingenuity to achieve a pale shadow of what a working system would give - but as they dont have working system, just corrupt systems rigged for a few winners, it becomes what it is - a race to survive by avoiding the system and, more or less, accept its corruption as the way the world is.

46:

Noel, see my comment at #36 about why I find the article interesting. (Not the content so much as the context. Also: trolling for libertarians.)

47:

Greece has compulsory universal military service for males (read: conscription). Conscripts are cheap -- you barely pay them, just provide bed and board. The real military costs are things like the 1244 main battle tanks (!) or the 156 F-16s, to say nothing of the surface warship fleet. Those are serious weapons systems that cost a fuckton of money to procure and keep in fighting order.

48:

The "charming gambler" heteromeles mentioned seems like an appropriate comparison. Greece has been in over their necks for more than a decade now and it doesn't seem like they did anything to improve the situation. Now that they are inevitably going to go broke without the bailout they are having a vote on whether or not to adhere to some inarguably strict austerity measures. That's a bit like you give money to your spendthrift cousin saying "but you can't spend it on hookers and gambling" the answer being "if you're going to interfere with my lifestyle that badly, I really need to think about this first".

I can't deny that I think having a vote is good, however, because if they accept help they will be committed as a people instead of as a state and if they don't they can't blame the situation on anyone else but themselves.

49:

That is almost like thinking -- you create a straw-man, find a counter-example that on the surface satisfies your ideological preconceptions -- and profit?

Yeah -- we have a discussion that points out internal exploitation as another way to run a kleptocracy and then someone comes back with "You hate the West --- but what about China?"

That is really an impressive way to fake thought. The "West" is a simple thing, and "China" is a simple thing --- if and only if you think in slogans and propaganda.

The idea that thinking is a process of applying chess moves to a small number of preset phrases.... well, it really is one of the worst curses that the post-enlightenment left behind, the idea that thinking is a mechanical process. (Not that it only belongs to the enlightenment...)

50:

Soru@42: Even a halving of defence spending, to 2% of GDP/year, would make a substantial dent over time. One problem being that simply sacking the soldiers would probably drop GDP by a similar amount. The other is that if you try, they quite likely say 'no', and finger their rifles.

Interestingly, the Greek defence minister has just fired all four of the armed forces chiefs.

I wonder why?

51:

I realize that "potentiate" is a real word, but it really shouldn't be.

52:

@erald: That's a bit like you give money to your spendthrift cousin saying "but you can't spend it on hookers and gambling" the answer being "if you're going to interfere with my lifestyle that badly, I really need to think about this first".

Well, if you want to apply metaphors from human personal interactions and then apply it to systematic aggregations of millions, you at least have to go further than that...

Because it's a bit like loaning your spendthrift cousin who's an alcoholic money after you open a liquor store next door, then bitching and moaning that he can't afford to pay you back. Then you promise to loan him more money -- if he'll lend you his wife for the evening and he sells his children to slavers to pay back some more. Oh -- but you also agree to give him a new 10% discount on whiskey, 'cause you're good, church-going folk, unlike your terrible, terrible cousin.

I'd have to say -- whenever folks moralize via metaphor, I get extremely suspicious.

53:

You'd be better, in my not so humble opinion, to ask Bill Mitchel (http://bilbo.economicoutlook.net/blog/) or Steve Keene (http://www.debtdeflation.com/blogs/) who at least don't believe in a provably wrong economic model. Though Krugman is a lot righter than many others in the "Neo-Classical" or "New Keynsian" schools.

54:

I'm always charmed by how easy is for people to blame an entire population and classify them in a way that absolutely all down to the last Greek responsible for what their corrupt politicians did.

You know, they ALL lied to Europe (they all knew they were broke!), they ALL racked in big debts knowingly, they ALL...

No room for you standard citizen just being misled, swindled, defrauded and screwed by their politicians and robbed blind by banks. No, its just that they have it in the blood, you see? Cant be serious hard working people, like nordic ones are. Cant trust them, good for them to learn how to... be poor, because the EU knows the latest round of austerity measures just made the Greek economy perform worse, thus making paying the debt more difficult.


55:

And BTW, the latest comedy with "referendum! No wait, I was joking" seems to me ... hell, if I was Greek I would be looking at something Papandreu's shaped to burn. And probably would demand the original.

56:

anura @52:
You're right, of course. The nations with the largest contributions to the bailout (GER, FRA, NL) are also the ones that make a lot of money selling them their Main Battle Tanks.

On the other hand, if you go to Crete you'll see a guesstimated 40% of motor vehicles where the owners didn't bother to get license plates. That has to make you wonder if the police aren't able to enforce something as basic as this, how much are the authorities on top of other things? And: Is it really so much to ask to enforce the law?

57:

I wonder what a country dominated by the black/grey market would look like?

If law enforcement can still be called by the System D-ers, then there might not be too much of an increase in organised crime, if not, then organised crime might well interpenetrate with the government and come to control it. I don't know how the government would react to that. An honest one could easily have social policies similar to 19th century England's (or not), or a dishonest one might well have socialist rhetoric and nothing to match (or not, or lots of debt like Greece).

58:

Tim Whitworth @57: "if law enforcement can still be called by the System D-ers..."

Were you being sarcastic or is this a little beside the point: In the romanticized world where they exist System D-ers aren't supposed to require public services. They defend what's theirs gun in hand, they repair their own cars, they boil their own drinking water and if they get cancer they rip it out with their bare hands.

59:

Hmmm, local currencies anyone?

Seeing all this stuff makes me think all the more that we havn't changed much since the last round of globalisation peaked in the early 20th century. Despite decades of economics research and improvements in tools to use, the governments are still running around at the behest of moneyed interests. (Hmm, am I sounding like J. F. C. Fuller? Oh dear)

Of course one technophilic way to damage the black economy would be to ban the use of cash and make it all electronic, which would work fine until they gathered enough programmers to hack it and bribe the maintenance guys. I seem to recall reading though that one american state was trying to ban the use of cash to pay for anything much at all.

60:

Notice the handwavy "[e]xcluding traditional criminal activities"! A hell of a lot of this stuff is criminal in nature, intent and in many cases personnel; and if anything goes pearshaped, it sure as hell isn't the nice policeperson who enforces contracts, etc. This is thuggery and neo-19th-century unregulated worker-eating capitalism, romanticized by parlor "libertarians" who would starve to death in Galt's Gulch.

61:

@guthrie "one technophilic way to damage the black economy would be to ban the use of cash and make it all electronic"

Spot on! And this is the reason why in some countries (sunny Mediterranean again) the credit card point-of-sale terminal does never work when you want to pay that thing you bought at the nice small shop.
Owner driving a Mercedes, his kids getting preferential treatment when choosing school because you know, according to the tax documentation, it's a very poor family.

If I were a honest Greek taxpayer, by this time I'd be beyond mad.

62:

I doubt there are very many honest Greek taxpayers, although hopefully there are some. For example, 2/3 of Greek doctors report an annual income of less than 12,000 Euros (see link below).

However, there are some honest Greek tax collectors who are reportedly beyond outrage, and talking about how they were taken off investigating tax fraud because they were too good at it. However, tax fraud doesn't get reported much in Greece because it's so pervasive that it's not news.

The saddest part of such a culture of cheating is that it's hard for the Greeks to trust each other. Now that they're in a crisis where they have to work together, that lack of faith probably hurts them more than anything else. If you can't trust the legal system and you can trust your friends and family, how do you get out of a crisis together? How do you even know who's telling the truth?

63:

I'm hoping the Greeks give the finger to the Eurozone, and the banking system as a whole falls into the shit. Maybe then the politicians will consider reforming the structure. I doubt there's much stomach amongst taxpayers for a bailout of the "too big to fail" sector again without some serious controls being introduced.

64:

If I might move this US-wards for a minute, it might be interesting to take a close look at the economy in South Texas, roughly between I-10 and the Rio Grande. It's actually not a bad place to live -- the Republican propaganda about a crime wave due to brown-skinned invaders is crap -- but the lower end of the economy is very, very informal.

65:

What exactly is the point of a romanticised world? Do you really think they can stop the mafia? The question is, will the mafia grow?

66:

Not directly relevant maybe, but an interesting couple of BBC editorial pieces. one about Greece and economic rebalancing and one about some research into why people obey the law.

67:

Warning: Off topic. But I feel the need to make this response to """
The idea that thinking is a process of applying chess moves to a small number of preset phrases.... well, it really is one of the worst curses that the post-enlightenment left behind, the idea that thinking is a mechanical process. (Not that it only belongs to the enlightenment...)
"""

Actually I *do* believe that thinking is a mechanical process ... for appropriate definitions of mechanical. This doesn't make it simple. Just because the individual moves are simple doesn't make the process simple.

If you disagree, I'll assume you are a master of go to justify your position. Or can become one in a week. All the moves are quite simple.

Thinking is much more complicated, however, because a lot of the moves occur in parallel, with strange timing dependencies. This doesn't mean it isn't mechanical. A McCormick reaper also had a lot of parallel simple moves with strange timing dependencies. Not as many, but it had (has?) them, and it is purely mechanical in every meaning of the word. (Except, of course, for the horses that pull it.)

Mechanical doesn't mean simple, much less oversimplified. I am not a vitalist, and don't believe that you can show any process above the quantum level that can't appropriately be described in mechanical terms. And I really doubt that quantum behavior is required for thought. (There are those that disagree, but their reasoning is quite suspect.)
N.B.: Saying thought requires quantum mechanics doesn't mean we can't build a thinking machine. Quantum computers already exist. Their value is quite questionable, but they are theoretically interesting, in that there are a few processes that they ought to be able to do a lot faster than non-quantum computers. Like factoring prime numbers. This means that as they decrease in price all current financial transaction methods (except going there physically, either in person or via an agent) will become unreliable. It doesn't seem to have much to do with thought. (Large scale parallelism, however, does. And we are well along the path to that.)

68:

I don't live in Greece - never have - but I do have family there, so I throw the following into the ring, based on what they've told me.

1) Military
Greece has this quaint thing called conscription. I think it's something of an antidote to the national paranoia about the Turks. Reducing the army substantially could probably be done by ending conscription. The government as tallking about it a couple of years ago, but AFAIK it didn't happen. The real cost issue is not the boys; it's the very expensive toys they play with. The sort of useless crap they have is remarkable (they work, presumably, but there doesn't seem to be much point for them, except perhaps for a therapeutic anti-Turkish placebo effect).

2) Systeme D & taxes
My brother is trying to build a business in Greece. Some time in the last 18 months, he was held up by the government for a large'voluntary' additional tax (Eur.8K, IIRC): "it is voluntary, but if you don't pay we'll drive you out of business" (by sending tax inspectors around every single day, making proper business impossible for as long as it takes for you to cough up). Paying it was very painful. This is on top of the rise in various other taxes. And it's not just his business. He was about to secure private finance to expand the business when the government mugged his investor for millions. Faced with a choice of withdrawing from the investment or firing staff, the investor scrapped the deal with my brother (forget getting money from the banks: they won't lend a thing). I think there is a large proportion of the Greek population who would welcome government action to integrate the informal economy into the mainstream economy: they see the need for emergency action, but are sick of being the only ones to pay, repeatedly.

3) Social security
Greece doesn't have much of a social security system to cut by comparison with northern European countries. Unemployed people are expected to get support from their families.

4) Civil service
There are plenty of stories of astonishing, unjustifiable waste - telephone technicians being paid eye-watering sums, university textbooks being given out free to all comers (no student ID required), that sort of thing. But one thing I heard, about a year ago from a politically connected person who should know, is related to righting past wrongs. During the military dictatorship, lots of people suffered for their political views (largely left of centre). After the dictatorship ended, many of these people were given jobs in the civil service as a kind of redress, i.e., they weren't expected to do much. Make of it what you will.

Finally, I have noticed very strong national differences in media coverage and analysis. As I see it, based on limited sampling, the UK media is saying that Greece will leave the Euro; just a matter of time. German media seems to be saying that Greece will stay in the Euro, though it'll be tricky for a while. Same with the referendum: UK media think Greeks will say No, German media think it'll be Yes (Caveat: circumstances change hourly, it seems, and I've not accessed any news yet today).

69:

Huh. That final point ("I have noticed very strong national differences in media coverage and analysis") sounds like media analysts are applying confirmation bias to their predicted outcomes -- projecting outcomes that confirm their own prejudices about the broader question of EU institutional stability. Either that, or editorial level bias is creeping in.

Which means we can't trust anything we read about this topic in the comics that doesn't come with a side order of hard figures.

Talk about search bubbles ...

70:

I find myself comparing these people who live within the black market economy with the rioters in the UK earlier this year. They are, quite simply, people who genuinely believe it is a good idea to take things and not pay for them.

Obviously this attitude is very likely to prove self-destructive in the long term, but the interesting part is the reason why people think this way. They don't believe it is their own society that they are harming, because they don't think of themselves as part of that society.

71:

Well, Charles -- this is the old argument about what it means to be deterministic, one that I think is answered very poorly by most folks who think about it.

It may be that in some sense, at some layer, for a very small subset, that you can in fact describe it as a mechanical process --- and that may be true for all subsets that are small enough and splintered off of the largest system. I think it is incorrect to go from there, however, and claim that therefore thinking in full is mechanistic.

If no one can in fact describe the mechanical process, partly because of the recursive problem -- or to any arbitrary amount do so, but only to a very bounded amount -- then to say that it "really is" mechanical is to apply words in a meaningless, gamey sort of way.

This is like claiming that a box full of ball-bearings rattles in a deterministic fashion (ignoring QM effects). I think that's nonsense -- the information needed to track the position of the balls grow exponentially. So for any observers, there's a hard bound beyond which the positions of the balls are not deterministic in any useful sense of the words --- no one can actually do the physics. Of course, the thermodynamics are deterministic, but that's another question.

We can't treat thinking as Turing-equivalent, even if we can do so for any sub-games. You just can't in fact do the needed construction, even hypothetically. You'd need a God -- anything that can only be done by a God, I don't consider physically real.

72:

Can someone answer this for me. When I was last in Greece, early 1980's, it was still a very safe place to go with almost no theft, because of what I understood were high penalties.

Was I misinformed? If not, how is this compatible with an economy that I would regard as disorganized theft?

73:

There are two aspects to the deterrence effect of law: severity of punishment, and probability of punishment. It turns out that you don't need very severe penalties to deter criminal activity if the risk of apprehension is perceived as very high indeed. Conversely, horrendous penalties won't deter people from crimes if the probability of apprehension and conviction is low (cf. the UK in the 18th century under the Bloody Code).

Alternatively, consider that over 50% of British motorists admit to speeding on the motorway -- where the speed limit is currently 70mph (a rise to 80mph has been proposed recently, at which point the number exceeding that limit would drop to under 10%). Low probability of apprehension for motorway speeding, combined with widespread lawbreaking, result in that particular law as being seen as having no legitimacy.

Now, put that together with, say, the Greek tax system: if everyone is evading, then (a) evasion is legitimized, and (b) if you fail to evade you are penalizing yourself to support those who do it.

74:

Its hard to think of "the good of society" when 1% owns most of it

76:

It's possible times change... early 1980's is 30 years ago after all. That's Maggie, Falklands War, no mobile phones, all those changes in the UK and the world... And just think no boy bands! Well not by that name anyway.

But there's also a difference I think in crimes against the person and crimes against "da man." Some people will, of course, commit crimes against both quite happily. But people who wouldn't ever steal from you personally will happily skim a bit off their taxes, then a bit more... It's a bit like Slippery Jim DiGriz and his "victimless crimes" - we all pay a little bit, and when times get hard it's suddenly much harder for the country or whatever to recover.

77:

Was that a imperial fuckton or a metric fucktonne of cash?

(runs to hide).

78:

According to the CFE Treaty, Greece is reducing to 1735 tanks This is still over 40 battalions, and doesn't look very sensible in light of Greek geography.

About 1200 of the current tank stock are 105mm armed, variously M48, M60, and Leopard 1. Some 400 of these may be transferred to Afghanistan and Iraq, mostly M60 models. It's possible that these are not owned by Greece, being cold-war military aid from the USA

Greece also has about 350 Leopard 2 tanks, about half of them Bundeswehr-surplus, half new-build. Handwaving a bit about reserve stocks, this could be a couple of Armoured Divisions, or more likely just the one, with some battalions assigned to other formations.

I wouldn't read too much into totals. Greece seems to be getting rid of a lot of old stuff, and there's something that feels a little shady about some details. They've been buying systems from German stocks, originally East German, that are within a few years being passed on to Iraq.

79:

Context?

Everything in that article is skewered out of context. Right from the beginning the author misrepresents totally the sense of "Systeme D".

France is a hi-tech industrial country with a highly centralized and tightly run bureaucracy with several centuries of Parisian control. The systeme D is all about making do in the context of the limits of that bureaucracy and the way it touches every single aspect of a citizen's life. I think it's perverse to apply the term to places which are the opposite of France in tech, social and political terms.

If you want to find answers as to what might happen to the Greeks if it seeks to improvise after a financial disaster I think you'd be better off looking at what happend to Argentina after they defaulted on their loans and start off with this article in the Guardian:

http://www.guardian.co.uk/world/2007/may/11/argentina.rorycarroll

Then you could balance it by going to look at the Economist web pages, which have now several interesting articles on what's been happenning in Argentina since the 2002 bakruptcy. It's right-wing free market stuff but there are a lot of interesting facts in there that you can interpet on your own.

If you want my opinion though, I think it's more likely that any Greek who can get out of the country will make a run for it and end up in places like Argentina (or here in Canada where half of all restaurants, the supposedly Chinese ones included, are owned by Greek entrepreneurs running things completely legally) , instead of trying to establish worker-run enterprises in their own country.

80:

And the hard figures need to be read carefully.

See my post on Greek Army tank numbers: a lot of very old kit, maybe not all owned by Greece (US military aid), and signs consistent with the Greek government acting as a cut-out between Germany and Iraq.

And about half the first-line Leopard II tanks are Bundeswehr-surplus, so not full-price.

81:

I'm always charmed by how easy is for people to blame an entire population and classify them in a way that absolutely all down to the last person responsible for what their politicians did.

I suggest that even people who actually voted for people in the winning party didn't necessarily agree with what their elected representatives did. Whether that's the 20-odd percent of US citizens who voted for Bush/Obama/Clinton or the 0.01% of UK citizens who voted for Blair/Cameron/Clegg, holding the whole country responsible for the actions of the leaders is a core part of representative democracy. It's one of the failings of the system, in many ways, but that's how it works.

And yes, basically no-one gets to vote for the British Prime Munster. Apparently that's better than their old system, because absolutely no-one got to vote for the monarch.

82:

(a rise to 80mph has been proposed recently, at which point the number exceeding that limit would drop to under 10%)

I think you're mistaken. You're assuming that motorists wouldn't respond to a change in the law. My observation suggests that motorists rarely base their speed on anything other than the speed limit, so "about 10 over the limit" when the limit changes just pushes up the average speed. It won't go up by 10mph, because not everyone can or will up their speed, and those already doing 100mph+ probably won't increase their speed - they already don't care about the legal limits (they are the 1%?).

83:

Alternatively, consider that over 50% of British motorists admit to speeding on the motorway -- where the speed limit is currently 70mph (a rise to 80mph has been proposed recently, at which point the number exceeding that limit would drop to under 10%).

For a whole fortnight until the signs are all changed, maybe. Then the informal "speed limit" will rise to 90mph.

As you point out, there are two factors involved: "will I get caught?" and "what are the consequences of getting caught?". The more interesting question here is "why is the difference between the posted speed and the amount people are exceeding it by only 10 mph?". I know the Australian answer to that question [1], and I suspect the British one is very similar.

(Incidentally, if there's anyone out there who believes that the informal speed limit won't rise shortly after the formal one does, I have a bridge in Sydney harbour you might be interested in. One owner from new, freshly painted, very popular with tourists.)

So maybe the considerations also include "will I be able to get away with it if I do get caught?". And the answer to that one varies on so many levels, for so many people.

[1] The difference between the posted speed limit and the informal speed limit on just about any Australian road is +10km/h. If you're caught travelling at 10km/h or less over the posted limit, the cops usually don't bother to book you, because it could be a temporary aberration, a wobble on the speedo[2], a problem with calibration errors on their equipment, etc etc. So you get a warning ("don't get caught doing it again") and released. Over 10km/h, and it's easier to point to this as proof of wrongdoing in court, which earns you a fine and some demerit points on your licence.

[2] Speedo = speedometer. Not the swimsuit.

84:

I would guess that those exceeding 80mph regularly have someone else to pay for their fuel.
Right now I have a car where I can see the mpg I'm getting. The drop off above 60 is staggering.
Currently:
50mph - 70mpg
60mph - 60mpg
70mph - 50mpg
80mph - mid 30mpg

85:

> The difference between the posted speed limit and the informal speed limit on just about any Australian road is +10km/h.

Pretty much the same as on major highways in the US. Speed limits are typically around 70 mph and you're safe going 75 unless you get really unlucky. 80 is taking a bit of a risk, though it varies by location.

86:

Its hard to think of "the good of society" when 1% owns most of it

Why? I don't have any trouble with the concept, and I'm certainly not in a high economic quantile (recently emerged from grad student penury, struggling to pay off what accumulated in the dying days). This is what I don't understand about the inequality debate - why should it bother me what my neighbour earns, provided that I've got enough for what I need. I accept that things like individuals not being able to afford healthcare and transportation are a disaster for society - the poverty trap is real, and needs to be fixed. The bit I don't get is why people who aren't in that trap care what the 1% make.

87:

"Hey, look! I just reinvented the Shock Doctrine. I wonder where I've seen that before ..."

Speaking of which, Greece is a country going through a forced 'shock' - so where are the shady Austrian economists looking to screw up the country to prove libertarian ideas?

You know someone, somewhere, is looking on this as an opportunity to play some trials in a big sandpit, make some ill-gotten gain, etc. And now, a 'System D' meme floats to the surface, effectively saying, allow people to all play in the black economy; setting up ideal circumstances for an organised crime set of 'security' to spring up and harvest them.

Smells slightly fishy...

88:

...1244 main battle tanks (!) or the 156 F-16s, to say nothing of the surface warship fleet.

The questionable land forces kit has been addressed; does anyone here know anything about the Greek Navy? A quick visit to the wiki shows a larger force than I would have guessed; does Greece really need half again more ships than Canada? (Granted that Canada is unlikely to be invaded by Turkey, but they've got a shitload of coastline to patrol.) Certainly Greece has had a naval tradition since forever, so I may be overlooking something reasonable and obvious.

89:

If all else fails, they can always crew up the Olympias and fight Salamis style.

90:

"[1] The difference between the posted speed limit and the informal speed limit on just about any Australian road is +10km/h. If you're caught travelling at 10km/h or less over the posted limit, the cops usually don't bother to book you, because it could be a temporary aberration, a wobble on the speedo[2], a problem with calibration errors on their equipment, etc etc. So you get a warning ("don't get caught doing it again") and released. Over 10km/h, and it's easier to point to this as proof of wrongdoing in court, which earns you a fine and some demerit points on your licence."

Not so. The police do not allow 10Km/h - they don't allow any margin. This has caused grumbling given that everyone, manufacturers and police included, acknowlege that speedometers can be off by up to 5%.

What they do do (and I know this from working in a law firm that deals with at least 40% of the district's traffic offences) is round the reading down. Suppose I get pinged for doing 132 in a 100 zone. Because that pushes me into a higher penalty bracket, I might challenge it in court, and the magistrate might indeed rule that the police can't be sure of calibration, and so throw the whole thing out. In order to head this off (and I honestly don't know how often it has happened or how succesful it might be in future, but from a police perspective it has happened, and it is evidently better not to let it happen again and go with the work-around instead), the will round that down to 125 or so. Lesser penalty, less calibration error, fine levied and paid. Certainty is assured.

As for going over the limit by 3 or 5 Ks? They'll ping you every time.

91:

"Why? I don't have any trouble with the concept, and I'm certainly not in a high economic quantile (recently emerged from grad student penury, struggling to pay off what accumulated in the dying days). This is what I don't understand about the inequality debate - why should it bother me what my neighbour earns, provided that I've got enough for what I need. I accept that things like individuals not being able to afford healthcare and transportation are a disaster for society - the poverty trap is real, and needs to be fixed. The bit I don't get is why people who aren't in that trap care what the 1% make."

Because some people are greedy and envious. Especially in mobs.

92:

The American IRS looks at the money in use and says staggering amounts go around and round overseas subsidiaries till they go up something's ass and just disappear.

Goldman Sachs took $300 million in fees to hide Greece's true financial situation AND made big side bets on it going into the dump just like they did Wall St. Rope is reusable.
Nobody knows what will happen because most of the so called Iron Laws of Economics never worked the way economists said they would. And remember money is just a battery that stores work. Where is the work now days.

93:

If all else fails, they can always crew up the Olympias and fight Salamis style.

That may be the best - er, least impractical - suggestion of this thread. The Olympias only needs about 200 men, and you could cover the operational expenses by touring or something. Besides, I like the sheer whimsy of it.

I may not be the best person to consult; I've made similar comments about the Constitution, and the desirability of getting the crew more sea time and occasional gunnery practice.

94:

The argument for the Greek navy is that Greek territory contains a very large number of islands, and they need to be able to control their domestic waterways. Some of which are known as the "Agean" and "Mediterranean". See also the perpetual open bed sore that is Cyprus.

(I think the large navy of relatively small, fast, short range warships actually makes a lot more sense for Greece than the huge armoured divisions. Both are very much mid-to-late Cold War forces rather than modern 21st century responses, but at least the navy makes sense in the context of local geopolitics.)

95:

The funny thing about Cyprus is, it is like a sticky bomb. I don't know about Greece side of the things but Turkey does not want to pay support for it, Turkish government on Cyprus do not want Turkey for aegis yet these wishes don't turn into reality because of the cold war anxiety (a.k.a. string They; Console.WriteLine(They + "will invade us if we do that!";)).

96:

US examples: It's fascinating to see what sort of discount you can get from private businesspeople by offering to pay in (paperwork-free) cash. Roughly two-thirds of what I expect their marginal tax rate to be seems to be the average.

Home Depot and other DIY stores tend, in good weather, to have a very polite and silent crowd of Mexican or other Central American immigrants standing around at the far side of the parking lot. After having bought materials on the up-and-up, you can then purchase labor (in cash). Inquiring about whether these entrepreneurial sorts pay taxes on the income seems rude...

97:

If the family is the model for Communism, my opposition to it is firm, then.

My bank and I, for example, have explicit, written agreements about who is going to do what and when and why, and we exist in calm harmony. My wife and I have gotten into screaming fights about who is supposed to do what on a given day.
Of course, the income isn't completely pooled, either- separate bank accounts have headed off many a dispute about resource allocation.

Childhood family life also wouldn't be a socialist idyll- it was always clear that since my economic contribution to the family was basically zero, that while I was free to have and voice opinions on resource allocation and make persuasive cases, I had zero _authority_ about resource allocation.

98:

> Certainly Greece has had a naval tradition since
> forever,

I did once row in a Greek Naval Warship...

http://www.hellenicnavy.gr/trihrhs_en.asp

99:

I see ES @ 53 came up with the right suggestion, which I was going to make (ahem) - ask Paul Krugman.

TW @ 67
A country dominated by the grey/black market?
EASY
Russia 1992-2002. Congo under Mobutu
As other posters have suggested, the original article is pseudo-libertarian shite.

68 & 69
Media bias, yeah.
However, Greece was admitted to the Euro on false premises, and false accounting, and with internal procedures as described by Stephanos.
Now ... the bills are in.
It should never have happened.
Greece should never have been in the Euro.
Now what?
Greece defaults INSIDE the Euro?
ARRRGH!
Or Greece defaultsts outside the Euro?
Really bad, but not as bad as the previous option.
I think we are reduced to trying to find the least-worst scenario. Not a pretty prospect.

Charlie @ 73
The system must be universal and FAIR, and percieved to be fair.
Otherwise you get systeme-D and a Mafia state.
Yes? No?

@ 82
IIRC the speed-limit change proposed was to go from 70mph laxly enforced, to 80 mph, but rigidly enforced - so instead of doing 77mph in a 70 limit - pass. you do 82 mph in an 80 limit - points on your licence....
But enforcement then gets difficuot and expensive.
Um, err ... which is why, I think, opinion has generally come down on the side of leaving it alone.
The same applies to LOWERING the DD-limit, which would be a disaster.
A LOT of people drink, and are very careful about how much, and drive.
And it works.
Almost all DD convictions are of idiots well over the current limit.
Change that, especially with strict enforcement, and it'd all fall apart.

YUP just seen that Megpie71 has spotted this one as well.
Also, in Britain, you MUST NOT have a speedometer that reads SLOW.
You are allowed to have one that reads up to 10% fast.
Mine is 7.5% fast - I can garuantee that in the appropriate areas, if my speedo reads

Ian Smith @ 87
YUP they want to re-run 1967-74.
The CIA backed the Greek colonels' coup, the King was slow off the mark, and his attempted countercoup failed.
He got blamed for allowing the colonels in (false) and the US is still deeply hated there, for good reasons.
Now they want another go - it's a trail run for a bigger state, of course (Where, who?). The fact that it went pear-shaped last time, and every other time since (Can you spell Chile?) doesn't seem to stop these nutters, any more than it seems to stop the Islamists, or other insane ideologues.
ONLY
This time it's MONEY they are after, which is very worrying....

JasonJ @ 91
Some people are greedy and envious, agreed.
Ten there's the other subset: Greedy and Mean - can anyone around here spell "Koch" ??

100:

#Various ref speed limits, setting of.

There are serious studies (start at http://www.abd.org.uk/ ) that suggest that the best speed to set a limit at is the 90th percentile speed of what drivers actually use on that road in the absense of fear of prosecution. Speeds below this increase the "offence" of "driving at speeds in excess of an arbitrary set figure", but have very little effect on the frequency of severity of accidents.

For most Western European nations the 90th percentile figure tends to be about 80mph to 130kph on free-flowing extra-urban motorway-class roads. This even holds true on the unrestricted parts of the German autobahnen.

101:

#20 and earlier links - Some spokeman from the EUCB was on the BBC news last night and just said "These is no provision in the Eurozone treaty for a nation to leave the Euro". To me, that doesn't mean that you can't do it; just that the necessary mechanisms have to be negotiated on a case by case basis.

102:

Seriously, if you and your wife are having screaming fights about anything then that suggests the problem lies with your marriage, rather than with everyone else's.

(No. Family communism isn't idyllic. But it works on a small scale because the information flow within a non-dysfunctional family is free enough that economic needs are essentially transparent; you don't need an internal market to tell you that the 3 year old is hungry, for example. And indeed, a huge component of the failure of Soviet central planning was that factory managers habitually lied to the planners, due to fear of the consequences of confessing to any failure to meet targets, however trivial it might be.)

103:

#110 Para 1 erratum - The last sentence should read "...frequency or severity of accidents."

104:

#103 erratum - The cite shoud read "#100..."

105:

We have a solution to enforcement of speed limits; it's called the GATSO camera. Their rarity on motorways is a matter of some puzzlement ...

Wrt. speedometers, mine reads optimistic by roughly 5%; I've tested it with GPS, and at an indicated 70mph the car is doing a GPS-verified 67mph. (Safer that way than the other way round.) So my current speed strategy on long motorway stretches in a vehicle with no cruise control and good visibility is to put my foot down when the needle drops to 70, and to lift off (or if necessary brake) when it hits 77 (which is actually more like 73-74).

The police allow a margin of error of 10% over the speed limit plus 1mph, at least in good driving conditions for a driver who isn't otherwise being a dick, so the threshold for prosecution/a fine on the motorway would be an actual measured 78mph.

106:

Nah, we're generally extremely functional...it's just a few bones of contention that pop up every year or so for a day.

Anyhow- you're assuming that an economic system exists to maximize the fulfilment of its members' needs and wants as a whole, and that the thing that mainly interferes with this is lack of information. You can have perfect transparency and still have impasse because the members' _desires_ are different.
To expand on your example- both parents might know the 3 year old is hungry...but they may disagree on who should feed it. Given a stubborn enough couple, the kid starves for a while until someone gives in (Or not. Cue the evening news- they've got a headline).

Group utility versus individual (or subgroup) desire, I guess.

107:

GATSO placement is dependent not so much on where people are breaking the speed limit most, but more on where they are having accidents most due to excessive speed.

Which is, when you look at it, the way you would want it to be.

Part of the thinking about raising the motorway limit is that they are, per vehicle-mile, much the safest places to be despite the way that on some of them most vehicles are travelling at above the current limit.

There are places where GATSOs aren't about accidents: where they're trying to encourage smooth traffic flow (chunks of the London area motorway network).

108:

It wasn't that long ago that the Greek army was planning to fight facing *north*, in which case a shit-ton of heavy metal would have been very useful (like the British army found out on the Metaxas Line in 1941). Well, they could have got rid of tanks faster. But the history of Balkan politics is not one to fill you with confidence that if there was a war with Turkey, the Bulgarians would sit it out and be a reliable left flank. In fact, history would suggest that's the absolute last thing a Greek army in Thrace fighting the Turks should expect and that they'd be fools to rely on such an assurance for one moment.

109:

@98: Matthew Seaman wroteI did once row in a Greek Naval Warship...

Nominative determinism? :-)

110:

In 1974, when things were looking decidedly touchy between Turkey and Greece, my father was on the staff of the British Embassy in Bulgaria (I got an early exposure to the reality of the Socialist Workers Paradise, and apparently by age 8 was quite handy at "spot the tail car").

IIRC, the Bulgarians quietly announced that they were going to mobilise their troops in the southern part of the country, just in case either Greece or Turkey decided to take a short-cut through Bulgaria in order to bypass the other side's defences; and then invited the various Embassies' Military Attaches to observe, so that the Bulgarian actions wouldn't be misinterpreted. After all, the invasion of a Warsaw Pact country by either one or two NATO members might be a cause for concern...

...our (very small - 60 pupils from >10 countries) school playground was fun, given that both Greek and Turkish kids were in attendance...

111:

They're appearing on overhead gantries on the M1 down Northamptonshire way, adding to those already in position around Birmingham. To add to the fun, they appear alongside variable speedlimit signs, suggesting that the cameras can be changed too...

112:

Oddly enough, in the UK I have the suspicion that, consciously or not, the gvt and their pals are setting us up for private police forces. Witness the damage to police (And court) capabilities in the swingeing cuts, and the maintenance of managerialism gone mad despite the politicians claiming targets have been abolished. See shopkeepers in Liverpool banding together to fund private security guards. Watch as every possible police function is outsourced to G4S and other ummmmmm, companies. (Other terms not used because of slander and libel considerations)

Moreover, by pushing for a national police college to which officers will have to pay fees to be a registered policeman; which organisation being under the control of ACPO will issue certificates of competence to anyone who passes their courses, allowing direct entry senior officers with no experience on the ground; they will effectively make it a very short step to a situation where companies would bid for local/ regional police services, the franchise being run by graduates of the new college who work for the private company, employing desperate ex-police who need a job, and newer non-professional graduates of said college.

Let me know if this sounds at all unlikely. I wish it did.

113:

It all sounds frighteningly plausible, I'm afraid. (I used to think the asset-stripping must surely have run its course by now, but I've come to realize that was naive of me.)

114:

Compare with the A14 between Huntingdon and Cambridge, where the damned things are average speed cameras. Cue everyone trying to do absolutely bang on 70 for mile after mile after mile, and getting upset when the person in front doesn't. Cue my satnav counting the whole route as a single speed camera zone, and hiding half the information I usually see, not to mention beeping at me if I drift up to 71 rather than 70.

I avoid that road. It really wants cruise control, and that's something I don't have.

Its main problem is that it is heavily congested, and the way to get the maximum possible throughput is to constrict everyone to doing the same speed. The problem is that that road is part of several major routes: (a) Kent and the Channel ports to anywhere in England north of Birmingham. (b) Southern East Anglia (including Felixstowe Port) to almost anywhere north of London. (c) East London to anywhere north of Cambridge and east of the M1. (d) North Wales, Scotland and Ireland to the European mainland.

115:
I think the large navy of relatively small, fast, short range warships actually makes a lot more sense for Greece than the huge armoured divisions. Both are very much mid-to-late Cold War forces rather than modern 21st century responses, but at least the navy makes sense in the context of local geopolitics.

Oddly enough, your first sentence seems to also apply to 5th century Greece . . . B.C., that is.

116:

Come now, you know well enough that there's our pensions (How have they gone with the compulsory farming out of pensions to private companies idea?), every possible facet of local and national government (Privatisation of the OS, British waterways, the NHS, the DVLA, post offices, royal mail, job centres etc etc) so that the ideal they appear to be aiming for is that every government function is done by a private company. We all know where that leads, don't we?

117:
If the family is the model for Communism, my opposition to it is firm, then . . .
My wife and I have gotten into screaming fights about who is supposed to do what on a given day . . .
Childhood family life also wouldn't be a socialist idyll- it was always clear that since my economic contribution to the family was basically zero, that while I was free to have and voice opinions on resource allocation and make persuasive cases, I had zero _authority_ about resource allocation.

Heh. If you disapprove of communism, family style, then you really won't like my family setup, which something along the lines of a benevolent tyranny. I make more money than the better half does, but every month I meekly hand over my paycheck in exchange for my weekly allowance of perhaps $20 and gas money. Oh, and a list of things to do of course, like digging out the leaves clogging the gutters this weekend.

This seems to be a common family model ;-)

118:

I forgot to make it more clear in the previous post - not all of those parts of the government have been privatised, but many have been or are under consideration to be privatised.

The key point for me is, is it a natural monopoly or essential service? E.g. electricity distribution, water and sewage are essential services and natural monopolies. As is the railway system. So too are courts, police and a National health service*

So anyway, the current system we have encourages corruption because these natural monopolies are formed into bite sized chunks for a small number of private companies to hold to ransom as they like. Although watchdogs and the like are put in place to try and make it work, ultimately they can be captured and neutered.
So to bring it back to the original post, in a country such as the UK people will put up with a certain amount of corruption as long as it doesn't get in their way, however the more obvious it is the more they'll strike back. Which if the corruption involves the gvt (local or national) will ultimtely involve the black market and not paying taxes.

So if they do privatise the police they might just end up with a poorly paid and performing system transferring public wealth to private hands just at the time that they need a well functioning public service that is on their side...

*A non-national health service isn't really a natural monopoly, although has some cost disadvantages compared to a national health service. But some people like to feel free-er and such a model does allow more spending on health, which when carefully shepherded by appropriate legislation, allows better outcomes. Otherwise you end up like the USA.

119:

Living in the Netherlands 13 years (as of next week), I've grown to like social democracy. It's basically fair. (And I'll miss it if it goes, which it will if the Dutch keep re-electing the governments they've had the last 10 years.)

But the "good" countries (NL included) and supranational treaty organizations increasingly smile on activities more commonly associated with gangsters--market manipulation, loan-sharking, protection rackets, even gun-running. This not going unnoticed.

(Mafia clans don't scale as well as limited-liability corporations do, and don't have the same access to local, state and (inter) national police forces. Which is why Las Vegas is now a family-friendly simulacrum.)

Every system can be fiddled, and it's reasonable to tolerate some fiddling when (1) stopping it costs more than it recoups and (2) it doesn't threaten the perception of its fairness overall. A functional society needs a bit slack. The Dutch government goes by this, though less so than before. The UK and various US states, on the other hand, spend millions, mostly on private contractors, to recoup thousands, while giving the biggest cheats a partial or full pass. This gets noticed too. (And when governments talk about hunting terrorists and their money while making use of "black" funds, guns of uncertain origin, and the services of nasty regimes to do so, that also gets noticed, usually later.)

Every society has System D types. As noted, obedience to the law correlates weakly with harshness or even certainty of enforcement. But the most law-abiding and tax-paying people tend to live under the most honest governments, with laws that aren't very harsh. Greeks living in honest countries tend to pay their taxes, funny that.

The greater the proportion of System D types, the less successful the society. Their presence on an international scale is a sign of a planetary society that just isn't coming together.

To attain a halfway decent planetary society it is necessary to save the global economy. It is not necessary to save global business as usual.

Which is the point of the Occupy movement.

120:

I am surprised Charlie didn't respond. Since he didn't, I will.

There are more reasons to worry about wealth inequity than I can ever possibly list. They are social, economic, and historic; they have to do with both general and individual welfare.

When 1% of the population owns or controls 90% of the wealth (money, businesses, property), that level of concentration means stagnation. It means a very small number of people get to decide the future for vast numbers.

The best thing for an economy is a rapid exchange of wealth. Currency moving between as many people as possible. When 90% of the wealth is concentrated with 1% of the population, that doesn't happen -- that concentrated wealth tends to stay there.

The result of this is that the extremes widen. And that has been very visible: the shrinking middle class in the US, resulting in incomes dropping everywhere but the top 3 or 4% -- and even that's shrinking, and it will soon be the top 1% that have increase incomes.

It's an utter disaster in the making, and the results will be violence, collapse, or both.

provided that I've got enough for what I need

The reason you should care what the 1% make is because they are, very literally, deciding whether you get enough for what you need. And they don't want you to.

121:

I am surprised Charlie didn't respond. Since he didn't, I will.

Because I missed the comment. (I'm a bit busy with other things right now.)

NB: Krugman calls it, here. And it's not even the top 1% who are the real winners; more like the top 0.1%.

122:

Ah, thanks; I must not be feeling well, since I didn't point out that it's an oligarchy, even though I know the word ;).

123:

Interesting tidbit — I never heard of that origin for 'système d' (which sounds sort of self-evident for a native French speaker, and doesn't exactly beg for an origins-type story). Do you have any reference material for further reading on the topic, by any chance ?

The non-bowdlerised version of 'systeme d' (demerde rather than debrouille) is the most-commonly understood, and could be fairly translated as jury rigging, ie make do with whatever's at hand, starting under adverse circumstances.
One has to be in it before they get to 'demerde' oneself (literally get yourself out of shit).

Debrouille, which means literally un-muddle/untangle also means manage/get by, but doesn't necessarily carry the subtext of "having to", and could apply equally well to 'cutting corners' or 'hacking' in the broadest sense.

124:

I also think his etymology is wrong. The French Army mobilisation plan, with the big push on the right into Lorraine, for 1914 was designated Plan XVII. The French Army mobilisation plan for 1939, with the Maginot line, the halt on the border, and the move forwards into Belgium at a later date with the far left wing reaching north to Breda, was termed internally the Dyle-Breda plan and abbreviated to Plan D.

Both of them were pretty dreadful and had the initial effect of getting several hundred thousand Frenchmen killed, but only the second actually ended up with the Germans in Paris.

126:

@ 114
The answer to that problem is, of course, to electrify Diss - Ely - Peterboro' - Nottingham, and re-open March-Spalding, for RAIL FREIGHT.
It'll all happen, in about 30 years, I reckon ....

bjacques @ 119
NO
It really is not the point of the "occupy" movement..
Who claim to be "anti-capitalist" and "Anti-corporations" (Which are two entirely separate and different things, incidentally.
THEN one sees these ill-educated idots, drinking "strabucks" coffee, and using Mac iBooks.
And they are anti-corporation in what way, precisely?
And, of course, they are selling copies of stupid wanker "socialist worker" - and claiming that they aren't "stalinist" and it will be different this time.
Not three brain cells to rub together.

I'm not actualy sure this so-called movement has GOT a point, any point.

127:

"best speed to set a limit at is the 90th percentile speed of what drivers actually use" Back in the mid 60's Texas made some new roads and put radar on them with no speed limits. They found that what most drivers drove was what the engineers would has made the speed limit. It could have been just habit.

128:

A couple of observations:

The Greek military - army, navy and air force - have lots of really expensive kit, and this dominates the military budget.

The arms trade is corrupt, through and through: someone's making a shedload of money from that, and not just in Greece. Those involuntarily-retired Generals are rich, as in powerful and capable of buying governments, as well as militarily-capable of taking over.

Tax. Nobody pays any tax in Greece. Seriously: nobody. Foreign corporations and the politically-inept make up the bulk of it, and nothing you can read about it will ring true: either because it's a flat out lie, a propaganda piece by someone with an agenda; or because it's written by someone who's been there and seen it first-hand, and it's so chaotically-corrupt and alien to everything we know is true and 'normal' that we instinctively reject it.

Seriously: nobody pays tax in Greece. And they might even be able to afford their jobs-for-the boys patronage state if someone, somewhere, actually did. Or at least, they could have budgetary cost control and sanity instead of this destructive 1980's IMF austerity that's making everything worse.

But I don't even know how they could *start* collecting taxes. Nobody pays. Nobody collects, except as a cash cow for their middle managers, who make fortune taking bribes to overturn these tax demands in a 'appeal' tribunal. Nobody acts as an efficient - or honest! - legal system to pursue the noncompliant. Their only hope is that the mafiosi takeover of the entire 'black' economy matures into an inescapable corruption that eventually codifies and institutionalises into a regular system of payment ...That becomes a tax base for the infrastructure and whatever gang becomes the de facto law and order militia.

Meanwhile... I think the talented youth have already left the country. Such as they are: Greece is heavily-dependant on expatriate labour in the technical professions, which points to serious problems in the education system. You'll see a lot more Russians than Greeks in London and New York, in engineering, mathematics and programming. More South Africans, too, now I come to think of it.

Actually, I haven't seen *any* Greek expatriates in the numerate professions, and nobody I know is hiring them. Plenty of Russians though... Yes, I know that this isn't the same as a systematic economic survey, but I don't think Greece has the human resources that helped Russia through the economic chaos of the 1990's.

I have to hope that low- and semi-skilled labour will provide remittances from 'gastarbeiters' to sustain the Greek economy... But surely we'd have seen that happening already: it's not as rich a country as (say) Poland or the West of Ireland were, twenty years ago, and the Polish and the Irish were on every building site in Britain when the poorer parts of their economies were doing rather better than the North of Greece.

So, er, all I can predict for Greece is lawlessness, despair, and dirty jobs that Mexicans would hesitate to do. And I'm trying to be optimistic.

129:

Implications of the Greek economy being 25% "System D" and leaving the Eurozone? Not being an economist, I can only guess. (And a cynical view is that economists also just guess.)

Short term, it means that Greek debt isn't really 150% of GDP or whatever, but much lower. So if much of it is just, say, a restaurant owner not paying taxes, they can keep going just fine.

Long term, though, 25% black market isn't sustainable. As pointed out above, this means that workers are being exploited, environmental impacts ignored, etc. Even if the restaurant owner is otherwise honest and doesn't want to poison their customers, who is keeping their suppliers honest if the tax system can't fund health inspectors?

Russia in the 1990s had an economic collapse, but enough natural resources to still make money. Greece could sell off islands to the wealthy. Or, more likely, antiquities. Think the Elgin Marbles on a grand scale. Maybe a Russian entrepeneur would like to buy the Parthenon?

The military will be a problem. Cutting back on military spending means cutting into the fortunes of various powerful people at a time of political disorder when the existing system appears to have failed. Egyptian style military oligarchy?

Starting a war is a traditional response to "unify the country" and divert attention from internal problems. There's always a danger of losing though, especially with a weak economy. I'd say Macedonia would look like an attractive target for intervention of some sort.

130:

The Teabagger movement was pre-fabbed over time by economic royalists and their PR people, complete with web pages. When Rick the Fox guy, called out for someone to do something, the web pages opened with the right kind of tall tales for all the right kinds of people.
The "occupy" movement started from 0.

131:

So the Tea party's better at preparation and organization, is what you're saying?

132:

Nile @ 128
So, you're saying that Greece is already a 100% systeme-D state?
btw ...
If no-one pays taxes, how does the military get paid for?

133:

The Tea Party is clearly better at preparation and organization. Having billionaire backers (the Koch brothers) planning everything doesn't hurt ...

134:

On the other hand...

http://www.pathfinderonline.co.uk/articles/item/697-festering-anger-nazi-war-crimes-and-the-£60bn-the-greeks-believe-the-germans-owe-them

particularly the last couple of lines.

(Apologies for the length of the link.)

135:

Interesting - That suggests that either my statement is correct, or that the speed limit could have been higher and the drivers just didn't realise that there was no limit. I don't know enough about Texan highway engineering and speed limits in the 1960s to say which though.

136:

Greg Tingey @ 128

Greece is an odd hybrid: you can be a contract programmer paying taxes (and the tax rates aren't actually unreasonable) from (say) Hays International rentageeks (unless you've been parachuted in by an iternational consultancy that's done a deal on counting your fees as offshore earnings) and you'll be the only person in the building paying taxes.

Everyone else will be employed through personal-service consultancies that pay the not-an-employee a salary a cent below the minimum taxation threshhold, and launder the remainder of their pay in laughably simple accountancy fictions. Local operations of foreign companies pay taxes - and this makes it difficult for them to hire locally - but I'm prepared to bet that at least one prominent American bank's office in Athens pays nothing, zip, nada.

But... That's not quite system D. It's ordinary-looking 1970-ish office people in a regular job. They just don't pay taxes. Oh, and contracts are a little different, especially payments, because you simply can't enforce a debt or breach-of-contract in court.

There's a *lot* more cash-in-hand work in construction, farming, and the casual labour segments of catering and tourism.

Actually, it's everywhere. Greece is a nation of small businesses, and small-business *practices* in medium-sized ones. This discourages business growth beyond 10 or so employees: ironically this might make the Greek econony more resilient in a recession, as micro-enterprises are often the engine of recovery... But very, very inefficient at the 'process' work that bigger companies are best at, and aren't really doing as much of in Greece as you would expect.

The good part of that irony is that there's enormous scope for gains in productivity - together with the beneficial effects of deregulation - but I worry that efficiency will start with an attack on overmanning - medium-to-large enterprises in Greece are bedevilled by 'Spanish practices' - which will be deeply unhelpful if there's already mass unemployment.

Also: benign deregulation is good for employment - this really is a state that interferes and has to be lubricated constantly with bribery - but the dark anarchy of Austrian-School deregulation promotes exploitation and reduces working people to near-destitute sweatshop labourers.

As for how they pay for all those shiny toys and tanks: they don't. Partly, this stuff's paid for by foreign aid; which is actually aid to Boeing, General Dynamics, Dassault and BAE from the host governments. And mostly, this stuff's paid for by borrowing: some of it on favourable terms underwritten by the manufacturers' host governments - there are all kinds of subsidies in the arms trade - and part of it is paid in cash and ends up added to the general stock of Greek government debt. Deficit financing, in other words.

137:

What I've read in a couple of places is that there are a lot of obsessives or less fully employed people who burn themselves out doing Tea party organising because they truly beliece (At least at first) in the cause. After a year or six months of running around organising they are burnt out and jaded and replaced by someone else. Or in other words, a lot of right wing types, as part of the whole self sufficiency I don't need the government type thing, are capable ot putting a lot of energy into something. Shame it's into a cause which actually hurts them.

138:


With some slight exceptions(*), that's certainly my experience in TX. Most people really don't act like they're aching to go 90 mph on a 70 mph interstate or other major road. 75, certainly; 80 maybe.

(*) There's the occasional weird dip to 60 where there's no obvious reason for it. OTOH, there are some stretches of 70 mph where that's obviously too fast, and traffic slows down on its own.

139:

Tax what’s hidden. It is estimated that America’s super-rich already sock away more than $100 billion a year in offshore tax havens. (from years ago)The super-rich use offshore tax havens to avoid paying what they owe in taxes. And businesses who have overseas subsidiary pass the money around till it goes into a hole and is never seen by the IRS. That's what IRS said. GORGE THE FIRST ordered the IRS not to waste time and money going after the rich. He said it was better to go after people without the money to fight.
We pay instead. They’re reneging on their duties as citizens. If it’s more important for someone to avoid paying what they owe in taxes than to continue being an American, then let them keep their money. And move out and not come back. Some are already trying to give up their American citizenship so they can come here safely and not be arrested.

140:

There are traffic cameras designed for catching speeders and red-light runners scattered around the US. They aren't very popular as they are usually operated by private for-profit contractors who get paid by the ticket.

On the topic of Greece and taxes it strikes me that most Greeks do in fact pay tax, it's just that it's collected by the very inefficient means of bribery.

141:

On the topic of Greece and taxes it strikes me that most Greeks do in fact pay tax, it's just that it's collected by the very inefficient means of bribery.

+1. Informal means of managing a society were replaced by formal ones for a reason. This is also why Brits and Swedes do not rely on backhanders and FOAF to deal with their respective administrations - the formal system works, and therefore there is very little reason to use the informal one unless your requirements are strange or you are barred from the formal one for some reason.

Systéme D is, as was pointed out above, what you do *once you're in the shit*. It's not an argument for getting yourself into the shit.

142:

@Greg Tingey 126:

Point taken. Actually half a point. The protesters probably don't care about saving the global economy, but the concrete demands that have arisen from the protests would go a long way to saving it.

The protests are actually quite focused compared to the usual leftist protests. Like the poor, Shitty White People, aka the SWP (h/t the Clash movie "Rude Boy") will always be with us. In the US, I've seen the same weedy types, the same boring black (or purple!) and white signs. They're tolerated but have no influence and everyone looks down on them.

The messages are indeed varied, but they boil down to:

- Reverse regulatory capture by the finance industry. Now.
- Stop the rewarding of large-scale failure and the overzealous punishment of individual failure.
- Stop the selling off of public goods to private actors, especially with a taxpayer-backed guarantee of profits for those private actors. Businesses lower costs by choosing their clients. Governments don't have that option.
- Stop bullshitting us about solving unemployment with further education we can only afford by mortgaging ourselves for life.

Which leaves the "hypocrisy" of protesters drinking Starbucks coffee and using Macbooks. Where have I heard that before?

Maybe here? or here? How about here?

That wheeze was old well before Home Sec Theresa May and MP Louise Mensch got hold of it. Macs and overpriced but decent coffee are part of the landscape. But nobody's mentioned that, for all the faults of Apple or Starbucks--and they are many--at least the former's computers actually work and don't also blow out the house mains or destroy the internet, and my drinking the latter's coffee doesn't result in my family being poisoned. Compare and contrast with the practice--still going of predatory lending and repackaging the resulting unstable debt into complex financial instruments. What could possibly go wrong with that?

(OMG, I just found this. Wingnuts are all over the Starbucks Xmas holiday mascot, the Nutcracker looking too much like a certain 400-years-dead Catholic plotter!)

143:

Are you trolling?

Seriously: nobody pays taxes in Greece? Nobody? Consider these three kinds of taxpayer, then.
First, consider all those state employees about whose salary the government is well-informed and able to gather tax at source. Second, there are business owners who do actually pay their taxes, after doing what most of the rest of the world's businessfolk do, namely engage in tax avoidance by hiring tax consultants (yes, tax-paying business owners do exist in Greece; my brother is one of them). And - third - you can be pretty sure that employees of large companies also pay taxes. Again, before he set up on his own, my brother paid plenty of taxes while working for a large multinational.
And don't forget that every single person in Greece also pays tax every time they make a purchase that generates a receipt.

Then you say that "the talented youth have already left the country. Such as they are." You go on to say that you "haven't seen *any* Greek expatriates in the numerate professions, and nobody I know is hiring them." Perhaps you're looking in the wrong places, perhaps you haven't been looking very hard; I don't know. But it seems quite a strange statement, and as it's so sweeping, it's easy to disprove with just one black swan example. Step 1) Go to the website of just about any decent UK university and look at the names of PhD students and faculty, including in the literate disciplines such as physical sciences or economics. We can probably agree that you're seeing a sample of reasonably talented people. You will find Greek-looking names. 2) Use a rough filter to remove the offspring of emigrants from your list by looking for the ones who studied in Greece. You could also listen out for the Greek accents when news outlets like the BBC ask UK-based analysts about various aspects of the news of the day.

I don't know why there are many more expats doing technical jobs in Greece than there are locals, assuming your statement is actually true. But it might have to do with stupid government policies relating to expats, or perhaps differences between what locals can earn on the Greek market and what they can earn by going overseas. Perhaps your explanation is even correct. Data, please.

Yes, Greece has really screwed things up and is having serious problems.
Yes, there has been a rather low level of taxes paid overall (causing, by the way, tax bills to be sent to independent businesses based on expected rather than declared earnings).
Yes, tax avoidance has been a national sport in Greece - just as in other countries (In Europe, I'm thinking particularly of Belgium).

But to imply that therefore all of Greece is a kind of pit of corruption, incompetence and poorly educated people is simply not cricket. You certainly have a right to be critical, even insulting, and to cast serious aspersions. But that is tied to a responsibility to back up what you're saying - and the more serious your allegations and sweeping the statements, the greater is your responsibility to do so.

Charlie, sorry if this is too off-topic, but I just couldn't let it go.

144:

The Tea Party is clearly better at preparation and organization. Having billionaire backers (the Koch brothers) planning everything doesn't hurt

And Art Pope in secretly running the R parting in North Carolina. Well not so secretly since he was "outed" by the New Yorker.

Sorry I don't buy either position. And neither does the definitely not R leaning local newspaper about Art Pope.

Any more than I believe George Soros is secrectly running the D party over here. A favorite theme of the hard core right.

145:

There is a bit of a difference between "I'm responsible of having elected people that were found to be crooks" and "I'm a crook".

But the popular narrative up north seems to be back to "lazy Mediterraneans cant be trusted cause they are inherently crooks, not like us". Which I have no doubt make them feel all happy and warm inside while not looking at the crooks at their banks.

146:

@128
"The arms trade is corrupt, through and through: someone's making a shedload of money from that, and not just in Greece."

To that point, I will shamelessly plug this book which was published only last week (disclosure: the author is a friend).

Regards
Luke

147:

> I wonder what a country dominated by
> the black/grey market would look
> like?

Possibly a lot like the Union of Soviet Socialist Republics.

The USSR was possibly unique in that it had two unofficial markets - the "on the left" barter system, that was used by the proletariat for everything from onions to road machinery, and the government's own black economy based on the gulags.

The figure I have for 1946 was that 30% of the Soviet economy was driven by prison labor, and that the percentage had been the same back in Tsarist times. I've found some later references, but they didn't name a definite percentage. Though Lenin had originally promised to shut down the gulags, apparently they were such a critical part of the economy the system was left in place.

The "barter" system was a little more extreme than in most places, as so much of production was kept off the books that even official government agencies were reduced to aquiring necessities via the black market.

148:

Stephanos, there's clearly a theme in the media portraying any country failing to "honour their debts" as a cesspit of unmitigate corruption. After all, people reading the news must do so with the comfort that this is something that always happens the others who are lazy, corrupt, profilgate, or all of the above. We don't want them to think it can happen to them, do we?

As for Greece, if they finally grow the balls needed to dump the Euro and default their debt, expect it to be still be called a basket case no matter how much they recover afterwards. After all, they still do so with Argentina after a whole decade of record growth.

149:

Doubly so when said "campaign" seems to be led by the Daily Wail and Daily Excess!

150:

Diego @148:

I read an article today claiming that according to a Protothema poll 80% of the Greek population want to remain in the Euro zone. I was more than just a little surprised, but OTOH I shouldn't have been, because the short term effects of "dumping the Euro" might be extremely unpleasant for them. Just imagine 800 000 (this the number I heard, I think) civil servants without income in a country with a population of just 11M.

That number needs to go down either way, but it would be a lot worse than the austerity measures if it just went bang in one go because without the aid (and by extension the Euro) they are BROKE and have been for a long time! I shout the "broke" because it appears to be a fact that some people here seem to be missing. A controlled phase out is impossible without help at this point, and help is not going to be forthcoming for a non-Euro country, it's as simple as that. The most important factor of propping a weak countries in the Eurozone is to keep the foreign exchange rate low (even with Greece it seems impossible to reach Euro-USD parity).

This can be a problem for a weaker country, because for them the exchange rate is artificially high, but much as I hate to say it beggars can't be choosers. As soon as they've cleaned up their act, which they're going to have to anyway, they are probably be better off opting out of the Euro. If I lived in the country, I'd much rather go with a whimper than with a bang.

151:

myself @150:
2nd Paragraph: "a weak country" of course, and more importantly I forgot to say after "exchange rate low" was "without breaking internal markets"

152:

No erald, in retrospective you'd prefer to go with a bang, believe me. Been there, done that, got the t-shirt.

In 1999, two years into the recession that started in 1997, Argentina voted for president and chosen someone who promised the currency peg with the USD won't be dropped. That would be more or less analogous to the situation now Greece is, so the similarities aren't surprising. Unfortunately, you can't count on the population to really understand the implications of that, specially when there's an active interest in them not understanding. Two years later the situation was untenable and Argentina collapsed.

You said that the government won't be able to pay its civil servants? Wrong. There's a thing called a printing press. Go use it to print some money. Inflation? Sure, but when you have depresion-level unemployement it can only go so far. Your population sinks into poverty, yes, but some of them (many, perhaps) took their cash out of the bank before the crash and now have the money to start a new bussiness. That, plus a devaluation that restricts your imports and increases your exports jump-starts your economy. It may take some time for your economy to surpass your pre-crisis levels but people are normally happier when poor-but-progressing than while rich-but-sinking.

The process

153:

Diego @152:"No erald, in retrospective you'd prefer to go with a bang, believe me. Been there, done that, got the t-shirt."

I'll go with that, always having preferred experience over assumptions.

But I think Greece is in a slightly different position: They haven't just tied themselves to the mast, they are part of the ship. And believe me, a part that most of the people that live in wealthy but insignificant Euro countries would love to see go, because they only see it as a cost factor.

I think it's a little more difficult than that: The Euro will survive if Greece goes, it will survive if Spain goes, it will even survive if Italy goes, although the last one will cause more than a few ripples.

From a very selfish perspective: The Euro will go through the roof. It will be very hard indeed to export to growing economies.

From their (the Greek population's) perspective: They are not just a bit overextended, like a non-Euro country could be. They are in well over their heads, and it's not just something that can be remedied in a few months, even with a default. My guess is there would be a decade of hardship before the Greek state would be trusted with a couple of billion Euros again.

There's something to be said economically for a hard reboot, but where would that leave their population? You know, not just civil servant's pay, but also pensions, public health, drinking water(! not super abundant), shipping lines (6000 islands !!eleventy1!), Turkey, etc ...

I think we've been making an embarrassing show of it, but Europeans wouldn't want the Greeks to have to take that road just yet. If they can't get a grip on it within the next ten years, yes I believe we will drop them. I hope no sooner than that.

If they want out themselves, they always have this option (hasn't anyone told that to the Brits, I wonder, seeing as how painful it seems to be for them to be in the EU).

154:

Kicking Greece some more. I think it was Freeman Dyson who spent a year there. He gave a address at the end and said there was no real science education going on. Students memorized the dark print in texts and were tested on them. But they knew nothing about how they worked together. And could not think. But it was done to them by past leaders.
Why do leaders so love the Austrian school of economics that has not worked in the real word as well as Keynes has. They say cut back, save, fire people and it will get better with out hurting the rich's banks. Oh Hoover tried that before they called it Austrian, so have others. Keynes way worked better. All the time, every time!

155:

"I think it was Freeman Dyson who spent a year there." Thinking more, the style was more likely Richard Feynman. But I am not going to look this up this time.
Is every body sure that the people of Greece are not being made a scapegoat for what happened in many places, thanks to American phony AAA bank bonds? The top in Greece may have been worse.

156:

It was Feynman who said exactly that indeed, but that was in Brazil, not Greece.

157:

Keynes also passed one of the good tests of an economist, which was that he got rich due to his own efforts (trading in foreign currency, if I recall correctly). This contrasts with, oh, Marx, and with that group of modern Nobel winners whose investment firm went bankrupt a few years ago.

It is a fascinating question after all: why should we trust economists who are themselves no better than middle class, and that only due to tenure? You may detect a certain disgust with the Austrian and Chicago schools...

158:

You are right. Now I remember.
But he had some hard things to say about Greece. I think?

159:

> That may mean that they have to bite the bullet and crack down on that black economy, or they may end up in anarchy.

Given that there is currently rioting in the street and a failing economy, there's a good argument that anarchy might be an improvement. There are certainly enough anarchists around to make sure that the new anarchist Greece gets off to a good start.

160:

I dunno - the bankers are stealing all our money and the rich never pay any tax, so why should we?

If it's good enough for Philip Green and the top ten US corporations, it's bloody well good enough for me!

161:

System D is the planetary unregulated black market, concentrated in the developing world.

How about when 3D fabbers and related technology gets really good and cheap? Or when biotechnology instrumentation gets good and cheap enough that people start developing their own stem cell and gene therapies?

This is when system D will get really good.

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This page contains a single entry by Charlie Stross published on November 3, 2011 1:10 PM.

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