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Saturday, August 19, 2006


PASOK’s Legacy: A Lost Generation of Social Development

A strange thing happened to me on the way to my computer a few days ago. For some months now, I’ve been gathering material for an article on social mobility in the US and Europe, specifically, on the myth (yet another in an endless chain of fractured fairy tales) of allegedly greater American vertical social movement in relation to the reality in Europe. It would, more or less, follow the forensics of an article I wrote last year (see, “Whose Fear, Whose Rejection? A Response to David Brooks from an American Living in Europe,” September 8 and October 14, 2005): that is, it would compare respective data for the US and Europe from a series of recent studies on the salient aspects of social mobility and inclusion. To determine the lay of the land, I first tackled a survey by economists John Schmitt and Ben Zipperer entitled, Is the US a Good Model for Reducing Social Exclusion in Europe? (hereinafter also referred to as S&Z), published last month by the Center for Economic and Policy Research in Washington, DC. The advantage to this study (funded by the Rockefeller Foundation) as a “first cut” of comparative data was that, with the exception of a couple of categories, its statistical base was almost completely taken from the OECD, about as “objective” (and, in that sense, pro-American) a body as it is possible to have in these kinds of analyses (although there are no data from South Korea or Turkey, both OECD member-states). As I began going through the various material, however, it was not the US’s preeminent position in Western social disability that struck me; after all, I had expected that, and had it once again baldly confirmed. It was another country—which I had not been looking for but which unexpectedly kept popping up at or near the bottom of all kinds of categories of social development—that not only surprised me, but, frankly, even shocked me. I repeatedly came across Greece as a paradigm of social disinvestment. So, I quickly switched gears; rather than write a (much longer) piece on social exclusion in the US (a topic to which I will return in the future), I decided to focus this article on Greece and on what is in fact acid proof of the manifest failure of Greek “social democracy” (I will not insult the reader’s intelligence by using the word “socialism”) under PASOK.

Before I present the data from Schmitt and Zipperer’s report, however, I want to make clear that I not only share the skepticism regarding “lies, damn lies, and statistics,” but I urge it upon the reader. One of the reasons I don’t believe any numbers (on any subject) that issue from the current US government, for example, is because I know that the figures have been cooked every which way to the Sunday talk shows on which the Bush administration’s flacks will throw them out like candy in a kindergarten class. It’s Statistics 101: the most important backstory to a set of data is where they come from and why. The best data always come from widely based (that is, multiply monitored) and (relatively) disinterested bodies (OECD, UN, EU). Moreover, precisely because anybody can spin any set of “neutral” figures any which way, the most effective means to impose intellectual honesty and interpretive coherence on data is to ensure that they are strictly comparable (same category, same time frame, and, above all, same criteria) and—this is the point to Disraeli’s lies, damn lies, and statistics—not ripped out of (a, more often than not, ambiguous and even contradictory) context.

The data that follow are not only comparative but collected by an organization entrusted by its stakeholders to process the information objectively and with absolute intellectual detachment, regardless of the implications. Founded to administer Marshall Plan aid in Europe, the OECD today doesn’t merely group together the West’s top 30 economies. Its analytical and statistical resources are used specifically to scrutinize these economies (and, increasingly, many others as well, including those of China and Russia); as such, its diagnostic conclusions on the socioeconomic health of nations, as a whole and in specific areas, are universally considered incontestable. I say all this only because the data that follow on Greece are truly appalling in many ways, and there will be those who will try to deny—or, more probably, “reinterpret”—them in some form or other. That is a fool’s venture. These data are scandalous exactly because they are unimpeachable.

The numbers
The first thing to be said here is that there are certain data that the Greek government does not provide, for obvious reasons. Table 1 in S&Z concerns “household income inequality,” which is determined by what is called the Gini coefficient (named after the Italian statistician—and, interestingly enough, fascist theorist—Corrado Gini) and quantified as the Gini Index (the coefficient expressed as a percentage, that is, multiplied by 100). In “Whose Fear, Whose Rejection?,” I cited the CIA’s definition of the index. Here it is again:

This index measures the degree of inequality in the distribution of family income in a country. The index is calculated from the Lorenz curve, in which cumulative family income is plotted against the number of families arranged from the poorest to the richest….The more nearly equal a country’s income distribution…the lower its Gini index, e.g., a Scandinavian country with an index of 25. The more unequal a country’s income distribution…the higher its Gini index, e.g., a Sub-Saharan country with an index of 50. If income were distributed with perfect equality…the index would be zero; if income were distributed with perfect inequality…the index would be 100.

In S&Z’s table, only four countries have hyphens in their respective columns, indicating no information available: Iceland, New Zealand, Portugal, and Greece. Regarding Iceland, which, with a population of about 300,000, GDP per capita (in 2003) of $36,377 (Japan was at $33,713 and the US at $37,648), a cradle-to-grave social-security system, unemployment of just 1.3 (!) percent in May, and—for all those reasons—ranked number 2 last year in the Human Development Index (HDI) of the United Nations Development Program (UNDP), I don’t think social exclusion is an enormous problem. (Ironically, Iceland is currently “suffering” it’s worst economic “crisis” in years. Would that most countries suffered so; to quote the assessment earlier this month by Moody’s, which retained its Aaa rating for the country’s bonds, reports of the crisis were “exaggerated.”)

But Iceland is the exception that proves the rule. You don’t have to be a macroeconomist to know that when countries refuse to provide such fundamental data as the Gini coefficient and/or index have now become, they’re covering their backsides. New Zealand is, of course, notorious; it was there that a newly elected “Labour” government embarked in 1984 on what has subsequently been called—depending on the point of view—one of the most “radical,” “extreme,” or “brutal” neoliberal shreddings ever undertaken of a preexisting social-democratic state. (Georg Menz, a political economist at the University of London, has described it as “making Thatcher look timid.”) Within six years, unemployment almost tripled, reaching 11 percent, and the economy actually shrank by 1 percent (while, in the same period, total growth across the OECD countries rose by nearly 20 percent); within 10 years, 20 percent of New Zealand was living below the poverty line and UNICEF reported that the country had the third highest youth suicide rate in the world. A year earlier, a report by the Joseph Rowntree Foundation in the UK, Income and Wealth, found that the only comparably industrialized nation in which the gap between rich and poor had increased faster than in Thatcherite Britain in the previous decade and a half had been New Zealand. By 1999, the bottom 80 percent of New Zealand’s households had suffered a net reduction in their share of total national income, while the top 10 percent had increased their share by 15 percent and the top 5 percent saw an almost 25-percent increase in income (shades of Bush’s America). Tellingly, however, New Zealand’s ranking in the OECD fell, from ninth in 1970 to nineteenth almost 30 years later. (By 2004, it had fallen another couple of places, to number 21—just ahead of Greece.) So much for trickle-down globalization.

New Zealand is important because of the sheer perversity of its “left-wing” government during the Eighties. It anticipated by more than a decade the evolutionary adaptation of Old Thatcherism as it transmogrified into New Labour under Tony Blair’s pitiless tutelage. It is thus not merely a cautionary tale, but a representative one, veering only from the general direction of “progressive” politics in the West during the last quarter of a century in the extreme degree of its unapologetic deformation of social democracy into social Darwinism.

When Labour was elected in New Zealand in 1984, PASOK had already been in power for almost three years. A few months before Andreas Papandreou won the elections of October 1981, Francois Mitterand had led the French socialists to their greatest electoral triumph since the victory of Léon Blum and the Popular Front in 1936. At the time in Greece, that result was seen as an augury of the Greek left’s success; indeed, the slogan of the hour among PASOK’s partisans became “Ελλάδα, Γαλλία, Συμμαχία” (or, bereft of metrical rhyme, “Greece, France, Alliance”). And while it is true that, in the first couple of years at least, it seemed that Papandreou, and his party, had more in common with Mitterand, and his party, it is clear now that Greek “socialism” would ultimately follow an Antipodean course rather than a Gallic, or even broadly European, one.

As I said above, Greece doesn’t calculate a Gini coefficient to track income (broadly, social) inequality. (Neither does Portugal, another country marked by the rhetorical socialism of its recent past). The government also doesn’t compute the country’s poverty rate. It is possible to get a Gini Index for Greece, however, if one goes to the UNDP’s most recent Human Development Index. The figure is 35.4, which means that the coefficient is 0.35. On the basis of the rest of the data presented by S&Z in Table 1, that puts Greece in the very bottom rank of Western social inequality, just below Portugal (whose Gini coefficient of 0.38 I also took from the HDI) and tied with the UK for the worst records in the European Union, and behind only the US and Mexico for worst of all (the latter at a breathtaking 0.49). Interestingly enough (but unsurprising), the four formerly communist societies in the survey (the Czech republic, Hungary, Poland, and Slovakia) all had lower income inequality than Greece.

Sadly, this massive social failure is verified by another set of data. In S&Z’s Table 11, “Income mobility 1993-1995,” which measures “percent of low-income families exiting low-income status each year,” Greece’s percentage of 38.8 was the lowest of all 15 pre-enlargement EU member-states, with the exception, again, of Portugal (with 37 percent). Admittedly, this table has many gaps (as well as, obviously, the problem of data that are roughly a decade old). The gaps, however, primarily concern the former communist states and, expectedly, the Nordic nations. In regard to the latter, I may be naïve, but, somehow, I can’t imagine that societies such as those of Finland, Norway, Sweden, and, yes, Iceland would be less socially mobile than Portugal or Greece, especially when the data do show Nordic Denmark having the highest social mobility, with an extraordinary 60.4 percent of Danes exiting low-income status annually from 1993 to 1995.

More to the point for Greece, what is particularly striking in these data is the disparity between its own social stratification and those much more dynamic western European societies that, just a generation ago, were generally considered to be as—or even more—underdeveloped. Spain’s mobility from lower to higher incomes is an impressive 49.6 percent, while Ireland’s is a jaw-dropping 54.6 (Celtic Tiger, indeed). But even Italy, despite the last three decades of civil (and, for many years, armed) struggle, massive institutional corruption, secessionist movements, and Silvio Berlusconi—all of which have taken an enormous cumulative toll on Italian social order (and progress)—is marginally more mobile, with 40.6 percent of Italians moving out of low incomes annually.

The data, however, become even uglier as they become more specific. Table 10 of S&Z concerns employment (as of 2004). At 10.4 percent, Greece has the fourth worst unemployment rate of the 28 OECD countries, with Spain at 11 percent, and Slovakia and Poland at truly staggering levels of 18.2 percent and 19.3 percent, respectively. The devastation caused by “structural adjustment” in eastern Europe after communism’s collapse is most evident in the employment data; simply put, the four formerly communist societies are employment wastelands, consistently registering the worst figures in most OECD categories. However, if we exempt these obviously not-strictly-comparable countries from the list, Greece suddenly becomes the consistent occupant—or co-habitant—of the cellar in every employment measure. For example, Greece is second to last (59.6 percent) in employment-to-population rate, followed only by Italy, at 57.4 percent (even Mexico has a marginally larger segment of population, 60.8 percent, working.) Greece is also last in jobs for females and youth (15-to-24-year-olds), with figures of 16 and 26.5 percent unemployment, respectively. But Greece is in the top tier of countries with low levels of unemployment for the less educated, coming in ninth with 6.6 percent. The problem here, of course, is that the last thing a modern economy, and society, needs is jobs that require the least skills and, therefore, the least remuneration and social development (or “value added,” as they say in business).

The issue of skill sets is underlined by related data. Again, removing formerly communist Europe from consideration leaves Greece third from the bottom in the category of 20-to-24-year-olds not in education and not employed, with a depressing 22 percent of young people in that category. Only Italy (24.3 percent) and Mexico (26.6 percent) register worse figures. It is noteworthy that the corresponding figure for Ireland, 10.8 percent, is less than half of Greece’s; even Portugal comes in at only 12 percent for this critical segment of the population. Furthermore, at the top range of twenty-somethings (25-to-29-year-olds) who are neither in education nor employment, Greece has an even worse record than Italy (25.2 to 24.8 percent, respectively) and is only “outdone” by Mexico, with 30.6 percent.

And what does all of this youth dysfunction entail for a society as a whole? S&V’s Table 4 provides the shocking answer. In the category, “Variation in mathematics performance among 15-year-olds, 2003,” which tabulates the results of an international standardized test in math, the land that invented the word “mathematics” came in second to last after Mexico in all three categories of grading: tenth percentile, mean, and ninetieth percentile. Just to take the third group, with the best results, Greece scored 566, ahead of Mexico’s 497. The top score was Belgium’s 664, virtually 100 points higher than Greece, followed by Japan’s 660 and the Netherlands’ 657. As to why Greek schoolchildren are so behind in math, another series of data answers that question.

S&Z’s Table 6 measures “Average annual educational expenditures as share of GDP” (2002). The ranking is gruesome: Greece’s 2.7 percent is dead last in total (public and private) spending for primary and secondary education, even behind the formerly communist countries and Mexico (which, at 4.1 percent, actually spends 50 percent more of its GDP on its schoolchildren than Greeks do). Of course, when it comes to the tertiary level, Greece’s 1.2 percent of public spending is surpassed only by Switzerland (1.4 percent) and—no surprise here—the Nordic countries (Norway, 1.4; Sweden, 1.6; Finland, 1.7; and Denmark, 1.9). But that’s exactly the point—and Greece’s enormous educational (and social) problem: because the rest of the developed world spends so much more money on primary and secondary education, it need not spend so much on the highest level, as the necessary preparatory work for university education has already been done. But there’s another issue here. When measured by actual per-student expenditures in US dollars (at purchasing power parity [PPP] rates of exchange), Greece’s $4,731 for each university student is, again, dead last. In addition, Greek expenditures of $3,803 per primary-school pupil and $4,058 per secondary-school student are the lowest among Western countries, with the by-now standard exception of the formerly communist ones and Mexico. Just as an example, even Portugal spends $4,940 for each primary-school pupil and a substantial $6,921 for each of its secondary-school students.

Finally, we come to a fundamental element of social inclusion and security, which, unhappily, once again relegates Greece to the margins of progressive (I am tempted to say civilized) society. According to Schmitt and Zipperer’s report, Greece is tied with Switzerland (!) and second only to the US for the percentage of GDP (4.8) spent on private healthcare. Moreover, the 5.1 percent of GDP that accounts for public spending on healthcare is tied with Austria for being third from the bottom of OECD countries, only above Poland’s 4.5 percent and, predictably, Mexico’s truly scandalous 2.9 percent.

With the exception of the four-year Koskotas- and Dêmêtra-determined interregnum beginning in 1989 and leading directly into the Mitsotakis government defeated in 1993, PASOK ruled Greece from 1981 until 2004. That’s a long time, essentially a generation. During that period, PASOK won five separate elections. It is impossible, therefore, not to conclude that if the social structure of Greece in 2006 is unusually exclusionary and regressive by Western standards, much, if not all, of the fault must inevitably fall on the party that governed the country for most of the preceding quarter of a century.

There’s no reason to belabor the obvious. I will only stress four points in closing for ongoing reflection.

1. Greece is a tiny, European country of 11 million. It is one thing, in other words, for a South American nation with a population ten times that of Greece, such as Mexico (whose 70-year, one-party rule, furthermore, was only ended in 2000 by the conservative Vicente Fox) to suffer structural social inequality. It is quite another for contemporary Greece to follow the same downward decline (if not yet equal terminal descent). It is also confounding (to say the least) that Greece should have almost the same rate of social exclusion as the US at a time in which Greece was governed by a rhetorically Marxian socialism, while the US was at the mercy of a bipartisan neoliberalism, some of whose most unforgiving acts of social cleansing, such as “welfare reform,” were perpetrated by Democrats. So, while the Megaro Maximou was inhabited by Andreas Papandreou and Kôstas Sêmitês during the time that Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush were in the White House, the difference in elemental social policy was nugatory.

2. It is incredible that with a labor force of a mere 4.86 million (according to the Hellenic Center for Development), 25 years of “socialist” government could not add the roughly 500,000 jobs needed to wipe out unemployment entirely. This is especially bizarre given that, during this time, Greece (fortunately) welcomed about one million immigrants to the country. Have immigrants “stolen” Greek jobs? In some cases, undoubtedly, but—in any fundamental, qualitative sense—hardly. The truth is, Greece’s governments have not been able to foster the economic or social climate for creating jobs of long-term value, either to the jobholder or the society at large. This, of course, is a critical reason for the multiple debility of current labor policy in Greece, including the obscenely high rate of both unemployment and income immobility, as well as the inexcusably low ratio of population-to-employment. (On the latter issue, it is mind-boggling that Mexico has a larger part of its 107 million people working than Greece has of its 11 million people!)

And just to anticipate the self-pitying lament that Greece’s “small” size does not allow for big ambitions (admittedly a counter-intuitive objection for Greeks given their enormous egos, both individually and collectively), the obvious refutation of this patent nonsense has been staring the world in the face for quite a few years now. During the last three decades of EU membership, Ireland—once a Western archetype of national immiseration, irremediable social cleavages, and cultural reaction—took advantage of its tiny but therefore unusually manageable economic universe and transformed it into a “competitive advantage” (to echo the business world again). Indeed, while PASOK was demolishing any hope of a modern European economy in Greece (that is, one based on widespread distribution of opportunity and, so, wealth), Ireland roared ahead to become an economic powerhouse that now, according to the most recent IMF report (April 2006), produces the fourth highest GDP per capita in the world, just behind, in ascending order, the US, Norway, and Luxembourg. (For anybody interested, Greece is thirtieth in the word, just ahead of Slovakia and right behind…the Netherlands Antilles!)

3. In Greece, however, one can always rest assured that the right is even stupider than the left. Consequently, for example, we see playing out before us at the moment the issue of the privatization of the country’s higher education, or, more precisely, the entry into the educational “market” (the terms used betray the idiocy of the “debate”) of private institutions—as if that is the major problem facing Greek higher education today, let alone education as a whole. It apparently hasn’t dawned on anyone that private secondary education by the bucketfuls hasn’t been particularly helpful when it comes to math scores—although it’s consistently served its basic purpose in Greece (as in most of the world), which, of course, is social advantage. In the event, this whole spectacle of fly-by-night American and British “universities” (degree mills is more like it) operating in Greece would be hysterical were it not so tragic for the consequences it will bring in its wake. Any modern society that spends as little as Greece does on primary and secondary education has a collective death wish. Nobody has yet explained how “private” university education is going to undo the damage resulting from the fact that Greece spends (at PPP exchange rates) $3,803 per pupil in primary school, while, just to give some examples, Germany spends $4,537, Spain $4,592, Portugal $4,940, France $5,033, and Denmark $7,727. And why will more “choice” (another moronic buzzword) in higher education matter if the resources in secondary education are so limited that the student is ill prepared in any case for viable, and substantive, university instruction? (Greek spending per student in secondary school is $4,058, as opposed to $6,010 for Spain, $6,921 for Portugal, $7,025 for Germany, $8,003 for Denmark, and $8,472 for France.) There are a multitude of problems with higher education in Greece (as with education generally), and there is a significant role for private capital in university education—including public education—but the totally disorienting disputes raging today are just a continuation of the country’s decades-old educational “wars” that have done so much to poison the educational environment and, more important, the education of Greek youth.

4. Finally, I will end on a personal note. Recently, I had a medical emergency in Greece, which, fortunately, ended up quite well (and with me very impressed by the proficiency and sheer abilities of Greek doctors). I was lucky, however, in the sense that when things initially took a very bad turn at the local hospital in which I found myself in Karystos, a friend immediately got on her cellphone and called her brother-in-law, who just happened to be chief of a major unit in one of the best private hospitals in Athens (i.e., the country). Although I was in pretty serious pain, my wife and our friends managed to get me on a ferryboat, which was met by a taxi in Rafina, which got me to the hospital, near the Olympic Stadium. Five days, a battery of tests, and a pretty major intervention later, I left, fit as a fiddle. All’s well that ends well—except for one thing.

If our friend (and her partner) hadn’t been there, and if her brother-in-law wasn’t a senior physician at the only hospital in Greece affiliated with Harvard Medical International, the results might have been decidedly different, and infinitely worse. Frankly, I’d rather not think about it. Suffice it to say that when my wife rushed me to the local “hospital” in Karystos, I was told by the supervising doctor that the x-ray machine was not operable (because there was nobody to operate it), an ambulance could not be spared to take me to another hospital on the mainland (although it wasn’t apparent why on that very slow Sunday), and that, generally—and with a tone of increasing exasperation—there was nothing anyone could do for me. Luckily, a young, long-haired intern, doing his agrôtiko (rural service)—to whom I will be forever grateful—had immediately put me on an IV and administered the initial injections of painkillers, muscle relaxants, and antibiotics. Even more luckily, I had my wife, our friends, and—this is where the privatization of primary Greek social services has led—my American Express card. PASOK’s partisans never stop boasting about the radical social difference their party’s 20-plus years in power has made to the Greek people. They’re right about that. As my wife and I were leaving that impressive private medical center on Kêfisias Avenue, near the Olympic Stadium, on the day I signed out, having just put the entire tab on my Gold Card, I could have sworn I was back in the States.

Peter Pappas is co-founder of
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