Wednesday, December 10, 2008


Are the Greek riots at least partly a reaction to economic issues? I have no idea, but they might plausibly be. In a number of countries around the world - certainly the US and UK, but in the last five years or so, even in solidly social-democratic countries in Europe - there has been a massive transfer of wealth from the lower and middle strata of society to the top. This has led to the rather remarkable spectacle of median wages remaining stagnant (or even falling) while productivity increased. Meanwhile, in China, one way of looking at what's happened is that only some of gains from their huge leap in productivity have found their way to workers, the rest having being used to prop up the US and help pay for ridiculous financial shenanigans in the West.

To be clear: I'm not saying there was a coherent global conspriacy, only that there was a prevailing economic ideology, unfounded in theory or empirical evidence, which favoured some people, who therefore both believed in it, and sought to spread its influence.

In any case, the net result of all this is that the amazing gains brought about by (i) advancing technology (often underpinned by publicly funded research and carried out by poorly paid scientists) and (ii) hard work on the part of ordinary people all over the world flowed disproportionately to a handful of businesspeople (perhaps we should call them rent-seekers, or even parasites), who contributed little to (i) or (ii).

For a whole host of reasons people didn't see the extent to which they were being ripped off. However, now that the years of looting are taking a more obvious toll, people are not happy.

I would therefore not be surprised (very sad, but not surprised) if in the next few months and years we see more unrest, in even less obvious places than Greece, perhaps in the UK, Germany or even China.

Will things change? I think probably not very much. What I've called The Looting simply isn't understood widely enough to be a political issue. The crisis has already been carefully spun to sound like an act of Nature, and people are bracing themselves for hard times. The parasites remain very close to government on both sides of the Atlantic, and it is by no means clear that the crisis has taught them anything, dampened their hubris or reduced their political clout.

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