Thursday, April 10, 2014

Gloomy about Europe

Borrowing costs may have come down across Europe – even in Greece – but the underlying economic situation in many euro zone countries is still grim. And it may well be that the political consequences are only just starting to emerge.

In a recent piece in the Financial Times Gideon Rachman suggests that the euro crisis hasn't gone away: it has simply moved from the periphery to the core.

Italy, for example, has lost 25% of its industrial capacity since 2008, and the real level of unemployment is about 15%. The country's ratio of debt to GDP is more than 130%. France too has double-digit unemployment and the national debt is rising towards 100% of GDP.

Tension between European Central Bank president Mario Draghi and the German economic establishment including finance minister Wolfgang Schäuble seems to be increasing. And Rachman fears that Europe is very vulnerable to an external shock – such as higher energy prices as a result of any standoff with Russia over Ukraine.

Europe's fragile economy is in danger of being tipped into a deep recession. "And," writes Rachman, "a return to deep recession would favour the radical fringes in Europe."

Anyone who has witnessed Marine Le Pen's unequivocal and outspoken but brilliantly controlled television interview performances will be only too aware of the dangers.

But though she has made the Front National far more respectable than it was under her father and has achieved impressive electoral successes (such as in recent mayoral elections) with the prospect of more to come, she has not moved her party into the political – and certainly not into the economic – mainstream. She appeals directly (and effectively) to the French people and scorns the institutional status quo. And her protectionist economic policies are quite at odds with the economic thinking of both the centre left and the centre right.

The situation in other European countries, of course, is different but groups supporting policies similar to those of the FN are now a common feature of the political landscape.

In Asia, by contrast, despite rising nationalism and real threats to the continuing growth of trade and prosperity, bilateral free trade deals and other new arrangements to facilitate international trade and financial transactions are somehow continuing to happen. (Deals between Australia and Japan and Australia and South Korea have been finalized in recent days, for example, and a suite of new arrangements between Australia and China is expected to be concluded this year.)

Despite problems in some regions – like poor air or water quality, or food contamination – much of East Asia (and South and South-East Asia and Australasia) continues to benefit from strong levels of economic activity, with most countries still firmly committed to further lowering barriers to increased trade and investment.

Meanwhile Europe, driven by long-term historical, economic and demographic trends as well as more contingent cultural factors, is moving slowly (but apparently inexorably) to the periphery of global politics and trade. It doesn't help that, under an ineffective President and an increasingly dysfunctional political system, the United States seems to be drifting into a long, drawn-out and perhaps inevitable decline.

Such prognostications, I know, are not worth much. But as more people come to see things in this way – and they will if nothing happens to suddenly render this narrative implausible – these expectations will affect behaviour, feeding and consolidating deep, underlying economic and social trends. Even now, many Asian cities (like Singapore, for example) are booming and attracting some of Europe's and America's best talent.

I don't know that it makes sense to talk about Europe as a single entity. It has always been a patchwork of nations and regions with very different cultures and levels of prosperity. And – despite attempts over recent decades to create a more unified and homogeneous union – it remains something of a patchwork, more interdependent, certainly, but also more divided in new and complex ways.

Some regions, no doubt, will prosper; others will languish, relatively speaking. Given the overall economic situation, however, the best one can hope for, I think, is that the countries of Europe will maintain social harmony and hold at least to the general levels of prosperity which currently exist.

This would not be so bad. But such an outcome is far from guaranteed.

Wednesday, April 2, 2014

A path not taken – twice

Reminiscing is a dubious business, sometimes indicative of a failing life, a fading brain (or both).

In fact, I have sometimes wondered whether Marcel Proust suffered from premature aging of his brain, as the past typically looms largest for dementia sufferers as old memories rise again eclipsing more recent and shallower ones. If he was in the early stages of dementia, he certainly made good use of his affliction.

For myself, I look to the past by and large only to try to make sense of the present, strongly believing that people (and organizations and societies) can only be properly understood when seen in the light of their development and history.

So for the individual, say, dwelling on past experiences or decisions need not be an entirely futile exercise and may even provide a better understanding of oneself and what it is one is really looking for (if indeed one is looking for anything at all).

In this regard, mistakes and bad decisions are particularly worth scrutinizing. Though what is lost is lost, critical scrutiny of past errors makes it less likely that similar patterns of behaviour will be repeated. (This is the essence of human intelligence, as I see it. Forget about cleverness.)

Though I'm skeptical about history as a discipline and the stories that historians tell, a sense of history gleaned from reading contemporary sources is undoubtedly valuable in understanding why things are as they are. Likewise, having a sense of an organization's history is a necessary prerequisite to understanding its culture. Learning from one's personal (and family) history is also possible, so long as one is able to remain sufficiently detached.


I've been thinking about the medical profession and doctors lately because I have had some recent dealings with them (concerning some minor but nagging symptoms which were bothering me*).

If I have regrets about paths not taken, not having taken a medical degree is not one of them. [A careful reader will be justifiably suspicious of the triple negative here. Does it indicate subconscious rationalization, a mind playing tricks on itself, I wonder?]

I tell myself that practising medicine would only have exacerbated my hypochondriacal propensities, because if one is constantly dealing with the health problems of others it is virtually impossible not to see potential parallels with the operations of one's own body.

And – have you noticed? – doctors seem all too often to die before their time. Statistics I have seen support this observation, and I think there is little doubt that the stress of dealing constantly with disease and death and being responsible day in, day out for making crucial decisions and giving advice to patients is largely the cause. (Also, easy access to benignantly lethal drugs has contributed to a relatively high suicide rate amongst doctors, I believe.)

Interestingly, two (at least) of my favorite writers were medically trained – William Somerset Maugham, whose early literary success allowed him to forego a medical career (and live to a grand age); and Anton Chekhov, who did practice (and died young). Another notable literary doctor was Céline (whom I haven't got around to reading).

My father had had thoughts of going to medical school. His mother was very keen on the idea (as mothers all too often are**).

At that time you needed a foreign language to get in, but his attempt at mastering French over a summer break with the aid of a linguistically-inclined college friend ended in failure.

Though he maintained a strong interest in science and medicine and (especially) genetics throughout his life, most of his reading – and he was a voracious reader*** – was non-scientific: history and (mid-20th-century) fiction.

He also maintained an exaggerated respect for the French language which he was very keen for me to keep up in high school.

He meant well but he was ineffective in steering his children in sensible directions, partly because he was increasingly out of touch with them and partly because he was out of touch with the times in which he lived. He remained only vaguely cognizant of the radical social and cultural changes that had occurred in the course of the four decades which separated his own high school years from those of his eldest child.


* The symptoms had nothing to do with my heart, but my general practitioner heard a murmur (which I have had from childhood and which has never caused problems) and he wanted it checked out. So I was booked in to have an echocardiogram. I was expecting something easy and quick like an ECG, and was surprised not only at how long it took but also at the physicality of it: all that poking and prodding and breathing out and holding one's breath and so on. To make matters worse, a couple of times during this process a terrible sloshing and gurgling noise – quite chaotic-sounding, actually – became briefly and alarmingly audible. I referred to this as I was getting dressed and the doctor was tapping away on the computer, trying to finish off whatever she had to finish off regarding my test. She said that that noise still bothered her and she was only now, after a number of years, starting to get used to it. I took some comfort in her remarks, as nervous airline passengers sometimes take comfort in the reactions – or non-reactions – of flight attendants to sudden turbulence or strange bumps or noises. Clearly my chaotic gurglings were not dramatically different from anyone else's...

** Jewish mothers especially? I rarely remember jokes; I tell them badly so what's the point? This one stuck however... From the shore, a Jewish mother sees her adult son in serious trouble in the water. "Help! Help!" she cries. "My son (the doctor) is drowning!"

*** Before there were any children, my parents went to a beach cottage together for a holiday. After they arrived, my father immediately got out a pile of books and settled into a comfortable chair. (Needless to say, this didn't do my mother's confidence any good. She was very young and naïve and starting to wonder about this time what she had got herself into.)