Running Out of Options, Portugal Turns Right
Can voters escape a crushing legacy of debt and bureaucracy?
June 23, 2011 - 12:00 am
In Portugal, this year’s elections mark the beleaguered country’s most significant turn to the right since the seventies. Of course, the right is not exactly the same as the right in the U.S., but it is the rightward-most option available. In some respects, the Partido Social Democrata can sound almost libertarian.
Their work is cut out for them. In Portugal, a different understanding of the state and its relationship with the people prevails than that enshrined in the U.S. Constitution. In Portugal, the idea that the government is at the mercy of the governed is, if not heresy, occasion for the open-mouthed incomprehension usually reserved for the remarks of an eccentric aunt or grandmother.
Yet, Portugal is in a predicament similar to America’s. Both countries have too many commitments and not enough money to cover them.
This is not new in Portugal — a country that started out profoundly indebted, having promised the pope some fantastical amount of gold in exchange for the recognition of its independence from one of the lands that eventually united to become Spain.
Portugal has played the game of going heavily into debt only to inflate it away by running the printing presses day and night. This was both permissible and negligible: permissible because its currency was its own to do with as it pleased, and negligible because it was a very small country to whom other, bigger countries, could repeatedly lend (relatively) great amounts of money — and because most people didn’t have their wealth in any form but in inherited land or gold.
Because the debts Portugal inflated away were small by international standards, they were roughly the equivalent of foreigners such as Americans “supporting” a child in a third world country at $20 a month. It is no great amount to us, and it makes a huge difference to the child.
But then Portugal became one of the European Union countries.
While giving all your power to unelected and unaccountable leaders is one of those ideas so profoundly stupid that only the very well educated and conventionally intelligent could believe in it, many accepted the root idea that all which stood between Portugal and competitiveness was its lack of size. If Portugal joined with the other countries of Europe, all of Europe would show America a thing or two.
Somehow this has failed to materialize, and no one mentions it anymore — speaking wistfully instead of the day when China will replace the U.S. (as if the Chinese would indulge Europe as the Americans have done!). And Portugal is torn between breaking away from the EU to fall into its old but comfortable habits and reckoning with the possibility that the rest of the world might opt against keeping the loans coming.
There have been several showdowns. A steadfast refusal to pass a bloated budget finally led to the fall of government. Teachers have had to take a cut in benefits despite their strenuous protests, and yet social security payments have gone up. Voters must choose either bread and circus or austerity.
Here is what they face: a “new left” under Prime Minister Jose Socrates, slick and polished and full of its own wisdom which consists, in the end, of practicing crony capitalism in a more suave way than its predecessors; a right-leaning coalition torn between privatization and mercantilism; and a hodgepodge of unreconstructed radicals vowing to “increase production and renegotiate the debt.” How is Portugal to increase production in a country where the top tax rate is more than 50%? Where unemployment is a way of life, particularly for the young? I suspect like all bureaucrats seeking to dictate economic change from above, they would prescribe a five-year plan, calling for a steel furnace in every backyard.
So the success of the rightward coalition in the new elections was bittersweet. Bittersweet because PSD did not win enough of a majority to rule alone and must instead ally with the Centro Democratic Social/Partido Popular, which is definitely the “rightward most” party in Portugal, at least on the axis of protectionism. It wishes for a kinder, gentler government, not necessarily a smaller one — a government that encourages “traditional ways of life” and takes a benevolent view of economic protectionism.
The word “compromise” was used so much in the victory speech by the party leader that I was sure the speaker must be a McCain on his mother’s side. On the other hand, there remained odd grace notes, particularly for Portugal. The victors want to shrink government and call a constitutional convention to remove the dread words “Portugal is a republic on the way to socialism” (among others).
Alas, still left unaddressed are the unavoidable facts, so unavoidable that Portuguese might be no more aware of them than a fish is of water: social commitments are unsustainable; cradle to grave social security cannot and will not work in a country where borders are effectively open and the native population is aging and failing to adequately reproduce; it is impossible to become rich with one month guaranteed paid vacation for all and untold paid “leaves” for various reasons; it is impossible to be the most productive country of Europe when one has the most holidays of any European country.
Unspoken also is the staggering cost of bureaucracy in Portugal. Part of this is because Portugal is a country where when looking for work one must keep in mind that “he without a godfather dies in jail” — that is, he without connections will get nowhere. The idea of restraining government growth has never really occurred to anyone. In fact, government is where you find a job for that unemployable youth or your ne’er-do-well cousin, by talking to “some guy I know.”
I seem to remember hearing in school that the Portuguese chose to adopt French-style bureaucracy. The idea seems staggeringly unlikely, but people do all sorts of stupid things, particularly when those people are very educated and theoretically smart. For the simplest things — say, re-booking a flight — one must get form B with which to obtain form C with which, if that clerk is not out at lunch or on coffee break, you might hope to obtain the other form that gets you the ticket. This is so not just in government but everywhere. It’s entirely possible this madness has seeped into the national character, formed by education and culture. (My family is shocked I have to punctuate my novels myself, surely a restraint on my artistic talent. Surely they have some secretary who can do that for me?)
At any rate, every time I come to Portugal, I leave with the picture of an energetic and often brilliant or at least plucky people, constrained by an unresponsive government and a crushing bureaucracy — a people whose principal export, increasingly, is the more ambitious and work-minded of its children.
It could probably be said that this is our future.
I wish the victors of their — and our — latest elections luck and spine. They’re going to need both.