Pension is such a boring topic that most people loathe to think about it within their own country/system.  But much of economic unrests in Europe in the coming decade might come from unreasonable pension guarantees and calculations.

In France, private pensions are almost unheard of for majority of the working population. The only group that has private pensions is the executive class. So post-retirement, most people would rely on state pension to get them through the rest of their lives, which is long if you are French.

Most French are compelled to save for their retirement through their payroll in a pay-as-you-go fashion, contrary to the combination of work-place pension scheme and private tax-incentived savings we have in North America.  In the French national system, as it is in some large pubic pension funds – CalPERS come to mind – the money paid into the system today is used to fund those that are currently drawing from the pot.

Needlessly to say, as it is in most of Europe, France has a demographic problem and no private savings to back up the public coffers.  But thinking about the issue from a about-to-retire French’s perspective – they have paid into the system for most of their lives with the explicit guarantee that they will be taken care of.  So that’s perhaps why, out of “principle”, shaving a couple of years off their almost 3 decades of post-retirement bliss is something worth protesting about.

It’s probably a bit too easy to be universally dismissive of what’s been fought here.  The leftist obviously points to other figures getting unjustifiably shifted around in the budget in the riches’ favour, while the centre-right accuses the unions to call strikes just for for the sake of striking.

This video is from 2007, but you can run the story and interview word-for-word without edits today, and nobody would know the difference. Must be comforting to the French to know that nothing changes.

PS. Starting at around 9:40, note how comparably small the French unions are, but are somehow able to call on the general public for support.

How do you use the term burn-out in a sentence?  Is it more like, I worked so hard I’m getting burnt out, I’m at the end of my ropes and feel kind of burnt out, or is it more like, another one of my colleague is burnt-out and going on disability leave?

If you are in western and northern Europe, it is likely that the latter is the case.

Are you surprised that countries with five weeks of vacations, solid job security, ample social security on all levels of life, can somehow also cause a significant portion of its working population to claim long-term medical disability because they’ve short-circuited themselves on the treadmill of life?

Must be nice to have a lifeline to cop out from.  Divorce getting to you, adolescent children raking havoc, running a household while working and can’t get your leisurely evening walks in, or just simply not liking your job and want to take some paid leave once in a while?  There’s always “burn-out”.

So it’s probably no wonder that in the Netherlands, a country of just under 16.5 million people, and a working population of around 7 million people (although this data’s from 1990, so the number might be slightly higher, around 8 million or so), at any given point in time, 950,000 of the working population is on long-term benefits.

A more extreme case?  Denmark. The highest-taxed country in the world with the fluffiest welfare schemes also has the highest percentage of its work force on long-term income transfer schemes.  Because those unemployed are always undergoing some kind of government-mandated “training”, they are not accounted for in the dreaded unemployment figures.

In a country with 5 million people, approximately half of which are capable of working, 850,000 people are on some kind of government benefit at any given point in time.  At its peak in 1995, that number was 963,000.  That’s to say, at its worst, just under 40% of the working adults are effectively not working, but subsidized by the other 60% of the population that is.  Approximately 1/5 of those in the group picks up and starts to work again.  That means 4/5 of the 850,000 are stuck in limbo either getting retrained in another profession, or just want to take it easy.

This peeves me in two ways.

One, figures like these are not taken into account when measuring unemployment figures.  So on paper, Scandinavia always has a miniscule percentage of unemployment, while in reality, something like 1 in 3 or 4 ably-bodied labour market participants are not active in the work force.  This is even taking into account the poor female labour market participation – because they are not even interested and looking, which is something like 55% in the Netherlands, and this accounts for both full and part-time work, with part-time work being the most prevalent case.  This is for another day.

Two, Denmark flaunts its flexible work scheme, which in theory, means companies can hire and fire people as much as they like, with the government picking up the pieces in providing those out of work with welfare and retraining.  But in practice, the idea centres on a highly collectivist mentality, which is say, everyone is replaceable because we can always retrain this person to do something else, and we can always hire someone else to do the same job.  That’s highly cynical and corporatist, and a rather pessimist way of looking at human potential, no?

No shocker that the system is starting to reform.

According to the NYT, Sweden’s parental leave policies is something to be desired and imitated.  A thoroughly interesting and somewhat surprisingly read.  For some background on my previous thoughts on fertility rates and interventionist policies on getting women back into the work place full time, here.

But scrolling down to second half of the article, the rosy picture decidedly darkens.

Some, however, worry that as men and women both work and both stay home with kids, a gender identity crisis looms. “Manhood is being squeezed” by the sameness, argued Ingemar Gens, an author and self-described gender consultant.

So is the Swedish taxpayer. Taxes account for 47 percent of gross domestic product, compared with 27 percent in the United States and 40 percent in the European Union overall. The public sector, famous for family-friendly perks, employs one in three workers, including half of all working women. Family benefits cost 3.3 percent of G.D.P., the highest in the world along with Denmark and France, said Willem Adema, senior economist at the Organization for Economic Cooperation and Development.

Bodil Sonesson Gallon, head of sales at Axis Communications, an IT company that specializes in video surveillance, admits that parental leave can be disruptive — for careers and companies. She laments that with preschools starting at 12 months and little alternative child care, there is huge pressure for parents to take at least a year off.

Small businesses find it particularly tricky to juggle absences, said Sofia Bergstrom, social insurance expert at the Confederation of Swedish Enterprise, which represents 60,000 companies. Worse than parental leave, she says, is the 120-day annual allowance for parents to tend to sick children, which is impossible to plan and which is suspected of being widely abused.

When women and men used to be able to split their shared parental leave time however they wanted, women usually took the majority of allotted time off, because their pay was usually lower, thus the economic impact on the family unit as a whole was less.

For more dynamic businesses that want to avoid missing key personnels for too long, there’s a decided shift towards hiring men ahead of women so as to minimize the disruption of its workforce.

In effect, this sort of chess-play has resulted in women mostly confined in public-service works with lower pay and less exciting career trajectories than their husbands.

Fathers take on average only 20 percent of the 16 months of paid parental leave offered in Sweden to either mums or dads, according to Statistics Swede—a skimpy average that has sparked a broad debate over how to encourage more fathers to take the paid time off and reduce inequalities in the home. In most cases it is mothers who invoke their legal right and stay home with the kids.  Women are over-represented in low-income jobs, such as teachers or nurses, and on average earn 84 percent of the average male salary, according to Statistics Sweden.

Now to remedy this situation, the government is considering mandating parental leave for both members of the family in a way that is not transferrable.  That is to say, if a man does not take his share of parental leave benefits, it’s lost.

This at first sounds like a good knee-jerk reaction to remedy the still-pending gender inequality issue in child-rearing, but it is certainly interventionist. Good intentions, in this case, in keeping women in the workforce even after they bear children, seems to have an adverse effect on the more natural distribution of women in leadership positions in the country.  There are some serious trade-offs made here.

I leave you with a critical look on the state of female work place participation in Sweden.

“What is more, the glass ceiling problem is larger in family-friendly Sweden than it is in the hire-and-fire-at-will US, and it has also grown as family-friendly policies have expanded. In Sweden 1.5% of senior management are women, compared with 11% in the US.”

And that’s not all. Take another barometer of equality – the gap between men’s and women’s pay – and Sweden puts on another poor show. It is difficult, says Hakim, to get accurate figures, but she reckons that Swedish women are paid around 20% less than Swedish men – a similar pay difference to the one that exists in the UK. Interestingly, other EU countries with a lower pay gap don’t show a correlation with better family-friendly packages: Italy has a 15% pay gap, Spain a 12% gap and Belgium and Portugal an 8% gap. None of these countries is held up as providers of great family-friendly packages – indeed, some of them, including Portugal, have systems in place that are not only a great deal less generous than that of Sweden, but also a lot less accessible.

75% of Swedish women are working in the public sector – traditionally the lower-paid, lower-qualified end of the employment market – while 75% of men are working in the racier, more demanding private sector. What has happened through the years of family-friendly policies, she says, is that private companies have reduced their number of female employees because they can’t afford the cost of the generous maternity packages.

[T]he story of Sweden over the past two decades is the story of a country whose small industries couldn’t foot the bill for the ideological parental-rights packages being embraced, and who have largely taken avoiding action when it has come to employing women of childbearing age.

Last weekend the NYT weekend magazine edition published a feature on Job Cohen, one of the frontrunners in the Dutch national election in the coming week.

An interest in him is expected and entirely logical: he’s Jewish, an academic and highly intelligent, a moderate integrationist in a country increasingly mired in populism rooted in anti-Muslim rhetoric.

In recent weeks however, Job Cohen’s status has dimmed with each intensely scrutinized TV debate.  The well-regarded former major of Amsterdam has stammered, stuttered, said no to questions that could have demonstrated his knowledge of everyday life, as well as generally refusing to engage in political banter with his opponents.

[A]ccording to the criteria of the modern mediacracy, Cohen is failing spectacularly. When he doesn’t have an answer to a question, he admits it honestly instead of dancing around it peddling half-truths. The effects register in the following day’s headlines. When other politicians interrupt him, he lets them speak for minutes, and only resumes his answer after they have finished. The camera zooms out and the organised applause cuts through his answer. He shrugs helplessly when interviewers persist in stirring things up with trivialities. “I don’t play those kinds of games,” he says.

End of the day, Cohen seems to operate on a separate plane than the other players in the pen, which begs the question: when a politician refuses to play the game, does that make him more admirable or just a bad politician?

The NRC thinks this particular affliction strikes those on the left often, and hard.

Left-wing politicians are, in their thoughts and actions, primarily indebted to what one could call the Platonic tradition. The characteristic of this tradition is that all its representatives – from René Descartes to Immanuel Kant – start from a philosophical distinction introduced by Plato: the contrast between ‘appearance’ and ‘reality’. The starting point of this is, to put it concisely, that two sorts of ‘reality’ can be identified. One is reality as we experience it, mediated by our emotions, language, culture and interests. Behind that, these thinkers say, is objective reality: reality ‘as it is’, the ‘facts’ that we all share.

On the other extreme is the tradition which, broadly put, runs from Thomas Hobbes via Friedrich Nietzsche to Richard Rorty. Their philosophies differ widely, but they share a criticism of the Platonic differentiation between appearance and reality. Reality, they argue, is just as it appears – mediated by emotions, language, culture and, most importantly, our competing interests. There is no ‘objective’ reality beyond this; human being can’t go beyond their ‘perspective’ on the world. Right-wing politicians generally feel much more at home in this tradition. Thus they regard the business of politics as an issue of rhetoric. What matters is the image of reality you want to create, not whether that reality corresponds with ‘reality’.

Interesting theory, but true?  Only to a limited extent, in my opinion. In both the UK and US, the Labour Party in the last decade, and the Democrats in this one, triumphed despite their (relativist) left-leaning policies.

In the Dutch context, I have seen various left-winged parties wage rather successful campaigns in the media, GreenLinks in particular.  The issue with Cohen is perhaps rather more uncomplicated, that he is a capable administrator but hardly a visionary and shrewd politician.

Harsh criticisms over this non-optimal currency zone is now emerging from within the EU.

Here, president of the Czech Republic talks about the conflict that many Eastern European countries faced after the fall of communism: the need for closer integration with the west, in this case, western Europe, while shying away from the statist aspirations spear-headed by France and Germany that only reminded them days of Soviet rule.

People like me understood very early that the idea of a European single currency is a dangerous project which will either bring big problems or lead to the undemocratic centralization of Europe. My position was clear: With all my reservations, we had to apply for EU membership, but at the same time we had to fight against projects such as the euro.

His criticism separated the idea of European cooperation, from the euro project itself, which for all intents and purposes, has failed.  Klaus the economist says:

The huge amount of money that Greece will receive can be divided by the number of the euro-zone inhabitants, and each person can calculate his or her own “contribution.” However, the “opportunity” costs arising from the loss of a potentially higher growth rate, which is much more difficult for a non-economist to imagine, will be far more painful. I do not doubt that for political reasons this price will be paid and that the euro-zone inhabitants will never find out just how much the euro truly cost them.

Unsurprisingly, as the leader of a country that’s suffered dearly in the hands of communism, Klaus the politician minces no words in his critique of opaque bureaucracy centered in Brussels.

The recent dealings in EU headquarters in Brussels—literally behind closed doors—about the aid package for Greece demonstrated that there is no democracy there. The German-French tandem made the decision on behalf of the rest of the euro-zone countries, and I am afraid this will continue.

Not everyone heeds to this view, of course.  As late as March, many eastern and central European states still aspire to join the euro party, many already pegging their own small currencies to the euro.

While Horst Köhler’s resignation cannot be directly attributed to the euro crisis, it certainly epitomizes the clash between the post-war political configuration in Europe and the increasingly impatient Germany.

In the past, Germany has always provided the passive sheet-anchor stability that allowed Europe to work. Occasionally a Schmidt or a Kohl would find partners and a surge of European integration would take place. But now Germany has no idea of what to do next. It will not admit that its economic weltanschauung, based on relentless exports and damped-down internal demand, is now part of the European and world crisis of capitalism.

The new Germany would like to behave as a normal nation and certainly has national security on its mind.  Both domestic and European-wide politics have yet to catch up with it, even when the question of military interest is framed within the scope of expanding and protecting its economic interest.

Köhler made the point that German military capability was relevant to German interests, including German economic interests. As the world’s second biggest exporter after China, Germany has a self-evident interest in keeping the world as open as possible for the free flow of trade and commerce, and to help defeat the growing scourge of piracy. This is so worrying Nato policymakers that an entire session at the Nato parliamentary assembly’s spring session this weekend in Riga was devoted to the question of how to ensure peace and free traffic on the high seas.

Some political and business leaders are quietly applauding the continual slide of the euro as one of the tools to stimulate exports in the region, others argue that a weak euro do more harm than good in eroding business confidence in the region, which may prove to be the worst legacy resulting from this ongoing fiasco.

The biggest worry for European business, however, is not so much the decline of the euro itself but rather what it says about the European economy. European governments will have to reduce public spending dramatically to allay the market’s fears. Spain has already announced that it is cutting public-sector wages by 7% and Greece by 16%. This will inevitably remove spending power from the European economy and so dent its short-term prospects.

… The introduction of the single market and the single currency were supposed to spark a glorious period of innovation and productivity growth. This has not happened. The European economy remains dependent on long-established corporate champions such as Daimler and on public-sector jobs. The old continent has dismally failed to create local equivalents of America’s Microsoft and Google.

The FT has an interesting piece that questions the impact of fiscal austerity on a continent that, for the past few decades, consistently prioritized lifestyle and the ubiquitous work-life balance ahead of economic growth.

But while taking a more relaxed attitude towards the pursuit of wealth may make sense as a personal philosophy, it is an uncertain guide to public policy. It is relatively easy for the comfortable middle classes to play down the need for economic growth. But absolute poverty still exists, even in western societies, and adjusting to a stagnant national income can be a painful process, as many European countries may soon discover.

It would be a curious irony if the spiritual east embraced the ruthless pursuit of wealth just as the western nations that invented modern capitalism went for a Zen-like repudiation of materialism. If the pursuit of rapid economic growth became a largely Asian pastime, the global balance of power would also change in ways that might make life in the west considerably less comfortable.

For better or worse, it seems unlikely that many western politicians, outside the environmental movement, will repudiate the pursuit of economic growth as one of the goals of public policy. Some have occasionally toyed with this thought. In 1979, US President Jimmy Carter made a speech in which he argued that “owning things and consuming things does not satisfy our longing for meaning”. A year later, he went down to defeat to Ronald Reagan, whose most effective electoral tactic was repeatedly to ask Americans if they felt better off than four years previously.

The fact is that people like piling up material goods. Mr Sarkozy may argue that there is more to life than economic growth – but, on a personal level, he seems to be quite fond of flashy watches and holidays on millionaires’ yachts.

It is also clear that for China, now the world’s second-largest economy, high rates of growth remain an absolute imperative – both to buy social peace and to drag hundreds of millions of people out of poverty. Even among Indian intellectuals, the Gandhian disdain for materialism is becoming less common, as economists, politicians and a burgeoning middle class embrace the pursuit of wealth as both a personal and a national goal.

The question on everyone’s mind right now is the issue of how the EU can better monitor and regulate the fiscal health of its member states, given the historical and cultural back droppings of this diverse continent.  Most of the ideas point in the path of more fiscal and political integration.  Some are nothing but populist and reactionary rants. But fantasy or not, the intent is there.

So given such an astounding lack of creativity, it’s interesting to see ideas that suggest smarter, and not more integration.  It might require a large degree of tinkering to make it work, but this makes more sense to me than most rhetoric I come across.

In referring to proposals that have member states monitoring each other’s budgetary decisions:

It would clearly be anathema to the German government to have its spending and tax policies approved by France, let alone by Greece and Portugal. The problem for the EMU leadership is therefore to find a way to prevent excessive deficits while leaving member states free to shape their own spending and tax policies.

Instead of imposing such intrusive measures, a united continent of Europe can conceivably impose stricter constitutional measures within its member states – certainly ones that are part of the currency zone, that place limits on state deficits. The United States is held up as such am example.

Although the 50 states share a currency and each sets its own spending and tax policies, state deficits remain very low. Even California has a deficit of only about 1 percent of the state’s GDP and total general obligation debt of less than 4 percent of state GDP. The basic reason for these small deficits is that each state’s constitution prohibits borrowing for operating purposes. States can issue debt to finance infrastructure but not salaries, services, transfer payments or other operating expenses.

With a similar set up in principal, European states can possibly retain independence over its budgetary and tax decisions, while having a deficit ceiling that it cannot break regardless of which way the political wind blows.  But the issue with Europe right now is to overcome the (rightly so) fears of sovereign power erosion. Several national elections are taking place across the continent over the summer, and ceding more power to Brussels will win nobody votes this time around.

Smart negotiations over state sovereignty for more economic stability, or handing over more power to Brussels in matters that they have little business in that will end up where we are any way.  One of the many questions for EU leaders to ponder.

As the Eurozone crisis rages on, the depth of analysis that goes behind the very construction of the union gets deeper.  This is my favourite today, a discussion on European national identities, and a lack of continental common identity.

For the past two centuries, the European obsession has been the nation. First, the Europeans tried to separate their own nations from the transnational dynastic empires that had treated European nations as mere possessions of the Hapsburg, Bourbon or Romanov families. The history of Europe since the French Revolution was the emergence and resistance of the nation-state. Both Nazi Germany and the Soviet Union attempted to create multinational states dominated by a single state. Both failed, and both were hated for the attempt.

There is a paradox in the European mindset. On the one hand, the recollection of the two world wars imbued Europeans with a deep mistrust of the national impulse. On the other hand, one of the reasons nationalism was distrusted was because of its tendency to make war on other nation-states and try to submerge their identities. Europe feared nationalism out of a very nationalist impulse.

Thus, the foregone conclusion on the other side of the Atlantic is that the Eurozone project has failed, as the very essence of the integration project worked against the cultural and historical backdrop on the continent.

The European Union is an association — at most an alliance — and not a transnational state. There was an idea of making it such a state, but that idea failed a while ago. As an alliance, it is a system of relationships among sovereign states. They participate in it to the extent that it suits their self-interest — or fail to participate when they please.

Lastly, check out the Viewsflow Daily Briefing, which has focused heavily on the Eurozone crisis for the past week.  Some samples here, here, here, and here. Check them out, sign up here, or follow it on Facebook here.

When discussing the Greek crisis, most point to Greece’s loose credit, easy spending, and government’s oversight (or inability) to collect taxes from its constituents over the past decades.  Many also mention the inflexible labour structure, its huge public sector, and fraudulent accounting in concealing its financial troubles for as long as it did.

All good and well.  But what most failed to mention are the following: outsized and outright ridiculous defense spending, as well as a price the Greek political leaders have paid, to essentially bribe social peace.

First off, Tomasz Wegrzanowski dug up some numbers on defense spending as a percentage of GDP, and Greece came up pretty high.  This is not a table that you necessarily want to come up on top of.  But here is is, Greece, relative to the other big boys.  A caveat that there are still far more countries that spend more extravagantly than Greece, and more often than not, ones that are least able to afford it.

Secondly, the issue of just exactly how Greece managed to transition from a dictatorship to a democratic society, and the kind of political bargain that had to be made for the country to achieve peace.

The late Andreas Papandreou’s strategy in the 1980s was to give the disenfranchised, who formed the bulk of PASOK’s voters, a shot at living like the middle class. If this meant throwing European assistance and subsidies around like political favors and giving pensions to people who had never contributed to social security (such as farmers), then so be it. At last, all those who had been shut out by the right-wing establishment which triumphed in the Civil War in 1946-49 – and which was thoroughly discredited by the dictatorship of 1967-74 – would get to share in the wealth of the nation.

The fact that this new middle class was founded on wealth that the country was not producing meant that the economy broke free from all logic and went into its own orbit. PASOK established the National Health System and poured money into education but it also undermined the gains by destroying any semblance of hierarchy, accountability and recognition of merit in the public sector.

And it is a sobering thought when the author asked the readers to consider Greek nepotism, clientelism, and perhaps today’s corruption, in that historical context.

Take the painful question of the huge public sector, and all those civil servants with jobs for life, and unusually generous retirement packages. The existence of those jobs for life is not a cultural quirk, in which Greek officials simply like coffee and backgammon too much to do any work. It is the end result of a brutal, multi-decade power struggle between the left and the right: a struggle that got people killed within living memory.

In Greece, plenty of grown-ups remember when the alternative to social peace was their neighbour, or their loved-one, vanishing in the night into a jail cell or worse. The current clientelist truce between right and left is the price (albeit a horrible, wasteful price) established for the current version of social peace enjoyed in Greece.

I also like A fistful of Euros’ comment that as much as we wish it so, all liberal democracies are not created equal.  Far from it.  In fact, histories behind the process of democratization carries far more weight than the end product at times, such as now, when the decade-long bill that paid for relative political peace is due, and the debtors come knocking on your door.

The idea that liberal democracy can fix broken societies is an essential part of the EU project. That is, on the whole, a good thing. But it encourages a certain sort of small-scale-map historical amnesia, where all liberal democracies are considered more or less equal, and ugly pasts are relegated to a sort of historical basement where they’re not supposed to be able to affect the clean democratic present.

This is an illusion. Maybe to some extent it’s a necessary illusion. But the EU is full of countries where the dead past isn’t really dead, or even past.

I second the hypothesis that there is a very strong link indeed, between the scale of economic problems now arising in certain countries, and their authoritarian past that is perhaps not past at all.

In an interview that might very well turn my last post on its head, Andrea Elliott from the NYT went on Charlie Rose to explain the new trend of American radicalization, epitomized by a small-town Alabaman boy that went on to become the face of fighting and recruiting propaganda for an Islamic insurgency based out of Somalia.

Two points are interesting.

One: the relationship between economic disenfranchisement and radicalization is not always there.  In this case, Hammami comes from a well-off middle-class family from a small town in the South, presumably without the cluster of poverty and fanaticism associated with Europe’s immigrant underclass.

Two: Elliott suggested looking at problem of radicalization not only from the angle of religious indoctrination, but as a sociological phenomenon, where adolescents channel their alienation, curiosity, and the urge to bond into, say, joining a cult or a gang.  The implications for preventative measures are bound to be quite different in this case.

Having forged some pretty sturdy commercial ties with Africa and Latin America, China is now entering Eastern Europe.  Long-time backyard of Russia, and some-time cold war battlegrounds in bygone days, many have become scourges of Europe in recent years.

Enters China with tons of cash.

China last July signed a memorandum of understanding to lend Moldova $1 billion – equal to a tenth of the east European country’s gross domestic product, and easily the biggest loan it will have received from anywhere.

Last June, it agreed to invest more than $1 billion to build power plants and roads in Tajikistan, an impoverished ex-Soviet state with limited natural resources. In March, China’s central bank agreed a three-year currency swap worth 20 billion yuan ($2.93 billion) with another former Soviet republic, Belarus.

And why would China want to throw its money into those economic basket cases?  Political capital with its main energy provider, Russia.

China will increasingly need leverage with Russia as its dealings with its oil- and gas-rich neighbor expand. Russia provides nearly 8 percent of China’s total crude oil imports, and Gazprom is in advanced talks on a deal to supply gas.

Just to be clear, there’s never been an acknowledged nor formal definition of the Beijing Consensus, which is an alternative economic development model to those proposed by the Washington consensus.

This article in Foreign Affairs argues time might be running out on this social contract based on a trade-off of political and economic freedoms, when and if the country’s economic growth slows down.

China’s astronomic growth has left it in a precarious situation, however. Other developing countries have suffered from the so-called middle-income trap — a situation that often arises when a country’s per-capita GDP reaches the range of $3,000 to $8,000, the economy stops growing, income inequality increases, and social conflicts erupt. China has entered this range, and the warning signs of a trap loom large.

So far, China has been applying band-aid solutions to social unrests as a result of unfair and inequitable distribution of wealth.  This kind of short-term patching might not be enough to assuage the discontented for much longer.

The reforms carried out over the last 30 years have mostly been responses to imminent crises. Popular resistance and economic imbalances are now moving China toward another major crisis. Strong and privileged interest groups and commercialized local governments are blocking equal distribution of the benefits of economic growth throughout society, thereby rendering futile the CCP’s strategy of trading economic growth for people’s consent to its absolute rule.

Compassion or cruelty?

That is the question raised by the Economist, when assessing Europe’s particularly rigid labour market.  Countries ranging from Italy, Greece, to Spain and Sweden, have been staunch defenders of its labour-market laws and social system.

Two problems are raised.

One is that the natural desire for social cohesion is being abused to justify the protection of “insiders”—those in permanent jobs, in trade unions or in privileged professions. But the cost of protecting insiders falls largely on “outsiders”—the unemployed and those in temporary work, especially young people and immigrants.

Essentially, the call to preserve social cohesion can be abused to protect the “haves”, and alienate the “have-nots”.  While existing contracts are protected, fewer new permanent ones are signed.  Therefore, temps do not receive the kind of training they need to be fully integrated into the labour market and move ahead.

The second common thread is that social cohesion has become a reason to defend the privileges and perks of the public sector, which is also now the last bastion of trade unions. … One result is that the state is taking a rising share of GDP, which is sure to lead to heavier taxes. Another is that public-sector pay and benefits have shot ahead as a cosseted caste extends its privileges.

While private businesses cut employee pays and lay off workers, many governments are reluctant to do the same with its public sector workers.  The paper then suggests troubled economies in Europe look to Ireland and Germany for solutions to halt the “decline, entrench divisions and thus threaten the harmony” of the very cohesion it’s trying to protect.

Not a dilemma for countries in the West, since most have imposed economic sanctions on North Korea, which means no trade, but also no humanitarian aid either.

However, this doesn’t quite work for those in the neighbourhood.  For South Korea, China and Japan, North Korea is a reality that must be dealt with, in all its cultural-socio-geo-political complications.

This is an interesting point brought up by a blogger that I’ve not considered before: do you send aid to North Korea, or don’t you?

China and Japan may be weary of a nuclear North Korea.  But more likely than not, those two are more concerned over the potential social upheaval, both politically and economically, as a result of a collapsed North Korea.  The apocalyptic image of millions of starving North Koreans streaming over the Yalu River, or those seeking asylum at the Japanese embassy, must have caused somebody sleepless nights.  Better keep the country afloat and somewhat alive, than having it going into coma indefinitely. So the decision to extend North Korea the much-needed lifeline makes sense.

For South Korea that longs for an end to this expensive and psychologically draining military stand-off, but unsure of when and how the Kim dynasty will fold and just exactly how re-unification will get paid, the decision to the above question can be a constant struggle.

That’s where this blogger’s analysis gets interesting.

No one can plausibly monitor nor distinguish military personnel from civilians, since all it takes is a change of uniforms and a plate off the truck.  Therefore, if South Korea gives aid, then it will no doubt go to the military first.  The aid will go to prolonging the militarization of North Korea.  This is not good for South Korea nor for ordinary North Koreans.

If South Korea turns its back on aid, however, then it is knowingly starving a whole lot of people. Again, because that line between military and civilians is so thin, and because Kim Jung-Il has the power to raise army and militia from ordinary citizenry should he choose to, a soldier today can be a civilian tomorrow, and vice versa.

You can make the argument that blocking aid will cripple its army and accelerate Kim’s eventual fall from power, but on the other hand, if and when this whole madness is over, South Korea needs to deal with a nation of malnourished, developmentally stunted citizens.  Not only will this impose a huge humanitarian cost for North Korea (imagine the finger pointing once the world sees pictures of skeletal children), it also has far-reaching social and economic costs for the government and people of South Korea.

Not an easy decision at all.

CSM has a series of articles the past weekend on the perils of ignoring land disputes in Africa. Perhaps not at all surprising, given survival in largely agricultural and herding communities depend on pastoral and grazing grounds.

Most of the deadly conflicts in Africa over the last two decades erupted from unresolved land issues: Darfur, DRC, Ethiopia vs. Eritrea, Kenya, Rwanda, Zimbabwe; and trouble brewing on the horizon: Burundi, South Africa, Sudan, Uganda, Zambia, are all related to land.

Even the Nigerian riots over the weekend, supposedly as a result of religious frictions between the Muslim and Christian groups, can really be traced back to grievances about lands claims.

So here’s what activists say about preventing an escalation of land-related conflicts.

Africa’s most famous disasters, many argue, could have been prevented with changes in national land laws or better local conflict resolution but for one problem: Prevention doesn’t sell.

What does sell – what gets airtime, aid dollars, and military or other attention – is the violent chaos the world fails to prevent. By the time land conflict gets an international audience, land is an afterthought; talk turns to tribe and ethnicity or local politics and corruption. News coverage and nonprofits focus on the worst symptoms – refugees, rapes, massacres. Distracted by suffering, they miss the structural problem that can, it turns out, be solved.

In Africa, as elsewhere, economic grievances are behind every political movement and ethnic dispute.