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29/06/2011 | The pain in Spain

Carlos Alberto Montaner

Young Spaniards are indignant. They suffer from high levels of unemployment. Thousands have taken to the streets in protest, with some calling for a general strike. That’s a strange remedy – akin to cutting off your leg to relieve the pain of a bunion.

 

These indignant people believe the state and society have failed them. Why are there so few jobs (and badly paid, at that)? We have only one reasonable response: Because there are not enough profitable businesses to generate benefits, investments and jobs. If they existed and were technologically competitive, they’d have to pay higher salaries to keep their valued employees.

That’s what happens in, for example, Germany, Switzerland and Denmark. Workers in those countries aren’t highly paid because the law demands it, but because they produce enough, and are profitable enough, to be able to afford high wages.

Young Spaniards (and Greeks, and Portuguese) have identified the symptom, but they don’t have the right solution. If they understood the nature of the problem, they would demand measures that promoted the accumulation of capital, the transfer of technologies, open markets, and the lessening of the social tax that serves as a restraint on hiring. They would also favor other steps that promote a healthy economy, including an education system that actually prepares its graduates to compete for well-paying jobs.

If these protestors could figure out the right way to relieve their anxieties, they would demand incentives for employers and a faster and simpler way to go about creating a new business. If the problem is that there aren’t enough businesses to generate good jobs, isn’t it obvious that the solution lies in preserving the relatively few good jobs and strong enterprises that already exist and creating new ones as rapidly as possible?

If these indignant youngsters (and those not so young) were capable of asking the government for policies that could overcome the economic malaise and improve job creation, they would insist on reducing public debt to save money on interest payments. That way, more could be spent on infrastructure projects to benefit job seekers. That would also control inflation to improve buying power. And they would demand an end to corruption and waste and fair systems of arbitration to settle job-site disputes impartially.

It makes no sense to demand or offer a job as if it were a civil right. That’s the demagoguery of politicians on the campaign trail. Stable jobs are created when someone discovers a way to satisfy supply and demand in the marketplace. This happens only under the umbrella of the private sector, an area where both Spain and Latin America have an enormous and shameful deficit. Nor is it reasonable to take to the streets to threaten and demand that others risk their investments and their resources to create jobs for those who don’t appreciate the critical role of the private sector.

The debate, in short, comes down to this: Why have Spain and other countries of Southern Europe been unable to create and nurture a private sector that is both diverse and powerful? The great countries of the world – not necessarily those with the biggest population, or territory, or military force – are characterized by their ability to develop a competitive and productive economic system. Why haven’t Spain and Greece and Portugal been able to do the same as the Scandinavian countries, or Austria, Germany, The Netherlands, Israel and another half-dozen hard-working countries that enjoy economies far stronger than those found in Southern Europe?

Sadly, this is not the focus of the indignant class. They insist on attributing their problems to the negative excesses of capitalism rather than addressing the real source of their discontent: the traditional weakness of private sectors in countries burdened by cultural customs and ideas with a profoundly anti-capitalist spirit.

It would be useful if the protestors in the streets and plazas of Spain could focus their complaints on the real source of the problem. Alas, I fear they will never do it.

Miami Herald (Estados Unidos)

 


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