Archive for February, 2015

In living beings with legs, legs come in pairs -either two or four. This is because pairs three legged ladderhelp with balance while moving – and moving around  is what life is all about. But if you want rigid stability, you need three legs – and this is because three points are always on the same plane, no matter how off-balance and steep the latter may be in relation to the force of gravity (if gravity is a force and not a space-time anomaly).

For the Greek post-War economy, a small static economy of a conservative society, the legs were none, then one,  then two, then three, and now we have lost two of them. 

“None” -as in civil war and poverty that led to massive emigration up to 1950’s.

“One-legged” as in Constructions Sector to support (and boost) the massive urbanization of the Greek population (1960’s onwards).

“Two-legged” as in add the Tourism Industry, exploiting a natural resource (1970’s onwards).

“Three-legged” as in “Expanding Public Sector”(1980’s onwards), to create a “modern European  state”, in terms of infrastructure and welfare policies.

(I do not include our Seafarers of Greek origin, because they always had a …bizarre relation and interaction with the domestic economy).

So we had two Supply-side legs, and one Demand-side leg.  And now we have lost two of them, with only the Tourism-leg remaining. The Constructions leg will take years to become again a driving force in the economy, if ever. Our new government envisions, at best, to provide a half-leg by re-hauling the Public Sector.

So we won’t have a “domestic Demand champion” to press Supply into action. Therefore we need Demand coming from abroad –and to do so we must have something to offer.

But nobody talks about the (at least) one more export-oriented Supply-leg that we need. Nobody is throwing wild ideas on the table, nobody is brainstorming publicly on the matter. We are just speaking foggily about  the need to restart the economy, and that investments are needed (for how much see here).

So, in what economic activity that produces a tangible good (or a service) that moreover can be exported, do we have a long tradition (so it suits us), do we have already trained human capital and labor in sufficient quantities, (so no large adjustment costs and time lags to kick-start)? An economic activity that could become one of the missing and needed economic legs of the domestic economy?

For a Greek living in Greece a first and very specific potential answer should be obvious -after perhaps a little  open-minded thinking.