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The New Specter Haunting Europe

by HA-JOON CHANG

“A spectre is haunting Europe.” Thus began the famous opening passages of The Communist Manifesto by Karl Marx and Friedrich Engels.

Today, once again, Europe is haunted by a spectre. But, unlike back in 1848 when Marx and Engels wrote those passages, it is not communism, but laziness.

Gone are the days when the upper classes were terrified of the angry mob wanting to smash their skulls and confiscate their properties. Now their biggest enemy is the army of lazy bums, whose lifestyle of indolence and hedonism, financed by crippling taxes on the rich, is sucking the lifeblood out of the economy.

In Britain, the coalition government constantly slags off those welfare slobs in the working class suburbs, sleeping off their hard night’s slog with Sky Sports and online casino. It is their shameless demand for “something for nothing,” pandered to by the previous Labour government, we are told, that has created the huge deficits that the country is struggling to get rid of.

In the eurozone, many believe that its fiscal crisis can be ultimately traced back to those lazy Mediterranean types in Greece and Spain, who had lived off hard-working Germans and Dutch, spending their time sipping espresso and playing card games. Unless those people start working hard, it is said, the eurozone’s problems cannot be fixed.

The problem with this story is that it is, well, just a story.

First of all, it is important to reiterate that the fiscal deficits in the European countries, including Britain, are largely due to the fall in tax revenues following the finance-induced recession, rather than to the rise in welfare spending. So, attacking the poor and eviscerating the welfare state is not going to cure the underlying cause of the deficits.

Moreover, on the whole, poorer people typically work harder. They usually work in jobs with longer hours and tougher working conditions. Except for a tiny minority, they are poor despite the welfare state, not because of it.

The point comes into a sharper relief, if we compare nations. According to the Organisation for Economic Co-operation and Development, people in Greece, that famous nation of skivers, worked on average 2,032 hours in 2011 – only a shade less than the supposedly workaholic South Koreans (2,090 hours). In the same year, the Germans worked only 70% as long (1,413 hours), while the Netherlands was officially the “laziest” nation in the world, with only 1,379 hours of work per year. These numbers tell us that, whatever else is wrong with Greece, it is not the laziness of their people.

Now, if the laziness story has such flimsy bases in reality, why is it so widely believed? It is because, in the past three decades of dominance by free-market ideology, many of us have come to believe in the myth of the individual fully in charge of his/her destiny.

Starting from Disney animations we watch as young children telling us that “if you believed in yourself, you can achieve anything”, we are bombarded with the message that individuals, and they alone, are responsible for what they get in their lives. This is what I call the L’Oreal principle – if some people are paid tens of millions of pounds a year, it must be because they’re “worth it”; if others are poor, it must be because they are either not good enough or not trying hard enough.

Ha-Joon Chang is a Senior Research Associate with the Center for Economic and Policy Research.

This article originally appeared in the Guardian.

Now, it is politically difficult to criticize the poor for their incompetence, so the attack is focused on the mythical lazy slob, who has no moral leg to stand on. But then the end result is the dismantling of a whole set of policies and institutions that help all poor people in the name of punishing the lazy.

The beauty of this worldview – for those who disproportionately benefit from the current system – is that, by reducing everything down to individuals, it draws people’s attention away from the structural causes of poverty and inequality.

It is well known that poor childhood nutrition, lack of learning stimulus at deprived homes, and sub-par schools restrict capability developments of poor children, diminishing their future prospects. When they grow up, they have to contend with all sorts of prejudices that constantly discourage and deflate them, especially if they have the wrong gender or the wrong skin colour.

With these sandbags on their legs, the poor find it difficult to win the race even in the fairest market. Markets are frequently rigged in favour of the rich, as we have seen from a series of recent scandals surrounding deliberate mis-selling of financial products, lies told to the regulators, to the rigging of the Libor rate.

More importantly, money gives the super-rich the power even to rewrite the basic rules of the game by – let’s not mince our words – buying up politicians and political offices (think of all those former banker-turned-U.S. treasury secretaries). Many deregulations of the financial and the labor market, as well as tax cuts for the rich, in the last three decades are results of such money politics.

By turning the debate into a morality tale of laziness, the rich and powerful can divert people’s attention away from all of these structural problems that create more poverty and inequality than is necessary.

All of this is not to say that individual talents and efforts should not be rewarded. Attempts to completely suppress them can create societies that are ostensibly equal but fundamentally unfair, as in the former socialist countries.

However, it is vital to recognise that poverty and inequality also have structural causes and start a real debate on how to change those things. Ridding the debate of the pernicious and baseless myth of the lazy mob is an important first step in that direction.

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