The Writing on the Wall

Last Thursday was Restoration Day. December 1st 1640 marked the end of a period of sixty years during which Portugal was occupied and ruled by Spain. In point of fact, although it marked the restoration of independence, the ensuing attempts by Spain to regain its lost possession only ended twenty-eight years later.

During the Spanish occupation, Spain pointed the Portuguese navy at England, with disastrous results―first with the destruction of a part of the Spanish fleet at Cádiz, where Drake used fire ships to wreak havoc, and then with the defeat of the invincible Armada off the southwest coast of England. In Galway Bay, on the Irish west coast, lie the Aran Islands. Some of the vessels defeated in the battle made their way up the Irish coast, damaged and lost. The Spanish graves in the cemetery attest to the new found home of some of the sailors.

Early in the XVIIth century, the Dutch seized their chance and made inroads into the Portuguese empire, both in South America and in the Far East. Those sixty years were the most costly decades to Portugal, which paid an enormous price in strategic and political importance, lost revenue, and national pride. Apart from hostile trading, the Dutch protestant motivation was to dilute Spanish power by attacking overseas possessions, in order to overextend it. This led the way for the expulsion of the Habsburg Holy Roman Empire  from the Netherlands.

The consequences of the religious fracture are still seen in Belgium today, an artificial country cobbled together as a federation of Dutch-originated Flemish, and francophone Waloons, who are collectively unable to form a national government since June 2010.

As the seventeenth century drew to a close, Portugal was left with its African colonies, Brazil, and a few eastern enclaves such as Goa, Timor, and Macau.

Had the 1640 restoration not taken place, it would be over three hundred and fifty years since Portugal existed as a country. The potential consequences would have included the participation in the Spanish civil war that preceded World War II, a total disconnect with Brazil and Africa, and the dilution and possible disappearance of the language itself, at least in its European version.

Last Thursday marked the final year that this national holiday is formally observed. Due to the claim by the IMF/EU/ECB troika that the country has an excessive number of public holidays, the government and the Church arrived at a compromise and erased four holidays by decree, two from each side. For a nation to give up the celebration of a memory of so much bloodshed and patriotic devotion is appaling. National celebrations are typically abolished by conquering nations to avoid reminders that might lead to rebellion of the occupied people. It’s like abolishing the Fourth of July; how many Americans would put up with that?

It’s disgraceful to lose this holiday as an appeasement  to third-rate technocrats. And apart from that, from the point of view of solving the underlying problem, it is plainly wrong. The problem of debt is an issue of money circulation, and the underlying trust that regulates the interest paid. That trust is really a trade-off between fear and greed. These days, the balance is on the side of fear.

There’s a joke doing the rounds about a businessman who wants to book himself into a penthouse suite in a swank hotel. He asks the manager if he can have a look around the suite, and the manager agrees, but requests a one hundred euro deposit. One never knows, these days. While the prospective client takes the elevator to the thirtieth floor, the manager pops out and pays  the electrician a hundred euros, owed from some work previously done on the suite. The electrician has an urgent debt to a prostitute, who is now denying him her favors. And he urgently needs to spark up his sex life. After she receives the hundred euros, she too liquidates a debt. A one hundred euro commission to the hotelier for use of the penthouse suite in the entertainment of discerning clients.  The young lady is exiting the hotel through the revolving door, just as the businessman arrives back in the lobby, collects his deposit, and bids farewell to the manager.

This joke only works if the cash can circulate (preferably with a little interest). If the electrician defaults on his debt, the circle breaks. If the interest is too high, one or more parties default.

When people are confronted with a problem they are unable to solve (let’s call it Problem A), they convert it into Problem B, which they are able to solve, and then solve that one. Does that solve the original problem? You tell me. The developed world suffers from a combination of profligacy, speculation, and moronic administrative procedures, which to a greater or lesser degree are common throughout Europe. The first two are driven by banks, the last is a consequence in southern Europe of Roman law and Napoleonic codes.

So let’s look at this cut in holidays, and how it might resolve the sovereign debt crisis. Let me put it bluntly: for every complex problem, there’s a simple solution. And it’s usually wrong.

The Organization for Economic Cooperation and Development lists the hours worked per capita per year for a number of countries in this bizarre world of ours. These are averages, and of course, as every woman knows, statistics are like men. Properly manipulated, you can get them to do anything you want.

Excess in average working hours per year over 2000-2010. Data from OECD, displayed as a percentage relative to the Netherlands, the country with the least hours (click to expand).

So I got in touch with my feminine side and did a little manipulation. Ordering the table in descending order for the 2010 data is a good start. Thirty-five countries are analyzed; China and India are not included. I had to launder my list in Notepad, then do some search-replacing in Excel with obscure hidden ASCII characters, and I finally got a file I could work with. This was not manipulation, only foreplay.

I did three things to my list. First I calculated the average across the eleven years tabled (2000-2010), and then two other little things. One is called the coefficient of variation, and it tells us how much scatter the data have across the years. The second was to look at the trend in data; in other words, if people worldwide were working less in 2010 than in 2000.

Out of the thirty-five, South Koreans work the hardest, the Swiss work the least hours. In 2010. Italy is at number twelve. Then the United States, two places above the OECD average. Portugal is two places below the average, at number 17. Canada at 18. Then Finland. At 23 is Spain. Then the U.K. Germany trails in at 29. West Germany, evaluated separately, is at 31. Norway is the filling in the German sandwich.

Across years, there is not much variation. The guys who reduced most are the South Koreans, about 13% across the eleven years. Presumably they no longer have to get up before they go to bed, a reminiscence of the classic Four Yorkshiremen sketch―I’ve picked the version with John Cleese and the late Marty Feldman.

Finally, I did some rankings based on mean working hours over the eleven years, looking at the percentage difference among countries, with respect to the country that works least hours. Over the 11 year time period, it is no longer the Swiss that work least. The five at the bottom, in descending order, are France, Germany, West Germany, Norway and the Netherlands. Portugal is now only one position below the OECD average. Japan is one notch above the average. Italy still beats the U.S. by one position. The poor bloody Koreans are still number one, Greece comes in at number three.

Conclusion? Working hours are a piss-poor indicator of productivity. Work smart.

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