Zoltán Pogátsa's blog on economics in English

Zoltán Pogátsa's blog on economics in English

Wednesday, 31 March 2010


It is often heard from the far right that gypsies are unwilling or unable to sustain a normal job, due to some alleged deficiency of socialisation that leaves them unaccustomed to regular work. When trying to counter these arguments, the more tolerant segments of society have mostly pointed to the high degree of prejudices against Roma in the workplace as the primary reason for their generally very low level of employment.

While doubtless true, this argument is not accepted by extremists, and even reinforces their stereotypes to some degree, with the following logic: 'even pro-Gipsy arguements accept that Gypsies DE FACTO DO NOT WORK'.

Well, recently I came across some very interesting data. It came from the latest available survey of Gypsy employment in Hungary. (It is in itself quite telling that we do not have such sruveys on a regular basis, and the latest such results come from 2004. It shows the lack of commitment of the Hungarian state and goverments to the Roma issue, apart from declarative involvement in 'decades of Roma inclusion' and EU financed 'pilot projects'. But let us leave this aside for now. See the letter of the head of the National Court of Auditors for more detail.)

The survey led by Erzsébet Debreceni concluded that while the rate of Roma employment in rural Eastern Hungary is around 14%, in Budapest some 49% of Roma are employed. Now this is incredibly interesting for three reasons.

Firstly, a 49% employment rate amongst adults in an ethnic subculture is not very far away from the roughly 56% employment rate in Hungary overall. Even if Budapest has a higher employment rate than the national average, 49% is way closer to majority levels than 14% to majority levels in Eastern Hungary. What this really indicates is that BY AND LARGE GYPSIES IN BUDAPEST HAVE FOUND EMPLOYMENT! It is an interesting argument against racists: whenever there is plenty of work, such as in the case of the development pole of a peripheral economy, there will be jobs available for the less educated Roma as well!

Secondly, it provides a hint that either rural Gypsies are very unlike urban Gypsies as a subculture, or an impoverished rural setting provides no opportunities for the poor of the poor, the rural Gypsies. This question would be interesting to investigate further.

Thirdly, the findings provide hope for the future: if any future government would be willing to introduce REAL programmes for Roma emacipation, and if the Hungarian economy improved in general, there is in fact reason to believe that Roma employment could indeed be guaranteed in the longer run, and interethnic tensions could wither away! It has become commonplace to refer to the Communist system as a contrast in terms of how it had been able to create (some claim artificial) employment in industries such as construction to provide work for the Roma, while the market economy is preceived to be unable to do so. Well, these findings suggest that we need not go back to any planned economy to be able to create work for minority groups with lower levels of education.

Tuesday, 9 March 2010

Greece would NOT be better off outside the Eurozone!

It is an interesting dimension of the ongoing Greece saga how many people think that it would be better for Greece to be outside of the Eurozone at the moment. They seem to suggest that if the country still had its good old drachma, it could now devalue, and would have an easier time adjusting than with the eurozone rules.

I think this is not quite right. First of all, if Greece would not have been in the zone in recent years, it would not have had access to cheap credit, and the few years of boom would not have taken place (which, in spite of the excessive credit boom, were perceived to be good years by the Greek population).

Secondly, devaluation is not necessarily a painless alternative to fiscal cuts. First of all, it makes import prices higher, something that the whole population would suffer from. Secondly, it would wipe out people's savings. Thirdly, it would not save Greece from carrying out efficiency oriented, meritocratic reforms of its state apparatus, and attempt to control 'visma', the endemic corruption which is characteristic of business and state relations.

Monday, 8 March 2010

Historic Iceland vote about rules of globalisation

Over the weekend Icelanders have voted in a little noticed referendum about the rules of globalisation. The actual question asked was whether they would be ready to pay for the debts that the Icelandic bank IceSave owes to its mainly British and Dutch former customers.

93% voted against. This is in fact a historic defeat for a previously accepted principle of globalisation that while financial institutions can go overseas and act fairly unchecked, they immediately seize to be multinationals as soon as they are hit by a major crisis.

Icelanders decided enough is enough. Why should they be forced to foot the bill for the reckless mistakes of a group of bankers in a private enterprise over which they had no control?

Naturally, the Iceland saga is still not over. Ratings agencies are expected to downgrade Iceland, and it will be more difficult for them to borrow. We shall see how that goes. However, the people of Iceland at this point must be applauded for their confidence.

It is also quite clear that although initially Icelanders believed they could seek refuge from similar financial crises in the EU, they have now turned against EU membership. They have understood that Brussels would acually be in support of them paying for the sins of their banking system, rather than establishing that financial regulations and oversight had not been prudent enough. They have understood the EU to be what it really is: integration pro-capital rather than pro-people.