More on Race, IQ, and Wealth

Cover page of American Conservative, a megaphone for dubious science? (source)

My comments on Ron Unz’s article “Race, IQ, and Wealth” have led to further exchanges between myself and Ron. There seem to be two sticking points:

1. Ron is more like a military strategist than an academic. In other words, the goal is already decided on, and all that remains is to work out the best strategy for reaching that goal. For him, the optimal strategy is to find the weakest point in the enemy’s defenses and to hammer away at it relentlessly. Once that soft spot is breached, the entire defense line will collapse.

2. Ron sees only “perfect” evidence and “imperfect” evidence (which must be discarded).  This may be just naiveté on his part. Actually, there is no such thing as perfect evidence. There is only evidence with varying degrees of imperfection, and a good academic should view all data with a wary eye, even "Gold Standard" stuff. By the same token, one should not dismiss data that have a high degree of “noise,” unless a better dataset is available.  Such evidence is still useful for picking out general trends and formulating hypotheses for further study.

The following is our exchange of views:

Ron Unz here,

Let me focus upon a single experimental datapoint, of which there actually exist a considerable number. Lynn provides three Irish IQ samples: a 1972 sample of 3,466 yielding an IQ of 87, a 1993 sample of 1,361 yielding an IQ of 93, and another 1993 sample of 2,029 yielding an IQ of 91. These are all very large samples. There is also another minuscule 1979 sample of 75 which (unsurprisingly) yields an outlying value. All these results are Flynn-adjusted by Lynn.

[…] However, in America Irish these days have IQs slightly above the white average, and in Europe the recent PISA scores for Ireland are also right around those for Germany, France, and Britain.

Now my hypothesis is that the huge recent rise in Irish IQs is probably due to changes in urbanization and socio-economic factors. But perhaps I'm entirely wrong. So, then, what is the alternate hypothesis explaining these wildly different Irish IQ scores across  just a 35 year period?

[Answer to question about how one defines “American Irish” ]

Being "Irish" is based on self-identification and reporting, so I'd certainly expect that most of the "American Irish" aren't "pure Irish."

But none of that makes a difference. If the Irish had an actual, innate, genetic IQ of 87, and this figure was not subject to rapid change under socio-economic influences, there would be *massive* evidence of this in American society.

For example, something like 15% of all the Irish in America would have IQs below 70, and would be subject to clinical mental retardation. Do you really believe that 15% of all American Irish are mentally retarded?

Okay, maybe lots of those Irish aren't pure Irish, and are part German or Italian or something. Well, according to Lynn the (South) Italian IQ is around 89, so that wouldn't really help much. But anyway, we'd still be seeing millions of mentally-retarded Irish-Americans. Do you believe that?

Here's another point. During the 1970s, the Wordsum-IQ gap between rural whites and urban/suburban whites was almost exactly the same as the black/white gap. Again, that implies that something like 10% of all white farmboys during the 1970s were mentally retarded. Do you really believe that?

Finally, as I've pointed out, between the 1980s and the 2000s, roughly 61% of the Wordsum-IQ gap between white Americans and American-born Mex-Ams disappeared due to an enormous rise in the Wordsum-IQ of the latter group. These are hard, empirical facts. Perhaps my explanation is entirely wrong. But what is your alternate explanation?

Ron,

You're pointing at weak evidence as a way to undermine strong evidence. A single IQ test, even with a large sample, is at best a rough indication. The main problem is sample bias. Is the sample truly representative? If the sample comes from a school classroom, you have the problem of absenteeism. Truants tend to be problem students, so the higher the rate of absenteeism, the higher will be the IQ score.

Even if the sample is representative, there are other sources of bias: the amount of coaching for the test and the way the test is presented. These sources of bias may cancel each other out. Or maybe not. One thing is sure: they increase the amount of noise in the data. In your case, you had three data points: 87, 91, and 93. You focused on the lowest of the three figures. How come? Why not take an average? Even then, I would still be skeptical.

I am even more skeptical of your recent data on "Irish Americans." There is no such population. There are simply a lot of people with varying amounts of Irish ancestry. "Irish Americans" are increasingly people who take an interest in Irish music, culture, and history, and such people tend to be more educated than average. Another factor is that people tend to identify with the branch of their family tree that has a stronger sense of ethnic identity. If a person is part English and part Irish, they tend to identify as Irish. But if a person has equal contributions of African and Irish ancestry (like Mariah Carey), they tend to identify as African American.

Finally, Wordsum is not IQ. It has a correlation of 71% with standard IQ tests, which in turn have a correlation of 50 to 75% with innate intelligence. So we are already two steps removed from any genetically transmitted factors.

This is a recurring problem with your line of argument. You present "A" and try to pass it off as "B", hoping that no one will notice the difference.

Ron Unz here:

Don't be ridiculous, Peter. Please do read my arguments more carefully.

(1) The PISA tests are very widely regarded as one of the best current means of estimating the IQs of European countries, certainly by my sharpest critics. If you look at the PISA scores for Ireland, they are almost exactly the same as those for Britain, Norway, Denmark, France, Sweden, and several other European countries. That almost certainly implies that Ireland's current IQ is quite close to 100.

Now an enormous IQ sample provided by Lynn placed Ireland's 1972 IQ at just 87, and Lynn has explicitly confirmed this by stating that his years of late 1960s personal research in Ireland convinced him that the Irish were a low-IQ people, whose only hope lay in a heavy eugenics program. So unless a huge sample and Lynn are both wrong, this is probably correct.

Therefore, some unknown factor—I strongly suspect urbanization—apparently caused a massive rise in Irish IQ between 1972 and today. Further evidence for this rise is shown by the fact that at the half-way point—the early 1990s—two additional huge IQ tests provided by Lynn placed the Irish IQ at around 92, exactly half-way between those two endpoint values.

Bear in mind, that all of these Irish results are about as "Gold Standard" as you can find anywhere—huge IQ samples, Lynn's years of personal research, and PISA. None of it has anything to do with partial Irish ancestry or Wordsum. But the fact that these Ireland Irish results are totally consistent with the separate Irish-American Wordsum results certainly doesn't weaken my case.

(2) Here's another example: Poland. The 1989 Polish IQ results quoted by Lynn are based on the largest sample he's found anywhere, over 4000 individuals. The Flynn-adjusted Polish IQ was 92. Yet just 20 years later, Poland had precisely the same PISA scores as Britain, France, Norway, Sweden, etc, all which Lynn claims have IQs of around 100. How do you explain this?

(3) Essentially, your perspective seems to be that we should just throw away all the Lynn/Vanhanen IQ tests which you don't like---many of which tend to be the largest ones---and keep the ones you do. Or perhaps you're just suggesting we should bite the bullet and throw away ALL of the Lynn/Vanhanen data, and therefore base all our estimates of European IQs on "personal intuition." If that's not what you're saying, please do clarify.

Ron,

A PISA test suffers from the same problem I pointed out earlier. It's based  on students in a classroom. It excludes those students who weren't around on the day of the test. I'm not talking about a small proportion of the youth population either.

And a PISA test is not an IQ test. Like WordSum, its results correlate with those of IQ tests, which in turn correlate with genetic factors that influence human intelligence. Again, you're trying to pass off "C" as "A" by using the argument that C correlates with B and B correlates with A.

The IQ data compiled by Lynn provide weak evidence for heritability of IQ.  There is a lot of noise in that kind of data.  And much of that noise will not be squeezed out by large sample sizes. If there is a bias in participant recruitment, that bias will distort a big sample as surely as it will distort a small one.

With respect to the Polish data, we have the same phenomenon that we see with the East German data. IQ scores were lower during the Communist era than they are today. The most likely explanatory factor is truancy. It is much easier for problem students to skip classes today than it was back then. During the communist era, truants were sent to detention centres that were little more than prisons. No one wanted to go to those places. If you were a pretty boy, you would have to become a "wife" for one of the alpha males.

You ask me:

Your perspective seems to be that we should just throw away all the Lynn/Vanhanen IQ tests which you don't like---many of which tend to be the largest ones---and keep the ones you do. Or perhaps you're just suggesting we should bite the bullet and throw away ALL of the Lynn/Vanhanen data, and therefore base all our estimates of European IQs on "personal intuition." If that's not what you're saying, please do clarify.

Gladly. Lynn's IQ data are useful for picking out general trends that should be confirmed by more controlled studies. Unlike certain people, I don't ignore evidence that doesn't fit my preconceived ideas. I try to explain it as best I can, or I simply describe it as an unresolved problem.

As I said earlier, I view Lynn's work with some caution. This doesn't mean I reject it out of hand. Nor do I accept it uncritically. I do the sort of things that most academics do. I check the sources, I look at related studies by other authors, and I examine the data from as many angles as possible.

Ron Unz here:

Look, Peter. I don't claim to be an IQ expert. I'm just someone who looks at the data reported by the people who supposedly ARE IQ experts and then applies a little common sense and pattern-recognition.

Everyone seems to say that Lynn is one of the biggest IQ experts, and his book is filled with IQ studies.  Perhaps the ones with tiny sample sizes shouldn't be taken seriously, but the Irish and Polish ones are among the *largest* studies he reports.  If I can't believe any of his large IQ studies, or what he concluded from his years of personal research in Ireland, then maybe I should just throw away all his books and say that IQ obviously doesn't exist.

Well, you say I shouldn't trust any of Lynn's IQ studies.  Fine, so then I'll look at the Wordsum-IQ data from the GSS.  But then you say I shouldn't use Wordsum, because it's not really IQ, just (supposedly) has a 0.71 correlation with IQ.  Everyone else discussing IQ tends to use Wordsum as a rough proxy, but you say I shouldn't.

Okay, then maybe I'll use the international PISA results. Volkmar Weiss, who's supposedly another very big IQ expert, wrote a whole article in which he discussed PISA scores as useful proxies for IQ:

http://www.v-weiss.de/calibration.html

But you say I shouldn't use PISA.

So now I can't use Lynn's IQ studies, I can't use Wordsum in the U.S., and I can't use PISA worldwide.  Then what's left?  Suppose I ask you the simple question "What's the estimated IQ of Ireland?"---how would YOU figure out the answer...

Ron,

I would answer: "I don't know." I would also point out that none of the existing data on Irish IQ involve twin or adoption studies. All we have is data from classroom IQ tests and more distal sources like PISA. The existing evidence is nonetheless interesting and I would like to see more controlled studies done.

In any argument, there will always be weaker evidence and stronger evidence. A common debating tactic is to focus on the weaker evidence and create the impression that it is somehow central to the entire argument. With enough hand-waving, one might win the debate. This was, in fact, your line of attack in the American Conservative article:

Yet an objective review of the Lynn/Vanhanen data almost completely discredit the Lynn/Vanhanen "Strong IQ Hypothesis." If so many genetically-indistinguishable European populations—of roughly similar cultural and historical background and without severe nutritional difficulties—can display such huge variances in tested IQ across different decades and locations, we should be extremely cautious about assuming that other ethnic IQ differences are innate rather than environmental, especially since these may involve populations separated by far wider cultural or nutritional gaps.

In my opinion, this kind of debating strategy is unworthy of you. We're not here to engage in courtroom theatrics. We're here to find out the truth.

Reference

Unz, R. (2012). Race, IQ, and Wealth, The American Conservative, July 18. http://www.theamericanconservative.com/articles/race-iq-and-wealth/

Ron Unz on Race, IQ, and Wealth

Former juvenile detention center in Torgau, East Germany. Was truancy treated the same way in West Germany and the DDR? (source)

Ron Unz has come out with an article on “Race, IQ, and Wealth” in the latest issue of the American Conservative. He had earlier sent me a draft copy and asked for my comments. I did as best I could, not considering myself to be an authority on IQ.

Reading through the published article, I can see that very little was modified. The only real change was that he toned down his anti-Gould rhetoric at the beginning of the article. In general, the introduction seemed to be written in such a way as to “hook” HBD-oriented readers and get them to read the whole thing. Judging by the comments at iSteve, his strategy worked …

While I don’t disclose criticisms of unpublished drafts, I feel free to criticize the published versions. The following text is the one I had sent Ron, minus my comments on certain words and sentences he later removed. The quotes from his article have also been updated to reflect the article as actually published.

If I could rewrite this text, I would point out more clearly that the IQ difference between West Germany and East Germany probably reflected differences in truancy. The more leniently a school treats absenteeism the higher it will score on IQ tests, since the truants tend to be problem students. But the higher IQ score is illusory.

I would also add that IQ may indeed differ between European countries. The existing data, however, are compromised by problems of comparability. Europeans are separated not only by national boundaries but also by different political systems. These differences create differences in sampling bias, in ways of conducting IQ tests, and even in the test itself.

Comments on “Race, IQ, and Wealth”

When I read the first two pages of your article, I got the impression you were trying to get on the good side of HBD readers, as if you wanted to be treated as “one of us” and not “one of them.” If so, you’re overdoing it. Why not forget the reader and concentrate on presenting your argument to a naïve version of yourself?

Your main argument

Your main point is that the variability in European IQ over time and space suggests that most of this variation is environmental in origin and not genetic. By extension, this point casts doubt on the genetic origin of larger-scale IQ difference, particularly those between White Americans, on the one hand, and Black and Hispanic Americans, on the other.

This argument is hard to reconcile with the evidence from twins and/or adopted children. In the Minnesota Transracial Adoption Study, for instance, racial differences in IQ remained unchanged even within a shared family environment overseen by liberal-minded parents. Could differences in uterine environment have been responsible? This is unlikely, since the biracial children among the adopted had probably come from white mothers.

You acknowledge this problem when you refer to studies on adopted twins:

These individual results, usually based on relatively small statistical samples of adopted twins or siblings, seemingly demonstrate the extreme rigidity of IQ—the "Strong IQ Hypothesis"—while we have also seen the numerous examples above of large populations whose IQs have drastically shifted over relatively short periods of time. How can these contradictory findings be squared?

There is an answer. In adoption or twin studies, the data are produced by a single research team who use the same methodology, the same sample of subjects, and the same context of data production. In contrast, your analysis involves studies that differ in all three:

Differences in methodology

You cite several studies that were done in Eastern Europe before the collapse of communism. Eastern bloc countries, however, never used Western-designed IQ tests. Even the term “IQ” was avoided. I suspect those countries were using an older type of test that was less culture-free than modern IQ tests.

Sampling bias

IQ tests are usually performed on students in a classroom. They thus exclude those students who are (a) truant, (b) currently expelled from class, or (c) have parents who can’t or won’t pay certain mandatory fees. There is thus a sampling bias that tends to exclude lower-performing students. More to the point, this bias varies from one time period to another and from one jurisdiction to another.

Differences in context of data production

In some cases, the IQ test is administered after the students have had some experience doing sample questions. In other cases, the test is administered unannounced. In some cases, the test is administered in the native language or dialect of the students. In other cases, it isn’t. This is a problem in many European countries where the official written language differs from the normal spoken language. The Greek language, for instance, comes in two versions, and the version used in the schools has varied according to the dictates of the party in power.

Other criticisms of your paper

Lynn and Vanhanen draw the conclusion that intelligence leads to economic success and—since they argue that intelligence itself is largely innate and genetic—that the relative development ranking of the long list of nations they analyze is unlikely to change much over time, nor will the economic standing of the various groups within ethnically mixed countries, including the United States.

No, this isn’t their argument. Intelligence leads to economic success only in a system where people can accumulate wealth by working and by keeping the fruits of their labor. If people accumulate wealth mainly through pillage and tribute, there will be a selection for a different package of mental and behavioral traits. For this reason, Lynn and Vanhanen argue that market economies tend to outperform State-run economies if innate intelligence is held constant.

[…] although Greeks and Turks have a bitter history of ethnic and political conflict, modern studies have found them to be genetically almost indistinguishable

Two populations can be almost indistinguishable on some genetic traits, yet very different on others. It depends on the intensity of selection. Selection is typically weak and slow-acting because most genetic traits are of low selective value. This may be seen in the large genetic overlap that exists between any two human populations.

When the early waves of Catholic Irish immigrants reached America near the middle of the 19th century, they were widely seen as particularly ignorant and uncouth and aroused much hostility from commentators of the era, some of whom suggested that they might be innately deficient in both character and intelligence. But they advanced economically at a reasonable pace, and within less than a century had become wealthier and better educated than the average white American, including those of "old stock" ancestry. The evidence today is that the tested IQ of the typical Irish-American-to the extent it can be distinguished-is somewhat above the national white American average of around 100

In the 19th century, Irish immigrants were perceived as being uncouth largely because American moral and behavioral norms were much stricter than they are now. Dancing, for instance, was banned in many communities. So there has been convergence in both directions. Immigrants have assimilated to American norms, but those norms have also become more liberal.

I would like to see your sources for Irish American IQ. In Canada, most people of Irish origin are only part-Irish (including myself). Yes, one can find people who are sure of their Irish ancestry and who can produce genealogical records to prove that their ancestry is entirely Irish. But such people would tend to be better educated as well as more interested in history and genealogy. If that isn’t a biased sample, I don’t know what is.

(last two pages)

I realize you feel passionately that Mexican Americans are getting bad press. I also realize that the conclusions from your analysis of European IQ may have implications for the American immigration debate. Unfortunately, you tend to go off on a tangent and discuss points for which the implications are far from evident.

As you note, WordSum has a correlation of 71% with standard IQ tests, which in turn have a correlation of 50 to 75% with innate intelligence. So we are already two steps removed from any genetically transmitted factors. I’m not surprised that Mexican-American performance on WordSum has improved over time. But does this improvement rule out innate differences in IQ between Mexican Americans and White Americans? Is that your argument?

With regard to Hispanics, you also note that from 1994 to 2006 the poverty rate dropped by one-third and that household income rose by 20%. Most of this rise can be traced to the boom in construction, as well as to the generally good economic climate of that time. But what does this factoid tell us about IQ? You’re going off on a tangent.

[…] it seems likely that the tens of millions of Hispanics living in America in the early 1990s probably advanced more rapidly in economic and educational terms than had any of America's large European immigrant groups of the past, such as the Irish, the Italians, the Jews, or the Slavs.

Steve Sailer would argue otherwise. Several intergenerational studies have shown that Mexican Americans have lagged behind Americans of other ethnic origins.

Reference

Unz, R. (2012). Race, IQ, and Wealth, The American Conservative, July 18.

http://www.theamericanconservative.com/articles/race-iq-and-wealth/

Are male and female homosexuality inversely correlated?

U.S. General Social Survey (analysis by Jason Malloy),
- only groups of 40 or more individuals included
- homosexual category includes bisexuals

Jason Malloy has looked into the U.S. General Social Survey for rates of homosexuality by national origin and by gender.  Not surprisingly, he found that different national origins have different rates of homosexuality, given their different levels of sexual permissiveness. Surprisingly, however, there is an apparent inverse correlation between male and female homosexuality. If sexual permissiveness were the causal factor, shouldn’t it increase the numbers of both gays and lesbians? Perhaps not to the same extent, but the effect should at least be in the same positive direction.

This finding is in line with the one discussed in the last post. Although female homosexuality is becoming more common among younger age cohorts, these same cohorts show a stable or even decreasing rate of male homosexuality.

Again, what is going on? When cultural constraints are weak or absent, it may be that the upper limit for expression of homosexuality is higher in females than in males. But that in itself wouldn’t produce an inverse correlation. Perhaps different national groups, for reasons of genetics or family environment (e.g., diet, early childhood upbringing), have different susceptibilities to male and female homosexuality.

For instance, Chinese Americans may be highly susceptible to male homosexuality but only weakly susceptible to female homosexuality. This particular finding might be related to the community’s higher birth ratio of males to females and its corresponding wife shortage. Yet that kind of explanation still rings a bit hollow.

Any ideas?

Born this way?

Lady Gaga on the Monster Ball Tour, 2010
Note: Post has been updated with new data from Jason Malloy

“Why not? It will leave more women for the rest of us.” I remember hearing that argument for gay rights while in high school, the assumption being that gays greatly outnumbered lesbians. There was some exaggeration in both directions. Gays have never made up 10% of all males and lesbians have never made up only 1% of all females. Even so, the former seemed to outnumber the latter. Back then.

Today, the tables have turned. If we look at General Social Survey data (2010) from the United States (analysis by Jason Malloy), the proportion of gay or bisexual men has held steady at 5 to 6%, although there seems to have been a decline among men born since 1980. Meanwhile, the proportion of lesbian or bisexual women has risen from a low of 4% in the oldest cohort to a high of 9% in the youngest one.

Percentages of men who have had a male sex partner, by birth cohort:

1900-1919  =  6.0
1920-1939  =  5.7
1940-1949  =  5.1
1950-1959  =  6.4
1960-1979  =  6.4
1980-1992  =  5.0

For a better look at what's been going on among males born since 1980 (who are still young adults), the last two cohorts are compared only for the 18-23 age bracket:

1960-1979  =  6.0
1980-1992  =  4.6

Percentages of women who have had a female sex partner, by birth cohort:

1900-1919  =  3.9
1920-1939  =  3.5
1940-1949  =  3.7
1950-1959  =  5.8
1960-1979  =  7.4
1980-1992  =  8.9

This upward trend seems to be continuing among the youngest females (18 to 23 year-olds only):

1960-1979  =  6.5
1980-1992  =  9.2

What is going on? It looks like male homosexuality is much more hardwired than female homosexuality. As our social environment becomes more liberal, fewer gays are coming out of the closet—probably because so few are left there. In contrast, the number of potential lesbians seems much more open-ended. Is there an upper limit?

Greece at the crossroads

The Greek government's debt became unmanageable after autumn 2008, but the EU didn’t respond until over a year and a half later. (source)

In the post-national Greece that developed after 1974, the clear winners were the middle class.  Thanks to the strong purchasing power of other European currencies, and later the Euro, they could travel abroad and buy imported goods at little expense. Domestic goods and services likewise remained cheap thanks to outsourcing of jobs to lower-wage countries and insourcing of lower-priced labor for agriculture, shipping, domestic help, and construction.

The clear losers were the working class. Not only did they have to scramble for fewer and fewer jobs—those that could not be relocated to lower-wage countries— but they also faced growing competition from legal and illegal immigrants who would work for half the going market rate. This two-way movement of jobs and workers curbed the rise in wages of low-income earners and increased the rate of permanent “structural” unemployment.

And it has been the least skilled who bear the brunt of the effects of competition from clandestine immigrants on the job market. […]. In the functioning of the Greek economy, peripheral or marginal workers (women, unskilled young people, Roma, seasonal workers, etc.), who play a key role in the functioning of the parallel economy, have seen their status undermined by the mass entry of clandestine immigrants who offer their labor for even less. But this is also true for other categories of wage-earners such as construction workers, who are nonetheless among the most unionized and best protected of all workers. In this sector, clandestine foreign workers make up over 50% of the total workforce, and their wages reportedly do not even reach half the legal minimum.

The rise of unemployment in recent years more greatly affects unskilled workers whose traditional sectors of employment have today become the main ones where clandestine workers are most heavily concentrated. (Pteroudis, 1996, p. 178)

Native Greek workers thus became steadily impoverished, at first in comparison to other Greeks and, later, in absolute terms.

Responses of the Greek government

The Greek government was aware of the plight of the working poor and responded by greatly increasing social assistance, pensions, and public-sector employment. While this response provided displaced workers with more secure incomes, it also increased their dependence on the State. A kind of clientelism developed where recipients of government benefits supported the party in power as long as it maintained or increased their benefits. One example was the lowering of the retirement age to 55 for men and 50 for women in the case of arduous occupations. The definiton of "arduous" was then gradually broadened to cover even waiters and hairdressers. Early retirement became a way to create loyal voting blocs and also to thin the ranks of older unemployed people, thus making the unemployment rate seem lower than it really was.

The government did try to attack the root problem, i.e., the outsourcing of jobs to lower-wage countries and the insourcing of lower-priced labor. This two-way movement, however, benefited the middle class by providing cheaper goods and services, and it was this class that influenced public policy the most, either directly as politicians or civil servants or indirectly through the media and popular culture. For the middle class, it was too easy to portray the pauperized working class as losers in the new global economy.

As a result, protectionist measures were half-hearted. There was certainly an awareness that Greece was drifting into an uncompetitive dead zone: unable to compete against lower-wage countries for manufacturing jobs and also unable to compete against higher-wage countries for high-tech jobs:

The Greek sectoral structure consists mainly in low knowledge sectors. Many such sectors have lost their comparative advantage due both to the low labour costs of some less developed countries and to the high value added business strategies aiming at niche markets in more developed countries (Ministry of Development, 1997, p. 7)

For the Greek government, the solution was to specialize in “high technology and knowledge intensive sectors.” Such an industrial policy would evidently favor workers with high intellectual capacity, i.e., the upper third of the IQ distribution. But what about the other two-thirds?  To bring as many people as possible into the knowledge economy, there would be an expansion of technical education and “a policy to increase the mobility and to improve the quality of the labour supply” (Ministry of Development, 1997, p. 14).

This industrial policy was never really carried out. Part of the problem was lack of money. The main problem, however, was wishful thinking. Few of the structural unemployed were suitable for retraining as knowledge workers. It was even more naïve to see immigration as a way to meet this need. Finally, more should have been done to identify specific market niches where Greece could compete globally. It simply wasn’t enough to point to the knowledge economy as the wave of the future.

The government might have kept things from getting worse by halting the inflow of lower-wage migrants. It did make some attempts, which generally took three forms: 1) legalizing the existing illegal immigrants; 2) taking measures to prevent further illegal immigration; and 3) penalizing employers who hire illegal immigrants (Pteroudis, 1996, p. 179). Of the three, the first one was the easiest to put into practice. But it also made the other two even harder to implement. By raising hopes that future rounds of legalization would be in store, it encouraged even more immigrants to come. Employers responded similarly, seeing illegal status as only a temporary obstacle. Measures against employers were also difficult because lower-level inspectors could be bribed and higher-level functionaries pressured to water down enforcement.

The debt crisis

As Greece entered the new millennium, the pauperization of native Greek workers remained a worsening problem. More and more money had to be found to keep them at a First World level. For a time, this seemed possible, especially during the boom years of 2000 to 2007 when the economy was growing at an annual rate of 4.2% —one of the highest rates in the Euro zone.

Yet even during those boom years, with money pouring into the public coffers, the government not only continued to run deficits but also ran them at levels higher than what the EU officially allowed.

At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing. The purpose of these deals made by several successive Greek governments, was to enable them to continue spending, while hiding the actual deficit from the EU.  

[…] the revised statistics revealed that Greece at all years from 2000-2010 had exceeded the Euros stability criteria, with the yearly deficits exceeding the recommended maximum limit at 3.0% of GDP, and also the debt level clearly exceeding the recommended limit at 60% of GDP. (Wikipedia, 2012)

The boom ended in autumn 2008 as the subprime mortgage crisis spread to Europe. Greece’s main industries of shipping and tourism were badly hit, and by early 2010 the government was openly admitting that its debt level was no longer sustainable. In April, rating agencies downgraded this debt to “junk bond” status. In May, the EU finally responded by organizing a bailout loan with the IMF in exchange for austerity measures.

Why did the EU take so long—over a year and a half—to respond? One reason was that it had been repeatedly misinformed on the extent of the debt crisis.  Another reason was the ongoing effort to admit Turkey as a full EU member. Greece’s support was crucial, particularly given the continuing Turkish occupation of northern Cyprus, and there was some reluctance among EU leaders to come down too hard on the debt issue.

Greece at the crossroads

Today, Greece has two options. One is to remain in the EU, pay off its huge debt, and accept a package of austerity measures. The other is to leave the EU, cancel at least part of its debt, and let the value of its national currency depreciate to bring imports and exports into balance.

For now, Greece will remain in the EU. There is a strong element of national pride at stake here, and also a fear of the costs of moving back to a national economy with its own currency. But the status quo will also be costly, as seen in the measures of the latest austerity package (February 2012):

• 22% cut to the minimum wage from the current €750 per month
• Holiday wage bonuses to be permanently cancelled
• 150,000 jobs to be cut from the state sector by 2015
• Pensions to be cut by €300 million in 2012
• Laws to be changed to make lay-offs easier
• Spending cuts to health and defense
• Industry sectors to be given the right to negotiate lower wages
• Closed professions to be opened up to allow for more competition, particularly in the health, tourism, and real estate sectors
• Privatizations worth €15 billion by 2015, including Greek gas companies. Over the medium term, the goal will be €50 billion (Wikipedia, 2012)

There is nothing here to prevent further pauperization of native Greek workers. In fact, the business community will have an even freer hand to relocate jobs to lower-wage countries or bring in lower-priced migrant labor. The package will also scrap the remaining refuges from globalization by cutting back on public-sector employment, by lowering the minimum wage, and by opening up closed professions.

Staying in the EU is an option that lacks even the virtue of stability. It will probably worsen the existing class conflict in Greek society. To maintain their position of relative affluence, the post-national middle class may openly abandon the native working class and stigmatize them as bums who deserve to be replaced by hardworking immigrants.

In contrast, leaving the EU would shift the costs from the working class to the middle class. By going back to the drachma, and letting it devaluate, the country could stem the outflow of foreign exchange by making imports more costly and exports cheaper. Less money would be wasted on frivolous spending, especially trips abroad and imported luxury items, and more spent on Greek-made goods, thus creating local employment.

Rebuilding a national economy would not be easy, but the main stumbling block is not the transitional costs, however painful these costs may be. It’s the current post-national elite. Leaving the EU would severely undermine their legitimacy … and their lifestyle.

References

Ministry of Development. (1997). International competitiveness and a consensus-based industrial strategy for Greece: The main points of consensus, Project “The Future of Greek Industry”

http://www.cibam.jbs.cam.ac.uk/research/projects/futuregreekindustry/downloads/fgi003.pdf

Pteroudis, E. (1996). Emigrations et immigrations en Grèce, évolutions récentes et questions politiques, Revue européenne de migrations internationals, 12, 159-189 (Espagne, Portugal, Grèce, pays d'immigration).

http://www.persee.fr/web/revues/home/prescript/article/remi_0765-0752_1996_num_12_1_1503

Wikipedia (2012). Greek government-debt crisis

http://en.wikipedia.org/wiki/Greek_government-debt_crisis

Electing a new people?

Immigrants in the port of Patras, Greece (source). An immigrant community as large as three million people, in a country of eleven million.


It was during the early 1970s—the time of the Colonels—that Greece began to receive large numbers of immigrants, mainly Africans recruited for insecure low-paying jobs in construction, agriculture, and shipping.  In 1972, they numbered 15,000 to 20,000 officially and 60,000 unofficially (Pteroudis, 1996, p. 163).

The same years also saw the start of a related trend: loss of employment in manufacturing. These jobs were relocated to countries with cheaper labor and less stringent work regulations. But other jobs could not be relocated by their very nature—jobs in tourism, construction, agriculture, and shipping. It was in these same sectors that employers began to import low-wage labor:

 […] the economic crisis that hit Greece beginning in the mid-1970s led to a process of deindustrialization. But not all sectors of industry were affected in the same way. The more traditional labor-intensive sectors that served the domestic market were less penalized than the more modern sectors that were open to foreign competition. The traditional sectors that held up were also those in which the possibility of using foreign labor was greater (Pteroudis, 1996, p. 164).

When one employer began to hire lower-priced foreign labor, usually without authorization, pressure grew on others to follow suit. By the mid-1990s, foreigners made up 10% of all workers and even more of the “informal” labor force:

More generally, the development of the parallel economy was linked to clandestine immigration. Other than tourism and agriculture, the underground economy assumed considerable proportions in the sectors of construction, industry, and trade. The parallel economy contributed in the early 1990s to 30-35% of Greece’s GIP […]. For some authors it was the development of the size of the parallel economy that attracted the clandestine immigrants […], whereas for others the use of clandestine labor supported the informal economy (Pteroudis, 1996, p. 164).

In theory, the clandestine foreign workers were distinct from the documented ones.  In practice, legal immigration facilitated illegal immigration:

Not all of the non-European Community foreigners present in Greece were clandestine workers. In some sectors they coexisted with documented workers. This was for example the case with the merchant marine. As early as the late 1970s, this strategic sector of the national economy resorted massively to foreign labor, especially in low-skilled jobs. In 1990, there were around 10,000 foreign sailors out of a total of 37,000 people employed on Greek ships. But according to other sources, alongside the documented workers, the merchant marine was employing 12,000 to 14,000 workers from Egypt and Pakistan and 30,000 clandestine foreigners. (Pteroudis, 1996, p. 165)

According to a review of the literature in the early 2000s, this immigration was slowing down the rise in incomes of poorer Greeks:

[…] the wages of Greek workers have not been reduced during the period of immigration (since 1990) but the rate of increase is much lower, in real terms, than in the past. It is interesting to note that the money wages of workers paid with minimum wages have increased at very low rates, between 1% - 2% per year, whereas wages in general have increased by higher rates. The difference between the increases of the two wage rates may be attributed to the fact that those working with minimum wages are unskilled workers without work experiences and therefore these are the people who, in general, are in competition with immigrants in the labour market. (Lianos, 2004, p. 11)

Nonetheless, little has been done to restrain the influx of low-wage workers. In fact, it has actually increased. Why?

Several reasons may be given:

Costs and benefits fall on different people

A big reason is that the adverse impacts fall on those people (the working poor) who have the least input into public policy.

[…] immigration is increasing the inequality of income among various categories of income and profit recipients. A general equilibrium study […] has found that immigration to Greece has indeed this effect. It has reduced real disposable incomes of poor households and has increased the incomes of middle and rich households. (Lianos, 2004, p. 13)

The latter households, who benefit from immigration, have the most input into public policy:

It is interesting to mention that many economists in Greece see immigration as an important factor in keeping wages low, thus keeping the cost of production low and therefore the rate of inflation in a period when Greece was making a serious effort to join the economic and monetary union (EMU). One can go one step further and argue that the policy of low inflation was served by immigration and perhaps even better by illegal immigration. Thus, the lack of haste on the part of the Greek governments to regularise illegal immigrants is attributed to a conscious policy rather than to a lack of administrative ability. (Lianos, 2004, p. 11)

Besides influencing public policy directly, the elites also exert an indirect influence via the media, the arts, and entertainment. This influence builds on an existing tendency among artists, entertainers, and writers toward individualism and post-nationalism.

Post-nationalism

In Greece, post-nationalism has replaced nationalism since the Colonels left in 1974 and even more so since the country entered the European Community in 1981. The increasingly prevalent view is that the nation-state no longer matters and that there are only individuals buying and selling in a global marketplace

Post-nationalists are aware that many immigrants see things differently. But this fact is usually blamed on the host society; if the Greek people would just be more welcoming, fewer immigrants would seek refuge in their own cultural and religious identities.

Such refuge is even seen positively as an understandable response to the challenges of an alien society. Post-nationalism has thus become wedded to multiculturalism.

Belief in unrestrained markets

There has also been a growing belief in the virtue of unrestrained free markets, especially among government officials:

“I am enthusiastic about the Albanians. They certainly work illegally, but that is a prerequisite to their being able to offer their labor at a low price,” declared the minister of the economy in 1993 […]. The usefulness of this very flexible labor is to maintain the competitiveness of certain branches of work […] It is estimated that the cost of clandestine labor is 50% less than that of documented labor (Pteroudis, 1996, p. 177-178)

Collapse of the Eastern bloc

Finally, external circumstances have greatly increased the pressure of immigration, both legal and illegal. One set of circumstances was the end of the Cold War and the collapse of regimes throughout Eastern Europe:

But the increase in the volume of clandestine immigration is to be understood above all as a consequence of the opening of the countries of Eastern Europe and the Balkans. Until 1989 there were practically no citizens from the Eastern bloc in Greece. Only a few thousand Poles had requested asylum […]. But the collapse of the communist regimes and the opening of the borders fundamentally changed migration between the East and the West of the continent (Pteroudis, 1996, p. 165-166)

The 1990s brought hundreds of thousands from the former Eastern bloc. They were difficult to keep out because of the long land border and also because many were entitled to Greek nationality by virtue of having Greek ancestry (i.e., jus sanguinis, as in Israel and Germany). These “ethnic Greeks” usually had only a vague connection to their ancestral homeland. While studying in Voronezh, I worked at a language school where one of our students was preparing to “return” to Greece. He had in fact only a limited understanding of Greek.

These legal immigrants thus created a cosmopolitan environment that could support and conceal illegal immigrants from the former Eastern bloc and, increasingly, from elsewhere.

A Third World baby boom comes of age

Another external circumstance has been a baby boom in a zone stretching from West Africa and the Sahel, through the Horn of Africa and parts of the Middle East, and into South Asia. This boom is fueled by three interacting causes: traditionally high fertility, modern medicine, and relative peace. As these children come of age, most have nowhere to go but out. And “out” is increasingly Europe.

Initially, they went to the countries of their former colonial masters, usually Great Britain or France. This flow of people was seen as “chickens coming home to roost”—payback for the sins of colonialism and imperialism. In the 21st century, however, the chickens are also flocking to other homes. Something else is going on, and it isn’t payback.

How many?

In the mid-1990s, Pteroudis (1996, pp. 174-176) cited Greek estimates that ranged from a low of 180,000 illegal immigrants to a high of 1 million. The number of legal immigrants was likewise uncertain. The 1991 census gave a total of 167,000 whereas other sources pointed to a much higher figure.

Today, estimates range from a low of one million foreign-born to a high of three million. That’s a lot for a country of eleven million people. The low figure is extrapolated from the 2001 census:

[…] the number of immigrants living in Greece in 2001 was 762,191, making up approximately 7 percent of the total population. This figure includes all foreign born irrespective of immigration status, as well as the 46,869 individuals who were citizens of the countries comprising the European Union at that time.

[…] Nevertheless, the actual size of the foreign-born population is estimated to be significantly higher: Many analysts believe that there are between 1 million and 1.3 million immigrants in Greece, making up as much as 10 percent of the population. (Kasimis, 2012)

We may know more when the results of the 2011 census are fully released. But even those numbers will be doubtful, since illegal immigrants tend to shun census-takers. As Kasimis (2012) notes: “The data from the 2011 census […] are not expected to be detailed nor particularly credible because of the problematic organization and management of the census.”

The problem here is not just methodological, It’s also definitional. The term “foreign born” excludes Greek-born children of immigrants. Yet children tend to identify with their parents’ ethnocultural background, and this is especially true for Muslim immigrants (Gogonas, 2011).

Here we come to the high estimate of three million, which is denounced as fear-mongering and yet is probably close to the truth. There might indeed be that many if we add the children of the foreign-born. Of that total, fewer than a quarter are easily assimilable, i.e., ethnic Greeks and other Orthodox Europeans. The rest are mostly Muslim Albanians, Middle Easterners, South Asians, and Africans. 

Conclusion

The past forty years have drawn Greece into a two-way movement of jobs and workers. On the one hand, industries have been relocating to countries where labor costs are cheaper. On the other hand, low-wage labor has been coming in and displacing Greeks from those jobs that cannot be relocated.

This two-way movement initially caused wages to rise more slowly than they would have otherwise. Now, a second phase has begun: a downward leveling of wages and working conditions.

Of course, this phenomenon isn’t unique to Greece. It’s unique only to the extent that the Greek people are (1) less able to keep up the fiction of a First World lifestyle by borrowing money and (2) geographically more exposed to the forces of globalization. Greece is, so to speak, the canary in the coalmine.

But there’s a larger question at stake. Will the Greek people survive? If we accept the logic of post-nationalism and globalism, there can be only one answer and that answer is “no.”

Keep the following points in mind:

-        The Greek people number only eleven million and are on the front of a massive population expansion that is pushing out of Africa and southwestern Asia.

-        Their fertility rate is only 1.3 children per woman, in contrast to rates up to six times higher only a short distance to the south.

-        The ideological environment is hostile to any collective defense of the nation-state. There is a transnational system of defense, NATO, but its aims reflect the geopolitics of another age.

These are admittedly current circumstances, and circumstances can change. But change will have to come soon.

References

Gogonas, N. (2011). Religion as a core value in language maintenance: Arabic speakers in Greece, International Migration, 50, 113-129.

Kasimis, C. (2012). Greece: Illegal Immigration in the Midst of Crisis, Migration Information Source

http://www.migrationinformation.org/Profiles/display.cfm?ID=884

Lianos, T. P. (2004). The impact ofimmigration on Greece’s society, European Migration Network, Greek National Contact Point, Center for Planning and Economic Research.

http://www.emn.at/immigration/docs/b04.pdf

Pteroudis, E. (1996). Emigrations et immigrations en Grèce, évolutions récentes et questions politiques, Revue européenne de migrations internationals, 12, 159-189 (Espagne, Portugal, Grèce, pays d'immigration).