By Jonathan B. Wight

While tourism and mining are both on the rise in Portugal—boosting the economy—there is still a sense of malaise as the country continues to lose population.  Every building at street level is tagged with graffiti, and owners seemed disinclined to do much about it. If they did paint over, how long would it take before a repeat offense? 

Despite this, one thing that strikes any visitor immediately is how safe Portugal feels. We have been renting an apartment in one of the poorer neighborhoods of Lisbon (Alfama), historically an Arab or Moorish sector, but today filled with immigrants from Asia, Africa, and Latin America—plus a lot of tourists! (See photo.)

Regardless of the neighborhood or the city, one feels safe, and the data bear this out. The murder rate is 0.6 per 100,000 people, compared to 3.0 for Europe as a whole and 5.4 for the United States. That’s an enormous difference—you are 9 times more likely to die violently in the rich U.S. than in this much poorer country.

I’m not sure about the reasons for this. One factor could be the social safety net (even though it’s stretched thin by austerity measures). Another could be the legalization in 2001 of marijuana, cocaine, heroin, and LSD for personal consumption. 

I have seen some poverty, and some begging, but nothing like the panhandling in my hometown of Richmond, Virginia.  This is despite a poverty rate in Portugal of a whopping 17%, which amounts to several million adults, and perhaps a half million children.  

Inequality is considered high by European standards, but is low compared to the U.S. The Gini coefficient is .33 in Portugal, and has been trending downward for the past decade (1=complete inequality, 0=no inequality).  The U.S. Gini is .41 and trending higher.

With the influx of tourism and retirees here, gentrification is a huge issue for the poor and middle class dwellers in trendy neighborhoods like ours.

Another feature of this economy, unsurprisingly, is the relatively low price of services, and the high price of goods. The low price of services is understandable, given the high unemployment and low wages. 

The relatively high price of goods may be due to the VAT (23%), or to the tiny retail establishments that seem to abound in our neighborhood with no economies of scale and presumably high transport and handling costs. Gas costs the equivalent of $5.70 per gallon, and trucks are scaled down in size to maneuver through the narrow, winding streets.  Our friends who live here drive once a month to a large grocery store to stock up.  That is not available for many residents who live in tiny apartments with tiny fridges and little freezer or storage space, and don't have a car to begin with.

Prices in Portugal are lower outside of the metropolis (https://www.numbeo.com/cost-of-living/country_result.jsp?country=Portugal).

By Jonathan B. Wight

Over its recorded history, the area today called Portugal was “invaded” by Phoenicians, Greeks, Romans, Carthaginians, Arabs, Visigoths, and others. The city of Lisbon traces back 3,200 years of this history, and earlier. Vestiges and scars of the battles and resettlements are everywhere.

Portugal became a premier world power and seafaring technological leader during the 15^th and 16^th centuries. It acquired enormous colonies, most notably in Brazil, Angola, and Mozambique. To take advantage of the wealth in sugar and other commodities, Portugal participated in the barbarous slave trade.

Because of Portugal’s longstanding trade with England (defying France’s blockade in the early 19^th century), Napoleon invaded the country in 1807.  The royal family fled to Brazil. This unleashed a river of change, including the opening of Brazil’s trade with non-colonial powers such as England, and the beginning of other liberal policies.  Brazil soon received co-equal status as a kingdom with Portugal. (For details see Jose Luis Cardoso, “Free Trade, Political Economy and the Birth of a New Economic Nation: Brazil, 1808-1810,” Journal of Iberian and Latin American Economic History 27(2): Otoño 2009: 183-204.)

After the British helped repulse Napoleon, the royal family eventually returned to Portugal, leaving the prince regent Dom Pedro behind in Rio de Janeiro. When the legislature in Lisbon tried to demote Brazil to its former colonial status, the flames of independence were stoked and Dom Pedro helped bring about a fairly peaceful break with the mother colony.

The richness extracted by that colonial period is evident everywhere in Portugal, often in the magnificent cathedrals and museums filled with sacred art. The irony of all that religious beauty arising from the sweat and suffering of slaves is shocking.

In the modern era, Portugal has been on the low end of income standards in Western Europe (see chart).  It was hammered hard during the global economic recession and hundreds of thousands of talented Portuguese fled the country for work. That is partly why the unemployment rate has fallen from over 17% five years ago to under 7% today.

While still losing population, the country is attractive to immigrants from even poorer countries in Africa, Asia, and Latin America.  A tourist boom fuels a service economy.  On a recent day, I witnessed a long line of people trying to get permits to stay in the country (photo). 

In our Lisbon neighborhood of Alfama, Bangladeshis staff a disproportionate share of shops and restaurants. Our favorite waiter lost his mother a month ago but could not attend her funeral for fear of not getting back in. A Bangladishi who got off a plane only a month ago and doesn’t speak much Portuguese, mans the nearby fruit and vegetable shop.  He is already working 14 hour days for his cousin who owns this store. The cousin owns another shop two doors down that sells sundries while his young daughter plays on the floor until 10 pm and his wife tends the till.

Life goes on and people struggle to better themselves. This is human history in its pathos and its glory.

By Jonathan B. Wight

The blog has been quiet for a while as I’ve sopped up “green wine” with codfish in Lisbon and other haunts. The joy of sabbatical is getting outside one’s comfort zone.  Indeed, the main defense of international trade and travel, as noted by John Stuart Mill, is that it enlivens and widens our view of fellow men and women.

In Coimbra, yesterday, one of the oldest university towns in Europe, our apartment overlooked some of the riotous student fraternities. Black-caped students swirled about, joyous about something. The prestigious University of Coimbra was founded in 1290 and has been in continuous operation since, although with discombobulations.  It is considered the Oxford or Cambridge of Portugal.

The highlight of the campus tour (listed as a UNESCO World Heritage site) is the Joanine Library, dating from the early 18^th century. It is the most stunning room I have ever been in. Words cannot convey the richness of the atmosphere of gorgeous oak wooden book shelves rising up to the heavens. Photos are not allowed within the room, but from the outside, there is a huge keyhole that one can peer through (see photo).  The richly ornate building does not feel oppressive like many such gilded rooms.

Most importantly, it contains 60,000 books that date from the early Scientific Revolution and Enlightenment. What a statement of values to build such a library to celebrate the frontiers of knowledge in that era. Bats are maintained within the structure to feed at night on insects that otherwise would munch on the paper. (Low tech solution to a problem.)

By Jonathan B. Wight

Richard Vedder, emeritus professor of economics at Ohio State, is writing a book on declining productivity in American universities.  A précis was printed in the Wall Street Journal as “College Wouldn’t Cost So Much If Students and Faculty Worked Harder.”

It’s hard to argue with the main points, namely that, compared to 50 years ago:

• Students study fewer hours;
• Students get higher grades after learning less;
• Faculty teach fewer hours;
• Faculty publish more papers that are read by fewer people;
• Administrators have come to outnumber teaching faculty.

This is truly a mess.  The ethics of it arises because of misaligned incentives, as Adam Smith wrote about in castigating his own teachers at Oxford.  

In modern America, administrators want to get donations and accreditation.  Accreditation bodies want to justify themselves by pretending they are ratcheting up quality. Faculty quality is mistakenly often construed to mean more publications.  And so on…. [Let’s not even talk about athletics.]

The situation is somewhat worse than Vedder portrays, because the rise of administrators is highly correlated with the rise of meetings and paperwork. While faculty are teaching less, they are caught up in more rigmarole of governance, tenure, promotion, and other time-sapping (but highly important) activities. 

But why pick on colleges?  Exactly the same facts probably pertain to high schools.  When my father graduated high school in 1932, he wrote beautifully using Shakespearean metaphors and knew world history. 

My only pushback to Vedder is that he assumes that the only reason to do research is to create knowledge that will be recognized by others as advancements in thinking. This is a worthy but elusive goal; most researchers, even at prestigious universities, will never publish anything that will be read by future scholars.

A more pragmatic reason for encouraging and rewarding faculty engagement with research is that it keeps a teacher from going stale. A faculty member, through stretching oneself and subjecting oneself to a research review process, must necessarily command more control of the classroom.  At least that has been my experience.  This is not a defense against Vedder’s general critique, only a qualification.

[Thanks to Bacon's Rebellion (https://www.baconsrebellion.com) for the link!]