Alternative title: Why I moved to China
Tyler Cowen likes to say that everyone is a regional thinker. It took me a while to understand how that applied to me. I have a split identity (and two passports to go with them). I am both Portuguese and British, with a German high-school education (in Lisbon). So, it’s not even clear which region I should be grouped with.
But Tyler’s statement (as I understand it) is not everyone can be classified as belonging to a regional school of thought, but rather your thinking, even in the most abstract of subjects will have been molded by where you spent your formative years.
I grew up in Portugal, coming of age in the 1990s. The narrative I learned at the time goes as follows: Portugal was held back by the dictatorship, which turned its back on development and the world, Salazar, dictator from 1926-1968, famously said “Portugal will be proudly alone”. Fortunately for the country (unfortunately for the regime), people were still learning about the outside world and eventually got fed up: after the revolution in 1974, the country turned to Europe, joined the EU, and started to catch up to the rest of the West.
Now, having been born in a democratic Portugal, we were the first generation to grow up in a modern Portugal and we’d have lives that were European and turned to the future, not the past. Everyone complained about all the construction that was taking place as the city of Lisbon was being transformed into a modern city, but it was also a sign of progress. The high point of this period was the 1998 World Expo in Lisbon, which included a large expansion of the subway network, and a shiny new bridge across the Tagus, at the time the longest in Europe.
I could now point to where this narrative was a bit too simplistic (in particular, there was a lot of economic growth in the 1950s and 60s, and the true victims of the dictatorship were in the African colonies), but the point is that this is how we thought of the situation: Portugal had been held back by an accident of history and we could see Spain across the border being slightly richer as an example of where the country would be a few years later and the core of the EU as where we could expect to be within our lifetimes.
In 1998, the World Expo in Lisbon was a huge success (after a few initial hiccups), a whole new modern-looking neighbourhood was built on what had been industrial lands. Now UN Secretary-General Guterres was prime-minister, one of the darlings of the international “Third Wave Socialists” movement. Portugal had gotten rid of the nasty right-wing in 1974, now it also had a modern Left.
Then came nothing. Economic growth stumbled. Guterres resigned a few years later (curiously, for someone who was bringing a modern social-democracy, Guterres was, and probably still is, a social-conservative). Outside of Lisbon, things were still improving as the other cities caught up to the capital, but eventually that petered out. Portugal has now had two lost decades. Adjusting for inflation, GDP per capita grew 7% between 2000 and 2008. I mean it grew 7% over that whole period, not on a yearly basis. Then it fell during the crisis and only last year did it get back to 2008 levels, so that between 2000 and 2017, total growth was 7%. Nobody believes that today’s 20-year-old kids will have an European lifestyle (and I don’t even mean a Nordic lifestyle, just a France/German lifestyle).
A few months ago, Noah Smith tweeted that “people compare themselves to other in their society, so saying that ‘things are getting better’ doesn’t help. Nobody compares themselves to people in 2318”. When I read that, I thought, “Why not? I might not look 300 years into the future, but I certainly compare our world to the world in 2038 and think we’re failing”. (Noah might have tweeted a better version, I couldn’t find the original tweet).
The idea of a Great Stagnation has always been deeply intuitive to me and I frankly cannot understand people who say that technology is moving too fast. I grew up seeing real change around me, see it suddenly stop, and feeling short changed by Portugal. Eventually, I left. I didn’t leave because growth stopped, but I stayed away because growth stopped.
I see a lot of superficial changes all the time, but that’s like fashion: now we wear tight jeans, we used to wear bell-bottoms. It’s change, it may even be a good thing, in that it is fun, break the monotony, change” but not progress.
To be sure, stagnation may not be so bad. Germany is the stagnant country par excellence and it’s a nice place to live. It is certainly one of the best countries in the world in terms of quality of life. But, Germany is stagnant and once you see it, the gap between what could easily be and what actually is gets too large to be ignored. As time goes on, the gap will only get larger. I guess if you grow up without large changes for decades, you start to expect stagnation, maybe even enjoy it. You compare yourself to the Jones’ next door and not to 2038 because there is no picture in your minds’ eye of what 2038 should look like and how it should be better.
The population who lived in Portugal through the last 10 years now get excited over 2.2% year-on-year growth. After so many years of nothing, mediocre growth feels amazing. Still, if you cross the border into Spain it no longer feels “this is what Portugal will be in 2021”. Compared to Portugal, Spain now feels like a much wealthier, qualitatively different, better economy. Portugal could have been that, but, at least in my lifetime, it probably won’t be. This is a lost opportunity and it brings me sadness.
Maybe it’s not that I am a regional thinker, but a regional feeler. I have a visceral feel for what it means to “grow to the level of Greece and then stop there” that comes from lived experience.
In summary, this is why I recommend you read Stubborn Attachments.