About numbers (Part II, Politics)

Greek society is not in good terms with numbers. Only recently it realised that there is an over 300 billion Euro debt and that this year there are pending payments of about 40 billion. Very, very few know what the next year payments will be. Even more, few people realise the significance of what 300 billion may be like. Huge numbers, beyond the arithmetic that people usually engage with, in their daily lives, are not easy to grasp. If people, for instance were told that the market value of the National Bank of Greece is something like 10- 15 billion Euros, this would have provided a comparative benchmark; “our debt is 20- 25 times the value of our flagship corporation”. Similarly, if people knew that the yearly payments to the public sector employees is 30 billion Euros again, he could perceive the magnitude of the debt; it would be the money all public employees receive in 10 years.

So, few indisputable numbers are made available, and these are known and understood by the few. Is it because of the inherent difficulty for individuals to come in terms with numbers or because their political leaders have kept them in the blind for their own reasons? Or rather a, most probable, mix of the two? Of course, in the lack of numbers, adjectives and fairy tales abound. As a result, we have truly an abundance of myths, big words and metaphysical hopes in the country.

My purpose however here is not to discuss why people are not used to numbers. Rather to elaborate on those, lacking, numbers who could provide some insight on major economic phenomena in the country in the last thirty years. And would shed light on who has benefited and who has lost and especially how much. Only for the debt, we can be sure that the political parties between 1980 and 2010 put it on the safe shoulders of the teenagers of today and of tomorrow. This is a fact, the most certain verdict of history, and time will eliminate all defensive or self justifying myths to take the blame from the particular power holders of this period and shift it elsewhere, in or out the country.

But it was not only the debt that massively redistributed money, among generations in this case. There have been also other major efforts or practices that benefit some to the expense of others and the society at large. Where the scale of the crime has not been measured.

Three examples of what I consider among the most unfair and greed driven practices, that resulted to major redistribution on money.

First, the black economy. Huge revenues that are not traced, not taxed but felt around us, in the glitz of the life of not a few Greeks. Who, by the way, are the globally best market of the super posh car brand Porsche (see sales statistics of the car maker). Can this be about productivity? Of course not!

How big is the black economy, and who are those who mainly benefit? Is it just 30% as rough statistics say of far higher as lots of us feel.

In any case, those who benefit from black economy, do so to the expense of public tax revenues. Greece has truly not been able to make any wise use of these revenues. The quality of services, the corruption and the bureaucracy is third world and the cost of services higher than first world. So, lots of people. living in the white economy, are eventually and justly not so much concerned, if some segments of society engage in black transactions. Transferring funds to a such an incompetent state appears to be no real issue for them. For sure, they have a point..

More sinister than the black economy, in terms of creating social injustice and an uncompetitive economy, has been the structure of the public sector itself. The public in Greece has roughly two parts; the social part (health, education, administration, etc.) and the entrepreneurial part, i.e., public companies, doing business or pretending to do so. This, latter one, has succeeded in securing extremely high earnings to its employees. People working in the trains, in the metro service (old part), in the electricity corporation, the telecoms and Olympic airways (until recently) enjoyed, and still enjoy, earnings often many times more their colleagues of the "social" public sector. Not to mention of course the wages in the second class, private, sector. Just to give an idea. There is still no University professor in Greece matching the average earnings of an employee (typically including drivers, cleaners, ticket clerks, supervisors, etc.) of HSAP (old part of the metro system), where the average monthly earnings amount to ~7000E (Kathimerini, 14 March). Even if the University brought in some Nobel holder he would be making far less than the average worker at HSAP!! Just to remind. Most of these public companies are totally uncompetitive and living in deep red for many years now. Whenever the state found the muscle to shut down any of them it had to pay out massive compensation plans to avoid protests (in Athens it only takes 100- 200 people to destabilize the whole city). Plans, that, by the way, no private sector employee could ever dream of.

The qualitative aspects of this weird phenomenon are known and are indisputable. Greek administration, as of early 80s, massively strengthened the political power and the financial earnings of these organisations, collectively knows as DEKO. The political system created space for its many friends and political clients under the most favourable conditions and the simple commitment to share the profit. Contrary to what is happening today, a lot of cheap money was easily pouring in from the EU and the International funds at those easy years and had to be managed timely and effectively.

The package was nowhere to be found, east or west; huge earnings, no work, infinite possibilities for engaging in corrupt transactions with the private sector clients. And atop of all, the safe haven of the “public” and the pseudo-mission of serving the public interest. A completely vicious set-up.

The first victim was the country itself. Not only because it took on its back the financing of this huge ballast but also because this destroyed any chance that the private sector would emerge in the international markets with any notable success. Huge, public, fat and corrupt clients, as the 80's telecoms (OTE) were the best show in town for Mr. Kokkalis and his technology ventures of the time. Why risk in the international markets if you can have such a client? Buy yourself a football team to have some fanatics ready to sacrifice, in case something goes wrong, and get on with the easy business. Short term vision, as it turned out to be? Maybe. Life is short term after all

The uncompetitive economy was built on this rotten substrate. This, as an impact was far worse, than the financial sustaining of all this fat.

Socially, the injustice of having such large privileges in the entrepreneurial part of the public sector was paramount. Towards both the social, public sector, as well as the private sector employees and workers. Now, why this dramatic social injustice escaped all notice of the Left is just evidence of its consistent extra-terrestrial habits. Even if somebody gets 7000E a month to engage in personal and corrupt transactions with the private sector, in the mind of the Greek Left, he still qualifies as a worker and should be granted all possible solidarity.

However clear the roll out of the process, we dramatically lack any arithmetic approach. How many, how much, how long? Questions left unanswered. Most likely, nobody will even learn the size and all details of this crime.

Last, the stock market scandal of the turn of the century. When hundreds of thousands of micro investors, encouraged by the political system, lost their money, in search of extreme and unlikely paybacks. This was definetely an instance of a massive transfer of money from the poor to the rich. However, how many billions exactly changed hands, and in exactly which directions, will remain a mystery. As long as we lack such numbers we can only be speculative.

Society would benefit much from arithmetic analyses of such phenomena. And a lot of people, would no longer be able to hide behind missing numbers.


About numbers (Part I, Science)

I read, recently, an excellent book. Or, to be accurate, I am in the process of reading it. I haven't yet reached the conclusions section; so its not the opinions raised or the conclusions reached by the author that I find compelling; its just the methodology. I would strongly recommend this book to any person even remotely interested in modern environmental issues and global change, in general, and in renewable energy in particular.

The book is entitled “Sustainable Energy — without the hot air” and has been written by David JC MacKay, professor at Cambridge. You can buy it at Amazon for twenty Euros, you can freely download from the web at www.withouthotair.com.

What is special about this book is that it is about numbers. In the preface, the author himself endorses “Numbers not adjectives”. This is that drives the whole analysis. Numbers in science can be very complex. The author, a technology professor himself, fully appreciates this difficulty. The challenge he embarks upon is to explain in simple words what we can expect from renewable energy. He religiously respects the mandates of science and common sense. All the scientific complexity is however addressed in the annexes; the main text can be followed by almost every person with a grammar school level of mathematics. For those seeking to understand the full complexity of the issues, details are presented in the annex.

The author, step by step, builds two stacks; that of our energy needs (demand) and that of what renewable energy can supply to us, under assumptions of a true, massive, exploitation of these, many, technologies (supply). Again, I haven't yet reached the point where the result is disclosed; which stack is higher and how much. For the moment I am enjoying the extraordinary style of the book; what I would epitomize as a rare example of “true science made simple”.

Renewable technology is strongly debated. There are all sort of views around. All the way from “the ultimate solution” down to a “silly romantic nonsense”. All views have typically serious people among their ranks. Many motives may drive this diversity; wishful beliefs, economic interests, psychological needs to condemn or to praise, and many more.

In retrospect, when reading this book, I realized the practical impact such books can have. Because of their powerful approach, based on numbers, which respect science, they can restrict this vast range of views. At least, for the vast majority of good willed people. Who put truth above selfish interests or strong inner psychological drives, including religion.

In other words, we may have so many views about renewable energy because such, solid and number based approaches, have not yet become mainstream. Of course, even in science there are errors, there are limits of confidence. In real life, there is hardly ever one solution only. Rather a spectrum of possible solutions. However only numbers can draw the borders between science and superstition or meta- science approaches. Only numbers can provide for hypothesis assessments, can assign probabilities to them, can restrict the spectrum of potential truth that, without science, will easily expand from heaven to hell.

This book will help realize or recall the true power of numbers.

The question now is: why have such rigorous, number-based, approaches appeared so late. This debate on renewable technology is ongoing for 20-30 years. Why did it take so much time?

Difficult to say. Is it manipulation by specific economic interests? Lots of people see conspiracies everywhere, especially when economic interests are at stake. I sort of reject this conspiracy scenaria. I don't think that any economic interest can manipulate western type democracies.

Answers are often simple. I would say that I tend to believe that such approaches take so much time to appear in the literature, because at the end it may simply be extraordinarily difficult to be both a true scientist, understanding the full complexity of numbers and, at the same moment, a person able and willing to report on this complexity is a way understandable by the broader audiences.

This is the rare triple skill of Professor McKay. He commands the science in its full broadness and complexity and has no intention to use political and public appealing and flattering nonsense as cheap substitutes. Then he has the ability to communicate this complexity to the people. And finally, he is not the person that will be manipulated by any economic interest; even more, he has the will to push forward, driven by the moral of reporting important scientific truths for the benefit of society.

Sadly, there are not many people, of this caliber and integrity, around.

(to be continued...)