Judith Stein: The Perils of Portugal
[Judith Stein is a professor of history at the City College of New York Graduate Center. She is the author of The World of Marcus Garvey: Race and Class in Modern Society, Running Steel, Running America: Race, Economic Policy, and the Decline of Liberalism, and Pivotal Decade: How the United States Traded Factories for Finance in the Seventies.]
The British economist David Ricardo told the Portuguese in the nineteenth century to sell their wine to England in exchange for cloth. Whatever the virtues of comparative advantage, the Portuguese sold their wine, but also their textiles, until they joined the EU in 1986. At that point, the textile industry was destroyed by cheap Chinese imports.
Adopting the euro in 1999 did not restore the old industry or create new ones. Low interest rates set off a housing and real estate boom. More than half of the nation’s housing is less than twenty years old. I recently drove from Portugal’s second largest city, Oporto, to a conference in Braga, one of the oldest Christian cities in Europe. Along the thirty-two mile route, I saw no factories but many attractive new houses. Portugal has a nouveau riche elite based in real estate that flipped houses and land as often as Floridians did in the United States....
Read entire article at Dissent
The British economist David Ricardo told the Portuguese in the nineteenth century to sell their wine to England in exchange for cloth. Whatever the virtues of comparative advantage, the Portuguese sold their wine, but also their textiles, until they joined the EU in 1986. At that point, the textile industry was destroyed by cheap Chinese imports.
Adopting the euro in 1999 did not restore the old industry or create new ones. Low interest rates set off a housing and real estate boom. More than half of the nation’s housing is less than twenty years old. I recently drove from Portugal’s second largest city, Oporto, to a conference in Braga, one of the oldest Christian cities in Europe. Along the thirty-two mile route, I saw no factories but many attractive new houses. Portugal has a nouveau riche elite based in real estate that flipped houses and land as often as Floridians did in the United States....