Forgetting Some Important Lessons

Way back in the day when I was an undergrad, a professor of mine had my class read "The Republic of Cousins" by French anthropologist Germaine Tillion. Although the book was focused on oppression of females throughout the Mediterranean region, what struck me most about the book was Tillion's argument for a basic cultural affinity in the Mediterranean basin that transcended religion and nationality. The basic framework around which societies organized themselves and ultimately conducted themselves was no different if you were talking about southern Spain or Morocco, etc. It's an argument that has stuck with me for at least a decade and a half and one which I have admittedly done nothing with.

I was reminded of Tillion again today after reading this story about Spain in the Wall Street Journal. The parallels between Spain and much of the Middle East, at least according to information in this article, are numerous. A quote: "During the good times, its economy is held back by low productivity, an extensive underground economy and scant labor mobility. Studies show that Spaniards are unusually reluctant to move away from their home region -- a trait that acts as a drag on the economy. Today, however, being close to one's extended family is a lifeline. Members of Spanish families help one another pay the mortgage, so there are fewer foreclosures. Even when they lose their homes, Spaniards rarely end up on the street. For the most part, they move in together." "The family represents kind of a social-welfare network that allows the country to withstand a much higher rate of unemployment," says Rafael Doménech, chief economist for Spain and Europe at BBVA bank. Another interesting nugget from the article- Given the rigidities of its labor market, the country's "natural" rate of unemployment is far higher than that of other countries. Economists at Spain's BBVA bank put the country's so-called Nairu -- the sustainable rate of unemployment that can be reached without the economy overheating -- as high as 14%.

I have to admit to being a bit surprised by all of this. Many, many economists tend to focus on a small handful of things when looking at the Middle East- population growth rates, high unemployment, GDP and GDP per capita. Shockingly, few focus on issues like labor productivity, labor mobility, and social networks. I am not above saying that I've not delved all that deeply into these issues myself although I did recently present a paper at a conference that discussed low labor productivity in passing. And I am almost embarrassed to admit that I've never even heard of the concept of a "natural" rate of unemployment.

I think Tillion's time has come in my own research. I am rather excited to discover what else might be out there to give us a more solid understanding of the Middle East and where it might be going.