Author: Vincent Geloso

Recently, I was interviewed on Quebec City’s Radio X regarding the economic future of Greece. An important part of the interview focused on privatization and how it could help Greece.  Let us look at some of the assets that Greece is currently privatizing currently :

1. Hellenic Post (minority stake)
2. Public Gas Company (minority stake)
3. Concessions over ports and airports
4. A casino (minority stake)
5. Water suppliers
6. Banks (yes, they own banks which will be partially privatized)
7. others…

In of itself, privatization is no panacea to a public debt problem. Let’s think about it for a second : you are selling an asset to get rid of a liability. You may do such a thing, but your net worth will not be affected in any ways.

Hence when you privatize, you might want to look at something else. According to the OECD (as quoted in this paper), Greece has one of the most regulated economy in Europe and has a higher degree of state-owned corporations as a share of GDP. As the OECD reports again, SOEs (State owned entreprises) in Greece accounted for a higher share of employment than it did for its share of GDP, which might indicate a productivity problem. Hence the idea of privatizing. You are betting that the assets would be made more productive through private ownership and by new incentives provided by competitors (if the crown corporation was a monopoly).

I understand that evaluating the Greek productivity in SOEs challenge is problematic, but this is not the key of this comment but rather that privatization ought to be done in order to liberate the forces of entrepreneurship and instill more discipline in corporation so that they grow more productive, increase in value and reduce prices for consumers.

The proceeds of privatization in this case are only a “happy by-product” of the adopted policy. Considering that corporations like Hellenic Railways are pilling up losses at the pace of 3 million euros a day, privatizing in order to make the economy more open to competitive might just be a policy that could help Greece.

I have a new series of data concerning the casualty of the First World War that were suffered by the United Kingdom on a monthly basis from August 1914 to November 1918. All though unrelated with economics per se, I often see military history be approached without any graphs or data (with the notable exception of the “Wages of Destruction” by Adam Tooze and the Statistical Handbook of World War II). I believe that collecting such data is quite useful for the purposes of the study of military history and I hope that some military historians will find them useful.

I have just added a new data series that might just please students of World War II and fans of the HistoryNetwork.org podcast. It is the first of a series of many as I share a passion with many historians for the history of World in between 1920 and 1950.

This data series might just be of interest to individuals who argue that the post-war economic miracle of Germany (fast growth) was in fact just a “rebound effect” of reconstruction of physical capital. I expected a greater extent of destruction than observed here which casts doubt on this view in my opinion, but it does help to fuel the debate.

Please note that this data series is made available in the “data sets” page of this blog and be consulted free or charge.