Bryan Caplan on Spain

He spent a bunch of weeks there, there are many good observations, here is one of them:

17. Big question: Why is Spain so much richer now than almost any country in Spanish America?  Before you answer with great confidence, ponder this: According to Angus Maddison’s data on per-capita GDP in 1950, Spain was poorer than Argentina, Chile, Mexico, Peru, Uruguay, and Venezuela, and roughly equal to Colombia, Bolivia, Costa Rica, Cuba, Ecuador, Guatemala, and Panama.  This is 11 years after the end of the Spanish Civil War, and Spain of course stayed out of World War II.

And this:

The worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway.

Do read the whole thing.

Comments

"The worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway."

I live in Switzerland and tomatoes, strawberries, lemons, oranges, bell peppers and many more produce comes from Spain. It's not surprising that the cost of produce is cheaper there: no logistics costs, lower storage costs.

The Scandinavian set of dietary preferences is pretty dire to anyone used to the United States. It is reminiscent of the North of England in the ‘70s, though the dairy, meat, and coffee is a lot better.

I can't generalize, but I just got back from Iceland, and I found their dietary preferences to be vastly better than the American average. The food is expensive, but all of it is delicious, all of it. Plenty of variety, too.

Please elaborate. It sounds like a insult of "average" Americans. The point isn't or shouldn't be what people choose to eat but what is available in stores. I presume you have a better than thou attitude about fast food. But please, elaborate.

Hahaha! Are you kidding? I'm not going to elaborate to someone who has already explicitly stated that they are assuming the worst of me.

No, seriously. I wouldn't argue if your entire position was opposed to fast foods. It is a common belief, one I don't agree with but wouldn't bother arguing about. But if you had other opinions I would be interested and may not even disagree with. But, your choice.

I don't mind if you argue with me, as long as you argue in good faith. If you want to begin by taking the least-charitable interpretation of my comment before you bother asking for a clarifying explanation... well, bless your heart.

So let's back up. Roy LC said, "The Scandinavian set of dietary preferences is pretty dire to anyone used to the United States."

To this, I replied, "I just got back from Iceland, and I found their dietary preferences to be vastly better than the American average."

The only person talking about fast food here is you.

You also wrote, "The point isn't or shouldn't be what people choose to eat but what is available in stores." Maybe that is the point to you, but it is not the point of Roy LC's comment. Roy's point was that Scandinavian dietary preferences are "dire."

The food available in stores in Iceland is fresher, because it is almost entirely local. That means they don't have to pick fruits and vegetables early and allow them to rot on shelves in order to ripen. The meat and diary is organic and free-range; that's not a moral high ground to me, but it does tend to make the food tastier, albeit more expensive. And the overall variety of options in Icelandic grocery stores is just what you'd find in the United States, except with perhaps fewer junk food options.

None of the above would suggest anything like Scandinavian dietary preferences' being "dire." If that offends you, bless your heart.

Nothing "offends" me. I am simply interested in food in general and food myths in particular.

I think Spain implemented reforms Latin American countries didn't. It can make so much different. For instance, recent free market reforms in Brazil made possible a 6.5% yearly growth GDP rate.

As Chinese growth slows and the Brazilian economic miracle unfolds, I think, with our help, Brazil will be able to counterbalance Red China's deletrious influence in the world. Brazil's amazing success will also serve as great publicity for free market capitalism and democracy. I think it is in our enlightened self-interest to help Brazil as much as we can.

Spain has successful neighbors. Well, certainly France, Netherlands, Switzerland, Britain, Germany and the Nordics.

While Brazil has an intelligent, public-spirited leadership, limitless natural resources, one of the biggest economies mankind has ever known and, last but not least, a very smart, hard-working people. It is morning in Brazil.

I think that would be wonderful if it happened, Thiago. Any word on the pension reform? Is it going to take place?

I am not Mr. Ribeiro. I am Mr. Johnson from upstate New York.

According to reliable news sources, the pension reforms has passed the first vote in the House with overwhelming majority. The second and definitive vote is scheduled for August. Then, the Senate will vote the plan, too. All things considered, it will probably be sign into Law in September or October.

Brazil is implementing the most radical free market reforms since Perestroika! The stockmarket is rallying.

The clouds are lifting. The sun is breaking through. It is morning in Brazil thanks to Brazil's leader, President Captain Bolsonaro.

Robert Johnson,

What is with all you Bolsonaro pumpers. Brazil GDP growth rate right now is barely above zero and its budget deficit is not noticeably shrinking. Where are you people getting your fake news numbers from?

1) "Brazil GDP growth rate right now is barely above zero and its budget deficit is not noticeably shrinking."

You are presenting a failure of imagination. Imagine what will happen when the pensions reform is signed into law and the plan to slash expenses in education is implemented. And all the privatizations.

Trust me, the marketstock is not rallying just because Brazil won the America Football Cup.
2) Thanks to President Captain Bolsonaro's free market reforms, Brazil's GDP grew 0.5% in April. In a yearly basis, it means a 6%+ plus GDP yearly growth rate, something almost unheard of in South America. Meanwhile Red China's growrh has slowed down dramatically.

2)

Thiago, with his plethora of generic sounding alternative handles all espousing the greatness of Brazil is a 21st century performance art piece in the vein of Ken M.

I think you are mistaken. I am not Mr. Ribeiro. I am Mr. Johnson.

You are from the Mississippi Delta, not upstate NY. You shouldn't have diddled the roadhouse owner's wife. You might still be playing a mean slide guitar down at the crossroads.

We had a deal....

That Robert Johnson died. Haven't you collected?

I can assure you that was another Robert Johnson.

+1 to Hmmm.

But Ken M is WAY more entertaining

He has probably always been Robert Johnson. It was always obvious “Thiago” wasn’t really Brazilian. He didn’t appear able to speak Portuguese for one thing.

Spain went through a pretty major economic boom in the 1960s, and until the more recent recession in the late 2000s it was mostly doing alright economically aside from inflation in the 1970s. Just having an average 2-3% real GDP growth rate for decades can do wonders.

As with most such booms, it's hard to pin down exactly what the biggest factor in it was. The Wikipedia entry for the economic history of Spain in that period lists high remittance flows, a massive increase in tourism, fairly solid macroeconomic policy that avoided high inflation and recessions, large inflows of Foreign Direct Investment (including technology), and state-led industrialization as the factors.

I suspect the biggest reason was just solid macroeconomic management with political stability for decades, with not too much trouble for business formation and investment.

+1. A high level of economic growth in Spain has been the rule not the exception. In 1961, Spain's GDP grew by almost 12%, in 1972 and 1973 by around 8%, in 1987 by around 5.5%, most of the 1990s between 4% and 5%, the slow growth years (but still positive) occurring in the 1970s and the first half of the 1980s, negative growth only in 1993 and during the early years of the Great Recession. All that growth has to be reflected in the standard of living.

By comparison, during the 1960s and 1970s Latin America experienced high GDP growth rates (around 6% to 6.5%) but beginning around 1980, the GDP growth rates in Latin America have languished far behind the growth rates in Spain, varying between around 4% and zero. Why such a big difference in growth rates? Is it because Spain is in Europe, with relatively strong trading partners? Or is it because Latin America is not Spain (or Europe): white Latin Americans (European descent) in Latin American countries account for only between 32% and 39% of the population. Latin American countries also have high levels of inequality and experience political instability as well as economic instability. Is it the inequality?

Chile's real GDP per capita was pretty much the same in 1976 as in 1948, while Spain's went from about Chile's in 1948 to three times as much in 1976.

Since then, Chile has grown rapidly, but not faster than Spain until 2007 when Spain GDP per capita started flatlining.

Of note, Chile today is rated as far more "Economically Free" than Spain on the Index of Economic Freedom.

Adopting the Acquis Communautaire with EU access in the mid 1980s when it was well developed probably also played a large role. Most important was free movement of goods and favorable trade gravity, coupled with fairly cheap workers from Morocco. This led to Mercedes production in Vitoria and Seat production around Barcelona, and the boom of citrus cash crops around Murcia. Education policy also probably benefited, mostly from the subsidies - Spain has good schools and universities that started in the 1980s. Tourism gravity of course - starting during the dictatorhip years and the country's profile as a good safety/cost tradeoff around the Med (Mallorca and Ibiza are legendary!). Also Spain was in EMU when the crisis hit in 2008 and had the full power and backing of the ECB against its very reckless banks, which had fueled the burbuja by lending to anyone, while keeping Inflation down.

This reads like immigration propaganda. Israel is arguably a better example of a high immigration success story. That territory was very poor and depressed in the early 20th century, then it had a surge of immigration, almost everyone who lives there is a first, second, or third generation immigrant, and now it is phenomenally successful and wealthy and prosperous.

In the same line as the Zionist experiment, an even bigger immigration success story: https://en.m.wikipedia.org/wiki/Generalplan_Ost

Of course, there were some bumps along the way.

Not comparable at all. Israel brings in the most educated people in the world.

The bigger difference is Israel has an immigration system designed to preserve and enhance the ethno-religious identity of the nation and the people. Spain does this too. They have some Muslim + African immigration, but it seems mostly from ethnically-linguistically-religiouslly related peoples from the Americas. Singapore too, their immigration system preserves and enhances identity groups.

It's not unreasonable to say that every human is an "immigrant" in that they "immigrated" at birth from the womb.

Maybe so, but I do not think that the custodians of wombs should accept this as an argument for unrestricted womb-entry by any and all parties.

I don't agree with BC's views on immigration in general, but this seems entirely sensible: When illegal migrants register with the government, they immediately become eligible for many government benefits. Before migrants can legally work, however, they must wait three years. Unsurprisingly, then, you see many people who look like illegal immigrants working informally on the streets, peddling bottled water, sunglasses, purses, and the like. I met one family that was sponsoring Venezuelan refugees. Without their sponsorship, the refugees would basically be held as prisoners in a government camp – or even get deported to Venezuela. Why not flip these policies, so migrants can work immediately, but wait three years to become eligible for government benefits?

Yes, the piece you quoted does sound reasonable. One counter point: At Caplan's Government University, they deny non-student residents the
right to take classes and take tests and develop their careers in that direction, but they do allow non-student residents access to local amenities and buildings and museums and bathrooms and such. Maybe this should be reversed? Are those people considered "prisoners" in the way Caplan considers foreigners who move to Spain and are denied access to job markets?

Yeah, the economists love this meme. Immigration is wonderful and we should import the whole 3rd world.

My BS detector is ringing like crazy.

All of these thoughts from Caplan based on some Uber rides with his sons as interpreters. Really good data!

Caplan: 14. How can immigration to Spain be such a free lunch? Simple: Expanding a well-functioning economy is far easier than fixing a poorly-functioning economy.

It's odd how blithely Caplan can state this without any real empirical evidence of what very high migration rates would do.

Would world economic growth have been higher from moving all the Chinese to the USA, or to Australia, or from keeping them in the PRC? I would doubt it; the political institutions would bust in two, and the environmental constraints would bust in two. And this is the people who probably clearly under-performing their economic "potential" on our planet.

Still, anyone who really believes this is the case is welcome to use Israel as a demonstration in point. Or the San Fernando Valley, where Caplan lives.

Let's have Spain down at the other end of the spectrum, hmm?

"Using my sons as interpreters, I also conversed with about 25 Uber drivers. Hardly a scientific sample, but here are my reflections on the experience."

Via interpreters and using opinions and anecdotes, the blind man describes the elephant - the elephant lives in his imagination.

"Won’t these migrants vote to ruin Spain? I don’t see the slightest hint of this. Migrants come to work, not to change Spain. "

And passengers board aircraft to get somewhere, not to add weight to the aircraft.

Nevertheless.

The Nordic countries only sell goods with high profit margins. This is what you have to do when you have sky-high VAT. Spain taxes food at 4% and 10% VAT vs Sweden's 25%. As far as GDP/head differentials, maybe Caplan should read Garret Jones and Gregory Clark.

"This is 11 years after the end of the Spanish Civil War, and Spain of course stayed out of World War II."

The Spanish Civil war ended on April 1st 1939, next morning there was peace, love, higher productivity and economic growth........well, no. The next morning there was a dictatorship that killed 2-3 times more people than the Civil War between 1936 and 1945. https://en.wikipedia.org/wiki/White_Terror_(Spain)

The Civil War ended in 1936 when one of the organized belligerent groups was defeated. But the end of the war did not yield peace. It only meant that the winners could execute the losers easier and faster. A purge that would have made Stalin or Mao envious. So, "neutral" during WW2 did not translated into peace and growth.

The next morning there was a dictatorship that killed 2-3 times more people than the Civil War between 1936 and 1945

The historian Hugh Thomas estimated that Civil War dead in Spain amounted to about 600,000, with about 2/3 of those killed behind the lines being those executed by the Republican forces. The notion that the Franco regime slaughtered 1.2 to 1.8 million people in Spain over the succeeding six years is decidedly implausible.

I think the 600K estimates comes from death by all Civil war related causes (famine, illness, death in jail). Death in combat and executions were lower at 150-200K. The political repression (White Terror) took 60K-400K lives.

So, compare violent deaths to violent deaths. It would be good to know an estimate of preventable deaths by famine, illness,etc during the dictatorship to compare it to the Civil war period.

In any case, the point is that there was no peace during WW2 in Spain.

No, that's not how he calculated it.

In the areas they controlled, the bolshevists' massacres of Catholic religious and lay people were massive.

Probably 99% of the murderers Franco had executed truly deserved worse.

Caplan provides more evidence that Franco, like Pinochet did for Chile, saved his country.

The mortality rate for clergy and religious in Barcelona was about 80%. In the country as a whole, about half of the population lived in areas that were (within some weeks of the beginning of the war) controlled by the Nationalist forces or by the Basque militias (who were not anti-clerical). In the rest of the country, you could divide the clergy in thirds: one third were killed, one third fled into exile, and one third spent the war in hiding or seclusion. Churches were closed in Republican Spain.

"Caplan provides more evidence that Franco"
Caplan provided no such thing rather he highlights that immigration is what helped Spain. All those Brits and other EU expats helped prop up Spain. The richest part of Spain, Catalonia, historically opposed Franco for destroying their culture, outlawing Catalan, and taking their wealth. Since Franco's death, they found a path from persecution to prosperity. More power to them.

Hmm, let's read that Wikipedia page. Specifically, this bit:

unlike the political repression by the right wing, which "was concentrated against the most dangerous opposition elements", the Republican attacks were irrational, which featured the "murdering [of] innocent people, and letting some of the more dangerous go free. Moreover, one of the main targets of the Red terror was the clergy, most of whom were not engaged in overt opposition" to the Spanish Republic.

All right.

So, on one side, we have an organized group under central control that, during the exigencies of a civil war, concentrated its executions on genuinely dangerous enemies.

On the other side, we have a bunch of people killing at random, including innocents, with their leadership very obviously failing to control it.

Really, how hard is it to identify the good guys here?

I have trouble acknowledging the "good" guys were the ones supported by the Third Reich. In contrast, the "bad" guys were supported by Stalin. It was an special civil war with no good guys, both sides were beyond redemption.

The only redeeming quality of Franco for the US is that he opposed communism at the Cold War peak, no more.

I'm not seeing what he's seeing looking at the Maddison numbers. The ratio of the per capita product of a given country to that of the world's anchor economy in 1929, 1973, and 2016 are as follows:

Spain: 0.57, 0.41, 0.59
Portugal: 0.20, 0.36, 0.52

-Majors-
Brazil: 0.10, 0.16, 0.25
Mexico: 0.17, 0.28, 0.30
Argentina: 0.71, 0.51, 0.35
Colombia: 0.20, 0.20, 0.24
Peru: 0.16, 0.14, 0.22

-Southern Cone-
Chile: 0.40, 0.26, 0.40
Uruguay: 0.43, 0.29, 0.38
Paraguay: [no data], 0.08, 0.16

-Central America-
Panama: 0.20, 0.19, 0.41
El Salvador: 0.09, 0.09, 0.16
Costa Rica: 0.22, 0.25, 0.26
Guatemala: 0.17, 0.12, 0.13
Nicaragua: 0.18, 0.14, 0.09
Honduras: 0.20, 0.09, 0.08

-Caribbean-
Cuba: 0.35, 0.19, 0.14
Dominican Republic: [no data], 0.13, 0.27

Panama is an amazing story.

In the long view, it is as you say, and Spain's, in part, reversion to its longer term trend relative to Latin America isn't too unexpected. It's not like Caplan would cherry pick a year which was less than representative, after all?

Spain in 1950 as "below" Mexico (equal GDP per capita), while being "about the same" as Bolivia (3/4 the GDP per capita) is classic Caplan.
Check - https://ourworldindata.org/grapher/maddison-data-gdp-per-capita-in-2011us-single-benchmark?yScale=log&time=1800..2016&country=ARG+BOL+BRA+CHL+MEX+PER+PRT+ESP+URY+VEN+COL

The stagnation of Argentina and to a lesser extent Uruguay and Chile since the mid 20th century is perhaps more the mystery to solve, not Spanish convergence. (The lack of convergence of the other states is less mysterious).

(And Venezuela is, of course, an oil economy, and does not quite count).

Somehow I agree with him. It's not always the case.

Level and trend.

On a GDP per capita measure, Spain is beneath Mississippi, the poorest US state.

Venezuela was the richest Latin American country until Hugo Chavez blessed it with the socialist paradise while stealing $1 billion.

Hey! Let's it to America.

In terms of per capita GDP in 1960 Spain was poorer than the Not Particularly Democratic Republic is today, which is generally considered to be the world's poorest nation.

Of the Congo. The Not Particularly Democratic Republic of the Congo.

>Why is Spain so much richer now than almost any country in Spanish America?

British retiree money being spread around a bit? After effects of its housing boom?

Spain has benefited greatly from the EU single market, in a way not open to the South American economies. Duh!

Yep. Precisely. Would be great if the Western Hemisphere could get on the trade zone trolley, but alas.

Spain is hardly more affluent vis a vis the United States and Britain than it was in 1929.

"You might credit Trump’s opposition to Maduro, but the driver said she liked him because “He doesn’t talk like a regular politician.” I wanted to ask, “Couldn’t you say the same about Chavez and Maduro?!” but I was in listening mode."

Where did this come from? Chavez was renowned for really long political speeches in the vein of Fidel Castro where he promised massive widespread social and economic changes. Which were tantamount to heavily taxing the rich (including the states oil money) and giving the largesse out to the poor.

Can Caplan really be that tone deaf?

To be clear, speeches are probably the wrong metric. However, it's pretty clear that Trump stands out for not speaking in the same manner as most politicians. He's nearly iconic for that. His blunt comments are what riles his opponents up more than anything else.

What is really to explain is not why Spain did so much better than Latin America in the last 70 years, but why Spain was so poor 70 years ago.
The last 70 years were just a standard regression to the mean, Spain catching up (almost though tot entirely) with its richer neighbors (France, Italy, UK).

The question of why Spain, from the richest European country in the XVIth century to one of the poorest in the middle of the the XXth is of course a much discussed, much debated and very complex question.

to one of the poorest in the middle of the the XXth

It wasn't.

Per the Maddison database, Spain was among the most affluent countries in Europe in 1929, trailing only Britain and Denmark. In 1958, after war reconstruction was complete, Spain had fallen behind, but still compared favorably to the Balkan peninsula, Hungary, Poland, and southern Italy.

Really? I am surprised. I thought Spain was far behind France or Germany.
I'll look at the databases and correct my views accordingly.

It is worth keeping in mind that Spain sat out both world wars, not just the second one.

"Per the Maddison database, Spain was among the most affluent countries in Europe in 1929, " That's very interesting because all the travelogues and novels from Spain in that period- off the top of my head I can think of Michener's Iberia and Hemmingway- portray it as quite poor with extreme income inequality with Spanish peasants sunk in extreme poverty.

I've looked at the Maddison database, and the data I found showed Spain much poorer than many other Wetsern Europe countries, including France and Germany, in 1929 (and years after and before). I found the source at www.ggdc.net/maddison/oriindex.htm under the header Historical Statistics.

So for GDP per capita in 1929 I find Spain at 2,739 trailing Italy 3,093, Germany 4,051, France 4,710, UK 5,503.

This is more consistent with the image we have from novels and other anecdotical evidence as Hoosier says, and with the following summary sentence from wikipedia (Economic History of Spain):

"[E]ven with the stimulus of World War I, only in Catalonia and in two Basque provinces (Biscay and Guipuscoa) did the value of manufacturing output in 1920 exceed that of agricultural production. Agricultural productivity was generally low compared with that of other West European countries because of a number of deficiencies: backward technology, lack of large irrigation projects, inadequate rural credit facilities, outmoded landtenure practices, as well as the age old problems of difficult terrain, unreliable climate, isolation and difficult transportation in the rugged interior."

Human capital.

The EU is underrated.

+1

There's nothing intrinsically that keeps the EU from being as powerful as the US.

Yes, and that's what is worrisome about EU. The US have been far from perfect in foreign policy, but UE and the countries in it have been several degrees of magnitude worse (colonial wars everywhere, horrible internal wars, etc.) America's historical role is to protect Europe from herself and the world from Europe.

Spain joined the EU in 1986 - https://en.wikipedia.org/wiki/Member_state_of_the_European_Union

No major change in log Spanish GDP per capita in 1986 - https://tinyurl.com/yyzk9432 (That is, no major step change in growth rates).

Re-convergence of Spain happens in the same Trente Glorieuses as continental Europe as a whole. (They were rather more glorious in Spain and Portugal).

There's perhaps some boom in 1986 when Spain joins EU, but it is not clear to me that the EU can take credit for this and not the later bust.... EU membership definitely doesn't explain Spanish reconvergence with the rest of Europe.

The EU is probably overrated; where we can disentangle EU membership from post-war recovery and the ending of Communism, it doesn't seem too much associated in GDP per capita terms, in the big picture.

It probably did a nice job in improving the post-fascist legal framework in Spain, but I can't credit that it did too much economically, or certainly there is no clear "big bang" effect.

'EU membership definitely doesn't explain Spanish reconvergence with the rest of Europe'

Well, if a hard Brexit occurs, there will be an interesting natural experiment to see what happens when a major agricultural exporter (or importer, for that matter) is cut off from the common market.

Or do you not buy any Spanish produce in the UK? You certainly do in Germany, and that was not particularly the case even 20 years ago.

What you quote of my comment seems to have no relevance to your next lines. You don't seem to be refuting or commenting on the subject of overall GDP/capita convergence.

There's enough benefit that countries would face real immediate upfront costs from leaving the EU and possibly small benefits from joining*. But the EU does not explain why Spain converged, or more broadly likely really any of the convergence in post 80s Europe with the former communist bloc either.

Unless you contest that (and propose that Spain's growth was largely from the EU, before Spain was ever an EU member), I don't see what the purpose of your comment is, other than a mere reaction to being triggered by the words "The EU is overrated".

*And the EU uses this for lock in to obtain political powers and EU wide citizen freedoms that no one really wants very much to go to it.

'What you quote of my comment seems to have no relevance to your next lines.'

Spain jioned a common market, and prospered. A hard Brexit will demonstrate the effects of leaving a common market. Though the UK will have the opportunity to be blessed with American food exports, regardless of whether anyone in the UK actually wants them.

'You don't seem to be refuting or commenting on the subject of overall GDP/capita convergence.'

There will always be winners and losers, and many ways to measure success, but the benefits of being in a common market - including the classic a rising tide lifts all boats cliche - means a certain amount of convergence, contrasted to divergence at least, is to be expected. This is even more plain in the case of Eastern Europe. And the slightly better dateline is not the mid-80s, but the mid-70s, as Franco left the stage.

'and possibly small benefits from joining'

Amusingly, countries like Ireland, Portugal, Spain, and basically all of Eastern Europe disagree with that analysis. Of course, it is generally Brexit proponents who point out how money from EU states like Germany or the UK flow to such countries in terms of infrastructure projects.

'"The EU is overrated"'

Who care about the EU? My comment was about the common market, and its effect on the growth of the now quite large Spanish agricultural industry. One can certainly argue about the value of food compared to the vast wealth represented by Facebook, but this snippet should be fairly plain - 'GDP From Agriculture in Spain decreased to 7563 EUR Million in the first quarter of 2019 from 7982 EUR Million in the fourth quarter of 2018. GDP From Agriculture in Spain averaged 6334.09 EUR Million from 1995 until 2019, reaching an all time high of 8220 EUR Million in the fourth quarter of 2017 and a record low of 4136 EUR Million in the first quarter of 1995.' https://tradingeconomics.com/spain/gdp-from-agriculture

The convergence of Spain with the rest of Europe is not due to the EU or the Common Market.

Spain did not join until 1986 in which point most of the convergence is completed, and there is no indication that you can attribute even half of any residual convergence to membership of the EU or Common Market. Hence my statement that the benefits are fairly small.

I'm not sure what you think your point is? It seems like a ramble about Brexit.

Spain is rich now because fascist regimes are good at laying the foundation for, and commencing, sustainable economic growth. Note that Chile is the richest Latin American economy, for the same reason.

I guess that is why Chilemwas in the same position as compared to other Latin American countries when Pinochet left power as it was when Allende was elected. But I guess a pair of devastating recessions and wasting 17 years is a fair price for fascism.

https://en.m.wikipedia.org/wiki/Economy_of_Chile#Economic_policies

Spain made use of some institutional structures (sindicatos) you could see in Mussolini's Italy, but was not otherwise a fascist regime. Chile was an institutional military regime and was not fascist at all.

Then Venezuela is not socialist. I am pretty sure Mao and Stalin would notice there is still private property in the country. And what matters in a gas station posing as a real country, oil, is in state hands since the 1970's.

I see no reason to split hairs and pretend Venezuela is not socialist (Brazil opposes its regime) or pretend Chile was not fascism. Totalitarianism is in the nature of Chileans (Allende, the junta, Pinochet, etc.) and Venezuelans. The Castillian is not like you and I are, I can assure you. It is savage, unruly, cruel and violent.

By your definition, were any governments other than Mussolini's fascist?

Ask Stanley Payne.

Personally, I'd say revanchism or some sort of vainglorious ambition is an essential feature. Spain was brutal with the regime's political enemies in 1939 and 1940, but I'm not seeing any other sort of revanchism.

The social ideologies animating the Spanish and Portuguese regimes were anti-liberal and anti-parliamentary, but I'm not seeing the ideological underpinnings of a regime of mobilization. Primo de Rivera tended to be reserved about fascist movements in other countries and the ideologist of the Falangist movement (Serrano Suner) offered that parliamentary institutions were not categorically bad, just unsuited to Spain. And, keep in mind the Falangists were just one element of the Nationalist movement, which also encompassed Carlism, Alfonsine monarchism, and the 'autonomous Right'.

You want an example of fascism outside Germany and Italy, suggest you look to the post-war Arab world, Egypt, Syria, and Iraq in particular. Croatia under the Ustase might be another example.

Spain has a terrible orography, it's not until terrestrial transport improves (autovías) that exporting and industrialization and has a chance and cities boom.

Oreos were rolled out in Spain by 2004 iirc, quite some time before you could get them in central Europe .

Nueva Leon is the Texas of Spain. And immigration wouldn’t benefit Spain, it would benefit the immigrants.

Spain has benefited greatly from the EU. For example, roads/highways are greatly improved. This is what I gather after visiting Spain and talking with some people there.

Not having a hugely drug-hungry neighbor, and horribly corrupt and self-serving post colonial elite running things kinda helps, yaknow

Somewhat surprised the comments on his experience in Spain were not more analytical on Spain's higher unemployment rates. If he was teaching Labor Econ. would think there was more concrete, as opposed to anecdotal, information on the subject.

Also he wonderfully overlooked the Muslim terrorist attack in 2004, killed almost 200 people, and more recent attacks. But he did attack Catholics so I guess that makes up for that omission.

>Big question: Why is Spain so much richer now than almost any country in Spanish America?

That's your "big" question? It is a very dumb one.

Gee, why is France so much richer than Haiti?

Because the French left Haiti but the Haitians did not.

First, what a great observation (about not only a divergence between Spain and Latin America, but a reversal of a trend! Potentially very informative!) Also, the quality of food on offer in Spanish stores vs Northern Europe is one many people including myself have also observed. From a quality of life perspective I would much rather live in Spain than northern Europe (disclosure, am not Spanish but speak Spanish, plus live in Mediterranean climate currently and do not want to live in temperate climate.)

Good article. Just got back from Barcelona, great time. Son speaks excellent Spanish and some Catalan. Most hotel rooms are very small and no air conditioning, unless you stay at some big new place. Ride through the Costa Brava was great, with unique hilltop towns. Very good Metro but avoid in summer when tourists are everywhere. Met my son's friends from all over Europe and Latin America who are also attending university in Barcelona. Most students seemed conservative, especially those from Latin America. Europeans are more likely to be liberals. Most hotel people speak some English. Very old buildings and sights. Newer things by the Mediterranean.

PS Outdoor markets were amazing.

Caplan and Cowen keep making this error. Caplan doesn't use GDP per capita PPP, which you need to do when making country comparisons. Spain was not poorer than Mexico, Venezuela or Brazil but was poorer than Argentina.

GDP per capita (PPP)
1960 v 2016, Maddison (wiki) 1950 not given:

Spain............... $6,000........$30,000
Mexico...............$5,600.........$16,000
Venezuela..........$6,000.........$15,000
Brazil..................$4,000..........$14,000

Argentina.......$10,000............$19,000 the exception

+1

Do we see if Caplan or Cowen correct this or should we just give them a Pinnochio?

2 Trumps...{grin}

+1, informative

Stop ruining my narrative!! I would've gotten away with it too if it weren't for you pesky kids and that mangy mutt!

Chile & Spain had about the same GDP per capita PPP in 1960. Chile didn't have real free market reforms until about 1980, when its growth took off.

Spain's GDP per capita growth came to an end in 2007, and has flatlined since. At this rate, expect Chile to catch up by 2030.

"The worst grocery store I saw in Spain offered higher quality, more variety, and lower prices than the best grocery store I saw in Denmark, Sweden, or Norway."

Coming from the Nordics and having spent some time especially in France and Italy, but also a bit in Spain, I'm baffled by this comment. Adjusting for salaries, I really doubt food is cheaper in South European supermarkets. Variety is broadly speaking similar, although all countries have their own special stuff. Some, but by no means all, fresh produce is fresher in the south, for obvious logistic reasons.

I wonder what Brian, or Tyler, think this supermarket point would prove or show, even if it was true (which it only partially is)? Seems very superficial and simplistic to me.

Nice that someone else raised this point, particularly as there are Lidls in Spain and in several Nordic countries, making the point even more ridiculous than it might first appear.

(Yes, there are regional variations - the Spanish Lidls have an excellent seafood selection compared to German Lidls, for example.)

Indeed, I question it as well. Lower prices in Spain than in Scandinavia: lower prices for who? The tourist who is exchanging US dollars? A visitor from Sweden exchanging kroner?

People, it’s 2019. This is the internet, you can say it with me now: H B D

Griff du Lion or whatever his name is figured this out years ago. GDP per head is well explained by verbal IQ smart fraction (ex outlier resource economies). Latin American countries generally do fairly poorly in terms of mean IQ, there’s no mystery here.

So Spain got smarter vis-a-vis its Latin American counterparts over the last several decades?

The comment on English fluency surprised me. I have been to Madrid, Barcelona, Toledo, Seville, Granada, Cadiz and Cordoba and not had any issues being understood except once. English language fluency among the young is really high in Europe. South Korea by contrast has far fewer people, even in multinationals who are English-fluent. Common to see one guy having to attend all meetings because he needs to translate to Korean for his co-workers.

In general, I think they are good observations, but he is missing a key bit: Emigration. Spain can take a lot of immigrants, but a lot of its educated youth has emigrated, and keeps doing so. Less than 20% of my graduating high school class, top 10 in the country, is currently employed in Spain. Not because there are no jobs at all there, but because the skilled market salaries are very low: A Spanish Computer Science graduate that was magically transported to, say, Minneapolis, would do about the same work for 4x the pay. Mds, engineers, scientists... if you can handle a different language, you are better off abroad.

Now, for a country that should take more immigrants, it should work harder on a national story other than blood and soil. The country might not have big racial concerns nowadays, with the right wing populists not winning a lot of seats compared to everywhere else, But it's hard to keep this going without a system that helps integration. Getting Spanish citizenship is easy if you can claim Spanish great-grandparents, but otherwise naturalization is very difficult, and it's even difficult for children of already naturalized parents.

Tyler,

Re: "17. Big question...etc", why do so many economic commentators equate GDP with wealth? I understand GDP as a flow, analagous in some ways to a person's income, not their wealth. A "wealthy" country could have a period of low GDP/capita, without necessarily ending up "poor" in the same way that a wealthy person could, correct?

This seems to be the basis of the answer to Bryan's question, but he refutes it in the asking - characterising Spain as poorer than Argentina et al in 1950 because Spain's GDP per capita was lower.

They surely "overtook" these countries because they started using their (greater) wealth more effectively, after a period of poor management.

Why does this framing of "GDP as wealth" persist? Is it because it is too difficult to put any sensible frame of reference around "whole country wealth"? It is not so difficult to imagine Spain in 1950 as being wealthier ( in a stocks sense) than any spanish american country (higher capital stocks, stronger and therefore more valuable institutions, higher total property values).

Regards,
Pat

+1 for the first paragraph. A basic and important question that I'd like to see discussed by Economists.

For instance, France doesn't seem any poorer than the US to me, despite having a 25% smaller GDP per capita, and I presume this perception comes from all the wealth accumulated over two and a half millennia
(say since the arrival of the Gauls) on the French territory.

But I don't think this point helps answering the question about Spain vs Latin America, a question which you can formulate using only GDP and removing word like "poorer".

Great point. Same goes with the ridiculous "in 1950, South Korea and Japan were as poor as Chad" trope

The perception is likely due to the fact that France's income inequality is lower than America's so the typical area won't be as far apart as 25%.

If you think a house is just a house regardless of size, unless at the extremes, then the typical 1,200 sq foot French house will seem the same even though quite a bit smaller than the typical 2,200 sq foot American house.

What you don't easily see is that on average the French work 20% less than Americans.

I agree with this approach! If you don't like the stats, or they're hard to explain from visiting the fruit and veg department, just pretend they're wrong!

Some comments from one of those immigrants living in Spain.

Terrible level of English is explained by dubbing movies instead of subtitiling them. In Portugal where subtitiling is customary, English is spoken much better.

Spanish local government actually works. In our small village near Barcelona rubbish and recycling is collected every day. Recyling containers for all kinds of things are everywhere. They collect even used olive oil (!!).

Sadly, there is no Uber in Barcelona.

Young people unemployment is 45%. It is very hard to find temporary summer jobs in Spain for locals.

Catalan independence already slowed down growth in barcelona and it will only become worse.

Housing market is stagnant. Even changing a door in you r garage requires permission from a local council. Deposit for the mortgage is 20%. On top there are 12% tax on all first and second hand property transactions.

At the moment there are 2 contrsuction cranes in Barcelona as seen from Montjuic (apart from Sagrada).

If only they liberalised housing market, Spain could have become a Texas of Europe....

But first they need to fix mediterranean coast. It is incased in 70th concrete jungle... Disgusting....

"If only they liberalised housing market, Spain could have become a Texas of Europe....

But first they need to fix mediterranean coast. It is incased in 70th concrete jungle... Disgusting...."

..that's what Texas looks like, at least the cities. Hundreds of square miles of asphalt. Not aesthetically pleasing, and the heat island effect sucks, but economically it works okay (as long as everyone is rich enough to afford a car).

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