Juan Torres (Granada, 1954) has a degree in Economic and Business Sciences. He is a professor at the University of Seville in the Department of Economic Analysis and Political Economy. He is considered one of the great economic referents of the left. Weeks ago he presented in Palma, invited by the Cercle d’Economia de Mallorca, Econofakes, his latest book.
Why a book of these characteristics?
The fakes, the falsehoods, the lies seem to have become a sign of our time. They have an especially disturbing presence in the economy.
List up to ten falsehoods, could any economist subscribe that they are a lie regardless of their ideology?
It is not an ideological question. In the book I have taken ten sentences and I show that they are a lie, that they are contrary to reality. For example, when I say ‘every year the Nobel Prize in economics is awarded’ it is a lie. Does not exist. When I say that ‘to create jobs you have to lower wages’ is a lie. They are phrases from politicians and even from economics manuals and they are a lie.
That is, there are economists who defend these lies.
There are also lying economists. During the financial crisis of 2007/2008 we have seen how many reports that were made on the economy were falsified.
And that that raising the minimum wage causes the loss of jobs?
It can be said exhaustively that it is a lie. We have dozens of empirical studies that have shown that there have been increases in the minimum wage and no jobs have been destroyed.
Would it be good for Spain to have a public bank? Has a great opportunity been missed with Bankia?
If I pronounce myself saying that it would be good, I would be making a normative judgment, a preference. I prefer to say that in countries where there are public banks, they have reacted better to crises than private banks. Public banking can carry out tasks in the financial sector that private banking will never carry out. In addition, a well-managed public bank is of great use to society. In countries such as Germany or the United States, there are public banks that do not compete with private banks since they are engaged in different businesses. In fact, the public bank creates good clients for the private one. The problem with savings banks that ended badly is not that they were public banks, but that they were poorly managed.
Would it also be a great fake to think that the public is managed worse than the private?
What is true is that in the private sector there is something that forces us to do things right. It is that you are gambling your patrimony. In the public sector, managers do not risk their assets. The public sector must be well designed, well controlled, well managed. Mechanisms for alerting and punishing misbehavior must function effectively.
I was reading his book and I was calmer about the future of my pension.
In this book, what I say is that affirming that the aging of the population prevents the financing of pensions is a lie. The sustainability of the pension system depends on many other factors.
But can I be calm?
I would not be very calm. Recently we were able to see a minister of a government that is supposed to defend public pensions, how he proposed the existence of a private savings fund. You may be uneasy because for thirty or forty years the international banking and financial system has proposed that people’s savings do not go to finance public pensions but rather go to their entities so that they make profitable investments. They do it very intelligently, step by step, making people believe that they will not have a public pension. The danger comes from the Spanish economy becoming rentier, not increasing productivity, not increasing employment, wages remain low … The important thing is that when you have to decide what to do with public money, a part is allocated to pensions.
In this sense, the Government discourages individual pension plans.
It is a fiscal expense that the state should not assume.
Inflation is skyrocketing. Will short-term interest rates go up?
I hope that central banks will not go back to the great blunder of raising interest rates now because they are raising prices. It would be suicidal, outrageous.
But it would control inflation.
Not in any way.
The Government has announced that it is going to reform labor regulations.
I am in favor of reforming some things that were done in the last reforms, not only in Rajoy’s. I think they have generated a big problem in the Spanish labor market and that is that they greatly unbalanced the bargaining power of the parties. And that’s not good … Behind these reforms there is a vision of the job market exclusively of large companies. And of the large company that considers salary only as a cost … The worst thing I see is that it places the emphasis on salary as a cost. I would dare to say that the reform of Rajoy was against the majority of the companies. A labor legislation that lowers the global wage bill takes away sales from companies. The Spanish employers have a problem and that is that they have become the employers of large companies.
In recent years there has been a proliferation of working poor.
It has been an endemic disease for years. It is the result of the continuous modification of the balance when negotiating.
Rajoy also reduced the dismissal, but this issue is not on the table.
What matters to me is not whether my funeral will be expensive or cheap, but whether I die as late as possible. I prefer to talk about the conditions that prevent dismissal from happening before talking about how much they will pay me if they fire me …
The four-day workweek, is it possible or is it a utopia?
It’s going to be inevitable, but I don’t know if we’ll see it. In the last century the working day has passed by half … The working hours are multiplying and that does not make sense.
You have defined yourself on several occasions as a man of the left. Do we have a left-wing government? What do you think of the Yolanda Díaz phenomenon?
It is getting harder and harder for me to know which ones are mine. Mine are not those who threaten the freedom of others, against human rights … I find it difficult to identify myself. The left, for me, is public health, education, pensions … I think about what kind of social organization and philosophical principle and political organization would allow human beings to guarantee our livelihood in a more satisfactory and equitable way. I find it difficult to identify with some things that I see on the left. Yolanda Díaz seems to me to be a person of great worth. I hope it succeeds, but I also think that it is very difficult that only one person is enough. Leadership is important, but I don’t think it is enough. We would have to regain a sense of common sense. We would have to go find common sense policies. Common sense tells us that we cannot destroy the planet, it is not common sense that wealth accumulates in so few hands … Common sense must be recovered.
In 2014 you collaborated with Podemos. I have perceived resentment in some of your statements …
Fortunately, I have managed to avoid having bad feelings inside me. If resentment is a negative thing, I don’t have it. It is true that I have a bad feeling towards someone who did not treat me well personally and politically… I have written my multiple disagreements with Podemos and I have even expressed my displeasure with the treatment I received. Another thing is that what has been done against the leaders of Podemos has been a real undemocratic butchery, a personal, political, and judicial shame … It is unfair. It has been defamed, slandered and lied without any modesty.
European Next Generation funds represent an exceptional opportunity for Spain. Do you think they will be used?
I hope so, although putting the money in the hands of those who have done what they have done is not the best option.
Are you referring to politicians or big business?
To large companies in the oligopolistic sectors.
And the hotel companies?
It is a different market. The problem that the Spanish tourism sector has had is different. In large part, the problem is that many hotel assets have been sold. Tourism is a problematic activity on the territory, by its very nature, but much more so if this tourist investment is not seen as a source of income and wealth that is reverted to the territory.
Are we overly dependent on tourism in the Balearic Islands?
The problem is not to depend a lot on tourism, but to do it exclusively. That is a problem.
But specialization is good, right?
They are different questions. A tourist industry conceived as an activity focused on territorial development feeds other types of activities. For example, a global hotel chain, which has to make the most of its supplies, is not going to be aware of whether it can make local purchases, which are going to be more expensive. Tourism is not inherently negative.
Seasonality is a difficult problem to solve.
It is unavoidable. Monoculture is a problem. It is necessary to try to generate sectoral balance. We have to understand that it is not possible to consolidate an economic model minimally capable of generating wealth that does not have an important industrial base. I am not thinking about blast furnaces, but I am thinking about transformation activities, generating high added value …
The Balearic Islands have had a serious financing problem for years.
A state has to be structured. The state of the autonomies has gotten out of hand.
Do you bet on its suppression?
Not in any way. We have to think with great territorial fraternity in what way we articulate Spain. We have a high degree of decentralization.
Devertebrate. Do the educational systems need to be so different? We must see what state structure we need, what way of coordinating income and expenses is better … The state of the autonomies is not working. How do we solve it? It is not so much a problem of financing, of spending … it is a problem of philosophy, of citizenship.
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Juan Torres: “The state of the autonomies has gotten out of hand”