The Peter Zeihan Podcast Series - Can the Six-Day Work Week Save Greece? || Peter Zeihan

Episode Date: August 15, 2024

*This video was recorded during my backpacking trip through Yosemite in the end of July. How would you feel if you had a beautiful view of the coastline, but could only ever get out by the beach once per week? Well, now that employers can mandate a six-day work week in Greece, many are faced with that exact problem. Full Newsletter: https://mailchi.mp/zeihan/can-the-six-day-work-week-save-greece

Everybody, Peter Zine here coming to from just below Matterhorn Pass, where I just came from. And tomorrow's project is over there. That's Doghead Peak. And then this is the Fingerhead Peak, which I will not be doing because I'm not that crazy. Anyway, I copied the entire Ask Peter forum to my phone before embarking on this trip. And wow, some of you have some very strange questions. but one that popped up that I thought really tied some themes together was something going on in Greece right now.

The government has recently approved that employers can force employees to work six-day work weeks. And you're like Greece, that Greece, the Greece that spent itself into oblivion 15 years ago, the Greece had had the hard left governments that basically refused to pay debt. Well, yeah, they've been beaten into shape now. But this is a whole new level. every economic model doesn't matter if it is laissez-faire capitalism or European socialism or Chinese fascism or Biden debt-driven New Dealism or Trumpian peronism. Doesn't matter what it is.

All of them are about managing the differences and the communications between the four major pillars of economic activity. consumption, production, capital, and labor. And different systems will favor different methods. So like socialists generally go more for labor, capitalists generally go more for capital, just for example. It's in the name. What's happened in Greece is that they are running out of those four pillars. Part of this is a series of very, very, very bad government and financial decisions that date back to the 1990s.

Remember, the Greeks had the largest bailout in EU history and indebted themselves to something like 140% of GDP. The bailout to pay it back is going to take them decades. So the capital side of the equation was already all wonko for them. The second problem is demographic. The birth rate in Greece has been below replacement levels for in excess of a half century. And they're simply running out of people under age 45 to do the work. work, much less have children. And so with these two forces completely out of whack, all that's left is supply and demand and an economy that has been in and out of recession now for 15 years. That's not

great. So what we're seeing is the government try to take a brokering role to decide which one of those four forces, supply, demand, capital, and labor has to be crunched down so the other three have a chance to work. And this government has chosen labor. That will obviously generate some political problems. I don't mean to suggest that it won't. The Greeks are hardly the only country that is in this situation. And despite all of their many, many differences, I would say that the country in the world that is second closest to having to make these sort of hard choices is Japan. Demographically, they're the oldest country in the world. They're the fastest aging. And from a debt point of view, they have been running massive, like Greek style, like Biden style, like Trump style, budget deficits now

for 30 years. And if you take into account things like pension, rare is in local debt, which I think you should, you're talking about a debt that's somewhere between 450 and 500% of GDP. So, you know, whenever you look at a country, they're like, oh, wow, their debt's bad. Look at Japan. The Japanese have used what capital they do have to try to find technological solutions for some of these problems, getting people to work later in life, for example. What the Greeks are doing and what the Japanese are doing are very much projects and progress. We have no idea if it's going to work, because remember, we've never, ever been in this position as a species before.

We're looking at the fundamental the bedrock. We've got a little windy. The bedrock of what makes our economic structures work turning inside out, and we are going to have to find a new way forward. For this, I would not necessarily look to Greece and Japan. I mean, for the experiment, by all means, watch them closely. But I would look for the more robust countries that are more internationally involved that have a more dynamic economy that are hitting us.

The top of my list is going to be Korea, which is aging much faster than Greece or Japan. I had to correct myself there. Japan is no longer the fastest aging country in the world. They've done like 10th. Korea is in the top five. I would look at Italy. So you can get a European example as well. They've been below replacement level for 70 years.

And then, of course, look at Germany. Germany has had a number of issues in its past when the economic model no longer functioned. if they got delightfully lively. So that's it for me today. Keep an eye on these countries as they try to redesign themselves. It's not all going to go well. If you happen to be to North America, keep in mind that the United States

is furthest from this problem for demographic reasons. Our demographics have been stronger than everybody else for quite some time. And Mexico has the best demographics in its peer class. So Mexico City and Washington get to watch everybody else and see how they stress over this and hopefully we will learn something from that.