Friday, August 6, 2010


I just returned from several weeks in Portugal, which is my sixth trip in the past five years. These trips have allowed me the opportunity to visit many towns and regions outside of the two dominant cities of Lisbon and Porto, and spend time with a variety of Portuguese citizens. It is an ancient country, from its Roman ruins to splendid palaces, cathedrals and castles, and it should make any American realize how short our own history is.

Today, as a peripheral country of the European Union and broader global economy, Portugal is at a crossroads. Kenneth Wattret, the chief euro region economist at BNP Paribas in London stated in April 2010 that ”The reason we’re concerned about Portugal is not because its public sector debt ratios are excessively high; it’s more that the Portuguese economy doesn’t really grow.” This small seafaring country which once controlled much of the world, dominating the trade routes to Japan, India, Africa and South America, is now the fodder of economic and political pundits, being labeled one of Europe’s “PIGS” (Portugal, Ireland, Greece and Spain), a poster child of European government mismanagement, bloated public sector and pension systems run amok.

Last week, over lunch (fresh sardines!) in Lisbon with a Harvard classmate who is a prominent entrepreneur in Portugal, we talked about our respective countries. He shared with me that while Portugal has made much progress since the long oppressive reign of António de Oliveira Salazar (1932-68), often simply referred to by Portuguese as “the Dictator,” he took special note of the lack of capacity and willingness of Portuguese to take risks of any sort in any business. While there are other factors (colonialism, wars, etc.), the contemporary view is that Salazar and his government machinery created in the Portuguese a mindset that the government would take care of everything if the populace just gave them their votes and acquiesced to its policies. It is frequently said that what Salazar did was to keep the country occupied with “Football, Fado and Fatima” (Portuguese sports, music and religion, respectively). What Salazar actually did was disembowel the inherent Portuguese entrepreneurial spirit, leading to a population ill prepared for the global world.

As Americans, what do we draw from this? While we must be careful to not attempt to overreach in the analogy, it seems clear that when people lose their inherent skepticism towards its government, regardless of its particular form, that with time the people inevitably are harmed. The rulers invariably win over the ruled. I am reminded of Alexis de Tocqueville, the French political thinker who over 160 years ago said “I cannot help fearing that men may reach a point where they look on every new theory as a danger, every innovation as a toilsome trouble, every social advance as a first step toward revolution, and that they may absolutely refuse to move at all.” (Tocqueville also said “Socialism is a new form of slavery” but that is a topic for another day.) Tocqueville accurately predicted the Portugal of 2010.

I am convinced that the future of Portugal rests not in the hands of its political leaders but its ordinary people, who get up early and stay up late trying to secure a better future economically, socially and culturally for their family and communities. In many instances these are the entrepreneurs, those strange and restless personalities who undertake opportunities where they find it. They will likely not create the next multi-national company, but they can create something better than they have at the moment. And in Portugal, and perhaps here in the U.S., we need to encourage those who do this, in all their variant forms and contexts.

If not, and we choke off these restless spirits, we may find that the painful acronym has grown to “USPIGS.”

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