Christmas in Tuzla

Frankly, Christmas is not my favorite holiday. For one, the gospels are nearly completely silent about how or where Jesus was born. (It seems so much of an after-thought, concocted to bring Jesus into line with pagan ritual and biblical prophecy.) Plus there is all of the consumerism. From I-Secretly-Want-To-Be-Trampled-In-Early-Morning-Consumerist-Stampedes Friday (now Thursday), the day after Thanksgiving (now the day of Thanksgiving), right on up to the post-holiday sales, that is all we hear about: buy, buy, buy for Christ’s sake! Then there is the zombified Right Wing Christian-Fox Network-Tea Party Klan, whose only sustained ritual seems to be complaining that Buddhists, Muslims, Jews, Hindus, and atheists don’t want to be subjected to officially sanctioned displays of life-size plastic creches featuring life-like Scandinavian figures posing as the Holy Family. (Evidently Jesus was born in Stockholm, not Jerusalem, in the line of Johansen, not David.) Don’t get me wrong. I am all in favor of giving gifts and lighting candles. But, since our family normally also observes Hanukkah, the Festival of Lights, another illuminated holiday seems a tad excessive. (We also observe Twelfth Night, the Orthodox Christmas; plenty of lights, plenty of ritual.)

I am much more an Easter Christian — actually a Good Friday Christian. I am deeply attracted to the belief that God shares in our passibility, our frailty, our mortality, our (the Hegel word) particularity. You cannot drag me away from the Triduum, the days during Holy Week leading up to Easter. Christmas service? Well . . . that’s another matter.

wpid-IMG_1295-2013-12-24-07-41.jpgStill, were we in Berkeley right now, we would be thinking of Christmas Eve services at Saint Mark’s, planning Christmas dinner, and, after dinner, paying a visit to what is known as “Christmas Tree Lane,” located on the 3200 block of Thompson Street on the urban island of Alameda, just a short bridge or tunnel away from Oakland, in San Francisco Bay. There must be some households along Christmas Tree Lane that observe religious Christmas. But, that’s not the point. Because every Christmas season, without fail, the households along the 3200 block of Thompson Street drag the lights out of their cellars and attics, drag out wpid-IMG_1296-2013-12-24-07-41.jpgthe life-size creches, the plastic pink flamingoes, along with every conceivable Pixar and Dream Works cartoon character ever plastered on the screen and they light up their entire block, not in tasteful, subdued, subtly dancing and sparkling lights. No, when they are finished “Christmas Tree Lane” looks like Carol Doda’s Condor Club, all lights a-blazing, plus the whole of Broadway and Columbus, and then some. Garish to a fault, the opposite of pious, a cheap hotel district, if you catch my drift. (Wink wink, nod nod, nudge nudge.)

And, then, there’s Christmas morning, that magical moment when we wake up way earlier than we want to, when no one ever receives what they were hoping to receive, and, when, at least in Berkeley, there is never a White Christmas. No snow. Ever.

But I had intended this to be a blog about Christmas in Tuzla. Christmas in Tuzla? Yes, Christmas in Tuzla.

wpid-IMG_1730-2013-12-24-07-41.jpgIt may surprise readers to learn that, in many respects, Christmas in Tuzla is not unlike Christmas in Berkeley. Indeed, it was something of a surprise when, wandering into the Bingos, Merkators, and DMs, supermarkets that densely litter the Tuzlan cityscape, I am confronted by enough fake tinsel Christmas trees, full-size animated santas, Christmas tree balls, strings of lights, holiday baskets to make even a Costco jealous. It is really quite remarkable.IMG_1731

Of course, Tuzla is one of the few remaining cities in Bosnia and Herzegovina with a genuinely and militantly mixed religious and ethnic population. (We will be attending services at the Franciscan monastery this evening.) But, according to our local friends, that doesn’t quite explain the abundance of Christmas litter everywhere we go. Apparently, the observance of Christmas in Bosnia and Herzegovina goes back to the good ol’ Communist days, when Christmas was observed in every factory on every shop floor across a unified Yugoslavia. Here, some unlucky factory worker dressed up in a red and white costume and distributed gifts to awe-struck workers’ children and glasses brimming with Rakia were tipped, surely not for the Christ child, but for Winter, for celebrations of light in the midst of darkness, for the coming New Year, and for something all Yugoslavs know how to do from birth: the preparation and enjoyment of mounds of food with friends and family (always, always, of course, with just a nip of Rakia to ward off ill health).

(Anglicans reading this blog are, of course, free at this point to display a little jealousy if they want.) But, of course, this is actually much nearer the tradition as it once was practiced before Hallmark and Coca Cola got their hands on it. Family, food, celebrations of new life and light, and good tidings. (We will leave the Hallmark Christmas to our good friends at Fox News, whose souls are apparently so plastic and sugar-coated and polyester as not to know that they are observing an ersatz holiday, created and marketed by the Chamber of Commerce, of which, again apparently, God is held to be the CEO.)

IMG_1820But there is more. Several times a day a man shows up in Sjenjak, our neighborhood, decked out in Santa gear, carrying a brown sack — get this — filled with real toys. No joke. And he is distributing these real toys to real kids. “Ho, ho, ho!” I hear outside my window, two, three, four times a day. In our neighborhood, this Santa is the same plump fellow who has attended every Tuzla Sloboda professional basketball game for the past twenty-five years, who runs a BBQ stand across the street from the open market, where he sells tickets for the games, and who is also a devout Muslim. Go figure. But there is also a Santa who peddles his free wares to awe-struck children downtown, next to the outdoor skating rink, in a square decked out in Christmas cheer. It was this Santa who, impromptu, joined our demonstration last Saturday in support of students whom the Federal Legislature has denied EU scholarships. Can you imagine a shopping mall Santa in the US joining in a labor action while on duty? He’d be fired on the spot! But, here, in Tuzla, no one pays these Santas. Quite the reverse. They are not hired to bring in customers or ring bells for change. They purchase or receive donations for the gifts in their bags. They distribute the gifts, just as they march with protesting students, because this is the spirit of Christmas.


No. This is not Thompson Street. And it is not Saint Mark’s. And, yet, there is something very real here, something very much like the spirit of Christmas. Plus snow!

IMG_1854Merry Christmas!

Transcripts and Powerpoint to my Address and Seminar at the ICEI Conference

This morning I had the pleasure of delivering the Keynote address at the Third International Conference on Economic Integration – This was followed by a seminar I had the pleasure of leading. Too many of you have asked for the transcripts and PowerPoints for me to remember. So I am posting them here. Please feel free to comment if you have any questions.

Integration or Assimilation Whence the Private Sphere [Powerpoint]

Modeling Economic Integration Text [Keynote Address]

ICEI Modeling Economic Growth [Seminar]


Speaking Truth to Power

This Friday at Hotel Tuzla I will be delivering the key-note address to the Third International Conference on Economic Integration. After looking over the list of several hundred participants from Departments of Economics throughout Central and Western Europe, a local student of Economics remarked: “I don’t like any of these guys. They are all the enemy.” Perhaps it is another indication of my naiveté, but I would like to believe that scientists, even economic scientists, are still open to reason.

The problem of economic development in the former Yugoslavia is extraordinarily complex. One might suggest that those nations that won their wars of national independence – Kosovo, Slovenia, Montenegro, Croatia – have faired better economically than Bosnia and Herzegovina because they won the right to establish the rule of law. The more comprehensive argument in this direction would claim that ethnic and cultural diversity introduces distortions into free market; that the piling of of local or regional traditions amounts to an unacceptable accumulation of transaction costs. Ethnic, cultural, and religious homogeneity entails an unacceptable drag on the economy. Another argument, with its own merits, holds that President Tito was a necessary link in the economic well-being of Yugoslavia; but that his death signaled the end of the micro-managed economy. Those economies survived best that adjusted most readily to the institutions, laws, and regulations that governs the world economy. But, then, what are we to tell communities upon whom rules were imposed by the international community that are explicitly out of favor with the very international community that imposed those rules?

Finally, we might well question the wisdom of international institutions such as the IMF and World Bank that simultaneously advocate stronger reinforcement of the rule of law and dismantling the very institutions empowered to enact and enforce that law. It is this approach that displays how completely delusional are the scions of international finance, whose left and right hands are in constant battle against one another.

In my key-note this Friday I will point out that Bosnians and Herzegovinians earn an average hourly wage of € 0.62, compared to the average Eurozone average wage of € 23.40. Neoliberals should be complaining that the Eurozone wage is way too high because it is depressing capital formation. Neoliberals are right. All else held equal, capital should be pouring into Bosnia and Herzegovina at a rate of 38-1. The only problem with that complaint is that capital is pouring into the Eurozone, not the reverse. Why? The answer is that, contrary to neoliberal metaphysics – which holds that market exchanges take place in a complete vacuum, that they are as natural as DNA, built into the very genetic sequence itself – market exchanges take place within a comprehensive, robust, and independent public institutional, legal, and regulatory constellation. When this constellation is lacking, private households step in to fill the breach with partial, selective, and purely private institutional, legal, and regulatory arrangements. This is precisely what the oligarchoi in Bosnia and Herzegovina have done. Such arrangements, while beneficial for a few powerful households, are terribly inefficient for the economy as a whole. Just ask Amazon or Best Buy or Home Depot or Target or any number of other international consumer stores; ask them why they will not ship to Bosnia and Herzegovina. They will tell you why: because of the absence of the rule of law.

So why are the IMF, the EU, and the World Bank urging Bosnia and Herzegovina to make further cuts in the very public institutions charged with enacting and enforcing the rule of law? Here is precisely where the metaphysics kick in. The scions of the international financial community believe that markets are, by nature, self-regulating, that all the state need do is step back and watch the magic show. They cannot understand why in the absence of robust law enforcement oligarchs refuse to obey the law. They point to the 12.8 % of overall income in Bosnia and Herzegovina claimed by civil servants, the highest in Europe. These civil servants, however, nearly all owe their appointments to members of the private oligarchy, which now almost completely occupies the plumb civil service positions in the state. Go figure. In the absence of a strong, independent public sphere, the most powerful private households force their way into the public treasury – precisely where the IMF, the EU, and the World Bank deposit their “aid.”

There is no mystery here. No neoliberal metaphysics is necessary to decipher this hieroglyph. Did Bosnia and Herzegovina enjoy robust, independent public institutions, laws, and regulations – sufficiently powerful to stand up to the oligarchs – capital would easily be flowing into Bosnia and Herzegovina, if not 38-1 then at least 20-1. European and American firms in a snap would be attracted to the cheap labor and ready access to bargain basement raw materials and land. Nowhere in Europe are the factors of production more affordable.

And, yet, were the EU and the UN to acknowledge the critical need for state-building instead of state-destruction, they would have to give up their neoliberal metaphysics; that this they cannot do without admitting that their leading policy directive for the past quarter century is bankrupt.

So, if you are in Tuzla this Friday, and make your way to Hotel Tuzla (foreign-owned, by the way). There, amongst the bankers, IMF officials, EU representatives, and private oligarchs, you will find me, at 10:30, delivering a most unlikely key-note address.

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We Don’t Want Your Money

Bosnia and Herzegovina doesn’t want our money.

EXAMPLE #1: This Friday we should have been driving our new car to Belgrade to spend the weekend with our friends Damir and Zoran. Instead, we found ourselves in a loaner wondering whether we will have a car in time for Kirsten to return to Belgrade on Thursday to fly back to San Francisco for her ordination. We were ready three weeks ago to purchase a used car. Renting cars on the weekends has become too expensive. Purchasing a used car makes sense. In the US (or France or Italy or Spain or Holland or Germany or Slovenia or Croatia or Serbia or almost anywhere else in the world), we would simply take our cash into the dealer, purchase a car and then register the car at the DMV. (The French family staying in our home in Berkeley who purchased our car before we left encountered a brief hang-up at the DMV that cost them a day.) But Bosnia and Herzegovina doesn’t want our money.

The first hurdle we had to jump was simply getting the money. From the US side this was fairly easy. We simply asked our US banker to increase our withdrawal limit. Problem: we can’t withdraw more than $250 a day from ATMs in Tuzla. So we went to a bank to withdraw the money without an ATM. The bank told Kirsten that we could have the money wired to the bank by someone in the US. Can we wire ourselves the money? No.

The second hurdle we had to jump through was buying the car. Foreigners can’t buy cars. So we had to find a Bosnian willing to buy the car for us.

Third hurdle: Foreigners can’t register cars. So we had to find a Bosnian willing to register the car.

Bosnia and Herzegovina doesn’t want our money.

EXAMPLE #2: It is a well-known fact that Bosnia and Herzegovina is the poorest country in Europe. It is less well-known that Bosnia and Herzegovina’s cell phone contracts are the third most expensive. No problem. I’ll just switch from a pay-as-you go contract to a pre-paid contract, which would enable us to enjoy a data plan. And so I go down to the state run, BH post office/mobile office. Sure, they can sell me a pre-paid plan, so long as I can come up with $500. Like most Bosnians, I’m not willing to part with $500 simply for the luxury of a data plan. And so instead I spend the customary 20KM a month (roughly $10) for a simple voice plan.

Now it might be thought that $500 is the figure of maximum marginal efficiency. In a country where the average monthly wage is less than 900KM (roughly $500), this cannot be right. So what this means is that pre-paid plans are for that very small percentage of users who fall in the top percentile.

No. This rate plan is not efficient. But nor is it efficient on a macroeconomic level. I have not run the numbers on what these impediments to free and efficient communication cost the Bosnian and Herzegovinian economy overall. But the fact is that it is far more difficult to communicate here than elsewhere in Europe and that this must constitute a huge drag on the economy. But, Bosnia and Herzegovina does not want our money.

So what is all of this about? Some critics will point immediately to the fact that a larger chunk of Bosnia and Herzegovina’s wages goes into the pockets of civil servants – 12.8% – than into the pockets of civil servants anywhere else in Europe. Reduce the size of the state and voila, problem solved. But this ignores both why the state plays such a large part in the wage market and, more importantly, what these civil servants do. Appearances can be deceptive.

Here is how it works: the IMF distributes international loans to the BiH government; BiH politicians allocate funds to friends and patrons; friends and patrons support politicians. Which means that faulting a bloated public sector misses the point. This becomes clear if we ask what civil servants are doing. Hint: they are not reigning in state corruption, cronyism, monopolies, or cartels or enforcing the rule of law. Rather are they filling meaningless positions distributed by politicians as political favors.

Now ask yourself who, if anyone, has the authority and mandate to reign in state corruption, cronyism, monopolies, and cartels or to enforce the rule of law. When the international community pushes privatization, they are actually undermining the only viable institution with any hope of containing corruption, public, private and otherwise. Instead of pushing privatization, the international community should be helping Bosnia and Herzegovina to strengthen the independence and authority of the civil service; and this will mean erecting and reinforcing the wall that should stand between an independent civil service and the corrupting influence of private money, patronage, and cronyism.

Someone – though not your average Bosnian or Herzegovinian – is making money by playing the role of gatekeeper on purchasing and registering automobiles. Someone – though not your average Bosnian or Herzegovinian – is making money by preventing consumers from purchasing or renting cheap, affordable, and efficient data plans. But until the state is authorized and empowered to limit and remove the oligarchs from power, there is little chance that matters will improve.

Until then, Bosnia and Herzegovina does not want our money.