I didn’t want to mix this in with my substantive Portugal post, but a few readers might be interested in some maudlin memories from my youth.
You see, back in 1975, shortly after the overthrow of the dictatorship that had ruled the country for half a century, the governor of Portugal’s central bank, Jose da Silva Lopes, called on his old friend Dick Eckaus, a professor at MIT, to see if he could get some MIT people to come and offer expert advice. Sure enough, a team consisting (I think) of Eckaus, Rudi Dornbusch, and Lance Taylor showed up (I’m pretty sure Bob Solow also visited). They apparently did fine work putting together the national accounts, among other things, and Silva Lopes wanted more. Unfortunately, senior MIT faculty were not available.
So, in the summer of 1976 they got five MIT grad students: Miguel Beleza (a Portuguese national who would later serve both as governor of the central bank and finance minister), Andy Abel, Jeff Frankel, Ray Hill (who went off into the private sector), and me. Judging by later academic reputations, they got quite a group! The next year, by the way, they got David Germany, Jeremy Bulow, and, guess who, Ken Rogoff.
Portugal in the summer of 1976 was a bizarrely interesting place — still somewhat chaotic in the aftermath of both the coup and the withdrawal from its African empire (the hotels were filled with “returnees” from Africa placed there on a temporary basis). Lisbon often seemed like a fossil, with much of its appearance and infrastructure little changed since the Edwardian era. Democracy seemed shaky, although the truth was that the Maoist posters everywhere were deceptive; the democratic left had won pretty decisively by the time we arrived (although the TV was still showing East German programs about tractors, even as the film theaters caught up on a decade of Western porn).
The country, in short, was fascinating, lovable, and still very poor.
We had a reunion conference 25 years later, and Lisbon was, to be frank, a bit disappointing: it had become a normal, if charming, European city. But this normality was, as we all recognized, a wonderful thing: Portugal had emerged from a long, troubled history to become part of the basic decency of the European social model.
And now all of that is under siege.
I sometimes encounter Europeans who think my harsh criticism of the troika and its policies means that I’m anti-European. On the contrary: the European project, the construction of peace, democracy, and prosperity through union, is one of the best things that ever happened to humanity. And that’s why the misguided policies that are tearing Europe apart are such a tragedy.
Update: A blurry but still embarrassing photo; Beleza, Abel, Frankel, me: