As mentioned in the last post, prices are on the rise and this place just isn't nearly as cheap as it was a few years ago. But there's one class of things that's still a tremendous bargain for visitors from the US (and probably Europe, but I can't be sure) -- personal services.
This week I will take 5 one-hour private spanish classes at 30 pesos ($10) each, a one hour private tennis lesson, which includes court fees for 70 pesos ($23), and a 90-120 minute private photography lesson for 60 pesos ($20). And all of these are with highly qualified providers. My friend Piper and her friends take lots of private tango lessons. Of all the private lessons, these are probably the most expensive, only because tourist demand is so great. But they're still somewhere between 30 and 50 dollars US I believe.
Another thing we visitors indulge in here is massage and other personal treatments. I've been going to this one masseuse three years running now, and she is fantastic. She has been studying to be an osteopath, with a focus on cranial-sacral therapy (which I guess is the approach osteopaths in Europe take, whereas American osteopaths lean more towards chiropractic manipulation). She now apparently charges 70 pesos for an hour, and she is really, really qualified. Cheaper but still very good massages can be had for 45 pesos ($15) or so.
Last year I went to a physical therapist for my shoulder. I got a whole hour out of the guy, though admittedly about half of that was being iced and getting some kind of weird magnetic stimulation (not the standard electro-stim you get in the states). But even then half the time he stayed in the room and nicely spoke basic spanish with me. This treatment -- free spanish practice included -- cost me all of 30 pesos, though I understand he raised his fees to 45 pesos now.
I haven't had a haircut here in a while, but a couple years ago a super-stylish salon charged me 30 pesos, and that was way upscale. I believe I saw a price list in a regular salon listing 11 pesos, or under four dollars, for a hair cut. I'm sure things like manicures and facials and what-not are equally reasonably priced.
So, visitors, give up your dreams of buying cheap crap here in Argentina. Chances are you have enough crap back home. Instead, get yourself pampered, or figure out some skill you'd like to develop via lessons while you're here. That's the bargain, and the money goes right into the pockets of people who need it.
Wednesday, January 30, 2008
It's Semi-Official -- Inflation at 25% last year
A very common complaint in Buenos Aires is how prices are going up. And coming back after just eight months, I could see that almost everything seemed more expensive. Taxi rides in particular -- wow, they seem to have gone up close to 100%. What used to be a 10-peso ride now costs 20. Food too seems quite a bit more expensive. As I said, it's something everyone complains about, something covered on the local news all the time.
But the official government rate of inflation for 2007 was 8.25%, which isn't so bad. And absolutely nobody believed it, it seemed. When the figure first came out, there were lots of stories on the local news, interviewing people on the street and business people and whoever, and everybody disputed that figure, citing all kinds of examples of rising prices.
And sure enough, yesterday the results of an independent study done by what appears to be a respected group determined that in 9 months of last year inflation was 18% or so, extrapolating to 25 or 26% for the full year. This is much more in line with people's experiences.
This is a sad development. Inflation tends to 'spiral' -- inflation leads to more inflation. I studied economics a fair amount, and I'm still a bit fuzzy on the mechanics -- I think everyone is. In general they say 'inflation expectations' get incorporated into price-setting, contract negotiations, labor negotiations, and so everything just keeps getting more and more expensive. But what causes it to spiral out of control, I don't know.
But I do know that this is something that's happened in Argentina, a bunch of times. I will try to go back and find some statistics, but make no mistake, it's a habit here. And it's definitely a risk right now. (Turns out that increased economic activity tends to lead to inflation. "Too much money chasing too few goods, is how the economists put it. This is what they're talking about when they say the Fed or whoever is afraid the economy is "overheating." And argentina is having lots of economic activity right now. It hardly looks like it's overheating, but, to continue the metaphor, at what point your economy overheats depends on what it's made of. If it's made of straw, it may overheat easily. If it's made of ceramic or steel, it can take lots of heat.
I don't think that the argentinian economy is made of straw, but unfortunately, it may be made of wood. Inflation watch ahead.
But the official government rate of inflation for 2007 was 8.25%, which isn't so bad. And absolutely nobody believed it, it seemed. When the figure first came out, there were lots of stories on the local news, interviewing people on the street and business people and whoever, and everybody disputed that figure, citing all kinds of examples of rising prices.
And sure enough, yesterday the results of an independent study done by what appears to be a respected group determined that in 9 months of last year inflation was 18% or so, extrapolating to 25 or 26% for the full year. This is much more in line with people's experiences.
This is a sad development. Inflation tends to 'spiral' -- inflation leads to more inflation. I studied economics a fair amount, and I'm still a bit fuzzy on the mechanics -- I think everyone is. In general they say 'inflation expectations' get incorporated into price-setting, contract negotiations, labor negotiations, and so everything just keeps getting more and more expensive. But what causes it to spiral out of control, I don't know.
But I do know that this is something that's happened in Argentina, a bunch of times. I will try to go back and find some statistics, but make no mistake, it's a habit here. And it's definitely a risk right now. (Turns out that increased economic activity tends to lead to inflation. "Too much money chasing too few goods, is how the economists put it. This is what they're talking about when they say the Fed or whoever is afraid the economy is "overheating." And argentina is having lots of economic activity right now. It hardly looks like it's overheating, but, to continue the metaphor, at what point your economy overheats depends on what it's made of. If it's made of straw, it may overheat easily. If it's made of ceramic or steel, it can take lots of heat.
I don't think that the argentinian economy is made of straw, but unfortunately, it may be made of wood. Inflation watch ahead.
Monday, January 28, 2008
More on Trust, Wealth, and Cities
I've been avoiding updating this BA blog because I knew I had to write more about the topic I brought up last week, Trust in a society at large. This is a Big Issue, and like all big issues, it's hard to write about because there are no easy answers. So this post will be long, rambling, and probably boring. My apologies. But I like to dabble in such issues, because they're really, really important. When we ask ourselves what kind of world we want to live in, I think one of the things that should come up near the top is just this -- a world in which we can trust everyone. When you can trust people, you just don't have to worry about as much. A world without trust is a tense world, a world where you have to second-guess and third-guess everything.
And I'm not sure, but it seems to me a world without trust probably devolves into a world where power and violence become more and more important. And that does not sound like a nice world to me.
So, to start, I want to get back to what I need to last week's post. I do need to correct something, or at least elaborate. In particular, I said, or at least strongly implied, that it's more likely in a rich society that you're able to trust people than in a poor society. My thought there was that in a poor society, people are just more desperate, and so are less likely to be constrained by ethical concerns.
That's probably true to some extent, but it absolutely must be said that in a lot of poor societies, people are very, very ethical, and there are tons of people in rich societies like the US who are not very ethical at all, who will rip you off at the first opportunity. So clearly wealth is not some kind of direct determinant of ethical behavior.
One thing I mentioned last week that makes a big difference at least in larger-scale transactions is good contract law. If there's no good contract law, you can't call on the legal system to help resolve a private dispute. And if you can't get your private disputes resolved in a reasonable manner, then you're going to be much more wary about your your financial dealings. This tends to inhibit business and economic vitality in general. I think it probably also has a trickle down effect to people's personal behavior. If people see businesses and rich people and people in official positions screwing everyone over, then the screwing of others is going to seem more permissible generally. On the other hand, if screwing others over gets you in trouble, then it seems like a worse idea. And the legal system is the public mechanism for the prevention of screwing-over. So, a bad legal system, corrupt and/or inefficient, can make screwing-over more popular, leading to an over-all decrease in Trust.
There are no doubt many exceptions, but it's probably safe to say that rich countries are more likely to have effective contract law than poor countries. So that's one thing rich countries have going for them.
I'm not sure about the legal system in Argentina. A proxy that is sometimes used is the corruption index published by Transparency International. In a way this is an estimate of Trust in business dealings, and it attempts to include contract law and official and political corruption, among other things. And guess what? Argentina comes pretty far down the list, 105 out of 179. It is way behind Mexico, Brazil, Peru, India, and China (all tied at 72 -- the list is admittedly very approximate).
As an aside, the US comes in at number 20, behind most of the other rich-rich countries. I think this is largely because of the power of lobbyists to affect policy and the power of money to affect elections. I think this list is interesting enough to mention the top 10 "most transparent" countries:
1. Denmark
2. Finland
3. New Zealand
4. Singapore
5. Sweden
6. Iceland
7. Netherlands
7. Switzerland
9. Canada
9. Norway
These are all pretty rich countries, but another thing that jumps out on this list is that all of these are relatively small countries. Canada is the biggest country on this list with 33 million people, and most of them are much smaller. This leads to another factor that has to affect Trust -- population, and more specifically anonymity.
I think most people would agree that it probably becomes harder to maintain public Trust when anonymity increases. No big surprise here -- in a small town, everyone knows you, and so you're much less likely to screw people over. It's going to get back to you. In a big city, you'll never see these people again, and on a strictly practical level you're a lot less likely to suffer repercussions if you behave unethically.
But of course, in Singapore and Copenhagen and Toronto and New York and Buenos Aires for that matter people do behave ethically most of the time, even with complete strangers they will never see again. I think I'd go as far as to say that maintaining Trust in big cities, having people behave ethically despite the anonymity of the megalopolises, is one of the great achievements of humankind. People behave in a trustworthy fashion not because it benefits them on a practical level, but because they just feel that this is the way they should behave. This is what holds society together, right?
So, OK, what about Buenos Aires? I think Trust probably is a little harder to come by in BA than in NY and in a lot of countries. Especially on an impersonal level -- like you're more likely to get screwed on a business deal, you're more likely to have a corrupt official try to get a bribe from you, you're more likely to have some 'inspector' of your business try to shake you down. But on an inter-personal level, I don't know. I think people here are mostly great -- highly civilized, highly trust-worthy. There is a big lower class that I don't know much about, and those people I can't be sure of at all. But in the educated classes, on a personal level things seem good.
And of course crime is probably a bit higher here than it is in the US, at least petty street crime. (Sorry I don't have the energy to look it up right now!) I hear of lots of people who've been robbed here, and I hardly know anyone in the states who's been mugged lately. Of course this crime level is party, maybe largely a matter of the current economic hardships of the country. But also the culture of machismo has got to make crime more attractive. After all, Machismo is all about Force and Power, and robbing someone is nothing if not an exercise of Force, of physical power (although that power may mostly reside in a gun or knife).
Think about it -- where is Machismo lowest? Probably East Asia, right? Where do they have super-low crime rates? East Asia. Hmmm, I'll have to think about this.
But don't worry, I'll try to get back to more interesting topics and posting pictures.
And I'm not sure, but it seems to me a world without trust probably devolves into a world where power and violence become more and more important. And that does not sound like a nice world to me.
So, to start, I want to get back to what I need to last week's post. I do need to correct something, or at least elaborate. In particular, I said, or at least strongly implied, that it's more likely in a rich society that you're able to trust people than in a poor society. My thought there was that in a poor society, people are just more desperate, and so are less likely to be constrained by ethical concerns.
That's probably true to some extent, but it absolutely must be said that in a lot of poor societies, people are very, very ethical, and there are tons of people in rich societies like the US who are not very ethical at all, who will rip you off at the first opportunity. So clearly wealth is not some kind of direct determinant of ethical behavior.
One thing I mentioned last week that makes a big difference at least in larger-scale transactions is good contract law. If there's no good contract law, you can't call on the legal system to help resolve a private dispute. And if you can't get your private disputes resolved in a reasonable manner, then you're going to be much more wary about your your financial dealings. This tends to inhibit business and economic vitality in general. I think it probably also has a trickle down effect to people's personal behavior. If people see businesses and rich people and people in official positions screwing everyone over, then the screwing of others is going to seem more permissible generally. On the other hand, if screwing others over gets you in trouble, then it seems like a worse idea. And the legal system is the public mechanism for the prevention of screwing-over. So, a bad legal system, corrupt and/or inefficient, can make screwing-over more popular, leading to an over-all decrease in Trust.
There are no doubt many exceptions, but it's probably safe to say that rich countries are more likely to have effective contract law than poor countries. So that's one thing rich countries have going for them.
I'm not sure about the legal system in Argentina. A proxy that is sometimes used is the corruption index published by Transparency International. In a way this is an estimate of Trust in business dealings, and it attempts to include contract law and official and political corruption, among other things. And guess what? Argentina comes pretty far down the list, 105 out of 179. It is way behind Mexico, Brazil, Peru, India, and China (all tied at 72 -- the list is admittedly very approximate).
As an aside, the US comes in at number 20, behind most of the other rich-rich countries. I think this is largely because of the power of lobbyists to affect policy and the power of money to affect elections. I think this list is interesting enough to mention the top 10 "most transparent" countries:
1. Denmark
2. Finland
3. New Zealand
4. Singapore
5. Sweden
6. Iceland
7. Netherlands
7. Switzerland
9. Canada
9. Norway
These are all pretty rich countries, but another thing that jumps out on this list is that all of these are relatively small countries. Canada is the biggest country on this list with 33 million people, and most of them are much smaller. This leads to another factor that has to affect Trust -- population, and more specifically anonymity.
I think most people would agree that it probably becomes harder to maintain public Trust when anonymity increases. No big surprise here -- in a small town, everyone knows you, and so you're much less likely to screw people over. It's going to get back to you. In a big city, you'll never see these people again, and on a strictly practical level you're a lot less likely to suffer repercussions if you behave unethically.
But of course, in Singapore and Copenhagen and Toronto and New York and Buenos Aires for that matter people do behave ethically most of the time, even with complete strangers they will never see again. I think I'd go as far as to say that maintaining Trust in big cities, having people behave ethically despite the anonymity of the megalopolises, is one of the great achievements of humankind. People behave in a trustworthy fashion not because it benefits them on a practical level, but because they just feel that this is the way they should behave. This is what holds society together, right?
So, OK, what about Buenos Aires? I think Trust probably is a little harder to come by in BA than in NY and in a lot of countries. Especially on an impersonal level -- like you're more likely to get screwed on a business deal, you're more likely to have a corrupt official try to get a bribe from you, you're more likely to have some 'inspector' of your business try to shake you down. But on an inter-personal level, I don't know. I think people here are mostly great -- highly civilized, highly trust-worthy. There is a big lower class that I don't know much about, and those people I can't be sure of at all. But in the educated classes, on a personal level things seem good.
And of course crime is probably a bit higher here than it is in the US, at least petty street crime. (Sorry I don't have the energy to look it up right now!) I hear of lots of people who've been robbed here, and I hardly know anyone in the states who's been mugged lately. Of course this crime level is party, maybe largely a matter of the current economic hardships of the country. But also the culture of machismo has got to make crime more attractive. After all, Machismo is all about Force and Power, and robbing someone is nothing if not an exercise of Force, of physical power (although that power may mostly reside in a gun or knife).
Think about it -- where is Machismo lowest? Probably East Asia, right? Where do they have super-low crime rates? East Asia. Hmmm, I'll have to think about this.
But don't worry, I'll try to get back to more interesting topics and posting pictures.
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