Why Is Southern Europe So Poor? 

A poorly researched video with many historical falsehoods, for instance the claim about the absence of trade monopolies in Northern Europe.

Northern Europe rich but: -broken family units, people living in isolation, very small households -greater prevalence of obesity, STIs and other lifestyle diseases -far bigger wealth inequalities than in Southern Europe I'll be glad to accept a lower GDP per capita for the lifestyle of southern Europe and fewer of the problems of northern Europe. $$$ is far from the only thing that matters.

Define poor. Also, compare a British average house to a Spanish house. Then same with diet and health. I know what I choose

I think the South's focus on agriculture should be mentioned. Also from my understanding Southern Italy and Southern Spain lands were owned by nobles, and since most of the economy was agricultural all the money was earned by a small group of people. Also, most of the gold from the Americas was never used for investments. It was a resource curse where all of Spain's economy was based on gold extraction which caused Spain to be irrelevant once they lost their colonies. Most of Southern Europe was ruled by large foreign powers. Spain and Italy were ruled by the Habsburgs and Greece by the Ottomans. Southern Italy was also ruled by the Spanish. The Hapsburgs wasted a lot of the Spanish Gold on religious wars and they never invested the money on its territories. Castile was hit very hard by all the taxes and people used to fight wars for the Habsburgs. The argument of religion never made sense to me because the French were Catholic monarchs but their literacy also increased during the same period. I think the issue was mostly the focus of absolute monarchs and nobles trying to enrich themselves and maintain power and the existing order. The South's goal was to maintain power and wealth for the nobles at the expense of its lower classes and its institutions reflected that. The North's goal was to increase the wealth of its business class and traders and so it's institutions and laws were more egalitarian. Just want to clarify I am not an expert and this is just my opinion.

productivity experiences a decline of up to 4% for each degree increase beyond 27 degrees Celsius

I’d like to see how Eastern Europe fits into this, as many of the former Soviet block are overdoing southern Europe in GDP per capita.

Actually the main difference between south and north is that north introduced liberalism and democracy long before south. If you look for example Republic of Dubrovnik, which was till Napoleon took control over it, one of the bastions of liberalism and democracy in the Europe you can notice that there were rich exemptions in the south also. Every rich country in the past and now is rich only because of its liberal economics. There is no exemption. You can have all the resources (Venezuela is the best example) and still be extremely poor if there is no free market, individual responsibility, rule of law and freedom of speech.

I will add one thing which is the weather in my opinion. In north cold, rainy and wind so there is nothing to do except to study and work while in south the sun and beach push the person go out and hang out longer

Climate should be considered as well. Throughout history, beautiful weather does not make people work harder. The harsh climate of the North required more effort for survival. With that said, I would rather live on a beach rather than a northern latitude where the sun shines less bright and there is more winter than summer.

global south and eastern europe financial difference is more noticable than this😂

Somehow, I also think geography should have a massive part of the explanation.

But the quality of life in those southern Europe looks attractive than the north , I've experienced Portugal and not the touristy parts i quietly enjoyed my vacation there its still my most memorable of most European countries

great idea to summarise key points at the end. really good video

I found this video surprisingly interesting. I never thought about it like that before, so food for thought thanks.

Because the simulation wanted it to be

Switzerland 🇨🇭 is more central Europe, not northern europe.

I’d say it’s culture… I’m a Belgian and Belgium is a country that exists of two people: Flanders (with a generally Germanic mindset) and Wallonia (with a generally Romanic mindset). I’m working for a company that employs about 50-50 people from both regions and the difference between the amount and quality of work that a Flemish person delivers is vastly superior to the output of the Wallonian colleague. The company has no other choice then to accept that the productivity throughout the complete Walloon hierarchy is just much lower than throug the Flemish one.

This video doesn’t explain why the same phenomenon exists in North America. The northern states are and have been on average much wealthier than the southern states. I suspect the main reason has to do with less reliance on agriculture and farming and a faster adoption of technology and industrialization.

We just kept farming instead of reading and starving to death

Interesting analysis, but missed the critical aspect. Industrialization. Iberia made a crucial mistake because it outsourced it's production to the flanders region. The region consolidated into multiple clusters and when the industrialization era started, it completely left the south behind. Until today, south Europe is still catching up.

What do you mean by "so poor"? I am not European so I checked the standard economic indicators online. And for most of southern Europe, the incomes by PPP are high enough with low Gini indices and high HDI values as well close enough to that of the northern European nations, so I do not know what you are talking about.

They basically have oil, gas, coal and iron. So the wealth shifted from South to North. South used to be very rich, while North was scrapping bread buns. For example UK, they had plenty of coal to burn and run mechanical looms on the industrial scale. Plus you specialize: you only produce cotton. That's it. No competition for that price and you take the whole market.

To blame the plague for the current situation is nonsense 😅

The highest GDP per capita in Europe is in the inland mountainous areas of Central Europe, Switzerland, Austria, and South Germany. The GDP per capita in Europe spreads out from this place and decreases. The spread is not uniform. The GDP per capita decreases greatly from the straight line of Iceland-UK-Netherlands-Switzerland-Austria-Croatia-Montenegro to the southwest and northeast. Then the decrease from Central Europe to the northwest and southeast is very small on this line. The GDP per capita of the Czech Republic is greater than that of Russia, Slovakia is greater than that of Greece, France is greater than that of Spain, Germany is greater than that of the UK, South Germany is greater than that of North Germany, North Italy is greater than that of South Italy, and South Sweden is greater than that of North Sweden. I expect that Northern Europe, especially Northeast Europe, will converge with Southwest Europe, but will still be slightly stronger than Southwest Europe, and the GDP per capita will only be about 10% higher. I think the reason why there is such a big difference between Northern Europe and Southern Europe now is that Northern Europe was intact and Southern Europe was destroyed due to World War II. I built a model to predict the relative degree of GDP per capita, using average temperature and precipitation. The difference between the average temperature of the coldest month and the average temperature of the hottest month is 15℃, and the best average temperature of the year is about 10℃; the difference between the average temperature of the coldest month and the average temperature of the hottest month is 25℃, and the best average temperature of the year is about 16℃ The best annual average temperature decreases by 0.6℃ when the temperature difference decreases by 1℃; the best annual average temperature increases by 0.6℃ when the temperature difference increases by 1℃ The best annual average precipitation is 1350. Decreasing or increasing GDP per capita will decrease (1.19*temperature difference)²+(1.8*precipitation difference [hundred])²=GDP per capita multiple² Copenhagen, Denmark 9-11.2=-2.2 1350-549=801 (1.19*2.2)^2+(1.8*8.01)^2=214.73 Reykjavik, Iceland 5-7.6=-2.6 1350-1017=333 (1.19*2.6)^2+(1.8*3.33)^2=45.5 Norway Oslo 8-13=-5 1350-884=466 (1.19*5)^2+(1.8*4.66)^2=105.76 Sweden Stockholm 8-13=-5 1350-478=872 (1.19*5)^2+(1.8*8.72)^2=281.77 Finland Helsinki 6-13.6=-7.6 1350-610=740 (1.19*7.6)^2+(1.8*7.4)^2=259.22 ---------------------- Baltic States Estonia Tallinn 7-13.6=-6.6 821-1350=-529 （1.19*6.6）^2+（1.8*5.29）^2=152.35 Lithuania Vilnius 7-14.8=-7.8 1350-748=602 （1.19*7.8）^2+（1.8*6.02）^2=203.57 Latvia Riga 7-13=-6 1350-594=756 （1.19*6）^2+（1.8*7.56）^2=236.16 ---------------------- Poland Warsaw 9-13.6=-4.6 1350-633=717 （1.19*4.6）^2+（1.8*7.17）^2=196.53 ---------------------- Central Europe Czech Republic Prague 9-13=-4 1350-550=800 （1.19*4）^2+（1.8*8）^2=230 Slovakia Bratislava 11-14.2=-3.2 1350-584=766 （1.19*3.2）^2+（1.8*7.66）^2=204.61 Hungary Budapest 11-14.2=-3.2 1350-680=670 (1.19*3.2)^2+(1.8*6.7)^2=159.94 ---------------------- Slovenia Ljubljana 12-13.6=-1.6 1350-1417=-67 (1.19*1.6)^2+(1.8*0.67)^2=5.08 Croatia Zagreb 12-13.6=-1.6 1350-896=454 (1.19*1.6)^2+(1.8*4.54)^2=70.41 Bosnia Sarajevo 11-13=-2 1350-954=396 (1.19*2)^2+(1.8*3.96)^2=56.47 Serbia Belgrade 14-14.2=-0.2 1350-706=644 (1.19*0.2)^2+(1.8*6.44)^2=134.43 Romania Bucharest 12-15.4=-3.4 1350-644=706 (1.19*3.4)^2+(1.8*7.06)^2=177.86 Southern Europe Italy Rome 16-11.8=4.2 1350-605=745 (1.19*4.2)^2+(1.8*7.45)^2=204.81 Spain Madrid 15-13=2 1350-408=942 (1.19*2)^2+(1.8*9.42)^2=293.17 Portugal Lisbon 17-8.2=8.8 1350-534=816 (1.19*8.8)^2+(1.8*8.16)^2=325.4 The smaller the value, the better

Tho those points might contribute to it, i think the time scale is too big. The dominamt reasons must have to be more recent

Switzerland is kind of southern central

Southern European food tastes better...

Its same in Serbia ,south is like different country compare to north ,much poorer. Also same was in Yugoslavia ,North which was Slovenia was multiply times more ritch then Macedonia which is on south

Portugal is slowly developing, Lisbon is something of a magnet for internet start up companies- and although it is the poorest country in Western Europe, there is a square mile within Lisbon in the top ten richest in the entire world. So the division is not only between states or north to south but far more complex. The trouble is that it would take thousands of start ups to compensate for rural areas where entire streets- and even one whole town as I saw on another YT channel. Also Portugal has quite a large elderly population, that puts more demand on fewer available workers to pay taxes

My theory was always, that it's the climate. In roman times, the warmer climate of the south was a comparative advantage, as agriculture was the main source of GDP. In modern times, where being inside for longer periods of times promotes studying, experimenting and any other abstract work, that translates into today's high-performing ecocomic sectors, the colder climates have this competitive advantage. Even for Italy, this is true. Milan has a very crappy and often foggy winter. Time to sit inside and work on Ferrari engines.

well actually south is rigth now powering up and growing much, much faster than anything in north so timing of the video is actually bad lol.

@visualeconomiken as a Portuguese please do a vid about possible ways to fix it ❤

Until the middle of the XIX centuary only London, Paris and Naples where bigger than Lisbon. The demise of Portugal and Spain starts at the Napoleonic wars. Countries whithout Coal and Iron ore had rough times in the XIX centuary, both in Northern and Southern Europe. Spain and Portugal had the 3th and 4th (both mercantile and war) european navies by 1800. They were unable to build steel sheaps in the following decades. The independance of Latin America whith the total hegemony of the British Navy pushed the portuguese (and dutch) trade out of the Indic and the Pacific Oceans. Portugal as a junior partner of the British felt particularly abused. After the Napoleonic wars, where Portugal suffered 200,000 deaths and utter destruction, France was alloud to keep all the looting done. We had to return rhe french Guiana, for instance, because the British sad so.

Bro labeled south of France poor

Who’s writing the script? They are poor because of the plague hundreds of years ago.

FYI, there is no unemployment problem anymore in Greece or Spain. Actually there is a huge problem due to lack of labourers. The problem is rather low wages...

Gucci, Vespa, Ferrari, Lamborghini, Zara, etc etc

I've addressed it a bit on my channel over the years, I think, but it is quite nuanced. I do find Catholic-oriented countries to be more complicated and cumbersome getting a deal done quickly, so if you compound that over millions of transactions over centuries, it creates quite a gap. However, unless it has changed in the last few years, the total household assets in Italy are much higher than in Sweden and most northern countries, and this comes down to trust. The Swedes have trusted that a pension and other safety nets are going to be there, so they don't save that much, whereas the Italians may not trust institutions and have saved more... and they were a more centralized power and thus had a huge head start. In Eastern Europe, often people own multiple properties, debt-free... they may not have a huge value, but when you look at things in a tangible way, the east and south are richer than they might appear on paper.

Totally fascinating and thought provoking. Thank you for the brilliant content!!

And Mærsk is small in competition to Novo Nordisk.. in Denmark.... And I ditten even said Lego.... Dam 😂😂😂

The Whig interpretation of (economic) history is what essentially the video is promoting.

Except UK.

Wine vs Beer. Beer just beats Wine for productivity.

So now Switzerland is Northern Europe uh!? 😂

North Europe invests in Itself. South Europe moves outside for Itself.

Switzerland being north is confusing for me here in Finland. Poland is quite south in Europe and they are north from Switzerland.

I think a counterpoint to this, is that with most of these problems having been fixed in the last hundred years, the south should be experiencing catch up growth. But they’re not so while these reasons may have held back southern Europe in the past, what is holding them back now?

This has to do with development. Northern areas had to development more due to climate needing more innovation to keep and store food.

Nice theory..... why there s a big economic gap between northern and southern Europe .... And maybe yes long ago.... WW2 was a great reset most northern countries where in ruins and still southern Europe was not able to close the gap .... Its a cultural thing ,the work ethics in North is higher because its cold ,rains , snows , freezing, in the winter so you need to work hard in the summer time to make sure your not putting hunger on the list as wel and is very different in the southern parts of Europe

The cultures in the north also very noticeably make recreation out of productive activities, i.e. work of one kind or another (usually making stuff, e.g. carpentry or canning), while the cultures in the south instead prize goofing off, mainly by simply gathering with friends to chat or spending their time at eateries, rather than doing something productive. That reinforces a very different mentality that affects how they approach everything else about their lives, which affects both economics and politics there.

"Programmers stay with the firms that pay the most." Hmm.. not all compensation is $$. Some of us stay with the companies that provide adequate $$ + compensation that no accountant would know how to ledger. Value is marginal, and Subjective.

Ay, that checks out. Explains all those Lambos and Bentleys cruising down the streets of Inverness whilst Londoners traverse the Thames in their (horse-drawn) Ladas.

Spain and Portugal relied too much on gold and silver from America and didn't industrialized

water is an important thing, in north europe, they carry on to use canals and rivers, in the south with animals nowadays trucks

what happens when your brain gets too hot? Now what happens when your brain is cool.

Monaco has a great shipping economy, and Slovenia is doing pretty well. Souther Balkans has a pollution and logistics problem which isn’t their fault.

The Amsterdam Stock Exchange is not the oldest in the world. It was established in 1602, while the Antwerp Stock Exchange dates from 1460.

Southern Europe had dictatorship states well into the 1970s, while democracy was deeply rooted in Northern Europe from the mid-1800s, with a German exception, but there is also a different mentality, we in Northern Europe do not expect the state to solve all our problems. in fact, we believe that associations and cooperatives are better than the state and the municipalities in the vast majority of cases. the main rule is that we do not have a minimum wage which is determined by law in Northern Europe versus the South where the state decides MUCH more, the culture is significantly different because we have this significant difference.

Portugal, was doing okay with the money from the spice trade from India and south Asia and the sugar trade from Brazil, then we lost our independence to Spain; Spain decided to sink most of our ships, that were part of the "great armada" (who do think the Spanish send into battle first?); our allies the British became enemies, also the Dutch because they were at war with Spain and now Portugal was part of Spain and we started to lose colonies, trade and influence. And in 1755 we had a major earthquake that destroyed most of the south of Portugal and even affected other parts of the country.

Also consider that northern regions generally built cultures around scarcity of resources, which caused wealth to be more strongly tied to ingenuity and hard work to make new resources rather than just corralling existing resources. The "Curse of Natural Resources" puts the resources primarily in the hands of those who can take rather than those who can make, and taker economies are always weaker than maker economies, since economics is not a zero-sum game.

Maybe it's because of coffee consumption.

Wait?! An event 700 years ago determines what happens today?!

Portugal had good intitutians before emgland and others but because of the gold the king became more powerfull.

The whole Protestantism/Catholicism theory is only party valid, since deeply catholic regions of Europe such as Austria, Bavaria, and catholic Switzerland are among the wealthiest areas of europe...

Funny, it seems the closer you get to the consistent warm weather, the poorer (lazier) people get. Same thing here in the Statea, the poorest people are in the deep South.

So poor? 😂define poor? The income per capita shown is not wide! And comparing Greece with no oil to Norway which has massive oil is inapt. I’m sorry, I can’t take this video seriously.

Answer: Racism

I think it all has to do with our gay rights! We were always more respected and had more of our rights in the North than in the South.

Could it be governance? Nah! 🗣️🗣️🗣️🗣️

great vid!

U said it I the 1st sentence northern counties have more industry more production produce more and consume less the south has no mass produce that it sells to the world

9:36 wins it for me. This is massive.

I find it interesting that the US civil war was fought between the wealthy industrial north and the poor rural south.

I dont think Southern Europe is poor especially Italy and Spain. They have a lot of big companies maybe not as many as the north but they have less countries. They are quiet more advanced in other areas. Also south of France also has most of the economic vibrant cities in France, Paris is the only city representing the north of France. Northern Italy, Madrid, Baqur country, Navarre and Catalonia are wealther than many places in the north of Europe.

Hmm, Bavaria and Austria, also Southern Italy are all catholic, not protestant. Explain that.

because it's not, cope more

No immediate access to world's oceans and not many deep rivers for cheap transport to develop commerce.

You speak the french Riviera is richer than the UK as a whole 😅. Wanna see their Maserati? I am from Italy and I feel like the UK skews its numbers. Sorry :/ Is it jealousy? Really? Think whatever you want 😅

This video is super wrong. I am italian, who works in logistics and manifactures in UK. The real reason stands behind the Italian economic structure. That many italian businesses rely on speculations, instead of productivity

In ancient times ...the southern countries was civilized ...the north barbarians

Wrong about the protestants Vs catholic. Look at Bavaria in Germany that is one of the richest areas in Germany and are catholic area. So there was something else.

If southern Europe is considered poor to you. I wonder what you think of my country

This gap is getting smaller and smaller

Sorry, putting together two totally different countries such Spain and Italy make the whole explanation a bit wobbly...

Hmmm... Median wealth per adult citizen: - Germany = 66 735 dollars -Austria = 68 432 dollars - Portugal = 70 409 dollars -Italy = 107 315 dollars -Spain = 107 507 dollars. But please do tell me how the southern Europe is poorer than the north. It's fun. 😅 P. S. Germany, Switzerland, Austria, etc. are central Europe, just like for example northern Italy. Also there's PLENTY of big world famous brands from the southern Europe. For a long time the richest man of the ENTIRE Europe was the Spaniard owner of the Zara. And Zara is mighty famous brand, together with Berschka, Pull & Bear and other famous Spanish fashion brands, plus there's car brands Seat from Spain. Also from Italy, there's Versace, Gucci, Dolce & Gabbana, Diadora, Kappa, Sergio Tacchini, Oviesse, Terranova, Napapijri, etc. talking about the fashion, and Ferrari, Lamborghini, Alpha Romeo, Fiat, etc. talking about supercars and cars. There's super cars these days even from Croatia like Nevera, and even Balkan countries got their own brands of HDTV and other tech. There's Tesla, FOX, VOX from Serbia, for HDTVs, smartphones etc, there's VIVAX, Quadro etc. from Croatia, there's Lobod from Montenegro. All those countries produce their own 4k HDTVs in HDR, smartphones, headphones, etc.

Nice try. But it's mainly culture, work ethic and the mindset. It only takes a couple of weeks spent in Greece to see clearly why the South is poorer and why it will stay poorer for many years to come.

People mentioning weather weather weather 😂😂😂 tf does weather have to do with productivity Texas (despite being a state in a relatively modern country) is highly productive compared to other states in the same country but arguably a top five in high temperature average year round.

The weather, hotter regions cbf working hard

It could also have something to do with establishment of masonic organisations in northern Europe.

Mate, you are so wrong. Forget the plague. These differences were already explained many times: - Religion, the south is poor because the catholic religion forced the bible and mass to be in latin, a language almost no one understood. Only the clergy could interpret the bible and no one else. There was no incentive to get educated. While in the north the protestants forced the bible to be in the local languages, therefore people had to learn how to read and got educated. Here we need also to see the jewish problem. The Catholics expelled the jews, who were the most educated people of that time, and they went to countries like The Netherlands with all their secrets. The Netherlands became a superpower just because they harvested the knowledge of those jews, and use it for themselves. - Weather, the warmer regions have a harder time, and against that we can do little. When you have an easy life you get lazy, unlike in the north where you had to fight for your survival since immemorial times. People there couldn't be lazy, otherwise they would starve. - Discoveries, while the north was locked in land conflicts, the south went on discoveries across the world. At one point Portugal was the richest country in Europe due to its colonial empire. Spain the same, but they had also territories in Europe. - Political, the north didn't have to fight against fascism, while in the south that cancer was installed until very late in the XX century (except in Italy where it stopped with WWII but they were the birthplace for it). - Industries, while the north is more industrial, the south relies more on the primary sector in the tourism. Like it or not, the industries in the south are more basic and add less value. The idea that the plague had anything to do with it is ridiculous. Portugal and Spain ruled the world after the plague. And there wasn't even one plague, but many plagues. It was something that would happen at least once every century across all countries. And you are forgetting many important factors. Switzerland was a very poor country until the XX century. The same with Norway, until oil has been found. Both countries are very rich now, but that had nothing to do with their history before the XX century. Norway discovered oil and Switzerland started investing in a series of industries (watchmaking, pharmaceutical and banking). Both countries had a hard working philosophy due to the harsh conditions of living, but historical that gave them nothing until last century. The Swiss were even more known as mercenaries than anything else. The Norwegians were vikings because they couldn't survive in their own land.

Its not only happened in Europe but rather the whole world. The northern countries are overall doing better than the southern countries. It comes basically to the climate that shapes the mentality of the people. The people from the northern hemisphere have to overcome the harsh climate, long cold winter since the ancient time. These evironmental challenges push the northern people more critical in any aspect such as think more critical, more punctual, more quality awareness, more sharp, etc. Because the nature doesnt provide abundance of food or opportunity to survive. In the ancient time if you miss the summer to harvest, you wont have anything to eat in the winter. The southern people in other side have abundance sun light all year long. They dont need to be sharp to survive. This habit shaped the mentality of the people. Although people all over the world can live comfortably nowdays , the critical mindset and habit of northern people are already in their DNA. It help them significantly to thrive and build prosperous countries. Human is basically lazy animal, but we also want to survive. Therefore we try to make improvement everyday and the biggest improvement comes only through hardship.

If you ask that question in 12 or 16th centuries you'd get very different answer.

Except for a few cases, as go south people tend to be lazier and more content with less..

The further north you go the colder it gets. It takes a lot of planning to survive the winters. Those with higher intelligence had more offspring therefore the average iq is higher in northern climes. Higher iq means more innovation resulting in greater wealth.

South Europe is NOT "so poor".

The Bot that reads your headlines now is weird. I wonder how long until Josh will be replaced by a bot.

The bubonic plague theory seems like a just-so story, and might be a bit of a broken window fallacy. To make a better theory, you would need to corellate impact versus future prosperity. But cities were hit harder than rural areas, yet ultimately cities lead to prosperity. How does killing off a lot of people lead to better institutions? Lots of areas that are really prosperous now where also dirt poor in the past. If you want an politically incorrect just-so story, might as well blame Islam. The direct impact of better institutions is probably well supported by evidence. What causes better institutions and keeps them is harder to pin down.

The bubonic plague has nothing to do with any of this.... Religion is maybe more relevant because Protestantism was much more accepting of merchant than Catholicism (Venice maybe excepted). But mostly it is cyclical. Imperial Spain, Portugal were extremely wealthy, as was the Roman empire, etc. Catholicism was also centralized and ost countries that adopted this faith have a centralized system (Paris, Madrid etc). When you bring in the effect of the Napoleonic code which affects a lot of countries in southern Europe to this day versus a maybe more pragmatic approach by anglo saxons. all this centralization also causes a huge tax burden and favors large companies over small companies / entrepreneurs. This is still a heavy heritage but again this is all cyclical. And in terms of your examples, Switzerland in not Northen by any stretch of the imagination, the largest shipping line in the world is now MSC, CMA is 4th and neither are from Northern Europe. and in the car industry, I do like German cars (but forget VW) but I would rather have an Italian car if I could afford it. and fashion well that is a French / Italian affair. And I would venture that if you ask anyone what the most famous European brand is they would say Ferrari or LV or Prada or Lamborghini. Not sure anyone would say Maersk (and I work in shipping)

Seriously? This plague argument is total bs.

sorry the UK is poor