What's really wrong with austerity a la Merkel et al?
Greece is a good case study of that. Too much, rigid, austerity, without a growth element.
A result of Ordiliberalism? Still not convinced?
Or is it a result of the type of the philosophy Max Weber described in his 1905 book "Protestant Ethic and The Spirit of Capitalism"?
Or a result of austerity that focuses on such rigid targets that even the Dutch or Germany itself has trouble adhering to (thus opening Pandora's box, see eg the German and French violations of the Stability Pact in the previous decade)?
There is no question that not only Greece and other so called "PIIGS" as well as other Eurozone, EU and OECD countries need to consolidate their budgets.
The issue is how. How fast, how strictly,and with what policy tools and side-effects (including unemployment and social systemics).
A somewhat "fundamentalist" approach to austerity is what makes the so called Fiscal Compact, proposed by Germany in December and signed (but not ratified yet) by 25 in March such a hard pill not only for the PIIGS but also for NL and even Germany to swallow.
To paraphrase a slogan re taxes, too much austerity (planned) = no austerity, or failures of the austerity dogma all over Europe!
Ordoliberalism, with its insistence on separation of economic policy between fiscal (by governments), monetary (by 100% independent central banks) and macroeconomic (by market actors, eg social partners) , leads to un-cordinated economic policy, even at national level.
The capitalist dogma that to be helped, "sinners" must prove worthy, is another (faulty) fundamentalist element.
Fiscal fundamentalism is not going to help Europe. No fundamentalism ever did.
The proper economic and other policy mix is needed. But who knows how to get that mix right?
Showing posts with label capiitalism. Show all posts
Showing posts with label capiitalism. Show all posts
Thursday, March 29, 2012
Monday, March 19, 2012
No more economics - and especially finance - please, we are humans!
I am paraphrasing the title of a well know British theatre play of decades ago to reflect the following.
Muhammad Yunus, the inventor of micro-finance has given a most interesting video interview to the Guardian today: 'Economists have misunderstood human beings' is the title and he proposes that humans are multi-dimensional, not one dimensional money making robots!
He also proposes that social enterprises can offer solutions in a world where the profit making ones and the social ones co-exist.
Meanwhile, the Merkozy fiscal pact is having adoption issues not only in Germany (see recent posts of mine) but the Netherlands as well! My POV is not that good fiscal "housekeeping" should not be an element of national and Eurozone policy but that this must not turn into the sclerotic and rather rigid thing that the Merkozian fiscal pact has become! So much that not only a Spanish convervative PM (Rajoy) is having trouble abiding to, but also the Netherlands. Yes the NL which is the closest "ideological" ally Merkozy has to its philosophy,
Via Twitter, I continue to ask my German followers/friends if indeed "Ordocapitalism" is the philosophy that drives the policy thinking of Merkel and her advisers (many of them of CB and/or banking mindset). I continue to get very mixed replies. Too early to write a post on that.
So capitalism and its problems, which was the topic of thus year's WEF at Davos, the Euro crisis, the vendetta between Financial Agorocracy and Democracy, and many other such issues continue to be the core of European, EU, US and world affairs and policy.
Now, back to Yunus. I have many economists friends but as an MBA I agree with Yunus on this argument taht economists have misunderstood human beings.
As per the profit vs social entrepreneurship, I think that there is also a "third kind". The for profit but not profit (shareholder value) maximising one, the one that my father practiced, ie for profit business that does not operate with a single directive: "Maximise Profit, Maximise Profit" (flashes of The Terminator, The Walking Dead and other zombie and vampire movies and series, parade inside my mind for a few seconds). What I call "noble capitalism" (mind you: my father was not a "royal", he was a product of the middle class, the good old middle class that credit capitalism has destroyed in recent decades, IMO).
After all there is such thing as "Socially Responsible Investment" where investors can participate in funds that choose their portfolio based not solely on performance but environmental, social and other non direct profit parameters!
But is it economist who have misunderstood human beings or is Max Weber's 1905 book "The Protestant Ethic and the Spirit of Capitalism" that is more relevant in understanding a) the faults of capitalism and b) Merkel's philosophy?
Food for thought, mes amis!
Muhammad Yunus, the inventor of micro-finance has given a most interesting video interview to the Guardian today: 'Economists have misunderstood human beings' is the title and he proposes that humans are multi-dimensional, not one dimensional money making robots!
He also proposes that social enterprises can offer solutions in a world where the profit making ones and the social ones co-exist.
Meanwhile, the Merkozy fiscal pact is having adoption issues not only in Germany (see recent posts of mine) but the Netherlands as well! My POV is not that good fiscal "housekeeping" should not be an element of national and Eurozone policy but that this must not turn into the sclerotic and rather rigid thing that the Merkozian fiscal pact has become! So much that not only a Spanish convervative PM (Rajoy) is having trouble abiding to, but also the Netherlands. Yes the NL which is the closest "ideological" ally Merkozy has to its philosophy,
Via Twitter, I continue to ask my German followers/friends if indeed "Ordocapitalism" is the philosophy that drives the policy thinking of Merkel and her advisers (many of them of CB and/or banking mindset). I continue to get very mixed replies. Too early to write a post on that.
So capitalism and its problems, which was the topic of thus year's WEF at Davos, the Euro crisis, the vendetta between Financial Agorocracy and Democracy, and many other such issues continue to be the core of European, EU, US and world affairs and policy.
Now, back to Yunus. I have many economists friends but as an MBA I agree with Yunus on this argument taht economists have misunderstood human beings.
As per the profit vs social entrepreneurship, I think that there is also a "third kind". The for profit but not profit (shareholder value) maximising one, the one that my father practiced, ie for profit business that does not operate with a single directive: "Maximise Profit, Maximise Profit" (flashes of The Terminator, The Walking Dead and other zombie and vampire movies and series, parade inside my mind for a few seconds). What I call "noble capitalism" (mind you: my father was not a "royal", he was a product of the middle class, the good old middle class that credit capitalism has destroyed in recent decades, IMO).
After all there is such thing as "Socially Responsible Investment" where investors can participate in funds that choose their portfolio based not solely on performance but environmental, social and other non direct profit parameters!
But is it economist who have misunderstood human beings or is Max Weber's 1905 book "The Protestant Ethic and the Spirit of Capitalism" that is more relevant in understanding a) the faults of capitalism and b) Merkel's philosophy?
Food for thought, mes amis!
Wednesday, January 25, 2012
Looking for a new version of Capitalism in the Alps!
IMO capitalism is the system where money capital plays the central role, borne out of the capital intensive industry
Now that the majority of economic activity in most of the West is Services related, a new system is needed, one with money capital in a merely secondary role. Will it still deserve the term "capitalism"?
.
Now that the majority of economic activity in most of the West is Services related, a new system is needed, one with money capital in a merely secondary role. Will it still deserve the term "capitalism"?
.
Monday, January 23, 2012
The faults of capitalism lie in faults in Western thinking
1) "Davos elites to seek reforms of 'outdated' capitalism" is the title of a report (via AFP) in France24.com. "Capitalism in its current form, has no place in the world around us" says the founder and host of the Davos World Economic Forum.
2) Also in the news: "Europe plans new, ‘objective’ credit ratings agency" reports firstpost.com
Here are my comments:
Capitalism, a product of a specific school of thought in The West (see Max Weber's work), has failed to blend with the world in all its forms so far.
In short Capitalism has been proved incompatible with many cultures not only in the world but in Europe as well (see eg "Dolce far riente").
Both Capitalism and Communism, being Western products, were based on faulty foundations of Western thinking such as a quest for certainty and objectivity hence a need to measure and predict that leads to faulty decision making.
In the credit ratings issue, again, "Europe" takes a wrong approach to solving a problem. Each investor should do his/her "own" credit rating, there's no objectivity in credit rating by its very nature.
To be continued ...
2) Also in the news: "Europe plans new, ‘objective’ credit ratings agency" reports firstpost.com
Here are my comments:
In short Capitalism has been proved incompatible with many cultures not only in the world but in Europe as well (see eg "Dolce far riente").
Both Capitalism and Communism, being Western products, were based on faulty foundations of Western thinking such as a quest for certainty and objectivity hence a need to measure and predict that leads to faulty decision making.
In the credit ratings issue, again, "Europe" takes a wrong approach to solving a problem. Each investor should do his/her "own" credit rating, there's no objectivity in credit rating by its very nature.
To be continued ...
Thursday, September 1, 2011
Speculators, liquidity, rainy days, capitalism, Marx, Rand, mobility
66% of 2011 gone. 8 months flooded with hyped up doom and gloom
Is there an economic system that is immune to barbarism?
Many years ago, my now late mother went to a stockbroker to sell my stocks (I think it was banks'). She indicated a range of prices she would be OK with, around the current price, and had to wait for days until a buyer was found. Speculators. We were told that they provide liquidity so that the rest of us can find a buyer or seller at any time, not have to wait for days like my mother did. Well, if that is indeed the contribution of speculators to the functioning of the financial markets (or even the real estate and other ones) then obviously what we have seen in recent years is a "runaway train". Not worth the benefit of liquidity my mother could not benefit from.
Now, on a related topic. People do need a way of storing value in days of :"sunshine" for "rainy days". Are the ones available nowadays via the current "version" of "Capitalism", suitable for that job?
How much of the funds speculated around the world every day are actually savings not entrusted to managers for greed, but for maintaining "nest eggs" for "rainy days"? In that sense is the European Social Model capitalism's biggest enemy? One that must be destroyed so that people will have to depend on that markets for "safekeeping" (!) their "savings" for "rainy days"? Oh my!
Thus:
Key question: Do speculators speculate with their own money or using the money of people & orgs who have no idea what their money is used for?
Now, moving on:
Beyond Marxicm, Randism etc:
How much does 2011 capitalism have in common with 1850 capitalism? 1910? 1950? Even 1980? Please address the problems of 2011 capitalism!Using 2011 tools not 1850 or 1950 tools or even worse, antiquated economic & ideological dogmas!
Too financial times:
Do you realise how many people are sick and tired of financial and economic issues being at the forefront of current affairs? Many more than those who are sick and tired of party political news!
Politicians should stop offering voters simplistic models re what is happening & why! If they themselves don't know, should ask people who do.
Finally, ponder on this:
Bureaucracy does not like mobility (of people, workers, companies). Yet mobility, more of it, can help solve many public policy problems.
Is there an economic system that is immune to barbarism?
Many years ago, my now late mother went to a stockbroker to sell my stocks (I think it was banks'). She indicated a range of prices she would be OK with, around the current price, and had to wait for days until a buyer was found. Speculators. We were told that they provide liquidity so that the rest of us can find a buyer or seller at any time, not have to wait for days like my mother did. Well, if that is indeed the contribution of speculators to the functioning of the financial markets (or even the real estate and other ones) then obviously what we have seen in recent years is a "runaway train". Not worth the benefit of liquidity my mother could not benefit from.
Now, on a related topic. People do need a way of storing value in days of :"sunshine" for "rainy days". Are the ones available nowadays via the current "version" of "Capitalism", suitable for that job?
How much of the funds speculated around the world every day are actually savings not entrusted to managers for greed, but for maintaining "nest eggs" for "rainy days"? In that sense is the European Social Model capitalism's biggest enemy? One that must be destroyed so that people will have to depend on that markets for "safekeeping" (!) their "savings" for "rainy days"? Oh my!
Thus:
Key question: Do speculators speculate with their own money or using the money of people & orgs who have no idea what their money is used for?
Now, moving on:
Beyond Marxicm, Randism etc:
How much does 2011 capitalism have in common with 1850 capitalism? 1910? 1950? Even 1980? Please address the problems of 2011 capitalism!Using 2011 tools not 1850 or 1950 tools or even worse, antiquated economic & ideological dogmas!
Too financial times:
Do you realise how many people are sick and tired of financial and economic issues being at the forefront of current affairs? Many more than those who are sick and tired of party political news!
Politicians should stop offering voters simplistic models re what is happening & why! If they themselves don't know, should ask people who do.
Finally, ponder on this:
Bureaucracy does not like mobility (of people, workers, companies). Yet mobility, more of it, can help solve many public policy problems.
Monday, August 15, 2011
The new capital? How and for whom?
Humankind that gone from real estate & farming land Capital to monetary Capital and now to patent & copyright (intellectual) Capital.
The US did not manage to convince the WTO members to do an agreement on it and tried in a much smaller ad-hoc group with the EU, Canada & 1-2 more (ACTA).
Will this new form of capital be the cause of future friction between countries?
In principle, intellectual capital (and intellectual goods) are one way for the US and EUrope to be able to compete in the international trade game. The other is to erect fortresses in manufactured goods trade. Many services are or can be traded (after all tourism related services count as exports ie they bring revenue to an economy that are equivalent to the one from export of goods).
But what types of "intellect" or "great matter" intensive goods (as opposed to labour or monetary capital) can act as an adequate basis for a modern economy? Can eg an economy live & prosper by producing music, films, TV series, pop art and pop culture, ibn addition or instead of more traditional forms such as traditional R&D "products" (high tech etc)?
The US did not manage to convince the WTO members to do an agreement on it and tried in a much smaller ad-hoc group with the EU, Canada & 1-2 more (ACTA).
Will this new form of capital be the cause of future friction between countries?
In principle, intellectual capital (and intellectual goods) are one way for the US and EUrope to be able to compete in the international trade game. The other is to erect fortresses in manufactured goods trade. Many services are or can be traded (after all tourism related services count as exports ie they bring revenue to an economy that are equivalent to the one from export of goods).
But what types of "intellect" or "great matter" intensive goods (as opposed to labour or monetary capital) can act as an adequate basis for a modern economy? Can eg an economy live & prosper by producing music, films, TV series, pop art and pop culture, ibn addition or instead of more traditional forms such as traditional R&D "products" (high tech etc)?
Friday, August 12, 2011
Should we push the reset button on economic and political theories of the era?
Should we push the reset button on economic thinking & theories. Have most of them become irrelevant in our era? Back to basics as foundation?
Let me start off with this syllogism:
My parents taught me to sell only what I own and to only buy something when I have the money to pay for it. Were they wrong?
Someone suggested that my parents were wise. But does that mean that they were they right? Or wrong? Did they raise me for success or failure in the real world, based on that mentality (culture)? In other words, was/is that mentality a way to succeed in the modern world? Or a barrier? Just discussing.
Someone else suggested that if everyone did the same the economy would implode. Did he mean that credit based capitalism would implode? Assuming so. what does that then imply about its fundamentals? Sound or shaky?
Moving on:
Capitalism: Storing value is one thing, but Is it "OK" to make money (profit) from lending/investing money?
Moving on:
Many (eg in Britain) talk re "Sovereignty" vis-a-vis EU.
But:
How sovereign is a country that has financial obligations to foreign countries or nationals?
How sovereign is a country that takes instructions from foreign private organisations, media or "houses"?
How sovereign is a country that relies on foreign investment or foreign consumers or has a trade deficit?
Can't/shouldn't a sovereign have the freedom/power to walk away from any foreign or international legal (eg EU and its set of laws in the form of transposed directives or regulations) or financial (eg debt) obligation to another sovereign or a non-sovereign entity or even a private entity?
What about the sovereignty of the human race as a whole vis-a-vis global warming, radiation pollution risks, HIV/AIDS, cancer, famine, etc?
Sovereignty of a) nations, b) states (a state is not necessarily/usually a nation) or c) the human race? d) __________?
Moving on:
If the world is indeed global nowadays, then why do we still have ranking of countries in many areas/things? Why is there no label "Made on Earth"? Is it a global world or a global championship between countries?
How can one be a "citizen of the world" when the world is not a single Polity or state (in the Platonic sense)?
Is there a European union or a European championship between 27 countries with the EU institutions as the governing body & referee?
Just thinking, philosophising, etc. Because and therefore I am.
In 2011, is it "I think therefore I am" or "I am therefore I think"? Or both? Or neither (seems the case)?
Let me start off with this syllogism:
My parents taught me to sell only what I own and to only buy something when I have the money to pay for it. Were they wrong?
Someone suggested that my parents were wise. But does that mean that they were they right? Or wrong? Did they raise me for success or failure in the real world, based on that mentality (culture)? In other words, was/is that mentality a way to succeed in the modern world? Or a barrier? Just discussing.
Someone else suggested that if everyone did the same the economy would implode. Did he mean that credit based capitalism would implode? Assuming so. what does that then imply about its fundamentals? Sound or shaky?
Moving on:
Capitalism: Storing value is one thing, but Is it "OK" to make money (profit) from lending/investing money?
Moving on:
Many (eg in Britain) talk re "Sovereignty" vis-a-vis EU.
But:
How sovereign is a country that has financial obligations to foreign countries or nationals?
How sovereign is a country that takes instructions from foreign private organisations, media or "houses"?
How sovereign is a country that relies on foreign investment or foreign consumers or has a trade deficit?
Can't/shouldn't a sovereign have the freedom/power to walk away from any foreign or international legal (eg EU and its set of laws in the form of transposed directives or regulations) or financial (eg debt) obligation to another sovereign or a non-sovereign entity or even a private entity?
What about the sovereignty of the human race as a whole vis-a-vis global warming, radiation pollution risks, HIV/AIDS, cancer, famine, etc?
Sovereignty of a) nations, b) states (a state is not necessarily/usually a nation) or c) the human race? d) __________?
Moving on:
If the world is indeed global nowadays, then why do we still have ranking of countries in many areas/things? Why is there no label "Made on Earth"? Is it a global world or a global championship between countries?
How can one be a "citizen of the world" when the world is not a single Polity or state (in the Platonic sense)?
Is there a European union or a European championship between 27 countries with the EU institutions as the governing body & referee?
Just thinking, philosophising, etc. Because and therefore I am.
In 2011, is it "I think therefore I am" or "I am therefore I think"? Or both? Or neither (seems the case)?
Tuesday, June 26, 2007
On the new capitalism
New capitalism is the capitalism of ideas and intellect.
And it is a free market. I do not thus see, as a centrist liberal ("libdem" in Europe in ideology) why my grand father and family are less reliable sources than any other, person or organisational entity, in a truly (rather than nominally) free and non-oligopolistic market (agora) for ideas and knowledge, especially given the subject of Civil War in Greece. As per Corporatism, see Max Weber.
PS. Capitalism is not about winning or losing either. Sports are. And a corporation's mission is not to win but to maximize shareholder value. Many people who criticise capitalism and corporations fail to realise that, IMO. They think in terms of "war" or "sports" and they transfer this thinking, faultily, IMO, in other areas. My way of thinking and analysis is a product of my MIT education.
PS. Capitalism is not about winning or losing either. Sports are. And a corporation's mission is not to win but to maximize shareholder value. Many people who criticise capitalism and corporations fail to realise that, IMO. They think in terms of "war" or "sports" and they transfer this thinking, faultily, IMO, in other areas. My way of thinking and analysis is a product of my MIT education.
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