Showing posts with label dynamics. Show all posts
Showing posts with label dynamics. Show all posts
Sunday, December 9, 2012
End of what?
Now I am puzzled! Which will come first? a) end of the world b) end of euro c) end of Monti's government?
Friday, November 30, 2012
The values of wisdom and stamina and the danger of too financial times
My 12 weeks in the UK, NL, BEL, FRA, ITA were full of hard knocks. Tweeted much re that. So have the 2 weeks (back) in GRE. It has been a hard 7 days because I thought there was something wrong with my health. Turns out I am fine but I keep the lessons learned! We tend to think we are like companies, ie we live in perpetuity. Being aware every day that we are not, leads to better life management, ime.
Today I heard that another one of my bosses (good and bad times) in the 1990s passed away, this one this week. I shall miss him too.
Some years ago a friend accused me that I care too much about old people compared to young ones. Not true. I care much for both. But I feel that in this hard day and age, society has somewhat abandoned old people. I think old people, 80s+ are very cool and interesting. I also think that old people are very cute and lovely humans. And full of memories and wisdom to share with us.
Why both are bad trends? Because IMO there shld be a healthy mix, Plus today's trend not good news for humans in general! The current high market value for stamina reflects a de-humanization of work and the economy in general. Are we headed towards IRobot humans?
My MBA with heavy electives in Finance does not prevent me from considering our times as too financial. A new type of middle ages.
Tuesday, November 27, 2012
For global and EU systemics to work they need more than trade flows. Or less
Here are some systemics and dynamics thoughts (written and tweeted Nov 24, 2012):
What libertarians seem to forget imo is that any group of more than 1 person constitutes a "society" or polis etc. Laws are part of explicit and informal "social contract" between members of a society/group/polis (politics comes from polis). The economy is also a dimension of a social contract when families stopped self producing everything and started trading w/ each other. Intra-polis trade between families created need for prices (even in barter trade) and thus money. But in basic intra-polis/village trade no one was really left "jobless", was mostly specialization benefits.
I am sure economic theories/models (be they of 5000 BCE or 2012 CE) worked much better in 5000 BCE! In a way, extra-polis trade (see eg explorers to "new worlds") disrupted the social/econ contracts/balances of de facto closed societies. Not to mention that lack of competition rules probably had created warlords and other oligarchs inside closed systems/cities/villages.
Why do I say probably? Cos I was not there to see for myself, at 5000 or something BCE. Were you?
Opening up and allowing trade between families in a polis came as part of social and legal contracts/laws/balance. But but inter-polis (ie inter-national) trade/exchanges were not coupled by common laws and a social/econ contract! Were they? No WTO etc.
That is still in 2012 the underpinning element of trade and other inter-state exchanges of all kinds: They fall outside national scopes. Of course so many are in favor of free trade without unification, it sort of allows them to have the cake and eat it too!! Think about it!
Trade between entities not bound together the way a country is bound together is sort of having a cake and eating it too! Sort of "dumping".
That is also part why most economic models/theories have failed. They deal in principle and de facto with closed systems. Look at GATT and the WTO: It regulates basically trade but fails to deal with many other dimensions thus systemically unbalanced. What I am saying is that trade, investment, migration and other flows need to happen within a "system". Is such system compatible with any sub-global/earth sovereignties? In other words is even trade compatible with national sovereignty since separate social contracts?
Can comparative advantage really exist in a league (competition) between 200+ national economies where there is no actual "league"? Does this mean that the world needs to become a federal political entity for "fair" trade to exist? Is it otherwise an "animal farm"? Can national social contracts exist at the same time as free trade exists? Much like libertarians who want to exploit imo the benefits of a society (econ is a social activity) w/o the "costs" of a society ... Or look at how some in the UK want to free-ride Europe and the world w/o any associated social contracts or rules! Pick and choose only!
Thus no wonder that many of the arguments used against the EU are actually prompting localism/separatism in many EU member states!To use absiloute logic, either sovereign states need to become like eg Cuba or North Korea or join together in a federal entity!!
But in any case, imo trade was, back when it started in human history, the first opener for more open systems. But that was thousands of years ago. Not in 2012! The systemics to work need more than trade flows. Or less.
The idea that one can be a sovereign state (city, national, etc) and still engage even in trade with others is imo challenged in this era! It worked in 1200 BCE or 1400 CE or even 1949 (GATT era) etc but not in the systemics and dynamics of 2000s!
Thus it should come as no real surprise that European and US and world systemics and dynamics are out of control in the 2000s and 2012 and that globalization, regionalization (EU, UNASUR, ASEAN), nationalization (UK), localisation/separatist dynamics do co-exist in 2012! Because systemically speaking the system is out of whack! Freedom of trade and investment cannot work systemically for long w/o full system integration.
Note: Available for research and analysis for think tanks, NGOs, civil society orgs, firms, policy makers, media, academia anywhere in world.
What libertarians seem to forget imo is that any group of more than 1 person constitutes a "society" or polis etc. Laws are part of explicit and informal "social contract" between members of a society/group/polis (politics comes from polis). The economy is also a dimension of a social contract when families stopped self producing everything and started trading w/ each other. Intra-polis trade between families created need for prices (even in barter trade) and thus money. But in basic intra-polis/village trade no one was really left "jobless", was mostly specialization benefits.
I am sure economic theories/models (be they of 5000 BCE or 2012 CE) worked much better in 5000 BCE! In a way, extra-polis trade (see eg explorers to "new worlds") disrupted the social/econ contracts/balances of de facto closed societies. Not to mention that lack of competition rules probably had created warlords and other oligarchs inside closed systems/cities/villages.
Why do I say probably? Cos I was not there to see for myself, at 5000 or something BCE. Were you?
Opening up and allowing trade between families in a polis came as part of social and legal contracts/laws/balance. But but inter-polis (ie inter-national) trade/exchanges were not coupled by common laws and a social/econ contract! Were they? No WTO etc.
That is still in 2012 the underpinning element of trade and other inter-state exchanges of all kinds: They fall outside national scopes. Of course so many are in favor of free trade without unification, it sort of allows them to have the cake and eat it too!! Think about it!
Trade between entities not bound together the way a country is bound together is sort of having a cake and eating it too! Sort of "dumping".
That is also part why most economic models/theories have failed. They deal in principle and de facto with closed systems. Look at GATT and the WTO: It regulates basically trade but fails to deal with many other dimensions thus systemically unbalanced. What I am saying is that trade, investment, migration and other flows need to happen within a "system". Is such system compatible with any sub-global/earth sovereignties? In other words is even trade compatible with national sovereignty since separate social contracts?
Can comparative advantage really exist in a league (competition) between 200+ national economies where there is no actual "league"? Does this mean that the world needs to become a federal political entity for "fair" trade to exist? Is it otherwise an "animal farm"? Can national social contracts exist at the same time as free trade exists? Much like libertarians who want to exploit imo the benefits of a society (econ is a social activity) w/o the "costs" of a society ... Or look at how some in the UK want to free-ride Europe and the world w/o any associated social contracts or rules! Pick and choose only!
But in any case, imo trade was, back when it started in human history, the first opener for more open systems. But that was thousands of years ago. Not in 2012! The systemics to work need more than trade flows. Or less.
The idea that one can be a sovereign state (city, national, etc) and still engage even in trade with others is imo challenged in this era! It worked in 1200 BCE or 1400 CE or even 1949 (GATT era) etc but not in the systemics and dynamics of 2000s!
Thus it should come as no real surprise that European and US and world systemics and dynamics are out of control in the 2000s and 2012 and that globalization, regionalization (EU, UNASUR, ASEAN), nationalization (UK), localisation/separatist dynamics do co-exist in 2012! Because systemically speaking the system is out of whack! Freedom of trade and investment cannot work systemically for long w/o full system integration.
Note: Available for research and analysis for think tanks, NGOs, civil society orgs, firms, policy makers, media, academia anywhere in world.
Wednesday, October 31, 2012
Systemics and Dynamics Live NP Blog, October 31, 2012
Read bottom up to follow the flow:
Evening:
Euro crisis/Troika:
I thought memorandums were supposed to be brief, not as brief as executive summaries, but brief.
There seem to be 2 divergent views re the effect of Sandy on US economy: a) disruption of the recovery b) growth stimulus effect by money spend on the damages, multiplied by a greater than 1.0 factor. As per electoral effects, some think it may prove beneficial for Obama and Dems if seems presidential in his dealing with Sandy effects is deemed effective. Or could backfire. Will it also restore some faith of people in "government" and make collective esprit (eg health care) more popular. Guess we shall see.
Early morning:
EU/Euro/econ/fin crises:
Many admire the Iceland "model" of dealing with it. But they should recall it has a population of 320,000, a total area of 103,000 km2 out there in the Atlantic and a volcano!
More philosophical:
The problem with parents raising their kids with prince/princess aka noble values is that unless they also give them a Principauté, they are in for a rough ride in the "streets" of life.
Philosophical:
Hard times for "princes" and "princesses" (not the real ones, the other ones). Also hard for vagabonds, though. Unless in warmer climates.
Jobs/Career:
For decades now, searching for a job had become a job. In recent years, it has become a career.
Evening:
Euro crisis/Troika:
I thought memorandums were supposed to be brief, not as brief as executive summaries, but brief.
There seem to be 2 divergent views re the effect of Sandy on US economy: a) disruption of the recovery b) growth stimulus effect by money spend on the damages, multiplied by a greater than 1.0 factor. As per electoral effects, some think it may prove beneficial for Obama and Dems if seems presidential in his dealing with Sandy effects is deemed effective. Or could backfire. Will it also restore some faith of people in "government" and make collective esprit (eg health care) more popular. Guess we shall see.
Early morning:
EU/Euro/econ/fin crises:
Many admire the Iceland "model" of dealing with it. But they should recall it has a population of 320,000, a total area of 103,000 km2 out there in the Atlantic and a volcano!
More philosophical:
The problem with parents raising their kids with prince/princess aka noble values is that unless they also give them a Principauté, they are in for a rough ride in the "streets" of life.
Philosophical:
Hard times for "princes" and "princesses" (not the real ones, the other ones). Also hard for vagabonds, though. Unless in warmer climates.
Jobs/Career:
For decades now, searching for a job had become a job. In recent years, it has become a career.
Tuesday, October 16, 2012
European myths and real fears: Time to face the truth
Applying logic consistently can lead to some very hardcore argumentation in European Affairs. Especially when coupled with humanism.
Here we go (based on thoughts originally posted via my Twitter account, today):
Xenophobia and "paymasterism" are evidence of insecurity due to policy failures by mostly national policy-makers.
E.g. Angela Merkel and Co. blamed Greeks and other South Europeans to cover up for her own policy failures in 2005-2012. Except for very recently.
Plus, the EU has always been used by national politicians as a scapegoat for their failures but not their successes.
So who should be in more fear of losing their jobs and who should lose them? People or policy makers. Desperate policy makers produce even more desperate policies. Not to mention desperate (for ratings hence ad revenue) media.
So, for voters, focusing at national and local level is in a way a natural reaction, whereas the wise reaction is to focus at Euro, EU level and beyond.
Instead of helping the man/woman in streets feel a tad of stability via their policies, policy makers have been doing the opposite.
Note also that 2 months of somewhat positive propaganda by Merkel and friends re Greece seems (see polls in Germany) to have managed to partly counter 2+ years of negative propaganda. Is that scary or good? Or both?
That is the real state of the EU in 2012. It is time we start discussing those things, not only the agenda the mainstream traditional media and social media set.
Example:
People in NW and North Europe are panicking and blaming foreigners because, imho, they know their national exceptionalisms are a hot air result of propaganda - narratives. They are in real fear. Because they feel/know that their economies are way more un-competitive and cruel than anyone would admit. They are scared of losing their accumulated privileges and fear more than South Europeans, because they know their societies are more cruel than in South Europe.
Yes what I am proposing, after roaming around the UK, Belgium and the Netherlands (NL) in the past 5 weeks and lots of talking with people from all walks of life, observing systemics and dynamics and lots of thinking, is that the real reason Dutch, Finns, Germans, Belgians, Brits are reacting the way they are is: they are scared. Even more scared than South Europeans.
Take a good look for example at the "streets" of any UK, NL or Belgian city. People are "bowling alone" (much more than Greeks or Spaniard are "bowling alone") and they know it.
That is I propose the main way to interpret eg the local results in Antwerp.
So whereas Greece, Spain, Portugal, Italy need real policies badly, the NL, Belgium, the UK, Germany, Finland need real policies even more badly. And more humanism (and that is a matter/task for society and thought/opinion leaders, not policy makers per se).
On the other hand, imo what Greeks and Spaniards should really worry about is not labour market reforms but of having lost part of their traditional humanism. Because once that is lost, no laws or rules can after all restore that. And liberalism needs humanism in order to work. Every system does, but liberalism (in the European not US sense of the term) does even more (that is of course why Romney and Ryan should not win the elections in the US, the country where the term "bowling alone" was invented).
The Greek and Spanish labour markets are already a "Kaiadas" (see Ancient Sparta) even without labour market reforms, so what worse can reforms do than admit that reality?
Plus Greeks, Spaniards, Portuguese, Italians should look at their national and local "champions" and elites and ask them: What have you done for me lately? In a way they are. In a way.
Being pro-EU doesn't mean being pro European Commission, pro EU Council, etc. It means being pro the common interests of 500,000,000. Because in the world systemics and dynamics of the epoch, mainly at continental and world level can effective solutions be formulated and implemented. But with a systems analysis approach that looks at the forest and at the trees at the same time. These are indeed testing times for policy makers.
The European media and social media should not focus on the symptoms (they do make for good copy, true) but at the diseases. I know it's hard.
Even more analysis on this complex topic and implications for policy makers, the civil society and economic operators at EU, Euro, national and local levels, is available upon request.
Here we go (based on thoughts originally posted via my Twitter account, today):
Xenophobia and "paymasterism" are evidence of insecurity due to policy failures by mostly national policy-makers.
E.g. Angela Merkel and Co. blamed Greeks and other South Europeans to cover up for her own policy failures in 2005-2012. Except for very recently.
Plus, the EU has always been used by national politicians as a scapegoat for their failures but not their successes.
So who should be in more fear of losing their jobs and who should lose them? People or policy makers. Desperate policy makers produce even more desperate policies. Not to mention desperate (for ratings hence ad revenue) media.
So, for voters, focusing at national and local level is in a way a natural reaction, whereas the wise reaction is to focus at Euro, EU level and beyond.
Instead of helping the man/woman in streets feel a tad of stability via their policies, policy makers have been doing the opposite.
Note also that 2 months of somewhat positive propaganda by Merkel and friends re Greece seems (see polls in Germany) to have managed to partly counter 2+ years of negative propaganda. Is that scary or good? Or both?
That is the real state of the EU in 2012. It is time we start discussing those things, not only the agenda the mainstream traditional media and social media set.
Example:
People in NW and North Europe are panicking and blaming foreigners because, imho, they know their national exceptionalisms are a hot air result of propaganda - narratives. They are in real fear. Because they feel/know that their economies are way more un-competitive and cruel than anyone would admit. They are scared of losing their accumulated privileges and fear more than South Europeans, because they know their societies are more cruel than in South Europe.
Yes what I am proposing, after roaming around the UK, Belgium and the Netherlands (NL) in the past 5 weeks and lots of talking with people from all walks of life, observing systemics and dynamics and lots of thinking, is that the real reason Dutch, Finns, Germans, Belgians, Brits are reacting the way they are is: they are scared. Even more scared than South Europeans.
Take a good look for example at the "streets" of any UK, NL or Belgian city. People are "bowling alone" (much more than Greeks or Spaniard are "bowling alone") and they know it.
That is I propose the main way to interpret eg the local results in Antwerp.
So whereas Greece, Spain, Portugal, Italy need real policies badly, the NL, Belgium, the UK, Germany, Finland need real policies even more badly. And more humanism (and that is a matter/task for society and thought/opinion leaders, not policy makers per se).
On the other hand, imo what Greeks and Spaniards should really worry about is not labour market reforms but of having lost part of their traditional humanism. Because once that is lost, no laws or rules can after all restore that. And liberalism needs humanism in order to work. Every system does, but liberalism (in the European not US sense of the term) does even more (that is of course why Romney and Ryan should not win the elections in the US, the country where the term "bowling alone" was invented).
The Greek and Spanish labour markets are already a "Kaiadas" (see Ancient Sparta) even without labour market reforms, so what worse can reforms do than admit that reality?
Plus Greeks, Spaniards, Portuguese, Italians should look at their national and local "champions" and elites and ask them: What have you done for me lately? In a way they are. In a way.
Being pro-EU doesn't mean being pro European Commission, pro EU Council, etc. It means being pro the common interests of 500,000,000. Because in the world systemics and dynamics of the epoch, mainly at continental and world level can effective solutions be formulated and implemented. But with a systems analysis approach that looks at the forest and at the trees at the same time. These are indeed testing times for policy makers.
The European media and social media should not focus on the symptoms (they do make for good copy, true) but at the diseases. I know it's hard.
Even more analysis on this complex topic and implications for policy makers, the civil society and economic operators at EU, Euro, national and local levels, is available upon request.
Monday, October 15, 2012
Europe's social volcano: NW Europe compared to Athens
Until when are NW Europeans going to continue living their lives in quiet desperation? Policies must alleviate pressures now! Imho that is.
Greeks and Spaniards are more extrovert, but if an already active social volcano erupts in NW Europe, I am afraid that Athens will seem a paradise by comparison.
Europe: In the old days there was America and its Ellis Island. In 2012, Mars? This time Europe must solve its problems w/o emigration to America, America or (intra-European or another Europe caused World) war.
PS. To what extent has war been replaced by trade and finance? Food for thought.
More analysis on this topic and implications for policy are available upon request. Contact me.
Greeks and Spaniards are more extrovert, but if an already active social volcano erupts in NW Europe, I am afraid that Athens will seem a paradise by comparison.
Europe: In the old days there was America and its Ellis Island. In 2012, Mars? This time Europe must solve its problems w/o emigration to America, America or (intra-European or another Europe caused World) war.
PS. To what extent has war been replaced by trade and finance? Food for thought.
More analysis on this topic and implications for policy are available upon request. Contact me.
Friday, September 28, 2012
London and NYC: Quality of life vs zest for life?
Some 14 million live in the London metropolis and 19 in the NYC one. Other than the rich and the hopeful, why do they? A "Hollywood" effect? In other words, do people stay in places that offer the feel/perception of opportunities even in the face of different experiences?
Are people willing to tolerate much more hardship of all kinds when the situation has an "opportunities" aura? And how does that play in today's systemics and dynamics in London, UK, Europe, USA and the world (as we perceive it, ie Earth). Quality of life vs zest for life.
Are people willing to tolerate much more hardship of all kinds when the situation has an "opportunities" aura? And how does that play in today's systemics and dynamics in London, UK, Europe, USA and the world (as we perceive it, ie Earth). Quality of life vs zest for life.
My Preliminary conclusions re London systemics and dynamics
After 11 days in London (17 in UK) here are my preliminary (working) conclusions (up for discussion):
a) London is best for young professionals (eg under 35) and for rich people (high net worth or high earners). b) Compare with NYC London is huge and somewhat chaotic (NYC is even more huge, 19 million).
The Tube is imo overrated as a mode of transport (too many staircases - compare and contrast with Paris). London buses may be an underrated factor in London mobility systemics. Maybe the no-stairs mobility alternative to the Tube. Other cities, eg Brussels, Manchester, Berlin, etc (Paris? Systemics like London's?) may provide better quality of life. But opportunities?
Thus: Does London give to the Londoners or to the newcomer (from Europe and the rest of the world) the opportunities it seems to offer (via an everything is possible feel)? That is an expensive question, considering London's cost of living while searching for a good job, not any job (plenty of labour intensive service jobs in London, it seems, by the way).
These are some preliminary conclusions, or rather, thoughts!
PS. In a relevant discussion on Twitter tonight, my fellow tweep Lars Pellinat (@Lars9596) offered a bery insightful piece of info:
"@npthinking The big riddle: Average salary in greater London below 30K per year, but 2 bedroom flat IN London can cost 2.500 a month"
Analyse this!
PS2. Maybe London's biggest asset is what I have described as a "Babylon 5 feel" to London, in the sense that people who everywhere (on Earth) live and work in London. But is that asset, by itself, enough to sustain London? I don't know.
a) London is best for young professionals (eg under 35) and for rich people (high net worth or high earners). b) Compare with NYC London is huge and somewhat chaotic (NYC is even more huge, 19 million).
The Tube is imo overrated as a mode of transport (too many staircases - compare and contrast with Paris). London buses may be an underrated factor in London mobility systemics. Maybe the no-stairs mobility alternative to the Tube. Other cities, eg Brussels, Manchester, Berlin, etc (Paris? Systemics like London's?) may provide better quality of life. But opportunities?
Thus: Does London give to the Londoners or to the newcomer (from Europe and the rest of the world) the opportunities it seems to offer (via an everything is possible feel)? That is an expensive question, considering London's cost of living while searching for a good job, not any job (plenty of labour intensive service jobs in London, it seems, by the way).
These are some preliminary conclusions, or rather, thoughts!
PS. In a relevant discussion on Twitter tonight, my fellow tweep Lars Pellinat (@Lars9596) offered a bery insightful piece of info:
"@npthinking The big riddle: Average salary in greater London below 30K per year, but 2 bedroom flat IN London can cost 2.500 a month"
Analyse this!
PS2. Maybe London's biggest asset is what I have described as a "Babylon 5 feel" to London, in the sense that people who everywhere (on Earth) live and work in London. But is that asset, by itself, enough to sustain London? I don't know.
Saturday, September 8, 2012
Too financial?
Our times are definitely too financial. From the credit card a hotel asks you to register you to the fin news that dominate media and social media.
Thursday, August 16, 2012
Paymasters, in the EU and the US
Why is no one talking of "paymaster" states among the 50 US states?
Because the US has a real union, unlike the EU/EZ!
Because the US has a real union, unlike the EU/EZ!
Sunday, August 5, 2012
Crucial events/factors in EU/EZ systemics and dynamics
Crucial events/factors in EU/EZ systemics and dynamics have been:
1) The enlargements. They did make deepening harder after all (UK got its way but got bit some way)
2) BuBa's inflation phobia
3) China's Dec 2001 WTO entry
(3) is the one that disrupted EU/EZ systemics and dynamics the most, esp PIIGS' (and others).
In a "more closed" EU Single Market (or in a WTO withoit China), PIIGS' wages would have to compete with eg Slovak and Bulgarian ones. But now they have to compete with Asian (mostly Chinese) ones.
Saturday, August 4, 2012
Capitalism is getting old. New product needed.
Is socio-economic "Calvinism" and the related "pure" version of capitalism (see Max Weber) marketable/exportable to a) South Europe and the b) rest of the world outside Europe?
Is it dominant in the US anymore?
It seems not, based on results.
New "product" needed.
Is it dominant in the US anymore?
It seems not, based on results.
New "product" needed.
If the world wants to maintain freedoms in trade and capital
Systemically speaking, if the world wants to maintain freedoms in the trade of goods and the movement of capital, it must liberate movement of labour & services too.
Otherwise, look at the global, EU, EZ other systemic crises driven by uneven freedoms and the systemic instability they cause.
Eg see what Achilles Heel for the EU Single Market and Single Currency low intra-EU labour mobility is.
Towards more national and local or continental and global?
The argumentation that subsidiarity drives focus at national or local level is faulty!
On the contrary, the most appropriate level of decision making is becoming more continental and more global (Earth-al).
The opposite is a fallacy.
Global warming is but one of the issues that require global scope and drive this dynamic towards continental and global level "subsidiarity". Financial regulation is another.
As per things such as the EU, Mercosur or UNASUR, ASEAN and other dynamics towards continental scope in statehood, they are more useful now than ever before. In spite of the populism/narratives re national and local dynamics. They are part of the problems humankind faces, not the solutions. From city states to national states to continental and hopefully an Earth-state.
In indeed the appeal of local and national is emotional, but reality paints a different picture. Time for gutsy political and philosophical leadership to pave the way.
Wednesday, May 23, 2012
Reform this!
In the meantime, Lagarde said all Eurozone members have to implement "structural reforms".
In my opinion, the main structural reform the Eurozone (and the EU) need is: A real single market for everything (at last).
In my opinion, the main structural reform the Eurozone (and the EU) need is: A real single market for everything (at last).
Thursday, May 10, 2012
Euroland: Lost, Fringe or FlashForward?
Lost in Euroland: Next key episodes: May 15: Hollande assumes office, May 25: Bundestag vote on Fiscal Compact has been postponed until mid June (& Italy?), May 31: Irish referendum. The Euro-saga continues!
One would think that the Hollande win last Sunday would be enough to create the conditions for putting aside the existing Fiscal Compact (agreed a few months ago but in need of ratification by at least 9 of the Euro 17) to be replaced by a compact of a quite different philosophy, less inflexible, less sclerotic, one that does to rely on the dogma that austerity is the road to growth. One that allows member governments, maybe via the Eurogroup, much more leeway in conducting economic policy.
Yet Angela Merkel insisted last Monday that ""It is a matter of principle in Europe that following elections, be they in small or large countries" (she is obviously referring to Greece and France - yet actually Greece is the 9th in population member of the EU27, so not a small but a medium size country) "we do not renegotiate what's already been agreed". Crowning her declaration of Euro-principles with the warning: "Otherwise we could not work together in Europe". Which could beg the uncomfortable question: Who can or wants to work together with Angela Merkel in Europe (EU or Eurozone or Europlus)?
What makes the German PM so determined (some would say inflexible, even scary), in spite having just lost control over the German state of Schleswig-Holstein, to the SPD and the Greens, and after not only the break up of the Merkozy via Hollande's win and in the face of his intent to renegotiate the Compact, as well as the loud anti-austerity elections results in Greece as well as local elections in Monti's Italy?
A crucial point is whether the SPD and Greens will bow to Angela Merkel and her driving economic dogma, some say it is Ordoliberalism, some say it is Austerity hawkishness, and vote for the ratification of the Fiscal Compact. The vote in the Bundestag was supposed to take place on May 25 but press reports have indicated that the FDP-CDU/CSU.coalition has decided to postpone it at least until the middle of June (that means the original date of the Bundesrat vote, June 15, is likely to change. Also the effects from a potential No in Ireland on May 31. It will not veto the Fiscal Pact for the rest, but it may provide even more socio-political anti-austerity impetus than today.
Maybe the fact that her popularity, which pools above CDU/CSU results, propagated by her narrative (as well as that of certain German media) regarding the causes of the Euro crisis (the PIIGS) makes her feel that she has the German public opinion of her side, 25% of the total population of the Eurozone!
After all, in spite the Hollande win, conservatives (right of center) still govern in Euro member states representing 54% of the Eurozone population (including Portugal and Spain), compared to the left of center's 28% and an 18% (Italy and Greece) that falls under a "it's complicated" status (with Monti actually acting pretty much as a right of center PM, see the concurrent ratification vote in Italy with Germany on May 25, a sign of an emerging "Merkonti" duet to replace the loss of the Merkozy one?).
Are SPD and the Greens Ordoliberal enough to ratify the Fiscal Compact in return for merely a growth pact offset? Or is it that in spite the developments in other member states, they still do not feel that they can challenge Merkel in front of the German public opinion? Maybe the election results in the German state of North Rhine-Westphalia this Sunday, May 13, could be a turning point. Or maybe not.
The postponement of the Bundestag vote on the Fiscal Compact from May 25 for at least 3 weeks seems to indicate that something is going on. Either related to Hollande's stance or to an SPD/Greens stance, or both or neither!,
'
The plot thickens.
Here is a calendar of some key events in Europe that could affect the austerity vs growth balance:
May 13: Elections in the German state North Rhine-Westphalia
May 14: Eurogroup Meeting, Brussels, Belgium
May 15: Francois Hollande officially assumes the office of the President of France, France
May 15: Meeting of Economic and Financial Affairs Council (ECOFIN), Brussels, Belgium
May 16: Governing Council meeting of the ECB in Frankfurt
May 25: Bundestag ratification vote on Fiscal Compact - postponed til mid-June or later
May 25: Ratification vote on Fiscal Compact by the Italian Parliament (??)
May 31: Irish referendum on the Fiscal Compact "treaty", Ireland
June 6: Governing Council meeting of the ECB in Frankfurt
June 10 and 17: Legislative elections for the 14th National Assembly, France
June 10 or 17: Date for potential new Greek parliamentary elections, Greece
June 15: Potential dare for Bundesrat ratification vote on Fiscal Compact, Germany - probably postponed as a result of the postponement of the Bundestag vote.
Parts of this analysis were quote in the this blog post (in Portuguese):
Capitalism: My definition
Capitalism is the system where people make money out of money, by lending or investing it and where te most crucial resource for starting and operating a business is financial (monetary) capital.
The transition from manufacturing and other industry to services as well as intellectual (largely non-tangible, non-material) products was supposed to gradually decrease the importance of financial capital in starting and operating a business (services or intellectual products such as music, books/ideas etc) and increase the importance of labour-human capital and the grey matter.
For many reasons, this has not happened. I have and will continue to tweet and blog on the reasons (eg here). In this post I want to emphasize that the extra-time that Capitalism as I defined it has got has produced some really weird dynamics. Is the strategic option for the US and the EU to save and even regain manufacturing from Japan, China et al, or to learn how to live in a post-industrial era (at least for the "West")?
The transition from manufacturing and other industry to services as well as intellectual (largely non-tangible, non-material) products was supposed to gradually decrease the importance of financial capital in starting and operating a business (services or intellectual products such as music, books/ideas etc) and increase the importance of labour-human capital and the grey matter.
For many reasons, this has not happened. I have and will continue to tweet and blog on the reasons (eg here). In this post I want to emphasize that the extra-time that Capitalism as I defined it has got has produced some really weird dynamics. Is the strategic option for the US and the EU to save and even regain manufacturing from Japan, China et al, or to learn how to live in a post-industrial era (at least for the "West")?
Tuesday, May 1, 2012
A look into some elements of Eurozone systemics
The Eurozone 17 member states have a combined population of 331 million, that is about 66% (two thirds) of the EU27 501 million.
Germany plus France account for 82+65 = 147 of the 331 million, ie 44.4% of the seats in a theoretical (does not exist, yet?) Eurozone parliament. If there was an upper house, they would only have 4 of 34 "senators" (if the US Senate system was used) or bit more than 2/17 if a "Bundensrat" system was used (3-5 votes per member, depending on population size).
If one adds Spain + Italy (population 60+46 = 106 million) then one realises that 4 of the 17 Euro members account for 253 of the 331 million in population, 76.4%! So 3 out of 4 Eurozone inhabitants live in just 4 of its 17 members.
By comparison, in the EU27, the 6 largest members (Germany, France, UK, Italy, Spain and Poland) account for 253+47+38 = 338 of the 501 or 67.5% of the total EU population (roughly two out of 3).
So the population weight of the 2 and the 4 largest members in the Eurozone is quite high. 44.4% and 76.4% respectively.
Of the other 13 members, only 5, NL (16.6), Greece (11.3), Belgium (10.9), Portugal (10.6) and Austria (8.4) have between 8 and 16.6 million in population, 57.8 million in total of the 331 million (17.5%).
So 9 larger of the 17 members have a combined population of 93.9%!
The rest are:
Slovakia 5.4
Finland 5.3
Ireland 4.5
Slovenia 2.0
Estonia 1.3
Cyprus 0.8
Luxembourg 0.5
Malta 0.4
There are many ways to look at the systemic and composite picture of the Eurozone (and the EU of course):
a) GDP
b) GDP per capita
c) Population
d) Inter-governmental
We looked at (c). Many look at (a) and (b). One problem of (a) and (b) is that it treats richer countries and citizens of richer countries (GDP per capita) as more important than the rest. That would not be OK in a political union where each citizen/vote should count the same (but not the case in the US with their electoiral college system and the winner takes all electors system most US states use in the Presidential election).
A mix of (c) and (d) would be the case in a US of Euro or Federal Republic of Euro scenario.
At the current stage, many think the IG (d) way is the way to decide things in the Eurozone. Yet many complain that Germany and France try, under Merkozy together, to run things in the Eurozone.
Well. they do have 44.4% of the people and a large part of the Euro17 total GDP.
Other members, such as the Netherlands and Finland, want more say than 1/17 or their populatoon share, because not only of their GDP per capita but also of their CRA ratings (when in crisis and bailout times).
In finance, things get more complicated. The complex nature of the financial systemics and the resulting contagion risks show that when systemics are more integrated towards a real system (and whether one likes it or not, finance brings the Euro17 "closer" together than politics or economics or trade or even football, do) show that in a real union (financial, fiscal, economic, political etc) the interconnections are such that one cannot look at each member separately.
-----------------
Now, politically, and in view of the May 6 Prez election in France, one notes that only Slovakia, Slovenia, Cyprus and Austria have a left of center government (in Austria actually it's an PES-EPP coalition but the PES member is the one with more seats and with the PM), things in Italy and Greece can be described (if one borrows the Facebook or dating sites' lingo) as "it's complicated".
So most of the Eurozone governments are conservative (EPP member is the sole part in government or the majority partner is a coalition). Eg the Ireland, with the reverse of the Austrian grand coalition, an EPP+PES one, but with the EPP member (Fine Gael the one with the majority and its leader Enda Kenny as PM) . In the NL, the coalition that just fell (elections September 12) was led by an EPP mmeber with an ELDR/ALDE member as minority and the support of PVV.
That is partly why a win by Francois Hollande and thus the Socialist Party will be crucial in changing the Eurozone (as well as EU) dynamics. It will mean that 65 million of 331 in the Euro17 will have a left of center political leadership. That is also 65 of 253 in the EZ big 4 and 65 of 147 in the German-French "relationship" (meta-Merkozy).
1) Left of center governed Euro17 members:
Belgium 10.9
Austria 8.4
Slovakia 5.4 (as of March 2012)
Slovenia 2.0
Cyprus 0.8
Total (May 1) >> 27.5 million (8.3% of 331)
With France 65
Total (May 7) 92.5 million (28%)
2) It's complicated:
Italy 46
Greece 11.3 (and will probably remain complicated after May 6 election, because eg New Democracy is EPP member but its views on austerity etc are not typical EPP).
Total: 57.3 million (17.3%)
3) Right of Center
Germany and 8 other members with 331 - 93.5 - 57.3 = 180.2 million of 331 (54.4%)
Thus if Hollande wins, the right-of-center bloc in the Euro17 will decline from 245( (74%) to 180 million (54%) and the left of center will climb from a measly 8.3% to 28%! Plus acquire an impetus, which may also activate the German social democrats (polling at 24%, while the Greens 12%, CDU/CSU 36%, and Pirates 13%).
Germany plus France account for 82+65 = 147 of the 331 million, ie 44.4% of the seats in a theoretical (does not exist, yet?) Eurozone parliament. If there was an upper house, they would only have 4 of 34 "senators" (if the US Senate system was used) or bit more than 2/17 if a "Bundensrat" system was used (3-5 votes per member, depending on population size).
If one adds Spain + Italy (population 60+46 = 106 million) then one realises that 4 of the 17 Euro members account for 253 of the 331 million in population, 76.4%! So 3 out of 4 Eurozone inhabitants live in just 4 of its 17 members.
By comparison, in the EU27, the 6 largest members (Germany, France, UK, Italy, Spain and Poland) account for 253+47+38 = 338 of the 501 or 67.5% of the total EU population (roughly two out of 3).
So the population weight of the 2 and the 4 largest members in the Eurozone is quite high. 44.4% and 76.4% respectively.
Of the other 13 members, only 5, NL (16.6), Greece (11.3), Belgium (10.9), Portugal (10.6) and Austria (8.4) have between 8 and 16.6 million in population, 57.8 million in total of the 331 million (17.5%).
So 9 larger of the 17 members have a combined population of 93.9%!
The rest are:
Slovakia 5.4
Finland 5.3
Ireland 4.5
Slovenia 2.0
Estonia 1.3
Cyprus 0.8
Luxembourg 0.5
Malta 0.4
There are many ways to look at the systemic and composite picture of the Eurozone (and the EU of course):
a) GDP
b) GDP per capita
c) Population
d) Inter-governmental
We looked at (c). Many look at (a) and (b). One problem of (a) and (b) is that it treats richer countries and citizens of richer countries (GDP per capita) as more important than the rest. That would not be OK in a political union where each citizen/vote should count the same (but not the case in the US with their electoiral college system and the winner takes all electors system most US states use in the Presidential election).
A mix of (c) and (d) would be the case in a US of Euro or Federal Republic of Euro scenario.
At the current stage, many think the IG (d) way is the way to decide things in the Eurozone. Yet many complain that Germany and France try, under Merkozy together, to run things in the Eurozone.
Well. they do have 44.4% of the people and a large part of the Euro17 total GDP.
Other members, such as the Netherlands and Finland, want more say than 1/17 or their populatoon share, because not only of their GDP per capita but also of their CRA ratings (when in crisis and bailout times).
In finance, things get more complicated. The complex nature of the financial systemics and the resulting contagion risks show that when systemics are more integrated towards a real system (and whether one likes it or not, finance brings the Euro17 "closer" together than politics or economics or trade or even football, do) show that in a real union (financial, fiscal, economic, political etc) the interconnections are such that one cannot look at each member separately.
-----------------
Now, politically, and in view of the May 6 Prez election in France, one notes that only Slovakia, Slovenia, Cyprus and Austria have a left of center government (in Austria actually it's an PES-EPP coalition but the PES member is the one with more seats and with the PM), things in Italy and Greece can be described (if one borrows the Facebook or dating sites' lingo) as "it's complicated".
So most of the Eurozone governments are conservative (EPP member is the sole part in government or the majority partner is a coalition). Eg the Ireland, with the reverse of the Austrian grand coalition, an EPP+PES one, but with the EPP member (Fine Gael the one with the majority and its leader Enda Kenny as PM) . In the NL, the coalition that just fell (elections September 12) was led by an EPP mmeber with an ELDR/ALDE member as minority and the support of PVV.
That is partly why a win by Francois Hollande and thus the Socialist Party will be crucial in changing the Eurozone (as well as EU) dynamics. It will mean that 65 million of 331 in the Euro17 will have a left of center political leadership. That is also 65 of 253 in the EZ big 4 and 65 of 147 in the German-French "relationship" (meta-Merkozy).
1) Left of center governed Euro17 members:
Belgium 10.9
Austria 8.4
Slovakia 5.4 (as of March 2012)
Slovenia 2.0
Cyprus 0.8
Total (May 1) >> 27.5 million (8.3% of 331)
With France 65
Total (May 7) 92.5 million (28%)
2) It's complicated:
Italy 46
Greece 11.3 (and will probably remain complicated after May 6 election, because eg New Democracy is EPP member but its views on austerity etc are not typical EPP).
Total: 57.3 million (17.3%)
3) Right of Center
Germany and 8 other members with 331 - 93.5 - 57.3 = 180.2 million of 331 (54.4%)
Thus if Hollande wins, the right-of-center bloc in the Euro17 will decline from 245( (74%) to 180 million (54%) and the left of center will climb from a measly 8.3% to 28%! Plus acquire an impetus, which may also activate the German social democrats (polling at 24%, while the Greens 12%, CDU/CSU 36%, and Pirates 13%).
Wednesday, April 18, 2012
Who's the Boss?
Weird weather today in much of Europe. Nothing new, in my opinion.
It's simply Nature, reminding us who is the real boss, her, not the "markets" (aka the financial markets), or other "gods" of our 2012 "Western culture".
She (Nature) often does that with earthquakes (been in a few, big ones), tsunamis, etc.
That is why I recently tweeted that I am "atheist" when it comes to modern "religions" such a Capitalism, liberalism, Communism, ordoliberalism, Merkelism, etc etc.
It's simply Nature, reminding us who is the real boss, her, not the "markets" (aka the financial markets), or other "gods" of our 2012 "Western culture".
She (Nature) often does that with earthquakes (been in a few, big ones), tsunamis, etc.
That is why I recently tweeted that I am "atheist" when it comes to modern "religions" such a Capitalism, liberalism, Communism, ordoliberalism, Merkelism, etc etc.
EU issues: Balance?
It's 20.5 years, since when I first get involved in EU issues, when I accepted a post in Brussels with an NGO-social partner organisation. Since then I have monitored EU issues via various jobs and with only small breaks.
Based on my experience, I can say that in this period, 1991-2012, EU issues have, in different sub-periods, been a) over/too political b) too economic c) too social d) too legal e) too financial. The recent years can of course be characterised as too financial in terms of EU issues.
What is best?
A balance, the right balance.
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