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 can European integration learn ...

1) What can European integration learn from the German Confederation (1815-66) and the German unification (1871)?

I mean both positive and negative lessons.

2) What can "united Europe" learn from the United Kingdom (1801-present)?

Is the UK the "Austria" of European unification (in 1871 analogy)?

Is the UK potentially the "Austria" of European unification (in 1871 analogy)?

By European unification I mean not the current state of the EU but the potential political union, that would count of a unification analogous (to be compared AND contrasted) with the Germany unification of 1871 and the 20-30 years after that.

One of the policy issues coming out of such analysis is whether the UK can potentially be the "Austria", ie left out of the unification.

Another issue is whether European unification of the depth of the 1871 German one, will lead to stringer or weaker large members of the EU, namely Germany and France. And of course for the United Europe as a whole, and all its components 25 or more or less of the current member of the EU27.

Sacrifices in 2012

The Incas  (see article) and other ancient civilisations were sacrificing humans to the gods, the modern world to the "markets" esp. the financial one. O tempora!

Until when?

What would the world today be like if ...

(food for thought)

1) The Ancient Greek cities had united politically into a one country in the 5th century BC, or if Athens not Sparta had won the Peloponnesian War.
2) Alexander the Great had not died but had lived 20 more years and deepened his multi-culti Empire.
3) Carthage had beaten the Romans
4) Julius Caesar had lost the battle of Alesia
5) Constantine had not moved the Roman Empire's capital from Rome to Byzantium.
6) Columbus had landed on the (then) USA
7) The siege of Vienna or the battle of Vienna has had a different outcome
8) The English Puritans and Separatists had not sailed to America in 1620
9) The winter of 1788-1789 in France had been milder
10) Napoleon had not been sent to military school in Paris
11) Adolph Hitler had become a successful professional painter
12) Winston Churchill had not lot the 1945 elections and thus had a stringer position in the Potsdam conference
13) The French Assembly vote had not rejected the creation of the European Defense Community in 1954

and/or more

Germany 2012 AD - Athens 470 BC

The role and effect

a) of Germany in the Eurozone and

b) of Athens in the Delian League.

Compare and contrast.

If .... then .... else! Ancient Greece, USA, Europe

If the city-states of Ancient Greece had united into one entity, the History of the world 450 BC - present would be different

If the states of America were not united & thus had not joined WWI and WWII, the history of the world 1914-present would have been different.

If the countries of Europe do not unite properly, the history of the world 2012- ..... will be different than if they do.

PS: Food for thought:

At different times, Athens, Sparta, Thebes & Macedonia failed to create a United States of Greece. They abused their power over the others. These days, the "Sparta" & "Athens" of Europe, Germany & France, are trying something, together! But are their leaders doing it properly or alienating the other member states (by analogy to the Ancient Greek city-states).

Is Greece the "Delphi" of modern Europe? Is France the "Athens"? Is Germany the "Sparta"? What is the UK? Spain? Finland?

What did Alexander the Great and Diogenis of Sinope have in common?

Philosophise on this (re ways of life, life missions, quests, etc):

Why did Alexander the Great, when he met Diogenis of Sinope (see Wikipedia), say that if he wasn't Alexander he would wish to be Diogenis of Sinope?

In other words, what did Alexander the Great and Diogenis (or their missions in life or quests) have in common? Or what is not a common element but an alter element?

In any case, why did he say it?

Towards a new paradigm for the "West"?

1st draft of a brief working paper

1) The West's dominant paradigm has failed to gain global approval - appeal

2) It has even failed to gain approval - appeal in a large part of Europe and the EU

3-4) It is now being challenged in some its core hubs (UK, USA) while in Germany and North - North-West Europe it is trying to gain appeal via populism and xenophobia

5) Is there a solution? a) To incorporate other existing paradigms frm the rest of the world & from rest of Europe b) to go back 2 its roots

6) Option B: Go back to its roots & rebuild from there. But which are its roots? Renaissance, Rome, The Hellenistic Times, Athens?

7) What would the paradigm today be if Alexander the Great had not died but had lived to further develop his own "globalisation"?

8) Alexander's prepared the Hellenistic Times by respecting Egyptian, Persian & other cultures and merging them w/ the Classical Greek one

9) It was left up to his successors & lasted not long enough. Had it lasted longer, would Rome have emerged the way it did?

10) Option A: Can West's Times respect & incorporate other world cultures the way Alexander incorporated others to the Classical Greek one?

See also: My post "Globalisation, today and in 300 BC" (April 20, 2008)

Europe keeps failing in its History and Logic exams!

Can one imagine what the world would be like today of the US states had decided not to create a federal union but created a free trade area (as some Britons and other Eurosceptics want the EU to be) instead?

If the Ancient Greek city-states has created federal union in the 5th or 4th century BC, the world be different today. Rome would have probably more emerged, among other things.

In 2000 years or maybe much sooner, people will be saying the same re Europe!

Why is it so difficult for European to wise up after thousands of years of experiences and unite?

Europe has/is being "played" by the USA, the Asian tigers, Japan, China and others, plus the global financial system. Time to put an end to that or not?

Unless Europe grabs the bull by the horns, austerity in Europe will last. Time to talk of EU interest.

Outsource This: Thoughts on current dynamics (EU, UK, USA, World)

A solid decision must take into account local, national, regional (eg EU) and global regulatory & legislative constraints. Not an easy time for decision makers then!

Eg business in 2011 will have little in common with business in 2008. In that the conditions & working assumptions of 2008 that affect business have changed radically, it's a totally new "ballgame".

Eg (policy) to address the demands of the times governments need to completely overhaul the philosophy & the existing body of legislation & regulations.


Management: From out-sourcing to in-sourcing?

The competitiveness of economies (for business location purposes) is IMO a matter for the Strategy - Corporate Planning Dept of a corporation to determine, on a case basis. Yet most corporations do not have such depts since many decades ago. Maybe that's the "problem"!

In a few years, some corporations will be outsourcing the top management function of the corp. as well!
Is it time for corporation to start "in-sourcing" their advertising, strategy, IT, HR, functions/depts? #management (back to basics).
The decline of the Roman Empire started when they started outsourcing to the Goths, the Vandals, etc.
The decline of Sparta started when they started outsourcing their left flank to "allies".
And the decline of capitalism started when corporations started "outsourcing" their capital needs to the "markets" & banks rather than their shareholders.

By outsourcing important functions, corporations looked lean & mean in the eyes of the "markets" & analysts but in fact became "anorexic".

Plus, many analysts & commentators act as if they are judges in talent shows, "judging" corporations & countriies as if they are hopeful singers, puting even more pressure on publicly quoted corporations to max performance short term.


Exporters = modern heroes?

Are there mindset factors at play in the loss of exports competitiveness of the US and the UK in recent decades?


Information (and analysis) is Power

The US and the UK are used to analysing the world (think tanks, media, etc).
In recent times, the "world" is also analysing the US & the UK!


Are mentalities and attitudes in the UK but also Germany & France the key barrier to a deeper EU?
a) They dub foreign lang TV shows & films about 3 hours ago via web
b) They are pro EU as long as the EU is molded in their national model
c) France after all almost rejected Maastricht and rejected the pre-Lisbon Constitutional Treaty (in May '05).
d) Gernany's participation in a deeper EU seems tied by the decision of its Const Court.

The EU isn't in crisis this year. It has always been in crisis, because the EU & EEC/ECs were/are built via weird design & flawed project management!


Can a leader lead EUrope and his/her country at the same time?
The obvious answer would be: Yes.
Case study to the contrary: A few months ago Nicolas Sarkozy seemed to be the kind of visionary leader that could steer EUrope forward, through the debt crisis etc. A few monhs later, his proposals and actions in the field of immigration (recall of citizenship, Roma etc) in an effort to please a certain section of the French electorate have tainted his and his country's leadership role in EUrope!


The EU and the UK in a prisoner's dilemma!

The issue of a UK referendum on EU membership is kept alive in the UK. Polls indicate a strong lead againt EU memership (ie exit of the UK from the EU).

A few introductory notes:

* It's the Lisbon Treaty Euroskeptics fought against that actually provides a process for the #UK to leave the EU, should it so decide!!!

* The sovereignty card being played by English and other British Euroskeptics and anti-EUers could IMO actually backfire on England!

* I still think the UK could actually lead the EU into a deeper union! But it would require a major change in mentality (via better info). Read what I mean, below!

* Would the UK have a a) better or b) worse balance of payments if it was outside the EU and its Single Market?

* Would the potential for a deeper - fuller European Union increase without the UK (europhobia) & Germany (constitutional constraints etc)?

* Is a) the #UK b) Germany c) both d) other e) no MS holding back a "deeper" #EU (army, taxation, econ gov, etc)?

Here's my take:

Legal systems in Europe tend to have very different philosophies, eg British vs French vs German vs Italian. Yet another Babel!

Actually IMO better law-making could lead to a very large reduction in the number & volume of laws & better "protection" of people.

Those who fear that the EU leads to laws being decided by the EU institutions rather than national ones are right! A single market needs "single" (or common) laws in most areas in order for the market to be single (or common).

The UK's Euroskepticism is in my opinion justified only in that Euro continental policy & law making is more interventionist (see "dirigisme") compared to the British. The solution to that is a pro-EU UK that leads the thinking towards a deeper union that has better but less legislation (federal & national). A deeper yet less interventionist European Union with single yet fewer and "better" law and "statist" intervention! That is the best solution in the "prisoners dilemma" of the EU and the UK.

If UK and EU continue in their current paths, a lose-lose "divorce" seems inevitable down the line. The UK tradition for less interventionist policy & law making has many allies in all other member states but someone needs to lead the way With or without the UK, a dirigist EU will continue to lag behind the US plus lose ground to the BRICs, suffocating entrepreneurship & citizens.

One has to consider how the union system of the EU suffocates not only companies & growth but citizens as well. Let's take a look at the demographics of the "mighty" (in terms of GDP) Eurozone! A single state Europe is the only viable strategy! Plus: Can one argue that the Germanic states were better off before they were united into Germany in the 1870s?

Can a weirdly designed union of 27+ countries of 500 million compete with a solid 300 million US of A, the 1100 million of India and the 1300 million of China (for GDP/growth, jobs, etc)?

There are hundreds of languages spoken in the homes in the USA! But a single one is used in the workplaces and marketplaces. That means that national diversity can exist, even flourish, under uniform parameters, thus a single state Europe need not supress national "IDs". A single state EUrope is indeed a leap compared to the current situation & the socio-political trends in MS. But without vision Europe is bound for bust.

Otherwise, we might as well move back to a city-states system! Like eg pre-1870s Germany! Or Ancient Greece! With Germany, France and the UK vying for the dominant role, like Athens, Sparta and Macedonia or Thebes (Spain?)!
Ancient Greece has similarities to modern Europe. Greece did not become a single state until 1831 and after Roman and other occupations. When will Europe then become a single state? In 3010 or 4010 AD?

Without English as its lingua franca (in the workplaces & markets) the EU will remain a quaint linguistic Babel for American & other tourists! A real single EU market needs banks with connecting branches all over the EU, the ability to be serviced by a single mobile provider no matter where in the EU one lives, an EU-wide "NHS", an EU income tax system that encourages mobility, etc etc!

Anyway, in 50 yrs, Europe will probably either be
a) a single country OR
b) a huge museum for American, Japanese, Chinese, Indian etc tourists.

Probably the latter!

A continued Euro-chaos as now? That option actually leads Europe to the museum I mentioned.

I propose you also read my post: Britain and the heart of Europe, in 2005 (and today)


The pseudo-immigration problem in EUrope:

... of non-EU and intra-EU "immigrants" is IMO one of the reasons the EU will remain un-competitive in the world while the BRICs & US will do much better!

Intra-EU "migration" isn't supposed to be "migration", just like intra-EU sales are not considered exports/imports. Yet it is not treated that way. Maybe that's the problem with the EU. Most things are not clear cut, they are half-way, thus confusing the average person & firm. Everything EU is vague (flou). US-style inter-state relocation doesn't require a single EU state though. And sovereignty is another "flou" subject, globally! Ie what constitutes "sovereingty" in 2010 is quite different than in 1910, 1810, 810!

The population of a new member state should be given the same transition period constraints re relocation to one of the "old members". Not the current pick your choice between 0, 2, 5 and 7 (I think) years. In 2004, the UK chose a 0 years transition period for population of the "A8" new member, while many member states chose 2 years and 7 years (!!) was
chosen (I think) by France & Germany! Quite uneven! 2 years for all by all should be the policy, IMO.

But at present, EU citizens' freedom of intra-EU, inter-state relocation is not as free as intra-US, inter-state freedom. Alas EU laws don't give EU citizens per se freedom to relocate, only give it to those who find job, start biz or have means not to become burden on the state. But does not apply to intra-US "migration", eg when a Californian moves to New York or vice versa.


Certainties about Uncertainty & Economics vs Physics

There is an ongoing debate re the certainties of Economics and its similarities and difference with sciences such as Plysics.

This is my take:

Between certainty and "que sera, sera", there is a lot of room in between! A lot!

Having studied Prob/Stats, OR (Operations Research) - Decision Sciences while at MIT & NU & Finance at INSEAD I wouldn't over-estimate their ability to predict.

How many are aware of the maximum efficiency frontier on a E(return) vs E(risk) table, anyway?

The trade-off between expected return and expected risk (curve) remains one of the most not understood Financial (and decision sciences) concepts.

The use of either perfect markets or perfect information hypothesis in most Economic theories & analyses waters down the realism of the results.

In spite of the use of fancy math formalas in recent decades Economics (including) is still a Social Science. Physics is a Natural Science.

I used math/OR to try to better assign aircraft to flights in my MS thesis (1987) but didn't claim I was actually optimising, ie finding an exact or perfect solution!

A lot of Economic & Financial stuff these days seems more like product of a "religion" (see dogma/dogmae) rather than a science!

Economics, including macroeconomics, is a useful tool, but still not Physics" or able to predict/assess with the certainty we read quoted in or by well known media etc!

In other words, I agree with the conclusion in Legrain's Aftershock book but of course Macroeconomics is not Physics. Riccardo was not Newton!


Spare thoughts:

WTO -Doha: Have the US Congress & Senate given Obama the "fast track" powers GW Bush had?

UK exports in Services: £3.8 billion surplus on trade in services in July, surplus of £3.6 billion in June. Not too bad, eh?

Civil Society will make or break the European Integration

Banking and Finance are not the core of modern economies

SMEs must take a more proactive approach to European Integration

Hungary says will meet euro criteria by 2014-15

Understanding East and SE Europe crucial for understanding current EU dynamics

Understanding the history of each of the 27 member states - countries of the European Union is IMO key to understanding the current dynamics in the EU and "European Integration" and well as planning for the future of the EU.

Within this task lies, IMO, a task that may be a tad harder than awareness of the history of the UK, Germany, The Netherlands and other EU countries that are Western European in geography: Understanding East and SE Europe (and to some extent Central Europe) and the history, especially between the 15th century and 1990, of EU members Greece, Cyprus, Bulgaria, Romania, Slovenia, Poland, Lithuania, Latvia, Estonia, as well as more central ones such as Hungary, Czech Republic and Slovakia. In other words 9 of the 10 countries that entered the EU in 2004, the 2 that entered in 2007 as well as Greece, that entered in 1981 (as its 10th member). As well as countries that are candidates for EU membership, at any stage, eg Croatia, FYROM, Serbia, etc.

A number of posts in the coming days and weeks will try to give readers from W. Europe, the US and the rest of the world, some idea.

Understanding East and SE Europe: Some key history dates

1453, 1529 and 1683 are three key dates in East and South-East European history.
But there are more.

Understanding East and SE Europe: FDR's great mistake

"I just have a hunch that Stalin is not that kind of a man. . . . I think that if I give him everything I possibly can and ask for nothing from him in return, noblesse oblige, he won’t try to annex anything and will work with me for a world of democracy and peace."

Franklin Delano Roosevelt, 1942, in response to William Christian Bullitt Jr.'s warnings re Stalin's "appetite" for annexing parts of Europe (which did happen after WWII).

Was Athens or Sparta more influential in the making of the US?

Since there is a lot of talk these days about the role of the US Senate in the US political systemics, consider this:

Which political system, the Athenian or the Spartan, was more influential to the US Constitution and the making of the US in general?


And since we are on the topic:

a) Who was the "father" of Democracy: a) Cleisthenes b) Pericles or c) Leonidas?

b) Why did Sparta beat Athens in the Peloponnesian War (431-404 B.C)? Why did Sparta lose to Thebes at Leuctra (371 B.C.)?


Feel free to tweet me your replies @npanayotopoulos (via Twitter of course).

Sparta or Athens?

history - systemics - policy:

Sparta or Athens?

Which city state system was more successful and viable?

from city states all the way to ...?

history - politics - globalization:

From city states to empires to modern countries to ......?

Civics: The Athenian vs. Spartan models today

Are there people today who consider the ancient Spartan socio-political model better than that of ancient Athens?????

Who makes History?

is History made by the "VIPs" or the "ordinary people"?

On "Open Britain"

A couple of key points (from memory)and thoughts of mine resulting from the speech the new British Foreign Minister gave at the Chatham House in July 2007:

International Relations are not conducted only by governments these days, but business and NGOs (Non-Governmental Organisations) as well.

"Open Britain" is the goal. In the 21st century, countries with "open" social, political and other systemics (eg business and economic?) not only to organisations but people too, will do the best.

Thoughts: Open (or Global) Britain seems indeed a permanent strategy of the UK's political leaderships (it is the EU which is not). But are the citizens and the media "in agreement" (or on the same boat as the "globalists") with this strategy and ready to deal with its pros and cons? Plus is Britain "risk converse" or in other words, not afraid to undertake risks in the pursuit of "returns"?

------------------

Some more thoughts of mine on the concept of "Open Britain" that the new Foreign Minister referred to in his speech at the Chatham House, July 19, 2007:

Britain is indeed an amalgam of "roots" (I do not wish to use other terminology).

For example, last year there was news reporting of a study of the DNA "mapping" of modern Britons that found an immense variety of DNA traces.

In spite of its island geography, compared to "continental Europe" (aka "the Continent"), Britain was a very popular "destination" of various invaders over the centuries. I personally find the history of Britain, from BC times to date, amazingly complicated and thus interesting!

From Boudicca, whose sculpture can be found on the banks of the Thames, to the legend of King Arthur to its colonial activity around the World (eg India), the impact of Winston Churchill's leadership on Britain (and the outcome of WWII), British history is very useful in understanding modern British and European as well global dynamics.

The migration of UK jobs (albeit exaggerated as a recent report finds, see relevant recent post in this blog) to native-level English speakers in India is one "small" example.

For food for thought for European Union policy makers:
Why do most intra-EU "migration"-mobility is towards Britain (I have called this dynamic "The EU "works" in Britain")?

Which football league is today more multinational (in global not just European nationalities) than the English Premier League?

Which other football (soccer) superpower has had a non-native National Coach?

Where did Eric Cantona's super talent find ground to flourish?

Britain may, indeed, often irritate EU systemics with the anti-Brussels rhetoric of many British media, political forces and citizen reactions, but that does not mean that Britain is closed to the world, on the contrary, to some extent, I think, Britain's "Euro-scepticism" is a reflection of its scepticism of some EU related "Euro-centrism".

In the past, the British stance on the EU/Europe issue has made me consider the possibility that Britain is not "open", that it has an "island mentality".

Maybe that holds for some Britons, but for most, in my view, Britain is neither better suited for a state a US of Europe (something that Sir Winston said in the aftermath of WWII, ie that Europe needs a "sort of" United State of Europe) or a potential 51st state of the USA (as some claim they would like) role.

Britain 2007+:

Modern Britain is made up of fascinating and complicated systemics and has a certain "global player" mentality, not in a traditional "colonial" type of mentality, but in a dynamic "converse to globalisation" one. A globalisation that covers much more than just economic or trade affairs.

The current Prime Minister, who appointed the new Foreign Minister to his cabinet, made a speech last year at some City related conference that has resided in my mind. He spoke of
a Britain who is not afraid to take risks.

I also still recall Tony Blair's speech at the European Parliament in Strasbourg last July, at the beginning of the UK's Presidency of the EU.

Tony Blair's and Gordon Brown's political and personal profiles are not identical. Neither, I think, is their "mindset" re Britain's internal (socio-economic and general) "model" and strategic thinking re Britain's role in the world. But the latter have common foundations. I am not sure how representative they are of the grass roots of the Labour Party or exactly how the mindsets and models and strategies of the Tory leader David Cameron and the LibDems differ from the "Open Britain" model. Food for further thought.

Modern Britain is possibly already the most "open" country in the world (more than the US of decades past) and to the extent that the theory that "open countries" will lead the world arena in the next decades is accurate, Britain seems to be already leading the field.

Comparisons: Open US?

But the US, I think, has not said its final word. The post 2008 period in the US, whether led by a Democrat or a Republican, will have a bearing on the "Open USA" model and strategy selection.

In varying degrees and with emphasis on different aspects (economic, social, cultural, etc), John McCain, Rudolph Giuliani and Hillary Clinton are, according to my perception "open" to an "Open USA" model of thinking. We shall see.

We definitely live in interesting times.

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"England is England and we are strangers"
Anne of Cleves, the German 4th wife and then sister (!) of Henry the VIII.

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