2012 Review: US vs EU models (dreams vs quality of life)

Even in 2012, US and EU systemics point to:

US best to pursue your dreams, EU best for quality of life.

In 2012, quality of life in the EU27 took a further beating and the European Social Model (with its variations) is under threat, with the "excuse" of austerity. As I have pointed out before, various private sector interests are eyeing the "filet" and other parts of the EU27 health "market"/pie, encouraged, inter alia, by the block of the Obamacare public option in the US in the first 2 years of the Obama admin.

The US, in spite of the continuing bureaucratization of US life and economy (to some extent one could label it, Europization), by comparison to EUrope, the US continues to be a better place for one to pursue one's business, tech, entrepreneurial, artistic, sports, etc dreams, and succeed or fail (and wind up even homeless) when doing so (hence the relative absence of safety nets compared to EUrope).

In 2013?

Management and HRM: Chains, links and what's wrong with biz/work/econ systemics today!

Rough day at the dentist and then electric fuse blew when I returned to the flat where staying temp and not feeling at home in. What a day! But the building owners' rep energised her wits and local connections when I called her, so the fuse that was busted, the one at the basement, not the flat, was fixed very quickly!

She's a master of her work. Gotta love that!

Which brings me to the point of this post:

People who master the work they do in diverse and somewhat complete ways make life for all of us better! Kudos! She has been doing this work for years but I know many who do a job for many years yet still too "casually". They make our lives worse off, I propose.

People have to try to master the work they do out of respect for themselves, their job & the people involved. No room for zombies in management and workplaces today.

What I am saying is that no job is w/o value when the person who does it respects himself, the job, the clients and all ppl involved in general. No job!

And that is where work/econ systemics are failing today imho. The rating of jobs tends to devalue many and systems fail due to 5 cent screws or low pay and what is worse, low valued/rated jobs, economically and societally, ie jobs that thus attract people who, alas, do their job as if they are "zombies"! Or to put it differently, they are simply there (and just that). They are the real "bureaucrats" of not only the public but also the private sector? Their personal fault? Maybe to some extent, but also the management's, the "HR's", and systemic faults, I argue. And these are the ones where priority must be placed, to improve things!

So even jobs that are rated low are valuable if one realises that chain is a strong as its weakest link! 1 has to look at marginal benefit/cost. When one does that, one realises that no job is of low value to the "system" if the system is to work.

South European systemics

The South Europe life systemics and dynamics need to fit the South, in a way the South was more systemically sound some decades ago than today. Eg Spanish siesta made lost of sense.

Being in Athens is not that different frm being in LON, BRUX etc. Basically alone BUT less cost/day AND much easier to engage with "strangers"

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.

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.

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.

On the competitive advantages of countries (and USPs)

Athens has never had a Manhattan (like NYC) and imo it never should.

Or a City (like London).

The solution is for those who want a City to move to London and for those who want Acropolis, Greek, islands, and a different way of life to stay or move to Greece. Especially true in an EU context, since intra-EU freedom of relocation is high (not perfect or as high as within the USA, but high). That same rationale could apply globally if global freedom of relocation of persons was anywhere near a descent level, but it is not (the WTO and capital freedoms are not enough, humans' freedom is the key premise in my rationale here, because humans are the basis for all econ/fin, biz and other dimensions, w/o humans what the point of economics, biz etc, not a Caprica (see US TV series)).

Trying to import US, UK, German and other models to Greece and other PIGS (and vice-versa) is wrong Strategy (and wrong philosophy).

One does not give up one's USP (unique selling proposition) to try to copy another's. In spite what many think re the success of copycat products in recent years (aka survival of the cheapest).

For example, US and other foreign educated Greeks (and tdes me) have the challenge to develop suitable original models for Greece not try to copy or transpose other models or patches of the UK, US, German, Dutch etc models.

My scepticism includes study of best practices, not in principle, but in practice. Imo, at best, best practices should be examined as a mere part of a brainstorming process, not as an excuse to shortcut original (and systemic) thinking in models of competitiveness.

Employability and (geo) mobility

The key to 2012 employability in Europe is geo-mobility but regional, national and EU admins do not foster that. On the contrary!

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.

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.

Faulty premises leading to faulty analysis and policy

As issues such as the Euro crisis have shown, many analysts & commentators treat economies or societies or states as a human person.

I propose that this type of analogical analysis is flawed and thus leads to faulty policy conclusions.

Countries, economies, societies, states etc are not persons. they are systems and the suitable analysis is systems analysis. That's my view.

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!

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.

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.

Who are the real free-riders?

One could argue that countries that rely on nuclear (and to a lesser extent CO2 emissions) are worse offenders of EU/global community interests and "free-riders" than debtor countries.

They expose neighbours and the rest of the planet to risks for the own benefit.

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.

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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%).

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.   

EU vs WTO

Compare and contrast an EU with a WTO membersbip.

Is the WTO the "free trade area" that some, many in Britain, want the EU to be?

Is it?

Let;s assume it is.

Then why should the EU copy the WTO? Those countries that want to belong to a mere free trade are a with the minimum transfer of sovereignty have the WTO.

The EU was intended, is and will be much more than a free trade area or even a common or even a single market (a status it has not really achieved yet though, Single Market, 19 years after "1992").

The WTO though is maybe just what The City needs.

What does Germany need? What does Germany want? Analysis of the former should come before analysis of the latter. Does not seem to be the case though.

What the EU needs: Single Laws but National/Regional Policies & Strategies

The EU member states need to have common laws in everything, instead of national or local laws, so the EU Single Market can work properly especially for the average citizen and the average company (SMEs). In other words, the optimal level for legislation is the EU level instead of national and local level.

But one must realise that that does not mean one-fits-all policies eg economic policy or competitiveness policy/strategy!

That IMO shows some of the irrationality of the Merkozy Fiscal Compact and in its thinking in general.