Here are some thought on recent events:
1) The EU can open up export markets using its 500 million market as leverage via bilateral deals not WTO. WTO is fail (see eg Doha Round).
2) David Ricardo's theories don't apply 200 yrs later. Trade has to be balanced, reciprocated in a way. Not the case eg with Germany that wants the cake and eat it too (see its views on Barroso proposals on reciprocity in world trade).
After China joined WTO, US and EU kissed manufacturing goodbye. Plus there is only a limited world market for German quality products, not much room for more players or capacity.
3) So, which does more damage to the EU economy and jobs? a) immigration or b) imports? IMO, (b)
4) Wage cost is antique economics (IMF, etc). Modern biz competes on quality and/or branding not price. Which Eurozone, EU or third country's wages do Greek or Spanish wages have to match for eg Greece and Spain to achieve competitiveness in IMF/Troika's logic?
5) Germany, USA and China have been partying in the EU market while many of the EU members are "starving". Time to raise trade walls and lower immigration walls.
Showing posts with label world systemics. Show all posts
Showing posts with label world systemics. Show all posts
Saturday, March 31, 2012
Friday, February 3, 2012
If GDP per capita in USA, EU, China, India was to converge then ...
2010 GDP (PPP)(1) Population (2)
$ billion in billion ppl
EU 15,203 0.500
USA 14,526 0.313
China 11,300 1.340
India 4,058 1.210
World
Total 74,385 6.992
(1) IMF data. Source Wikipedia
(2) Wikipedia
What do these rough numbers tell us? That assuming the total sum GDP of the first 3 remained constant, then
for the GDP (PPP) per capita to converge, the convergence level would be at about 19000 USD. Given that the per capita is now (2010) 46400 in the USA, 30400 in the EU and 8400 in China, that would mean a loss of 27400 per US citizen (in GDP per capita) ie 59% loss, 39% for the EU and +125% for China!
Obviously some of the gains of China will be absorbed by GDP growth but the previous figures give you an idea of the reductions in GDP per capita the EU and especially the US will have to absorb as the GDP per capita of China converges towards the EU and US ones.
Should I add the scenario where India is included too? The level of convergence then becomes 13400 USD, ie 6000 less than the previous scenario. And an even bigger reduction for the GDPs per capita in the US and the EU!
Should I also add Brazil and Russia? The Asian tigers?
Fasten your seat belts!
Of course this convergence will take time. But how much?
Mind you, GDP adjusted for PPP was used, which is not necessarily the correct approach.
The effects of this convergence are already being seen. The fact that China has so far used its "profits" from trade to invest them in US T-bills, other binds as well as other assets in the US, the EU and elsewhere, has partly eased the effect so far. But is it not delaying the inevitable?
One approach is to say that convergence is only fair. And that what needs to be managed is the transition, the shock for Americans and EUropeans.
Now do you feel a tad more allegiance to the Greeks?
Of course this analysis is based on rough estimates, rough calculations and rough assumptions. But the future is also in any case rough for Americans and EUropeans.
$ billion in billion ppl
EU 15,203 0.500
USA 14,526 0.313
China 11,300 1.340
India 4,058 1.210
World
Total 74,385 6.992
(1) IMF data. Source Wikipedia
(2) Wikipedia
What do these rough numbers tell us? That assuming the total sum GDP of the first 3 remained constant, then
for the GDP (PPP) per capita to converge, the convergence level would be at about 19000 USD. Given that the per capita is now (2010) 46400 in the USA, 30400 in the EU and 8400 in China, that would mean a loss of 27400 per US citizen (in GDP per capita) ie 59% loss, 39% for the EU and +125% for China!
Obviously some of the gains of China will be absorbed by GDP growth but the previous figures give you an idea of the reductions in GDP per capita the EU and especially the US will have to absorb as the GDP per capita of China converges towards the EU and US ones.
Should I add the scenario where India is included too? The level of convergence then becomes 13400 USD, ie 6000 less than the previous scenario. And an even bigger reduction for the GDPs per capita in the US and the EU!
Should I also add Brazil and Russia? The Asian tigers?
Fasten your seat belts!
Of course this convergence will take time. But how much?
Mind you, GDP adjusted for PPP was used, which is not necessarily the correct approach.
The effects of this convergence are already being seen. The fact that China has so far used its "profits" from trade to invest them in US T-bills, other binds as well as other assets in the US, the EU and elsewhere, has partly eased the effect so far. But is it not delaying the inevitable?
One approach is to say that convergence is only fair. And that what needs to be managed is the transition, the shock for Americans and EUropeans.
Now do you feel a tad more allegiance to the Greeks?
Of course this analysis is based on rough estimates, rough calculations and rough assumptions. But the future is also in any case rough for Americans and EUropeans.
Thursday, December 15, 2011
Dynamics: Nothing to fear
A friend sent me a "Merry Crisis and a Happy New Fear!" season's greeting!
The more we believe that a crisis exists the bigger the crisis becomes. That's the nature of social systemics & economics and finance are social sciences!
We do indeed have nothing to fear but fear itself in these crisis dynamics and aura. They are counting on our fear, they are promoting it, they are amplifying it, to benefit their goals.
The more we believe that a crisis exists the bigger the crisis becomes. That's the nature of social systemics & economics and finance are social sciences!
We do indeed have nothing to fear but fear itself in these crisis dynamics and aura. They are counting on our fear, they are promoting it, they are amplifying it, to benefit their goals.
Saturday, October 22, 2011
Systemics: Time for major re-thinking (Eurozone. EU, world)
If 300-350 bn Euro of debt cause the Eurozone, EU and world economic systems the problems we have seen, then these systems are really flawed.
In other words, the "Greek crisis" exposes how flawed Euro, EU & world (inclusing the US) systemics (economic-financial, business, political/policy, social, etc) are!
Major re-design needed.
In other words, the "Greek crisis" exposes how flawed Euro, EU & world (inclusing the US) systemics (economic-financial, business, political/policy, social, etc) are!
Major re-design needed.
Tuesday, October 11, 2011
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
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
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)
Saturday, August 6, 2011
World and European dynamics: 20 years later ....
20 years ago today, the WWW was born. The world was still celebrating the winds of change propelled by the fall of the Berlin Wall and the return of freedom in Eastern and South Eastern Europe (and part of Asia).
The Presidency of the Council was in Dutch hands and the leaders of the then 12 members of the then EEC were slowly preparing for the European Summit aka IGC that was scheduled to take place in Maastricht in December 1991. That decided to create the EU out of the EEC et al and decide on a Economic and Monetary Union (that started in 1999, coins and banknotes introduced on 1/1/2002).
The mere suggestion of China membership of the WTO was unthinkable (it happened 10 years later, December 2001).
76 years ago today (August 6, 1945, the nuclear bomb was dropped at Hiroshima (Nagasaki on August 9).
Today, August 6, 2011 the winds of change have long died down. The winds of doom, gloom, xenophobia, etc etc etc are in full force.
December 1990: I was going from Brussels back to Paris by train and reading, in a well known magazine, about the plans for a single European currency while a few pages apart I was reading about the dis-integration of the Soviet Union. Little did I know that less than a year later I was to work in Brussels and dive into EU policies/affairs.
Times for the winds of change to blow again. Time for political union of the EU. Why? Unless you have been living in a cave for the past 20 years, you can understand why. Come to think of it, even if you have, you can still appreciate why.
One reason? Read this and connect the dots. Unless maybe you think that a social medium of 200 or 500 million "inhabitants" is a Polity or a country. You should not because it is not. Please unplug the matrix.
The Presidency of the Council was in Dutch hands and the leaders of the then 12 members of the then EEC were slowly preparing for the European Summit aka IGC that was scheduled to take place in Maastricht in December 1991. That decided to create the EU out of the EEC et al and decide on a Economic and Monetary Union (that started in 1999, coins and banknotes introduced on 1/1/2002).
The mere suggestion of China membership of the WTO was unthinkable (it happened 10 years later, December 2001).
76 years ago today (August 6, 1945, the nuclear bomb was dropped at Hiroshima (Nagasaki on August 9).
Today, August 6, 2011 the winds of change have long died down. The winds of doom, gloom, xenophobia, etc etc etc are in full force.
December 1990: I was going from Brussels back to Paris by train and reading, in a well known magazine, about the plans for a single European currency while a few pages apart I was reading about the dis-integration of the Soviet Union. Little did I know that less than a year later I was to work in Brussels and dive into EU policies/affairs.
Times for the winds of change to blow again. Time for political union of the EU. Why? Unless you have been living in a cave for the past 20 years, you can understand why. Come to think of it, even if you have, you can still appreciate why.
One reason? Read this and connect the dots. Unless maybe you think that a social medium of 200 or 500 million "inhabitants" is a Polity or a country. You should not because it is not. Please unplug the matrix.
PS. Some 2491 years ago, in August or September 480 BC, the battle of Thermopylae took place.
Saturday, July 30, 2011
Prisoners of our Mindsets
We are Prisoners of our Mindsets, especially in this era of complex systemics and volatile dynamics. Can we think outside "the box" or at least go around it, instead of closing ourselves in it so it feels like those "safe rooms" in NYC?
Thursday, July 7, 2011
World Dynamics: Mind the B Scenario!
Those who are banking on China (now a communist capitalist system) becoming a democracy via its economic dominance should also mind scenario B: EU & US become communist instead.
As for the EU, forcing EU (Eurozone) member states to rely on Chinese investment is critical undermining of the future of Europe not only the EU/Eurozone. Europe solve your problems (yet today's ECB decisions do not look promising to that end).
As for the EU, forcing EU (Eurozone) member states to rely on Chinese investment is critical undermining of the future of Europe not only the EU/Eurozone. Europe solve your problems (yet today's ECB decisions do not look promising to that end).
Friday, July 1, 2011
Saturday, June 25, 2011
World systemics: Import this!
After reading the WSJ article: "Germans, Prizing Virtues of Saving, Find Euro Bailouts Hard to Swallow", June 25, 2011, my brain was stimulated enough to make the following syllogisms:
Roughly speaking, it seems some people (eg Germans) are over-saving, some (eg Americans, Greeks, Irish, Portuguese, etc) are/were over-spending (consumer credit).
Some eg Germany, China, S. Korea, etc are over-exporting, others eg USA, Greece are/were under-exporting (or over-importing).
Please import these syllogisms and export your opinion:
Was Ricardo wrong?
Roughly speaking, it seems some people (eg Germans) are over-saving, some (eg Americans, Greeks, Irish, Portuguese, etc) are/were over-spending (consumer credit).
Some eg Germany, China, S. Korea, etc are over-exporting, others eg USA, Greece are/were under-exporting (or over-importing).
Please import these syllogisms and export your opinion:
Was Ricardo wrong?
Wednesday, June 15, 2011
EU: political union or economic colonisation by world powers?
Especially in our era, few if any local issues and dynamics are not intertwined with regional (eg EU) or global issues and dynamics. Unless humanity goes back to countries-fortresses.
In our era's volatile global systemics, a country can always build walls ie become a fortress in an effort to preserve its sovereignty and its distinct ID, be that in culture and "values", laws and their underlying philosophy. Opt out of the global trade "game" and preserve the ownership of its key industries, rely on its own "capital", be it monetary or any in any other form. Not have to rely on the views of the global financial community or follow the rules of the WTO or other international bodies. Every country should have and has that right. But how realistic is that? How can it be self-reliant on energy, foods (at least the basic ones), security, economics, capital, etc? And what size (land, population, GDP, internal market) does this option require?
Shared sovereignty (via a real political union USA or FR of Germany style) is a better option than being colonised (economically etc) by one of the world powers, ie China, India, USA, Russia. This IMO applies to the countries of Europe, South and Central America, and other parts of the world. And the EU and UNASUR (in South America) are "vehicles" of such "shared sovereignty" but which has yet to materialise via proper political union.
Everyone is different, But that is a relative term. To a certain extent every country is different and to a certain extent all countries are the same. Which is more feasible eg a political union between eg Ireland and Greece or one between Ireland and eg South Korea? To a certain extent neither is feasible and to a certain extent both are feasible! We do live in "nothing is impossible" times.
Local, national, regional (eg European) and global citizen identities can well co-exist. The issue is at what level, local, national, regional (EU) or global the Polity is formed. Continent-state is an emerging model in terms of having the potential, via shared sovereignty, to provide an adequate level of self-reliance in energy, foods, defence, have a large enough internal market, economies of scale in many utilities and social welfare (eg a Health Service).
People have indeed tended to group around ethnic, geographical and cultural ties. But these are not static over time. Plus melting pot models have always existed (see eg my post "Globalisation, today and in 300 BC"). The US or even just NYC (or London) is a place where nationalities, languages etc can co-exist in a melting pot under a common polity, currency, laws and language spoken at work. Dozens of languages (337 according to Wikipedia) are spoken in US homes or even homes in NYC, one of the key metropoles of the era (138 languages spoken in Queens, NY)
In our era's volatile global systemics, a country can always build walls ie become a fortress in an effort to preserve its sovereignty and its distinct ID, be that in culture and "values", laws and their underlying philosophy. Opt out of the global trade "game" and preserve the ownership of its key industries, rely on its own "capital", be it monetary or any in any other form. Not have to rely on the views of the global financial community or follow the rules of the WTO or other international bodies. Every country should have and has that right. But how realistic is that? How can it be self-reliant on energy, foods (at least the basic ones), security, economics, capital, etc? And what size (land, population, GDP, internal market) does this option require?
Shared sovereignty (via a real political union USA or FR of Germany style) is a better option than being colonised (economically etc) by one of the world powers, ie China, India, USA, Russia. This IMO applies to the countries of Europe, South and Central America, and other parts of the world. And the EU and UNASUR (in South America) are "vehicles" of such "shared sovereignty" but which has yet to materialise via proper political union.
Everyone is different, But that is a relative term. To a certain extent every country is different and to a certain extent all countries are the same. Which is more feasible eg a political union between eg Ireland and Greece or one between Ireland and eg South Korea? To a certain extent neither is feasible and to a certain extent both are feasible! We do live in "nothing is impossible" times.
Local, national, regional (eg European) and global citizen identities can well co-exist. The issue is at what level, local, national, regional (EU) or global the Polity is formed. Continent-state is an emerging model in terms of having the potential, via shared sovereignty, to provide an adequate level of self-reliance in energy, foods, defence, have a large enough internal market, economies of scale in many utilities and social welfare (eg a Health Service).
People have indeed tended to group around ethnic, geographical and cultural ties. But these are not static over time. Plus melting pot models have always existed (see eg my post "Globalisation, today and in 300 BC"). The US or even just NYC (or London) is a place where nationalities, languages etc can co-exist in a melting pot under a common polity, currency, laws and language spoken at work. Dozens of languages (337 according to Wikipedia) are spoken in US homes or even homes in NYC, one of the key metropoles of the era (138 languages spoken in Queens, NY)
The alternative is colonisation, driven by economics, by one of the real world powers of the era (China, USA and maybe Russia and shortly, India (*)). A balkanised Europe, with a minimal EU and each member "sponsored" by one of those powers.
(*) Could one count the global financial system as one of those powers?
Monday, June 6, 2011
Global and EU systemics: Major systemic imbalances in urgent need of fixing!
I am not sure how the following model fits with traditional economic models (note: I am an MBA, decision scientist and a policy analyst, not an economist or financial analyst anyway) such as the capital - labour - land or the capital - labour - knowhow ones:
In "my" model, there are 4 factors: capital, goods, services and work. And IMO for a system, be it the EU or the USA or the world (globalisation) to work, these 4 factors must have more or less the same level of freedoms ("4 freedoms").
Also IMO, the current instabilities in the global and EU systemics are due to uneven levels of fredom between these 4 factors.
Capital has a very high level of freedom to move and relocate around the world. Capital movements have, realitively speaking, few restrictions, within the world and within the EU.
Goods have seen their freedom grow exponentially since GATT was founnded after WWII leading to the creation of the WTO in 1994. But still, the level of freedom of goods is nowwhere near "free trade". Many tariffs and quotas, especially the former exist even between the WTO membems (and within WTO rules). Even in the EU Single Market for goods, many problems still exist, especially for small firms.
Services at least the most tradeable ones, have been making progress but their freedom is nowhere similar to that of capital and goods. At WTO and at EU level. Eg in the EU many are in fear of the travelling plumber!
When it comes to work or the freedom of labour, then things are quite sad, especially at WTO/global level and even at the EU level many problems exist. Too many.
My thesis is that unless the level of freedom of all these 4 factors converges upwards, it will soon start to converge downwards (that applies to the global and to the EU "systems"). In goods, the by now admitted failure of the WTO to reach agreement in the Doha agenda, opting for an effort to conclude a lite or extra lite one instead, the backwards pressures can be seen. With a zero or low level of public debt being reconised as a key factor in sovereignty (due to the Euro crisis etc), the concept can easily be expanded to the trade balance and the CA balance. Already certain countries have been accused (by the US) of "exporting too much" (eg Germany and China). Movement of workers, free lancers and people is "near apartheid" level globally and be in for political asylum or so called economic immigration reasons, it is alas getting worse pretty much all over the world.
What is more, the economic globalisation, in the form of the freedoms of capital and trade, needs to be balanced, structurally by a global political and a global social pillar!
Else, it is structuraly unsound.
If there is no global polity (a world parliament and possibly government (eg for the WTO 153)), or at least continental-level polity, I would not exclude de-globalisation and either regionalisation or nationalisation/localisation of capital and goods freedoms (see eg "buy local" initiatives).
Or a system of 4-7 major global players (federal EU, USA, China, India plus Russia, Japan, Brazil (or UNASUR), see my recent relevant post).
It is in the good interest of capital and the finance world to encourage or at least not block the globalisation of the other factors and the creation of global political and social pillars.
That is maybe why, in a way, the financial markets seem to be pushing the EU or at least the Eurozone towards political union!!! Because a single currency and a single market need a single polity as foundation and the financial system may not be always responding to crises in rational ways, but its vision is as good as anyone's. And the prudent financiers IMO know that either the other factors gain more freedom or capital loses much of its own.
Plus, the business world, those who produce and deal in goods and services, have clear vision too. And to the extent that the finance world does not manage to be part of the solution to the imbalances, they will ally with the politicians and societies against them.
Not for the battle for midde earth though! Enough metaphorical headlines or slogans (overdone by media etc in recent months). What is going on is the world today is the ultimate real show, much more interesting and cruel than any fairy tale or show.
The humans will prevail, eventually, they always do. Ask the monarchs, the Romans, the Soviets, etc. The financial system is next, it seems, if, as a system, it does not read the signs of the times and listen to the prudent voices inside it.
In "my" model, there are 4 factors: capital, goods, services and work. And IMO for a system, be it the EU or the USA or the world (globalisation) to work, these 4 factors must have more or less the same level of freedoms ("4 freedoms").
Also IMO, the current instabilities in the global and EU systemics are due to uneven levels of fredom between these 4 factors.
Capital has a very high level of freedom to move and relocate around the world. Capital movements have, realitively speaking, few restrictions, within the world and within the EU.
Goods have seen their freedom grow exponentially since GATT was founnded after WWII leading to the creation of the WTO in 1994. But still, the level of freedom of goods is nowwhere near "free trade". Many tariffs and quotas, especially the former exist even between the WTO membems (and within WTO rules). Even in the EU Single Market for goods, many problems still exist, especially for small firms.
Services at least the most tradeable ones, have been making progress but their freedom is nowhere similar to that of capital and goods. At WTO and at EU level. Eg in the EU many are in fear of the travelling plumber!
When it comes to work or the freedom of labour, then things are quite sad, especially at WTO/global level and even at the EU level many problems exist. Too many.
My thesis is that unless the level of freedom of all these 4 factors converges upwards, it will soon start to converge downwards (that applies to the global and to the EU "systems"). In goods, the by now admitted failure of the WTO to reach agreement in the Doha agenda, opting for an effort to conclude a lite or extra lite one instead, the backwards pressures can be seen. With a zero or low level of public debt being reconised as a key factor in sovereignty (due to the Euro crisis etc), the concept can easily be expanded to the trade balance and the CA balance. Already certain countries have been accused (by the US) of "exporting too much" (eg Germany and China). Movement of workers, free lancers and people is "near apartheid" level globally and be in for political asylum or so called economic immigration reasons, it is alas getting worse pretty much all over the world.
What is more, the economic globalisation, in the form of the freedoms of capital and trade, needs to be balanced, structurally by a global political and a global social pillar!
Else, it is structuraly unsound.
If there is no global polity (a world parliament and possibly government (eg for the WTO 153)), or at least continental-level polity, I would not exclude de-globalisation and either regionalisation or nationalisation/localisation of capital and goods freedoms (see eg "buy local" initiatives).
Or a system of 4-7 major global players (federal EU, USA, China, India plus Russia, Japan, Brazil (or UNASUR), see my recent relevant post).
It is in the good interest of capital and the finance world to encourage or at least not block the globalisation of the other factors and the creation of global political and social pillars.
That is maybe why, in a way, the financial markets seem to be pushing the EU or at least the Eurozone towards political union!!! Because a single currency and a single market need a single polity as foundation and the financial system may not be always responding to crises in rational ways, but its vision is as good as anyone's. And the prudent financiers IMO know that either the other factors gain more freedom or capital loses much of its own.
Plus, the business world, those who produce and deal in goods and services, have clear vision too. And to the extent that the finance world does not manage to be part of the solution to the imbalances, they will ally with the politicians and societies against them.
Not for the battle for midde earth though! Enough metaphorical headlines or slogans (overdone by media etc in recent months). What is going on is the world today is the ultimate real show, much more interesting and cruel than any fairy tale or show.
The humans will prevail, eventually, they always do. Ask the monarchs, the Romans, the Soviets, etc. The financial system is next, it seems, if, as a system, it does not read the signs of the times and listen to the prudent voices inside it.
Wednesday, June 1, 2011
Systemics and prospects of the WTO and of a USA, EU, Russia, Canada merger!
"Doha Trade Deal Seems Likely" reports the Wall Street Journal on May 31. 2011 (must read, here).
"Or a circumpolar space... USA, Canada, EU, Russia ..." proposed my fellow tweeter, which was exactly what I was also thinking as another potential scenario.
European Union 15.9 + United States 14.6 + Canada 1.6 + Russia 1.5 = 33.6
EU+USA+Russia: 32.0
Whether the Doha lite, or in my opinion "extra lite" agenda is agreed upon by the end of the year, or even a "zero" one (ie no deal, end of the round that started in November 2001 in Doha) I do agree with the view that the era of progress in trade multilateralism is probably over.
As I have pointed out in my posts that one can find on this blog, after the 2003 failed Cancun meeting of the WTO, many bilateral and regional trade (or more than just trade) agreements have popped up.
A few days ago (25/5), I posted on what systemics I can see developing post Doha. IMO China, India, the US, the EU (mainly) plus Japan, Russia and Brazil or UNASUR (South America's "EU" project that of course includes Brazil) will be the main "players" in the world economic "arena".
The WTO rules as they stood before the Doha Round of talks in 2001 will probably still exist (although the survival of the WTO is not a given IMO) plus whatever rules come out of the Doha lite agenda that some seem to hope to be concluded (I have my doubts, read the WSJ article for some of the reasons, aka USA, plus. as far as I know, the US Pres has no fast track powers given by Congress on concluding a deal, and if that is indeed so, it is possible that the US Congress may decide to amend (!!) any deal, thus bringing a new deal back to the WTO, etc).
Conclusions
1) Most progress in rules or deals will most likely between 2 or more of the above 4+3 main players.
2) The EU, the US, and the other main players will continue to conclude (or at least try to, see US) bilateral deals with others, in some cases group agreements, regional or not.
3) The EU needs to strengthen its position and a political union of the EU is the main such way.
More:
Here comes some thinking that some may consider sci-fi, but we shall see:
I was involved in a most interesting discussion on Twitter (aka "tweetscussion") with a very esteemed fellow tweeter, @paulstpancras) on the night of May 29 to May 30. At some point, talking of the EU, political union potential, the UK POV, I said: "Or maybe UK would be OK with EU if merged with (the) USA; 77+ states. Then (UK) could ally with Texas, Arizona, etc! :)".
Why, because in addition to covering a ring around the planet, this union would have a population size that starts to approach that of China (1.3 billion) and India (1.2 billion):
USA+CAN+EU+Russia = 0.3 + 0.03 + 0.5 + 0.14 = 0.97 billion people.
In terms of GDP (nominal (in trillion USD) 2010 estimates (Source: CIA, World Factbook)) the picture would then be:
European Union 15.9 + United States 14.6 + Canada 1.6 + Russia 1.5 = 33.6
China 5.7
India 1.4
India 1.4
There is an obvious imbalance between the 33.6 and China's and India's GDP but with their rapid growth the potential for more GDP balance between the three exists.
There is another reason why a USA+EU merger would have to bring in Russia too. Russia would get very itchy if the US and EU were to merge, and including it could fix that. Canada has only 30+ million inhabitants but huge natural resources.
So while one scenario is EU+USA+Russia+Canada, another is EU+USA+Russia with almost the same population as the former, 0.94 billion and 32.0 instead of 33.6 2010 trillion USD.
But is a EU+US merger scenario even a remote possibility? Well, yes and no. 2-3 years ago, when I think the US proposed a free trade deal, some in the European Parliament said, why not a "single market". Well, IMO a single market, even without a common currency, needs single laws, which brings things, again IMO, towards a single legislature, ie political union. IMO the US+EU potential will largely depend on developments in/with China.
But what about the rest of the world? Well, China+India+EU+USA+Russia = almost 3.5 billion people. That leaves out 3.4 billion people (of the 6.9 billion total in 2010). Note: Only 11 countries have population size over 100 million but there are many countries, more than 200 in the world (planet).
Since world GDP was estimated at 62.2 trillion USD in 2010, the result of this scenario would be:
EU+USA+Russia: 32.0
China 5.7
India 1.4
Rest of the world: 23.1
including in that 23.1:
Japan 5.4
Brazil 2.0
Canada 1.6
Australia 1.2
Mexico 1.0
Canada 1.6
Australia 1.2
Mexico 1.0
Such a merger could prompt other countries to merge in groups, eg Japan, ASEAN & rest of Asia (with or without some of the ex-USSR states) plus Oceania, Africa, South and Central America. The world would not become a global polity, but a small number of super-countries/states (regionalisation+). Global trade talks would bring to a table reps of 4 to 6 such super-states. Not all of the world's countries would want or be included of course (and why should they, there should be room for exceptions and other approaches).
But in any case, in the complicated and perpetually changing world after 10% of the 21st century has elapsed, and the rapid growth, economic and in "power" of the BRICs as well as other developing countries, the EU has to be a single polity, it cannot continue to be a loose group of 27 countries. EU political union is a must, for the EU to be taken seriously by the rest of the world (see eg recent issues re selection of new IMF chief, the issue of a UN Security Council seat for the EU, the marginal role played by the EU as opposed to the US and China in the Copenhagen COP 15+, etc).
Thursday, May 26, 2011
What are France, the UK, Germany and Italy doing in the G8?
This is one of the follow up posts to yesterday's post Key factors of "strength" in "post Doha" (and post WTO?) world systemics and on the occasion of the G8 meeting in Deauville (France), today and tomorrow.
The G8 started as G6 in the 1970s with France, Germany, Italy, Japan, the UK and the United States ie 4 large and "rich" (GDPwise) European countries members of the then EEC plus USA and Japan (also large and rich, see yesterday's post). Canada was invited later, and later Russia.
The EU is an extra, "associate" type of, participant.
My observations and points:
1) With G20 now in existence, what is G8 for?
2) Since the EEC is EU (since the 1990s) what is the point/sense of having France, Germany, Italy and the UK?
3) Considering Canada's population size compared to the other 7, why is it there (plus China and Brazil are in 2010 GDP terms richer than Canada)
4) Why is China (No. 1 in population and No. 2 in GDP) not there?
5) India is marginally less rich than Canada and Russia (1.4 vs 1.6 and 1.6 trillion USD 2010 see yesterday's article).
Hence, and depending of the weigt attached to GDP and population, the G8 should be:
either
A) G4: EU, USA, China and Japan
or
B) G7: EU, USA, China, Japan, India, Russia; plus Brazil (or the UNASUR).
The current G8 seems so 20th century and so globally irrelevant to 2011!
And in any case, EU members states have no place there, the EU does.
See also: Key factors of "strength" in "post Doha" (and post WTO?) world systemics
The G8 started as G6 in the 1970s with France, Germany, Italy, Japan, the UK and the United States ie 4 large and "rich" (GDPwise) European countries members of the then EEC plus USA and Japan (also large and rich, see yesterday's post). Canada was invited later, and later Russia.
The EU is an extra, "associate" type of, participant.
My observations and points:
1) With G20 now in existence, what is G8 for?
2) Since the EEC is EU (since the 1990s) what is the point/sense of having France, Germany, Italy and the UK?
3) Considering Canada's population size compared to the other 7, why is it there (plus China and Brazil are in 2010 GDP terms richer than Canada)
4) Why is China (No. 1 in population and No. 2 in GDP) not there?
5) India is marginally less rich than Canada and Russia (1.4 vs 1.6 and 1.6 trillion USD 2010 see yesterday's article).
Hence, and depending of the weigt attached to GDP and population, the G8 should be:
either
A) G4: EU, USA, China and Japan
or
B) G7: EU, USA, China, Japan, India, Russia; plus Brazil (or the UNASUR).
The current G8 seems so 20th century and so globally irrelevant to 2011!
And in any case, EU members states have no place there, the EU does.
See also: Key factors of "strength" in "post Doha" (and post WTO?) world systemics
Wednesday, May 25, 2011
Key factors of "strength" in "post Doha" (and post WTO?) world systemics
The combination of population size & GDP (not per capita) are key factors of "strength" in "post Doha" world systemics.
What do I mean?
1) The WTO and its 180 some members have failed to reach an agreement on the "Doha Round" for almost 10 years now. While that does not mean that the existing WTO rules are not in force and that they provide for some kind of multilateral "free-ish" trade (ie with many fewer quotas & tariffs than when the GATT started post WWII), it does call into question the whole WTO/multilateral system.
2) After all, in the last few years, because of the failure of WTO to reach agreement in Cancun & Hong Kong, many bilateral and "group" (usually regional) trade agreements have sprung up as a hedging mechanism. Eg in South America, UNASUR has been gaining ground. Brazil, India & South Africa signed an agreement a few years ago. Many ASEAN members have signed an agreement with China. The TransPacific Partnership is evolving. Africa was developing its own union (although it is nor clear how events in North Africa in recent months will affect it).
3) The US and the EU have signed many on the bilateral ones (although the US had trouble signing anything trade related while the House was in Democrats' hands).
4) The G7 then G8 has now been sort of taken over by a G20.
With multilateral "globalisation" in shaky grounds, a system of sub-global entities have been evolving.
In my systemics and dynamics based POV, the following new "geography" is evolving, in terms of its major participants:
EU, USA, China, India, Brazil or UNASUR, Japan, Russia, ASEAN
Some see the BRICs (Brazil, Russia, India, China) as a group. But IMO they do maintain their own POVs.
On the other hand, countries like the UK (a member of the EU, at least for now), seems to favour a more "free agent" approach compared to the other EU members (especially with Cameron as PM).
With NAFTA not much of a success, where does that leave Canada & Mexico?
Canada is a traditional member of the G8 and now of the G20, but with some 30 milion population, where does a country like Canada fit in the new global geography?
But let's go back to my theory that a combination of population size & GDP (not per capita) are key factors of "strength" in "post Doha" world systemics and have a look at the top rankings in terms of these two parameters:
A) Population (out of 6.9 billion total)
Note: Only 11 countries have population of over 100 million
China 1.34
India 1.21
USA 0.31
Indonesia 0.24
Brazil 0.19
Pakistan 0.17
Nigeria 0.16
Bangladesh 0.15
Russia 0.14
Japan 0.13
Mexico 0.11
Note: No EU member country has population over 100 million.
3 of the 11 are in the Americas (2 of which from North America and NAFTA)
6 of the 11 are in Asia (7 if one counts Russia)
1 of 11 in Africa
The EU, with 0.5 ranks 3rd, after China & India and well above the US. Even the Eurozone, at 0.33 has a larger population than the US!
B) GDP nominal (in trillion USD) 2010 estimates (Source: CIA, World Factbook)
World 62.2
1 United States 14.6
2 China 5.7
3 Japan 5.4
4 Germany 3.3
5 France 2.6
6 UK 2.3
7 Italy 2.0
8 Brazil 2.0
9 Canada 1.6
10 Russia 1.5
11 India 1.4
12 Spain 1.4
13 Australia 1.2
14 Mexico 1.0
If one does not count individual EU members (in this case the 5 richest ( and largest in population) but only the EU as a whole, then the geography becomes:
(World 62.2)
1 European Union 15.9
2 United States 14.6
3 China 5.7
4 Japan 5.4
5 Brazil 2.0
6 Canada 1.6
7 Russia 1.5
8 India 1.4
9 Australia 1.2
10 Mexico 1.0
Population and GDP are 2 key parameters but of course other parameters play a role. Eg export (trade balance or current accounts power).
Notes:
1) Canada (1.6 trillion USD) has GDP power but (in spite its size in surface), its population size is a key handicap in being considered, on its own, a major participant in the post Doha geography. Mexico (1.0 trillion USD) and 0.11 billion inhabitants, is a candidate, albeit marginal, for the "premier league". It is thus ufortunate that NAFTA is not working that well and the potential for a North American Union (the equivalent of the EU for NAFTA) is bleak. But the US may soon find that its population may put it at No. 4 in the world, behind China, India and the EU and its GDP at No. 2 but it its way behind in the population parameter and that a USA+Canada+Mexico entity would have 0.45 bilion inhabitants and put its 1.3 trillion USD above the EU in GDP at No. 1.
2) In effect the EU, China, India and the US are the "big teams" in the above premier league that is based mostly on GDP and population.
3) The above analysis shows why a real European Union (ie united politically and with a real internal market) is an urgent need.
What do I mean?
1) The WTO and its 180 some members have failed to reach an agreement on the "Doha Round" for almost 10 years now. While that does not mean that the existing WTO rules are not in force and that they provide for some kind of multilateral "free-ish" trade (ie with many fewer quotas & tariffs than when the GATT started post WWII), it does call into question the whole WTO/multilateral system.
2) After all, in the last few years, because of the failure of WTO to reach agreement in Cancun & Hong Kong, many bilateral and "group" (usually regional) trade agreements have sprung up as a hedging mechanism. Eg in South America, UNASUR has been gaining ground. Brazil, India & South Africa signed an agreement a few years ago. Many ASEAN members have signed an agreement with China. The TransPacific Partnership is evolving. Africa was developing its own union (although it is nor clear how events in North Africa in recent months will affect it).
3) The US and the EU have signed many on the bilateral ones (although the US had trouble signing anything trade related while the House was in Democrats' hands).
4) The G7 then G8 has now been sort of taken over by a G20.
With multilateral "globalisation" in shaky grounds, a system of sub-global entities have been evolving.
In my systemics and dynamics based POV, the following new "geography" is evolving, in terms of its major participants:
EU, USA, China, India, Brazil or UNASUR, Japan, Russia, ASEAN
Some see the BRICs (Brazil, Russia, India, China) as a group. But IMO they do maintain their own POVs.
On the other hand, countries like the UK (a member of the EU, at least for now), seems to favour a more "free agent" approach compared to the other EU members (especially with Cameron as PM).
With NAFTA not much of a success, where does that leave Canada & Mexico?
Canada is a traditional member of the G8 and now of the G20, but with some 30 milion population, where does a country like Canada fit in the new global geography?
But let's go back to my theory that a combination of population size & GDP (not per capita) are key factors of "strength" in "post Doha" world systemics and have a look at the top rankings in terms of these two parameters:
A) Population (out of 6.9 billion total)
Note: Only 11 countries have population of over 100 million
China 1.34
India 1.21
USA 0.31
Indonesia 0.24
Brazil 0.19
Pakistan 0.17
Nigeria 0.16
Bangladesh 0.15
Russia 0.14
Japan 0.13
Mexico 0.11
Note: No EU member country has population over 100 million.
3 of the 11 are in the Americas (2 of which from North America and NAFTA)
6 of the 11 are in Asia (7 if one counts Russia)
1 of 11 in Africa
The EU, with 0.5 ranks 3rd, after China & India and well above the US. Even the Eurozone, at 0.33 has a larger population than the US!
B) GDP nominal (in trillion USD) 2010 estimates (Source: CIA, World Factbook)
World 62.2
1 United States 14.6
2 China 5.7
3 Japan 5.4
4 Germany 3.3
5 France 2.6
6 UK 2.3
7 Italy 2.0
8 Brazil 2.0
9 Canada 1.6
10 Russia 1.5
11 India 1.4
12 Spain 1.4
13 Australia 1.2
14 Mexico 1.0
If one does not count individual EU members (in this case the 5 richest ( and largest in population) but only the EU as a whole, then the geography becomes:
(World 62.2)
1 European Union 15.9
2 United States 14.6
3 China 5.7
4 Japan 5.4
5 Brazil 2.0
6 Canada 1.6
7 Russia 1.5
8 India 1.4
9 Australia 1.2
10 Mexico 1.0
Population and GDP are 2 key parameters but of course other parameters play a role. Eg export (trade balance or current accounts power).
Notes:
1) Canada (1.6 trillion USD) has GDP power but (in spite its size in surface), its population size is a key handicap in being considered, on its own, a major participant in the post Doha geography. Mexico (1.0 trillion USD) and 0.11 billion inhabitants, is a candidate, albeit marginal, for the "premier league". It is thus ufortunate that NAFTA is not working that well and the potential for a North American Union (the equivalent of the EU for NAFTA) is bleak. But the US may soon find that its population may put it at No. 4 in the world, behind China, India and the EU and its GDP at No. 2 but it its way behind in the population parameter and that a USA+Canada+Mexico entity would have 0.45 bilion inhabitants and put its 1.3 trillion USD above the EU in GDP at No. 1.
2) In effect the EU, China, India and the US are the "big teams" in the above premier league that is based mostly on GDP and population.
3) The above analysis shows why a real European Union (ie united politically and with a real internal market) is an urgent need.
Tuesday, May 17, 2011
Systemics: If finance is to remain global then polities ....
Assuming the validity of the theories about econ-financial contagion at continental and even global levels, if finance is to remain global, then polities must become continental (ie political union in the EU/Europe, South America (UNASUR), Asia (on top of existing efforts such as ASEAN), Africa (African Union), etc.
Even if finance was to become sub-global, ie continental, then polities should have the same (continental) scope.
Hence: Global finance & world trade need continental if not global polities. The G20, the WTO, the UN, etc cannot or have not shown that they can satisfy the need for political balance to eco/fin dimensions.
For EUrope, that means absolute need for (real) political union and no more myths re national sovereignty in these globalised conditions/systemics. Sovereignty can only be achieved at (near) global/planetary or at least continental level.
The sooner political and opinion & thought leaders in Europe and around the world admit that, the sooner the imbalances that affect the lives of people everyday around the world will be addressed.
EUrope is supposed to be ahead of this wave. But in recent years, it has flirted with populist rhetoric and short termism in national political visions.
Even if finance was to become sub-global, ie continental, then polities should have the same (continental) scope.
Hence: Global finance & world trade need continental if not global polities. The G20, the WTO, the UN, etc cannot or have not shown that they can satisfy the need for political balance to eco/fin dimensions.
For EUrope, that means absolute need for (real) political union and no more myths re national sovereignty in these globalised conditions/systemics. Sovereignty can only be achieved at (near) global/planetary or at least continental level.
The sooner political and opinion & thought leaders in Europe and around the world admit that, the sooner the imbalances that affect the lives of people everyday around the world will be addressed.
EUrope is supposed to be ahead of this wave. But in recent years, it has flirted with populist rhetoric and short termism in national political visions.
Saturday, March 12, 2011
March 11, 2011: A Dire Reminder and a Call for Unity
11/3/2011: The mega earthquake in Japan, the resulting Tsunamis, the radiation concerns: A dire reminder we all (6.9 bn) live on the same vessel & that borders are mere artificial construits. A call for world unitY
Plus: A shocking reminder why No to CO2 does not mean Yes to nuclear energy.
Plus: A shocking reminder why No to CO2 does not mean Yes to nuclear energy.
Sunday, September 26, 2010
Release real growth and real jobs from the chains of over-regulation and red tape!
It seems that the key skills for success in business etc today are not biz studies or motivation/inspiration but legal ones.
Why?
Due to over-legislation & red tape!
Stop "killing" personal & business creativity via over-regulation, over-legislation & the resulting red tape monster (national and cross border). This IMO applies to most areas of economic activity (excludes the Finance sector though). In other words, regulate Finance more, radically deregulate real business, for "healthy"/viable real growth and jobs!
Because the "governing dynamic" is: Whatever you decide to do, red tape wlll eventually catch up with you!
How many jobs in EUrope are created and maintained by red tape? How much growth and real jobs do they prevent from happening?
A large part of legal frameworks for business in European & other countries were created in the industrial era, based on an implicit belief that business (big industry with its high start-up and fixed costs) was a big bad wolf! In the Services era this is even more irrelevant & job desructive than ever!
Entry to markets, economic activities & professions, either national or cross-border suffocate real growth and real jobs or the real economy.
The roots:
In older days, markets, industries & professions were protected via over-regulation, red tape & other barrriers. The system kind of worked, then, providing "stability" (and sclerosis) for companies, professionals & workers. But with freedom of trade etc, the system has IMO collapsed and mobility (across sectors, professions and borders) for companies, professionals and workers is still fenced, hence systemic instability and lack of real growth and jobs at various national (eg USA), regional (eg Europe) and global levels.
Why?
Due to over-legislation & red tape!
Stop "killing" personal & business creativity via over-regulation, over-legislation & the resulting red tape monster (national and cross border). This IMO applies to most areas of economic activity (excludes the Finance sector though). In other words, regulate Finance more, radically deregulate real business, for "healthy"/viable real growth and jobs!
Because the "governing dynamic" is: Whatever you decide to do, red tape wlll eventually catch up with you!
How many jobs in EUrope are created and maintained by red tape? How much growth and real jobs do they prevent from happening?
A large part of legal frameworks for business in European & other countries were created in the industrial era, based on an implicit belief that business (big industry with its high start-up and fixed costs) was a big bad wolf! In the Services era this is even more irrelevant & job desructive than ever!
Entry to markets, economic activities & professions, either national or cross-border suffocate real growth and real jobs or the real economy.
The roots:
In older days, markets, industries & professions were protected via over-regulation, red tape & other barrriers. The system kind of worked, then, providing "stability" (and sclerosis) for companies, professionals & workers. But with freedom of trade etc, the system has IMO collapsed and mobility (across sectors, professions and borders) for companies, professionals and workers is still fenced, hence systemic instability and lack of real growth and jobs at various national (eg USA), regional (eg Europe) and global levels.
Monday, August 9, 2010
Is the new "America" virtual?
Following the "saturation" of the US the world needs a new "America, America" where one can pursue the original "American Dream" but there seems to be no "real estate" left on this planet for this new America to be "built" on!
So maybe the new "America" is a) virtual b) has to wait for mass space travel (!!) c) other (specify:.......)
Europe could become the new "America" but instead it seems to be falling back to the old "malaise" that made Europeans move to "America"!!
SE Asia?
So maybe the new "America" is a) virtual b) has to wait for mass space travel (!!) c) other (specify:.......)
Europe could become the new "America" but instead it seems to be falling back to the old "malaise" that made Europeans move to "America"!!
SE Asia?
Friday, July 23, 2010
Wisdom vs Consumerism: In search of a new equilibrium
Asian and other wisdom has been penetrating the US and the rest of the West for some time now. Can it help adopt a healthier way of life?
US and other Western consumer and other elements have been penetrating the rest of the world in recent times. Effects already visible.
Thus which of the two influences will be more effective? What will the new equilibrium be? For a) West b) Asia et al c) World?
US and other Western consumer and other elements have been penetrating the rest of the world in recent times. Effects already visible.
Thus which of the two influences will be more effective? What will the new equilibrium be? For a) West b) Asia et al c) World?
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