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Greed- Conversation with an imaginary comedian


What happened in the last economic crisis? The government transferred its responsibility for printing money to the banks and it’s management and who they are? The bastion of greed, the adorers of lust for money. So what they do? Of course what you would do if all you had in your head is obsessively circulating one word, MONEY, MONEY, MONEY. You steal it. 

So if you ask me why was the 2008 economic crisis, my answer is the greed.  And not that I made it up. Every economist will agree, that greed is the basic stone of the economic animal psychology.

GREED is the core element of our modern economy.  If in middle Ages the economy was based on food production and gold. The food was produced and most of it also consumed by peasants and the Lords played war, for which they needed gold to pay their army. The industrial age was based on coal, steem, iron casts and steel, and all this are real stuff, you can touch. Only the contemporary economy is based on money, that is nothing else than a line on the computer screen. So do not be surprised, if those who are responsible for money creation, the bankers, they just grab it.

 If you think they are stealing it you are accusing them of immoral behavior. Watch yourself doing it, you can be easily sued. They never bridge the law. How could they if they are the law, they create it. So while they put their hands in the jar where your money is deposited, they call this take; bonuses for good performances. It doesn’t matter if the performance is positive or negative, it is all about to have a “good” performance.  So in a way they are not very different from a comedian.  Also for them the most important thing is the performance. It can be good or bad, negative or positive, it doesn’t matter, all what counts is to have the performance.

And so we have here this faith in the new God, the greed, the followers of this God, the banksters and the money. What do you think can be the outcome of all this? Yes your guess is correct, economic crisis.

So what is the outcome from all this? To go back to material things as the fundamental media of the economy.  Not anymore virtual money but a material money.  No, let’s not go back to gold as some may suggest. After all what good can do a metal when transferred from underground dich in South Africa, to another underground dich in USA or Europe called Central Bank or Federal Reserve. No let us base our economy on the real thing, us, me, you the comedian. Whats so funny about my proposal? Am I not more credible than some bricks of gold? (Threatens someone in the audience. ) You see it already works. I am just like the Government.  I threaten someone and immediately have respect and credibility. So if I have credibility I can create money.

Did you hear about bit coin? This is an all virtual money.  Some clever mathematician put on the Internet a program that generates by itself money. Yes it just generates it without any human interaction. In a self controlled speed.  Some started to use it. Then its price went up and collapsed again. I wonder, was it an invisible hand of the market? Or was it a very visible hand of some banksters? They just don’t like someone competing with them on creating money. Usually they would turn to their friends in the government and ask to rise an army to crash the “falsificator”. But with bitcoin they have a problem; Who is the enemy? Where is he? Can they attack it. Deminish it. A mathematical formula? Hardly. They can moralize like; Do not allow some uncontrollable mathematical formula to compete with us. We banksters, we and You are after all the government. Without us you couldn’t exist.  Who would support you at times of need for cash? By the way, are there any other times? If yes, let me know.

They can also threaten us by saying, if you touch us the holy money creators, the worst will come. Without us you can’t exist. We are the one above the law, the untouchable. Even don’t try it on us. 
But the bit coin is not frightened, he just can’t hear them. 

But then if the recruited army can’t do its most important job, to defend money and it’s creator the banksters, what tool is left for them to fight this nasty fomula? They can call it a virus a disease a plague but then all is left for them is to try to destroy the bitcoin with the only tool they know best, money itself. So they buy lots of bitcoins and immediately sell it. By doing it they have to buy expensively and sell cheaply. But then they lose money. “Their money”. Of course they don’t really mind, after all they can create of it as much as they like. But what if they will lose more and more? What this means? It means bitcoin money will replace the banksters money. And then? Mathematical formula will replace the banksters. What the hell will they do then?

Can be predicted WWIII


I will try to cope in the following pages with the question, is any possibility to predict WWIII. “Luckily” I do not have to cope with the obvious, like what will be after WWIII. So, let us take as…

Source: Can be predicted WWIII

Conflict of cultures


purasuchikku wrote ;”Individually, people do not mean much (self realization is only the acceptance that we are mortal), they always fit into a larger group (a nation, a culture, even a religion or an association) with a transcendent, divine destiny”.
This seems to be the central point of present conflicts in the world. While the European civilization (some tend to call it Western civilization incorrectly, after all the Western Civilization from the Japanese point of view is the Chinese civilization), so coming back, the European civilization started with new scientific and philosophical understanding about the world sometime in the 16-17 century, while still embracing the political system of belonging to a group, community, nation, kingdom. Only at the 18 century appeared first time new ideas about individuality that brought at the end of this century the famous slogans of French revolution. “Liberté, égalité, fraternité”. This ended with unprecedented violence unseen until this time of the guillotines and Napoleonic wars. During the 19 century, after years of “Restoration” of the old order, slowly the ideas of the revolution penetrated to the European subconsciousness and in France and Brittany, with the new industrial revolution, the individual human being started to be counted. It was not an easy process. France and Europe needed the Dreyfus affair to bring to the awareness of the European population the criminality of the power structures enforced by the traditional leading elites. (I am France against J’accuse).
Twenty century seemed to start as promising, when Germany, Austria and after the 1905 revolution even Russia adopted certain kind of constitutional Royal political system, where the elected parliament had more and more influence. But the traditional political forces surrounding the one royal family ruling in whole Europe, (except in France), was not ready to accept so easily the decline of their political power. Mainly it was truth in Germany and also in Austro-Hungarian empire, a remainder of political structure created in late middle ages. The World War I was the result of this political power structure. The German ruling elites had no difficulty to recruit the nationalistic feeling of the social grouping called the German nation, created just few decades before, to start a war. This war as to my perspective ended after 80 years at 1992 with the dismantling of the Soviet empire.
The horrors of WWII, the moral remorse and joint shame of the Europeans, about the crimes they committed to the humanity, that included genocide and annihilation of cultures and races, caused a U turn in the European political culture, from national commonality to liberal individualism and human centralism. The liberal political system, that emphasizes the rights of expression of each individual human being, brought an outbrake of individual creativity, that helped to endorse economic and cultural expression, and brought progress and riches in these fields as never before in the human history.
Yet this U turn was not adopted by all the world communities. In contrary. In Europe itself, the post Soviet Russia, and lately also Turkey’s political leaders try to adopt a more pro communal focused political system, with more rigid cultural expression, suppressing the free expression of the individual, while still trying to enjoy the economic fruits, the liberal political system enabled to create. Their success is very partial, because the successful economic wealth creation in Europe based on scientific, technological and cultural freedom needs to open its societies and political system to the each individual without difference in beliefs, social belonging and even education source. Even if social coherence in these states seems to be stronger than in Europe, and many individuals, with less need for self expression, can find it more advantageous than the alternative “chaotic” state, where every individual has the right for any kind of non-normative behavior or opinion, on the long term, the liberal individualistic society, with its creative diversity, and apparently chaotic state, successfully causes emergence of new cultural and economic values, that eventually win the game, and bring the progress and the economic and cultural wealth.
Even worse economic-social-political fiasco than in Russia and Turkey can be observed in the Arab countries, adjacent to Europe and in their peripheral Muslim countries like: Iran, Afghanistan, Pakistan. In this countries non of the liberal individualistic approaches were adopted. Their education system is not universal, and doesn’t support learning about cultural diversity and intellectual openness. In contrary, the education system based on faith and rigid religious values suppresses the opened minded exchange of opinions so dear to the liberal individualistic approach of the Europeans.
In all the Arab countries political despotism and social-cultural intolerance prevails. The failure in these countries in all the fields of human existence is so colossal, that these states ceased to be a place to provide to its citizens a life worth to live, with right for honor and decency, and its population in desperation tries to escape to the neighboring Europe, while risking their life. Even in countries like Iran and Pakistan, where officially governs a “democratically” elected governments and certain free political expressions are allowed, as to the humanist record and the right of the individuals to self expression, they are totally repressed. No freedom of choice is given to the population in these countries in the issues of religion, sexuality, social belonging economic transparency, etc.
Unfortunately to Europe, the desperate population of the Arab and Muslim countries, while leaving behind their original homeland, bring with them their cultural identity, religious beliefs, and tribal communal belonging, that in its essence opposes the liberal individualistic European philosophy of life and politics.
The conflict between this new emigrants and the Europeans is inevitable unless the emigrants will be willingly absorbed by the original European population and the immigrants themselves will be ready to abandon their cultural identity, or at least to adopt it to a form that will enable their cultural incorporation to the liberal individualistic cultural concepts of the European societies. Obviously this is not what is happening. Such a cultural change and adaptation of millions of people is a prolong process, even if the immigrant is ready to live behind his beliefs and cultural identity, that brought on them in the first place the tragedy of need to leave their birth place and home.
Also the European political leadership and its population is not ready to make necessary changes in their political philosophy to try to cope with the new situation, where bigger and bigger populations of Europe live a cultural life, that strongly opposes the individualistic humanistic values the European political culture is based on. The conflict between political system based on absolute faith in scripts expressing belief in extraterrestrial extra-human entity governing human destiny and individual life, and the rational scientific belief system believing in the right and duty of each individual to take responsibility on its own beliefs, destiny and acts seems to be at this state of affairs inevitable.

About economy with Brodix


 

https://patriceayme.wordpress.com/2016/07/08/american-uncivil-war/#comment-57831

An excellent analysis. Let me add to your perspective some thought of mine i published in the past about money..
https://rodeneugen.wordpress.com/2013/09/24/fiat-money/
https://rodeneugen.wordpress.com/2013/08/31/thoughts-about-macroeconomics/

You rightly said the money as we know it is mostly product of commercial banks, giving credit. If traditionally the banks used to give loans to entrepreneurs, hoping that their venture will be successful and they will generate enough cash to repay the debt, it is not so anymore. Since the seventies the credit purpose shifted from credit to entrepreneurs to consumers credit.

After the 2007-2008 crisis the households credit started to shrink as percentage of the GDP. This shift happened as the financial markets became more and more sophisticated and the entrepreneurs diversified the sources of their financing, like corporate bonds, equity financing, stock exchange etc. The banks ceased to be the only possible source of financing. Add to it the decline of economic growth rate in the highly developed world, and you will understand that Banks had to make this dangerous shift to consumer credit, mainly mortgages for private houses, and here you have the inevitable, the 2008 year crash. The private households still did not recover from the debt crisis of 2008, and this is the reason why the economy is rather sluggish, the interest rates are close to zero, and the commercial banks are forced to keep reserves, much higher then required by the central banks. The only tool the central banks have to oppose this situation is to purchase the government bonds, reducing the interest rate close to zero, and hoping that it will work. It worked only partly, because the households still carry the debts and the trauma of high indebtedness. Not surprisingly some economist, who did not take in consideration the moral aspects of such a deed, suggested to write of some of these debts. Economically it could maybe even work, but what about the whole system of borrower-lender? It could disrupt the whole system of credit responsibility.
The central banks try an other form of intervention after no more government bonds were left on the market to purchase. They intend to purchase corporate bonds. But this would mean that certain corporations will get more easier to credit than others. Clear discrimination that will be probably unacceptable legally.

  • brodix Says:
    Thanks, Eugen.Economists and bankers no more fully understand how the economy works, than weathermen fully understand the weather.
    To top it off, much that is known is obscured. As I pointed out, much of the value of the money is backed by government debt, yet often politicians go all populist and rail about government spending, while those paying them off have piles of government bonds in their portfolios.
    It has to keep cycling. The government borrows excess out of the private sector, including China Inc. and spends it back into other parts of the economy. Otherwise people might realize there is far more money than the system can actually absorb.
    Are the people in charge of the military as incompetent as they seem, or are there other motives, like just spending as much as possible?
    When the price of bread goes up, people think they are poorer, but if the stock price of the bread company goes up, those owning it think they are richer. So the game for the last 36 years has been to keep the excess out of the general economy and stuff it in the investment sector, but even that is getting saturated and investors are panicking about how to keep making money on their money.
    Interesting times ahead.

    • EugenR Says:
      Economists and bankers no more fully understand how the economy works……
      Yes, as an economist i can tell you the confusion is great. All the theory of money gone. Zero interest rate and no inflation. People trust virtual money against all the odds. Governments print money as it was greeting cards, and still no inflation in the horizon. Real estate is sky rocketing everywhere where is enough trust, that the government will not confiscate property. Production costs efficiency of goods due to efficiency is dropping to zero (marginal cost of a car, without marketing and design costs, made of thousands of components produced all over the world costs less than an average salary). Oil price is in its historical low point. Services as entertainment and intellectual knowledge are given free of charge. (viz this blog).
      Yet, people without originality and special skills are becoming irrelevant in the production process and either are becoming “dishwashers” or unemployed. Even if generously supported by the social systems, still unsatisfied, (viz the British coal miners voting for Brexit, inspite of generous pensions they received from the government ) and have revolutionary mood. Enough a charismatic leader, who is more committed to some case than the well known clown Boris and the world is again in danger of being grasped by some crazy nuts.

Economic Reflections


The problem of inequality in wealth and income, each economic system causes, even if based on ideological dogma of equality, as the Soviet system was.
Most of the economical systems, be it mercantilism, communism, feudalism need deep collaboration between the government (king), and the economic elites. This collaboration by its nature creates those who are close to the political leadership and those who are not and discriminated. The close elites gained certain kind of monopoly, supported by the power of government. While the feudalism had chosen the economic leaders from among the aristocrats, the mercantile system among successful merchants, military leaders, entrepreneurs, adventures.
The communist system kept the monopoly in the hands of the governing body itself. All this systems were very inflexible as to resource division and social and economic mobility, even if mercantilism was more flexible than the rest. So the economic inequality was built in, in the system itself.
The capitalistic market driven system as compared to the other systems mentioned above opened itself to the most skilled and in principle, the government’s task should be support for smooth free competition environment. But this system has its faults too. If the system exists uninterrupted for more than a generation, socially the economic and political elites create a network of mutual collaborators, through the elite schools and social relation of the next generations, and disrupt the lassaiz faire system of competition. Again the inequality grows to unacceptable levels. This is the stage we are heading too in Europe and the US. Usually this stage ends with war or revolution.
The economic dynamics of different economic systems can be easily graduated, from the least pro wealth creative to the most wealth creative and is in perfect correlation with the level of social, economic and political mobility, the economic system enables. The worst economic systems as to the wealth creation are the communistic and the feudal system. It my be surprising that the communistic system is together with the feudal system, if to remember that USSR competed with the capitalistic countries as to its success to create wealth. But the results were far from the plan, and it was not an accident. Monopolization of economic resources, freezing of economic, social and political mobility has to delude the wealth and is anti economic development. As contrary to communism, feudalism did not try to create a economic system of growing wealth, but contrary to that. It rather tried to freeze the wealth and its distribution among the different levels of society.

Naturally the capitalistic free market economy, based on competition and continues fight against tendencies for monopolization of certain segment of the economy is the most dynamic and pro economic growth system. But it has its own problems.
The first one is the advantage it gives to entities that already created capital, while the entrance fee to join the club of the wealthy socially and economically is becoming harder and harder, as the length of period of time without major political disruption grows. In these times can be some new comers, mainly some new technology opportunists or fortunate ones, who are in the right place, in the right time with the right skills.
The other problem of the capitalistic-market economic system is capital’s lust for continuous ever growing yield, while it pushes the system to necessity for ever growing economic output and performance, without consideration, if this economic growth brings additional value to the standard of living of the population or rather reduces it. This results need for increased productivity, that if not in correlation with level of aggregate demand necessarily brings disruption in economic balance, and with it unemployment.
The capitalistic-free market system is based in principle on many competing fragmented economic entities, whose goals are profit and ever increasing market share. This goals many times brings very short term planning to the entity, many times for a one year period, between publishing the annual financial report. Also economic entities put very little attention to global effect their activities cause. This brings the phenomena of neglecting long term ecological impact on environment, or health issues, as in the case of tobacco companies.
Other issue for consideration is the need of the system to encourage continuously consumption not always for the advantage of the consumer, by different tools of deception, like false but mainly dis-informative advertisements, consumers credits, that often brings the consumers to exceed their consumption beyond their needs and means and many others.

The main problem of the capitalistic-free market economic system is lack of built in instruments in the system to put in consideration the long term problems of the human kind, and has no respect to human needs beyond the needs caused by immediate urge to possess and consume.

NYTimes: A Model for ‘Clean Coal’ Runs Off the Tracks


A Model for ‘Clean Coal’ Runs Off the Tracks http://nyti.ms/29sl3JH

תורה, קדושה ושאר הירקות


מי שמאמין בקדושת התורה , הוא מראש מגביל את עצמו בהבנת המציאות כפי שהיא משתקפת מתוך העדויות שנצפות בנסויים מבוקרים באופן מדעי. עצם המושג קדושה משמעותה, “מעל כל ספק”. לעומת זאת הידע המדעי הוא תוצאה של הספק. כדי שמידע יהפוך להיות תובנה מעבר לרשם חושי, חייב לעבור קונצפטואליזציה. אבל מה? הקונצפטואליזציה עצמה היא נגזרת של העובדות הנצפות של המציאות מתוך התבוננות מבוקרת בה.  התנ”ך נכתב לפני יותר מאלפיים חמש מאות שנה, מה ידעו כותבי התנ”ך אז? הם ידעו מה שכל העמים שחיו בתקופה הזאת בסביבה חשבו באותה עת, כלומר שאלוהים (אל כלשהו) ברא את העולם. הם לא רק שלא ידעו על תורת היחסות של אינשטיין או תורת הגרוויטציה של ניוטון, אלא שחיו במימד של זמן ומרחב היומיומי לפי קנה מידה של הניסיון האנשי. לכן היה להם אך טבעי לחשוב שהעולם נברא בשישה ימים וכדור הארץ והאדם בתוכו הם מרכז היקום. זה היה הידע האנושי, עד שכמה גאונים, (לא יהודים) כמו קופרניקוס, קפלר, גלילאו, וניוטון, פיתחו שיטת התבוננות מדעית על העולם, והצליחו להתבונן מזווית אחרת על המציאות. מכאן שהתנ”ך, אם לא חושבים עליו כמקודש שנכתב על ידי בורא העולם בעצמו, הופך להיות ספר מצויין של אגדות, משאות חוכמה, שירה, תאורים היסטוריים (להבדיל מתעוד הסיטורי) וחוקים מגמתיים שהיו רלוונטיים לתקופה בה החוקים נכתבו, והתנ”ך נכתב ונערך.

Brexit, what next


I would try a prophecy about the near future events following the Brexit. Just remember, since only fools are prophesying, i will make voluntarily a fool of myself.

EU, when the rather energetic Hollander will take the lead will boot Brittany out from the EU within few month. The economic catastrophe will appear immediately in the UK and will touch very marginally the EU. After all UK long time ago stopped to produce merchandise and all it produces are services, mainly financial and houses for supper rich from all over the world. And still the British will need to import merchandise, and will pretty soon discover that the prices of merchandise jumped by 30-50%. On the other hand the financial services will be damaged immediately. Banks are already considering to allocate thousands of their employees to Dublin and Amsterdam. I would predict that in the medium term some of them will be allocated to Edinburgh, the capital of independent Scotland. The Scottish gave up their independence for money, and will regain their independence for the same reason. If in the short and medium term the British economy will fall to insignificance, in the long term the other important service industry, the real estate market in London will become even more attractive to the outsiders, and even less reachable for the British people, holding mainly assets connected to British pound. So after 12 centuries of British independence, (since Alfred the Great), “Great Brittany” will finally become just an another marginalized Muslim country, with English speaking Pakistani majority, country that most of its 200 million citizens will try to emigrate, after the collapse of secular half military half civil regime and establishment of Muslim regime introducing the strict form of sharia law.  Just don’t ask me what will happen to the hundreds of nuclear weapons of Pakistan. this even a fool wouldn’t try to predict.

Europe-is the crisis fatal?


Europe is in the middle of process of unification that started with careful unpretentious steps between post war France and Germany. Europe was divided and in continuous conflict since the Roman times. This conflict peaked with WWII horrors. The aim of all this wars was reunification.Charlemagne, Bonaparte, Hitler, all these considered themselves as the unifiers of Europe and failed. And here few years after the end of WWII a certain R.Schuman a Frenchman with German name, came with an idea to unify the coal and steel market between the Franco-German nations. This humble step, (opposed by many politicians, who embraced it later due to its success), that at the end put down the last empire of evil, USSR. Not the US H-bombs, but the envy of the population in USSR of the EU wealth and well being had broken this Satanic political and economic system. Encouraged by their success, the EU made the natural next step. Common currency. Not everybody joined it. The Scandinavians, as to their national tradition, trying to benefit from all world, without to pay the price, have not joined. Also some small countries, like Czech R. ruled to suffocation by the new local plutocracy, did not join. On the other hand, Spain, that needed Euros for its huge white elephant projects, (viz. examples of airports in Madrid and Valencia etc.), Greece, its plutocracy wanted to enrich itself, and Italy where the population just don’t like to pay taxes, did join the Euro club. Surprise, surprise, Germany-France did not like it and made end to it. So the EU project started to shriek and be shaken. All the shrews suddenly appeared out of their holes. No solutions, no reason, no wisdom, just loud unbearable shriek.

System failure of the democratic politics


There is a saying, “You can lie, someone sometime, but you can’t lie to everybody all the time”.
The same is happening today in US politics. Inspite of the unique opportunity Obama had at the beginning of his presidency, (super majority in both houses) he failed to cope with any of the long term political issues, the EEF problems, environment, education and financial system. Today the two expected presidency forerunners evidently are rather anti-nominated than nominated. Very cleverly only 5% of US citizens trust the congress. It is not just a failure to find a proper candidate for US presidency, but the failure of the whole political system, just like the Chernobyl disaster was not only a local event but a whole system failure.

New Economy


 

http://www.economist.com/news/finance-and-economics/21700415-quantitative-easing-euro-area-enters-new-phase-unyielding

In front of us evolves a new economy with new economic problems and the old economic tools seems to stop to work. The tools used are with called quantitative easing, that is eventually a process of replacing one government liability in form of treasury with cash money. While the treasury securities are with interest paid, the cash money is without. The cash money deposited in banks and lately stop to pay interest or pay very low interest on the deposits, mostly the cash money is deposited in the most liquid form. With very little real investment opportunities, the investment opportunities are rather in virtual form, like publicly traded company shares, company bonds etc. The bond price fluctuation is limited to heights representing zero interest rate, so the upper price level of bonds is limited while the share price is not.

The symptoms of this new economy are?

  1. No growth in GDP measured by the old monetary tools.
  2. Close to zero interest rate.
  3. No investment opportunities that can secure long term positive yield.
  4. 4. Close to zero inflation level.

What causes these new unprecedented phenomenon in the new modern economy?

  1. Aging and declining population in the developed world.
  2. Over investment in the most developed countries by the private sector.
  3. Long period of planning and preparation needed to enter a new grand scale project.
  4. Reluctance of the Government to take to its hand the leadership on economy by replacing private sector in major investment projects due to history of failures in the past, such as new airports, sport facilities, cultural facilities, even whole new cities, never really utilized. Since the 2008 economic crises, governments are closely watched by the public and there is less legitimacy for such grand scale projects, based on political initiatives, many times judged without economic calculations. Many times their initiators, sometime political leaders on the local level were accused of corruption.
  5. Economic growth is concentrated in economic activities of high tech products in fields of internet services, with very strong tendency for price reduction, in many cases reduced close to zero.
  6. GDP is measured as monetary expression of economic production and not as measurement of aggregated volume of production exchanged between the supplier and the demander. Even less it measures the products quality that exponentially increases with the evolvement of certain technology.
  7. The production productivity efficiency of services and goods is increasing with the new  technologies, replacing the need for human employees in production and even parts of its engineering planning and management processes are replaced by machines.
  8. Marginal production costs, after the investment have been done, have tendency to be marginalized, with propensity to become zero. This brings new production competitors to the market and the products price drops. The very good example are new and new smart phone producers, but also services like taxi transportation hotel accommodations that need to cope with online tools as Uber and Airbnb.

Why economy without inflation and without economic growth as expressed in its monetary measurement is a problem?

  1. The Government collects taxes out of monetary transfers and not out of free exchange of products and services through the internet without any money exchange involved. Reduced prices mean less GDP measured in monetary form.
  2. The capitalistic system is based on capital investments into activities that generate positive yield, higher than the available interest rate paid on low risk government treasury securities. All these have to be expressed in monetary form. If there are no investments with predicted income in monetary form, the capital will stop to generate yield.

But the major challenge of all is the reduced capacity to control the economy within the monetary zones, like Euro or Dollar zones, by the banks and the governments. These two institutions created a joint venture symbiotic partnership to rule and manage these monetary zones and enjoy also personal benefits from this partnership. This explains also why it is so hard to advance legislation that would reduced the enormous rewards paid to the financial leaders and their political supporters. Add to it the appearance of a new form of monetary tool, the bitcoin, that endangers the monopoly of governments and banks to produce money, and you can understand why are all the central and commercial bankers alarmed.

As to the new plan to purchase corporate bonds, of course will include only the huge corporations with tight connection to the inner club of the Monetary Barons, who by this step will be officially introduced to closed club of chosen ones. These corporations will have free access to unlimited financial resources, while guarantied the government backing without to secure any reward to the general public from them. By the way what public benefit comes out of “Anheuser-Busch InBev corporation”, its main business activity is to take over smaller more innovative breweries and trying to force by aggressive marketing techniques the bars all over the world to sell to the public only their disgusting Stella Artois bier?

Truth


“Poetry is a political act because it involves telling the truth.”

May I ask you, what is the truth all about?

Is it something worth to fight for?

Some may value it even much more than that.
Those who are ready to sacrifice it all,
The most valuable when they get the call,
To marsh frantically within the  mobs,
Demanding death, upon all the others,
Who have no respect for the ultimate truth,
The untouchable essence of all of us,
Thee holy consecrated imaginary One!!!
This being beyond all our senses,
Who is above all our perceptions.
Then let it Be, whoever it may be,
Whose holiness is beyond all the whole,
Smaller than the very energetic string,
Vibrating in the depths of the substance of all,
Larger than the very multiverses,
Reaching beyond the edges of infinity,
The very zero,… who is more than many.

Yet to those, who can know only the perceived reality,
The One may seem nothing but imaginary,
Yet the fact that it can’t be validated,
Makes it beyond all our means,
Causing unbearable horror to me,
When exposed in its perfect naked fallacy,
Emerging in me inhuman pain and agony,
Beyond anything comprehensive on earth,
Shaking my very material existence,
Demanding from me to kill and be killed.

May i ask you, is this what the truth is all about?

Fuco and me


Someone warn me in one of your responses from becoming a Fucoist. I thought about this notion, and meditated about the question how you came to this idea. Fuco as to me is like a waiter, who is cleaning up the table, but then has no menu and no food to offer. So he is the cleaning lady, but someone else has to come after him and bring the menu. 
Then i thought you probably mean the archaeology of history in Fuconian terms. Meaning i try to derive out of historical events that changed the human history and collective consciousness, the answer to the question, where we are and to where we are heading too. But except of the technique Fuco used, that seems to me quite trivial, nothing in me is Fuconian. I’m digging into the history to find there directives to where from here and on, while Fuco just tried to find the source of collective consciousness, that substance of which all the ethics, norms, conformity and morality is derived from, to diminish it. Then he opposed any trial to create a new substance, which could create new norms of any kind that could guide the human social behavior. I wondered, what kind of food Fuco would eat without recipe? 
Then I wondered, it is obvious on Fuco’s system couldn’t be established a community life, but maybe a total individualism could work. So i made a thought experiment, and imagined what would happen to Robinson Crusoe if he would live a Fucoian life, instead of puritanically harboring his island. He would probably psychologically fall apart.
Then my associations changed to wonder, what a world was then in these times when still existed inhabitable islands, without human creatures and without five star hotels. And here i understood, this is all about Fucoism, when you come to the point that you have to give answers, you just change the subject.
What’s right about Fuco to my opinion is his observation of effectiveness of modern surveillance and control of the individual as compared to the medieval system, cruel by itself by any stands to the individual, but very ineffective as a tool for domination.

The main problem of Fuco, as political scientists before him, starting from Machiavelli, Hobbs, Lock, but even Karl Marx is that they looked at political power or any kind of authority of one human being upon other, from the point of view of elites. Yet, the point of view of subordinates, those who are ruled, coordinated, monitored, indoctrinated, humiliated, suppressed, exploited, and sometime even enslaved or murdered, without to be explained why it happened, etc. is very different from this point of view. They are not looking to understand the structure of authority, or not even for moral questions of right and wrong, but they are looking for justification for the authority of those who rule. Yet, those who submit themselves to be ruled are not looking for justification in explanation of some rational philosophical theory of power, like Machiavellian understanding and managing cynically the evil to arising submission and control, or Hobbs idea of creating a body of human community managed by one top manager who has the authority to create fear and obedience, or Locks social contract between the rulers and the ruled. Those who act out of submission, under the rule of others, don’t even look for a turn of the wheel, so their turn to rule would come. Even if by accident those, whose destiny and cognitive capacity is to be submitted to the rullers they happen to participate in such a turn of wheel called revolution, out of the revolution again will emerge as the leaders those others, who are destined or have the knowledge to rule. Here Fuco was right, authority and power to control others is about knowledge, or i would put it rather as ignorance of those who are submitted. But those who lack this knowledge, the ordinary people, who voluntarily subordinate themselves to authority have no knowledge of this kind. They are happily deceived by all the instruments created by those who dominate them. Instruments like, all the media ( Hollywood, newpapers, television, even the most popular clips on the internet), festivals like sport and cultural events, public holidays, public ceremonies, public events, divinization of  celebrities, etc. They are definitely not in a mood to change their state and position from being submited and monitored to a position of self-rule, without any predifined norms, codes, epical heroes and heroines to indentify with. 
For these people Fuco has no place, he would cause them to be lost in confusion. As contrary to Fuco, the ruling elites, who do have the knowledge and capacity to dominate others, will create the mythology to mystify the ruled by their divinely justified position and authority. Do not look for rationale behind any of this justification. Enough to remember the intensity in which the worlds 95% population watched for days the funeral ceremony of princess Diana, to understand how important is for the majority of worlds inhabitants the epical story of his heroes.
And who was this princes Diana after all? Will here death cause any change in human existance? Nothing of this kind. And yet she was the ultimate heroine to morn for and not someone like Rosalind Franklin, who died at age of 38, even before she could recieve the well justified nobel price for discovering the basic structure of the DNA. So all the fame could go to Watson and Crick, who have stolen her laboratory results with generous help from Roisalins college, Maurice Wilkins, who had stolen from Rosaline her results, to give them to Watson. The Nobel commission find this avct enough to justify to give him the nobel price instead to  Rosalind Franklin, she by the time of the ceremony was dead. To my knowledge, no wide spread public ceremonies were hold in her funeral.

Oil price slump


Response to Paul Krugman’s article in New York Times

http://krugman.blogs.nytimes.com/2016/01/16/oil-goes-nonlinear/#commentsContainer

Good for the oil producing companies and countries to suffer from oil price slump. For years the oil producing corporations exploited their position of being large and very profitable, neglecting and jeopardizing any long term energy policy needs and alternative solutions to wasteful energy usage. The declined oil and commodity prices are due to alternative energy and material technologies like the cheap gas, which is by 30% less polluting than the oil. This means less CO2 emission, less pollution, etc. Good for everybody except for the oil producing corporations, whose steering long arms are everywhere.

Those who suffer from oil price slump are those who invested in environmentally dangerous oil cracking technologies on assumption of above 75 $ per gallon oil price. The others are the huge corporations who used for years their financial power to block change in US energy policy, that could diversify energy sources and make it environmentally more friendly.

Instead of feeling sorrow for oil price slump, and its impact on the oil producers, it is exactly the time to call for abolishing the subsidies this industry is getting by not taxing the environmental damage it causes, and by using public money to built roads used by private cars. It is time to introduce in the US taxation of economic activities with negative green house effect. At today’s oil price it would not be felt by the consumers, and it would bring positive long term developments. For example it could help to close the US federal budget deficit, it would have positive impact on the climate change, and if the additional federal government income would be invested into infrastructure, like modern railway system or some social issues, like Medicare or education, it would bring even a positive economic growth.

And yes, the low energy prices are good for economy. It is like tax reduction. Since when tax reduction damages economy? High energy prices transferred financial resources from productive economies like US, Europe, Japan and China to non productive Saudis and other OPEC countries, who used these funds to personal luxuries of political elites, investments in real estate without real economic need and wars. It is just good that this flow of financial resources will stop and the money will remain in the countries whose people work to earn it.

The time came to think in an alternative concepts of thoughts and realities. Tax imposed on fuels and other polluting products, relative to their level of green house effect and pollution can be easily explained to the public by the need to find funding to clean the mess this activities caused.

Then people and corporation would adopt a different approach. For example no more electricity production from coal, meat price would jump (due to methane emitting cows and pigs) etc. (bad for unhealthy burgers). People would find another way for transportation than the highly inefficient private cars. (Ineffective because of traffic jumps, one man one car system, bigger and bigger cars, etc.)

How all this can be bad?

Big things are happening in Economy


Big things are happening in Economy beneath the surface.
A. The technological revolution. Alternative energy sources, new nano-technology materials, e-economy mainly services but also production management, etc. Te only economic field that did not participate in this e-economic revolution is real estate and agriculture. Buildings and agriculture still need the same land, and it is becoming more and more scarce. The price collapse of oil and other raw materials is a result of this e-economy.
B. Money printed by governments to purchase government securities, that started in US, is now happening in Euro-zone and Japan.
C. The Chinese Yuan will become eventually a world currency. Then to prevent capital runaway to US and Europe, they have to improve the transparency of their political and legal system. No modern economy can thrive without faith in fairness of the political and legal system. In the near future i would rather expect a revaluation of the Chinese currency than a devaluation.
D. Chine is fast to adopt new economic trends. Since the consumers markets of US and Europe stopped to grow, there is no place for its additional export oriented products. After 2008 it focused its over production to major infrastructure projects, the white elephant projects showed this policy also has its limits. So their new 10 years plan is inward oriented emphasizing environment, living standard of Chinese citizens and technology-science development.
E. The cash money flood filling the banks vaults or rather the central banks vaults where they are deposited, is a big mystery to what direction it will blow up. The banks are in these days in process of restoring their equities according to Basel III accord requirements. http://www.basel-iii-accord.com/
Since equity can be created out of profit or new capital influx, and at today’s interest rates the profitability of the banks is reduced, and so are the chances for new capital raising the only option for the banks left is credit squeeze. Viz.; http://qz.com/163160/the-euro-zones-credit-crunch-will-get-worse-before-it-gets-better/
http://value4risk.com/the-mispricing-of-financial-institutions-tail-risk/
This process will end sometime in 2020. What then? By then the non financial institutions will learn to find capital from other sources. http://value4risk.com/wp-content/uploads/Screen-Shot-2015-08-20-at-9.17.05-AM.png
So when in 2020 the bank wake-up day will come, what will the banks do? They will have the capacity and liquidity to credit policy ease, but there will be less need for their money in economy with demographic collapse in Europe, China and Japan, when technological innovations channel the economic activity to products free of charge or cheaper and cheaper. Then we have the corporations with mountains of equity and liquidity due to reduced investment rates. To this have to be added the cheap money policy of close to zero interest rate, that will be hard to change due the liquidity in the financial but also non financial institutions. The banks will be able to keep their funds in the central banks vaults, or invest into the real estates, that still represents certain level of perspective for profitability.
Conclusion. The E-economy is an economy where bigger and bigger part of economy are channeled out of the conventional economic institutions. It is global, partly free of charge and hardly registered in official statistics. So the GDP figures will hardly grow and so the taxes.

Tribal system


Everything in the reality is a system. Atom is a system, living cell is a system, living being is a system, but also tribe is a system, a social system. Every system interacts inwardly and outwardly. So doe’s the atom and so the tribe. The inwardly interaction activity  of the system is to help to sustain and flourish the system and as a such its strategy is very similar in most of the systems. On the other hand outwardly interaction of the system differs from one system to the other. The inorganic system interacts outwardly mechanically and in a predictable way. This is truth even if the human knowledge is not always sufficient and maybe never will be sufficient enough to understand what is in the core of the system. At the essence of every system are the laws of causality. While mechanical they can be understood, meaning it’s reactions can be predictable, even if probabilistically. This is because a mechanical inorganic system has no intentionality. There are those who claim that there exists intentionality also in the mechanical systems. No scientific evidence was found for such a claim, so it remains in the sphere of the religious faith and esoteric believes, without scientific or technological impact.
On the other hand, the organic system does have intentionality that can be observed. The most obvious and universal intention phenomena is the continuous uncompromising strive for continued existence of the system. If there is a system without uncompromising intentionality for survival, it is destined to be doomed. This can be observed in a simple viruses or in a complete social systems like a tribal system.
An organic system sometimes is broken to parts or its subsystems that continue a separate existence, and sometime they join together to create a new unified system. Such an unification can occur voluntarily out of adaptation of the innate or learned intentionality of the system, to a new intentionality as it is defined by the new unified system. In other cases such a unification is done by violent acts among the seperate organic systems. The result is adaptation of the winning dominant systems intentionality by the subordinated systems, that during the process are disintegrated or annihilated. Yet sometimes the subordinated system, as it becomes part of the winning system, it itself influences the winning system and causes it to be changed accordingly.
To understand certain tribal phenomena as a system, we have to look into its intentionality. The very best expresion of intentionality of a tribal system is expressed in its mythology. What is one of the most important mythological movers that drives the tribal intentionality and also defines the tribal existence? Belief in transcendental coordinator. Without it the tribal identity loses its goal, meanning and finally also its vitality. The whole European idea failed to create a unifying myhology. Cultural diversity and liberalism seems to be rather an antidote against creating a commonly excepted mythology with intentionality the Europeans can identify with. It seems, the goal of creating a wellbeing, peaceful existence is not enough to create a mythology. The reason i see is that mythology needs its mysticism, a beyond human understood phenomena. It needs a hero who can act beyond daily human perception. No bureaucrat of Brussels is good for that. What seems to me with more chances to create a platform for whole European mythology with intentionality is the muslim jihadist threat. If the Muslim jihad will emerge more are more from its marginalised corners to the consciousness of Europeans, it will cause more and more recruits to a reaction against it. What prevents to this to happen is the memory of whole European criminal violence, its major symbol is Auschwitz, where the human capacity for absolute evil was obviously expressed.

Coming back to Mother Teresas myth, as a representative of the Christian system intentionality, of course her phenomena is beyond the inter-human relations on the personal level. The same is truth with the Muslim faith and the mythology that drives the Muslim intentionality. To understand the future impact of the new emigration wave on the European culture, it is necessary to learn the myths driving them to the acts of immigration in spite of all the dangers and potential personal price they have to pay.

Psychology of suicide attacker


It is time to ask the question, what motivates young human beings in their twenties, that were brought up in France or Belgium to commit such a ultimate act as suicide, while they did have the choice to live a meaningful life as normal citizens in their country. The popular story that they the reward of 77 virgins is their major motif, sounds very naive and improbable. After all we are not speaking about teenager, whose unfulfilled sexual desires can drive them crazy. Often the suicide attacker is a married man with children and even sometime woman, who for sure will not be mystified by virginity.

More serious claims about their motives than the virgin story are the economic and social motives. Many of the Muslim Youth may feel frustrated by the surrounding society and their position towards them. If this would be the reason why they commit these extreme acts, and obviously they have no fear of the consequences their acts will cause to them, i would expect them to become ordinary criminals, who bridge with no problem the law and costumes of their housing countries, that they doesn’t identify with. This would be a perfectly rational act, to achieve the goal of improving their social status and economic achievements within their communities. And in fact many of them do turn to this solution, as the high criminality in the immigrant districts shows us.

But here we have a completely different phenomenon. A young man or woman, sometime even well educated, decides to end his life, as to his view fighting certain evil or injustice, that can’t be even by him defined as an absolute injustice, that endangers his and/or his family’s life or his tribe’s existence. If to compare their situation to that of Jews under the Nazis, whose aim was physical annihilation of all the Jews, i could understand a Jewish suicide bomber who would kill a German Nazi to protect his family or tribe (what unfortunately very rarely happened), but the situation of the Young Muslim in Europe is entirely different. Today no one in European political establishment ever implemented or declared a political view of annihilation  or extermination of Muslims because of them being Muslims. So the suicidal attackers can’t claim, they act out of self-defense, as it could have been against the German Nazis. It is obvious according to the claims published through the web, the intention of the Muslim extremists are aggressive and not defensive. To try to establish a caliphate in Europe, which is a primitive form of imperialism is an obvious aggressive act. If looking to the level of evil that the Muslim “resistance” to the West brings, any apologetic explanation to the Muslim extremism, looking for some injustice caused by the Europeans to the Muslims in the past, like the Crusaders, Colonialism, American Imperialism or Zionism doesn’t makes any sense .

So if the suicide acts of the Muslim extremists are not acts of self-defense, not childish desire to be rewarded by 77 virgins, and are not caused by economic-social frustration, what can be the driving force behind it?

What we can hear from those extremists, when asked what motivates them, they come up with a story,  partly derived from the Quran text and other Islamic texts. So can be the identification with the massage of these text or their interpretation be the real reason behind the acts of the Muslim extremists? This explanation stands also on shaky ground. How could be with such an explanation explained the suicidal acts of the Jihadists in the Muslim countries, many times against the same sect they claim to represent.

To try to come with some explanation, i would like to bring some thought about the subject. There are two different kinds of suicide attackers. The first are the recruited ones. A recruited Muslim suicidal extremists goes through several stages of recruitment. The first stage is the act of recruitment of the potential suicide attacker into ordinary military ranks. This is the stage, where the recruiter comes in the first contact with the future suicide attacker. Then it my be, that the recruiter will have strong inclination acting violently due to his past life experience, or due to his innate aggressive character, which can fulfill him with feeling of heroism, commitment to mission, or probably combination of all these. When the first stage of recruitment was done, the act of suicide becomes a military act, not very often but still used in the past not only by the Muslims. The most famous example is the Japanese kamikaze, but there were many others, like the Tamil suicide bombers for example, who were probably the first since WWII to introduce this tactics.

But even more interesting and less explainable is the self recruiting suicide attacker, and there are examples of this kind of suicide attackers. It is hard to imagine what kind of psychological process brings a perfectly normal human being to go through a process that at the end of the line will bring him to commit suicide, hoping that with his death will be killed as many other fellow human beings as just it is possible. What kind of blind hatred has to feel the suicidal attacker toward other people to be able to act like that, without any social or psychological support. Hardly it can be explained by simple reasoning, like religious faith, faith in Islamic texts and Quran and the specific text out of it, that instructs every Muslim to be intolerant to any other human being except of the fellow Muslim. To try to find all the explanation to the Muslim suicide attackers just on the level of religious faith and its murderous ideology will leave many holes in the understanding of the phenomenon.

Islam and the monotheism


For long time i asked myself, the question what next. Western world but mainly Europe has reached a crossroad where it has to decide between two choices. The first and easy choice is to continue as if nothing happened, until the next time.

But it has to be remembered the conflict between the fundamental Islam and the western values is deepening and the Muslim activists have chosen the road of escalating the conflict. If the September 11, by itself a very sophisticated attack was orchestrated by activists known to the western governments. President Clinton had authorized the CIA to bring bin Laden to the United States after the 1998 United States embassy bombings in Africa, it is not so anymore. Those who organized the attack in Paris are practically unknown.

The phenomena of suicide attackers brought to the conflict a variable of completely different dimension. Not because it is much more effective than the usual approach of commando attacks of hit and run, but because of its psychological dimension. It is hard to understand the ideological and practical motives of these mass murderers, and that’s what these Islamic suicide attackers are, since they have to be indifferent to what kind of world will remain after their attack. What’s obvious, they have no limits as to the level of destruction and number of casualties they aim to inflict by their acts. In contrary if given to them a chance, they would blow up a whole city and better a big city like Paris or New York, to make a big show out of their “heroism”. It can be said, that it was a fortune they didn’t succeed to penetrate to the football stadium with tenth of thousands of spectators. You may remember the incident at 1985, when some Liverpool  fans attacked the Juventus fans with beer cans and resulted death of 39 spectators.  It is hard to imagine what would happen, if the attackers were successful. Probably  the number of  casualties would be counted by thousands. And exactly this was the aim of the Attackers.

To those who believe in humanistic approaches i would like to say, this conflict between the western, post WWII, modern way of life and the fundamental Islam is not going to disappear by itself. It seems according to the results of free elections in the Arab countries like Egypt (not the last elections), Libya and Tunis, the fundamental Islam is deeply rooted in the hearts of majority of the Arab world population. The idea of “whole world”, Muslim Caliphate has probably many supporters in these countries.

If you wonder what kind of life are we offered under the regime of Muslim Caliphate, all is needed is to look at the life in Saudi Arabia, but without the riches of oil there. This is the situation in most of the Arab countries, with no democracy, no civil rights, no freedom of expression, no social communities without the interference of the religious or regime authorities, no modern economy, no government run social institutions helping the old, sick, invalids, etc. Add to it the inter-gender moral codes of the Islam, the limitation it imposes on artistic expressions. I highly recommend to watch the prayers and religious interpretations TV shows in Saudi television and you can see, what a gloomy, miserable life without colors and diversity the Islam caliphate supporters have in mind. (Music and satire is forbidden).

The other way the Western intellectuals have is to check the Muslim faith with intellectual honesty and with openness to any conclusion. There is definitely a direct connection between religious fanaticism and their deeds.

To explain that every religion has in itself positive massage and commands enforcing humanistic approaches is self delusive. The basic principle of every monotheistic faith, if sincerely followed, is accepting authority of ancient scripts, and the authority of  those who claim to represent the divinity, or claim knowledge  about the divine and interpret these scripts. Only this principle makes the follower of religious faith a person who limits the spectrum of his own thinking within a religious code framework. What’s worse, such a believer automatically wants to limit the spectrum of thinking of all the others. This self imposed limitation on the thought, and the will to force upon ALL the others this limited framework of thinking, is the basis of the ideological conflict between the modern world and the religious, mainly Islamic world (due to its relative success to sustain its ideological influence as contrary to Christianity).

It is understandable that the basic tool for scientific method is openness to any kind of critique. Without it the modern science could not develop science and technologies, that enable and give chance to a sustainable life to 7 billion people on the earth. The alternative way of abounding this way of thinking, as demanded by the Islam and other monotheistic religions is not an alternative, unless the human population would reduce itself to numbers that existed in the pre modern times. This process is happening already in the failed Arab and African countries, from where the people are “exported” to the functioning European countries. But the act of emigration and abandonment of homeland is not accompanied by change of mind of the emigrants. Only few of them understand that their personal tragedies were self inflicted upon them. Most of them would rather continue their previous way of life and religious faith, believing that this time it will work. But as explained above, it can’t work. From the emigrants, who stick to their traditional values, will come the next generation of youth, who will feel natural in their new homeland, and believe that their family’s moral code and belief system is the right and valid one. Out of them will be some individual forerunners, who will become the Muslim activists, ready to sacrifice everything to bring back to the world the life, their parents abounded in desperation a generation before.

Crisis of Economics 1


What are the major problems of the frame of reference of the current economic system and thought?

It seems the number one problem is the limited sustainability  of world resources at the existing trend of world population increase together with increasing demand for ever growing consumerism, that is spreading gradually to most parts of the world. When speaking about limited resources,  usually people tend to think about limited energy resources or other row materials. But the technological development trend thought us, that when such a problem occurred in the past, the science and technology found its way to solve this problem within reasonable period of time. There is no reason to think it will not be the same in the future. But when I speak about limited resources I mean the world itself, as a living organ, where interlocked ecological processes created in certain balance that enabled life on earth to evolve, until reached today’s point, when human consciousness and cognitive processes gave to humanity tools to thrive and farther develop toward higher level of consciousness about the reality in the world. Also the humans managed in the last 200 years to develop at speeding up rate understanding about the extraterrestrial realities, at the whole cosmic scale, uncovering the time schedule of very beginning of the cosmos. On the other hand the sciences succeeded to discover realities in the micro scale, down to the level of the very basic elements that the reality consist of, and successfully implements these technologies in the everyday life. Also in field of humanities, the human cognition and social reality is put in more realistic perspective, diminishing the tendency among those educated in these realities to adopt forms of political thought based on unverified claims of conspiracies and faith in extraterrestrial omnipotent human shaped power.

These development in science change the level of consciousness among those who are educated to understand these realities in the world, beyond the realities obviously perceived from the everyday life. But this new levels of consciousness  that I would dare to call God like are not generally spread, far from that. Only small minority of the humans, most of them in places, with highly developed education system, have scientific education and are aware of these new findings. But the majority of the people in the world are out of this unique club of these scientifically educated people with high level of consciousness about reality, and there is a huge gap between them as to understanding of the world view that emerges out of sciences. In political system based on preferences of the majority, who are not aware of these realities and have preferences very different from those aware, create a huge gap between the political system and the scientific community. Yet the technological achievements derived out of the new scientific findings are free for use to all, and this includes also the destructive power these technologies can generate. This means the same development that brought the humanity to the edge of omnipotence, gave to humanity also tools to destroy the delicate balance on earth that enabled all this to happen.

The understanding that the world resources are limited are as long as the humanity. It didn’t need Maltus to formalize this understanding. Until the beginning of 19 century the global world economy growth was parallel to the population growth and not changing substantially per capita, with occasional changes due to population collapse due to plague or some significant technological change in agricultural technology. The big change came with the beginning of industrialization,  with it came growth of cities and general population but even more grew the economy, and with it the per capita income. The population growth speed up ever since the beginning of the nineteen century,  and get additional impulse since WWII,  with introduction of antibiotics,  and worldwide vaccination programs initiated by the world health organizations. The connection between income and lower birth rate appeared by then. The newly accumulated wealth in the developed countries was relatively widely spread due to social policy adopted after WWII, and was followed by cultural change from societies based on scarcity of the most elementary needs to societies of mass consumption.

While the population growth at beginning of the industrial revolution take of mainly in the new industrial countries, and with the increase in education level and standard of living the population birth rate has dropped, since WWII this has changed and the population growth was mainly in underdeveloped regions,  among poor people, with low level of public services and infrastructure. In parallel to the population growth, a global scale economic growth started, that gradually caused accumulation of wealth, at first in the US and the developed world of Europe and Japan, and gradually it spread to additional countries. It meant that the birth rate dropped worldwide, but not fast enough due to local costumes, local low income places, with inefficient economies, wide gaps in wealth distribution, social structures not adequate for modern functioning societies, and above all despotic and corrupt political systems. The result is that in the last decades the world population growth was around one billion people per decade, most if not all of it in the underdeveloped world. These phenomena creates big gap of conscious awareness about realities between people living in developed states with modern developed education systems and those who live in states characterized by all the ills described above.

Back to the definition of the problem of limited resources, it is not certain raw material in limited supply, as it was perceived quite recently, but the need to protect the world as a living organ, where interlocked ecological processes created are in balance that enabled life on earth to evolve, and human consciousness at its existing level can thrive. To adopt this vision of reality beyond the short term, short sighted vision demands certain level abstract system understanding. It can’t be achieved in communities whose behavior is adopted to the strife for survival for the basic everyday needs. This communities that have no luxury of feeling, that their daily basic needs will be satisfied, whatever happens, can’t be supportive to a long term policy, environment protection demands.

What has to be done to achieve immediate change of this unfortunate trends?

The number one problem is the uneven distribution of the wealth between different regions and cultures. The uneven distribution of the wealth is not only a problem of participation in the welfare the modern states are capable to create,  but also diversion of the population growth from the developed rich world, with developed education systems, to poor countries,  with very limited education system, or education system that opposes the modern values, of openness to diversity in cultural, ideological, and belief values.

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Since 2008 the collapse of world economic system have risen questions about validity of economy as a scientific field that has contribution to human existence.  My opinion, as contrary to the often heard views is;  economic profession and economists did prove their skills immediately after the collapse of 2008, when, as contrary to all the political ideologies connected to the president Bush, they helped to implement economic policy of support to the banking system,  saved the monetary system and with it prevented collapse of the fiscal economic activities. As addition to this policy, they supported fiscal economic enlargement by public investment initiations. This economic intervention proved to be very successful as compared to the devastating economic policy implemented at 1929, when similar economic collapse was treated very differently with policy of fiscal austerity and high interest rates. The catastrophic result of this policy is well explained in the economic history books, and is still a sign of warning, what consequences can bring desperation of the masses. Luckily since then, several economic models were developed,  sometime competing,  sometimes supplementing each other, that may be used at different weight in different economic situation. The basic idea of all these economic theories is, that the governments major economic task is to implement policy of anti cycle. When the deflation is on the economic horizon,  enlarged public expenditures and monetary loosening policy  is applied,  while when inflation is the problem the opposite economic policy is advised by economists to the policy makers.

Yet with all this praising of the economists, as  successful advisers in the macro-economic decision making process, i understand, that while the economists are good to find tools to make short term corrections in the existing economic system, to prevent catastrophic collapses, when it comes to long term corrections, it appears that the existing economic system itself has difficulties to cope with. The economist have no tools to find solutions that are out of the frame of reference, of the existing economic system.

The first question is, what is the frame of reference of the existing economic system,  that prevails and became the only dominant economic system after the collapse of the Communistic system due to its failure.

The second question is why the alternative Communistic economic system failed? Was it because of failure of the Communistic political leadership, the political system they implemented, or was it much deeper failure on the system and ideological level? If the failure was only political and not of the economic system then certain elements of communistic system, without the previous dogmatic implementation could be adopted in the future.

The third question I would like to ask is, is there a way to come out with a different economic system that has tools to cope with the major economic social questions the humanity is facing at the beginning of the 21 century.

The winning economic system, that happens to be the so called capitalistic system, is based on market economy. At its essential level the market economic system is based on belief that market is a place, where demand and supply meet, where the price of the items for sale and purchase fluctuate in a way that it tends towards certain equilibrium point, that may change continuously as the surrounding circumstances change, yet in every moment there is one equilibrium point that acts as a magnet dragging the price of the good merchandise or service towards it. The equilibrium point represents an absolute point of optimal utility, that can be created in a system where there is always a supplier and a purchaser. Every other price on the market is in relation to this price and relative to it.

The other essential basis of the capitalistic market economy is the generated capital, its attributes and the behavior of those who own or manage it, and its influences on the economy. The basic attribute of capital is that it is accumulated in two forms. On one side in form of physical assets, as machinery, technology, trained work force, stock, know how, etc. on the other side in form of monetary deposits. Both these forms of capital exist and aim towards one goal, increased yield on investment. Yet, there is major difference between the physical and monetary capital. While the physical capital is an essential part of the production process,  that creates economically valuable items, exchangeable on the market against money, the monetary form of the capital has capacity to be exchanged for economic values created by the physical capital.

The physical capital is owned by legal entities or private ownerships. While the physical capital translates the add value created into monetary form of profit out of production, the monetary capital gets its share out of the added economic value created by the physical capital in form of interest payments or participation in profits of the producers in form of dividends.

The production in the economy, while changing with the technological development, improves in efficiency in production processes and eventually with existing work force, the production growth’s continuously in its volume and quality. So to prevent unemployment or over supply and slump of prices and with it economic collapse, the demand for products needs to grow. The economic growth is also important to the monetary capital, that expects ever growing increase in yields for the invested money. It can be secured on the long run only with the economic growth.  Comes out that economic growth is the major goal of the macroeconomic models. The main instrument to measure economic growth and economic production volume is GDP (Gross Domestic Product)

Most of the economic model today support the view that GDP growth is necessary for a healthy economy. This views goes so far that their followers praise the Fukushima disaster as a positive event for economic growth in Japan. According to this view also the WWII is sometime praised as a positive event that ended the 1929 world economic crisis, though even in US it took years until its economy, as a tool to create standard of living, returned to its prewar level. Of course, the damaged infrastructure and social-political disruptions the war caused, depressed the economic activity focusing to improve standard of living in the US, not to speak about Europe. This wrong position considers only very short term goals represented on the annual growth rate per capita income as a major indicator to the general public wealth-being. It doesn’t take in account the accumulated assets as an important measure for economic activity and its impact on the standard of living.

Other problem of the measure of economic performance with the GDP indicator is the growing number of products available free of charge, that annihilate whole range of services as paid services, and as such doesn’t appear in the GDP statistics. As example for such a service i would mention the availability of academic level education free of charge on the web. We can speak also about films, music etc. Truth is all these are virtual services, but also products from the real material world are already knocking on the door to enter the markets.

Let’s try to imagine a 3D printer at home, and for the evening gala party if needed a new costume, you can just download a design with instruction for the 3D printing machine to print the new costume. All is needed is virtual instruction how to print the dress. Probably in the future will be such instruction free of charge on the web, exactly as you can find today some services. And here you have a product created just in time exactly done to the needs of the consumer, and it will not be included in the GDP economic measures, except the raw material needed for the 3D printing machine. An other threat to the GDP as an objective ruler for economic performance are the financial services, where bitcoin and kickstarters enable to replace whole range of financial services, and even more they may destroy the monopoly governments and commercial banks have in money creation.

This new economic phenomena called “Zero Marginal Cost Economy” (ZMC economy) as contrary to the classical economy, where product purchase is symbiotic with monetary cash flow, in ZMC economy inevitably bigger and bigger parts of  the economy will become virtual and without impact on the financial world, and as such will be not included in the GDP measurment. But of course it is not just a problem of statistics, and how to evaluate the economy, but a real problem to the whole existing financial system, that is based on need of usage of money in every act  of exchange of ownership on merchandise or service consumption ( cash flow).

If economy will be run without or with reduced level of cash flow, The monetary system will squeeze too. The institutions, that control directly the money flow, the banks, the government, the central bank, the insurance companies, etc. will have to squeeze, will have to start to share power with other elements in the economy, who are not centralized. The already existing trend of close to zero interest rate, stagnated prices, in spite of relatively stable economy, if we take in account the unemployment levels and the quantity of merchandises and services supply levels are not in stagnation, but rather in growth, together with stagnating GDP figures is an almost unknown phenomena.

In the past existed free of charge services, mostly supplied by the government, municipalities or some voluntary organizations. But these activities were financed by taxes or donations, that did have expression in the macro economic data and the cash flow, since someone had to pay to the suppliers of these services. It is very different in the new economy of ZMC, where the supplier is not charging for the service or merchandize or charging very little. This little it charges, by asking for donation (tips) or very low price, can work, since the individual supplier, when supplying his product, he is doing it through the internet, so he can reach millions of consumers, out of them if even very lowly paid, can thrive. This also means, that only the very best, the most popular, the most wide spread product suppliers can sell their products. It again brings as to the social problem caused by efficiency brought to us with the new technologies, when only few can be productive and successful, while the rest of the population is necessarily marginalized.

At the end the truth wins


What really means the quote “At the end the truth wins? “. Let us analyze one by one each of the words, end, truth, wins. In historical context.

At the end can mean only end of human civilization, for example due to overheated planet earth? Or if taking from example from history, it can mean destruction of Roman empire and its replacement with hundreds of barbaric kingdoms, ruled for 1000 years be mostly illiterate kings (except of Alfred the Great)? Julius Caesar as contrary to it could not only read but also write a history book, quite a valuable one, so could Claudius, Marcus Aurelius, etc. and of course Nero the poet+-)).
Or maybe the end means replacement of Napolean by restored Bourbons? Who were 16 years later replaced by  Louis Philippe, Duke of Orléans, himself replaced by Napoleon the third? Or end of WWII, that temporarely ended the European barbaric ideologies of mass murdering at least in the Western Europe. Oops, forgoten, in France and Italy the communistic parties, leaded by Stalinistic communistic spys almost won absolute majority in the democratically elected parliaments? By the way, the Christian Democratic party of Italy, with its mafioso roots was also nothing to be proud of. As to France they had also their Stalinist conspirators in the communistic parties. If to make a prediction, maybe end means the Fukuyamas joke about the end of history, or the Nazi kind of final solution implemented by the Nazis on the Jews. Or maybe the prediction of the end of European civilization due to depopulation from its original European people and its re-population with people from failed African and Muslim States?
As to the truth, we should know that the truth in politics and history is very relative term. Mostly it is the truth of the winners. The real truth is that the most successful leader of twenty century was Josef Stalin. He won all the wars he was involved in, imposed his regime successfully during his lifetime on half of Europe, enlarged the Russian Empire to its largest size, including to Eastern Prussia, and helped to impose his own style communistic régime in China, Vietnam, North Korea, etc.etc. When dying he could say to himself, i have accomplished most of my historical aims. The scientific communism and historical determinism was proven to be right. At the end the truth will win.
So by this i defined and explained not only the meaning of truth, but also of the victory. Who cares that non of the hundred millions murdered directly or indirectly by Stalin did not enjoy his great victories. Who cares that entire communities with rich culture and intellectual significance (like the Jewish communities in whole Europe were annihilated?). Who cares that intellectual developments, that could have taken place, if the intellectuals and their communities were not wiped out, did not happened? Who cares that if not Christianity imposed on Roman empire by Constantine, and the following de-legitimization of Greeco-Roman intellectual achievements by the Christian fanatics, maybe we would have industrial revolution already in fifth or sixth century, and didn’t have to wait for it until the eighteenth century.
What is important, that the truth eventually wins.

Europe and its Jews


The statehood of Israel is a direct consequence of all the tragedies, the European barbaric militarism brought on the world since the disintegration of the Roman empire. I am not capable to summarize the post Roman European history in few sentences, yet i will try to say some personal view about it.

“European history since the disintegration of the Roman empire is about a trial to re-integrate the fragments of the empire, to bring back its greatness, glory and enlightenment. These politically disintegrated kingdoms, that followed the Roman disintegration, were culturally and religiously intertwined, an in a way represented a one big family, fighting within itself about the heritage, the leftovers of Roman empire.”.

Not the Franks, be it Charlemagne or Napoleon, not the Roman catholic church, and not anyone else succeeded to bring back integration. Yet this continuous fight for a glorious goal  made the barbaric militaristic kingships, whose very essence was continuous warfare, to be legitimate. The European militarism had no precedence in the history of the rest of the mankind. If compared with the history of other civilizations like the Chinese or Indian, their civilization look very peaceful compared to the European civilization. Even Islam, with its militaristic foundation, and its continuous internal and external wars, looked like a pussycat if compared to that of the Europeans.

But there is the other side of the same coin. This continuous military warfare brought European civilization to a state of continuous change and renewal of its political structure, and with it also its cultural essence. The result was the philosophical enlightenment, which started in the 16 century and came to full blossom in the 18 century, that made a new start in the human history. With the philosophical enlightenment came the scientific and technological advance, that brought since the nineteen century the industrial revolution. This revolution brought the European militarism to advantages, that no other parts of the world could cope with. It also brought urbanization and unprecedented demographic growth. All this advance in knowledge was according to European traditions immediately exported throughout the whole world by its political leaders, who continued their barbaric militaristic traditions, with the colonialism, that did not change practically until the end of WWI.

If the post Napoleon European intellectuals believed that their political leaders will act according to the newly found wisdom and humanistic principles, they were wrong. It is enough to look at the pictures of all the pre WWI kings, wearing  well designed military uniforms, carrying themselves in a traditional  proud pose, in spite of the fact, that none of them participated even in one war. All their military activity started and ended around the maps representing military maneuvers. Strangely most of the European intellectuals did not find it alarming, that Europe with its dangerous military force is leaded by anachronistic aristocratic clowns, whose roots of ethical and political values lay deep in their middle ages origin, when leadership was all about to conquer and subdue your neighbor.

In this Europe lived people, who were seen as outsiders, in spite of living in Roman empire, where at certain epoch they were a significant minority, (almost 10% of its population). These people had their own culture, beliefs and way of life, that did not change in its essence for 2000 years. More of that out of these people came an unwilling prophet, whom the Europeans adopted as their own, in-spite of his teaching, which was full of love and compassion, so much contradicting the political culture of Europe. Yet the Europeans were not grateful to these people for showing them light to love and compassion, but in contrary. They saw in very existence of these people basic contradiction to the essence of their faith, the divinity of the holy trinity. So they continuously persecuted, abused, humiliated and many times murdered them for no crime from their side. Yet from time to time, due to an opportunistic king, who needed their skills, they thrived, until they were again persecuted and expelled from the territory of their kingdom.

Then with the new philosophical understanding of 19 century Europe stroke out, suddenly the Europeans  realized (even in Spain from where they were expelled more than 300 years before), that their attitude to the Jews was criminal. So they gradually emancipated them and let them in certain parts of the Christendom to integrate to the non Jewish society. And the Jews again thrived, and with them the European society, who suddenly discovered their intellectual capacity (mainly in Germany).

But the European history did not stop there (no end to history). The demographic growth, with the new urban centers, full with uprooted peasants, who had no skills for urban life, so they became degraded to second class citizens started to look around. They ceased to look anymore with adoration on the kings, wearing their clown uniforms. What’s worse, they were less and less ready to give automatic legitimacy of their leadership. It was not enough for them anymore to tell them the ancient stories about the heroism of their barbarian ancestors. So they started to look for other form of identity and found it in new political entities. Either those who wrapped themselves in packing of equality for all, or those who wrapped themselves in packs of ancient glory. Both these political movements did not like the old aristocrats (the descendents of the barbarian barons), but some of the aristocrats understood, the old political structures are unsustainable, and they have to become part of the new structures. So obviously they had chosen the glory of the past and opposed the alternative of equality for all. And as it happened many representatives of this political movement for equality happened to be descendents of Jewish communities, who just recently were freed from their ghettoes, with it from the Jewish communities and old believes, that originating from middle ages and even before.

Eventually the European kings continued to live in their fairytale world of false heroism, glory and high self-appreciation, and started to take seriously their costumes as if they represented some real value and not just a clowns disguise. So they caused a earthquake (WWI), that was followed by a tsunami (communistic and fascistic regimes) that one of their main agenda was to finish with continuous existence of this annoying nation, the Jews, who lately in their arrogance started to be involved not only in European intellectual activities but also in politics. It may be, God forbid,  that in the future they may ask even for positions in the military establishment.

The result is well known. The Jews were annihilated in Europe and some leftover wretched refugees, concentrated their last hope in establishing a Jewish state in the only place, that could draw them, the ancient homeland of Israel, where their cultural heritage and faith was created. It was a crazy idea, but a normal response to a crazy situation caused by insanity of European events. After all, who would believe before WWI, that ausgerechnet out of all this scientific, philosophical and technological progress will come these monstrous regimes and ideologise as Nazism and Communism. If someone would tell to anybody in July 1914 what is expected to happen to the Europeans and the world in the twenties century, no-one would believe him.

But unfortunately the Jewish solution of creating a Jewish state ausgerechnet in the ancient land of Israel, surrounded by Muslim population with Islamic military tradition of Dar al Harb   (Dar al-Harb (Arabic: دار الحرب “house of war”; also referred to as Dar al-Garb “house of the West” in later Ottoman sources; a person from “Dar al-Harb” is a “harbi” (Arabic:حربي). Dar al-Harb is a term classically referring to those countries where the Muslim law is not in force, in the matter of worship and the protection of the faithful and dhimmis.[6] It is unclean by definition, and will not become clean until annexed to the House of Peace. Its denizens are either to be converted, killed[7] or, if people of the book, tolerated as long as they pay the jizya.) was not a happy one.

So the newly established Jewish state had to fought war in average every 5 years since its 66 years of existence, and could not lose even one, because it would mean immediate implementation of enforcement of Islam law, which as we know is “not very tolerant” to the non Muslims, or those whom they call unbelievers.

The result is all what we see in these days, a new generation of Israelis, who were born and grow up to a statehood, that economically and culturally is thriving in-spite of all these wars. Israel is also trying to project to the world that it is a normal country with normal citizens with normal expectations from the life, without to feel everyday threat on their life. This they try to achieve in spite of its Arab Muslim neighbors (living in neighborhood or in far lands), who even when in peace among themselves, express a totalitarian animosity towards the Jews, that were not heard since WWII. But they don’t stop with the words, but also express military activism in spite of being not a match to the Israeli military might. And when retaliated they expose to the world their suffering, expecting from the “merciful Europeans” support. And the European, full of regret for the crimes they committed to the world, but mainly to the Jews, (not to the Arabs)  are suddenly merciful, even if it is on account of the Jews, or maybe due to it, according to their historical tradition of hatred to the Jews, that many of European in a way did not abandoned, just wrapped to a new packing.

The worst rule because they are the worst


EugenR; The worst rule the world, because they are the worst.

GD; Not for long

EugenR; For ever

GD; What about  Non Violent Civil Disobedience ?

EugenR;  At the end the “Non Violent Civil Disobedience” is a human organization, and as such it will either die out, or in worse case will have an organizational structure in which the worst bullies will be on the top. There is nothing new under the sun.

GD; At the end the truth, that at the age of internet is a simple finger click away, will win.

EugenR: At the end the truth wins, the question is when and at what price. In between the lie and cruelty celebrates. Just remember the last century events (Hitler, Stalin, Mao Zedong, Pol Pot, Mugabe i mean Dr Mugabe, etc.). All of them are gone (except the least evil Dr Mugabe). Did you know Pol Pot studied in Paris? Don’t be upset by history but learn from it. And now you have the Islam fundamentalism, that is all about cultural and religious non tolerance, racism (Sudan, Darfur, etc.), legitimization of enslavement of the non Muslims, intellectual degradation of women, death penalty for apostasy (Under current laws in Islamic countries, the actual punishment for the apostate (or murtadd مرتد) ranges from execution to prison terms. Islamic nations with sharia courts use civil code to void the Muslim apostate’s marriage and deny child custody rights, as well as his or her inheritance rights for apostasy. Twenty-three Muslim-majority countries, as of 2013, additionally covered apostasy in Islam through their criminal laws.), etc.

GD; The real question is do we have less fear because we have more access to knowledge? Or more fear because the media has portrayed fear as the new normal? I am not sure that mass herd mentality works in modern society anymore. And that is how dictators ruled. The new fear is forced acceptance. It is worse. Or should I say financially forced acceptance.

AH; I believe that unarmed truth and unconditional love will have the final word in reality. This is why right, temporarily defeated, is stronger than evil triumphant. Take the example of Martin Luther King, Jr.

EugenR; Yes, they were in history few good leaders who won. Martin Luther King is among them, others are N.Mandela, M. Gandhi, V. Havel all of them won, but at what personal price. Two of them murdered, two served years in jail. And anyway after them came some scoundrels destroyed anyway their achievements. Still the strife for self evident justice (that’s what these leaders were after) must go on. But who are the new Mendelas, Gandhis, Kings or Havels? Those who came after them are at the best Obamas.

AH; It is a process. In the last 500 years from time of Galileo (who was threatened by his Church for telling the truth about the nature of the planets) to today there has been tremendous progress on a global scale. We with progressive values and committed to the path of love, must remember that darkness is also part of human nature (perhaps an essential part) and remain vigilant — and hopeful.

EugenR; I assume you never lived in a country where the government terrorizes its citizens. Try to express your truth in one of the terror countries, like Saudi Arabia, Iran, Afghanistan, Pakistan, etc. Try to say there, it is wrong not to let women to have education (about 50% of them are illiterate). Try to say something about freedom of faith. Communism was wiped out only 20 year ago, its leftovers are regimes like the one in N. Korea but also Cuba. You say, ……darkness is also part of human nature…. The question is not if darkness is part……..it definitely is and nobody can deny it, but how do you fight it. In most of the cases the fight is with even more darkness.

AH; I have never lived in a terrorizing country. I did have terrorizing parents and an entrenched belief in a terrorizing Pentecostal God. I am a racial minority in a world that devalues everything I do because of my skin colour. We all have our challenges. In the end, it is arrogant for me to think you can make (force) people do what I think they should do or feel what I think they should feel. This is exactly the mindset of the dictator and I reject that thinking completely. The best I can do is look at my inner signaling. I seek to elevate my own consciousness and change myself for the better. The next step is the social conversation. I share my thinking and values with others in the hope that they too will be inspired to change themselves for the better.

Darkness cannot drive out darkness: only light can do that.
Hate cannot drive out hate: only love can do that.

― Martin Luther King, Jr.

EugenR; Sorry Alexi, this time M.L.King had it wrong. The Nazis were defeated by Stalin, just because his cruelty did not have limits, while the Nazis limited their cruelty only to the non Germans. Without Stalin the Western powers would never stand against the Nazis.

AH; If you think about it carefully, the darkness of Hitler was replaced by the darkness of Stalin. This was true for the USSR, East Germany, East Berlin and most of East Europe. So Stalin did not drive out darkness, he just replaced it with his own dark shadow.

Alexi: Stalin was in control by 1923, ten years before Hitler (Lenin tried to stop him at the end of his life).

PA: The French started the nuclear bomb program in 1938. Nobel Laureate Irene Curie was certain that a bomb could be made. The program went to Manhattan, in total secret to the Nazis, and total opening to Stalin. Hitler would have been nuclear bombed into submission.

EugenR; If we speak about destiny probably Hitler would survive even the nuclear bomb, as he survived about 30 assassination attempts. If to believe in God here you have him. God is against humanism and humanity, and mainly against his “chosen people”. As he misled His Own People, some Jewish rabies  made a trial of God in some extermination camp, and their verdict was, Death penalty. But then after the verdict they went to the next ceremonial pray. The religion is not about morality (mostly in contrary), not about reality or evidence, not about belief in truth (I know many skeptic believers), not even about tribalism since there are religious newcomers, who did not grow in the tribal tradition.
It is all this about some false answers to questions of eternal life? It can be right for some, but not for everyone. So tell me, what it is all about? The faith in communism did not include even belief in eternal life, and still it has so many followers. It seems religion or faith is a need of the human spices to believe in some fundamental dogma, be it even an obvious lie, all it needs is enough followers, and supporters of a false idea. In a way to be a football club fun is also a religion.

Quote

Love with the age


The relativity of our existence is not only a phenomena observed by physicists, but even more a daily human reality. As the human being is aging, he adds with the time new and new layers of suffering. And it seems to me it is not just another layer of the same, but there is a development in the quality of it. A development towards the eagerness for love. But not eagerness for being loved, but for loving the others. This tendency is installed in us by the nature. When a child is born, to him seems, as if all the world exists only for him. Then he starts to be “cultured”. He starts to learn that not all the attention is focused only on him. So he cries and tries to get the attention, even if not of love but at least of anger. Until his biological processes open his eyes to the  reality (sad for him) that there are others. And this grows within him.
Then one day he is in love, a hormonal love. But out of it may come a new life, that makes him entirely altruistic. Even the worse human beasts (like Fouche or Gobels) felt this kind of love. And with the years it accumulates. But as we know love is an emerging property. And as such, to emerge it has to become ripe enough to become a conscious feeling.

Myths and not the ratio are the substance of morality 


A comment to:

https://howtobeastoic.wordpress.com/2015/09/17/ancient-vs-modern-ethics-a-comparison/

All this ethical ideas don’t speak about the real essence of human ethics, the tribal ethos. All the experiments to neglect the faith and the beliefs behind all the ethics brought only disaster. The truth is, the myths run our life and desires, even in our modern times.

What are all the marketing tools like, brands, Hollywood stars, false kings and princesses (like princes Diana, probably a very bad mother and wife, lets not mention her other follies), presidents and governors, fashion channel, Formula 1’s heroes and all the magazines around it that fill the airports, if not modern myths? Should we be surprised if the reality, mainly the scientific one, that is full of prediction about future, and nothing to put on the shelf of malls, real or virtual, is not a subject of public interest? They can alarm the world with warnings about global warming, that will have catastrophic consequences in the future, these people, full of modern myths will never listen to them?  After all future is not our world. Who cares about the cultural and scientific wonders, created by committed individuals, who piece after piece accumulated the human knowledge, that enables the life of luxury in the modern world, most of the individuals enjoy. It is subject of interest of only very few freaks.

Then there is the other world of faith in ancient myths, sacred texts, sacred prophets, (mentioning their name improperly can bring masses of people to deadly rage), etc. Beliefs in sacredness of physical items, some that bring luck others curse. And what about belief in power of spells, pray, the whispers, abracadabra, etc.? Adding to it the spirits of the ancients, the died loved heroes and hated enemies, the spirits and the taboos.

To the ancient spirits believe systems we have to add the and newly recycled ones, the New Age phenomena, with the UFOs, the time travelers, the ex-terrestrial beings who visited us in their “Chariots of Gods”, built the pyramids, and left in hurry, etc.

All this is the tribal ethos, that justifies the old traditions and modern customes, that has nothing to do with rationality and scientifically understood reality. Yet if someone things that the majority of people are more interested in rationality than in the myths, i suggest him to compare the number of views in both kind of clips, and then judge who are the normative ones, and who are the freaks.

In the European history few times the people of reason tried to create moral codes based on reason, and then disregarded the myths as old-fashioned, primitive, irrelevant, disappearing, until the myths, the ancient or the new ones stroke back with ferocity. The first were the Greek-Romans, who supported cultural plurality and scientific thinking. In the first century before and after Jesus crucifixion many of the leading elites were Epicureans (as it appears including father in law of Julius Caesar) and followers of Stoicism, but then they were swept away by the Christianity. Also in eighteen and nineteen century Western Europe the belief in rationality went on. It ended with WWI, that was the victory of belief in German mythology of victimized superior nation. Then this myth was upgraded by Hitler and the Nazis and on the eastern side of Europe Stalin based its political morality on “communistic” mythology. After the disastrous 80 years war of 1914-1992 years,  which almost was won by the regimes guided by newly created mythology, seemed as if finally the reason won upon the myths. (Viz. the famous, but incorrect essay of Francis Fukuyama first published in haste at 1989). But this illusion was swiftly swept away at September 11, 2001, if not few years before it, when unsuccessfully Muslim fundamentalist myth believers tried to crash a plane to Eiffel tower at 24 December 1994.

Growing to where?


The time came to economic model change. The ever growing lust of the capital to earn higher and higher yields, forces the system to continuous growth, without to ask the question for what and for whom. Who is really enjoying the overcrowded shopping malls, traffic jams, polluted environment, the growing income gap between the wage earners and the yield earners or what is called the rentiers. Only the very few at the top of the income ladder enjoy it, but they are the one who count. What about a new economic model, where the growth is not a necessity, but rather looked upon as an evil. What about a model where rather the redistribution of the wealth is seen as an aim than the growing gap between the rich and poor. What about admitting, that the time came in many places in the world, where less is more than more. Less consumerism, more environment, less private cars on the road, more confort in public transportation. Less meat eating, more natural environment left to non human spices. Less corrupted despots, who are the agents of rentiers interests, wishing to become rentiers themselves, less wars and evil caused by humans against humans.

Nation is its epic


This article is a response to the following link:

https://patriceayme.wordpress.com/2015/08/12/only-philosophy-can-reverse-civilization-collapse/#comment-48986

EugenR Says:
August 13, 2015 at 6:36 pm | Reply

I meditated and asked myself, can a short term onetime event like a battle, change the world history?
The answer is not so obvious as it may seem. Let’s take some historical examples, and I will try to do it chronologically.
The most important battle from the ancient times that comes to my mind is the battle of Kadesh, fought between Ramses II and the King Muwatalli II of the Hittite Empire, dated between 1274-1290 b.c. The battle was the most important one fought between the two superpowers of the ancient world, and ended actually in draw. Thanks to this result, the young Egyptian pharaoh understood the limits of military power, and agreed to sign peace treaty with the Hittites that lasted for the remaining of his whole long reign of at least 60. And still surprisingly nothing is written about this battle, not in Greek historical sources and not in Bible, which is even more interesting, since in the Bible is mentioned the name of Ramses as a city built by the Hebrews. Also according to the bible chronology, presumably the epoch of the judges and Joshua is very close to the epoch of reign of Ramses, and Kadesh is very close to the northern borders of Israel. But i will rather not comment on the historical genuineness of the Bible, which get it’s written form about a half millennium later.
If not “Napoleon’s” Egyptologists, nobody would remember the battle of Kadesh. So this is a historical event, that had no importance what so ever for the future historical developments.
On the other hand the Greek victories upon the Persians at Marathon, did have a long term influence, seen even today. Why it is so? It definitely is not because this battle ended with clear victory of the Greeks against the Persians, and this happened contrary to all the odds. I would say the reason this victory is so well remembered and penetrated even the contemporary consciousness is it becoming part of Classical Greek epical memory, its influence on human consciousness is profound. So not with the battle itself won the Greeks the war, but turning it to an iconic cultural event.
There is another battle of historical consequences  of different category, the battle of Hastings, in which William the conqueror won against Harold a relatively small battle, with less than 15,000 fighting participants, that changed the future of England and France. If not this battle, England would remain probably Saxon, without Norman influence and Norman Kings. Since the Normans ruled also in parts of France, this victory paved the road to claim of English kings to French territories. It may sound strange, but the whole regional but also European history would be very different, if this battle would end differently or would never happened.

Patrice Ayme Says:
August 13, 2015 at 7:54 pm | Reply

Can a battle change world history? It depends which battle. But yes. Marathon is the obvious example.

The battle of Kadesh is known in detail (Ramses saved the day, in the end, barely). However, frankly, I doubt it would have changed anything: Egyptians and Hittites were not dissimilar. The alphabet arose around Tyr, Phoenicia (a few minutes flight time from Kadesh). The People of the Sea wiped out the Hittites, but then they were defeated and enslaved by the Egyptians (once again, barely).

Kadesh was mild plutocracy against mild plutocracy.

Marathon was Direct Democracy (Athens) versus invasive giant plutocracy (Persia). The Persian defeat was crushing. Democracy gained nearly two centuries. I warn you against falling in the same sort of mood as Michel Foucault (the medium is the message, as the equally clueless Marcuse proposed, in a bleating echo of “French Theory”).

The Normans did NOT rule part of France. Guillaume’s army was full of French barons. The Normans; had accepted the king of France as suzerain in the early tenth century. Claims of English kings on French territories never happened. It was more like claims of French on French. For example Eleanor, Duchess of Aquitaine married the king of France, had 3 daughters, then married the king of England, had 5 children, including 3 sons. One of those Richard Coeur de Lion (Lion Heart), is in front of Westminster (Whom his mother vastly improved). However, in his entire life, he spent less than 3 years in England. Richard was a French king, mostly.

The Duchy of Aquitaine was bestowed originally as a division of the late Roman empire (before the Frankish Renovation)…. So its infeodation to Paris was not clear.

Edward III of England (who launched the 100/485 years war between France and England) was the grandson of Philippe Le Bel. His mother, the queen of England, was also nicknamed the “SHE WOLF OF FRANCE”, and, legally speaking, OUGHT to have been made Queen of France.

It’s flattering the Brits to call the wars with France the way they are usually called. Actually they were Franco-French wars.

A little more on the period, my way:
https://patriceayme.wordpress.com/2013/05/18/joan-of-arc-roasted-too-late/

EugenR Says:
August 15, 2015 at 4:10 am | Reply

Thanks for the addition information about the antiques. You are right that the People of the Sea destroyed the Egypto-Hittite world. Not Egypt and not the Levant will be the same after them. The Phoenician, the Hebrews, the Philistins, Phoenicians the Greeks and many other nation appeared as new nations after the People of the Sea invasion. Most of the new nations were Semitic, as contrary to the Egyptians and the Hittites, out of them the Assyrians came out as leading force, who subdued not only the Levant, Iraq and Persia, but also Egypt. The Assyrians, Babylonians where nations that survived the invasion, and after destruction of the Hittite empire their turn came to rule the region. The Persian empire was the direct continuation of the Assyrians and the Babylonians. Interestingly Assyrians and the Babylonians were Semitic origin, while the Persians were not. In a way they developed as a ” Nation”, in the edges of the region close to the Caspian sea.
Anyway to judge the rules and their identity in today’s terms like French, English etc., is absurd. These early medieval kings looked on themselves as family or clan members, first in the rank due to heritage rules, who possess territories, on which live people, who are also their family possession. ( they even were not tribe leaders, like the Arab sheiks).
The fact, that they all spoke French, did not make them French in the modern terms.
The Vikings invaded northern France and England from the 9 century. England they took over very soon, and if not Alfred the Great, probably would not be Saxons in England at all. Then in beginning of eleventh century Harald and then Canute the Great (great is my addition) created a new Viking dynasty, after Canute adapted English manners and Christianity.

By the way, Vikings were ordinary pirates, who invaded foreign countries for robbery. Then they discovered that no one can militarily oppose them, then why not to rule a whole territory.
In France the Vikings occupied Normandy and established there their kingdom. Against the Franks they were not as successful as against the Saxons, and later culturally integrated with them. By the way, William the conqueror is a direct descended from Rollo, the establisher of the Duchy of Normandy.
The early middle age was more a Mafioso style territory under “protection” of common criminals, who decided to call themselves kings, barons, duchess, noble man, you call the rest, than a statehood.

Patrice Ayme Says:
August 15, 2015 at 1:22 pm | Reply

Got to run, just read an interview from a top mafioso who now studies philosophy and history. He reached the exact same conclusion… And that’s why I prefer to call them “PLUTOCRATS” rather than “nobles” or “aristocrats”, titles which are too good for them. Exactly as what the top mafioso is screaming as loudly as possible

Patrice Ayme Says:
August 15, 2015 at 5:04 pm | Reply

I agree with lots of your early historical analysis, except:
1) I did not know that Assyrians and Babylonians were “Semitic”
2) I don’t know what a “Semite” is. Arabs sure are. Yet I read the Jews may have been originally from the Kurdish area… OK, there are “Semitic” languages (Arab, Hebrew, Aramaic, etc.)
3) The Achaemenid Persian empire was truly plutocratic multi-ethnic. The Pars/Iranians had their own fortress to live in, the giant Persian Plateau a sort of low elevation Tibet…

France as Francia existed and made sense. Then the Lingua Franca was actually degenerated Latin. Later the kingdom of France, stricto sensu, was a tiny fraction of both Francia, and today’s France. History has shown that Francia’s territory is natural, but any smaller entity is not, and is unstable. Hence the EU, and the Euro. Amen.


EugenR Says:
August 15, 2015 at 7:59 pm | Reply

You wrote
1) I did not know that were “Semitic”
2) I don’t know what a “Semite” is. Arabs sure are. Yet I read the Jews may have been originally from the Kurdish area… OK, there are “Semitic” languages (Arab, Hebrew, Aramaic, etc.)

My answer is of course the Assyrians and Babylonians spoke Semitic languages as most of the people east of Egypt. Babylonians and the Assyrians spoke Aramaic and Akkad, as do the modern Assyrians. These are Semitic languages close to Hebrew and Arabic. The population of Mesopotamia and the Levant were originally Semitic, then the Hittite took over the region, Their origin was from modern Turkey or even north of it. They spoke Indo-European language as do the Persians. Semitic group of languages in the antics had many branches and dialects, even if not so much diversified as the Indo-European Languages. I am not a linguist, but to my judgment (i speak at least one language in each group), the similarity between Aramaic, Hebrew and Arabic, is more like the similarity of the Slavic or German language group.

I don’t know from where you got the information, that the Hebrews originate from the Kurdish region. If to take the Bible as the source, it clearly points to two cities. One from where Abraham originate, Ur-Kasdim, where he was born, and it is close to the region of delta of Euphrates, Ur was uncovered, and is close to modern Al Basra. Then before moving to Kennan, Abraham’s family moved to Haran, which is in modern Turkey, in the Kurdish area. Yet, according to the modern scholars and archaeological studies, the Hebrews were not outsiders to Israel, but the original Canaan population, who revolted against the aristocracy in their cities, like Hazor, Megido, etc. Then they left the fertile low lands and moved to the mountains of Judea and Sumeria, where they adopted a new religion, faith in one God. The story of Abraham is a mythology. There is no scientific evidence, that anything of this kind ever happened.

The Phoenician Qart-ḥadasht meaning “New City”.
Aramaic: קרתא חדתא‎ Qarta Ḥdatha;
Hebrew: קרת חדשה‎ Qeret Ḥadashah) or in modern Hebrew New City is Qiria Hadasha.

The Romans completely twisted the name to Cartago.

Patrice Ayme Says:
August 15, 2015 at 8:10 pm | Reply

Another story I read is that Israel started as one of the fellow traveler tribes of the “People of the Sea”… Thus the enslavement by the Egyptians, and the plausible origin from the Kurdish area. But I am the first to admit that’s all on fumes. However, Egyptian monotheism, and the People of the Sea happened just prior to the apparition of Israel. And Egypt did not keep slaves which I know of, except after the People of the Sea capture.

I believe we will know more in the future… For example now we have a fair idea of the origin of Chinese characters with the Chang empire, 3,600 years ago… Thanks to archaeology. Also a writing from the builder of the pyramids was recently discovered, giving us important data.

EugenR Says:
August 15, 2015 at 8:47 pm | Reply

This theory of connecting the People of the Sea to the Bible sounds very unreliable. The only thing we know about them is that they came from the sea and destroyed the civilized regions. The Hebrews were definitely inland people. Their mythology speaks about shepherds, living in mountainous regions on the edge of the dessert. Except of it the sea people also attacked the Greek islands, and drew the local population to the mountains. Nothing of this kind exists in the Hebrew mythology. The most probable candidate for the people of the sea, seem to me the Greeks. In Iliad and Odyssey they definitely speak about invasion to Northern Turkey through the sea. Also the timing is perfect. And they also appeared in the region in the right time.

Patrice Ayme Says:
August 15, 2015 at 9:04 pm | Reply

The “People of the Sea” expression is an Egyptian artifact. Recent archaeology shows that the invasion involved many people, some extremely inland, all the way from the Kurdish area to… Greece. BTW, the Etruscans, one of the “Sea People” settled in Northern Syria, before shipping themselves to the iron area of northern Italy, and I doubt they were welcomed with open arms… Lots of Hollywood epics to be written…

EugenR Says:
August 16, 2015 at 4:48 am |Reply

Yes, you are right. The difficulty to point on certain nation as the People of the Sea, directed the historians to conclusion that the Sea People were rather people of very low rank, probably slaves, who rouse up against the ruling elites. These could be people of many nationalities and enough of one authentic leader as it happen in case of Spartacus, to create a huge turmoil and destruction. The Egyptians successfully opposed them, but were impoverished and the total destruction of Hittite empire damaged them economically. At the end of tenth century b.c. a new pharaoh Shishik tried to conquer the Levant, caused a lot of destruction to the Israeli cities like Hazor, which the early archeologists interpreted as the invasion of the Israelites lead by Joshua. Modern archeologists dated the event to end of tenth century b.c.
Maybe the revolt of suppressed people (called by the Egyptians “people of the Sea”) influenced also the Israelites, or the subordinated Keenan people, who rouse against their city elites, the kind of destruction found in archeological sites of the time points toward intentional destruction of this kind. Then, when the rebels were opposed by the army of the elites, they just moved to the mountain region on the edge of the desert sparsely populated, mainly by shepherds. Someone or somehow it became the epic story of exodus, that repeated itself several times. Exodus of Abraham from Haran, exodus of Jacob to Egypt and finally exodus of Moses from Egypt.

As I wrote in the past, I strongly believe, nations are creation of their epical stories. This is why Jews in spite of all the acts of annihilation they experienced in the past are still here, while the ancient Romans or Greeks are not after they have abandoned their unique epical stories and adopted instead Christianity. The Europeans in the last two centuries abandoned their epic, the Christianity, tried to adopt a new one, Communism and Nazism, with disastrous consequences, lately abandoned these also completely, and now are helpless against the Islamic people, who as contrary to them do have their epical story, that leads them in their acts and intentions. In the US tried from the fifties until the collapse of USSR, to introduce a new epical story, a modern scientifically based epic, (superman, All the science fiction moves and serials, etc.), not very successfully. I don’t know to much about movements like Scientology, etc. but seems to me, they are failed experiments to create this kind of new epic.
My question to you and anyone who my read me, can be created a rational epical story, that would supplement the old, not relevant anymore epical story of the Western Civilization?

Patrice AymeSays:
August 16, 2015 at 6:30 am

1) I believe that Athenians and Romans lost their own stories of direct democracy by plutocracy overall, yet, for proximally different mechanisms: Athens was defeated by the students of Aristotle (Alexander, Antipater, Craterus):
https://patriceayme.wordpress.com/2014/09/28/aristotle-destroyed-democracy/

Rome imploded under its own plutocracy, MORE than FOUR centuries before emperor Constantine imposed Christianism, and actually more than FIVE CENTURIES before general/emperor/Spaniard Theodosius transformed Rome into a ferocious theocracy (381 CE).

So in my book, my epic, Christianism is more consequence than cause: I differ from Gibbons there.

2) The West has somewhat lost its epic, because of a clash between Enlightenment and Empire. Mercantilism (Britain) instead won. That’s an enormous subject, not even on the radar of common intellectuals. Voltaire played a nefarious role, unbeknownst to philosophical critics…. Sade may.

Sade may have been much more subtle (Voltaire was boyfriend so to speak of Louis XV, and advised him not to save Canada, or go all out to win the Seventh Year War… or maybe that was also because an oligarchic plutocracy (UK) is more democratic, hence stronger than a monarchical plutocracy (Ancient Regime France); Sade was perhaps the most important personage of the French Revolution, tactically and strategically, short of Louis XVI himself; normal history ignores him totally: too embarrassing, Sade as Saint…).

So yes, I agree with you, epics are important. Yet, the Franks’ epic, that of “EUROPE” (their concept) is alive and strong, see the UN Charter. And just defeated German hyper tribalism, on the question of the Euro… Greece has no intention of paying its debt (nor should it, because it’s not really “its” debt)

EugenR Says:
August 16, 2015 at 8:25 am | Reply

One more thing on the subject. I wrote ……..”Jews in spite of all the annihilation they experienced in the past are still here, while the ancient Romans or Greeks had disappeared, after they abandoned their unique epical stories and adopted instead Christianity”.

I must comment myself on this. The Greeks as a nation did not disappear, they are still here, but they are a different nation, even if they  continue to speak the Greek language. They may learn about the Greek mythology but Achilles is not anymore their hero, and they are not praying to classical Gods and Goddesses. They may study Plato as anybody else, but it is not theirs more than it is ours.

With the Jews it is very different. Even a secular Jew as me, feels and strongly connected to the Jewish epics, which has many layers and is still continuing to created new stories and heroes, or anti heroes. Just one example, the Holocaust. This became very strongly a dominant layer of the Jewish epical story and culture. The Jewish epics  is not only a well known, a well documented, and intellectually studied subject, but it is part of Jewish emotions and feelings, and by ceremonies and rituals, it became part of the everyday life.

Can a battle change the world history?


Can a short term one time event like a battle change the world history?
The answer is not so obvious as it may seem. Let’s take some historical examples, and I will try to do it chronologically.
The most important battle from the ancient times that comes to my mind is the battle of Kadesh, fought between Ramses the second and the King Muwatalli II of the Hittite Empire, dated between 1274-1290 b.c. The battle was the most important one fought between the two superpowers of the ancient world, and ended actually in draw. Thanks to this result, the young Egyptian pharaoh understood the limits ot military power, and agreed to sign a peace treaty with the Hittites that lasted for the remainning of his whole long reign of at least 60. And still surprisingly nothing is writen about this battle, not in greek historical sources and not in bible, which is even more interesting, since in the bible is mentioned the name of Ramses as a name of city built by the Hebrews. More to this, according to the bible chronology, presumably the epoch of the judges is very close to the epoch of reign of Ramses, and Kadesh is very close to the northern borders of Israel, and still nothing. But i will rather not comment on the historical genuineness of the bible, which get it’s writen form about half millennium later. If not “Napoleon’s” egyptologists, nobody would remember the battle of Kadesh. So this is a historical event, that had no importance what so ever for the future developments.
On the other hand the Greek victories upon the Persians at Marathon, did have a long term influance, obvious even today. Why it is so? It definitely is not due the fact that this battle ended with clear victory of the Greeks against the persians, and this happened against all the odds. I would say the reason this victory is so well remembered is due to it becoming part of Clasical Greek epical memory, which is the basis of the European culture, its influence on human consciousness is profound. So not with the battle itself won the Greeks the war, but turning it to an iconic cultural event.
There is an other example of different category, the battle of Hastings, in which William the conqueror won aganst Harold a relatively small battle, with less than 15,000 fighters all together, and changed the future of England and France. If not this battle, England would remain probably Saxon, without Norman influence and Norman Kings. Since the Normans rulled also parts of France, this victory paved the road to claim of English kings on French territories. It may sound strange, but the whole regional but also European history would be very different, if this battle would end differently or never happened.

Macroeconomics


At 2008 Macro-economist have done quite a good job if compared to the macro-economic mistakes done by them before WWII, at 1929. The economists definitely improved their prediction tools since then.
In the microeconomics level, if you mean by it the stock prices in the stock exchange, all the models on the long-time failed and will fail. The fundamental value evaluation of corporations with publicly traded shares is very problematic, since it is based mainly on predictions of expected future performances. These predictions in one hand take in account the past performance of the company, but also many other more subjective factors, like management team, market share, future of the main products of the company, etc. But above all this stands the problematic position of the top managers of corporations, with publicly exchanged shares, who usually are not a majority stake shareholders, but professional managers, whose not always represent the shareholders long term interests. Adding to these difficulties many times lack of enough expertise of the brokers to analyze companies, most of the active players in the stock exchange act as short term investors, who speculate on gaining in the short term profits out of fluctuation of the share price. In such a market the share price booms and slumps of the whole market are inevitable, and unpredictable. Since so, the economic models about the share prices, even if mathematical are more interested in human behavior, than in fundamental value of the companies.

Germany versus Greece


EugenR on July 21, 2015

Surprisingly in all the articles i read about Greek catastrophe caused by entering the Eurozone no one mentioned even with one word, that without the Eurozone, Greek’s GDP per capita and their standard of living would be about the level of Bulgaria. (17,000 US$ in Bulgaria as against 26,000 US$ in Greece after its fall of 30% since 2010). There is no real economic reasons for Greece to be economically better off, than a country, that its only industry is tourism. Yet during the 10 years of theft and deceit of the Greek political elites, with whom happily cooperated the private commercial banks, and channeled on account of rest of Europe finances, at least some of the stolen money went into Greek infrastructure and public services. As result of it, if the right decisions will be made, and the young highly educated Greeks will get jobs, and not chased out of the country by all the cartels, monopolies, oligopolies, professional unions of taxi drivers, etc. who close the labor market before them, i believe Greece will have chance to overcome its difficulties. By the way what kind of professional capacity is needed to become a taxi driver? To me with GPS and driver license everyone could do it. If the labor markets will be closed to the young educated Greeks, maybe Greece is heading towards the standard of living of a typical tourist country, like some Caribbean island.

Hubert Marcks on July 22, 2015

Consider this: Germany owes a lot of its economic success to the fact that its exporting industry is living off other countries debt. The German current account surplus is expected to reach an all time high of 7.5 to 8 percent of GDP this year, which amounts to more than 200 billion EUR worth of German exports exceeding the amount that Germany’s economy spends on imports from other countries. As a consequence, those other countries can only afford to buy all those shiny new luxury cars, capital goods and high-tech weapons systems by borrowing money, because they do not sell enough of their own goods to Germany to earn the money that they spend on German stuff. Ironically, in the past, German banks have been handing out such loans in great numbers, which is one of the main reasons why they had to be bailed out via the so called ‘rescue’ efforts for deficit countries like e.g. Greece

By the way, by insisting on maintaining this surplus, Germany is permanently violating one of the sacred rules that Germans love to enforce so much on their European partners, which in this case is a limit of current account surplus to 6% of GDP. Germany itself insisted on that number because at the time this rule was implemented, the German surplus was at – guess what! – exactly 6 percent of GDP.

Now the German government with its master of coin, Doc Schäuble, at the helm prides itself of a budget with zero deficit, or – as we call it “die schwarze Null” (‘ the black zero’), and scolds the Greek people for having lived beyond their means by taking up loans they cannot repay.
Even if one were to just forget about the fact that one of the main reasons for the inability to repay those loans is the moronic idea of imposing harsh austerity on a country that is already in a depression, the German superiority complex would still be nothing but pure hipocrisy, due to the fact that German corporations have made enormous profits from this ponzi-scheme.

And let’s not forget about the German Banks, which didn’t buy those Greek government bonds out of the sheer kindness of their hearts but because handing out credit and making money from interest rates is part of any bank’s fucking business model! (please pardon my French)

So now we (the Germans), the ones who profited the most from the common currency and whose exporting industries and their owners have been lining their pockets with what ultimately turned out to be toxic loans taken up by their customers and was then transferred to the European tax-payers, have the audacity to point our fingers at Greece and its citizens, to call them lazy irresponsible parasites and declare ourselves the poster-boys of fiscal discipline, industriousness and sound entrepreneurship.

Now tell me again how Germany has not completely forgotten any lessons it may once have learned from its past and how it has not reclaimed its abhorrent former narcissistic notion of being better than everybody else.

EugenR on July 22, 2015

Dear Hubert, i am not going to write any comment about German national psychology, because being a second generation to holocaust survives Jew, it wouldn’t sound serious. But i definitely disagree with your economic analysis. And the reason to this disagreement is an economic concept i strongly believe in, that if you make a deal where one gets a Mercedes and the other gets an obligation paper without any security for repayment, the one who has the Mercedes is better of. As to calling the Greeks lazy, is racism and stupidity. The Greek dysfunctional economy is due their political elites who acted out of political profligacy. Many nations, who failed in certain period of their history, after a deep crisis changed entirely their political behavior with the change of their leadership. The best example is Germany and Japan.

Hubert Marcks on July 23, 2015

Maybe I misunderstood, but you seem to have already made an assumption on “German national psychology” – as you phrased it – by claiming that Germany’s intentions were essentially benign because it had learned from its past mistakes.
Please don’t get me wrong, I would never compare what my country is doing now to the holocaust. That would be a horrible insult to the millions of victims of nazi mass-murder.
But there is a revival of the German hubris, and it’s not just some politicians playing hard-ball during the ‘negotiations’ with Greece, but it is starting to show throughout all of German society.

I don’t know if you are familiar with what has been going on during these past months in the German media, but I must tell you that the constant propaganda campaign they have been waging against Greece, its politicians – especially former Minister Varoufakis – and even the Greek people as a whole, has not only influenced public opinion against Greece but it also seems to have stirred a dormant German desire to feel morally superior towards the rest of Europe and to reclaim some kind of perceived inherent right of the German people to impose their will on those people of other nations who would disagree with their way of running things.

On top of that, there is a growing discontent among the german puplic with taking on refugees, including extreme right-wing protests and the occasional burning of refugee shelters, to which our glorious leaders had not much to say except to issue a law that will expedite deportations. There is also evidence that the German interior secret service, whose only job is to protect the constitution, was in cahoots with a homicidal nazi-terrorist group and all the government is doing about it is trying to bury the parliamentary commission tasked with investigating the case under a giant pile of bureaucracy and thereby sweep it under the rug.
But the average German ‘tax-payer’ – as we like to refer to ourselves – doesn’t seem to care about the fact that the people whose salaries come out of these taxes are obviously permanently violating the constitution they swore an oath to protect. What does concern them greatly, however, is a small country on the south-eastern fringe of the European Union trying to regain a sense of democracy and national sovereignty against a coalition of technocrats, led by Germany, that seems to be willing to openly deny them those rights. As a second generation descendant of nationalist, racist mass murderers, I find that highly disturbing.

As for my “economic analysis”, this is not some personal theory of mine. The German surplus problem has already been addressed by the European commission, various economists all across the globe (excluding almost all of the German ones, of course) and even by the US-Government, including the President himself.
You wrote: “[…] that if you make a deal where one gets a Mercedes and the other gets an obligation paper without any security for repayment, the one who has the Mercedes is better of.”
And of course that may be true from a microeconomic point of view. But with this analogy you are adhering to the same kind of neo-classical dogmatism that seems to be all the rage among german economists by discussing a macro-economic problem in micro-economic terms. It is not the Daimler-Benz corporation who got stuck with worthless IOUs for the Limousines they sold to Greek customers. It is the ordinary citizens and tax-payers of Europe who would be left with worthless debt certificates, which they got in exchange for their share of the bailout funds, if Greece were to somehow ‘exit’ the Eurozone. These bailouts, as everyone should know by now, where mainly used to save Greek and other European Banks, first among them German and French ones, from collapsing under the weight of all those toxic loans they had given out, some of which may certainly have helped to fuel a credit based rise in overall consumption rate in Greece prior to the crisis. But neither Daimler-Benz nor Deutsche Bank will have to deal with the results of their bad business decisions.
And although I have never been to Greece myself, I very much doubt that the streets of Athens or Thessaloniki are teeming with German luxury cars and even if that were the case – you can not blame ordinary people for trying to better their living standards if they get the chance to do so and you can also not expect them to realize the macro-economic implications of a whole country living ‘beyond its means’ as the glorious German leadership likes to put it. As a consequence, punishing those ordinary people for crimes their elites have committed is just cynical and cruel and does not make any sense economically. But that is exactly what is happening right now and a majority of my esteemed German compatriots deems this kind of collective punishment an act of justice.
Which, as I wrote before, is especially stupid since German corporations and Banks have long secured their profit shares and shifted any kind of loss over to the public sector.

But anyway, the argument between Greece and its creditors has long left the realm of economics and has become a purely political one, where a majority of conservative governments – most of all the German one – and a few ‘social democratic’ ones who appear to have made themselves the lackeys of their conservative overlords have essentially knocked out democracy and they made sure that it won’t recover from this blow for a very long time. And here in Germany this is not only widely accepted by the public but also applauded as sound politics

EugenR on July 23, 2015

Dear Hubert, thanks for your eye opening comment. I don’t read German newspapers, and have no idea about the German popular mood. What you wrote sounds horrific especially for me. In my views I express in the comments, I argue for the sake of certain economic view, which is based on understanding, that the real economy is about products produced by humans, be it intangible or not, merchandise or services, etc. and not about the flow of money. I find that many people tend to see economy as the “science” of money and it is not. Far from it. Money is only a catalyst to enable the flow of products from one hand to an other, but doesn’t represent a real value. Viz the following argumentation in my blog.
https://rodeneugen.wordpress.com/page/2/

And also some other assays on the subject.

https://rodeneugen.wordpress.com/2015/07/18/2796/

Hubert Marckson July 24, 2015

I think I understand the German agenda pretty well. After all, it was a social-democrat and green coalition that started the whole idea of austerity in Germany 15 years ago, although with much less dire consequences to the common people as is the case now in Greece.
Back then, when the idea of a ‘social market economy’ was still part of the German self-image, a conservative German government would never have dared to implement such drastic cuts in social security and pensions while at the same time deregulating labor markets and lowering taxes on the top income bracket, on corporate profits and on capital gains. Only a ‘leftist’ government could persuade the unions to accept stagnating wages and the majority of working class voters to agree with a policy that would eventually lower their living standards and expedite the redistribution of profits towards their employers.
So the way it turned out in Greece may just as well be seen as a win-win situation by our glorious German leadership. However, I still refuse to judge Mr Tsipras or Syriza for acting the way they did. To me it is clear that their defeat – or their betrayal as some might call it – was orchestrated in Berlin, Frankfurt and Brussels and that they never really had a choice unless they were willing to start a real revolution and plunge the country into chaos.
What concerns me the most is not even the refusal of Mr Schäuble and his cronies to allow an honest discussion about the failed policy that they so stubbornly keep insisting on. It is the majority of my fellow German citizens who are not just standing idly by while greek democracy is being sacrificed to an inhumane ideology, but are actively cheering and supporting this shameful act without thinking for even one second about what this could mean for their own future within this so-called European Union.

EugenRon July 25, 2015

Dear Hubert, i think the disagreement on the Greek issue between us originates from different points of view we have about the question, what is the major issue Europe has to cope with. If i understand it correctly, your position is to try to secure the Social welfare state in whole Europe, and everything that endangers it has to be removed. My opinion is different. As to me the major issues to be Solved in Europe are as follows.

  1. To secure European Union and strengthening it as much as it is just possible. I am for reducing the political-economic  function of national government to minimum (economic issues that need political decision processes). It will not only be more effective but will prevent a lot of corruption in the economically weaker states. Of course i am for one European central bank, one federal budget and one federal tax system and one tax collection organ. The local government should act as states in federation, with limited authority as to the economic issues, yet on the level of region, with its own budget, approved by the federal European government. Of course to do it Brussels has to become democratically elected, what is very difficult now to achieve, when the attendance on European election is hardly 20 %. Most of the people in Europe identify themselves on the national level, and very few on the European level. Still Europe, with its declining and aging population, cultural decline due to tendency of self denial, can hardly effort not to act as united, against the threats out of it.
  2. Europe has to integrate economically and politically the East European states, including those that are already part of EU, and those that are not, like Ukraine and even Turkey, that want to be part of it and have democratic regimes. The standard of living and infrastructure of some of these countries is catastrophic. To my opinion it is more important to invest in these countries to bring their economy closer to the EU level, than to invest in Greece to sustain their standard of living, just because they get used to it in the times when they could freely borrow without responsibility.
  3. You are right that the Greek people are not to be blamed for the wrong doings of their political elites. Still their position of “Let me die with the Philistines”, is very dangerous and egocentric. It is very amoral, in one side to demand solidarity from the rest of Europe, on the other hand to threaten Europe with destroying its economic system, even if it is a threat with gun without bullet.
  4. As it seems to me, after the Greek government agreed to reforms by new legislation, (and let us assume that the demanded reforms are necessary to improve the Greek economy), EU and the rest started to release financial funds to Greece.

Hubert Marcks on July 25, 2015 at 10:27

My apologies for another lengthy rant. I just can’t help it.

Of course our disagreement originates from our different views – and they differ greatly, if I might add.

I don’t even know where to start. But let me try and make my point of view absolutely clear:

First of all, the welfare state is not a pipe dream of luxury without responsibility conjured up by leftist romanticists – as today’s defenders of a minimal neoliberal state like to put it.

It is the result of a long and often bloody struggle of the lower classes for more independence from the wealthy elites.

It is (or rather: it used to be) also an essential part of european democracy because it enables all of its citizens, even those at the bottom end of society, to participate in social life and democratic processes without fear of losing the means to support themselves and their families at the whim of their capitalist employers.

Dismantling the welfare state, as is happening all across Europe, be it rather slowly like in Germany or at ‘Blitzkrieg’-speed like in Greece, renders the ‘have-nots’ more and more powerless and – more importantly – diminishes their faith in a society that does not care for their fates, denies them equal opportunities to better their lives and does not wish for their voices to be heard.

However, what is probably the most important part of an intentionally dysfunctional welfare state is the fact that it is being used as a threat to pressure the workforce into accepting lower wages in order to save themselves from having to join the ranks of the unemployed and become excluded from social life by lack of means to participate in it.

Myopic neoclassical supply-side economists (like almost all of the german ones) usually welcome this development because in their universe – which is based on blind faith in mathematical models rather than on empirical evidence – low wages equals high competitiveness, which automatically leads to job creation and ultimately renders the welfare state irrelevant because the result is a society graced with full employment and optimal realization of market potential, where everybody has a job and earns a sustainable income determined by the great moderator that is the free (labour-) market.

Back in the nineteen-sixties and seventies, when Keynesianism was still a viable alternative to neoliberalism (within a capitalist framework!) and not a derogative pinned on ‘leftist’ economists who refuse to accept an ideology as rational science, even among members of the german conservative Christian Democratic Union (Ms Merkel’s and Mr Schäuble’s Party) there existed a broad consensus about the necessity of the state to actively regulate the social economy.

They realized that State intervention was inevitable in order to balance the tendency of a capitalist market economy to redistribute wealth from the bottom to the top against the need of a society to have decent standards of living for all its participants.

They also understood that social security, unemployment benefits and a pension system worth its name are not just hand-outs for lazy people, but a macro-economic necessity to counter the negative effects of mass unemployment (which started to show in the seventies) on aggregate demand. In other words: poor people are very poor at being consumers or, to quote a famous capitalist: “Cars don’t buy cars.”

Today, the welfare state is no longer accepted by (neoliberal) mainstream political economists as an integral part of democratic societies but rather treated as an annoying atavism, a relic of the past and a hinderence to economic success that responsible governments need to get rid of or shrink down to the lowest possible level in order to allow their national economies to become more ‘competitive’.

In Germany, this change of attitude is not openly discussed but it is evident in the behaviour of the ruling political class, their economic advisory boards and the representatives of major business associations (who usually employ the most important economic experts).

It ist also going hand in hand with a slow but steady transformation from the ‘social market economy’ of the mid-twentieth century to a market society in which every aspect of human life is expected to be open for commodification and human interactions are more and more treated like market transactions – which require sufficient funds for market participants in order to buy themselves a decent place in society.

Consequently, the lower income class and the unemployed have already stopped caring for democratic decision making processes. At best, they have become indifferent to a society that does not care for them and they have lost their faith in democracy’s ability to change anything about that. As a consequence most of them do not even bother to vote any more.

Those who refuse to succumb to (political) apathy often rally behind right-wing populist parties, conspiracy theorists and other demagogues who offer seemingly easy solutions to very complex problems. Those groups are also becoming increasingly efficient at making up threats like the alleged islamification of Germany, a growing ‘leftist’ Zeitgeist purportedly trying to turn god-faring, honest working, family-loving Germans into homosexual, bohemian atheists, or the imminent transformation of the EU into a Soviet-style communist(!) dictatorship. They are also very good at presenting scapegoats to their followers like greedy immigrants, a global conspiracy of (zionist) bankers, the Euro itself or the US-government, providing them wit a canvas to project all their frustration and hate onto.

The elites are well aware of that phenomenon, but – completely lacking the will to acknowledge their failures or to make substantial changes to a running system that provides them with ever increasing profit rates – all they can do about it is set their own superior mechanisms of propaganda in motion in order to make up some scapegoats of their own, like the threat of globalized competition (i.e.: China), islamic terrorism (so far non-existent in Germany), the evil expansionist empire of the sinister Czar in the east (highly debatable), or lazy irresponsible Greeks voting the wrong people (socialists) into office. They do this in order to at least placate the middle and upper middle class, rally them behind their cause and put the fear of god into them of losing their precious savings to the world’s moochers and ‘have-nots’, should they dare to disagree with the ruling classes and their grand plan to turn Europe into a technocrat minimal state ruled by the iron fist of the markets with business contracts substituting constitutions.

Now, one could argue – and many have done so – that the idea of the welfare state as integral part of ‘western’ societies can no longer be afforded in the face of global competition.

But for this argument to work, one must first accept the idea that market competition between nations – especially but not exclusively those sharing a common currency – is essentially a desirable thing, both socially and economically.

One must also share the notion that democracy, equal opportunities, and social justice may be desirable things but that in order to keep the system running, hard choices must be made and beloved achievements of civilization must sometimes be sacrificed for the greater good. And one must ultimately agree that ‘the greater good’ which needs to be maintained at all costs is a socio-economic system that – to put it bluntly – takes from the poor and gives to the rich – not just in Greece, or Bulgaria, or even Germany but all across planet Earth.

And that last blunt statement is an empirical fact, not a mathematical theory.

So, yes. My point of view seems to be very different from yours.

Hubert Marcks on July 25, 2015

One other thing. To help Greece out from its economic mess, Greece have to cooperate with rest of Europe and its creditors. Their policy of claiming that Grecexit will destroy EU is not exactly cooperation. It is also very arrogant and haughty. After all except of its debts Greece has no economic significance for Europe at all. Also it’s pre crisis economic policy of creating so big economic mess that it will become a whole European problem, wasn’t very much about solidarity. Let’s take for example countries like Romania and Bulgaria. Their joint population is about 35 million. The infrastructure in this countries is in horrible state. Their GDP per capita is about half of Greece. Their standard of living is much below from all what the Greeks can imagine. I visited few years ago Romania, spoke there to a women, wife, mother of small children, academically educated, etc. To sustain her and her family’s life she had to wake up every morning at 4 o’clock, to walk 2 hours to the bus stop, to reach her working place at 7. She said in Romania that’s how it is, except maybe in Bucharest, where you have proper public transportation. And it wasn’t in some remote village, but in one of their urban regions close to the Hungarian border. I wonder how many Greeks remember this kind of reality, that few decades ago was probably very common in their country too. European solidarity is about to try to create decent life for all the Europeans and not for one kind of European on account of an other kind.

Hubert Marcks on July 25

And while I’m at it: Comparing eastern european countries to Greece as a justification for the austerity programmes is probably one of the most cynical arguments one could come up with.

I have heard this comparison being made buy countless german politicians, journalists and even ordinary people on the street many times over and it is a prime example for the disturbing efficiency of the european elites’ propaganda campaign against Greece and its leftist government.

Have we really sunk so low as to pick the countries with the lowest possible living standards, the most miserable social security system, the worst overall level of education and most insufficient infrastructure and take that as a reference for what people in Greece, or anywhere in the Eurozone (except the surplus countries, of course), have to come down to in order to become ‘competitive’ by serving as a cheap labour force for the north-western exporting industry?

Don’t get me wrong here. What is happening in eastern Europe is a crying shame, there is no doubt about it. But it is not the greek people who are to blame for this mess and further cutting of their wages, pensions and health insurance and raising consumer taxes will not improve the average Romanian’s standard of living one bit. And selling off state’s assets that still generate at least some kind of revenue at firesale prices will neither improve the greek government’s long-term income situation nor will it help to improve the infrastructure of Bulgaria or any other eastern european country.

On the contrary, the one effect this will definitely have on eastern Europe is that it will make absolutely clear that any attempt to demand a more just distribution of wealth in those countries will be absolutely futile and incite harsh punishment from the powers that be.

Any political movement from the Baltics to the Adriatic Sea that would dare to even discuss alternatives that might benefit the general public instead of the corrupt elites who enrich themselves by renting their workforce out to german corporations at minimum wages like modern-age slaves, is being nipped in the bud.

But what do we do? We do not show solidarity with the people who are desperately trying to gain at least a little emancipation from a corrupt and inhuamane social-economic system and from the elites that this system helps to keep in power. We do not see their struggle as an example for others to follow – especially in eastern Europe.

Instead, we turn their claim to maintain decent standards of living into a sense of false entitlement, parroting the propaganda of the ruling class.

EugenR on July 25, 2015 at 14:34

Dear Hubert, I understand your frustration about the social and political trends in Europe, and not only in Europe. This process you so correctly describe, I would call process of depossesing bigger and bigger parts of the European society. This started with the globalisation, that from European point of view it brought disruption into the long established social contract. But from the global point of view it brought worldwide new population out of poverty, mainly in China and India. So maybe what we see is the long waited redistribution of the wealth between highly developed and underdeveloped countries. If you believe as I believe, that the assumption of limited world resources is right, then the alternative to redistribution of wealth is enrichment of Europe, US, Japan etc. and farther impoverishment of the underdeveloped world. You could see what happens to these countries if they are impoverished. All the political violance we see in Muslim and African countries is the result of it. Also the waves of desperate refugees flooding to Europe, process that can be very destructive to Europe as you mention, disrupting the existing democratic fabric. It even more deepens the problem of breaking the existing social contract. There is real danger that it will cause farther undermining of the social and political framework in Europe, you so well describe in your comment.
In the last years this process of transfer and spreading globally the world economical wealth slowed down, and started a new economic process of introduction of new technologies, that will make more and more, even highly professional employment jobs irrelevant. This process will be probably even more painful than the previous one.
As to the situation in Eastern Europe versus Greece, your claim is that this are separate issues. I disagree. To my view when the Greek plutocracy borrowed unscrupulously, to enrich themselves, these financial sources could be used instead to improve the situation in Eastern Europe, and not be used “to purchase Mercedesess and Porsches”. I do agree with you, that the Greek people shouldn’t be punished because of what have been done by their elites. As to the politicians who caused this tragedy, it would be just right to punish them. But it seems, there are people who are above the law, or better said there are certain obviously unethical acts of the ruling elites that are above the law. You yourself mentioned the Nazis, who were not punished. It is again the same case. There is no justice for those abused by political abusers, even if they are cruel murderers. Actually only one case lately I remember, when the Israeli president was jailed for molesting his secretaries. I wonder how will end Berlusconi etc.
But back to Greece, I would suggest to look rather into the Greek economic future, than into its past. As I already expressed my opinion in my blog, macroeconomics is not only about aggregate demand and supply, GDP, income distribution, public deficit, etc. These economic values are just result of social and political structures, that create the economic activities. To explain my idea I would use an example from ancient Greeks and Rome, that had technical know-how probably in much higher level in many fields than Europe of beginning of nineteenth century. And yet, economically it was not developed at all. Some say because of the slavery, that prevented to create productive social networking. It had no banking system, no developed international commerce out of the Roman empire, no mas-production industries, etc. All this was invented and established in Europe out if necessity.
It seems to me Greeces social and political structure is in some way fundamentally wrong. If there will not be created a necessity to Greece to make such a fundamental change, it will never happen, because it hurts to make such a change. But what is the alternative? To remain all the time the underdog of Germany?

Hubert Marcks on July 25, 2015 at 13:37

I agree with your assumption that global ressources are not limitless and I also think that the world outside of the industrialized ‘western’ nations has every right to get their fair share of the profits generated through the use those ressuorces.
However, firstly, one cannot deny the fact that the new-found wealth in developing and emerging countries is mainly concentrated on a small elite. The majority of chinese, indian, or brazilian workers serves as nothing but fuel for the profit generating machine that is global capitalism. Judging the wealth of nations solely by their GDP does not tell us anything about whether or not the majority of inhabitants of these nations really sees the enrichment of their ruling elites as an improvement of their own quality of living. I doubt that under-age girls in Bangladesh working under horrible conditions for the mass manufacturing of textile products for western markets, consider their newly found life as expendable human resources as an improvement, just to name an example.
Besides, I have yet to hear about a credible source of statistics for any of these countries, really providing the same level of detailed demographical and sociological data we have in the ‘western world’ with its long tradition of record-keeping and its obsession with bureaucracy. And even our own statistics are often faulty and constantly being misinterpreted, doctored, or simply faked by all kinds of interest groups (including leftist ones) and used to underline completely contrary positions. So I find all that praise about the positive impacts of globalized capitalism on the societies of the developing world at least debatable.

But even if that were the case and if indented servitude, forced labour, the lack of unions, worker’s rights or any form of workplace protection was something that people in the developing world were accepting as necessary hardships on their way to prosperity, there is simply no way that the western elites will let them become truly inependent economic forces of their own. Because our elites know full well that they would not be able to maintain their profit margins if there was real competition and if something like a ‘free globalized market’ would actually exist. Instead they support and make deals with Kings and Dictators and even ‘communist’ regimes like the chinese one, or they invent complicated trade agreements like TTIP or CETA, all to ensure that the freedom of the industrialized world to exploit the rest of the planet as they please is not seriously impeded by those lower down the food chain.

I absolutely believe that it would be theoretically possible to distribute the wealth of this world a lot more equally among all nations – not just those of the ‘first’ world. But I absolutely do not believe that capitalism can provide such a wondrous feat. Capitalism is the rule of those who already have the means to rule and they can never stop accumulating more of those means or they will lose their power. It is not about equal opportunities for all.

P.S.: I really fail to see how the Greek plutocracy enriching themselves by borrowing money could have had any impact on the situation in eastern europe. It’s not like there was only a limited supply of money in the Eurozone and because the greeks took so much of it there was nothing left to invest in the east. It’s fiat money, it only exists because someone has borrowed it from a bank somewhere.

EugenR on July 25, 2015 at 15:01

I will start with the easy one. As banking system works, they have as any profits generating institution a goal to achieve. It was just easy to achieve this goal by “profits”, out of “secure” loans to Greece government. Why to bother then to find new markets for borrowings in the “risky” east European markets. From personal knowledge, the only banks who were ready to finance new privet investments in these countries were the small Austrian banks, that were geographically close. To my knowledge most of them had done well, until they entered the risky Russian market.
As to the problem of capitalism etc. I myself wrote about the problem, that the capitalism, driven by need for ever higher yield, and the need to pay interest, has no model to solve the major long term economic problems, like environment and more evenly distributed wealth. So the solution should be a different economic system. I have some ideas about some directions, but not good enough for publishing it.

Hubert Marcks on July 25, 2015 at 17:07

I’m sorry to drag this out so much but I feel a need to point out a major flaw in your whole argument.

You wrote:
“It seems to me Greeces social and political structure is in some way fundamentally wrong. If there will not be created a necessity to Greece to make such a fundamental change, it will never happen, because it hurts to make such a change. But what is the alternative? To remain all the time the underdog of Germany?”

So I have to ask: What do you think it would take to create an appropriately urgent ‘necessity’ for greek society to make those hurtful changes? And, furthermore, are you really implying that the greek people have not suffered enough?

I would like to give you the benefit of a doubt and not accuse you of purposefully following the Troika’s propaganda lines, but I’m afraid that is exactly what you’re doing

a) by insinuating that either the Greeks have simply not yet realized that they really are in dire straits and therefore need to be told to do their homework again and again, or that they do realize it but stubbornly refuse to take responsibility for making significant changes and

b) by approaching a social and political problem via the typical neoliberal paradigm that only given the right economic incentives can people be made to act responsibly and that any leniency given them by their overseers will result in them falling back to irrational, self-destructive behaviour.

I wonder: why is it so hard to understand that by voting for Syriza – who have made it clear from the very beginning that things needed to be changed significantly – back in January, the greek people have already voted for change?
That they have been denied the right to decide the nature of that change does not change the fact that a majority of them have already realized the ‘necessity’ for it. Actually it is the merry band of Doc Schäuble & the Friends of Austerity who are in complete denial about the necessity for a fundamental change in the way they think this whole european project ought to be run.

I find it curious how you can criticize capitalism and at the same time align yourself with its staunchest supporters by using their arguments against Greece.

As for the banking system and how it works – you are right, banks are profit generating institutions. They are also mostly free enterprises who can choose whichever way they want to achieve that goal. Buying ‘secure’ greek government bonds instead of financing bulgarian infrastructure projects was a business decision they made and not something they were forced to do by the corrupt greek oligarchy. It also enabled them to deposit those bonds as collateral with the ECB and borrrow even more cheap money from it, which they could just as well have used to invest in romanian Autobahns rather than to buy ‘secure’ asset backed securities, credit default swaps, collateralized debt obligations – you name it – from Lehman Brothers or any other one of those banks that were still awarded triple A ratings right until the very moment they almost crashed under the weight of all their toxic papers.

You can certainly blame the previous Greek governments for having doctored their numbers to swindle themselves into the monetary union and to gain access to cheap ECB money, you could also blame Goldman Sachs et.al. for helping them do it and the rest of the Eurozone governments for knowing exactly what was going on and still sweeping it under the rug in order to expand the currency union – foolishly believing that this would promote european integration.
You can not take all that blame, forge it into a giant sledgehammer and use it to crush a democratically elected government who had nothing to do with all of this.

p.s.: Concerning the involvement of Austrian banks with investments in eastern Europe, please google: Hypo Alpe Adria.

EugenR on July 25, 2015 at 20:23

Dear Hubert, I representing only myself and my intellectual and professional understanding as an Economist in all my assays. To your questions.
When the Greek people suffering will be satisfactory to change some fundamentals, my answer is right now, since in these days Mr. Tsipras, the most radical opposer of European dictatum decided to except them. I hope the Europeans, including the Germans will understand what such a move means to Mr. Tsipras and the Greek people and will find the resources to help Greece out when restructuring their economy. It will give also a signal to others who my need help in the future, that problems are to be solved with cooperation and not with conflict.
When I spoke about social-economic structures, I meant the economic networking, that is essential part of well functioning modern economy. This networking is not based on regulations and restrictions, but rather on creative social interaction. Out of this networking will rise the leading elites, who are not only looking for personal gain, but to take social responsibilities too. All this can’t be created, when institutionally it is suffocated by political structures. In the modern economy only those who have creativity can be successful. To endorse creativity you need to have competitive environment and political and economic freedom. No workers union is supporting this. Still I am against the impoverishment of the working middle class. Its thrive is essential to well functioning moden society. Ways have to be found how to eat the cake and leave it whole. It’s not easy but there are tools to do it.
As to my opposition to capitalistic system, this forum is not exactly the place to write about it, mainly because my ideas are not fully developed. Probably a face to face discussion could be a better way, and if you are ready for the challenge, why

Greece without Grexit


Someone asked why i write negatively about Greece. My answer is I found intellectually annoying certain stand point, giving false support to the Greeks, and i will try to mention some of these claims and explain my opposition to it;
1. The Germans let the Greeks to enter the Eurozone with overvalued Drachma, to create market for its exports. By doing so they caused destruction of Greek economy, exactly as they have done it to Eastern Germany.

This is annoying non sense, enough to see the size of Greek market to understand it. But the other issue is, why would anyone sell to someone any merchandise, while knowing that the customer will never pay for it?

2. Germans should compensate the Greeks for the evil they caused to Greeks during WWII.

First of all the Greeks are not alone in this claim. If right morality would exist in this world, probably the whole world could have claim against the Germans. If i understand correctly only the Jews were compensated for German crimes against them. But what’s more important is that all the post WWII arrangements in Europe including the EU were based on non revanchist attitude, as contrary to the post WWI arrangement, which later became the main cause for the outbreak of WWII. But then Greece was compensated, while taking about 500 billion Euro loans, that will never be return. Truth, this money was not invested properly, but mostly stolen by the corrupt Greek politicians, but this is a Greek internal problem.

3. Greece should never enter the Eurozone.

Yes, this is truth, but then they wouldn’t be able to borrow 500 billion Euro loans, without the coverage of the Eurozone and its standard of living would remain probably at the level of Bulgaria.

4. Greece should exit the Eurozone, devaluate the new Drachma and then start to export its merchandise.

This is a good solution for economy which has unexploited capacity to produce competitive products to export. Obviously this is not the Greek case. All what would do devaluation is inflation and reduction of Greek GDP per capita bellow the Bulgarian numbers.

5. If Greece will exit from the Eurozone, (Grexit) the EU will collapse.

This claim is arrogant overestimation of the importance of Greek economy. It is hardly 1% of the EU GDP. But then the claimers who understand this say, but what about the psychological effect, that will destroy the European monetary markets. As you can see nothing of this kind happened, and the markets hardly moved during the last crisis. Everybody understood that 1% can’t destroy 99%. Since 2010, when it became obvious that the Greek economic policy of profligacy can’t anymore go on, the EU leaders prepared tools to cope with eventual Grexit. To my opinion this was the last straw the Greek government, full of self-denier demagogs tried to hold too. When they understood that no one is afraid anymore of Grexit, they surrendered and excepted the European ultimatum.

From now on new era of economic life will start in Greece. Greece, with the secured support from the EU, will have very good chance within 10 years be in completely different situation. I visited Athens 25 years ago and several times in the last years. Greece has modernized in the last 20 years. Its young population is highly educated. All is needed is to start to work, and let the young to take over, to create new economic structures, to replace the old ineffective, unproductive ones.

Europe’s Vindictive Privatization Plan for Greece – Project Syndicate


Yanis Varoufakis

For the Project Syndicate site click here. Or…

View original post 842 more words

Europe!!! Where too?


Due to Greek tragedy that it unfolding in front of as i have to publish some of the articles i published in the past about the subject.

A lot of talk went through the media about the Greek crisis. Yet most of it is how to solve, or not to solve the problem of Greek debt, which is in its essence a monetary problem, that can be solved relatively easily by monetary tools, that as were shown can be very effective if implemented correctly. But as it happens to be, monetary policy influences the physical scenery too, mainly if it is all about greed, deception and theft, and for very long time, like in the case of Greece. The mounts of loans that the Greek politicians took, since they entered the Eurozone based on false statistics, where used mainly to enrich the Greek plutocracy. To be able to do so undisturbed, they corrupted the whole Greek nation by enabling to them standard of living of Germany, without to be productive like Germany. This policy not only did not prepared the Greek economy for the D-day, when eventually the creditors will ask for loan repayments, but in contrary. The wages, the pension system, the business environment, were all formed not on economic achievements but on protective incorporation of employment associations, to protect those who are members of the incorporation from those who are not. These incorporations could be workers or profession unions or association of drivers, etc. When the hangover day came, all this associations and their members, will stuck together even more tightly than ever before. 50% youth unemployment is direct result of this situation.
These phenomena evolved in decades and there is no monetary policy, which can resolve it. So even if most of the Greek debts would be erased it couldn’t help to create a long term sustainable Greek economy.
Economics is not just about curves and numbers. It is also about people, their intentions and their acts within an economic, political and social system. If certain senior employees created in an organization where they are employed an union, which prevents from more talented new employees to bring positive changes to the organization (and I am not against the unions as principle, only if it fights for self destructive policy ) its damage to economy can’t be quantified. If certain entity becomes a monopoly and increases the prices of the products, it’s negative influence is also not measurable in the GDP. If highly educated young Greeks can’t get jobs, because the senior less educated and less effective Greeks are protected by laws, unions, professional guilds, etc. the negative impact of this state on the GDP is also not measurable.
So if Greece wants to overcome its problems, reduction of its debts is not enough. Somehow this economic train has to be relocated to a different track.
—————————————–
There are commentaries in the media, where “professional economists” pointed out, that at 2008, Greece debt was “only” 100% out of the GDP, and now with the shrink of the GDP, even after its reduction it became 170%. This claim is worse than a lie, it is professional deception, done intentionally our out of ignorance. Before the crisis, the Greek GDP per capita was close to that of Germany, mostly financed by loans. The GDP can be sometime a very sleazy measure instrument, since it measures the short term economic performance calculated out of national income. Out of definition General Domestic Product equals to General Domestic Income. But this income doesn’t makes difference between income generated out of merchandise or service production an the income created by financial operation which creates indebtedness. So the Greek GDP did not represent real values, but values generated by debts, which became the very core of all the economic problems of Greece.
he “Greek problem”, is just a symptom of a much larger system problem common in Europe and US. I would call this problem, “The limits of democracy to solve long term problems”.
We come in contact on daily basis with the problems created by political decisions made 20, 30, 40 and even 50 years.
Some examples,
– Destruction of world environment, that people became aware of already at 1930 after the catastrophe in the Meuse Valley, Belgium .
https://en.wikipedia.org/wiki/1930_Meuse_Valley_fog
-The French and latter whole European immigration policy of sixties.
– The welfare state, that disconnected the European population from the natural realities of hardship.
– Running economies on debt, what means in practical terms, that when the economy will stop to grow, the mutual guaranty economic system of obligations to the less capable, like old people or one parent families with children will have to be decreased or abolished.
– Creating an education system, where parents and the children have all the rights, while nothing is left for teachers.
– Under the flag of plurality and democracy, letting to certain social groups to establish communities, that clearly oppose the humanistic values that prevail in Europe since WWII.
In Greece the symptom, of not to take responsibility for its acts, reached a national level. In other countries still the problem is only on individual level and sometime of certain social groups. But there is no political force to stop this trend of adopting stand point of “After me let the floods come”. How could it be otherwise, if the politicians themselves act according to this slogan?

From where comes a good scientific theory


Some if not most of the great scientific discoveries come out of correct or mistaken scientific theories. Kepler is an example of having a “scientific” theory about planets orbiting in Platonic “perfect” spheres. Then with data of Brahe Tycho, he illegally took possession of, the evidence proved otherwise. Circle happened to be a unique geometric form out of more general Ellipse. He was smart enough to drop his wrong theory, even if he invested into it a fortune. He have prepared a golden model of his “perfect” theory of planetary orbits, to present it to the Habsburg King. I wish many others (mainly politicians) would have his courage, to abjure wrong investments and start again from the scratch.

On the other hand there are many more known successful scientific theories, that became later scientific truths. What jumps to my mind is Mendeleev’s elements periodic, where he presupposed order in elements, including prediction of unknown elements.

Truth is scientific theory do has in itself element of faith, to be believed without support in evidence. And such a faith can be very dangerous and then has to be opposed. The main problem of human thought and philosophy is to separate the scientific theories with potentiality to become scientifically truth or false, while supported or rejected by experimental evidence, from the false and dangerous ones, (the most dangerous are mainly in social and political sciences). The most well known false “scientific” theory is Marxism, that pretended to predict social, economic, historical development. The resulting disaster of implication of this theory is well known. Other such false theory was endorsed by the Nazism, with pseudoscientific theory of eugenics that became the scientific base for policy of genocide.

Greece versus Slovakia


There are many who claim that the Greeks where tricked into the Eurozone by the Germans. I am ready to join any criticism against the Germans, mainly their blame on destroying the pre- 1914 Europe, and causing by it the European self destructing policy, as I expressed in my article not long time ago. Greek problem seems to be more than just overvalued currency. Greece economic problem was not created when it entered the Eurozone. It started before, and developed after. It was partly caused by unrestrained budget policy of Greek political elites and partly because Greece in reality never developed modern economy, interwoven in European and ex-European economy, except in the tourist industry. Yet the tourist industry based state can provide GDP per capita of tourist location states, like for example the Caribbean states, or Costa Rica but not of Germany, as it was before the crisis in Greece. (About half of the present Greek GDP per capita.
Let’s compare Greece to Poland, Slovakia and Czech Republic. These three countries became the industrial hub of Europe after 1990. Most of the European, Japanese and Korean car and electronics production industry  moved to these countries. Nothing of this kind happened to Greece. Yet before 2010 the Greek GDP per capita was double to these countries. Now they are more or less equal. And this happened in spite of unimaginable terrific social, economic, political, post-communistic heritage. This heritage included not only lack of modern infrastructure, but also unbelievable moral degradation among the old but then also the new leading elites caused by 40 years of communistic despotism and false morals, taught by this regime. But as contrary to Greeks, the people in these countries were ready to take in their hands the new opportunities, sacrificing the present for a better future, and eventually crawled out from the hole, the communistic regimes dag for them for 40 years.

Is economy all about money printing?


Is economy all about money printing?

(correspondence between EugenR and pshakkottai  about macro economy)

EugenR

04/07/2015

As it appears, monetary policy of quantitative easing, which in practical terms mean printing new money, implemented by the Federal Reserve bank since the economic crisis in the US, and more recently by the ECB in the Eurozone, did not bring economic catastrophes as some predicted. If so why not to do it even in wider range? Why not make our citizens rich by dropping on them US Dollar and Euro bills out of the helicopter?
Of course there are many problems with such a policy.

  1. The newly printed money is channeled in certain way, and through certain financial institutions. For example if the newly printed money is used to purchase government securities, their price will rise, and this means lower interest rates. Then the monetary investors, mainly pension funds and small investors, who try to preserve the value of their life savings for the hard times are impoverished, while the economically active entrepreneurs, who base their economic activities on credit are enriched. This enlargement of gap of income, we see everywhere. It causes social and political disruptions, but also negatively influences the aggregative demand, since the top rich have limited capacity for demand, so it has deflationary influences too.
  2. The newly printed money is channeled to the economy through financial institutions, mainly banks, and the top managers of these banks, who use some of this money for their own enrichment, and even worse, to buy political influence. This phenomena even more impoverishes those who are out of the circle of the few on the top. More damaging than this is the monopolization of resources in the economy, that is direct result of concentrated financial power in the hands of view

As example i would bring the mining industry of most of the basic raw material production like oil, ore and even fertilizers concentrated in very few hands. This has negative effect on both, the price level for the users, and the consumers, who are forced to pay higher prices, who are again the masses not connected to the top. But monopolization in the economy is not just in the resources. It is in the financial world too. No one can compete the very few biggest US, European and the Swiss banks, behind them are the three most worldwide used currencies, which are the basis and the point of reference to most of the other currencies in the world.

  1. Excessive money printing will eventually make the money very abundant. Abundance of some item makes it cheap, (like glass crystal compared to diamond crystal). It means the money necessarily will lose its value. Or in other words the inflation is a necessary outcome of such a policy. Inflation did not occur yet in spite of the policy of quantitative easing of the Federal Reserve, because the banks, following the 2008 meltdown needed to build up reserves to save themselves. Also new International regulatory framework for banks called Basel III, introduced by Basel Committee on Banking Supervision since the economic crisis, forced the banks to squeeze the credit and the borrowings. This era of stabilization of the banking system is coming close to its goals, and probably the monetary squeeze the banks caused will end. All these occurrences will bring probably new instability to the world economy.
  2. While the monetary policy strongly influences the aggregative demand, it has relatively little direct influence on the aggregative supply. Its direct influence on supply is mainly through the interest rate.

The aggregative supply is more influenced by technological development, and/or by limited resources which can have different nature. The main limited factor in last years has been the negative environmental impact of the economic activity. At first it forced the producers to introduce expensive equipments and cleaning systems into the production processes. Now the new events are more intensive and catastrophic. It is caused more often by natural disasters caused by changes in the world environments. (as example i would use the Fukushima nuclear disaster, even if not caused directly by the human activity, it could have such an immense consequences, because of the concentration of nuclear power plants in one, not very appropriate spot, due to lack of alternative more appropriate locations. All these economic events have limiting influence on the supply side if the economy. Of course these limiting factors are mostly balanced and even overbalanced by the technological developments, but as well known, technologic development is unpredictable, so is its economic, political and social influence.

  1. What the recent economic history teaches us is that monetary policy on the global scale is able to moderate economic imbalances between the countries, and also on the time scale between the present and the future. But it is doing it through the tool of borrowing from those who accumulate assets in monetary form as savings, to those who accumulate it in physical form as investments in economic assets, be it tangible or intangible assets (knowhow, good will, etc.). Then when the day of repayment comes, and it doesn’t come in a smooth flowing way, but rather in big chunks the whole system tends to collapse. The collapse is not good for those who saved their money, and not to those who borrowed it with a perspective of future income and profits. The only one who can gain from this collapse are the financial sharks, who know how to react to any new financial circumstances, and who are close enough to the events to be the first to react. And as to my opinion their impact on the economy is mostly if not entirely only negative.

pshakkottai

Rösler’s crowing aside, the Germany is building on the flesh and blood of its neighbors and its citizens. In a brilliant campaign, reminiscent of the American .1% income group’s campaign to impoverish the U.S. middle- and lower classes, Germany has convinced the world its success is based on “budget consolidation” and “solid finances.”

A growing Gross Domestic Product requires a growing supply of money. In the case of Monetarily Sovereign nations, like the U.S., Canada, China, Australia etc., that money can be created ad hoc by their sovereign governments.

But for monetarily non-sovereign nations, which have no sovereign currency and so the total supply cannot be increased, each nation must try to steal Euros from the others, in a nationalistic riot of mutual cannibalism.

When the other euro nations finally surrender to the eventuality that they either return to Monetary Sovereignty and re-adopt their own currency, or merge into a financial version of a United States of Europe, Germany will run out of blood donors.

At that point, German citizens will begin to suffer so much they will seek out a strong, ruthless leader, who will identify and persecute scapegoats, then renounce the euro, so as to finance a war, just like the one Hitler did.

During the chaos, the German uber-reich will feed off the dying German populace, as salaries are diverted to taxes and the focus turns to saving the government. Soon there will be but two classes: The very wealthy and the very poor. The gap will be complete.”
From Mitchell predicted two years ago, in

http://mythfighter.com/2013/03/13/germany-eat-our-neighbors-then-kill-our-citizens-wwii-revisit

It is best to make up Greece’s debt and think of becoming like USA, a UNE for United Nations of Europe, and establish a European Central Bank to finance all Europe and create Euros under federal control. Get rid of all private banks. prosperity will follow promptly.

EugenR

Hopefully your prediction of future will not be fulfilled. As to United States of Europe I am more than for. But this means also one federal budget, one taxation, one planned deficit, and finally one Eurobonds. Europe unfortunately is still very far from it. If it happens this also would mean that Greece can’t continue with its irresponsible budget and taxation policy. If I understand correctly the German position to Greece this is exactly what they actually wanted to achieve, by squeezing the Greeks. So actually German economic policy is more for United Europe than Greeks. Now that the Greeks finally understood that they can’t be in and out in Euro Zone at the same time, they will have to give up another inch of their sovereignty, and so will have to do all the others. So at end of the day, the Greek tragedy became a good lesson to those, who planned just to take from the reservoir and nothing to add to it. If EU and mainly Germany has any moral obligation to any country, so those would be the Eastern European countries, including Ukraine and Belarus, that as consequence to WWII suffered additional 40 repression from USSR, an indirect result of WWII, and economically are still far behind the rest of Europe. Until now they hardly enjoyed the wellbeing created in EU.
Greece will have to return to its right size, what it represent as real economy (without borrowings). If in the future the new young Greek generation will be maybe more capable and productive than their fathers. Then they will get back the lost paradise, and hopefully it will be a real paradise and not a fatamorgana.

pshakkottai

Historically, GDP increases with deficit by an incremental slope between +8 and +3 but in recent times (near 2008) it is actually negative showing something is seriously wrong. I interpret is wasted money for gambling etc.

EugenR

As I read more and more your economic views, I come to the conclusion, that when we speak about economy on national level, you and me, we look on economics from entirely opposite point of view. You see economy as flow and accumulation of money, and I see it as flow and accumulation of products. To you national wealth is aggregative accumulated money, to me it is aggregative accumulation of products.

If you look at economics of an individual, his economic activity, be it production, consumption or savings, copies almost entirely exchange of money. But on national level it is not so. If an individual’s monetary savings was translated by someone else to economic activity, mainly investment product, but sometimes just by using borrowed money to immediate consumption, money will represent one to one this economic activity. Since it is easier to calculate the money volume value than the product volume value, (theoretically it could be calculated with a different measurement scale than money) the economic activity is usually represented in form of money. From here comes National income (in terms of money)=National product (in terms of products). Still it doesn’t mean that money is the real economic value created.
To prevent double calculation, you will never use in measurement of GDP other tool than money. The result of this is that economic activity, without money exchange, will not be calculated as part of GDP. It also means that when in an economy nothing else changes except decrease of product price, the GDP of such an economy will decrease too, even if the level of wealth has not changed (actually this is what is happening in last years in Japan). Of course there are tools to calculate annual change of GDP in real economic terms, where the price change is neutralized, but in absolute terms the GDP was changed just because of price change of the product. The absurdity of such an accounting system is that when the prices drop due to development of technology, the GDP drops too. Luckily the new technologies create also new paradigm changing products, like mobile then smart phones, or new communication systems, that will add to the national accounting new values. Take for example electricity versus phone companies. 20 years ago, these two business activities couldn’t be compared as to volume they represented in the GDP. If you can recollect, your personal bills to phone companies compared to electricity companies, you will immediately see the huge change in proportions of this two items in your bills, but also in your life. And this did not happened because you reduced your electricity consumption, in contrary, it grew in absolute terms too.

pshakkottai

“The conclusion;, at the end of the party the bill has to be paid. How the USA will pay its bill for 35 years of public deficit and reduced private savings? Probably by inflation or currency depreciation or both, or if we are lucky with some NewApple company shares or pieces of real estate.”

No. Deficit has become wealth at the end of 35 years. Red area = Blue area +or – green area.
Created money + labor+ materials + talent = real material wealth. Money is only a “token for the ride”!

EugenR

I agree, the U.S. public deficit with low saving rates creates huge US debts to foreigners. This is balanced by selling green papers ($) all over the world, but also US assets. If those assets were newly created it is ok. But if not at the end US economy will be run by the foreigners. But let’s not forget, that US is a magnet to the world wealthiest people and also the most talented ones. So to predict what will really happen to it’s economy is quite pretentious.

pshakkottai

The same balance applies to poor India, also a monetary sovereign. Again India’s wealth is the sum of its ( fiscal deficit- trade deficit) with the miserable exchange rate $1 = Rs 60. Whether foreigners will own much of Indian economy remains to be seen.

The full equation for a monetary sovereign is: FISCAL DEFICIT – TRADE DEFICIT = PRIVATE SAVINGS – PRIVATE INVESTMENTS = NET PRIVATE SAVINGS and data shows this equality in

https://pbs.twimg.com/media/BWeTDJKCAAAGeuQ.jpg:large

See the symmetry of this plot. At low trade government deficit in red plotted positive downward is equal to private saving in blue positive upward. Trade modifies this as indicated in green, the balance as in the equation above.
USA data does not show much inflation. As long as labor is available, inflation is believed not to occur. So money can be created for all public purposes till labor shortage is incipient. At that point interest rates can be increased or reduce the creation of money.
EugenR

To my understanding:

  1. private saving – fiscal deficit=net savings. Net savings + net borrowings from foreign source = total investment.

In the US economy net saving is negative, so it is balanced by net borrowings from foreign source. The domestic debt is not significant, since it can be repaid by new taxes, inflation etc. Since the US dollar is used as currency out of US, it can be seen as export item, and then maybe the US borrowings from foreign source are not so bad after all.

  1. Labor is not the only limiting factor in the production. Some raw material can be also, or lack of entrepreneurship, etc. So connecting money supply only to labor can be sometime mistake, like it happened in seventies and eighties, and then you have stagflation.

pshakkottai

In the equality as expressed above, taxes and borrowings are absent. Bank transactions net to zero because one man’s loan is another’s saving (except for interest). Only the fiscal deficit counts as income to the macro economy and eventually contributes to wealth. The source for wealth is (FISCAL DEFICIT – TRADE DEFICIT) and not federal taxes and bank borrowings. If they were involved the symmetry of the plot would be less precise!

EugenR

Fiscal deficit=total government expenses-total taxes. So fiscal deficit includes taxes. Fiscal deficit-trade deficit=total net newly printed money in the domestic market. I am not sure what it means, since money is more created by the commercial banks due to multiply borrowings, than by government. I am not sure if money on national level has much to do with real wealth, maybe with the illusion of wealth. Real national wealth are assets that have potential to create new wealth or economic value of consumption. It doesn’t have to be tangible asset, it can be also education level of population, health, know how, entrepreneurship etc.

pshakkottai

Deficit=government spending – government tax = Fiscal deficit = created money, involves taxes incidentally but what counts is ONLY created money. Taxes can be zeroed out and the economy will run fine. Taxes are entirely unnecessary to fund anything. Government deficits are supposed to fund public investments like education , infrastructure, healthcare which contribute to wealth of a better informed talented citizenry. Taxing is only required to control inequality which is bad for democracy. Taxes remove money from the economy which is bad.

EugenR

Newly created money not necessarily creates new wealth. If wealth creation is blocked by some obstacle, like monopolies, social disruption, white elephant projects, lack of entrepreneurship, lack of needed professional force, I can continue to write all the obstacles that my stop wealth creation and never get all of them. The capacity to print new money on the other hand is easy and unlimited. So do not fall into the illusion that it is enough to print unlimited amounts of money and the wealth will come by itself.

1) Whole your model speaks about Cash flow and “Public Deficit=Private Savings”, what about the balance sheet? The depletion of the asset value, caused by wrong investments?
2) What if the private savings is external of your currency region. The government may lose its independence to regulate trade deficit.

3) To much “deficit-savings”, “Reduces the Currency Value=Depreciation of the currency”. It can be visible as inflation and currency depreciation or hidden, as the mountains of government reserves hold by foreign governments. (US government bonds in Chinese + Japanese vaults).
4) US has not only public deficit but also negative private savings. How is it possible according to your model?

There are several options:

  1. Point 3) above
  2. US economy creates continuously new asset values, that are commercialized to  investors many of them foreign, like new start-ups publicly traded  companies. This of course causes huge inequality in the income. This is why has the US economy the biggest inequality in income in the western world and not so much because of the tax system. I would say in contrary, in Europe my be the tax legislation more progressive than in USA, but the tax leakage is so common, (because of the independence of tax collection of each individual country, including Lichtenstein, Cyprus. etc.), that it is hard to speak about progressive tax collection at all.
  3. The real estate market of USA is continuously creating new values, because of growing population and growing economy. From while to while (lately every 20 years) this market collapses, and erases the private investors asset values, reducing by it the public debt too. Since “Reduced Asset Value= Reduced Liquidity”, due to reduced propensity of the banks to lend money. On the other hand the government can supplement this lack of liquidity by printing money, and that’s what is happening now in USA and gradually in Europe too, under policy called Quantitative Easing.

The conclusion;, at the end of the party the bill has to be paid. How the USA will pay its bill for 35 years of public deficit and reduced private savings? Probably by inflation or currency depreciation or both, or if we are lucky with some New Apple company shares or pieces of real estate.

———————————————————————

Is GDP a good measure of economic performance?

18/07/2015

Economy is not flow and accumulation of money, but as I see it, it is a flow and accumulation of products. National wealth is aggregative accumulation of products and not of money. Only very few countries, like US, Switzerland, United Kingdom and eventually Euro zone, succeeded to make out of their money a product, supplying security, so countries are ready to exchange against it merchandise or services.
I have to add here my definition of product: “Product is everything created by human activity, that can be consumed or accumulated for future consumption, direct or indirect (indirect; means product still in process or tool for usage to produce another product at present or in future). Product can be for self use or transferred to others. Then the tool used for this  transaction of product is money (at least so it is in modern economy).”
I will try to explain this view of mine.

Money is a tool that copies certain parts, even if the most significant part of economy, but not all of it. For example, if someone publishes a new article in her/his blog and teaches or pleases someone, she/he produced a product, and still there will be no exchange of money for it. This part of economy is taking more and more significant part in the modern economy. There is a whole new economic theory explaining this trend by Jeremy Rifkin. Viz link: http://www.thezeromarginalcostsociety.com/

If to look at economics of an individual, his economic activity, be it production, consumption or savings,  it copies almost entirely exchange of money. But on national level it is not so. If an individual’s monetary savings was translated by someone else to product, mainly investment product, but sometimes just by using borrowed money to immediate consumption, money will represent one to one this economic activity. Since it is easier to calculate the money volume value than the product volume value, the economic activity is usually represented in form of money. From here comes National income=National product. Still it doesn’t mean that money is the real economic value created.
To prevent double calculation, you will never use in measurement of GDP other tool than money. The result of this is that economic activity, without money exchange, will not be calculated as part of GDP. It also means that when in an economy nothing else changes except decrease of product price, the GDP of such an economy will decrease too, even if the level of wealth has not changed (actually this is what is happening in last years in Japan). Of course there are tools to calculate annual change of GDP in real economic terms, where the price change is neutralized, but in absolute terms the GDP was changed just because of price change of the product. The absurdity of such an accounting system is that when the prices drop due to development of technology, the GDP drops too. Luckily the new technologies create also new paradigm changing products, like mobile phones then smart phones, or new communication systems, that will add to the national accountings new values. Take for example electricity versus phone companies. 20 years ago, these two business activities couldn’t be compared as to their volume share in the GDP. If you can recollect, your personal bills to phone companies compared to electricity companies, you will immediately see the huge change in proportions of this two items in your bills, but also in your life. And this did not happened because you reduced your electricity consumption, in contrary, it grew in absolute terms too. The communication activity grew out of proportion compared to the past. It became a product of different dimension, still much cheaper than before. Who could imagine few years ago, that international phone calls with filming transfer will be possible, and free of charge, through your mobile phone. Even in science fiction movies the speaker had to use phone box for such an operation. I wonder how is this expressed in the GDP account?

pshakkottai

GDP=Federal Spending + Non-federal Spending + Net Exports.

This definition counts only the money spent and not the outcome. Sometimes negative outcomes are also counted positive. Like global warming, air and water pollution etc. Damage to the environment is not counted and medical care is counted positive and also air and water cleanup. Law enforcement is another. No money is spent on rehabilitation but more prisons are privatized and show good profits.
USA has had net imports in the last few years which is a bargain for the USA because you are exchanging printed money for useful goods from foreign countries.
The reduced labor required could have been used to reduce work hours and give more vacation to people but no. Unfortunately, plutocracy which controls the government produces less employment and more overwork! Plutocracy also has increased student loans and general misery instead of making education totally free. Less educated people means GDP decrease. This is counted positive because private funding of private student loans is highly profitable. Whether they are educated or not is not figured in the GDP.
Cell phones are a big plus to the economy, however. GDP should include the negative terms which are not counted at present.

EugenR

Agree!!! Junk produced is also part of the GDP. The capacity of US to exchange green papers for merchandise and services is an amazing fact. But what will happen if the Chinese one day decide to stop the game? This brings instabilities to the world economy. The 2008 economic crisis was a direct consequence of this situation.

Germany is not to be blamed for everything-mainly not for the Greek economic crisis


Read more…

GDP, what does it measure?


GDP is so much adored by economists, that it became the anchor for every measurement on national accounting. To my view it is a very partial tool to understand economic performance and wealth of a country. The very best example, where the GDP failed is the Greek economy. Before the Greek economic crisis at 2010, it showed GDP per capita comparable to that of Germany. Also the level of debt as percentage of GDP did not exceed 100% as compared to 170% today, after significant write offs of debts. How so? Because of heavy borrowing, that financed big share of the Greek economy in the past.

Other source of miscalculation GDP causes is it’s being tool for measurement of the current flow of economic activity, and not expressing anything about accumulated national wealth. Take for example countries like, Russia and China compared to US. US economy runs for years a huge current account deficit, and Russia or China, have years of surpluses. Yet which countrie’s economy is better off? Of course US’s. Why? Because it accumulated during its last relatively uninterrupted 150 peaceful years (since the civil war) capital in many forms.
The official GDP is only part of this story. The other part is the very existence of well functioning economic institutions like: financial systems, political system supportive to business, well functioning management systems, highly developed stock exchange market, local capital owners who use the capital for economically positive purposes, entrepreneurship in all business sizes and every imagined field of activity, accumulated know how in its universities and other institutions, like for example Google, etc. Add to it the absolute and relative size of US economy, its military power supportive to its currency, and you will understand, that the traditional economic tools, like GDP, or deficits and debts as proportion of GDP are not good enough to measure the strength of the US economy.

Is GDP a good measure of economic performance?


Economy is not flow and accumulation of money, but as I see it, it is a flow and accumulation of products. National wealth is agregative accumulation of products and not of money. Only very few countries, like US, Switzerland, United Kingdom and eventually Euro zone, succeeded to make out of their money a product, supplying security, so countries are ready to exchange against it merchandise or services.
I have to add here my definition of product: “Product is everything created by human activity, that can be consumed or accumulated for future consumption, direct or indirect (indirect; means product still in process or tool for usage to produce another product at present or in future). Product can be for self use or transferred to others. Then the tool used for this  transaction of product is money (at least so it is in modern economy).”
I will try to explain this view of mine.

Money is a tool that copies certain parts, even if the most significant part of economy, but not all of it. For example, if someone publishes a new article in her/his blog and teaches or pleases someone, she/he produced a product, and still there will be no exchange of money for it. This part of economy is taking more and more significant part in the modern economy. There is a whole new economic theory explaining this trend by Jeremy Rifkin.
Viz link:
http://www.thezeromarginalcostsociety.com/

If to look at economics of an individual, his economic activity, be it production, consumption or savings,  it copies almost entirely exchange of money. But on national level it is not so. If an individual’s monetary savings was translated by someone else to product, mainly investment product, but sometimes just by using borrowed money to immediate consumption, money will represent one to one this economic activity. Since it is easier to calculate the money volume value than the product volume value, the economic activity is usually represented in form of money. From here comes National income=National product. Still it doesn’t mean that money is the real economic value created.
To prevent double calculation, you will never use in measurement of GDP other tool than money. The result of this is that economic activity, without money exchange, will not be calculated as part of GDP. It also means that when in an economy nothing else changes except decrease of product price, the GDP of such an economy will decrease too, even if the level of wealth has not changed (actually this is what is happening in last years in Japan). Of course there are tools to calculate annual change of GDP in real economic terms, where the price change is neutralized, but in absolute terms the GDP was changed just because of price change of the product. The absurdity of such an accounting system is that when the prices drop due to development of technology, the GDP drops too. Luckily the new technologies create also new paradigm changing products, like mobile phones then smart phones, or new communication systems, that will add to the national accountings new values. Take for example electricity versus phone companies. 20 years ago, these two business activities couldn’t be compared as to their volume share in the GDP. If you can recollect, your personal bills to phone companies compared to electricity companies, you will immediately see the huge change in proportions of this two items in your bills, but also in your life. And this did not happened because you reduced your electricity consumption, in contrary, it grew in absolute terms too. The communication activity grew out of proportion compared to the past. It became a product of different dimension, still much cheaper than before. Who could imagine few years ago, that international phone calls with filming transfer will be possible, and free of charge, through your mobile phone. Even in science fiction movies the speaker had to use phone box for such an opperation. I wonder how is this expressed in the GDP account?

Quote

Koons and Chicholina


I just visited the Guggenheim Museum in Bilbao. The museum itself is a wonderful exposition of modern art, where imagination, creativity, modern technology and science, and probably also lots of mathematics was put together, to create this wonderful building. This building represents a lot of what is so amazing about modern western culture, science and arts. Yet, most of the exposition in the museum itself was of Jeff Koons, who made probably a huge donation to the museum, to become the sole occupant of this wonderful museum. If I would create an art movement, probably it would be called, “Clearing the public space from Koons’s kitsch”. When I spoke about cultural decadence of Europe, I spoke exactly about people like Koons. The only positivity about him is Chicholina, who in contrary to Koons, expressed herself in an authentic and revolutionary way. Koons himself is nothing more than a self-possessed, mediocre. A product of American consumerism and advertising industry, where only lies, falsification, flattery, idealisation of wrappings with no real content are the rule, and the real things is politically not correct. Koons is part of the trend in Europe I mentioned, where the people are not asked to face the realities as they are, and demanded to help to cope with the problematic developments they are living in, but rather are asked to close their eyes in front of them.

The German guilt


WWII and WWI was brought on us, human beings, by the German nation. To the question, why so, some tend to give psychological explanation and they.mean because of the German feelings of frustration with the French, who in spite of military and economic inferiority, continued to hold cultural superiority as leaders of the European cultural scenery. Others (geographical explanation) say because the Germany was geographically squeezed between Russia and France. Some may say because the Germans were racists in their culture and nature. You can find even Marxists, who continue to claim that the Great 80 year German War (1914-1992) (80YGW) happened due to economic reason . I personally couldn’t find any rational explanation satisfactory to explain the German aggression towards its neighbors,  and co-citizens.
As to the consequences of this war, it is obvious, Europe lost due the wars Germany caused its dominant political position in the world, and good that so it happened. What’s bad is, that the Europeans dug and covered their feelings of cultural superiority, and with it let it be influenced and be leaded by US, Oriental and lately also Muslim cultures. The problem is, while the Oriental and US cultural influence came peacefully and as such it has integrated to European culture, the Muslim culture came with historical  animosity towards the European culture, and with even greater animosity towards its modern secularism. The Muslim aims in Europe are with no tendency for peaceful integration, but separation and conquest. This couldn’t happened if in Post 80 Years German War (80YGW) , the European mood wasn’t so defensive as its post-colonial, post-fascistic, post-communistic political mood is today. This mood of cheap consumerism enabled to the political elites to make all the mistakes they had made, with their shortsighted political vision, without to pay until now any political price for it.

Conclusion:  The world wars initiated by Germany do have far more catastrophic consequences than people usually are ready to think or admit. If European culture is doomed, and maybe it is, it will be a direct result of The 80 Years German War.

Other issue is the Greek tragedy, that from historical point of view is small scale representation of what will happen, when plutocratic elites, to secure their  hold of the reign at any price, corrupt the people-their electors, who are just happy to be corrupted. They leave the people just to enjoy the golden calf and not any of the teaching of the responsibilities, that have to be taken. The Greeks then moralize, as if they were the only one who suffered the consequences of the 80YGW. Yet this is far from truth. There are others, like the Polish people, Czechs, Slovaks, Serbians and many others who suffered even more than the Greeks during WWII.
To change this trend of European self destruction, responsibilities has to be taken by all those, to whom European cultural identity and European way of life is dear. There are too many out there who want to infiltrate Europe just to destroy it and it is nearsightedness not to see it.

Money printing – what’s wrong with it?


As it appears, monetary policy of quantitative easing, which in practical terms mean printing new money, implemented by the Federal Reserve bank since the economic crisis in the US, and more recently by the ECB in the Eurozone, did not bring economic catastrophes as some predicted. If so why not to do it even in wider range? Why not make our citizens rich by dropping on them US Dollar and Euro bills out of the helicopter?
Of course there are many problems with this policy.
1. The newly printed money is channeled in certain way, and through certain financial institutions. For example if the newly printed money is used to purchase government securities, their price will rise, and this means lower interest rates. Then the monetary investors, mainly pension funds and small investors, who try to preserve the value of their life savings for the hard times are impoverished, while the economically active entrepreneurs, who base their economic activities on credit are enriched. This enlargement of gap of income, we see everywhere. It causes social and political disruptions, but also negatively influences the aggregative demand, since the top rich have limited capacity for demand, so it has deflationary influences too.
2. The newly printed money is channeled to the economy through financial institutions, mainly banks, and the top managers of these banks, who use some of this money for their own enrichment, and even worse, to buy political influence. This phenomena even more impoverishes those who are out of the circle of the few on the top. More damaging than this is the monopolization of resources in the economy, that is direct result of concentrated financial power in the hands of view.
As example i would bring the mining industry of most of the basic raw material production like oil, ore and even fertilizers concentrated in very few hands. This has negative effect on both, the price level for the users, and the consumers, who are forced to pay higher prices, who are again the masses not connected to the top. But monopolization in the economy is not just in the resources. It is in the financial world too. No one can compete the very few biggest US, European and the Swiss banks, behind them are the three most worldwide used currencies, which are the basis and the point of reference to most of the other currencies in the world.
3. Excessive money printing will eventually make the money very abundant. Abundance of some item makes it cheap, (like glass crystal compared to diamond crystal). It means the money necessarily will lose its value. Or in other words the inflation is a necessary outcome of such a policy. Inflation did not occur yet, because the banks, following the 2008 meltdown needed to build up reserves to save themselves. Also new International regulatory framework for banks called Basel III, introduced by Basel Committee on Banking Supervision since the economic crisis, forced the banks to squeeze the credit. This era of stabilization of the banking system is coming close to its goals, and probably the monetary squeeze the banks caused will end. All these occurrences will bring instability to the world economy.
4. While the monetary policy strongly influences the aggregative demand, it has relatively little direct influence on the aggregative supply. Its direct influence on supply is mainly through the interest rate.
The aggregative supply is more influenced by technological development, and/or by limited resources which can have different nature. The main limited factor in last years has been the negative environmental impact of the economic activity. At first it forced the producers to introduce expensive equipments and cleaning systems into the production processes. Now the new events are more intensive and catastrophic. It is caused more often by natural disasters caused by changes in the world environments. (as example i would use the Fukushima nuclear disaster, even if not caused directly by the human activity, it could have such an immense consequences, because of the concentration of nuclear power plants in one, not very appropriate spot, due to lack of alternative more appropriate locations. All these economic events have limiting influence on the supply side if the economy. Of course these limiting factors are mostly balanced and even overbalanced by the technological developments, but as well known, technologic development is unpredictable, so is its economic, political and social influence.
5. What the recent economic history teaches us is that monetary policy on the global scale is able to moderate economic imbalances between the countries, and also on the time scale between the present and the future. But it is doing it through the tool of borrowing from those who accumulate assets in monetary form as savings, to those who accumulate it in physical form as investments in economic assets, be it tangible or intangible assets (knowhow, good will, etc.). Then when the day of repayment comes, and it doesn’t come in a smooth flowing way, but rather in big chunks the whole system tends to collapse. The collapse is not good for those who saved their money, and not to those who borrowed it with a perspective of future income and profits. The only one who can gain from this collapse are the financial sharks, who know how to react to any new financial circumstances, and who are close enough to the events to be the first to react. And as to my opinion their impact on the economy is mostly if not entirely only negative.

Consciosness, I and EUREKA


EugenR Lowy עוגן רודן

The problem of body and mind is one of the major questions the human intellect tries to cope with since the down of the humanity, either in religions or in philosophical terms. So what can be added to this subject after more than two millennium of intellectual activity with the subject? Few decades ago with the development of brain research, computer sciences, quantum physics and understanding the material behavior on the smallest sub-sub-atomic scale of individual electrons, the hard sciences joined the philosophers and started to ask the question, what is consciousness, what is this “I”, who is always with me, what is mind etc. To start to answer this question we have to try to go to the very start, and probably begin with a provocative “well chewed problem; “To most of the people it seems obvious what human body is, but they have no clue what this soul…

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War


War is more than a hell. It is a crossroad, where choices have to be made, without a way of return. In the war in every moment a decision has to be made and every decision can have catastrophic consequences. In the war you never really know what the outcome of the war will be. In war are no winners only losers. At the end someone will come out victorious, and most probably it will be the most evil and the notorious one ( viz. Gingishan, Atila, Sparta, the early Muslims, but also the more recent Stalin, Mao Zedong, Pol Pot, etc.). And if it is not enough, also when the ” good” wins the evil, you never now the long term outcome. Lets not forget, war is about gaining political power, and every political power corrupts on the long run. i try to think about cases of political leadership, that ruled for more than a decade and still continued to act out of righteous moral codes.
Yet, sometime a war has to be fought, when the enemies ideology is about your cultural annihilation. This was the case when the Nazism and the Communism implemented policy of cultural annihilation. But war is about doing acts of cruelty and injustice. Many times you can’t spare the innocent, because the innocent of today will be your enemy tomorrow, or because to save them while fighting the enemy would cost to many lives of your own. There are no nice wars, only cruel ones, there is nothing noble in war and in dying on the battlefield. Yet if a war has to be fight, better if you and your soldiers know and believe in the cause of the war. And this ability lost the West after WWII, when it exposed its criminal past. It is relatively easy to endorse faith in the necessity for cruelty among the hungry and the uneducated people, but hard and almost impossible among the full-fed educated ones. And I don’t remember when in the recent history last time the war winners where the well feed armies. Not in Vietnam, not in Algeria, and not even in Afghanistan or Iraq.

Romans, Jews


EugenRSays

The Romans had great respect to ancient religions and cultures, like the Egyptian and also Jewish, even if it was less impressive at the time. Probably it was because they had no ancient history of their own at beginning, and had to invent it out of Greek mythology. Culturally the Romans adopted mainly the Greek and partly the Egyptian culture. Only later after the Jewish war the Jewish culture became influential because of the Christianity.

  • Patrice Ayme Says:
    Thanks to eclipses, stories and archaeology, the founding of Rome by Romulus has been very precisely dated. I don’t remember the details, but they fit exactly the official Roman date of 753 BCE.

    Greek mythology was old by then. So it spread in the West. As I have explained, it had penetrated even Celtic lands.
    Romans did not tolerate human sacrifice religions. Both Christianism and Judaism, in my opinion, were playing around with the notion.
    Jewish mythology obviously came from the monotheist Pharaoh (Akhenaten) & queen Nefertiti.
    http://en.wikipedia.org/wiki/Akhenaten

    By 311 CE, the rule of too many fascist emperors made the empire ready of theocracy, and it got implemented, starting with the Balkan-British Constantine, in the next 70 years (Spanish Theodosius). No more tolerance then: only the Jews survived, even the Samaritans got near-exterminated.

    • EugenR Says:
      The Akhenaten theory is only one of the possibilities how Monotheism was created. The bible definitely has both sumerian and egyptian influences. The diety name Yahve most probably comes from norh Saudia, close to modern city of Akaba. If to believe to the story of Exodus as describing certain historical event, (check the story of hixos) this is the place to where the bible puts Moseses first accounter with God, and some of the modern scholars place to the same place the mount of Sinay.

      • Patrice AymeSays:
        This part of history is poorly known. What is known is that it was incredibly messy. It started with the invasion of the “People of the Sea” (Egyptian semantics). Some have even suggested that the ancient Israelis were ONE of the Peoples of the Sea, barely defeated by the Egyptian army, and then enslaved.
        So some have suggested, for this and other reasons, that the Israelis came from present day Kurdistan (then powering up).
        As you show, cultural elements came from all over.

        In a more general way, let’s point out we all have Middle Eastern origins, to a great extent, as confirmed by recent (2014 genetic studies). Our Middle Earth origins are political, cultural, racial (so to speak), and economic…

      • EugenRSays:
        The people of the sea attacked Egypt and the Hettitian Empire which they destroyed. They were not people of the region and probably did not speak Semitic language, otherwise they would be recognised by the two leading empires, who left about them writings, and also in Ugarit they find tablets about them. They also attacked Creets, Greece and even Sicilia. The historians think their decendens were the Plishtinians or the Greeks. There are also theories that they were some kind of rebels of different nations. After they destroyed the Hettitans and weakened Egypt, new nations appeared in the region like, the Hebrews, Greeks, Phenicians and the Phlistines. The Hebrews occupied the montain regions of land of Israel and the Phlistines were mainly on the sea shores and in the valleys.
        By the way, the most probable theory about the origin of the Hebrews according to the new archaeological findings is, that they were the common Kennany people, who rebeled some city states like Hazor and newly setled in the mountain regions. There they adopted new monotheistic religion brought to them most probably by some priests from Egypt.

Global thoughts


Answer to PatriceAym https://patriceayme.wordpress.com/2015/06/20/our-impotent-self-glorifying-leaders/

Dear Patrice, your blog of frontal attack on plutocracy exposes a certain political phenomena present everywhere, and the time came to explain what plutocratic phenomena means. To my understanding it is all about the rule off the few, who happened to accumulate economic wealth (capital) and political power. As contrary to it, the French revolution, and similarly the Russian revolution was about giving the chance to the people to take over the leadership. As it happens, none of these political systems was successful to secure decency, integrity, righteousness and fairness to the quiet majority of the society, those called the middle class. My definition of the modern middle class is “professionally skilled people, with no access to capital”.
As to the post revolutionary regimes in France or Russia, (but also Iran, Chine, South east Asia etc.), the failure of these political experiments was so colossal, that there is no need to speak about it in this forum. On the other hand, the “liberal-democratic” political system, introduced since WWII to the “West” is a different story. While still under the threat of Soviet dominance, it nourished the well being of the middle class, (more in Europe and less in US). But then with the collapse of the USSR, there seemed to be no alternative to their political system (Fukuyama, End of history). But the plutocratic forces immediately had loosen their previously self imposed reign. The result is a process of impoverishing of the middle class. With the new technologies, with its capacity supplementing most of the highly skilled work, the middle class lost its negotiation position against the ruling elites. The natural ruthlessness and plutocratic tendencies of the ruling elites, left out the self-imposed restrain from their political process. Very soon the impoverishing of the middle class started, with the international corporations practices of, tax sheltering, out sourcing of work to China and India, and introduction of modern technologies in many new professional jobs, previously occupied by highly skilled engineers and equivalently educated people, who in the one hand did not reach the top of the ladder in their profession, and on the other hand did not succeed to accumulate capital.
In the heart of this process are the international corporations, with publicly traded shares, that in one hand lost their connection to majority share holders, and are ruled by dominant minority stake holders and their emissaries, who exploit the position they gained, and stopped to play a fair play. Let me remain you that laissez-faire is not only about free trade, no government regulations, etc, but it means; “let it be fair”. So without fairness, meaning with monopolization of financial and political power, the so called capitalistic system is destined to be doomed. The 2008 economic collapse, was a direct remainder of what it can mean.
But the 2008 collapse resulted re-allocation of financial resources and change of capital flow within the capitalistic system. But there are other more major threats that put in danger the whole global social and economic system due to the collapse of postcolonial state-hoods in most of the Muslim countries, and Africa. These countries more than quadrupled population since their independence and their population still continues to grow. This happens when they are not able to create politically, socially and economically functioning statehood. The result is, population at such a despair, that parts of it are ready to endanger their and their children’s life to escape the misery in their homeland. Yet when reaching the secure shores of Europe, they bring with them the same cultural values, that brought their communities and states to this despaired situation. As this young, hungry population settles, it is in natural conflict with the wealthy older original European population, who holds most of the wealth and has cultural values so different to this largely Muslim immigrants. Yet these values enabled them to create the successful post WWII Europe.
On the other hand these new emigrants, continue to live according to their inherited culture, fueled by religious mysticism and conspiracy theory fairy tales. They are ignorant about the European history, cultural values, social and political arrangements. Add to it the destructive tendencies of degenerating the woman position in family and their right for education and equal social position to that of man, the conflict is inevitable. So they start actively to oppose the cultural values of the European population and try to crumble their society. But these European cultural values of endorsing rationality, mutual social guaranty, moderate solutions to political conflicts, are necessity to maintain the European welfare state. Without it we would see the same political phenomena that is destroying the political-social fabric of the Muslim and African world. Let me remain you, that the pre-WWII Europe, in spite of its achievements in science and technology, politically was not very different from the today’s Muslim world, even if got rid of the religious and traditional social values. So these destructive tendencies (fascism, communism, nationalism, etc.) still strongly prevail among many of the original Europeans.
To add to the problem of population dislocation due to the failed statehood in the Muslim and African countries, a new wave of ecological emigrants, as it is expected to come from the regions destroyed by the political in-activism in the environmental issues, and you have a perfect scenario for a new Hollywood disaster move.
On the other hand, humanity is on the threshold of many technological breakthroughs, that will bring us to the point of singularity, when the superior position of the humans on the globe is not automatically secured. It is easier than ever to imagine, that a transcendent being will take over the globe, to prevent from the humans to destroy all what they had culturally achieved.
Human existence came to a crossroad, where choices have to be taken.

Greece versus Eastern Europe.


You describe very clearly the agony of Greek people after 2010, who after all can’t be blamed for the fault of Greek plitical and economical elites of the past. Yet, EU is not only Germany, nation whose historical responsibility for the misery in many places of Europe prevails until now. Take country like Poland or Czechoslovakia, countries who vere the first victims of Nazi Germany. Then after the war they were victimized by the Stalinist USSR, and 25 years ago slipped out of this reign of evil with tooth and eye. And let me to remain you, these countries before WWII were economically among the most advanced nations in the world, as contrary to Greece of those days. Today, 25 years after the fall of Berlin wall, and after investing enormous effort to rebuild their economies and even more their society crippled by 40 years of despotism, humiliation, imposed policy of systematic destruction of local elites in every field, where these countries are? People in these countries until now had never tasted the welfare created by the post war western Europeans. Their standard of living is still under that of the post 2010 Greece. And lets not forget, as contrary to Greece, they are not victims of cynical local elits, but of two big European nations, they happened to be located in between.

Morality as science


The avoidance of scientists to inquire about morale questions scientifically leaves all the space in question of morality to religious or non-religious preachers, politicians and other kind of falsifiers. Education and scientific training seems to create people with higher integrity than any other activity of human intellect. It is probably caused by scientific method that doubt in everything is in its essence. Yet morality is about being right without doubt. The major question to be asked is, how to bridge between these two methods of thought.

Banks, currency, deficit


1. The annual World economic growth in the last 20 years with some exceptions was between 3-4 % (only negative year of 2% was 2008). It means the world economy almost doubled in these years, viz
http://lb-stage.economist.com/news/briefing/21582257-most-dramatic-and-d…
This increase created demand also for increased financial liquidity that was supplied by US$, and the result is the US deficit.
2. The Euro partly replaced US$ as world currency with some recent setback. I believe the Euro crisis is nearing to its end and and most probably Euro will be back in the near future. Yet, the European economy is a long term stagnating economy, due to demographic and political problems. So the Euro will never really have the capacity to compete US$ and endanger its position.
3. China with its increased self confidence, probably will start to shift its policy from exporting and net lending economy towards more balanced economy, with increased local consumption level. (This trend is already happening). If this process will be cleverly done, this process will be done with creating a stronger and internationally recognized freely convertible currency. The Chinese Yuan will be appreciated in real terms against the US$, Yen and the Euro (the alternative is inflation). This process, even if marginally damaging exports will only strengthen the position of China in the world economy.
4. As to unprecedented world economic growth, the modern economy is based on debts expecting to generate returns as interest and equity investment expecting high yields. This can be secured only while the economy is growing. Otherwise an economic crisis is inevitable. Yet if there will be no major technological breakthrough in the fields of energy, basic raw materials, accumulated environmental unbalances, this resources have their limits, and when reached their price jump is inevitable. The world economy will have to react to these commodity price increases caused by limited resources with slow down. This is why to try to solve the problem of low economic growth with encouraging increased consumption, like in US is a very short term short sighted policy.

5. While the western banks loans were consumers credit the Chinese banks loaned mainly to investment projects. At 2008 crisis it became clear which bank system has done better. To be a Chinese leader i wouldn’t run to western style banking system, leaving to the bankers full autonomy how to manage the depositors money. Yet banking system based on decisions of local politicians is also not a good solution. Maybe there is place to create a system, where the depositors have a say as to the credit policy of the banks? At the end of the day the depositors are the local population, and if the banks would be forced to act in harmony with them, the local politics would become also more democratically oriented.

Do You know yourself?


You know yourself out of social reflection  this opposes the Descartes idea of absolute loneliness of you, what he called the only certain thing that you can know for sure. As you meditate about yourself, you know yourself. The mind can also dream, day dream, self reflect inwardly. It can’t have senses directly without using the body. social interaction is also a body act.

You cannot think about two sentences at the same time, while you can make two acts of body at the same time and even speak in parallel .

Your mind consists of senses, memory, thinking by using words. Do you need words to be able to think? Can you think without words? The act of speaking definitely needs  words. From where you pull out from your memory words without knowing upfront which word to use next?

If  you  look in the mirror after long time you haven’t do it, you get a feeling a stranger is looking at you? If so, isn’t the perception of I just a learned phenomena, while without looking on yourself in the mirror you may lose it? What about feelings? Pain, emotions attached to sensations coming from your senses,  memories coming up to your mind arising emotion? logical structures that come from memory? Are all these learned phenomena?

Logical structures that are suddenly created-eureka kind of experience, are they a result of learning? Act of calculation in your head is it in words? Yes and no. If you make calculation on paper? in the moment of calculation do you understand the  essence of the number, its relative value or you just remember the multiplication table  ?
The thoughts come with the expressed word. expressed vocally,  in written form, or just in heart. Can be a thought without words? Meditation is a technique to stop not the thoughts but flow of words.

Can you know pain, without to call it pain? Can you know beauty,  disgust,  sorrow, fear, love, tenderness, green, red, nice, fast, hard, noisy, quite, noisy,  all words of description, without to call it so? Can you know tree, grass, land sky, words of material, without words? Yes the answer is  yes the same it will be with an act, if you are familiar with the act.

Can you know complete, partial, comprehensive, sequential, words of concept without knowing the words? The answer will be NO.

If no free will exists then do we exist? All this feeling of I is based on the concept of i want this and that.
You can look on the world from outside in or from inside out. From inside out it is rather observing than feeling, while from outside in it is rather feeling than observing.
What do we know about the One who is in charge of the mental I? Not too much.

EugenR Lowy עוגן רודן

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