Archive for November, 2011

November 28, 2011

I want the 13.5% of my life back! (which the shadow economy of Europe is stealing from me)

 

Based on the IMF data the shadow economy in European Union accounts for anything between 11.9 and 15.1% of its GDP or $14.53T*13.5%=$1.96 T per year!

There is more to that though because it also means that:

  • 13.5% of us plus all those that they are aware of the fact currently tolerate (read agree with) this practice which impacts on our behaviour and inevitably on all our social institutions
  • We as individuals pay at least 13.5% taxation then we should or
  • we work 13.5% more then we should or
  • we take 13.5% less pensions than we should
  • or receive 13.5% less medical care or
  • Taking 13.5% less holidays
  • Have 3% less growth (.135*.22=3%)  in our economies then we should
  • We have to work for more then 23 years in order to repay our countries’ debts
  • ….
  • Or a combination of the above and the most important
  • We are prevented from using a fiscal tool that can stop the European Fiscal Crisis in its track now!

Complaining though without any proposition is of limited value so here it comes:

Introduce the electronic only euro now…

Before you start judging the propositions, for its merit, do consider that it comes with additional benefits like:

  • Elimination of the drug trade (within five years provided we will control gold sales)
  • Elimination of illegal immigration and human trafficking
  • Reduction of street crime by 60%
  • Reduction of burglaries by 90% over 6 years (provided we control illegal goods export)
  • Increase in non European tourist spending by 12% (the amount people spend in addition when plastic cards are involved)
  • A whole new industrial sector that will be created in Europe and a boost in productivity
  • An additional positive argument in favour off the European Fiscal integration
  • Reduction on the environmental impact that illegal trades support
  • Add your own…

Now judge…

SM One of the Gaianomy think-tank founders

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November 27, 2011

Total collapse of the Global Economy by 2019, can it be true?

 

I was looking at global data for one of my projects and I checked how much is the Global Gross Domestic Product, or how much all humans produce in a year and it is approximately $63 T.

On the other hand the Global Government-only debt stands currently at $40.5 T http://www.economist.com/content/global_debt_clock.

By the way, the global household debt exceeds these numbers.  According to a study sponsored by Credit Suisse, global wealth amounts to $ 195 T,  https://www.credit-suisse.com/news/en/media_release.jsp?ns=41610 ,on the other hand global house hold debt amounts to 67.5% of the Global GDP of $63T or $42.5 T, https://www.allianz.com/static-resources/_assets/homepage/en/gwr2011/v_1315816862000/globalwealthreport2011en.pdf.

If we accept, that the average interest rate for Governments Bonds is 3% ,using the US as the average due to the nature of the USD a global currency  or $1.2 T http://observationsandnotes.blogspot.com/2010/11/100-years-of-bond-interest-rate-history.html , then the global growth, in order to eventually repay this debt, should be at least >3%…..Well guess what, IT IS NOT.

To be accurate it stands at 0.8% and its trend shows no signs of recovery!  If that is not devastating enough global inflation runs currently at 4.7%  http://www.gecodia.com/World-Inflation-up-again-in-May-2011_a1926.html

That means that instead of reducing the global debt, we increase it by [(3-0.8)+4.7% =6.9%]  per year. With this rate it will take anything between 12 to 15 years for all values reach zero (0) and anything between 6 and 9 years under the current economic model to reach a point of no return and a total crush.  

One might say that if you see the system overall then there is a surplus of (195-42.5-40.5=112 T) so somehow all these years of work of the humanity as a whole did not come up to nothing and of course you would be wrong. Just contemplate the fact that 93 to 97% of all money are fiat reduces this value to less then 10T in real values. How much can they last? I am afraid unless proven otherwise the 6 to 9 years is all we have.

So what do we do? The answer is simple correct the systemic deficiencies and start now!

We have one solution on the table Gaianomy more will be a welcome sign but please let us act.

November 26, 2011

There is a citizen-friendly solution to the Global Fiscal Crisis! (Part 3)

In the previous two Parts, we introduced you to the concept of Gaianomy and the first steps towards global institutional reformation.

Specifically in Part 1, we introduced the Human Institutions and way they influence societal behaviour, the way they combine to create complex forms and the mechanism through these forms shape our economic behaviour at a global and local scale.

Equally important, was the introduction of the concepts that:

  1. humanity and the environment are a single interconnected entity, a super-organism within which institutions operate in a similar manner as proteins within a human body and
  2. the manner by which the social and the economic dimensions of our society are connected, is suggesting that any economic measure will always affect the social and vice-versa.

Based on the above we concluded that in order to address the current crisis one has to modify the human (informal) institutions that combined to create the so called “Global Economy” instead of relying to pure fiscal measures or wait for The Markets to bring the “Global Economy” to order.

In Part 2, we introduced the first four changes out of a total of eight we feel necessary in order to exit from the crisis. These were, rethinking Globalisation and its governance needs, introducing the need for one world currency, one new standard the H2E that should replace the fiat and the golden standard and finally the abandonment of all physical representation of currencies in favour of the electronic one. We listed as well a myriad of benefits deriving from this.

 

Step 5 .

With these four fundamental institutional alterations in place the next step should be the re-valuation of work. There have been several propositions and a lot of sociology and economic papers have been devoted to the subject (see example in www.neweconomics.com) . The major idea behind them is the migration from the current narrow definition of productivity related valuation of one’s work, to one that accounts for one’s social contribution as well.

I’m really fond of it personally and I will show below the benefits of implementing it. That said, I personally believe we need to go one step further from the existing propositions and apply to it, macro-social and meta-social criteria. These are the net value to the global society as well as the net value of its environmental contribution (I use net, as inevitably negative effects will always co-exist even if they are at a very small percentage).

Rethinking and redefining work will be a no-mean social engineering feat. This will be the biggest institutional modification in the human history.

To pre-empt questions that may be raised, it will be unwise to move this institutional change into Step 1 instead of Step 5, in order to speed up the process and bring its monumental benefits forward.  I firmly believe that any such attempt will prove futile. To change this mega-institution one needs all the foundations and its constituting institutions in place and within them are all the redefined Globalisation, the Global currency and the H2E. We will need all of them before we are ready to rebuild this one.

The ways one can go about redefining work based on a universal framework of values, are not many and all, one way or another, are criteria based, criteria that carry these universal values and embed them within this redefined institution.

Until a better idea is presented I will propose that we use a hierarchical-needs points system based on weighted benefits, as appears to be the order according to crowd-sourcing internet analysis of fundamental values I attempted, namely:

  1. The environment as a whole (to what degree this is benefited or destroyed)
  2. The local ecosystems & the preservation of the species
  3. The Human Race (well being, medical advancements etc.)
  4. The Food production and Water sources management
  5. The Energy Production and the replacement of scarce resources and materials
  6. The Scientific and technological advancement
  7. The country
  8. The community (or enterprise/organisation)
  9. The family
  10. The individual

With the above list agreed (that is why we need the global institutions in place to debate such issues), all we have to do in addition is; a. to identify the net degree of contribution and b. the net degree of applicability (i.e. how many “units” will be positively impacted) to end up with the initial value of one’s work. Of course it is a bit more complicated then that and one should account for additional parameters with the list being by no means exhaustive, like:

  • The degree of mental dexterity
  • The degree of talent (inherited or acquired)
  • The degree of knowledge
  • The degree of experience
  • The time needed to reach average competency
  • The degree of dependence on external factors (systems or organism and energy needs)
  • The degree of innovation
  • The degree of ability
  • The extend of physical effort
  • The impact on one’s health
  • The risk of harming himself
  • The degree of reluctance across the population to undertake the specific duty and

Finally a parameter which will reflect the ratio between the global average and the specific country’s GDP at that point in time. (See below in step 6).

I will not propose a formula on how to calculate the above, even if I have one worked out of curiosity, instead let me offer an example of how this might work.

If we accept that the unit is an individual and the Human race equal 7 billion immediately a universally accepted climax from the first list can be agreed.

With this in place the next step will be to define for every task the degree of one or more of the applicable elements in the second list and lets name then B1 to B12 with each one able to take values between 1 and 100.

Then in order to calculate one’s contribution it will be enough to add or subtract (some of them have a negative sign) all elements that apply from the second list in their relevant degree and multiply the end result first by the (combined or not) contribution from the first list and finally by the GDP ratio mentioned above.

It is easy to understand under this system of interpreting work values and one’s remuneration, that manipulating numbers in front of a computer the actual job of an FX trader is definitely of lesser value than of the Prime Minister’s of that country!

Equally obvious is that an inventor of a device that deters 100% of all midges and mosquito from biting us should be rewarded higher then a singer with an average music global hit.

The immediate benefits of the above will be unimaginable and they are definitely in the wish list of all social movements in one form or another. Listing here only the major of them are:

  • Remuneration for the same work across the globe will become equal (gradually though as it will be influenced of that country’s current GDP) and with it
  • A new global equal rights’ charter can be at long last created
  • Low pay driven production-migration will be repatriated and with it
  • Air and sea pollution will be reduced drastically. This by itself maybe able to regulate emission levels beyond regulators dreams
  • New industries will spring next to where the resources are and with them employment education and infrastructure levels in underdeveloped countries rich in raw materials or with a farming potential will drastically increase
  • Illegal migration will cease (gradually though)
  • Human exploitation will decline drastically and with it human workers trafficking
  • Fiat money will be reduced to its final stage before total elimination
  • Patents will be unlocked and with it the open source system will be boosted
  • Organisation leaders remuneration packages will stop appearing in the news entries reducing this way the current social friction
  • Research will be given the biggest boost possible and with it scientific breakthroughs will follow
  • Non productive and parasitic functions in government level will cease to exist
  • Remunerations across the globe will be rationalised and the most important
  • Unemployment will decline everywhere
  • GDPs will be altered to a more realistic level with its absolute accuracy increasing overtime and with it the remuneration level in the country (or decreasing where the current GDP evaluation is artificial) with the people sharing a part of the added value they created
  • Inflation will be reduced further and it should become less then the currency micro fluctuations
  • National pension schemes will get a real boost
  • Country finances will start to recover as well as national dept and
  • The dream for social justice will come closer then ever before

For most countries and societies this will be a dream coming true at long last.

On the other hand needless to say that every single country, organisation (legal or illegal), social group and individuals currently enjoying benefits from the current situation will “revolt”. This move changes the institution of Capitalism into something totally different whereby human exploitation (the old institution of slavery) is not an active segment any more, so reactions should be expected.

The list of opponents will be endless and, thankfully, all effort will be futile.

You see institutions are made by the societies not their governance and in this case we can give at last the society control over the institution altering the status quo.

The rule is very simple. You vote for those only that have the path (the eight steps) into their manifesto.

This is the end of Part 3. In case you cannot stop reading, the whole text is available within the same blog.

Next week in Part 4, we will attempt the last major step that will free us all once and for all of this monstrous institution we created Profit.

Until then have a great week and enjoy life.

S.

November 25, 2011

Μια πρόταση για την Ελλάδα (applied gaianomy)

Εις απάντηση πλείστων συναφών ερωτημάτων για την πρακτική εφαρμογή της Gaianomy, ιδού μια από τις προτάσεις που μπορεί να προσφέρει λύση σε ένα από τα συστημικά προβλήματα της Ελληνικής οικονομίας, με μηδενικό πρακτικά κόστος εφαρμογής και μόνη προϋπόθεση μία γενναία πολιτική απόφαση:

Αναρωτιέμαι, εάν κάποιος πρόσφερε μια συνταγματικά ελεγμένη λύση η οποία:

  • θα έδινε από 12 έως 17 δις φόρους επιπλέον κάθε χρόνο
  • θα έριχνε στην αγορά από 30 έως 120 δις και επιπλέον φόρους της τάξεως του ενός τουλάχιστον δις κάθε χρόνο

  • θα εξαφάνιζε την φοροδιαφυγή σχεδόν παντελώς

  • θα μείωνε την ανεργία κατά 5 ποσοστιαίες μονάδες
  • θα εξαφάνιζε παντελώς τον χρηματισμό των δημοσίων λειτουργών

  • θα εξαφάνιζε τα ναρκωτικά από τους δρόμους

  • θα σταματούσε τα περισσότερα από τα εγκλήματα οικονομικής προελεύσεως

  • θα ενίσχυε τα έσοδα του ΙΚΑ κατά 20%

  • θα σταματούσε την παράνομη εργασία

  • θα εξαφάνιζε την επαιτεία

  • θα εξαφάνιζε την τοκογλυφία

  • θα μείωνε την μετανάστευση των Ελλήνων

  • θα εξαφάνιζε την παράνομη μετανάστευση

  • θα μπορούσε να εφαρμοστεί σε λιγότερο από 9 μήνες χωρίς έξοδα για το κράτος

ποιος Πολιτικός η ποιος πολίτης θα τολμούσε να εναντιωθεί στο μέτρο;

Η απαντηση είναι η μετατροπή ΟΛΩΝ ΤΩΝ ΣΥΝΑΛΛΑΓΩΝ ΣΕ ΗΛΕΚΤΡΟΝΙΚΕΣ (ΧΡΕΩΣΤΙΚΕΣ ΚΑΡΤΕΣ) ΚΑΙ Η ΤΕΛΕΙΑ ΚΑΤΑΡΓΗΣΗ ΤΗΣ ΥΛΙΚΗΣ ΜΟΡΦΗΣ ΤΩΝ ΧΡΗΜΑΤΩΝ ΟΠΩΣ ΚΑΙ ΤΩΝ ΕΠΙΤΑΓΩΝ ΣΕ ΟΛΗ ΤΗΝ ΕΠΙΚΡΑΤΕΙΑ.

υγ. Μεταχρονολογημένες συναλλαγές μπορούν να διατηρηθούν μέσω τραπεζών

November 19, 2011

There is a citizen-friendly solution to the Global Fiscal Crisis Part 2:

In Part 1, we introduced the Human Institutions and way they influence societal behaviour, the way they combine to create complex forms and the mechanism through these forms shape our economic behaviour at a global and local scale.

Equally important was the introduction of the concepts that a. humanity and the environment are a single interconnected entity, a super-organism within which institutions operate in a similar manner as proteins within a human body and b. the manner by which the social and the economic dimensions of our society are connected, which eventually are suggesting that any economic measure will always affect the social and vice-versa.

Based on the above we concluded that in order to address the current crisis one has to modify the human (informal) institutions that combined to create the so called “Global Economy” instead of relying to pure fiscal measures or wait for The Markets to bring the “Global Economy” to order.

The solution

So how do we achieve that?

Well, as I have said above we will need to, forcefully, if need be, “reengineer” our favourite failing political systems/institutions to their next evolutionary stage as soon as possible. You want to call the emerging structure meta-capitalism, meta-socialism, meta-..XYZ it makes no difference. If I am proven right I would suggest we call it simply gaianomy (the science of just distribution of our global resources) but I am not going to insist on this either. It is the socioeconomic institution we need to change and its evolution is more important then its name. The good news is that we do not need to invent new mathematical tools; we have all we need now!

Step 1&2

Where we can start from? Globalisation, should be the first step, we need a brand new understanding of what it means and a new interpretation of its minimum “governance” needs.

If we are going to build a really global institution pre-programmed to eventually “regulate” (remember the enzyme paradigm above) the way distribution of resources will benefit us all we need to accept and embrace the new “definition” of Globalisation. Benefit in this instance does not contain the notion of profit as stands today.

Nationalism in its current distorted form and its various local interpretations, which is one of the “proteins” within Globalisation, will have to evolve as well. The sooner we understand that there is a need for all of us, to be equally local and global at the same time in the near future, the better it will be.  I am happy personally to be recognised as European and “Earthian” at the same time. What ever I call myself I still breathe the same polluted air as everyone else, use the same internet and am affected by the same global crisis. Can any country be realistically self-sustained to survive in isolation from the global community?  No.

However, nationalism is an institution with very ancient roots and its resistance to change should not be taken lightly. Voluntarily changes in this institution will be accepted by its members only if they can see that the impact on the majority of their current interlocking with Nationalism institutions formal and informal will be positive, hence I am so optimistic of the outcome. I firmly believe that fanaticism-blinded rational aside (i.e. conservative nationalists that believe in the “free economy”, an oxymoron in itself), its proponents will consciously support the new definition.

From a governance perspective, we do have currently global formal institutions that can be used by the new institution of Globalisation, to become its initial gatekeepers. I refer to the UN in combination maybe with the World Bank Group. But, they will have to be empowered and manned with the best minds available. No offence was indented to the current delegates, but the men power I am referring to, will serve totally different functions in need of a different kind of scientists, institutional entrepreneurs from all social segments and legislators.

With such a governance body in place or even better in parallel with its creation, a new Global Currency can be created. This Global Currency can be a either a virtual one, that all other currencies will micro-fluctuate against in a predetermined manner or an actual one, that will replace all those wishing to adopt it as a standard from day one, or a combination of the two.

What will be the difference one may ask, why do we need a global currency?

Institutionally-wise it is easy to explain, in antithesis with the vagueness occurring if we used economic theories. The difficulty to explain its benefits is possibly why only one of the global leaders, the President of China (2010) has ever suggested it. Nevertheless we need this standard to be equal everywhere and as such to become the foundation for Globalisation to operate within, until that is, technology will be able to provide us with endless free energy to get reed of money all together.  There is though the practical site of the Global Currency and the benefits will be immediate:

  • Provided that all nations accept the principals of the new currency and the regulations are in place all currency exchange markets can cease to exist as unnecessary. Micro-fluctuations based on GDP variance can be agreed in advance.
  • This will immediately give an end to the current currency wars that affect the income of us all (mainly through the currently distorted value system, see below step 6)
  • Will normalise the degree of influence fiat-money profits have on the GDPs and
  • Normalise (partly) the remuneration within the financial institutions that caused such as  social anguish (i.e. OCCUPY demands)

Of course the eventual proponents of the global currency should expect an avalanche of arguments regarding the “impracticality” or the “impossibility to implement” and from doomsday theories to blackmail in order to prevent its implementation from the banks and all those with vested interests. However what ever the banks will do, the final word belongs always to the global society, us. You see banks are organisations and as such they are open systems belonging to and depending (how many of them we have bailed out currently?) on an environment.  The environment in this instance is the global community, us, the necessities of which has created the banks in the first instance and the environment will decide if they are still necessary or not to retain and in what form, not the other way around.

If eventually we will need to re-engineer this institution even at this early stage so be it (see forthcoming Part 4)

Step 3 & 4

These steps contain at first the introduction of an equally suitable Standard (as an institution this time), to base the new currency on, to forcefully “mutate” it away from being fiat (the root cause of the majority of our problems) into a back-to-basics one with a positive intrinsic value. I do not refer of course to gold or any other material when I use the term intrinsic, but rather to what has been proposed already a modified form of a time-based currency.

My personal favourite is H2E which stands for Human Effort Equivalent. It is a “mutation” of the time-based one and it stays clear of unrealistic notions like one hour’s work of a dentist, equals one hour’s work of its nurse or an hour’s work of a PM.

H2E has a series of interesting characteristics; it is universal, it is easily measurable, it is finite as it increases analogically with the Earth’s population and it cannot be misinterpreted.  In addition it is all inclusive, as it can take under consideration both the physical and mental effort needed. I will come back to this later as well (see below in the paragraph referring to value of work).

For the time being you can think of it as a new standard according to which all other values (work, raw materials, products, services etc.) will be measured against. As the relatively healthy working population of Earth, at any given moment in time, can be relatively accurately measured  we can agree of the amount of units (subunits and denominations) needed to be in circulation to represent all values on earth. Any global growth can be “absorbed” in this currency and need not increase the amount of units but rather its value (minus the results of inflation and debt repayments)! The idea is that every day products and services should remain almost constant in H2E equivalence!

Step 4 in this phase is a more radical one, the complete digitisation of all forms of transactions which despite the controversy that it might generate as an idea, will introduce immense benefits and the technologies to support it as well the global infrastructures are already in place. (i.e.  The credit card infrastructure in combination with the mobile phones’ one)

Benefits-wise the implementation of the H2E based Global Digital Currency (GDC or a “G” with two horizontal lines if I may propose a suitable sign) will:

  • Cause the fiat-currency driven inflation to decline immediately! (leaving behind only parts of the systemic one).
  • Eliminate a big part of the discrepancy between the banking and non-banking remunerations systems
  • Interrupt terrorist group financing channels
  • Enable the equal rights charter (see below Value of Work)
  • Create the conditions to stop illegal economic migration between countries (barter in kind is not enough to sustain illegal migration and no trafficker will accept barter as his remuneration)

Finally it will become the bedrock to build a new definition of work, connecting it at last with social contribution (see below)

At the same time on a more practical side it will:

  • Reduce drastically money driven street crime (if all money is digital only objects can be stolen which again cannot be exchange for cash)
  • Eliminate bank robberies
  • Stop poaching (Black markets will find it very hard to operate by reverting to other then cash)
  • Regulate syndicate managed prostitution and illegal gambling, which primarily operates with cash
  • Reduce within 5 years from its introduction the global drug trade by at least 80%. 5 years is the maximum time before the global privately owned stock in gold, that is practically the only other means of exchange beyond hard currency for drugs, will be depleted. Simultaneously with drugs becoming less on the street by the day, all drug related anti-social behaviour will diminish rapidly (see global statistics on drugs related crime) with the effect reaching some of the route causes of civil wars (see Mexico, Afghanistan etc.)
  • Impact positively on gang cultures across the globe as the loss of their operational capital will reduce their attractiveness as alternative to work options
  • Eliminate practically overnight government corruption and officials’ briberies (current corruption statistics suggest that more then 90% of transactions are made in cash)
  • Reduce reoffending ratios in relation to non-violence crime that are primarily of financial nature
  • Last but not least, the links between enterprises, organisations, political parties, public servants and individuals with vested interest in the continuation of the existence of black markets, illegal trade, human trafficking, drug trade, weapons trade, It will immediately be unveiled. It will be easy after that to know whom not to vote in the next election.

Of course once again, a fierce reaction of The Markets, and The Banks should be expected, in order to delay its implementation as well as a monumental legislation and negotiations marathon between the proponents of the change and those controlled by the Markets and the Banks.

Drug Cartels, Organised Crime Syndicates, Black Market shadow organisations even Sovereign States in a covered way are expected to fight tooth and nail to avoid the implementation of this institutional change.

However, from the moment that people will know what to expect and why, all these “actors” will have lost the game before it begins. They cannot possibly control all politicians and all legislators, so fear not.

If on the other hand they can offer us a better alternative, a step change that can achieve all the above mentioned benefits sooner I will be the first to vote for their preferred politicians.

This is the end of Part 2. In case you cannot stop reading, the whole text is available within the same blog.

Next week in Part 3 we will see how the new Currency and the new Standard allow us to implement the most fundamental institutional change ever proposed the modification of the institution of Work!

Until then have a great week and enjoy life.

S.

November 13, 2011

There is a citizen – friendly solution to the Global Fiscal Crisis: Part 1

After popular demand we decided to publish the “Gaianomy” theory in “palpable” shanks

Prologue

There is a citizen-friendly solution to the global crisis! After almost five years of research I reached a point whereby the study of institutions and organisational structures was connected into a promising analytical tool. This tool creates virtual prisms that separate institutional “light” to its component “colours” which are much easier to study. Post its conception, it was inevitable that one would be tempted testing its usability against current social problems like the Global Crisis.

Escaping from the maze of obstacles, our current complex socio-economic theories create, when one is planning for specific outcomes (i.e. reducing unemployment, control migration, reduce debt) is almost a futile exercise, as most policy makers discovered to their dismay recently. Too many external parameters influence the outcome rendering it unpredictable.

Analysing however, the same above problems using the new institutional analysis tool led me to viable solutions, to all of the above and much more. That said, the accuracy of my hypothesis, regarding the better solution, is in need of a peer review to become a valid theory so, here I submit my findings and, please, comment.

To be noted, that below I present only the path to the desired outcomes and I omit the analysis, for three main reasons.

A. it was not in the intention of this paper to present a new institutional theory but to offer an alternative view using relatively easy to communicate notions

B. To provoke a debate with similarly thinking scientists and activists from all disciplines without confining their rational within a limited framework and

C. To move, the inevitable, debate towards the social domain, instead of the highly technical socio-economic or institutional analysis one.

I am happy though if one is interested to take him through basics of the actual analysis.

The Socio-economic Framework

We call in sociology an “institution” everything that describes a recurring social behavioural pattern. Analysing social problems, in this instance the global crisis, under their prism is similar to a brain scan but without the deterministic downside and the theoretical “noise”. You do not care what the muscles that move are, the nature of these muscles or the nutrients they need but rather the part of the specific brain circuitry that causes muscles to move and the chemistry behind it. It so much simpler then the “rational” way through the maze of the economic theories as it is currently attempted by the EU, the US, the IMF, etc. and it is my explanation why so many great minds around the globe do not have any holistic tangible theory to present (Google “solution to the global crisis” to see what I mean).

We as a society created over the millennia thousands of these institutions. Some of them were genetically programmed in our brains deriving directly from prime instincts like Foraging, Grouping or Nature-observing while other evolved from the them, examples that spring in mind, Farming, Animal Domestication or Fighting. They started to pile up and combine between them to create new more complex ones from the moment two people started doing the same thing repeatedly with the observing others following their paradigm.

As I see things, after so many years of studying the field, institutions are very similar to DNA segments in their nature, they can combine in infinite ways to produce social “proteins” like Democracy or social“enzymes” like Profit that catalyse social reactions, acting like tiny social machines that alter social bonds and create new “social molecules”, all the time.

I appreciate that I used far too many “technical” terms in just one paragraph so, allow me make it simpler; allow me tell you our brief institutional story not dissimilar as you will discover to the socio-economic ones you may heard.

Once, humans were primarily resource-seeking Nomadic with a primitive Economy, until Settlements where created wherever resources were in abundance and the consequence of which was the creation of Farming and Animal Domestication. The family based settlements became Tribes by the means of mainly an interbreeding process between settlements. The tribes expanded and settlements transformed into villages and the villages into the first towns.

That is where the first real troubles begin hand in hand with progress, as the increase in population and the depletion of readily available resources in the vicinity created conflict and War which in its turn created the people champions and Kingship and Slavery. That in combination with the inevitable Division of Labour within the towns created the Classes while the lack of locally available resources gave simultaneously rise to the Markets and Trade.

Division of labour, the markets and the trade combined with slavery gave rise to, a new form of the previously effort vs. reward, Profit. In parallel the earlier introduced Barter the markets and the kingship gave birth to Money as a Standard and that in its turn to Currency until eventually all DNA segments needed to create Capitalism, Socialism and the rest of our theories where in place.

As the story goes new institutions kept accumulating, the markets shaped Consumer behaviour which combined with the profit-driven need of the Growth-driven societies to synthesise Credit and Banking. The transition from the early markets to the primitive first banks lasted less then a 1000 years and it served us well for the last 6500 after that (or not).

Progress for as long as each one of us keep thinking in a different way is guaranteed so each and every one of the institutions (in italics), briefly described above, kept combining and evolving with the help of institutional entrepreneurs altering the overall societal DNA.

The settlements evolved into villages the villages into towns, the towns into city states, the city states into kingdoms that gave birth to empires and back into countries the countries into Unions and inevitably into one Global Union

Money started with being a simple shell, to intrinsic value currency (golden coins), to fiat currency, to fiat e-currency.

Primary Anarchy evolved into all recognised today forms of governance from Authoritarian to Constitutional Monarchy to Constitutional Republic to Democracy to Dictatorship to a very long catalogue of forms including Monarchy, Oligarchy, Plutocracy, Theocracy even Totalitarianism .

Political ideas followed a similar evolutionary path institutionalised from time to time into relatively stable forms to today’s one, with the Markets “regulated” Capitalism (and some forms of Socialism i.e. China, Russia etc.) being currently the standard that most countries follow.

Until 5 years ago, one could even suggest that this was a good ending to our story overall and an excellent foundation to build our future. But at the same time, in a yin and yang type symbiosis, poverty was at its highest point, the environment is suffering, the credit crush global events aftermath keeps policy makers and economists sleepless, war zones keep accumulating, vital natural resources are misused in an alarming rate, public anguish mutates into violent forms, the North African Nations one after the other demanded an end to the previous political forms, new reform movements like OCCUPY start to take shape…. the list is endless.

Based on recent events, it becomes apparent, more then every other time in the past, that there is an urgent need for reform. A reform obviously dissimilar to the futile one that is attempted currently, a reform that touches evenly all parts of the globalised socio-economic environment, a rather radical one.

It is my belief that this should target the very deep root causes this time around, which is our cherished institutions described above, nothing else will suffice. Irrespectively of one’s socio-economic inclinations there is a consensus on the fact that institutions shape our behaviour and it is these which need at long last to evolve or be even be replaced. The suffering deriving from their current outdated form becomes bigger by the day across the globe. To use a metaphor we need to rewire our collective brain circuitry and not try forcing our muscles in before the consequences become irreversible.

Even without the institutional interpretation of problem, there is a rapidly growing mass of evidence suggesting that the Global Crisis appears to be the end result of the decisions of the various political actors around the globe, the majority of which utilising a form of Capitalism or Socialism. The fact leads to the inevitable conclusion that the problem lies within the foundations of our political systems.

Based on both of the above mentioned points of view, It appears that our dear Capitalism, Socialism, and the rest of the political systems current forms are on their last legs after 6500 of evolution, with their basic constituting primary institutions the Economy, the Labour, the Capital, the Markets, the Money, the Profit and Information all in desperate need of radical reform.

I need to clarify at this point the fact that institutions may appear on first glance similar across nations, however, their governance and the artefacts we created to support and enhance them, as well as their use, depends primarily on local “interpretations”. In other words what other sub-institutions the local population combined in order to create them.This is the primary reason that localised policies (EU, US etc.) are unable to correct the problems of the otherwise interconnected world.

So, returning to the primary institutions I was referring above that are in need of reformation, I will start with the Economy, one of the most archaic institutions.

Economy in its pure form means distribution of the “household” resources. Now consider this oxymoron; everyone currently is talking about The Global Economy, pick up every newspaper or internet news channel you wish to see what I mean as if it is something real. But please take a moment to contemplate, do we really have one? Who exactly is in control of distributing the Global Resources to all the citizens of this planet, The Markets? You guessed it right NONE. Countries are too weak to impose global legislation, our formal global institutions (i.e. UN) are not empowered to do so and The Markets have no interest or the necessary mechanisms to be doing so either. The exact opposite is actually true, as The Markets have every interest in keeping things the way it is, as one of the ways they make money is by taking advantage of the scarcity of materials locally, due to the labour-wage-driven unbalanced distribution of the production centres. Bottom-line is that WE DO NOT HAVE A GLOBAL ECONOMY and we should give an end to this distorted notion.

Labour as an institution and I touched on it above dictates the measurement of value of one’s contribution to society. Work rights, employment terms, rewards, male-female equal rights, social justice etc. all derive from or contain it and by interlocking create the framework that gives definition to its wider meaning. Under globalisation though, most links within the framework have cease to exist. Think for a moment the difference of a US based singer who sells his songs through media hubs, with a farmer in Afghanistan or a public servant in Sweden. Do they really have anything like a similar labour framework?

To cut the long story short the same distorted variances and broken frameworks stands true for the Capital, The Markets, the Money, and the Profit. Every single one of them has acquired a different, mutated form across the Globe and it is influenced in a different way by local legislation. The myth that The Markets can regulate the (non existent) Global Economy is BUSTED as they would say in the popular American TV series at least from an institutional analysis perspective. Similarly all attempts from Governments, Union or the G20s are destined to fail because the foundations that should support the “corrections” are not stable but floating in a socio-economic “swamp”. The wrong decision we made back in 1972 and the corporate greed driven fiat-money economy we created cannot sustain enforcements any more. It would be impossible other wise for a small country like Greece to be able to affect the “Global Economy”. We need to create a new foundation structure this time on bedrock, below those of our current socio-economic structure. It is not going to be either easy or quick. It might take years but it has to be this time a viable and long term solution.

Next week in Part 2 I will introduce the Solution until then have a great week. S

November 12, 2011

We are in safe hands!

Saturday morning and you sit in front of your laptop browsing the news feeds. “Daddy” your elder son asks you.

I need to write an essay on the problems we face as humanity, any ideas?”. You give it some thought and then …enlightenment. “Have a look at the G20 summit communiqué” you say. “What ever they try to correct should reflect our current problems” and certain about the wisdom of your suggestion you go back to your browsing.

A couple of days later your son comes back. “Daddy,” he starts again “are you sure that this is the right answer? I went through it all. The title of the final declaration document has nothing to do with the content and the issues that I had in mind, have nothing to do with what they suggest! Are you sure that these are our immediate problems? How exactly BUILDING OUR COMMON FUTURE: and RENEW… COLLECTIVE ACTION FOR THE BENEFIT OF ALL can be solved with fiatcurrency and a dash of influence on climate change…as they say. Has your generation gone totally mad? “

http://www.g20.org/Documents2011/11/Cannes%20Declaration%204%20November%202011.pdf

November 6, 2011

On the the 2010 tax reform bill of Greece (a prophetic text)

Η επιτυχία της φορολογικής «μεταρρύθμισης» που η ελληνική κυβέρνηση προσπαθεί να εισαγάγει, θα εξαρτηθεί κυρίως από το βαθμό ευκρίνειας που αντιλαμβάνεται τις δομές μέσα στο ελληνικό κοινωνικό σύστημα. Πιο συγκεκριμένα χωρίς να αναλωθώ σε ακαδημαϊκές αναλύσεις τα γεγονότα σύμφωνα με την άποψή μου είναι: Η αντίσταση στην αλλαγή οποιουδήποτε κοινωνικού συστήματος αντιπροσωπεύει το «φόβο» του συστήματος για απώλεια της ισορροπίας του. Στην περίπτωση της Ελλάδας η ισοροποία προσδιορίζεται από την υφιστάμενη αναλογία μεταξύ της φορολογητέας και αφορολόγητης οικονομίας. Εάν κάποιος διανείμει την φορολογική συμπεριφορά των Ελλήνων θα καταλήξει σε μια καμπύλη με μορφή «καμπάνας» στην οποία στο χαμηλότερο άκρο της βρίσκουμε εκείνους που δηλώνουν όλο το εισόδημά τους, στο μέσο εκείνους που το δηλώνουν σε έναν βαθμό και στο ανώτερο άκρο εκείνους που «αποφεύγουν» να δηλώσουν οποιοδήποτε εισόδημα, για οποιοδήποτε λόγο νομικό ή όχι. Από κοινωνικής πλευράς, η μέση της καμπύλης συμπεριφοράς του συστήματος είναι αυτή που κρατά το σύστημα σταθερό με το βαθμό σταθερότητας να εξαρτάται από τον βαθμό διαφοροποίησης (όσο μεγαλύτερος τοσο καλύτερα) και της διά-συγγενικής πολυπλοκότητας μέσα σε αυτή. (Να σημειωθεί ότι ο ασφαλέστερος τρόπος να καταστραφεί η σταθερότητα ενός συστήματος είναι η ελαχιστοποίησης την ποικιλομορφία και η όδευση προς τα δύο διπολικά άκρα όπως προτείνεται αυτή την περίοδο από πολλούς εισηγητές και με την οποία διαφωνώ). Λόγω των ανωτέρω, η ταχύτητα της αλλαγής, και αναφέρομαι στο βαθμό αλλαγής που εισάγεται σε ολόκληρο το σύστημα, μειώνεται ανάλογα με τη σοβαρότητα που γίνεται αντιληπτή η «απειλή» από το ίδιο το σύστημα (τους οπαδούς της φοροδιαφυγής) ενώ παράλληλα αυξάνεται αναλόγως και η αντίθεση στις συνολικές προτάσεις. Θα πρέπει να κατανοηθή επίσης, ότι η αντίσταση στην αλλαγή μπορεί να προέλθη όχι μόνο μέσα από το σύστημα αλλά από το περιβάλλον του συστήματος (επειδή οι κοινωνίες είναι ανοικτά συστήματα) όπως η ΕΕ η τμήματα της παγκοσμοίου κοινότητας. Συνεπώς, θα πρέπει να ληφθή υπ’όψην η συνολική αντίσταση τόσον η εσωτερική όσο και η εξωτερική, προκειμένου να υπολογιστεί το «κόστος» για την επίτευξη της επιθυμητής αλλαγής. Πέραν ενός σημείου καταναγκασμένης αλλαγής σ’ ένα υποσύστημα (όπως η φορολογητέα οικονομία) από το ίδιο το σύστημα, μπορεί να καταστρέψει συνολικά αυτό το υποσύστημα χωρίς ωστόσο, το ίδιο το σύστημα να μπορεί να αποφεύγει τις συνέπειες. Υπάρχουν εν τούτοις «ασφαλέστερες» προσεγγίσεις. Η εξελικτική αλλαγή παραδείγματος χάριν είναι η καλύτερη δυνατή μορφή αλλαγής που ένα σύστημα μπορεί να υποβληθεί χωρίς να επηρεάσει την ισορροπία του ή να διακινδυνεύσει μια βίαια «αλλεργική» αντίδραση. Από την άλλη πλευρά, η εξελικτική αλλαγή είναι κάτω από κανονικές συνθήκες πάρα πολύ αργή για να αντιμετωπίσει την επείγουσα ανάγκη που απαιτείται στην προκειμένη περίπτωση. Έτσι, η ερώτηση στήν οποία τελικώς καλούμαστε να απαντήσουμε είναι: πώς κάποιος μπορεί να επιτύχει την «ελεγχόμενη» εξελικτική αλλαγή αντί της «επιβαλόμενης» αλλαγής, για να ικανοποιηθή επίσης η ανάγκη για ταχύτητα; Την εξελικτική αλλαγή μια και είναι πολύ πρόσφατη έννοια μπορεί να την φανταστεί κάποιος ως “surfing” (ανάβαση) στα κύματα της παγκόσμιας αλλαγής και επηρεάζει τα συστήματα βαθμιαία αλλά πολύ ποιο γρήγορα απο συνήθως (πχ. Μόδα, είδη μουσικής , χρήση του διαδικτίου, κινητή τηλεφωνία κτλ) από μέσα καθώς επίσης και από έξω. Από τη φύση της, και είναι μια υπόθεση που μπορεί να κάνει κάποιος εκ του ασφαλούς, στοχοθετημένα «κύματα γνώσης/επιροής» που κάποιος μπορεί «να οδηγήσει», συμβατά σύστημα με τα υπάρχοντα (συνολικά) οικονομικά κύματα μπορούν να «αναγκάσουν» την επιτάχυνση της εξελικτικής αλλαγής και να την κατευθήνουν στην επιθυμητή κατεύθυνση. Ωστόσο, κάποιος πρέπει να καθορίσει σε ποιο βαθμό, το χρησιμοποιημένο «κύμα γνώσης/επιροής» θα έχει επιπτώσεις σ’ αυτόν τον οργανισμό και την ισορροπία του. Με τ’ ανωτέρω θπ’ όψην κάποιος πρέπει να απομονώσει τα υποσυστήματα που μπορούν να δημιουργήσουν τη διαφορά (ίσως χρησιμοποιώντας τεχνικές οπως το 80/20 του Παρέτου) και να εφαρμόσει εκεί μόνο τις αρχές της εξελικτικής αλλαγής. Σε τι θα έπρεπε να στοχεύσουν αυτές οι αρχές της εξελικτικής αλλαγής και πώς μπορεί κάποιος να επιτύχει μια ελεγχόμενη εξέλιξη αντί μιας καταναγκασμένης αλλαγής; Λοιπόν, βλέποντας την ελληνική οικονομία εκ του μακρώθεν και έχοντας εμπειρία από πρώτο χέρι θα σύστηνα, χωρίς τα παρακάτω να αποτελούν τις μοναδικές λύσεις:  Να στοχεύσουμε την κοινωνική αποδοχή της φοροδιαφυγής σαν θεσμό αντί της επιβαλόμενης φοροείσπραξης, ετσι ώστε να μετατραπεί σε ελεγχόμενη αποφυγή. Αυτό μπορεί να επιτευχθή παραδείγματος χάριν με τη συγχώνευση Μικρομεσαίων Επιχειρήσεων σε μεγαλύτερες επιχειρήσεις ή αλλες επιχειρησιακές μορφές όπου η φοροδιαφυγή να ήταν ενάντια στα αρχικά κίνητρα που τις δημιούργησαν (φοροαπαλλαγές με βάση την ετήσια αύξηση του κύκλου εργασιών;)  Να μειωθεί η σύνδεση της εννοίας της κοινωνικής θέσης με το χρήμα (που παροτρήνει δημόσιους υπαλλήλους να ενεργήσουν παράνομα κάτω από την κοινωνική πίεση) με την εισαγωγή νέων μορφών κοινωνικής επιβεβαίωσης (ανταμοιβές για την καινοτομία ίσως, πρόσθετα κοινωνικά προνόμια με τη χαμηλότερη νομισματική αξία; Οι επιλογές είναι ατελείωτες)  Να εφαρμοστούν έξυπνοι στόχοι παραγωγικότητας στην εργασία των δημόσιων υπαλλήλων, σε συμφωνία φυσικά με τις συνδικαλιστικές ενώσεις που να οδηγούν εντούτοις και σε πρόσθετες ανταμοιβές σε περιπτώσεις υπερπαραγωγικώτητας καθώς επίσης και την απόλυση για επαναλαμβανόμενες αποτυχίες. (Ίσως ένας νέος νόμος θα απαιτηθή που θα χρειαστεί τη δημόσια υποστήριξη και αμφιλεγόμενα την πρωτοβουλία των δημόσιων υπαλλήλων εάν πιστεψουν στην ιδέα)  Να δωθούν ρεαλιστικά κίνητρα για όλους τους μισθωτούς να μείνουν εν υπηρεσία αντί της μετάβασης στη σύνταξη έως ότου ανακτηθούν τα οικονομικά των συνταξιοδοτικών σχεδίων (πρόσθετη σκέψη ίσως απαιτείτε όταν πρόκειται για δημόσιους υπαλλήλους)  Να συνδεθεί το επίπεδο σύνταξης με τη συνολική συμβολή της διάρκειας εργασιακής ζωής των πολιτών  Να προωθηθούν σχέδια κινήτρων που μπορούν να προσφέρουν την εισοδηματική ανακούφιση/παραγωγή στις οικογένειες από την υιοθέτηση των εναλλακτικών, προσανατολισμένων προς την οικογένεια επιχειρήσεων  Να δωθούν κίνητρα για οικογένειες και επιχειρήσεις να μεταναστεύσουν σε μικρότερες κοινότητες μακρυά από τις πόλεις, έτσι ώστε να μειωθή ο κοινωνικός ανταγωνισμός, τα έξοδα σε υποδομές πόλεων και να βοήθειθή η αποκεντρώσης των νεωτεριστικών κέντρων  Να προετοιμαστεί το έδαφος προς την ηλεκτρονική οικονομία με την αναβάθμιση των υποδομών διαδικτύου που θα βοηθήσει τις online επιχείρησεις και τις συναλλαγές από τις οποίες η φοροδιαφυγή είναι σχεδόν αδύνατη  Να επιταχυνθούν οι διαδικασίες για την διμιουργία νέων εταιρειών και τους εναλλακτικούς τύπους επιχειρήσεων εκτός του τουρισμού  Προωθήση on-line αγορών με τις οποίες οι συναλλαγές μπορούν να ελεγχθούν και η ευκολεία του ελέγχου είναι προφανείς  Να δωθούν κίνητρα (μειωμένος Φ.Π.Α;) για τις αγορές μέσω των χρεωστικών καρτών που επιτρέπουν τον εύκολο έλενχο των συναλλαγών και αποθαρρύνουν τη χρήση των μετρητών που διευκολύνη την παραοικονομία .  Να επιταχυνθούν οι διαδικασίες της χρηματοδοτησής όλων των επιχειρήσεων, συμπεριλαμβανομένων των προαναφερθέντων, οι οποίες δηλώνουν το εισόδημά τους πλήρως, και η εισαγωγή νέων μεταβλητών μηχανισμών χρηματοδότησης μέσω των τραπεζών (που εδρεύουν ίσως στα κριτήρια όπως το μέσο φόρο ανά υπάλληλο;). Στις τράπεζες θα πρέπει να δωθούν τα κίνητρα για να επιτευχθεί αυτό.  Να προσφερθούν κίνητρα για τη μετανάστευση στην Ελλάδα των επιχειρήσεων από τις χώρες όπου η φορολογική πληρωμή θεωρείται κοινωνική υποχρέωση, για να αλλάξουν το σύστημα εκ των έσω. Αυτό δεν πρέπει με κανένα τρόπο να στοχεύσει τις ναυτιλιακές εταιρίες αλλά πρέπει να είναι όσο το δυνατόν πιό συμπεριλαμβάνον.  Να προσφερθούν κίνητρα στις ελληνικές ιδιωτικές εταιρείες για να συγχωνευθούν με τις επιχειρήσεις που προέρχονται από το εξωτερικό ειδικότερα από χώρες όπου φόρος-ως-κοινωνική-υποχρέωση είναι εμπαιδομένος  Να ενθαρρυνθεί η δημιουργία online επιχειρήσεων που πωλούν τα προϊόντα και τις υπηρεσίες τους στο εξωτερικό όπου η φορολογία παράγεται κατά τη διάρκεια της online συναλλαγής, ικανή να ελεγχθεί και απο όπου τα φορολογικά έσοδα μπορούν να αυξηθούν πέρα από τις προβλέψεις κυβερνητικών προϋπολογισμών  Να υπερφορολογηθούν οι αγορές που ευνοούνται από τους φοροφυγάδες στην πηγή τους. Ζητήστε από το ίδιο το κοινό να δημιουργήσει τον κατάλογο, έτσι κανένας δεν θα παραπονεθεί (επίσημα).  Να παρέχετε φορολογική ελάφρυνση στις επενδύσεις σε νέα καινοτόμα προϊόντα συμπεριλαμβανομένου του φορολογικού ελέγχου/των υπηρεσιών οργάνων ελέγχου ακόμα κι αν η επένδυση (σε έναν βαθμό) προέρχεται από προηγούμενη φοροδιαφυγή Ελπίζω να είναι προφανές ότι σε όλες τις ανωτέρω προτάσεις δεν υπάρχει ούτε ίχνος καταναγκασμού ή σημεία κοινωνικής φρήξεως και είναι όλες παραδείγματα θετικής αντιμετωπησης του προβλήματος και συμβατά με την έννοια της εξελικτικής αλλαγής. Ειλικρινά πιστέυω οτι σε συνδιασμό με την παράλληλη εισαγωγή προτασεων γιά επιπρόσθετη άμεση και έμεση φορολόγηση (που είναι δυστυχώς σε ένα βαθμό αναπόφεφκτα) μπορούν να ελαχιστοποιήσουν την επικείμενη κοινωνική αναταραχή. Συγχωρήστε με για την έκταση της πρότασης και την ίσως ανεπιτυχή μεταφραση από την Αγγλική.

November 5, 2011

There is a citizen-friendly solution to the global fiscal crisis

Prologue

There is a citizen-friendly solution to the global crisis! After almost five years of research I reached a point whereby the study of institutions and organisational structures was connected into a promising analytical tool. It is admittedly an unusual framework compared with mainstream institutional and historical institutionalism analysis alike. This framework creates virtual prisms that separate institutional “light” to its component “colours” which are much easier to study. Post its conception, it was inevitable that one would be tempted testing its usability against current social problems like the Global Crisis.

Escaping from the maze of obstacles, our current complex socioeconomic theories create, when one is planning for specific outcomes (i.e. reducing unemployment, control migration, reduce debt) is almost a futile exercise, as most policy makers discovered to their dismay recently. Too many external parameters influence the outcome rendering it unpredictable.

Analysing however, the same above problems using the new institutional analysis led me to viable solutions, to all of the above and much more. That said, the accuracy of my hypothesis, regarding the better solution, is in need of a peer review to become a valid theory so, here I submit my findings and, please, comment.

To be noted, that below I present only the path to the desired outcomes, for three main reasons.

A. it was not in the intention of this paper to present a new institutional theory but to offer an alternative view using relatively easy to communicate notions

B. To provoke a debate with similarly thinking scientists and activists from all disciplines without confining their rational within a limited framework and

C. To move, the inevitable, debate towards the social domain, instead of the highly technical socioeconomic or institutional analysis one.

I am happy though if one is interested to take him through basics of the actual analysis.

The Framework

We call in sociology an “institution” everything that describes a recurring social behavioural pattern. Analysing social problems, in this instance the global crisis, under their prism is similar to a brain scan but without the deterministic downside and the theoretical “noise”. You do not care what the muscles that move are, the nature of these muscles or the nutrients they need but rather the part of the specific brain circuitry that causes muscles to move and the chemistry behind it. It so much simpler then the “rational” way through the maze of the socioeconomic theories as it is currently attempted by the EU, the US, the IMF, etc. and it is my explanation why so many great minds around the globe do not have any holistic tangible theory to present (Google “solution to the global crisis” to see what I mean).

We as a society created over the millennia thousands of these institutions. Some of them were genetically programmed in our brains deriving directly from prime instincts like Foraging, Grouping or Nature-observing while other evolved from the them, examples that spring in mind, Farming, Animal Domestication or Fighting. They started to pile up and combine between them to create new more complex ones from the moment two people started doing the same thing repeatedly with the observing others following their paradigm.

As I see things, after so many years of studying the field, institutions are very similar to DNA segments or “animoacids” in their nature, they can combine in infinite ways to produce social “proteins” like Democracy or social“enzymes” like Profit that catalyse social reactions, acting like tiny social machines that alter social bonds and create new “social molecules”, all the time.

I appreciate that I used far too many “technical” terms in just one paragraph so, allow me make it simpler; allow me tell you our brief institutional story not dissimilar as you will discover to the socioeconomic ones you may heard.

Once, humans were primarily resource-seeking Nomadic with a primitive Economy, until Settlements where created wherever resources were in abundance and the consequence of which was the creation of Farming and Animal Domestication. The family based settlements became Tribes by the means of mainly an interbreeding process between settlements. The tribes expanded and settlements transformed into villages and the villages into the first towns.

That is where the first real troubles begin hand in hand with progress, as the increase in population and the depletion of readily available resources in the vicinity created conflict and War which in its turn created the people champions and Kingship and Slavery. That in combination with the inevitable Division of Labour within the towns created the Classes while the lack of locally available resources gave simultaneously rise to the Markets and Trade.

Division of labour, the markets and the trade combined with slavery gave rise to, a new form of the previously effort vs. reward, Profit. In parallel the earlier introduced Barter the markets and the kingship gave birth to Money as a Standard and that in its turn to Currency until eventually all DNA segments needed to create Capitalism, Socialism and the rest of our theories where in place.

As the story goes new institutions kept accumulating, the markets shaped Consumer behaviour which combined with the profit-driven need of the Growth-driven societies to synthesise Credit and Banking. The transition from the early markets to the primitive first banks lasted less then a 1000 years and it served us well for the last 6500 after that (or not).

Progress for as long as each one of us keep thinking in a different way is guaranteed so each and every one of the institutions (in italics), briefly described above, kept combining and evolving with the help of institutional entrepreneurs altering the overall societal DNA.

The settlements evolved into villages the villages into towns, the towns into city states, the city states into kingdoms that gave birth to empires and back into countries the countries into Unions and inevitably into one Global Union

Money started with being a simple shell, to intrinsic value currency (golden coins), to fiat currency, to fiat e-currency.

Primary Anarchy evolved into all recognised today forms of governance from Authoritarian to Constitutional Monarchy to Constitutional Republic to Democracy to Dictatorship to a very long catalogue of forms including Monarchy, Oligarchy, Plutocracy, Theocracy even Totalitarianism .

Political ideas followed a similar evolutionary path institutionalised from time to time into relatively stable forms to today’s one, with the Markets “regulated” Capitalism (and some forms of Socialism i.e. China, Russia etc.) being currently the standard that most countries follow.

Until 5 years ago, one could even suggest that this was a good ending to our story overall and an excellent foundation to build our future. But at the same time, in a yin and yang type symbiosis, poverty was at its highest point, the environment is suffering, the credit crush global events aftermath keeps policy makers and economists sleepless, war zones keep accumulating, vital natural resources are misused in an alarming rate, public anguish mutates into violent forms, the North African Nations one after the other demanded an end to the previous political forms, new reform movements like OCCUPY start to take shape…. the list is endless.

Based on recent events, it becomes apparent, more then every other time in the past, that there is an urgent need for reform. A reform obviously dissimilar to the futile one that is attempted currently, a reform that touches evenly all parts of the globalised socioeconomic environment, a rather radical one.

It is my belief that this should target the very deep root causes this time around, which is our cherished institutions described above, nothing else will suffice. Irrespectively of one’s socioeconomic inclinations there is a consensus on the fact that institutions shape our behaviour and it is these which need at long last to evolve or be even be replaced. The suffering deriving from their current outdated form becomes bigger by the day across the globe. To use a metaphor we need to rewire our collective brain circuitry and not try forcing our muscles in before the consequences become irreversible.

Even without the institutional interpretation of problem, there is a rapidly growing mass of evidence suggesting that the Global Crisis appears to be the end result of the decisions of the various political actors around the globe, the majority of which utilising a form of Capitalism or Socialism. The fact leads to the inevitable conclusion that the problem lies within the foundations of our political systems.

Based on both of the above mentioned points of view, It appears that our dear Capitalism, Socialism, and the rest of the political systems current forms are on their last legs after 6500 of evolution, with their basic constituting primary institutions the Economy, the Labour, the Capital, the Markets, the Money, the Profit and Information all in desperate need of radical reform.

I need to clarify at this point the fact that institutions may appear on first glance similar across nations, however, their governance and the artefacts we created to support and enhance them, as well as their use, depends primarily on local “interpretations”. In other words what other sub-institutions the local population combined in order to create them.This is the primary reason that localised policies (EU, US etc.) are unable to correct the problems of the otherwise interconnected world.

So, returning to the primary institutions I was referring above that are in need of reformation, I will start with the Economy, one of the most archaic institutions.

Economy in its pure form means distribution of the “household” resources. Now consider this oxymoron; everyone currently is talking about The Global Economy, pick up every newspaper or internet news channel you wish to see what I mean as if it is something real. But please take a moment to contemplate, do we really have one? Who exactly is in control of distributing the Global Resources to all the citizens of this planet, The Markets? You guessed it right NONE. Countries are too weak to impose global legislation, our formal global institutions (i.e. UN) are not empowered to do so and The Markets have no interest or the necessary mechanisms to be doing so either. The exact opposite is actually true, as The Markets have every interest in keeping things the way it is, as one of the ways they make money is by taking advantage of the scarcity of materials locally, due to the labour-wage-driven unbalanced distribution of the production centres. Bottom-line is that WE DO NOT HAVE A GLOBAL ECONOMY and we should give an end to this distorted notion.

Labour as an institution and I touched on it above dictates the measurement of value of one’s contribution to society. Work rights, employment terms, rewards, male-female equal rights, social justice etc. all derive from or contain it and by interlocking create the framework that gives definition to its wider meaning. Under globalisation though, most links within the framework have cease to exist. Think for a moment the difference of a US based singer who sells his songs through media hubs, with a farmer in Afghanistan or a public servant in Sweden. Do they really have anything like a similar labour framework?

To cut the long story short the same distorted variances and broken frameworks stands true for the Capital, The Markets, the Money, and the Profit. Every single one of them has acquired a different, mutated form across the Globe and it is influenced in a different way by local legislation. The myth that The Markets can regulate the (non existent) Global Economy is BUSTED as they would say in the popular American TV series at least from an institutional analysis perspective. Similarly all attempts from Governments, Union or the G20s are destined to fail because the foundations that should support the “corrections” are not stable but floating in a socioeconomic “swamp”. The wrong decision we made back in 1972 and the corporate greed driven fiat-money economy we created cannot sustain enforcements anymore. It would be impossible other wise for a small country like Greece to be able to affect the “Global Economy”. We need to create a new foundation structure this time on bedrock, below those of our current socioeconomic structure. It is not going to be either easy or quick. It might take years but it has to be this time a viable and long term solution.

The solution

So at long last what is the solution?

Well, as I have said above we will need to, forcefully, if need be, “reengineer” our favourite failing political systems/institutions to their next evolutionary stage as soon as possible. You want to call the emerging structure meta-capitalism, meta-socialism, meta-..XYZ it makes no difference. If I am proven right I would suggest we call it simply gaianomy (the science of just distribution of our global resources) but I am not going to insist on this either. It is the socioeconomic institution we need to change and its evolution is more important then its name. The good news is, that we do not need to invent new mathematical tools; we have all we need now!

Step 1&2

Where we can start from? Globalisation, should be the first step, we need a brand new understanding of what it means and a new interpretation of its minimum “governance” needs.

If we are going to build a really global institution pre-programmed to eventually “regulate” (remember the enzyme paradigm above) the way distribution of resources will benefit us all we need to accept and embrace the new “definition” of Globalisation. Benefit in this instance does not contain the notion of profit as stands today.

Nationalism in its current distorted form and its various local interpretations, which is one of the “proteins” within Globalisation, will have to evolve as well. The sooner we understand that there is a need for all of us, to be equally local and global at the same time in the near future, the better it will be. I am happy personally to be recognised as European and “Earthian” at the same time. What ever I call myself I still breathe the same polluted air as everyone else, use the same internet and am affected by the same global crisis. Can any country be realistically self-sustained to survive in isolation from the global community? No.

However, nationalism is an institution with very ancient roots and its resistance to change should not be taken lightly. Voluntarily changes in this institution will be accepted by its members only if they can see that the impact on the majority of their current interlocking with Nationalism institutions formal and informal will be positive hence, I am so optimistic of the outcome. I firmly believe that fanaticism-blinded rational aside (i.e. conservative nationalists that believe in the “free economy”, an oxymoron in itself), its proponents will consciously support the new definition.

From a governance perspective, we do have currently global formal institutions that can be used by the new institution of Globalisation, to become its initial gatekeepers. I refer to the UN in combination maybe with the World Bank Group. But, they will have to be empowered and manned with the best minds available. No offence was indented to the current delegates, but the men power I am referring to, will serve totally different functions in need of a different kind of scientists, institutional entrepreneurs from all social segments and legislators.

With such a governance body in place or even better in parallel with its creation, a new Global Currency can be created. This Global Currency can be a either a virtual one, that all other currencies will micro-fluctuate against in a predetermined manner or an actual one, that will replace all those wishing to adopt it as a standard from day one, or a combination of the two.

What will be the difference one may ask, why do we need a global currency?

Institutionally-wise it is easy to explain, in antithesis with the vagueness occurring if we used economic theories. The difficulty to explain its benefits is possibly why only one of the global leaders, the President of China (2010) has ever suggested it. Nevertheless we need this standard to be equal everywhere and as such to become the foundation for Globalisation to operate within, until that is, technology will be able to provide us with endless free energy to get reed of money all together. There is though the practical site of the Global Currency and the benefits will be immediate:

  • Provided that all nations accept the principals of the new currency and the regulations are in place all currency exchange markets can cease to exist as unnecessary. Micro-fluctuations based on GDP variance can be agreed in advance.

  • This will immediately give an end to the current currency wars that affect the income of us all (mainly through the currently distorted value system, see below step 6)

  • Will normalise the degree of influence fiat-money profits have on the GDPs and

  • Normalise (partly) the remuneration within the financial institutions that caused such as social anguish (i.e. OCCUPY demands)

Of course the eventual proponents of the global currency should expect an avalanche of arguments regarding the “impracticality” or the “impossibility to implement” and from doomsday theories to blackmail in order to prevent its implementation from the banks and all those with vested interests. However what ever the banks will do, the final word belongs always to the global society, us. You see banks are organisations and as such they are open systems belonging to and depending (how many of them we have bailed out currently?) on an environment. The environment in this instance is the global community, us, the necessities of which has created the banks in the first instance and the environment will decide if they are still necessary or not to retain and in what form, not the other way around.

If eventually we will need to re-engineer this institution even at this early stage so be it (see below in step 7)

Step 3 & 4

These steps contain at first the introduction of an equally suitable Standard (as an institution this time), to base the new currency on, to forcefully “mutate” it away from being fiat (the root cause of the majority of our problems) into a back-to-basics one with a positive intrinsic value. I do not refer of course to gold or any other material when I use the term intrinsic, but rather to what has been proposed already a modified form of a time-based currency.

My personal favourite is H2E which stands for Human Effort Equivalent. It is a “mutation” of the time-basedone and it stays clear of unrealistic notions like one hour’s work of a dentist, equals one hour’s work of its nurse or an hour’s work of a PM.

H2E has a series of interesting characteristics; it is universal, it is easily measurable, it is finite as it increases analogically with the Earth’s population and it cannot be misinterpreted. In addition it is all inclusive, as it can take under consideration both the physical and mental effort needed. I will come back to this later as well (see below in the paragraph referring to value of work).

For the time being you can think of it as a new standard according to which all other values (work, raw materials, products, services etc.) will be measured against. As the relatively healthy working population of Earth, at any given moment in time, can be relatively accurately measured we can agree of the amount of units (subunits and denominations) needed to be in circulation to represent all values on earth. Any global growth can be “absorbed” in this currency and need not increase the amount of units but rather its value (minus the results of inflation and debt repayments)! The idea is that every day products and services should remain almost constant in H2E equivalence!

Step 4 in this phase is a more radical one, the complete digitisation of all forms of transactions which despite the controversy that it might generate as an idea, will introduce immense benefits and the technologies to support it as well the global infrastructures are already in place. (i.e. The credit card infrastructure in combination with the mobile phones’ one)

Benefits-wise the implementation of the H2E based Global Digital Currency (GDC or a “G” with two horizontal lines if I may propose a suitable sign) will:

  • Cause the fiat-currency driven inflation to decline immediately! (leaving behind only parts of the systemic one).

  • Eliminate a big part of the discrepancy between the banking and non-banking remunerations systems

  • Interrupt terrorist group financing channels

  • Enable the equal rights charter (see below Value of Work)

  • Create the conditions to stop illegal economic migration between countries (barter in kind is not enough to sustain illegal migration and no trafficker will accept barter as his remuneration)

Finally it will become the bedrock to build a new definition of work, connecting it at last with social contribution (see below)

At the same time on a more practical side it will:

  • Reduce drastically money driven street crime (if all money is digital only objects can be stolen which again cannot be exchange for cash)

  • Eliminate bank robberies

  • Stop poaching (Black markets will find it very hard to operate by reverting to other then cash)

  • Regulate syndicate managed prostitution and illegal gambling, which primarily operates with cash

  • Reduce within 5 years from its introduction the global drug trade by at least 80%. 5 years is the maximum time before the global privately owned stock in gold, that is practically the only other means of exchange beyond hard currency for drugs, will be depleted. Simultaneously with drugs becoming less on the street by the day, all drug related anti-social behaviour will diminish rapidly (see global statistics on drugs related crime) with the effect reaching some of the route causes of civil wars (see Mexico, Afghanistan etc.)

  • Impact positively on gang cultures across the globe as the loss of their operational capital will reduce their attractiveness as alternative to work options

  • Eliminate practically overnight government corruption and officials’ briberies (current corruption statistics suggest that more then 90% of transactions are made in cash)

  • Reduce reoffending ratios in relation to non-violence crime that are primarily of financial nature

  • Last but not least, the links between enterprises, organisations, political parties, public servants and individuals with vested interest in the continuation of the existence of black markets, illegal trade, human trafficking, drug trade, weapons trade, It will immediately be unveiled. It will be easy after that to know whom not to vote in the next election.

Of course once again, a fierce reaction of The Markets, and The Banks should be expected, in order to delay its implementation as well as a monumental legislation and negotiations marathon between the proponents of the change and those controlled by the Markets and the Banks.

Drug Cartels, Organised Crime Syndicates, Black Market shadow organisations even Sovereign States in a covered way are expected to fight tooth and nail to avoid the implementation of this institutional change.

However, from the moment that people will know what to expect and why, all these “actors” will have lost the game before it begins. They cannot possibly control all politicians and all legislators, so fear not.

If on the other hand they can offer us a better alternative, a step change that can achieve all the above mentioned benefits sooner I will be the first to vote for their preferred politicians.

Step 5 .

With these four fundamental institutional alterations in place the next step should be the re-valuation of work. There have been several propositions and a lot of sociology and economic papers have been devoted to the subject (see example in www.neweconomics.com) . The major idea behind them is the migration from the current narrow definition of productivity related valuation of one’s work, to one that accounts for one’s social contribution as well.

I’m really fond of it personally and I will show below the benefits of implementing it. That said, I personally believe we need to go one step further from the existing propositions and apply to it, macro-social and meta-social criteria. These are the net value to the global society as well as the net value of its environmental contribution (I use net, as inevitably negative effects will always co-exist even if they are at a very small percentage).

Rethinking and redefining work will be a no-mean social engineering feat. This will be the biggest institutional modification in the human history.

To pre-empt questions that may be raised, it will be unwise to move this institutional change into Step 1 instead of Step 5, in order to speed up the process and bring its monumental benefits forward. I firmly believe that any such attempt will prove futile. To change this mega-institution one needs all the foundations and its constituting institutions in place and within them are all the redefined Globalisation, the Global currency and the H2E. We will need all of them before we are ready to rebuild this one.

The ways one can go about redefining work based on a universal framework of values, are not many and all, one way or another, are criteria based, criteria that carry these universal values and embed them within this redefined institution.

Until a better idea is presented I will propose that we use a hierarchical-needs points system based on weighted benefits, as appears to be the order according to crowd-sourcing internet analysis of fundamental values I attempted, namely:

  1. The environment as a whole (to what degree this is benefited or destroyed)

  2. The local ecosystems & the preservation of the species

  3. The Human Race (well being, medical advancements etc.)

  4. The Food production and Water sources management

  5. The Energy Production and the replacement of scarce resources and materials

  6. The Scientific and technological advancement

  7. The country

  8. The community (or enterprise/organisation)

  9. The family

  10. The individual

With the above list agreed (that is why we need the global institutions in place to debate such issues), all we have to do in addition is; a. to identify the net degree of contribution and b. the net degree of applicability (i.e. how many “units” will be positively impacted) to end up with the initial value of one’s work. Of course it is a bit more complicated then that and one should account for additional parameters with the list being by no means exhaustive, like:

  • The degree of mental dexterity

  • The degree of talent (inherited or acquired)

  • The degree of knowledge

  • The degree of experience

  • The time needed to reach average competency

  • The degree of dependence on external factors (systems or organism and energy needs)

  • The degree of innovation

  • The degree of ability

  • The extend of physical effort

  • The impact on one’s health

  • The risk of harming himself

  • The degree of reluctance across the population to undertake the specific duty and

Finally a parameter which will reflect the ratio between the global average and the specific country’s GDP at that point in time. (See below in step 6).

I will not propose a formula on how to calculate the above, even if I have one worked out of curiosity, instead let me offer an example of how this might work.

If we accept that the unit is an individual and the Human race equal 7 billion immediately a universally accepted climax from the first list can be agreed.

With this in place the next step will be to define for every task the degree of one or more of the applicable elements in the second list and lets name then B1 to B12 with each one able to take values between 1 and 100.

Then in order to calculate one’s contribution it will be enough to add or subtract (some of them have a negative sign) all elements that apply from the second list in their relevant degree and multiply the end result first by the (combined or not) contribution from the first list and finally by the GDP ratio mentioned above.

It is easy to understand under this system of interpreting work values and one’s remuneration, that manipulating numbers in front of a computer the actual job of an FX trader is definitely of lesser value than of the Prime Minister’s of that country!

Equally obvious is that an inventor of a device that deters 100% of all midges and mosquito from biting us should be rewarded higher then a singer with an average music global hit.

The immediate benefits of the above will be unimaginable and they are definitely in the wish list of all social movements in one form or another. Listing here only the major of them are:

  • Remuneration for the same work across the globe will become equal (gradually though as it will be influenced of that country’s current GDP) and with it

  • A new global equal rights’ charter can be at long last created

  • Low pay driven production-migration will be repatriated and with it

  • Air and sea pollution will be reduced drastically. This by itself maybe able to regulate emission levels beyond regulators dreams

  • New industries will spring next to where the resources are and with them employment education and infrastructure levels in underdeveloped countries rich in raw materials or with a farming potential will drastically increase

  • Illegal migration will cease (gradually though)

  • Human exploitation will decline drastically and with it human workers trafficking

  • Fiat money will be reduced to its final stage before total elimination

  • Patents will be unlocked and with it the open source system will be boosted

  • Organisation leaders remuneration packages will stop appearing in the news entries reducing this way the current social friction

  • Research will be given the biggest boost possible and with it scientific breakthroughs will follow

  • Non productive and parasitic functions in government level will cease to exist

  • Remunerations across the globe will be rationalised and the most important

  • Unemployment will decline everywhere

  • GDPs will be altered to a more realistic level with its absolute accuracy increasing overtime and with it the remuneration level in the country (or decreasing where the current GDP evaluation is artificial) with the people sharing a part of the added value they created

  • Inflation will be reduced further and it should become less then the currency micro fluctuations

  • National pension schemes will get a real boost

  • Country finances will start to recover as well as national debt and

  • The dream for social justice will come closer then ever before

For most countries and societies this will be a dream coming true at long last.

On the other hand needless to say that every single country, organisation (legal or illegal), social group and individuals currently enjoying benefits from the current situation will “revolt”. This move changes the institution of Capitalism into something totally different whereby human exploitation (the old institution of slavery) is not an active segment any more, so reactions should be expected.

The list of opponents will be endless and, thankfully, all effort will be futile.

You see institutions are made by the societies not their governance and in this case we can give at last the society control over the institution altering the status quo.

The rule is very simple. You vote for those only that have the path (the eight steps) into their manifesto.

Step 6

This will be the last major step, and maybe by having achieved the previous this will be considerably easier, however, one must prepare himself for some additional “hardship”. Changing Profit one of the most ancient institutions, through the redefinition of our material value system, may well equal in number the obstacles of the previous step.

Just to clarify by material value system in this instance I mean the way that, for example, we calculate; how much a company stock should be valued, how much is the net added value of an industry at the end of its production line, what is the net value of transporting goods from place A to place B, what is the actual value of a specific service of a Bank or a Consulting Firm, what is the value a mill adds to the price of wheat by transforming it into flour etc.

We need to always be mindful of the fact that what ever is produced has an impact on the environment, the ecosystems, our genes, and the society overall. It is a cost we never calculated before, with some exceptions. Can we really afford to keep ignoring all these parameters? How does it makes sense to allow water demanding cultivations to sprang in areas where water is a scarce resource, and value the product the same as one produced where the environment is impacted minimally?

Profit as an institution is really prehistoric. From the moment our ancestors start to consider the effort needed vs. the reward, in choosing what food to gather/hunt and what not, the institutional segments to build Profit where in place. With the addition of Growth and Money, Profit took a life on its own and infiltrated all socioeconomic theories developed over the millennia, even communism where it was practiced by the state, to reach in its current “selfish” form. It is exactly this selfishness that we need to alter in a way that profit, at last, takes under consideration the impact it has on the rest of us and the environment. Making profit from cutting down out fins from sharks currently is still acceptable by some societies, as is opium trade profits that sustains revolutionary movements. It is madness and it will have to stop.

So, how we approach the whole change?

First of all we need to redefine the cost of all products using the Human Effort Equivalent (H2E) principal introduced above. To do so we need to define the actual value of the raw materials and the value of the capital needed in addition to the human effort. (Changing the basic principals of our economic theories at this moment in time will pay no dividend and will not affect our decision making hence, I am using the same ones.).

Raw materials can be valued again as products, as do all other elements of any production process and consequently can be measured in H2E but in this case with an additional twist.

All non-renewable raw materials are finite (at least until we build replicators or we achieve space mining) and consequently scarce to a degree. In most cases we know for how long we can keep harvesting them based on the projected consumption trends. It is relatively easy consequently to agree how much we need to “invest” as society in research and development, in order to have an alternative or a replication mechanism ready when they are depleted. By adding this “cost” in the equation we can calculate the actual value of this material.

On the same subject, I think that, this part of the material’s value should be excluded from local taxation and the accumulated revenue be divided through a mechanism build within the processes of our global governance body, to research centres around the globe.

Eventually with all the end to end process of every product calculated based on the H2E and the capital already measured against the same standard all one needs adding is the impact to society which will always be both positive and negative to different degrees. To calculate that I am proposing that we use the same 10 elements list as above, and by accessing that as well we are done.

Services now as products are much simpler to calculate as we already have defined how much every work actually “costs” including its social impact. We know as well the material it needs and we can add that to the total cost as well. We know finally the energy consumption needed for this service to take shape, which itself as being a product in its own right is no difficult to account for and add its worth to the final total cost.

So we have all cost ingredients (capital, materials/products and services) and all one needs to do is add the applicable elements.

After that we will be ready to estimate profit and that will be a straightforward calculation to make, depending on the method we will decide to use.

This include several options, none of which need to be decided now. Examples can be:

  1. To regulate globally a min and a max profit climax depending on product desirability

  2. To connect the profit margin to the workers remuneration packages. You may recall that we calculated above with relative consistency the value of every work. I never suggested that this should be his payment, so adding to that the same margin the enterprise wants to make as a profit overall may sounds in a lot of people’s ears as fair. However, every application of this type is better to remain with the local governments as it affects taxation levels.

  3. To use a rigid min and max profit margin depending on any other parameters or a combination of them like country’s GDP vs. Global average, scarcity, poverty levels, level of unemployment etc.

  4. Or…we can devise as many as our imagination and our sense of social justice allows us.

Brace yourselves though for a confrontation with all the short sighted ones, those with vested interests in retaining the currents status quo or those that are generally afraid change.

You see, most nations in this post-industrial era with some notable exceptions, those mono-product based economies and China, followed economic services oriented paths. These were build on the belief that services offer better profit margins then industries, they offer more predicted taxation revenue, faster growth and practically no need for subsides. Even nations that could not afford to migrate away from their traditional products followed that path (i.e. Greece). Cheap labour utilisation and the numbers in which it was available fuelled the industrial migration.

Look however in today’s world, which are the strong economies under this capitalistic model, Brazil, Russia, India, Korea and Germany. What do they have in common? Their ratio between the industrial products vs. post industrial era ones is positive. Every nation that lost its balance and moved too soon into the post industrial era has suffered the consequences and currently carries disproportional debts. The notion that capitalism is all about fiat money capital, has proven disastrous and we know it now. (See the terms or banks recapitalisation the EU leaders propose, demanding an increase of the banks’ securities to 9%) But on the other hand high profit margins have been associated even now with growth and countries will find it difficult to move away from this institutionalised idea.

What I am suggesting above is a totally radical and it will force all policy makers and political theorists alike into bringing forward a white paper start again approach.

Ok enough said on the topic, so let us see the benefits of such an alteration.

Well as expected they will be almost unbelievable.

  • Drastic reduction in pollution levels will follow immediately as product prices will be connected to environmental impact. No need for any additional Kyoto like treaties will be needed

  • All non productive functions will gradually disappear boosting this way global growth

  • Unemployment gradually will hit its lowest ever level and with it the benefits cultured that fuelled anti-social behaviour in various countries will be altered for ever

  • Inflation will decline to its lowest level as new mechanism to control it will exist within the system

  • Financially driven migration will be reduced further

  • Human trafficking will become a thing of the past

  • The equal rights charter will be further enforced

  • Poverty will start to decline rabidly as decision on capital investments will alter course

  • Remunerations at all levels will reflect social and environmental contribution and with it social anger will cease

  • Poaching will stop all together

  • Drug trafficking will reduce further as new legal absorption avenues will open and people will be given realistic alternatives to its cultivation

  • Fiat money will be reduced further as profits from its use will stagnate

  • Research and the open source movements will get all funds needed

  • Pensions crisis will become a thing of the past as amount of people at work will multiply

  • Several major reasons that fuel war will be eliminated and with it weapon fuelled research will be able to contribute to society more

  • Refugee camps will diminish

  • Stability will increase globally and with it capital flow and investments in currently deprived areas

  • Countries GDP will be further rationalised to indicate the nation’s global contribution not just its richness

  • Global institutions will move a step further empowered to make this planet a better place to live

Step 7&8

Apply a new global banking operational standard: In various instances above I referred to our financial institutions and especially the Banks. Banking as an institution I still consider it as being necessary for both the global and local economy. At the same time I think it is about time we rethink what we expect of it to serve. Banks when first created was a place to store goods. It mutated into a safe of Money and eventually into a regulated (?) financial formal institution and the main cause of the wrong turn our capital-driven policies have taken. We allowed them to elevate into the biggest player of what we call today The Markets, the dictator of all economies (see resend attempts of the EU countries to control the cost of borrowing). We allowed them to create fiat money by reducing minimum capital ratio to unacceptable standards and allow them to loan, operating under the distorted idea of money as a debt principal (see Money as Debt in YouTube for a relatively accurate intro to the concept). Going forward, though, several things will need to change if we are to escape the current recession circles.

  1. We will need to separate the commercial with their investment parts and thankfully most countries tend to consider this option

  2. We will need to gradually increase their minimal capital ratio for their commercial parts. My personal favourite solution it will be for it to reach the level that reflects their declared profit margin around 94% from the 3% that it is today.

  3. We will need the banks to adopt a new type of logistics enterprises identity on top of theirs to monitor on our behalf the global transactions and, of course, be rewarded for that. This service on its own (based on the new definition/valuation of services) will be able to provide them with enough profits to recapitalise themselves.

  4. With the closure of the FX trade under the one currency principal their investment part will need to be regulated as well by introducing the same social and environmental criteria repeatedly mentioned above, in their investment choices, as an indicator of their profit margin (see profit out of services above). In other words higher profits should be connected to higher social contribution.

  5. Include in the regulation of investment all non-banking financial enterprises, funds etc. as well as the VISAs and AMEXs of this planet.

Of course, it will be a disproportional shock to the system if we try to alter too quickly the capital ratio or reducing the margins of investments or credit card operations. That said they (capital ration and margins) will need to be rationalised based on the profit principal above as fast as possible because they are the prime source of inflation globally. The speed of the exercise with the shock in the system aside may be traded against practical things countries have in need.

For example in order to reduce a country’s debt we may consider during the gradual restructuring of the Banking rules of the game to tax profit deriving from the use of fiat currency to a degree that allows only for the Banks expenses to be covered with the rest going towards that country’s debt repayments. That will hopefully incentivise the Banks to recapitalise faster until they reach 100% of capital ratio and stay there. To remind you in order to avoid confusion, with the existence of H2E as a standard it will be easy to absorb the global growth minus interest/profit-driven inflation in its value.

The new Global Bank could well be assigned to monitor such type of exercises and make sure that countries reach to a predefined debt level at the same time with country banks reaching their recapitalisation targets.

Needless to say that The Markets will not give up easily their current privileges, but with the re-evaluation of work and products as well as the introduction of social value as a regulator of the profit margin there will be very little they can do.

Additional benefits of these two last steps will be endless. I am listing only few below as indicators.

  • Further and more profound reduction in pollution levels

  • Elimination of Human exploitation

  • Redaction of Human Financial Migration to its absolute minimum

  • Minimisation to its absolute minimum of electronic crime and money laundering

  • Further resolution of the pension crisis

  • Rapid shrinking of countries debt

  • Boost research and development

  • Boost loans availability to new start ups and SME enterprises

  • Boost tax revenue and put a smile on all financial ministers’ lips.

Epilogue

I honestly started this text assuming it will be a couple of pages that can be copied pasted in online blogs but despite my best intentions its initial concentrated form, that of a matrix on a spreadsheet, it was transformed into a white paper.

I am told that the notions within it are still very concentrated and they need additional explanation so apologies in advance. To compensate please allow me to summarise:

  • The current socioeconomic framework is incapable to offer nations solutions to the present economic crisis (global growth is fading while global accumulated debt is increasing)

  • All countries by themselves alone cannot regulate The Markets and at the same time

  • The infamous Global Economy is a myth causing all efforts to influence it, a futile exercise

  • As a possible remedy I propose the creation of a global regulatory mechanism, which will manage the modifications of the institutions (not only the formal ones), that are the bedrock, the foundation of our global socioeconomic structure and theories.

  • These should for the first time in history we consciously re-engineered them as global, avoiding localisation, to support the new global socioeconomic model that I propose we call “gaianomy

  • The roadmap I propose, alter these eight institutions in turn one at a time. It is not a quick fix by any means (even if it can be implemented in a very short time if changes happen in parallel) but it offers a safe alternative before the EU and US imminent fiscal collapse.

  • The institutions I propose to be modified are Globalisation (as a meaning), Currency, The (currency) Standard, Work, Product and Services, The Profit, and The Banks. (All of the above process could be easily to become the new banner for activist and thinkers alike let’s call it the Eight First Steps).

  • The major changes I suggest refer to the connection of every “value” with its impact to the environment or the society or both, while as the intrinsic value for new digital only global currency I propose the H2E or Human Effort Equivalent.

The whole text is dedicated to the sixth sense blessed unknown OCCUPY member that knows that something is seriously wrong but do not yet have a holistic proposition to offer. Gentlemen if you agree with my approach please raise a banner for me (Gaianomy Now!) as I am unable to be there in person.

It is equally dedicated to all Greeks in hope that they will escape their self-pity syndrome and especially the generation of the 45+ that feel currently that it is their fault. Gentlemen, it is not; the institutional distortions are not of your making you just used the wrong paradigms.

Credits to: The unknown member of OCCUPY the Wall Street, Marshall McLuhan, Robert Mundell, Andre Gunder Frank, PA Hall, DW Soskice, Aristotle, Jacques Derrida, Lotfi Zadeh, The Sociology and Business Faculties of Warwick, Isaac Asimov, Hu Jintao, Mervyn King, The Green Movements around the Globe, The Global Justice Movement, All friends and family that review this text before its submission.

November 5, 2011

World meet Gaianomy…..gaianomy meet the world.

“Gaianomy”  is the science of just distribution of global resources.

We developed over the last five years an institutional theory that can offer a tangible solution to the global fiscal crisis.

We build this blog to interact with the global audience in order  to test  the hypothesies we made when forming the theory of gaianomy.

We welcome comments of all kinds especially from non sociologists.

We publish in the next blog a brief intro and look forward to your comments.

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