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

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3 Comments to “There is a citizen – friendly solution to the Global Fiscal Crisis: Part 1”

  1. Look forward to reading your solutions.
    I am so aware that kicking against is not enough, as I keep saying to people and as you yourself clarify, we are kicking against an illusion. What we need are solutions and alternatives to the current paradime. We need to be talking about other ways of managing our communities and our economies. We are kidding ourselves by asking an ethereal ‘them’ to share out the wealth.

  2. Salutations from Japan. I am learning my English and came to this blog just to say how much I like reading it everytime you post. Can you please e-mail me the next time you post. My email is Noman@uf.edu . Thanks

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