Posts tagged ‘Fiscal Crisis’

January 21, 2012

Paperless currency, is there a case for implementation?

We wrote already two relevant articles on the subject. In every case, when the articles published, in news sites or linked through general interest sites, the shock of the “radical” change needed appeared to overwhelm a part of the non-familiar with the subject readers, resulting in an avalanche of queries regarding its implementation challenges. The trend was dissimilar with the one we encountered from our regular readers.

It became apparent that the degree of analysis required on a subject is equivalent to its expected benefits.

We write this blog in compliance with this otherwise profound conclusion.

Our regular readers will be aware of why one the major propositions within the Gaianomy framework is the introduction of paperless currencies. For those that the concept is unknown, as a parenthesis, we present briefly some of the potential socioeconomic benefits of a paperless currency system.

  • Eliminates tax evasion (Only in Europe it can ease the taxpayers burden by €1.96 T yearly!)
  • Eliminate practically overnight government corruption and officials’ briberies (current corruption statistics suggest that more then 90% of transactions are made in cash)
  • Reduce drastically money driven street crime (if all money is digital only objects can be stolen which again cannot be exchange for cash)
  • Regulate syndicate managed prostitution and illegal gambling, which primarily operates with cash
  • Reduce within 5 years from its introduction the drug trade by at least 80%. 5 years is the maximum time before the privately owned in any country gold stock, 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 would 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.)
  • Eliminate the fear of counterfeit money
  • Eliminates all the black markets (at least the 93%)
  • Impact positively on gang cultures as the loss of their operational capital will reduce their attractiveness as alternative to work options
  • 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)
  • Eliminate bank robberies
  • Reduce the jails population by at least 35%
  • Reduce reoffending ratios in relation to non-violence crime that are primarily of financial nature
  • Interrupt terrorist group financing channels
  • Stop poaching (Black markets will find it very hard to operate by reverting to other then cash)
  • 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.

You will have to agree, that it is an impressive catalogue of benefits, which societies may ignore to their peril. We see no apparent reason why any government will refuse to implement it. Especially if one considers all the additional positive side effects, the application might have, like: reduction in policing needs, money production and distribution, reuse of the cash handling human resources to more productive economic sectors, the inevitable reintroduction into the economy the proceeds of previous illegal activities, the long term health benefits of the country’s population, the reduction in health spending etc.

Of course as every change in societal level, one must manage such an undertaking carefully and in a socially sensitive way. Based on the feedback we received the major of the challenges identified were:

  • If one country only, implements the paperless currency how can they stop other currencies from “over-spilling” through its borders?
  • Will the cost of policing, the implementation, will exceed the benefits?
  • What will happen with the tourists?
  • How technophobic and elderly will adjust?
  • How the less educated will avoid overspending?
  • How one may address fraud in its usual forms?
  • How the banks will react to the additional stress on their systems and services from the additional amount of transactions?
  • In case of the county’s communications networks going down, how transactions can continue?
  • What the implementation cost will be?
  • How a country should avoid phenomenon of people hiding their currency during the transition period, which will feed later on the black markets once more?
  • Does it need constitutional changes?
  • In case of a country, like Greece that is a part of the EU does it need EU approval?

Lets take them one a at a time.

“Over spilling”: The ways to, illegally, import currency are known and involve mainly smuggling either through the customs or through the borders. In the case of the European Union where boarders do not really exist and people can transfer with them any amount of money without any checks.

To counter the risks a country ought to: (a) introduce a comprehensive law where all risks are addressed and for all possible bridging attempts, the law enforcement units have a “weapon” (b) transfer all fiscal benefits from the implementation of the system to the people in order to transform them into guardians of the institution (c) introduce punishments severe enough to be respected (d) offer sufficient rewards for compliance and uncovering illegal transactions (e) offer at the points of entry an easy to use and effective system of transferring currencies into paperless forms either by prepaid debit cards or by links to direct debit facilities or mobile solutions without additional cost to the bearer.

We calculated that a period of 5 years would be enough to reach a compliance level exceeding 93%.

Cost of policing the implementation: As already mentioned above, one should design the system in a way that society owns responsibility for its diachronic success. No level of policing can substitute that. Hence, our proposition seeks the people’s endorsement primarily and its government bodies secondary. In support to the societal “neighbourhood watch” one should add, of course, intelligent controls into people’s transactions whereby “broken” trails, amounts they cannot be justified, within the country and outside of it, are flagged.

 

What will happen with the tourists:  We covered this in the two previous replies

How technophobic and elderly will adjust: Technophobia is one of the manifestations of resistance to change. As Habermas would put it interest drives actions. What we are proposing as a resolution, and feel free to add to it, is to counteract resistance through benefits and ease of use. We know for example that the fear of being mugged is higher than the fear of pressing a button on your mobile or typing a pin or placing your finger on a sensor. There are so many user-friendly technologies today that the probability of a nation finding no solution to cover the need of this niche group is remote

How the less educated will avoid overspending: Well this one is simple. In every transaction, the system can give them the remaining available credit similarly, to what today the cash dispensers are able to do.

How one may address fraud in its usual forms: Well this is a very large subject. Fraud will always exist but this time it has just one option to be electronic. This however is a backdrop for the fraudsters as every transaction will be recorded and traceable. We analysed all of the “usual suspects” and in every case we found a way to counteract it. We look forward to suggestions from you for cases where someone may get hold of your money without leaving a trail.

How the banks will react: We believe extremely positively. You see, for the banks collecting the taxes, on behalf of the state, and paid for it, is not something we see them objecting to. The states on the other hand have more then enough benefit from the reduction of personnel needed, the immediate collection of the VAT and the benefits deriving from the counteracting of systematic tax evasion that willingly will pay enough to compensate the banks. Finally, the potential stress on their systems and services from the additional amount of transactions is not even an issue for modern technology.

If the county’s communications networks going down: The probability of this happening to a wider region due to the inherited redundancy of today’s communication networks is negligible and in any case one will be equally able to utilise the mobile network infrastructure or any other wireless network for that reason. Al technologies for this to happen are both existing and mature.

What the implementation cost will be:  According to our calculations, anything between $35 to $350 per transaction point, which is negligible and can be, possibly, financed by the participating banks and the mobile operators.

People hiding their currency during the transition period: We expect phenomena of this type to appear, however diachronically as all research in the field of institutions suggests will disappear. We see as being part of the 3 to 7% inefficiency we predict in the system, but definitely more research may be needed. Bottom line is we do not really see this as an issue if all measures described above are in place.

Does it need constitutional changes: None in the team is a constitutional-law expert. As a matter of interest, we tested the proposition’s compliance against the Greek constitution and we found no evidence of the opposite

In case of a country, like Greece that is a part of the EU does it need EU approval? There is no prior experience, due to the novel nature of the idea, but knowing the way EU operates we think that the answer should be yes. Will they oppose? We very much doubt it. Will they delay an implementation attempt, most probably? Nevertheless, we definitely believe they will succumb to the propositions strong arguments eventually.

January 6, 2012

To get the “truth” in UK you will need at least three news channels. …and the power of mental associations

Association is a synapse-like mental sub-structure, connecting two, recorded (sensed) or pre-existing (genetically imprinted), informational units into one, on a conscious or subconscious level. There are strong indications that associations operate as a membership function of a fuzzy set http://bit.ly/qhKzcQ  varying its strength overtime. It is a fundamental tool within the new synthetic institutionalism proposition but to the average reader means absolutely nothing… until now. You see so far, all research was based on questionnaires and small relatively samples ignoring (due to methodological mainly shortcomings) the subconscious level http://bit.ly/Ibin0. If I ask you to give me your opinion, you employ your rational to do so suppressing subconsciously all information institutionally bounded. It is human nature. If, on the other hand, I never ask you the question but instead I dig through your writings where conscious and subconscious operate in unison your opinion would be crystal clear. What ever you believe for whatever reason will surface. If in addition I combine ALL associations made in writing so far, by all of you, then the probability of accuracy will exceed 97%!  http://bit.ly/19iKDS This is the power of association and that is how we analyse institutions (in case you were curious). As usual, we would leave to your discretion to make any conclusions from the graph, from our part we would make just one. To get the “truth” in UK you will need at least three news channels. Please send us your conclusions and we promise to publish the best.

The Gaianomy T-T

December 31, 2011

Και όμως το 2012 θα είναι καλύτερο για την Ελλάδα (Apologies to our regular readers but this post is intended for Greeks readers only)

Κάθε οικονομία επηρεάζεται και επηρεάζει τις άλλες, ο βαθμός μόνο διαφέρει. Επί χρόνια η Ελλάδα είχε «έλλειμμα» σε αυτόν τον τομέα και στο άμεσο μέλλον δεν υπάρχουν ενδείξεις ότι αυτό μπορεί να αντιστραφεί, με βάσει τουλάχιστον τα λεγόμενα και γραφόμενα στον Ελληνικό τύπο που επιμελώς παρακολουθώ.

Η εξάρτηση αυτή, σε συνδυασμό με τις επιβαλλόμενες έξωθεν μεθόδους «αναδιάρθρωσης», την ανυπαρξία προτάσεων ουσιαστικού περιεχομένου για την έξοδο της χώρας από την κρίση όπως επίσης και την συνειδητοποιημένη πλέων οικονομική δυσχέρεια του μέσου Έλληνα, τροφοδοτούν ένα κλίμα δικαιολογημένης απαισιοδοξίας.

Σε όλα αυτά έρχεται να προστεθεί και η συνειδητοποίηση, στον μέχρι πρότεινως αδιάφορο πολίτη, των συστηματικών αδυναμιών της οικονομίας, της πολιτικής και της δημόσιας διοίκησης και των ζοφερών αποτελεσμάτων της συνδυασμένης αρνητικής επίδρασης τους στην καθημερινότητα. Αναπόφευκτα η απαισιοδοξία μετατράπηκε σε εθνική κατάθλιψη και τα όποια σενάρια για πιθανά δεινά βρίσκουν πρόσφορο έδαφος ανάπτυξης σαν βακτήρια σε ανοικτές πληγές.

Η μοιρολατρία κερδίζει συνεχώς έδαφος με κίνδυνο να τροφοδοτείσει νέους κύκλους λανθασμένων αποφάσεων από τους διοικούντες, είτε διότι οι ίδιοι έχουν πέσει θύματα του ίδιου καταθλιπτικού συνδρόμου τροφοδοτούμενο από παντελή έλλειψη ιδεών, είτε διότι οι φωνές του πλήθους τους αναγκάζει να πάρουν αποφάσεις που μέχρι πρότινος θα θεωρούνταν από πρόχειρες μέχρι εξωπραγματικές.

Το να βρει ο όποιος αναγνώστης πλέον ένα αισιόδοξο μήνυμα είναι σαν να κερδίζει στο lotto.

Η συνειδητοποίηση του πεπερασμένου της σκέψης και του κίνδυνου της επικείμενης ανταπόδειξης των καταστροφικών προφητειών με οδήγησαν στο να γράψω αυτό το κείμενο σαν προάγγελο της επικείμενης συνολικής πρότασης της ομάδας σκέψης που είμαι μέλος για την έξοδο της Ελλάδος από την κρίση, που θα αποσταλεί σε όλα τα μέσα ενημέρωσης στους πρώτους μήνες του 12.

Η επιστήμη που υπηρετώ έχει την τάση να «βλέπει» τα πράγματα μέσα από ευρύτερα πρίσματα αναδεικνύοντας χώρους χωρίς αδιέξοδα όπου η αλλαγή είναι διαρκής και καλοδεχούμενη. Εάν δεν είχε ήδη όνομα (synthetic institutionalism) θα μπορούσαμε να την μετονομάσουμε σε κάτι που να προσωποποιεί την αισιοδοξία.

Δεν θα σας κουράσω μακρολογώντας περισσότερο επί του αντικειμένου. Όσοι είναι γνώστες της αγγλικής μπορούν να πάρουν μια γεύση στο http://bit.ly/s0Q4hK .

Η ουσία είναι ότι:

·Η οικονομική κατάσταση της Ελλάδας είναι παγκόσμια πρωτοφανές γεγονός και γέννημα ενός συγκεκριμένου οικονομικού συστήματος που δεν είχε ποτέ σχεδιαστεί να λειτουργήσει κάτω από συνθήκες συστημικής αλληλεξάρτησης.

·Λόγω του προηγουμένου τα συστημικά προβλήματα είναι ΑΔΥΝΑΤΟΝ να επιλυθούν με οικονομικά μέτρα μόνον. Η ομοιοπαθητική δεν έχει εφαρμογή στην οικονομία.

·Η όποια στρατηγική ανάπτυξης, που όλοι οι συνάδελφοι οικονομολόγοι επικαλούνται, σαν την μόνη αποδεκτή μακροχρόνια λύση για την Ελληνική οικονομία δεν μπορεί να εφαρμοστεί. Πρώτον για τον λόγο που ανέφερα στην πρώτη παράγραφο αυτού του κειμένου και δεύτερον γιατί κανείς δεν έχει την δυνατότητα να σχεδιάσει μια στρατηγική θεσμικών αλλαγών που αποτελούν την προϋπόθεση επιτυχημένης ανάπτυξης ελλείψει θεωρητικού υπόβαθρου για την ανάλυση τους μέσα στα πλαίσια των σημερινών οικονομικών θεωριών.

·Η ποιο πρόσφατη ανάλυση της οικονομίας (σαν κοινωνικός θεσμός) σε παγκόσμιο επίπεδο (αδημοσίευτη επί του παρόντος πέραν του ιστοχώρου μας http://bit.ly/sZDN90 )  έχει παύσει να υπηρετεί τους πρωταρχικούς λόγους δημιουργίας της, έχοντας μετεξελιχθεί, συν τω χρόνο, σε ένα άγνωστο για τους οικονομολόγους πεδίο συμπεπλεκομένων αλληλεπιδράσεων, τα αποτελέσματα του οποίου βιώνουμε σε παγκόσμιο επίπεδο.

Θα μου πείτε όμως ότι, εμμέσως πλην σαφώς, υποσχέθηκα καλά νέα ενώ το μόνο που κάνω είναι να προσθέτω στην κατάθλιψή σας.

Τα καλά νέα λοιπόν.

·Η θεωρητική σύνδεσης μεταξύ θεσμών και οικονομίας έχει επιτευχθεί ανοίγοντας τον δρόμο στη δυνατότητα στρατηγικού σχεδιασμού της Ελληνικής οικονομίας υπολογίζοντας αυτή την φορά (επιτέλους) τον βαθμό αρνητικού εξωγενούς επηρεασμού

·Η ανάλυσης της οικονομίας σαν θεσμός μας δίνει την δυνατότητα να εκμεταλλευτούμε για πρώτη φορά, βασισμένοι επιτέλους σε ουσιαστικές αναλύσεις, τούς ποιο προσοδοφόρους και συνάμα ασφαλείς δρόμους που μπορούμε να χαράξουμε

Πέραν όμως του θεωρητικού υπόβαθρου υπάρχουν πολλά καλά νέα προερχόμενα μέσα από την Ελληνική κοινωνία που δεν μπορούν να διαφανούν με «γυμνό» μάτι και αναφέρομαι στα εξής:

·Ο Ελληνικός λαός σε επίπεδο μόρφωσης και διαδικτύωσης σε παγκόσμιο επίπεδο έχει ξεπεράσει την δυνατότητα των Ελλήνων πολιτικών να πείθουν με ατεκμηρίωτες υποσχέσεις, υπαγορεύοντας έτσι ένα πλαίσιο ορθολογισμού και τεκμηρίωσης ανήκουστο μέχρι πρόσφατα στην Ελλάδα

·Η Ελληνική κοινωνία πλέον έχει αποδεχθεί το γεγονός ότι πολλά πρέπει να αλλάξουν και συστηματικά αναζητά τις ουσιαστικές λύσεις πέραν της Ελληνικής επικράτειας. Το γεγονός ότι δόθηκε η ευκαιρία στον ΟΟΣΑ να πραγματοποιήσει την ερεύνα για το Ελληνικό δημόσιο και το γεγονός ότι επετράπη η παρουσίασή της κατέρριψε πρακτικές εκατονταετιών.

·Η κατάρριψης θεσμικών «αξιών» δεν αποτελεί πλέον σοκ σε κανένα, δίνοντας το πράσινο φώς σε νέες ιδέες που ίσως είναι αδιανόητες για άλλα κράτη και προσφέροντας έτσι στην Ελλάδα συναγωνιστικό πλεονέκτημα εάν το εκμεταλλευτή κατάλληλα.

·Οι υπάρχοντες πολιτικοί οι πολιτικές που εξυπηρετούν και ο τρόπος με τον οποίον αυτό γίνεται έχουν απαξιωθεί στην συνείδηση του μέσου Έλληνα που αναζητά εναλλακτικές λύσεις μια από τις οποίες είναι και ο διαχωρισμός της πολιτικής από την διαχείριση του κράτους, κάτι που θα ήταν αδιανόητο ακόμη και ένα χρόνο πριν, κάνοντας την αρχή με την επιλογή του κ. Παπαδήμου. Παρεμπιπτόντως όλο που χρειάζεται είναι ένα απλό νομοσχέδιο πού να ορίσει το πλαίσιο εφαρμογής ενός τέτοιου μέτρου απαξιώνοντας εν μέρει έτσι τα διλήμματα που ανακύπτουν από την έλλειψη εμπιστοσύνης μεταξύ κομμάτων και λαού.

·Η φοροδιαφυγή από εθνικό σπορ έχει μετατραπεί συνειδησιακά σε κατάπτυστο κοινωνικό αδίκημα και λύσεις για την παντελή απάλειψη της έχουν ήδη προταθεί και είναι εύκολο να εφαρμοστούν http://bit.ly/vFhAEv

·Η Ελλάδα λόγω του προβλήματος έχει αναφερθεί στα διεθνή μίντια σε βαθμό που επηρέασε το αίσθημα της συμπάθειας από όλους τους λαούς γεγονός που μπορούμε να εκμεταλλευτούμε εμπορικά και όχι μόνο

·Οι Έλληνες του εξωτερικού ανέκτησαν εκ νέου ενδιαφέρον στα Ελληνικά δρώμενα μετά την απογοήτευση δεκαετιών γεγονός που μόνο θετικά αποτελέσματα μπορεί να έχει (ευελπιστώ ότι η ύπαρξη και μόνο αυτού του κειμένου μπορεί να εκληφθεί ως ένδειξης).

·Οι Έλληνες του εσωτερικού από την πλευρά τους για πρώτη ίσως φορά μετά την μεταπολίτευση ανακάλυψαν πάλι την αξία του πολιτικού διαλόγου και νέες πολιτικές ιδέες είδαν το φώς της δημοσιότητας προσφέροντας εναλλακτικές

·Έχει αρχίσει ήδη να εμφανίζεται μεταστροφή της αστυφιλίας και νέοι άνθρωποι, μορφωμένοι ως επί το πλείστον, εγκαταλείπουν τις πόλεις με ανείπωτο μακροχρόνιο όφελος για την Ελληνική κοινωνία και τις επόμενες γενιές

·Η ανεργία και η φτώχεια επανεκκίνησε την χαμένη δημιουργικότητα των Ελλήνων μια δημιουργικότητα που είχε ατονίσει για δεκαετίες ενώ σαν επιπλέον όφελος επανεμφάνισε την ανθρωπιά προς τον συνάνθρωπό μας που κινδύνευε να με εξαφάνιση από την υιοθέτηση της παράλογης ατομικότητας

·Νέες ξεχασμένες αξίες βρήκαν ξανά το δρόμο προς την επιφάνεια με τις έννοιες της συμπολίτευσης και του Εθνικού οφέλους να κερδίσουν συνεχώς έδαφος

Κύριοι όλα τα προαναφερόμενα δεν υπήρχαν ένα χρόνο πριν και είναι εχέγγυα μιας νέας αρχής που βασισμένη σε μια μίξη πατροπαράδοτων θεσμών με την σύγχρονη επιστήμη έχει όλα τα χαρακτηριστικά που απαιτούνται για υγιή αναδημιουργία.

Παρά τα όσα απαισιόδοξα μηνύματα ακούγονται εγώ θα επιμείνω, εάν μου επιτρέπεται, να ισχυρίζομαι ότι το 2012 θα είναι ένα καλύτερο έτος για την Ελλάδα και ότι για πρώτη φορά στα τελευταία 2000 χρόνια μας ξαναδίνεται η δυνατότητα να αντιστρέψουμε την θεσμική μας ένδεια σε εξαγώγιμο πλεόνασμα.

Καλή χρονιά σε όλους

Σωτήρης Μελιούμης Αναλυτής Οργανισμών, Ηνωμένο Βασίλειο

 

December 11, 2011

Scarcity the driving force behind Politics and the birth of the Technocrat Politician (Credited to the thinker who asked us the question “do we really need the politician”)

Scarcity refers to the tension between our limited resources and our unlimited wants and needs. On an individual level, resources include time, money and skill, while on a country level, limited resources include natural resources, capital, labour force, technology and information.
Because all of our resources are limited in comparison to all of our wants and needs, individuals and nations have to make decisions regarding what goods and services they can pay for and which ones they must forgo.

Whatever, the form of governance societies tolerate, they in practice have “assigned” the decision making to groups that “persuade” them they know exactly what these much needed resources are and that they have the means of acquiring them on the nations’ behalf.

Economics (macroeconomics to be accurate), in turn, aims, in theory, to “study” why these groups make these decisions and how they could allocate resources more efficiently.

The ways these groups employ to persuade nations that they can utilise Economics to provide these resources and the art of justifying their failure to fulfil their promises (by blaming all but themselves) is what we call Politics.

Recently we witness a reluctant power transfer from politicians to technocrats, in two counties under “siege” from the Markets, Greece and Italy. The degree of power transition in both cases was different with Italy going all the way to assign technocrats in all key positions. In both cases, they called the whole structure “transitional government” and in both cases, it was the “influence” groups from abroad that imposed the change. Are there any conclusions we can draw? Is what we experience the end of the politician, as we knew them thus far?

If the experiment succeeds, would that mean that nations would start developing a new way of thinking?

If the actual need of the nations today is to manage their economy, why do they need the “middle man” and not combine the two forms into one.

However, before you start thinking yes this is rational, ask yourself, what actually are these “influence” groups that forced the change, are they not “The Markets”?

Moreover, we know from the above, that scarcity in a way drives “economic” growth. It is doing so by increasing the pressure on societies to come up with solutions, which can satisfy both their needs and wants. However, what exactly is the scarcity that drives this specific change the solution of which is the technocrat?

The profound answer is economic growth (or rather the lack of it and the consequent attempt of debt renewal), which though is a cyclical notion. Remember we started with the notion that it is scarcity that creates growth and consequently, if the growth was not materialised means that there was no scarcity in the first place.

Are we in a dead end?   The apparent puzzle is similar to what a two dimensional men has when find itself within four connected into a square lines on a piece of paper and he wants to escape.

Luckily, we do know that there are more then two dimensions so I wonder why do we insist to simulate the two dimensional men.

We know that the universal problem of all nations is debt. We know that what created the problem in the first place is the economic framework within which we operate. We tried to give solutions to perceived scarcities by means of it and we failed.

Let us do the right thing this time around. Let us go beyond the “two dimensional” economic framework, jump on the “third axis” into the socioeconomic one where scarcity can be analysed holistically, https://gaianomy.wordpress.com/2011/12/04/hierarchy-of-social-needs-by-gaianomy-at-last/  .

There the politician 2.0, https://gaianomy.wordpress.com/2011/12/09/the-politician-2-0-and-an-introduction-to-post-democracy/ takes a different form and so does the technocrat. In there, we can decide what mandate to give them and if we need them both?

However, do remember in the socioeconomic environment the definition of the technocrat goes far beyond the economist. The scarcity we are faced with is the lack of institutional entrepreneurism mainly (that is why the “system” is trying to produce them i.e. occupy movement) and there is where the emphasis should be given, in a more organised way though.

December 10, 2011

There is a citizen-friendly solution to the Global Fiscal Crisis (Part 4)

In the previous 3 parts we introduced you to the concept of Gaianomy and the first steps towards global institutional reformation.

Specifically in Part 1, https://gaianomy.wordpress.com/2011/11/13/there-is-a-citizen-friendly-solution-to-the-global-fiscal-crisis-part-1/  we introduced the Human Institutions and way they influence societal behaviour, the way they combine to create complex forms,  the mechanism through these forms shape our economic behaviour at a global and local scale and the ways that economic measures 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,  https://gaianomy.wordpress.com/2011/11/19/there-is-a-citizen-friendly-solution-to-the-global-fiscal-crisis-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.

In Part 3,  https://gaianomy.wordpress.com/2011/11/26/there-is-a-citizen-friendly-solution-to-the-global-fiscal-crisis-part-3/ we introduced the next major step the re-evaluation of work based on macro-social and meta-social criteria or in simple terms the net value of work to the global society, as well as the net value of its environmental contribution.

Once more, the benefits described are far reaching but do not complete the Gaianomy vision.

To do so we need to follow the path to the end and it tales only three more steps that we will present in this and the final part.

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 depts. 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

….

Next week we will finish the journey we started five weeks ago and publish the final chapter (Part 5) of the theory.

Until then enjoy life and your weekend and please keep up sending us your comments and suggestions.

S

December 3, 2011

Greeks may be able to save the world after all! (from the global fiscal crisis that is…)

I came across, twice this past week, two texts separated by almost 15 centuries that described the same phenomenon, the importance of what is not there (cannot be seen). The Tao Te Ching text and Terrence Deacon’s “The importance of what’s missing” in last week’s New Scientist p.34

I was amazed by the coincidence and the degree of intro-relatedness of both texts with a third , quantum theory whereby particles have unknown states until we try to measure them and the whole mystic is lost together with our opportunity to have more than one!

The fact is that the “unknown” in all three occasions works perfectly until we interfere and try to understand it. This I see as a dilemma we have to overcome especially during periods whereby our limited knowledge has “persuaded” us that we are heading for disaster. Yet again even if it is arrogance that lead us to intervene I personally find reassuring that the whole system is self-regulating and none of u,s being a part of it, cannot alter it to a degree beyond recovery, or can we?

Any way, staying idle and just observe the system, is not me. So I start thinking…

If it is a single person that is causing all the Global Financial Crisis I would love to meet him to understand why and what is coming next. I am certain he will not be doing it for profit, too low a motive  in Maslow’s hierarchy of needs. If one reaches a point where he can direct 7Bn souls to agree upon a direction, I want him as our leader. That said he may oppose the whole  “finding him” idea altogether as according to quantum theory knowing him will deprive him of his abilities.

If the existence of this person is only a wishful thinking and we follow the conspiracy theorists’ way of reasoning of being a team, a group of “sinister” thinkers behind the GFC, once more I would love to understand why and the “maths” behind it. In this case I may be persuaded to believe that motivations may be interpreted through Maslow’s pyramid, with Power being the most probable cause. Yet again we face a dilemma, how do we know a. that what they are doing is not simultaneously an effort to resolve a bigger problem which we do not understand (do not forget that they belong to the same system as us so they want to retain it) and b. that they have not anticipated that we will react and a have a plan already in place to prevent our reaction?

If though none of the above is true and no man or group(s) have created this Global Fiscal Crisis for any reason it is just an “unfortunate” reaction caused by the institution of Economy in its path to transition in another stage, what is not known becomes one with the system, the “the observer” that “helps” self-regulation to exist. In this case our ignorance driven arrogance can find “rational” arguments for intervention.

Any way, staying idle and just observe the system, is not me. So I start thinking…

Greece was once  the force pushing the boundaries of understanding beyond the known. Maybe, just maybe, they can do it again. You see in this instance the fact that they are poor is irrelevant all they need is once more to think what is missing, all things outside “the box”. Mental power and intelligence  apparently they have in abundance, especially when it comes to economics…

Just think of how many for how long have managed to deceive the system! 

Applied gaianomy Part “unknown”.

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

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

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