Posts tagged ‘Politics’

October 15, 2012

To the Greek goverment…and not only. Can you please listen?

We monitor, for over two years now, the situation in Greece, one of the the richest currently fields of institutional metamorphosis and the institutional changes as they happen.

Institutions are, by nature, modular entities not dissimilar to organic proteins and which societies combine together to create new complex institutions, while others acting like enzymes catalyse/forge change causing modifications in belief systems.

Based on the above definition Politics, being an institution, undergoes rapid changes across the Globe and even faster ones in Greece, Spain, Italy, Egypt, Libya etc.

We studied in detail all political manifestos in Greece as they evolve (based on the new developing belief system) and several of them appear to be following viable paths towards a stable meta-economic framework within an environment affected by global influences however each one in its own apospasmatic way.

So, with the hypothesis of political ethos and integrity after the last elections almost a given, we are writing to you in order to propose a very simple solution to some of the Greek problems, which can be implemented immediately.

The way we approached  the solution, coming from a non-economic bounded theoretical framework, but instead a sociological one, allowed us to identify the  institutional root causes of the current problems in Greece and their  supporting mechanisms. Thankfully they appear all to derive from the same one which means that altering the nature of this supporting mechanism one may introduce eventually the desired change.

We acknowledge that the proposition is both radical and unconventional. To counteract the  expected scepticism, we tested it as a hypothesis within the current economic theoretical framework and it proved to be a solid proposition with minimum (at a national scale) social disturbance.

We will not attempt to present the whole analysis in this text even if we are ready to demonstrate it if needed. Instead we will move straight to the point starting from the potential  benefits of the solution which are simply  extraordinary. A small selection of them is listed below.

  • Eliminate the Greek government debt in less then 4.5 years after full implementation (based on current projections on the size of tax evasions)
  • Combat in its totality tax evasion within 12 months from implementation and brings a minimum of 18bn and a maximum of 52bn per year (in subsequent years) of additional taxes without the need for any additional taxation on any sector of the economy.
  • Refinance the Banks without the need for any additional loans within a maximum period of 18 months with at least 18bn (93% probability)
  • Elimination of most of the  black markets (85% within a year from implementation)
  • Eliminate corruption in the public sector (immediately)
  • Decrease street crime, robberies etc.  by more then 70% within a year of implementation
  • Eradicate within 12 months from implementation illegal migration towards Greece (not the transit one though)
  • Eliminate money laundering to a significant extend
  • Eradicate drugs trade within Greece within 36 months
  • Eradicate people trafficking and with it, illegal working and prostitution

In addition secondary effects will cause:

  • Capital repatriation
  • Additional available capital in the Banks for loans
  • Ability to accurately plan fiscal policies due to taxation revenue certainty
  • Increase the GDP and the ability of the country to borrow (if ever this will be necessary)
  • Provide the government with all arguments needed to modify the existing fiscal treaty
  • Eradicate the hysterisis  in ΦΠΑ (VAT) returns bringing the revenue in real time
  • Elimination of the need for tax and ΦΠΑ (VAT) returns from citizens and companies

So, what this solution consists of?

The total abandonment of all forms of paper money and coins across the country in favour of  a paperless e-currency in the form of contact-less debit (not credit) cards in conjunction with fingerprint recognition technologies or any other similar secure technologies.

We cannot emphasise enough the fact that partial implementation of the proposed solution will have no effect.

These (the debit cards) can be issued by any bank and should be free from monthly  or usage charges. Overdraft facilities should be at the discretion of every Bank to issue or the can be regulated by the central bank of Greece. Every adult citizen will be required to have a personal account (in his chosen bank) corresponding to his national insurance number (ΑΦΜ) from the age of 15 (?), while younger members can share their parents accounts and own debit cards in the name of their parents with a predefined upper limit.

The technology is mature and already in place at a minute cost  while mobile phones can play the role of tills. All recorded transactions either through the mobile phones or bank accounts will feed into a central IT tax backbone system. The Existing Greek one to our knowledge can accept this load with minor modifications.

It goes beyond saying that the transition needs to be managed robustly, however with given the successful transition from Drachma to Euro, in the past,  the expertise already exists within the country. The difference in this case will be in the additional amount of technology needed.

The whole approach do not violates to our understanding  any articles of the Greek constitution  or any personal freedom acts or European regulations for that reason (we went though all relevant one’s).

Tourist or businessman visiting the country will be required to use their own credit or debit cards, travellers checks and prepaid cards.

Policing against the influx of  illegal money from abroad will take some planning to be achieved and to our calculations based on previous research will be never eradicated completely. One should expect that anything from 0.3 to 3% of the current black markets will be able to retain funding. The best way to control these amounts is by offering incentives to  the citizens, traders and companies in the use of paperless money, by adjusting the taxation system.

Incentives should be offered as well in order to avoid citizens and groups holding onto paper currency for future illegal use. A possible solution will be in agreement with all European banks to destroy all Greek Euros within an agreed period.

The use of gold or other valuable metals is expected to increase initially, in order  to counteract the lack of cash by the black market, the illegal trade and the drugs traders. However based on global standards the amount of gold available for the Greek market, in private hands, cannot last more then 36 months being in decline from day one.

We anticipate as well an attempt from all types of outlaw operatives to try to utilise prepaid tourist debit cards, prepaid mobile cards or even stamps as alternative currency to avoid detection of their illegal transactions. All of the above can be counteracted by simple regulations (i.e. replacing stamps with bar codes that contain one’s ΑΦΜ.) and we expect the groups controlling the black market to migrate soon after in other countries, which will be easier  then  battling policing methods and the rising cost of money laundering.

We expect as well a rise in the creation of offshore companies and foreign accounts where transaction between them will evade monitoring . However the existing and new coming regulation within Greece and from the EU we believe are adequate to capture the majority of the initial attempts to bypass the enforced transparency in transactions while at a later stage and after the reactions have been studied thoroughly new regulations or bills can be introduced.

Overall we strongly believe that the benefits far outnumber the initial problems and in any case this proposition, despite its unusual nature and the possible reactions it will cause, is by far more realistic and just then everything proposed thus far.

One should think of the thief that cannot sell his illegally acquired goods, the public servant that cannot ask for a bribe, the illegal immigrant that cannot be paid an days work, the businessman that cannot evade the national insurance contributions towards  his employees, the elder that is not afraid to go out in case he is mugged, the abandonment of the idea for additional salary reductions, the money influx into the economy or the ability to have a debt free Greece within 5 years, in order to dismiss any initial “discomfort” this solution may cause to one’s belief system.

Institutional change is a complex undertaking so we analysed it using similar studied institutional actors’ reactions that appeared on very similar in nature issues. The type of arguments that will/may  be used against the proposition by those that consciously or subconsciously (involuntary resistance to change) will try to oppose it are listed below. These arguments we expect to mainly instigated by the following institutions:

  • The church
  • The street markets
  • Hospitality and
  • The black markets

and they will be based on these generic arguments:

  1. Difficulty to implement
  2. Difficulty to police
  3. Will create unemployment due to the closure as unnecessary of all tax offices but the central governance and IT services
  4. Will leave unemployed all private accounting firms and sole accountants
  5. It will increase poverty levels to the very poor, beggars who depend on the black economy for survival
  6. It will be extremely hard to the drug addicts and will increase the cost to the Health System
  7. It will be a shock to the market which is used to be subsidised by the black economy
  8. The European Union may not approve
  9. The elderly will have problem to adjust
  10. The technology to support it will cost a lot
  11. It will affect tourism
  12. It is a “capitalist” trick to control money flow
  13. The market is not ready for it
  14. The “Banks” are behind it

Counterarguments for the above are:

  1. Implementation can be as short as nine (9) months only (mainly dependant on the mechanisms the government will put in place to collect all currencies currently in the market)
  2. We where doing it in the past when there was a need to manage foreign currency in the country. In addition technology now is at its best to counter any attempt to illegal circulation
  3. There are already plan in place for the transition of civil servants to other parts of government
  4. Additional jobs will be created within the banks and the public sector which at last will have capital to expand
  5. Barter will be able to substitute immediate needs in conjunction with an improved social provision that the country will be able to afford
  6. This is a benefit and not a negative argument and actually the cost to the Health System long term will drop to near zero
  7. That is true but it will take less than 18 months and then the market will adjust. (see at the implementation of the tills)
  8. That is equally true but it up to us to sell the arguments. We anticipate that if it will proposed as a reversible if fail  situation or an experiment towards a paperless money economy in the EU it will be accepted. In any case  we believe that they do not have to offer a better solution.
  9. That is not true contact-less technology in conjunction with fingerprint identification will be easier then the transition from Drachma to Euro (see Korean studies on e-currency)
  10. It will cost less the $12 per unit, provided a mobile phone exists and in any case that cost can be taken on by the Banking system
  11. Tourists in Greece will be able to use their own credit or debit cards as well as prepaid debit cards issue at all ports or entry points or their countries provided that they are e-linked to their National Insurance Number and their passport or their ID.
  12. An educated person can distinguish easily between fiat money and e-currency
  13. One needs to look at the trends in the use of e-currency to counteract this
  14. The exact opposite is true. Despite the fact that they will welcome the measure they know that will never again be able to control money supply as they used to returning this way the control to the Central Bank

We have seen the reaction of others (control groups) when the idea was introduced/tested initially and we are aware of the people’s tendency to dismiss ideas that do not “connect” with their belief system. Human nature  favours stability by resisting change. However we believe that you will give the idea due consideration and discuss its practicality and possible impact with other intellectuals you trust.

If nothing else there is no other proposition on the table currently, and believe us we monitor the situation in Greece very carefully, to offer equal benefits. Utilisation of fiscal/monetary solutions within the existing economic framework failed us so far and they will keep doing so, due to the nature of the Greek economy and the expected duration needed to return to growth,  as they ignore the needed management of institutional change.

Finally, in case the government or your party lack institutional analysts to perform any institutional impact analysis ,you may wish to undertake, until such a proposition was put forward, we would like to offer our assistance.

We are happy as well to disclose our findings as well as the methodology used to calculate the amounts and the time needed for any of the suggested effects to materialise, even if we believe that it would be better to be tested by people you trust. We have very many excellent scientists in Greece that can perform these type of economic simulation.

On Behalf of the Gaianomy Think Tank

Sotiris Melioumis Organisational Architect

January 22, 2012

“Democratic” bacteria

I was reading the other day an article in an old New Scientist (1.10.11) referring to group behaviour that I found intriguing.

The study was around bacteria (Pseudomonas) that are antibiotic resistant, but the interesting part was about the fact that a. they have the ability to work together as a super-organism and b. that while they are capable of overwhelming any human organism defences they cause pneumonia only to 15% of their “victims”!

Both events are extraordinary but not surprising, I would dare saying.  The surprising part was what the scientist s discovered, being the reason for that.

And I copy …“It turns out that the armies of Pseudomonas are often greatly weakened by indiscipline in the ranks.  They come to be dominated by cheaters and layabouts, who feast on the spoils of victory but ignore all orders to attack. These selfish bacteria multiply faster then the obedient ones, resulting in a less aggressive infection. The discovery opens up the possibility of radical new ways to tackle superbug infections… (by) deliberately encouraging the growth of  cheater strains and injecting them into  people”!

I do not exactly know why, but I immediately associated the bacteria behaviour with politicians from several democratic countries currently under “stress”. Not all of them of course, there are indeed those they methodically, in the name of an ideology, try to destroy the last defences of Democracy, and they are currently winning the battle I am afraid, but those cheaters, those that have never fought a battle but have just enjoy the benefits ….

Ending 1

You probably understand where I am heading with this… Should we encourage the people in the next election to “inject” more of them into the “system” in order to save these countries…?

Or Ending 2

You probably understand where I am heading with this… The instinct of the people in the last election was right and that is my explanation why these specific countries still exist!

Have your pick. As usual, comments of all kinds welcomed. SM

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 14, 2012

The 12 Olympian Gods and the Hierarchy of Societal Needs

Mythological stories always fascinated me.  Listening about the gods and the heroes was my favourite hour, in the elementary school, in antithesis with history. Not that initially I was able to distinguish between myth and history. To history’s credit, it had battles heroes and kings and the Greeks were always the winners, but something was lacking. Myths appear to be always so much better as stories, then the “boring” history.

I will return home every afternoon, with my mind full of new stories to tell to my poor mother, who patiently will sit next to me and listen. I thought she could never distinguish the actual story from my “additions”.

I never became the hero I always wanted to and the nearest I came to these gods was be climbing mount Olympus and allowing my fantasy to act as augmented reality, there is no app for that yet.

The study of Christianity that followed in consequent years (compulsory back then) took away all the Olympian glamour and forged into my mind a new belief, that one god is better then twelve. There were no more stories for my relieved mother. There was no glamour anymore just suffering, a very different perspective of life.

It took me another 30 years or so, to realise that there was no so much difference after all between monotheism and polytheism. Both of them were there to cover human existential needs, both of them represented a different but not dissimilar philosophy of life and both of them, theology aside, were social institutions designed subconsciously (primarily) and as such build to order, to serve specific societal needs.

At last I had the answer that was lurking at the back of my mind for so many years, “why one is better the twelve” and I realised that based at least on the third perspective the institutional one, that the Greeks and the rest of the monotheism-bounded humanity got it wrong!

I realised as well how difficult the transition must have been and why even now these old religions still have proponents. Beliefs and spirituality aside, it is the social institutions and what they represent what keeps them alive.

I came across yesterday, while cleaning my folders, an image of the twelve gods and exactly next to it, the jpg file with the Hierarchy of Societal Needs. It did not took long before curiosity overwhelmed rational and “in the name of science”  I started to explore the needs, institutionally wise, the twelve gods were designed to cover if mapped against the Hierarchy of Societal Needs (HoSN).

It was a bizarre, to say the least exercise, but then again something that to my knowledge none attempted before which by itself, as every scientist will tell you, was justification enough.

It did not take long after that to find what every one of the twelve gods was representing to my ancestors and map it against the HoSN.

Having read so, far I bet you will be wondering what was different back then. Well it depends upon your expectations.

For one their gods were there, primarily, to cover for all their uncertainties, all their fears and everything else their science could not explain. (See highlighted in yellow the institutions covered from the 12 Olympians).

The socioeconomic framework was there in all its glory, so it was nationalism. All four basic-needs levels namely survival, coherence, progress and prosperity where to a degree represented.

The interest though, some to my surprise, was that:

  • They did not fear about having work or not, they all had!
  • They did not care (fear) that much, about money and currencies and the most important was that they show no need for “wealth as a mean” so, no prayer was spared to gods for gold and riches. Harvest yes, “prosperity” yes but riches was not in demand.
  • Diplomacy and Politics were totally absent from their fears list
  • Banks as well, were absent (as expected?) and so were “Services”
  • Immigration was not an issue nor was Social Integration… slavery was doing an excellent job
  • They did not have any type of complex civil services so they did not have to create a god to protect them from bureaucracy… lucky people!
  •  …
  • And the most important they were at ease with war as an integral part of life!

That last one, to be honest, spoiled the whole image because, I have to admit, until then I was tempted to, triumphantly, declare that my ancestors were wiser then us.

As usual, I leave enough for you to conclude on your own.

SM

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 29, 2011

The Economy and the Societal Needs (Part 1)

Ask anyone what the economy means to him or her and you will receive a different answer. Economy is a discourse for quite a while now.  For the North Korean farmer economy finds its meaning in securing the survival of his family and he is organising his life accordingly. For the foreign exchange trader in the City of London economy is a profit exploitation framework satisfying through it his prosperity needs. Putting the extremes aside though, until now none to our knowledge, has ever explored how humanity utilises the economy and what are the needs it tries to cover.

If you are a regular visitor of our blog, you may immediately understand the potential benefits deriving from such an analysis, for the newcomer though it makes sense to put the horse before the car and explain what the problem was, the solution of which is our research.

Politics, you see, is a discourse on its own right, which by the way we are in the process of deconstructing as we did with the economy. Defining it loosely, it was until today, the art of “explaining” to the masses, using normally a political in conjunction with an economic theory, the degree of accuracy in interpreting the nation’s needs and a “justification” for the strategies used.

However, until a month or so ago, neither hierarchy of societal needs nor an actual deconstruction of the economy existed rendering all the explaining and the justification anything between an inaccurate “science” to a plain fiction,  if you were a cynic. That was simply the problem and our hope is to contribute towards transforming the art into actual science.

Of course, we are still a few months away from the point whereby we would be able to analyse specific countries but the power of Synthetic Institutionalism (http://bit.ly/s0Q4hK) in conjunction with our constantly increasing mental-association analysis toolkit provide us with plenty of optimism.

For the time being, we are pleased to be able to offer you an initial mapping of the Economy substructures against the pyramid of societal needs (http://bit.ly/upeNTq) we presented at an earlier stage. Enjoy!

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 9, 2011

The Politician 2.0 and an introduction to post-Democracy

We established in the previous blog (https://gaianomy.wordpress.com/2011/12/06/do-we-really-need-the-politician/) that the politician as an institution needs to change and together with it, the institutions of the political party and public administration.

Where can we start the change?

Inevitably, we need to evaluate  the probable “futures” we can see, compare these with today’s reality and plan a phased transition from today to the future vision, with the minimum of “allergic” reactions, ideally. Equally important is to agree on the fact that no one solution can fit all, as different nations will start from different systems and institutional forms that support them currently so probably localisation of the principals will be needed.

So, “back to the future” and let us see how our vision of post-Democracy could be defined.

Based on current trends and having excluded several incompatible scenarios we can see it as:

  • A framework allowing  the country’s and the global interests to coexists at least as equal partners
  • An environment whereby political parties are groups of thinkers or citizens-members, an evolution of a think tank in combination with an evolved political party, that will never get into power
  • Whereby politics and public administration are two distinctly different things
  •  An environment where policy making is a process of careful impact analysis on the socioeconomic level within a globalised framework
  • A socioeconomic environment whereby election circles do not exist but instead
  • A process where legislation and policies are approved by the means of a fully electronic process driven by common grounds between the interested non political parties (instead of a majority) and based on impact analysis on both the environmental and social aspects
  • An environment where public administration is run in the background funded by a central independent body that is responsible for the country’s fiscal policies, the socioeconomic analysis needed for decision-making and the allocation of funds
  • A framework where the citizen rules
  • A framework where the economy and the social coexist as equal partners
  • An environment whereby public services/resources  are distributed equally to all
  • An environment that rewards the citizens according to their contribution to society
  • A framework within which taxation forms are related to social and environmental contributions
  • A system where the politician is used only as a representative of the state in global institutions, as foreign policy leaders, diplomats, ambassadors, institutional entrepreneur, and social lobbyists for new policies and maybe as political philosophers if they are up to it

So, how Democracy 1.1 can look like, what the first step can be to start the journey, from where we are, to where we would like to be?

We believe that societies are currently mature enough to:

  • Break the connection between a political party and the country’s  governance
  • Eliminate party vote in favour of the elected individual
  • Separate the politician from the party during elections and vote him on his political manifesto, personal integrity and capability with all of them graded in the vote. When elected they can group into political fractions if they wish
  • Reduce the amount of elected politicians
  • Progress with (or start if not in place yet) the separation between Politics and Public Administration by assigning Undersecretaries and restructure the Public Administration Structure according to real needs
  • Enhance the public consultation principal, by presenting the recommendations of all parties in it as the baseline, for all legislations
  • Give gradually-increased  gravity to public consultation into regulations affecting the majority of the citizens and national policies
  • Transfer to an independent body, away from political groups, the country’s fiscal policy, the socioeconomic analysis needed for decision-making and the allocation of public funds.
  • Reduce the central governance and move responsibility to the periphery
  • Plan for the transition away from Parliaments
  • Change taxation of individuals and enterprises to reflect social and environmental impact
  • Eliminate corruption and crime by introducing the electronic only currency (see relevant articles on the subject)

Then sit back and enjoy!

The Gaianomy think-tank

December 6, 2011

Do we really need the Politician?

A politician, political leader, or political figure (from Greek “polis“) is an individual who is involved in influencing public policy and decision-making you will read in Wikipedia.

He is, according to online dictionaries, also:

  • An expert in politics or political  government
  • A person who is active in party politics
  • A person who holds a political  office
  • A person skilled in political  government or administration; a statesman or stateswoman.
  • As well as a seeker or holder of public office, who is more concerned about winning favour or retaining power than about maintaining principles and if I may add
  • A professional

As a “species”, they exist in all social environments and all type of government “models”. They exist in organisations, formal institutions, unions and other social forms.

They are a part of the reality we created for ourselves, the people we pay as societies to give us hope, to transform history into fiction, to deceive us in believing in the art of the impossible.

Almost certainly at the end of each “episode”,  we call election cycle, they will be those that will receive our anger and hatred, become our excuse, our little trick to evade personal responsibility the “actors” we can blame for all things wrong in the society.

Seeing it from this perspective, one may even sympathise with them and question why they do it.  Well, all research in the field suggest that they enter politics for a mixture of reasons but mainly ideological in combination with power seeking, family tradition, vanity, personal indulgence and of course money with the degree varying for each one of them.

It is a tough job we have to admit, a 24/7 one. Do you want to be doing it? I doubt it. Neither do I.

This however is only part of the story, because if you stop perceiving the Politician as person but as a notion, a societal necessity, then the Politician is transformed into a social behavioural pattern and as such an institution!

Mainstream Institutional analysis suggests that every institution (every behavioural pattern) evolved or emerged from something else and according to the Gaianomy Theory is an assembly of other more fundamental and inevitably more ancient institutions.

So what exactly gave “birth” to the Politician?

It is not so hard after all to imagine. If we start from the first tribe settlement in Africa, to a the villages in Mesopotamia, To Egypt, to the kingdoms of East and middle East,  to the city states in ancient Greece, to middle age states to today countries and unions we can draw a functional path that this institution had to follow. Add to that, elements from the newly developed Hierarchy of Societal Needs pyramid and …presto.

Leadership, kingship, the elders council…taxation, polis, state, economy, tradition, religion, army…law, legislation… aristocracy, public servant, public administration, democracy, representative, union leader…diplomacy… trade… to name the major ones all contributed.

Now, stop and contemplate. If I was giving you all of the above institutions and was asking you to synthesise them in all possible ways you may probably in between all others found one with the characteristics a Politician as well, the question is though would you keep it as a viable model?

Is this institution really, what we expect of the politician today? What is the ideal model you have in mind? Of course, different countries have different approaches and possibly different requirements but let us take the average democratic state.

What the people expect our politician to be doing?

  • Have a political philosophy
  • Be knowledgeable and educated
  • Know in depth public administration
  • Know how the real economy really works
  • Being able to legislate
  • Be moral enough to care and defend the interests of the citizens in his constituency
  • Be a good negotiator
  • Be a good diplomat
  • Understand the basics in economics and resource management

Probably you expect all of the above to a degree.

Does he necessary have to be?

  • A CEO
  • An Organisational Analyst
  • An expert in HRM
  • An expert in Resource Optimisation
  • An expert in Process Optimisation
  • An expert in Economic Design
  • An expert in Organisational Modelling
  • An expert in Public Health Management
  • A Strategy Consultant
  • A Management Senior Consultant
  • An expert in Risk Management
  • An expert in Constitutional Law
  • An expert in Globalisation
  • An expert in Commerce & Trade
  • An expert in Finance & Banking
  • An Investment Senior Consultant maybe
  • A Supply Chain Senior Consultant
  • An Institutional Analyst

I bet, that your answer will be no and you will be right.

However, this is exactly what a modern democracy operating under capitalism or capitalism bounded socioeconomic models, is demanding /expecting of them and we close our eyes in the obvious fact that they just cannot do it. They may hire consultants and analysts to advise them, but themselves very rarely understand even remotely the basics and based on their nature end up with the wrong decisions most of the times.

Look around, with all countries in debt, several countries and Unions desperately trying to save their economies from collapse, the global fiscal policies in total disarray, decisions that ought to take hours taking  months instead, unemployment in its highest in all Western economies…..

What we ask from our politicians, they cannot deliver. (Full stop)

Having someone to blame is always a good thing but, we are in a very gray area currently and we jeopardise the future of the next generation not to mention the planet. You cannot have an omelette without breaking eggs. Is it not time to see things for what they are and grow up?

If you see a country as a Business, the way The Markets do, I wonder, is there a place for the Politician, the Political Party, the Public Administration of the 20th century pre- Markets world or we need to alter these institution and with them the Democracy framework that supports them into something different, something more 21st century?

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