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1 Feb. 1997   From Poor to Rich

By Pavel Kollar
Cofy Anan in Davos called big business to help fight the poverty in underdeveloped countries. He said that private business was ever a powerful mean in development. He also proposed this help to be regulated by UN. The aim is to create a mid class which could be a guarantor of stability. He wants to stop the widening of income gap because this can destabilize societies.
I think the best start for the solution of this problem is the precise definition of the terms poverty and richness, and bringing under the focus the way of enrichment, making difference between criminal way which set foot in some post-communist countries and a normal way. Then stating clearly who is poor today, why and where and similar and also who is rich today and why. This will enable better insight in the value systems. What is the value for whom and where? What the people need and where and what they can do? And what are doing the rich? This is the question of communication.
What's the so-called mid-class, I think this generalization is not the best way to approach the problem. This mid-class can be development promoter to one point but after this point it can be development inhibitor. The best example is Latin America which has this mid class which stabilizes society but on the level which is adeqate to this class. This class did not resolve the problem of poverty in this region, although it monopolised the power. The better solution, among existing known solutions, is the free market type economy of North America which is less monopolized and where there are more classes which promote development and are playing as stabilising factor.
Among new but non-existing solutions, there can help the separation of societies. This is pure theory now. Posssible one day it will become practice. The problem of poverty was tackled by communists also but they solved this problem in criminal way. They deprived capitalists totally as though they hadn't contributed to the value creation anything. Social democrates tried to solve this problem through negotiations about the value(income) distribution but these negotiations came to one point when the workers(poor, later turning to mid class) remained without arguments, so all remained dependent on the good will of employers.
So, there is today some turning point(at least in problem detection) which requires new ideas from both sides but until now there is no any. The only really way out seems to be the competition of poor with rich. But this requires a good part of isolationism on both sides, and also a new, more individualised technology which until now does not exist. This is nothing other than a set of liberal ideas, this time used by poor, ideas which made once in the past the poors of that time rich of the present time. This means that those political groups which traditionally were speakers in the name of poor must change their doctrine, which is the income redistribution doctrine, and to apply the income creation doctrine of liberals, but now only on the part of the society which is poor. This would possibly require disintegration of traditional societies.
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 ©Copyright 2001 Pavel Kollar



25 Jan 1997    What Soros Really Reproaches Capitalism?

By Pavel Kollar
He is criticizing money and market saying they are sources of troubles. I think he really criticise the social moral and personalities of decision makers. The present capitalism does not functions according theory but according normative agreements. Many values can't be expressed in money directly, but inderictly yes. With removal of money and market there will go lost even this partial measure of value. What is to be corrected is the moral and the character or more concrete the moral codes and the PSY-tests according which the present leaders are selected. The present capitalism functions according the authoritarian moral code, not the liberal one. True liberalism cannot exist until there exist some authoritarian institutions such as churches, police and military.
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Today poor is one who has no good tactic and rich is the one with better tactic, tactic of using authoritarian institutions for own benefits. But tactics include knowledge also, knowledge how to come on the top of social hierarchy. This knowledge is not delivered by education system but  ....
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Change money from indirect expression of moral and into direct one, and from a mean for partial expression of value to expression of value as whole.
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Communism failed because they removed money even in this indirect expression of moral, and relied upon unclear and ununderstandable moral rules, a manipulation of communication.
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This is not theory, only illustration of thoughts, making them more visible
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Profit making in the practice is selling relatively cheap products to great number of buyers or expensive ones to small number of buyers. Today great profit makers are those who have many customers for their products, products which can be produced with min number of employees, that is, at min costs. It is clear that not all people have such a talent. Communists tried to equlize individuals so that despite of their different talents they rewarded them equally. The income distributor in society was a central office under the control of the dictator. There were not market negotiations between sellers and buyers on the market. These were removed under the explanation that negotiations between unequal people cannot be just. They solved this problem so that they enforced full employment and centrailized the reward distribution. The result was that the firm lost the ability to transform.
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Happy buyer of consumption goods is the one who is making savings from every shopping. Happy emplyee(seller on the ability market) is the one who can sell his/her abilities at highest price. But the competition on this market is too sever and not ever fair(in the sense that not ever the required abilities for performing job are purchased by buyers of abilities, there are many other factors, ....). Beside this the buyers of abilities are not stabile buyers, there are many bankruptcies, shot-downs. But possible there is no enough buyres on this market of capabilities because the producers of goods and services are big collectives, are monopsonists on the ability markets, are organized and they have much better marketing organization than the individual(or even the organized) emloyee. Communists solved this problem so that they removed the market and introduced central distribution of abilities.
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Individual discarded from the labour market cannot become the competitor on the good market, to compete with the big producer who shut his doors before him. The reason for this is lack of technology. Good production technology today is taylored to big collectives and can produce cheap products on mass scale.
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Today the big car producer has nothing to worry about the roads, about the ecology, about the security of buyers, etc. Not so the Luna Park owner which is responsible for all this.
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How to make a choice in situation when there are only two bad alternatives? The rational decision maker will choose the less bad one. The decision maker with phantasy will try to create third good one.
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 ©Copyright 2001 Pavel Kollar



24 Jan 1997    Globalization, pro and contra

By Pavel Kollar
The promoters of globalization argue that in spite of inequlities and turmoil globalization is unifying force, offering work to poor around the world. One leftist author is bringing evidence of devastating results:
l) The rise of enequalities, gap between the part of global work force and those who are not globalized. Despite this globalist enterpreneurs are lifting millions out of powerty. 447 billionaires income is greater than the income of 1/2 of world of poors. 2/3 of worlds people are out of decent life, hurt or marginaiized by globalization.
2) Dvindling jobs and wages .. globalists are using home child labour ..... people are living under terrible living conditions, even the well payed worker under good working conditions. These workers have no right to organize and strike. In US companies use threat to move production to China and Mexico, to bargain dovn wages and benefits.
3) Casino economies.. US government and the World Bank are making pressure on poor countries to open up their stock and financial markets to foreign capital. While offering new profit opportunities to the global investing elite of the world.. these measures are turning the third-world economies into casinos, vulnerable to the whims of the 20-somethings who manage the world's mutual and other investment funds.
4) Environmental plunder .. China, Chile, Indonesia, Philipines ..."development" ... combination of tearing down forests, overfishing, rapid depletion of minerals and poisonning of land by agri-chemists. The long term costs of this growth are not factored into various measures of success, yet the next generation in these countries will spend much energy coping with erosion, depleted fishing banks and increasingly unproductive soil.
5) Community collapse ... there is progress, poor people lending jobs in factories, entering the cash economy and purchasing that first TV set and this is available to millions .... yet many rural communities are by-passed or undermined by globalization, where well functioning social units.. where hunderts of mil. of subsistence farmers and fisher folk have earned a livelihood for decades. While poor in terms of cash income, their commmunities often scored high in terms of nutrition, social peace and even education. ... A few people lend jobs in the large corporate fishing fleets and agri-business farms that are the engines of globalization, but many more joins the ranks of the hungry unemployed. In this sense globalization is destroying liable rural communities.
6) Democracy in danger ... policies are adopted to serve the needs of global firms, undermining stabile communities, clean environments and dignified jobs. As corporate contributions became the determining factor in elections world over, governments' ability to serve the needs of their people diminishes.
Clinton ... launch new spote(?) of initiatives to expand free trade world wide. These will be opposed by a growing international network of organization of workers, environmentalists, farmers and women. Evidence: cuurent rute to economic of globalization is not working for a most of humanity.

Here is my comment:

- It seems that on every USD 1 of increase of income of poor, there is an increase in income of rich of more than USD 1. The result is widening income gap. This is the law of income creation or law of investment: every investor expects an earning greater than the cost or the invested sum. Income gap can be narroved only by exchanged roles. Rich are now the investors, earning interest on their invested money. They are in the role of lender. Poor are in the role of borrower. Can they exist one without another? According theory, both are better if they specialize and trade. Rich are selling money to poor in exchange for more money. ... on every USD 1 hired they are getting back USD 1.1 for ex. after elaps of some time. Poor will borrow money under the condition that this money will allow him to earn something, and from this earning to pay back to lender the capital plus interest. But reality is that this earning is not sufficient to create own capital and pay back.Considering the pay-back is compulsory, the lender will earn money, not so the borrower. Rich are richer because they supply more money than they demand. Poor are poorer because they demand more money than they supply. The net earning of the first is positive, of the second negative. Poor can break this vicious circle of powerty only if they create some balance between demand and supply of money. And to make this, one will have to choose the way of slower development and isolationism. The opposite way, the fast development(what means accept the specialization role offered by rich, and this role is to be poor for ever) will widen the income gap.
- It is questionable whether globalists create jobs... additional jobs or whether they only transfer jobs from one geographic area to another. For them the geographic frontiers are diferent from the national ones, but all economic indicators are related to national frontiers, not to global or international(what is without boundary, the greatest whole). This is manipulation. Creation of jobs is the function of the demand for products in one geographic area which allows free movement of people. Between China and US such a free movement does not exist.
- Casino economy is the problem of decision making ... a decision freedom of one decision maker, who makes decision about .... what? If the accounting area is Philipine but if the decisions about the money spendings in this area are made in US then there are two decision makers ...and the question is the choice of one between the two ... who makes better decisions for Philipine, the US government or the Philipine government ... and the continuation of this speculation is that US and Philipine should have one government or that the two governments are making the best partial decisions which max how their partial benefits so the total US-Philipine benefit.... that both of them are taking into account the interests of the whole.
- Environment plunder ... money itself cannot be need satisfactor for all fields of individual's needs: PSY, MET, GEN. But there are physical activities which do not serve to any need satisfaction, whose uniquelly aim is to create money. Money was invented to gear physical activities for need satisfaction. In some cases money is used to gear activities whose results do not contribute to need satisfactions but came to function because of some false impulses from the money stream, when this stream runned out of control. Money from mean transformed to aim, for purpose itself.
- Community collaps .... is the same as in one society were two currencies functioning just haphazardly and without influence of their owners, making confusion. This is not the case of two groups, every with own currency, trading with each other. This is chaos.
- Influence of economy on policy by means of money ... according theory economy is self-regulated by money. When political influence into this system by overregulation(law) then democracy is turning to dictatorship.One solution could be that political parties are financed only by private money of their founders but I am not sure that this will make some difference. The second possibility is to remove governments as decision makers by law, letting them only with communication function(and all to be regulated by money). The present governments are allround institutions, not oriented to basic human sub-systems(PSY, MET, GEN).
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 ©Copyright 2001 Pavel Kollar



16 January 1997      Soros, again ....

By Pavel Kollar
I read an article from Gerge Soros in IHT recently. Mr. Soros is not only a good money player but also a good journalist. He is writing his articles so that readers argument in his favour, what I made also. But at first what he said about capitalism: Capitalism threates to undermine free and open societies. Laissaize-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society. Capitalism had now replaced communism as the greatest threat to open society. Open society is anti-totalitarian. Dogma(Communisms and Fascisms). Soros is distressed now by growing global fealty(=loyalty, alegiance ... duty of tenant to his-lord)... magic of marketplace which drives to elevation of self interest over the common good and to belief that money is the true measure of all values. What used to be a medium of exchange has usurped the place of fundamental values. "Being successful is not identical with being right" A. Smith believed into more than the invisible hand of the market forces monging(=promoting) his economic theory with a deepsealed moral code. Soros about ownself: He made more money than he needs...using it now for fastening of democratic institutions in East EU. Today market idolatrism threatens to depart from realm of the merely distortefull into that of the downright dangerous in several areas. Market which in the past brought prosperity have crashed, sending ripples of destitution racing across, creating conditions for totalitarian backlash. Laissaize faire system has bias toward income inequality and toward the social tension that may generate. Soros: governnent intervention is "ultimate evil". Laissaize-faire ideology has banished income or wealth redistribution. The tendency of governments to sit on their pocket-books rather then opening them, brings up the point that appears to be the wellspring for Soros's article: the lack of financial support from Western governments for rebuilding of East can have grave consequences. Communist bosses now succeeded in power by "robber" capitalists in a system grown unbalaced. Russians are turning to charismatic leaders promising national reveal at the cost of civil liberty.

Here is my comment:

- I do not understand how can cipitalism undermine free and open soclety when the two are the same thing only expressed in different forms, in the first case this being the money and in the second the rights, rules,... Between two individuals there are relations or interactions (relations are structural concepts, interactions functional ones) and these can be expressed in different forms. With the term 'rights' is usually described the position of individual in the group, and with 'money' is described the value transfer in transactions. The real values are physical goods and services, money is only their representative, it is an information. As different from some goods and services which are not storable, money is universally storable. So, capitalism and free society are the same. In communism the money was valueless because all was prescribed by force.
- Free market is destorted by monopolists.(Laissaize-faire is noninterference in policy or economy by outside authority, that is the relations and interactions between the two are result of agreement between the two). In the free market the value exchange is the result of negotiations between the two. But this situation, by existing state power(what is monopoly) rare exist because ever one side has support from this universally monopolist. So, free society is distort by monopolies, not by free market.
- The tradional definition of the market is that this is some exchange of goods for money.(Market = sale, the opportunities for buying and selling, conditons for this, supply and demand (quantities) and their prices(asking price, offering price) needs(preferences) and abilities). But when two persons speak to one another this is also market only value transfer happens in different way. So before attacking market it would be better to clear the definition of the market. The state interference into private business is also market only the actors are not in equal position: one is monopolist another free competitor. Then the conclusion is the same as in the first paragraph above: Free society is destort by monopolists, not by free trade.
- Can 'market value' distort the free society? Value is created in negotions and agreements between the two(at least). Society is interacton between the many. From individuals' standpoint value is a quocient: 'what I need/ what I have as ability to satisfy this need'. The question is under which conditions can be created more 'realistic' value for individual: under influence of monopolies or in free negotiations? The answer is apparent.
- Can bargaing distort the free society?(bargain=agreement as a result of negotiation). Robinson Crusoes every on his/her own island are not society. So, bargain is free society. But is communist distribution of values(by central government) a really society. Only by chance, because every individual communicates only with governor, not with other individual. So, yes and no.
- Can free society exist without exchange?(exchange=give or receieve on place for another; the relation in value; one value in terms of another; comparison of values, obtain in exchange for or by some sacrifice). The conclusion is similar as above.
- So, capitalism and open society are the same. Communism was a system in which common relations were on the basis of ideolgical rules and interactions(exchange of goods and services) also on the bases of idelogical rules. So, communism was neither capitalism nor open society. Rules were prescribed by dictator and controlled so, there was neither bargain, nor negotiation, nor exchange between groups and inuividuals, there was central distribution.
-Soros: capitalism has negative by effects(selfinterest over the common good) caused by wrong interpretation of the role of the money... money is only a mean of exchange(form in which value can appear, one of many ..) not value itself... image of value, not its substance...from medium of value it transformed to value itself [This is the Marxian theory of "fetishism of goods" because money is good also by itself] so the owner of the money can be rich but need not be happy(or observed and valuated as right person by other)[My comment here: Wrong is that not all values are expressed in money. So, it can happen that great values can be marketed at low money value(or zero money value) and vice versa(for great money one can buy small value or disvalue). So, the interference of these other representatives of value(they interfere with setting of money price) has for result that money is often considered as 'false' representative of values. But question is: is moral value by itself or only representative of value, similar as money. My answer is that it is only representative of value. There is no difference between rules written down in Bible and the same rule imprinted in a coin or printed on a piece of paper. Both are rules. Value is individual feeling, it belongs to PSY not to economics. The way of expresion of this feeling is not perfect until now. This is the source of problems with money and also with all rules(moral, law, knowldge, emotions, power, ....). Setting rules is much problem of communication than economy. By communication, to be communication and not manipulation, one must ever make picture about the communication partner. In other words this picture calls environment for the first one. So, the value as individual feeling and comes to implementation in communication. Economy is communication science, but narrowed only to money communication.
- Economic theory is positive thinking, it is mathematics, logic and is truthfull only so much how much are the assumptions truthfull. But these assumtions are not ever facts but rather valuations, "good or bad", are the "environment" of the theory, are normative statements hardly decidable by mathematics and are usually decided in democracy by voting system, compromises, consensusses or by staying every with own=separation of societies. So, I think Soros, criticizing the market and money really criticise moral=what is not expressed in money directly but indirectly yes(there exist dirty money for ex. and money laundering) and personalities behind the great social decisions. The so-called management science is normative, not positive theory. Then the present private business need not to be considered as a natural phenomenon in the physics, explanable by physical laws and theories, but as human group with its value system consisting of value systems of many individuals. That means it is a broke-house or a value exchange. The present capitalism do not function according theory although theoretical statements can be parts of decision models of managers (and nonmanagers) but the role of these theoretical particles in decision models is only to help to categorise directions or to make easier this. All decisions are made on the basis of value systems by one criterion or another, as described above. So the poor money is only an indirect expression of morals rules prevailing, and of personalities of decisions makers... and in spite of the fact that the money is only an indirect expression of moral and personality, it is a very precize measure of these decision making elements. And this is why it deserves to be kept. What is to be corrected is the moral and the character of decision makers. How to accomplish this? The present decision makers are selected according PSY tests. If the argument is that the present moral and present decision makers are bad then the tests were bad and these are to be corrected. But this is only the start ...this moral and character correction ... the decisive step in this reform of moral will be its expression in money terms. To do the opposite, to remove money from decision making and replace it with moral, equally the old one or the new, is the way which was already walked but it proved to be blind. The communists removed money from decision making(retaining it only pro forma, possible only by mistake or by misunderstanding of their doctrins ...but not because it had some value for decision making or possible using it only as a mean for inderect expression of their moral and personalities) replacing it by ideological rules and personality features of decision makers. The money which they kept expressed the results of their decisions but they had trouble to interprete the negative monetary results. Many transactions were not expressed in monetary terms. Why they failed? Possible that the rules were contradictory on different levels, misunderstood, the new values and the words in which they expressed themselves were hard understandable by older generation, that there were "mixes" and possible that the "iron curtain' was not perfect and their intention to compete with the West caused an aggressive competive reaction by Western societies.... They would possible survive in conditions of total and perfect isolationism. Then what is the another way? To improve money, to improve capitalism, give monetary expression to those values which were until now expressed in the form of rules. Make capitalism total and perfect. The present capitalism is unperfect because many markets are monopolistic, because it is too collectivistic and because its technology is also collectivistic. Its pricing procedures are incomplete, omitting many factors. The majority voting of democracy is cause for many monopolies, among them the greatest are the national governments. From social decision making system there is completely eliminated the consensus, compromis and separation. The present globalisation is too authoritarian and monopolistic although it is market. The credo of globalists is based on the false interpretation of theory of comparative advantages or opportunity cost differences. They are motivated with the gain from trade under present pricing system which ommits many costs. They are making decisions on the basis of illusive alternatives. They need not to bother that they will loss their markets because the monopolistic state will always supply them with cheap labour. Their decision models resemble to those of the politicians: there are two bad alternatives and we will choose the less bad one. How to choose the third good in this situation? This is the choice of either suicide of decisin maker or decision maker is killing the two bad alternatives and becoming the third good alternative by oneself. How to accomplish this in the practice? Today there do not exist some theory which would make easier decisions regarding the direction of future development. So, what remains is intutition and guess. The only plausible explanation seems to be that too much trade is wrong and also too much isolationism is wrong. So the optimum could be somewhere between the two. For more better explanantion a theory of social transformation is necessary but such one do not exist today. The results of such a theory would be for ex. a knowledge about how to change borders(front lines) between social groups so that the benefits for all be max and the costs min. But this is already normative statement. The existing economic theories do not deal with such an issues directly. The theory of firm for ex. states that the quantities of products or services demanded and supplied depend on changes in prices and it forecasts the behavior of consumers and producers as reaction on the changes in prices. The consequences of these reactions of producers and consumers on changing prices are changes in market structures of products. Some products are lossing consumers another are gaining. Market consists physically of groups of people on given territory or space and in given time. Restructurization is transformation. All is in changes, how products produced so industries in which the producers were active and from whom the consumers used to by products and services. And all this is governed by profit interests of producers and by saving (or utility) consideratons of consumers. Naturally all expressed in money, the moral and the personalities of decision makers as given. Supposition is competition, that is free entry and free exit from the markets, equally in which role. But this supposition of freedom in practice does not exist. The cause for monopolizations are how in producers so in consumers. There are some physically barriers for freedom but most of them are PSY ones(moral, personalities). There does not exist theory of individual life which would predict how many openess or freedom is good and how many autarkism is good. The present theory of comparative advantages and opportunity costs is too partial to explain the behaviour of individual. Today poor is one who has no good tactics to protect oneself against aggressive "take-awayers" who with their offers of small satisfactions are taking away great values. And rich is the one who is skilfull in offering small values in exchange for great ones. For somebody this could resembles to Marxian theory of exploitation. But only on the first sight. Marx explained his theory on consequences of the market exchange, that is statically. There were rich on the one side and poor on the another. For better understanding of the same phenomenon one must go behind the market functioning:
      - poor is competitor on labour(or factor) market where he/she offers or supplies or sales his/her 'products of life' and where the competion is severe pushing the prices down; and the one is also competitor on the market for goods and services where he/she takes over the role of demander(or buyer) for the products and services of others which are his/her 'life producing factors' and where the the competition is also severe, pushing the prices up
      - rich is a monopolist(or near monopolist) on labour(factor) market where he/she is selling his/her 'products of life', posing the prices high; and one is also monopolist(monopsonist) on the markets for goods and services where he/she is buying his/her 'life producing factors' so being in position to push down the prices of some products(not of all).
In this situation the only reasonable solution for poor is to leave the common society with the rich. The exchange between the two societies will possible continue but the prices will tend to equality. This will come as the result of 'role universalition and isolationism'(as opposite of 'specialization and trade'). If in addition the moral and the personalities of decision makers would be expressed in money terms they'll more easier enter the pricing calculations, so the prices would be more realistic. The objection against this solution could be that many goods would become expensive, that this would be the end of mass and cheap productions, that many pleasures of the present life would vanish .... Pleasure is feeling and can come how from physical touch so from imagins. Today the car is a thing which can transport you to distant places relatively fast and also create a feeling of freedom, prestige, an experience of speed of movement through the space, of possession ....These are all effects which could be felt also in "Luna Park" situations or in some 'drug' session also, without physical car. Today the car producers are selling not only these need satisfactions and the feelings which follow them but also the whole environment of their products which cause those feelings, these environments being the broad streets and highways, parkings, but also the air pollution and the consequences of it. Without this environment they won't sell any car. But the buyer of the car pays only the price of the car to the car seller, for the environment the payments are going to other sellers. So, the prices of products are today partialities. There is no some 'price of the whole life'.
- Profit making in the practice today is when one seller is selling cheap mass product to great number of buyers or expensive goods to small number of buyers, and these products being produced by min number of employees. In this situation the profit will be max. The results are known: unequal distribution of incomes. The communists solved this problem so that they increased the number of employee but they payed this full emloyment and egalitarian advantage with loss of tranformability the firms. They made a rigid and unchangable society. The changes were delyed to some undefinied future time. But what were the consequences of this decision? When this time came after long waiting, the lesson was clear. Instead of making changes step by step in the past, they had to make them all at once now. And were their buyers happy? If the description of happy buyer is as the one who is making saving at every shoping and who is selling his/her abilities with highest yield then the communist buyers were free of these feelings because they got all decided by the central distributor. In capitalism today the problem is the market of abilities, the selling of abilities. The competition is too great, many went bankruptcy. They became early obsolete, unemployment benefit receiver or social support receiver in relatively early age with small chances to change industry. But is the problem in too many suppliers or in too little buyers of abilities(these are the enterpreneurs)? It seems that the present enterpreneurial function is monopsony(solely buyer). The main contributors to this their advantages are the big collectives and the technology tailored to these big collectives. The individual suppliers of abilities are isolated persons or families or households. There is no such technology today which would enable them a successful competition with big collectives.
- Communists solved this problem with enforced employment and with administartive prices for capabilities. The result was that they had to correct also the prices of goods and services in the same way. The profit and the saving lost their function as ego-interest creators and as motivators for performance. Market competition was replaced with competition for place in social hierarchy with criminal methods. There arose a new moral, a criminal moral, a legalized criminal.
- It is true that individual or his/her family is uncompetitive in comparison to big organized business. But on this point there are to be distinguisehed two terms: the physical production of great pieces with great tools and the information base for this production. The latter can be individualised. And the new informational technology is on this way. This is the chance for potential employees to break the monopolies so that they will offering their abilities to more than one buyer and so increasing the price of their services. Naturally this is not a theory but only illustration of thoughts.
- Soros: These negative side efects of capitalism, such as poverty, income inequlities and social tensions(in comparison to great richness=two societies running paralel at different speed and acceleration) will motivate the slower(which could be in majority) to stop the race violently(comunist revolution). So, the present capitalism is preparing its own burrial[Marx said the same]. Is there some way out? Soros is against government intervention("ultimate evil"). He is right when he sais that the laissaize-faire ideology was not even an income redistribution ideology(it was income creation ideology and did not care too much about its equal distribution, because the supposition was that everyone has these abilities and that the society is so organized that everyone can implement this ability) but he didn't say that, as reaction on this failure of liberalism there arose one democratic redistribution ideology, the social-democracy in EU which performed this by using state, that is by state intervention. And these two ideologies in succesion kept the balance of social integrity. But can liberalism be reformed without state intervention? According me yes, making capitalism perfect and total. Not removing money but enlarging its function so that all moral rules become converted into money and all personal characterisitics also. Only under these conditions the pricing calculations could be real and money would become much better representant of the value than it is today. It is not easy to imagine all details of this transformation(one need a good insight in the future) but I am certain that such future is possible and realistic. But this process will have to go paralel with political changes. Instead of majority voting there will be separation or discrimination voting. The present societies will disintegrate into more separate societies, every with its own government, banking system and currency. This disintegration will take place on accounts, not physically. Eelections will be every year not only in four yeras terms(these will be possible for medium or long run decisins). The votes will be more differentiated, instead of voting personalities there will be a big check list for quoting needs and offering abilities in different fields(PSY, MET, GEN) and all this in money terms, expressing how much is one ready to invest and what one expects in return. Government will be a big communication system not a decision system instead of individuals as it is today. It will be an information mediator and supplier of information related to whole, but the most decision making will be made by the individuals in direct negotiation with one another.
- What's the remark that Western governments are sitting ... instead of helping to East to rebuild ...it seems to be in contradiction to the statement that the government intervention is a "last evil". Why governments, why not private investors? And who are the really "capitalists" of the East today? And why the new leaders there made mistakes in the name of democracy and market economy, presenting them unfunctionable in those societies? Is this to be attached to democracy and market or to social moral and personalities of those contries? Democracy and market are not values by itself only a mediators of values, a techiques of decision making and in this sense thay cannot fail. They are expressing only very precisely the "quality" of the latter two components. Then what is to be repaired is not the democracy and capitalism but much more the environment in which they function, the moral and the personalities of decision makers. If somebody there offers other solution (communist dictatorship) then these are wrong in their estimations, because the backward transition will bring even greater troubles then the present faults of the reformers. To persuade them that they are false, Wests must undertake steps to improve its own capitalism and democracy, to show them that the liberty need not be in contradiction with income distribution, that the market can be income distributor also without intervention of the state, and that the market system do not need to work against social integrity. And the Western societies are very near to this state. The only what they need to sacrifice is the authoritarianism. Separation is the symbol of freedom, and the social cohesion based on it is much stronger that the one based on authority. There are many example which can prove this. Communists experimented too much with federation but all these resolved into independent states. Bilaterally contarct between free entities can be much better sources of cooperation. So, West is on the move which could be crucially important for the future and today only the West have necessery potential to undertake this step.]]]]]
./.
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 ©Copyright 2001 Pavel Kollar



31 December 1996    Trade Between Poor and Rich

By Pavel Kollar
Some empirical data allowing conclusions regarding advantages from trade between poor and rich:
- an OECD report from the beginning of 80s showed the widening gap between poor and rich although progress in both categories, the progress being slower in the first one(comparison of countries)
- American data from mid 9os, comparison of income of different social groups in A... gap is widening... although there is increase but much slower for the poor
- American data ... increased demand for lux-articles ... more find more people in categories of high income... less people in categories of low income(?)
What kind of conclusions are to be made from these data?
- the income gap is independent on the fact wether the trade is accomplished in one currency(America) or in more currencies with existing excahge rate mechanism(World)
- greater the specializbtion and trade, wider is the income gap ... specialization and trade regulated exclusively by market indicastors such as demand ad supply, price and quantity and market type
- but there is no proof that free undertaking(without governments interference into markets) will contribute to more competive markets(= less monopolized markets) the oprosite is possible also
-the widening income gap is a result of monopolized markets
-in situation where the state interference in markets is present, the income gap can show narrowing tendency but on the account of less new products offered by producers, especially for lower income classes, for reason of slower transformation
-in less regulated societies the transformaton is faster, but the income gap is showing widening tendency
-the widening income gap is an indicator of monopolis(strong integration without state interference into markets) and is a signal that demonopolization is necessery, this being possible only by decomposition of big societies into more smaller ones
- there must be one point when specialization and trade are turning back to autarky(self-sufficiency)
- autarky societies are not comparable with one another(and from their own standpoints) if there is no some higher level obsever with own measuring system .... ?
./.
Some more empirical data regarding the above mentioned problem:
- l914-18 some regions of A-H Monarchy(rich or poor, equal) complained that they were in disadvantgeos position in the unitar(or federal) state, that they lost from free trade and one currency
- in YU whole time(1950 - 1990) how the poor so the rich felt that they are lossing from being together(one state, one currency, free trade).
Conclusion: it seems that the source of disadvantages is the rigidity of the system, mnonopolies, non-changes when these are advantageous and the opposite also, too great changes when steadiness is better. And when such things are happening (disadvantages) then their cause is in bad governing ... some mistake in governing functions, possible not enough sensible measurement, unclear goals, etc. Theory of optimal governing until now do not exist. Governing is normative science, not positive.(?)
/.
As general conclusion regarding the discussion above is that there are two directions of movement or tendencies:
- from autarky(and one currency) to specialisation and trade (with one or more currencies)
- and the opposite direction from specialization and trade (with one or more currencies) to autarky(with one currency).
But there is no unique answer on question about the criterions ...when to choose one and when another.
./.
So the question could be: how common or non-common currency and how specialization and trade or autarky contribute to differences or similarities in the wealth of different groups. But wealth is not positve category but a normative one. So there is no common measurement to measure it. Theory needs common measurement to measure different phenomenons, what means that the theory is valid only under the supposition of common measurement. Common measurement is absolute one, it is a closed system(God). Open systems require relativities or different standpoints(to understand them as open systems we must make this supposition). Individuals are born as different, so one can argue that the theory of differences in comparative costs(or comparative advantages) is, until now, a natural law. Every individual has some features different from other individuals, what gives him/her identity, although some other features can be similar, but not same. Groups of individuals are created how on the basis of differences so on the basis of similarities. Then what is common in these difefrences? The fact that individuals are individuals, that every individual has identity. To compare different individuals one needs to be either God(a commander of a group equipped completely with information abot every individual) or Ideal(an individual equipped completely with information about the whole, so that one do not needs commander), equipped with some measurement with which one can measure and compare. But this higher level is abstract(equally understood as one authority as separate entity- institutionalzed in physical institution - or only as an agreement between two equal), not real. Real is only a concrete individual with his/her ability to experience and feel. And these experiences and feelings of concrete individual are twofold: once he/she can find some similarites or equalities in differences and this is the direction from concrete to abstract, from part to whole, the univerzalization, and another time the abstract whole is decomposed to individual parts, it is analysed or specialized into concrete units with point on diffrences in common or similarities, this is the direction to individualization or specialization, from abstract to real or concrete. So, if differences are normal and real then specialization and trade(open system) will be the prevailing tendency. But, experiences and feelings from this reality are processed to abstractions which can turn this tendency of open system into opposite tendency, to be self-sufficient(closed system). But closed systems are abstractions, not reality. Would they be reality, then individuals would be equal, copies of one original. [This conclusion differs from the one given in Emery('System Thinking', Penguin Management Series, ~ 1970 , ... by Sommerfeld(author of the article) ... he argues, discussing the transformation of the system ... that the normal tendency of all systems is closed system .... that the system is forced to open itself only under the stimulies from environment .... This was the supposition in discussion.... But is this sufficient abstract supposition? Then isn't it so that only the system is closed, not its environment. Then what is the common feature of both? My supposition is that the common feature of all systems is openess, coming from common feature of all systems that they are different from one another, that there are no two equal systems]. So, differnces are real, equalities are abstract.
./.
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 ©Copyright 2001 Pavel Kollar



4 August 1996     The Public Policy and the Citizen

Policy of policy makers is based on dissatisfactions of public or consumers. Naturally under condition that the communication between politicians and public is good. Otherwise this dissatisfaction will be completely based on the interpretation of this dissatisfaction by politicians alone, combined with their ego-interests. How close will be this policy to concrete individuals, seeking fulfilment of their individual lives? Can one concrete individual, under present conditions manage his/her life in direction of this fulfilment?
./.
The Modern consumer

The modern consumer is a collector similar as its predecessors from remote past. The only differece is that the supplier of that time was the primary narture, today this being the man made nature and the probabilty of satisfaction(the succesfulness of search) is higher today and also the supply is more diversified what made search easier.
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 ©Copyright 2001 Pavel Kollar



26 July 1996      Economic Snippets

Managers of the old school derived their goals from broad context of social considerations and values. This was some kind of altruism. The new managers are more egoists ... they follow the goal of profit of owners and the satisfaction of customers...
./.
Profit of the owners vs. wages and salaries of the employee are categories from the standpoint of the firm. Behind them are resources: invested money of the owners nad the labour of employee. Both are factors of production, their income depends on the situaation on the market of these factors. It seems owners of money are in short supply because they earn more then employees. How they spend their income? Profit is of a good part reinvested, investments into new technology, products, etc. Wages and salaries are going mainly to consumption, only in smaller part into investments. Both of these are incoms but of different type. Without these new investment it is not possible to put in run the vicious circle of income creation ...
./.
Policy is governing of open systems and consists of setting of values, making decisions, control of peformance, etc. But this is from functonal standpoint of the system. Before system starts to function there must take place structurization, integrating different factors which are parts of the system. This integration is also governing. So, governing is structurizing and making this structure to function, then again restructurization. From the standpoint of longer time span governing is governing of transformation usually in direction of growth in capacity and complexity. But new generations of systems are ever less integrated than the previous ones because they are growing in complexity. Is the final point of this development and of governing a return to self-governing of sub-systems?
./.
The economic globalization today seems to be the implementatationn of God's idea. The idea of God was cerated in times when the knowledge about the whole was not regularly distributed ... it was common only to exceptional personalities ... so these personalities were God's and they cretaed this idea of God. Today this knowledge is more common ... today there are more Gods than in past times ... every individual one God .... one can expect that one day the relations between these individuals will be so perfect that no outer regulation will be neccessary.
./.
Globalization today is a drive in direction of one World Government and one world Corporation. The exact copy of Biblical God. The individualization means no government at all - every individual is government and corporation. The relations are either not necessary at all or are regulated on the same level. This is internet. Individualism means knowing all about oneself and also about the environment(how much neccessary for own equilibrium). One individual do not want to govern any other, although supplying information is possible.
./.
Globalist are using the inequlibriums in the world system today. This inequlibrium enables interactions because one system is supersatisfied another unsatisfied. Their national systems became saturated, so lack of interactions which could cause restructurization which they want to avoid. So they are moving outside their national systems looking for unsatisfied systems to continue interactions without restructurization. But what when one day the world system turns to equilibrium and stability. They will be forced to restructurize. So, with globalization they only postponed restructurization. Is this advantage? If they call their domestic situation crisis, then they only export crisis. The way out from crisis is restructurization.
./.
Globalization today is export of social problems ... together with capital and knowledge ... from one land into another .... it is not problem solving in concrete land ..... Globalists are cutting branches on which they are sitting ... one day the whole system will be saturated ... then restructurization ... possible too late ....
./.
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 ©Copyright 2001 Pavel Kollar



12 March 1996       Unemployment

Unemployment ..... employees are paying contribution to unemployment fund during employment ..... then one part of them is falling out and is living from benefits from this fund. This in aggregate. From standpoint of individual firm ..... these fired are saving the firm or enabling its transformation ..... That they are out of job is for reason of unharmonized transformation of the system ....... Instead of paying to unemployment fund they should pay to investment fund.
./.
Question ... whether poor is gaining or lossing when trades with rich? And the same for rich. Would they not be better on if they would be autark  .... self-sufficient?
./.
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 ©Copyright 2001 Pavel Kollar



21 February 1996     What is Price?

Money was invented to replace some things which were used as value stocks in trade. Trade is an exchage of things which bring some value for both sides in transaction. These values satisfy individual needs and are coming form individual abilities incorporated into things. The basic human needs can be grouped as PSY, MET and GEN. The basic abilities are: INT, CREAT, EMOTIONS, SPIRIT. These are the basic values entering the prices of goods and services. The final market price is a consolidated price of all values of supplier and customer. So, there are:
- the asking price of the seller which incorporates two things:

                  $/INT, CREAT, EMOT, SPIRIT                  $/PSY, MET, GEN
- the offering price of the customer which also incorporates two elements:                 $/PSY, MET, GEN                $/INT, CREAT, EMOT, SPIRIT.

Now, both of them, seller and customer encounter one another on the market with their own consolidated prices:

             ($/INVESTMENTS INTO PRODUCTION ~ $/EXPECTED CUSTOMER CAN PAY)              ($/LIFE NEEDS SATISFACTION  ~ $/ESTIMATED INVESTMENTS OF SUPPLIER)

The bargain or market price is the outcome of negotiations on the market or a consolidated price of individual prices of market participants:

             ($/CONSOLIDATED PRICE OF SUPPLIER ~ $/CONSOLIDATED PRICE OF CUSTOMER).

In relation to the price is also the question of individual value. Th term can be explained with the 'net value of the firm' of the present economic theory but is more broader: it contains not only firm's value but also the private(household) value. Generally the individual value is:

                                    $(PSY, MET, GEN)/$(INT, CREAT, EMOT, SPIRIT)

and contains how firm's values so household values. But this is based on individual evaluation of isolated individual. This must be corrected for the influences of environment coming through communication and exchange with environment similarly as it was done in price analysis above. This corrected formula can be something as following:

                        $(PSY, MET, GEN)(invested-expected)/$(INT, CREAT, EMOT, SPIRIT)(expected-invested).
../.
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 ©Copyright 2001 Pavel Kollar



11 February 1996     What is Economy?

The differences between currencies ..... From the standpoint of economy as whole(aggregate) money considered in its mass as flow is a mean by which the government can regulate the real flow. This is pure physical problem.... a regulator. From the standpoint of one consumer it is a question of 'basket of goods' one can buy for some quantity of money. This is also physical problem. The basket of goods in use is a psychological problem.
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 ©Copyright 2001 Pavel Kollar



23 December 1995      Again Economy

The nowday economy ..... how the resources are used ...... what is expensive, what cheap ....on macro level ... agregats ... the economy is presented as flow of different resources from some original source ..... natural resources, labour ..... to final products consumend by comsumers. In this chain of transformation not all stations are equally valued. I think the greatest user of resources is the production of tools for producing products ...... But it is not clear from where is this coming .... from technology or from organization of institutions. I think institutional organization.
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3 November 1995     And Again the Same

Today, economic system is based on strong specialization of labour in production of goods and services .... labour division ..... this is the result of model which argues this is the optimum. And this economy influences also the land use, the use of space. There are some negative consequences. Can these negative consequences be removed by less specialization?
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 ©Copyright 2001 Pavel Kollar