Strategies for Sustainability of Environmental & Resources Efficiency

http://mpra.ub.uni-muenchen.de/id/eprint/43373

Strategies for Sustainability of Environmental & Resources Efficiency

Joshua Ioji Konov

October 4, 2012 

Chicago IL, the USA

Joshua.konov@gmail.com

Abstract

The best global model for expanding Alternative Energies and Environmental Protection is through using market equilibrium, whereas governmental subsidies and fiscal stimulus to be just supplementary. Accelerated Globalization and rising Productivity’ Market equilibrium depends on matching consumption demand and supply through price deleveraging[1]. Hence is achievable in a more fair market competition only by changing market (i.e. economic) agents: from presently used trickle-down economics that stimulate big business and big investors[2] to a more market related economics (Marketism) that would stimulate Small & Medium Businesses and Investors (SME&I) boost business activities and related employment, fiscal reserves and over all market utilized consumption.

This paper is based on two previous papers[3]&[4] and Bibliography.

However, it explains and adds the theory from a new prospective.

Introduction  

Longer-term market development strategies for environmental protection and the adoption of environmentally friendly energy generation and alternative ways of consumption to reduce pollution and waste are essential. Such strategies should be done on a global scale too, whereas the interdependence is real. Shocks apparently emanating in the United States have led to the largest global slowdown since the 1930s[5].

In general, the alternative energies’ technologies and environmental protection are expensive prepositions unreachable by less-developed markets (i.e. economies). While market (i.e. economic) stagnation has been accelerated by the last 2007-9 Great Recession the probabilities for many greatly underdeveloped markets to adapt some advance technologies for environmental protection and reduce pollution and wasting recourses are practically incomprehensible. The ongoing globalization and rising productivity have established some very new market (i.e. economic) conditions of deindustrialization of some developed markets as the US, most EU, and Japan ones, and conditions of lack of possibility for industrialization of other undeveloped markets as Eastern Europe, Southern Europe, many African and e.g. markets.[6] “This climb is a permanent, irreversible change. With China and India — which together account for almost 40 percent of the world’s population — resolutely moving up this ladder, structural economic changes in emerging countries will only have more impact on the rest of the world in the future.”[7]

 The long-term recessions could hardly be self-adjusting by cyclical market forces as it was observed in the last recession this is why the governments intervened in the markets (i.e. economies) through stimulus packages, equity acquisition in the AIG and GM cases, or even farther through Quantitative Easing. Hence, market equilibrium was not left on its self-adjusting powers but it was reached by direct governmental actions to ensure the overall market stability.

The trickle-down economics considers self-adjusting business cycles as necessities for cutting redundancies; a system of market forces based on rising productivity and investment of shady business practices and reduced business laws of tricked-up concentration of capital promoting large transnational corporations and large investors. Capital that would trickle-down to markets (e.g. economies); these agents are supposed to prompt and maintain market (i.e. economic) development (i.e. growth). A system that had brought economic growth for a few Centuries in the US, many EU markets (i.e. countries) and Japan the successfully built developed markets (i.e. economies). However, with the most recent accelerated Globalization, rising Productivity, China’s industrialization, the overall advances in technologies[8] and Internet the global market equilibrium has been greatly affected*[9]. Hence, the marginalizing US income and declining middle class[10] and  “Transnational Corporations, which are considered by the modern economics as frontiers of high productivity and global growth, however their actions have had negative effect in many occasions on the market development of countries as Bulgaria, Romania, Latvia, etc., countries losing equity by letting existing infrastructure deteriorate, reducing their Social Policies and Medicare, and finally deepening into general disproportioned inequality and weak consumption (market demand) into national debt.[11]; For the last 20 years[12] and the last 2007-9 Recession’s severity was the best example for the imbalance (i.e. disequilibrium) in the local and global “demand-to-supply”[13] marketplaces. The Imbalance (i.e. disequilibrium), which could not have been adjusted but by direct governmental interference and when under the emerging conditions in the European Union interference was not properly applied the consequences were recessionary well observed (e.g. the EU marketplace)[14]. Modern days global monetary and fiscal policies by the MDIE that have changes after 1979 from PMAF to AMPF policies[15]. A large deleveraging of foreign assets by Belgium and Swiss banks (about 30 percent of foreign assets), followed by British and German banks (with deleveraging of respectively 24 percent and 21 percent), US and Dutch banks (13 percent), and French banks (10 percent, however the up to 40 deleveraging by all factors of banking can cause high losses and a collapse of international banking activities.”[16]

The faster action by the Chinese, the Japanese and the US governments’ the better results were observed, the slower and indecisive action by the EU the worst and less successful market (i.e. economic) results. Most studies reach the broad conclusion that fiscal policy is cyclical in developing markets and countercyclical or acyclical in industrialized ones[17],

Long-term strategies to protect the environment directly reflect a consistent global market development. Hence, pricy technologies for reducing pollution and deforestation could be achieved under the most recent global market conditions only by business diversification, business enhancement, and overall development in a more secure marketplace. The Rule of Law[18] of contract laws, intellectual protection laws, adequate insurance and bonding[19], etc raises the market security establishing conditions for more lend-able SME&I and less-developed markets, which combined with the artificial for the markets Social and Environmental Expenses becoming more equitable in such more secure marketplace might invoke major market noise. In Maslov[20] the theory of complexity in monetary policies, which could be achieved by diversity in currencies in this paper is extended to micro-macro market complexity of putting new weights on business from easy business of shady practices into more regulated business. The new complexity (entropy)  on a global scale from micro-macro market level will bring similar effect to the real marketplace (i.e. Economy), thus the complexity needed will stop the coming debt disaster and reveres it under the new conditions into global development[21].

This paper adopts the necessary technologies and approaches to prevent global worming and exhaustion of resources into a system of relative market equilibrium under the conditions of global market long-term development. However, to succeed such substantial and fundamental  change of approaches toward less developed markets is needed, whereas from general market (i.e. economic, business approaches) that promote big business and big investors into one that does promote and maintain relatively fair market competition.

The Marketism is based on free entrepreneurship as the motor for market development (i.e. economic growth). Moreover, the Social and Infrastructural expenses alone with Lower Interest Loans and Subsidies are included as market agents to prompt market development, however artificial to the markets agents that to be used only in cohesion with the natural for the markets free business market agents. The Marketism accepts randomness as market (i.e. business) development (i.e. cycles) whereas the market tools coming out of the market agents (i.e. economic agents) are used to succeed market equilibrium. The accumulated in time market redundancies under this new system of Marketism should be extinguished and deleveraged by using thus natural and artificial market agents, whereas parameters in more like system resembling Quantum Physics called Quantum Economics.

Marketism and Environmental Strategies         

Market development (i.e. economic growth) not relying on the governments but mostly on the free entrepreneurship in the conditions of Global Worming and Decreasing Earth Recourses could be only achieved if global market security is enhanced that is in the fundamentals of the Marketism, whereas Environmental Strategies are not anymore uncompetitive redundancies but part of the market entropy[22]. The Capitalism is based on lower economic security, relatively high lending interest rate (exclude Tier I), shady business practices, Currently, these standards do not create binding legal obligations on U.S. corporations and state law fiduciary duty standards do not compel corporate Boards of Directors to act in furtherance[23] of sharply fluctuating business cycles, etc the Marketism is based on higher market security, relatively lower lending rates, the rule of law in business, adjusted randomly market fluctuations by using statistics to locate and parameters to disperse negative built-ups. The formal firms are the most severely affected by financing obstacles[24]. The Environmental Strategies could become part of the Marketism in a more diverse business entropy being redundant under the Capitalism as uncompetitive. Under the Capitalism, the Environmental Strategies could be developed through governmental subsidies and fiscal breaks only.

Market Security

The productivity and the investment are the agents for economic growth in the Capitalism: business laws and regulations, taxation to the rich, social and infrastructural expenses, consumer protection laws, even intellectual property laws, and the environmental and consumer protection laws, e.g. are breaks in the way to economic growth. However, in time, under the social and market pressures the business laws and intellectual protection laws have been better implemented by the best-developed economies than by the developing and undeveloped economies. The developing and undeveloped economies are pressured by the International Organizations (WTO, the WB, and the IMF) toward lower taxation, relaxed business laws and regulations to attract foreign investment “IMF-supported market reforms, with their emphasis on fiscal reforms, have affected the procyclical behavior of government spending in developing countries.”[25]. and thus to boost productivity. Pro big business has been considered the only way for global economic growth, therefore some time fraudulent corporate actions have been overlooked. “Corporations may have assets and liabilities, but they don’t commit crimes — their officers, executives and employees do. And the 23-page letter agreement between Tyson and the Department of Justice, the criminal information, and the S.E.C.’s public statement of facts all withheld names, identifying the participants only as “senior executive,” “VP International,” “VP Audit” and so on.”[26] generally and 151–153 the transnational corporations : “a large fraction of disputes related to foreign investments nowadays is settled by private arbitration and not by national courts. So corporate law firms and accounting firms add yet additional layers to routine transnational rule-making.”[27] In history such approach had worked fine until the major changes in the last 20-25 years, whereas the major tip-off in industrial production has occurred with the mentioned above* The out of balance system brings the necessities for the Marketism becoming achievable as never before in history. The priority of this new system is to improve the market security establishing the conditions for lower lending rates, and to boost SME&I and Less Developed Countries’ market participation. On regional markets or on the global marketplace the effect of improving the market security is to lower interest lending rates that will allow more participants, more business entropy and more consumption (i.e. market demand). By its nature, such change is a market revolution; however, in details it is a very practical micro and macro economic modification of simplified close to the market forces amendments. Achieved high market security would allow long-term environmental strategies’ market related utilization, for these becoming part of the global market competition.           

Market Changes and Enhancements

The market (i.e. economic) agents that work to prompt economic growth (i.e. market development) of the Capitalism do not necessary prompt market development (i.e. economic growth) of the Marketism:

Capitalism	Marketism
Shady business contract laws	Strict rule of law in business
Limited liability corporate legal form[28]	Unlimited liability corporate legal for decision makers form
Business and market exchanges regulations	Business and market exchanges laws
Vague liability and project insurance	Comprehensive liability and project insurance, and bonding
Vague intellectual property protection	Comprehensive intellectual property protection[29]
Vague environmental and consumer protection	Comprehensive environmental and consumer protection
Social and infrastructure as expenses	Social and infrastructure as partial equities[30] [31]
WB and IMF as lender	WB and IMF as promoter and controller
Pro cyclical economics	Counter-cyclical economics[32]
Low Governmental employment and low taxes	Balanced governmental employment and taxes to overall market activity
Productivity and investment as main economic agent[33]	Business entropy (i.e. noise) and diversity as main market agent
National budget as leading indicator to a country’s economy	Inflation/deflation as leading indicator to a country’s market[34]
Big business and investors as beneficiaries  -  compare to SME&I same for small and underdeveloped countries	All market participants including Small and Medium business and investors, small and underdeveloped markets as beneficiaries
Pro supply economic policies	Pro market equilibrium market[35] economics[36]
Global currencies merging (i.e. EU)	Global currencies entropy

 

The Marketism utilizes on these changes and enhancements to marginalize engraved for centuries market insufficiencies in order to accelerate market activities and overall market entropy under a market environment of well developed global industrial basis and capabilities of the US, Japan, China, Germany, and etc. 

Environmental Protection one of the Agents for Development

If higher market security enhances market entropy (i.e. business activities) and diversity the particular and important market agent – Environmental Protection is to be fundamental to carryon even further this market entropy and the following market development. Markets, which are creating conditions for faster market development and could be pushed by targeted market leaps or consistent pressures on some particular market segments that could bring overall accelerated market development. Alternative energies, farming, and technologies are the one to improve environmental protection, lower pollution and reduce the usage of Earth resources; however, if these are competitive market activities, boosted through subsidies and low rates lending it (the environmental protection) could be the major agent for overall market development. The most important, as mentioned above, is such market agent to be natural to the market competition (not artificial as it is now, because of the uncompetitiveness of high prices, low productivity, ineffectiveness it brings). Thus, if the system of economics creates more diverse and comprehensive market conditions the entropy (i.e. noise) of such market environment would utilize the Environmental Protection as market more efficient agent. By itself, such market efficiency would create employment and working competitiveness being rightly subjective to current market equilibrium. Whereas improving productivity and international investment is a market agent that increase market entropy by its improving efficiency and competitiveness in an market environment of dominance for Large Businesses and Investors, the improving productivity and international investment enhanced by inclusion of more participants is a market agent to increase the market entropy in a market place overloaded with industrial goods and manufacturing capabilities in a market entropy of no oligopolies (i.e. dominance) but relatively fair market competition.   

In a market place with high entropy of business activities the overcapitalization, which in case provoked the 2007-9 Recession would not do such harmful effect because the energies that built such overcapitalization would disperse into other market sections, however preventive actions should be used, too. The transmissionability of a more diverse and active marketplace is to be increasing, therefore any monetary and fiscal actions would have more and faster effect on the overall market (i.e. economy). Generally, under the conditions of lower lending interest rates the market as a whole would be able to accumulate and go through longer-term negative recessionary periods without structural disintegration.

Environmental Protection and Lower Lending Rates

Lower lending rates mean generally higher business activities, on a global scale consequencual of less poverty and underdevelopment. For the environmental protection to become globally effective an global market prospective is feasible only. Pollution from exhausted aging vehicles and primitive heating, deforestation, uncontrollable waste disposal, e.g. are uncontrollable in underdeveloped and undeveloped markets (i.e. countries, economies), but international dependence from pollution is enveloping Earth. Moreover, if hypothetically the global marketplace driven by productivity and international investment noise is industrialized, and global economic growth is succeeded by the currently accepted economics the disproportioned pollution and exhaustion of resources would destroy it all. If, however, the underdevelopment continues the pollution and waste would destroy it too, maybe a bit later.

Considering these two possibilities only a third, more comprehensive is possible whereas many markets (i.e. economies, countries) are given conditions to develop but not by industrialization. I.e., immediately, the question appears, is it possible, anyway?

Industrialization and Market Development

The industrialization is the highest point of development in the Capitalism; the technologies and R&D, education and middle class, taxation and fiscal policies are all directly related to the industrial production[37], therefore with the decline in industrial production overall economic decline is imminent.

Historically, the farming was fundamental for the economy agent the industrial production is the agent now[38]. However, the new global developments* have reduced the opportunities for many markets (i.e. economies) to maintain needed for their fiscal reserves industrial production[39] and for great many others to industrialize. Thus, developed and developing markets alike could not manage their fiscal balance or develop in case, therefore high unemployment, underemployment, fiscal shortages, declining middle class, deficit and national debt[40] have become synonyms of lack of industrial production. While the Economic Growth was not possible but by industrial production; Market Development is only partially dependent on industrial production. Even productivity and investment agent does not lose importance in Marketism the market entropy from enhanced business activities should become market agent prompting market development, too; the market equilibrium in such conditions should be more market oriented than it is now, whereas governmental involvement would be less in percentage-wise in compression. The improving technologies, the internet, the high manufacturing capacity of transnationals and China, the easy moving and outsourcing capabilities, the open global marketplace, e.g. are of great balancing supply market agent.

International Financial Institutions and the Environmental Protection

The international financial institutions (WTO, WB, and IMF) are being founded[41] on the principle of lending and bank controlling: lending on relatively high interest rate and short term to less and undeveloped markets (i.e. countries)[42]. The high risk of the borrowers justified the high rates and short terms. Progressively global security exchange markets have extended their share by trading sovereign debt on free market principles. Both ways, at and after the 2007-9 Recession the abilities of many countries to repay their debt have been declining and fewer countries were daring to borrow from the international financial institutions changing them to transmitters of subsidies and emergencies help funds. While public flows plunged in all countries, there is an indication that grants were replacing loans in low-income countries, which is consistent with donor commitments[43]. The targeted by the international financial institutions global economic growth has decelerated into global slow down or recession but a few exceptions. This process, however, has had some longer tail of at least 20 years with deteriorating undeveloped markets’ borrow-ability and repayment-ability, which process could be connected to the weakening consumption in the most developed economies and the rising industrial capability of China, India, and e.g. that has undercut many undeveloped markets (i.e. countries) of manufacturing and exporting goods. As some of these countries are also heavily dependent on external financing from banks and investors, around 60-70 percent for Greece, Ireland and Portugal, a financing crisis becomes almost inevitable[44]. The return on the invested capital coming through WB and IMF funds for many countries has deteriorated, also “The outflow of foreign capital from emerging and developing countries, with its destabilizing effect on private and public finances in these markets”[45]. whereas the globalization has utilized energy and commodity prices rising constantly. Hence, the borrowed capital disappeared into covering previous debt, basic expenses, and corruption instead of prompting economic growth. The international financial institutions started lending on project-by-project basis that made no difference to the conclusions above. 

Even the ways of lending of the international financial institutions have practically changed, ideologically and conceptionally they have not evolved: the formal tightening budgets and close deficit observance are in practice as ever. Hence in a volatile and insecure marketplace is well reasonable. However, with the ongoing changes of realities* the role of the international financial institutions must change too by comprehending and accommodating these realities into regulatory and financial structures prompting market development and managing inflationary processes. From mostly being a lender and collector to mostly being a promoter and controller the international financial institutions should promote the rule of low in business and other Marketism’ utilities on the global marketplace, and thru lower lending rates to raise market noise and diversity.

Business Laws and Environmental Protection

Business regulations mostly used for environmental protection[46] should change into business laws apply indiscriminately and unconditionally. Moreover, formal firm growth improves with better enforcement as measured by fair and impartial courts, while informal firm growth is constrained by organized crime, pointing to their inability to take full advantage of the legal and judicial systems[47]. Hence, unless easing business laws in currently used system prompt economics growth the enhanced business laws would have the opposite effect under the Marketism prompting market noise and diverse business environment. When it comes to environmental protection[48], the effect by such change would have the most positive consequences of all. In a higher security market place in lower lending rates environment whereas governments and international organizations use subsidies and fiscal tools to boost market development through marginalizing market disadvantage for the SME&I the whole new market opportunities will appear… the individual imagination and creativity and the individual entrepreneurship would flourish. Things like consumer protection and environmental protection, the strict business laws e.g. would not prevent businesses and investors from expanding, but in the opposite will level-up competition creating more opportunities in high technologies and more market related education.

Conclusions

This paper may seem to optimistic and bordering unreality, however the possibilities that could come with rising market security on a global scale may go even further. The inclusion of Environmental Protection in the market competition as an market agent instead of the subsidized by the governments artificial part is a possibility, if not the only one that could save Earth from destruction. The system of Marketism is founded on free entrepreneurship and individual freedoms a natural Historical extension entailed into the best-succeeded economic systems of the past.  

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[1] Tressel 2010

[2] Saez 2013: From 2009 to 2011, average real income per family grew modestly by 1.7% (Table 1) but the gains were very uneven. Top 1% incomes grew  by 11.2% while bottom 99% incomes shrunk by 0.4%.

[3] Konov 2011

[4] Konov 2011

[5] Bayoumi and Bui, WP/10/239

[6] Konov 2011

[7] Spence 2011

[8] Konov 2011:  the three main market facts: 1) the ongoing globalization; 2) the rising productivity; 3) the environmental pollution and exhausting Earth resources have major exogenous and endogenous casual effect on the real markets of the Advanced Market (AM) and Emerging Markets (EM) alike. (China is not included as an EM)

[9] Khanna 2013: There is no doubt that America’s manufacturing base has declined, peaking at 19.6 million jobs in 1979 and now at just over 11 million jobs. Despite this economic transition, however, U.S. manufacturing jobs are still worth having. On average, full-time manufacturing work pays 20 percent more than full-time service-sector jobs.

[10] Table 1

[11] Konov 2011

[12] Babecky, and others WP/10/198

[13] Friedman 2013: There is no doubt our economy is primarily being held back by the deleveraging and drop in demand that resulted from the 2008 financial crisis.

[14] Krugman. Paul Data, Stimulus, and Human Nature NYT 2013 That said, if you look at players in the macro debate who would not face huge personal and/or political penalties for admitting that they were wrong, you actually do see data having a considerable impact. Most notably, the IMF has responded to the actual experience of austerity by conceding that it was probably underestimating fiscal multipliers by a factor of about 3.

[15] Traum and Yang, WP/10/243

[16] Tressel WP/10/236

[17] del Granado and others WP/10/234

[18] Tom Bingham, Lord Chief Justice 1996-2008, presents eight parts of the rule of law: The law must be accessible and so far as possible intelligible, clear and predictable. Questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion. Laws should apply equally to all, unless objective differences justify differentiation. 

[19] strategies to mitigate  the impact of climate change will vary by line of business, solvency-related risks remain central to all insurers and lines of business. As such, the threat that climate-change-driven weather-related risks pose to insurer solvency is of universal concern for insurance regulators, especially considering that insurer financial stability is heavily dependent on its investment portfolio. So it is imperative we examine how climate change will impact the investments insurers hold and establish applicable regulatory standards for the investment practices of insurers.

[20] Maslov 2008

[21] Konov 2011

[22] A measure of the disorder or randomness in a closed system. The most general interpretation of entropy is as a measure of our uncertainty about a system. The equilibrium state of a system maximizes the entropy because we have lost all information about the initial conditions except for the conserved variables; maximizing the entropy maximizes our ignorance about the details of the system.[18] This uncertainty is not of the everyday subjective kind, but rather the uncertainty inherent to the experimental method and interpretative model.

[23] Law firm of Fried, Frank, Harris, Shriver & Jacobson LLP 2007

[24] Dabla-Norris and Inchauste WP/07/112

[25] Akitoby and others WP/04/20

[26] Wells and others 2007

[27] Man, Senior International Law Advisor International Institute for Sustainable Development 2008

[28] Ruggie 2007

[29] Watt 2011

[30] Espinoza 2011

[31] Arslanalp 2010

[32] Tressel 2010

[33] Contessi  2010

[34] Anderson 2011

[35] Bhattacharya 2011

[36] Bayoumi 2011

[37] Stiglitz 2002

[38] Bandyopadhyay 2011

[39] Boragan and others 2011

[40] Reinhart and Rogoff 2009: have recently engaged in a prodigious research effort aimed at collecting and analyzing economic data and financial crises across dozens of countries and hundreds of years. The most comprehensive repository of this work is their 2009 book This Time is Different: Eight Centuries of Financial Folly; a separate report “Growth in a Time of Debt” (GITD hereafter), based on a subset of their data on national debt and economic growth, has received considerable attention in the media and among policy makers after professor Reinhart testified at the National Commission on Fiscal Responsibility and Reform.

[41] Shultz 1998

[42] Smith 1937

[43] Combes and others WP/1109

[44] Konov 2011

[45] Chami and others WP/09/91  

[46] Schnaiberg 1980

[47] Dabla-Norris and Inchauste WP/07/112

[48] Schnaiberg and Gould 1994

Enhancing Markets (i.e. Economies) Transmissionability toOptimize Monetary Policies’ Effect

 

Link at Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect

Enhancing Markets (i.e. Economies) Transmissionability toOptimize Monetary Policies’ Effect

Joshua Ioji Konov

Monetary Policies of expanding liquidity through bottom low interest rate; stimulus packages, quantitative easing, etc should be transmissible to the entire market(i.e. economy) for best performance. However, current markets (i.e. economies)do not posses enough market security to provide the transmissionability to reach adequate market development (i.e. economic growth). This paper theoreticizes that by mitigating of 1) the shady business practices of 2) vague personalcorporate liability and 3) contract laws, 4) vague insurance and bonding laws, 5)inadequate 1) intellectual property laws, 2) environmental protection and 3)consumer protection laws, etc market marginalization in fact will enhance themarket security, and improve the transmissionability and the effectiveness of themonetary policies to boost market development (i.e. economic growth).

JEL Codes: A1, D01, D5, P48, K0

Market Leap prompts Market Development

LINK:  Market Leap prompts Market Development

Market Leap is a provoked jump in business activity by artificial for the market (i.e. economy) means: such as targeted low-interest landing or subsidies under higher-market security’ market environment.
The unpredictable but still directed buildup of Market Equity (Eq) through accelerated Market Entropy (En) by Market Leap (L) is a long-run Market Development:

Market (i.e. Economy’s) Equity of Market Economics (i.e. Marketism)

Market Equity[1] is the value built in assets[2] by the level of market development. Market Equity (i.e. Eq) decreases with rising Lending Interest Rate (i.e. LIR), whereas Market Entropy increases with rising Lending Interest Rate (i.e. LIR).

http://www.scribd.com/doc/131635795/Market-i-e-Economy%E2%80%99s-Equity-of-Market-Economics-i-e-Marketism

 

 

Market (i.e. economy’s) entropy of Market Economics (i.e. Marketism)

Market (i.e. economy’s) entropy of Market Economics (i.e. Marketism)

 

The technological improvements in manufacturing, international trade and communications i.e. rapid Globalization and rising Productivity have established global market (i.e. economic) allowances for expanding business activities into not-necessary-industrial related market sectors without prompting Inflation (called by the Marketism – “market entropy”). The entropy is unpredictable business activities succeeded in a market (i.e. economy), which could be invoked by “natural” to the market competition agents i.e. businesses and investors, or “artificial” to the market competition i.e. governmental interventions, or a combination of both. However, if mostly artificial to a market (i.e. economic) competition market tools are used the possibilities for market redundancies or shortages and therefore market volatility and instability if high entropy is achieved is probable, e.g. the governments’ ineptness in handling market (i.e. economy) is well observed. The probabilities for governmentally run economies to bring market distortion are high. However, the trickle-down economics of the a priory Capitalism has exhausted its strength to spur enough business activity for supporting adequate market development (i.e. economic growth) for employment and fiscal reserves. The transnational corporations and big investors are favored by the “shady” business laws and practices, fiscal brakes, lack of international transparency, weak intellectual property laws, e.g. whereas they cannot prompt and maintain enough business to respond to the global demand for such. The appointed globalization and productivity growth in combination with the China’s industrialization has tipped off the market possibilities for the expansion of manufacturing internationally to the point needed to prompt and maintain global development: the productivity and investment considered as the only market (i.e. economic) carriers for global development under this current condition underperforms greatly. Moreover, the Earth pollution and exhaustion of resources are two factors that additionally load the system because of the necessities for quite expensive environmental protection and the rising natural resources prices. Thus becomes natural for the governments to get involved in markets (i.e. economies) by using stimulus packages, keeping low interest rates, pouring liquidity, e.g. and unorthodox tools such as quantitative easing all in prevention from total economic breakup  or to prompt business activity, low rate lending and subsidies to promote environmental protection. However, the pinned to a tight-budget politicized economics of oligopolies and monopolistic competition has weak transmissionability to the bottom market that the real business activity is needed to balance the market demand in natural for the market competition. The Small and Medium Enterprises & Investors (SME&I) are those that could enhance and diversify such business activity into unpredictable and uncontrollable directions, i.e. entropy, but the unfair market competition does not allow SME&I natural for the market expansion: the shady business environment is weakening the market security.

Named after Boltzmann’s H-theorem, Shannon denoted the entropy H of a discrete random variable X with possible values {x1, …, xn} and probability mass function P(X) as,

 H(X)=E[I(X)]=E[-ln(P(X))]

Here E is the expected value operator, and I is the information content of X.[8][9] I(X) is itself a random variable.

Joshua Ioji Konov, 2013

Market Economy under Rapid Globalization and Rising

Market Economy under Rapid Globalization and Rising

Productivity

Joshua Ioji Konov* October 4, 2012

*Chicago IL, the USA Joshua.konov@gmail.com

Abstract

Market economy of enhancing business laws in contracting, bonding, insuring, legal corporate structures, e.g. will marginalize the economic agents and tools that make market competition unfair, empower small and medium businesses and investors, and boost business activities, fiscal strength, employment, and capital transmission. Keynesian capital infusion will extend its market effect in such higher security marketplace.

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42.  Aspachs-Bracons, Oriol and Pau Rabanal, The Effects of Housing Prices and Monetary Policy in a Currency Union,  WP/11/6

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48. Ruggie, John Gerard International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order International Organization, Vol. 36, No. 2, International Regimes (Spring, 1982),

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50. Ruggie, John Gerard, 2007 “Business and Human Rights: The Evolving International Agenda.” Corporate Social Responsibility Initiative, WP/31

51.  Rudrani Bhattacharya, Ila Patnaik and Ajay Shah “Monetary policy transmission in an emerging market setting”, January 2011.

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56. Contessi, Silvio, What Happens When Wal-Mart Comes to Your Country? Multinational Firms’ Entry, Productivity, and Inefficiency, 2010 

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58. Smith, Adam. The Wealth of Nations. Modern Library Edition. New York: Random House, 1937.

59. Stiglitz, Joseph E. Globalization and Its Discontents. New York: W.W. Norton & Co., 2002.

60. Bandyopadhyay, Subhayu and Suryadipta Roy “Political Economy Determinants of Non-agricultural Trade Policy “,Federal Reserve Bank of St. Louis Review, March/April 2011

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Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect

Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect

Joshua Ioji Konov*

January 26, 2013

*Chicago IL, the USA

Joshua.konov@gmail.com

Abstract

Monetary Policies of expanding liquidity through bottom low interest rate; stimulus packages, quantitative easing, etc should be transmissible to the entire market (i.e. economy) for best performance. However, current markets (i.e. economies) do not posses enough market security to provide the transmissionability to reach adequate market development (i.e. economic growth). This paper theoreticizes that by marginalizing the shady business practices of vague personal corporate liability and contract laws, vague insurance and bonding laws, inadequate intellectual property laws, environmental protection and consumer protection laws, etc will enhance the market security, and will improve the transmissionability and the effectiveness of the Monetary Policies to boost market development (i.e. economic growth).

 

In Addition

Market Economics Research concludes of few papers, which adapt an exploratory method more logical and philosophical than detailed; however, its conclusions are in detailed comprehension. It is innovative but realistic, which ideas have been concluded by economists such as Paul Krugman, Michael Spence, and Joseph E. Stiglitz among others, who recognize the inadequate economic approaches under the modern day globalization that bring high unemployment & national debt. The innovation that separates this research from many others concludes its reliance on free entrepreneurship as a main motor for economic development. It (this research) moves the weight along the big business & investors to the small and medium businesses & investors as main economic agents. Instead of more governmental economic interference as Mr. Krugman and Mr. Stiglitz suggest or more protectionism as Mr. Spencer suggest to solving globalization related issues this research recommends more robust business environment as a markets related approach.

This paper is based on two previous papers* and Bibliography.

*1. Joshua Ioji Konov / JK, 2011. “2001 & 2007 Recessions prompted remaking of the international organizations,“ MPRA Paper 34588, University Library of Munich, Germany.

   2. Joshua Ioji Konov/ JK, 2011. “Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc),” MPRA Paper 35714, University Library of Munich, Germany.

However, it explains and adds the theory from a new prospective

REFERENCES

1. Konov, Joshua Ioji / JK, 2011. “2001 & 2007 Recessions prompted remaking of the international organizations,“ MPRA Paper 34588, University Library of Munich, Germany.

 

2. Konov, Joshua Ioji / JK, 2011. “Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc),” MPRA Paper 35714, University Library of Munich, Germany.

 

3. Anderson, Kym, The Challenge of Reducing Subsidies and Trade Barriers, CENTRE FOR INTERNATIONAL ECONOMIC STUDIES, Discussion Paper No. 0412, 2004

 

4. Cowling, Kith & Poolsombat, Rattanasuda & Tomlinson, Philip ”Advertising and labour supply: why do Americans work such long hours?  International Review of Applied Economics, Taylor and Francis Journals, vol. 25(3), p. 51 2011

 

5. Kumhof, Michael & Benes, Jaromir, 2011. “Risky Bank Lending and Optimal Capital   Adequacy Regulation,” IMF Working Papers 11/130, International Monetary Fund.

 

6. Bair, Sheila C.  “Bull By the Horns: Fighting to Save Main Street From Wall Street and Wall Street From Itself,” 2012

 

7. Hicks, John (1939). “The Foundations of Welfare Economics”. Economic Journal (The Economic Journal, Vol. 49, No. 196) 49 (196):  696712. doi:10.2307/2225023.  JSTOR 

 

8. Kaldor, Nicholas (1939). “Welfare Propositions in Economics and Interpersonal Comparisons of Utility”. Economic Journal (The Economic Journal, Vol. 49, No. 195) 49 (195): 549–552.doi:10.2307/2224835. JSTOR 2224835.

 

9. Villemeur, Billette de, Etienne; Flochel, Laurent and Versaevel, Bruno  Optimal collusion with limited liability, Unpublished, 2012

 

10. Pareto, Vilfredo, In Talcott Parsons, Theories of Society; Foundations of Modern Sociological Theory, 2 Vol., The Free Press of Glencoe, Inc., 1961

 

11. Zhang, Tao , Heng-fu Zou, The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India, Volume 12, Issue 1, Spring 2001, Pages 58–81

 

12. Cashin, P., “Government Spending, Taxes, and Economic Growth”, IMF Staff Papers, 1995

 

13. Hagen, Jürgen von, Government Spending and Growth Notes for Presentation at the ECB Public Finance Workshop by University of Bonn, Indiana University Kelley School of Business, and CEPR December 6, 2007

 

14. Bleaney, Michael, Gemmell, Norman, Kneller, Richard,   Testing the endogenous growth model: public expenditure, taxation, and growth over the long run, Canadian Journal of Economics, 34,  2001

 

15. Utton, M.A., The Political Economy of Big Business, p. 186, Oxford 1982

 

16. Ormerod, Paul, The Death of Economics, p. 55. 1995

 

17. Sawyer, Malcolm C., The Economics of Industries and Firms, p. 35, 1981

18. Sawyer, Op. Cit., p. 108

 

19. Lazonick, William, Business Organisation and the Myth of the Market Economy, pp. 86-87, 1991

 

20. DuBoff, Richard B, “U.S. Hegemony: Continuing Decline, Enduring Danger”,

Monthly Review , December 2003.

 

21. Maslov, Alexander and Ivanchenko, Igor (2011): Money Field Theory: in Pursuit of Formalism. Published in: International Journal of Humanities and Social Science , Vol. 1, No. 8 (July 2011): pp. 19-29.

 

22. Beder, Sharon, ‘Economy and environment: competitors or partners?’, Pacific Ecologist 3, Spring 2002, pp. 50-56.

 

23.Commonwealth Government, Ecologically Sustainable Development: A Commonwealth Discussion Paper, AGPS, Canberra. 1990

 

24. Spence, Michael, “The Impact of Globalization on Income and Unemployment,” July/August 2011

 

25. Katz, Richard 2012**, TROUBLE ON THE HOME FRONT, Foreign Affairs, 2 March 2012

 

26. Ukpere, Wilfred I., Globalisation and the challenges of unemployment,

income inequality and poverty in Africa, African Journal of Business Management Vol. 5(15), pp. 6072-6084, 4 August, 2011 

 

Table 1                    Table 2                            Table 3                              

  

How Globalization affects Equity

How Globalization affects Equity   

Joshua Konov 2010

In times of Globalization some economies and markets build equity, however some not only cannot use their equity to improve their standard of living but lose their equity to lack of business that provokes deterioration of equity or at least discount of equity.

Equity is in the foundation of the economy and the market: in the past most of the equity consisted to physical property but gradually more intellectual property and subjective market securities have become equity. Thus when individual or corporate equity is evaluated plus the physical equity if any the intellectual property, the hold securities and the projected economic growth are considered equity. The trend toward intellectual property and market valued securities instead of physical equity is more than obvious for private and corporate equity equally. However, private equity for the majority in the world consists of physical property equity when intellectual and market securities equity is more possessed by very wealthy individuals and individuals living in the most developed economies.

There is direct correlation between market individual income and equity value, because equity value reflects general market value of a property which relates income financial statement. A property value supported by higher income statement is higher than a property value supported by lower income financial statement. In some cases -as it happened before the last Great Recession- market property value became uncontrollable prompted by pure speculations and compromised lending practices. Consequently the exasperation of property value burst bringing financial losses and lost of properties to many. Seemingly equity of property values should well reflect the real market property values which reflect general income level in this market. Talking about equity not related to physical property but could be intellectual property, market security, or projected economic growth with very high subjectivity in the real economy the market value of such equity is more related to security of intellectual property, market securities and certainty of projected economic growth. Factors that directly affect these equity are scrutinized historical development of the market, most recent economic indicators showing the direction of this market and consistent indicators of the direction of proximal development, factors that indirectly affect these equity are the level of real acting rule of law and contracting laws of such market, the clarity and accountability of the marketplace and trading exchanges, the clarity and accountability of intellectual property laws, and the level of personal liability of the risk management of corporate structures, the fiscal stability and the respective infrastructural maintenance and improvement, and social and medical security in this market.

Globalization has invoked the need for individual markets of using Social and Infrastructural expanses for balancing “demand-to-supply” when in the past these expenses were functioning as stoppers toward economic growth because the overall productivity was lower and there were many closed for globalization markets, now the conditions are changing the productivity is rising constantly and the almost all markets are eager to globalize. Other major changes at the moment are the China’s entering WTO and the global competition and the consistent economic growth for the last 20 years China has succeeded. By attracting the majority of global investment and by becoming economy to which outsourcing and new startup manufacturing China become the industrial power that might well tip-off “supply-to-demand” into “demand-to-supply” market configuration; such processes shorten already shortening employment in manufacturing to the rest of the world. Manufacturing, industrial production could well be considered in the foundation of the modern Capitalism that adds the most to fiscal reserves of most of global economies by highly paid employment; the most advantageous return of investment and the most secure buildup of equity: the higher growth of industrial production the higher level of equity value.

The Most Developed Economies are considered the Most Industrialized Economies.

In such market environment of Globalization (outsourcing and moving industrial production to less expensive economies) and rising Productivity (improvements in high technologies and shrinking employment marketplace cause this rising productivity) industrial employment is shrinking fast at US. Very few are the economies of Most Developed ones that have succeeded under current forces of industrial competition to sustain industrial production and keep up their industrial leadership: Germany and Japan are the few. The value of equity as stated closely relates industrial production of the modern day economics therefore overall such value will deteriorate in markets with deteriorating industrial production.

Modern economics does not take in consideration the value of already succeeded equity if economic industrial economic growth is not maintained and only short term self-adjustments are project-able. Such positions of equity directly relate the financial system of individual markets and the global financial system which lends on relatively high interest rates and short term, and in which corporate structures are run on short term profitability. Indeed equity related intellectual property and equity related market security are long term corporate equity however the fluctuations of overall market equity value often fluctuate and reflects corporate equity values violently.

In the past when supply was leading and most developed countries were firmly holding onto the global industrial production such fluctuations of individual and corporate equity values were productive because of prompting concentration of capital than prompting consecutive economic growth, then also less developed economies were more like satellites to the most developed ones being able to support fiscal reserves for social and infrastructural expenses. Even some parts of such industrial production was developed here and there in different countries the majority was still kept by the most industrialized economies. The equity values in most industrialized markets were therefore higher than these of in less developed markets and these still are, except that under the new arousing conditions of globalization and rising productivity industrial production has been gradually moved and outsourced to China, and now India, Brazil and Vietnam which are vastly populated countries with inexpensive labor force and some good industrial structures, therefore in terms of value of equity related industrial production the most definitive becomes the issue of lack of such industrial production to many economies and if such is reduced or lost what consequently would be their value of equity. Intellectual property and market security values are much more flexible and adaptive than the real estate equity value because intellectual property and market security equity reflects an economy, country, marketplace achievements in education, social and infrastructural development that requires long term development thus countries as US that very well represents such succeeded development will be hard to be shut away as holders of such equities. However such superiority is a short term prospective even to the mighty US because of the Internet and the constant exchange of information and technologies, because of the outsourcing and moving industrial production the new emerging economies would pop-up if these themselves develop required infrastructure, social structures, and education to respond to the changing realities. In case of China when in the past its communist social policies were counter productive to its industrial growth and development under the most recent globalization and rising productivity China’s Social and Infrastructural expenses proved to be very productive in balancing its “demand-to-supply” and thus succeeding consistent economic growth even when the rest of the world went through the Great Recession, thus China’s equity has risen much because of its economic growth.

Equity values are very sensitive economic indicators more like currencies; the difference between them is that currencies’ values are more related to short term global adjustments and fluctuations when equity works in longer terms. Equity values are harder to built: real estate, infrastructure, intellectual property, market security equity values are to be used in the future as economic indicators for a country, economy, market evaluation and underwriting. To use equity values, economics must change the ways these values are preserved and enhanced even when industrial production is not going to be the main economic indicator as it has been for some time. Economic “tools” are to be used to sustain equity values in a “as it comes: as it goes” basis and approach, that approach differs from country, economy, market to country, economy, market because of their level of development, mentality and tradition. In some Social and Infrastructural expanses should be reduced in short term to prompt economic development in some the Social and Infrastructural expenses should be well enhanced to prompt such economic development. There are some economic “tools” that are for all and these are the expanses for preventing pollution and implementing renewable energies, these are economic “tools” for balancing “demand-to-supply” on a global scale and are to be financed by the global financial structures of the World Bank, IMF and WTO through Commercial Banks on a marginal interest rate or subsidies. For such lending paramount should be the enhancement of businesses security: of business and contracting laws, of personal liability to corporate structures, of corporate bonding. The global financial structures should be given the controlling functions over global balance of “demand-to-supply” to prevent from inflation, the issuing of monetary quantities power to keep interest rates low, the targeting countries, economies, markets weak points for building equity, the controlling over countries, economies, markets compliance with the guidelines and underwriting, the controlling over commercial banks’ execution of these guidelines and underwriting matrix.

The existing equity of countries, economies, markets should be the foundations for low interest lending therefore overall security should be enhanced thus countries, economies, markets could become eligible for financing.

In the new century of market economics industrial production should not be the only way for fiscal reserves but ones equity that could be built by properly balancing its “possible demand-to-supply” and properly and pragmatically using all economic “tools” to raise its “security”.

• China’s Barbie Doll EconomicsOft-quoted, Dong Tao, a heavyweight economist at UBS in Hong Kong, once said: “A Barbie doll costs $20, but China only gets about 35 cents of that.” He was talking about global trade statistics at the time, but that proclamation might help explain why Chinese companies are increasingly shopping for and successfully acquiring storied brands, most recently, Ford’s Volvo.The lesson: the big money is in owning the brand, not just making it for foreign companies, writes the AP’s William Foreman.
• Great exportations “China overtakes Germany to become the biggest exporter of all” “CHINA’S rise has long appeared inexorable. Despite a decline in total world trade, China has seen its exports fall less than those of other big powers. A new report by the World Trade Organisation calculates that the total value of merchandise exports fell by a staggering 23% in 2009. Among the top ten exporters, Japan’s shipments were worst affected (falling by 26%). Although China’s exports also fell (by 16%), the contraction was less painful than in Germany (down by 22%). As a result China is now the single largest exporter. The global downturn has helped to reduce global imbalances; the leading three exporters accounted for 26.7% of total world exports in 2009 down from a third of the total in 2008. The WTO expects trade to rebound by nearly 10% this year.”
• The Real Reason China Resists on the RMB“As I see it, China is asking a question to which there is no easy answer; what right does the US have to lecture anyone on economic matters now, having played so large a part in causing the current global recession through loose monetary policy, poor risk management by some of our most prestigious companies and monumental regulatory failures? They are responding to the continued US belief in American exceptionalism, that we can do whatever we do, right or wrong, and ignore the criticisms and demands of other countries who often bear the consequences of our actions, while we continue to insist on our right to criticize and make demands on them. As Brad Delong and Stephen Cohen have pointed out, the US simply no longer has the economic clout to get away with this any longer, and who better than China to stand up to it?

Capacity (Equity) building as a China’s National Policies is a balance between Free Enterprises rising Productivity and Social and Fiscal Policies and Infrastructure

Equity, capacity and sustainability “The concept of equity in the context of capacity building is not sheer ethical. It”s mixed with certain practical social and economic meaning, therefore inseparable from sustainability.Equity here contains three folds of meanings: 1) equity between existing generation and future generations; 2) Equity between different social members under the same generation; and 3) Equity in responsibility and obligation that different social members or groups have to achieve sustainable development. Equity between generations, to much extent, is subject to ethical area. The current generation, in moral sense, should avoid “eat rice from ancestors while break future generations”pot”. They have no right to overconsume and damage natural environment and resources that the future generations will live in. This point was made very clear in the World Committee on Environment and Development Report. In its definition of sustainable development, that not to harm the future generations to meet the need of their own was established as a condition. Although capacity building of the current generation is helpful to equity between generations, this equity however is not the most important problem to solve in the area of capacity building. The equity between different social members under the same generation is closer related to sustainability. On the one hand, from the perspective of social justice, it”s necessary that the society takes into consideration the poor’s interests so as to reduce the gap between the rich and the poor. This was emphasized in the Brundland Report. That is, The basic needs of the poor in the world should be put at the top priority. On the other hand, equity between different social members under the same generation is also a condition to sustainable development. It seems that there is not much connection between equity and sustainability, or not so direct. However by some analysis, can you find that different social members”unequally possession of the resources is an important reason for difficult sustainable development.This is because that even though the society in general is rich in resources averagely speaking, yet the gap in term of resources possession will force the social members short of resources to overuse or abuse their limited resources to make a living. Since the environmental problems are interrelated and intereffected, some part of unsustainability in the society will likely lead to an overall sustainability. Therefore, equity is also a condition to the sustainable development process. Sustainable environment and equity of social responsibility and obligation have been an issue that developed countries and developing countries keep debating on. Who has polluted the environment? Who is making the environment worse and worse? This is an issue of responsibility and obligation. Even though it”s an issue of equity between different social members or groups under the same generation, in essence, it”s a practical issue in international politics and economics. However, even if every social member or group is willing to assume the obligation, does he have the capacity to realize the commitment? There you find that equity, capacity and sustainability are closely related with one and another.”

State Employment is used as a balance for higher wages in Non State Employment instead of used by the Economics of Capitalism (mostly and only) Employment Market Forces.

Ⅲ. The Institutional Transition Under the Dual Labor Market From our analysis of the features of employment absorption and wage determination in the two parallel urban labor markets we can make the judgment that the labor market in the newly established sector determined by market forces represent the future direction of development. In other words,the process of transformation from the SOE”s employment system to NES”s is the process of the formation of the labor and wage system of the market economy. How will this system transition take place? Since the two systems of labor and wage in the two kinds of sectors dominate their respective labor market, the competition for laborers between these two kinds of enterprises and therefore the expansion of one labor market and the reducement of another will realize the transition from one system to another. This is the first form that the transition of employment system will take. In the process of expansion and reducements of the two labor markets, caused by the competition between the two kinds of enterprises, the traditional system of the state sector will respond accordingly, namely by introducing reform in order to survive in the competition and shift to a market economy. In this way the second form of system transition takes place. First, we will look into how the first system transition that is characterized by employment transfers between the two kinds of enterprises occurs and the features of its transformation. If we suppose the urban labor market is closed off for outsiders, laborers are distributed merely between the SOEs and NESs. Chart 1 indicates the competitive relations between these two sectors as well as the process of expansion and reducement of the two labor markets.The horizontal axis stands for the labor volume. From O1 to the right, the labor volume of the SOEs can be measured; from O2 to the left that of the NESs can be measured. The domain between O1 and O2stands for total supply of labor. The vertical axis stands for the marginal productivity of labors or the wage level. The curve tilting downwards from the right to the left is the curve of marginal productivity of labors in the NESs. It tilts because their marginal productivity of labors decreases with the increase of the employed labor”s size. At the same time, the marginal productivity of labors in the SOEs increases with the number of workers leaving their enterprises.Thus, the curve tilting downwards from the left to the right is the curve of marginal productivity of labors in the SOEs. The curve that is steeper, is the curve of marginal productivity of labors in the SOEs under the assumption that their wage level is determined by the market (see name in quotation marks). In this situation, this curve intersects at the point A with the curve of the marginal productivity of labors of NESs during their employed labor volume expansion. This means the wage level of the two kinds of enterprises are equal to the point Wa, and the expansion of labors”volume in NESs no longer continues. Then the labor”s volume in the SOEs is O1A while that of NESs is AO2. Since the SOEs are overstaffed and wage is not determined by the marginal productivity of labors, however, their curve of marginal productivity should be more flat (might be a horizontal beeline without elasticity), i. e. the curve whose name is without quotation marks that intersects at the point B with the curve of the marginal productivity of labors in the NESs. It is at this point that NESs stop expanding their labor volume, here the wage rate is Wb. As the wage is determined institutionally NESs need to pay higher wage to attract laborers; and the transformation of the laborers from the SOEs to NESs becomes smaller. In the real laborer”s distribution, the laborer”s volume employed by the SOEs is O1B instead of O1A, that for newly established enterprises is BO2 instead of AO2. So the NESs are limited by their ability to pay higher wage, the difference between labor volume they really employ and that they should employ is indicated by the distance between A and B in the chart. Chart 1 Labor Transfers between Two Sectors Our theoretical analysis reflect the reality of transformation of laborers between the two sectors. One characteristic of NESs is very labor intense. It is not feasible for NESs to pay very high wage to attract employees from SOEs if NESs are to keep their advantage in laborer”s resource. So competition of employment is limited by the scope of their ability to pay high wages. Within this scope, however, NESs can certainly attract relatively high qualified workers to form the backbone of their enterprises without taking cost into account. As it is not possible for the NESs to obtain all the laborers they need from the state sector it is necessary to have other channels to find labor. If NESs had not have other such channels, this sector would not have been able to develop to the present stage. Our analysis above was made under the assumption that the urban labor market was closed off for outsiders, in our further analysis we will give up this assumption. NESs obtain highly qualified workers from the SOEs by paying higher wage in order to satisfy their needs for technology. The other source is laborers with common skills from the rural areas.

China has discovered that globalization and international competition work in its favour.

The problem of the Rest of the World is the ideological almost blind following of Marx’s’ “Das Kapital” financial system controlled by the rules of “trickle-down” Capitalism that happen to be quite impractical even when this system built North Americas, Great Britain, France and Germany: Great Powers envied by anyone in the World, however looking in History things sometime have to change; it happened to Rome, Persia, Victorian Empires, and etc., thus change could be considered as ongoing now affecting different countries and markets in different ways, but the trend is quite similar ( In the World short term history: once mostly agriculturally driven GDP changed into mostly industrial production driven GDP, now it is about to change into mostly “artificially” balanced “Demand-to-Supply” Market Economics GDP not the ideological one followed as a mantra by the west, however if global economy does not adapt to the new upcoming with the globalization challenges very hurtful consequences may occur).

Joshua Konov 2010

 

Strategies for Sustainability of Environmental & Resources Efficiency

ast.  

Strategies for Sustainability of Environmental & Resources Efficiency

Joshua Ioji Konov* October 4, 2012

*ChicagoIL, the USA Joshua.konov@gmail.com

Abstract

The best model for expanding Alternative Energies and Environmental Protection globally is through using market equilibrium, whereas governmental subsidies and fiscal stimulus to be just supplementary. Market equilibrium depends of matching consumption demand and supply under price deleveraging that could be achieved only by changing market (i.e. economic) agents from presently used trickle-down economics that stimulate big business and big investors to a more market related economics (Marketism) that would stimulate Small & Medium Businesses and Investors (SME&I) boost business activities and related employment, fiscal reserves and over all market utilized consumption.

This paper is based on two previous papers** and Bibliography.

**1. Joshua Ioji Konov / JK, 2011. “2001 & 2007 Recessions prompted remaking of the international organizations,” MPRA Paper 34588, University Library of Munich, Germany.

   2. Joshua Ioji Konov/ JK, 2011. “Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc),” MPRA Paper 35714, University Library of Munich, Germany.

However, it explains and adds the theory from a new prospective

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Table 1(FRED)

 

How Economic Changes can boost US Economy and save Free Entrepreneurship

How Economic Changes can boost US Economy and save Free Entrepreneurship

Under the brand new global market conditions

• of rapid market (i.e. of economy, economies) globalization and rising productivity;
• of China’s industrial growth;
• of improving technologies in manufacturing and the Internet;
• of colossal size transnational corporations;
• of Vietnam, India, Brazil, and e.g.;

the theory of Market Equilibrium, Philips Curve, Productivity Effect^, Starving the Beast, Frontier Economics^^ the Frontier Thesis^^^ and many other theories of economics, sociology or politics do not  explain comprehensively the needed changes that could prompt under these new conditions the US economy into longer term market development (i.e. economic growth). The 2007-9 Recession with its deep global equity reduction effect and the post recession sluggish rebound is a good example for how dysfunctional modern day economics is where it comes to predicting and countering the effect such upheaval had on the US and many other economies. The WTO, WB and IMF and the entire international financial system, which was suppose to prevent the spreading of economic decline in production and capital failed to do it.

The monetary, stimulus packages, quantitative easing, and e.g. measures taken and being in process by the US, Japan, and China were counter-cyclical by nature far beyond Keynesian theories or even farther the rigid Austrian Economics so much practiced. Moreover, these have been acts of desperation pressured by the real market forces, however the governments helped save the global market from total collapse, whereas the ideological in its nature science of economics has been predicting inflation and doomed dollar that never materialized. Only the European Union continued following the ideological postulates, and the results has been catastrophic, indeed. Throughout this time, the US, Japanese and Chinese governments have been taking over business functions by physically buying share of companies, by giving easy money to different sections of the markets, and by interfering with the market balance (i.e. equilibrium). Many forms of wealth distribution have been implemented too. It has become obvious for the governments to save the market is necessary to raise demand and to help large financial institutions get rid of their evaporated equity, thus lending could be ignited, so the government acted for which high appreciation to President Obama and his decisive approaches.

However, what the US and other governments have been doing by direct market interference should be supplemented and extended into long-term economic program to boost the market share of Small & Medium Size Businesses and Investors (SME&I) bringing them to the front-line as market agents.

The market transmission-ability, whereas large sums of liquidity have been injected into the market through QE and other ways, is a paramount issue needing immediate solution; the options are two either the government takes bigger role in the overall business activities, or the SME&I are given such, thus the choice is between the inept governmental market interference or the market forces and competition to prompt a long-term market development. It is clear who should be doing it: the SME&I, but for them to do it the overall Market Security should be enhanced to raise SME&I’ lower-rate borrow-ability; through changes and enhancements of the intellectual property protection, the contract laws, the insurance and bonding provisions, of the corporate governing bodies personal liability laws, e.g. (http://bx.businessweek.com/market-economy/)

^Australian Economic Papers, Vol. 48, Issue 2, pp. 105-123, June 2009

^^http://www.frontier-economics.com/_library/publications/frontier%20bulletin%20-%20closing%20loopholes.pdf

^^^by historian Frederick Jackson Turner in 1893

that will raise the Market Security and bring the related relative Market Competition Equilibrium in favor of SME&I.

The overall globalization and rising productivity that brought deindustrialization of many developed markets followed by high unemployment and declining middle class and fiscal reserves could be positive to these markets if diverse business activities expands; the Productivity approach (only) cannot keep up with these new global market developments, therefore more diversified business environment is needed to boost employment, whereas the Inflation/Deflation are the main indicators for Market Balance (Equilibrium).

The R&D and Better Education are equally important, however, diverse market activities will expand overall capital and bring more opportunities for connecting R&D and Education to the real markets.

The Social and Infrastructural Expanses under these new conditions will become more equitable thus equally been used for Market Balance, however their Market Share should be limited to additives whereas the free Market Completion should be considered for primary market agent.

To comprehend the market possibilities such approach a detail and comprehensive research (http://joshuakonov.wordpress.com/) of should be taken in consideration.

On the question, can the US economy succeed and maintain long-term Market Development under these new global market conditions? The answer is definitely yes, because in the equity based new arriving global economics the well developed and with high equity flexible US market/economy could be a leader; however, the revolution of prioritizing SME&I role should be implemented.

2011

1. 2001 & 2007 Recessions prompted remaking of the international organizations
   MPRA Paper, University Library of Munich, Germany View citations (1)
2. Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)
   MPRA Paper, University Library of Munich, Germany

Joshua Ioji Konov, 2012