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


Joshua Ioji Konov (joshua.konov@gmail.com)

No 205, EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey from Ekonomik Yaklasim Association

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 mitigating of A) the shady business practices of B) vague personal corporate liability and C) contract laws, D) vague insurance and bonding laws, E) inadequate 1) intellectual property laws, 2) environmental protection and 3) consumer protection laws, etc market marginalization in fact will enhance the market security, and improve the transmissionability and the effectiveness of the monetary policies to boost market development (i.e. economic growth).

Keywords: Monetary Policies; Market Economics; Transmissionability (search for similar items in EconPapers)
JEL-codes: A1 D01 D5 P48 K0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
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Downloads: (external link)
http://www.ekonomikyaklasim.org/eyc2013/?download=Paper%20205.pdf (application/pdf)

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

Real Market Economics


Disproportionate Rising Inequality in the 21st Century shows the inability of the Capitalism to apprehend the powers of the ongoing Globalization and rising Productivity into a productive force to improve living standards and alleviate poverty!

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The Industrialization of a Trickle-down Economics is the culmination of the Capitalism; however, such could not workout under these new global developments without destroying Humanity! Only by using Environmentally Friendly Technologies such destruction can be avoided!

The theory of Marketism i.e. Market Economics  is all about Market Equilibrium: a Demand that grows proportionately to the Supply capabilities (not the way around when it comes to most Globalized Markets) under moderate Inflation/Deflation. Whereas General Equilibrium is the target and compilation of the Parts i.e. Sectors Equilibriums (meaning contradictory to the current Central Banks policies of varying Prime Interest Rate). Marketism, however, does not reflect only Monetary and Fiscal Polities i.e. used by the Keynesian or Liberal approaches; it changes and enhances the Market i.e. Economic Structures to adapt to the exogenous and endogenous forces arousing by the ongoing Globalization and rising Productivity. The principle of Marketism is free flow of people and resources, freedom of speech and respect for human rights. Its main difference from the Capitalism is the dimming of existing ‘trickle-down’ economics into an ‘as it comes; as it goes’ economics meaning to not relying on the concentration of capital and related investment that mostly relates Large Corporations and Investors that benefit from such system; but, such system that deleverage such advantages into a ‘more just’ economic system that establish condition where Small and Medium Businesses and Investors would have similar access to capital and market competition. For such conditions to succeed the Rule of Law in Business should be firmly adopted along with Environmental Protection, Consumer Protection, Labor Protection, Insurance, Bonding Laws must be enhanced too, for supporting such deleveraging. Marketism obliges the Central Banks alone with the IMF and the World Bank to use not just discount rate but number of Economic (Fiscal, Monetary, and some new) tools either to prompt Market Development i.e. Economic Growth or to slaw such in case of exploding Inflation/Deflation occasions. The Social, Educational, Medical, Infrastructural expenses in Marketism are considered Equities under the conditions of moderate Inflation/Deflation, the development of Environmentally friendly technologies, farming, and tourism are paramount Economic Tools to be used to prompt such Development in the same limits.

The Market Economics takes market competition and re-balancing to a Microeconomic Level from the Macroeconomic such because of the same exogenous and endogenous forces formally mentioned: the economic tools used indiscriminately (not politically or ideologically motivated) to either boost Market Development through or slow such – whereas main indicator (trigger engaging) is the Inflation/Deflation fluctuations:  the currently used debt constrained Economics is to change into Inflation/Deflation constrained such. Market Leaps through targeting  artificially and semi-artificially boosted Environmentally friendly Market Development on National and Global scales is from one side to alleviate poverty and inequality, and from another to protect Earth Environment while such accelerated Market Development is succeeded. mThe Debt under Market Economic becomes Private Issue moderated by the Courts than the Governmental issue of the Present when the World Bank and IMF are backed by the Most developed Countries Governments. Lending, Crediting, Public and Private financing are risk taking enterprise that cannot and should not be individual nations issue; however, the strict Rule of Laws in Business of the Marketism ensure better Investment and Bonding Insurance along with Business Protection Laws: the difference is in the separation of National Governments from International Investment. The currently used Debt Controlling Policies constrain Economies from development not taking in consideration the exogenous forces of the ongoing Globalization and the endogenous forces of the rising Productivity that are bringing inequality, diminishing Middle Class, rising Poverty and Underdevelopment that affect straightforward the Earth Environment through polluting it and not implementing the more expensive environmentally friendly technologies: and from another side, bringing xenophobia, racism, nationalism, religious fanaticism, wars and dictators: the Middle East, Ukraine, Mr. Putin, and now Mr. Trump.

We should have seen a decrease in inequality with globalization, but that’s not what has happened in the last 25 years, according to Nobel Laureate and Harvard Professor Eric Maskin. While there are a number of reasons to care about inequality, he says there is a high correlation between high inequality and social and political unrest, with consequences for a country’s political and economic stability. tfNthGCPJzJj5lxFsPSkcAsFVeT6JS33gbTZ2RSIW-g

 The Large Transnational Corporations and Investors have been beneficiary of the underdeveloped economy supply driven and trickle-down for generations – system that had performed well ever before the 21st Century because the economies had run shortages and the pro–supply forces were overwhelmingly strong thus justifying such system. there how Western Europe, United States, and Japan succeeded incredible economic development.

The expanding Globalization and rising Productivity, the Chinese Industrialization and the Internet tipped-off the pro-supply predominant forces in economics to a pro-equilibrium on the demand side economics where the exogenous and endogenous forces of overproduction overrun the supply shortages market forces and thus the Social Economics (trickle-down) that worked in the Past have become inadequate – lacking the flexibility to ensure a commutative demand. The 2001 and 2007 Recessions reminiscent the powers of these new forces and accelerated the negative effects of the Capitalism’s incomprehensibility under these new conditions bringing inequality and rising poverty, diminishing the existing Middle Class, and finally xenophobia, religious fanaticism, wars and revolutions from the Middle East, Africa and Ukraine .

 There are just two fundamental ways to boost the demand side: either by expanding the governments interference in markets i.e. economies or to let the market competition create competitive conditions enough to prompt employment, income, and alleviate poverty on a national and global levels. However, the Large Transnationals and Investors under the Economics of just Productivity and Investment cannot prompt enough business activities, that must be environmentally friendly, too, to make this happen. The moving and outsourcing production prompts instead corruption, pollution, and inequality – the advanced technologies and desperate governments to give up anything to ensure some employment add to these new processes. The Internet Companies’ stocks busted balloon in 2001 and the Real Estate such in 2007 are a natural effect of not working US Economy that the lack of adequate business activities allowed the over-capitalization of the two pointed sectors. The letting markets competition in prompting enough business activity and raise income must be considered the most adequate to saving personal freedoms and most importantly flexible enough to avoid recessions and upheavals – so, a system of new economics must appropriate ways to allow market system that will allow competition to predominantly balance market equilibrium instead of giving these functions to inflexible, politically motivated governments do it.

The Small and Medium Businesses and Investors have become a leading market i.e. economic agent under these new conditions while the employment, income, and related fiscal and monetary effects have become paramount to succeed Market Development; however, under the conditions of ‘shady’ business laws of the Capitalism the markets i.e. economies treat unequally them comparing their large competitors.  Whereas Large Transnationals and Investors have access to lower rate lending, public financing, corporate pork, lower taxation, and etc the SME and Investors are lacked into a circle of high interest lending if any possible financing and lack of contract and other business laws to protect them from predatory actions. The interrelation between Business Laws and Financing is streight – the market i.e. economic security comprise the risk in lending: by improving the market security a market i.e. economy enhances finance-ability of in the case SME and Investors.

 Marketism is a Market Economics the enhanced Business Laws, (Insurance, Bonding, Environmental, Labor, Consumer Protection, etc Laws) improves Market Security and thus easier Financing to SME and Investors: Final result of such actions must be a natural to the market competition boosting business and investment activities, income and equity. These market Agents are mandatory for all markets i.e. economies, whereas the usage of Market Tools such as Stimulus Packages (National and Global), Social (incl. educational, medical, retirement) and Infrastructural Investment, Targeted Investment, Market Leaps, etc. vary from market i.e. economy to market i.e. economy because of the accent needed on individual to any market specificity (expl. China needs less accent on Social and Infrastructural targeted investment as it has already been developed than the US where it must expand further). The Principle of treating markets compatible to their specifications apply globally!

The limitation of the currently used Economics, in particular the EU orthodoxy may is well presented in: Vítor Constâncio: In defense of monetary policy “Opinion piece by Mr Vítor Constâncio, Vice-President of the European Central Bank, 11 March 2016.” One of the best example of how the Capitalism’s ideologically inclined Economics underperform and is hard to fix I consider The G20 has appealed for the use of other policies, notably fiscal and structural reforms. While other policies would certainly be welcome, one can have justified doubts about their implementation. For a start, active stabilising fiscal policy is restricted by law in the EU and by politics in the US. More generally, countries that could use fiscal space, won’t; and many that would use it, shouldn’t. That leaves us with structural reforms. Some, like upgrading education and judicial efficiency, are important but take a long time to implement and to produce results. The structural reforms economists often have in mind (i.e. liberalization and deregulation of markets) lead to lower wages and prices in the short-term, which does not help inflation normalisation. And concerning unemployment, higher productivity often initially implies labour saving. Structural reforms are essential for long-term potential growth, but it is difficult to see how they could spur growth significantly in the next two years, especially when the current problem is lack of global demand. And as regards their delivery by governments, we should recall the embarrassing results of the G20 plan agreed in Brisbane to generate an additional 2% in world growth via a long concrete list of reforms put forward by the IMF and the OECD. In fact, the world economy now risks not even attaining what was then considered the baseline scenario.”

However, the formal conclusions even brilliant do not lead Mr. Constancio to major changes on the structural economics but points into more aggressive Monetary Policies, which is a washout because the practical economic tools considered at the moment as well the market structures cannot accommodate Capital in away to boost business activities, income, and equity to a point of needed 90+% employment by using environmentally friendly approaches. Aggressive Monetary Policies in a low level transmissionability can only  create excessive over-capitalization, balloons, and economic upheaval.

The G20’s structural reform agenda should address income gap and financial system fragility BY: DATE: MARCH 15, 2016 “Traditional macroeconomic policies have been important in stabilizing the global economy, but they are no longer enough to addressing the fragility and low growth of the current economic environment. In particular, they cannot sustainably address the persistent weakness of demand, let alone drive new productivity growth. Such policies have far more limited ammunition now than 8 years ago, when the global crisis erupted. Monetary policy in numerous large countries is at the zero lower bound, and interest rates can hardly be lowered further. Fiscal policies are more constrained in some countries now than they were before the crisis.”
Everybody agrees: wages need to grow if Japan is to make a definite escape from deflation. Full- time wages have increased by a mere 0.3 percent since 1995! For example, despite its record profits, Toyota increased its base salary only by 1.1 percent last year. The average of 219 Keidanren firms managed just 0.44 percent. Clearly, an increase in base wages, colloquially referred to as “base up”, is long overdue.

The current Global Markets i.e. Economies situation vary from bad to worst the very exception is China that uses an aggressive method of Economics similar to this promoted by the Marketism; and when the debt-to-gdp ratios observed the negativity goes even step further – the Capitalism, as formally stated: is inflexible to anyhow accommodate the exogenous force coming from the Globalization and both exogenous and endogenous force of the rising Productivity; and thus running into a constant stagnation. On top of it the pollution result of driving old vehicles, using primitive heating, unsustainable woodcutting, etc may bring Environmental disaster before the Economic such to arrive.

The only way for the world to survive under these new conditions stands at apprehending these exogenous and endogenous forces to alleviate poverty, keep very low unemployment and underemployment, maintain and build sustainable Middle Class under strict Environmental protection Market Development: that is the Marketism – a Market System of Human Improvement in place of the Social System of the Capitalism, Social-Capitalism, or the Communism.

2015 in review


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Click here to see the complete report.

The End of the Social Level with the Beginning of the Market Level of Human Development


The Globalization and rising Productivity along the Internet and the rise of China have created very new economic worldwide conditions where aggregating national debt and inequality brought unknown powers to the practiced by the Social Level – trickle-down Capitalism: system built on rising productivity that prompts Investment that mostly capitalize on large transnational corporations, investors, and favoritism under the conditions of shady business practices to concentrate capital that would have countries prompt business activities that in time will crystalize into industrial and high-tech production. The way Brussels and Berlin have pushed Greece to reduce its Labor laws, adapt further austerity and increase its Value Added Tax to provide better conditions to the Large Transnationals and Investors to prompt Greece’s competitiveness and productivity could be considered a good example of the Social Level philosophy – however, the barely growing EU economy, the increasing inequality and national debt, and the ongoing global stagnation accompanied by the out of balance demand have indicated the inability of such philosophy to perform on national or global levels alike for such to be considered the status-quo it is. Why in the past the economies were driven by such supply sided philosophy into building such great economy like the US, Germany’s, or Japan’s ones, through and after the 2007-9 Great Recession economic policies have shown that the more interference by the governments by using stimulus packages, quantitative easing, and etc. the more successful into overcoming the recession and prompting economic growth they have been; and in the opposite: the more neoliberal pro austerity ( EU is the best example of such) the least successful they have accomplished. Whereas China has been the best example of using ‘random’ an ‘as it comes; as it goes economics’ in succeeding the highest growth of them all. Thus, naturally, the conclusion that the 21st Century’s global market conditions have brought the exogenous interference with national economies to the point when the supply powers have greatly overcome the demand side of these thus prompting unsuitable for the Capitalism market conditions, therefor the inequality increase substantially along with widespread debt: national and private.

There are not that many options to overcome these new developments but the governments taking over further over the market forces, or the market economics to comprehend and apprehend these forces into an improved system of market development – here in particular: the economies are replaced by markets and the economic growth by market development! And, because it is well known the inabilities of any government to run markets and business, it is well known their inflexibilities and corruptness, it is obvious a need for a market driven system to maintain market equilibriums and long term market development.

The difference between such Market Economics and the Capitalism is not in the ways of appropriating someone’s recourses to be distributed or redistributed by social means, but into the very much enhanced level of Business, Consumer Protection, Environmental Protection, Labor, Insurance, and etc. Laws to deleverage the existing market disadvantages for the Small to Medium Businesses and Investors in compression to the Large such that will establish more secure market conditions to boost business activates naturally enhancing the demand; however, because Market Economic uses an ‘as it comes; as it goes’ approach the ‘Invisible Hand’ of subsidies and direct investment, fiscal and monetary stimulus, social and infrastructural expenses are well included as market tools to balance market equilibriums when needed, indeed.

Targeted Environmental Protection must be used as a main tool for Market Development nationally as well globally by using market tools into Market Leaps to prompt and maintain Market Development. Total ban on pollution and deforestation can be succeeded only by overcoming poverty and providing conditions for employment to everyone – the theories of ‘healthy’ 4+ percent unemployment, or the limited resources keeping many to access such creates conditions for wars and extremism to finally destroy Earth environmentally!

To maintain markets in equilibrium in an ‘as it comes; as it goes’ business environment the market tools must be used as parameters more like a Quantum Factor approach however remote it may looks like the Uncertainty Principle applies onto these new market conditions than the Trickle-down one, or the Governmentally run one. The complexity of Market Economics could be only overcome by adjusting market fluctuations in a quantum environment like; because, by aggressively prompting business activities and thus the demand side the possibilities for market fluctuations arises!

The supply side Social Level of development prompted economic growth by keeping low inflation and eventually by allowing overheating economies accept limited recessions to rebalance excessive production and management; whereas, the market equilibrium Market Level succeeds Market Development by allowing self-adjusting only on Microeconomic level whereas it interferes wherever unbalances affect general equilibriums; therefore, the Central Banks practice to balance general equilibrium by raising or lowering interest rate changes into a system of Central Banks interfering on microeconomic sections level by number of stimulus or restricting tools!

Joshua Ioji Konov, 2015

Market Economics Using Quantum Approaches


The number of articles I have written on the subject could be very perplexing for specialists and regular readers alike, because of the complexity of issues evaluated and mostly because of the ideologies have been broadened out for centuries, the ideologies that justify the deep division between rich and poor, countries and regions. The Cold War with its profound partition between the ideas of free market entrepreneurship of the Western Block Countries and the government-run economies of the Soviet Block Countries. Thus, it will be well concluded that altogether cultures of philosophical schools and religious conceptions have been exploited to smooth these divisions inside countries and set up conditions for unity and normality in life. Nationalism, chauvinism, xenophobia and over all “I am better then you are” aptitude have helped countries prosper competing to others, Empires rose and fall alone; and at present Economic Powers came up into existence.
Most of these Historical developments could be greatly explained by the processes of economic progress, because the Economy is a mirror of the History indeed. Over all the farther we go in the past when the means of production were less developed and the individual intellectual involvement was far less productive the bigger division between the having and the having not. And, in the same time the closer to the most recent times, the more middle class participation, the more individual intellectual involvement, and the more enhanced standard of life for the majority.
The rise of the technologies, the Internet, the ongoing Global political depolarization and the subsequent Economic Globalization, the ability for investing to another place not just into the developed part of the Western world for a substantial ROI “Return On Invested” capital, had brought general economic explosion of the 1990’s, but also these brought the economic upheaval of the 1989 stock exchange crash, and the most recent Great Recession of 2006.

The existing economic and social structures of (I call it) Social Order that was well perfected by the Most Developed Western Economies which is pro supply by nature of more or less trickle-down economics with relatively high lending rates (the set by the Most Developed Economies’ Governments low almost to 0 internal interest rates do not affect that much the inter-countries lending rates nor this do to the majority of the Worlds’ Small and Medium Businesses where these rates are even higher then before the Last Recession: see the interest rates of the securities sold by Greece, Ireland, Portugal, Spain, or see the rates Small and Medium Businesses are borrowing in the US). The Capitalistic trickle-down

economics is based on a relatively shady Business Practices maintained to prompt “easy business” which under the most recent conditions allows better and faster concentration of capital which effect does not result a possible on the US marketplace business expansion  but instead this effect consequences of high  profitable ROI from some Developing Countries then from the US; the “shady” business practices in which laws and regulations are far from the perfected common laws generally allow easy businesses start-up but than the “security” of these start-ups is quite limited to let lower interest lending, nor the Small and Medium Businesses have easy chances to collect on contracts from their Big Brothers’ Intercontinental Corporations by lengthy court cases, and finally when they (SMB) outsource or move any production to elsewhere trying to stay competitive globally these Small and Medium Businesses easily become a prey of weak international laws for intellectual property and anti damping protection, therefore it could be easily concluded that in the most recent times and under the most recent economic conditions the system of Social Order works better for the Large Transnational Corporations then it does for the Small and Medium Businesses, also the same formula could be well applied to how Global investment affects Large Investors and Small to Medium Investors; the lack of proper Personal Liability Laws and Regulations on National and International levels of Stock, Money and Commodity Exchanges benefit mostly the Large Investors by lowering substantially the security of investment for the Small and Medium Investors.
It may be noticed with great certainty that the Social Order of the so-called Capitalism is more in favor of Big Transnational Corporations and Large Investors then of their smaller brothers Small and Medium Businesses and Investors. Well, if such Social Order had worked well under a pro-supply conditions of a less connected and less developed world of the past, when under the most recent ongoing Globalization and ever rising Productivity such approaches are becoming quite contra productive by their fundamentals for a consistent economic growth and development; First, when Small and Medium Businesses and Investors use more than 75% in the US and the industrial production by the Transnational Corporation has been gradually moved and outsourced to China and elsewhere, Second, when Large Investors have gradually moved their investing to these Far Eastern Markets where the ROI and the economic prospective are mach advance then these in the US, Third, when in Global prospective there could be considered impossible for all regions in US and all countries in the World to enhance their Industrial Production to support in order and properly enhance their Fiscal Reserves for handling their ever getting older population required by the economics of Capitalism approach it is obvious that high interest inter-countries lending, the high rate securities controlled by the World Bank and IMF is beyond contra-productive for these underdeveloped economies , and Forth, may be the most important. The diminishing Earth resources and the disastrous Global Worming may not and cannot be addressed if the division between rich and poor people, regions, and countries is not overtaken by some new approaches in Economics differing from the Capitalistic one, in less developed and developing markets the usage of old cars, means of primitive heating, uncontrolled wood cutting, uncontrolled usage of pesticides and etc. may well destroy this Earth much faster then it is expected, to address these issues better system of Economics should be used that may accommodate and use flexible approaches to solve these.


So, even when the Capitalism or the Socio-Capitalism or the Communism systems of Economics which all represent the Social Order of the past claim to comprehensively deal with Market Economics it must be easy to prove that under the new Global market conditions non of these or any combinations of them could properly be called Market Economics: First, any economics of so-called Social Order is based on the philosophy of cyclical dialectic development that rely on the market economy to fix by itself when market fluctuations of recessions and upheavals occur which could have worked out in a pro-supply marketplace but experience real difficulties in a Global ever rising Productivity marketplace; the last Recession, the stalled industrial employees income diminishing Middle Class  for the last 10 years in the US, the setback in the European Union where maybe only Germany is doing relatively well and it is because of the German export to China of high-tech machinery, most of other countries are experiencing tremendous economic stress and are literally reducing their once succeeded higher standard of life: their social security, pension funds, Medicare instead of being enhanced and improved is being losing quality because of Fiscal shortages; then it comes China which succeeded in maintaining high growth and withstand the Recession of 2006 by expanding their own marketplace and export even under not very favorable economic conditions: China have done it and is doing it just because the flexibility with which the Chinese authorities use the economic instrument to maintain growth is very proper, the balance between social and infrastructural policies for employment and private sector, the prompt action when the real estate market was overheating last year by regulating second house lending matrix a developers specula regulations (2009), the constantly adapted policies of subsidizing exporters and certain economic areas (the photovoltaic equipment as an example), the policies of equity enhancement and values, and the etc. showed that the Chinese approaches are the best in the World now days, and such accomplishments showed to everyone that politics and economics under the most recent economic developments are two separate things to deal with, and showed that Karl Marx, Adam Smith, John Stuart Mill. And etc. are dead wrong in how the economy works under these most recent economic conditions of the Globalizing and high Productivity marketplace. And, second, no one ever really philosophically explained how the lock of resources and the Global worming could be dealt with under the Social Order conditions in an open marketplace, because never in History the people were given the opportunity or more exact had the abilities to produce more industrial goods then they consume (because by China, India, Brazil joining the Most Industrialized Economies of the US, Japan, Germany such capability for industrial goods is just very high) and at the same time the exhausting Earth resources are pushing toward Alternative Energies and Very High Technologies, and at the same time any countries but very few in the World rely on Industrial Production for their GNP, Fiscal Reserves and so on.


Even the Social Order systems of Economics in one way or the other proclaim the Market Economics as their best; none of them really deals with the most recent market fluctuations by using their established system of economics; so when under the pressures of the last Recession many governments took monetary and fiscal actions to stimulate their economies, which they still continue doing it, these actions include taking off debt from Banks and Large Financial Institution, partially acquiring businesses as it happen with GM, and printing money and quantitative easing as they are doing now; actually what the governments were doing is interfering with the market forces to prevent their economies from collapsing, and at least for moment they are succeeding, but what they are mostly doing is braking with the philosophy of cyclical dialectic economics of the trickle-down capitalism to not relying on the cyclical dialectic forces of the market to fix the mess of the consequences from the  last real estate overcapitalization that brought the Recession of 2006. The Keynesian approach of financial market interference that also was used in the Great Depression was well extended by the actions taken in this Recession to points well beyond Keynes imaginations and limits. When from Microeconomic prospective: “The cost-push theory basically emphasized the role of excessive increases in wages relative to productivity increases as a cause of inflation, whereas the demand-pull theory tended to attribute inflation more to excess demand in the goods market caused by expansion of the money supply.[1]” non of the conceptions can explain the total disruption consequence of extensive moving and outsourcing of industrial production and outflow of capital to other parts of the world. Neither Thomas Robert Malthus [2] nor John Maynard Keynes [3] neither most modern economists could or even like to explain an employment shortage not founded on economic development in a particular market, economy being replaced by a quickly globalizing marketplace where industrial production went so far out of hand so the question of balancing wages to employment to inflation is cut short of industrial employment which as it seems becomes in shortage not just because of the ever improving high technologies but even farther it becomes such because the majority of industrial employment is moved and outsourced indeed. Thus the questions from Micro and Macro Economic prospective are beyond existing logic in current economics. The question about inflation started relating more the value of the US Dollar to the Yuan, and the real costumer consumption when the costumer may not have a job in industrial production, and when in the same time GDP is founded predominantly on industrial production. Such, in an economic environment of exploding demand enforced by the new industrial powers in a marketplace of shortening industrial employment for the rest of the world, and reducing industrial employment for even some most developed industrial economies the questions about employment, Fiscal policies, distribution and redistribution of wealth are taking more power than ever if ever in History, so the questions become with depleting industrial production in the US marketplace and almost everywhere:

·        How to manage inflation without industrial production growth?
·        How to keep up and enhance consumption related growth when unemployment is high and may get higher?
·        How to manage Fiscal policies and Monetary quantities without industrial production growth?
·        What is this new world that changed one time from Farming into Industrial Production, and now what change is coming?
·        Why and what China is doing better to keep up high economic growth when the rest of the world crawls?
·        Why such a good world as the US Economy which with a few exceptions had grown for the last 100 years with at least 20% every 10 years in case has stalled for the last 10 (2000 – 2010)?
·        Why the hard-working and with the highest in the world productivity US workers are running short of jobs and how far it would go?
·        Etc.?

Actually, let me suggest what is happening and to where things in economy in the US and almost everywhere else may go to:
·        The Economics of trickle-down Capitalism may have to change to a Market related Economics of variances (I call) Quantum Economics which promotes the ideas of prompt, practical, flexible economic actions to prevent violent economic fluctuations such as the Last Recession of 2006, Inflation and deflation;
·        With the  self-adjusting  Economics gone, economic instruments/tools may be used “as it comes as it goes” approach of pure statistical principles;
·        The ideological approaches of Republicans against Democrats of how to run the economy may still be in place but will be much less intrusive to how the economy is run, because it maybe much clearer the principle system of the Science of Economics as a system of adjusting market fluctuations by using old and some new Instruments of Economics;
·        Social and Medicare expenses,  Infrastructural expenses along with

Subsidies for Alternative Energies may have to be considered more on the equity side of the governmental books not on the expenses side as it has been practiced until now, which also may have to be considered Instruments of Economics.
·        The Industrial production US Economy is about to continue changing into a Service Sector Economy, but the already succeeded equity including over all standard of life, Social and Medical Structures, Infrastructures, Educational System, relatively high valued Real Estate and the accumulated Capital may have to play important role in a more regulated Stock and other Exchanges for investment into less developed areas in the US as well Global by the Small and Medium Investors who now are handy caped by the hostile to them market exchanges;
·        The business laws and regulations may have to be enhanced for corporate, limited liability and trust management that must improve their security for lower rates “lend-ability” of Small and Medium Businesses, that must prompt more employment in different spheres of business;
·        The Government may have to start using better tools to subsidize and prompt growth; tax breaks, tax initiatives, employment stimulus, and etc. are part of these;
·        Internationally, the government may have to promote equal laws and regulations to these on the US market.

The Social Order of the Past may be changing into the Market Order of the Present and the faster these new developments are adapted by an economy the better this economy will stand globally. There maybe countries and economies losing their superiority over others and really hope the USA is not one of them. As stated above Personal Freedoms, Democracy, Liberties are not necessary bring and support the best and most advance economics because the game has changed, however the values of these succeeded extremely important accomplishments of Humanity must be preserved in any cause.
http://sites.google.com/site/economicsofmarket/
© Joshua Konov, 2011


[1]“Macroeconomics,” Microsoft® Encarta® Encyclopedia 99. © 1993-1998 Microsoft Corporation. All rights reserved.

[2]“Macroeconomics,” Microsoft® Encarta® Encyclopedia 99. © 1993-1998 Microsoft Corporation. All rights reserved.

[3]“Macroeconomics,” Microsoft® Encarta® Encyclopedia 99. © 1993-1998 Microsoft Corporation. All rights reserved.

Market Economy Under Rapid Globalization and Rising Productivity


http://thescholedge.org/index.php/sijmd/issue/view/43/showToc

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VOL 2, NO 9 (2015)

TABLE OF CONTENTS

ARTICLES

Cover Image
Dmitry S. Sсhmerling
1-8
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Joshua Ioji Konov
9-23
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Michael Emmett Brady
24-36
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Serge Piabuo Mandiefe, Jonas Chia Bafon
37-52
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Giovanni Antonio Cossiga
53-69

 

Which are the worst current economics’ compatibility points to the present accelerating globalization and rising productivity? By Joshua Konov, 2012


  • Relying on high productivity as main economic/market agent for growth (1/f noise), whereas, many economic/market agents and tools should be considered “noise” to diversify business activities to maintain economic/market development

Someone has to lose money,” Guo Qigang, the plant’s general manager, said in a recent interview. “We’re a state-owned corporation, and it’s our social responsibility.”http://www.nytimes.com/2011/10/26/wor…

  • just as occurred decades ago with agriculture, the declining role in our economy of manufacturing, which over the last half-century is down from 32 percent of the work force to 9 percent, will continue. Let’s also recognize that retreating into protectionism would turn a win-lose into a lose-lose.


Tallying the Toll of U.S.-China Trade online.wsj.com Many Americans believe low-priced Chinese imports kill U.S. factory jobs. Most economists say the benefits of the trade far outweigh its costs. But new research suggests the damage to the U.S. has been deeper than these economists have supposed.

A typical General Motors worker costs the company about $56 per hour, which includes benefits. In Mexico, a worker costs the company $7 per hour; in China, $4.50 an hour, and in India, $1 per hour. While G.M. doesn’t (yet) achieve United States-level productivity in China and India, its Mexican plants are today at least as efficient as those in the United States.


‘In this perspicacious and persuasive book, Tom Palley shows how Conventional Economic Thinking led ultimately to the disaster of the Great Recession and how it is now threatening to culminate in the Great Stagnation. His thoughts on how to avoid that and how to recover are compelling and important.’ Clyde Prestowitz, President, Economic Strategy Institutehttp://paper.li/joshuak2077/1329070660

  • Low economic/market security founded on the shady business practices and lack of rule of law that gives major advantage to the large transnational corporations, and grieving disadvantages to the small and medium businesses

Small Business Majority and the American Sustainable Business Council reports that’s not the case. On the contrary, 78 percent of small-business owners in the study think regulation is important to help level the playing field with big business, and 76 percent believe existing regulations should be enforced.http://paper.li/joshuak2077/1329070660#

Whenever government wants more power it ignores the regulations that are in place, and then everything goes to hell. I don’t believe in a lot of regulation but I do believe you’ve got to have the proper structure in place to minimize the conflicts of interest involving greed and corruption. But regulations are not worth the paper they are written on if they are not enforced http://paper.li/joshuak

  • High interest rates lending to the small and medium businesses and investors that’s is accumulative in short term cyclical adjustments, and dysfunctional in another way

Struggling euro-zone economies like Greece, Portugal, Spain and Italy cannot cut their way back to growth. Demanding rigid austerity from them as the price of European support has lengthened and deepened their recessions. It has made their debts harder, not easier, to pay off.http://www.nytimes.com/2012/02/18/opi…

  • Industrial production as a main and fundamental economic/market agent for fiscal reserves that could have worked-out short term downturns, whereas, well exampled by the last 2007-09 Recession, the downturns are neither short, nor moderate, and could be followed by long rebuilding term

a study released on Wednesday found that entry-level wages for students who graduated from college in 2010 was lower than a decade earlier, after adjusting for inflation.http://economix.blogs.nytimes.com/2011

Technology and cheaper goods from overseas have replaced many of the not-especially-creative professions. A tax accountant loses clients to TurboTax; many graphic designers have been replaced by Photoshop; and the small shopkeeper by Home Depot, Walmart or Duane Reade. Though a lottery economy is valuable to various industries, the thought of an entire lottery-based economyhttp://www.nytimes.com

  • Business cycles as main and fundamental economic/market agent for adjusting economic/market redundancies, whereas the economies/markets fluctuations are less predictable and cycles progressively untraceable, the economic agents and tools should be used much more random “as it comes, as it goes, instead

Companies are focused on jittery consumer confidence, an unstable stock market, perceived obstacles to business expansion like government regulation and, above all, swings in demand for their products.http://www.nytimes.com/2011/09/10/

It is encouraging to see the Bank of England, the Bank of Japan, and the Federal Reserve all working to raise growth through stimulus primarily focused on the domestic economy. (While Japan’s central bankers would surely be happy to see the yen fall, they’re not, for the moment, following Professor Ben Bernanke’s advice to print yen and buy foreign exchange.http://paper.li/joshuak2077/1329070660

(VIDEO: Watch From Davos: Is Capitalism Failing? A TIME Discussion With the World’s Top Business Leaders) Third, and most importantly, the evidence is mounting that the austerity-led reform programs are not working to help countries exit the crisis. Take a look at Portugal Read more:http://business.time.com/2012/01/31/w…

  • The trickle-down approach of capital supported by political and fiscal economic/market agents that in the time of China and rising productivities carries on and accelerated wealth concentration into progressively the very few, in large disadvantage to the middle class in national plan, and less developed economies/markets in global such

 President Obama issued his sharpest warning yet about the German-led solution. He said the focus on long-term political and economic change was well and good, but emphasized that failure to react quickly and strongly enough to market forces threatened the euro’s survival in the coming months Unlike ·http://www.nytimes.com/2011/12/11/wor…

Lacking such evidence, the obvious conclusion seems to be that economic growth, and employment growth, would have been significantly stronger over the last two years without government cuts. But I’d invite readers to point us to any research that bears on the question, one way or the other.http://economix.blogs.nytimes.com/201…

  • Short term investment and capitalization by business practices prompted by the high interest rate lending, and the corporate structures business practices of short term profit and distribution
  • Practiced corporate limited liability laws mainly serving large transnational corporations thus giving to these competitive advantages and lowering market security over all

Large corporations can often squelch their competition. They can minimize their costs by dumping waste products into the environment, contributing to pollution and global warming. They can use their profits to buy political influence. If they don’t like the regulatory policies of one nation-state, they can simply shift their operations to another.http://economix.blogs.nytimes.com/201…

  • Hurting the earth environment short term investment and capitalization business practices, by the high interest rate landing, by the shady business, by the lack of liability and accountability transnational corporations, by the deepening devising between poor and rich people and countries, by the imposed by the developed countries and the international organizations: WB, IMF, WTO austerity and restructuring measures on the less developed and developing economies

Waning Support for Wind and Solar By DIANE CARDWELL Wind and solar companies say they need more government support to be competitive. But in Washington, there’s little enthusiasm for more subsidies.

  • The governments growing inept involvement in finances and business actually making the gap between rich and poor wider

The currency intervention also functions as a massive inequality-creation machine. U.S.-based behemoths, which own or use many of those exporting Chinese factories, benefit, as do their shareholders. And because more than 90 percent of U. S. stocks are owned by the wealthiest 20 percent, the spoils are disproportionately concentrated at the top

  • The bureaucratization of economic/market agents well presented in the European Union VAT and the EU funds for development that prompt corruption, politicization, and injustice

The campaign group farmsubsidy.org says there are 1,212 farm subsidy millionaires across Europe, including 268 in Germany, 174 in France and 29 in Britain. Charities such as the RSPB and corporations such as Nestle are believed to receive more than £1m a year. The Queen qualified for £473,500 in farm aid in 2009 for Sandringham farms.

Economy: Rich Countries’ Farm Subsidies Benefiting Royals by Julio Godoy (Paris)Friday, August 06, 2010 Inter Press Service Subsidies for agriculture in the industrialised countries of the world grew again in 2009, benefiting the largest companies and land owners, such as Prince Albert of Monaco and Queen Elizabeth of Britain.http://www.globalissues.org/news/2010

  • The lack of laws preventing market and commodity exchanges from shady transactions and activities that gives market advantage to the large investors, and greatly hurts the small and medium investors

JPMorgan Sees Clients With Less Than $100K as Unprofitable bloomberg.com – By Laura Marcinek – Tue Feb 28 16:54:17 GMT 2012 Enlarge image Jamie Dimon Jamie Dimon, chief executive officer of JPMorgan Chase & Co., center, at the World Economic Forum (WEF) in Davos, Switzerl…

  • Debit/Credit finance accounting, which because of the low economy/market security keeps very tight economic/market development, whereas the transnational corporation are expected to expand business and raise productivities attracted by lower taxes and unregulated labor marked: the transnationals not only raise money on the public market exchanges but also are credited on very low interest rate, however under these new conditions transnationals cannot maintain or expand industrial production any closer to the global markets need of employment

Mr. Fillon “made clear it had not been his intention to call into question the U.K.’s rating but to highlight that ratings agencies appeared more focused on economic governance than deficit levels,” Mr. Clegg’s office said.http://www.nytimes.com/2011/12/17/bus..

  • The pro-supply a priory economics cannot maintain balanced market demand-to-supply under this new emerging markets environment

The economists that I spoke to estimated that China’s currency policy has cost the U.S. between 200,000 and 3 million jobs. Of course, the wide range suggests that these are little more than educated guesses. But a broad picture does emerge. U.S. manufacturing employment has fallen by around 6 million over the last decade. If China had allowed its currency to adjust naturally, life might be much b

by Joshua Konov, 2012 joshua.konov@gmail.com

SEE http://mpra.ub.uni-muenchen.de/34588/1/MPRA_paper_34588.pdf

Association For Heterodox Economics 17th Annual Conference 2-4 of July,2015 Presentation by Joshua Konov


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State and Private Debt of Market Economics


In recent economics debt is in the foundations of business and equity – state debt limits governments’ expenses, social, educational, infrastructure, policies and international relations – private debt limits individuals’ expenditures, abilities to access better education, housing, and etc; however, ‘credit’ that could fall into ‘debt’ is a main market tool giving governments and individuals the abilities to expand infrastructure, business, equity, and etc using capital, which could not be approachable but by through crediting. The difference between ‘credit’ and ‘debt’ is in the momentum – whereas ‘credit’ is targeted investment considered in motion, a ‘debt’ is a negative after deficiency market imbalance. The distinction between working ‘credit’ and accumulating ‘debt’ is a thin line that could be crossed by global recessions, works of nature, or political turbulence. Between ‘credit’ and ‘debit’ comes public financing – in case the ‘risk’ is taken partially by the investors thus limiting the issuers (could be governments or corporations) liability; however, in cases like “Bond holders against Argentina”,

CAMBRIDGE – Argentina and its bankers have been barred from making payments to fulfill debt-restructuring agreements reached with the country’s creditors, unless the 7% of creditors who rejected the agreements are paid in full – a judgment that is likely to stick, now that the US Supreme Court has upheld it. Read more at http://www.project-syndicate.org/commentary/jeffrey-frankel-explains-why-a-recent-us-supreme-court-ruling-leaves-creditors-and-debtors-worse-off#LEKoUJp5KSDDLW2A.99

or “IMF, ECB, Germany and other lenders against Greece” bonds are capitalized into loans and the governments of Argentina and Greece are required to pay these in full.

There are many historical occasions when ‘debt’ on countries level was forgiven or let it die in time:

The revolutionary war setup the United States’ new monetary system – all partially causal to the austerity measures and trade restrictions on the Colonies implemented by the Minister George Grenville – by year 1763 Britain’s national debt had risen to £122 million, or over 150 percent of the Gross Domestic Product that prompted strict austerity and trade restrictive policies:

“Grenville passed the Currency Act of 1764, which forbade the colonies to emit any new currency. Finally, in 1765, Grenville ushered the American Stamp Act through the House of Commons, a measure that was designed in part to restrict the colonial land market.” se 1776: The Revolt Against Austerity”

Germany after the Second World War  and Poland after the fall of Communism are the best example of such …

Yet debt forgiveness has an established historical precedent in Europe. Poland, for example, had accrued external debts of about 57% of GDP by the time the Communist system had collapsed, with the majority of that debt (around $33 billion) being owed to Western governments. Poland’s largest creditor at the time was Germany, which reluctantly agreed in 1991 (under pressure from the United States) to go along with the “Paris Club” of creditor nations and forgive half of Poland’s debt to the West (though this was less than the 80% write-off Poland had originally been seeking). An even more dramatic example is provided by Germany itself. Historically, Germany has been described as the biggest “debt transgressor” of the 20th Century, with restructurings in 1924, 1929, 1932 and 1953. Total debt forgiveness for Germany between 1947 and 1953 amounted to somewhere in the region of 280% of GDP, according to economic historian Albrecht Ritschl of the London School of Economics. Today, Greece has an external debt-to-GDP ratio of roughly 175% (by comparison, Germany’s external debts currently stand at about 145% of GDP).

On individuals or corporate level ‘debt’ has been washed out by bankruptcy procedures – in the US bankruptcy courts are much speedier and over all easier than these in the EU, that some economists consider a main reason for the better way US economy has performed in post 2007-9 Recession times. By giving debtors a second chance bankruptcy courts play some fundamental role in taking individuals and businesses out of the big hole of debt into the market opportunities, thus boosting business and consumption.

The most unorthodox economic approaches to flood capital into underperforming markets is the used by the US, UK, Japan and now EU central banks so called ‘quantitative easing’, while instead of borrowing publicly or privately capital to revive their economies these central banks ‘produced’ such capital from ‘thin air’ into the system. The ‘status quo’ economics predicts that additional capital – such not product of an economy market activities (debit/credit) – would prompt inflation; however, no inflations but deflations have occurred in the post recession times? Neither, the huge debt accumulations by Japan, the US, many EU countries, and others have prompted inflations either! Thus, neither the quantitative easing nor the huge debt has yet created sweeping inflationary forces. In context with the ‘status quo’ economics are the ways government accounting is done by not properly deducting QE from the overall debt even so the capital infusion by QE writes off debt by acquiring issued bonds? In referring to inflationary forces or the lock of it for the last 20 plus years the ongoing Globalization, rising Productivity, China’s Industrialization, and the Internet could be considered causing the increasing exogenous economic pressures over national economies indicated in by their deficit adding to their debt.

The world is crippled by too much debt. The borrowings of global households, governments, companies and financial firms have risen from 246% of GDP in 2000 to 286% today. Since the financial crisis began in 2007, debt-to-GDP has risen in 41 of 47 big economies. For every extra dollar of output, the world cranks out more than a dollar of debt. The Economist explains why the world is addicted to debt http://econ.st/1eaQEgc

As simple as things may look like the results of this system of economics not being able to accommodate these exogenous forces cause fundamental global market imbalances – unemployment, declining middle class, small business and investment, and accumulation of high national debt.[1]

Market Economics employs exogenous market forces and thus capitalize on the 21th Century irreversible developments by not only enhancing the international accounting but further by employing the immense powers these exogenous forces posses to boosting national and global Market Development through alleviation of poverty and environmental Earth protection.

The countries debts are considered by Market Economics as the present corporate and individual debts involving bankruptcy, mitigations, negotiations, and etc; whereas investors take their reward and risk; however, Foreign Direct Investment and Productivity are not considered primary force for global development but supplementary such, because the more important consideration such as Earth protection requires poverty alleviation by not prompting mass industrialization.

The Capitalism uses foreign direct investment by transnational corporations to raise productivity and bring return on this investment that could be only achieved through industrialization, and the global accounting system is setup on these principles;

The Marketism uses subsidies, low interest financing, and etc along with foreign direct investment to prompt environmentally friendly Market Development that will alleviate global poverty and thus save Earth from destruction using market principles and saving individual freedoms.   Joshua Konov 2015 [1] http://www.economist.com/blogs/graphicdetail/2015/05/daily-chart-4?fsrc=scn/fb/wl/dc/st/thetracksofarrears

Parameters – Market Agents and Tools – of Market Economics


Market Economics uses environmentally friendly approaches to steer business and employment of a democratic societies that consequences into poverty alleviation and middle class growth on a global scale. It is founded of the existing principles of the Capitalism, however, it changes the shady ‘easy’ business into strict law of business to deleverage the inequality of market competition to raise ‘market security’ and the small businesses and investors lend-ability that differs from the currently economics.

If Market Economics accepts ‘uncertainty’ as an ongoing and growing market (economic) development – product of the ongoing exogenous for individual markets (economies) forces coming from the ongoing Globalization, rising Productivity, Chinese Industrialization, and the Internet – to manage such ‘uncertainty’ an ‘as it comes; as it goes’ approach is needed that could be only achieved if market (economic) tools are used as ‘parameters’ to prevent the global marketplace from exasperations that could bring upheaval.

The ‘market agents’ are status quo necessities required for raising the ‘market security’ by marginalizing the existing inequality in current market competition – how ‘small and medium businesses and investors’ are affected by the business laws and conditions in comparison to the ‘large businesses and investors’. For the ‘market economics’ to enhance ‘capital transmission-ability’ and thus boost business activities – employment and fiscal abilities – the acceptance of more fair ‘market agents’ is paramount: enhanced business, liability, contract, environmental, consumer protection, bankruptcy, insurance, bonding, and labor laws will raise ‘market security’ allowing lower rates of lending.

However, the ‘market tools’ are used as ‘parameters’ to balance market equilibriums in synchrony with the ongoing deflation/inflation forces in the real economy – flexible capital infusion through FDI but also through Subsidies, Low Interest Lending using ‘market leaps’ mostly by developing alternative: energies, tourism, and farming should go global. Social, educational, research and development, and infrastructural expenses, prevailing wages, and etc are also such ‘market tools’,

To save Earth the alleviation of poverty is necessary; however, achieving it not through the industrialization of the present Capitalism but through targeted ‘leaps’ of diverse environmentally friendly businesses of the Marketism (Market Economics).

The Marketism will work under high ‘market security’ with enhanced ‘market agents’ whereas the ‘market tools’ are used indiscriminately in comparison to the ideological approaches or current budgetary economics – the debt issues will resemble the individuals/businesses system of lender/debtor approach in which governments and countries will have less intrusion in economics being more on the controlling side than on the capital transmission such – Commercial Banks and International Financial Institutions will approach directly markets thus reducing corruption and politically motivated investment of the Presence.

The ‘parameters’ are flexible in nature: some on the supply side such as targeted subsidies and low interest business financing another on the demand side such as social, infrastructural, educational, prevailing wages, and etc expenses. Balancing ‘market equilibrium’ because of increasingly relevant exogenous market forces will be targeted through market sectors ‘parts equilibrium’ than the currently used ‘general market equilibrium’ – thus monetary policies will not work by varying discount interest rates of the Central Banks but by expanding or reducing individual market sectors lending rates and/or fiscal initiatives. If markets are taken as ‘demand to supply’ (not to be mistaken with ‘supply to demand’) places for business competition the long-term ‘market development’ depends on the relative ‘stable’ market environment that is only possible by mitigating the excessive market/economic fluctuations through using the ‘parameters’ to prevent ‘big waves’ of excessiveness – the market forces on sectored/partial level – natural to the market competition are the best ways for keeping ‘marketing equilibrium’; however, the fierce variations experienced in the last 2007-9 Recession lesson goes to active usage of these ‘parameters’ to prevent such harmful consequences of a ‘as it comes; as it goes’ economics.

Joshua Konov 2015

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