Market Tools B(x1, x2, x3, x4, x5, x6, x7, x8, xn)|P (1→n) Boosting Market Development While Keeping Inflation / Deflation in Limits ΙΔ|P(-05⇔0.5)


ε,ε1xε,ε1p = Θ x [ζ – (ζ x ΙΔ)]1 

The Market Tools B(x1, x2, x3, x4, x5, x6, x7, x8, xn) as parameters setup by flexible usage through Market Leaps, Targeted Projects, Carry on Market Policies uses Environmentally friendly technologies, techniques in farming, manufacturing, energies, heating and coolinggarbage disposal, services, transportation to boost Market Development: business and employment, infrastructure and acceptable living standards I.e. alleviation of poverty, elimination of any Earth pollution under sustained Inflation / Deflation ΙΔ|P(-050.5)

Market Development

1 μ1 = [μ + (ε,ε1x→ε,ε1p)] = Θ x ∑[ℑζ[A(y1→y7 ) |P(1) +B(x1 , x2, x3, x4, x5, x6, x7, x8, xn ) |P (1→n) x ΙΔ |P (- 05⇔0.5)] _____________________________________________________________________________

(μ1) – it is seasoned Market Development after the gained Entropy, Equity; ε,ε1– Equity, Entropy (x → p) added by the Θ amount invested through – Market Leap, Targeted Project, Carry-on Capital Infusion) multiplied by the ℑζ – J Constant then subtracted by the multiplied ΙΔ – Inflation or Deflation. (see: Example) ℑζ – J Constant is the sum of 2 probabilities; the Market Agents and the Market Tools. A Market Agents implementation A(y1→y7 ) considered probability to 1 B Market Tools probability p(1→n] utilize the B (x1 , x2, x3, x4, x5, x6, x7, x8, xn ) – Market Tools’ probability effect on the Real Market that is most complicated probability that needs Quantum Approach possible by using Quantum Computers – Market Tools are used as probabilities in conditions of implemented Market Agents meaning in high Market Security business environment that allows lower interest lending and high transmissionability of the invested capital. ΙΔ – Inflation or Deflation – acceptable variance p(-05⇔0.5)

B(x1, x2, x3, x4, x5, x6, x7, x8, xn) – Market Tools to accelerated Entropy/Equity

  1. Quantitative Easing, SDRs; 
  2. Subsidies; 
  3. Low Rate Lending; 
  4. Social Expenses (incl Educational, Pensions, Medicare, Social Security, Unemployment Benefits, etc.); 
  5. Infrastructural Expenses; 
  6. Markets, Regions Parts Equilibrium Monetary Policies; 
  7. Fiscal Policies; 
  8. Sectoral Regulatory interference by Central Banks, International Finance Institutions.

      n. Others 

The general unpredictability / uncertainty of very complex market forces aggravated by the globalization, rising productivity, improving technologies, transnational corporations global expansion in farming, manufacturing, retail, wholesale, technologies, financing, the Chinese industrialization, and the Internet have brought exogenous for most market forces to improbable complexity that could not be offset by the status quo ideological economics of the Capitalism nor by the Game Theories, nor by the governments taking bigger role in the such orthodox economics’ practices. The self adjusting Economics cannot prevent crushing recessions like the 2007-9 one, nor accelerate the post recession rebuilding; under the heavy pressure of possible economic collapse the central banks and governments in the most developed economies have taken highly revolutionary policies such as Quantitative Easing, Subsidies, Bailouts of BanksExpanding Foreclosures and Unemployment Benefits periods that supposedly would have brought Inflation but instead imploded stagnation; the even chaotic such actions helped the economies to regain some vitality, growth. However, the ideological economics that brought the 2007-9 Recession on the first place regain their ideological grip not being able even to explain what really had happened. The only marketplace that somehow and to a certain extend continued its growth was China that used the tools of economics very flexibly on an ‘as it comes; as it goes’ policies principles. The Market Economics go beyond such economic policies into creating a system where the Market Tools are used as Parameters to prompt from one side continuous Market Development of alleviation of Poverty through Environmentally friendly methods, and by having market forces on Micro-market level self adjusting through market competition, and from another whereas on Macro-market level artificially using Market Tools to keep very low Inflation / Deflation.

The improperly setup flexible usage of Market Tools might have different effect  on individual markets: 

  • If exaggerated I.e. incompetable amount of money is invested in a market such can bring high inflation and may even crush itor 
  • Inot enough of capital is invested in a market than such may bring huge deflation and impoverish even higher percentage of its population 

Thus bringing further Earth pollution, with high unemployment, a not properly functioning market. 

In this research is strictly stated that individual markets have their specifics therefore any intervention: Market Leap, Targeted Project, or Carry on Investment must be done in apprehension of such differences; however, with the required implementation of the Market Agents as stated by previous working papers of these research a existent minimum of a high security market environment would be in place. Despide of such existent minimum the differences, specifications must be taken in consideration in any artificial move on any market. Thus to relativity between individual Market Tools to Inflation / Deflation, and to full Employment, Business activity, Infrastructure (Equity) building is a highly improbable to be achieved by the probabilities possible by the existing technologies but through Quantum Computing allowing unreachable in the past compatibility and variations. Thus this Market Economics was called Quantum too, because of its very high uncertainty and demanding complex relativity between number of factors, possibilities.

The majority of Market Tools could be applied, enforced more to either supply or the demand sides of the occasion – thus to seek balance, first such must be seeked on parts, sectoral market basis equilibrium instead of general such as some sectors overheat needing tightening up while others are in the opposite side of the occasion either needing additional boost or at least still in their ways up; second, the one way approach let say the demand side only can prompt quick inflation – instead careful configuration a particular market specifics is needed: let say a market is socialized like the Norwegian one than the pro private business policies are to balance the market imbalance of an one way development, the opposite distinctions require the other way around thus too rigid privatization while the demand is relatively weak and stagnation sweeps through the Social expenses must be used to offset such extreme situation. It is all about balances under very low Inflation /Deflation – the second particularly distinguishing such economics from the Capitalistic one and the probabilities of high market security market development allow such difference to be possible where the lending rates to small businesses and investors could be very low without compromising with the risk factor requirements. The Market Tools also  will have multidimensional effect being invoked by the need for Earth preservation that is not purely market factors but a dominant such that requires actions not necessary in synchron with the debt controlled current budgetary economics, and therefore, as such artificial factor modulate the global marketplace the Market Tools must be used artificially on Macro-market Level to accelerate, promote, carry-on high business activities, full employment, market balance; thus the quantum uncertainty and multidimentuallity can provide such balances and allow the markets to develop without prompting harmful recessions. The relativity that accumulate by the Market Tools and affects the real economy has been well researched by the current economics though in combinations of multiplicity and intermarkets (globally) such could not be done first, because the mathematical approaches are limited in such uncertainty and second, because the further developed game theories could not accept multiple factors either even though the Nash Equilibrium and other probability theories were in use. The Quantum Economics i.e. Market Economics goes far beyond single or couple probabilities into ‘n+’ probabilities and the effects on multiple factors on global marketplace.  

_________________________________________________________________

Example 1: you have 10b QE subsidized into public transportation, infrastructure, Social Expenses, Fiscal Breaks, prevailing wages, residence requirements, limited lending to small businesses up to middle size – however the equipment, materials, energy is produced by large transnational corporations that make it global. 

The Market Agents are implemented in the Market!

If for the local market 10b is 10% of the market – the demand side are salaries, business income, social expenses, fiscal breaks, etc – the supply side are the purchases, small business production, services, etc; however, the effect from global exchange of manufactured equipment, materials, goods, is to retain low Inflation. Thus open market exposure to the globalized marketplace is paramount.

The Market Development is 1. Entropy – Sales, expenses, business activity, employment and 2. Equity – infrastructure, market competition, poverty alleviation, clean environment;

To accelerate Entropy / Equity build up the higher Market Security with the implementation of the Market Agents will be established, however, the flexible ‘as it comes; as it goes’ usage of Market Tools under very low inflation even Deflation will be achieved only by appropriately weighing on the different Market Tools in accordance with the specifics of an individual market.  

In this example the Investment is to change the old vehicles, improve public transportation, provide the needed employment by steering the needed business but also by apprenticeships and expanded public education. The funds are to be disposed by the commercial banks on setup matrix. To alleviate poverty also the social expenses are lifted targeting food, heating, transportation, job opportunities through prevailing wages and residency requirements. The Fiscal Breaks on taxation are to have the capital circulate in the Market. In case it is a Targeted Project in a process. There are three requirements for the implementation: 1. Proper preparation 2. Fast execution 3. Not allowing any corrupt or disruption practices. 

What complicate this Targeted Project is the necessity for multiple such Projects that must be executed simultaneously on the markets in proximity for 1. To sustain huge movement of people toward Targeted Project 2. To settle employment spread to all areas, 3. To avoid pollution coming with a concentration of people in less developed as infrastructure markets. The Market Economics does not prompt urbanization, industrialization, concentration of people but alleviation of poverty by using environmentally friendly methods in place: meaning in some market it could mean manufacturing and services in another farming and services, in third tourism and services to dominate a market industries. 

Again, all Market Leaps or Targeted Projects are tagged to Inflation / Deflation and therefore to the maximum a Demand-to-Supply internally must be paramount even though the globalized marketplace could sustain serious inflationary pressures by themselves. 

The complexity of multiple projects, invested capital, other market tools and the requirement to sustain low –0.5 to 0.5 Inflation / Deflation must be overcome by taking in consideration the pro-supply projected business, the existing supply local and global capabilities, the rise of demand under these projects that in a pot must avoid ‘big waves’ that can crash the market. 

While, in practice, China is using very similar project approach but on a smaller scale and therefore the results succeeded even impressive compared to the rest of the developed world are very limited in comparison to the probable Market Development under a very aggressive and widespread Market Economics: and what really presses the need for such is the necessities for poverty alleviation to Earth preservation not providing long term allowance. The Chinese experience even extremely valuable in practice, and serving as example does not provide the needed on the large scale functionality. 

In the Example 1: If 10% or 10b USD is invested through Market Tools to steer enough business activities, employment, consumption, building of equity just the implementation of the Market Agents (A) should provide Probability (1) effect on the invested capital so no losses are projected but the Inflation’s deduction therefore the Inflation / Deflation should be kept close to (0); the Market Tools effect should add additional acceleration, transmission-ability to the Investment thus adding to ROI, Entropy, Equity in which continuous after the operation business activity, employment, consumption must be achieved; thus, it isn’t about quick in-and-out profit driven operations but a long term Market Development where Equity / Entropy are seasoned: the Detroit’s effect where capital goes through brings profit and when the industrial production technically moved out or was robotized a devastated marketplace was left over; such, effect cannot be environmentally accepted – therefore, it is the service sector along with small business and investors, and the Social and Infrastructural Expenses that are suppose to keep the Market Development running on, the market competition, employment, consumption in check., and the Earth environment clean. 

To use environmentally friendly technologies in transportation a very inexpensive public transportation, electric and hydro vehicles, and railroad, water channelsairfreight system must offset pollution; to use such in energy generation – the green energies must become the only source, same with farming, manufacturing, tourism, etc; to offset deforestation the heating and cooling must become elsewhere driven by green energies. The biggest difference between this new Market Economics and the Capitalism is the involvement of the developed economies to swiftly export Market Development all over the global marketplace, to extinguish any pollution, to establish stability by having people engaged in productive activities, having access to jobs and opportunities. Someone will call this research utopian, but actually it is the only possible way to avoid Earth destruction by using peaceful means, and by saving personal liberties, freedoms and by not letting the government to take over business, life, personal freedom. 

The implementation of the Market Agents expands personal management liability, strict environmental protection, consumer and labor such that must stop large transnationals, all businesses from hurting the environment or inflicting human rights violations. But all of this is possible with the expansion of possibilities for productive business activities, market development, prosperity on a global scale. 

Joshua Ioji Konov 2017
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Uncertainty, Probability, Parameters, Market Economics Using Quantum Approaches


The complexity of modern day economics invokes the uncertainty principle because it becomes profoundly clear that using mathematics or the game theory may hardly take in consideration multiple variances, changing data, probabilities. The probabilities of multiple ever changing economic realities could be only adjusted by using parameters, as it is done in quantum mechanics, to adjust or at least prevent extreme variances by applying pressures on certain relevant points.

Until to date the tight budgetary leach has been used to prevent from excesses, redundancies or at least such approach was suppose to work. In the pro supply economy if the tight leach budgetary releases certain expansion to prevent inflation it might be considered the only comprehensive way possible for its time. Then with the new global economy complexities arriving with the development of high technologies, productivity, globalization the game theories have flourished becoming relevant in such progressively perplexing realities. In Market Economics such perplexity goes beyond the possibility for even game theories to apprehend thus changing realities, possibilities, pressures. In practice the aggregating inequality, personal and national debt, declining middle class, and with the exception of China: expanding poverty, insecurity – pressures of exogenous forces of super productivity achieved by the Transnational Corporations in farming, manufacturing, banking, services through better management, technologies, moving, outsourcing the China’s Industrialization, the Internet that have tipped off the ‘old’ supply driven economies into demand, balance driven such. The 2007-9 Recession put the final nail in the coffin of the supply economics by accelerating the processes globally toward recalibration of assets, redundancies, the inadequate consumption, demand in a highly vigorous supply possibilities marketplace.

21st Centuryinability of the orthodox economics to apprehend the globalized, high productivity possibilities could be put in the following grading from China that uses a best ‘as it comes; as it goes’ economics showing best results running for the last 2017 quarter 6.9 GDP growth down to the European Union’s under 1.5%. However, the results elsewhere are limited by the budgetary/debt driven orthodox supply driven economics that limits economic possibilities for vivid development. The low security of the trickle-down Capitalism, Socio Capitalism used at the moment comes from the main targets of easing business by overwriting labor, consumer, social protections to provide tempting for the investors, companies conditions to invest, do business, have better return on investment; the entire system, philosophy relies on such shady-business approaches that seeming had worked well for the developed economies like the US, Japan, Germany to succeed their high living standards, middle class, relative prosperity in the 20th Century. But this kind of prosperity is all but gone, the globalization, technologies, the non existing labor markets have taken over shrinking employment, small business and only allowing the really big business and investors to prosper – inequality, debt, unemployment, lost generations, reduction of social services, pensions, crumbling infrastructure that’s how the Orthodox Economics performs in the 21st Century, and therefore the new, Market Economics is needed to capitalize on the achievements from the 20th Century along with the new market developments in the 21st Century. Thus what was good for the 20th Century is quickly becoming abomination in the 21st Century that need enhancements, changes to apprehend the new market forces.

However, the question remains: how to avoid redundancies, inflation, economic upheaval if the leach of firm budgetary economics is not there?

If the Game Theories cannot solve the dilemma because of the high Uncertainty in modern day markets than only the Quantum Computing and the principles used in Quantum Mechanics to find the best adjustments in a particular situation will: both new sciences are brand new staff, never experienced; thus the principle used in modern science of adding up on past experience may not apply under these new circumstances! Lets say the Nash Equilibrium could be applied on individual Market Sectors development but not as a Game Theory, instead the multi Quantum Balance/Equilibrium may be reached by using the relations between Market Tools (Quantitative Easing, SDR, Subsidies, Low Rate Lending, Social Expenses Infrastructural Expenses Market Leaps, Targeted Projects, Markets, Regions Parts Equilibrium Monetary, Fiscal, Regulatory interference by Central Banks, International Finance Institutions) + Market Development + Inflation / Deflation + Market Competition (Equity, Assets, ROI) + Market Forces – a function between many relative Data to be mixed in a pad of relativity to the overall possibilities; the Market Tools are used as Parameters that either accelerate or slow down Market Development (entropy to equity or their ways around).

Uncertainty Principle and Sectoral Nash Equilibriums may apply for balancing factors to succeed equilibriums, the Market Tools are practically used as PARAMETERS to get accelerations, slow downs, carry-ons in limits not boosting Inflation / Deflation and thus undercutting Market Development.

The Probability goes through the Invested / Subsidized Capital to the Market Tools that are flexibly applied in sinhron with the a market’s specifics, to J Constant that combines the statuary Market Agents and must be reached %% Macro-level Factors relating the succeeded adaptability under the circumstances to the subtracted Inflation / Deflation effect that must be kept in limits (-0.5 to +5) when both direction Inflation or Deflation are taken in number/fraction the – or + irrelevant;

___________________________________________________________________________________

ε,ε1xε,ε1p = Θ x [ζ(ζ x ΙΔ)]

_____________________________________________________________________________

μ1 = [μ + (ε,ε1xε,ε1p)] = Θ x [ζ[A(y1y7)|P (1) +B(x1, x2, x3, x4, x5, x6, x7, x8, xn)|P (1n) x ΙΔ |P(-050.5)]

_____________________________________________________________________________

(μ1) – it is seasoned Market Development after the gained Entropy, Equity;

ε,ε1Equity, Entropy (x p) added by the Θ amount invested through – Market Leap, Targeted Project, Carry-on Capital Infusion) multiplied by the ζ – J Constant then subtracted by the multiplied ΙΔ – Inflation or Deflation. (see: Example)

ζ J Constant is the sum of 2 probabilities; the Market Agents and the Market Tools.

A Market Agents implementation A(y1y7) considered probability to 1

B Market Tools probability p(1n] utilize the B

(x1, x2, x3, x4, x5, x6, x7, x8, xn) Market Tools’ probability effect on the Real Market that is most complicated probability that needs Quantum Approach possible by using Quantum Computers – Market Tools are used as probabilities in conditions of implemented Market Agents meaning in high Market Security business environment that allows lower interest lending and high transmissionability of the invested capital.

ΙΔInflation or Deflation acceptable variance p(-050.5)

_____________________________________________________________________________

Example:

14 = (Θ)10 X c[(ζ)2 [(μα)1(Ω)(μτ)(1] X (Ι/Δ)0,3/0.3 = 0.6] 2 – 0.6 = 1.4 x 10 = 14

14 = 10 x [2 x 0.3] = 0.6 (2 – 0.6) = 1.4 x 10 = 14

ε,ε1(Equity, Entropy) gain 14 thus M^ = 114-10 Liabilities;

if the invested capital comes from QE, SDR it must be subsidized to lift the EE will reach 121 whereas ‘seasoned’ EE may bring it down (seasoned E,E – Equity, Entropy = M^ – Market Development

_____________________________________________________________________________

The Quantum Probabilities are:

Market Agents [A(y1y7) ]complete implementation that will keep in (0….1) variance;

Market Tools [B(x1, x2, x3, x4, x5, x6, x7, x8, xn) ] that will add to the J Constant to accelerate, multiply the Market leaps, Targeted Projects, Carry-ons;

The J Constant ζ up to n%;

Targeted Low Inflation / Deflation Ι/Δ[(0.5….0….0.5)] that will not undercut Market Development – these factors are specific for individual markets, too;

Market Leaps / Targeted Projects / Carry-ons Θ that will be enough in value (at least 10% of the current M’s GDP) to ensure full employment and consistent Market Development;

These variances are targeted by the Market Tools indiscriminately; but also these are in relations to each other that must be taken in consideration and therefore only Quantum Computing can take so diverse variances into possibilities. Fundamental is the retaining of Inflation / Deflation where the Market Actions are tagged to it. The Partial / Sectoral Market Equilibriums are reached to make up the General Equilibrium; so, the Uncertainty and numbers of Possibilities are becoming even higher.

Μ– Market Development requires seasoned E,E – Equity, Entropy

Θ– Market Leap, Targeted Project, continuous Market Development

A(y1y7) Market Agents:

Strict Rule of Law in Business,

Unlimited Corporate Liability for the Management

Enhanced Protection Laws in;

Insurance,

Bonding,

Earth Environment,

Consumer,

Labor

B(x1, x2, x3, x4, x5, x6, x7, x8, xn) – Market Tools to accelerated Entropy/Equity

Quantitative Easing, SDRs;

Subsidies;

Low Rate Lending;

Social Expenses (incl Educational, Pensions, Medicare, Social Security, Unemployment Benefits, etc.);

Infrastructural Expenses;

Markets, Regions Parts Equilibrium Monetary Policies;

Fiscal Policies;

Sectoral Regulatory interference by Central Banks, International Finance Institutions).

n. Others

ζ J Constant (0……n) where MS (Market Security) with implemented A (Market Agents) brings ζ to (1) in relation whereas the (1 – n) relate the adapted, adjusted Market Tools toward the Macro-level Market thus the efficiency fraction.

Ι/Δ – Inflation/Deflation

The Principle of self adjusting Micro-level Markets and artificially adjusted using Market Tools as Parameters on Macro-level Markets on Parts / Sectors Equilibriums’ approach.

The most perplexing, hard to adjust, Probability in the above relativities is the B

(x1, x2, x3, x4, x5, x6, x7, x8, xn) Market Tools: Parameters’ mitigating effect on individual Parts/Sectors acceleration or slow down but also the relation among these parameters themselves; so, when a parameter is added or subtracted to certain value it affects the overall Market Development on a Sectoral and General Equilibrium as well other parameters in the occasion; when having in consideration the UNCERTAINTY PRINCIPLE and the MULTIPLE POSSIBILITIES and apprehensive overview requires QUANTUM COMPUTING capability to do such multi-functional, multi-operational, multi-informational estimation.

The ζJ Constant (0…1n) is consequential to the implementation in complete of the Market Agents that would give (0…1) ; the (1 to n) is a effect coming up from the proficiency of B(x1, x2, x3, x4, x5, x6, x7, x8, xn) in the execution of a Market Leap or Targeted Project that reflect the specificity of Individual Markets: (example: let’s take a market that is socialized so the more private business inclination will have better effect on the ζ performance, or the way around: if the market is too privatized that reflects lack of employment: then the adding some social distribution would be more effective). The targets are high business activities to keep full employment using indiscriminately the Market Tools in an ‘as it comes; as it goes’ approach. Even there are countless variations in putting pressure on different Data Indicators: the positive, accelerating business are some that can be considered boosting business activities, employment to the required levels, thus the probabilities are limited and the % of impact vary but is yet limited in varieties: from these possible varieties are extracted the most vigorous for a particular market under its circumstances, development.

Joshua Ioji Konov 2017

PHILOSOPHY OF MARKETS


INTRODUCTION

What really must be stated before starting this essay is that Economics is not self centered but on creating business, employment, assets principle that greatly differs from any Economics used by current reliance on trickle-down of capital, some combination of private market related economics and social governmental distribution, or the governmental involvement and control on business and distribution. Current kinds of Economics are politically and ideologically motivated, directed, and most definitely self centered around ideas, convictions, status quo. What really defines current Economics is the rule of what is expected based on ideologies than the objectivity to reach results; thus the disfunctionality, slow growth are considered either consequences of not imposing enough such Economics principles by the book status-quo convictions or some kind of temporary distortion. Such Economics relies on the investment trickled-down, the improving productivity, the lowering labor and consumer protection and taxes to attract large corporation, investors to boost economic growth; in context some countries, economies have higher government involvement into wealth distribution, business, control than others; however, the principle of ‘hands off’ is widely accepted as the only working. Only, China uses much more flexible economics that have achieved consistent development taking hundred of millions out of poverty, building incredible infrastructure; the China’s approach more chaotic and partial having in mind the usage of the Orthodox Economics as a primary approach and the ‘as it comes; as it goes’ Economics as a secondary, even though very proactive approach when compared to the Market Economics* that uses Orthodox Economics with major amendments as a Micro-market-level approach and artificial hand-on Economics on Macro-market-level. It could be also stated that the Quantitative Easing and Stimulus Packages used by the US, UK, Japan, and later EU are Market Economics’ Tools but there they were even further partial – more like adjusting to prevent the full collapse from the 2007-9 Recession and the slow following economic revival.

ABSTRACT

The Market Economics* promoted by these research is an ‘as it comes; as it goes’economics adaptable to the most recent exogenous and endogenous forces coming from the globalized marketplace and the improving technologies, productivity – it is non ideological, conviction-like, or status quo. Even though it values democracy, personal freedoms, individual rights it is apolitical by nature relying on flexibly used Market Tools to steer business activities, full employment, market development by capitalizing on environmentally friendly technologies, farming, tourism, development in a high Market Security business competition marketplace.

EXPOSITION

The Market Agents required (considered unifying) implements:

  • Strict Rule of Law in Business, 
  • Unlimited Corporate Liability for the Management

Enhanced Protection Laws in;

  • Insurance, 
  • Bonding, 
  • Earth Environment
  • Consumer
  • Labor  

that provide the high security market conditions for flexible usage of the Market Tools as Parameters in an uncertain market motion to offset harmful fluctuations ups-and-downs that can bring high inflation/deflation variances. To accelerate and carry-on Market Development with robust business activity, full employment, alleviate poverty, save the Earth environment are flexibly used Market Tools:

  • Quantitative Easing, 
  • SDR, 
  • Subsidies, 
  • Low Rate Lending, 
  • Social Expenses 
  • Infrastructural Expenses 
  • Market Leaps
  • Targeted Projects, Markets, Regions
  • Parts Equilibrium Monetary, Fiscal, Regulatory interference by Central Banks, International Finance Institutions 

pinned to Inflation/Deflation (not to Budgets) are to either accelerated or decelerate consumption in keeping the Inflation/Deflation in strict limits. The Game Theories cannot be explored to setup such limits because the complexity of economic data, the globalization forces, the unevenness in development and therefore the Parameters must be applied on a Quantum Factor principles with extreme flexibility. The Nash Equilibrium can be used on individual Parts/Sectors Level but again not as Game Theories but more like balance between Demand to Supply (the Supply goes second not accidental).

      The theory of Supply driven Economies evolves into Demand, Balance driven Markets;

  • from General Equilibrium – Economics into Parts/Sectors Equilibriums – Market Economics; 
  • from Nationally defined Economies into Level of Development defined Global Markets; 
  • from Budgetary constrained  Economies into Inflation/Deflation constrained Markets;
  • from Shady Business Environment of the Capitalism into Strict Rule of Law such of the Marketism;
  • from hands off Trickle-down Economics to active ‘as it comes; as it goes’ Market Economics;
  • from Macro and Micro Levels General Equilibrium economic intervention by the Central Banks through manipulating the Discount Rates to a only Macro-level Parts Equilibriums all around intervention while on Micro-level the market competition is self-adjusting (market driven);

       The Joshua’s Three Laws in Market Economics:

  1. “If a House needs Painting and a Painter is Available: Market Economics should have the House Painted and the Painter Employed”
  1. “If ‘the House is painted’ and ‘the Painter employed’ in limited Inflation/Deflation and higher than ONE/MINUS ONE ‘J Factor”s market environment: the market Entropy is boosted and Equity is built; therefore, thus Invested Capital/Subsidies/Low Rate Lending prompts Market Development”
  1. If the capabilities of the Market Economics are not explored and used globally under enforced Environmental Protection Laws and the rest ‘J Factor’ Laws & Practices the Earth’s Environment is to deteriorate and the inequality is to rise to the points of no return bringing Environmental Destruction and Global Social Unrest”.

These Three Laws basically explain and direct the ways Market Economic works: thus isn’t about Budgets and a tight leach has been used by the status-quo current practice but it is baout more motionsteared by the necessities, demand for development so, the Market Economy to respond to these necessities through using the Market Tools in a High Market Security Environment that would allow lower interest lending. The need for Earth’s Environment Protection overwrites Budgetary Restraints setting up new principles of handling Economics. 

What does the Market Economics means in practice?

To stear enough business activities, employment, equity built up and to use other than Industrial production methods to protect Earth from pollution thus alleviate Poverty the Market Economics is using an ‘as it comes; as it goes’ Economics in which even though the Market Agents are mandatory, unifying the Market Tools are used flexibly, differently, specifically from market to market compatible to individual markets historical specifications. The Market Tools are used as Parameters mor like in Quantum Mechanics than in Game Theories because of the high Uncertainty in the Global-marketplace where the Data is very complex and insufficient. On a Micro-market-level the Market Economics relies on the free market competition to self-adjust disbalances whereas on Macro-market-level artificial adjustment, interference is used to prompt and carry-on rebust business activities, full employment (down to 1%), accelerated Global Market Development that requires the governments and central banks of the most developed economies along with the international finance institutions (WTO, IMF, others) very active policies that through Commercial Banks access to Markets to setup Matrix to succeed such vigorous activities without limiting individual freedoms, liberties. 

CONCLUSIONS

To exploit current possibilities of Globalized marketplace, Improving technologies, robotization, the Internet, the highly concentrated capital the Market Economics uses the Market Tools indiscriminately meaning with no concern or direction to political ideas, motivation: it is all about practical methodology system of Demand to Supply balance under the conditions of accelerated business activities. The Inflation/Deflation is the tagged data indicator: the Market Economics accepts both very low (in the quarter of percent) Inflation or Deflation as normal variances and fight vigorously bigger fluctuations; because, generally in Market Economics the Interest Rates are low the higher Inflation/Deflation may have negative effect on consistent Market Development, and because of the same reason a modest Deflation may establish boosting effect on competition and improve living standards. The current idea that lower Inflation or even Deflation may have very negative effect on the Economy is based on a low economic security and relatively high lending rates particularly to small and medium businesses and investors evolves into a Market Economics in which lower rates, Inflation, Deflation are compatible to the entire market structure. The entirety of projected Market Development relies on boosted a huge business activities on a global-scale that will bring limitless opportunities for investment and companies expansion but it will be on a larger scale than currently experienced. However, in perspective the change from quantity driven global-market-expansion may come into a quality such, but then the market motion will move to new technologies, improvements, higher productivity leaps that may allow certain companies higher profit margins.

The large markets expansion brought by the Market Economics will boost business activities and individual income using natural for the market micro-market competition why the macro-market-level will keep it up and running and preventing for catastrophic exacerbations, redundancies, The Research and Development, Education, overall Living Standards will expand  proportionately establishing prosperity: the ability to apprehend the exogenous and endogenous market forces coming from the ongoing Globalization and rising Productivity will be the main accomplishment. It could be considered utopic such projections but hypothetically said if the market forces of the 21st Century Globalization and Productivity, the Internet, the China’s mighty industrialization, the Transnationals spreading globally in many business sectors of farming, retail, banking, manufacturing, technologies are supported along with rising market development and market related demand the possibilities for expansion of such forces are not just probability but a reality.

REFERENCES

Konov, Joshua Ioji, Market Economy Under Rapid Globalization and Rising Productivity (October 4, 2012). Available at SSRN: https://ssrn.com/abstract=2789388

Konov, Joshua Ioji, Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, Etc) (January 5, 2012). Available at SSRN: https://ssrn.com/abstract=2947755

Konov, Joshua Ioji / JK,. “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, 2011.

Enhancing Markets Transmissionability to Optimize Monetary Policies: Pro-Demand Indefinitely – the Result of the Ongoing Globalization and Rising Productivity Paperback – January 12, 2017

by Joshua Ioji Konov (A1)

BLOG Philosophy of Market Economics https://joshuakonov.wordpress.com/

Joshua Ioji Konov 2017

Market Economics Tagged to Inflation/Deflation not to Debt/Budget

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To take Inflation/Deflation as a Data Indicator to adjust Market Development  by using Market Tools one way or another in meaning either accelerating it through Market Leaps and Targeted Investment or slowing it through Sectoral Monetary & Fiscal Policies, Lending Restriction and Temporary Regulation instead of the currently used Debt related Budgetary Economics may look improbable, incomprehensive, revolutionary but actually there are in now days Economics presaging practices such as

  1. Equities Exchanges (Stocks, Securities, others)1*
  1. Quantitative Easing2*
  1. Accrual Accounting3

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https://en.wikipedia.org/wiki/List_of_stock_exchanges
2 The numbers are daunting if not shocking: $12.3 trillion of money printing, nearly $10 trillion in negative-yielding global bonds, 654 interest rate cuts since Lehman Brothers collapsed in 2008.http://www.cnbc.com/2016/06/13/12-trillion-of-qe-and-the-lowest-rates-in-5000-years-for-this.html
3 Definition: Accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged. The term “accrual” refers to any individual entry recording revenue or expense in the absence of a cash transaction .

__________________________________________

That are not Budgetary/Debt related*

However, currently Governments, Central Banks, International Finance Institutions use the Orthodox Budgetary (debt related) Economics Policies, Accounting that have performed quite well in the Supply. General Equilibrium driven economies of the 20th Century but have become counterproductive, obsolete in the Demand, Market Parts Equilibrium required 21st Century of ongoing Globalization^ and rising Productivity^, of the Internet^, China’s Industrialization^, and the overall superproduction by the Transnational Corporations in manufacturing, farming, finances, retailing, wholesale, services^. The last 20-25 years have shown increasing accumulation of private, cities, and national Debt, rising Inequality, Poverty, Unemployment, Underemployment, and deteriorating Middle Class that with the exception of China who used an ‘as it comes; as it goes’ Economics, has enveloped the Globe, indeed. The inability of the Capitalistic trickle-down, orthodox, status quo Economics to deal with the 21st Century developments, issues^ has become more than obvious where the Debt could be considered the best indicator of such incoherence, incomprehension. 

To deal with the exogenous and endogenous global market forces coming from the 21st Century Developments^ is necessary a new approach, approaches to apprehend their powers instead of resisting them, thus Market Economics is a Philosophical however Practical system that preserves democratic, individual freedoms, liberties to exploit, use these new Development^ for Global Market Development.

The main, fundamental factor that makes Market Economics not maybe but must be is the Global Warming and the necessary measures to sustain it or even reverse it: clean Pollution, alleviate Poverty by using Environmentally Friendly Technologies^^ in Farming^^, Manufacturing^^, Transportation^^, Tourism^^. The usage of such technologies^^ as main Economic Tools to implement Market Leaps, Targeted Projects is in the foundation of Market Economics. 

Market Economics usage of Inflation /Deflation Data Indicator tagged to Market Development does not differ from the appointed current presaging practices* but rather it extend such practices to the Governments, Central Banks, International Finance Institutions’  Economic Policies, Accounting. The Debt Budgetary Economics is overwritten by first: the need for Environmental Protection^^ and second: by the practical reason to boost business, employment, development. As mentioned above the exogenous and endogenous forces^ have become unsustainable by using the Orthodox Budgetary Economics whereas the Market Economics capitalize on these forces to boost and maintain Market Development; what these forces do the most is preventing markets from Inflation by being capable of flooding the marketplace with products, services a basic 21st Century development. Thus, to apprehend these forces^ the existing budgeted capital and the system of distribution must evolve by first: having the Market Agents: Strict Rule of Law in Business, Unlimited Corporate Liability for the Management, Enhanced Protection Laws in: Insurance, Bonding, Earth Environment, Consumer, Labor implemented that will enhance Market Security** and second: using ‘as it comes; as it goes’ approach Market Tools: Quantitative Easing, SDR, Subsidies, Low Rate Lending, Social Expenses Infrastructural Expenses Market Leaps, Targeted Projects, Markets, Regions Parts Equilibrium Monetary, Fiscal, Regulatory interference by Central Banks, International Finance Institutions indiscriminately as inquired by the current market possibilities; the Debt, Investment, Financing evolves into ‘risk-and-reward’ approach well protected by the high Market Security** but not enforced on national or international approach currently used; the Quantitative Easing, SDR are not distributed by trickling down approach but by Targeted Investment: Market Leaps, Targeted Projects; whereas the National, International Accounting evolves from the current Cash based into Accrual-like based including Social (incl. Educational, Social Security, Medicare, Social Programs, etc.) expenses’ as ‘equities’ and Infrastructural ‘expenses’ as Assets when the Market succeeds Balanced the negative Debt could be either accumulated just on ‘Books’ or written off against ‘equity’, ‘assets’ that approach will clear the Accounting from some Debt that goes against the QE, SDR; however, private Debt must be indicated as Invested and must be returned as ‘Return on Investment’ the ways current Equities, Securities Market Exchanges work. The Central Banks, International Finance Institutions using QE, SDR have to write off debt against achieved, succeeded, accomplished by the Market Leaps, Targeted Projects: Equities, Assets. The Private Investment is Preferred first when the Market Leaps, Projects are Targeted and second, it will be retained as Liability on the Books. The Principle of Market Economics is that on a Micro-market Level the markets should self-adjust based on market competition with minimum or not any outside interference while on Macro-market Level the Governments, Central Banks, International Finance Institutions must use Commercial Banks on setup Matrix to execute Market Leaps, Targeted Projects and use the Market Tools indiscriminately as Parameters to boost or slow down business activity tagged to Inflation/Deflation Data Indicator. 

The 21st Century global marketplace indicators are very complex therefore the principle of Uncertainty is accepted that cannot be apprehended by the Game Theories but the Quantum Market Principle of Parameters is used, though the Nash Equilibrium overall applies on the Parts/Sectors Market Equilibriums (in comparison to the current General Equilibrium practice).

The theory od Modern Economics goes that moderate 2% gives the best economic environment so business have leverage to turn profit; therefore, the Central Banks use mitigating with the Discount Rates (Tier 1) and other Monetary and Fiscal Policies to keep it at this level. Such theory is based on assumption of relatively high return on investment and short term rebuilt after downturns that both do not apply with the 21st Century developments: the very deep 2007-9 Recession, the slow post recession growth, the strong deflationary forces bringing stagnations even when Trillions of Dollars is poured into the most developed economies; thus, the Central Banks keep rates very low even negative and the Banks are constantly in trouble even being given free loads of very low interest Tire 1 loans. 

The Market Economics accept Inflation and Deflation in possibly shortest span whereas all Market Tools along with boosting business and employment are tagged to Inflation/Deflation variances. The –1….-0.5…..0…..+0.5….+1 are variances considered acceptable; -0.5…0….+0.5 are triggering points. The large quantity of business activities, consumption must compensate the businesses for their effort and Deflation is to adjust prices on a Micro-market Level as a preventive valve of self adjusting market powers. On a Macro-market Level the Central Banks, Governments, International Finance Institutions must fight larger span variances indiscriminately and it must be done on a Parts/Sectors Market Equilibrium!

More detailed research on the Parts/Sectors Market Equilibriums) to follow up!

Joshua Ioji Konov 2017

Uncertainty, Probability, Parameters, Market Economics Using Quantum Approaches

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The complexity of modern day economics invokes the uncertainty principle because it becomes profoundly clear that using mathematics or the game theory may hardly take in consideration multiple variances, changing data, probabilities. The probabilities of multiple ever changing economic realities could be only adjusted by using parameters, as it is done in quantum mechanics, to adjust or at least prevent extreme variances by applying pressures on certain relevant points.

Until to date the tight budgetary leach has been used to prevent from excesses, redundancies or at least such approach was suppose to work. In the pro supply economy if the tight leach budgetary releases certain expansion to prevent inflation it might be considered the only comprehensive way possible for its time. Then with the new global economy complexities arriving with the development of high technologies, productivity, globalization the game theories have flourished becoming relevant in such progressively perplexing realities. In Market Economics such perplexity goes beyond the possibility for even game theories to apprehend thus changing realities, possibilities, pressures. In practice the aggregating inequality, personal and national debt, declining middle class, and with the exception of China: expanding poverty, insecurity – pressures of exogenous forces of super productivity achieved by the Transnational Corporations in farming, manufacturing, banking, services through better management, technologies, moving, outsourcing the China’s Industrialization, the Internet that have tipped off the ‘old’ supply driven economies into demand, balance driven such. The 2007-9 Recession put the final nail in the coffin of the supply economics by accelerating the processes globally toward recalibration of assets, redundancies, the inadequate consumption, demand in a highly vigorous supply possibilities marketplace.

21st Centuryinability of the orthodox economics to apprehend the globalized, high productivity possibilities could be put in the following grading from China that uses a best ‘as it comes; as it goes’ economics showing best results running for the last 2017 quarter 6.9 GDP growth down to the European Union’s under 1.5%. However, the results elsewhere are limited by the budgetary/debt driven orthodox supply driven economics that limits economic possibilities for vivid development. The low security of the trickle-down Capitalism, Socio Capitalism used at the moment comes from the main targets of easing business by overwriting labor, consumer, social protections to provide tempting for the investors, companies conditions to invest, do business, have better return on investment; the entire system, philosophy relies on such shady-business approaches that seeming had worked well for the developed economies like the US, Japan, Germany to succeed their high living standards, middle class, relative prosperity in the 20th Century. But this kind of prosperity is all but gone, the globalization, technologies, the non existing labor markets have taken over shrinking employment, small business and only allowing the really big business and investors to prosper – inequality, debt, unemployment, lost generations, reduction of social services, pensions, crumbling infrastructure that’s how the Orthodox Economics performs in the 21st Century, and therefore the new, Market Economics is needed to capitalize on the achievements from the 20th Century along with the new market developments in the 21st Century. Thus what was good for the 20th Century is quickly becoming abomination in the 21st Century that need enhancements, changes to apprehend the new market forces.

However, the question remains: how to avoid redundancies, inflation, economic upheaval if the leach of firm budgetary economics is not there?

If the Game Theories cannot solve the dilemma because of the high Uncertainty in modern day markets than only the Quantum Computing and the principles used in Quantum Mechanics to find the best adjustments in a particular situation will: both new sciences are brand new staff, never experienced; thus the principle used in modern science of adding up on past experience may not apply under these new circumstances! Lets say the Nash Equilibrium could be applied on individual Market Sectors development but not as a Game Theory, instead the multi Quantum Balance/Equilibrium may be reached by using the relations between Market Tools (Quantitative Easing, SDR, Subsidies, Low Rate Lending, Social Expenses Infrastructural Expenses Market Leaps, Targeted Projects, Markets, Regions Parts Equilibrium Monetary, Fiscal, Regulatory interference by Central Banks, International Finance Institutions) + Market Development + Inflation / Deflation + Market Competition (Equity, Assets, ROI) + Market Forces – a function between many relative Data to be mixed in a pad of relativity to the overall possibilities; the Market Tools are used as Parameters that either accelerate or slow down Market Development (entropy to equity or their ways around).

Uncertainty Principle and Sectoral Nash Equilibriums may apply for balancing factors to succeed equilibriums, the Market Tools are practically used as PARAMETERS to get accelerations, slow downs, carry-ons in limits not boosting Inflation / Deflation and thus undercutting Market Development.

The Probability goes through the Invested / Subsidized Capital to the Market Tools that are flexibly applied in sinhron with the a market’s specifics, to J Constant that combines the statuary Market Agents and must be reached %% Macro-level Factors relating the succeeded adaptability under the circumstances to the subtracted Inflation / Deflation effect that must be kept in limits (-0.5 to +5) when both direction Inflation or Deflation are taken in number/fraction the – or + irrelevant;

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ε,ε1xε,ε1p = Θ x [ζ(ζ x ΙΔ)]

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μ1 = [μ + (ε,ε1xε,ε1p)] = Θ x [ζ[A(y1y7)|P (1) +B(x1, x2, x3, x4, x5, x6, x7, x8, xn)|P (1n) x ΙΔ|P(-050.5)]

_____________________________________________________________________________

(μ1) – it is seasoned Market Development after the gained Entropy, Equity;

ε,ε1Equity, Entropy (x p) added by the Θ amount invested through – Market Leap, Targeted Project, Carry-on Capital Infusion) multiplied by the ζ – J Constant then subtracted by the multiplied ΙΔ – Inflation or Deflation. (see: Example)

ζ J Constant is the sum of 2 probabilities; the Market Agents and the Market Tools.

A Market Agents implementation A(y1y7) considered probability to 1

B Market Tools probability p(1n] utilize the B

(x1, x2, x3, x4, x5, x6, x7, x8, xn) Market Tools’ probability effect on the Real Market that is most complicated probability that needs Quantum Approach possible by using Quantum Computers – Market Tools are used as probabilities in conditions of implemented Market Agents meaning in high Market Security business environment that allows lower interest lending and high transmissionability of the invested capital.

ΙΔInflation or Deflation acceptable variance p(-050.5)

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Example:

14 = (Θ)10 X c[(ζ)2 [(μα)1(Ω)(μτ)(1] X (Ι/Δ)0,3/0.3 = 0.6] 2 – 0.6 = 1.4 x 10 = 14

14 = 10 x [2 x 0.3] = 0.6 (2 – 0.6) = 1.4 x 10 = 14

ε,ε1(Equity, Entropy) gain 14 thus M^ = 114-10 Liabilities;

if the invested capital comes from QE, SDR it must be subsidized to lift the EE will reach 121 whereas ‘seasoned’ EE may bring it down (seasoned E,E – Equity, Entropy = M^ – Market Development

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The Quantum Probabilities are:

Market Agents [A(y1y7) ]complete implementation that will keep in (0….1) variance;

Market Tools [B(x1, x2, x3, x4, x5, x6, x7, x8, xn) ] that will add to the J Constant to accelerate, multiply the Market leaps, Targeted Projects, Carry-ons;

The J Constant ζ up to n%;

Targeted Low Inflation / Deflation Ι/Δ[(0.5….0….0.5)] that will not undercut Market Development – these factors are specific for individual markets, too;

Market Leaps / Targeted Projects / Carry-ons Θ that will be enough in value (at least 10% of the current M’s GDP) to ensure full employment and consistent Market Development;

These variances are targeted by the Market Tools indiscriminately; but also these are in relations to each other that must be taken in consideration and therefore only Quantum Computing can take so diverse variances into possibilities. Fundamental is the retaining of Inflation / Deflation where the Market Actions are tagged to it. The Partial / Sectoral Market Equilibriums are reached to make up the General Equilibrium; so, the Uncertainty and numbers of Possibilities are becoming even higher.

Μ– Market Development requires seasoned E,E – Equity, Entropy

Θ– Market Leap, Targeted Project, continuous Market Development

A(y1y7) Market Agents:

Strict Rule of Law in Business,

Unlimited Corporate Liability for the Management

Enhanced Protection Laws in;

Insurance,

Bonding,

Earth Environment,

Consumer,

Labor

B(x1, x2, x3, x4, x5, x6, x7, x8, xn) – Market Tools to accelerated Entropy/Equity

Quantitative Easing, SDRs;

Subsidies;

Low Rate Lending;

Social Expenses (incl Educational, Pensions, Medicare, Social Security, Unemployment Benefits, etc.);

Infrastructural Expenses;

Markets, Regions Parts Equilibrium Monetary Policies;

Fiscal Policies;

Sectoral Regulatory interference by Central Banks, International Finance Institutions).

n. Others

ζ J Constant (0……n) where MS (Market Security) with implemented A (Market Agents) brings ζ to (1) in relation whereas the (1 – n) relate the adapted, adjusted Market Tools toward the Macro-level Market thus the efficiency fraction.

Ι/Δ – Inflation/Deflation

The Principle of self adjusting Micro-level Markets and artificially adjusted using Market Tools as Parameters on Macro-level Markets on Parts / Sectors Equilibriums’ approach.

The most perplexing, hard to adjust, Probability in the above relativities is the B

(x1, x2, x3, x4, x5, x6, x7, x8, xn) Market Tools: Parameters’ mitigating effect on individual Parts/Sectors acceleration or slow down but also the relation among these parameters themselves; so, when a parameter is added or subtracted to certain value it affects the overall Market Development on a Sectoral and General Equilibrium as well other parameters in the occasion; when having in consideration the UNCERTAINTY PRINCIPLE and the MULTIPLE POSSIBILITIES and apprehensive overview requires QUANTUM COMPUTING capability to do such multi-functional, multi-operational, multi-informational estimation.

The ζJ Constant (0…1n) is consequential to the implementation in complete of the Market Agents that would give (0…1) ; the (1 to n) is a effect coming up from the proficiency of B(x1, x2, x3, x4, x5, x6, x7, x8, xn)in the execution of a Market Leap or Targeted Project that reflect the specificity of Individual Markets: (example: let’s take a market that is socialized so the more private business inclination will have better effect on the ζperformance, or the way around: if the market is too privatized that reflects lack of employment: then the adding some social distribution would be more effective). The targets are high business activities to keep full employment using indiscriminately the Market Tools in an ‘as it comes; as it goes’ approach. Even there are countless variations in putting pressure on different Data Indicators: the positive, accelerating business are some that can be considered boosting business activities, employment to the required levels, thus the probabilities are limited and the % of impact vary but is yet limited in varieties: from these possible varieties are extracted the most vigorous for a particular market under its circumstances, development.

Joshua Ioji Konov 2017

Market Tools B(x1, x2, x3, x4, x5, x6, x7, x8, xn)|P (1→n) Boosting Market Development While Keeping Inflation / Deflation in Limits ΙΔ|P(-05⇔0.5)

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ε,ε1xε,ε1p = Θ x [ζ – (ζ x ΙΔ)]1 

The Market Tools B(x1, x2, x3, x4, x5, x6, x7, x8, xn) as parameters setup by flexible usage through Market Leaps, Targeted Projects, Carry on Market Policies uses Environmentally friendly technologies, techniques in farming, manufacturing, energies, heating and coolinggarbage disposal, services, transportation to boost Market Development: business and employment, infrastructure and acceptable living standards I.e. alleviation of poverty, elimination of any Earth pollution under sustained Inflation / Deflation ΙΔ|P(-050.5)

Market Development

1 μ1 = [μ + (ε,ε1x→ε,ε1p)] = Θ x ∑[ℑζ[A(y1→y7 ) |P(1) +B(x1 , x2, x3, x4, x5, x6, x7, x8, xn ) |P (1→n) x ΙΔ |P (- 05⇔0.5)] _____________________________________________________________________________

(μ1) – it is seasoned Market Development after the gained Entropy, Equity; ε,ε1– Equity, Entropy (x → p) added by the Θ amount invested through – Market Leap, Targeted Project, Carry-on Capital Infusion) multiplied by the ℑζ – J Constant then subtracted by the multiplied ΙΔ – Inflation or Deflation. (see: Example) ℑζ – J Constant is the sum of 2 probabilities; the Market Agents and the Market Tools. A Market Agents implementation A(y1→y7 ) considered probability to 1 B Market Tools probability p(1→n] utilize the B (x1 , x2, x3, x4, x5, x6, x7, x8, xn ) – Market Tools’ probability effect on the Real Market that is most complicated probability that needs Quantum Approach possible by using Quantum Computers – Market Tools are used as probabilities in conditions of implemented Market Agents meaning in high Market Security business environment that allows lower interest lending and high transmissionability of the invested capital. ΙΔ – Inflation or Deflation – acceptable variance p(-05⇔0.5)

B(x1, x2, x3, x4, x5, x6, x7, x8, xn) – Market Tools to accelerated Entropy/Equity

  1. Quantitative Easing, SDRs; 
  2. Subsidies; 
  3. Low Rate Lending; 
  4. Social Expenses (incl Educational, Pensions, Medicare, Social Security, Unemployment Benefits, etc.); 
  5. Infrastructural Expenses; 
  6. Markets, Regions Parts Equilibrium Monetary Policies; 
  7. Fiscal Policies; 
  8. Sectoral Regulatory interference by Central Banks, International Finance Institutions.

      n. Others 

The general unpredictability / uncertainty of very complex market forces aggravated by the globalization, rising productivity, improving technologies, transnational corporations global expansion in farming, manufacturing, retail, wholesale, technologies, financing, the Chinese industrialization, and the Internet have brought exogenous for most market forces to improbable complexity that could not be offset by the status quo ideological economics of the Capitalism nor by the Game Theories, nor by the governments taking bigger role in the such orthodox economics’ practices. The self adjusting Economics cannot prevent crushing recessions like the 2007-9 one, nor accelerate the post recession rebuilding; under the heavy pressure of possible economic collapse the central banks and governments in the most developed economies have taken highly revolutionary policies such as Quantitative Easing, Subsidies, Bailouts of BanksExpanding Foreclosures and Unemployment Benefits periods that supposedly would have brought Inflation but instead imploded stagnation; the even chaotic such actions helped the economies to regain some vitality, growth. However, the ideological economics that brought the 2007-9 Recession on the first place regain their ideological grip not being able even to explain what really had happened. The only marketplace that somehow and to a certain extend continued its growth was China that used the tools of economics very flexibly on an ‘as it comes; as it goes’ policies principles. The Market Economics go beyond such economic policies into creating a system where the Market Tools are used as Parameters to prompt from one side continuous Market Development of alleviation of Poverty through Environmentally friendly methods, and by having market forces on Micro-market level self adjusting through market competition, and from another whereas on Macro-market level artificially using Market Tools to keep very low Inflation / Deflation.

The improperly setup flexible usage of Market Tools might have different effect  on individual markets: 

  • If exaggerated I.e. incompetable amount of money is invested in a market such can bring high inflation and may even crush itor 
  • Inot enough of capital is invested in a market than such may bring huge deflation and impoverish even higher percentage of its population 

Thus bringing further Earth pollution, with high unemployment, a not properly functioning market. 

In this research is strictly stated that individual markets have their specifics therefore any intervention: Market Leap, Targeted Project, or Carry on Investment must be done in apprehension of such differences; however, with the required implementation of the Market Agents as stated by previous working papers of these research a existent minimum of a high security market environment would be in place. Despide of such existent minimum the differences, specifications must be taken in consideration in any artificial move on any market. Thus to relativity between individual Market Tools to Inflation / Deflation, and to full Employment, Business activity, Infrastructure (Equity) building is a highly improbable to be achieved by the probabilities possible by the existing technologies but through Quantum Computing allowing unreachable in the past compatibility and variations. Thus this Market Economics was called Quantum too, because of its very high uncertainty and demanding complex relativity between number of factors, possibilities.

The majority of Market Tools could be applied, enforced more to either supply or the demand sides of the occasion – thus to seek balance, first such must be seeked on parts, sectoral market basis equilibrium instead of general such as some sectors overheat needing tightening up while others are in the opposite side of the occasion either needing additional boost or at least still in their ways up; second, the one way approach let say the demand side only can prompt quick inflation – instead careful configuration a particular market specifics is needed: let say a market is socialized like the Norwegian one than the pro private business policies are to balance the market imbalance of an one way development, the opposite distinctions require the other way around thus too rigid privatization while the demand is relatively weak and stagnation sweeps through the Social expenses must be used to offset such extreme situation. It is all about balances under very low Inflation /Deflation – the second particularly distinguishing such economics from the Capitalistic one and the probabilities of high market security market development allow such difference to be possible where the lending rates to small businesses and investors could be very low without compromising with the risk factor requirements. The Market Tools also  will have multidimensional effect being invoked by the need for Earth preservation that is not purely market factors but a dominant such that requires actions not necessary in synchron with the debt controlled current budgetary economics, and therefore, as such artificial factor modulate the global marketplace the Market Tools must be used artificially on Macro-market Level to accelerate, promote, carry-on high business activities, full employment, market balance; thus the quantum uncertainty and multidimentuallity can provide such balances and allow the markets to develop without prompting harmful recessions. The relativity that accumulate by the Market Tools and affects the real economy has been well researched by the current economics though in combinations of multiplicity and intermarkets (globally) such could not be done first, because the mathematical approaches are limited in such uncertainty and second, because the further developed game theories could not accept multiple factors either even though the Nash Equilibrium and other probability theories were in use. The Quantum Economics i.e. Market Economics goes far beyond single or couple probabilities into ‘n+’ probabilities and the effects on multiple factors on global marketplace.  

_________________________________________________________________

Example 1: you have 10b QE subsidized into public transportation, infrastructure, Social Expenses, Fiscal Breaks, prevailing wages, residence requirements, limited lending to small businesses up to middle size – however the equipment, materials, energy is produced by large transnational corporations that make it global. 

The Market Agents are implemented in the Market!

If for the local market 10b is 10% of the market – the demand side are salaries, business income, social expenses, fiscal breaks, etc – the supply side are the purchases, small business production, services, etc; however, the effect from global exchange of manufactured equipment, materials, goods, is to retain low Inflation. Thus open market exposure to the globalized marketplace is paramount.

The Market Development is 1. Entropy – Sales, expenses, business activity, employment and 2. Equity – infrastructure, market competition, poverty alleviation, clean environment;

To accelerate Entropy / Equity build up the higher Market Security with the implementation of the Market Agents will be established, however, the flexible ‘as it comes; as it goes’ usage of Market Tools under very low inflation even Deflation will be achieved only by appropriately weighing on the different Market Tools in accordance with the specifics of an individual market.  

In this example the Investment is to change the old vehicles, improve public transportation, provide the needed employment by steering the needed business but also by apprenticeships and expanded public education. The funds are to be disposed by the commercial banks on setup matrix. To alleviate poverty also the social expenses are lifted targeting food, heating, transportation, job opportunities through prevailing wages and residency requirements. The Fiscal Breaks on taxation are to have the capital circulate in the Market. In case it is a Targeted Project in a process. There are three requirements for the implementation: 1. Proper preparation 2. Fast execution 3. Not allowing any corrupt or disruption practices. 

What complicate this Targeted Project is the necessity for multiple such Projects that must be executed simultaneously on the markets in proximity for 1. To sustain huge movement of people toward Targeted Project 2. To settle employment spread to all areas, 3. To avoid pollution coming with a concentration of people in less developed as infrastructure markets. The Market Economics does not prompt urbanization, industrialization, concentration of people but alleviation of poverty by using environmentally friendly methods in place: meaning in some market it could mean manufacturing and services in another farming and services, in third tourism and services to dominate a market industries. 

Again, all Market Leaps or Targeted Projects are tagged to Inflation / Deflation and therefore to the maximum a Demand-to-Supply internally must be paramount even though the globalized marketplace could sustain serious inflationary pressures by themselves. 

The complexity of multiple projects, invested capital, other market tools and the requirement to sustain low –0.5 to 0.5 Inflation / Deflation must be overcome by taking in consideration the pro-supply projected business, the existing supply local and global capabilities, the rise of demand under these projects that in a pot must avoid ‘big waves’ that can crash the market. 

While, in practice, China is using very similar project approach but on a smaller scale and therefore the results succeeded even impressive compared to the rest of the developed world are very limited in comparison to the probable Market Development under a very aggressive and widespread Market Economics: and what really presses the need for such is the necessities for poverty alleviation to Earth preservation not providing long term allowance. The Chinese experience even extremely valuable in practice, and serving as example does not provide the needed on the large scale functionality. 

In the Example 1: If 10% or 10b USD is invested through Market Tools to steer enough business activities, employment, consumption, building of equity just the implementation of the Market Agents (A) should provide Probability (1) effect on the invested capital so no losses are projected but the Inflation’s deduction therefore the Inflation / Deflation should be kept close to (0); the Market Tools effect should add additional acceleration, transmission-ability to the Investment thus adding to ROI, Entropy, Equity in which continuous after the operation business activity, employment, consumption must be achieved; thus, it isn’t about quick in-and-out profit driven operations but a long term Market Development where Equity / Entropy are seasoned: the Detroit’s effect where capital goes through brings profit and when the industrial production technically moved out or was robotized a devastated marketplace was left over; such, effect cannot be environmentally accepted – therefore, it is the service sector along with small business and investors, and the Social and Infrastructural Expenses that are suppose to keep the Market Development running on, the market competition, employment, consumption in check., and the Earth environment clean. 

To use environmentally friendly technologies in transportation a very inexpensive public transportation, electric and hydro vehicles, and railroad, water channelsairfreight system must offset pollution; to use such in energy generation – the green energies must become the only source, same with farming, manufacturing, tourism, etc; to offset deforestation the heating and cooling must become elsewhere driven by green energies. The biggest difference between this new Market Economics and the Capitalism is the involvement of the developed economies to swiftly export Market Development all over the global marketplace, to extinguish any pollution, to establish stability by having people engaged in productive activities, having access to jobs and opportunities. Someone will call this research utopian, but actually it is the only possible way to avoid Earth destruction by using peaceful means, and by saving personal liberties, freedoms and by not letting the government to take over business, life, personal freedom. 

The implementation of the Market Agents expands personal management liability, strict environmental protection, consumer and labor such that must stop large transnationals, all businesses from hurting the environment or inflicting human rights violations. But all of this is possible with the expansion of possibilities for productive business activities, market development, prosperity on a global scale. 

Joshua Ioji Konov 2017

Governing in Market Economics


The theory of Orthodox Economics makes government either accomplices to shady business environment as per pure Capitalism or an alternative employer, business incubator as per Social Capitalism taking some of the functions of an economic competition. The self-adjusting theory is suppose to help reduce redundancies from the business and governments alike with its final target more competitive overall economy that establish the right conditions: less debt, less bureaucracy, less expenses on government spending to boost investment, business, productivity that finally had proven through centuries to improve living standard, economic power, growth. That’s how the theory goes: a pro-supply economy needs easy business environment to make startups easy, private entrepreneurs supported by trickle down capital would create enough business to employ, improve infrastructure, stabilize fiscal reserves, then ensure some social expenses, pensions, basic education. When an economy goes into down turn, the government expenditures, regulation, employment must be reduced, as mentioned before, to kicks off investment, business, productivity; thus it goes on and on. The dialectic spiralis of such economics should go upward with short downslopes of self-adjusting. 

The right role of a government and the International Finance Institutions in a Market Economics should be an ‘invisible hand’ along with investors: national or foreign; the principles of how a market/economy is organized compiles of Market Agents: strict laws in business, unlimited corporate liability, enhanced and strict environmental, consumer protection, labor, insurance, bonding laws – laws that will create market conditions for competition, boost business activities, increase demand, alleviate poverty, establish middle class; why in the developed markets the governments are the ‘invisible hand’ to succeed Market Development in the poorly organized countries lacking capital the International Finance Institutions through Commercial Banks, Transnational Corporations must target environmentally friendly market developments by separating economics, economies from politics; thus corruption, disorganization, mismanagement do not overrun targeted Market Leaps as it has been experienced. Economic policies must be separated from politics by requiring the implementation of the Market Agents into the market, economies structure: the Rule of Laws in Business! Market Economics in its fundamentals is full implemented Market Agents that raise its Market Security: lend-ability, marginalized advantages of the Big Business and Investors to the Small to Medium Businesses and Investors, marginalizing the advantages most developed markets, countries, economies hold to the developing, underdeveloped, undeveloped markets, countries, economies. However, the big businesses, investors, the most developed markets would play substantial role in the process of market development that will benefit them substantially giving to them even further boost as manufacturing, market, educational, technological, Internet hubs. 

What the Market Economics does is kicking off environmentally friendly business,  employment, consumption, demand, alleviation of poverty by using the globalization and rising productivity to offset inflationary forces. 

To succeed Market Development the market agents are implemented as a compulsory but the market tools are used on an ‘as it comes; as it goes’ approach: used flexibly in synchrony with  the individual market specifications; the Market Tools are the Quantitative Easing, Market Leaps, targeted Subsidies, low interest Lending, Fiscal, Monetary Policies, International and National Investment, Social (including education, pensions, social security, Medicare) and Infrastructural Expenses. The major difference between Market Economics and the Orthodox Economics is the in the usage of such Market Tools not based on political ideas but on purely economic, data, situation. (as an example: if  a market, economy needs to be balanced by expanding Social Expenses, Fiscal, Monetary means to boost consumption, demand the Social Tool as a Market Tool must be used indiscriminately, the other way around goes the same: if the Social Expenses boost inflation counter measures may include not further expanding such, or even reducing some).

Market Economics is using the most enhanced developments in economics, the globalization, the rising productivity to boost business, employment, fiscal reserves in the individual markets, countries through using Market Tools pinned to the Inflation/Deflation variances. Whereas, the Orthodox Economics bases economic growth purely on budget, investment, productivity, self-adjusting approaches pinned to Debt/Deficit. What makes Market Economic possible are the mostly exogenous forces of the Globalization and rising Productivity that offset Inflationary forces; the Market Economics is artificially adjusted on Macroeconomic level, and self-adjusting on Microeconomic level. How is it possible to split Macro and Micro economic levels is by implementing the Market Agents that create unifying market condition for working economics – micro market level independency, competition, self-adjusting. The Market Tools are to be used as parameters in a very complex market environment to either boost business activities on a sectors based approach. The Game Theory may not work in such situations because of the high complexity exogenous forces prompted by the globalization and rising productivity. 

The necessity to find new approaches in economics to handle the 21st Century economy is aggregated by the weighing Global Warming that requires immediate action to protect Earth Environment – the EU most developed countries, China, the US and a few other like Morocco have taken actions to clean environment by using more and more green energies, however, the most polluted cities, countries are not the most developed once but those using old vehicles, mass fossil fuels, wood for heating, the improperly disposed garbage The sources of current pollution lays into widespread poverty, underdevelopment; thus the only conceivable way to reduce, eliminate it goes through the poverty alleviation by not using uncontrolled industrialization, even though by using the improving technologies the widespread industrialization is not probable at all, the robotization, the improving corporate organization, the over all high productivity reduce any possibility for such; however, the shady business laws, the corrupted governments, the need for employment opens the doors for any possible pollution in these developing markets, countries. From any prospective the Earth protection and cleaning is paramount therefore the Market Economics take Environmental Protection, Poverty Alleviation as targets overwriting budgetary constrains – Debt, Deficit, the lack of Capital must not stop Market Economics from actively pushing Market Development so the Global Poverty is alleviated thus the Earth Environmental Protection is accomplished. But these developments are implemented through market competition, preserving individual freedoms, relying on private enterprises not on the governments take over. 

The most developed economies will have to expand Social and Infrastructural expanses much further than it has been accepted to keep market balance in tact: the accelerated business activity are the only alternative to it, and such must be targeted by Stimulus, Lending, Fiscal, Monetary sectoral policies; the Quantitative Easing to become a supportive tools to supply the needed capital; what comes first is not the Capital but the Development, employment, business activities; the Inflation is only indicator that must be taken to limit or expand the active market tools.

Debt, Deficit is the ruling Orthodox Economics indicator – Inflation, Deflation is the ruling Market Economics indicator!

The Investment, Capital is becoming less secure more like current Stock Exchanges, even though the Market Risk is very much limited by the high Market Security succeeded by the implementation of the Market Agents. In the overall market development the volatility on a macro level could be only adjusted by using the Market Tools one way or another as Parameters. The value of investment, capital is not to change the idea that only investment, capital means growth, development must change, however, because the unorthodox tools of accelerating market development such as quantitative easing, SDR, stimulus do not rely on investment, capital only. The unorthodox market tools are necessary to boost enough business, employment, social expenses to succeed alleviation of poverty, consistent market development. 

The International Accounting System has to accommodate all orthodox and unorthodox market tools moving to an Accrual Accounting – the investment, capital, capitalization must be taken in their relation to Market Development, and it must be done Globally. Private Investment, Capital brings Return on Investment that comes with the risk; it should be no such thing as protected by the governments, International Finance Institutions investment whereas they pursue borrowers, impose sanctions, require austerity measures – the role of the governments, international finance institutions is to ensure the Market Agents are fully implemented, and all participants play by its rules that are very simple: the Rule of Law in Business. 

Joshua Ioji Konov 2017

Why It Is That Difficult to Change Economics?


 

The system Economics has evolved in time into Game Theories based on data mining; conceptions founded, many times, on idiosyncratic endogenous principle conclusions. Mathematics has been used to backup these conclusions: formulas taken as status quo in time. The over all philosophy of the orthodox economics accepts straggle to survival as bringing in individuals, markets the vivid powers to invent, innovate, create, organize, adjust to the changing economic conditions; when exaggerations, redundancies, inefficiencies compile a adjustment, recession occurs that could be self-adjusted by individuals, companies, institutions to a point when a new fun off can start; thus, spinally the economic pressures increase productivity, sufficiency the standard of living, better conditions of infrastructure, education, better life for the many. A minimum unemployment rate needed to carry on enough eagerness for the labor to support the demand for employment, labor without prompting inflation as if the unemployment goes under the % so the labor market is disrupted then high wages are required that boost inflation, high prices and limit businesses ability to increase productivity, production, keep competitive internationally in the US it means interstate, too.

The orthodox economics has evolved into game theories when in time varieties of factors, indicators appear that obviously invoked the need to use probabilities but still in an idiosyncratic, close system. Even though the game theories give certain wider spectrum of data and using that data, the overall scheme of certainty was retained: the principles of debt, investment limits, productivity have never been overwritten or taken in different but the developed trickle-down economics. From the pure Capitalism of the wild wild west to the Social Capitalism of some European Countries, to the Communism of the post communist block economies the system of spinally self-adjusting economic growth – recession – growth has been the status quo – the orthodox economics of the 20th Century. The Keynesians added more monetary through governmental intervention counter cyclical measures to shorten recessions, even accelerate business activities. Same of the game theories added to that by targeting different economic sectors to boost further business. However, the status quo of debt, investment, productivity has been retained and any substitute was considered be done by expanding the governmental role in business activities: the two opposite right to left either asking for less or more governmental intervention, and explaining economic developments by such economic interference; blaming one another for all the gloom and bust.

Actually, the leftists and the rightists of the present are both correct the economy in the developed and with few exceptions in the developing countries is grossly under-performing: debt, inequality, un and under employment, insecurity, diminishing middle class and rising poverty are spreading as a plague. But, when the pure Capitalism approach has been used it did not affect these developments neither prevented it – such as the 2007-9 recession that enveloped the globe, neither the Social Capitalism, not the least the Communism have done it, the Soviet Block disintegrated, the European Union is in a process of disintegration: the Brexit, Italian referendum, Hungary, Romania are good example of what have been the consequences to not working economies. The globalization and the rising Productivity of the 21st Century have changed the pro-supply economic pressers of the past to pro-demand, asking for equilibrium forces of the presence. China’s Industrialization, the Internet have aggregated these new conditions actually started and worked out by the Transnational corporations, the improving Technologies, the hugely accumulated Capital that exploited these new conditions to move, outsourced, expended industrial production, financial services, retail, wholesale, farming, services. The global marketplace has become overtaken by these forces to change the pro-supply economic prevailing force to the pro-demand, pro-equilibrium required such. The economies changed into markets; the economics must change into market economics to apprehend these new developments, but it did not happen: ideologies, status quo, politics have prevented the science of economics to evolve into market economics. That has brought the economic slam elsewhere but China who accommodated an ‘as it comes; as it goes’ economics that worked out the 2007-9 recession and post recession global slow down and instead took out of poverty 600 Million people, and maintained high economic growth.

The China example has not prompted the western politicians, economist to start figuring out what really has happened to adjust and adopt the orthodox economics, but in the opposite, it made them become hardliners insisting that these new developments are temporarily, or a result of not imposing even further austerity, debt restrictions, shady business environment.

The 21st Century calls for flexible market economics that will ensure less inequality, full employment, Earth’s environment protection, open global marketplace, however individual markets developing such flexible policies that can manage consistent market development, alleviation of poverty, saving of the personal freedoms and the democracy for all.

Joshua Ioji Konov 2017

The Relativity and Uncertainty of Market Economics


Economics is a philosophical system of taking statistical data on individual technical indicators consequential to subjective conclusions: example of such: Gross Domestic Product  variations call % positive or negative growth while two consecutive quarters of the second calls a recession. Although the GDP does not indicate the distribution of gained or lost wealth or many economic activities such as at home labor and any transactions that do not exchange cash. Other example is the Unemployment Rate The official unemployment rate (technically called U3) simply divides the number of people who are not working, want to work, and have been actively applying for jobs (defined as having applied to at least two different employers within the last month) by the sum of the people working and those defined as unemployed. Thus, lots of people who are unemployed by many reasonable definitions do not count as such in the official government statistic. Using the government’s own definition, workers who are discouraged or marginally attached to the labor market do not count in the official unemployment rate. There are different, broader, unemployment measures available, but they do not get the headlines.

However insufficient, the GDP, Unemployment Rate, and other statistical indicators are used to draw ‘at the moment’ situational picture on an economy that provides the Central Banks parameters to trigger Monetary, Fiscal or other Policies. When recession persist going even deeper into red the actions take even very unorthodox actions such as Quantitative Easing, saving individual Banks, Corporations, extending Unemployment Benefits, etc.

What ‘modern’ economics lacks? – first the inability to call economic indicators: trigger flags into a system of relativity and uncertainty where ‘market tools’ must be used not based on believes or ideologies but on ‘counter’ or ‘pro’ cyclical pragmatic measures – parameters into an unstable market environment; and second, the prioritize on at the moment actual market tools to accelerate or prevent relative market developments. Let say that a market e.d. economy is running into stagnation with diminishing demand: seemingly it must trigger pro-demand measures; or a market is running under strong inflationary forces: such should take measures to boost the supply driving market forces. The relativity of demand to supply or the way around is balanced by market equilibriums in which situation the market resistance is at it’s the least force. So to speak, when market tools are used as parameters on an ‘as it comes; as it goes’ approach triggered by ‘at the time’ market developments; such pragmatic approach may prevent the real economy from violent market variations.

The relativity of real economy’s market developments is not unconditional because of the high uncertainty of economic realities; however, by isolating ‘at the moment’ developments then acting to smooth or accelerate these developments: let say, a market is running stagnation (deflationary forces) while the consumption/demand is indicated then the pro-expanding demand market tools should be used to steer higher employment, income, and consumption. The action strength will depend from the strength of the indicated variations.

Market Agents such as the Environmental Protection that are unconditional – thus any other market actions must comply with. Less demanding but not the least important are Poverty Alleviation; or Consumer & Costumer Protection, the Rule of Law in Business, and Insurance & Bonding that will help saving Earth, raise market security to allow SME and Investors lower rates lend-ability, raise the level of quality of business activities.

Market Tools as triggered Market Leaps through Direct Investment, Subsidies, Low rate Financing, or Social and Infrastructural Expenses, Sectoral Monetary Policies, Fiscal and Lending Policies, Prevailing Wages or just maintaining market equilibrium by using these Market Tools as Parameters under Uncertainty. Inflation/Deflation are fundamental Market/Economic Indicators that can trigger actions on the Demand or Supply Sides. Minimum Unemployment is down to Full Employment relying mostly on Small to Medium Businesses and Investors to steer enough business activity; however, governmental and other means for employment are feasible: balancing private employment. Some markets where the governments are more involved in employment could evolve into more private employment, other may follow the way around: ‘the means justify the deeds’; however, free entrepreneurship performs as best in in market development and manage at best market equilibrium; the inflexible bureaucracies cannot compete private entrepreneurial organization such. There are market sectors that common hold property is must to ensure fair common services, and the percentage of non private employment will probably rise – the fiscal reserves that support such employment must also be flexible, sometime not debt related but market demand driven. Overall, to succeed full employment in a highly technologically developed and developing world the idea of National Debt should evolve into the ideas of protecting Earth Environment and alleviation of Poverty to support it, the entire market economics should be founded on two bases: first is the Micro –level that is directly market forces compliant and adjusted by the by competing market participants and second is the Macro-level that is not only market adjusted: the appointed factors of Earth Protection and Poverty Alleviation will overwrite it, but also even the existing market forces could not let it self-adjust as it is seen by the 2007-9 Recession that required enactment of many counter-cyclical  governments actions such as the Stimulus  packages, the QE, the bailing of ‘too big to fail’ Banks. The Market Tools usage could be adjusted on Macro-level to eventually slow-down an overheating market by targeting individual market sectors (example of such interference is the way China cooled down their Real Estate in post recession time by limiting lending access to 50% LTV on first property and prohibiting lending on a second property, also not allowing for the Developers to change prices from the previously listed ones. The targeted actions by the Central Banks should not be limited to Discount Rates or even Quantitative Easing but should go to individual sectors and fix the redundancies or shortages.

The ongoing Globalization and rising Productivity have put strong market exogenous forces over national economies in the 21st Century as seen it has prompted excessive national debt and rising inequality. The Transnational Corporation in manufacturing, financing, services have flourished under these new conditions by outsourcing and moving business elsewhere; in addition the China’s Industrialization and the Internet have aggregated these market processes of changing the pro-supply forces well handled by the economics of Capitalism into a pro-demand and pro-supply new forces ravaging many markets because the inability a new system of market economics be implemented.

To include these exogenous market forces along with the endogenous such of technologies and highly sufficient management, and the Earth Protection very expensive and uncompetitive means, and the needed Poverty alleviation on a currently used Budgetary Economics is going to be impossible: if the whole economics is ruled by debt and budgetary approaches the many issues arousing from these 21st Century developments cannot be properly dealt, and therefore an evolution to a Market Economics adjusted to Inflation/Deflation must be apprehended. To overcome the head winds coming from the new developments to stay on Austerity adjusted Debt economics is impossible by nature, neither all economies can industrialize to fulfil their Fiscal shortages nor by cutting on expenses can take these to some balance to the necessary investments to build the required infrastructure, full employment, stop polluting by focal fuels, old vehicles,  stop woodcutting, garbage disposal, invest substantial money into green energies and technologies. To succeed Market Development the Debt stigma can not apply, the lending, financing, shareholding, are private issues based on ‘risk’ or ‘reward’ principles that must become national and international investment principles too:

How governments will handle these highly demanding new expanses? – Foreign Direct Investment, available other capital: Public or Private, the Quantitative Easing, the SDR issues by large Central Banks and International Finance Institutions are the one to provide and control proper investment and execution, even though, this is not going to change the current economic order in complete it will create some very unknown market conditions.

How the government will make sure not prompting at the moment Inflation? – the Market Leaps are targeted environmentally friendly project developments that target infrastructure build up, construction employment, maintenance employment, other employment: double targets as could be seen; what such project must sustain is not prompting excessive Inflation and consequential diminishing employment: the complexity of making projections should include the scenario of having large manufacturers, banks, wholesalers and retailers be included in the project as auxiliary  filling the blanks to prevent Inflation, also a project should include green farming, tourism, apprenticeships, courses in management, finances, agriculture, to prompt employment and teach the locals to manage themselves – the Prevailing Wages, Residential Requirements, SME lending parameters are necessary too. Such project will employ  in the beginning many foreign managers, instructors, teachers, and specialists that will provide the needed expertise but all mid-management, labor, support must be done by the trained locals in prospective all the positions must be occupied by trained local staff. The discussed project imply some underdeveloped markets with lack of proper education and skills, however, when a Market Leap is done in an developed market the need for outside specialists could be limited.

Most developed markets may not need Market Leaps but just acceleration of the existing green energies projects; however, employment is an issue in these markets too, so to prompt business and employment many new approaches must be used that will boost SME activities, will create opportunities for all – meaning full employment that consequently will give more Fiscal power and revive the optimism and the desire to succeed. The motion, when created, will employ the positive energy of many skilled currently underemployed or unemployed people.

In details, the developed markets have many channels to shake up business, social and infrastructural expenses are not excluded as a market tool’ the Market Agent apply to these markets as well to developing ones in their entire powers; they are the foundations for higher market security that will allow low interest lend-ability to small and medium businesses and investors, and establish high requirements for consumer and labor protection changing the ‘quantity’ development into ‘quality’ development. Under higher quality requirements more education, professionalism, is going to be required to compete, but better rewards will follow up. The globalizing marketplace will provide plentiful of opportunities for highly educated specialists.

To ensure modest Inflation the developed markets artificially boosted Market Development should be done in a complex manner by engaging more diverse measures: from manufacturing, service sector, farming, tourism to all go green – protecting the Earth environment. The substantial capital needed

such actions must come mostly through QE, but investors will get involved after the project starts. The commercial financing must be done through commercial banks on setup terms and subsidies (in the beginning) why letter the high security at the markets will make such low interest rating market compatible. The Market development literally means developing markets: developed or developing by using Market Tools for targeted Market Leaps or accelerated economic activities under implemented Market Agents business environment. These projects differ from country to country and from market in a country to another market could be in the same country (example: South of Chicago and North of Chicago could be considered different markets: differing in education level, access to employment, safety, property values, opportunities for business development – even though neighboring, having the same currencies, language, etc even under GDP, Unemployment, and other current indicators the difference is substantial; thus to approach these two markets requires dissimilar planning, financing, and executing: the planning for North of Chicago will improve already developing green infrastructure, by vehicles replacement with electrical, solar and wind power generation, renovation of buildings aiming  isolations, finance existing small and medium businesses to expand, using fiscal breaks to leave more money for consumption, higher social pension, Medicare, helping for high education, schools, etc that much of the project could be financed by direct and indirect investors. The strong middle class markets require upgrading to more business opportunities, green infrastructure, electric means of transportation, zero pollution.

Whereas, the South of Chicago is needed ground up planning for a Market Leap closer to one in the developing than in the developed worlds formerly explained.

Marketism calls economies markets so the less advanced parts of an economy could be qualified into markets with their specifics that require individual planning and actions.

The governments involvement and interfering with economic activities or the control on business vary substantially from country to country as mentioned before. Markets like China have strong State Companies competing straight with private companies whereas markets like the US does not run State Companies and the competition is among private companies, markets like the Scandinavian have very strong social protection system with public Medicare  far different than the more individual US such. These examples are to show how diverse the world markets are and therefor, the Marketism should use compatible Market Tools to their specific business activities, employment, environmental protection.

Market Agents are required by the need for markets unification, for marginalizing competition disadvantages to Small and Medium Businesses and Investors, and for higher market security. In the world of so much diversity the basic rules of Market Agents are more than enough to stabilize international business and financing to allow the proportionate usage of Market Tools to steer enough business activities, local investment, employment, alleviation of poverty, and finally protection of the Earth environment by market means.

Up to now the tight budgetary leach on economies prevented or were suppose to do so from exacerbations in business and governments, modest recessions were suppose to cut dead branches of redundancies by painful but necessary self-adjusting. Then the 2007-9 ‘Great’ Recession hit the economy so hard that the multiple interference by the Central Banks and the Government was necessary to prevent from total melt down. The ‘certainty’ of the science of economics evolved into ‘uncertainty’ – so, instead the measures (pro-cyclical) follow the trickle-down philosophy of the Capitalism, the ‘as it comes; as it goes’ counter-cyclical approach of using market tools as parameters was used. The Keynesian interference could be considered closer to the methodology used by the Central Banks means but the Quantitative Easing, for example, was far beyond it; the complexity of the interference into the economy went far unorthodox, but it saved the world economic order from destruction. The showed the level of ‘uncertainty’ prompted under the new global conditions that exceed the conceptions. After substantial amounts cash was infused by the Central Banks Inflation was predicted by the orthodox economics, however, such did not come: the exogenous forces more powerful than even huge quantities of money prevailed. How strong are these forces though? And if Inflation has evolved into chronical Deflation where is the turning point?

Thus from one side the Globalization and rising Productivity have been taking away the fundamental industrial jobs from another it has pushed prices and Inflationary pressures down. The ideas of certainty by letting these developments self-adjust cannot be considered practical. Example of sticking to the orthodox ideas was the European Union insisted by Germany: the weak results of a barely improving EU markets are a good example how such philosophy underperforms. Example for using more flexibly economics is China that even though it had highly dependent on export economy it gradually been changing by exploring QE, targeted stimulus, subsidies, on the supply as well on the demand sides; thus raising living standards and boosting consumption.

The question how to prompt the right market development by not triggering excessive Inflation in the most fundamental for an ‘as it comes; as it goes’ economics; the diversity of markets structures further complicate any setup system. Actually, there isn’t any possibilities for a ‘setup’ system – it is about using Market Tools as Parameters to boost business activities and employment while preventing excessive Inflation. In principle, as mentioned before, if Market Leaps are used these must be more complex having in account all sides of a market while balancing demand to supply. The excessive capabilities of the Transnational Corporations to expand global production, financing, outsourcing, and moving are preventive valves to short term inflation; in a longer term, the steering of market competition on micro-level could self-adjust, on a Macro-level prompt actions to cool overheating market sectors must be preventively used. The game economics can not comprehend the complexity of data from endogenous and exogenous prospective to setup a system working for the appointed diversity in market varieties, only based on parameters that slow or accelerate certain market sectors the system may localize and address effects and consequences for a market, particularly in a short term; in a long term for a market that has overgone market leaps or targeted business activities boost the micro-level market competition should let such market self-adjust business activities; the interference on macro-level should boost environmentally friendly business activities in any possible varieties and if needed to use Social expenses along with Subsidies to maintain full employment, that is considered paramount by Market Economics.

The full employment of Market Economics is not in the 2-3% level but in the single 1% . To have such high employment is the target: in less developed markets such employment consists of less advance jobs but yet giving the individuals the ability to maintain normal life to the local standard of living. It is obvious that the most developed markets will have more access to high education and high-tech jobs, at least of the beginning of such global market development. Industrialization is not considered by Market Economic as the way to Global Markets Development – the Market Agents consist strict Environmental, Consumer, and Labor Laws thus not giving to the Transnationals the initiative of deregulated markets. The non-industrial market development is the most fundamental difference between Market Economics (Marketism) and the Capitalism. The artificial Market Leaps and targeted Projects which are not self-adjusting on a Macro-level are the second big difference – in this case the Environmental Protection targeted by Market Economics overwrites the Debt controlled self-adjusting Capitalism.

Market Economics I.e. Marketism is based on free entrepreneurship as a vivid force for global development; the Market Tools use many artificial approaches such as Subsidies but on Micro-level the market competition is ruling, thus the finance institutions and governments are the ‘invisible hand’ to prompting business activities not the overhand of making business or money. Freedom of capital flows, labor, recourses, private ownership, freedom of speech and ideas are paramount for Market Economics to succeed in a long term.

Joshua Ioji Konov 2016

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

How Globalization affects Currencies, Monetary Policies


EY International Congress on Economics I205: Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect DownloadsJoshua Ioji Konov

With the acceleration of ongoing Globalization market conditions have changed consequently affecting the value and volatility of national currencies. In European Union the Euro EUR has replaced many local currencies. The U.S. Dollar even still maintaining its powers has been challenged by the Renminbi (RMB). Many other currencies are pegged to the U.S. Dollar and the Euro EUR to avoid fluctuations and harmful volatility. The power of such unification of Global currencies is used by some countries such as China and Germany to maintain growth, the weakness of such unification of Global currencies consequence for many countries such as Greece and Spain to accumulate huge national debt and many more other countries to deepen into genuine poverty. As everything else in the process of Globalization there are winners and there are losers as well.

Currencies reflect the economic situation of their issuers: when Japan got into economic crisis in the 90s the yen (JPY) reduced is value, when the US got into 2007 Recession the U.S. Dollar lost price far in advance then when Greece got into “high debt” trouble the Euro started deteriorating; it should be clear that major currencies like the U.S. Dollar (USD), the Euro (EUR), the Renminbi (RMB) and the Yen (JPY)  reflect most recent economic developments and the central banks projections; however, in the new Globalization the accumulation of National Debt as a result of stimulating economies does not necessary decrease currencies values for which good example is the USD in the last year or so and austerity fiscal policies with promises of cutting deficit and playing sound “old” economics does not necessary increase currencies value for which good example is the EUR and its most recent developments; nor by expanding one’s Social and Infrastructural policies would necessary decrease their currencies values for which good example is the RMB which value is considered depreciated instead, nor by heavily subsidizing your industries and SMB would decrease one’s currencies value for which good example is the JPY.

Many more factors are provoking currencies fluctuation but the trend goes like this: the Globalization has weighed more on

  • the Demand-to-Supply side of the economies instead of the Supply-to-Demand side as it always had been;
  • the Deflationary market forces than and instead of the Inflationary such as it always had been;
  • the Prospective for stable market development than and instead the Prospective for expanding industrial production as it always had been.

However, the variety of “many more factors” mentioned above such as:

  • socio-economic structures
  • productivity
  • infrastructure

All of these are considered in the Market Economics as “equity” and play a major role to currencies value.

Here, it will be important to mention the “relativity” of the economic “tools” for maintaining currencies value, because even a general trend could be apprehended the currencies value could easily go the other way and supply may overrun demand, and inflation may overrun deflation, if proper economic rules are not expanded internationally; but still the possibilities for a very accelerated industrial production in regions of China, India, Vietnam, Brazil are so “easily” achievable because of the mobile highly developed structures of the global conglomerates, the high technologies and the global capitalization basically offset in a short term these possibilities of turn around. However, certainty in the modern economics I believe are quite limited: there are more like of “quantum economics” adjusted by economic “tools” used as “parameters” instead of philosophical “certainty” of the dialectic economics; (for more see: Quantum Economics – Philosophy of the Economy”)

The currencies value reflects the ongoing Globalization and how adequately individual governments follow “the momentum” in history: the Demand-to-Supply motion of possibilities for development; thus, under certain condition lifting one’s Social and Infrastructural expanses might be positive to balance the Demand-to-Supply ratios, in another it might be negative for the economy; also these economic “tools” could differ from country to country and from region to region, so proper evaluation of individual countries “current possibilities and momentum” should be paramount when balancing Demand-to-Supply ratios. For some countries giving a bit more freedom to businesses may accelerate their economies for another regulating business to make it more “secure” for easier financing could be the answer of “the momentum”. However, the trend is the trend, and for the most developed economies the biggest problem at the moment is the lack of proper Demand. Production based economics of the Capitalism when production means mostly industrial production that adds the majority to these countries GDP must well change its (the Capitalism) ideological approaches toward economics and start using more pragmatically inclined approaches of “as it comes: as it goes” economics of market adjusting to keep Demand-to-Supply ratios balanced.

For the last couple of years it has become obvious that the system of economics of self-adjusting Supply-to-Demand has become inadequate and governments started taking the role of investors, banks and promoters which trend if followed will move to governments taking on the majority of business, if a few more recessions go through, while the governments are generally inept in doing and promoting business and lack any flexibility so needed in business: they the governments should be only the “invisible hand” for directing and correcting economies and the consequential currencies values.

To prevent from recessions is not easy but could be possible if:

· economic “tools” are used pragmatically instead of currently used ideologically;

· general business laws start applying to all participants on the Global marketplace, which could promote the Small to Medium Businesses (SMB) and Small to Medium Investors (SMI) to become equally competitive to the Big Businesses and Big Investors;

· Global central banking represented by the World Bank, IMF and WTO change their role from being “the lender” into the one of being “the controller” of keeping Global Demand-to-Supply balance trough using low interest loans and subsidies to SMB to promote Global growth and to impose renewable energies and environmentally friendly enterprises too;

· Global central banking should have issuing monetary power, instead of levying on financial institutions which action will jack-up lending rates instead;

· Global central banking should use commercial banks for marginalized lending on set matrix to promote growth;

· The priorities of the Global “controlling” should change from lending to inflation (Demand-to-Supply balance), because that’s the most important indeed.

Currencies reflect individual countries adaptability to the new developments in the new Globalizing marketplace but also the currencies are becoming more like a computer game and particularly when (RMB) becomes a natural balance to the (USD) their (the currencies) value will well increase its volatility if this Globalization is executed properly:

Good example of how such Globalization was not executed properly is what happened in the European Union where countries were politically united under the same currency but their economies differed substantially in development and living standards: the EU did not attempt to equalize these differences by strong social programs and business laws; it could have been done  by using commercial banks to access SMB and also by lifting individual countries standard of living, but instead it has been done by governmentally run programs, very complicated and inaccessible to the majority of SMB and by general lack of Social Programs, Business Laws, and Consumer Protection Laws . As a result of the EU inadequate actions, some countries like Greece deepened in National Debt and others like Bulgaria (which currency is pegged to the EUR) deepened in Genuine Poverty in which both cases the value of the (EUR) and the overall economic growth of the EU was not improved. The austerity measures approved by the EU obviously were not accepted as positive by the currency traders so the value of (EUR) is drifting away. The way EU has been developing is more like having a million dollar house next to the ghetto and wondering why its market value is very low. It is obvious that the condition of your nationhood is important for your prosperity, the schools in the area, its crime rate and etc.

What was referred to EU and the problem of underdevelopment for the EU, that brought all of its problems, basically applies to the rest of the world, where such inequality is huge, and because of the Globalization has become not a problem for these poor underdeveloped countries but for the entire world, and mostly for the most developed industrialized countries, which capacities of industrial production has long time overrun their own demand (here it is important to mention that underdevelopment exist in some parts of the most developed countries internal areas: in the US some states like Michigan, in EU many countries like Bulgaria and in China many areas).

The model of self-adjusting trickle-down capitalism based on profitability from industrial production mostly does not posses the capabilities to change the Global marketplace because all countries cannot be industrialized when technologies cut on manpower and outsourcing moves production elsewhere; still I believe the freedom of business and the vitality of entrepreneurship should be used but many fundamental changes should be done so instead with the next recessions the governments do not take over business: bureaucratization seems very monstrous way of solving these problems indeed; there goes away with personal freedoms and there goes away with liberty too. But for these freedoms to be saved the Global business, financial system, the ways underdeveloped markets are approached and the ways economics is used must change.

2010-18-06 08:37

Joshua Konov – economics

Possibilities verses Investment

The real possibilities for market development and individual access to such must reflect the flood of available products and services aggregated by the ongoing Globalization, rising Productivity, and the Internet, which supported to the available Capital and developed Financial structures have expanded rapidly enveloping any market; developed or developing alike. The exogenous forces of overproduction prompted by the exceeding powers succeeded by the Transnational supplemented by the Large Investors and Public Capital have come to a turn around point: from a supply driven trend of shortages and inflation to a demand driven trend of overproduction and deflation – with two main consequences: Inequality and Debt the former causal of the power these Transnationals posses as access to marketplace and public and private capital, and the legal superiority over other market participants, the Communists Block’s fall, the Chinese admittance in WTO, the 2007-9 Recession, and many more historical developments have helped the forces of the Globalization and Productivity empower to succeed what the global economy is : from declining middle class ,rising underemployment and debt in the developed markets to the increasing poverty and radicalization in many developing markets; in both the lack of opportunities have created radicalization bringing back ‘old’ almost forgotten excessive nationalism, xenophobia, religious radicalization, and most demanding the widening Earth Pollution by old vehicles, primitive heating, deforestation, and plastic disposal.

 The Foreign Direct Investment through the Transnationals has become the main tool for global economic development, but unless more than 75% of the global resources and revenue goes tho them they employ a low digits globally: the high technologies and perfected organization have given opportunities to reduce employment through mechanization along with outsourcing and moving to less demanding in terms of labor and environmental regulations countries. Thus the global economics have evolved from pro-supply driven such to a pro-demand; thus the principles of the ‘old style’ Capitalism that are founded on industrial production are losing their abilities to prompt enough business and employment needed for farther market development.

As it could be concluded the exogenous as well endogenous forces under the most recent developments have changed the trend from The new possibilities for expanding business without prompting inflationary forces of the past. The trickle-down economics approach of tight leach to prevent inflation has become counterproductive, therefore. The budgetary-economics supporting the former approach has produces debt: national and individual alike – on a mass scale such debt has enveloped the global marketplace. To maintain social and infrastructural expenses while inequality rises and employment is scare has become paramount however current system cannot invoke such activities, thus further deepening in both: inequality and debt are natural to the markets. What the Central Banks have done through Quantitative Easing has attempted boosting business activities by flooding markets with more capital eventually reaching down to the small to medium businesses and investors that are the main employers; however, the entire Economics has been persistent to their development: the business laws in contracting, liability, the environmental, labor, consumer protection, insurance, bonding, intellectual protection laws that build-up Economics and leverage Market Security have been insufficiently adjusted, and therefore the overall effect from such capital injection by the central banks could not succeed but very shallow growth, indeed. The constrains on the developing economies by the developed economies and world finance institutions, as well the EU on their members, went even further by imposing to them pro cyclical economic policies that resulted in total disaster: from Greece and Bulgaria to Spain and Ireland results are the least slow-motion business and income growth. 

So the Quantitative Easing without the right Market Tools to spur Market Development is highly improbable or just limited. While the Shady business environment gives advantages to the Transnationals and Large Investors it greatly undercuts their counterparts thus limiting the QE abilities.

 The individual markets; developed and developing are deeply inter-winded in a global marketplace not being able to protect from one another economic turbulence: the 2007-9 Great Recession is the best example of it – started from the US and enveloped the World. The presumption that protectionism would have saved someone is Utopian. Same inter-winded global marketplace becomes even further such by the Earth Pollution Issue and the necessity from immediate action. The farther industrialization remotely resembling the past could be catastrophic for the Earth environment, on another hand the growing inequality, debt, unemployment, and underemployment may well aggregate this trend. So, to expect the ‘business as usual’ to have any substantial long term success is unrealistic. On micro and macro level market policies must be applied to apprehend the existing market forces into a working global marketplace.

 The tight leach Capitalism relies on, the relatively high lending rates to small to medium businesses and investors under loose market security that makes start-ups easy and doing business or accessing lending hard – condition benefiting the Transnationals and large investors; economic system that had performed well in the Past, before the beginning of the 21st Century, system of supply driven economies, but as said before the system is not performing any close to the possibilities of this new conditions. The Foreign Direct Investment and the International Finance Institution lending approaches cannot respond to the needs of this new century: the required global alleviation of Poverty to save Earth, the capabilities af these same Transnationals and Chinese manufacturers to overcome almost any market demand, that tipped-off the existed market trend from supply to demand, do not provide any other possibilities but to change and update the system of Economics by having in consideration all these new developments. The means of international financing as used is limited by its abilities but also by the low market security that does not allow any other approach, thus in order to lower lending rates the market system of economics must change to accomodate the new developments and allow lower lending rates. The size of at the moment capital for investment is not enough to boost the vast global market for a short run accelerated market development, so, not the market security, the approaches of investing, but also the quantities of available capital is short to prompt enough action. The two main targets of Marketism e.d. Market Economics are the full employment (no more than 1% globally) and sustained very limited Inflation/Deflation (no more than 1%) – you can see the huge difference from the Capitalism just in these two measures! To succeed in these targets the economics is split in two levels: the Micro where the self-adjusting is used to ensure balanced markets and the Macro where intervention is required to hold longer term balance: the market tools are used as parameters to accomplish macroeconomic balance.

 The Capital on hand for investing and through QE could accelerate market development on a large scale through direct investments and Market Leaps in a more secured market where the Market Agents are implemented and market tools are flexibly used to boost or slow-down market development using the Inflation/Deflation as a trigger point.

 Market Agents are strict:

  1. rule of laws in business & unlimited corporate liability

  2. environmental laws

  3. consumer protection laws

  4. labor laws

  5. insurance laws

  6. bonding laws

  7. intellectual property protection

 Market Tools are flexible and flexibly used:

  1. foreign direct investment

  2. quantitative easing

  3. SDR

  4. targeted sectors investment

  5. social, educational, R&D, infrastructural expanses

  6. market leaps

  7. low rate lending

  8. subsidies

  9. fiscal policies

  10. sectoral e.d. parts monetary policies

 Thus, under strict market condition leeway of mostly financial tools are used to either accelerate or slow-down market forces on macro-level.

 The schematic approach to this article is to prove first the inability of the orthodox economics to deal with the new appearing economic developments; second, to present a solution to these new developments, and third, to show the new role of capital into a non-budgetary on macro-level market economics why budgetary on Micro-level such. By splitting the economics on Macro-level on Market Sectors controlled by using Market Tools as Parameters.

 Up to now, the trickle-down economics kept firm grip on capital flow made it easy just for Large Corporations & Investors to prevent from supply overrunning demand to prevent from Inflation – a pro-supply approach; now, the market competition is going to be under relatively just opportunity making Small to Medium Businesses & Investors: so it is about alleviation of poverty and Earth preservation while personal liberties and freedoms are preserved as well entrepreneurial freedoms are.

 The risk management of Market Economics applies breaks to overheating /sharp market fluctuations by using Market Tools selectively.

 The Mostly Indebted Countries along with the Foreign Direct Investment and the Capital (SDR) introduced by the International Institutions is not even close to required by the necessities for boosting enough business and employment to succeed Property Alleviation that may save Earth from Pollution  on a Global Scale. To deal with pollution it is not enough by going green by the most developed markets, instead the entire world must go green. The pollution from one country affects its neighbors as well the global climate – the pollution from old vehicles, primitive heating, deforestation, and improper garbage disposal are becoming the main polluters replacing bettering by technologies manufacturing and energy production. The world have come to a point of great division between the few Rich and the majority Poor that could be individuals, or regions, or countries: technically could be named markets. The tendency to protectionism and stopping the processes of Globalization and rising Productivity may only isolate individual markets/economies. But back to the required Capital for boosting global market development it must exceed the one in hand in great numbers, also the ways direct investment is done must be supplemented by aggressive and targeted market leaps and long term subsidies, law interest investment globally. The FDI is a Market Tool that would continue to be fundamental for market development but it must be supplement in great numbers. The basic improvement in Market Security by implementing the Market Agents would allow Lower Interest Lending to Small and Medium Businesses and Investors that would open countless opportunities for investments and returns. A distinguished independence of investment from governments must be made, when the governments or international finance institutions cannot be collectors or policy intruders to borrowers as it has been practiced, the higher Market Security by itself would instigate proper conditions for collection and stability: this is a general globalization of business and finance.

The current possibilities for global market development are real the globalization and rising productiveness are factors that offset inflationary forces that have brought poverty and inequality for centuries into a new marketplace that provides countless opportunities for development if properly apprehended by economics. Marketism i.e. Market Economics capitalize on these new global developments providing an enhancement of the Capitalism to accommodate the new Century developments into a working economics.

Joshua Ioji Konov 2016

Marketism i.e. Market Economics and Governments

 The Marketism is based on firm rule of law in business. environmental, consumer, labor, insurance, and intellectual property protection laws. the Governments under such conditions are obligated to implement and hold these Market Agents in order these markets to deleverage from the current system that give advantage to Big Business and Investors: thus causing increasing inequality, stagnation, declining middle class, and global unrest to more fair competition with higher market security: thus prompting more business activity particularly through the Small to Medium Businesses and Investors. It is a change of priority and powers from the centuries ran trickle-down economics into a market run on a micro and macro levels such: a revolutionary change of the ways societies and markets i.e. economies work. Such changes have only become possible because of the ongoing Globalization, rising Productivity, Chinese Industrialization, and the Internet: factors unknown in the Past that prompted global, exogenous to most markets i.e. economies, forces of industrial overproduction. The Capitalism which is based on such industrial production could not manage these new developing overproduction forces: rising inequality, falling standards of leaving for developed economies and not improving such for the developing economies, and ongoing Earth pollution have invoked from the Capitalism inadequateness that brought back the excessive forces of nationalism, bigotry, chauvinism, religious fundamentalism and finally global unrest: wars, refugees, instability.

The usage of old vehicles,  primitive heating devises, the poverty driven world continues polluting, cutting and burning woods, disposing garbage elsewhere are the main sourses of environmental pollution; therefor, to save Earth from destruction elimination of poverty and imposition of environmental protection laws are necessary and paramount.

 The Marketism uses market forces on Microeconomic level to boost business activities globally; it is not a Budgetary approach, as all historical systems have been, but connected to Inflation/Deflation variedness whereas Budgets and Investment are rased to an open level to free flowing capital more like the current Stock Exchanges are: with the risk comes the reward; so, it is not any governmental role to protect or control these capital flows – the general rule of law in business incl financing should do the job; for an example: if someone fraudulently breaks the laws elsewhere in the participating markets, he or she will fall under the justice system; the common laws, or personal laws in their current meaning will apply to business laws as well; even though bankruptcy, insurance, and bonding will limit some liability causal of market forces when personal fault is proven no exception to the rule of law should apply. Corporation’s managers or investors, large or small, should have the same liability to the law.

 Such market driven system of business will raise market security thus lowering risk for borrowing or insurance coverage thus taking business (financing incl) to some new hights. The governments are not to interfere into business or financing disputes nationally or globally.

 Now, the so called ‘invisible Hand’ by the governments becomes very important under these new condition because the markets and investment may not be sufficient to steer enough business activities, and also the Market Tools used differ for individual markets (for example more socialized markets may need less social expenses to boost such business activities than less socialized): an ‘as it comes; as it goes’ Market Economics targets very low unemployment through high business activities under limited Inflation/Deflation by using the Market Tools in any flexible way possible. The Market Tools are FDI, Subsidies, Prevailing Wages, Social incl Educational and Infrastructural Expenses, Quantitative Easing, Market Leaps. The ‘means justify the deeds’ as long the Market Agents are mandatory.

 What the Marketism does is taking the level of self-adjusting from Macro to Micro  Economic; thus, on a Microeconomic level the markets i.e. economies must self-adjust while on a Macroeconomic the system of using Market Tools as Parameters must persist to prevent from recessions/depressions. The Nash Equilibrium should be used on Macro Level indiscriminately meaning not politically motivated approach. The Central Banks should use any possible way to prevent upheaval! Example is the ways Chinese Central Bank avoided the Real Estate bust by imposing limits on second mortgages and asking for high LTV on the first.

 The WTO, WB, IMF must be the frontrunners for opening global markets through implementing the Market Agents and then providing the sufficient capital plus the FDI to succeed accelerated Market Development in all markets. Educational programs, apprenticeships, prevailing wages, maybe necessary to setup and boost  business activities.

Joshua Konov, 2016

State and Private Debt of Market Economics

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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 – 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 issues 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 is considered by Market Economics alike 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;

whereas, 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


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This is ongoing – updated article/blog reflecting ever changing Global Marketplace and some individual countries’ economies

_________________________________________________

While the markets are becoming more globalized and productivity is being propelled by ever improving high technologies, some economies as Chinese and Indian are growing rapidly thus becoming real powers in industrial production, however the old “science” of Western Economics is changing very slowly not being able to conceptualize these undergoing changes. The “old” system of Economics firmly believes that:


“The main motivations for the rapid expansion of multinational activity are as follows:
Higher profits and a stronger position and market access in global markets
Reduced technological barriers to movement of goods, services and factors of production
Cost considerations – a desire to shift production to countries with lower unit labour costs
Forward vertical integration (e.g. establishing production platforms in low cost countries where intermediate products can be made into finished products at lower cost)
Avoidance of transportation costs and avoidance of tariff and non-tariff barriers
Extending product life-cycles by producing and marketing products in new countries
The urge to merge – the financial incentives created by the global deregulation of capital markets is making it easier to achieve acquisitions and mergers and thereby encouraging the external growth of a business”

In the foundation of modern days Capitalism are the Transnational Corporations, however the role of these conglomerates is very limited if not negative in solving problems of rising debt, of accelerating genuine poverty around the world and of environmental issues;

Introduction Norms controlling activities of TNC’s in UDHR and ICESCR Why and how these TNC’s are responsible for environmental damages and harms. Three catastrophic disasters in human history International Guidelines controlling TNC’s activities Are these Norms and guidelines are enough to hold these TNC’s liable Need of international binding regulations Recommendations Concluding remarks

Transnational corporation liability for environmental harm

Before starting my presentation on present topic that is transnational corporation liability for environmental harm, I would like to say that this seminar presentation is only an approach paper presenting set of issues involved which in the course of direction take us to the steps of suggestions as far as the TNC’s liability for environmental harms are concerned. Or I can say that this is the first step of my research work.

To begin with let me first briefly explain to you, what TNC’s or MNC’s basically are?

Transnational corporation (TNC), also called multinational enterprise (MNE), is a corporation or enterprise that manages production or delivers services in more than one country. It can also be referred to as an international enterprise.

The Norms specifically define a “transnational corporation” as “an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries– whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively.” The working group defines the phrase “other business enterprise” as “any business entity, regardless of the international or domestic nature of its activities, including a transnational corporation, contractor, subcontractor, supplier, licensee or distributor; the corporate, partnership, or other legal form used to establish the business entity; and the nature of the ownership of the entity.”

Very large multinationals have budgets that exceed some national GDPs. Multinational corporations can have a powerful influence in local economies as well as the world economy and play an important role in international relations and globalization. It is beyond dispute that TNC’s are now the leading vehicles for economic globalization. According to UN Conference on Trade And Development (UNCTAD). In 2002, global sales of TNC’s reached $18 trillion for world exports.

Throughout the past half century, states and international organizations have continued to expand the codification of international human rights law protecting the rights of individuals against governmental violations. In parallel with increasing attention to the development of international criminal law as a response to war crimes, genocide, and other crimes against humanity, there has been growing attention to individual responsibility for grave human rights abuses. The creators of this ever-larger web of human rights obligations, however, failed to pay sufficient attention to some of the most powerful non state actors in the world, that is, transnational corporations and other business enterprises. With power should come responsibility and international human rights law needs to focus adequately on these extremely potent international nonstate actors.

Transnational corporations evoke particular concern in relation to recent global trends because they are active in some of the most dynamic sectors of national economies, such as extractive industries, telecommunications, information technology, electronic consumer goods, footwear and apparel, transport, banking and finance, insurance, and securities trading. They bring new jobs, capital, and technology. Some corporations make real efforts to achieve international standards by improving working conditions and raising local living conditions. They certainly are capable of exerting a positive influence in fostering development.

Some transnational corporations, however, do not respect minimum international human rights standards and can thus be implicated in abuses such as employing child labourers, discriminating against certain groups of employees, failing to provide safe and healthy working conditions, attempting to repress independent trade unions, discouraging the right to bargain collectively, limiting the broad dissemination of appropriate technology and intellectual property, and dumping toxic wastes. Some of these abuses disproportionately affect developing countries, children, minorities, and women who work in unsafe and poorly paid production jobs, as well as indigenous communities and other vulnerable groups.

It is no doubt that environmental consequences of TNC’s behaviour are multiple and substantial, and here I am going to discuss these environmental consequences of TNC’s.”


“Crediting” is a economic “tool” of the Capitalism to allow acceleration of startup businesses and higher consumption, however the “crediting” could properly function in economic growth with short self adjusting recessions but the most recent developments in world economies do not support such consistent gradual development thus “crediting” started bringing negative value instead;


By LAURIE WINSLOW World Staff Writer

Published: 6/17/2010 2:20 AM
Last Modified: 6/17/2010 7:09 AM

Over the last two decades, peoples’ ability to borrow against their homes or run up credit card balances during recessions has helped create an appearance of a safer environment while actually making the economy more fragile.

That is one observation of Mitchell Petersen, professor of finance with the Kellogg School of Management at Northwestern University in Illinois. He spoke Wednesday evening at a private gathering of college alumni at the Summit Club.

Petersen took time before his presentation for a phone interview to talk about some of the more pervasive, and overlooked, issues he believes have contributed to the current economic and financial crisis.

While the most visible signs of the current crisis include falling home prices, increasing mortgage defaults and record unemployment, the seeds of today’s problems were planted well before the housing boom of the last decade, Petersen says.

“A lot of what we call this economic and financial crisis are problems with individuals having too much credit card debt and too much consumer debt,” he said.

Consumer debt was relatively flat through the 1960s and ’70s until about 1983, when the level of debt started to increase, Petersen said.

He noted that the 1991 and 2001 recessions were relatively mild, as consumption dropped a bit. Unemployment never hit 8 percent in the recession of the early 1990s, and it barely got above 6 percent in 2001, Petersen said.

By contrast, the recessions of 1974 and 1981 were
much more severe.

Normally, during recessions of the 1960s, ’70s or early ’80s, if employees lost their jobs, they didn’t have the ability to borrow against their houses because home equity loans didn’t exist and credit cards were scarce.

People decreased their consumption during economic slowdowns and quit buying things, which made recessions more severe coming down. But once people resumed work, they could start buying again, which caused the economy to bounce back, Petersen said.

In later years, however, people who lost jobs could take out home equity loans and run up credit card balances and continue consuming, which led to recessions becoming less severe over the last couple of decades, Petersen explained.

This tendency to borrow when times are tough and then borrow and buy more when times get better causes debt to rise, Petersen said.

“That means that a buffer for rainy day is no longer there so when we have a severe recession like we are in now, our savings essentially have been consumed,” he said.

This ability of middle America to borrow over the last two decades has created the appearance of a “less risky and a safer” U.S. economy, and people in turn have changed behaviors and saved less, Petersen said.

Whereas the average middle American in the 1960s put money in a savings or checking account, today people put it in the stock market, “which is good when it goes up, but a disaster when it collapses because that wealth disappears,” Petersen said.

The shady business policies that worked so well in a capitalism of growth and short time self adjustments when “easy” business was considered kicking off and maintaining economic development has begun provoking negative impact under the new conditions; the lack of business laws and personal liability for the risk management, and the deregulated contract laws is not anymore spearing such economic growth and in the opposite:

Late Payments – A Serious Problem for Small Businesses By incisiveleads

A recent study has shown that more than half the small businesses in theUK have to delay payments to suppliers and other parties after being victims of late payment themselves. If you are a small business owner who has been at the receiving end of a customer who keeps deferring his payments, you know how that can disrupt your cash flow. Cracking down on late payments is not easy either, because most small businesses have few clients to start with and have to keep them happy.
Well, there is no foolproof way to ensure you get payments on time, but that does not mean you are completely helpless. One basic rule is to print all terms and conditions on your invoices so there is no misunderstanding between you and the customer. Any delay in payments should be immediately followed up, so ensure you have a point of contact that is always available. The Late Payment of Commercial Debts (Interest) Act of 1998 also allows you to charge an interest on late payments, but be sure to inform the defaulter that you will be charging an interest. Any payment becomes ‘late’ beyond thirty days of the initial payment period, even if nothing was specifically mentioned in the agreement with the client.

However, late payments will happen some time or the other, and as a small business you need the right tools to tide you over a period of financial crisis. If you have a cash flow problem and a bunch of unpaid invoices, you should go for invoice factoring. There are quite a few factoring companies who you can approach, and at our website you can get factoring quotes for free. All you have to do isclick right here. It makes the process of deciding on a particular factoring company a lot easier.
Incisive business can help your small business in a various ways. To find out how we could assist you in your business activities,click here and visit our website. We can connect you to service providers specializing in business banking, invoice factoring, vehicle tracking and a host of other services.


One of the great joys that men in free societies have long enjoyed is the ability to earn an honest wage for an honest day of work. In particular, the amazing capitalist engine that powered the U.S. economy for decade after decade greatly rewarded the incredible hard work and industriousness of the American people. America was known as the land of opportunity, and we built the largest middle class in the history of the world by working incredibly hard. But today, all of that is fundamentally changing. Thanks to rapid advances in technology, and thanks to the globalization of the work force, the labor of American workers is rapidly losing value. Automation, robotics and computers have made many jobs obsolete. Today one man can do the work that a hundred men used to do. Not only that, but today American workers literally have to compete against workers from all over the globe. Global corporations often find themselves having to choose whether to build a factory in the United States or in the third world. But in the third world workers often earn less than 10% of what American workers earn, corporations are often not required to provide any benefits to workers, and there are usually hardly any oppressive government regulations. How can American workers compete against that?



The truth is that labor is now a global commodity. How can an American worker compete against a desperate, half-starving worker in the third world that will work like mad for a dollar an hour?

Though neither by not responding to the very important Environmental concerns and quickly exhausting Earth resources, nor to the poor Wealth Distribution and Redistribution of a deregulated Capitalism that prompted mass Fiscal shortages and poverty proved feasible to get any country out of the Last Global Recession.

  • The Boston GlobeThe coming catastropheUnder a cuts-only approach, Social Security recipients would see their cost-of-living adjustments reduced. Medicare premiums would rise, as would the public pension retirement age. The Pentagon would have almost no money for new arms systems or for Afghanistan-scale military operations. All other spending would have to be lowered as a share of GDP. If we simply tax our way out of the problem, Penner said, the total federal tax burden would increase by 50 percent by 2040. Assuming income tax rates rose in tandem until the top rate took half of an upper earner’s income, we’d also need a value-added tax that ramped up to 7.7 percent by that date. Further, Social Security and Medicare taxes would also have to rise. A fiscal cons”


It (the last Global Recession) showed to anyone that if Governments of the Most Developed Nations of US and EU did not intervene by expanding Monetary Quantities (through accumulation of high National debt), pouring capital into Financial Institutions (such as Fannie Mae, Freddy Mac, and AIG) and even financing Individual Businesses (such as GM) their Economies and even the Global Economy could have collapsed under the pressure of the bust after huge Real Estate over-capitalization succeeded in “Trickle-down” Capitalism’s “freedom” of speculations of deregulated business and financial structures, the inadequate system of wealth distribution unable to sustain and raise “demand”.

Berlin increases loan guarantees for troubled lender

  • A German government banking fund is providing an extra 10 billion euros in protection to state-owned bank Hypo Real Estate. The new guarantee comes as markets grow more sensitive about exposure to government debt.

    German nationalized bank Hypo Real Estate has received an extra 10 billion euros ($12.3 billion) in public loan guarantees to protect it from renewed market turbulence.

    The German government’s bank rescue fund SoFFin said on Friday that it was extending its guarantee level to 103.5 billion euros because of “the current situation on financial markets.”

    Fund head Hannes Rehm said that the bank required the guarantees as it carried out a restructuring program.

    Any failure of that restructuring process “would have huge consequences for the German economy,”


Other reason and not the least important for the deadly Global Recession of 2007-2009 could be considered the exodus of Industrial Production and related Capital Investment from the Most Developed Countries and Markets such as US and EU into China and India.


  • Xinjiang attracts nearly 13 billion yuan of external investments in Q1“External investments have played a crucial role in spurring economic growth in Xinjiang Uighur Autonomous Region. Xinjiang attracted nearly 13 billion yuan of external investments in the first quarter of 2010, up nearly 46 percent from last year, marking the highest quarterly growth rate of paid-in investments since the global financial crisis.”



In the past, Social expenses where contra productive for maintaining Economic growth, thus Economies of most socialized countries such as of these of the Eastern Block and then China and India (of the Early and Mid Sixties, Seventies) were not able to keep up enough “supply” to balance the “demand” for goods and services, however with the ongoing Globalization and rising Productivity, supported with huge Capital the system of Social Wealth Distribution is becoming more economically adequate as the economies of China, France, Germany, and in its own ways Japan have showed. These countries were able to overcome the Global Recession by having better then US Social Systems for Wealth Distribution.

After the fall of the Eastern Block and the China’s entering into WTO the Globalization stepped on to establish economic conditions for incredibly fast industrialization of China and now of India; very accessible and easy movable highly technologically advanced industrial equipment for manufacturing combined with already highly capitalized US financial markets leering for ROI found prospective on vastly populated Chinese marketplace (of educated and skilled labor) to move industrial production, outsource and invest huge capital into industrial production and related technologies.


  • India’s Rising Thirst
    UCLA economics historian Robert Brenner makes the case that the current economic unrest is due to global overcapacity and not financial shenanigans. Essentially, he believes the world is able to produce far more goods than it logically needs. As a result, profits will continue to decline until a permanent solution is found to remedy this overcapacity. What are investors to do? One strategy is to find companies participating in markets with a pent-up demand for a product or service. A good example is India and the liquor trade. According to United Spirits, which is the second largest company of its kind in the world, over 50% of India’s 1.2 billion population has yet to reach legal drinking age. You don’t have to be a genius to see the unlimited potential of selling liquor in India. If only 10% of those currently underage take to drinking, we’re talking about 60 million people. That’s almost twice the population of Canada. We’ll look at what public companies are doing in the world’s second most populated country.
    US, China announce anti-dumping steps (AP) — BEIJING – The United States and China have announced new anti-dumping steps against each other over aluminum, nylon and optical fiber, possibly reviving strains over trade and currency that had eased in recent weeks.”


In the Sixties and Seventies a similar to the Chinese and Indian industrialization was experienced by Germany and Japan, however the vastness of the Chinese and Indian Economies and Marketplaces were not remotely matched by German and Japanese Economies and Marketplaces therefore to suggest that most recent Globalization and Industrialization was ever historically experienced is not feasible.


What really changed in the 21st Century is a first time experience of Vast Marketplaces of China and India’s Economies joining US, Germany and Japan into a Global industrial production, but because China and India are vast and with educated inexpensive labor-force, and most important with a very practical Confucian system of Economics mixing Capitalism, Socialism and even Communism systems of Economics (however comes: whatever goes)


These “system-internal” organizations can be distinguished from their “system-external” counterparts not only because they number among the state and collective forms of ownership, but also because they assume numerous socioeconomic and work-related functions in order to attain various objectives.the majority of political, economic, social, and work-related resources as well are also redistributed via the work units. Monopolistic control and distribution of various resources in conjunction with a corresponding attitude of expectation in the unit””s members may provide individuals with a sense of security and assurance, but at the same time create a strong dependence on the respective work unit. Thus mechanisms for social integration as well as social control are established. In other words, authority is exercised on the basis of monoplistic control and distribution of resources; this makes it possible for the will of the authority to be imposed on material, political, and ideological levels, and for obedience to be compelled. In contrast, “systemexternal” organizations must use the persuasive capacities usual for that culture as well as legal means as the main ways of imposing the will of the authority.

China will adjust its monetary policy in accordance with changes of economic indicators and feedbacks from policy implementation, said central bank governor Zhou Xiaochuan Saturday.
Zhou made the remarks at a press conference held on the sidelines of the annual session of the National People’s Congress (NPC), the country’s top legislature.
China targets a rise of consumer price of around 3 percent this year, according to the government work report delivered by Premier Wen Jiabao Friday.
“It’s difficult for us to anticipate all the possible scenarios and changes in indicators. Therefore, our plicy will be adjusted according to changes in economic indicators and feedbacks from implementation,” said Zhou.“We are going to continue with a moderately easy monetary policy but at the same time closely follow inflation and changes in other economic indicators,” he said, noting that inflation control will be very complicated this year.China will enhance the focus and flexibility of the policy according to new conditions and strike a balance between inflation expectation management and maintaining a sound growth, he said.”

these countries are manipulating markets to maintain sustained development and they are succeeding on an unimaginable scale.
Peg is dead as China vows yuan flexibility before G20 “This is an important move as it signals recognition by Chinese officials that a more flexible exchange rate is in China’s own interest and also acknowledges its responsibility to the international community,” said Eswar Prasad, a former head of the International Monetary Fund’s China division. China has long said it would not bow to international pressure over its currency, and the central bank went out of its way to dampen expectations for any big yuan rise.
“We believe this is a positive gesture, suggesting the yuan will soon resume its appreciation against the dollar,” said Goldman Sachs economists Yu Song and Helen Qiao.The news could also ease fears of a trade dispute between the United States and China at a delicate time for the world economy and may propel world stocks markets higher on Monday.It was clear that China intended its announcement — published in English at around the same time as Chinese, a departure from usual practice — to mark the end of the yuan’s de facto peg to the dollar. That had been defended as a special protection policy during the global financial crisis.”The global economy is gradually recovering. The recovery and upturn of the Chinese economy has become more solid with enhanced economic stability,” the Chinese central bank said in a statement on its website.”It is desirable to proceed further with reform of RMB exchange rate regime and increase the RMB exchange rate flexibility,” it said.China has held the yuan at roughly 6.83 to the dollar since July 2008 in an attempt to insulate the fastest-growing major economy from the turmoil sparked by the U.S. credit crunch.

  • 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.
  • Frequency of interest rate the central bank statement touched a sensitive nerve point large differences speculation“Zhou Xiaochuan at the International Monetary and Financial Committee meeting made the following statements. He said China will make comprehensive use of monetary, fiscal and other policy tools, pay close attention to price movements and to manage inflation expectations, and effectively prevent and resolve all potential systemic risk.”

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.


  • 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?


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 Worlds short term history: once mostly agriculturally driven GDP changed into mostly industrial production driven GDP, now to change into mostly “artificially” balanced “Demand-to-Supply” Market Economics GDP).


(For “parameters” see my research “Philosophy of the Economy”)


If these new developments of Globalization have harmful effect on the Most Developed Countries of North America, France, Germany and Japan to the rest of the World their effect is deadly: rising national debt or genuine poverty are everywhere: Latin Americas, Africa, Eastern Europe, and elsewhere;



  • Credit Swaps at Record High as Greek Debt Crisis Infects Europe“April 27 (Bloomberg) — Credit-default swaps on European sovereign debt surged to records on concern that Greece’s fiscal crisis is starting to hurt the borrowing ability of indebted nations throughout the region. Contracts tied to Greek government bonds climbed 54 basis points to 764, Portugal rose 38 basis points to 349 and Spain increased 16 basis points to 204, according to CMA DataVision. Yields on Greek two-year notes surged above 15 percent, the highest since at least 1998, on concern bondholders will be forced to take losses as the country grapples with the highest debt ratios in the European Union.
  • IMF warns against Japan’s fiscal deterioration“WASHINGTON — A top official of the International Monetary Fund on Sunday warned against rising vulnerability in Japan’s fiscal conditions amid snowballing public debts and called for an accelerated effort to put the nation’s finances in order. ‘‘Although Japan’s problem should not be treated in the same way as the Greece debt crisis, its fiscal vulnerability is rising fairly high,’’ IMF Deputy Managing Director Naoyuki Shinohara said in an interview with Kyodo News.” Japanese fiscal deficits have been financed by the nation’s high savings so far, but the pace of fiscal deterioration is ‘‘pretty high,’’ Shinohara said.”
  • Greek budget deficit 13.6 percent of GDP in 2009“(AP) — LONDON – Financially-stricken Greece had an even bigger budget deficit for 2009 than previously thought, official figures showed Thursday-at a time the country is considering whether to tap a bailout facility from its 15 partners in the eurozone and the International Monetary Fund.”


Greece, Portugal, Spain, and Bulgaria are among many economically struggling to couple with ever lack of Fiscal and Monetary quantities countries: to maintain the rising productivity of Germany, Japan and China or to industrialize themselves is just futile so they are cursed to high National Debt like Greece, Portugal and Spain or to high Poverty like Bulgaria whose Government was “hired” by the World Bank and IMF to maintain strict financial order:


  • World Bank, IMF end Spring Meetings with solid step in voice reform“The World Bank and the International Monetary Fund (IMF) ended their Spring Meetings in Washington on Sunday, with a solid step in the long-expected voice reform, a cautious note on exit strategy and a call for global cooperation amid uncertain recovery prospects. STRIDES IN VOICE REFORM The meetings approved a plan to increase the developing countries’ voting power in the International Bank for Reconstruction and Development (IBRD) by 3.13 percentage points to 47.19 percent, representing a total shift of 4.59 percent to developing and transition countries since 2008.”

  • Rating Agency Data Aided Wall Street in Mortgage Deals“In essence, banks started with the answers and worked backward, reverse-engineering top-flight ratings for investments that were, in some cases, riskier than ratings suggested, according to former agency employees. The major credit rating agencies, Moody’s, Standard & Poor’s and Fitch, drew renewed criticism on Friday on Capitol Hill for failing to warn of the dangers posed by complex investments like the one that has drawn Goldman Sachs into a legal whirlwind. But while the agencies have come under fire before, the extent to which they collaborated with Wall Street banks has drawn less notice.


  • U.S., EU call on Tokyo to ensure fair competition against Japan Post TOKYO —
    “The Japanese government has received a letter from the United States ambassador and his European Union counterpart calling on Tokyo to ensure fair competition when revising the nation’s postal privatization plan, Chief Cabinet Secretary Hirofumi Hirano said Friday. In the letter, U.S. Ambassador to Japan John Roos and Hugh Richardson, ambassador and head of the delegation of the European Commission in Japan, are believed to have claimed that Tokyo’s plan on raising the deposit cap on Japan Post Holdings Co’s banking unit may breach World Trade Organization agreements.”
    Commentary: This is very suspicious to say the least. As the international criminal bankster gangsters enrich themselves by creating havoc around the world(Greece, Ireland, Iceland, Spain, Italy, Portugal, US,)and get countries under their control, a national safe haven for savings is very important.US ans EU are claiming unfair competition because Japan wants to enable a safe haven for people’s savings. Japan, hold strong to your national sovereignty, do not let these criminal scumbags and there New World Order agenda in. World Trade Organization creating problems and enriching those at the top through neo-mercantilism.”



However neither of these two approaches (the one that Governments keep raising National Debt nor the one which Governments maintain strict Budgetary austerity) happen to bring “prosperity” to these countries: “high deficit” or “financial austerity” both are not going to make Spain, Portugal and Greece nor Bulgaria “industrial powers” thus they could cover their ever arising Social Expenses and Infrastructural Deterioration to ever shrinking Fiscal Reserves.

  • Profit of Bulgarian Banks Down by 37% in 2010 Q1 “The profit generated by the Bulgarian banking system in the first quarter of 2010 amounts to BGN 170 M, which is a 37.2% drop year-on-year. At the same time, however, the profit of the Bulgarian banks grew by 7.5% in January-March 2010 compared to the last quarter of 2009, showed data of the Bulgarian National Bank released Thursday.
  • Fed chief: Joblessness, housing still problematic Despite a more stabilized economy, he says, the U.S. is “far from being out of the woods.” “WASHINGTON — Problems in the housing market and high unemployment are the biggest economic challenges the nation faces, Federal Reserve Chairman Ben Bernanke said Wednesday. After suffering through the worst recession since the 1930s, the economy seems to have stabilized and is growing again, Bernanke said. But he warned: “We are far from being out of the woods. Many Americans are still grappling with unemployment or foreclosure or both.” In prepared remarks to business people in Dallas, Bernanke said he saw no evidence of a “sustained recovery” in the housing market, noting that foreclosures keep rising. Commercial real estate remains a trouble spot, too. The toughest problems are in the job market. Even though layoffs have slowed, hiring is “very weak,” Bernanke said. He noted that unemployment, now at 9.7 percent, is still close to its highest levels since the early 1980s.”
  • ADDRESSING THE PARALYZED HOUSING MARKET
    “Some in the US (especially the democrats) have been calling for a housing stimulus bill that will help the struggling home owners stay in their homes and also stop the house prices from falling further. President Obama recently announced an expected plan to fight a deepening housing crisis by committing up to US 275 billion to stop the wave of foreclosures sweeping the US. The plan aims to help around 9 million American families. Under the proposed plan a US 75 billion fund will be formed to reduce the monthly payments for homeowners and provide them a buffer of up to $ 6,000 against any decline in the value of the houses. The treasury will also agree to double its financial aid to Fannie Mae and Freddie Mac enabling them to play a bigger role in supporting the housing sector. The aim is obviously to increase the confidence in Fannie and Freddie ensuring the strength and security of the mortgage market and to help maintain mortgage affordability.
    G20 sounds warning note over new bank rules “One of the lessons of the crisis is that facing global challenges we need to have global answers,” IMF Managing Director Dominique Strauss-Kahn told the Romanian parliament during a flying visit to Bucharest. “This lesson is about to be lost,” he said. The IMF chief said individual countries were working on new regulations and creating new supervisory bodies. “The only problem is, they don’t fit together,” he added. The G20’s steering countries said in a letter to all group members that governments must recommit and deliver on reforms they agreed to in Pittsburgh.”We all have a mutual responsibility to deliver on all our commitments to address the weaknesses that led to the financial crisis,” the letter said.”This will require that we maintain our vigilance to address the required reforms and guard against complacency as our economies recover,” it added. Bank of England director of financial stability Andrew Haldane said it is possible that no amount of capital or liquidity will be enough to totally shield taxpayers as profit incentives may place risk one step beyond regulation. “That means banking reform may need to look beyond regulation to the underlying structure of finance if we are not to risk another sparrow toppling the dominos,” Haldane said. PAY RULES PATCHY But G20 leaders said there can be no let-up on efforts to agree a new set of bank capital and liquidity rules — dubbed Basel III — for implementation by the end of 2012. They singled out the need to still include a leverage ratio or cap in Basel III as some countries like France have expressed concerns about its impact. The letter also said all countries must have adopted the existing Basel II bank capital framework by 2011, a reminder to the United States which has yet to implement it in full. They also reiterated the need to regulate over-the-counter derivatives by the end of 2012 and implement the G20’s principles aimed at curbing big bonuses for excessive risk- taking at banks. The Financial Stability Board, tasked by the G20 to implement its regulatory pledges, said several countries have yet to fully apply the remuneration principles. They were agreed in part to help quell public outrage at the return of big bonuses in a sector that had to be shored up by taxpayers during the financial crisis. “Firms will need to maintain momentum toward reforming their compensation practices through 2010 and beyond,” FSB Chairman Mario Draghi said. Many of the major financial centers like the United States, Britain, Germany, France, Japan and Hong Kong have taken the regulatory or supervisory steps needed to implement the code. Argentina, Brazil, Singapore, India, Indonesia, Mexico, Russia and Turkey lag, the FSB said.
  • Sarkozy urges new world finance rules in US speech“Sarkozy wants the United States to champion firm regulations of financial systems, from tax havens to hedge funds. His ideas were shared by many in the immediate wake of the financial crisis but momentum for dramatic changes has since slowed. “We should invent a new global monetary order,” he said Monday, insisting that new regulations would “save capitalism.”



Impossibility for many countries to industrialize joined by constant lack of capital means “no solution” under the control of the World Lenders (World Bank. IMF, WTO) that “control” their borrowers tightly.


Could not be denied that some of these less developed countries might have corruption, improper bureaucracy, insufficient markets, and etc. but whatever WB and IMF could present as reasonable for lack of development: the ongoing processes of Fiscal shortages for these and many other countries are to be unavoidable: and because most of the World economies are 80%+ based on consumption these countries lower life standards prompt weak market demand boomeranging back to the Most Developed Industrial Countries’ export and so it goes on and on.

Unless in the Past, these new conditions of decreasing industrial production, following consumption and demand affect US, many countries in EU, and the rest of the World in a very harmful ways seen at the Last Global Recession.



US


  • U.S. rebound on good footing: Fed’s Fisher (Reuters) – The U.S. economic recovery is gathering speed as business activity picks up pace, despite lingering weakness in employment, Dallas Federal Reserve Bank President Richard Fisher said on Tuesday.


  • Alternatives to appreciating the Chinese yuan “Recent debate has focused on how to increase US exports and savings and increase Chinese imports and consumption in order to correct the trade imbalance between the US and China. In America in particular, focus has been placed on Chinese exchange rate policy. American leaders would like the RMB to appreciate significantly and quickly. They hope that this would lead to an increase in US exports and employment.”


  • H-man – Thursday March 04, 2010 08:06AM EST “I was a manufacturing executive for the past 30 years. I directly observed our manufacturing base disassembled and outsourced. The pace only increased and unfortunately continues unabated. The manufacturing jobs sent out of the country were much better paying than the service jobs that replaced them. The bottom line is now Americans can no longer just “BUY AMERICAN” and don’t have the $ to do so anyway. Greed (Corporate, Political, Individual) has killed the Amercian Dream.


  • The New Poor “Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed. Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.”

  • America tied-up by Record Debt
    “Smoothing out the economy’s ups and downs, however, has a cost which is now tying America’s hands. At this time when fears of a double-dip recession are rising, it’s an obvious moment for the government to apply more stimulus spending as it has in the past. But the U.S. finds itself more leveraged than ever before, limiting its options.”
    Small businesses need a disaster plan — and plan B(AP) — NEW YORK – Small business owners in the Upper Midwest have just gone through a disaster preparation drill as the Red River rose and threatened to repeat last year’s catastrophic flooding. The region dodged a bullet this time, but more floods may well come, and other parts of the country could see tornadoes and hurricanes. Disaster preparation is one of those tasks that many small business owners say they’ll get around to, soon. But it often gets pushed down the priority list, especially when a company is focused on bringing in new business or improving cash flow.




President Obama is doing a lot of positive economic actions in attempt to revive US economy: currently signed in laws Health Reform, imposed support for homeowners mortgage defaults, financing SMB and helping Student Financing are moves into a right direction. In regard Wealth Distribution by following the last Global Recession facts are showing indiscriminate link between using Social and Infrastructural Expenses as Economic “tools” for balancing “demand-to-supply” ratios. Such trend could be changed by using an enhanced Stock and Commodities Exchanges regulated structures that would be sufficiently allowing Small to Medium Investors to invest Globally and to be able to profit from thus going Global growth: the ROI (return on investment) such SMI (small and medium investors) could become Market driven ways for Wealth Distribution; Other Market related ways for such Wealth Distribution could be by imposing common Global Markets’ regulations (for making SMB equally competitive to the Large International Corporations) , enhancing Business Contracts and Bonding Laws, enhancing Intellectual Properties laws and Risk Management Personal Liability laws to prompt SMB Global expansion.


President Obama has a few key economic messages for the world: China needs to buy more stuff from other countries; Europe (and the U.S.) shouldn’t be too hasty in the push for austerity; and banks need to hold bigger rainy-day funds.

Those are the messages (some implicit, some explicit) in this letter to world leaders, written ahead of the upcoming G-20 summit and obtained by the Washington Post.

Here are a few of the key passages:

The letter doesn’t mention China by name. But it includes a passage that clearly applies to China.

For years, the U.S. has imported more than it’s exported, while China has done the reverse. Obama writes:

A strong and sustainable global recovery needs to be built on balanced global demand. … I am concerned by weak private sector demand and continued heavy reliance on exports by some countries with already large external surpluses.

This is followed by a bit that’s aimed at China’s policy of tying its currency to the dollar. U.S. officials have called for China to allow the value of its currency to fluctuate. That would make U.S. goods cheaper for Chinese consumers. (It would also make Chinese goods more expensive for U.S. consumers.)

… I also want to underscore that market-determined exchange rates are essential to global economic vitality. The signals that flexible exchange rates send are necessary to support a strong and balanced global economy.

Elsewhere in the letter, Obama addresses Europe and the U.S., when he argues that governments shouldn’t cut spending too quickly:

We need to commit to fiscal adjustments that stabilize debt-to-GDP ratios at appropriate levels over the medium term. … But … we must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.

Finally, he argues for a few reforms of the global financial system. This section of the letter is pretty general.

On one key subject — how much money banks should hold in reserve, and what form that money should take — Obama basically says banks should hold bigger cushions, but doesn’t get into specifics:

We want our negotiators to reach agreement on a new capital framework … that will include higher common equity requirements, tighter definitions of capital, a simple mandatory leverage ratio, and appropriate liquidity requirements.

Update: Thanks to the commenters who pointed out the typos in the post. They’ve been fixed.



mses-2010-thumb.jpgLack of funds & late payments force MSEs to perform billow capacity


Dearths of funds and delayed payments have forced the Micro and Small Enterprise (MSE) sector to perform below capacity, a study conducted by the industry lobby ASSOCHAM said Sunday. “Most of the MSEs are running at close to 70 percent capacity utilization due to paucity of funds, arising out of unduly delayed payment of their dues, resulting in serious suffocation,” says the ASSOCHAM study.

There is a Global trend toward enhancing Personal Liability laws for Corporate Risk Management. (article: “Quantum Economics-Philosophy of The Economy: Corporate and Business Structures in Market Economics”)
  • Mutual fund workers get whistle-blower cover: judge(Reuters) – A U.S. law protecting whistle-blowers at publicly traded companies also covers mutual fund firms, a federal judge ruled in a case involving two former Fidelity Investments employees.


Monetary and Fiscal Policies are to be adjusted to the Globalization and rising Productivity by Global Centralized Banking System


EU

  • Greek turmoil puts pressure on markets as loan costs soar: “The yield or return on Greek 10-year bonds topped 7.5 percent for the first time since Athens adopted the euro in 2001 but later came back to 7.35 percent — still more than double the rate on the German 10-year bond at 3.09 percent. Finance Minister George Papaconstantinou said Athens “is borrowing and will keep on borrowing” despite the record high costs imposed by financial markets.
  • Ireland hits banks with hefty penalty, to inject billions (Reuters) – Ireland hit its banks with a hefty penalty to take loans off their hands and said they needed at least 22 billion euros ($30 billion) in extra funds to recover from a property collapse that was worse than feared.
  • U.S. Stocks Retreat as Iceland, Greece Temper Economic Data March 30 (Bloomberg) — U.S. stocks retreated as concern that deteriorating government finances will derail the global economic recovery overshadowed better-than-estimated reports on American consumer confidence and home prices. Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. lost more than 1.6 percent as Standard & Poor’s cut Iceland’s credit rating and Greece failed to sell half the 12-year bonds it offered. Exxon Mobil Corp. and Chevron Corp. retreated as oil declined after yesterday’s 2.7 percent rally. Stocks also fell after London-based Gartmore Group Ltd. suspended the manager of its two biggest hedge funds amid an investigation.
  • Ten Years of Pension Reform in Bulgaria: Achievements and Challenges These are difficult times for Bulgaria, Europe and the world. For more than ten years the World Bank in Bulgaria has been a steady partner, supporting reforms in the area of social security and pensions, both in terms of investing in the modernization of the social security administration and in terms of analytical support to ensure fiscal sustainability of the pension system – and we are delighted to respond to the Minister’s request for continued support and work with all partners towards an effective, just and sustainable pension system.
  • Government aims to boost sluggish export growth
    ” The Economy Minister rejected recent criticism of Germany’s export boom voiced by his French counterpart Christine Lagarde. Last week Lagarde argued that Germany’s huge trade surpluses with countries in Europe had created imbalances that were partly responsible for the budget problems in Greece and other EU nations.”Such criticism is unfounded,” Bruederle said. “Germany’s exports are increasingly becoming a motor for the economies of other European Union countries to overcome the crisis.”
  • Greece: It’s a Deal
    France and Germany have brokered an emergency financing mechanism to help Greece, following extensive bilateral negotiations between the two sides earlier on Thursday (25 March). Under the deal, approved by eurozone leaders after late evening talks, a funding package will be created, made up of voluntary contributions from euro area countries and cash from the International Monetary Fund.
    The Pain in Spain: An Economy in Crisis “JesusManson323 Spain is a leech economy. Much of its “new economy” is just Bernie Madoff-style banking sucking blood out of Latin America. It really says something that Spain did NOT start Europe’s Industrial Revolution, despite being an early colonial power that imported massive amounts of gold and silver from North/South America.”





  • Some Latin Currencies May Be Too Strong
    “That will be a big challenge, because right now the region gets only 2 percent of the world’s overall investments in research and development, compared with 28 percent received by Asian countries, according to RICYT, a region-wide science and technology research network. While China invests 1.4 percent of its gross domestic product in research and development, Brazil is investing 1 percent, Argentina 0.6 percent, Mexico 0.4 percent and Colombia and Peru 0.1 percent, respectively, RICYT says. Even more worrisome, the bulk of Latin America’s investments in research and development are state-funded projects on theoretical issues of no commercial value. Consider this: While South Korea registered 80,000 patents worldwide last year, Brazil registered only 580, Mexico 330, and Argentina 80, according to the World Intellectual Property Organization.


Industrial Production moved to the Fast Developing Vast Countries as China and India




China



  • India, China to Reap Reward of Global Power Shift, “Roubini SaysThe size of the emerging markets is going to become larger and larger, and it’s going to become greater than the GDP of the United States,” Roubini said. “It may take 20 to 30 years, depending on relative economic growth, but the process will occur” and “we should get used to it.”As the U.S., Europe and Japan struggle to recover from the worst recession since World War II, India’s main stock-market index has soared over the last 12 months and its economy may grow 8.2 percent in the year starting April 1, the fastest in two years, the Finance Ministry said in February. Chinese gross domestic product grew 10.7 percent in the three months through December, the quickest pace since the fourth quarter of 2007.“China has been a hare and India a tortoise but growth is accelerating in India,” Roubini said. Emerging markets are set for a V-shaped recovery, even as India still has a “massive” need for human and financial capital as well as economic-policy changes to achieve double-digit growth like China, he said.
  • It’s China’s World We’re Just Living in It “It’s easy to forget that big international bodies like the IMF and the World Bank were created by just a few nations, led by the United States. These economic organizations have global reach, but that globe used to be dominated by the American superpower, and their policies were suffused with U.S. values. When Beijing was a small-stakes player its leaders didn’t always like the setup, but they lived with it, even facing down fierce grassroots opposition to join the World Trade Organization. But now China has more worldwide clout, and public opinion at home has taken on a combative (and sometimes downright jingoistic) tone. So with one eye on China’s national interests and the other on domestic critics accusing the regime of “coddling” the West, Beijing has begun to push harder to reshape international systems to make them more China-friendly (and, in the process, to raise the regime’s chances of survival).
  • China Exports Soar 45% GrowthCHINA reported Wednesday exports soared for the third straight month in February. The fastest pace in three years as most analysts believe it could leave Beijing more open to a stronger yuan. Overseas shipments grew 45.7 % on-year last month to US$94.5 billion, the China customs bureau announced. The consistent data cements a turnaround that began in December when a year-long”


The success of China and India is not because of the cheap labor only: such cheap labor could be found around the Globe, neither it is because of the vast population only: as a whole South America counts about 400M but could not succeed consistent economic growth, nor because of “right time in history”: for the last 20 years number of recessions have plagued the World Economy (1999,2008 deadliest ), hence, why these countries succeeded in economic growth even when recessions were ongoing?

Countries with very strong Social policies and Wealth distribution and redistribution? – Maybe just because in the modern Capitalism the biggest problem is Wealth distribution and redistribution, maybe because they ignored following the taboos of “trickle-down” economics and used flexible economic policies “as it comes as it goes”, maybe because the Great Industrial Nations of US, Japan and some in EU were not flexible enough in adjusting their Economic policies to succeed Economics growth, maybe because the Big Internationals and Big Inverstors moved to China and India as a better choice: ther consistent at the same time flexible economic policies, social stability, vast population, work ethics and discipline, or finally, may be because China and India pretty much ignored the Parish Club, the World Bank and the IMF in the ways they conducted their Economic Policies: supported by strong foreign investments they changed the rules of the economic game “as it comes: as it goes”: example is the devaluation of the Chinese Currency, the strong business and financial laws against Corporate Risk Management fraud, and etc.




India



  • “Industrial output in February grew at a slower rate of 15.1 percent,
    official data showed on Monday. The production in January was 16.7 percent. The index of industrial production (IIP), which measures factory output, stood at 10.1 percent during April 2009-February 2010 against 3 percent in the same period of 2008-09, data released by the Central Statistical Organisation showed. While basic goods grew 8.4 percent during the period under review, capital goods grew 44.4 percent. Consumer durables and consumer non-durables recorded growth of 29.9 percent and 2.3 percent respectively.”

shishir-Jaipuria-citi-THMB.jpg‘Extension of interest subvention for garment sector by April’
Namrata Kath Hazarika | 30 Mar, 2010
The extension of two percent interest subvention to the garment sector should be given by April 2010
Read more…. » Many of the govt. schemes for MSMEs are irrelevant: Anil Bhardwaj » Budget allocation would address the additional needs of SMEs: H.P.Kumar » ‘Increase in rural demand will accelerate growth of SMEs’ » ‘Hardware + Tools exhibition a solid platform for industry players’ » Consolidation need of the hour for SMEs in textile industry

  • ‘Indo-Canada trade standing at USD 4 bn annually’“He also mentioned that India stands out in the world, as an emerging market with a strong democratic base, fully functional in English – the worldwide accepted business language, as a country where the rule of law pervades and as a country that survived the economic recession. During the interactive session with Canadian business associations – Canadian Council of Chief Executives and Canada-India Business Council, organized by CII, it was widely recognized that India’s growing middle class and nation wide policies for inclusive growth present tremendous opportunity for participation by Canadian companies.


  • Govt. clears 23 foreign direct investment proposals“Among the approved proposals were Tikona Digital Network’s Rs. 1,142.21 crore offer for rasing the FDI to 74 percent by issue of compulsorily convertible debentures and Pune-based Bharat Forge’s plan to issue warrants worth Rs.576 crore. Opto Circuits India’s proposal to issue convertible warrants worth Rs.376.27 crore and a request by Intel Capital — the Mauritius-based investment arm of the computer chip major Intel — to acquire equity in the Multi Commodity Exchange of India for Rs.66 lakh also received the nod. The government put off decision on several proposals, including the offer of Gurgaon-based S Tel Private Ltd, a joint venture between Chennai-based Shiva Group and Bahrain Telecom, to issue fully paid-up fresh equity shares to undertake the business of providing telecom services in India.


  • Indo-African trade to grow by 22 pc in next two years’ “The bilateral trade between India and Africa is likely to grow by 22 percent in next two years, according to an ASSOCHAM paper released in the capital on Friday. “It is projected that bilateral trade between India and Africa could be around USD 55 billion in 2012 from the current levels of close to USD 45 billion,” said Arun Agarwal, chairman of ASSOCHAM’s Africa Committee.”




The exodus of Capital from North America and E.U. had a deadly effect on their Fiscal Quantities (GDP of any country in the World and the most of Developed Industrialized Nations is based mostly on Industrial Production and Return On Investment ROI mostly from Industrial Production).

Japan, Germany and France succeeded in retaining some of their High Tech Industrial Production but both Japan and Germany among others were overrun by China: Japan as the Biggest World Economy and Germany as the Biggest Industrial Exporter, however Germany, France and Japan have balanced their internal demand by strong Social and Infrastructural Policies much better then many other countries have done it.



Japan


  • Applications for employment adjustment subsidies fall in Feb The government grants subsidies to companies which have opted to maintain employment instead of dismissing workers by shortening the hours they work, for example. The subsidies are to make up for a wage decrease resulting from shorter working hours. The number of workers for whom subsidies were applied came to 1,608,149, down 119,066 from January, the ministry said.

  • The Global Debt Bomb: “Today Japan can borrow all it wants from its own citizens. Over the decades they have dutifully (if mechanically) piled up a $7.7 trillion cache of savings they keep mostly in low-yielding bank deposits. Those savings equal two-thirds of the total household wealth of Germany, France and the U.K. combined, says John Richards, North American head of strategy at RBS”

Japan’s consumer prices continue to fall

By Roland Buerk
BBC News, Tokyo

Japanese exports are rising, but deflation at home is cause for concern

Japan has been in deflation for 12 straight months, figures released by the government show.

Prices fell by 1.2% in February from a year earlier, threatening the country’s recovery from recession.

Japan’s economy has been periodically plagued by deflation since the “lost decade” of the 1990s, which led to years of stagnation.

The prospect that goods will become cheaper in the future makes consumers reluctant to buy today.

This leads to a vicious circle of falling company profits and wages.

Downward trend The latest figures – where the core consumer price index fell by 1.2% – is not as bad as in previous months.


Germany


Euro zone deal points to a more German Europe (Reuters) – The masks have fallen. From now on, we will all be living in a more German Europe, with economic policy driven by Berlin’s hair-shirt export-or-die model. That is the lesson of a deal among euro zone leaders on a financial safety net for debt-stricken Greece, adopted largely on German conditions on Thursday after months of wrangling that battered confidence in the single European currency.” The politics of the EU are undergoing a fundamental change at present, with Germany becoming increasingly willing to cast off the shackles of the past and make its voice heard,” said RBS analyst Timothy Ash in a research note.

  • China And Germany Unite To Impose Global Deflation Chindia, invented by Jairam Ramesh, an Indian politician, to describe the composite new Asian giant. Let me introduce you to Chermany, a composite of the world’s biggest net exporters: China, with a forecast current account surplus of $291bn this year and Germany, with a forecast surplus of $187bn (see chart).”
  • MF: German economy to grow faster than expected The International Monetary Fund is cautiously optimistic for Europe’s biggest economy this year. It expects the German economy to expand by 1.5 percent in 2010. Global growth is estimated at 3.9 percent. (26.01.2010
  • German economy records biggest slump in post-war history The Federal Statistics Office announced on Wednesday that Germany’s largely export-driven economy recorded its biggest-ever decline since World War II last year. The country also breached the EU’s deficit limit. (13.01.2010)
Audios and videos on the topic

· The new OECD survey (26.03.2010)

· The OECD offers a cautious forecast for Germany in its 2010 survey





France




  • Sarkozy ready to trigger EU ‘crisis’ to protect farm subsidies “President Nicolas Sarkozy addressed the nation Wednesday for the first time since his party’s defeat in regional elections. He vowed to push on with reforms and said that he is ready to provoke a “crisis” in the EU to defend French farm subsidies.”

Slight upturn for Paris region but no new jobs yet

“2010 will be a slightly better year than 2009 for industry and service sector companies in the Ile-de-France region which includes Paris and the surrounding area. According to the Bank of France’s annual report – based on a survey of some 2,000 companies – 2009 was a year of stark decline in both sectors. But for 2010, companies are expecting business volume to rise again – slowly but surely.

“The Ile-de-France region is particularly dependent on big companies which have a high degree of international exposure, and it has suffered” from the global crisis, the Bank of France says in its report.”

Change in performance per sector (2009)

Intermediate goods (wood, rubber, paper etc): -19.7 %
Automobiles: -15.2 %
Plant and equipment (electronics, aeronautic, rail etc.): +0.5 %

But it expects the region’s industrial activity to see an upsurge of some three per cent in 2010. The companies rely on consumer borrowing to individual households, which has remained stable.

But there was a sharp decline in investment in 2009. Rejecting claims this might hinder growth this year, the bank’s regional director Bernard Tedesco said, “If we’re dealing with full order books, growth can happen quickly. Investment activities have simply been postponed. And never have conditions been as favourable for companies as now, with interest rates at a historic low.“

But the outlook for employment remains grim, according to the report.

In 2009 companies in the region laid off 4.5 per cent of their staff, and another 1.4 per cent are likely to lose their jobs this year.

“Low profits mean that the CEOs are cautious. The job sector will be the last one to grow,” says the report.

Industry and service sector performance (2009 and 2010)

A survey among industry and service sector companies in Ile-de-France

The study was conducted among 1,022 companies from the industrial sector (producers of industrial or electronic machines, textile, automobile, consumer goods), as well as among 947 service sector companies (transport, merchandising, computer engineering, temporary work). In the Ile-de-France region, more than 300,000 people are employed in these two sectors.

Industry:
Business volume: -12.3 % (2009), +3.0 % (2010)
Export volume: -13.6 % (2009), +2.8 % (2010)

Service sector:
Business volume: -5.2 % (2009), +1.7 % (2010)
Export volume: -10.8 %, -5.6 % (2010)

The information and links provided above are to prove that the new trend in Economics differs from the “trickle-down” Capitalism: just because there is not trickle-down of capital to the US market but only trickle-up and trickle-down capital to the Chinese market, also to prove that all tools of economics are to be randomly used “as it comes as: as it goes” as these are used in China and India instead of ideologically used as in US. Pragmatism is about to rule the Science of Economics to the rest of this Century.




Production Economics and Marketism©


Quantum Economics-Philosophy of the Economy


Production (only) based economics tighten its monetary policies and financing guidelines on economic indicators reflecting growth in production (could be agricultural, industrial and partially services). Thus it (production based economics) curtails inflation by preventing economies from harmfully over-expanding monetary supplies. Production based economics are all currently used systems: radical capitalistic (like US, Japan), socio capitalistic (EU, China) and anybody else cracking in between, and communist (Cuba, Venezuela). The Paris Club, World Bank, IMF and WTO (lenders-which capital quantities are coming from the developed capital markets of the developed countries such as US, Great Briton and now China) are establishments that follow the ways of production based economics; these establishments’ policies and lending matrix require tight deficit and budgetary control over borrowers mostly less developed countries and markets; lending is done on relatively high interest rates and borrowers are watched closely; their budgetary policies are scrutinized. Thus borrowers are controlled on a daily basis so borrowers are prevented from wrongfully overextending their budget (social, infrastructural, etc. expenses); the usage of Internet has helped lenders to tighten control over borrowers therefore the countries borrowers have much less flexibilities to avoid this “hug” or spent a few dollars over the limit for Social expenses or fix a bridge or two over the limits set to them by lenders. The brightest of the brightest minds are hired by lenders, these mostly young guys would not spare a thing some time to their own nations if borrowers twist the rules anyhow, they thoroughly believe in the system of production based economics.

Production based economics is a reasonable philosophical conception defined very precisely by Karl Marx in his “Capital-Critique-Political-Economy” and clearly very precisely explains dialectic cyclically self adjustable periods of an economy of Capitalism, which economy in different proportions applys to the economies of Social Capitalism and Communism and overall to any system of economics taught ever after by any educational institution from East to West; when even in Communist economics throughout nationalization of industrial tools of production the people as owners of industries are sharing the profit “equally” instead of big fat capitalists smoking cigars taking the profit, they the people (whatever in reality it means) were reinvesting ROI and enhancing their standard of life ( in reality blah, blah , blah), but still the economics of Communism is a production based economics;

Has the production based economics really worked?

Most definitely: yeas, it worked even by experiencing difficulties such as the Great Depression the production based economics and its following financing and controlling practices were in the foundations of any most developed and developing country and market in the world: from the USA and Germany to Japan, all of these countries and their economies were developed by the system of production based economics: that how they avoided economic crashes, inflation and deflation, that’s how they enhanced their standard of life reaching far better life conditions compare anybody else’s; for any poor country these guys reached the sky…. And they did, but

What new happen that makes production based economics inflexible and inadequate?

Actually, what happen were mostly products and achievements of production based economics:

  • Eastern Block Communist countries change their totalitarian systems and embraced Freedom (which wasn’t a political act but a consequence of inadequate economics: these were the most sensitive to the new developments in a Globalizing marked with constantly rising productivity in the rest of the world: lock of competitiveness knock them off)
  • Almost any country in the world started pushing toward normalizing international relations and opened their markets
  • China become a member of WTO, open Her economy for investment and private enterprises
  • European Union started expanding East and Southeast following aggressive ante-corruption policies in any member country and establishing number of low interest and subsidiary funds for development and promotion of environmentally friendly projects
  • In the USA productivity was raising wild when risk-management and intellectual properties were becoming most powerful weapons too ?!? getting into China market. Capital was concentrating into smallest and smallest percentage of the population, and middleclass income growth after 2000 came to a hold
  • High technologies and concentration of capital were making industrial production and farming much easier to export: start up, expand and enhance very quickly elsewhere in a short time limits
  • Internet allowed people from elsewhere to exchange information and ideas thus making the world a small place; access to self education and new inventions, new marketing strategies and new media approaches
  • Etc

All of the above and many others were the new events and developments brought by the new Globalization some of which (events and developments) are totally experienced for first time, but the most important are the Environmental issues consequence of long years of indiscriminate pollution by most developed and developed countries industrial revolutions. Environmental issues of Global worming are not just concerns but scientifically proven facts that effect anyone living on Earth; production based economics is based on industrial production profit driven therefore high technologies for generation of renewable energies, technologies for cleaning emission of manufacturing plants are very expensive preposition in a highly competitive world: for US practically implementing Environmentally friendly technologies would make for many businesses difficult to compete to China, Russia and India when even without such burthen competition is fierce. Not the least is the widespread poverty around the world in where countries and markets are barely having enough production to feed their populations then to seriously consider adapting expensive Environmentally friendly technologies and working toward better environment.

Production based economics does not use economic tools to deal with most of these new developments:

  • Not all countries in a Globalizing market could become industrial: first, because they cannot compete countries like Germany, US, China and Japan that basically are capable to flood this Global market with manufactured goods; second, if all these countries go through industrial revolutions to become industrialized the pollution would be unbearable to the Earth environment
  • Even very developing countries like China and India should not go throughout industrial revolutions in the old known ways themselves that they could destroy the world easily
  • In the existing financial system of lending no country but the lenders could subsidize their economies if needed to reduce emissions and improve environment (when even these countries as explained could not do it on a large scale to not becoming uncompetitive)
  • Last Global recession showed that deregulated production based “trickle-down” Capitalism did not establish “release valves” for handling over-capitalization neither “preventive regulatory policies” to avoid it: the wild-wild-west trickle-down theory of economics did not estimate that instead to trickle-down the capital went oversees being invested in more stable markets, or just was not invested in man-engaging industries in the US particularly when in there these were not competitive and less profit generating)

What kind of economics could enhance production based economics to address above issues, and make ongoing Globalization possible?

Changes in Western economies are naturally ongoing: governments are financing lending institution and insurance conglomerates, buying shares in manufacturers and subsidizing agricultures…. Governments in most developed countries are doing what they can to save their economies from total collapses and this process will continue in the future in and out, but:

Is this kind of Governmental interferences in markets most helpful to these markets approaches to handle world recessions and are there better ways?

The change of production based economics could be changed possibly by an economics of Marketism based on parameters and economic tools to accumulate over-capitalization, and deal with inflation by using “artificial methods” to avoid recessions, using central banking with allowance to issue capital and lend under low interest rates to a World with better security

Quantum leap must be done by developing and undeveloped countries and markets in order industrial revolutions to be avoided thus Earth Environment be protected from consequential for industrial revolutions pollution.

Quantum leap is possible if economics of Marketism is implemented; the new developments in the world are empowering this new economics by the Rising Productivity and Globalizing Markets because of the free trade and high industrial capabilities of most developed countries and markets inflation is avoidable even when production based economics is not used but free entrepreneurship is not replaced by nightmarish governmental bureaucratization which will be probably unavoidable in future recessions if the old system of economics remains.



21th Century Global Financial System of Market EconomyIn the 21th Century currently existing Global Financial System leaded by US and other Most Developed Nations (incl. China) and managed by the Parish Club, WTO, IMF and the World Bank must change their approaches to apprehend the most recent developments of chronically becoming indebted World, in which except for a very few countries and market as China and India, most of the rest Most Developed Economies as US and GB, Developing Countries as Spain, Portugal and Greece, and Undeveloped Countries as Bulgaria, Rumania and many South American Countries, Asian and African Countries are greatly indebted or very underdeveloped. A Central Banking System is needed to control the global “demand-to-supply” balance by being able to issue capital, instead of the current global financial system which performs more as a “lender”.(SEE: How Globalization affects Countries & Markets” below

Engines of growth

Debt-GDP Ratio's - Major economiesDebt-GDP Ratio’s – Major economies

EU’s economy is contracting now for the last 18 months. The burden of the Welfare State is not reducing. EU’s populations are not scaling down their expectations. Who will pay for these gold-plated services, that Europeans consider is their birthright.

The Chinese+ASEAN economies depend on exports to US and European markets for growth. With these bankrupt economies as customers, the outlook for China+ASEAN is questionable. Middle East depends on US+EU for security, banking, monetary and fiscal management.

That leaves the global economy with Brazil, Africa India and Russia as engines for growth

There have been many indications that the process of running fiscal shortages for many countries cannot be reverse by using current Economics of Production based “trickle-down” Capitalism, because the Production based Economics is generally founded on industrial production that adds the highest percentage to any country GDP (General Domestic Product) and the consequential fiscal reserves for a country or a market to develop most definitely such country following the economics of production must industrialize, or for an industrialized country such must keep being Globally competitive in industrial production to maintain intact its deficit. The Globalization of the market place propelled by the great Capitalization and the rising Productivity have boosted the economies of China and now India to industrialize rapidly, that industrial power added greatly to the current industrialized economies of Japan, Germany, US capacity by how the Global industrial production capacity overall is coming to a point of great concentration of such industrial production into a very few industrialized economies. The possibilities for other small or even big countries to become competitive in industrial production and maintain their fiscal policies and reserves in tact are diminishing.

SEE: “Market Economics”

From the Most Industrialized Economies US is particularly vulnerable under these new Global developments of ongoing exodus of industrial production and capital investment to the Far East. The Capitalism of US Economics is very inept in distributing and redistributing Wealth so to speak the “demand” side of Capitalism correlates the “supply” and works well in a close marketplace in size of US market when “trickle-down” capital first “trickle-up” to concentrate wealth then comes “down” to create industrial production, but than when such “trickle-down” does not go to the US market but to elsewhere the shortage of consumption cannot be avoided, following in not properly balancing “demand-to-supply”, thus, to avoid economic catastrophes US Government steps up with infusing capital into the system: exactly what happen at the last Great Recession of 2007-2009. Also in time of narrowing ROI (Return Of Investment) particularly for the SME (Small & Medium Enterprises) and from the SMI (Small & Medium Investors), in time of Governmental policies promoting and tolerating pro Big Business and Big Investors deregulated “trickle-down” Capitalism which were mostly the only ones benefiting from the ongoing Globalization, the possibilities in such times for occurrences of Economic Bubbles are quite common. The 1999 Stock Exchange Bubble and the 2007 Great Recession are products of appointed lack of Wealth Distribution. Thus become obvious that the Government in situations like that step into actions by infusing capital, save even individual businesses and prompt social distribution: The Healthcare Reform, the Finance Reform, and the US SME Tax Reform are good examples how the system in distress works, though the consequences are up to be seen. It is hard to believe that the US Government could constantly manage the Economy and create business. In the Next Recession the Government will appropriate more function in financing and business that overall is a scary preposition having in mind how inflexible and inept a Government could be.

SEE: “Business Exchange – Market Economy

Environmental pollution and Earth exhaustion of resources under the current production economics based on industrial production mainly is unavoidable, because when even most developed industrialized nations could introduce and follow policies of protecting the environment, or even the developing nations of China and India follow up which is highly doubtful, there are many countries that will try to manage their fiscal shortages by compromising the rules for Environmental protection thus they can bring to their soil industrial production. In the World of ROI mostly from Industrial Production the prices of Environmental protection technologies are making businesses hardly competitive to others that do not implement these. Pollution comes also from cutting and burning woods to farm or from heating with coal, or from driving old autos, or from dispose sewers into open rivers. So to speak, without curbing on the Global poverty can not be ways to curbing on pollution. But to curb on poverty industrialization cannot be used thus the possibilities for saving the World from Environmental disaster by using industrial production are highly unlike.

SEE: “Environmental Issues of Market Economics”

To avoid multiple economic crashes and upheaval, to avoid The Government take over when next recessions, to avoid fiscal shortages and deficit, unemployment and poverty, to avoid Environmental destruction a new system of economics is needed, one that will allow countries to develop without being industrialized.

Is it possible to manage Global development without using current production based economics system?

  • Well the most recent US and any Governments’ infusion of monetary quantities, business involvement and social distribution of wealth is not based on production economics.
  • The Chinese approaches in handling Economy is not production based only economics: their interference in the ways “trickle-down” capital works in the marketplace does not follow Capitalism but is more-like “artificial” flexible usage of economic “tools’.
  • The Greece bailout by the EU and IMF is not “trickle-down” economics; it is an interference with the powers of the Capitalism.
  • There are many more examples of how Governments and organization interfere with freely flowing Capital and therefore using “artificial” methods of economics.

At the moment he mounting debt accumulated by almost any country in the World horrify economists and they predict imminent bust-and-doom (there was a suggestion by some German politicians to Greece to sell some Greek islands, but then funds has been appropriated help Greece). Though economists should be horrified only from high imbalance of “demand-to-supply” ratios, which imbalance provokes inflations and deflations; thus should be the biggest concern to the Global Financial Institutions instead these are fighting deficit and debt: these institution as mentioned above are acting more-like a “lender” then a “controller” these should be. If the Global marketplace is seen in its vastness as a common marketplace a mass industrialization should not be expected and cannot be achieved therefore. Thus, for balancing “demand-to-supply” ratios, the Monetary Policies should be used instead industrializing the entire Earth. Comprehensive Monetary Policies by Global Financial Institutions flexibly using Monetary Quantities as Economic “tools” and Business and Financial Regulations as enhancing business “security” are “the way to Rome” only.

Less Governmental involvement in business, more business laws and regulations on business contracting, business and project bonding, intellectual properties’ laws, risk management personal liability laws, and etc, these the supplements to an appropriate Monetary Policies: because these “regulatory” actions will enhance SME and SMI “security” and make these much more adequate to be financed.

Low interest rate financing and subsidizing are economic “tools” to be used by a Global Financial System in promoting environmentally friendly renewable energies and agriculture, environmental tourism and sustained growth. This new financial system must use commercial banks to invest in countries on project by project basis on set matrix and low margin.

joshua.konov@gmail.com

©Joshua Konov, 2010


https://sites.google.com/site/economicsofmarket/



Is any solution for the mounting debt

Philosophy of Market Economics

The Global financing system at the moment represented and executed by the World Bank, IMF and WTO should act as a controller that balances Global supply-to-demand ratios to avoid Global recessions consequential of such (supply-to-demand) serious imbalance;instead this system works as a stubborn lender that controls their(usually small, less developed countries) borrowers’ budgets: monetary and fiscal policies. Obviously the Global financial system did not perform that well in Europe: Greece, Spain, Portugal and etc. where governments were and still are equilibrating between ever rising social and infrastructural expenses and not so fast rising production of their economies: when their neighbors like France and Germany are enjoying high social and infrastructural budgets and which citizens are living in stable and secure environment; less developed countries of Greece, Spain, Portugal are strangling to maintain the European dreams of such prosperity and security however these less developed countries could not compete in anyhow to their well developed big “brothers” by establishing industrial production in levels corresponding to their rising expenses.

Some countries like Bulgaria choose to maintain relatively lower deficit which policies happen to result in even bigger then national debt disastrous consequences because of not being able to raise their standard of life to establish internal consumption or in other words these second category countries which followed the requirements of the Global financial system are in very poor condition (see:http://sites.google.com/site/businesslendingbulgsria2009/)for example 50% of Bulgarians monthly income levels 200 USD which makes Bulgarian market inadequate for development: industrial production, and especially when the Global demand shrank for the last number of years and export is getting harder; whoever even without current Global recession all of these countries (the first category with high debt and the second with limited debt) would never be able to compete in industrial production to their big brothers in Europe, North America and Asia, therefor their balancing social and infrastructural development with growing GDP’s – mostly contributed by industrial production is just futile as it could be!

In this currently used economics: to expand Monetary Quantities and cover ever expanding budgets countries must expand their production by growth based economies and business activities thus and only thus these countries will be able to expand their social and infrastructural expanses or even maintain their current levels of expenditures. Global Monetary System and consequential Global supply-to-demand balance imposed and enforced by the WB, IMF and WTO however does not anymore accounts for Inflationary-Deflationary processes on the Marketplace but more like a stubborn lender only interested in collecting its assets;

National debt has skyrocketed for many countries small and large: Greece and Spain in Europe, United States and Brazil in the Americas, Japan in the Far-East are growing their public debt by running deficit in attempt to overcome shortages in their Fiscal budgets, save their financial sectors in case of the US, or just maintain their preexisting levels of social expenditures as Greece and Spain; or shortages of monetary quantities as Japan.

Most known economists are predicting “doom-and-bust” for these accumulating debt countries and overall for the Global financial system that in someway has to take on the setback of these countries default or even possibilities of default on debt payments or issued papers devaluation payments:

Seems most recent times do not differ from that when currencies lost their gold reserve backups and even farther when farming was replaced by industrial production as a main employer and GNP source: in both cases then economists were predicting “doom-and-bust” and the end of the world; but alike then neither inflation nor deflation are coming too dangerous for the economy levels therefor the World from monetary stand point will be probably still standing and what is going to change is the Global Central Financing System that instead of being only a lender collecting “paper” assets will start acting as a controller and a regulator balancing “demand-to-supply” ratios and avoiding Global crisis: but for this thing to materialize most recent industrial production based economics must change too: how so? – just as simple as it could be the ongoing Globalization (best represented by China and India) supported by rapid rising Productivity and Over-capitalization have prompted a world of difficulties for less developed countries and markets to develop or continue maintaining competitiveness to China, US, Germany and Japan’ capacities for industrial production and competativeness. When Monetary Quantities for a country are directly related to this country industrial production the dead heat of the ongoing competition does not work in any help to any less developed country, therefore the struggle for such a country to maintain social and infrastructural expenses in such short of Monetary Quantities is becoming futile; The Global Recession particularly accelerated these new processes of financial turmoil for less developed countries and markets. Very good examples are Greece, Spain, Bulgaria, and etc. At the same time in a consumption driven economics as we are at with reducing consumption comes e diminishing production that consequently hits back to the industrial developing and most developed countries and markets, and so… on and on.

But is the “doom-and-bust” time unavoidable when the mounting debt of US and Japan reduce Global financial system to nothing?

May be so?…… but it is not going to happen, and how so?

The Global financial system of tighten to mostly industrial production Monetary Quantities is about to change in the ways last two exampled changes (of gold backed currencies to the current industrial production based and agricultural dominance to industrial production) it will change to a market driven Monetary Quantities basically tighten to most current market possibilities to avoid inflation or deflation (see: Quantum Economics-Philosophy of the Economy). The Global Central Banking System must be allowed issuing “capital” thus individual countries debt could be offset by low interest loans and subsidies: when such financing would not create dis-balance to “demand-to-supply” ratios.

Through low interest rates and subsidies to less developed countries and markets, and through development of Environmentally friendly technologies subject of these low rates and subsidies many countries and markets will be able to maintain some social expenses and infrastructure without becoming industrialized: organic production and renewable energies, environmental tourism and landscape protection, could be well enhanced and will become sources of growth, too.


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Quantum Economics-Philosophy of the Economy-Quantum Leap in Market Economics

In market economics economic tools (quantum economics: parameters) are used indiscriminately (not politically motivated but statistically formulated) to maintain balance (quantum economics: grid or quantum quantities) demand-to-supply ratios; Compare to currently used production (based economics that should be using self-adjusting dialectic economics of trickle-down approaches for development.

Because, economic tools (parameters) are “artificially” applied to limit over-capitalization or under-capitalization effect on real economies and markets, these (economic tools, parameters) may well be used to increase or decrease different parts of economies, markets by artificially accelerating or slowing business activities.

In modern times ecological issues are becoming extremely relevant to Earth survival: developing and less developed countries’ industrialization (considered by the standards of production economics only ways for development) will destroy Earth either by polluting the environment to point of no return or by exhausting Earth resourses to point of no return: both scenarios Earth will not survive such mass industrialization; In third scenario if developing and less developed countries and markets are pressed to stay as these are by using financial means and these (developing and less developed countries and markets) remain in such underdeveloped condition these still are growing in population and gradually polluting Earth and destroying Earth resources in much higher then most developed countries and markets rates; also in deregulated global market environment when environmental rules and regulations are obeyed by most developed countries and markets but not obeyed by other markets then industrial production will move to deregulated areas thus pollution is unavoidable in current production profit (only) based economics.

Quantum Economics Leap or Quantum Leap is ‘controlled’ economic jump executed by pointed use of financial means (low rate business loans and subsidies) to different areas of real economies and markets {particularly less developed countries, markets or parts of markets (in this category: parts of most developed countries and markets’ underdeveloped areas could be considered)}

Predominantly, development of less developed countries and markets, or parts of markets should be directed toward environmentally friendly technologies: renewable energy sources, organic farming, environmental tourism and etc. In economics of Marketism countries and markets should not necessary become industrialized to raise their life standards and development is not (only) related to industrial production:

Question:

Where industrial good will come from to bring needed supply to such growing demand from non-industrial development?

Answer:

It will come from globalizing rapidly expanding production of countries and markets of US, Japan, China, India, etc.

Globalization of industrial production and rapidly rising productivity could provide needed industrial and high tech “supply” to growing by quantum leaps consumers “demand”; to prevent from imbalances of demand-to-supply ratios central banking system should be established that uses formulas for monetary quantities and fiscal quantities and precisely applies economic tools (parameters) to limit economic recessions (quantum economics: energy buildups and consequential big waves). (See: Quantum Economics-Philosophy of the Economy-Monetary Quantities Formulas and etc related articles).


Philosophy of the Economy – (popular version)

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Joshua Konov Chicago, United States In the University my most powerful discipline was Philosophy and ever since I have been writing in. Thus 33 years has passed. View my complete profile

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