This is a book on philosophy, politics, economy and environment. The title sums up its contents. The work includes a set of essays that in some cases contradict traditional concepts in these subjects; therefore, the book can be considered as a different approach to orthodox ideas. Each essay addresses a particular theme but each one is linked to the others. This relationship between the subjects gives the coherence and complementation to the various parts of the work and therefore integrates a coherent whole.
The 100 essays in this book have been published on this blog between 2008 and 2014, but they have now been brought together by subject and divided into 12 chapters; are:
- 16 Essays on Venezuela's economic crisis and its solution.
- Austerity versus welfare, 20 essays on the world economy in the 21st century.
- 3 Essays on the role of communication; how the media can contribute to economic and social development.
- 5 Philosophical Essays, relativity, space and time.
- Overpopulation, food and environment, 14 essays.
- 15 Essays on the philosophy of economics.
- 10 Essays on the political development in the 21st century.
- 6 Essays on oil depletion.
- A concrete idea to combat unemployment, 5 essays.
- Why the United States debt is not a problem, 3 essays
- Difference between underdevelopment and poverty, 2 essays
- Philosophy of Science, 2 essays
These chapters cover several broad categories: philosophy, politics, economy, monetary policy, fiscal policy, financial policy, the impact of the media on social behavior, philosophy of economics, demography, employment and development.
The analysis was done considering a basic idea: the constant evolution of reality. This is the philosophical basis of the book.
The author attaches particular importance to issues such as space, time and relativity and includes several essays on these topics. The relativity of mathematical exactitude is also studied in the book.
In ten essays, the author shows why it is necessary to build a new political model.
Permanent change of economic reality should also transform the economy in a constantly evolving discipline; however, changes in the economic concepts have not followed the same pattern of intense change experienced by reality. Many economists have written many theses but only three had a decisive influence on economic thought and practice in the last 300 years; they are Adam Smith, Karl Marx and John Maynard Keynes, whose ideas have changed the lives of millions of people worldwide. No other economist can be compared to them in terms of global influence. Economic Liberalism and Marxism were the two economic doctrines that dominated the world in the twentieth century. An exception occurred in the thirties of the last century, when a new economic idea changed the world; it was the work of John Maynard Keynes, who modified the traditional way to attack the consequences of the economic cycle, the depression and unemployment, opening a new political and economic era.
While natural science undergo a process of continuous evolution, due to the constant discovery of new realities, the economy remains tied to traditional concepts that do not allow the global economic development and welfare of the population. For example, in 2012, in plenty 21st century, European troika (EU, ECB and IMF) insisted on harsh' economic programs of restraint and fiscal discipline that, instead of solving the economic problems in that region of the world, created more poverty and unemployment. Ancient and disadvantages theories, like the Quantity Theory of Money and neoliberal theories were resurrected. In other words, inspired by orthodox economic theories, the troika used the same argument that led to unemployment and depression in the past. This reveals that economic practice was captured by the defenders of the old policies of austerity.
Demography and overpopulation
The book assigns primary importance to population issues because the author believes that overpopulation is the most serious problem of mankind. People close their eyes in relation to this problem and remember with skepticism and scorn the predictions of one of the greatest thinkers of all time, Thomas Robert Malthus (1766-1834). It is easier to ignore than to recognize that the situation is unsustainable and that the resources of the earth have begun to be insufficient.
In the current world situation cannot be ruled out predictions about resource scarcity or ignore that the planet has limitations to house billions of people. Until now, the earth has been generous to a small part of its inhabitants, especially in industrialized nations, but also that welfare is now in jeopardy. The development achieved by the industrial world in the last 100 years has been supported by the overexploitation of natural resources, especially in the intense use of polluting energy sources like coal and oil. Industrialized nations have overexploited the resources of the earth and the world now faces the consequences. For developing countries the situation is worse, because for them is far the possibility of reaching the material level achieved by industrialized countries so far due to the increasing scarcity of natural resources especially water and oil.
The imposition of free market model (Neo liberalism) much of the nations has intensified the use of capital resources and changed policies of natural resources: in the 21st century high consumers are more aware of the progressive decrease in resources.
Welfare economics, which consider the human dimension of the economy and was present until the seventies of the 20th century was replaced by Neo liberalism in the early 80's. This accentuated disparities not only between nations but also within’s own developed nations and developing nations. The financial benefit has been the ultimate goal of Neo liberalism discarding activities in the real economy that contribute to the welfare and replacing them by financial speculation; this has been the cause of the economic crisis.
Employment and unemployment
Linked to demographic problems appear issues related to poverty, unemployment and environment. The author considers the options for solving these big problems including demographic control and creating a green jobs program –ecological employments- that would help solve the unemployment and environmental damage globally.
Employment, fair wages and social security are the key to development; therefore the author assigns special importance to these issues.
The book includes ideas to promote employment through a comprehensive program of reforestation; this program would achieve two objectives: a) the creation of millions of green jobs around the world and b) preserve the environment due to the positive effects of reforestation in nature. The other idea is to stimulate employment through an economic model for the intense use of time of production and infrastructure; the program is known as the Double Working-day and the Half working-day and the author presents in this document an overview of the book he wrote on the subject years ago.
Underdevelopment and poverty
One issue that has attracted attention in universities in developing nations has been the work on the differences between underdevelopment and poverty.
The primary cause of underdevelopment is the high rate of population growth because the population has increased by more than livelihoods and also the distribution of existing resources is unfair shared. But development is not only a problem of material resources availability but a problem of attitude towards life. There is a difference between poverty and underdevelopment. A person or a nation may be poor but not underdeveloped. Poverty and underdevelopment is not necessarily the same. There are poor but developed nations: Costa Rica and Uruguay, for example, whose population has a high level of culture.
A new vision of the factors of production
Other issues such as the status of the availability of natural resources are considered. The author presents a new approach on the factors of production and ensures that natural resources will be the scarce factor of production at medium and long-term. This will produce a radical change in the economy, politics and social relations.
The most important resource, water, is already becoming scarce in several regions of the planet; is feasible that this shortage will soon be more intense due to the damage caused to the environment in the world.
The consequences of the restriction on the availability of water will be of great magnitude, especially for food production. In China, the most populous country, the phenomenon is already present; in that sense, the perspective is very serious. China will fight for water and intensify migration of its citizens to the rest of the planet. The phenomenon is already happening and can be seen in many nations of the Western world.
A similar situation occurs with oil in regions like the North Sea; this will directly affect the UK, Norway and parts of Europe. The conventional oil reserves of countries like the United States and Mexico are also in its final stage; and even in the Middle East and can be observed reduction of reserves.
The book demonstrates that hands for production, labor, is abundant; the same happen regarding the resources of capital because man can create money, technology and physical infrastructure, but man cannot create natural resources; they are a blessing from nature. This idea changes the traditional conception of the factors of production, which considers that the scarce factor of production has been capital and attribute underdevelopment to lack of capital resources, especially money and technology (know-how).
Philosophy of economics
The philosophical aspects of the economy are also studied; the main reflection is regarding the character of science given to the economy and the social sciences in general. The author says that economics is not a science in the strict sense of the word and that only natural science deserve to be called science; in the case of economics, believes that this is a discipline subordinate to politics, so its correct name should be political economy, as was called by the founders. To support this idea, the author made a theoretical conception of the supremacy of politics. The author argues that the most important economic decisions are made by politicians and governments; therefore, the economy is subordinated to the politics in all economic systems, even in free market systems.
He shows that there is a great distance between theory and economic reality.
Monetary, fiscal and financial policy
Monetary issues figure prominently in the book. For example, the essay called Money is only metal and paper without intrinsic value assures that the only value of money is its acceptance as mean of payment but intrinsically has no value except metal and paper which is made; the current money is only fiat currency; nothing more.
Fiscal policy and financial policy is also considered from a different perspective. The fiscal deficit and debt are treated from a non-traditional view.
The author explains that countries do not have limitations for the emission of resources in their own national currencies. The real barrier is the lack of international means of payment, U.S. dollars. This idea represents a complete change in the manner of tackle the indebtedness of countries. A country should borrow in international means of payment only if requires to purchase goods and services in international markets and has no the availability of resources; only in this case it is justified borrowing in international means of payment.
The issuance of money is an act of sovereignty of each nation and no international agency can prevent or control the sovereignty of states. So as the debt of countries is considered sovereign the issuance of national currency of countries is also an act of sovereignty.
The national currencies of the countries are supported by gold, IMF values and dollars of the United States of America (the instruments of international reserves) but in reality this support is an illusion. What is the back of the U.S. dollar? What is the true value of gold? The unique value of both is the credibility that people assign to them as a means of payment; nothing else. The U.S. dollar does not have sufficient support in gold and gold intrinsically worthless. Gold is simply a metal of reduced use; is used only in jewelry and in very few industrial processes. The main use of gold is as an instrument of international reserves by central banks of countries; it is, therefore, a conventional instrument of value created by man; this is the truth.
To support his theory on the freedom of countries to issue their national currencies, the author developed a new concept that is collected in the essay entitled A different idea for calculating the implicit exchange rate of the currencies of nations regarding the U.S. dollar.
The author explains that the fiscal deficit is a consequence of growth. When an economy requires more money that means that their needs are growing and this, per se, is good because it reveals the expansion of the economy. A rational growth is positive. Bad is the opposite, because it shows that the economy is paralyzed.
The road chosen by governments to address the economic crisis after 2008, which was to reduce public spending, deepened the global recession and unemployment; that's not the right way. In this case the solution is to understand that the economy is operating at a new level and that resources should be adjusted to the new level. It is similar to what happens when a person gains weight. In this case, the right thing is to buy new clothing according with the new weight; the solution cannot be to reduce or cut the clothes; the same applies to the economy.
A different approach to the theory of value
In several essays of the book is implicit the idea for the formulation of a different approach to the theory of value. Traditional economics distinguishes between use value and exchange value. Also, the traditional theory makes a distinction between the sources of value; in that sense there are three positions: a) the value depends on the use of things b) the value is determined by the labor time expended to make things c) the value is determined by the marginal utility.
The golden rule of traditional economics says that the most valuable things are the scarce; for example, gold and diamonds have a high price; but I think this is a distortion of reality, a lie used to dominate people and economy. So far, the economy has homologated price to value; but I think that both categories should not be homologated. Sometimes things of very high price have a significant value but sometimes the opposite happens; for example, the price of water is negligible compared to the price of gold and diamond but the usefulness of them cannot be compared with water utility. You can live without gold and diamonds but you cannot live without water.
So far, the economic value has been determined by the concepts of scarcity or abundance but now, in the 21st century, the value of things will be determined by its utility, because the world has begun to face a global scarcity of natural resources, especially water and conventional oil, two basic inputs that determine the survival and behavior of the supply chain.
The orthodox concept of free market does not exist in reality
The conception of the classical economists on the free market is a utopia. Perfect competition has never existed. The same market has prevented the development of perfect competition; moreover, governments have always exercised direct or indirect control on market. Now, in modern times, this control has augmented. Governments decide the economic policy of nations and even in capitalist countries the involvement of governments in controlling the economy is getting stronger every day. For example, the control of the United States government on economic variables is determinant for economic performance of the country; and the United States is the world's leading capitalist nation.
At one point in my long research, I read a concept of John Maynard Keynes that impressed me. In the preface of the selected works of Alfred Marshall, John Maynard Keynes said that in his life he had known only an economic treatise and that was The Wealth of Nations by Adam Smith. Keynes believed that none economic work could be compared to Smith's thesis and recommended new economists write thousands of short essays rather than extensive works with pretensions of treatise. I pondered the idea of Keynes and I thought he was right. Indeed, a short essay responds best to the needs of the modern world, where time is restricted, limited. Also, a good short essay can keep the same depth and comprehensiveness of an extensive study or treatise but in fewer words; it depends on the author's ability. Therefore, I preferred to gather all my essays in a single volume rather than developing a long text with pretensions of treatise as Keynes warned. Long ago I read that a writer can write many books during his lifetime but the truth is that he writes only one book with different chapters.
The following are links to chapters:
16 Essays on the economic crisis of Venezuela and its solution
Austerity versus welfare, 20 essays on the world economy in the 21st century
3 Essays on the role of communication, how the media can contribute to economic and social development
5 philosophical essays, relativity, atom, space and time
Overpopulation, food and environment, 14 essays
15 Essays on the philosophy of economics
10 Essays on the political development in the 21st century
6 Essays on the oil depletion
A concrete idea to combat the unemployment, 4 essays
Why de debt of the United States is not a problem, 2 answers
Difference between development and underdevelopment, 2 essays
Philosophy of science, 2 essays