Preface
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.
Philosophy
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.
Politics
In ten essays, the author shows why it is necessary to
build a new political model.
Economics
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.
Methodological
aspects
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
Entradas
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