Sunday, December 31, 2017

2018 New Year Forecast: Conservativeness, Unintelligibleness, and Cryptocurrency

1. Introduction
There have been so many incredible and unexpected scenarios taking place in this world these years. The development of the economic and political globalism seems to stagnate. The management of both nation-states and corporations also seems to struggle as they tend to be directed to the undesired consequences such as perpetually accumulating deficit and losing their ethical path. Many economic and political administrators have whispered that these events are unexpected and incredible.

Nonetheless, this world is at an ethical and technological transitional period which many have not explicitly realised. The globalisation will continue advancing although their advancement is temporarily stagnating due to the current fashion of majority individual's preferences. The picture of the financial economy will be furthermore diversified due to the drastic transformation of the world monetary system.

2. Astrology: Conservativeness and Unintelligibleness

This is the astrology chart of 1st January, 2018. The main focus on this chart is the position of Saturn and Neptune which will significantly affect the characteristics of this year. Individuals will experience the deep characteristics of the postmodern nihilism during this time period.


3. Saturn and Capricorn: Conservativeness
Since last 20th December, Saturn has started crossing the ascendant in Capricorn, and Saturn stays in this position for approximately 3 years. Capricorn is Saturn's own zodiacal sign so that the effect of both Saturn and Capricorn will be remarkably strong. This implies that the trend of conservativeness is emphasised and people focus more on the local and micro level of their life than the global and macro level. Furthermore, both Saturn and Capricorn represent patience and responsibility so that the perseverance of individuals for living in their life will be tested.

Economy requires firms to set their conservative rather than expansive management style to overcome from economic recession. Individuals prefer putting priority on developing and improving their local environment to the global counterparts. Those who maintain their responsibility and patience in their daily life will be rewarded well whilst those spending their extravagant life style and abandoning their responsibility in their daily life will be punished.


4. Neptune and Pisces: Unintelligibleness
Neptune is still crossing the ascendant in Pisces, and it takes approximately 8 years from now to finish crossing there. Because Pisces is the own zodiacal sign of Neptune, the characteristics of both Pisces and Neptune have influenced and will influence for 8 years from now. The characteristics are ambiguity, mystery, and spirituality. At this time period, various information flows tend to be inconsistent and decision making processes are hard to be stabilised. Then, many logical predictions are easily undermined due to various obstacles of obtaining information sets, and individuals often put priority on emotional opinions rather than logical and rational opinions during this period.

During this period, individuals lose their trust in many academic and financial analyses because most of these analyses are unable to provide them with a consistent and accurate estimate due to the current chaotic situation of the information flows. By contrast, fictional writing and preaching self-enlightenment will be popular and successful. Fictional writers do not have to be responsible for the conclusion of their stories because they are fictional so neither related to nor affecting the real world situations. Self-enlightenment provides individuals with their ability to self-evaluate their own life by admitting everyone's life style is different from each other so that it is not necessary to indicate a stable consistent solution for everyone.


5. Bitcoin and the other Cryptocurrency: Initial Coin Offering (ICO)

Rise of Bitcoin has surprised and influenced individuals in the entire world. It looked like showing the replacement of the current world monetary system from the scratch. Many individuals once predicted that Bitcoin and any other cryptocurrencies would not be so popular because they were too complex to utilise. Nevertheless, they were suddenly surprised at the sudden rise of the share of Bitcoin in 2017, and many have regretted of not having bought it.

Although it was a clever and reasonably profitable action to have purchased Bitcoin and/or another major cryptocurrency, it is unnecessary to regret of not having done so because the bubble of their share will end soon. Unlike the currency issued by a central bank, the money supply of Bitcoin and any other cryptocurrency is limited by their mining capacity. The mining capacity is the total capacity of the entire computers in this world for spending their memories and calculations for trading with Bitcoin or another cryptocurrency.

The future prediction of cryptocurrency is that they will be used for the asset investments like bonds and stocks more than the intermediary of exchange. This phenomenon has already taken place and it is called Initial Coin Offering (ICO). Venture businesses can join the market using one cryptocurrency or issue their own cryptocurrency to increase their share if they have the level of technology to do it. When these ventures become successful, the value of this cryptocurrency is appreciated so investors may purchase this cryptocurrency as the means of their investment.

Many venture businesses have struggled to invite investors from the world due to the regulation imposed by nation-states' government and a groups of big corporations which restricts these ventures from issuing their bonds and stocks. By contrast, cryptocurrency is out of reach of this kind of regulation because it takes place in the globally connected decentralised environment. This innovation offers ventures with attracting prospective investors from all over the world.


6. Conclusion

This year and these coming years will be a tricky time period that both conservative characteristics and innovative characteristics are revealed simultaneously. The small sized businesses and regional activities will be a big fashion trend. At the same time, the style of globalisation will be transformed from connecting big organisations with each other to connecting small institutes with each other in the global level. Many major academics and financial analysts will be challenged by this era of chaotic information flows, and individuals are expected to set their own life plan and estimates in their own daily life without relying on the others.

Thursday, December 28, 2017

The invention of a cryptocurrency and its influence on the monetary system

- The Evolution of the Monetary System ------

The wealth gap between countries will be decreasing fast meanwhile the gap between rich and poor individuals will be increasing in the world. The world financial market remains to be active and expanding meanwhile it is become considerably competitive. This is the entire influence of the globalisation on the world financial economic situation. It provides individuals with the wide range of opportunities meanwhile it exaggerate competitions in the wide range. The new era of the information technological advancement combined with the globalisation will gradually transform the international macroeconomic environment and structure. The world monetary system will be based on the dual currency system of both the traditional currencies and the newly introduced cryptocurrencies.


- The invention of a cryptocurrency and its influence on the monetary system

In particular, the introduction of the cryptocurrency such as Bitcoin will be beneficial for individuals living in those countries where their national monetary system is immature and constantly in a turmoil situation. Many emerging countries (The term called LDCs and the third world will cease away) will adapt the electric currency such as Bitcoin or something similar. The leapfrogging development of the technological innovation allows various emerging economies in Africa, Asia, and South America to introduce the international electric monetary system like Bitcoin.This is far less costly than improving the already existing traditional monetary policy units. This is similar to the situation that these countries are much easier to adapt the new mobile phone devices and their market competition not restricted by the monopolistic corporations of the landlines.

Even the advanced economies with the relatively stable monetary system will be still impacted by the spread of this kind of cryptocurrency. More individuals in this world will start using Bitcoin or any other cryptocurrency due to the accessibility to currency and the scale of trading places connecting the entire world via the world wide web. So, the market transaction based on the traditional currency issued by central banks will be more influenced by this new market based on the cryptocurrency.


The great advantage of Bitcoin is that its default programme limits the maximum money supply. The money supply can be increased by adding more CPU capacities to calculate in the entire system connecting the whole world. An individual contributing to adding the capacity with her/his PC gain some extra Bitcoin, and this is called mining. The reward of this mining process becomes smaller when the aggregate supply of Bitcoin becomes closer to the supply limit set by the default programme. Therefore, there is no authority which is able to either increase the excess money supply or prevent individuals from accessing to its usage.

In another word, Bitcoin is more likely to be considered as a commodity like Gold. However, Bitcoin enables far more individuals to access to its usage than Gold. This is because it is electrically traded at the speed of light because it is more efficient to set its market value than Gold. The value of this cryptocurrency is instantly measured by the products traded in this market and their trade frequency via the transaction based on this cryptocurrency. So, its value is instantly adjusted to the purchasing power of the entire world market using this cryptocurrency.


The traditional currency of central banks of a nation or a group of nation will lose its authority over economy, and individuals will start choosing both currencies, the traditional one and the cryptocurrency, for each different situation. Central banks will struggle to keep their security of maintaining their authority over the market where their issuing currency is distributed. Any devaluation of and/or any usage limitation of the traditional currency will encourage individuals to use the cryptocurrency more often. Therefore, the authorities of nations and a group of nations will attempt to maintain the royalty of citizens to their traditional currencies so that they will inevitably need to restrict their asymmetric distribution of the money supply which deviates from the optimum level required by the market.

The world monetary system will be the system combining the advantage of both the fixed foreign exchange market under the gold standard and the free flexible foreign exchange market. The value of the traditional currencies will be less deviated from the purchasing power parity due to the influence from the competition with the cryptocurrency. Even though the foreign exchange rate remains to be fluctuating, the value of currency will be much faster to converge to the optimum stable rate in the market. This also implies that it will be more difficult to gain profit from the arbitrage in the foreign exchange market.


All in all, any individuals will be emancipated from the dominance of national monetary authorities. Furthermore, it will be difficult for anyone to maintain their dominance propped up by gaining profit from the market arbitrage. Then, more financial institutes and individuals participating the market will severely struggle in their cut throat competition. These financial corporations will shift to create the alternative model of their investment strategy based on this new market situation, and those who are behind adapting this new model will lose their revenue. Hence, the dynamic transformation of the market competition and the wealth distribution system takes place in not only the real market situation explained in the previous chapter but also the financial market.

Wednesday, December 20, 2017

Bitcoin and the other Cryptocurrency: Conspiracy and Limitation

Who is Nakamoto Satoshi?

Bitcoin challenges against the status-quo of the monetary system and its market. This influence of Bitcoin, the cryptocurrency, reduces the barrier of monetary transactions imposed by national governmental authorities backed up by the status-quo. These authorities are more likely to struggle to defend their vested interests obtained from the barriers imposed by the monetary system they control.

Doesn't anyone imagine the invention of Bitcoin seems to be similar to the invention of Tor, a free software for enabling anonymous communication? The CIA has invented Tor enabling the stealth search avoiding a censorship of various autocratic regimes opposing the US national interest.

Some conspiracy theorists say Satoshi Nakamoto is not a human: it is the joint name referring to the CIA. Nakomoto Satoshi (Surname before first name) can mean Central Intelligence Agency (CIA). Naka means centre, and Moto means base. Then, Naka-Moto can mean central. Sato of Satoshi partially means intelligent. Shi of Satoshi means history. It may make sense because the CIA is an agency remains various historical footprints in the current world.

Like Tor was introduced by CIA, this conspiracy theory assuming Bitcoin was invented and introduced by the CIA may sound plausible. Regardless of the true origin and the root cause of the birth of Bitcoin, the market competition becomes far more efficient by bypassing various barriers of monetary transactions such as the trade-protectionism favouring nation-states' government and the collective distribution of wealth. The inflexible protectionism imposed by corrupt bureaucrats and the unfair distribution of wealth controlled by vested interests of monarchy and aristocracy are no longer effective as much as used to be.


Mining and Limitation

The traditional currencies will not cease but will be also heavily influenced by the existence of cryptocurrencies. Relatively less economically developed regions and relatively smaller sized nations will adapt cryptocurrency faster than economically developed regions.

Bitcoin does not replace the already existing currencies backed up by central banks. The traditional currencies issued by a central bank still maintain their own advantages: They are already established and majority are accustomed with it. Their credibility is linked to the credibility of a big institute such as a nation or a supranational union. The money supply is not limited by something like the mining capacity like cryptocurrency.

It is more resemblance to various commodities like Gold. The nature of cryptocurrencies is notably resemblance to commodities such as Gold. Both Bitcoin and Gold requires "mining" to increase their supply. The value of cryptocurrencies is counter-cyclical to the traditional currencies.






Saturday, November 25, 2017

Max Stirner: The Ultimate Liberalist



Humans have aspired to establish various forms of their ideal political state by adjusting to the contemporary situations at each different time period in order to fulfil their desire and wish. However, regardless of any kind of political ideology put into practice including feudalism, liberal-democracy, and socialism, there is always a single public authority holding the final decision making power stabilising the decision making processes which tend to be messed up under different conflicting interests among individuals. This single public authority has been required in order to maintain the consistency of a state's policy administration in order to avoid breaking down a state.

As long as any system attempts to defend their political principle and individual-citizens there demand someone to maintain the consistency of this system, the existence of the single authority, which is powerful enough to suppress any possible conflicts of interests destabilising this system, tends to emerge. Liberal-democracy requires the single public authority sustaining the system providing individual citizens with their equality in opportunity whereas socialism requires the single public authority in charge of re-distributing incomes and resources equally among individual citizens. However, the single authority holds an enough power enabling to violate the system to provide itself with the unfair advantage to have a far stronger opportunity to monopolise resources and the power of various decision-making processes.

Even after abolishing a government of a nation-state, the alternative powerful public authority come into the power in an anarchist-communist state because individual-citizens claimed for the unified principle of stabilising their state under the unified interest of communism. In order to administrate the income and resource distribution among all individual citizens, the altruism of all individual-citizens was heavily emphasised, and any deviation from their altruistic union was seen as an error. Then, it was an obligation for any individual to obtain the permission from the group of other individuals in order to act independently. The autocratic pressure derived from the interaction of from the group of individuals should be called society which is physically unobservable unlike a governmental institution but it certainly exists as the public authority holding the authority equivalent to what a government of a nation state holds. Then, as long as individuals aspire to cling to sustaining the consistency and the stability of their collective distribution and the universal political principle, any form of the single public authority tends to emerge all the time.


How is it possible to establish the world where all individuals act and think independently without any authoritarian suppression including both the physical source of nation-states' government and the nonphysical structure such as society. Adam Smith has already invented the policy accomplishing this ideal by means of the economic scale. Then, Smith's economic liberalism, which tends to be called either free-market or capitalism, has enabled this world to optimise their resource distribution and increase the aggregate productivity enabling individuals to obtain the high degree of freedom of enjoying their material satisfaction. Nevertheless, the decision-making process of politics and social-policy is still held by a single authority such as a nation-state government. Therefore, even though the aggregate productivity is maximised under the economic liberalism, the distribution of the resources is still asymmetric due to the existence of the single public authority. The reason why this asymmetry takes place is that this public authority is powerful enough to violate the entire economic and social system by means of their personal favouritism. This unfair favouritism naturally emerges because not all individuals serving as the members of this public authority are not altruistic enough to serve the rest individuals, and they are prone to their selfish interests.


Instead of not solving the problem caused by the frustration of majority individuals due to the monopolised political power by the single public authority such as government or society, is there any possibility of establishing the world enabling individuals to live their own life by acting and thinking themselves independently without the suppression by the single authority? There was a great political philosopher called Max Stirner who invented his political philosophical ideal describing the world ultimately liberating individuals from the suppression of a public authority.



First of all, Stirner was critical about both nation-state and government. God's threat in ancient times and monarch's dignity in medieval controlled individuals' mind to repress their free action and thinking in order to deserve the ruling class. Both nation-states' government and society control individuals' mind by promising their liberty and right by word. At the same time, they are not guaranteed to fulfil the promise meanwhile they are expected to fulfil the obligations to their obeying authority more than their rewards. The contract between individuals and their obeying public authority of the modern nation state is based on their belief in their modern nation state. They are made to believe they will be eventually rewarded for their contribution to their nation states' authority without ensuring their actual result of obtaining enough rewards for their sacrifice. Therefore, this belief in the modern nation state government and society is resemblance to the belief in God's threat taught by religion and in the charismatic dignity of monarchy.

Unlike the majority classical anarchists claiming for condemning ego and abolishing private property, Stirner put emphasis on honestly admitting individuals' ego and allowing individuals to own private property. The other classical anarchists insisted that ego and ownership of private property were the means of unfair inequality and the perpetuation of the oppressive authoritarian regime. By contrast, the unfair unequal distribution of various resources was caused by the oppressive authorities artificially creating the collective incentive of controlling the distribution follows. In addition, Stirner encouraged egoism as individuals' vital energy source of living and rewarding themselves for their efforts and self-love. The fundamental problem was that only a limited number of privileged individuals in the authority were able to maximise their ego under the status-quo whilst the rest majority individuals were frustrated from maximising their own ego.

It is sometimes misunderstood as a survivalist denying any public community where individuals can rest from competition and they can use public goods and services provided by it. However, Stirner also claimed for a necessary public community providing its public goods & services and mediating social-contracts among individuals, and he called it the union of individuals. This union is an alternative form of the public body providing public goods & services and social-contracts & order which government and society have provided individuals with. This union should not be permanent so that it should be spontaneously created and relinquished if necessary without being constrained by the interest of authoritarian status-quo.



Perhaps, Stirner's political philosophy is something like the world of Liberalism in a bigger scale than what Adam Smith established. He seemed to want to enabling not only goods and services which are physically observable but also something more abstract and unobservable forms such as forming community and social-contracts to freely exchanged and replaced with another form spontaneously. However, these abstract and unobservable forms are difficult to measure their exact exchangeable value so that there tend to be a conflict of opinions and understandings among individuals without a single powerful public authority holding the final decision making power.

Those who have overtaken or been influenced by Stirner have always aspired to continue seeking any possibility of establishing an individual anarchism possibly maximising individuals' liberty, and then continue fighting against those who undermine any attempt of establishing it. Many new inventions are born out of an idea, and an innovation cannot be born without any plan based on an idea. So, as long as their ideal plan is derived from a logical analysis based on a rational principle, there might be a possibility to put this plan into practice in a real as a real policy. This is indeed an ultimately tough challenge because of the difficulty of maintaining its stability and the abstract characteristic of measuring what they are going to exchange to sustain the order of this politics. Despite this troublesome nature, it is important to hold this political philosophy as their fundamental principle while challenging the authoritarian status-quo clinging to sustaining their monopolistic power.

Nation states' government and society were emphasised as the oppressive authority repressing the possible individual liberty at the contemporary time period when Stirner was alive. At the current time period, it is precisely possible that an alternative form of an authority constraining individuals' liberty with their own justification emerges. The form of this authority may be more abstract to explain and/or constraining individuals' liberty more implicitly than government and society. Therefore, individuals may need to be far more cautious to more sceptically analyse their own life situation in order to defend their own liberty. If individuals want to live their own life which they are fully satisfied with, the ultimate liberalist ideal which Stirner dreamed of is worth off to keep holding out for.

Wednesday, November 08, 2017

What Marxist economics misses out



○ Marxian economic theory is actually considerably conservative because it is excessively biased on the supply side (productivity etc.).

○ Because Marx's economic theory is based on Say's Law which assumes that the demand always meets the supply where all supplied goods, services, and labours are consumed or utilised.

○ Maintaining the surplus value by exploiting the cheap labour force might be profitable for the capitalist class in the short term. However, Marxian economics ignores that the capitalist class will soon needs to look after those unemployed labour force after the aggregate demand slows down in the medium-long run.

○ Since the theory in Marx's The Capital entirely follows the theorem of Ricardo's economics, it assumes the market is always in a perfect competitive and the comparative advantage always prevails. This is a pretty much same assumption as the majority Neoliberalists whom Marxists antagonise.

○ Therefore, Marxian explanation is insufficient to explain the monopolistic force in any market.

○ The biggest defect of Marx's theory is that it is critically insufficient to explain "unemployment". Since Marx's economic theory assumes the labor market operate by means of Say's law, all the workers supplied will be hired so that the only existing unemployment is the natural unemployment i.e. everyone is voluntarily employed as well as voluntarily unemployed so there is no involuntary unemployment in his theory. This is also a pretty much same assumption as the majority Neoliberalists whom Marxists antagonise.

○ Marx successfully pointed out the cruel misery of those employees in a fate of keep being loyal to their employer and their institute. However, his theory hardly pays enough attention to the problem of those who cannot find any means of life like these unemployed individuals, which rather seems to be the underling problem of the modern developed world's social problem.

○ Marxian theory does not indicate the social problem of anomie where neither aristocrats nor capitalist provides the majority individuals with any means of living.

Monday, September 25, 2017

Three Dimensional Political Compass Spectrum



Type: Imperialist
- Real Example: Greco-Romanic Empire, Various European empires, and perhaps the USA under Republican government since the late 20th century.
- Fictional Example: The Leviathan state (Thomas Hobbes), Various aggressive strongholds in novels and games, Dark Force in Star Wars
- Advantage: Rapidly growing capital and accumulating wealth. Encouraging cosmopolitanism and unity under a stable protection of this robust political regime.
- Disadvantage: Costly to prop up due to the unlimited need of expansion. Perpetuating frustration of the marginalised individuals forced to subordinate.

Type: Oligarchist
- Real Example: Most of private corporations in the global capitalism. Perhaps the USA under Democratic government since 20th century.
- Fictional Example: Brave New World (Aldous Huxley)
- Advantage: Encouraging meritocracy motivating individuals to be competent to live. Rapidly improving the material living standards
- Disadvantage: Increasing social problems caused by anomie where individuals lose their means of living. Blunt cultural characteristic

Type: Nationalist/Patriotist
- Real Example: Scottish Nationalist, One Nation Tory, the typical characteristics of Japanese nation, Various modern Asian nations
- Fictional Example: Various kingdoms established by rebels.
- Advantage: Preserving its own culture, history, and identity.
- Disadvantage: Excess emphasis on its cultural superiority by looking down the others. Perpetuating the romanticism intoxicating individuals with day dream.

Type: Marxist-Socialist
- Real Example: Controversial to say if it has really existed.
- Fictional Example: Socialist world in Capital (Marx).
- Advantage: Efficiently reducing social problems like crime&deviance and discrimination against minority.
- Disadvantage: Weak economy and freedom of choice. Easily encouraging the corruption by bureaucrats.

Type: Democratic-Conservative
- Example: The Untied States of America from 18th to 19th century. Confederate State of America
- Advantage: Developing and preserving self-autonomy of individual-citizens and their culture and religion.
- Disadvantage: Excess emphasis on religion, traditional-values, and individuals' freedom while neglecting material well-being and economic and social stability

Type: Communitarian/Primitivist
- Example: Paganism, Counter-culture, Islamism
- Advantage: Growing strong spirituality invincible in any challenging situations
- Disadvantage: Significantly difficult to promote innovations and convenient material living standard.

Type: Anarcho-Syndicalism
- Example: Republican Spain during the Civil War
- Advantage: Having achieved the high level of spiritual happiness and equality of individual citizens while maintaining the reasonable level of industrial productivity and military strength.
- Disadvantage: Seeming to be vulnerable to survive because it existed only in a short time period. Maybe suffering from the same socio-economic consequence as Marxist-Socialist.

Type: Libertarian/Objectivist (Anarch-Individualism)
- Real Example: Never existed yet.
- Fictional Example: John Gould Gulch in Atlas Shrugged (Ayn Rand)
- Advantage: Rationality prevails everywhere in life: Fairness of all agreements, trades, and individuals' autonomy are guaranteed. All individuals are literally completely free to live and die.
- Disadvantage: Only the super-persons would survive and weak vulnerable individuals may severely struggle to live.

Sunday, June 25, 2017

Soren Kierkegaard



Soren Kierkegaard: My favourite existentialist philosopher. Although I disagree with majority of existentialists generally speaking, I strongly agree with and am sympathetic to Soren Kierkegaard. He explicitly criticised schools of the modern idealism and their influences in the modern world. The disease of modernity is a blunt dogmatic determinism without an emotional pasion. Also, he mentioned that the modern idealism merely attracts people with their abstract principle which is extremely complex to explicitly explain in a plain language. These modern idealists including both fascists and socialists over-estimate the future while depreciating the simple happinesses in both the past and the pressent. Either/Or is our ever lasting challange in our life and makes us strong, passionate, and then wise.

Sunday, May 28, 2017

A Proud Randroid against Theresa May's British Conservative government!

I am also deeply suspicious about the Conservative administration under Theressa May's government! This is not British Conservatism established by Edmund Burke; This is simply a road to serfdom!

The current British Conservatives are now following the command economy furthermore i.e. Their manifesto has started increasingly being more socialism. Although they "plan" to make the things better, their sacrificing economic freedom, the big market potential (e.g. completely leaving from the EU), and the social diversity (Emphasis on more security than freedom and variety).

Furthermore, in the second last part of this brief guideline of her manifesto, it describes thinking highly of egoism (honestly being selfish) as cult! This blog has introduced thinking highly of egoism as a necessary element of living as a sovereign individual with a strong self-esteem, and it also encourages a strong productivity and a unique innovation. As various famous Liberalist philosophers(true ones; not the self-proclaimed ones) such as Hayek and Ayn Rand had said, demonising egoism will eventually leads individuals into the totalitarian regime as an originally good intention/will induces a bad or even evil consequence. Altruism sounds good, but it is often violated by the powerful oppressor to induce the majority to serve their own good instead of doing good for the all.
Instead of defying egoism for forcibly encouraging altruism, it would be rather better to admitting and allowing individuals being selfish as long as it does not disrupt others being so. The functional method of establishing a prosperous and happy union of individuals is encouraging rationality of individuals. As long as individuals are able to maximise their selfish needs and wants while maintaining the public safety and the mutual fair contracts among them, these individuals can enjoy their happy life and sustain their strong self-esteem without being commanded by any moral entrepreneurs.

.

See! It pretty much explains how May's Tory is really a national socialist party and also why these inattentive kinds of socialist party supporters are so frantic about their political choice.

.

Well-said, Mrs. Margaret Thatcher!!
Mrs. Thatcher said "If they attack you personally, it means they have not a single political argument left." Well, this can be used for critically pointing out the idiotic failure of Theresa May. lol




.

lol Any way, at least, I admit her tough effort of maintaining her competence of being a leader of an unpopular political faction with an unpopular manifesto. I guess she has done her best despite her lack of merit as a political leader of the UK.

Sunday, April 09, 2017

Domination by Corporatism,The New Totalitarian

1. The rise of the new form of totalitarianism

In the past, reducing the power of nation states' government would lead to liberating individuals from the oppression, and encouraging the growth of capitalism was believed to be correlated with freeing individuals. By contrast, when the national borders became less significant for both capital movement and securing political interests after the Cold War, the power of big multinational corporations has become stronger and more influencing individuals' life than nation states' government.

Furthermore, as the power of these multinational corporations have become stronger and influential as such, nation-states' government have become obedient to the interests of these big multinational corporations in exchange for their immense productivity and their capacity of employing their national population. There is a symbolic quote "Being expelled from using an Apple product and service is more painful than being expelled from a national citizenship nowadays."

Many claim that our current world is dominated by utilitarianism. However, the current world of corporatist capitalism does not fulfil the fundamental principle of utilitarianism the greatest sum of pleasure and the lowest sum of pains. The majority are tricked to falsely believe these totalitarian corporatists are maximising the utility. The consequence of what they plot to maximise is the utility of the minority corporatists' utility. Then, this project attempts to indicate how the corporatism (Corporatistic capitalism) diverges from the happiness of majority individuals.


2. How Corporatism seizes the power of the gigantic corporations and suppresses both free market competition and individual liberty.

We have believed that the road to serfdom was evaded since the end of the cold war with a victory of capitalism over the socialist-empire, the excess form of socialism which was considered as the serfdom. Nevertheless, we are still in danger of being unintentionally guided to a serfdom. The modern industrial world has increased the material productivity and the political stability under the common interest in pursuing a material prosperity. At the same time, this has also produced the cost for individuals to live in an intensively cohesive structure.

These individuals and their corporations are actually not free to act and compete because some of them are privileged more than the others. The nation state's government and judicature set their roles suitable for their peer groups which are loyal to the authority or their nation-state. So, their freedom of action is still restricted by the roles and their competition is based on the authoritarian interests of a nation-state's autocracy and its fellow peer corporate elites.

This structure is a resemblance to the oligarchy dominated by the combination of monarchy and this monarchy's peer oligarchs explained in Fragment on Government. Even though their authority is merely a constitutional, the status-quo having been maintained so long time has already established the unbreakable hierarchy of power and wealth. These autocratic peers have already monopolised their power and wealth as much as they are able to prevent their potential competitors away from gaining more power than the already existing status-quo even under a free market competition.

Both capitalism and socialism frequently put emphasis on excess-conformity and staunchly regulate individuals and their freedom of action, life, and thought by condemning egoism as vice. Socialism forcibly integrates individuals into its autocratic cohesion meanwhile capitalism simply spontaneously excludes individuals, who are disloyal and/or useless for their interests, from the means of acquiring material well-being and status honour. Both are the homogenous political ideologies discriminating and ostracising who are too unique and eccentric.

Whenever individuals are employed by a corporation to spend their time and efforts for it, they must have realised that many of corporations do not base their business management on the rational market mechanism. The management of these corporations is influenced by the irrational preferences of both the high class members, the minority but powerful executive committees, and the peer-groups of the majority employees. The executives often tend to put priority on their personal favour and their biased view on unique individuals over individuals' competence and merit. The majority workers form their peer group to purge the other individuals hardly integrated into their peer group due to their jealousy and discrimination.

Because of this employment scheme biased by these irrational causes, the market equilibrium of demand and supply of the human-capital is hardly accomplish-able, and the mobility of human capital is far more rigid than the market structure explained by the free market principle, the classical economic theory of capitalism. There is then the political influence on the corporate structure. The modern corporate structure is unnecessarily big and complexly stratified as same as the bureaucracy of a nation state, and this does not look like how the private sector structural model is supposed to be by the free market principle.

The existence and the prosperity of these corporations are secured by the law enforcement and regulations designed and imposed by the single nation-state's authority, and these corporations aid the nation state authority by doing its favour. Unlike a pure form of socialism, how both various private corporations are incorporated into one unified nation-state bureaucracy. But, this capitalist structure is identical to the state-socialist counterpart seen in the USSR. Lenin had actually embraced the growth of state capitalism in The State and Revolution as the modern capitalism becomes more bureaucratic and incorporate into the nation-state's bureaucracy.


3. Economic growth = Inevitable Centralisation



Adam Smith, the father of economics, thought highly of the division of labour. When one smith can manufacture 100 pins a day, 10 smiths with the same skill can join together to produce more than 10,000 pins when the labour is divided to each smith. The scale of this institutional integration of labour force to produce a particular product is called the economic scale. The economic scale expands when the higher production capacity becomes more available and demanded.

Smith put emphasis on the market competition which should be encouraged to increase the motivation of individuals and their firms to produce more efficiently and effectively. These individuals are motivated by a higher reward i.e. their higher profit than others when they can produce better than the others. He also claimed for not only the competition of production but also the competition of ideas among individuals. Then, free open trades in a wider area provide them with more opportunity to compete and gain more productive ideas.

David Ricardo claimed for the specialisation of industries in a wider scale than Adam Smith. He argued that each different country should be specialised in producing what they are good at producing so that the aggregate productivity. In an international trade, the productivity can be maximised due to the division of labour available to be concentrated on producing higher quantity. This idea has provided an opportunity for countries with a relatively lower aggregate productivity to join the international trade.

The size of private sector industries has swelled by taking an advantage of the trade route expansion and the division of labour applied to their production methods as a new management tool. Firms have enlarged their production and management scale, and their business have branched out over the nation-wide and even the world. Then, they have started employing more labourers and their management structure has become more complex and structured. Then, their organisational structure has become more centralised under an authority of one opinion lead with a technocratically selected elites, called the executives, in order to maintain the decision making process consistent and efficient. The executives are usually selected by their merit and responsibility for their company management so that it is a technocracy. When their business management scale expands and centralised, the number of technocratically selected executive per head of the entire population of not only the company members but also all the civilians living in this economic region becomes significantly smaller. So, the entire community structure is considered to be more centralised.


Alexander Hamilton, one of American founding fathers and the first minister of finance in the independent United States of America (USA), insisted on the need of the sufficient degree of the intervention of government authority to economy. He supported the open free market trade among individuals and countries. But, he argued that, unlike the United Kingdom (UK) where the government and the royal intervention and regulation were already intense, the newly born USA needs more regulation and intervention were required. He mentioned that the shared public infrastructure and the public safety network are required to enable individuals and their firms to freely as well as fairly compete and cooperate together.

For instance, Hamilton put high emphasis on need of the central bank and the unified currency supplied by it. Establishing the consistent and legitimate intermediary of exchange is essential for the wide open active free trade. The currency ought to have its credibility enough to encourage saving to increase the aggregate wealth and stimulate the investment flow, and also motivate labourers to feel happy to exchange it with their labour. Furthermore, the unified public sector authority is required for establish a strong defence force and the consistent and fair legal system conducted by the rational authority. These two institutes function for protecting the public safety where individuals are enabled to peacefully trade, thrive, and live happily in their daily life.

Rational authorities, who are in charge of planning the defence strategy and the law enforcement, and interpreting the legal codes, are generally technocratically appointed by means of their qualification measuring their merit such as ability, competence, and knowledge so they are not generally directly elected by the popularity of the general public. Even under the majority modern democracy, these technocratic rational authorities are responsible for administrating these defence and legal process. The candidates directly elected by means of their personal favour of the general public can influence the decisions and the actions of these rational authorities to restrict the excessive centralisation of political decision making. But, the processes in a wide scale modern developed politics require the sufficient skill set gained in a long term training so that it is inevitable that these rational authorities are more likely to be demanded for the core executors of the political administration.


When the economic scale is enlarged and the population of economic agents there increases, the business cycle becomes more dynamic and fluctuating. At the level of the technology available in 19th and 20th century, it became difficult to leave the free market alone to grow itself because of the turmoil of its business cycle fluctuation. As an entire economy of one nation is easily affected by the sudden spontaneous shock, which can be either overheat or downfall, which starts taking place in one part of this national economy. The shock became more contingent than used to be. Therefore, the government's positive intervention reacting against this turmoil started to be required at that time period.

John Maynard Keynes reformed the concept of the market economy. He argued that it is important to keep the basic concept and the nature of the free market economy while he also affirmed that some form of the error correction of this wide fluctuating business cycle to stabilise the economy to enable the market economy overcome from the catastrophic turmoil. The self-proclaimed Keynesian economists support increasing the active role of government. They support increasing the public sector share of economy to the certain extent and the frequent discrete fiscal policy intervention by using the flexible tax rate and the national debt issuing. Milton Friedman and his followers called Monetarists support the monetary policy conducted by the central bank without relying on the government role.

The reason why this kind of the positive intervention toward business cycle is often required is that one shock in one area of a national economy is so high contingent in the modern developed economic structure. When some area economically stagnates, the national economy should deal with stimulating this stagnating area by splitting the resource from better-off areas and/or with the national-wide level stimulus package stimulating the hole national economy together. By contrast, the economy of an overheated area should be tightened by the monetary, fiscal, and supply-side policy. Regulations of labour and capital mobility also plays a big role in controlling the business cycle to either restrict or open their flow to adjust the business cycle. All in all, the rational authorities who are selected by their knowledge and merit of conducting economy, not by the popularity of the majority mass, are desired to be in the government position in order to manage this economic policy. Thus, the community structure is more centralised when the scale of economy at the current level of technology and ideas available.


When the entire economy is still immature and struggles to achieve in a stable growth and suffer from a considerable deprivation without any positive planning, one centralised opinion leader-like institution may need to emerge. In order to achieve in the rapid economic growth to overcome from such under-development and the goal is clear and achievable as long as the resource and the motivation are available, only limited number of authorised individuals of one ideologically unified institutional body ought to conduct the entire economy and politics. A selected cohort of intelligent individuals should directly command economy and private citizens to allocate their resources optimally for the development purpose. The conflict of opinions should be prevented because democracy, promoting freedom of choice and opinions, can be conditionally hindering especially under such an unstable immature state.

This is called the Development-Dictatorship which maintains the decision-making process efficient and unified until this nation is materially developed. When economy is developed at the certain level enough to require more flexibility encouraging freedom of thought and new innovations, any political dictatorship stagnates or even depreciates the growth. However, when economy is critically deprived by means of the material development, the priority is copying and adapting the already existing ideas and the resource concentration. Therefore, in this case scenario, the Development-Dictatorship is conditionally often functional for increasing the aggregate productivity.


Nowadays, it has come to the new era of the new economic paradigm. The world economy has become rapidly globalised so that regions in this world has become economically and politically interconnected with each other. Then, the national governments to struggle with stabilising their business cycle themselves. The transnational monetary institution has become necessary to intervene into the world economy by conducting each state economy because burdening responsibility on each nation state has become beyond the capacity of one nation state. The World War 2 (WW2) taught the lesson about the consequence of burdening full-responsibility on one nation state for its economic depression induces a world wide catastrophe. Then, the more centralised public institutes like the World Bank and the International Monetary Fund (IMF) have emerged as the intermediary of negotiation, policy-making, and transnational direct investment programmes. The authority and the role of these transnational public institutes are still relatively insignificant at the current situation. Nonetheless, as the speed of the globalisation has much faster since the end of the Cold War, and its speed acceleration has been more remarkably high since the last information technological innovation. Therefore, the role of the transnational institutes will become more active, and economic agents of this world might expect for the higher responsibility of them for the world-wide level economic intervention.

There has also been a radical attempt in a shifting paradigm from the age of nation states to the new age. Some member states of the European Union (EU) have adapted their shared common monetary policy and its currency called Euro, and the European Monetary Union (EMU) member states form the Eurozone. They attempted to reduce the menu cost incurred due to the fluctuation of the currency exchange when the international trade between two or more states have increased dramatically.

The currently ongoing economic crisis in the Eurozone occurs due to the systemic shock shown in the picture below:

As each Eurozone member state no longer has its own monetary policy controlling the interest rate and the money supply volume, they struggle in the positive intervention adjusting to stabilise the business cycles. Many economists claim that something like the US federal government conducting the fiscal policy to harmonise the business cycles of states in the USA should be establish to solve the ongoing crisis caused by the dis-harmonisation. Otherwise, it requires to whether bringing back to the system before the EMU was established or ostracise one or few remarkably troublesome members disturbing the harmony. Sum up, the stable solution will be either not only monetary but also fiscally integrating the Eurozone under a more centralised system or decentralise it to minimise the EMU scale enough to be stabilised without a fiscal unification.

There is my econometric analysis assessing the business cycle harmony among the Eurozone states.
The European Monetary Union is inevitable, but has to be fundamentally revised
Published on 23/07/2011 09:18 British Summer Time

The result indicates that all the members except for Ireland are harmonised (The business cycle shock is contingent to each other and the inter-border trade frequency among them is high) enough to cause any of their productivity decline after leaving the EMU except for Ireland. Greek cycle is strongly harmonised with the majority of the Eurozone members, and the significant difference of Greek economy from them is that Greek cycle tends to be exaggerated. This means that Greek economy may become overheated when the entire Eurozone is in boom meanwhile Greek economy falls into the severe economic depression when the entire Eurozone economy experiences the economic recession.


Overall, it seems to be able to affirm that the centralisation of institutes is an inevitable process to increase the aggregate productivity, and majority of the mainstream economists nowadays tends to agree with it. The productivity, representing the material well-being, is essential for individuals to become happy because they need material-resource to survive, live well, work in a productive and creative industry, and enjoy leisure. Nevertheless, this is questionable to regard that increasing the productivity is only the essence of being happy for individuals.


4. Happiness

From the ancient era, the objectivity of philosophy is to discover ways and ideas for individuals to become happy. In Ancient-Greece, all the remarkable philosophers after Socrates agree that the ultimate goal of philosophy is happiness even though they disagree with each other regarding to the process and the tool to induce this goal. Originally, all academic disciplines used to be more synthetic and based on philosophy before the modern era so that their objective of learning and developing used to be unified as pursuit of happiness. The spiritual aspect of individuals is never negligible. When they are used to the reasonable level of material sufficiency in their life, they may take their material well-being for granted, and be more likely to seek their own philosophical reason, which is not provided by the others, and their spiritual means of living. Then, the freedom of their own expression seems to be essential to achieve in happiness.

The centralisation stratifies individuals and their living community, and distinguish them between those who are authorised to conduct and the rest who obey more than the formers. This is suspected to increase the frustration of individuals who are discouraged from being free from the central authority to keep an autonomy. The excess focus on the centralisation for the productivity development purpose, and this might lead to the unrest caused by the frustration of the general public or the annoy-syndrome caused by the loss of meaning of life for majority individuals.



Jeremy Bentham, the father of Utilitarianism as well as a strong advocate of direct-democracy in the modern era, could be the pioneer having quantified the level of individuals' happiness. He generalised happiness to be equal to pleasure minus pain, which he called utility. It could be oversimplified as happiness can be more complex than being expressed by only pleasure and pain. Nevertheless, his assumptions has provided a strong insight to quantify and measure the variables influencing happiness.

* The following part is based on my econometric analysis about the happiness/utility correlated to both the climate and the political effects:


Bentham attempted to explain how the sum of utility is affected by the political structure with the following algebra.

He broke down the modern political structure into these main three elements, monarchy as the rule by one, aristocracy (It was referred as the synonym of oligarchy) as the rule by a few, and democracy as the rule by majority. Each element has its own advantage to provide individuals with their utility such as that monarchy is powerful with the charismatic authority, aristocracy enables elites to use their wisdom in politics, and democracy permits majority individuals to represent their wills in politics. He also affirmed that the element of democracy offers the greatest sum of utility due to its availability of allowing the greatest number of individuals to participate in politics to represent themselves.

At the contemporary time period when Bentham was alive, there was little objective ways to measure the sum of individuals' happiness in each nation in the world. By contrast, due to the development of the information technology, we have become able to collect some peer assessed numerical indices of various social scientific data sets. This happiness index is also collected by objective view points and survey methods under an academic peer assessment. Thus, it is interesting to assess Benthamite calculus owing to this world happiness index.

The econometric analysis based on the Happy Planet Index (HPI) regressed on the climate effect, represented by the altitude of countries and its square, the binary variables, monarchy, aristocracy/oligarchy, and democracy, and their interaction effects, and the algebraic equation below is used.



The coefficients and their significance is as follows:



The coefficients of the variables showing the climate effect are 0.02256 for the coefficient of the absolute value of Latitude and -0.0004 for the squared variable of the latitude. Then, the formula shapes an upward parabola shown in the picture below.



Therefore, the place where the latitude is either +31 or -31 maximises the happiness of people living.


All the three binary variables denoting the single effect have a significant and positive coefficient. Both the interaction of Monarchy and Aristocracy and the interaction of Aristocracy and Democracy have a significant and negative coefficient. The coefficient of the interaction of all three variables is non-significant, so that the half of the coefficient value is used. The HPI derived from each different political structure is as follows:



This is a bar graph showing the policy effect on the H.P.I.:




These trends can be roughly visualised in a picture graph like this:



A nation with the direct democracy (Monarchy = 0, Aristocracy = 0, Democracy = 1 ) produces the highest HIP. But, Switzerland is the only nation with such a system in the world. So, it is not sure if it is still significant number of the sample to prove its superiority.


By only means of political structure, this seems to be plausible to conclude that a more decentralised political system provides individuals with the higher sum of happiness than the centralised counterparts. As shown in the previous chapter as well as the algebra introduced in this chapter, the centralised political structures have their unavoidable advantages such as the charismatic power of stabilising individuals and their community and the wisdom rationally conducting a positive planning of economy and judicature organised by the elite rational authorities. Nevertheless, this econometric analysis of happiness indicates that the centralisation seems to induce the frustration caused by the repression of majority's representation in politics. This analysis claims that individuals seek the satisfaction from directly representing their needs and desires in politics, and its availability of the representation is beneficial to increasing individuals' happiness overall.

John Dewey also argued that democracy (if possible, more direct for is more desirable) is pragmatically the best political system for both the material and the psychological/spiritual aspects. The reason why American democracy has been successful is that her decentralised political structure does not limit the opportunity of representing new innovative ideas to only few individuals. The decentralised system has enabled various obscure but talented individuals to represent their opinions and inventions into practice. Perhaps, the upward curve denoting the aggregate productivity curve, positively correlated to the rational centralisation, can be more flexible than it is assumed in the previous chapter. So, in the longer run than it is assumed in the previous chapter, the upward aggregate productivity curve may shift rightward as more technological innovations will become available in a decentralised politics.



On the other hand, the concern is that the excess decentralisation can be not optimum as the centralisation seems to be still partially beneficial. Therefore, the optimum equilibrium point which maximises the benefit of both the centralisation and the decentralisation. The next chapter explains about the equilibrium point.


5. The Disequilibrium of the Material-Productivity and the Happiness: Going back to the origin of economics.


he distressful actions and mental sickness do not seem to decrease, and they seem to be even increasing, in various materially developed countries. Despite the high material well-beings available in these developed countries, not all of the majority individuals living in a materially developed country do not seem to be happy. The suspected reason can be the gap between the material well-beings pooled in their economy the happiness these individuals acquire.

The modern world still excessively focuses on increasing the aggregate material productivity rate so that they furthermore encourages the centralisation of authority for propping up the material productivity growth. This centralisation has already become excess although the centralisation only fulfils the well-being of the minority elites owing the means of production. So, the centralisation of the political and societal structure of this world sacrifices the happiness of majority individuals.

This phenomenon occurs due to the negligence of the happiness taken into the account while researching economics and politics. It may be the time to remember that the thoughts of Adam Smith, the father of economics, was influenced by Jean Jack Rousseau who derived the answer of increasing happiness from being sceptical about the increasing power of centralised authorities in the modern world.

When Adam Smith was alive, the UK economy was already in a rapid growth so that he did not need to put an only emphasis on increasing the aggregate material productivity. Both Rousseau and Smith affirmed that economic growth should be limited to the sustainable level enough to prevent only a few minority elites gaining the benefit from this growth. The sustainable growth implies providing time and energy to distribute the resources gained from this economic growth needed for majority individuals' happy life style.

As the regression analysis based on the H.P.I. in this project has shown, the degree of the opportunity of representing their opinion, not suppressed by the centralised autocracy, is significantly correlated with the happiness. This trend infers that the representation of majority individuals' will was critical for improving the well-being of their life enough to reflect their opinion. Hence, there seems to be the optimum level of the economic growth and the distribution of resources depending on their geographic and cultural characteristics of where they live.






Sunday, March 05, 2017

Stirner and Keynes met in my ideal



My pursue in politics is to find the way to maximise both the sustainable aggregate industrial productivity and individuals' freedom of choice and liberty together. So, I have been supporting free market economy (Many call it "Capitalism" but I try not to use this term capitalism) which is known as a complex computer spontaneously optimising both the distribution of resources and individuals' needs and wants.

Moreover, the individual anarchist political philosophy by Max Stirner has inspired me to open up my horizon of socio-economic political imagination. Since I read Stirner, I have realised that there is an alternative ideal which we have not created but are able to imagine, and this is the theory which provides us with the potential and the virtue of free market economic mechanism by abolishing many obstacles of free market economy such as monarchy, nation-states' government, and jealousy and over-emotional wishes of many irrational individuals who shall be called socialists.

Max Stirner was not an advocate of free market economy so much. However, he defended individuals' property right, freedom of choices, and honest attitudes of accepting egoism and natural desires, and Stirner's objective and the objectives of the free market economy share the common objectives which they wish to achieve.

On the other hand, I also know that free market economy having existed in the world is not a perfect socioeconomic political model although it has been the best ever among all the others having existed in the world. When economy expands its scale, the entire mechanism becomes way too complex and sometimes catastrophic. Then, any errors caused by mistakes and bugs of this complex computer called free market expands faster and causes a bigger negative impact on economy and individuals living there than a smaller scale. Therefore, some error correction unit overriding to forcibly intervene into the freely flowing market transaction processes.

John Maynard Keynes was the first and the most articulate economist who pointed out this problem. Keynes supported maintaining market economy itself meanwhile he suggested that economy should not be left perfectly free as it needs some intervention by positive planning.

Keynes finally concluded that some collective intervention by a big government intervention is inevitably needed for this solution. Keynes was against socialism and did not look like a nationalist who was ultra keen to protect an invincible nation state with its big government. But, he liked his own nation United Kingdom of Great Britain, and he merely concluded that government and nation might be necessary regardless of its controversy in order to enable the market economy survive. If there had been an alternative solution to solve the problem, he would have proposed an alternative without government and nation.

Max Stirner also recognised the potential problem of market economy as same as Keynes, and he did not invent a precise solution of it unlike Keynes. Stirner affirmed that the cut-throat competition and the monopoly of wealth should be prevented in order to protect all individuals liberty of living although he demanded to maintain the free market which allows individuals' freedom of transaction and decision making processes. At this point, Keynes also affirmed the same perspective as same as Stirner.

As Stirner was not an expert of economics, he did not draw a clear algorithm like Keynes could do. But, If Stirner had been equipped with the knowledge of economics, he would have created the same or similar analysis of catastrophic business cycles as Keynes described.

The big difference between Stirner and Keynes was that Stirner was passionately against government and nation-state whereas Keynes passionately supported government and nation-state. My personal objective is to discover the brand new model theory which fulfils both Stirner's aspiration of abolishing government and nation state and Keynes' inevitably claiming government positive interventions into economy.

Nevertheless, none has yet discovered or practiced the methods of stabilising economy by avoiding catastrophic errors without a positive collective intervention into economy by a governmental body. Someone who invents such a model will be definitely rewarded with Novel Prize. Otherwise, should we simply conclude that there will be no perfect socioeconomic political model theory like this one mentioned in this topic?

Tuesday, January 17, 2017

2017 New Year Forecast (3 of 3): A Gradually Emerging Complex & Incomprehensive World & Society

- 4. The Evolution of the Monetary System ------

The wealth gap between countries will be decreasing fast meanwhile the gap between rich and poor individuals will be increasing in the world. The world financial market remains to be active and expanding meanwhile it is become considerably competitive. This is the entire influence of the globalisation on the world financial economic situation. It provides individuals with the wide range of opportunities meanwhile it exaggerate competitions in the wide range. The new era of the information technological advancement combined with the globalisation will gradually transform the international macroeconomic environment and structure. The world monetary system will be based on the dual currency system of both the traditional currencies and the newly introduced digital currencies.


- 4.1. The invention of a digital currency and its influence on the monetary system

In particular, the introduction of the digital currency such as Bitcoin will be beneficial for individuals living in those countries where their national monetary system is immature and constantly in a turmoil situation. Many emerging countries (The term called LDCs and the third world will cease away) will adapt the electric currency such as Bitcoin or something similar. The leapfrogging development of the technological innovation allows various emerging economies in Africa, Asia, and South America to introduce the international electric monetary system like Bitcoin.This is far less costly than improving the already existing traditional monetary policy units. This is similar to the situation that these countries are much easier to adapt the new mobile phone devices and their market competition not restricted by the monopolistic corporations of the landlines.

Even the advanced economies with the relatively stable monetary system will be still impacted by the spread of this kind of digital currency. More individuals in this world will start using Bitcoin or any other digital currency due to the accessibility to currency and the scale of trading places connecting the entire world via the world wide web. So, the market transaction based on the traditional currency issued by central banks will be more influenced by this new market based on the digital currency.


The great advantage of Bitcoin is that its default programme limits the maximum money supply. The money supply can be increased by adding more CPU capacities to calculate in the entire system connecting the whole world. An individual contributing to adding the capacity with her/his PC gain some extra Bitcoin, and this is called mining. The reward of this mining process becomes smaller when the aggregate supply of Bitcoin becomes closer to the supply limit set by the default programme. Therefore, there is no authority which is able to either increase the excess money supply or prevent individuals from accessing to its usage.

In another word, Bitcoin is more likely to be considered as a commodity like Gold. However, Bitcoin enables far more individuals to access to its usage than Gold. This is because it is electrically traded at the speed of light because it is more efficient to set its market value than Gold. The value of this digital is instantly measured by the products traded in this market and their trade frequency via the transaction based on this digital currency. So, its value is instantly adjusted to the purchasing power of the entire world market using this digital currency.


The traditional currency of central banks of a nation or a group of nation will lose its authority over economy, and individuals will start choosing both currencies, the traditional one and the digital one, for each different situation. Central banks will struggle to keep their security of maintaining their authority over the market where their issuing currency is distributed. Any devaluation of and/or any usage limitation of the traditional currency will encourage individuals to use the digital currency more often. Therefore, the authorities of nations and a group of nations will attempt to maintain the royalty of citizens to their traditional currencies so that they will inevitably need to restrict their asymmetric distribution of the money supply which deviates from the optimum level required by the market.

The world monetary system will be the system combining the advantage of both the fixed foreign exchange market under the gold standard and the free flexible foreign exchange market. The value of the traditional currencies will be less deviated from the purchasing power parity due to the influence from the competition with the digital currency. Even though the foreign exchange rate remains to be fluctuating, the value of currency will be much faster to converge to the optimum stable rate in the market. This also implies that it will be more difficult to gain profit from the arbitrage in the foreign exchange market.


All in all, any individuals will be emancipated from the dominance of national monetary authorities. Furthermore, it will be difficult for anyone to maintain their dominance propped up by gaining profit from the market arbitrage. Then, more financial institutes and individuals participating the market will severely struggle in their cut throat competition. These financial corporations will shift to create the alternative model of their investment strategy based on this new market situation, and those who are behind adapting this new model will lose their revenue. Hence, the dynamic transformation of the market competition and the wealth distribution system takes place in not only the real market situation explained in the previous chapter but also the financial market.


- 4.2. The still hotly debated Eurozone future

Both Euro, the currency, and the European Monetary Union (EMU) might remain in the future because it is costly for many EMU members to replace it with their independent monetary system. However, there is a high possibility that some of the members will leave the EMU, and there is still a small possibility that the EMU will completely break up and Euro disappears. The common monetary union has both advantages and disadvantage by means of economic analyses.

It will be highly dependent on the philosophical view of these Europeans to decide whether they preserve it or not. The pure reasoning is not completely based on either an objective reality or a rational decision-making process. It is highly influenced by the subjective feelings of individuals deriving their reasoning. Then, any friction of their daily life events easily change their mind for determining their long term future political decisions. The cause of both the European Union (EU) and the EMU was based on not only the economic purposes but also their political ideal to unify Europe. Therefore, it is unpredictable to forecast whether their will remains to pursue their ideal or some influence on their mind disturbs their pursuit of the ideal.

The future situation is still relatively unpredictable for the EU. Only what can be predicted is that resolving the EMU will reduce the economic strength of the member countries. The world economic trend still encourages shifting to borderless trades and the big economies of scale which the current EMU provides all the Eurozone countries to develop their economy. Therefore, the EMU still have the enormous advantage of maintaining the EMU.

Only the problem is compromising the reform aimed at the further integration of the Eurozone economy including their fiscal integration. Otherwise, the unbalance of the economic environment of each Eurozone country among the EMU will be perpetuated, and it may urge some deprived Eurozone country to leave. Their future is determined by the will of European citizens to pursue development and progress or refuse drastic reforms for their stability.

Thursday, January 05, 2017

2017 New Year Forecast (2 of 3): A Gradually Emerging Complex & Incomprehensive World & Society

------ 2.2 From Capitalism to the Anticipated New Era ------

From now-on due to the information technological development, including both the internet and the artificial intelligence (AI), which has widen the market entrance of both the real-market (dealing with the goods and services) and the financial market (dealing with money and other forms of capital assets). It used to require a high volume of capital investment to open a new business so that those who were already wealthy to own enough capital had a much stronger advantage. By contrast, the current technology enables individuals to gather efficient tools and investment resources from a far bigger information resource than few decades ago.

This leads to the situation where it does not longer matter to seek a heavy volume of capital investment from banks and private investors for starting up a new business as long as any individual has an attractive idea of a new business. In another word, the cost of capital investment has become substantially low. This is one of the reason why the interest rate set by central banks in developed countries is close to zero or even minus. The supply of entrepreneurs will become far more abundant and the market competition among business owners will become far more competitive than it has been.

The traditional bourgeoisie such as the owners of big enterprises are going to face the severe difficulty in maintaining their dominance. These bourgeoisie owning huge enterprises with a high volume of capital are not flexible to change their policies and their organisational structure in comparison to the newly emerging entrepreneurs having started their business with a low volume of capital investment. These new entrepreneurs are far more flexible to adjust their business structure to the market demand and requirement even though their economies of scale is not big as much as the traditional capitalistic enterprises.


The economies of scale are also predicted to be smaller than they have been due to the technological development such as newly invented AI and 3D printers. Furthermore, the division of labour will be more emphasised in this coming era so that it seems to be the case that the industries had better include various independent small enterprises competing and often cooperated together instead of allowing one or few monopolistic big corporations controlling it.

The development of the cloud data base and the close-based administration system also devalue the importance of these big corporations because industries no longer need a big organisation constantly administrating and monitoring the business activities as well as their data-management. These administration tools will be organised by decentralised platforms such as a set of the remotely located hard-drive centres connected via online. The outsourcing will be more popular as there will be more small enterprises offering flexible services with good-quality. Therefore, companies no longer need to marge various departments and divisions inside their company, and these tasks can be easily outsourced.


This decentralisation process will also lead not only the previously mentioned traditional bourgeoisie owning private enterprises but also government-bureaucrats administrating public sectors and the market regulations, who can be called the new bourgeoisie, will also struggle to maintain their dominance. Not only the previously mentioned technological development and the market decentralisation but also the decline of nation-states caused by the globalisation are devaluing the necessity of the bureaucracy. Some of the public sector projects will be outsourced and the communication tool and the administration tools of public sectors will be so efficient that it will require less man-power.

In addition, both the already developed information technology and the newly developed AI will replace many tasks of these bureaucrats. Also, the diversification of this entire world will require anyone including the tasks of the bureaucracy to constantly change enough to frequently requires their skill sets to be always updated or even replaced by a completely new ones. Therefore, the structured static structure of the bureaucracy will be simply inefficient, and it will devalue the level of intelligence, wisdom, and hard-works of these elite bureaucrats.


At the same time, this transformation of the market structure will cause a hardship for the citizens who are already accustomed with their traditional way of living by being employed by a private company, public sector, or any structured organisation. The market becomes far more capital intensive owing to the technological development and the popularlised entrepreneurship owing to the information technology and networks. Then, the number of labour employed will become far smaller than it has been. Therefore, unless they find any new means of living such as starting their own business or any alternative way of sustaining their life, they will struggle to find their means of living. This may result in an increasing social problem of anomie (Normlessness or Meaninglessness) predicted by Emile Durkheim.

Overall, owing capital will become less important meanwhile people will be employed less and market competition becomes more competitive. Because owing (physical and financial capital) will become far less significant to become successful in the market competition, the name called capitalism may be going to be old fashioned. This newly emerging era should no longer be called capitalism although the market competition becomes much complex and intense and the social stratification still remains (It is far from the utopia for all individuals).


- 3. Diversified Education System

As the market becomes far more competitive as well as diverse, the skill sets required for succeeding in this market competition frequently change all the time. In this situation, there is no definitive skill guaranteeing individuals' job security. Then, the compulsory education will be more diversified unlike the current homogeneous plane style of education. As the change of the required skill sets becomes more frequent, individuals will rather prefer learning multiple skills in various methods to spending several years for obtaining one degree.

These organised educational institutes used to be valuable for children to gain an access to the basic educational information and the social skill with the others. By contrast, the primary education system is diversified nowadays and the remarkable development of the information technology enables anyone to gain the access to the education, the essential information required for life, and various diverse social networks. Therefore, compulsory education is no longer essential for individuals to obtain.

Nonetheless, education and nurturing will still be the key critical factors for succeeding to become the dominant class more than it has been. Those who can access to the flexible choice of education and nurturing and be brought up in an emotional stable environment while their childhood are more likely to succeed in the survival in this new era. Then, the family background, the chance to have a right mentor, the relationship with friends and acquaintances, and the living environment endowing individuals with innate abilities will become unavoidable variables to acquire the higher social status.