* This is actually published on 28th of June, 2012
The situation that Einstein became popular is just a coincidence. Just his existence and the demand at the contemporary time period matched with each other. Well, we cannot control over the "luck" at the time, place, and occasion we are born. This is one of socialists' characteristics I cannot trust: Socialists seem to attempt to control "luck" as though they were God. That's why socialism is called as the theism without God or with the alternative God as the mechanism of human-beings. I found socialism is very arrogant ideology more than any other religion.
* Speaking of what capitalism is, and Hegelian historical point of view:
The word "capitalism" is what socialists call as an antonym of socialism. There is no such a thing like capitalism: There can be what we call as Comprehensive Liberalism (Classical Liberalism). Dr. Ron Paul says "The system socalled capitalism has never been established yet".
I strongly disagree with Hegelian historical perspective (Social Conflict theory) which socialists follow. I do not see individuals' perspective and community structure dramatically change at a certain point to "evolve". I would say individuals' perspective and community structure change "gradually", and all of them work as "functionally" at the optimum level the technology available offers. I really detest that socialists always expect our future must always become better. If we adapt such a perspective, we eventually need to be disappointed by our past and present. In addition, I hate socialists for ranting on "society" the abstract metaphysics we cannot see and even we cannot access whether or not it exists! Their call on society kills individualism and introduces totalitarianism! I hate socialism!
* The reason why socialism fails, and is detested:
I also researched about non-authoritarian socialism such as syndicalism, social-democracy, Neo-Marxism, etc. But, I am still not convinced by socialism at all. The common failures of all kinds of socialism are (1) it fails to mention the fact that natural resource is limited, and (2) it tends to think human-beings are genuine and able to cohabit without any hesitation. (1) indicates that, if we try to attempt to accomplish the equal distribution and providing the basic standard of living for all, the resource will run out eventually. In order to avoid this situation, the population has to be declined at the feasible level, all individuals have to strive to obtain the resource in the severe competition, and/or someone (An individual or a government) or social norm (Tradition, Principle, etc) has to enforce the distribution (The distribution can be either unequal or makes everyone equally poor though). This results in the situation that what socialists try to accomplish is impossible to achieve. (2) indicates that socialists always think human-beings can become genuine and cohabitabe in peace after the battle between two classes ends. This is way too optimistic perspective. It fails to demonstrate how we can differentiate the reward and the punishment for individual. Someone can produce more than others, someone can be more generous than others, someone can be wicked but may be able to bring a productive consequence, someone can bear too many children beyond their responsibility available, and someone can violate liberty of others. We then need a fair judgement to distribute the reward and the punishment. Furthermore, I really detest the word of "fellow men" because it infers altruism. The notion of fellow men is very dangerous because it encourages homogeneity, cooperation (Dangerous if excess), and solid social norm. We only need a minimum right for all, carelessness about what all individuals think, believe, and behave, and some public goods and aids which only applies as much as these individuals previously invested to and as long as all individuals agree by means of their egoistic interest meets with the service provided.
Well, I think neither I am particularly superior to majority nor I belong to an elite cohort of human-beings. Nonetheless, I feel really awkward to be unconditionally looked after by someone I am not related, and I despise the community structure which either enforce or suggest us to unconditionally spend to those whom we are not related and those whom we despise so much. Only whom I want to care are myself and my family (related family members, my significant other, and those almost like my family). I want all people in this globe to be emancipated to become rationally egoistic individuals. Then, our wealth (not only monetary but also non-physical those who we inherit through family and culture) will not be sacked by a propaganda motivated by a superstitious abstract terminology such as society, public, and nation! We always want to make sure that we spend for those we can see and those which are objectively and explicitly valued as a fair exchange of values.
Wednesday, June 29, 2011
Sunday, June 19, 2011
The International Monetary Fund (IMF) is necessary and its necessity is inevitable
* This article refers to The Wall Street Journal
JUNE 17, 2011, 3:53 P.M. ET
IMF Cuts Growth Forecast for Global Economy .
I understand how angry the IMF is due to the bad discipline of the EU fiscal policy and the retarded attitude of all national governments in this globe...! I believe the IMF should intervene into both monetary and fiscal policies of all over the world because the world economy has already become globalised. Economic regions in all over the world is now too contingent to avoid focusing on the global economic political censorship by the global financial institute...!
I assume that the IMF "wanted to expect" the USA and the EU to install the right policy as the IMF suggested. I guess, this does not mean the IMF miss forecast; the IMF crackdowned to say these economies will be endangered because they did not listen to what the IMF said! This is the way, the IMF always change the prediction. I have recognised that the IMF economic prediction is rather subjective than objective. But, I do not say it is a bad thing; it is a strong indicator of what the IMF judges. I have more faith in the IMF than any national sovereign any way...
Do you know who said we needed the IMF? John Maynard Keynes, and I support his idea! So, I am not a fundamental monetarist although the national sovereignty in all over the world should be abandoned. This is not due to the political ideological issue (J. M. Keynes was actually an economic pragmatist), it is the "accountability" and "responsibility" issue...! It is a "natural evolution" of economy! As economy becomes globalised and contingent each other, the market (Nature! Geometrical fact!!) needs a global mediator. I am not for a world government, but I am for a world financial liberalisation!!
JUNE 17, 2011, 3:53 P.M. ET
IMF Cuts Growth Forecast for Global Economy .
I understand how angry the IMF is due to the bad discipline of the EU fiscal policy and the retarded attitude of all national governments in this globe...! I believe the IMF should intervene into both monetary and fiscal policies of all over the world because the world economy has already become globalised. Economic regions in all over the world is now too contingent to avoid focusing on the global economic political censorship by the global financial institute...!
I assume that the IMF "wanted to expect" the USA and the EU to install the right policy as the IMF suggested. I guess, this does not mean the IMF miss forecast; the IMF crackdowned to say these economies will be endangered because they did not listen to what the IMF said! This is the way, the IMF always change the prediction. I have recognised that the IMF economic prediction is rather subjective than objective. But, I do not say it is a bad thing; it is a strong indicator of what the IMF judges. I have more faith in the IMF than any national sovereign any way...
Do you know who said we needed the IMF? John Maynard Keynes, and I support his idea! So, I am not a fundamental monetarist although the national sovereignty in all over the world should be abandoned. This is not due to the political ideological issue (J. M. Keynes was actually an economic pragmatist), it is the "accountability" and "responsibility" issue...! It is a "natural evolution" of economy! As economy becomes globalised and contingent each other, the market (Nature! Geometrical fact!!) needs a global mediator. I am not for a world government, but I am for a world financial liberalisation!!
Friday, June 10, 2011
Difference between 1929 and 1990s, and 2000s-10s
Yeh, the scale of banks' bankruptcy was much smaller than the current banks' bankruptcy, not so many Friedmanites realised. In 1929, Friedman's claim of temporary money supply for rescuing these private banks may have worked because the bankruptcy occurred because of the fear of people assuming banks could bankrupt.
By contrast, 1990s and 2000s are the entirely different problem!
The financial crisis in 1990s was based on the immaturity of Asian financial institutional policy. I agreed with Stiglitz that these Asian financial institutions were not mature enough to let run independently. He claimed that the IMF should have had a great role to induct them, and more the foreign direct investment from the advanced nations should be injected into.
The ongoing financial crisis is tremendously much more problematic than these previous world financial crises! This problem also involves the "financial accounting" which allows institutions to involve the aggregate market value of the assets investment they have purchased which is their potential gain from asset investments (This is called "Unrealised Profit" in the pure cost accounting because it cannot be simply shown in the balance sheet based on the "Cost Total System" which is based on the total sales revenue minus the total cost).
Before the late 1990s, the financial law in majority of nations did not involve the aggregate market value of their shares purchased. However, from the late 1990s and early 2000s, the financial law in all the advanced nations started allowing involving any potential gain from asset investment. This change in the financial law dramatically changed the attitude of financial institutions in the advanced nations. All these financial institutions started to purchase a lot of shares. This resulted in that, although the profit comes from the total sales revenue subtracted from the total cost is smaller or even loss, the book involving the potential profit (the current value of share minus the value of share when it was purchased) shows the profit is huge.
The opposite case scenario of this financial accounting is Chinese government. Nowadays, Chinese profit based on the sales revenue minus the total cost is higher than the profit based on the aggregate market value because the value of all the foreign currency and all the national debts of the advanced nations, which Chinese government has purchased in the past to depreciate Chinese currency, become depreciated dramatically.
Therefore, unlike in 1929, the central bank could not predict the adequate volume of money supply it should have poured into the market to rescue these banks involved in this activity to increase the "aggregate market value" of their total asset investment. Some of the shares these financial institutions are foreign, different industries, and toxic. Therefore, although I would support Friedmanite bank rescue program in 1929, I am deeply sceptical about his theory applied in the current crisis. Many socialists tend to blame capitalism. But, I would rather blame the national authorities who regulate the financial accounting law. This problem is way beyond the central banks' responsibility and accountability on their loss.
If it were based on the accounting based on the revenue coming from the pure monetary saving and investment, yes Friedmanite policy should have applied. However, this problem highly involves the mal-management, which Friedman should have said there needed a strict crackdown on these financial institutions.
As a matter of fact, one of my lecturer in my MSc in Strathclyde uni was Friedmanite, and he highly criticised the current global financial market situation. He strongly disagrees with the Euro, the sub-prime loans (He said that such a private sector business involving the risk of bankruptcy should not have taken place), and the over-expansion of the current banking system.
Furthermore, the current financial recapitalisation was done by the fiscal policy rather than the monetary policy which Friedman insisted to use.
I know Friedman would have supported rescuing banks by the excess money supply, but some guys would say that it was Friedmanite policy to rescue these banks having involved in race of increasing their aggregate market value. However, if there are a violation of equity, such as the fiscal policy to rescue these mal-managed institutions by using the innocent tax payers' money, and the problem is beyond the accountability of central bank such as the ongoing financial crisis, the responsibility of monetary policy is very limited, Friedman would have said if he follows his original role.
Speaking of Hayek, I am more likely to detest Hayekian than follow. Hayekian theory strongly insists the importance of "tradition" and "traditional moral guide line" (I really despise them!) which Hayek defined as a key to stabilise economic and social order. In addition, Hayek is morea political philosopher than an economist, I would say, meanwhile Friedman is a pure mathematical economist. Hayekian ethics follows the school of Natural Law as same as Edmund Burke. This is why Hayek humiliated Friedman as an anarchist.
This is why Hayekian theory can be also applied to European Social Democracy seen in Germany and Scandinavian nations. Hayek did not particularly support free market economy nor fundamental reconstruction of economic structure unlike Friedmanite. Furthermore, the huge difference between Hayek and Friedman is that Hayek was deeply sceptical about Macroeconomics whilst Friedman put emphasis on Macroeconomics. As a matter of fact, North Western European economic policy is highly microeconomics, and hardly regards of macroeconomics. Hayek would be happy with the continental European economic policy, which is yet Socialistic and has installed the common currency, whereas Friedman would be upset about and against the current continental European economic structure...!
By contrast, 1990s and 2000s are the entirely different problem!
The financial crisis in 1990s was based on the immaturity of Asian financial institutional policy. I agreed with Stiglitz that these Asian financial institutions were not mature enough to let run independently. He claimed that the IMF should have had a great role to induct them, and more the foreign direct investment from the advanced nations should be injected into.
The ongoing financial crisis is tremendously much more problematic than these previous world financial crises! This problem also involves the "financial accounting" which allows institutions to involve the aggregate market value of the assets investment they have purchased which is their potential gain from asset investments (This is called "Unrealised Profit" in the pure cost accounting because it cannot be simply shown in the balance sheet based on the "Cost Total System" which is based on the total sales revenue minus the total cost).
Before the late 1990s, the financial law in majority of nations did not involve the aggregate market value of their shares purchased. However, from the late 1990s and early 2000s, the financial law in all the advanced nations started allowing involving any potential gain from asset investment. This change in the financial law dramatically changed the attitude of financial institutions in the advanced nations. All these financial institutions started to purchase a lot of shares. This resulted in that, although the profit comes from the total sales revenue subtracted from the total cost is smaller or even loss, the book involving the potential profit (the current value of share minus the value of share when it was purchased) shows the profit is huge.
The opposite case scenario of this financial accounting is Chinese government. Nowadays, Chinese profit based on the sales revenue minus the total cost is higher than the profit based on the aggregate market value because the value of all the foreign currency and all the national debts of the advanced nations, which Chinese government has purchased in the past to depreciate Chinese currency, become depreciated dramatically.
Therefore, unlike in 1929, the central bank could not predict the adequate volume of money supply it should have poured into the market to rescue these banks involved in this activity to increase the "aggregate market value" of their total asset investment. Some of the shares these financial institutions are foreign, different industries, and toxic. Therefore, although I would support Friedmanite bank rescue program in 1929, I am deeply sceptical about his theory applied in the current crisis. Many socialists tend to blame capitalism. But, I would rather blame the national authorities who regulate the financial accounting law. This problem is way beyond the central banks' responsibility and accountability on their loss.
If it were based on the accounting based on the revenue coming from the pure monetary saving and investment, yes Friedmanite policy should have applied. However, this problem highly involves the mal-management, which Friedman should have said there needed a strict crackdown on these financial institutions.
As a matter of fact, one of my lecturer in my MSc in Strathclyde uni was Friedmanite, and he highly criticised the current global financial market situation. He strongly disagrees with the Euro, the sub-prime loans (He said that such a private sector business involving the risk of bankruptcy should not have taken place), and the over-expansion of the current banking system.
Furthermore, the current financial recapitalisation was done by the fiscal policy rather than the monetary policy which Friedman insisted to use.
I know Friedman would have supported rescuing banks by the excess money supply, but some guys would say that it was Friedmanite policy to rescue these banks having involved in race of increasing their aggregate market value. However, if there are a violation of equity, such as the fiscal policy to rescue these mal-managed institutions by using the innocent tax payers' money, and the problem is beyond the accountability of central bank such as the ongoing financial crisis, the responsibility of monetary policy is very limited, Friedman would have said if he follows his original role.
Speaking of Hayek, I am more likely to detest Hayekian than follow. Hayekian theory strongly insists the importance of "tradition" and "traditional moral guide line" (I really despise them!) which Hayek defined as a key to stabilise economic and social order. In addition, Hayek is morea political philosopher than an economist, I would say, meanwhile Friedman is a pure mathematical economist. Hayekian ethics follows the school of Natural Law as same as Edmund Burke. This is why Hayek humiliated Friedman as an anarchist.
This is why Hayekian theory can be also applied to European Social Democracy seen in Germany and Scandinavian nations. Hayek did not particularly support free market economy nor fundamental reconstruction of economic structure unlike Friedmanite. Furthermore, the huge difference between Hayek and Friedman is that Hayek was deeply sceptical about Macroeconomics whilst Friedman put emphasis on Macroeconomics. As a matter of fact, North Western European economic policy is highly microeconomics, and hardly regards of macroeconomics. Hayek would be happy with the continental European economic policy, which is yet Socialistic and has installed the common currency, whereas Friedman would be upset about and against the current continental European economic structure...!
Friday, June 03, 2011
Europe in crisis...!
Definitely a strict crackdown on Greek treasury, and a fundamental Eurozone wide reform are required ASAP!!
No more liquidity (buying the bonds by printing excess amount money) 'cos it causes a further interest rate hike up* which discourages the private sectors! Greek economy unfortunately won't be allowed to leave the Europzone 'cos my regression analysis showed Greece economy is highly co integrated with the entire Eurozone economy!
(* Usually when the excess money supply goes into the market, the interest rate often falls if the economy has been in recession which is caused by lack of the aggregate demand which induces the excess supply. The US and Japanese case of the excess money supply caused the lower interest rate. However, European economic problem is not caused by the demand&supply fact; it is based on the "structural" problem. Therefore, it is more likely to cause the hyper-inflation, i.e. need of high interest rate for borrowing, instead of the liquidity-trap, the deflation.)
Greek economy is actually highly reliant on the Eurozone economy... Greek system should be more intervened by the European central government! The silly idea of the Eurozone is that it still allows each member to incur the national debt under the common monetary policy...! This is the same silliness as though allowing each state in the USA to hold its own public debt without complete separation of the states and the federation!
When I read the Wall Street Journal on 10th of May, this American news paper claimed that European economy will be drawn into the insoluble fiscal chaos due to her extremely tolerant attitude toward the irrational European populism... This fiscal chaos won't be overcome unless a strong (even oppressive) enforcement on fixing this fiscal imbalance and the irrational populist influence on the fiscal structure...
... I must say that the Europe suffers from the tyranny of majority as same as Japan! Therefore, any rational movement hardly takes place...
But, unlike Japan, the integrated European economy has a full of potential! An affluent human capital development, variety of factors of productions from different European countries, and the strong capitalist ethics which has been developed over centuries!
"Europe needs an iron-lady" as same as Britain had. But, the problem is that this scale of the economic failure is bigger than what Britain suffered from in the past. Therefore, the figure which is larger than British iron-lady...! But, the tyranny of majority won't accept such the "to be cruel to be kind" method as this majority is already spoiled by the illusion of their Utopian dream.
This is the same as Japanese tyranny of majority expelled Mr. Kakuei Tanaka, the admirable Japan's former prime minister, who thought of people better than what people thought. Mr. Tanaka was the person who could make Japan truly sovereign and enlighten Japanese people to be evolved from poppets to independent minded citizens! The similar event is now taking place in the Europe... If the tyranny of majority is strong enough to oppress the talent, it fails into the problem seen in both Japan and Europe!!
... "In order to defeat a monster, it needs the monster stronger than this monster...!". Hence, the tyranny may be only able to be defeated by another tyranny which is stronger than the current tyranny...............
No more liquidity (buying the bonds by printing excess amount money) 'cos it causes a further interest rate hike up* which discourages the private sectors! Greek economy unfortunately won't be allowed to leave the Europzone 'cos my regression analysis showed Greece economy is highly co integrated with the entire Eurozone economy!
(* Usually when the excess money supply goes into the market, the interest rate often falls if the economy has been in recession which is caused by lack of the aggregate demand which induces the excess supply. The US and Japanese case of the excess money supply caused the lower interest rate. However, European economic problem is not caused by the demand&supply fact; it is based on the "structural" problem. Therefore, it is more likely to cause the hyper-inflation, i.e. need of high interest rate for borrowing, instead of the liquidity-trap, the deflation.)
Greek economy is actually highly reliant on the Eurozone economy... Greek system should be more intervened by the European central government! The silly idea of the Eurozone is that it still allows each member to incur the national debt under the common monetary policy...! This is the same silliness as though allowing each state in the USA to hold its own public debt without complete separation of the states and the federation!
When I read the Wall Street Journal on 10th of May, this American news paper claimed that European economy will be drawn into the insoluble fiscal chaos due to her extremely tolerant attitude toward the irrational European populism... This fiscal chaos won't be overcome unless a strong (even oppressive) enforcement on fixing this fiscal imbalance and the irrational populist influence on the fiscal structure...
... I must say that the Europe suffers from the tyranny of majority as same as Japan! Therefore, any rational movement hardly takes place...
But, unlike Japan, the integrated European economy has a full of potential! An affluent human capital development, variety of factors of productions from different European countries, and the strong capitalist ethics which has been developed over centuries!
"Europe needs an iron-lady" as same as Britain had. But, the problem is that this scale of the economic failure is bigger than what Britain suffered from in the past. Therefore, the figure which is larger than British iron-lady...! But, the tyranny of majority won't accept such the "to be cruel to be kind" method as this majority is already spoiled by the illusion of their Utopian dream.
This is the same as Japanese tyranny of majority expelled Mr. Kakuei Tanaka, the admirable Japan's former prime minister, who thought of people better than what people thought. Mr. Tanaka was the person who could make Japan truly sovereign and enlighten Japanese people to be evolved from poppets to independent minded citizens! The similar event is now taking place in the Europe... If the tyranny of majority is strong enough to oppress the talent, it fails into the problem seen in both Japan and Europe!!
... "In order to defeat a monster, it needs the monster stronger than this monster...!". Hence, the tyranny may be only able to be defeated by another tyranny which is stronger than the current tyranny...............