I think I can best contribute
to this conference by setting down a number of outrageous short propositions, which more learned participants can then disagree
with at some length.
I am going to do an awful thing as a happy
economist (there are some) at a joint conference of the Danish Economic Association and the Danish Foreign Policy Institute.
I am going to say that most of the economic problems in front of us are very easy, and that it is doubtful if even economic
advisers to present major governments can for very long go on making a mess of them - although foreign policy experts, such
as Henry Kissinger, do a lot to help us try. And I am going to forecast that foreign policy problems are going to grow more
difficult, for reasons familiar to each of the three regions which we have been asked to think about at this conference.
At the end of this paper I will set down two propositions about the oil
exporting countries, which have moved from being very poor to being briefly very rich, but some of whom will probably soon
move back to being poor, because they are likely to be ruined by their monoculture of what will become unwanted oil.
In the middle of my paper I will
set down two propositions about the poor countries, the desperate two-thirds of mankind who should always be in the centre
of all human thoughts.
But at the beginning of my paper I hope
you will forgive me for setting down nine propositions about the rich or OECD countries.
The main reason why economic problems are easy in OECD is that, at a time when everybody is saying that economic
growth is going permanently to slow down, there is a strong probability that economic growth is instead going to accelerate.
The main reason why foreign policy problems may be going to become more difficult is that we are probably coming to the end
of the American century of 1876-1976, just as a hundred years ago we were coming to the end of the British century of 1776-1876.
Which leads to:
Proposition number one. Through some sophisticated
fluke, the two empires who through very temporary dynamism led the two successive centuries of material advance - the British
in 1776-1876 and the American in 1876-1976 - handled the task of world leadership rather surprisingly well. Most of the right
sides eventually won most of the big hot and especially cold wars. This has been particularly true of these last dangerous
30 years of the American century. I always infuriate my children by saying how much more hopeful things look in 1976 than
they did in 1946 when I was their age. We still barely recognise the progress we have made and the escapes we have achieved.
In 1946 the average age of death of an Indian was in the late 20s; now it is in the mid-sos. In 1946 real gross world
product was one-quarter of what it is now. In 1946 the political situation was that the principal arbitrating power in the
free world had just plopped into the hands of two small and unknown men - Truman and Atlee - by outrageous historical mistake.
1946 was also the year in which one of my contrymen was, as an act of idealism, giving the secret of the nuclear bomb to a
mad Russian dictator, whose qualifications for thus holding in his hands the power to destroy the planet were not comfortingly
advertised by the fact that he was soon to want to condemn his doctors to death for not making him feel better on the increasingly
frequent occasions when he went to bed mad roaring drunk. I am sometimes accused of being too optimistic in what I write.
I think that anybody who has been a journalist in the past 30 years has really been living through those 30 years in a state
of evaporating nervous breakdown. Now we come to one reason why it may not continue to evaporate.
Proposition number two. The Americans in 1976 are now showing the same symptomsof a
drift from economic dynamism as the British did at the end of their century in 1876. We britons are experts at describing
a drift from economic dynamism because we have spent 100 years observing it at close quarters. There were two early signs
of Britishdecay by the 1870s. First, the upper class just about then began to regard businessas something rather vulgar and
to look upon new factories as things that were ecologicallyunfair to their pheasants and wild ducks. That is exactly the mood
of America's- and, alas, Scandinavia's - intellectualupper class now. Secondly, after about
the 1870s a progressive person in British public life no longer meant a person who believed in progress, no longer a person
who was eager to rout down to the roots of every way of doing things so as to cut and graft whereever an improvement in production
or effectiveness or competitiveness or individual liberty could be secured. A progressive personbegan to mean a chap who did
not like progress and change very much, but who was most decently eager to pass on in welfarebenefits a larger part of the
growth in national income which his own anti growth attitudes now made it more difficult to attain.That is exactly the change
that has happened in America in these years just before 1976. Most of their new senators and congressmen seem to me to belong
to the Fabian society of about 1903. All their publicwomen are Mrs-Pankhurst-suffragettes. One can most easily envisage them
in bicyclingbloomers.
Proposition number three. World leadership
is therefore likely to pass into new hands quite early in the century 1976-2076. If one had been guessing in the 1870s who
would take over world leadership from the British, one would have guessed Bismarck's Prussia and been quite wrong. If
one is guessing in the 1970s who will take over from the Americans I would guess Japan and probably be quite wrong.
Proposition number four. During this new century 1976-2076
the world will face some extraordinary opportunities and also some bizarre dangers. The opportunities will probably include
an ability to put material living standards in the 21st century more or less whereever men want them. The history of
economic growth is that, after man stopped being a mainly migratory animal in about 8,000 BC, real gross world product per
head stood practically still for 10,000 years down to about 1776. Then it exploded. Real incomes have increased in each of
the 20 decades since 1776 (even the 19305) because of an increase in every decade in man's control over energy and matter.
To this has been added, in the last two decades, a breakthrough in the processing of information and a nascent breakthrough
in the distribution of information (ie, computers, telecommunications by satellite, the beginnings of packaged and computerised
learning programmes, maybe even at last a start towards understanding of the learning process itself). It seems to me rather
likely that this will make the potentiality for economic growth accelerate, not slow down.
Proposition number five. Ecologists say that the main barriers in the way of further growth will be a shortage
of (i) energy, (2) food, (3) raw materials, plus (4) high birth rates and (5) high pollution These seem to me to be the five
least likely barriers to growth in the next 20 years. Energy, food and raw materials are each things in high elasticity of
supply, each things whose productionis now in a state of exploding technologicalinnovation, yet each things in which the present
selling price to advanced countriesis above even present day marginal cost of production. The same broad considerationsapply
to birth control devices and to anti-pollution techniques - ie, advancing technology and subsidised oversupply. If we do run
into temporary shortages of supply, it is much more likely to be in things in which we do
not allow a market mechanism to operate properly, such as water and nonacademiceducation.
Proposition number six. We do, however, face a major problem in business organisation. In the rich one-fifth
of the world during the dying manufacturing age we have built up big hierarchical business corporations, in which executives
sit arranging what each man below him will do with his hands, down to the man turning a screw on the assembly line. Now in
the post-manufacturing age we have great hierarchical corporations in which executives sit trying to arrange what the man
below him will do with his imagination. This doesn't work, and can't work. New forms of business organisation will have to
be found, probably making big corporations into confederations of entrepreneurs. The firms and countries that will go bust
in these circumstances are those which try to replace hierarchical corporations by even more ossified forms of hierarchical
corporations: say, by deciding that you mustn't have a boss trying to arrange what free men do with their imaginations, but
can have a trade union committee doing so instead.
Proposition
number seven. The bizarre dangers in the century ahead will include, first, the biophysical. The present orthodox way of creating
a human being - namely by copulation between two individuals giving no thought to what the product will be - may quite soon
change. Sex is already 99-99 % f°r fun, and technology is bound to home in on the pre-planned twice in a lifetime occasion
when it will be for reproduction. duction.Our children will probably progressively be able to order their babies with
the shape and strength and level of intelligence that they choose as well as alter existing human beings so as to insert artificial
intelligence, retime brains, change personality, modify moods, control behaviour, enjoy artificial pleasure by stimulating
the pleasure centres of the brain. And lots of even more honied things like that. The pace and sophistication with which some
of these things are not done will hang on the world's leading nations whom other peoples will most wish to emulate or will
most fear to fall behind.
Proposition number eight. One
termonuclear explosion can now release more explosive power than was released by all of the explosions of all the TNT in all
the wars of history. And a thermonuclear bomb is soon going to be almost portable. Quite small groups of fanatics and terrorists
and individual criminals will therefore soon have the capability of destroying the planet. We have not made the beginning
of an advance towards thinking what we will do as that power of blackmail escalates.
Proposition number nine. Just as the centuryfrom 1776 to 1876 was based on the transport revolution of the
railways and on steam power, just as the century of 1876 to 1976 was based on the transport revolution of the automobile and
on manufacturers' assembly lines, so the third century of 1976-2076is to be based on the third and by far biggest transport
revolution - that of telecommunications - allied to knowledge processing. This is likely to change the whole pattern of our
lives, because it probably
Side 162
means that an increasing number of us will no longer have to live near the places of our
work. We will be able to live in Tahiti if we want to and be able to telecommute daily to our London or New York or Copenhagenoffice
in order to have continuous contact with the computers and colleagues with whom we work. Sociologically, this makes it quite
possible that the age of urbanisationis about to end and the problems of the re-ruralisation about to begin.
So much for the rich one-fifth of the world. Now for the poorest two-thirds
of what will become the nuclear trigger-minders' profession. We British left behind in the power structures of those countries
ex- Sandhurst cadets and ex-London-School-of- Economics-socialists; those are the two least suitable types for ruling anything
in this last quarter of the twentieth century; they are now fighting civil wars against each other across all the parts of
the map that were once painted an imperial red. So we economists had better look for ways of correcting these mistakes that
experts in Foreign Policy have made.
Proposition number
ten. The best mechanism would be something like this. At present nearly all big industrial countries look forward to what
their gnps may be a year ahead, and most often pump any desirable extra spending power initially into the hands of the poorer
countries (extra SDRs created so they can expand their imports?). Their use of this would then mop up unwanted unemployment
in the world's rich north.
The objective should be to
raise ever more countries to the sort of income level where their governments will be composed of people who think of themselves
and their political opponents as heading slowly towards comfortable retirement, instead of racing to get their brothers-in-law
to the firing squad first. Probably the best definition of the sort of government that will not start nuclear fighting is:
any government where the decision-makers assume that they personally will end their lives in the local equivalent of Southern
California, a dacha autside Moscow, or the House of Lords. This seems usual at gnps per head over about $ 1,000 a year.
Proposition number eleven. The worst mechanism will be one much favoured
by meetings of economists and foreign policy experts: namely conferences on international stability that pass motions in favour
of repealing the laws of supply and demand. All these attempts at creating buffer stocks are helping to lock poor countries
into products that are going to be unprofitable. We are repeating the same error as we commited 25 years ago.
Proposition number twelve. As we have one group of poor countries that
are temporarilyrich, do let us try to find during this breathing space a mechanism for movingwestern technology down to them
in the right places. I do not myself think that multinationalcorporations are going to prove the right mechanism: they make
goods bought by the richer 40 % of people in these countries,and are running into all sorts of organisationaldifficulties.
But it will be wonderfulif we can use this period to establish mechanisms for performance contracts: to bring a dynamic to
food production by sayingthat high profits can be received by any new sort of corporation that can raise nutritionstandards
Side 163
tionstandardsin
Algeria by starting green revolutions there, increase literacy and health standards in Nigeria by computer-assisted education
or health care delivery etc.
Proposition number thirteen.
You will have gathered that I do not think the age of high oil prices will last long. There are many thousand possible ways
of releasing energy from storage in matter. They range from petty ways, like 25 BTUs per pound of matter by letting a pound
of elastic bands untwist; through fairly petty way, like 20,000 BTUs by burning a pound of petrol; through more sophisticated
ways like 250 m BTUs from the fission of the U-235 isotope in one pound of natural uranium; up to 260 thousand billion BTUs
from the fusion to helium of a pound of hydrogen. Note that this last system, in which the waters of the oceans could serve
as a limitless reservoir of fuel, would be over 10,000,000,000 times more effective per pound of matter than burning a pound
of the Arabs' oil.
The trend since 1776 has been for new
technology to drive on in sudden bursts towards the cleaner power sources nearer the top of the range. The present "energy
crisis" - ie, the raising to a 100 times its marginal cost of the asking-price for the inconvenient mineral slime that
is temporarily considered the most transportable energy source - must make the next burst a bit faster. The likely speed of
the coming glut in oil might best be gauged by the speed with which other sources were displaced when oil became cost-effective
(oh, those poor interwar coalminers and horses), by the range of known future alternatives (unprecedented, including fusion,
solar geothermal, ocean-gradient, renewable cellulose-intoclean-alcohol, a lot of others).
That has provided an unlucky 13 of outrageous propositions. Briefly (1)(1) that the world has done
marvellously well in 1776— 1976; (2) that the Americans are in danger of becoming undynamic Fabians; (3) that world
leadership will pass to somebody else, with the favourite being Japan: (4) that economic growth will accelerate in the next
25 years, just as most people are expecting it to slow down; (5) that there will probably be especial gluts of energy, food,
raw materials, environmental controls and too few births, (6) that businesses need to become confederations of entrepreneurs;
(7) that there are big dangers that biophysics might alter the nature of man; (8) that there are even bigger dangers that
small groups of lunatics might blow the world up; (9) that telecommunications are going to provide the third great transport
revolution, and that we will all telecommute; (10) that we need to switch macroeconomics from planning gnp to planning gwp;
(11) that buffer stock schemes are bound to be unsuccessful attempts to repeal the laws of supply and demand; (12) that we
need to create performance contracts for new sorts of profitmaking multinational service corporations to be paid profitably
if they increase (eg) nutrition standards in Ruanda-Burundi; (13) that oil prices will crash.
I think I can probably be of most use at the conference if I do not make a long speech,
but throw myself open to answering questions and receiving assaults from the majority of participants who will probably disagree
with most of those propositions.
................................................
How to Avert A Great Depression Through the Hungry 2010s? Answer, By Making All Banking Very Much Cheaper This was Norman Macrae's last article written in December 2008
If banks in rich
democracies had been truly competitive institutions, at least one of them somewhere would have seized the main opportunity
created by the computer. This main opportunity was to make all deposit-banking vastly cheaper than ever before. By this
cheapening it should make such banking hugely more profitable. Then further competition would search for the cheapest ways
to guide all the world's saving into the most profitable (or otherwise most desirable) forms of capital investment, thus enriching
all mankind. Instead, during 2008 the total losses of banks in rich democracies- in North America, West Europe and Japan
- soared into trillions of dollars. Fearful for their solvency, these banks virtually stopped lending. The issuance of
corporate bonds, commercial paper, and many other financial products largely ceased. Hedge and insurance firms also crashed.
Mankind is thus threatened in the 2010s with its longest great depression since the hungry 1930s. Why? The strange answer
seems to be that other happy consequences of modern technology promised to make this cheapening even faster. Call centres
in Bangalore vastly undercut the middle class salaries of Midland bank clerk who until the 1950s expensively answered clients'
questions in their branches in the City of London. Cheap mobile phones kept village ladies in once miserable Bangladesh as
fully in touch with market prices as is the chief research officer of the First National Bank of Somewhere in California.
His weekly salary is still 1000 times greater than the previous annual earnings of that village lady. The cost-effective way
of running the old Midland or First National then seemed to be to cut its total salary cost by something like 99%. This
did not please Western welfare governments, or the decent chief executives of the old Midland or First National bank.
Awaiting the sensation of a short sharp shock From a cheap and chippy chopper on a big black block - WS Gilbert in The Mikado - why it is uncomfortable to work in an industry which needs 99% redundancies.
Western welfare governments have long preferred to run their banks in high cost cartels, and even
invented reasons why this seems to be moral. Their deposit-banks have usually kept in cash only 10% of the total amount
deposited with them. If 11% of depositors suddenly feared that their banks might go bust, this could accelerate a run that
would send them bust indeed. Governments therefore thought that depositors would be less fearful if they were assured
that the banks were officially and tightly regulated. Actually, this mainly meant that the banks had to hire ever more expensive
lawyers so as to escape any crippling consequences from this regulation. The attached quote shows that Samuel Pepys understood
this fact of life in his /Diaries of July 21, 1662.
I see it is impossible
for the King to have things done so cheaply as do other men - Samuel Pepys on discovering an important commercial fact
of life in his Diary, 21 July, 1662
The decent bosses of the deposit banks felt that
the best way of avoiding sacking nine tenths of their staffs was by competing with a very different sort of financing called
merchant banking whose earnings and bonuses were far more generous than those given to their own staff. These merchant banks
were of peculiarly differing pedigree. In London, it was assumed that they could best be run by families like Barings who
had done the job for over 200 years. In the 1990s, Barings went totally bust because one of its hired traders bet much of
its money on a hunch that a bad earthquake in Japan meant that the shares of Japanese banks and insurance companies would
become more profitable. In Zurich, merchant banks felt it most moral to keep the accounts of their depositors totally secret,
especially if these accounts were being used to defraud their own countries' tax authorities. In 2008 those secretive
banks were then defrauded. In Wall Street, Goldman Sachs and Lehman Bros bid up their annual bonuses to millions of dollars
for each partner. In 2008 even Goldman Sachs made a loss and Lehman Bros went bust. A former chairman of the Federal
Reserve argues that "fearful investors clearly require a far larger capital cushion to lend unsecured to any financial
intermediary now". He therefore thinks that taxpayers money should be ladled into them to make those investors less fearful.
This seems far more likely to make depositors intermittently more terrified and cause any depression into the 2010s to linger
on and on.
In the 1930s, the chief economic adviser to the government of Siam
was called Prince Damrong. I try always to remember it - quote from former director of International Monetary Fund.
One of the few big banks to make a profit in 2008 was the Grameen Bank (which means Village Bank)
in that once basketcase country called Bangladesh. The sole staff in a branch serving several villages was once a woman student.
It is now more usually someone who has learnt to use the computer in the right way. The rest of this report will examine
how this marvellously costcutting operation works.
Perhaps the most relevant and terrifying
analogy is to commercial airlines. In 1945, there were only a tiny number of passenger airmiles flown on them. In each successive
year these increased hugely and in this slump time 2009 there will be billions of passenger airmiles flown. In the late 1940s
most governments therefore created national airlines and were confident they would flourish in this boom industry, with official
regulation assuring they would be safe. Instead all proceeded to lose money, and later privatised but large airlines also
did. The present trend is to cost cutting airlines like Ryan Air.
The same will happen
to banks. Large banks mislending to the rich have run into losses that have created the slump. Politicians, thinking they
are saving the world, are mislending huge sums to these mislenders and will eventually make the slump worst.How
to create cost-cutting banks? To begin with Consider Bangladesh - peculiar as this may seem.
START IN A STARVING VILLAGE The Nobel peace prize for 2006 was controversially awarded, in Oslo, to a "banker
for the poor" in usually unfashionable Bangladesh. Since the microcredit system pioneered by this Dr Muhammad Yunus really
has lifted record millions of Bangladeshi women from the world's direst poverty, some of the world's toughest tycoons
have thrilled to his stated aim to "harness the powers of the free market to solve the problems of poverty". To
his fans' delight and astonishment, he is achieving exactly that. In the past quarter of a century, his Grameen Bank
has lent (without collateral or lawyers) increasing billions of dollars to millions of poor women in the previously starving
villages of Bangladesh, and got an extraordinary 99% repayment back. His often illiterate customers have started millions
of successful small businesses in unimagined fields like mobile telephone ladies and saleswomen of the world's cheapest yogurt.
All these successes have been won by keeping costs incredibly low. A banking operation that would cost Goldman Sachs
$100 in New York or London would cost Grameen in Bangladesh well under 100 cents. This is a huge development in human
history. Money can now be directly channelled into productive use by the world's poorest people, while unsuccessful lending
to the rich has caused a world slump.
How do we switch custom to cost-cutting banks? During Bangladeshi's terrible famine year of 1974, Dr Yunus ( who had won his doctorate in economics in a free market American
university, which most founders of banks have not done) came back to his 1940 birthplace of Chittagong, as professor
of economics at the university there. He started lecturing on his republic's 5 year plan, which like most 5 year plans was
economic nonsense. In search of reality he took a field party of his students to one of the nearby famine threatened villages.
His group analysed that all 42 of the village's small businesses (such as tiny farm plots and market stalls) were indeed going
bust unless they could borrow a tiny total $27 on reasonable terms. The first thought was to give the $27 as charity.
But Yunus lectured that a social business dollar, which had to be paid back after careful use in an income generating activity
was much more effective than a charity dollar, which might be used only once and frittered away. The careful use of loans
in very small quantities, says Yunus "means that you bring in a business model, you become concerned about the costs,
the revenue, how to bring more efficiency, new technology, how to redesign, every year you review the whole thing. Charity
doesn't bring that whole package". Mercifully, all those first 42 tiny loans were fully repaid, and lent back. After
9 years of further experiments, Yunus in 1983 founded his Grameen Bank. Its priority was to make loans that were desperately
needed by those of the poor that did repay them. Indeed, he argues that "access to credit is a human right so long as
that credit is repaid". This is the reverse of the usual banking priority, which is first (and in credit crunches only)
to make the safest loans those to the rich that can provide collateral. In these last 25 years, Grameen has provided
increasing $billions of loans to poor people with that astonishing 99% repayment rate. In 2006, it had 7 million borrowing
customers, 97% of them women, in 140,000 villages of Bangladesh. Microcredit had by then reached 80% of Bangladesh's
poorest rural families. Over half of Grameen's own borrowers had successful small businesses. The women borrowers predominated
because they usually are the poorest people in rural Islam and proved best in paying back. When a Grameen bank manager
goes to a new village, he has entrepreneurially to seek for poor but viable borrowers. He earns a star if he achieves 100%
repayment of loans, and other stars if his customers are fulfilling most of the 16 guarantees that all customers are asked
to pledge, ranging from intensive vegetable growing, through sending all their children to school, to renouncing dowries.
A branch with no stars would be in danger of closing, so borrowers rally round with suggestions, such as which unreliable
repayers to exclude. Borrowers from the bank who do repay are called owners of the bank and receive incentives such as
opportunities for insurance, and for winning university scholarships for their children.
A
GENERATION ON - ENTREPRENEURIAL FUTURES ARE MOBILISING An extraordinary income generator was the profession of telephone
ladies. They borrowed enough to buy a cheap mobile phone from a Grameen subsidiary. They draw fees for phoning to see if more
profitable prices for crops are available in a neighbouring village, and from anybody who wants to hire the phone to contact
the outside world. This is a job that could only become important in a microcredit setting. The owner of a mobile phone in
richer suburbia would not find many customers to hire her set. One special desire of Yunus was to improve the nutrition
of poor children in Bangladesh, and he formed a social business with the largest French food multinational. This Grameen-Danone
test marketed to find what sorts of fortified yogurt Bangladeshi children would like. Although Danone at first wanted large
plants with refrigerated systems, Grameen won the debate to make them small plants which bought local milk learnt a lot
about sales of a new product in poor countries. A French water company is forming a similar social business with Grameen to
offer a clean water alternative to the arsenic found in Bangladesh's rural water supply. Some American computer tycoons may
help to find the best way to establish computer centres in remote villages. The telephone ladies will then face competition,
but constant competition in new technology is one name of this game.
Nobody is suggesting that Goldman Sachs,
when it recovers,should operate precisely in Yunus' mode. But some competition in sharply cutting costs in most banks will
have to be part of the world's new banking system.
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What Everybody
Needs to Know First About Economics
Economics designs peoples futures but this depends
on what logics are analysed- here are the logics The Economist used in the early 19080s when it discussed how the net gneration
could be the most productive time for youth
A
nation/place cannot sustain growth unless its capital is structured so that family's savings are invested in their next generation's
productivity. Norman Macrae's 1954 book on The London Capital Market provides chapter and verse. Historically it
was timely as London's industrial revolution had planted most of the developed world's laws and financial instruments. Futurewise
this book became a source for Norman's forty years of leadership challenges including 3000 editorials. THese became branded
in the 2 genres of entrepreneurial revolution and future history of the net generation genre which he focused on from 1972.
They script in practical details most of the changes that economists would need to make to historic rules if globalisation
is not to collapse the worldwide financial system of 2010s
Norman framed his
writings on future purposes huan most wanted around the idea that The Net Generation to 2024 would face change on a scale
never previously experienced by our human race. To prevent risks and celebrate job creating opportunities Norman proposed
in his 1984 book (The 2024 Report) that the world should unite around youth's most exciting millennium goal. He explained
why economics would design the most popular futures if the goal was chosen as racing to end poverty everywhere. Reasons
included: its possible, its exciting, it creates jobs post-industrial generation will need to design around collaborative
technology, it can empower youth to joyfully unite cultures as we become borderless (more connected than separated), it aligns
economics principles with nature's exponentially (compounding) rules of evolutionary selection which are community-up and
open.
We are shocked how few people know of the main
findings of the renowned economist Maynard Keynes- increasingly only economics riles the world and the greatest risk to the
future working lives of our children comes from elderly macroeconomists who hire themselves out to the biggest who want to
get bigger.
Historically when faulty systems
of macroeconomists ruined civilisations they fell one by one. But Einstein took Keynes logic further and hypothesised that
the first generation to become more connected than separated by technology would be subject to a final exam. Now if we let
erroneous macroeconomists rule whole continents of nations will collapse.
By 1976 my father (Norman macrae) -probably the last student of economics
mentored by Keynes- was writing at The Economist why the next half century would see the net generation
tested - he called upon the genre of Entrepreneurial Revolution (ER) networkers to sort out the greatest innovation
challenge economics - and so the human race - will ever face .
.
The opportunity of 10 times
more productivity for the net generation (with million times more collaboration technology than man's 1960's race to moon)
.The
THREAT is preventing the threat of collapsing continent-wide
system of value exchange. By 2020 the (exponential track impacting future) sustainanbilyty of every village around the globe
will likely be lost or won
.....
How could we be experiencing record youth unemployent when we are living in a time
of a million times more collaboration tech than a generation ago? According to research by Entrepreneur networks started at
The Economist in 1976, we are 36 years off track in compounding 2 unustainable systems whose follies multiply each other
that caused by non-economic media which also distracts us with glossy images and
soiundbites instead of future realities and integrated cross-cultural and inter-generational understanding - full briefing here
World's biggest maths error compounded by macroeconomists and all global professions
with a ruling monopoly - see below
Discuss: what does everyone need to know about the way economists think and behave. Understand 2 opposite
segments of E : The Unacknowledged Microeconomist and the Fatally Conceited.MacroEconomist
Keynes
- because economics will incresingly rule the world, the greatest danger to the futures of youth is elderly macroeconomists
where fame maks them compete to superpower over peoples
Boulding: ****the
historic significance of capitalism is precisely a society in which exchange has become a more important source of power than
threat**** in his book economics as science
Von hayek- given the fatal conceit in my profession, I really think you shouldn't be doing this - awarding
me a first Nobel Prize in economics
freedom of
speech and everything about the future you want, NOW depends on enough people knowing how to play the value exchange game
- and why that isnt exactly what the game of monopoly teaches - an exchange is where each side says I wants something from you so let's work out what I
can do for you and purposefully improve on this over time through hi-trust communal feedback
debate difference between true capitalism and phoney capitalism
agree on a picture like
that on the right- we have seen cases where one of the 10 coordinates shown felt the system had betrayed their greatest
trust, and so zeroised the organsaition or network (even ones that accountants had been reprorting record profits ahd $100
billion equity
start discussing multi-win models - see our 4 favorites from 36
years of debates with entrepreneuruial revoltionaries
choose say 12 markets whose future
purpose is most vital to sustaining your children - and use media to agree what the greatest human purpose and corresponding
mkilennium goals are that need investing in to fee each market and youth's working lives in serving the most valuable purpose
get those (including all parents?) who save across generations to throw out speculators from banking systems
and capital markets - eg next time there is a bailout (which means taking your childrens money to refinance a bank) wipe out
shareholders; let them set lawyers on old managers and any politicians their pr's lobbied; keep savings accounts safe; restructure
bank so that it invests in youth productivity and sustaining communities not bubbles, and not trapping people in debt
Goodwill explains up to 90% of value impacts of any organsaition in a networked economy- yet no nation
yet requires that organisations it licences to audit goodwii. 20 years of research has proved the following reciprocal relationship
- the purposeful question" who would uniquely miss what if your organsaition did not exist?, has the reciprocal
question why let your organisation contnue to exist if it has broken my life-crtiical trust it promised to serve
.........................................
valuetrue capitalism maps how each side win-win-win from other sides communal purpose over time -this goes
back over 250 years to the criteria of free markets adam smith demanded freedom of speech questioned - he talked
about the transparency of community markets where a rogue trader might fool some of the people but not for long and not for
too big to fail! - the journal of social business edited by adam smith scholars at his alma mater Glasgow University
advises people of any other tongue how to build up from adam's hi-trust ideas to such constructs as sustainable global vilage
networking first mapped by schumacher (another keynes alumni) - we have a library of free articles for you to choose and translate
from
phoney capitalism spins a monopoly, a non-free maket - one side rules by
saying I want to take more and more from all of you- esentially this is what rules when global accountants audit only how
much one side has profited/extracted withouth how much has it sustains other sides- phoney capitalism can only result in exponentai
meltdown becuase so much has been extracetd from system that its unsustainable for human lives or for nature or for both
www.youtube.com/watch?v=qV4Xs1YgwUwSep 23, 2009 - 4 min - Uploaded by microeconomist Mobile Planet's Center of Entrepreneurial
Revolution?by cmacrae280 views ...
Mobile Planet's Center of Entrepreneurial Revolution? globalgrameenisborn
· socialbusinessdecade · yunus69birthdaylondoncreativelabs.avi · yunusyouth...
MORE ABOUT WHERE VALUING NETGEN CAME FROM
- in the 1990s I was working with big 5 accountants;
I argued for a missing audit they needed to do as regularly as their monetisation audit; I called this how goodwill modelling
multiplies value around a gravitational purspoe ewhise gials all sides want to progress over time; it turns out that in knowlege
scetors over 90% of the future is bayesian predicatbale on quality of goodwill relationships-3 yeras before andersen crashed
I usd this model to warn them that if they stoped multiplying conflicts around true and fair they would be zeroised by society-
I didnt succeed in getting my advice to be acted on but at that time unseen wealth publications made by brookings and georgetwon
had just been banned by the incolimng bush adminsitration - who didnt like to be told that without the second aidt risks would
compound unseen- every collapse USA has seen a hand in during 2000s (and viralised to other nations since 2008) can be traced
to this mathenatical error
what can be done about this mess
-debate difference between true cpaitalism and
phoney capitalsim
choose say 12 markets hose future purpose is most vital to sustaining your children - and use
media to aggree what the greatest huan purspose and corresponding mkilennium goals are that need investing in
get
thse who save across generations to throw out speculators from bankiing systems - eg next time there is a bailout (which means
taking your childrens money to refinace a bank) wipe out sharehilers; let them set lawyers on old managers and any politicians
their pr's lobbied; keep savings acconts safe; restructure bank so that it invests in youth productivity and sustaining communities
not bubbles, and trapping people in debt
-if you do this today's millions times more coalbration technology than
a generation ago can make the next decade the most productive time and joyful for youty and everyine to be alive instead
of the most dismal time where natios led by old macroecnomist put youth out of work
DO YOU KNOW...
Q: Original Purpose of Economics? A The Scotland of the 1750s was at the end of a first
generation to have found their country taken over by England's
Empire., So Adam Smith was motivated to start writing
about how to design systems so that peoples could could look forward to their next generation sustaining more productive lives
than they had had ... 7 quarters later keynes general theory issued humanity's greatest challenge- economics as a systems
science had reached the state that only economics rules the world ... more
Q: What do the man-made systems that rule the world look like? A Purposeful
value exchanges composed round 5 main flows of how productively peoples lives are used and 5 main demands human beings
make as co-workers, customers, owners, stewards of the globe, stewards of society at the village level - more
Q: Why can't human race in 21st C be sustained with choice of economics made by 20th C biggest
banks and govs etc? A Long Story: ER alumni are in their 37th year of offering debating scripts eg1 on wht some industrial age systems after world war 2 were designed to be too big to exist as the
first net generation became more connected than separated by geographical borders ... What is known is that 2010s is most
exciting decade to be an entrpreneur because our impacts define what will be possible for all our childrens' children more
World Class Brands are in 25th year (as a subnetwork of Norman Macrae's Entrepreneurial Revolution)
of helping sustain the most purposeful organsiations or markets in the world. Core to any charter of purpose is a quiz
revolving round this question- who would uniquely miss what if this didn't exist?.
From this Q&A's list of trust-flows, economics maps how to connect producers
and demanders of the exchange in multi-win models of purpose. Henceforth, potential conflicts with this goodwill
model are audited and resolved at every cycle so that unique purpose is celebrated to lead the future by
continuously multiplying the most value and trust. This model provides the simplest benchmark around all exponential
impact metrics of sustainability investement can be calculated and the transparency of all multi-win models are webbed
around pro-youth economics. Questions welcomed chris.macrae@yahoo.co.uk washington dc hotline 1 301 881 1655
Microfinance Focus, November 4, 2011: Professor Muhammad Yunus was invited to deliver
a key note speech during the G20 Young Entrepreneurs Summit held in Nice, France. Professor Yunus addressed an audience of
more than 400 entrepreneurs from all G20 countries. In his speech, he shared his personal entrepreneurship experiences, his
faith in young entrepreneurs to be the pillars of society and the need to include poor countries in the discussion process
in making global decisions.
Professor Yunus being an entrepreneur himself started off creating the Grameen Bank that
provides microfinance services to the poor who had little access to financial provisions. From that, he ventured into a wide
number of social businesses such as Grameen Nursing College, Grameen Eyecare Hospitals, Grameen Shakti, etc.
He has
always considered young entrepreneurs to be the most effective solution for the future. He said “In my opinion, G20
YES is a fabulous initiative, gathering so much energy and momentum from all over the world. Because of their creativity and
leadership, provided that they commit to share the value they create, these 400 young entrepreneurs in this room can change
the world.”
Professor Yunus is also a member of the Millennium Development Goals (MDGs) Advocacy Group, advising
the Secretary General of the United Nations. Hence, he believes that the next generation of youths should be handed over the
process of the MDGs as soon as possible. He believes that entrepreneurs will have a key role to play in fulfilling the MDGs,
if they are committed to the social value created by their companies, and social business can be part of the solutions.
In
his speech, he added that the G20 needed to broaden its scope to deal with the current world crisis. It can no longer remain
a political forum with economic agendas. The G20 needs to create a social agenda as well. Professor Yunus proposes that ‘social
business’ should be brought to the agenda of G20, as one of the concrete and effective solutions to be considered for
immediate implementation so as to guide capitalistic investment towards social value and jobs creation, rather than sheer
profit maximization strategies. A social business is a cause-driven business where profits stay within the company for its
sustainability.
Lastly, Professor Yunus concluded that the G20 should be expanded into the G25, where poor countries
from each continent should be included in the global agenda which they are part of. He added that “Their problems are
inter-related with others, and their proposals of solutions should be considered by the most economically advanced countries
in making global decisions. A G25 would be a big step toward ensuring that global social issues are raised, and MDGs implementation
is fully shared on the global agenda. And finally, because fighting poverty together is the only way to bring long lasting
peace in this world.”
inquiries chris macrae info @worldcitizen.tv us tel 301 881 1655 ; us office 5801 nicholson lane
suite 404, North Bethesda, MD 20852 USA - skype chrismacraedc
Mapping is a process of discovery. Crucially maps are only as usable as updating correctness of bottom
up information. Think of your own use of a map. You look for the "you are here arrow". You want to be directed to
somewhere/someone you dont know how to get to; you want your return vist to be safe as well as a value multiplying win-win.
Does anyone remember the simplest findings of einstein and jon von neumann. Einstein proved
that to innovate more value you need to go more micro in what you model; von neumann showed that there is more value to be
networked by interfacing safe flows across systems instead of ruling over separation of boundaries. There isnt a single
global metrics profession that gets these mathematical -and natural - principles right. Unless we change this global
markets will cycle through ever greater collapse and more and more communities will lose sustainability. Mapmaking is that
critical an idea to what the net genration will achieve in 2010s; but its also one that children from primary age up can action
learn. Its simple. Its just that it works the other way round from top-down people's fatal conceit.
It explores how to make the invisible principles and practices of real wealth creation
visible, and therefore useable. Our planet needs case studies underline the search for new win-wins that build ‘system
integrity’ Trust-flow is the unseen wealth to invest sustainability in. Tranpsarently mapped it develops
a goodwill gravity tyhat invites with roleplayer in a community to multiply goodwill while sustaining their own cashflow..
Trust is not some vague, mushy, abstract warm-hearted sentiment. It is an economic powerhouse – probably just as economically
and socially important as oil. The point is, there are specific things you need to do to get trust flowing, just as
there are specific things you need to do to get oil flowing. And like oil trust has a dark side. Right now, the world is awash
with the carbon emissions which threaten the stability and sustainability of its ecosystems. Right now, the world is also
awash with the ‘carbon emission’ of trust – mistrust. Indeed it may well be that our ability to tackle the
one issue – the threat of environmental catastrophe – depends on our ability to tackle the other issue: how to
generate, deepen, extend and sustain trust.>br>But what is the best way of doing this? One thing is for sure. You don’t
build and sustain trust via some sentimental exercise of goodwill to all and sundry. There are three very simple principles
at the heart of effective trust generation. First, trust is generated via win-win relationships. It’s virtually
impossible to generate or sustain trust without mutual benefit for those involved. But beneficial outcomes are not enough
in themselves. For trust to be built and sustained, both sides need to signal a demonstrable commitment to finding win-win
ways forward. Such a commitment may require real changes to what we say and do. Second, real ‘win-wins’
are hardly ever purely financial or material. You don’t build trust simply by walking away with more cash in your pocket.
Trust works at all the dimensions and levels of human exchange. Yes, it’s about financial and material rewards. But
it’s also about purpose (what people want to achieve). It’s about politics with a small ‘p’: the use
and abuse of power, the crafting and application of rules of fair play. And it’s about emotions: the sometimes overwhelmingly
strong emotions, both positive and negative, that are generated when people deal with other peopleWhat’s constitutes
a ‘win’ – a sense of real improvement – is therefore highly specific. It depends absolutely on the
details of who the parties are, what they are trying to achieve, in what context. Building trus, therefore involves discovering
these specifics. Just as oil doesn’t flow out of the ground, get refined and pump its way into motor vehicles automatically
and without effort, so identifying and doing what is necessary to get trust flowing requires dedicated, skilled effort. It
requires a disciplined, structured process, not a vague sentiment.
3) Third, even if we do steps 1) and 2) there’s
still a good chance it won’t succeed. Why? Because it ignores an invisible third factor. In the real world, purely two
way bilateral relationships don’t exist. There is always a third party whose interests or outcomes are affected by what
the other two parties do but who is not a party to the contract. The environment is a case in point. Producers and consumers
may both benefit from buying and selling to each other – but what happens if, in doing so, they destroy the environment
they both depend on?
This raises a hugely important question. When two parties pursue win-wins and build mutual
trust, are they doing so in a way which creates a win and builds trust for the third party at the same time? Or are they simply
pushing the problems – and the mistrust – further down the line on to this third party? Building vigorous, healthy
networks of trust is a different kettle of fish to ‘you scratch my back and I’ll scratch yours’
win-win conspiracies. It requires a Map of all the key relationships plus careful consideration of knock-on consequences.
It requires a different perspective.
These three simple, basic steps do not happen automatically. They need to
be worked at. The territory needs to be deliberately Mapped and explored. What’s more, there are obstacles in our way
– mental and practical obstacles that need to be cleared. Prevailing economic theories about ‘rational economic
man’ for example, deny the need to commit to win-win outcomes. Instead, they promote supposedly ‘rational’
(i.e. narrowly selfish behaviours) which actively undermine trust The same theories insist that the only valid measure of
human benefit is money, thereby excluding from consideration many of the biggest opportunities for improvement. Meanwhile
many vested interests do not want to extend the circle of trust to third parties and complete networks because their positions
of power depend on their ability to take advantage of the weaknesses of these third parties. That’s another job for
Mapping: helping to identify and mount such obstacles. The potential benefits of doing so are unthinkably huge. They
start with a simple negative: the relief that comes from when you stop banging your head against a brick wall. Mistrust breeds
wasteful, wealth destroying conflict that tends to feed on itself. Anger and hatred engender anger and hatred. Simply easing
or stopping the terrible waste of mistrust would transform prospects for many millions of people. We desperately need to find
ways of doing this. Then there are the positive benefits. Understanding the real nature of human wealth – all those
dimensions of purpose, ‘politics’ and emotion as well as money and material comfort – means we can start
being human again; human in the way we think, and act. What’s more, many of these intangible benefits won’t cost
a penny. They’re there for the taking, if only we puts our minds to it. But there’s more, because trust is
also an economic superpower in its own right. In the pages that follow we will show conclusively that material and financial
riches are also dependent on trust. In fact, we will argue the case for going one step further. We will say that material
and financial riches are a by-product of trust: the visible fruits of invisible, intangible human exchange. Once you understand
that sustainable cash flows are a by-product of sustainable trust flows, your understanding of what makes a successful business
is transformed. Separately, each of these three fruits – reducing the waste of conflict, unleashing the potential
intrinsic benefits of human exchange, and energising the sustainable creation of material wealth – are massive in their
own right. Put them together and they represent a vast new continent of opportunity. As we said, this book is addressed
to entrepreneurs and system innovation revolutionaries. Wherever you happen to be, whatever the change you want to make
is, the principles explored in this book apply. The wish to change and the will to change are not the same as being able to
change successfully. For that you need to understand your territory. You will need new Maps
.
0.1 Has
a continental or worldwide search solutions on job creation that can be replicated across communities been organised before
this EU launch of Nov 2011?
While alumni of entrepreneurial economics have always valued job creation searches- we know
of no clear evidence that this has been top of mind in the way that continental-wide government has operated since 1984 even
though it was scripted by The Economist's Unacknowledged Giant as the number 1 question the first net generation would need
to mediate if sustainable futures and humanity's most needed millennium goals are to be served
what's different about nov 2011 is 4 top directorates of the EU have nailed their future reputation to this search
-more
Tom Ashbrook: You're
talking about, writing about the end of the EU, the end of the common currency.
Paul Krugman: it's
unthinkable except that continuing down the current path is unthinkable. Spain is actually the epicenter. The Spanish government
did nothing wrong. Spain was running a budget surplus before the crisis. It had low levels of debt. But it had a monstrous
housing bubble, as did a lot of places, largely financed by the way by German banks which were lending to Spanish banks, which
then lent on. And when the housing bubble burst you were left with a severe, extremely severe recession, and so the answer
has been government austerity which just makes the slump deeper.
The alternatives to a breakup of
the euro have to be Europe-wide solutions. And so the solution, if there is one, involves accepting a higher rate of inflation
for Europe as a whole and that particularly means higher inflation in Germany. --Paul Krugman
What
are Spain's alternatives here? Well, if they still had their currency, their own currency, the answer would be devalue, let
the peseta drop, Spanish exports would become a lot more competitive, they'd be well on their way to recovery. They don't
have their own currency, so people are saying: Well, you have to do all this stuff to stay within the Euro. At some point
you say: Well, you know if your answer to our problem is just ever more suffering, ever more you know... 25 percent, 50 percent
youth unemployment. If that's your notion of a solution, then maybe although it would be a very terrible thing to have the
Euro breakup, maybe that's better than what we're doing. So that's becoming a real possibility now.
The alternatives
to a breakup of the euro have to be Europe-wide solutions. And so the solution, if there is one, involves accepting a higher
rate of inflation for Europe as a whole and that particularly means higher inflation in Germany. Talk to the Germans about
this and of course they go crazy, but you have to say to them: What is your answer? What you're doing right now is just a
path to the collapse of the euro with enormous damage and radicalization and a lot of things that you don't want to see happen
in Europe happening.
TA: If the Germans can't take their foot off the brakes, they're just intrinsically
and against history and everything else, Weimar, if they can't do it, what happens?
PK: Then Europe
breaks up and... No, I mean I think it's that stark. It really is, it really is that extreme because you know it's one of
those things, you can't be saying that, but then you say: Well, let's talk this through. You know, let's as it said in the
original edition of the Godfather - Let us reason together. Right? What are the ways that this can work out? And the current
path is not one that can work out.
It's like an irresistible force hitting an immovable object. On the one hand it's
unthinkable that they'll allow the euro to fail because the euro is a terribly important thing, it's not terribly important
economically, it would have been better off if they'd, if they had never done it, but now that it has been done, for it to
fail is a defeat for the European project, the whole project of bringing peace, democracy, integration to a continent with
a terrible history. So it's unthinkable that they'll allow it to fail, but it's also unthinkable that the Germans will accept
moderate inflation which is the only solution any of us have been able to come up with. So one of two impossible things is
going to happen. Your bet.
.
...
obamauni@obamauni bon mots hillary zero sum thinking leads to negative sum results http://www.erworld.tv/id347.html
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