are what we think.
Commentary by Astraea
Comment 20030628 Democracy and Capitalism - reaction to The Economist.
Human society has moved very quickly from command economic model towards market models. A command economy is based on hierarchical control from one at the top, whereas market economies (like nature) are based on free decisions made by all participants. Today, information flows quickly and virtually freely around the world. Individuals now increasingly influence resource allocation decisions. And, liberal trade is a subset of free markets.
But competition is not at the core of a market system. Competition is useful for benchmarking performance within sectors or across time, but a free market is efficient because of cooperation - all participants looking for a win-win solution. Competition is destructive in that it demands a win-lose result; if competition is the essence of a free market then half of the participants must lose, and this is not sustainable. Rather, as with all sustainable systems, interdependent cooperation must be the underlying value: the human body works because the circulatory system and nervous system cooperate, the biosphere works because carbon cycles cooperate with water cycles, companies work because teams work together (and they fail when internal competition destroys goodwill). Financial engineers use a "sustainable rate of return on equity" to evaluate capital structures and operating financials.
The impediments to free markets that you identify are falling away. The administrators (politicians, civil servants, regulators etc) that allow bosses to walk free are less able to do so as the individuals suffering from their unethical behaviour demand compensation. The bosses that reward themselves so well for doing so little are being recognised for the criminals that they are. And politicians and business leaders that could preach "the ends justify the means" are finding out that stakeholders know better than them that "what goes around comes around". In an efficient market you have to do the right thing the right way. And that always requires compromise and cooperation rather than competition.
For those passionate about anti-globalisation please remember: brands are good because, as in ancient times, they allow you to distinguish friend from foe. And capitalism is good because you can vote for the products and services you want with your wallet every day, whereas you may only get to vote or demonstrate once or twice a year. And please don't vandalise others' stuff; you wouldn't want it done to you, and putting energies into providing acceptable substitutes will have a quicker effect.
Let us play the game as if free markets are here and we do not have to accept the status quo of rewarding those with political or economic responsibilities because they are in positions of responsibility, but let us continue to move to a value-for-money marketplace. Voting with our wallets is an essence of the free market.
And if The Economist is still campaigning for free trade in even only 30 years, then it is very unlikely that there will be any kind of stable society to support The Economist in 160 years. The rapid pace of change in this age must result in a stable global economy soon or the forces at play, whether they are corporate bankruptcies, wars or weather patterns, will destroy our wonderful life. We may not expect "utopia", but we certainly have the resources to feed and house the world. Once resource allocation is stable, we can expect to continue to find interesting things to do with our time, other than competing for the spoils of war (military or corporate).
Comment 20030521 Banking in Europe -
Why are we allowing banks in Europe to steal our money? We don't realise it! For a decade banks have been aware of the impending European currency (Euro) and it has been the currency of Europe since January 2002. And yet banks will not let you use your account outside of the country of residence of the account, that is all cross-border barriers and costs are still maintained. They are perpetrating this collusion because they now get money for nothing, which subsidises losses in other areas, like investment! Their excuse is that there is no clearing system - for some reason they think we can be duped in to believing that this is difficult to set-up, though its already done!
Can anyone sponsor a call for a stop to this unethical situation? Is anyone interested in forming a European/Global private bank that will avoid these indecencies for the sake of its depositors?