Posted by: Dr Churchill | April 25, 2014

Rethink Europe

In Europe after the end of the Second World War, vast gains in economic growth, and wealth were achieved by rebuilding societies, economies, and lives shattered by the war.

Some intellectually astute men foresaw the possibility to rebuilt Europe as a Union in order to avoid the bloodshed and mayhem from recurring once again and went ahead and built ‘Institutional Infrastructure” in order to achieve unity, growth, and prosperity, through Peace.

They saw the peaceful Union as an opportunity arising out of a crippling crisis and thus formed the foundation of what we call European Union today.

Most notable amongst the founders was Jean-Baptiste Nicolas Robert Schuman; (29 June 1886 – 4 September 1963) who was a noted Luxembourg-born French statesman. Schuman was a Christian Democrat (M.R.P.) and an independent political thinker and activist. He served twice as Prime Minister of France right after the war, and as a reformist Minister of Finance and Minister of Foreign Affairs. He was instrumental in building the post-war European and trans-Atlantic institutions that serve us well today, and is regarded as the Visionary behind the European Dream, and as the key founder of the European Union, the Council of Europe, and NATO.

Robert Schuman’s quality of thought, determination, and vision, as contrasted with that of Adolf Hitler & Walther Funk, and of the “Gold-Rule” & “Laissez-Faire” economists, dominant respectively during and before the War — was the key difference between the economics that gave us the Weimar austerity and the resultant Nazi economic vision of Funk and that of the post war years Europe. Yet it was Schuman’s vision for a Franco-German alliance, unity, and economic cooperation, that helped usher the rise of the Middle Class and the redistribution of wealth throughout Europe. It was this vision along with the generous Marshal plan wealth distribution that helped Europe recover fully after the war of nihilism, the earlier depression, and the ravages of austerity and inequality, that brought the war on, in the first place.

Schuman was keen on preventing this tremendous disparity of wealth and the resultant crisis and austerity, from arising again, and thus destroying the peace and shattering the nascent Union.  His political innovation of Humanism, the tremendous post war growth, and the rise of the Middle Class, were the pivotal gains of our integrated economies as we inched closer to the fruition of the European Project — then known as the Common Market and now known as the European Union.

The fair capitalist open market – open mind system, along with equitable wealth distribution, and the egalitarian access to opportunity, are the very cornerstones and the basis upon which a United Europe can be built. This is what Schuman said and acted upon, and this is what am saying today, because it is the only way that we can ride the beast of burden — our history represents. Yet we need to grab the bull by the horns and ride the rodeo, just in order to save our Union. And still chances are slim… If we hold on to the changes we are proposing, we might just save the Union by the skin of our teeth.

But we should best learn from history: Robert Schuman being from Luxembourg and a young politician because of his expertise with Germany was called to become a member of Paul Reynaud’s wartime government in 1940. Yet later that year, he was arrested for acts of resistance and protest against the Nazi methods of the German occupiers. He was interrogated by the Gestapo but thanks to the intervention of a German lawyer, he was saved from being sent to Dachau. Transferred as a personal prisoner of the Nazi “Gauleiter” of France, Joseph Buerckel — adventurous Schuman escaped in 1942 and re-joined the French Resistance. He addressed large conferences in the French “Free Zone” explaining why the defeat of Germany was inevitable. This was at a time when Nazi Germany was at the peak of its power. The Germans then invaded and occupied the French “Free Zone” and yet Schuman kept at it, although his life was at risk. He spoke to friends about a Franco-German and European reconciliation that must take place after the end of hostilities, as he had already done in 1939–40. Robert Schuman rose to great prominence after the second world war ended with the defeat of Germany and the Axis powers; and he became the Minister of Finance, then Prime Minister from 1947–1948 assuring parliamentary stability during a period of revolutionary strikes and attempted insurrection. In the last days of his first administration, his government proposed plans that later resulted in the Council of Europe and the European Community single market. Becoming Foreign Minister in 1948, he retained the Minister of Foreign Affairs post in different governments until early 1953. When Schuman’s first government had proposed the creation of a European Assembly, it made the issue a governmental matter for Europe, not merely an academic discussion or the subject of private conferences, like The Hague Congress of the European Movements earlier that year. Schuman’s was one of the few governments to send active ministers. This proposal saw life as the Council of Europe and it was created within the tight schedule Schuman had set. At the signing of its Statutes at St James’s Palace, London, on the 5th of May 1949, the founding States agreed to defining the frontiers of Europe based on the principles of human rights and fundamental freedoms that Schuman enunciated there. He also announced a coming supranational union for Europe that saw light as the European Coal and Steel Community and other such Communities within a Union framework of common law and democracy and that has resulted in the European Union of today.

Unions are of course incurably romantic and fairly blind propositions, to enter into but who amongst us hasn’t gotten into failed relationships?  Please raise your hand for all to see but above all for yourself to realize how silly we can be sometimes when we are looking back through the benefit of hindsight. So when we launch a Retrospective of our relationship to Europe we best have a bit of slack and not fall for all the promises of filial love forever and ever…  Because today the weather has changed. Inclement weather is forecast for the years ahead…

And who amongst You, doesn’t see something wrong with the cloudstorms gathering above Europe all over again? And who amongst you is daft enough to believe these clouds are not pregnant with rain?  Either daft exuberant optimist or You are you just hoping for the selfish umbrella of personal or national protection. Either way you lose. No protection for the coming rain is going to be offered by any sort of European entity. If in doubt look at the fate of Cyprus or Ukraine, and fat lots of good it has done for them their association with the EU of differing degrees. Even Cyprus being a full member state it has not been able to escape the aggressive neighbour’s conquest. Same goes for Ukraine.  Bureaucrats from Belgium or Brusels Sprouts offer you the same amount of protection unless you are able to defend yourself and keep your house economics solid and your people safe and out of harm’s way. It’s pointless to wait to get under the umbrella of protection of the European Union in any way – economic or political – because there is no Brussels-brolly, strong enough to save you from the raining of bombs, or bonds, and all manner of inequity raining down from a dark sky.

When the shit starts flying all your Europe buddies will be just as good as your Facebook friends — largely useless in your hour of need and above all else hugely ineffective and a waste of time and energy. Same with the coming deluge in this Europe of ours. We are all either gonna be saved together, or we all gonna drown together. Simple as that. There is no individual salvation unless you can built your economy, your society, and your defense in a resilient manner — thus moderating the effects of the negative influence of the biggest to the smallest parts of Europe. It’s genius to be able to understand but fairly impossible (unless you are a Prophet) to see Europe failing and this reverbating to all the building blocks of the Union. A seismic change indeed is coming. And this earthquake will shatter all of our illusions along with the strongest and the proudest nations of this Babel we’ve constructed… And am not talking about nations like Greece failing — but am speaking of the dismal failure of our ideals of Democracy and principles of Human Rights.

It is a distinct failure of Democracy when we just speak of a European Democracy that allows citizens to retain the right to vote but does not give people the right to work and the right to live….

And that right to vote is barely a fig leaf and fully squandered when we consider that the highest offices of the Union are assigned to non elected Berlin bootlickers like Van Rompuy and Barosso.

There is a slogan seen around the walls of Athens – the capital of the hardest hit victim of the austerity policies of Berlin — and it goes something like this: “Be careful out there — it’s blowing indifference — dress well.”

Indeed “unions” are perennially romantic propositions, yet this European Project has been such a runaway train that is a miracle it still rides. A train without a conductor and no brakes — is set to crash. This wreck is what we call European Union today. This sort of Union cannot be saved by priest, Mayor, or even wedding planner. No amount of men and horses from Brusels and Berlin respectively can rescue the cracked Humpty Dumpy fallen from his perch. Splattered eggs could not be rescue in retrospect. And the terrible indifference amongst the various members of that nefarious Union, makes this imbroglio feel increasingly like a shotgun wedding with Humpty Dumpy committing suicide and voluntarily jumping off.

Not that there is any problem with shotgun weddings in principle — the bride can always run later — but our European Union is seriously faltering now, and there seems to be no “later” in sight. And those Ten Thousand suicides in Greece of people unable to take any more of the torturous ministrations of Berlin’s economic Austerity Policies is the reason am running for the European Parliament. Am running n order to restore our Democracy and Freedom and to bring our European People HOPE and OPPORTUNITY.

HOPE and OPPORTUNITY is what we need to start planning and thinking for the next day once again.Because in Greece, Italy, and Spain, people have stopped planning for the future. They stop planning… they stop l i v i n g .

It is Time. Time for Solidarity. Time for Freedom. Time for Democracy. TIme for HOPE and OPPORTUNITY offered from one European to another…

From one European to another…

Time is Now because this currently run fancy Berlinwood film “Europe United” is sinking faster than the Titanic. And it’s sinking because we were daft in brokering power through corruption, and we were ignorant in our ambitions, and certainly careless towards our neighbours. The aforementioned indifference amongst nations, and the vast disparity of wealth and power standing as a dividing wall between nations — has grown exponentially. It has grown so large that it makes it impossible for all of Europe’s nations to ride in the same train together. That much is clear…

A wall of Apartheid has been raised and it separates the North from the South leading to another European Civil War.  Nationalist, regionalists, and right wing ethnic militia groups, are ready with the finger curling around the Kalashnikov’s happy trigger, ready to unleash blood and mayhem. This is repeated all over Europe with the neo-Nazi fractions most active in Europe’s hardest hit economic ruins. In countries like Greece the bloodshed has already started…

You can blame it on Economic Policy dictated by Berlin or you can blame it on tensions rising and boiling over as it happens in every crisis. Either way you would be wrong. The European Project’s Failure is only because we lack LEADERSHIP. We are suffering through a serious lack of legitimate leadership since Europe is governed by the bootlickers of Berlin. So what do You expect? Did the Vichy government ever did anything right? So don’t expect much if anything from the European Commission governments either.

The only remedy would be to rebuild our Democracy and make it a True parliamentary Democracy. A true Union has to have nations compete with each other on the strength of their Democracy and not on the strength of their illicit influence by bribing all the local petty politicians of Europe to do the bidding of Berlin’s deep state…

And it’s just deserts because the current huge vacuum of power that was created by the strongest nation of Europe sucking out all the air and all of the vital energy of Europe — all shipped off to it’s Burgomaster — has left a vast imbalance of Energy throughout the continent that will lead to war and partition all over again. Don’t these lederhosen wearing bastards ever learn?

An imbalance the size of Matterhorn and the equals of which have not been seen since the Weimar Republic’s depression days is now the daily dosage of inequity for much of Europe. This Deficit of Democracy, coupled with the sovereign debt crisis is the Casus-belli of our imminent failure of peace, and represents the end of Life as we know it.

Take it from me: DEFICIT OF DEMOCRACY IS FAR WORSE THAN DEFICIT OF CAPITAL…

Hard shit to stomach but there you have it.

And as usual, we have two options…

An Economic one and a Military one.

We could take the High road or just sit on it. Doing nothing about this is also an option and thus we can all slide down the garden path unawares. Like innocents to the slaughter we all sit around pontificating and our Democracy has become a slow dance of endless committees and uncertain commitments. A chorus of despair and finger pointing is all we can hope to get out of Berlin in lieu of leadership. And the countries fall one after another like ripe fruit to the arms of the deep state of Germany becoming debt colonies through the Vernichtungskrieg of economic annihilation and returning capital streams as a one way transfer to Germany. A simple plan of Reich, that unites Europe via capital controls of Euro and strangling the monetary policy of the European Union, thus creating a Deutsctum all over again.

Little guys beware — timing is everything, in comedy as in Life. And so it is in Drama too. Careful because there is no place for you here anymore.  Best escape soon as possible — while going out is still an option.

Still the European Union could address the issues of monetary dominance and the one Way Transfer Union and thus become a true Union of Brotherly Love and Sharing or it will leave things as they are, and inexorably march blindly towards war, genocides, and famine.

Sharing is Caring and as it seems today — maintaining the status-quo is not possible. Yet this is the only thing that the Euro-bureaucrats are good at doing. Brussels sprouts are excellent in the difficult job of maintainance for the Status-Quo…

Of course this means a standing army of Brussels sprouts — all working hard at doing nothing. A bunch of European experts doing what they do best. Being experts of inaction.  An army standing at inattention. A lovely spectacle of lemurs jumping the cliff, comes to mind from all the “Nature porn” I’ve watched over the years at BBC.

This inaction of course will cause a mass exodus from the Union and it will certainly result in war. The looming war is inevitable sooner rather than later — anyway, or so the pessimists will tell you — but I believe this dismal fate can be avoided. And now that all these economic gains of the postwar era have been reversed  and the serious inequality gap has been revealed, our concerns are deepening. My concern is growing because when the Inequality deepens and the violence of indifference worsens through the widening gap between the rich and the rest — bullets start flying and blood gushing down the streets.

Yet we all know that we have choices and solutions. Solutions like rational and effective Economic policy for dealing with the latest “nemesis of clowns” to hit Europe emanating from Berlin as a new gospel. The Gospel of Economic Ideology coming down from Berlin, is unofficially called the “Trickle Down Economics of Austerity” by the Berlin economic policy insiders.

It is criminal that they could not come up with a better name… But the German efficiency doesn’t allow but for crudeness of expression and action. bear that in mind as we are going to be needed in order to address this new deluge of stupidity ideology. This time we will really have to go back to the roots.

We need a return to the Roots of Democracy and Human Civil Rights and get a serious understanding of the causes of the failure of our Democracy.:

We need to understand the Economic and the Social causes that gave us pause in our pursuit of higher principles.

A Retrospective of History done as a forensic Scientist performs an autopsy, will surely lead you to truth. Truth in turn will allow you to internalize the understanding of all such realities that need to be redressed. And after delving in these matters for the better part of the last five years — we’ve come to see these following actors as the most prevalent.

Economics: The surest path to a man’s heart is gold. The most barbaric the man — the more appealing gold is. This is the so called Golden Rule adjusted by me for the Age of Democracy that money can buy.

On the transfer of the wealth of Europe towards the Germans through the erosion of the real minimum wage, and working wages in general throughout Europe and the increases in productivity due to fear of unemployment we can speak for ages. Yet when this is coupled with the decay of labour unions and collective bargaining; the rush to globalization and intensified competition from low-wage workers in poor countries; technological changes and shifts in demand that eliminate mid-level jobs — we can also explain the vast unemployment of the European Countries like Greece (37% unemployment), Italy (25% unemployment) and Spain (31% unemployment). These figures include the young people in the calculations as it is reasonable to assume that young people need to eat too. And therefore a job would be nice, after all these years of schooling, secondary education, university, army duty, and drug or sex experimentation…

In a Democracy a JOB is a RIGHT for all of us.

In Economics, unemployment is huge. But so is underemployment and as we follow the Autopsy of the Failed Europe we need to distinguish the candidate causes of our failure in distinct three groups: Because each of these candidate causes seems to capture a bit of the truth.

But even taken together they do not seem to provide a thoroughly satisfactory picture. They do not speak to the really dramatic issue: the tendency for the very top incomes and for the top tier countries, as is the case for the engine of Europe – Germany – to pull away from the rest of society and from Europe’s lesser brothers. Greece is not just the underdog — it’s the runt of the litter. Yet as the other children of Europe seem to not care for her, she is just as likely to bolt to the East…

All the disparate causes of failure of Europe seem a little accidental; whereas a forty-year trend common to the advanced economies of Europe, US and Japan, would be more likely to rest on some deeper forces.

We need a name for this process for future reference. I will call it the “Rentier” or the “rent collector paradox” or the “rich-get-richer dynamic.” The mechanism is a little more complicated than Karl Marx let on, you get the picture. Modern capitalism is an unequal society, and the rich-get-richer dynamic strongly suggest that it will get more so. But there is one more loose end to tie up: The advent of very high wage incomes and the special opportunity to succeed as was left for few others. Only when you get to the top tenth of 1 percent does income from capital start to predominate. In the 1960s, the top 1 percent of wage earners collected a little more than 5% of all wage incomes, whereas nowadays 10–12%

We attribute this more than doubling of inequity to the rise of what we call financialization. It is financial services and the risk capital being derisked and becoming safe to hold and pass on from generation to generation. There is not much understanding of this phenomenon’ long term implications for Democracy and for progressive Societies besides the empirical evidence of the past few hundred years of wars and social upheavals. I can’t even begin to tell you what happens when that shit hits the fan…

Another major Cause of our Failure, is that Politicians, Bankers, and all Corporate Top dogs, Managers, and Corporate Superstars, who enjoy golden compensation and protections from the “Inclement Weather” of change — are a sort of adjunct to the “Rentiers” capital economic class that buys and sells the politicians all over EUrope. This class of cheap politicians, their financier bosses, and the oligarchical supercapitalists, belong socially and politically with the rentiers, and in this case obey the wishes of the German bosses. These classes of “Nouveau Rentiers” or what we term for convenience Banker-Wankers, petite bourgeois in lederhossen — are not at all aligned with the larger society. THey instead despise the body of salaried and independent professionals, middle managers, and civil servants or the entrepreneurial and often innovative start-up SME owners and operators. As an added insult these petite bourgeois, banker-wankers, and lederhossen wearing tribal economists, are totally ignorant of anything that is not serving their narrow parochial interests. They are for example not at all familiar with history and they are not versed in the Political and Economic Reality of Democracies. Because only when they familiarize themselves with the tenets of Real Democracy — they might see that a truly stable, wealthy, and resilient  society is to their interest.

If I were to rewrite the “Prince” of Count Machiavvelli today — I would state that it is to a very selfish interest for the Germans today to understand that in order to have a strong economy — they have to have a Strong Democracy throughout Europe. And that they should stop buying all of the Greek politicians in order to control the miserable country.  Yet sadly this they do not see, and instead they prefer to buy all the local politicians in order to control the divisions and fractions of little Greece. They are erring on the side of comfort, fear, and venal convenience, by turning the Greek Parliament into a whorehouse of paid politicians.  They also doing the same with other countries where Democracy is not strong, and where the Deficit of Democracy outweighs the Fiscal Deficit due to corruption. In all the European countries where corruption rules — look for German Gold lining the pockets of the Politicians. Countries like Greece, Poland, Spain, and Italy, easily come to mind — but you would be surprised to know that France is also part of this rather shameful list of countries running large Democratic Deficits…

It is unfortunate that the ruling elite of Europe today does not see that a Strong Democracy is the best Insurance for Economic Resilience and Growth. it is further unfortunate that the one country where the greatest wealth concentration is amassed at the big Middle Class swelling the bell curve at it’s centre does not see the benefit of this Economic policy for the rest of the countries comprising the European Union.

Germans can be sad indeed and lacking compassion and understanding. Yet in their runaway efficiency, their drive, and their propensity for Lego engineering the solutions to complex emerging socio-economic problems — they act like tools.  In my mind — societies are complex networks of unique individuals and they resemble the human Brain much more than they resemble the Internet. And thus as a leader, You must be able to understand that you cannot starve from blood and oxygen any portion of the brain and expect for the brain to work.

Still German minds are notoriously simplistic and unable to comprehend anything past their strictly tribal instinct due to the delayed Roman conquest by more than two centuries. So today instead of understanding and sharing within Europe the wealth generated form the very European Common Market — they are unnecessarily hateful towards the losers of the Social Contract. Blame Julius Caesar for that too.

Or go ahead and blame me for bringing it to your attention….

Still my German friends understand that I have feelings in my heart for the German Frauleins and thus by extension to them too. So they have to admit my penchance for humour goes past their Love of Apfelsaftschorle and house shoes.

The capital accumulation that makes the German rich so much richer that the rest of the European rich, and makes Germany so wealthy, and thus much more indifferent to the plight of Greece and Spain, or the general pain and torture visited upon the Citizens of these uber corrupt countries through the Austerity Economic policy, ought to strengthen, the bargaining power of European nations. But the German Gold in the pockets of the Greek Politicians and the Spanish ones — does just the opposite…

Greeks go wholesale to Berlin and throughout Germany as migrants in the labour market of the rich country.  Gastarbeiters from Greece, are workers within the European Union that encourages fredom of movement as a basic right — and yet in Germany they receive Racism instead of representation and denial of service, instead of citizenship. Greeks in Germany, encounter racism and this creates a backlash and many return to find their old spot given to a refugee from further afield. This see-saw of human movement gathers greater forces towards unemployment and permanent underemployment in Greece – the poor country of their origin since other economic refugees arrive in their place form countries like Bangladesh and Pakistan or Syria and Afghanistan

So who is hoping for Economic growth in the periphery of Europe without Democratic growth?

Nobody in their right senses.

Nobody except the Germans and their servant class of European politicians.

And that does not include the German people…. They want Democracy for their tribe — just don’t care for any others’ Democracy needs.

Because the constant drive of Germany towards a disequilibrium in their favour is what cheating looks like if You own the casino. So if we contrast European Common Market to Casino Economy — naturally follows that the owners of the Casino have the best chances and they make all the money because they control (own) the Bank. Thus a steady-state equilibrium growth path will never become the utopia where the European Economy converges over time, as the unelected Leaders of the European Union Barosso, Van Rompuy, and all the rest of Berlin puppets are busily calculating and propagandizing the glory of Germany Uber Alles. Especially now that steady-state growth path equilibrium has shown that it jumps in a comparative statistic with the failed countries — getting to a “Nash equilibrium” where the permanent unemployment is the norm, seems the path to extinction for People like the Greeks who failed to negotiate safeguards of national Independence and Sovereignty, in their haste to enter this shotgun Union.

Myself, judging by the background economic conditions that determine where the unemployment is — have to conclude that the shift to a state of massive and permanent unemployment is already evident in the periphery of Europe. Keep in mind that the opinion of Yours truly is a humble one, yet it is the product of serious observation of the nature of unemployment throughout Europe and the rest of the world. I’ve studied and practised Economics, Business, and have observed the dynamics of the Social Contract and “Work” in places small and large. I’ve been and seen places and countries and scientifically observed the Social Economic and political issues in as direct a way as possible. We must admit that an eyewitness account through travelling to most of the countries of this world and through working on the major ones and some far too distant and in the poorest ones, can give one an unprecedented road map to the Dynamic Equilibrium that I believe is the norm today.

Europe today has no theory of what determines the rate of profit, and we badly need one. And since we don’t have a real theory of the rate of profit, we don’t have a real theory of the rate of wages. The fact that German economists want to assume that the rate of profit has a floor below which it will not fall is wishful thinking. The fact that increased capital accumulation certainly reduces labour’s share of income and may lead to no trickle-down to real wages from the increased productivity that ought to flow from increased wealth accumulation — is the conundrum that Europe needs to answer.

We need a New Economic Theory to drive for better Political Decisions from our Collective leaders. Of course we need Leaders who understand Economics to begin with. And that is a tall order in and of itself. Yet in Europe today, we need Real Leaders. Leaders who are not bought and sold cheaply by the German Fools-Gold or by any convenient ideology. Naturally the true historical drivers of the process of Corruption to the German Gold are not just the rate of profit, and the growth rate of the economy, but rather the economic destruction of the relative wealth of the old European aristocracy as its landed rents collapsed after the Second World War; and the destruction of the Collective bargaining Leadership due to corruption again. Follow that with the rise of urban financial wealth and the general financialization of the economy and the huge cheap credit availability and you’ve got all the answers to your questions. This along with civil servant population growth and economic density have become a first-order economic cost and a serious call to attention as it drives our economies to collapse one after the other. All this calls to attention the fact that the poorer European citizens are going to burn at the stake for the glory of Germany and the for the Fiscal stability straightjacket as imposed by Berlin.

The market value and the GDP of a Country, along with the a physical quantity conception of capital is a potential source of confusion, and it has, I think, confused some leaders, bureaucrats and lederhossen wearing economists, and has thus driven them all the way to the beerhall for inspiration and a bit of cash from the teat of mama Angela. But this seems to me to be a very minor criticism, recognizing the market value of wealth as capitalized claims on incomes from whatever source – banks, mittlere Unternehmen, factories, Familienunternehmen, land, location, Mittelstands, buildings, machines, organizations, production processes, intellectual-property rights, protected monopolies, and so on – and things become clearer and the argument, becomes stronger.

I think, that if you have a physical-factor-of-production definition of “capital” in the forefront of your mind, it is very natural to make an additional argument here: that control over wealth shapes politics, and that politics will make sure that the rate of profit does not fall too far–that wealth is not allowed to compete with itself and so lower the rate of return and boost wages substantially as the process of wealth accumulation continues.

A story about technology and the world market making capital and labour more and more substitutable over time, and this is why r does not fall very much as wealth accumulates. This is story that is told to academic economists, and it is plausible, at least on the surface. The problem is, that it is only plausible. There are those who believe that capital and labour are not that substitutable, and consequently that capital accumulation raises the bargaining power of labour enough to guarantee rapidly rising real wages and probably a rising labour share and thus a decreased salience of capital ownership in income if not in wealth. They look forward to at least a partial euthanasia of the Rentier class, and see the process of accumulation as an equalizing rather than an unequalizing process. Thus, wealth-as-productive capital, and the return to wealth as the marginal physical product of that capital times the value of undifferentiated output, is relatively weak, cannot explain the madness for wealth accumulation of rich folk, and rich countries, like Germany.

There is another story though that I think best explains the conundrum of Germany vs Greece in better terms than soccer, where he who scores the most goals wins. It is that the rate of return on capital is set much more by institutions, norms and expectations (See European Union) than by supply and demand. I think the production approach is less plausible, because housing [with land] plays such a large role, average wages would have increased along with K/Y if factors are paid marginal products. Corporate governance actually suggests something quite different. A gap between cash-flow rights and control rights. This political dimension of capital, the difference between the valuation written down in the balance sheet and the real power to dispose of the asset. This is something that the institutional view of capital can capture better than the marginal product view. And here we have passed out of neoclassical economics entirely. Factors of production are no longer paid their marginal products. Instead, wealth controls government. Politicians are bought and sold like so much pork and this hog-dealing destroys Democracy. Ergo, ham-fisted governments set barriers to keep those kinds of property that the wealthy control, safe from competition and taxation, and thus protect them in perpetuity for earning their “rents.” Thus in our Democratic Deficit Europe the government becomes an “executive committee” for managing and protecting the affairs of the ruling class. And, as a bonus, the property rights system acts as a fetter on the process of economic development and Democracy, because it is tuned not toward equalizing private and social values but toward enriching the already-rich and disenfranchising the working poor, and forsaking the truly poor altogether.

There is clearly an argument here for progressive taxation: This is also a fruitful interpretation of what is at stake behind the old capital controversies and behind the preservation of inequity of Europe.  Because if there were a liquid capital market in Europe — capital would flow to the periphery. Now it is just a very high substitutability, unemployment is rampant, poverty increases exponentially, labour market reforms are off the table, as firms just replace workers with machines if you try to raise the wages and Deutchland Uber Alles reigns supreme.

We need to understand Economics better in order to take Macro-economic decisions worthy of our Peoples. All of our Peoples and not just one tribe versus the others. Capice?

In the European Union version, I dream of, the market is working well, and labour is well-paid because it is very valuable as human capital of educated and highly productive workers go — and is highly paid because it is very useful indeed.

Above all else we are including everyone in the game of Hope & Opportunity that our Democracy and our Union mean to me and you.

Still recalling that our Union is based on the principles of human rights and fundamental freedoms we have to redraw our Democracy to a vibrant one and the kind that embraces a Democratic Federal Europe — and to do this we need to massively RETHINK EUROPE now.

We need a rethink because we thirst for an authentic Democracy, an energetic and functional Democracy, and not one ruled by the “looted gold” Germany distributes freely to Greek politicians and other marginal political actors across the continent — to keep licking her boots and doing her bidding.

Yours,

Pano

PS:

And if you want to have your say in Europe of our Dreams come work, support, and vote with the European Democratic Party

 


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