Category Archive for 'Cadmus – Vol 1 – Issue 4'

Getting Risks Right: Thoughts about Increasing the Resilience of the Global Social & Economic System

The extraordinary extent of the financial crisis has inspired deep systemic reforms world-wide, rethinking financial stability, the resilience of our economic systems, and the role that national and international institutions play. While most of the ongoing activities are understandably centred on banks and the banking sector – the origin and centre of the crisis – other important elements have been relegated into secondary roles and fundamental democratic processes have been sidelined. Financial issues have crowded out real economic issues as policy-makers and politicians spend more time on the financial than the substantial (i.e. the real economy) and the democratic. Two fundamental concerns need to be addressed proactively: 1. A comprehensive approach to deal with both financial and real world risks on this planet, and 2. The global governance system based on democratic principles to follow globalisation of the business (and particularly the financial) sector. Read More

From Limits to Growth to Limitless Growth: A Revolutionary’s Vision of Wealth and Welfare

The publication of the Club of Rome’s landmark report ‘The Limits to Growth’ in 1972 shook the intellectual foundations of social theory and challenged the very premises on which modern economy and prosperity are based. Once set in motion, it led to a revolutionary re-evaluation of human aspirations and economic activities. Among its many consequences, it has stimulated creative minds to look freshly at the underlying processes governing the wealth and welfare of nations. The article then traces their creative impact on the mind of one of the most original economic theorists of our age – Orio Giarini.* As ‘The Limits to Growth’ alarmed the world by the unsustainability and dire consequences of unbridled economic growth, Giarini offers a correspondingly affirmative vision of economics with unlimited potential for wealth and welfare. Read More

Inclusive growth: Why is it important for developing Asia?

Although Asian countries attain relatively high growth rates of GDP, many citizens do not seem to benefit from it. To remedy this problem, multilateral development institutions have developed the concept of inclusive growth, defined as growth that allows all members of a society to participate in and contribute to the growth process on an equal basis, regardless of their individual circumstances. The most direct way to achieve inclusive growth in Asia is to bring the objective of full employment of the labor force (i.e., zero involuntary unemployment) to the top of the policy agenda. Specific policies to achieve it are: (i) Redress the neglect of agriculture; (ii) Undertake public investment in basic infrastructure; (iii) Use of industrial policy to accelerate industrialization and structural transformation in general; (iv) Direct fiscal and monetary policies to the achievement of full employment; and (v) Devise Job Guarantee Programs (JGP) to ensure full employment with price stability. Read More

Original Thinking

History that comes to us as a chronology of events is really a collective existence that is evolving through several stages to develop Individuality in all members of the society. The human community, nation states, linguistic groups, local castes and classes, and families are the intermediate stages in development of the Individual. The social process moves through phases of survival, growth, development and evolution. In the process it organizes the consciousness of its members at successive levels from social external manners, formed behavior, value-based character and personality to culminate in the development of Individuality. Through this process, society evolves from physicality to mentality. The power of accomplishment in society and its members develops progressively through stages of skill, capacity, talent, and ability. Original thinking is made possible by the prior development of thinking that organizes facts into information. The immediate result of the last world war was a shift in reliance from physical force and action to mental conception and mental activity on a global scale. At such times no problem need defy solution, if only humanity recognizes the occasion for thinking and Original Thinking. The apparently insoluble problems we confront are an opportunity to formulate a comprehensive theory of social evolution. The immediate possibility is to devise complete solutions to all existing problems, if only we use the right method of thought development.
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Economic Crisis and the Science of Economics

The American subprime mortgage crisis, the international financial crisis that followed and the European financial crisis presently centered on Greece are all expressions of a deeper and wider crisis that has been preparing to surface for decades. This crisis encompasses not only government fiscal deficits, exchange rates and financial markets but spreads out in concentric circles of rising unemployment, growing economic inequality and environmental devastation which now threaten to undermine the very fabric of the world economy. The sources of that crisis are no more difficult to identify than the sources of the American and French Revolution. Their origin can be traced from the mechanization of production during the industrial revolution to the computerization of financial markets in recent decades, but the heart of the crisis is neither machines nor intelligent systems. The real crisis is a crisis of thought, a poverty of ideas, a world view justified by specious formulas disguised as scientific theory, based on the fallacious conception that the infinite complexity of social life can be measured and mapped mathematically and the misguided faith in the benevolent wisdom of the unregulated market place, a fallacy which would have made Adam Smith cry laughing. The real problem is nothing more than ideological ignorance and narrowly selfish self-interest run amuck. The world does not suffer from poverty or shortages. Like the European church at the time of Copernicus, it suffers from insistence on dead conventional feudal conceptions and beliefs that are out of tune with our times. Read More

Immediate Solution for the Greek Financial Crisis

The recent agreement to write off a substantial portion of Greek bonds only postpones but does not resolve the essential problem. The key to the Greek crisis lies in economy, not finance. Any financial solution that results in further contraction of the economy will only aggravate budget deficits and debt servicing problems. Economy can restore financial stability, not vice versa. The solution lies not in successive rounds of external funding at concessional interest rates, no matter how crucial that may be in the short term, but in unleashing the productive forces of the Greek economy which has contracted by more than 10% in the last two years, 15.5% in December 2011 compared to December 2010. The most essential requirement for a quick turnaround and a lasting solution is to drastically reduce the unemployment rate which has tripled since 2008 from 7.2% to 20.9%. Youth unemployment is nearing a totally untenable 50%. Read More

Evolution from Violence to Law to Social Justice

Law is a complex phenomenon. The principles and practice of law are a composite of multiple forces – the force of past precedent, established custom and accepted tradition; the force of present political, economic and social power; and the force of emerging aspirations and ideas striving for acceptance. At any point in time, law consists of a more or less precarious balance between the past and the future. The elite of society who achieved in earlier generations naturally accord greater legitimacy to past precedent. Currently prevailing social achievers, like the hedge fund traders of today, affirm the legal basis for their wanton freedom of action. Read More

The Great Divorce: Finance and Economy

Social networking did not begin with the Internet. It is as old as human history. For what we now call social networking is really the evolution of human relationships which constitute the backbone of civilization. The emergence of the Internet is the third giant leap forward in a saga that began with the development of symbolic spoken language, the first great instrument that enabled human beings to evolve beyond their animal ancestry. Second came the invention of money as a symbol of value. Language connects people and facilitates the exchange of information, emotions and ideas. Money connects activities and events, facilitating the exchange of goods, services, property and anything else of social value. The progress of humanity over the past two millennia would have been inconceivable without this remarkable invention. But like all human inventions, money has a downside which arises from the inevitable tendency of we human beings to bind ourselves to the wheel of our own triumphant machinery and be conquered by our apparatus. Read More

Great Transformations

Great landmarks of history are few and far between. Normally they are recognized by scholars only long after the fact. Those in the thick of the fray may often be consciously inspired by the significance of their actions, but rarely does history come to share that perception. The rise of individualism in ancient Greece, its revival during the Italian Renaissance and the radical transformation of society following American, French and Industrial Revolutions retain a claim to lasting significance. Could it be that we are now on the cusp of another? Read More

Editorial: Human Capital

Society is a teeming ocean of human energies and capacities, unorganized but latent with unlimited productive potential. The organization of social energies and capacities converts social potential into Social Capital. Each member of society is a microcosm of human potential – an unorganized reservoir of energies, aspirations, and capacities. The organization of the energies and capacities of each member of society converts human potential into Human Capital. The formed Individual is the summit of social evolution where Human Capital and Social Capital intersect and become infinitely productive. The Individual is a product of the past evolution of society who internalizes its accumulated knowledge and capacities, attunes himself to the emerging aspirations and potentials of society, and applies his energies at critical points for personal accomplishment and collective progress. Thus, we find repeatedly in history that one individual can change the world. Read More

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