Tag Archives: Social economy

Peter Drucker Has Some Sage Advice For How Execs Should Respond To Charlottesville

BOOK REVIEW

Concept of the Corporation, The Practice of Management, The Effective Executive, Author: Peter Drucker.
The End of Economic Man, Author: Peter Drucker.

By Rick Wartzman – Drucker advised countless executives on how to more effectively run their companies.

Along the way, however, Drucker never lost sight of his real aim: not to help companies make more money (although he recognized that without turning a steady profit, it was impossible to be sustainable) but to encourage business to fulfill its role as a leading institution of society.

Drucker knew firsthand, after all, what happens when our institutions don’t act as unflinching protectors of our most basic values: “Terror,” as he put it, is apt fill the void.

“To make our institutions perform responsibly,” Drucker asserted in his 1973 masterpiece Management: Tasks, Responsibilities, Practices, is “the only safeguard of freedom and dignity.”

The obligation of business—which, Drucker reminded us, “is one of the very few institutions . . . that is not nationalistic in its worldview” and, at its best, “brings together” all kinds of people and “unites them in a common purpose.” more> https://goo.gl/QvrBNF

Investing in the next generation

A bottom-up approach to creating better outcomes for children and youth
By Bruce Katz and Ross Tilchin – The American dream is built on the promise of upward social mobility. Over the course of the past 30 years, the vast majority of our population has seen mobility rates stagnate.1 For too many, the American dream has stalled.

Making greater and more effective investments in children and youth will be the best way to improve social mobility throughout the nation. Research has demonstrated the positive long-term effects of providing a specific set of coordinated interventions from “cradle to career.” Despite the conclusive evidence, our nation has been unable to provide those in need with access to the right kinds of services.

The time to act is now. The question is, who will lead the effort to expand these proven strategies? Over the past decade, it has become apparent that we cannot rely upon the federal government or the states. Washington and many state governments have been hijacked by partisanship, leading to paralysis on or hostility toward many of the policies and interventions necessary for improving outcomes for children and youth.

Locally driven approaches to investing in children and youth are a part of a larger national trend. Over the past decade or so, cities and metropolitan areas have risen to the forefront of national problem solving across a wide range of policy areas. more> https://goo.gl/pj8f25

In 1939, I didn’t hear war coming. Now its thundering approach can’t be ignored

BOOK REVIEW

Don’t Let My Past Be Your Future, Author: Harry Leslie Smith.

By Harry Leslie Smith – Because I am old, now 94, I recognize these omens of doom.

Chilling signs are everywhere, perhaps the biggest being that the US allows itself to be led by Donald Trump, a man deficient in honour, wisdom and just simple human kindness. It is as foolish for Americans to believe that their generals will save them from Trump as it was for liberal Germans to believe the military would protect the nation from Hitler’s excesses.

Britain also has nothing to be proud of. Since the Iraq war our country has been on a downward decline, as successive governments have eroded democracy and social justice, and savaged the welfare state with austerity, leading us into the cul de sac of Brexit. Like Trump, Brexit cannot be undone by liberal sanctimony – it can only be altered if the neoliberal economic model is smashed, as if it were a statue of a dictator, by a liberated people. more> https://goo.gl/HaqHQ7

Is America Headed for a New Kind of Civil War?

By Robin Wright – The more relevant question after Charlottesville—and other deadly episodes in Ferguson, Charleston, Dallas, St. Paul, Baltimore, Baton Rouge, and Alexandria—is where the United States is headed. How fragile is the Union, our republic, and a country that has long been considered the world’s most stable democracy?

The dangers are now bigger than the collective episodes of violence. America’s stability is increasingly an undercurrent in political discourse.

Based on his experience in civil wars on three continents, Keith Mines cited five conditions that support his prediction: entrenched national polarization, with no obvious meeting place for resolution; increasingly divisive press coverage and information flows; weakened institutions, notably Congress and the judiciary; a sellout or abandonment of responsibility by political leadership; and the legitimization of violence as the “in” way to either conduct discourse or solve disputes. more> https://goo.gl/W6awUm

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A decade after the crisis’ first tremor, are we ready for another?

By David Wessel – It was 10 years ago, on Aug. 9, 2007, that France’s BNP Paribas suspended withdrawals from three funds that held U.S. mortgages, a move seen in hindsight as the first tremor of the global financial crisis that shook the world economy.

So this seems a good moment to ask if we are ready for the next financial crisis. The short answer is: No.

Dodd-Frank created a way to “resolve” (that is, wipe out the shareholders, convert some debt to equity and sell off the pieces) of any future Bear Stearns, Lehman Brothers or AIG so that the Federal Reserve and other agencies don’t have to improvise the way it did in 2008 and we don’t suffer the aftershocks of a Lehman-style bankruptcy. This “orderly liquidation authority” is under assault from Republicans in Congress. My bet is that it will survive, but we really won’t know how well this new mechanism works until it has been tested.

The politics of responding to an economy-shaking financial crisis are never easy: What’s needed to protect the economy from another Great Depression will never be popular politically because it looks like bailing out the very folks who created the problem in the first place. more> https://goo.gl/btZKrd

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The Wealth of Humans: Work, Power, And Status In The Twenty-first Century

BOOK REVIEW

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century, Author: Ryan Avent.

By Ryan Avent – The digital revolution actually is probably going to be as transformative as the industrial revolution and the big technologies like electricity and steam that we saw then were. I think this transformation has already begun, and ironically, the evidence of that is in the struggles that we’re seeing across lots of countries that workers are facing in terms of limited growth in wages, in terms of rising inequality.

What my book tries to point out though is that in fact the biggest effect is not going to be mass unemployment. The biggest effect of the digital revolution is not going to be massive numbers of workers who just can’t find any work; it’ll be that the work they find ends up being very low-paying, because the displacement effect of these new technologies is so great, and the economy is asked to absorb so many new workers, that that’s just going to put an incredible amount of downward pressure on wages. That’s the real short-run challenge, I think.

.. The difficulty I think, again, comes in deciding who is entitled to a share of that ownership. If you’re socialising the gains, is that limited to citizens of the country, and then are any immigrant workers second-class citizens? If you don’t limit it, then suddenly you probably have social pressure to shut out immigrants, and then that leaves people on the outside of the country all the poorer. more> https://goo.gl/1iz2EU

Why a Consumption Tax May not Make any Sense at All

By Steve Roth – You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that.

We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like?

Start with a simple pared-down household. The only accounting complication is that they own a house.

How much did this household “save”? Should the interest payments count as consumption? The principal payments almost certainly should not. But what about home maintenance? A new paint job increases your home’s asset value. Should you depreciate that asset value over some years? Or say you buy new appliances for your kitchen: You’re cash out of pocket, but your home is worth more. Are those purchases “consumption”?

This notion of some simple tally of your “saving” starts to look more complicated.

The tuition line raises a particularly vexing question, and brings us back to the second question: what economic effects would we see from a consumption tax, under various accounting and taxation rules? Clearly, if you tax tuition, you discourage education.

And consider more-prosperous families paying for private school. Are those families “consuming” more education than public-school families? Those households would be especially hard hit if tuition counts as taxable consumption — as would those private schools. Is that A Good Thing? more> https://goo.gl/LZSRZd

The crisis of expertise

BOOK REVIEW

The Death of Expertise: The Campaign Against Established Knowledge and Why It Matters, Author: Tom Nichols.
Expert Political Judgment: How Good Is It? How Can We Know? Author: Philip Tetlock.

By Tom Nichols – Experts get things wrong all the time.

The effects of such errors range from mild embarrassment to wasted time and money; in rarer cases, they can result in death, and even lead to international catastrophe. And yet experts regularly ask citizens to trust expert judgment and to have confidence not only that mistakes will be rare, but that the experts will identify those mistakes and learn from them.

Day to day, laypeople have no choice but to trust experts. We live our lives embedded in a web of social and governmental institutions meant to ensure that professionals are in fact who they say they are, and can in fact do what they say they do. Universities, accreditation organizations, licensing boards, certification authorities, state inspectors and other institutions exist to maintain those standards.

Science is learning by doing. Laypeople are uncomfortable with ambiguity, and they prefer answers rather than caveats. But science is a process, not a conclusion. Science subjects itself to constant testing by a set of careful rules under which theories can be displaced only by other theories. Laypeople cannot expect experts to never be wrong; if they were capable of such accuracy, they wouldn’t need to do research and run experiments in the first place.

Democracy cannot function when every citizen is an expert … more> https://goo.gl/NpQgga

The end of globalisation as we know it?

By Durukal Gun , Christian Keller, Sree Kochugovindan, Tomasz Wieladek – Modern globalisation has gone well beyond the trade of goods, as technology allowed for transfer of know-how and skills.

Since glottalization began in the middle of the 1800s, it has been through several different cycles. Now it appears to have reached yet another turning point.

Only recently has globalization matched the heights it reached before World War I.

  • First wave of globalization (1850s to 1914)
  • Protectionism (1914 to 1945)
  • Second wave of glottalization (1945 to 1990)
  • Hyperglobalization (1990 to present)

Among the clear beneficiaries of hyperglobalization are the emerging economies, which have become increasingly integrated into more and more complex global value chains. Their role in processing raw materials, and in value-added manufacturing and services has grown rapidly.

The first signs of opposition to hyperglobalisation emerged amid major demonstrations at the 1999 meeting of the World Trade Organization in Seattle. Concerns mounted in the wake of the 2008-09 financial crisis and subsequent global recession, reflected more recently in public resistance to trade and investment agreements such as the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership.

Discriminatory protectionist tariffs and trade measures are on the rise. more> https://goo.gl/K54eeK

The world is sitting on a $400 trillion financial time bomb

By Allison Schrager – Financial disaster is looming, and not because of the stock market or subprime loans. The coming crisis is more insidious, structural, and almost certain to blow up eventually.

The World Economic Forum (WEF) predicts that by 2050 the world will face a $400 trillion shortfall (pdf) in retirement savings. (Yes, that’s trillion, with a “T”.)

The US will find itself in the biggest hole, falling $137 trillion short of what’s necessary to fund adequate retirements in 2050. It is followed by China’s $119 trillion shortfall.

Much of the massive shortfall is baked into retirement systems; setups in which nobody, neither individuals nor the government, saves enough.

About three-quarters of the projected comes from underfunded promises from governments, with the rest mostly accounted for by under-saving on the part of individuals. more> https://goo.gl/UUisEk