Tag Archives: Super regions

Complexity Economics Shows Us Why Laissez-Faire Economics Always Fails

By Eric Liu and Nick Hanauer – Over the last three decades, an unprecedented consolidation and concentration of earning power and wealth has made the top 1 percent of Americans immensely richer while middleclass Americans have been increasingly impoverished.

Traditional economic theory is rooted in a 19th- and 20th-century understanding of science and mathematics. At the simplest level, traditional theory assumes economies are linear systems filled with rational actors who seek to optimize their situation. Outputs reflect a sum of inputs, the system is closed, and if big change comes it comes as an external shock. The system’s default state is equilibrium. The prevailing metaphor is a machine.

But this is not how economies are. It never has been. As anyone can see and feel today, economies behave in ways that are non-linear and irrational, and often violently so. These often-violent changes are not external shocks but emergent properties—the inevitable result—of the way economies behave.

The traditional approach, in short, completely misunderstands human behavior and natural economic forces. The problem is that the traditional model is not an academic curiosity; it is the basis for an ideological story about the economy and government’s role—and that story has fueled policymaking and morphed into a selfishness-justifying conventional wisdom.

It is now possible to understand and describe economic systems as complex systems like gardens. And it is now reasonable to assert that economic systems are not merely similar to ecosystems; they are ecosystems, driven by the same types of evolutionary forces as ecosystems. Eric Beinhocker’s The Origin of Wealth is the most lucid survey available of this new complexity economics. more>

How the Incas governed, thrived and fell without alphabetic writing

By Christopher Given-Wilson – Between the 1430s and the arrival of the Spanish in 1532, the Inkas conquered and ruled an empire stretching for 4,000 kilometers along the spine of the Andes, from Quito in modern Ecuador to Santiago in Chile. Known to its conquerors as Tahuantinsuyu – ‘the land of four parts’ – it contained around 11 million people from some 80 different ethnic groups, each with its own dialect, deities and traditions. The Inkas themselves, the ruling elite, comprised no more than about one per cent.

Almost every aspect of life in Tahuantinsuyu – work, marriage, commodity exchange, dress – was regulated, and around 30 per cent of all the empire’s inhabitants were forcibly relocated, some to work on state economic projects, some to break up centers of resistance. Despite the challenges presented by such a vertical landscape, an impressive network of roads and bridges was also maintained, ensuring the regular collection of tribute in the capacious storehouses built at intervals along the main highways. These resources were then redistributed as military, religious or political needs dictated.

All this suggests that the Sapa Inka (emperor) governed Tahuantinsuyu both efficiently and profitably. What’s more, he did so without alphabetic writing, for the Inkas never invented this. Had they been left to work out their own destiny, this state of affairs might well have continued for decades or even centuries, but their misfortune was to find themselves confronted by both superior weaponry and, crucially, a culture that was imbued with literacy. As a result, not only was their empire destroyed, but their culture and religion were submerged. more>

Why Brexit Won’t Cure Britain’s Broken Economic Model

By Simon Deakin – The critical thing with Brexit is to think about trade and regulation as being two sides of the same coin. When we talk about international trade we are really asking, which regulatory regime do we want to sign up to?

Inside the single market there is high degree of harmonization and convergence of rules, or what is sometimes called alignment. Regulatory alignment is the condition of frictionless trade in the European single market. It is a uniquely deep international trading arrangement because of the high degree of regulatory compliance that goes with EU membership.

We can’t achieve regulatory autonomy post-Brexit without giving up frictionless trade. So UK policy makers have to think about the consequences of moving away from the single market.

The first impact will be felt in those industries which rely upon regulatory alignment in order to function. For the car industry, and large manufacturers like Airbus, European supply chains will be very negatively affected by regulatory divergence.

That is why it is not surprising to hear that the car companies are going to put their production on hold if there is a prospect of a hard Brexit. They have said that they will pause their production lines for a while to see how their new supply chain arrangements can work. That will have a very serious impact on jobs.

Restrictions on migration from the EU after the transition period ends will not result in more jobs for British workers. The British government is likely to extend bespoke arrangements to allow firms in sectors such as agriculture, hospitality and construction to employ foreign workers outside the scope of British labor laws.

In some sectors, employers faced with rising wage costs are likely to respond by investing in labor-saving technologies, but that while this will improve productivity, it will not lead to net job creation. more>

How to Destroy Neoliberalism: Kill ‘Homo Economicus’

By Nick Hanauer – Mostly in life, we are judged purely for our actions and accomplishments. And I have been honored in that way before: as a successful capitalist and as a philanthropist and for my civic activism. But this award is more interesting and personally gratifying because in this case, why I do what I do is as important as what I do, and for this I am deeply appreciative.

To me, the great attraction of humanism is not that it holds us to a higher standard, but that it asks us to hold ourselves to a higher standard. It’s relatively easy to do the right thing because of a looming reward or punishment—even in an afterlife. It is much harder, and therefore more meaningful, to do the right thing simply because it is the right thing to do—particularly if doing the right thing appears to involve personal trade-offs in the here and now.

But more consequentially, the more I have come to understand market capitalism, both as a practitioner and as a student of economic theory, the more I have come to understand that this humanist ethos is a prerequisite for human prosperity itself. more>

Climatic changes and political shifts

By Laurenţiu Rebega – The elections in Bavaria were just the latest episode in a series that began with the Brexit referendum and continued with the elections in France, Italy, Austria, the Netherlands, Sweden, and so on. A series will not end any time soon.

It is not difficult to notice that the traditional center parties from all over the place – affiliated, at the European level, to the EPP or PES- registered significant backslides. At the same time, the so-called “extremists” or “populists” registered top scores that allowed them, in some cases, to adhere to power.

I believe the European electoral experiences in the last period can be analyzed from four points of view. One: Transforming politics in governance. For some decades now, not years, the functions of power shifted away from the political options, which involves making decisions according to a humanist vision, towards increasingly technical management options.

This means that the citizens’ wishes or opinions are second to mathematical arguments (in economy, transportation, communications and even human resources management). The philosophical consequence that few people have the courage to say out loud, is that a better world for all can be built on mathematical models in which the political factor is nothing but the root cause for perturbations, mistakes, and corruption. At the level in discussion, this phenomenon is reflected in the decrease of people’s interest in politics as a fundamental discipline of society. more>

Reversing The Globalisation Backlash

By Colin Crouch – In The Globalization Paradox Dani Rodrik argued that we have a choice among democracy, national sovereignty and hyper-globalization, a trilemma, and that we could have any two of these but not all three.

‘Hyper-globalization’ clearly implies the neoliberal ideal of a totally unregulated world economy. Democracy separated from the nation state – the only form of democracy ‘capable’ of dealing with the global economy – implies global democracy, which is impossible to achieve.

A non-democratic nation state is compatible with hyper-globalization, because it implies a national ‘sovereignty’ willing to accept governance by the market and corporate power alone. This seems to lead to the conclusion that we can preserve democracy only by limiting political ambitions to the nation state and seeking to use it somehow to evade globalization.

National politicians need freely to admit that there are problems that are beyond their reach, that they need to cooperate with others within international agencies. Governments’ policies within those agencies must then become fiercely debated within national politics.

Is it unrealistic to imagine a general election in which an opposition made a major issue out of a government’s failure to work with other countries within the WTO to suppress slavery, child labor and inhuman working hours?

If Donald Trump had demanded the incorporation of International Labor Organization standards within the rules of the WTO instead of retreating into protectionism, he would have made a major contribution to good global economic governance. more>

Politics, Pessimism and Populism

By Sheri Berman – Social democracy was the most idealistic, optimistic ideology of the modern era.

In contrast to liberals who believed “rule by the masses” would lead to the end of private property, tyranny of the majority and other horrors and thus favored limiting the reach of democratic politics, and communists who argued a better world could only emerge with the destruction of capitalism and “bourgeois” democracy, social democrats insisted on democracy’s immense transformative and progressive power: it could maximize capitalism’s upsides, minimize its downsides and create more prosperous and just societies.

Such appeals emerged clearly during the inter-war years, when democracy was threatened by populism’s more dangerous predecessor—fascism.

In the United States, for example, FDR recognized that he needed to deal not merely with the concrete economic fallout of the Great Depression, but also with the fear that democracy was headed for the “dust heap of history” and fascist and communist dictatorships were the wave of the future. This required practical solutions to contemporary problems as well as an ability to convince citizens that democracy remained the best system for creating a better future. As Roosevelt proclaimed in his first inaugural address:

‘Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for…. [Our problems are not insolvable, they exist] because rulers have failed…through their own stubbornness and… incompetence….This Nation asks for action, and action now….I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems….The only thing we have to fear is fear itself’. more>

The Collapse Of European Social Democracy, Part 2

By Paul Sweeney – The privatisation of state assets in Europe has added little value and was a costly distraction from the proper management of public services and development of a strong public sector ethos, delivering excellent services. Despite the privatisation of hundreds of billions of asssets, the outsourcing of public services, and fresh privatised ways of funding public services, spending in the modern state has not shrunk, though the value of state assets has been reduced.

The public sphere, open spaces, public ideas and the scientific commons which are open to all are coming under threat of being fenced off, privatised by extensions and enforcement of Intellectual Property, trademarks, copyright laws etc.. This needs to be curbed. The state has been remiss in protecting its own assets from privatisation over the past four decades and, simultaneously, it has given away substantial parts of this public sphere to private interests. It has done this by being over-zealous in protecting the “rights” of major corporations, drug companies, tech and data companies and rich individuals through extended patent rights, and the like.

Patents serve the useful purpose of protection for inventors whose ideas should be rewarded in order to encourage further innovation. But the balance has shifted from protecting innovation to blocking it. It is the state which provides this protection through internationally agreed laws and through enforcement. The growth in patents, trademarks, copyrights and industrial designs has been very high. The state is now agreeing to renewing patents and granting extensions to the likes of branded drugs, thanks to lobbying. Many patents are acquired to build a monopoly and to act as a deterrent against rival innovations.

Some MNCs now troll and hoover-up patents and others exist to build major patent portfolios with the purpose of blocking others’ innovations, moving upstream to protect broad future possible inventions. more>

In the future, you’ll never have to leave your neighborhood

By Layla McCay – In the city’s center, people stroll in landscaped gardens, enjoying the positive impact of nature, exercise, and socialization on their mental health and well-being. But for those living on the outskirts, that epicenter can feel distant, separated by slashes of motorways.

Public transportation often points inward in a spoke-and-wheel configuration, emphasizing that there is just one truly desirable destination. People of the peripheries must commute back and forth, below ground and along highways, on trains and buses, losing time for friends and family, relaxation, leisure, culture, and sports. The fable of city life is out of reach, lost in the sprawl.

Instead of focusing on city centers, we should reconfigure the infrastructure of the outskirts. The result could see the end of such epicenters: a future where we identify as much with our hyper-local neighborhoods as we do with the greater metropolis.

We can see this in the growing trend of placemaking. This is a planning and design approach that works with communities to understand, imagine, and deliver solutions that meet their local needs, rather than relying on the whims of a grand city plan. more>

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Updates from Siemens

Using NX and Learning Advantage to enable students to develop the professional skills required by industry
Siemens – With 1,700 employees and 15,000 students, Luleå University of Technology in northern Sweden is a thriving center of teaching and research that collaborates with businesses, educational institutions and public bodies across the world.

The Department of Engineering Sciences and Mathematics is home to a range of engineering courses that encompass materials, mechanics, power and sustainable energy. For engineering students within this department, the study of computer-aided design (CAD) is a basic requirement. However, students from other departments can select CAD as an optional subject. These include electrical engineers and space engineers, plus those studying subjects such as business administration and computer science. According to Peter Jeppsson, senior lecturer at Luleå University, CAD is a very popular choice.

The department has well-equipped workshops with a range of tooling machinery. Jeppsson describes the ethos of the department: “At the university we teach CAD software and engineering theory at the same time, not as separate subjects. We give students the opportunity to solve real-world problems and make better products by considering overall function, performance, production and lifecycle. We use computer-aided design and simulation for every aspect of a product.” more>