Ed,
At 06:59 04/01/2011 -0500, you wrote:
Interesting, Keith. I doubt very much that trading countries will go very
far in the direction of a single currency. As the EU is demonstrating,
adherence to a single currency can impose an awful burden on the
individual state. Control of currency represents considerable domestic
and international power.
There's no reason why governments shouldn't retain their own currencies --
for tax reasons if for nothing else. (We'll still need governments, even if
much reduced in future times.) But instead of each country printing its own
currency willy-nilly for its own bureaucratic reasons, let its currency
freely adjust against a steady world currency.
You are right about individual economies having become multilayered,
with the top layer, consisting of the largest firms, entwining the
globe. However, there are many layers below that in which firms can only
work nationally, regionally and locally. What I see is a bifurcation of
economies, with the top layer and the layers below having increasingly
different interests.
Yes. This was my cop-out. What I didn't say is that all the international
threads I mentioned, although all involved with different specializations,
seem to be composed of a distinctly more highly educated elite than the
masses. In our case it grew rapidly during the course of the industrial
revolution. (In the case of China and India an elite already existed -- the
Mandarins and the Brahmins.) In these days of growing automation (and the
drying up of mass-producible status-desirable consumer goods for the
masses) what about the rest? That's what troubles me. That's my cop-out.
I'm increasingly thinking these days that a new form of communism is
required. I would call it commune-ism, however. This time it must be based
on a more accurate grasp of what science is telling us about ourselves, not
on the basis of moralistic abstractions and ideologies.
Keith
Ed
----- Original Message -----
From: <mailto:[email protected]>Keith Hudson
To: <mailto:[email protected]>RE-DESIGNING WORK, INCOME
DISTRIBUTION, ,EDUCATION
Sent: Tuesday, January 04, 2011 4:57 AM
Subject: [Futurework] The softening of the cocoons during 2011
Politicians don't get it. Government bureaucrats don't get it. Central
banks don't get it. Most economists don't get it either.
Nation-states are spinning. No, they're not spinning round like tops.
They're spinning in the same way as silkworm cocoons are spun. As they
are becoming boiled (governments now going irretrievably into debt) the
political-credibility gum is melting in each cocoon and the shell is
softening. Fine strands are breaking through, and are being drawn to
intertwine with others from other cocoons to form threads around the
world. Depending on how many cocoons are being boiled concurrently, so is
the thickness of each thread.
That's the Western world anyway. Previously (and this is where the
metaphor breaks down!), the hard-shelled, territorially-defined
nation-states either fought one another or, between times, allowed their
businesses to trade with those from other countries. Previously (about a
century ago), the goods transferred between nations were either raw
materials or they were finished goods -- mostly consumer goods. Goods
were traded by nation-bound, nationally-taxed, nationally-recruited
businesses within each country using national currencies. Politicians,
bureaucrats, central banks (and most economists) thought of economics as
a summation, or a balancing-up, of these "national" economies with one
another. That's how they thought. National economies and national
currencies is what they thought they were controlling (in the case of
politicians, bureaucrats and central banks), or talking about (in the
case of most economists).
It's different now. The businesses are no longer nation-bound but thread
themselves around the world, increasingly having only nostalgic
allegiance to their countries of origin. They will locate their
operations wherever it suits them. Their production units will go to
where labour is either the cheapest or the most educated in the skills
they need. In the case of production units requiring high-skill,
well-educated personnel, businesses will go to the sunniest and
pleasantest places. In the case of the headquarters of these business,
they will go to where corporate taxes are most benign and where there is
plenty of access to banks, talented individuals for recruitment,
restaurants and a wide band of sexual and cultural entertainment. Most
of their trade is now raw materials and part-goods, the finished goods of
yesteryear being only the last segments of the freight chains which now
criss-cross one another.
But the flexible, yet stronger-than steel, silky threads now encircling
the earth are not just production businesses but also vast retailing
businesses. Also, there are many other international threads --
investment banks, hedge funds, scientific networks within each
discipline, habitations of the super-rich, urbanization, elite artists
and entertainers (soccer almost deserving a thread of its own!), special
interest groups, innovative ideas. There are even attempts by senior
bureaucrats and overly-ambitious politicians to turn the clock back and
form supra-national organizations such as the IMF, OECD, EU, EMU, NAFTA,
G7. G8, G20, ASEAN, SCO, IPCC, etc (the UN being the most obvious so far
to show the failure of such attempts).
What is different about the threads, compared with nation-states? There
are many differences -- including the lack of standing armies which are
not necessary to back up the threadies' power -- but two stand out. The
new threads are lateral and they are efficient. They accumulate wastage,
of course. All organizations do. But unlike pyramidal, highly centralized
multi-layered nation-states, they are self-culling or they don't last for
long. Being lateral, they allow for younger, more innovative individuals
to come to the fore and disturb their (much reduced) rank orders more
frequently.
The one universal feature that all the new threads need, but governments,
so far, are denying them, is a rock-solid currency to which national
currencies would have to anchor themselves instead of swishing about as
they do now (this month Chile being the latest country to devalue in
self-defence against the dollar). This is something -- it was rumoured --
that President Hu Jintao of China was going to discuss with President
Barack Obama at a meeting last June. I had a lot of naive hope for that
as I mentioned in a previous posting. But this fell through.
They're meeting again now, one learns. They'll certainly be discussing
currency. That's the tinder-box issue above everything else. But whether
they'll make any serious attempt at agreeing on a universal trading
currency is quite another. Perhaps they'll pay attention to the President
of the World Bank, Robert Zoellick, in calling for a currency with
gold-referencing. Perhaps they won't. Perhaps Obama and his coterie still
want to saturate the world with even cheaper dollar bank-notes. If so,
then America had better watch out. Many of the largest banks in the world
are now pushing the Chinese renminbi as a prototype world trading
currency. This could grow enormously during 2011. Be warned, Obama,
Geithner and Bernanke.
Keith
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2011/01<http://allisstatus.wordpress.com/2010/12/>/
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Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2011/01<http://allisstatus.wordpress.com/2010/12/>/
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