ICT, Globalization, Euro: economics & politics made easy E-Book

Fabrizio V. Catullo

• Herausgeber: Fabrizio V. Catullo
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2017

Beschreibung

ICT, globalization, economy... are all simple matters. And so is Politics consequently. Don't You believe it?
All in all economy stems from everyday life, from the value we give to the things we use and the actions we take. So who can understand it better than ourselves? The only thing we lack is perhaps to organize what we already know in an organic and logical way so that the overall picture gets clear.

That 's what the author tries to do in this book: organize the knowledge that already is inside us, revealing the complete design and thus opening up a new "visual" this time finally more understandable. Sometimes the truth is easy to see, is before our eyes, but we don't grab it because we keep our eyes focused only on a small piece of the picture.

In the second section, instead, the author analyzes in detail, in a more formal and mathematical way, some aspects of the general theory, in order to satisfy also the public of his economist colleagues who, however, like to deal with mathematical formulas and formal approaches better.

Leseprobe

Fabrizio V. Catullo

ICT, Globalization, Euro: economics & politics made easy

ISBN: 9786050435665

This ebook was created with StreetLib Writehttp://write.streetlib.com

Table of contents

Fabrizio V. Catullo

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Economic-Technical Section

The Basic Income:

The Model Adopted as a Political Proposal for Italian Regions.

The Basic Income and the Monetarist Economic Policy

Bibliography

Acknowledgments

Fabrizio V. Catullo

Fabrizio V. Catullo

ICT, Globalization, Euro

economics & politics made easy

Author: Fabrizio V. Catullo, 2017 – all rights reserved

Distributor: StreetLib

ISBN: 9786050435665

Preface

I'll surprise You: Economy is a simple matter.

All in all it stems from everyday life, from the value we give to the things we use and the actions we take. So who can understand economy better than ourselves? The only thing we lack is perhaps organize what we already know in an organic and logical way so that the overall picture gets clear.

That 's what I tried to do in this book: organize the knowledge that already is inside us, revealing the complete design and thus opening up a new "visual" this time finally more understandable. Sometimes the truth is easy to see, is before our eyes, but we don't grab it because we keep our eyes focused only on a small piece of the picture.

In the second section, instead, I analyzed in detail, in a more formal and mathematical way, some aspects of the general theory, in order to satisfy my fellow economists who, however, like to deal with mathematical formulas and formal approaches better. So I hope I made everybody's needs satisfied.

Chapter 1

The Distribution of Wealth.

“There's an old quote I love: I always skate where the puck will be, not where it's been".

What I have just mentioned is a quote pronounced at the annual Flint Center Apple products show by the great genius Steve Jobs. For those who do not know him, but I think very few, is the man (or rather was, because unfortunately he disappeared a few years ago) who invented the computer as we know it today, easy to use for anyone, even those who have never had anything to do with electronics and technology, even for children, and in fact it is simple and fun. So, Jobs has created a computer with all those colors, images, easy to use; but not enough, he then invented the smart phone, the iPhone, the phone that surfs the Internet, processes data ... so definitely a great genius and this is also clear in his famous sentences. The quote that I have mentioned before means basically: "When I'm in the game, I make the game." The meaning is obvious: the ability 'to stay ahead, to figure out before the others, in short, to make the game, not taking it. To be masters of what will happen and not ignorant slaves.

To be the ones who make the game, not let it be made, for example, by those who govern us. Frequently I notice that many citizens, the majority, do not know the relationship between economics and politics, and so they "vote badly", meaning in a manner that is different from their real expectations and intentions and that because, not knowing the merits of the issues well, they end up being more influenced by propaganda messages than proposals actually intended to suit their interests.

Only by understanding the things we can make conscious political choices and not the choices that are "suggested" by others. We shall learn then, in this little treatise, to understand how a nation's wealth is distributed and why there is a certain distribution. Then we'll see how the governments, politicians, manage to change this distribution of wealth in favor of the one side or the other of the population: we shall see, so, the political-economic theories (and we shall understand what for example Mr. Monti or Mr. Einaudi in Italy, or Mrs Tatcher in UK, or Mr. Obama in the United States etc., really did).

So let's see first how the wealth in a nation is distributed, and why some people have a certain “richness” and another part of the population definitely has a different wealth.

Imagine for example that Our State is called "Happy Republic" and it consists of only 5 people. Imagine then that the wealth that each year these 5 people are able to produce amounts to € 10.00 as a total. If, in forming this State, those 5 people were awarded on the basis of a principle of absolute equality, and had decided that no one could have more than anyone else, the wealth of 10 Euros above, would have been distributed in exactly the same way and that is 2 Euros per head.

However, our Happy Republic, with this wealth distribution, very soon would have begun having some problems, so to speak, of "intolerance" by some of its members. Why? Well, you yourself can make a game that kind with your friends: in front of the stasis of this situation, shall we bet that someone would try to "emerge" and get a larger slice of the total wealth of 10 Euros? Maybe offering you something he has got and does not need at that time, as a compensation?

But even if the 5 people of the population had determined that only one of them (the others taking advantage of his weakness of character and total submissiveness) would be the "poorest" with, say, a wealth of only 1 Euro and all the others with € 2.25 per head, yet that would not have made this community “happier” and more stable. The reason is that in any case, in relative terms, the vast majority of the population (4 out of 5 people in total) would possess the same amount of money and then some of them, sooner or later, would have felt the need, in the same way as before, to emerge and gather a greater portion of wealth. To be "equal" to others, although in the community there is a small minority of individuals who are at a much lower level, doesn't make the others “happier" and more satisfied as long as they are the majority and, among themselves, have the same richness and are therefore "equal” to each other. What expressed here in a very simple and elementary way of course, is a finding, now acquired, of the thinking of many sociologists and philosophers, among them above all it is necessary to recall Mr. Thomas Hobbes, English philosopher of the 17thcentury, of whom maybe some remember the Latin sentence "Homo homini lupus", being to indicate precisely what we have just said: the natural tendency of men placed inside a community of his peers to "emerge" and try to "prevail", concentrating in his hands the power or wealth at the expense of others.

Returning to our example, then, it is natural that none of the social arrangements above described would be of great satisfaction to the members of the Republic and this would happen because of the lack of that "psychological" element that is fundamental to the human being and that I like to call "Exclusivity", meaning the exclusivity in the enjoyment of a certain richness leaving the others out of it. Both in the first and in the second case, in fact, the very condition of having, almost all the components of the collectivity, an equal share of wealth, made them perceive a feeling of “lack of exclusivity" i.e. of “distinction” with respect to the others. In short, we can even imagine a society in which everyone of its members, absolutely everyone, can afford a Ferrari, but then, would you be so sure that those members would be so pleased and fulfilled? Would you be so sure that someone wouldn't immediately try, for example, to possess TWO Ferraris in order to stand out from the others? Eventually, are you so sure that the individuals of this society would be so happy and "stable" in their will of continuing such an order of social existence? In the opinion of Hobbes the answer was, as seen, negative. In the opinion of the great Italian statesman and economist Luigi Einaudi too. And, it seems obvious, in mine as well.

Pretty illuminating Mr. Einaudi himself in this passage of a famous work of his:"Every man should be placed in the same position as any other man so that he might be able to conquer that moral, economic, political place that is proper for his attitudes of intellect, moral character, working rigor, courage, perseverance.”Competitive “tension”, therefore, towards the achievement of higher, superior goals, where the superiority of course is meant in the only way in which a human being can perceive it, i.e. relating himself to his other peers, is the basis of a socio-economic system which, then, finds its ownraison d'êtreand lifeblood in the dynamism of achieving. And we can only but share these views of our illustrious colleague.

But let's get back to Our "Happy Republic." So, we can take it for granted that, at some point, someone takes action to emerge and, maybe, having special manual skills that are lacking for others, starts to build, say, some chairs. Inspired by the first one, suppose a second individual moves in that direction but, having a lower capacity, he is able to build chairs of a lesser aesthetic quality. After selling them, the situation will be: a wealth of € 4.00 for the guy who made the most beautiful chairs and therefore sold more and at a higher price, a wealth of € 3.00 for the second manufacturer of inferior quality and a wealth of € 1.00 each for the other three members of our State. The total wealth of the State, of course, is always 10 Euros and that is because, in reality, the wealth of a nation varies and tends to increase, of course, but in the long term (many years), while in the short term (e.g. a year) it shows so small variations as not to be perceptible to the community, that in fact will always have the feeling of having the same wealth to be shared. The great welfare changes that make people perceive the improvement in the average standard of living in a diffuse way, are only possible after long periods of time and therefore not relevant for the purposes of our example, for the moment.

It seems clear now that, thanks to the free market, to the stimulus for competition and improvement of one's own condition as a human component of human beings, we shall have a State that is beginning to show a certain neat "distribution" of wealth. We shall have two subjects, in fact, who may be considered definitely wealthier than the others and the remaining three (the majority, so) who are in a condition of neat economic inferiority.

Should we interview one of the three "poor" people, he would probably feel to say something like:"I depleted myself, I haven't got the money I used to have before. Now I can only try not to think about it and watch the game of the National soccer team! Me miserable! "

On the other hand the two “rich” people will say something like:"I've finally made it! I felt too constricted with that situation of equality and flattening with the others, I know I can do more than the others, I have skills that others do not and so I decided to put them to good use and it worked! Now I have much more money than the average of the others! "

At this point in time Our hypothetical civil society will begin to naturally divide into two groups: on the one hand the two rich people who have an interest in maintaining, also say “conserving”, the status of their greater wealth strenuously achieved, and on the other hand the three relatively “poorer" people who will try to recover their lost social positions and then regain at least part of the wealth they no longer have. So, the former we could call them "Conservatives" and the second ones, who want to improve their situation and then “progress”, move forward, we will call them "Progressists".

So we have just witnessed the emergence, in this Happy Republic of ours, of a Right-wing and a Left-wing, two categories, therefore, that are fundamental to the economic and social life of any State. In fact., it is unthinkable that the two people who got “rich” thanks to their work and effort, would accept to easily give up this new status and then make it "easy" access to their wealth for the part of the population left behind. It is a natural instinct for living creatures to defend their "territory", their "belongings." It is unthinkable, namely, that those who reached a certain position of superiority are willing to lose it immediately afterwards, without trying, instead, to hold and consolidate it. Just as it is equally unthinkable that the three "poor" people give up trying to regain what they have lost, since they knew a time when they were better. As usual, the only thing you could not want is what you do not know. On closer reflection, that is precisely what many authoritarian and dictatorial regimes do (in particular those communist ones of the past Soviet empire): to keep ignorance and the systematic concealment of any other world, so that it can not even be desired because it is not known.

Although the well-known Italian philosopher Benedetto Croce, with respect to that topic, never explicitly mentioned those political categories above, what we expressed in the previous paragraphs certainly is a basic key to reading the famous controversy between him and the great economist Luigi Einaudi on the meaning and value of social and political liberalism. Mr. Einaudi, as we know, placed extreme confidence in the ability of economic liberalism to ensure the right fluidity and social mobility that only can ensure growth and steady and peaceful development within a state. He criticized both the socialist planned economy and vehemently attacked that capitalism, widespread in the Western world in his opinion, which, as he put it,"gives a decreasing number of heads, chosen for non-economic quality, the exclusive privilege of governing the material tools of production."A capitalism, namely, that makes it look like free enterprise what is only monopoly and parasitic rent and, therefore, it is exactly the negation of liberalism, and has the same flaws of communism because it comes from the same logic."Communism and monopolistic capitalism tend to uniform and conform the actions, decisions and thoughts of men.”

Freedom is incompatible with monopoly.“The unremitting struggle for freedom against the tyranny of private and collective monopolies is the premise for a society economically and socially more equitable."For this reason Liberalism, Mr. Einaudi believed, sets some constraints to the action of men but these constraints are requested against the monopoly and not against freedom. Now, despite he could not but share what stated by Mr. Einaudi, philosopher Benedetto Croce (of whom Einaudi himself declared to be a sincere student) put the accent on the "superior" and highest character of liberalism as a political and ethic category, affirming the mereeconomic liberalismwas unfit to just "maintain" a social organization that would guarantee such freedom and instead it risked resulting in substantial anarchy. It is in the light of this, in our view, that our reader can then grasp, we can say along with Mr. Croce, the significance and the inevitability of the two macro-categories, Left and Right, mentioned above:there cannot be true freedom if it is not guaranteed to those who reach a higher social and wealth stage the possibility to reasonably "conserve” their achievement and thus be, with no negative connotations whatsoever, "Conservatives", and as well, there cannot be such freedom if you do not allow those who are at a lower stage to target and reach a higher grade in society, and therefore in this sense be "Progressists".

Let us therefore continue with our Happy Republic where we left it, that is, at the time of the formation of the two fundamental categories of Conservatives and Progressists. The thing that is immediately given to observe now is that if the wealth of the nation is always €10, when someone get richer and accumulate wealth, others get poorer. There is no alternative. Only in one case the number of people who have accumulated and are rich is greater than the poor: it's the case we saw at the beginning, in which just one person out of five was in such a status to be considered “poor” and had only €1, compared to the other four people who had €2.25 each. But, as already noted at the time, the “Exclusivity” was then missing, that is to say, the energetic forces of society as a whole, would feel "clipped" because the vast majority of the members of the community were all on the same level of wealth and, therefore, did not perceive their status as "exclusive". At the moment in which the richness with respect to relative poverty is perceptible, necessarily the number of wealthy people is less than the number of those who have a considerably lower wealth. So we arrive at a paradox: in a modern liberal society in which there is a distribution of wealth as seen, a few rich people and many "relatively" poor, at any political election, the Progressists would always win because they would be more numerous and thus they would lead the political and social situation back again to a socialist state from which we started! But in reality, as we know, that doesn't happen and a liberal and Western-style state always manages to keep a political balance, without ever resulting in extreme left-handed or right-handed solutions. How is that possible, then?

It is possible because, in truth, the Conservatives have a number of “escamotages” (very legitimate, of course) to avoid a guaranteed numeric defeat that would otherwise seem inevitable, as we have seen. On a closer look, the solution was quite well shown in the same Mr. Einaudi's words mentioned above: the only way to "catch" the votes needed to build a right-handed majority that otherwise would miss constantly if left to the natural instincts of the groups of the community, is to "open" to liberalism even more, that is, to offer by the conservatives the opportunity, for those among the progressists who are more sensitive to the solicitations of individualistic self-assertion, to be able to emerge and reach, more or less easily, that very status currently held by the Conservatives themselves. For example the Conservatives, during the election campaign, could propose to give large tax breaks and grant funds for those who wish to undertake particularly lucrative commercial activities. At this point in time a progressist if, on the one hand, would be inclined to vote in favor of his natural category since he is relatively "poor" and so interested in “gaining back” and get the wealth accumulated by the Conservatives redistributed, on the other hand will find interesting and appealing the proposal of the conservatives to have a chance to become like them, climbing the social ladder. So it is reasonable to expect that some of the, shall we say, " naturally progressists" in the end choose to vote in favor of the Conservatives, pushed by the opportunity to become part of their social category. Probably those who adhere to this "recall" will be the individuals economically closer to, let's say, the "income border" with the category of the wealthy and so they just need few more steps to get to it.

But not enough: usually it takes something else to really make it a likely election victory in front of an obvious numerical inferiority by "nature." And indeed there is.

The human being, you know, is composed of a part which is rational and a part, sometimes even overwhelming, that is irrational. Concepts and values such as "family, religion, homeland, passion" and so on (expunged, of course, every judgment on the merits and here considered exclusively in their sociological and political valence) clearly leverage on the irrational factor that plays a huge role in the choices and decisions of citizens. And it is so that, at some point, some Conservative remembers the words spoken long before by one of the interviewed "poor” guys who said, as you remember:"... I haven't got the money I used to have before... now I can only try not to think about it and watch the game of the National soccer team! Me miserable!..".Then, to make their political proposal even more appealing and enhance the chances of electoral success, the Conservatives might decide not only to provide the advantages we saw, that make it relatively easier to climb to the top of society, but also to leverage the emotional side and promise, for example, more money to fund the National Football Team and make it even more unbeatable. Nothing new, all in all: two thousand five hundred years ago our Roman ancestors used to say that in order to rule it was necessary to provide people with“Panem et circenses"(“bread and sports games"). There is a reason, isn't it?

The mix is formidable and in fact, at the following political election of our Happy Republic, the Conservatives win.

However, let us not forget that the total wealth of Our Republic is always €10.00 and that means that the liberal “openness" operated by the Conservatives in order to collect the majority has a price: someone among them, probably the most income-marginal band of the wealthy people (the so-called middle-class and upper-middle), will lose their privileged status to see it go in favor of those who have been able to take advantage of the opportunity offered by the Conservatives and are therefore now belonging to this category. So it has been an exchange of roles between certain portions of the civil society, we might say. Neither the Conservatives could not keep their promises because this would mean, in the long run, their final political suicide. The current wealth distribution of the Republic is theref [...]