[Debatte-Grundeinkommen] Wolfson

[axel.tigges at gmx.de]

http://aktuell.heidemarieschwermer.com/#home
was brauche ich? wer mangel hat födert mangel, wer fülle hat fördert fülle, doch er ist lebendig... 
mvg
axel tigges

> 
> Open letter to Lord Wolfson
> With reference to the prize winning question of how to get out of the Euro
> 
> Dear Lord Wolfson
> 
> Please let me enjoy the platonic pleasure of an idealist by presenting my
> own proposal for your prize riddle even after the deadline has expired two
> months ago. Hopefully, you will still be interested in the problem, as it
> has – at least in my view – not really been satisfactorily solved. I
> venture to say that it could not possibly be solved as it was framed in merely
> technical terms. You asked the public for what could be done to ensure an
> exit from the Euro at minimal costs. The answers obtained are certainly as
> good as they can possibly be. However, they do not really approach the core
> of the question which, I am afraid, lies well beyond money. The American
> Great Depression was arguably the most dramatic breakdown of a monetary
> system history has ever witnessed in times of peace, but the true cause for the
> sudden devaluation of the Dollar clearly lay outside the sphere of money.
> As Marriner Eccles, then governor of the FED and second powerful man after
> Franklin D. Roosevelt would later put it. „As mass production has to be
> accompanied by mass consumption, mass consumption, in turn, implies a
> distribution of wealth… to provide men with buying power equal to the amount of
> goods and services offered by the nation’s economic machinery.“ Eccles
> goes on to prove that this condition was no longer assured at the end of
> the 20s. As we know it was substantially by non-technical measures regarding
> the overall functioning of the economy, that the Great Depression was
> finally overcome.
> 
> The breakdown of the Euro – a tragedy
> 
> So my point with regard to your prize winning question is pretty much on
> the same line. I am convinced just as you are that there is no way to avoid
> the final breakdown of the Euro. However, I consider this to be no less
> than a tragedy since it deals a tremendous blow to the idea of a United Europe
> and could, for many years to come, turn the continent into an
> insignificant player in global affairs. Nevertheless, this tragedy is due to happen,
> and one among the six proposals offered in answer to your prize winning
> question will presumably be adopted. During a time of transition the return to
> their own currencies will result in great hardship but in the end it will
> give a substantial boost to Greek, Italian, Spanish and Portuguese economies.
> They will be free to devaluate and thus restore at least part of their
> competitiveness to levels obtained before the introduction of the common
> European currency.
> 
> How far will competitiveness be restored?
> 
> However, nobody should believe that this is a recipe to restore former
> health. History seldom if ever can simply be switched back to a previous stage
> by a mere sleight of hand. Lost competitiveness will not easily be
> regained even if there is no barrier to devaluation. Just think of your own
> country! For more than a century Great Britain had been the epicentre of
> world-leading industries and inventions. By now, however, most of these have gone,
> and nobody believes that by merely devaluating the English pound the
> country would revert to its old glory. Economic success is not just a matter of
> technical adjustment. Obviously, English people are by no means less
> intelligent than 150 years ago when the British Empire had reached its apogee. Nor
> are they less industrious. But they fight against what I would call a
> difficulty of temper that befalls all those who once enjoyed their time of
> greatness. You don’t make an aristocrat work in the gutter just to keep up
> with the Joneses. In order to be competitive against the Asian tsunami of
> cheap production, the countries of the southern periphery would have to fall
> back to a life of utter austerity, which means to a life of the type still
> prevailing in Chinese factories. Let their daughters work for 12 or more
> hours in industrial barracks, let natural environment be ruthlessly exploited,
> in other words, let life be solely devoted to material gain. That’s
> exactly what southern Europeans, brought up in a tradition of siesta and
> wellbeing, will by no means be ready to accept. According to all previous
> historic experience they will rather shrink into economic insignificance and even
> decay before turning into economic animals just for the economy’s sake.
> 
> I blame Europe
> 
> Mind you, I don’t blame the Chinese. They just follow the time-honoured
> path of capitalistic ascent where they are already so advanced as to be
> likely to become our betters after a short lapse of time. I blame Europe for
> its utter blindness! By now we should know about the inevitable consequences
> of such a race to the bottom. Europe will end up de-industrializing just
> as Great Britain has done and the United States has finally come to
> perceive. In a recent article given to the SPIEGEL, political scientist Francis
> Fukuyama made the following statement. “We have unthinkingly embraced a
> certain version of globalization that assumed we had to move very quickly into
> this post-industrial, post-manufacturing world. Doing so, we forgot that
> the whole reason real socialism never took off in the US was the fact that
> the modern economy seemed to produce middle-class societies in which the bulk
> of the population could enjoy a middle-class status. They worked in
> industries that were abolished in our countries and transferred to countries like
> China“.
> 
> It’s not the Euro, it’s certainly not merely money
> 
> So let me stress my argument once again. The introduction of a common
> currency at a much too early stage of European integration has turned out to be
> a damaging political error. Yes, a political error, not a technical one.
> The large socio-economical differences between European countries did not
> permit monetary unification. In other words, money is not at the core of the
> problem – neither for the southern periphery nor for its comparatively
> successful counterpart in the north. Germany, at present, has become a kind
> of schoolmaster for the rest of Europe. But how was this miracle brought
> about? After all, it is hard to forget that, until after the start of the
> century, Germany was still held to be the “sick man of Europe”. But then
> there was Chancellor Gerhard Schröder – a left wing politician. He bowed
> to the demands of globalization as right wing Margaret Thatcher had done
> some three decades earlier. Against the protests of Labour Unions he slashed
> social benefits in order to make Germany a more competitive player. Soon
> afterwards exports rose to unexpected heights while employment rates soared.
> 
> Germany will not rewrite the course of history
> 
> To be sure, this was, and still is, a story of success. But there should
> be no doubt as to a more sobering truth. Germany won nothing better than a
> temporary victory. Whatever our country does, it cannot possibly reduce its
> loans, its social system and environmental standards to Chinese levels. So
> its only lasting chance to retain a competitive edge is its technological
> advance. But even in this respect Germany will not be able to contradict the
> general course of history. Britain has lost its technological prominence
> against newcomers – as has the United States in most of its once leading
> industries. To my mind there is no hope whatsoever that Germany will be an
> exception to the general rule. For China will be even more successful than
> Japan some decades ago in first reaching and then overtaking Western
> countries in research and development. Unless war decelerates their breathtaking
> ascendancy, the Chinese will soon be our equals if not our masters for they
> can send more than one billion hard working pupils to be trained in their
> schools and universities - people who want nothing more than to live a
> better life than their elders. With its shrinking population of 80 million, most
> of whom (like the fore mentioned aristocrat) already had their good time
> in the past, Germany, on the contrary, has little chance to keep pace even
> if a dozen or more chancellors like Gerhard Schröder were to reduce incomes
> and slash social benefits for the least privileged to still deeper levels.
> 
> Globalization tears Europe apart
> 
> So what can and should Europe do? Finding the right technical formula for
> getting out of the Euro is important enough. But it is, certainly, not a
> way to save the European project. Such a formula will not get Europe out of
> its predicament which is of far greater weight than just the untimely Euro.
> The basic problem is globalization! Of course, if we consider the latter to
> be an incontestable verdict passed down on us from either heaven or hell,
> it is futile to hope for an escape. Not only will the United States lose
> its industries and finally its status as the world’s leading superpower,
> Europe will be forced to submit to the same inexorable fate. First, the
> southern periphery loses its competitive edge – as, in fact, has already
> happened. Then, somewhat later, the northern belt will hand what still remains
> of its industrial heritage to the Far East. And all those wise politicians
> in Berlin and Brussels will shake their heads and unanimously proclaim that,
> unfortunately, there is just no alternative.
> 
> But is this really the truth? I think we should ask ourselves whether
> globalization in the shape of merciless competition that gives victory not to
> technical intelligence and environmental consciousness but to the cheapest
> provider, really is and must be the fate determining Europe’s future.
> 
> A prize for saving Europe from further decay
> 
> Let me suggest to you that after offering a prize for the best idea to get
> out of the Euro, you should honour the best idea how to save Europe from
> de-industrialization and final decay. An appropriate answer to this question
> seems to me even more important than a technical solution to the Euro
> conundrum. I am sorry to say that the answer has meanwhile become much more
> difficult than it was some three decades ago. At the beginning of the 90s
> about 80% of Germany’s trade was still with its European neighbours as only a
> mere 20% of its exports went to the non-European world. At that time costs
> of production as well as income levels in German industries were still
> largely determined by competition within Europe itself. Asian labour and
> production costs could still be safely put aside as of no consequence. However,
> not content with its prominent role within Europe, Germany wanted its
> industries to be global players – and this ambition forced it to pay more and
> more attention to costs and prizes on outside (non-European) markets. Its
> machinery, cars and pharmaceutics were no longer competitive as soon as
> Asian producers offered equivalent goods at much lower prizes.
> 
> The greed for more and more profit
> 
> The turning point was approached before the end of the century. Surely,
> the European continent – like its American counterpart – was and is far
> big enough to provide for nearly all its nutritional and industrial needs
> out of its own resources in intelligence, people and raw materials. Those
> shortcomings as still exist, for instance in the energy sector, could be
> compensated by renewable energy sources in the near future. So, as in the United
> States, it is by no means an outside and ineluctable force that made
> Europe choose the way of outsourcing ever larger parts of its production beyond
> its borders. It was and is mere greed for more and more profit that leads
> western countries on a path of gradual self-erosion.
> 
> All of us will be losers
> 
> Dear Lord Wolfson. Let me assume for a moment that you already raised the
> question as how best to change direction in order to stop Europe’s
> erosion. And let me further presume that the following would be the prize winning
> answer. This answer would, I am sure, ascribe a chief role in any change
> of direction to Germany and its political leadership. My country would have
> to re-orientate its economy versus Europe instead of becoming more and more
> dependent on global markets and their relentless pressure. Germany should
> no longer reduce production and labour costs in order to remain competitive
> on the global scene, for this is a race to the bottom which it will and
> cannot win in the long run. The only result of such a misled policy will be
> Europe’s further disintegration. Even if Germany’s neighbours were
> willing to follow the Teutonic example gradually dismantling all previous social
> achievements, they would still end up as losers for a quite simple reason:
> Industrial capacity everywhere in the world is expanding at such a rate
> that large parts of its already existing structure are put at risk - just
> think of the American rust belt. In such an environment of overproduction
> hoping for a successful rebirth of industries in Greece, Italy, Spain or even
> France, seems to me rather absurd.
> 
> European independence
> 
> But the whole picture instantly changes as soon as European countries
> decide to (gradually) free themselves from the shackles of global markets and
> exclusively rely on the common European market as their outlet for
> production and source of consumption. In such an environment returning to national
> currencies would not – as it certainly does under present conditions –
> put the whole European project in jeopardy. Europe would be saved at the
> very moment that it saves itself from outside pressure. Greek products,
> whether merely agricultural or not, would immediately regain much of their
> competitiveness as they need only compete with products of the Union itself, but
> not with the whole outside world. Certainly, Germany would at first time be
> a prominent loser as almost a third of its industrial output is presently
> directed to non-European markets. And – what is perhaps much harder to
> accept - Germany would have to renounce its present status as global player.
> Nevertheless, advantages would, in the long run, by far outstrip all short
> term losses, for Germany could rely on a secure European market for its
> products.
> 
> But that is not all. The chief argument for such a reversal to the idea of
> a truly United Europe is the maintenance and safeguarding of Europe’s
> acquired social achievements and industrial strength. The race to the bottom
> would be definitely stopped. Germany would save the European project which
> it is now well on the way to destruction.
> 
> Is this more than utopia?
> 
> Is Germany ready to make this concession? Not yet. There are tremendous
> obstacles on the way of European reconstruction. Just to mention one of the
> more obvious objections: American products nowadays largely consist of Asian
> components, so that warding of the impact of cheap Asian goods would
> entail protection against American products as well. But Europe – and first of
> all Germany - trembles at the mere thought of antagonizing the United
> States. For the time being there are no German and hardly any European
> politicians (apart from foolish xenophobes of the extremist right and some French
> leftists) that dare come up with such a proposal. I am confident,
> nonetheless, that the situation will fundamentally change in the years to come. The
> United States themselves will gradually awaken to the dangers of
> de-industrialization. Protectionism, once the main policy of this country from the
> Civil War up to the middle of the twentieth century, is no longer an
> ostracized term in political discourse. Probably, the US will take the initiative
> with Europe then taking its chance. Let’s hope that this turnaround will
> come soon – sooner than Europe’s disintegration! In this case - but in
> this case only - the breakdown of the Euro would not seriously endanger the
> prospect for a politically unified Europe.
> 
> Yours sincerely
> 
> Gero Jenner
> 
-- 
Axel Tigges
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Phone +43 650  8080095
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axel.tigges at gmail.com
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