The relationship between finance and the real economy is arguably at the root of the contemporary economic malaise. Unlike earlier acceptance of simple linear causation, recent recognition of a curvilinear relationship between finance and economic growth
, implying ‘diminishing returns’, has important implications.
Agriculture is the bedrock of sedentary human civilization, without it we would have no governments or nations. It was food surplus generated by agriculture that enabled people to live in cities and form regimes able to organize food production in such a manner that some community members could engage in other activities than direct food production and thus give rise to the ideologies, techniques and goods which now constitute and govern our existence.
The feeling in the air at a recent meeting of the United Nations Office on Drugs and Crime (UNODC) was one of compassion and benevolence.
The focus was on children as Foreign Terrorist Fighters (FTFs), a subject that everyone at the panel discussion argued is delicate and politically sensitive.
With growing economic conflicts triggered by US President Donald Trump’s novel neo-mercantilist approach to overcoming his nation’s economic malaises, many voices now argue that bad free trade agreements are better than nothing.
After US withdrawal following Trump’s inauguration in early 2017, there is considerable pressure on signatory governments to quickly ratify the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the successor to the TPP.
As China rapidly replaces Europe and the USA as the key player in developing countries, the Western press is full of articles about the dangers of dealing with the Chinese.
Financialization has involved considerable ‘innovation’, often of opaque, complex and poorly understood financial instruments. These instruments typically have large debt components involving leveraging, deepening connections across markets and borders.
We humans are at the absurd stage in our technological evolution when we seem to have abandoned our common sense. Billions are spent by governments, corporations and investors in training computer-based algorithms (i.e. computer programs) in today’s mindless rush to create so-called “artificial” intelligence, widely advertised as AI.
The emergence and growth of financialization from the 1980s has been driven by several factors operating at various levels – national and international, ideological and political, and of course, technological. The 1971 collapse of the Bretton Woods (BW) international monetary system arguably paved the way for financial globalization.
Finance has not stopped at dominating the real economy. The tentacles of finance have reached into significant, if not most parts of society
characterises modern society, where finance is dominant, as a ‘portfolio society’, in which aspects of social life have been securitized and transformed into a kind of capital or investment to be managed.
The terrible feeling I had on waking up and seeing the Italian voting results at the recent European elections was that my country was suddenly full of strangers. How could the majority of Italians reconfirm a government which has been the most inefficient in history, quarrelling on everything every single day and looking with total indifference to the looming problem of how to establish the next budget without clashing with the European Union or squeezing Italian citizens? Its irresponsible debate on the Italian finances has now led to a spread (difference of value) of 290 points with the Germans.
Do not panic! This is not about telling you how bank accounts and pension funds have been used to finance the production of nuclear bombs (they call it ‘investment’).
Over recent decades, the scope, size, concentration, power and even the purpose and role of finance have changed so significantly that a new term, financialization, was coined to name this phenomenon.
Financialization refers to a process that has not only transformed finance itself, but also, the real economy and society. The transformation goes beyond the quantitative to involve qualitative change as finance becomes dominant, instead of serving the needs of the real economy.
Human existence includes dreams, thoughts, ideas, music, stories, religion, and other immaterial ”things”. They constitute an important part of our habitat
, i.e. the dwelling place of any living organism, consisting of both organic and inorganic surroundings. I learned this when I many years ago found myself among the undulating heights of Cordillera Central
, which rise diagonally across the island of Hispaniola, shared by Haiti and the Dominican Republic.
After the failure and abuses of privatization and contracting-out services from the 1980s, there has been renewed appreciation for the role of the state or government. Earlier promoters of privatization have taken a step backward, only to take two more forward to instead promote public-private partnerships (PPPs).
Privatization has not provided the miracle cure for the problems (especially inefficiencies) associated with the public sector. The public interest has rarely been well served by private interests taking over from the public sector. Growing concern over the mixed consequences of privatization has spawned research worldwide.
The World Bank has successfully promoted its ‘Maximizing Finance for Development
’ (MFD) strategy by embracing the United Nations’ Sustainable Development Goals, internationally endorsed in September 2015.
It has also secured support from the G20 of twenty biggest economies, and effectively pre-empted alternative approaches at the third UN Financing for Development summit in Addis Ababa in mid-2015.
At the risk of reiterating what should be obvious, the question of private or public ownership is distinct from the issue of competition or market forces. Despite the misleading claim that privatization promotes competition, it is competition policy, not privatization, that promotes competition.
Amid rising attacks on rights campaigners, and mass protests in countries such as France and Serbia, civil society groups are urging governments to ensure the protection of “democratic values” and freedom of expression.
In most cases of privatization, some outcomes benefit some, which serves to legitimize the change. Nevertheless, overall net welfare improvements are the exception, not the rule.
Never is everyone better off. Rather, some are better off, while others are not, and typically, many are even worse off. The partial gains are typically high, or even negated by overall costs, which may be diffuse, and less directly felt by losers.
UMEA, Sweden, 26 March 2019 (IPS) -- At this year’s Davos economic forum
, US executives warned that China may be winning the so-called Artificial Intelligence (AI) race with Europe. In another recent article, Bloomberg pointed out
that countries are rushing to not be left behind.
I see five issues that will be central to implementing the Paris Agreement on climate change and achieving the 2030 Agenda for Sustainable Development. South-South Cooperation can offer solutions to all of them.
First, rising inequality both between and within countries is eroding trust and deepening a sense of injustice. Globalization has enabled many people to escape poverty – but its benefits are not shared equitably and its costs fall disproportionately on the poor and vulnerable.