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NEW YORK – Europe has been in a financial crisis since 2007. When the bankruptcy of Lehman Brothers endangered the credit of financial institutions, private credit was replaced by the credit of the state, revealing an unrecognized flaw in the euro. By transferring their right to print money to the European Central Bank (ECB), member countries exposed themselves to the risk of default, like Third World countries heavily indebted in a foreign currency. Commercial banks loaded with weaker countries’ government bonds became potentially insolvent.
There is a parallel between the ongoing euro crisis and the international banking crisis of 1982. Back then, the International Monetary Fund saved the global banking system by lending just enough money to heavily indebted countries; default was avoided, but at the cost of a lasting depression. Latin America suffered a lost decade.
Continue reading on Project Syndicate…
- Can money pumping solve the European economic crisis? (cobdencentre.org)
- Three’s company (economist.com)
by Gene Callahan*
In his book Knowledge and Coordination, Daniel Klein distinguishes between mutual coordination and concatenate coordination. Mutual coordination is coordination which people intend: you and I plan to meet for lunch, or several con artists devise a scheme to defraud an elderly widow of her fortune. Concatenate coordination is coordination that is pleasing to an impartial observer: one of Klein’s examples is a room designed with a harmonious combination of colors, shapes, and so on.
- Fads as Social Cycles (thinkmarkets.wordpress.com)
- A few tidbits on the upcoming Adam Ant record (theredradio.typepad.com)
- 152. concatenate (muirnin.wordpress.com)
In India we ought to recognize that we are doing something that is historically without precedent: creating a full-fledged democracy before embarking on the processes of growth. In the USA, the constitution proclaimed the right of all to life, liberty and the pursuit of happiness but denied it to those who were the indigenous people of the USA. Perhaps some of the worst expropriations of other peoples land without the payment of any compensation and with death inflicted as punishment for refusing to part with land was in the same USA. It was quite late that the right to life, liberty and the pursuit of happiness was in theory granted to an entire people who had been stolen from another continent and transported across the Atlantic Sea to provide the manpower for the economic development of North America. After the proclamation of the emancipation of the slaves in 1863, it then took another 101 years till 1964 for the Civil Rights Bills to be passed to enable the American Black to enjoy the same civic political rights as others in his country.
Read more here : Column : Mani Shankar Aiyar.
Innovation that leads to increased productivity is seen as the most important way to generate economic wealth. No surprise, then, that so many people want to promote it as the Western world seeks to recover from recession. President Barack Obama has a strategy for innovation. In Britain there is a government department dedicated to championing it. Others think that innovation works best when government does least. Private companies establish skunk works in the hope of becoming more innovative. Others ask their employees to allocate time to thinking big thoughts. One popular strategy to promote innovation is to invest in maths and science.Maths and science certainly underpin many innovations—indeed, they are the basis for much of modern society, from the gadgets people use to the ways in which people interact with one another and the way in which they think. So close is the relationship that politicians seeking to persuade voters that they are promoting economic growth use “science” and “innovation” almost interchangeably. But, laudable as it is in its own right, does promoting maths and science represent the best way to stimulate future innovation?Yes, says Chris Budd, an applied mathematician at Bath University in Britain, and the defender of the motion. He points to the mathematical foundations of the commercial world: the internet, computers, mobile phones, modern medicine and even transport systems. These employ branches of mathematics that were considered obscure until recently but have found applications in areas such as building search engines, he argues. It is difficult to predict which new scientific advance will generate new economic activity but science nevertheless boosts productivity. And as governments have sought to promote business, they have encouraged universities to establish spin-off companies and to build partnerships with other fledgling organisations seeking to develop new products and new processes, which has helped to generate wealth.That may all be true, but it is not sufficient, says Chris Trimble, who co-wrote “The Other Side of Innovation: Solving the Execution Challenge” with Vijay Govindarajan, both of whom conduct research into innovation at Tuck School of Business at Dartmouth College in America. Of course maths and science can stimulate future innovation, but promoting these disciplines is not necessarily the best way of bringing about change. He cites targeted incentives, public and private spending and—most importantly, in his view—better management as more powerful alternatives. It is management education not technical education that is lacking, he argues. There is a surfeit of bright ideas but not enough wherewithal to implement them.Yet the ability to create wealth not only depends on using tools that were scientifically designed; it also requires people to think both creatively and in cold, calculating ways. To misquote Thomas Edison, innovation is 1% inspiration and 99% perspiration. Time then, mentally, to roll up your sleeves.
If you’re thinking of building an internet business, you should probably take a hard look at the following two questions:
If you build it, will they come and keep coming back?
If you don’t, will someone else?
The rest will follow from that.
Have a great day!
"We can’t legislate wisdom or passion. We can’t legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people."