A case of deflationary collapse or hyperinflation
Joseph Heller published his famous book “Catch-22” in 1961, describing American pilots during World War II. In this day and age of financial misery and economic havoc one could use Heller’s beautiful description of a catch-22 as an analogy. Central bankers everywhere face a classic catch-22. Bankers who are piloting our economies so to speak.
To me it is not so much of a question if they are facing a catch-22. It is one of how much Ben Bernanke, Jean-Claude Trichet, Mervyn King and all other central bankers are aware of it. Continue reading “A Catch 22”
On account of my article “Capitalism, Free Markets and Patents: Grounds for a Major Policy Revision“, I received a list of arguments that do not support my proposal.
I have decided to opt for a three part discussion of my earlier piece. In the first part I deal with simple economic theory. Its function is to summarize what is important to remember when any economic framework is discussed. This part focuses on market capitalism and what mechanisms are at hand. Its objective is to establish a clear view on economics and its terminology. It sheds light on the context of my proposal.
Part II discusses the arguments made for and against my proposal. This part discusses all the arguments made during an interesting conversation I had over the e-mail. It covers a wide range of key factors determining the added value of this proposal, as it covers the arguments against it. Upfront it is probably most fair to state that I stick to my proposal. Part II clarifies my position in much greater detail. If you were not convinced by the original article, I hope discussing the merits of these arguments will convince you to demand a major policy revision. My apologies upfront for the length of part II. Continue reading “Revisiting: “Capitalism, Free Markets and Patents: Grounds for a Major Policy Revision””
Capitalism has become a rather wide description of anything and everything what is considered to be part of economics. Economic science provides people a great variety of different views on market capitalism. This collection has made any use of the words of market capitalism and free markets open to interpretation.
Most important element of capitalism is commonly misunderstood. It is the concept of free markets. Before one is able to argue any economic policy it must undoubtedly become clear what someone has in mind when the words capitalism and free markets are used.
Science is dominated by discussions and it always comes down what definition is used. This part deals with defining important terminology. It is about how economists approach economic markets, and it questions how economic markets function. Are all markets the same? How are they interpreted as free? Continue reading “Part I – Arguing Any Economic Framework – What Is Market Capitalism About?”
In the original article on the patent-framework I summarized a few points that provided a basis to conclude (1) the current patent-framework is flawed, (2) put forward two preconditions that policy-revisions must meet, (3) defined a proposal to change the patent-framework, and (4) briefly explained why such a change will stimulate progress.
Most people consider patents to have emerged as a means to stimulate inventions. However, this is not the case. Originally, patents have emerged in a two-fold manner. Patents emerged as a reward for providing products or services that were thought of as strategically important (to the kingdom), not necessarily new. Beside, patents (in Italy and England, but also as guilds in the Netherlands) emerged as a means to limit competition and favor some people. This was nothing different, and still is not any different, than a pure form of state-initiated discrimination.
Patents eventually were set – for a period of time, nowadays 20 years – to accommodate inventors to profit from their inventions exclusively. The element of new (to the marketplace, or more practically, new to the patent registry) was added. But, the element of exclusivity remained institutionalized. Continue reading “Part II – Arguing the Patent-Framework”
My most profound travelling experience most definitely has been the walk through the “Holocaust Denkmal” (1), in Berlin. I think everybody should define their experiences themselves, but this one I want to share. Continue reading “Berlin”
Financial innovations have been at the heart of the current economic mess. For any economist who is educated and specialized in the domain of economic renewal and innovativeness, it must have been a distinctively uncomfortable experience to hear the word innovation so many times in the context of financial products.
All these bankers and their financial liaisons who commonly use this word, only do so because it seems to sound about right. Too many times this simple word is used in an elaborate story in which it is falsely claimed they were unaware of the substantial risks they took creating these so-called financial innovations.
Did they really think that risks could be innovated non-existent? In this age of financial wizardry, such an explanation must be considered a harbinger of blatant ignorance and intellectual incompetence.
Continue reading “Great Depression 2.0 – Now, That Is An Innovation!”
In 2006 and 2007 I worked on my graduation project. The subject of my thesis focused on the integrating world economy by specifically looking at foreign operations in the Netherlands. In this context I gathered data on foreign operations in the Netherlands for the period 1980 to 2005.
Curiously, the United Nations Conference on Trade and Development (UNCTAD) says it has similar data for three countries but they never published these. In that regard, my study explored uncharted waters. And unfortunately, I could not make any statistical comparison.
Continue reading “Global FDI-Stock Accumulation: A Question Of Causation”
I could not resist to pick up an old hobby. As an economist who always liked making drawings, I decided to put these two attributes together with the following result.
Click to enlarge…
Among the many economic problems of today one important issue has been receiving lesser attention. Of course the credit-crisis is more appealing and necessitating serious attention because of its detrimental impact it has and potentially will have for the world economy in the coming months and years.
However, this article focuses on another major issue: the international patent framework. This article sets out a necessary policy revision, which ultimately provides necessary economic incentives in case of a financial meltdown.
One pervasive misconception on market capitalism is that our economies are driven by free markets. Despite a couple of centuries of economic science and theory, free markets have still not been established. The capitalist markets of today are not synonymous with free markets. The globalization of market capitalism of today is more synonymous with oligopolistic markets and at times even with monopolistic markets. If capitalism can be saved its cure is found with laws and regulations that aim for free markets to emerge. One of these policy revisions enabling this goal, concerns an adjustment in our patent-framework.
Continue reading “Capitalism, Free Markets and Patents: Grounds For A Major Policy Revision”