terça-feira, 22 de fevereiro de 2011

Rethinking the world for future generations!!

I am sure that my generation, as others before, are tired of reading the well-intentioned Universal Human Rights Declaration, the list of the Millennium Goals of the UN and many other documents that reveal a general consensus that our children need access to nutrition, health and education – a sine qua non condition for survival and progress. Indeed, very little progress has been made in this field, and this fact concerns me profoundly.

This reflection is addressed to those who are convinced that the current world does not only represent an inheritance from our parents, but is a loan from our children. We must give them something better than we were given. Looking around, we can see the indignity of violence, social exclusion, hunger, misery, conflict, disregard for the human condition, and unjustifiable wars motivated by unspeakable economic motivations, where youths are killed in defense of spurious interests!! This text contains a proposal that searches to replace the changing logic of ideas - ideology - with the invariable logic of life – biology .

This proposal was conceived with an ideologically unarmed spirit, with a mind open and focused on soul concepts, lovingly trying to see through the eyes of the Creator, and with a heart pulsating strongly in search of the essence of the human being, and founded moreover on the reason of analytical evaluations accumulated in more than two centuries of human knowledge.

At the time of the American Revolution it was said – "You will never empower the weak ones by making the strong ones weaker". During the French Revolution the fall of the Bastille took away the privileges of the Bourbons and lit an indelible flame of hope in the human spirit, with its promises of "liberty, equality and fraternity". These human rights, born of the Enlightenment, are not widely respected until today, but they keep latent their strong appeal in the human desire for democratic participation.

In the pictures I pay a tribute to those who have made the most remarkable contributions to shaping this proposal. Other authors that I have dedicatedly consulted are not mentioned.

In the text below Adam Smith faithfully defines my state of mind on this matter:

" Philosophers of nature, in their independence in relation to public opinion, approach the condition of mathematicians and in their judgments on the merit of their own discoveries and observations, enjoy some degree of security and serenity." ... "Mathematicians and philosophers of nature, thanks to their independence with respect to public opinion, have little temptation to assemble in factions and sects, either to support their own reputation, or to reduce the reputation of their rivals. They are almost always men of great simplicity in ways, living in good harmony among themselves, like friends of each other's reputation, and are not part of intrigue to ensure public applause , although they like to see their works approved, not getting very vexed or very angry when neglected ."

ADAM SMITH (1723-1790), a trained philosopher, is the father of political economy. It is with him that economy is born as a science. His main work, "An Inquiry Concerning the Nature and Causes of the wealth of Nations", was published in 1776 and is considered the bedrock of political economy - However, the ethical and moral philosophical foundation for his thought was published in 1759 – "A Theory on Moral Sentiments"- a real dive into the essence of the human being. With Smith I learned the importance of the "invisible hand", that today is called market – individuals acting on their own interests – and it is always the individual interest that prevails – without governmental interference – as a superior model for human coexistence. I also learned with this remarkable teacher of ethics that every human being carries in his chest a jury court – each one of us knows how to discern between right and wrong, whenever in balance with our nature.

 "the statesman who wants to determine to people how they should employ their capital, not only will be overloading himself with an unnecessary care, but will assume an authority that could never be safely entrusted to a single person, nor even to any Council or Senate, and that nowhere is as dangerous as in the hands of a man who has enough folly and presumption to judge himself able to pursue it."

 "Each person, as the Stoics affirmed, should be first and foremost left to their own care; and each person is certainly, in all respects, more capable and able to take care of themselves than any other person "

KARL MARX (1818-1883) -the controversial and prolific humanist thinker – the icon of socialism and perhaps the most poorly understood of thinkers – died in 1883 and the Soviet Revolution occurred in 1917. Never has an author had so many speculations about his intentions – on his behalf were committed aberrations by fanatics hallucinated for power – one must dessacralize his writings – many have been sensible to recognize errors in capitalism but then acted like Marxist priests burning incense to their god. I have learned from Marx that the workforce must not suffer wear – "The worker sells his labor to keep it unscathed, except for the natural wear, but not to have it destroyed."

Workers need to eat and to have access to health and education systems, so that their labor does not get destroyed– it does not make sense to embed this in their salary, because the hunger of people is not a variable, but a biological need. Human labor is a process of transformation of human energy into physical or intellectual energy, and for this transformation to occur we need nutrition, health and education, ensured a priori and not embedded in salary. We need nourishment just like a vehicle needs fuel to work.

At the end of the 19TH century, in view of the growth of socialism, the Vatican released the ENCYCLICAL LETTER «RERUM NOVARUM» OF POPE LEO XIII, ON THE CONDITION OF WORKMEN- on May 15, 1891, during the fourteenth year of his pontificate, mainly to clarify the Church's position on the labor-capital relationship, on the role of the State and of private property, etc.

"This problem is neither easy to solve, nor free of hazards. It is difficult indeed to define accurately the rights and duties that shall simultaneously govern wealth and the proletariat, capital and labour. On the other hand, the problem is not without hazards, because on many occasions turbulent and crafty men seek to undermine its sense and leverage it to excite the crowds and foster disorder."

"Anyway, we are convinced, and everyone agrees on this, that it is necessary, with prompt and effective measures, to come to the aid of the men from the lower classes, since they are, mostly, in a situation of undeserved misfortune and misery".

Seeking justice and equity, I entirely agree with the Vatican in the condemnation of socialism and in the defense of private property-' thou shalt not desire thy neighbor's wife, nor his house, nor his field, nor his ox, nor his maidservant, nor his beast of burden, nor anything belonging to him». Charity is also advocated as a solution to the "changing relations between workers and employers, to the influence of wealth in the hands of a small number, contrasting with the indigence of the crowd".

"Governments must use the protective authority of laws and institutions; the rich and the employers must remember their duties; workers, whose fate is at stake, must defend their interests in legitimate ways; and since only religion, as we said earlier, is capable of eliminating evil by its roots ", "the desired salvation should be primarily the result of a great outpouring of charity: ... that same charity encompassed in the whole Gospel, and that makes one always ready to sacrifice oneself for his neighbor, as the surest antidote against the pride and selfishness prevalent in this century".

In spite of my respect for the historical, millenarian commitment of the Vatican to human conduct, I cannot believe that some may come to the world to live on charity, while others live in opulence!!! The alms destroy two of the most important and stimulating forces of a human being: dignity and initiative. I Prefer to believe that we must provide equal opportunities of nutrition, health and education to all. From there on, charity will be optional.

The French writer Victor Hugo said : "We will practice charity when we could not impose justice". Because it is not charity that we need. Justice reaches the causes of the problem; charity mitigates its effects. Monsignor Jacques Gaillot, also a Frenchman, with a serene look and pondered voice, dedicated his religious vocation to the defense of human rights, particularly those of the poor and of the prisoners of justice. He completed this reasoning: "I do not say that one must deny a plate of soup or a warm shelter to someone living in the streets. There are urgencies". "I will do this, but my conscience will not be at peace, because I think that we must struggle against the structural causes that bond these people to injustice." The saddest thing for me is that people get accustomed to injustice. For this reason I say: "Wake up! This is shameful! Let us show our indignation towards injustice!".

Social responsibility, sustainability and ecological balance are the keywords – ideas full of motivation and desire, that require defining how to make them real. Some focus their proposals on the alteration of the human DNA – or else they believe in the emergence of a new generation that will put the collective interests above their personal interests, something like the religious proposals that are at least 4000 years old, since the time when Prophet Abraham, at the origin of monotheistic religions, tried to indoctrinate, with little success, this curious biped human. I do not believe in this, because personal interests will always prevail in relation to the collective ones. Napoleon Bonaparte, in his reflections on the human soul, observed that people struggle much more intensely for their interests than for their ideals!

It is most important to put this human selfishness to the service of society. Just as politics and economics cannot be mixed, economics and religion are two distinct areas. Many foolish and deceiving leaders insist on creating the supermarket-shelf religion, to grab whatever is in their interest to make a profit. This happens not only with religions but also with associations speaking on behalf of ethics and philanthropy. For these are intended the hottest places in hell. In this context, it is worth recalling the recommendations of the English thinker Gilbert CHESTERTON: "To PRAY as though everything depended on God. And to ACT as if everything depended on ourselves". Definitely, religion has been used as a placebo for the people – the false remedy that works on certain situations.

JOHN MAYNARD KEYNES (1883-1946) is a regrettably outstanding character in the history of economic thought. His main work is titled "A General Theory on Employment, Interest and Currency" (1936). This book was, undoubtedly, the most influential in the industrialized societies after World War II, in an Europe destroyed by war, where governments started to play a decisive role in the economy. Certainly, the success of FDR's New Deal in the 1930s spurred this English economist to advocate the presence of the State in the economy. Keynes' treatise was a response to the crisis that struck the economy of that time, dominated by the marginalist theory, that was unable to explain the great depression that had hit the Western world in the thirties of last century.

According to Keynes, the State can play a very important role in preventing economic crises, by an increase in public spending that will prevent the rupture of aggregate demand, at a time of negative expectations among private agents.

"We must therefore equip the State with effective instruments of economic policy, to regulate the interest rate in order to keep it below the " marginal efficiency of capital ", to increase consumption by expanding public spending and to expand investment through government loans that will absorb idle resources."

It would be comical, were it not tragic, to imagine that the control of financial flows: currency, exchange and credit, could generate development. Only simple productive work can generate capital which, in its essence, is nothing more than cumulative work. The alleged stability achieved with government interference in the economy should be replaced by the full productive employment achieved through total freedom to produce and consume. Some presence of the State can only be justified during a limited time, to regain balance. A constant presence of the government in the economy replaces the invariable law of supply and demand on the free market with the questionable action of human will.

"In the medium term we will all be dead", could have been the response of Keynes to the implications of his proposals. He is now dead and cannot witness the disaster, after nearly seven decades, of his proposals to formalizing government interference in the economy.

Joan Violet Robinson (1903-1983) is one the leading economists of the twentieth century. She was the leader of the "Cambridge School", initially a follower of Marshall's theories, and finally an outstanding member of the neo-Ricardian and post-Keynesian schools. Significant contributions were made to the european economy by this admirable lady who worked with Keynes and whom I had the privilege of meeting – I can still remember her evaluation, when asked about the power of multinationals – she was very defined: I would rather be a slave of Volkswagen than not be anyone's slave!!! I Learned with Robinson that the market economy makes what is profitable and not what is needed – in this assertion I find her indication for the synthesis between capitalism and socialism.

Ludwig Heinrich Edler von Mises (1881 -1973)- was a member of the so-called Austrian school, also integrated by Carl Menger, Eugen von Böhm-Bawerk, Henry Hazlitt, Murray Rothbard and Nobel Prize-winner Friedrich Hayek. His work is a monument to economic liberalism, showing irrefutably the futility of government intervention in the economy, which can often have a result opposite to what was intended. I Learned with Mises and Hayek that nothing beats the power of the spontaneous organization of the market price mechanisms. All my texts are impregnated with the magnificent teachings and economic findings of the Austrian school.

"Humanity needs, before anything else, to get free from its submission to absurd slogans and to go back to trusting the wisdom of reason."

Without any unjustified nostalgia, I want to emphasize my belief in the values defended by these thinkers, according to whom an independent, active and productive human being writes his own history. Whatever may be one's view of democracy, the destiny of those ruled must never depend on the virtue of their rulers. In addition to universal suffrage and a free press, the reduction of power resources in the hands of an elite should be a criterion to qualify a real democracy.

After all, what went wrong with our world? How can we fix it? Certainly, human beings are not born socialist or capitalist.

Imagine a society with all of its members employed, in a labor market where the supply of jobs surpasses demand, where young students are searched before leaving their school or University, where wages tend to go up and there is no need for the government to impose a minimum salary to be paid. This is not a dream, it already existed during the industrial revolution, at the beginning of the 19th century. I am talking about introducing the substantial criticism of Marx – on the deterioration of the labor force – into the basic research of Adam Smith, and substantially reduce the presence of the State in the economy, to rescue the situation of full productive employment observed at the beginning of the 19th century. Only with full employment the State supervision will be unnecessary – the invisible hand will act inexorably!!

Government is an institution economically impractical, because its revenues and expenditures shall be determined by acts of human will. Economics is a science whose techniques are valid and applicable when the will of economic agents is limited by the natural law of supply and demand. This is why the economic techniques applied by the government are ineffective and have poor results. From an institutional point of view, the governmental bureaucracy, slow in its essence and disistimulating in its actions, is a lousy resource manager, because it grows in the shade of subservient favoritism, of incompetence and servilism, where friendship and political influence are worth more than merit and ability. Without a healthy competition that generates professional stimulus and technological progress, we will have a fertile field for monopolies, oligopolies and cartels.

Private initiative, operating in a competitive market with full productive employment, is a superior model for the production of goods and services. This does not mean that workers and employers in the private sector are superior beings, privileged by divine election. The model of private initiative is superior because it operates in an environment where the human will is limited by the natural and inexorable law of supply and demand.

The complexity of modern corporations cannot be managed by central planners. The so-called democratic centralism is pure sophistry, that appeals only to autocratic rulers. The swelling of the executive branch of power, with huge amounts of financial resources to be allocated by acts of human will, stimulates a race among unscrupulous politicians for power at any cost. "They do not disdain , in certain cases, alliances with cheating, fraud and corruption", to use the words of VILFREDO PARETO.

The speech in this case is about democracy, but the methods used lead inevitably to fill the coffers of the State. This paradox has transformed the democratic regime "of the people, by the people and for the people" into the autocratic rule of a regime "for the people", where the fate of those governed depends on the virtue of their rulers.

The world assists today, baffled and powerless, the supremacy and domination of the class of bureaucrats, since the practical evolution of the capitalist and socialist systems converge inevitably to a totalitarian regime. That is to say, the inequality of opportunities in the current rules for human coexistence is generating the most terrible process of human domination and bondage, the dictatorship of bureaucracy.

It is clear that, with the current rules for human coexistence, the government needs to intervene increasingly, but the real need for government intervention is in the fact that 3 sectors: agriculture, health and education cannot walk alone – The government needs to pump resources into these 3 sectors – something necessary, even if inefficient. Under the current rules, the reduction of government intervention in the economy would considerably increase the distance between poor and rich.

But in a new social pact where nutrition, health and education became private responsibilities in the productive process, the Government would proportionately reduce taxation and its interference in the economy. Instead of transferring resources from rich to poor, society would provide equal the opportunities for nutrition, health and education. This is not philanthropy, but a new concept of human labor as a transformation process of human energy into physical or intellectual power. It will replace the changing logic of ideas – ideology – with the invariable logic of life - biology.

Certainly, businessmen will not act philanthropically only: full productive employment will be the guarantor of this agreement of wills – the dynamics of the economy will lead to full employment, where government supervision will no longer be required. The English poet and polemist of the 17th century, John Milton, identified that human reason can distinguish good from bad ideas, in the same sense that Adam Smith said that we all carry a jury court in our chest – we know how to distinguish right from wrong. In the proposed way one can humanize the market and respond to the Mexican poet Octavio Paz, Nobel Prize in literature, 1990: "The market does not have a conscience or mercy". Or else, as Joan Robinson said – the market shall make what is necessary and profitable, with total freedom to produce and consume.

Oliver P. Schaffner, this proposal needs to be discussed to exhaustion by all those who bear responsibilities and believe that we have an obligation to deliver a better world to our children, grandchildren and future generations. Hunger cannot wait and the children born today have the natural right to be nourished and to access health and education systems. Before it's too late, we must humanize the market to deserve a better future.

May you have a healthy and profound reflection on these days of the New year. Best wishes,

Ronaldo Campos Carneiro – PDG District 4530 – 2008-9

rcarneiro@salutecafe.com.br – Jan/2011

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