The Third Industrial Revolution - a response to the Economist The Third Revolution by nature of its high mechanisation and non-labour intensity means an ever larger proportion of the general public will be excluded from the production process or remunerated to ever lesser extents. Amid the atonal monotony of crisis that has increasingly sirened from the media during the last several years, it has been very rare to hear of ‘good news’ stories with regards to political economy, manufacturing or industry, particularly within the context of the OECD countries. Equally rare are stories that choose to take a longer term view, that zoom out of the immediate predicament in order to take a more macroscopic view of things. That ask ‘where next?’ for capitalism, jobs, growth. This is unsurprising of course. That is why the leader article in this week’s Economist ‘Manufacturing - The Third Industrial Revolution’ stands out. The revolution will affect not only how things are made, but where. Like all revolutions, this one will be disruptive.
South Africa - ECONOMY South Africa - The Economy South Africa TRADING ON JOHANNESBURG'S financial markets reached a new all-time high on April 26, 1994, reflecting the buoyant mood of voters of all races who were about to participate in the country's first democratic elections. As South Africa emerged from the economic stagnation and international isolation of the apartheid era, the new government and its theme of economic reconstruction received international acclaim and encouragement. At the same time, however, it faced conflicting pressures to speed economic growth, to strengthen South Africa's standing among international investors and donors, and, at the same time, to improve living conditions for the majority of citizens. South Africa's economy had been shaped over several centuries by its abundant natural resources and by the attempts of immigrant populations to dominate and to exploit those who had arrived before them. South Africa South Africa - The Economy - Historical Development External Debt
Modern banking's fatal flaw Does this surprise you? It should not. It has been this way since 1844. In that fateful year, the British Parliament passed the Bank Charter Act, an attempt to bar commercial banks from engaging in fractional reserve lending. Back then, people would deposit gold (the money of the day) for safekeeping in bank vaults. The banks would issue depositors with a signed contract stipulating that the bank was obliged to hand over, on demand at any time in the future, a specified weight of gold to the bearer of the contract. These banks soon realised they could create banknotes that looked just like the original banknotes, with the same contractual stipulations (that is, a claim on gold) and lend them out to merchants at interest. This was fractional reserve lending. Creating economic havoc The injection of excessive monetary liquidity into the economy fuelled euphoric speculative bubbles in asset markets. The unredeemable banknotes immediately lost all their value.
Logic Freaks Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences for understanding the economic world. Economists have converted the subject into a sort of social mathematics in which analytical rigour is everything and practical relevance is nothing. At least three Nobel laureates have expressed their concerns. At a very early stage Wassily Leontief in 1982 objected that models had become more important than data: “Page after page of professional economic journals are filled with mathematical formulas … Year after year, economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same sets of data.” In 1997, Ronald Coase complained: “Existing economics is a theoretical system which floats in the air and which bears little relation to what happens in the real world.” Geoffrey M.
World's richest woman says poor should have less fun, work harder Just in case you were beginning to think rich people were deeply misunderstood and that they feel the pain of those who are less fortunate, here's the world's wealthiest woman, Australian mining tycoon Gina Rinehart, with some helpful advice. "If you're jealous of those with more money, don't just sit there and complain," she said in a magazine piece. "Do something to make more money yourself -- spend less time drinking or smoking and socialising, and more time working." Yeah, let them eat cake. Rinehart made her money the old-fashioned way: She inherited it. "There is no monopoly on becoming a millionaire," she said by way of encouragement. "Become one of those people who work hard, invest and build, and at the same time create employment and opportunities for others." Boom. Why are people poor? "The millionaires and billionaires who choose to invest in Australia are actually those who most help the poor and our young," she said. And now it's out there. Thank you, rich people.
Why resource-rich countries usually end up poor Photo by Walter Astrada/AFP/Getty Images. New discoveries of natural resources in several African countries—including Ghana, Uganda, Tanzania, and Mozambique—raise an important question: Will these windfalls be a blessing that brings prosperity and hope, or a political and economic curse, as has been the case in so many countries? On average, resource-rich countries have done even more poorly than countries without resources. They have grown more slowly and with greater inequality—just the opposite of what one would expect. After all, taxing natural resources at high rates will not cause them to disappear, which means that countries whose major source of revenue is natural resources can use them to finance education, health care, development, and redistribution. Resource-rich countries tend to have strong currencies, which impede other exports; Because resource extraction often entails little job creation, unemployment rises; All over the world, countries have been doing this.
Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study Science has spoken: Banks are doomed to suck at trading forever and should be stopped before they crash the global economy again. A new study by economists Arnoud Boot at the University of Amsterdam and Lev Ratnovski at the International Monetary Fund finds that recent blow-ups in the banking sector -- JPMorgan Chase's $6.8 billion "London Whale" losses and that whole financial-crisis thingy, to name two -- are not isolated events, but "a sign of deeper structural problems in the financial system." The only prescription? Less trading by big dumb banks. "Without policy action, crises associated with trading by banks are bound to recur," Boot and Ratnovski write in a blog post about the paper. Why can't banks just trade like George Soros and everybody else? First, banks have tons of capital laying around, relative to, say, a hedge fund, which specializes in trading. Also on HuffPost:
SA weathers storm, but food prices still set to double by 2030 | News | Environment Traditionally the cost of staple foods has gradually inflated over time, and future cost scenarios have taken this approach. But a report released by Oxfam today has factored in the rapid changes in price that come about due to climate-related crop failures. Their most conservative scenarios see food prices doubling by 2030. Half of this increase will be down to changes in average temperatures and rainfall patterns, it said. The report, Extreme Weather, Extreme Prices, said that for the moment South Africa is secure. It is these short-term changes that are the big problem. In the normal run of things a local failure would force South Africa onto the global market. The World Bank's records show that 80% of the world's grains come from five countries. This spike was battered down by the global recession in late 2008, but the food-price graph is rapidly racing up to meet its previous high. Price and production shock But for the immediate future, the country is treading a fine line.
Economists sound warning over carbon tax South Africa's high dependency on fossil fuel-powered energy has earned it a place among the top 20 carbon emitting countries in the world. In this year's Budget Speech, Pravin Gordhan announced the implementation of a carbon tax for 2013-2014. A draft policy is being drawn up for public comment. Carbon pricing was the topic under panel discussion at the Mail & Guardian's Critical Thinking Forum on Tuesday, hosted by the M&G and BHP Billiton. Panellists drew a direct link between a carbon tax and rising electricity costs. As Michael Rossouw, executive director of Xstrata Alloys, argued: "We have not learnt to decouple energy growth from carbon usage". Rob Jeffrey, Econometrix managing director, cited a recent study that revealed a carbon tax would reduce GDP by 3% by 2021, a sum that would amount to R88-billion. Carbon tax "South Africa makes up 1.1% of the world's carbon dioxide emissions," said Jeffrey. The shape of the future carbon tax still hangs in the balance.
Global systemic crisis/October 2012 -The global economy sucked into a black hole and world geopolitics heated to white-hot: The seven key factors of an unprecedented double shock As LEAP/E2020 anticipated since the end of 2011, the end of summer 2012 marks the beginning of the revival for Euroland with the emergence of a positive dynamic fed by two lasting phenomena: first, the progressive operational installation of the instruments bitterly discussed and decided upon during the last 18 months and, secondly, the visionary spark brought by the political changes of the last six months which have put Euroland’s medium to long term future back in the middle of the decision-making process. The Euro’s progress these past weeks offers a perfect illustration of the phenomenon (1). That being said, Europe will be in recession for the next six to twelve months. It just goes to show that the only good news that we announced in the June 2012 GEAB issue is far from being miraculous. Global arms sales and principal exporters’ share (2010-2011) - Source: New York Times, 08/2012 Because it is indeed that. --------- Notes: (1) See previous GEAB issues
Why do we take economists so seriously? | Guardian UK It's the economists, stupid! While we were not waving but drowning in soggy flags, economic stuff was happening. Big stuff, though it could not break through the gooey queen-fest. In the news blackout that was the jubilee, other countries were reporting the meltdown of the Spanish banks, and thus, eventually, the euro. Actually, that may happen. Why all this panic, though? The sudden ability to produce money out of thin air is exactly why economists such as Paul Krugman tell us that the Thatcher-lite hausfrau-speak of Osborne is senseless. But we are indeed in reduced circumstances when debate is reduced to bankers arguing with economists. Economics is not a science; it's not even a social science. Sure, there are some new radicals on the block who daringly suggest that we should not adhere to the old models. Risk-free capitalism was what the anti-globalisers always warned us about, but they had dreadlocks and dogs on string and were pepper-sprayed away.
47 Signs That China Is Absolutely Destroying America Have you ever watched a football game or a basketball game where one team dominates the other team so badly that calling it a "blowout" would be a huge understatement? Well, that is what China is doing to the United States. China is absolutely destroying America on the global economic stage. Once upon a time, the Chinese economy was a joke and the U.S. economy was the most powerful the world had ever seen. But over the past couple of decades the U.S. economy has decayed and declined while the Chinese economy has skyrocketed. If you do not believe that China is wiping the floor with America in front of the rest of the world, just keep reading. #1 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. #2 America has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years. #3 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade. #40 According to U.S.
What price the new democracy? Goldman Sachs conquers Europe - Business Analysis & Features - Business This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project. It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign debt drama, is under ex-Goldman management, and the investment bank's alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Until Wednesday, the International Monetary Fund's European division was also run by a Goldman man, Antonio Borges, who just resigned for personal reasons. Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as "the Vampire Squid", and now that its tentacles reach to the top of the eurozone, sceptical voices are raising questions over its influence. This is The Goldman Sachs Project. With these connections, it was natural for Goldman to invite him to join its board of international advisers.
97% Owned: New Documentary Introductory videos The basics you need to know: Why is there so much debt? Why are house prices so high? Explained in plain English in short animations. Presentations by Ben Dyson & others from Positive Money How is money created? Ben Dyson, founder of Positive Money and other members of the team give clear answers. Banking 101 Do you really want to understand how banks create money, and what limits their ability to do so? Economists about money, banking reform, Positive Money Why don’t economists understand money? Prof. Politicians, Journalists & Bankers Conservative MP, Labour MP, Green Party MP about money, banking reform, Positive Money. Former Reuter journalist on ‘Why doesn’t the media understand money’…and more. 97% Owned – Monetary reform documentary