The great challenges of our time, San Patrignano 2015
This is an English translation of my column Troïka : Il va peut-être falloir s’en occuper nous-mêmes ! of February 27 2015. Thanks to Ioana-Noemy Toma for her kind help !
Jean-Daniel Magnin sends me a newspaper clipping that tells about the actress Emma Thompson stating she will not pay income tax – which she’s in the habit of doing, so long as all those who don’t pay it – and are in the habit of not doing so, remain out of jail. This is civil disobedience for you: a way of taking matters into your own hands, should the government or governments fail to do so. Food for thought here!
Zebu wrote something on the Arte documentary about the Troika and a very good thing he did. Right now I’m watching that same film, and believe me there is a lot of stuff in there. Many things which, if true, should send many of these Troika people (European Commission, European Central Bank and International Monetary Fund) straight away into jail.
Instead of for instance pestering Dominique Strauss-Kahn, as French justice has recently been doing, about peccadilloes, it might be a very good thing to hear what he may have to say about a statement made there by one of the talking heads (Philippe Legrain, a former adviser of Manuel Barroso at the European Commission) that he deliberately pushed the head of the Greek people under water in order to release 20 billion euros for the French banks, to make this the dowry of the French presidency’s prospective candidate that he was at the time.
Is this true or untrue? God knows it might not even be true! How would you know? Well, actually, as a matter of fact we would precisely like to know what Mr. Strauss-Kahn thinks of the assertions of an insider such as M. Legrain. This is why the idea of a public opinion tribunal to judge the heads of the Troika may not be a bad idea after all – you know, just as the Russell-Sartre Tribunal on war crimes in Vietnam.
Mind you, the corpses are much less conspicuous with the Troika; but with millions, as in Greece, having lost access to health insurance, people are likely to croak out of sight.
Just as Emma Thompson is saying: let’s have the scoundrels indicted! That they are our leaders is a lame excuse for not doing so.
What’s your feeling, you people here, the readers of PJ’s Blog, about such an idea as a “Russell tribunal” for dragging to the court of public opinion the Troika crowd, those I affectionately call “priests of a ferocious creed”?
Does the LuxLeaks scandal represent a risk for the Commission?
Paul Jorion: Jean-Claude Juncker’s moral authority has been damaged. Of course, he hopes his investment plan will bring confidence, and it is a good idea. Especially if it can create employment and give purchasing power to European citizens. But his credibility has been tainted by the revelations about Luxembourg’s fiscal practices.
The current head of the Commission is the man who led the implementation of austerity policies within the Eurogroup, at the same time as organising tax evasion for big companies in Luxembourg. Member states lost billions because of him, and now he wants to impose austerity policies on us. This is an untenable position.
Paul Jorion, Ph.D., holder of the “Stewardship of Finance” Chair at the Vrije Universiteit Brussel, will resume his lecturing on Monday September 29 at 4 p.m.
The course is taking place every Monday afternoon at that time in lecture hall D0.03 of building D (central building) of the university, Pleinlaan 2, 1050 Brussels. The course is held in English and it is open to the public.
Guest post. The French version can be found here. Special thanks to Serge Boucher for the translation
We’ve shown in the first part of this post that a population of actors effecting “random walks” by betting their wealth daily, or more precisely a modest part of their fortune that lies above the poverty level, will eventually see a small group of “very rich” emerge, making everybody else comparatively poorer.
We now increase the number of actors to N=3600, all other hypotheses remaining the same, to get a more clear distinction between a continuum of the society and a few dominant elements. We’ll show how a small dose of “Pikettisation” avoids paralysis.
First, let’s study the situation as is, to identify the problem. Here’s a typical simulation with N=3600 actors during 35000 days. [See ((2)) in the appendix for a more detailed explanation, … even if you have already read ((1))!]
Guest post. The French version can be found here. Special thanks to Serge Boucher for the translation
On the subject of wealth concentration and rising inequalities, Thomas Piketty tells us that there is indeed a growing rift, and that the fifties were only an exception. One can always pretend that the Gilded Age gave us several decades of only occasionally rusty capitalism, hence reviving those levels of inequality is nothing to scoff at, especially if millions of people concurrently rise out of poverty.
Entertaining that view requires that we ignore many aspects of the Great Depression, which is highly difficult to understand, having taken place between two world wars, and in a period mixing technical progress, colonisation and then decolonisation. In any case, one can conceivably believe that history as a whole is so chaotic that what we’ll get at the end of the current rise in inequality need not be exceptionally bad.
Many reasons, which one might wish to file under “our planet’s survival”, suggest that now is a horrible time for deadlocking a system already made rusty by wealth concentration and the mass poverty that it implies: even though a sizeable and growing middle-class manages to get by, a world where even in rich countries 30% of inhabitants are poor, with poor countries doing much worse, can’t be expected to make the right choices regarding our planet’s resources.
An English translation of Sur l’Europe, en réponse à Monsieur François Hollande, président de la République, par Pierre-Yves Dambrine by Johan Leestemaker
Invited commentary, in response of a tribune de François Hollande published today May 8 in the daily newspaper Le Monde, Paris, France.
I have carefully read your speech on Europe, published today in the newspaper Le Monde, in the perspective of the very near European elections. I hold no doubt that you are a European by conviction. As many of us still are, because, as you remind us, the Union was a great and beautiful idea, and remains so. Undeniably she has been a factor of peace and has contributed to the economic rise that followed upon the Second World War. However you forget that for a great deal this peace has been also the result of the balance of terror, as Europe owes a part of its security to the American nuclear shield. Certainly, the peace could be maintained based on specific positive grounds, but also somehow by imperfection.
Exorcising animal spirits out of Keynes
Paul Jorion, Stewardship of finance chair, Vrije Universiteit Brussel
To be published in a forthcoming issue of the European Journal of Social Theory: special issue on “Rethinking Capitalism”, 2014
Might be referred to as “European Journal of Social Theory (forthcoming): http://www.pauljorion.com/blog_en/?p=1229″
Torn between the duties associated with the capacities of academic, banker and statesman, Maynard Keynes was in a constant hurry. He glossed over the missing parts of the economic theories he devised by referring to various unfathomable ‘psychological mechanisms’. It is claimed here that interest rates set at the level defined by the marginal yield of capital, a hypothesis Keynes envisaged cursorily but only to assert it leading to ‘circular reasoning’.
Keynes never considered the power balance between lenders and borrowers to be relevant in setting the level of market rates. However, resorting here as a blueprint to the economic arrangement known as sharecropping, power balance between involved parties is shown to be at the core of a fitting explanation.
Aristole : profit, ethics and price formation.
Lord Adair Turner : socially useful and socially useless financial activities.
National order and international disorder : tax havens, shadow banking, mafias
Oh boy! Only 327 people have watched this on YouTube: Peter Yarrow of Peter, Paul & Mary fame, about political singing – singing meaningful words! – and earning a living out of it.
Let’s give him a little push!
My intervention is part of the filmed account of the session on the Parliament’s own TV channel.
Here my contribution to European Parliament, Committee on Economic and Monetary Affairs, November 5, 2013, 3:30 to 6:30 p.m.
The future of the Eurozone can be approached as a logical problem. If not solved, it can at least be significantly clarified when the issue is examined from the single standpoint of the sovereign debt’s coupon for the nations belonging to the zone.
Within the economic zone where a currency applies, a single coupon level only should be in existence for each obligatory maturity. The founding fathers of the Eurozone assumed no doubt that such would be the case also for the zone – or at least would tend to become so on the long run. They did not envisage that measurable default risk would develop for individual member nations of the zone, neither of course that reverting to the old currency would ever be considered an option. The fact that for a single maturity coupons vary according to country within the Eurozone is as such an alarming symptom of its current troubles.
I will be the first speaker at 3:30 p.m.
The full programme can be found here.
My “Stewardship of Finance” lectures at the VUB resume on September 30.
Lectures will be delivered in English, they are held on Mondays from 4 to 6 p.m. in lecture hall QB (2 Pleinlaan, 1050 Brussels); auditors are free to attend.
Lectures are videotaped and can be viewed on YouTube as well as here on the blog.
1. Why stewardship of finance?, September 30
2. Is rational behaviour necessarily ethical?, October 7
3. Regulation and self-regulation. Adam Smith’s “invisible hand”, October 14
4. Law, Ethics and the business world, October 28
5. The business world and its regulators, November 4
6. National order and international disorder. Tax havens/shadow banking/mafias, November 18
7. Lord Adair Turner: socially useful and socially useless financial activities, November 25
8. Profit and Ethics. Aristotle’s chrematistics, December 2
“Stewardship of Finance” lectures will be held in French at the ULB (Université Libre de Bruxelles) during the second semester, their programme will be communicated in due time.