Tag Archives: economy

Economy for the Common Good in a nutshell

A very feasible model, indeed

Economy for the Common Good is far more practical and feasible than its somewhat utopian name may suggest. It is not about building castles in the air, it is a really well thought out and down-to-Earth model. Short and plain:
Do you want to produce goods and services flouting labour rights or polluting our planet? No problem: go ahead.
Do you want to sell your products or services in our market, too? All right, just do it.
Just one thing: we will tax your products 20 times higher than any other respectful products, so yours will be way more expensive on the market. Besides by means of a code (similar to a colour barcode), consumers will be able to see at a glance to what extent each product respects a series of ethical and environmental principles.
Isn’t your company transparent? Well, you can’t sell your products or services on our market. Sorry, mate!
Thus, if you want to make a profit, you will necessarily increase the common good in the process.
Result: if these are the new rules of the game, any entrepreneur, no matter how unscrupulous they are, will be willing to comply with the new legal framework so that their products and services are competitive on the market. It is a system that rewards the good businessperson and punishes predators, with the aim of benefiting the whole community. You can get rich, of course, but the only way to achieve it is by making a positive contribution. Economy for the Common Good calls for reevaluating economic relations by, for example, putting limits on financial speculation and encouraging companies to produce socially-responsible products.
So Economy of the Common Good is about changing the rules of the game, not the entire system. It is feasible because it only depends on political will.

So, at the end of the day, It is a model that juggles the legitimate aspiration to prosper and environmental awareness around to fit all human needs in. Furthermore, both liberals and left-wingers could agree upon such principles. How good can you have it?

Yanis Varoufakis on Universal Basic Income

Guaranteed Minimum Income, Universal Basic Income and Universal Basic Dividend

In the midst of the worst global pandemic since the 1918 flu — inappropriately named Spanish flu, since it didn’t originate in Spain—  some countries such as the USA are implementing economic emergency measures or, if you like, actions, to prevent millions of citizens from going bankrupt. In a sense, it could be argued that it is similar to a Guaranteed Minimum Income.

Meanwhile, the European Union, to put it mildly, doesn’t cut the mustard and is disappointing everybody once again: uncoordinated, lacking in solidarity, aimless, drifting… In one word: lame.

It is in this context that we should listen to the ones that got it right during the last financial crisis; people like Yanis Varoufakis, an eminent Greek economist, academic, philosopher and politician.

But before going into further details, we should know what we are talking about. First of all, we must distinguish between the Guaranteed Minimum Income (GMI) and the Universal Basic Income (UBI). Afterwards we can tackle the Universal Basic Dividend brought forward by Professor Varoufakis.

Guaranteed Minimum Income (GMI), also called minimum income, is a system of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by the following: citizenship, a means test, and either availability for the labor market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to reduce poverty. If citizenship is the only requirement, the system turns into a universal basic income.

On the other hand, Universal Basic Income (UBI) is a model for providing all citizens with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.

That said, let’s pay close attention to what Professor Varoufakis has to say:

So, according to the renowned economist, the Universal Basic Income shouldn’t come from taxation, since it might become a source of conflicts within the working class. He points out that nowadays capital is socially produced, so he brings forward the idea of a Universal Basic Dividend where a percentage of shares of all companies should go to a public equity trust that works as a wealth fund for society. The dividends should be distributed to every member of society equally, so the income comes from return of capital, not from taxation.

Contrary to what many may think, Varoufakis is for a global governance. He is not against free trade, but he stresses that it should be accompanied by binding rules in order to avoid social dumping.

One thing is for sure: something must be done, asap. Countries can’t just let their people and SMEs go bankrupt overnight. We might be about to face the worst economic crisis since the Great Depression, and this pandemic and its consequent lockdown could take a while. Util we don’t have a vaccine, what can’t be cured, must be endured, and unprecedented economic measures must be put into effect. A more egalitarian society fits everyone, since it means a more stable, safe, human and prosperous society. For once, let’s be smart. We are in this crisis together and we will come out of it together. There is no other way.

Recommended posts:

10 Economics short jokes

Jokes and stand-up comedians on Economy and Finance

Here are 10 short jokes + some extra jokes about economics and economists, some of them made up by economists themselves. Have fun and remember what Oscar Wilde used to say: Life is too important to be taken seriously. So, without further ado, keep calm and let the fun begin!

‘I’m a walking economy, you know’
‘How so?’
‘My hairline is in recession, my stomach is always in inflation, and these two together bring me into a deep depression’

Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. (Sam Ewing)

Did you know economists have predicted sixty out of the last five recessions?

“You know it’s said that an economist is a man who, when he finds something that works in practice, wonders if it works in theory.” – Walter Heller

Q: Why are Women more pessimistic about the economy than Men? A: Because men are in charge of the economy!

There were two economists who were shipwrecked on a desert island. They had no money but over the next three years, they made millions of dollars selling their hats to each other.

Did you hear of the economist who dove into his swimming pool and broke his neck? He forgot to seasonally adjust.

Why was astrology invented? So economics would seem like an accurate science.

How many economists does it take to change a light bulb? Seven, plus/minus ten.

Extra jokes

Economists do it with models

“We have 2 classes of forecasters: Those who don’t know . . . and those who don’t know they don’t know. “ – John Kenneth Galbraith.

What did the ruthless businessperson say to their employees?   If at first you don’t succeed, you’re fired!

Business is up and down at the moment; I sell yo-yos.

The banker fell overboard from a friend’s sailboat.  The friend grabbed a life preserver, held it up, not knowing if the banker could swim, and shouted, “Can you float alone?”  “Obviously,” the banker replied, “but this is a heck of a time to talk business.”

My boss asked me to put a joke on the first slide of the presentation…apparently a picture of my pay slip wasn’t what he was looking for.

When I was younger, I really wanted to be a banker…but I kept losing interest.

What’s the best way of making a small fortune in the stock market?   Starting off with a large fortune.

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, “Lets smash the can open with a rock.” The chemist says, “Let’s build a fire and heat the can first.” The economist says, “Lets assume that we have a can-opener…”

memes for economists, accountants and financiers
Don’t miss out on Memes for economists, accountants and financiers!

Don’t forget to visit the Humour section of this blog. I wish you a happy Christmas and a happy new year! Hopefully there are far better things ahead than any we leave behind. (Brad Paisley). So learn from yesterday, live for today, hope for tomorrow (CS Lewis).

P2P Governance: Blockchain as a Commons

How could a P2P Economy save the Planet?

I attended a conference given by Michel Bauwens yesterday in Barcelona that really went above and beyond my expectations and, to my astonishment, it made me see things through a different and hopeful prism.

Earlier on Financial Translation I wrote about the blockchain and even tackled some very alternative tools for organsing economy (see Wörgl, the miracle of a local currency) or Fuller’s World Game (see If we ruled the world), but yesterday Michael Bauwens took it up a notch.

Michael Bauwens, the founder and director of the P2P Foundation, is a top figure in the field of P2P economies and the commons movement. He presented his last P2P Foundation report “Towards a P2P Infrastructure for a Socially-Just Circular Society” . It explains how using shared perma-circular supply chains, post blockchain distributed ledgers, protocol cooperatives, and other forms of post-capitalist accounting, could save the planet.

Michel Bauwens P2P Economy Barcelona Meetup

Whether you are a fan of neoliberalism or not, and regardless of ethical and moral considerations, at this point, one thing that few people seem to doubt is that, at the current rate of growth, this system will end up depleting our natural resources and threatening our very existence. As we all know, the logic behind neoliberal capitalism is continuous growth. It just can’t stop growing. It’s like a shark: It has to constantly move forward or it dies. In a world of limited resources, it is sentencing human beings —and along with us many other species— to extinction. So it is not a question of ideologies or ethics, it has become an issue of sheer survival.

Since the fall of the soviet bloc, there has been no alternative to predatory ‘capitalism’ (which nowadays is not even capitalism, but an oligarchy exercising economic, social, and political influence out of all proportion). When you look at it, the paradox is that real capitalism was against oligarchic economies, and liberal countries were the ones with more antitrust laws to ensure free competition… That being said, what if ‘capitalism’ , ‘communism’ or any of their hybrids weren’t the only systems under which human societies could be organised? Ever since slavery, including feudalism, communism and capitalism, power has always been centralised. Even under communism, power was centralised in a single political party. Not surprisingly, it has been the source of corruption, plundering of natural resources, abuse and misuse of power, destruction of the environment, inneficiency, inequity, modern slavery, injustice and grievance…

The point is that maybe there is a decentralised way of organizing human societies in an era when states are losing legitimacy and becoming obsolete. It is hard to conceive because we have been born and raised imbued with the logic and spirit of market economy, as if we were born in a Matrix where we can’t even figure out other alternative realities to the old-fashioned post-liberal states. Michael Bawens is not himself an anarchist. He still believes there’s a need for a state and an administration, but a very different one in nature, a P2P state, a commons economy based on decentralised technology —most probably the Blockchain.

So if you want to think ouside the box, beyond the classical paradigms and expand your mind to new, decentralised ways of organising community life, listening to what Michael Bauwens has to say is a must. It actually might save the planet, which is not small feat.

my opinion

Recommended Links

P2P Accounting for Planetary Survival by Michale Bowens and Alex Pazaitis

Wörgl, the miracle of a local currency

If we ruled the world

Blockchain and Cryptocurrencies glossaries

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