Friday, April 18, 2014

Da li je komšija kriv što nam je crkla krava?


Nedavno sam napisao članak u kojem sam iznio tezu da je ekonomija bivše Jugoslavije zavisila od inostranih kredita, a zavisila je na taj način što je za održavanje vrlo specifične strukture proizvdnje u Jugoslaviji bilo potrebno neprestano zaduživanje kod stranih kreditora. Članak je naišao na različite reakcije, od ovacija do pljuvanja. U toj šarolikoj publici, čini mi se, bilo je i nekih koji nisu u potpunsti razumjeli tezu tog mog teksta. Naravno, ne pripisujem to nerazumijevanje nekoj nesposobnosti publike da razumije tezu. Prije će biti da je to zbog pomalo apstraktnog načina na koji je ona argumentovana. Zato ću pokušati tu tezu ispričati u obliku analogije iz svakodnevnog života.

Zamislite sljedeću situaciju. Imate kravu. Kravu pomuzete i 20 litara mlijeka koje ste dobili prodate za 20 evra. Za 4 evra kupite hranu za sebe, a svih ostalih 16 evra potrošite da nahranite kravu. Ali pošto 16 evra nije sasvim dovoljno da se krava pravilno nahrani, još 4 evra pozajmite od komšije da biste je nahranili kako treba. Vaš ukupni dug komšiji je samo 4 evra ili 20% od vaše ukupne poroizvodnje, prava sića u odnosu na vašu ukupnu proizvodnju, mislite. Sljedećeg dana vaš komšija odbija da vam dalje pozajmljuje 4 evra. Vi, 20 evra koje ste zaradili od prodaje mlijeka toga dana, podijelite tako što za 16 kupite hranu za kravu, a za 4 evra kupite hranu za sebe.

Pošto ste kravu slabo nahranili ovaj put, ona vam sljedeći dan da manje mlijeka--16 litara. Tih 16 litara prodate za 16 evra. Sada već uviđate da morate da smanjite vlasitu potrošnju da biste kravu bolje nahranili. Na svoju hranu ovaj put potrošite samo 2 evra, a ostalih 14 potrošite na hranu za kravu. Ali, ovo znači da ste kravu danas nahranili još manje nego prethodnog dana, kada ste kupili hrane za 16 evra.

Sljedeći dan vam krava uslijed slabe ishrane da još manje mlijeka--samo 10 litara. Sada već uviđate da je situacija alarmantna. Sada na svoju hranu trošite samo 1 evro, a na kravinu hranu ostalih 9 evra koje ste zaradili prodajom 10 litara mlijeka. Ovo je manje nego pola količine hrane potrebne kravi da normalno živi.

Uslijed slabe ishrane, krava sada više ne daje mlijeko i vi ste primorani da je prodate komšiji i postanete njegov najamni radnik kako biste se prehranili. Sa sjetom se sjećate vremena kad ste imali vlastitu kravu i sebi kupovali hranu kakvu ste željeli. Kunete komšiju koji vas je ekonomski uništio jer je odbio da vam pozajmljuje pišljivih 4 evra dnevno. Smatrate da je to sve bio dio njegovog plana da vas učini svojim kmetom.

Ali, da li je komšija kriv ili vaša loša procjena vlastitih ekonomskih potencijala. Da ste, recimo, umjesto krave odlučili posjedujete kozu, koja proizvodi 5 litara mlijeka a troši hrane u vrijednosti od 2 evra, mogli ste da ostvarite profit od 3 evra bez ikakvog pozajmljivanja. Taj profit biste onda mogli upotrijebiti da kupite hranu za sebe. Jeste da je to malo skromnije od 4 evra, koliko ste imali kad ste posjedovali kravu dok vam je komšija pozajmljivao novac za stočnu hranu, ali ovaj ekonomski model sa kozom je dugoročno održiv, a onaj sa kravom nije bio održiv bez komšijine finansijske pomoći.

U ovoj priči ekonomski model sa kravom je analogija za ekonomiju bivše Jugoslavije koja je bila održiva samo dok je uvoz jednog dijela repromaterijala finasiran spoljnim zaduživanjem. Struktura te ekonomije je bila takva da sama ta ekonomije nije proizvodila dovoljno sredstava da bi samu sebe održala u životu. U tom slušaju je nebitno što je 80% ukupnih potreba te ekonomije za samoregeneriranjem zadovoljeno domaćom proizvodnjom. Ako onih preostalih 20% ne dođe izvana u obliku novih kredita, stabilnost ekonomije će biti narušena i to započinje silaznu spiralu događaja koja vodi do kraha ukupne ekonomske strukture ako se prije toga ne izvrše neke bitne promjene.

Osamdesetih godina prošlog vijeka, odmah poslije Titove smrti i odmah pošto je priliv stranih kredita presušio, naša "krava" je počela davati sve manje mlijeka. 1989 ona je već prilično izgladnjela i posustaje. Tadašnji premijer, Ante Marković, predlaže da se započne proces planskog klanja "krave" i da se umjesto nje kupi "koza". To je bio pedlog restruktuiranja ekonomije kojim bi se neprofitabilna preduzeća zatvorila, a radna snaga postepeno preusmjerila u produktivnije sektore. Nažalost, taj prijedlog nije prošao kod političkog vrha zemlje tako da smo odlučili čekati da "krava" crkne dok smo se mi devedesetih prepirali i tukli oko toga ko je kriv što je ona gladna.

Poenta ove priče je da je sjeme propasti Jugoslovenske ekonomije posijano davno prije 1990. To sjeme je bilo u činjenici da struktura ekonomije nije bila usklađena sa produktivnošću te ekonomije. Muzli smo kravu koju nam je komšija dohranjivao, umjesto da smo sami hranili svoju kozu. Nismo htjeli vjerovati da nam krava lipsava, pa smo ostali skoro i bez koze. Sada krivimo komšiju što nam je krava crkla i sanjarimo o "dobrim starim veremnima" umjesto da se potrudimo da nam se isto ne desi i sa ovom kozom koju sad imamo

Sunday, March 9, 2014

The Economy of Tito's Yugoslavia: Delaying the Inevitable Collapse

There seems to be a resurgence of nostalgia for the “good old days” among the citizens of countries that were once known under the common name of Socialist Federal Republic of Yugoslavia. This article is dedicated to all of us former Yugoslavs, especially those who think that the Yugoslav economy during Tito’s rule was built on a stable foundation. If we look at and analyze economic indicators, we have to admit that the idea of the robustness of the Yugoslav economy was an illusion and that the "well-being" that many former Yugoslavs are recalling with nostalgia was borrowed at the expense of future generations. These generations are now paying the bill for the collapse of the unsustainable economic system of socialist Yugoslavia, along with paying the bill for the destructive wars of the 1990s and the interventionist economic policies of former Yugoslavia’s successor states.

The first sign that the robustness of the Yugoslav economy was an illusion appeared immediately after Tito's death. The 1980s were marked by constant delays of the beginning of the repayment period for Yugoslavia's maturing external debt due to the financial weakness of the economy. In 1991, Yugoslavia had about $20 billion of external debt. Previous to that, the International Monetary Fund reduced Yugoslavia’s total debt by $1.8 billion because the country simply did not have the means to return the interest, let alone the principal. What preceded this outcome? This outcome was preceded by several decades of building an economy whose structure was such that its survival depended on a constant increase in foreign debt – an addict economy.

The chart below shows the total debt of Yugoslavia from 1961 to 1980, and the line that approximates the trend in total debt. The line has an exponential shape and it approximates the actual debt in the period 1961-1980 quite well. According to this trend, the total debt increased by about 17.6% annually in the twenty-year period. Had this growth trend continued after 1980, the total debt would now be around $6 trillion. When we consider that the total annual gross domestic product (GDP) of all the former Yugoslav republics together is now around $200 billion, the astronomical size of that potential debt becomes clear. This also clearly shows that the growth of debt that was recorded between 1961 and 1980 was simply unsustainable.


These numbers put the actual increase in total debt of all former Yugoslav republics, from about $20 billion in 1980 to approximately $150 billion today in a proper context. It is true that $150 billion is a multiple of $20 billion, but let's keep in mind that, when we take into account the decline in the value of the dollar, $20 billion in 1980 and $100 billion in 2014 have roughly equal economic power. So, in real terms, the external debt of the former Yugoslavia has increased by about 50% since 1980. While we all might like this figure to be lower, compared to a doubling of foreign debt every three or four years before 1980, this represents a dramatic reduction in growth. This, of course, does not mean that the current debt of the former Yugoslav Republics is favorable and that their state economic policies are in good shape. It just means that it was unrealistic to hope that the Yugoslav debt could have remained at the level of $20 billion without serious structural changes and reductions in consumption.

While these numbers offer a potential explanation for the collapse of the Yugoslav economy in the 1980s, an exponential growth in total debt would not necessarily lead to a collapse, if the borrowing period was limited and its purpose was investment in projects that would bring about increased productivity in the future and thus facilitate successful repayment of the debt. Unfortunately, this was not the case in the former Yugoslavia.

The mere fact that the Yugoslav economy spent at least twenty years under the conditions of external debt growth of over 17% per year, suggests that the structure of the economy had formed in such a way that the future survival of the economy depended on the future enlargement of the debt. To understand why the Yugoslav debt rose at an increasing pace and why it was unsustainable, we need to analyze the chronology of the trade balance and productivity indicators of the former Yugoslavia.

The trade balance is a macroeconomic indicator of the relative size of imports and exports of a country. If the trade balance is close to zero, this means that the imports and exports are approximately equal. If the trade balance is positive, the country exports more than it imports, and we say that there is a trade surplus, and if the balance is negative, the imports are higher than exports and the country runs a trade deficit.

When the economy of a country is in a trade surplus, foreign currency (which the importers use to buy those exports) accumulates in the exporting country. On the other hand, there is an outflow of foreign currency (used to pay for the imports) from a country whose economy is in a trade deficit. Countries that have consistently negative trade balances must borrow from foreign lenders to compensate for the lack of foreign currency. It is not hard to see why this situation is unsustainable in the long run, that is, it is sustainable only as long as foreign creditors want to lend money to the debtor country.

If we take a look at the overall Yugoslav trade deficit during the 1970s, we find that it was growing rapidly between 1970 and 1980. Moreover, the deficit was growing even faster than the Yugoslav foreign debt. A part of this difference was covered by remittances of Yugoslav emigrants. For example, the total remittances of emigrants were $1.3 billion in 1971, while they amounted to $2.1 billion 1972. However, even the inflow of foreign currency through foreign loans and remittances of emigrants was not enough to cover all the trade deficit and prevent the outflow of foreign currency from Yugoslavia.


Measured as a percentage of the GDP, the total trade deficit of Yugoslavia between 1970 and 1980 increased from just below 10% to around 50% of GDP. The figure of 50% is not necessarily worrying in itself, but the the growing trade deficit in relation to GDP with no signs of slowing down indicates a worrying trend. This is another indication that the structure of the Yugoslav economy was such that the stability of the whole economy depended on the inflow of foreign funds for which there was no coverage in the domestic production.

The structure of the Yugoslav trade deficit was such that the imports were mainly oil and raw materials. This structure of production does not promise an increase in productivity in the future, which would cover the past trade deficit and that could be used to pay off debts. Moreover, although the total volume of production at the level of the Yugoslav economy grew because more resources were used, the productivity per unit of invested resources was decreasing in most industries during the sixties and seventies. With such reduced productivity, the chances of a successful repayment of the foreign debt in the future were nil.

The structure of production in which money for buying raw materials and fuel is borrowed ceases to be viable when the source of credit dries up, and, in the case of Yugoslavia, this happened in the early 1980s. The Yugoslav economy was then left without external "fuel" and, over the next decade, which was marked by postponing the repayment of foreign debts, this became painfully evident. Not only that the Yugoslav economy didn’t have the capacity to repay existing debts, but its capacity to function in an undiminished size was dependent on new borrowing. There was a sharp stop in the growth of the Yugoslav GDP in 1980, and its decline began around 1986.

These data suggest that the story we often hear about how the former Yugoslavia "heroically rose from the ashes" after World War II is not complete. First, it is not clear how heroic this rise was, especially if it was due to unsustainable borrowing. Second, it is difficult to give an assessment of this story if we don’t know how the other countries have "risen from the ashes."

So, let’s compare the GDP per capita of some countries that had roughly the same GDP per capita as Yugoslavia in the late 1940s. Let's see what the historical data tell us. They tell us that all the countries shown here, with the exception of Hungary and Bulgaria, had significantly higher growth of GDP per capita between 1947 and 1989 than Yugoslavia. So, maybe Yugoslavia rose heroically from the ashes, but it seems that Japan, Germany, Italy, Austria, Greece, and Spain have risen from those ashes even more heroically.

 
Even the figure of over $12 billion that the countries of Western Europe received in U.S. aid as part of the Marshall Plan pales in comparison with the $47 billion, that Yugoslavia received in the form of industrial equipment and money as reparations for war damages after World War II. In addition, there is strong evidence that the role of the US interests in Yugoslavia after the Second World War, represented in Truman’s and Eisenhower's foreign policy, was similar to their role in Western Europe. This role consisted in providing political and economic support for the regime as a counterweight to the "hard" socialism of the Soviet Union and its European satellites. Therefore, we cannot attribute the significantly faster growth of Western economies to a disproportionate help by the United States as compared to Yugoslavia.

On the other hand, Hungary and Bulgaria show similar slow growth in gross domestic product to that of Yugoslavia. Except that it should be noted that, unlike the other countries shown here, Hungary and Bulgaria had similar economic system to that of Yugoslavia, a detailed explanation of the differences in the speed of "rising from the ashes" is a topic for a separate analysis.

When it comes to the other economic indicators, such as household income, inflation, or unemployment, the situation was not rosy in the last ten years of Tito's rule either. Despite the pumping of huge amounts of foreign funds into the country, household income declined sharply in the second half of the 1970s. The annual inflation rate was measured by two-digit numbers, and a few years before Tito’s death, it accelerates and reaches 40% per year. Despite the departure of over 1.1 million (or 20% of the workforce) Yugoslavs to temporary work abroad, the unemployment rate climbed from slightly below 7% to about 12% from 1970 to 1980. Such growth rates of unemployment and economic emigration are characterized as a sign of a deep recession in economic literature. Thus, the Yugoslav economy was in a terrible condition in the late seventies, but this was masked by the increase in foreign loans of epic proportions, combined with a dramatic increase in economic emigration.

It might be time to revise our beliefs about the "heroic achievements" of our former homeland and acknowledge that, despite the steadily rising influx of foreign funds in the form of loans without a collateral, foreign currency remittances of millions of emigrants and politically motivated U.S. economic aid, the Yugoslav economy achieved only a modest growth. However, even this modest growth was not sustainable without continued foreign aid. What happened in the eighties and nineties, was only the revelation of the actual state of the Yugoslav economy. Just like a chronic alcoholic must face the reality of his addiction, so did we, sooner or later, have to face the reality of the powerlessness of the Yugoslav economy to function without external doping.

Tuesday, March 4, 2014

Mit o sporom ekonomskom oporavku "Jugoslavije"


Često čujemo tvrdnje da sadašnje države nasljednice bivše Jugoslavije još dugo neće uspjeti da dostigu nivo proizvodnje koji je bivša Jugoslavija ostvarivala 1990. ili 1989. Ako pogledamo statistike, uviđamo da ovu tvrdnju ne podržavaju činjenice, bilo da uspoređujemo nominalni bilo realni bruto domaći proizvod (BDP) bivše Jugoslavije i svih sadašnjih država nasljednica.

Pogledajmo prvo nominalni BDP. Nominalni BDP bivše Jugoslavije je ubrzano rastao od 1970 do 1980. Ovdje je objašnjeno da je za ovaj rast umnogome zaslužno ubrzano uvećanje spoljnog duga. Od 1980 do 1982 nominalni BDP Jugoslavije opada, a onda raste linearnim trendom do 1989, kada počinje oštar pad. Ovaj pad se nastavlja do 1993., kaada dolazi do kratkotrajnog oporavka, a zatim do platoa između 1995. i 1998. 1998. dolazi do novog pada BDP-a, a poslije 2000. kreće uspon sve do 2008., kada započinje svjetska ekonomska kriza.


Iz ovog prikaza se vidi da je nominalni BDP država nasljednica Jugoslavije još 2007. prevazišao liniju trenda 1970 - 1990. To znači da je i uprkos periodu od gotovo deset godina ratovanja devedestih, ekonomija država nasljednica Jugoslavije uspjela da za manje od osam godina nadoknadi i prevaziđe sve te ratne gubitke. Bilo je potrebno samo sedam godina mira pa da "Jugoslavija" počne da proizvodi više nego što je ikad u svojoj istoriji proizvodila.

Neko bi mogao reći da nominalni BDP nije dobar pokazatelj jer na njega utiče stopa inflacije dolara. Ako je inflacija veća, i stopa rasta nominalnog BDP-a je veća. Dakle, treba da pogledamo realni BDP, koji je izražen tako što je iz njega izuzet uticaj inflacije, tj. porasta cijena.

I ovaj prikaz nam daje sličnu sliku. Realni BDP je rastao do 1980. a poslije toga slijedi pad u prvoj polovini osamdesetih, zatim stagnacija, a onda još jedan pad koji započinje 1989., a završava se 1993. Slično nominalnom BDP-u, nakon 1993. dolazi do kratkotrajnog uspona, zatim do stagnacije i pada 1998. Uspon realnog BDP-a koji je započeo 2000., do 2008 je doveo do toga da je te godine realni BDP bio veći nego ikad u istoriji Jugoslavije.
 
 
Dakle, moramo zaključiti da su tvrdnje da "Jugoslavija" još dugo neće dostići nivo proizvodnje iz 1989. ili 1990. imaju status mita. Ne samo to nego je proizvodnja "Jugoslavije" 2008. premašila najviši nivo proizvodnje bivše Jugoslavije svih vremena, i to u manje od osam godina. Možda je vrijeme da razdvojimo emocije od činjenica. Činjenice nedvosmisleno govore da su nam emocije na krivom mjestu.
 

Wednesday, February 26, 2014

Dear Canadians, how is our "household" doing?


Current account is like a household account of current income and expenses. Ideally, you want to keep your current account near or above zero as much as you can. If your income is lower than your expenses over a longer period of time, you may be in trouble because you are accumulating debt to cover your expenses, and you will eventually have to repay those debts to your creditors. In that case, you want to make sure you are accumulating current account deficit by spending on things that will increase your income in the future (i.e., that you are making investments). But, if you are simply continually spending on regular day-to-day expenses more than you earn in income, then you might be in trouble in the future, when your creditors come knocking on your door asking for their money. So, dear Canadians, how well has our "household" been doing lately when it comes to its current account?

Sunday, February 9, 2014

Kratak osvrt na bosanski Manifesto


Bosanski Manifesto možete naći ovdje, a ovo je moj kratki osvrt na tu listu zahtjeva. Zahtjevi su ispisani "bold" slovima, a moj osvrt je ispod svakog zahtjeva. Opšti zaključak je da je ovaj dokument, u najmanju ruku, nejasan, a u najgorem slučaju poziva na stvaranje još očajnije države od one koja u Bosni već postoji.

- Oslobođenje mirnih prosvjednika iz zatvora.
A suđenje? A pravna država? Držanje neprijavljenih demonstracija je prekršaj, pa makar i svi bili mirni. Mada, malo smo mirnih prosvjednika tamo vidjeli.

- Trenutna ostavka premijera Hamdije Lipovače.
A razlog?

 - Reviziju ušteđevine dužnosnika stečene na funkcijama koje je obavljao.
A na osnovu kog zakona? Zašto?

 - Reviziju davanja ministarstava, poljoprivrednicima, nevladinim organizacijama, pojedincima i retroaktivno oduzimanje nelegalno dodijeljenih sredstava.
Znači, nagovorićete vlast da poštuje zakon tako što ćete ga vi prekršiti?

- Smanjenje plaćaa političarima na apsolutni minimum, sve dok država ne postigne cifru od 10 posto nezaposlenih građana.
Definišite apsolutni minimum. Šta ako je ono što sad primaju političari aposolutni minimum. Koju formulu koristite i zašto je to isparvna formula?

- Revizija budžeta na svim nivoima.
Ovo je toliko uopšteno da nije jasno šta se traži. Korz ovu tačku može da se provuče bilo šta.

- Uspostava anti-korupcijske policije, koja će biti financirana i pokretana nezavisno od državne uprave, te čiji će predsjednik biti nestranački opredijeljen i izglasan na demokratskim izborima svakih 10 godina.
Ako će ta policija biti nezavisna od države, zašto državi dajete zahtjev da odobri formiranje takvog tijela. Inače, ni u jednoj državi nema policije nezavisne od države. Policija je državni organ. Ali, niko građane ne spriječava da finasiraju istraživanje korupcije nezavisno od države.

- Uvod većih poreza na uvezene artikle izvan države, osim na one koji se ne mogu proizvoditi na domaćem teritoriju, te promocija domaćih proizvoda prehrane i proizvoda.
Pripremite se na porast cijena domaćih proizvoda i na povećanje poreza da bi se obezbijedile subvencije za domaće proizvode.

- Besplatno zdravstveno osiguranje za sve državljanine, koje će biti financirano iz budžeta države.
Pripremite se na konstantno prepiranje između domaćih proizvođača i zdravstvenog sektora oko toga ko treba da dobije veći dio državnog budžeta.

- Izglasavanje obaveznog izlaska na izbore, uz uvjet nemogućnosti ostvarivanja osnovnih prava na umirovljenje, u slučaju oglušivanja na izbore.
Znači, osnovna ljudska prava nema svaki čovjek nego samo onaj koji glasa. To će se, valjda, uvesti i u školski program o kome se priča u jednoj od narednih tačaka. Ako osnovna ljudska prava nisu bezuslovna, onda nisu osnovna.

- Demokratsko građansko glasanje svih novodonesenih zakona po uzoru na švicarski sistem.
Hoćete li i ovaj Manifest staviti na referendum?

- Uvid u cjelokupni rad svih javnih dužnosnika, kroz revizorske izvještaje.
Hoće li se i revizori plaćati iz budžeta? Koliko revizora će ići po jednom dužnosniku? Da li će se revidirati baš svi javni dužnosnici? Jesu li i revizori javni dužnosnici i, ako jesu, ko će njih revidirati?

- Formiranje crne liste zaposlenika iz javnog sektora, koja će onemogućiti njihovo ponovno zaposlenje, u slučaju da im se dokaže da su oštetili državu ili građanina.
Ta lista će onemogućiti ponovno zaposlenje uopšte ili ponovno zaposlenje u javnom sektoru? Ovo nije jasno iz rečenice, a vrlo je bitno.

- Minimalna 6-mjesečna revizija rada sudaca na svim nivoima vlasti, i javna prezentacija istih na web portalima.
Da li će ti revizori biti državni službenici i, ako hoće, ko će njih revidirati, u skladu sa jednom od tačaka iznad?

 - Izmjena zakona o radu u javnim institucijama, vezana za odgovornost radnika osobnom imovinom.
Ova rečenica je nejasna tako da pod ove izmjene može da prođe bilo šta. Da se ovakva rečenica nalazi u bilo kom ugovoru koji mi je ponuđen, ne bih ga potpisao jer ne znam šta potpisujem.

- Povećanje plaća prosvjetnim radnicima u osnovnim i srednjim školama i njihova OBUKA u cilju podizanja svijesti o osnovnim ljudskim vrijednostima.
Da li ta OBUKA uključuje i obučavanje o tome da nemaju svi ljudi osnovna ljudska prava (oni koji ne glasaju), u skladu sa jednom od tačaka gore?

- Ukidanje plaća svim državnim službenicima i ministrima odmah po prestanku njihovog mandata.
Nemam neke primjedbe na ovo osim pitanja: Zar i ministri nisu drzavni službenici?

- Revizija nelegalno privatiziranih javnih poduzeća.
Revizija u skladu sa postojećim zakonima ili u skladu sa zakonima koje ovaj Manifest uvodi?

- Hitno formiranje komisije za pokretanje stranih investicija i početak pregovora sa firmama koje su već pokušavale ulagati u BiH, ali nisu htjele davati mito.
Zašto je firmama potrebna posebna komisija da bi počele pregovore o investicijama? Ta komisija bi poreske obveznike koštala novca, a ne bi imala neku konkretnu funkciju.

 - Pravedno zapošljavanje mladih sa burze, uvodeći socijalnu kategorizaciju nezaposlenih
te ponovno pokretanje industrije.

Kako definišete pravednost. Pravednost je inače kategorija sa dosta emotivnog naboja i svako ima svoju definiciju pravednosti. Hoće li biti potrebna i komisija za određivanja šta je to pravednost i ko će tu komisiju da plati i revidira?

- Vratiti u fotelje kvalificirane direktore, nestranački opredijeljene, koji imaju znanje i spremnost da promjene stanje u firmama *BHtelekom, Elektroprivreda – uključujući Termoelektranu Tuzla u kojoj se zapošljavaju ljudi bez struke i znanja za posao koji obavljaju, vraćanje dostojanstva rudnicima u Tuzli u koje ne dolaze osnovna sredstva za rad jer Sarajevo nije odobrilo.
Ako nema fotelja, da li se oni mogu vratiti u stolice? Hoće li i ovdje trebati još jedna komisija koja odrđuje ko ima, a ko nema, znanje i spremnost i, ako hoće, ko će nju da plati i revidira i ko će revidirati revizore?

- Kupovina mjernih stanica za sve vrste zagađenja zraka u Lukavcu i Tuzli, kao najzagađenijim sredinama u BiH.
Kupovina čijim novcem?

- Kupovina mjernih stanica za zagađivanje vode od strane samovoljnih državnih i privatnih firmi.
Kupovina čijim novcem?

- Formiranje registra malignih oboljenja za cijelu državu.
Hoće li i ova služba biti plaćana iz državnog budžeta i da li i njoj treba revizor? Ako je to državna služba, treba joj revizor, u skladu sa jednom od tačaka gore.

- Povećanje broja inspektora za hranu, ekologiju, rad i korupciju, sa ciljem uvođenja boljih uvjeta za život građana, jer ukoliko ovo ne napravimo obolit ćemo cijelu naciju i fizički i psihički.
Znači, i ovdje da računamo na povećanje drzavnog aparata, posebno ako imamo u vidu da i za ovu službu trebaju revizori, u skladu sa jednom od tačaka gore.

- Povrat poreza u gradove u kojima je isti naplaćen.
Koja je logika ove tačke? Povrat poreza tamo gdje je naplaćen? Ako je tako, zašto stati na gradovima; zašto ne vratiti porez u kuće u kojima je naplaćen? Inače, sama svrha poreza, u bilo kojoj državi, je preraspodjela imovine tako da ova tačka ide protiv osnovne svrhe poreza.

- Pravilna raspodjela državnih agencija na sve gradove u BiH, a ne koncentracija istih u Sarajevo.
Koja je definicija pravilnosti? Pravilnost, kao i pravednost, su subjektivne kategorije za koje svaki čovjek ima svoju definiciju. Kako će taj problem biti riješen; osnivanjem još jedne komisije koju će plaćati poreski obveznici?

 - Otvaranje aerodroma u Tuzli.
Čijim novcem?

- Uvesti kampanju za naplatu poreza od svih privatnih osoba, firmi, kafića, pekara, trgovina sa ciljem povećanja svijesti građana o činjenicama da ukoliko ne traže račun za PDV od 17% a plate robu, onda taj novac ide vlasniku radnje, a ne u penzije.
Ako postoji poreski zakon, čemu kampanja? Kako će ta kampanja da izgleda i ko će da je plati? Jeste li sigurni da novac koji nije naplaćen kao porez ne ide u penzije? Mislite li da vlasnik radnje nema interesa da sebi obezbijedi prihode u starosti, nezavisno od države?


Friday, February 7, 2014

Mit o zdravoj jugoslovenskoj ekonomiji (2. dio)


Ovdje sam pokazao neke ekonomske indikatore bivše Jugoslavije koji su ukazivali da je ta zemlja išla ka ekonomskoj propasti. Jedna od primjedbi na taj tekst je bila da je teško izvoditi zaključke isključivo na osnovu perioda 1970-1980. Slažem se, pouzdanost naših zaključaka se može povećati tako što ćemo ih izvoditi gledajući na duži vremenski period. Zato sada ovdje gledamo na bruto spoljni dug SFR Jugoslavije od 1961. do 1980. Originalni podaci se mogu naći ovdje.

Grafikon ispod prikazuje ukupni dug (plavi kvadrati) i liniju kojom se može aproksimirati trend kretanja ukupnog duga. Linija je eksponencijalnog oblika i prilično dobro aproksimira stvarni dug u periodu 1960-1980. Po ovom trendu, ukupni dug se uvećavao za oko 17.6% svake godine od 1961 do 1980. To znači da, ako bi se taj tempo rasta nastavio i poslije 1980., ukupni dug bi danas iznosio oko 6 hiljada milijardi dolara. Kada imamo u vidu da je ukupni bruto domaći proizvod svih bivših jugoslovenskih republika zajedno sada oko 150 milijardi dolara, jasno nam je o kakvoj se astronomskoj sumi duga radi. Ovo nam isto tako jasno govori da je rast duga koji se bilježio između 1960. i 1980. bio jednostavno neodrživ.


Činjenica da je Jugoslovenska ekonomija provela 20 godina pod ovakvim tempom rasta duga sugeriše da se i struktura te ekonomije formirala tako da dalji opstanak ekonomije zavisi od budućeg uvećanja duga. Zato ni ne treba da čude trumatične promjene koje su se odigrale osamdesetih godina prošlog stoljeća kada je priliv novih kredita naglo stao, a došlo je vrijeme za otplatu starih dugova.

Kao što smo zaključili prošli put, ono što se događalo osamdesetih i devedesetih, samo je otkrivanje stvarnog stanja jugoslovenske ekonomije. Kao kad hronični alkoholočar mora da se suoči sa realnošću svoje zavisnosti, tako smo se i mi morali, kad-tad, suočiti za realnošću nemoći jugoslovenske ekonomije da funkcioniše bez spoljnog dopinga.

Thursday, February 6, 2014

Kapovićeva polovična logika


Mate Kapović, lingvista iz Zagreba, nedavno se istakao kao kritičar kapitalizma, neoliberalizma, libertarijanizma, i još mnoštva -izama. Ostaviću po strani činjenicu da nije definisao ove termine i objasnio kontekst u kome ih različite grupe ljudi koriste. Nešto drugo mi je zapelo za oko, a to je Kapovićeva polovična lgika. Naprimjer, kada piše o libertarijancima na svom facebook profilu, Kapović kaže:
Ne moš zapravo libertarijancima ništa zamjerit. Ljudi brane svoje materijalne interese (ili su jednostavno dovoljno glupi da brane tuđe). Naposljetku, i robovlasnici su na američkom jugu to isto činili prije kojih 150 godina. 
Dakako, kako to obično biva, uglavnom je to stoka sitnog zuba. Prave kapitalističke čunke nemaju vremena za aktivističko anarhokapitalističko laprdanje po internetu o slobodnom tržištu i o grozotama birokracije, nego zarađuju di stignu i kako god znaju (i od države, falabogu), smijući se malim wannabe poduzetničićima koji zavidni vrište o korporativizmu i utvaraju si da su popili svu pamet svijeta jer su pročitali 5 nadriučenih članaka na mises.org. 
Znači, po Kapovićevoj logici, postoje samo dva razloga zašto bi neko odlučio da bude libertarijanac: ili je čovjek sebičan ili je glup. Treće ili, ne daj bože, četvrto, ne postoji. Naravno, ako počnemo sa premisom da je libertarijanizam politička filozofija koju samo sebični ili glupi ljudi mogu smatrati privlačnom, onda bi većina nas došla do zaključka da libertarijanizam jednostavno ne valja. Kako može da valja nešto što se sviđa samo pohlepnicima i glupacima?

Ali, Kapović je isključio mogućnost da neko može da bude libertarijanac, a da nije ni sebičan ni glup. Možda je njegovo isključivanje ove mogućnosti ispravno, ali on nam nije to potkrijepio dokazima. Evo, recimo, ja poznajem mnogo ljudi koji su libertarijanci, a nisu ni glupi ni sebičani. To su, u stvari, veoma inteligentni i saosjećajni ljudi.

Kako onda objasniti njihove simpatije za libertarijanizam. Odgovor je prilično jednostvan. Ovi ljudi vjeruju da je libertarijanizam najkoherentnija politička filozofija s etičkog stanovišta i najkorisnija za većinu ljudi sa praktičnog stanovišta.

A šta ako ti ljudi nisu u pravu, neko bi mogao reći. Pa ako nisu u pravu, onda bismo ih mogli okarakterisati kao dobronamjerne inteligentne ljude koji su u zabludi, ali nikako kao sebične ili kao budale.

Možda bi Kapović i te inteligentne ljude koji su u zabludi svrstao u isti koš sa glupacima. Ako je tako, onda bi i sebe morao svrstati u taj koš. Zašto? Zato što on, na osnovu svog pisanja o tržištu i firmama, pokazuje da ne poznaje funkcionalno mjesto firmi i tržišta u ljudskom društvu. On je u zabludi, recimo, da isključivo model radničke kooperative može da obezbijedi blagostanje ljudskom rodu. Ali, ja Kapovića zbog ove zablude ne bih svrstao u kategoriju glupaka nego u kategoriju dobronamjernih, inteligentnih ljudi koji nisu upoznati sa teorijom (a i praksom) firme i tržišta.

Naposljetku, teorija firme i tržišta je nešto što se izučava na postdiplomskim studijama ekonomije; dakle, tema je strukovne specijalizacije. Tako je i, recimo, istorija pridjeva u slavenskim jezicima tema strukovne specijalizacije lingvista za koju sam ja laik pa bi i moji stavovi o toj temi bili stavovi laika, iako sam vrlo obrazovan u drugim oblastima i (nadam se, donekle) inteligentan.

Dakle, ako neće, ili ne može, da objasni zašto je glupost vjerovati da bi libertarijansko društvo donijelo prosperitet većini ljudi, gospodin Kapović treba bar da objasni zašto u njegovom svijetu ne mogu da postoje dobronamjerni inteligentni ljudi koji su u zabludi. Potreba za takvim objašnjenjem je tim veća što izgleda da i Kapović pripada toj grupi, ako ne pripada grupi zlonamjernih ljudi, a nadam se da ne pripada.




Tuesday, February 4, 2014

The Myth of Yugoslavia's Heroic Rise from the Ashes


We often hear the story of how the former Yugoslavia heroically "rose from the ashes" after World War II. But, it is difficult to give an assessment of this story if we don't know how other countries "rose from the ashes." So, I compared the gross domestic product (GDP) per capita of some countries that, in the late forties of the last century, had approximately the same GDP as Yugoslavia at that time. Let's see what the historical data show. The data tell us that all the countries that are shown here, except for Hungary and Bulgaria, had significantly higher growth of GDP per capita than Yugoslavia between 1947 and in 1989. So, maybe it is true that Yugoslavia heroically rose from the ashes, but it seems that Japan, Germany, Italy, Austria, Greece, and Spain rose from the ashes much more heroically.[1] On the other hand, Hungary and Bulgaria show a similar slow growth in GDP to that of Yugoslavia. Other than noticing that Hungary and Bulgaria had similar economic systems as Yugoslavia, unlike the other countries shown here, I would not go into a further analysis of the difference in speed of "rising from the ashes." However, it may be time to revise our beliefs about the "heroic achievements" of our former homeland.

 




Notes:
[1] One might argue that this difference may be a result of the western European countries receiving aid from the US under the Marshall Plan, but we need to keep in mind that the reparations for war damages received by Yugoslavia far exceed the total amount of aid received by all of the European countries together under the Marshall Plan.  

Mit o herojskom dizanju iz pepela bivše Jugoslavije


Često čujemo priču kako se bivša Jugoslavija herojski "digla iz pepela" poslije Drugog svjetskog rata. Ali, teško je dati neku ocjenu te priče ako ne znamo kako su se neke druge zemlje "digle iz pepela". Zato sam usporedio bruto domaći proizvod (BDP) po stanovniku nekih zemalja koje su krajem četrdesetih godina prošlog vijeka imale priblizno jednak BDP kao i Jugoslavija u tom vremenu. Pogledajmo šta nam istorijski podaci govore. Govore nam da su sve države koje su ovdje prikazane, osim Mađarske i Bugarske, imale znatno veći rast BDP-a po stanovniku nego Jugoslavija između 1947. i 1989. Dakle, možda se Jugoslavija herojski digla iz pepela, ali izgleda da su se Japan, Njemačka, Italija, Austrija, Grčka i Španija mnogo herojskije digle iz tog pepela. S druge strane, Mađarska i Bugarska pokazuju sličan spor rast bruto domaćeg proizvoda kao i Jugoslavija. Osim što bih primijetio da su, za razliku od ostalih ovdje prikazanih zemalja, Mađarska i Bugarska imale sličan ekonomski sistem kao i Jugoslavija, ne bih išao u dalju analizu razlika u brzini "dizanja iz pepela". Ipak, možda je vrijeme da revidiramo svoja uvjerenja o "herojskim uspjesima" bivše nam domovine.

Saturday, February 1, 2014

Oda jugoslovenskoj neefikasnosti


Ukupna šteta počinjena u Drugom svjetskom ratu u Jugoslaviji je bila procijenjena na 47 milijardi tadašnjih dolara. Jugoslavija je tu odštetu dobila u formi industrijske opreme i novca. Mnogi bi rekli da je ta odšteta bila važan pokretač proizvodnje u porušenoj zemlji, posebno kad se zna da bi ta svota, izražena u današnjim dolarima bila oko 1.5 hiljada milijardi dolara (oko deset puta bruto domaći proizvod svih bivših jugoslovenskih republika zajedno u 2014.).

Zamislimo sad ovu mogućnost. Šta bi bilo da je Jugoslavija, umjesto što je uzela te resurse u vrijednosti od 47 milijardi dolara, da ih je ostavila na korištenje onima koji su joj dužni, a pod skromnom kamatnom stopom of 5% godišnje? Pod tim scenarijem bi Jugoslavija svake godine mogla da potražuje određenu sumu, a da se na ostatak, kao i na glavnicu od 47 milijardi, obračunava kamatna stopa od 5%.

Pod ovim scenarijem bi svako domaćinstvo u Jugoslaviji moglo da prima mjesečno iznos ekvivalentan vrijednosti od današnjih 250 američkih dolara (obračun prikazan na kraju teksta). Da, dobro ste pročitali, svaki mjesec od 1946. do danas. I to nije sve. Kada bi se glavnica koja se akumulirala do 2014 podijelila na sva domaćinstva na prostoru bivše Jugoslavije, svako domaćinstvo bi dobilo iznos od 60,000 dolara.

Dakle, umjesto što smo sami upotrijebili resurse u vrijednosti od 47 milijadi dolara, da smo upravljanje tim sredstvima ostavili nekome drugome, nekom investitoru na zapadu, ta investicija bi, pod skromnom kamatnom stopom od 5% godišnje, imala značajne dividende. Ovo, naravno, ne znači da je Jugoslavija tada mogla da izabere ovu opciju. Ali, ova ilustracija može da nam posluži da ocijenimo relativnu produktivnost te investicije od 47 milijardi dolara sa kraja četrdesetih. Moramo priznati da su primanja od 250 dolara mjesečno tokom proteklih sedamdeset godina i povrh toga 60,000 dolara na kraju tog perioda, u sferi naučne fantastike za prosječno domaćinstvo sa prostora bivše Jugoslavije.

 
 

Sunday, January 26, 2014

Mit o zdravoj jugoslovenskoj ekonomiji


Ovaj tekst je namijenjen svima nama, a posebno onima koji misle da je jugoslovenska ekonomija bila stabilna za vrijeme Tita. Spoljni dug Jugoslavije je rastao eksponencijalnom brzinom od 1970. do 1980., sa oko 2 milijarde dolara 1970. na oko 18 milijardi 1980. To je rast od 25% godišnje. Svake tri godine, između 1970 i 1980, ukupni spoljni dug Jugoslavije se udvostručavao. Taj rast duga se naglo prekinuo 1980.

Šta to znači? To znači da je Tito još živ i da je nastavio pozajmljivati po stopi kojom je pozajmljivao od 1970. do 1980., spoljni dug Jugoslavije bi još 2004. bio 4.5 hiljada milijardi dolara, a ne oko 150 milijardi, koliki je sada ukupni spoljni dug svih bivših jugoslovenskih republika zajedno. Onaj ko misli da je 150 milijardi 2014. mnogo više nego 20 milijardi 1980., neka ima u vidu da, kad se uzme u obzir pad vrijednosti dolara, 20 milijardi 1980. i 100 milijardi 2014. imaju otprilije jednaku ekonomsku moć.

Dakle, u realnoj vrijednosti, spoljni dug bivše Jugoslavije se uvećao oko 50% od 1980 do danas. Iako bismo svi mi voljeli da je ta cifra manja, moramo priznati da to i nije tako loše u usporedbi sa duplanjem spoljnog duga svake tri godine prije 1980.

Ako pogledamo ostale indikatore kao što su kvalitet života, stopa inflacije i nezaposlenosti, ni tu situacija nije ružičasta sedamdesetih godina. Kvalitet života strmoglavo opada krajem sedamdesetih uprkos pumpanju ogromnih količina stranih sredstava u zemlju. Godišnja inflacija se mjeri dvocifrenim brojevima, a nekoliko godina pred Titovu smrt ubrzava i dostiže 40% godišnje. Stopa nezaposlenosti, koja se od 1970. do 1980 popela sa nešto ispod 7% na 12%, bi se u ekonomskoj literaturi okarakterisala kao znak duboke recesije. Dakle, jugoslovenska ekonomija je kasnih sedamdesetih bila u očajnom stanju, ali je to zamaskirano uvećanjem stranih kredita epskih proporcija.


Ono što se dogodilo osamdesetih i devedesetih, samo je otkrivanje stvarnog stanja jugoslovenske ekonomje. Kao kad hronični alkoholočar mora da se suoči sa realnošću svoje zavisnosti, tako smo se i mi morali, kad-tad, suočiti za realnošću nemoći jugoslovenske ekonomije da funkcioniše bez spoljnog dopinga.

[Nakon prvog objavljivanja ovog teksta pojavila se kritika da je eksponencijalna funckija nedovoljno precizna i da ne uzima u obzir eksterne faktore. Ovo je rast od 22% godišnje sa početkom 1970. sa 2.3 milijarde (predstavljen plavom linijom). Znam da funkcija ne uzima u obzir period prije 1970. i ne diskutuje ostale faktore, ali, pošto je svrha bila ilustracija šta bi se desilo ako bi se trend 1970-1980 nastavio, ovdje se možemo fokusirati na fit (koliko dobro ova funkcija aproksimira liniju ukupnog duga). Aproksimacija je, mislim, u razumnim granicama. Projekcija za 2014. sa ovom funkcijom rasta je 14 hiljada milijardi.]

Monday, January 13, 2014

Three subtle ways in which you are told you should stop being an immigrant and how to respond


1. You introduce yourself, and the other person fails to say anything that sounds even remotely close your name after three attempts. Then he/she makes it seem like he/she is physiologically incapable of pronouncing foreign names and leaves it up to you to come up with some domestic alternative he/she could use.

Incorrect response: "No worries, you are perfectly capable of saying my name, It just takes goodwill."
Correct response: You make up some name and say that that's the domestic version of your name.


2. You introduce yourself, and the other person says: "That's like Frederick, right? Can I call you Frederick?"

Incorrect response: "No, because that's not my name".
Correct response: "Sure."


3. You say your child's name, and the other person says: "Oh, that's different." But, he/she never tells you what it's different from.

Incorrect response: You explain that the very purpose of names is for them to be different from other names so we can distinguish between things. Otherwise, if names were the same, we would have only one name for everything.
Correct response: "Yeah." And then you say something apologetic that makes it sound like you weren't thinking straight when you chose that name.

Friday, January 10, 2014

Five economic statements everyone should think about for at least five minutes a day


1. Value is subjective.

2. Value is a logical concept, not a physical magnitude.

3. Choice is based on value.

4. Every choice implies giving up something.

5. Price is not value.

Thursday, January 9, 2014

Zašto se vjerovatno nikad neću vratiti u bivšu nam domovinu

Ponekad me pitaju da li bih se vratio u bivšu nam domovinu (bilo gdje u ex YU) pa kad im kažem da ne vjerujem da bih se vratio, kažu: "Ma imaš i pravo; ovdje nikad ne možeš zaraditi kao na zapadu." Ali, nije zarada moj primarni motiv. Najveći dio svog života sam proveo živeći veoma skromno, a ni sad se baš ne rasipam. Moje materijalne potrebe je vrlo lako zadovoljiti. Ono što je mnogo teže zadovoljiti je potreba za samoostavrenjem. Naprimjer, meni mnogo znači da rješavam probleme. U tome vidim vlastito ostvrenje. Dok god rješavam probleme, osjećam da postojim. Mislim da bi tu bio glavni kamen spoticanja kada bih se vratio u bivšu nam domovinu jer tamo je mentalitet i dalje usmjeren ka kočenju onih koji žele da rješavaju probleme. Takvi su često na meti dobro organizovanih interesnih grupa koje koriste malograđanske metode blaćenja onih koji žele nešto da promijene. Te malograđanske metode imaju dobru prođu kod velikog dijela našeg naroda. Ovdje možete vidjeti jedan takav primjer. Zbog takvih, i mnogih sličnih slučajeva, najvjerovatnije ću svoju životnu energiju uložiti negdje van bivše nam domovine. Jednostavno, to je, po meni, efikasniji način korišćenja vlasitite energije.

Friday, December 27, 2013

Skeniranje mozga

Komentar Novog Sindikata Zdravstva Srbije na moj tekst o radu na crno glasio je ovako: "Рајшићу, време ти је за скенер мозга. Потражи стручну помоћ, човече..."

Ovo je klasična matrica diskvalifikovanja neistomišljenika korištena kroz istoriju. Inkvizicija je "istjerivala đavola" iz onih koji se nisu slagali sa ondašnjim crkvenim dogmama. U bivšem SSSR-u su ljudi koji nisu vjerovali u komunizam slani na "psihijatrijsko liječenje". U bivšoj Jugoslaviji su politički neistomišljenici slani na Goli otok na društevno-političko "osviješćivanje."

Prednost ove taktike je da se nečije neslaganje sa određenom idelogijom objašnjava kao duševni ili fiziološki poremećaj--jer kako drugačije objasniti nečije neslaganje sa apsolutnom istinom? Ovim sistemom se implicira da disident do svojih zaključaka nije došao racionalnom analizom i zato racionalna diskusija s njim nema smisla. On je bolestan i jedini način da ga vratimo na "pravi" put je da ga tretiramo kao bolesnika. A tu je ponekad i sila opravdana jer sve je to za njegovo dobro, samo on to još ne razumije. 

Dragi članovi Novog Sindikata Zdravstva Srbije, moram da vas razočaram. Još uvijek sam fizički van dometa vaših skenera mozga i medicinskih aparata za popravljanje duha i karaktera. Moraćete ipak da upotrijebite racionalne argumente ako želite da me uvjerite u svoju svijetlu misiju za oslobođenje ugnjetavanih od tiranije ugnjetavača.

Thursday, December 26, 2013

One of the thousands of reasons why I prefer crony capitalism over crony socialism

There is a logical fallacy that is often used in debates over the desirability of different social systems--the Nirvana fallacy. It has nothing to do with the 1990s band from Seattle (or Aberdeen, to be more accurate), and everything to do with inappropriate comparisons. The Nirvana fallacy is when one compares an idealized version of social system X with the existing version of social system Y to argue that X is better than Y. For example, comparing an idealized version of socialism with the existing version of capitalism would be an example of the Nirvana fallacy. Similarly, comparing an idealized version of capitalism with the version of socialism that existed in the former Eastern Bloc would be an example of the Nirvana fallacy.

I will avoid the Nirvana fallacy by comparing one particular aspect of life in two actual social systems, which I call crony socialism and crony capitalism. Crony socialism is what existed in my homeland, the former Yugoslavia, up until the early 2000s, and crony capitalism is what exists in most of the western world today.

The particular aspect of life I will be comparing is buying shoes for a teenager.

Buying shoes for a teenager in crony socialism


In the 1990s, I was a teenager living in what is now Serbia, and what was then the FR Yugoslavia. As clothes are an important aspect the life of a teenager, I, like most of my friends, was making a statement by wearing particular items of clothing. One of the statements most of us wanted to make is that we were not poor. So, we would strive to buy items of clothing that had a price tag in the range of $50 to $200. This may not look like much in the western world, but keep in mind that the average monthly wage at the time in Yugoslavia was about $150.

The strategy I would take to persuade my parents to let me buy shoes that cost about $150 was to lie. I would tell them that the price is about $70, while I would make up the rest. How did I make up the rest? Well, by saving, but not by the kind of saving you might have  in mind.

Every day, I would get an equivalent of $1 to buy lunch at school. I rationed this money in the following way. The first day, I would by lunch. The second day I would buy cigarettes (yes, I smoked as a teenager); and the third day, I would keep the $1 and save it. If you repeat this for about 200 days, you get nearly $70 in "savings". Then, if you add these $70 with the $70 or so you get from your parents, you have enough for the pair of shoes you wanted.

Buying shoes for a teenager in crony capitalism


In crony capitalism, or the system that exists in the western world today, buying shoes is much simpler--If you are a teenager, you go to your parents, they give you about $100 for a pair of shoes, and you buy the damn shoes.

Reflecting back, I prefer this arrangement over the one I described above. I would prefer it if I was a teenager and I surely prefer it as a parent.




Tuesday, December 24, 2013

How to stop the mechanism of war?


Previous sections:
1. The mechanism of war: Introduction
2. The mechanism of war: The components
3. The mechanism of war: Starting the hell's engine

It is difficult, but not impossible, to halt the mechanism of war. Here I refer to stopping the mechanism before mass conflicts commence. Once massive clashes begin, it is almost inevitable that that conflicts will last until one of the opposing sides is completely ruined. When they enter into a period of mass conflicts, people on both sides are firmly convinced that the opposing side wants to destroy them, and that belief is strengthened with each new conflict.

As politicians and marginal types see an opportunity to achieve their life goals through war, they will not be interested in stopping the mechanism in its initial phase. That’s the stage when marginal types are not held accountable for crimes committed against members of other social groups (religious, ethnic, etc.) In that initial phase the producers have not yet begun believing that the producers in other ethnic or religious groups were willing to commit such, ethnically or religiously oriented crimes.

Once the producers begin to commit crimes, and justify them as necessary defense measures, it is too late for stopping the mechanism of war because each new act of violence keeps strengthening the belief that there is no difference between the producers and the marginal types on “their” side. Therefore, the only period when the mechanism of war can be stopped is in the initial stage when the producers within each ethnic or religious group still see the difference between marginal types and a producers of other ethnic or religious groups.

How to implement this? First, it is necessary to understand the structure of the mechanism of war, that is, it is necessary that the producers understand the psychological profile of marginal types and the politicians. The producers need to be aware of the incentives that these two segments of society have for initiating and maintaining a violent conflict. Once the conditions are right, these two groups will play their roles in the mechanism of war. However, the producers should always keep in mind that, without the support of the producers, politicians and marginal types are powerless.

However, just being aware of the politicians’ and the marginal types’ incentive structure is not enough. The hard part for the producers is actually acting to withhold their support for local politicians and marginal types. People have a natural tendency to be afraid of "foreign" groups of people and that fear has an evolutionary background. It is not easy to overcome this fear, but it is not impossible. As with other human destructive fears, one should use reason to fight and overcome the fear of “others”.

We have made the first step in this fight if we understand the structure of the mechanism of war. It is clear that the producers in "other" ethnic or religious group would decide to use violence only when they believe that they will be attacked by “our” producers. We understand that the producers want violence only when they believe that this is the only way to prevent violence against them. We also realize that first crimes are committed by the marginal types, not producers. The purpose of these crimes is to confuse the producers so as to induce them to believe that the marginal types in “other” ethnic or religious group are in no way different from the producers within those groups.

The next step is that the producers calmly assess the costs and benefits of not responding to the provocations by the marginal types. This calculation should take into account the fact that, in most wars, the producers on both sides lose a lot. Many lose their entire property, and there is almost no family that doesn’t lose a member in a war. With it come all the traumas that a war brings. It is hard to describe these costs, but anyone who has experienced long-term violence and fear for his own life and the lives of his or her loved ones will understand what I am trying to describe here.

On the other hand, refusing to participate in an armed conflict brings with it the risk of being attacked by the marginal types. This option also brings fear and uncertainty. But, there are several reasons why the marginal types cannot just keep terrorizing the producers. First, if the politicians see that the producers are not taking the bait and not starting to participate in the conflict, they have to use legal means against marginal types. A politician that tolerates uncontrolled behavior of marginal types for a prolonged period of time and does not maintain the rule of law (whatever law that may be) has no political future. Politicians know this, and that’s why their goal is to get the producers involved in organized violence initiated by the marginal types as soon as possible. However, if the producers refuse to get involved, an organized conflict will not occur.

On the other hand, if politicians do not establish the rule of law, then a breakdown of the state ensues. The story of the collapse of the state is interesting, but it would take too long to deal with that issue now. Those who are interested can read more about it here.

So, to stop the mechanism of war, it is necessary that the majority of producers on both (or all, if there are more than two) sides realize early on that, by engaging in a war, they would lose more than they would gain. Since the current tendency is that the producers fail to see through the game played by the marginal types and the politicians, we need to work to ensure that at least future generations of producers are more immune to this game. This is a difficult but not an unachievable task. For starters, it is enough that those who understand how the mechanism of war works and how it can be stopped transfer their knowledge to others. The most important thing is to transfer this knowledge to children and encourage them to think critically, outside the pattern imposed by the state education system. The education system is always tailored by the politicians, and we can be sure that our children will not learn about the mechanism of war in those schools.

This series of thematically related texts is my contribution to stopping the mechanism of some future wars. I am sure that my efforts will not stop here.

The mechanism of war: Starting hell's engine


Previous sections:
1. The mechanism of war: Introduction
2. The mechanism of war: the components

Participation in a war is a matter of choice. A person will turn to war only when he or she thinks that this is the best option, compared to all the options that are available.

Since the politicians and the marginal types often see conflict and violence as appealing ways to achieve their goals, one can easily see why those two groups would likely engage in a war if a good opportunity arises.

But, long-term and large-scale conflicts cannot occur without the participation of the most numerous category – the producers. We know that the producers don’t not like conflict. They want to, if at all possible, avoid conflicts because conflicts can destroy the productive, family way of life that the producers are building.

On the other hand, we know from experience that producers not only participated in the war in the former Yugoslavia, but they were the most numerous group in that war. This war was, for the most part, a war of producers of one nationality against producers of other nationalities.

This is at first sight contrary to my initial assumption that the producers don’t like conflict and therefore don’t want to attack other people. If we asked people on each of the warring sides why they were participating in that war, we would hear the same answer - that this side only defends itself from others. If "our" side sometimes attacks, it is only to prevent the otherwise inevitable attacks of "their" side.

From this destructive and violent scenario, it is hard to recognize those original peaceful and productive producers. How did this transformation occur?

To understand the process of transforming the producers from peaceful cooperators into paranoid warriors, we must go back to the first phase of the war. This is the stage where the politicians, for whatever reason, decide that a violent conflict between their supporters could strengthen and deepen the politicians’ authority. In the case of the former Yugoslavia, that suitable moment came in the late 1980s, when it became clear that the Yugoslav economy was in a downward trajectory and that, as such, could not withstand the increased pressures of the IMF for repaying old debts that Tito's regime used in the process of industrialization of the fifties, sixties and seventies.

This seemed to be a suitable moment for political authorities of some republics (i.e., federal units, provinces) to combine economic reforms with the desire of a large number of people within those republics for achieving the statehood of the republics. Deteriorating economic conditions in the country served as a motive for the ever increasing number of accusations that the republic X was "robbed of its money" by the republic Y or Z. Quite frequently, one could hear from top political positions the inflammatory rhetoric that "things cannot continue this way anymore" or that "accounts have to be settled" or that "we want to take what’s our own".

Such rhetoric from the highest political positions was the first signal for the marginal types that the highest political authorities, on each of the opposing sides, might look the other way if any acts of violence occured. Marginal types understood this as their chance to be noticed, recognized, respected, a chance that someone finally takes them seriously.

The first abductions, tortures and murders in 1991 in the multi-ethnic parts of Croatia were the first tests by which the marginal types tried to sense the sentiment of the current political elite, on both sides. On either of the sides, there was no categorical condemnation of these, still sporadic crimes. I’ll avoid mentioning any names because the names in this story are irrelevant. The mechanism is what’s important.

Even then, many producers have recognized that these crimes were committed by the marginal types, not by working and peaceful people. Most producers still did not see the seeds of war in these crimes because they were not seen as an expression of ethnic intolerance, but as an expression of inhumanity of the marginal types. One could often hear the producers saying that those first crimes were not committed by a Serb or a Croat, but by a nonhuman, a criminal. Also one could hear producers saying that if someone had been harassed or killed, the cause of the attack was not the nationality of that person, but the fact that the attackers were criminals and nonhumans.

Thus, most of the producers, on both sides, still believed that they were not threatened by the producers of other nationalities. Therefore, for most producers, the cost of achieving the political goals of their leaders through war was at that point too high. So, most producers thought that avoiding conflicts with the marginal types of the other nationality was a better option.

But, once the marginal types felt they would not be punished for crimes, they did not stop. Harassment, abductions and killings continued. Over time, errors and misinformation in the mostly verbal information transmission process accumulated. It became less clear whether someone was killed because he or she was a Serb, Croat or Muslim or because he or she simply crossed paths with an unaccomplished, frustrated marginal type. It also became less clear in the minds of the producers whether someone committed a terrible crime because he or she was an inhuman marginal type or because he or she was a Serb or a Croat.

This uncertainty produced two powerful emotions in producers: fear and disdain - fear for the safety of their own families and disdain for "them". In the minds of the producers, “they” are no longer just marginal types but more and more, “they” include the producers of other nationalities. The distinction between marginal types and producers is blurred and the main distinction becomes between the people of ‘their” nationality and people of “our” nationality. “They" hate "us" and are ready to use any means against “us”, just like they abducted and and maybe killed my acquaintance or family member. This is how producers on both ethnic sides are now starting to think.

This process leads to the subjective experience of falling costs of participating in a violent conflict in relation to avoiding the conflict. Producers could lose everything in a violent conflict, but they are also increasingly getting the impression that avoiding the conflict could cause them to lose everything as well. The marginal types, encouraged by the political elites on both sides, are now starting to ask the producers of their nationality to choose sides. If you are not with “us”, then you must be with ”them”. There is no third option. This too increases the cost to the producers of further delaying their participation in the conflict.

At that point, many producers are willing to spend the night hidden in their yards to prevent the attack on themselves, their families or neighbors. After this, there is only a small step to becoming a watchmen with an AK-47 rifle, which was conveniently supplied by the political leadership of each ethnic side through their marginal types. With a rifle in his hands, the producer has become a warrior. He is being lead and organized by the marginal types, who are now boasting that they were "the first to take guns in their hands." Even now, with a rifle in his hands, the producer still sees his military commander as a marginal type and a bum, but agrees to submit to this bum's command because the producer thinks that this is now a necessary step in protecting his family.

Now, on each of the warring sides, there are producers filled with fear and contempt. And when they attack, and when they destroy and kill, in their minds, they are defending themselves. Each new attack is only an answer to a previous attack of "the other side". Every new atrocity, in their minds, is necessary to prevent future atrocities of "the other side ". The mechanism has been started, and it will stop only when at least one side is completely destroyed.

Next section: How to stop the mechanism of war?

Sunday, December 22, 2013

First issue of Journal of Prices & Markets


It is with great pleasure that I inform you all that the debut issue of the Journal of Prices and Markets has just been published.
Ludwig von Mises Institute of Canada
Introducing The Journal of Prices & Marketspublished by the Ludwig von Mises Institute of Canada, a journal that seeks to improve the understanding of the role of markets in the economy. Submissions should seek to shed light on contemporary issues while being grounded in a praxeological reasoning. Prices & Markets welcomes submissions from a variety of fields such as politics, sociology, and psychology, where ever they can bring relevance to economic and financial questions.
Prices & Markets is a journal for those interested in how the application of economic principles can enlighten practical affairs. It stimulates debate on economic and social problems by disseminating complex issues in a widely accessible format. It takes as its starting point the good economics does not have to be complex economics.
The Journal welcomes submissions from a variety of fields such as politics, sociology, and psychology, wherever they can bring relevance to economic and financial questions.
Papers and panels cover a wide range of fields that impact on the Austrian paradigm, including: monetary theory; international trade; money and banking; methodology; history of thought; economic history; business cycles; geography; interventionism; literature; political philosophy; philosophy of science; society, culture, and religion; business regulation; environmental political economy; and history and theory of war.
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