 |
 |
July 26, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Mitchell Orenstein (1998)
· The problems of Russia – its overnight transformation into a world center for narcotics distribution and money-laundering.
· Well-ordered market economies depend upon strong, legitimate, and liberal state institutions.
· Russia may never bounce back to a law-abiding equilibrium if corrupt, criminal structures are established during the current “Wild East” period of capitalism.
· This article will argue that the dominant method of neo-classical economic reform in the world today –shock therapy- has actually contributed to the prevailing atmosphere of lawlessness in contemporary Russia.
· Shock therapy’s methods of lawlessness from above cannot engender respect for rule of law from below.
· Neo-classical economists have come to agree that strong legal institutions facilitate development. If this emerging consensus is correct, then economists need to seriously reconsider the fundamentals of their previous transition strategies. If building liberal state institutions is crucial, then why support deep cuts in public sector wages for judges and police? Why advocate and participate in the use of extra-legal means to achieve radical reform?
· You can continue reading more of Orenstein's thoughts by following this link.
J.Pozuelo-Monfort’s comments:
Russia represents how the west made repeated mistakes with the so-called shock therapy, that aims at establishing capitalism in former communist countries in a way that does not incorporate representatives of the society, in a way that imposes more than seeks a consensus, in a way that demonstrates its inefficiency and wrong-doing.
Neoclassical capitalism does not work without strong institutions that are able and capable of securing law and order, of securing equal rights for each individual. Neoclassical capitalism does not work without a serious and paced transition from a rudimentary, bureucratic system, to a market economy. Neoclassical capitalism is not the de facto standard and Russia proves, one more time, that democracy is beyond capitalism, that the rights of the people are before te monies of the more powerful, that the hungry investors from the west should wait, should have mercy, should allow developing countries to move up the ladder, before entering the financial markets of emerging countries agressively, before short-term speculating against currencies, against commodities.
Let’s once and for all put the people first. A controlled transition is more a guarantee of success, that an accelerated transition that only drives to the misallocation of resources to the more greedy and better positioned oligarchs.
Let’s once and for all put the people first. The people.
Continue reading 'Lawlessness from Above and Below: Economic Radicalism and Political Institutions'
July 23, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Charles E. Lindblom (1982)
· Suppose that we faced the fanciful task of designing a political system or a political/economic system that would be highly resistant to change.
· Another possibility might be somehow to place all power in the hands of a despot or oligarch. But doing so would enable the elites to change the system.
· Another possibility is to design institutions so that any attempt to alter them automatically triggers punishment.
· Such a change-repressing system would be all the more effective if the punishments were strong.
· When we come to that cluster of institutions called business, business enterprise, or the market, just such a mechanism is in fact already operating. Many kinds of market reform automatically trigger punishments in the form of unemployment or a sluggish economy.
· You can continue reading more of Lindblom's thoughs by following this link.
J.Pozuelo-Monfort’s comments:
In a beautiful promenade of explanatory thoughts. Charles E. Lindblom argues against the market, for the market imprisons policy, for the market imprisons thought and stops the intellectual venture. We live in a market-oriented society. We live in a market-oriented democracy that conditions the policy making process. A conditioned policy-making process cannot fully work. A conditioned policy-making process cannot fully operate. We live in a society needy of policy changes, but the more market-oriented society becomes, the more incapable it is to adopt changes leading to a new understanding and vision of how the world should function, of how the world should operate.
Neoliberal policies tend to impose a unique understanding of how the economy should be ruled, empowering the economic return, far from considering the social dimension. The market justifies a unique vision, the market becomes the default reply for those unable to move forward, incapable of thinking ahead.
The human kind is beyond the market. The environment is beyond the market. We need to make sure our policies, be them public or corporate, respect the human being and the environment. We need to make sure our policies guarantee universal access to water, healthcare, education and sanitation. These universal rights are beyond the market theory and theorists.
Our will, that of the citizens of the world, is not imprisoned. Our voice, that of the citizens of the world, is not condemned to silence. Market failures cannot explain the despair of millions. Market failures are the consequence of an economic system that will never work as the theory says or indicates. Because the system is run by individuals, and individuals are human beings that deserve some dignity.
Continue reading 'The Market as Prison'
July 20, 2007
Dr. Javier Carrillo Hermosilla, Executive Director of the Centre for Eco-Intelligent Management
El pasado miércoles fueron presentados en el IE a la prensa y al sector los resultados de un estudio que desarrollamos hace algunos meses, en colaboración con PricewaterhouseCoopers España, sobre El Entorno Competitivo del Sector Eléctrico Europeo en los Escenarios Post-Kioto (Download file).
El régimen de cumplimiento en el periodo posterior al primero del Protocolo de Kioto (“post-Kioto”) se encuentra actualmente en discusión. El propio Protocolo estableció que las negociaciones sobre los compromisos posteriores al 2012 deberían comenzar como muy tarde en 2005 y acabar en 2005. Aunque, en principio, esta cuestión debiera haberse dilucidado en la Conferencia de las Partes (COP) celebrada en Montreal en diciembre de 2005, no se pudo llegar sino al acuerdo genérico de los países industrializados con respecto a la necesidad de “fijar nuevos compromisos de limitación de emisiones más allá de 2012”, así como a una referencia expresa a la necesidad de garantizar su continuidad más allá de 2012. En la COP celebrada en Nairobi en noviembre de 2006 de nuevo tan sólo se llegó al acuerdo de que en 2008 se llevará a cabo una nueva revisión del Protocolo de Kyoto, que podría dar lugar (o no) al año siguiente a la construcción de un régimen post-Kioto.
Sin embargo, la importancia de conocer ahora y en mayor detalle cuál será dicho régimen futuro es determinante, no sólo por motivos ambientales, sino también empresariales.
Continue reading 'Escenarios post-Kioto'
July 19, 2007
María Soledad Pons Caruso, MBA 2007, Net Impact Chapter Leader
Wednesday, the 4th of July, the Global Village event took place at Instituto de Empresa. It was organized by Net Impact, but we would like to thank everyone who helped out in any manner. These people include the organizing committee, the country stand coordinators, those who prepared food or presentations, and all those who attended and helped support this cause.
The event raised around 2000 euros which will be split between four NGOs: ONGs: Koinonia (Kenya), Skip (Perú), Un Techo para mi país (Latinoamérica) y la New Gate to Peace Foundation (Jerusalem). Below you will find information on each. The money will be transferred next week. If you would still like to elect among them you may send an e-mail in the next few days.
At about 3 in the afternoon, many people left their classes early and began the preparations, led by Stephane who took charge of the logistics. At the door, the rest of the people were met by Guillermo, Lau, Sole, and Brent. More than 200 people attended! They were not only IMBAs, but also MBAs from September and February intakes, the master in Telecom and Digital Business, master in Finance y and Marketing.
The regions and countries represented were: Arab (Egypt, Iraq, Lebanon among others), Brazil, Central America (Honduras, El Salvador, Costa Rica, Panamá), Colombia, Dominican Republic, Ecuador, France, Germany, India, Italy, Japan, Macedonia, México, Netherlands, Peru, Portugal, Russia, Spain, Switzerland and USA.
The Global Village had a dual purpose: to raise money for the NGOs and to celebrate the diversity of countries at IE. IE has a very international student body, so we should take advantage to learn about the cultures of others in all aspects, not just the work – related.
Continue reading 'Global Village, Second Edition'
Joaquín Garralda, Vice Decano del Instituto de Empresa
Director del Centro de Responsabilidad Corporativa PwC - IE
Muchas empresas están descubriendo -como el personaje de la obra de Molière El burgués gentilhombre- que sin saberlo 'hablan en prosa', y en consecuencia repiten algunos de los comportamientos del satirizado burgués. La obra narra las ridículas actuaciones de M. Jourdain, rico burgués con deseos de ascender en la rígida escala social del siglo XVII en Francia, que se sorprende cuando su 'maestro de Filosofía' le hace ver que habla en prosa. M. Jourdain descubre que después de más de 40 años, cuando dice: 'Nicole, tráeme la pantuflas y el gorro de dormir', está hablando en prosa. Ante este descubrimiento, se siente 'el más agradecido del mundo' con su maestro por habérselo enseñado.
Es lógico que muchas de las empresas que se inician en temas de responsabilidad corporativa (RC) lo hagan repasando lo que hacían antes generosamente, de una manera más o menos natural, para ver lo que pueden poner en su comunicación institucional. En la búsqueda de alguna actividad que pueda denominarse de responsabilidad social, lo que es fácil que ocurra es que se den cuenta que categorizando de un modo diferente muchas de sus actuaciones pasadas, pueden presentar unas prácticas de RC aparentemente muy consolidadas. Incluso algunas empresas, a la vista de lo bien que quedan sus informes, lleguen al extremo de comunicar sus actuaciones -en la línea de M. Jourdain- con cierto triunfalismo y descuidando la escasa diferencia que en realidad aportan.
Sin entrar a ironizar en exceso sobre esta actuación (que no es tan extraña entre las empresas que inician su andadura en temas de RC), se puede extraer de la línea argumental de este artículo un mensaje de prudencia para las empresas que publican una memoria de responsabilidad corporativa en la que sólo se narran actuaciones pasadas, sobre las que se ha sabido ver algún matiz de RC.
Continue reading 'La ventaja competitiva de 'hablar en prosa''
July 11, 2007
Olga Slavkina, Wally Olins, Max Oliva, Juan Pablo Ramirez and Jacob Benbunan 
(photo Irene Medina)
Some time ago Olga Slavkina (IMBA 07) was told that if she wanted to know something about brands she should read “On Brand” Wally Olins latest book. Outspoken and abrasive, he is the Chairman of Saffron and one of the most claimed authorities in branding.
Now, while involved in her MBA, she had the great idea of sending Wally an e-mail asking him to be the first guest of the Funky Business club. The following day she received an answer from Wally himself accepting the invitation.
Continue reading 'Giving is the ultimate luxury: Wally Olins at IE'
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
Switzerland has shown throughout history its neutrality at war in conflicts that otherwise shook with violence and no wait the people and nations throughout the world, in the two World Wars that spread the panic in the northern hemisphere last century. A neutrality perhaps carefully earned that has its reward in life, in the lives of those who did not fight, in the lives of those who did not decease, who did not die in vain.
A neutrality, that of Switzerland, that once upon a time deserved the admiration of nations, nations that were involved, some more than others, in fierce battles of full regret, of empty reason.
A neutrality that Switzerland was able to maintain at war, a neutrality that Switzerland does not intend to maintain on taxes, attracting in a battle of the powers, the wealthiest individuals, with the promise that taxation will be lower if they move to the Alps.
A neutrality that is torn apart because an easy fiscal competition, based upon a supposed neutrality, is a hypocritical competition, is a competition stabbing on the back the rest of surrounding countries, that must appropriately tax high net worth individuals.
The last move suggested by the political class in Switzerland only benefits the powerful economically speaking, only taxing half of the dividend stream of those wealthy individuals owning over 10% of the shares of a firm. A measure that only benefits high net worth individuals inside and outside Switzerland.
Those European citizens willing to move their fiscal residence to Switzerland should be penalized accordingly. Their benefits for belonging to the European Union should be expropriated. The benefit of a European passport, the benefit of the free circulation, the benefit of the working mobility. One is European of the Union for the good, the bad and the ugly. One cannot be European of the Union for the picture, and in a footnote state that he or she decides to fiscally live in Switzerland. One cannot have the better of the two worlds. We should not allow our citizens to have the better of the two worlds in a society needy of the taxation of high net worth individuals to move forward, inside and outside the European borders.
July 06, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
A recent piece on the Financial Times explains the measures promoted by democratic candidates Clinton and Obama to tackle the US current account deficit. The US has a problem also faced by Spain: it imports much more than it exports. China is therefore the target and its presumably undervalued currency the punchline of the discussion.
Chinese imported goods are as a result undervalued and sold at below market prices, which hurts the US industry as much as it hurts Europe. However this technique might intend to calm the public opinion in the US that is more and more afraid of the effects of globalization on their undermined economy.
The US and Europe need to enforce labor codes to Chinese suppliers in particular and Asian manufacturers in general. If the Walmarts and Targets of the world enforce labor standards to their suppliers and threaten them to not purchase the merchandise if they do not proceed as indicated, prices will likely go up because operational costs will probably go up.
Enforcing labor standards will therefore have a double positive impact on both sides of the Pacific, while in the meantime China continues to finance the US current account deficit and the US benefits from a weak euro-dollar exchange rate, that is, in the end hurting Euroland. Europe could also complain that the US is artificially maintaining a weak dollar.
It is a concern on both sides of the Ocean, be it the Pacific or the Atlantic.
July 05, 2007
J.Pozuelo-Monfort, MSc candidate in economic development at LSE.
The non-effort related income
Non-effort related income is undeserved income. Non-effort related income is freely given, in a favor-driven system that reminds a feudal regime of the Middle Ages, rather than a democratic and globalized world of the XXIst century, a world of future possibilities.
The economic paradigm of the capitalist system is focused on rewarding personal effort. The mythical American dream is nothing else than the economic reward of the effort undertaken by those who are able to move forward in a fair system, a system of meritocracy that rewards the effort and barely relies on luck, a system that connects effort with prosperity. Effort will necessarily lead to a better world. Effort will undoubtedly compensate the gap created between the South and the North, a gap that has only stressed the grand evils that punish a majority of the population.
We cannot live in a society with individuals that devote their full time to live on the income inherited from their ancestors. We cannot live in a society in which certain privileged are in charge of spending their free time with extravagant habits thanks to the monies inherited from their older ones, while millions of individuals live in extreme poverty, with the sole hope of not passing away on the short run.
Today’s world is a different world. Today’s world is a globalized world whether we like it or not. We cannot benefit from the positives of globalization in expense of not compensating the negative impact they cause.
Continue reading Decem 06
July 04, 2007
Max Oliva, Associate Director, Social Impact Management
Hans Rosling's first GapCast is here. Professor Rosling shows how economic growth, public health and sexual rights have changed in Sweden during 300 years. How has life expectancy and GDP per capita of Sweden evolved from 1709 to 2004? He further explains how to use gapminder world in order to make statistics work for development. This is just the first on the series which promises to be a fantastic way to bring development into a visual and entertaining arena, thus further enriching the conversation and our understanding into how to make the “seemingly impossible, possible”.
If you haven't seen him yet, invest 6 minutes of your time and I bet you won't regret it. If you watch this and are asking for more, how about sword swallowing at TED? O see our post on Hans Rosling on Africa and its growth.
Want to play with World statistics? Google found Gapminder fascinating and decided to be part of it.
And finally, a very recent achievement on the statistics arena led by Hans Rosling has been that of attaining access to all UN Statistical Division's data for free from May 1 this year. You can read this and other news at Gapminder.
