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Nobel, Nobel Prizes And The Euro – Oped

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As everybody knows in politics there are two bandwagons often strongly assailed by those who would like to be admitted in: the winner’s bandwagon and the discontent’s bandwagon.

In normal times the drivers of the two wagons behave in quite the opposite way. The driver of the winner one tries to keep most people out, that of the discontent one, tries to embark most people in. The reasons of different behaviors are quite clear. The driver of the winning wagon follows the golden rule: less people share the cake, larger is the slice. That of the discontent wagon follows the golden rule: more people are discontent, larger is the cake that can be captured thanks to them.

Both rules usually work pretty well, but in order to win both need a slogan easy to capture, to sell, or to promote the intention of the wagon driver. In the first case the slogan Blood and Tears has worked usually well to maintain crowd out of the winning wagon. It conveys the idea that if you want to share benefits of the cake you first have to start to suffer. The mere fact that history shows that benefits often move from those who suffer to those who avoid suffering, is not usually recalled.

To justify this hiatus we can accept the idea that sufferance is a profession, often a vocation, which requires craft that not everybody has, and as a consequence must be left to those who have it. No reason to compete. As the slogan Blood and Tears works decently well, but only at times, for the discontent wagon the search of a slogan has a lot richer field of opportunities. The driver of the wagon can freely fish from the deep sea of discrimination, low wage, sexual abuse, religion bigotry, etc, etc. Easy to find a proper slogan? If the driver want good lasting results he should not be overcome by easy slogans.

Choosing the right slogan to convince people to mount the wagon of discontent is an art usually linked to the art of promoting fast oblivion. Let’s not forget this. To overcome unhappiness is much tougher then collect unhappy crowds. The driver can get many people jump on his discontent wagon but he must be sure that as he reaches some sort of destination (free election in a freed democratic country?), he must be able to make people to forget the disgruntlement in order to let him stay politically safe.

This peculiar ability to collect people who are unhappy, drive their discontent for a while, then as some sort of finish line is reached, to be able to discharge them fast enough to politically survive, it is a must required for those who want to drive a wagon of economic discontent, but it is also a dangerous game. Why? French President Hollande could make a seminar on it. In economy the deep sea of discontent is deeper then any other sea and more fishy then any other water. It is hard to believe there is anyone fully satisfied by his economic status. That means that if you want to get people on your discontent wagon you can freely fish in a deep sea and catch preys at will, but in economy if you want to make somebody happier is difficult that you don’t make somebody unhappy.. As Brutus said:

Had you rather Caesar were living and
die all slaves, than that Caesar were dead, to live
all free men?

Therefore if somebody is jumping on the wagon, many people could be induced to leave it. That is why the slogan is really the crux of the matter. Which slogan could keep most of the people in the same discontent wagon without inducing other people to leave it?

In Europe emerging political people are lucky. Ever since the year 2000 the ruro has taken on itself the charge of centralizing all types of discontent: Inflation, deflation, stagnation, high rental costs, excessive fluctuations of commodities, slowness of bureaucracy, you name an economic disease and soon or later somebody will write that is Euro’s responsibility.

I remember a very nice book of Daniel Pennac in which in a department store the work of one man was to be the scapegoat. He had to endure all complaints and take up the responsibility for whatever was wrong. In Europe the job of little guy that is beaten up for the prince’s faults in order to make the prince learn how to behave, is beautifully done by the euro. That is why many princes like it. They suffer, but the other guy is beaten up.

For many politicians, it is obviously convenient to have before people’s right complaint a good culprit: euro. That makes the gathering of unhappy people jumping of the discontent wagon easier. To easy to say that?

At this point as some recollections of Great William came up to now softly, now come to my mind strongly and I would like to assure that

Friends, Romans, countrymen, lend me your ears;
I come to bury Caesar, not to praise him.

If unemployment, inflation, deflation, low rent control, high commodities price variation, wrong function of street lights and bad sewage discharge come from the euro, then let’s bury it.

The evil that men do lives after them;
The good is oft interred with their bones;
So let it be with Euro,

Somebody dares to say that euro produced some good for the people?

Let’s not listen to them.

The noble Brutus
Hath told you Caesar was ambitious:
If it were so, it was a grievous fault,
And grievously hath Caesar answer’d it.
Here, under leave of Brutus and the rest–
For Brutus is an honourable man;
So are they all, all honourable men—

We must listen to the honourable man, the noble Brutus. Even though myself I would remember the fascinating diner with Baron Roy Jenkins, in a town, Pamplona, which closed a conference in which both of us were invited as speakers. (in my case I need to reckon more because of my bullfight affection that by my economy views). At dinner time, in the midst of a tasteful dinner, made more precious by the wonderful hospitality of Pamploneses, and by the over shrewd comments of Baron Jenkins, I dared to ask him if he wanted England to get into the European common market he assured me that he wanted much more. He opened up his wallet and he showed me many currencies he had in. He told me “I just came from many travels in European countries, it is ridiculous to have to deal with so many currencies”. That was a noble support to the euro.

The noble Brutus
Hath told you Caesar was ambitious:
For Brutus is an honourable man;
So are they all, all honourable men—

But who in economy is more Noble then the Nobel prize winner?

Easy answer. Nobody.

Didn’t they tell us well in advance of the 2008 crises so that we could take proper shelter from it?

Didn’t they tell us well in advance that oil price was going to drop dramatically after a dramatic surge?

Didn’t they advise well in advance insurances against too much easy real estate lending?

And the junk bonds, please, were they not complaining all the time against too much high rate of return on investment in garbage?

Of course this is just a short list of the damages Euro produced all over the world.

Come I to speak in Caesar’s funeral.
But Brutus says he was ambitious;
And Brutus is an honourable man.

For Europe the damages are much clearer. We all know Euro didn’t make 508 million people rich, nor flattened house rents to a marginal portion of our income, and neither reduced unemployment to acceptable sacrificial rate of 3-4 % enough to sustain a full employment policy. But is anybody able to show a quite better performance in countries out of Eurozone, or for those that share that Euro-maladie a much better performance in their own past times? Just to remain not within that euro field, but move on in the surroundings: England to overcome unemployment is voting for the Brexit, but now top financial institutions in England plan to move to Frankfurt. What? In the central core of Euro financial market? USA is promising walls to prevent people from NAFTA coming in, and is promising to throw out Muslims that already got in. What? Walls in the reign of free people movement that so much fascinated pre-Schengen euro people?

Did this in Caesar seem ambitious?
When that the poor have cried, Caesar hath wept:
Ambition should be made of sterner stuff:
Yet Brutus says he was ambitious;
And Brutus is an honourable man.

Obviously there is no greater usefulness for an economist to jump now on the wagon of the Euro discontent economists over populated by Noble Nobels. But leaving aside the economists, watching a bit carefully the face of political people ready to bury euro, one is sometimes worried that what they really want is something else then the good of economic people’s standing.

I speak not to disprove what Brutus spoke,
But here I am to speak what I do know.
You all did love him once, not without cause:
What cause withholds you then, to mourn for him?

A good friend of mine used to say that historically wealth of a country comes from low price of raw material (he was including with strong cynicism also labor), for capacity to control exchange prices with armored ships (he was saying England was top operator in this a bit forced version of International Labor division), for embodying knowledge into the production systems (and here the real master is California silicon valley dream).

Maybe the third road should be a bit better explored. Why not trying before burying the Euro the road of improving productivity of investment through a different knowledge policy? Had that be suggested by economic counsellors to Vladimir Putin perhaps he would have stood better in face of Russia’s budget crisis. But in order to do that, we need some key fundamental intellectual change. Not easy, indeed. Why not accessing to a new form of Wealth of Nations based on the production and distribution of Knowledge, (say Gross Domestic Knowledge Product)? Why not study in Europe a form of Knowledge Money where each country would be free to exercise its free money printing capacity without any restriction if not that of REAL political capacity to invest in the future of its people?

That in my mind should be preliminary explored, because without concrete alternatives the abolition of the Euro will spark a race in excessive national currency spending, not necessarily prolegomena to better investments, that would instead promote a run to inflationary monetary policy, very very difficult also for the dollar to manage.

The deep impression one has in the too much widespread euro criticism is that political people that strongly want the destruction of Euro really look for freedom to run deficits.

But yesterday the word of Caesar might
Have stood against the world; now lies he there.
And none so poor to do him reverence.


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Umberto Sulpasso

Umberto Sulpasso

Umberto Sulpasso, senior Fellow of Center for Digital Future Annenberg School of Communication, University of Southern California has a Degree in Economics in Italy and MBA from Columbia University. Has been teaching in different countries Economy of Knowledge, and publishing books and directing ecnclopedias. His most recent publication has been Darwinomics where for the first time the model of GDKP was announced.

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