NIFTY FIFTY
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Some random thoughts on Mutualism:
Firstly, to look at the biological aspect of this term Mutualism, its an interaction between two individual entities of different species. This interaction results in benefits to both entities. In this mutually beneficial interaction, chances of survival normally get a boost.
This is in contrast to exploitative associations, as in parasitic relationships, where only one species/partner benefits.
A good example of Mutualism is the relationship that exists between the Remora fish, and larger fish like sharks.
The Remora attaches itself to the host and yet is not a parasite, in that it scavenges for food around the hosts mouth and teeth, keeps away parasites, helps maintain a favourable eco-system, thus keeping the host in good health and hygiene. In return, the Remora get to hitch a ride, scatter and spawn far and wide, and get feed and protection.
Great Mutualism, great mutual survival benefits.
There is yet another aspect to Mutualism, and this one in an economic theory:
As a theory propounded by some Anarchists, this form of Mutualism is a labour theory of value, which holds that when labour or its product is sold, it ought to receive in exchange, goods or services representing the amount of labour necessary to produce an article of exactly similar and equal utility, and receiving anything less is considered exploitation, theft of labour, or usury. (Usury comes from old Latin for excessive interest). Mutualism opposed the idea of individuals receiving an income through loans, investments, and rent, as they believed these individuals are not labouring.
As any form of state/governance was anathema to the Anarchists, many proponents of Mutualism who originally considered themselves to be permissive Socialists, did not subscribe to State Socialism. If the state did not intervene, Mutualism believed, economic law would ensure that individuals receive no more income than what is in proportion to the amount of labour they exert. While opposed to socialising the ownership of capital, they aimed nevertheless to socialise its effects by making its use beneficial to allinstead of a means of impoverishing the many to enrich the few.
To conclude this part then, as the original concept of Mutualism is based in biology, its opposite would be Parasitism (from parasite).
And so, for the above reason, Mutualism looks upon the Capitalist order as a form of Parasitism.
So.why all this talk of Mutualism?
Well, to continue with our old saga, we now learn to see how the two variants of Mutualism help us cover a lot of ground and get closer to the end.
In the tale of the Remora and the shark, weve seen how the two species, with admirable Mutualism, lived and died together happily ever after.
Our own tale here could well have begun something like this:
Once upon a time there lived a giant Shark, known and feared as the big US of A.
The big Shark drew many varieties of Remora from all over the world.
In a great show of Mutualism, as the Shark grew, the piggyback riding Remora helped it to devour the worlds resources. The Remora kept Shark preened and prepped and primed, and in return, got to keep their crumbs of the loot.
Soon, the Sharks consumption reached titanic magnitudes:
One resident was consuming equal to 128 Bangladeshis, 307 Tanzanians, 370 Ethiopians.
In return for its gluttony, the shark gave back to the world over 22% of world's total industrial carbon dioxide emissions. . (Please recall this from earlier: Mutualism, the other kind, aimed at socializing the effect of Capital in trying to make its use beneficial to allinstead of a means of impoverishing the many to enrich the few.)
To consume more and more, wars would be fought and won, foreign lands colonized, resources cornered, puppet governments installed, lies told at testimonies. At each step of the way, the Remora all over the world be there doing their bit.
But that kind of consumption would inevitably lead to living beyond means.
Now, the need for injecting liquidity, a popular phrase in later times but an old concept nevertheless, would become necessary to keep pace with, and to stimulate that consumption: Plastic money and mortgage would be lent the high status of being equated with success.
But as the plot thickened, at the heart of all this, a kind of Parasite would be born, too powerful for even the Remora to do anything about.
In its early form, this Parasite would resemble a harmless entity known as Credit.
Later, it would grow into a demonic cancer the world would come to know as: Leverage.
This cancer would spread to all continents, the original homes of all the Remora.
Much later, as the Shark would engage in a deathly struggle against the Parasite, all the Remora governments would do everything to help:
Should the Shark sink, so would the Remora.
Mutualism, after all, is all about bettering the chances of collective survival, you see.
So now, we have so far seen the natural biological order of Mutualism degenerate and mutate into Parasitism.
Its time now to draw from the economic theory of Mutualism to tie up this piece.
We had reached the point of the cancer known as Leverage.
Well then, the cure for it was obviously known as: Deleveraging.
Typically, one condition caused by severe Leveraging is known as Recession.
Well actually, it is more a symptom of the cure rather than the disease itself.
Recession is primarily about an overdue debt reduction in the Sharklands non-government financial sector.
And so, here comes the rub:
Now enters the government, that terrible evil entity which is so abhorrent to the economic theory of Mutualism, with its kinder and gentler methods that resemble State Socialism. (Though Capitalist to its core.)
To alleviate the obvious hardships of both the indebted and the creditors, the government commits to buy the toxic assets, and inject capital into banks.
All very good.
But it is all quite toothless, as in this world there is no tooth fairy.
To begin with, the government doesn't create anything, it merely redistributes.
In other words, whenever the government bails someone out, its at the cost of another. The 700 billion bailout is not coming out of the magicians hat, but rather, out of the hat being passed around.
Were talking taxation here.
Add to that another 30% for getting the government into the picture, as it has its own overheads.
These actions increase the tax burden on the economy and do nothing to encourage economic growth.
Besides, all along, in a perversification of the economic theory of Mutualism, the Capitalist State had gotten into mutually self-serving cahoots with Joe The Hedge Fund Manager and others.
And to think that Joe The Plumber had nothing to do with either side of the Sub-Prime virus to begin with.
(Please recall this from earlier: If the state did not intervene, Mutualism believed, economic law would ensure that individuals receive no more income than what is in proportion to the amount of labour they exert.)
Borrowing from Peter to pay Paul doesn't bode well for the GDP. The stock market knows it.
To conclude, as the Shark and the Remora struggle with the cancer of Leverage by Deleveraging, they also need to deal with the fever of Recession:
There are many many trillions of Dollars in outstanding bank credit to be adjusted for starters, in way of Deleveraging.
But the combined GDP of the US and European economies is merely about $25 trillion.
In Socialising Capital, transferring Toxic Assets to the Public Sector does not eliminate indebtedness. On the other hand it has a negative impact on economic growth, the condition known as Recession.
In a magnificent if perverse show of Mutualism, the State has spread the cancer of Leverage into the hands of the Common Joes, whose hands have now been forced to become uncomplaining and persevering.
Why?
So that Deleveraging can be spread over Time.
Because Deleveraging in Price is a very scary thought indeed, as we have been seeing:
The wild dogs are on the run.
They have no place to hide.
Remember?
Firstly, to look at the biological aspect of this term Mutualism, its an interaction between two individual entities of different species. This interaction results in benefits to both entities. In this mutually beneficial interaction, chances of survival normally get a boost.
This is in contrast to exploitative associations, as in parasitic relationships, where only one species/partner benefits.
A good example of Mutualism is the relationship that exists between the Remora fish, and larger fish like sharks.
The Remora attaches itself to the host and yet is not a parasite, in that it scavenges for food around the hosts mouth and teeth, keeps away parasites, helps maintain a favourable eco-system, thus keeping the host in good health and hygiene. In return, the Remora get to hitch a ride, scatter and spawn far and wide, and get feed and protection.
Great Mutualism, great mutual survival benefits.
There is yet another aspect to Mutualism, and this one in an economic theory:
As a theory propounded by some Anarchists, this form of Mutualism is a labour theory of value, which holds that when labour or its product is sold, it ought to receive in exchange, goods or services representing the amount of labour necessary to produce an article of exactly similar and equal utility, and receiving anything less is considered exploitation, theft of labour, or usury. (Usury comes from old Latin for excessive interest). Mutualism opposed the idea of individuals receiving an income through loans, investments, and rent, as they believed these individuals are not labouring.
As any form of state/governance was anathema to the Anarchists, many proponents of Mutualism who originally considered themselves to be permissive Socialists, did not subscribe to State Socialism. If the state did not intervene, Mutualism believed, economic law would ensure that individuals receive no more income than what is in proportion to the amount of labour they exert. While opposed to socialising the ownership of capital, they aimed nevertheless to socialise its effects by making its use beneficial to allinstead of a means of impoverishing the many to enrich the few.
To conclude this part then, as the original concept of Mutualism is based in biology, its opposite would be Parasitism (from parasite).
And so, for the above reason, Mutualism looks upon the Capitalist order as a form of Parasitism.
So.why all this talk of Mutualism?
Well, to continue with our old saga, we now learn to see how the two variants of Mutualism help us cover a lot of ground and get closer to the end.
In the tale of the Remora and the shark, weve seen how the two species, with admirable Mutualism, lived and died together happily ever after.
Our own tale here could well have begun something like this:
Once upon a time there lived a giant Shark, known and feared as the big US of A.
The big Shark drew many varieties of Remora from all over the world.
In a great show of Mutualism, as the Shark grew, the piggyback riding Remora helped it to devour the worlds resources. The Remora kept Shark preened and prepped and primed, and in return, got to keep their crumbs of the loot.
Soon, the Sharks consumption reached titanic magnitudes:
One resident was consuming equal to 128 Bangladeshis, 307 Tanzanians, 370 Ethiopians.
In return for its gluttony, the shark gave back to the world over 22% of world's total industrial carbon dioxide emissions. . (Please recall this from earlier: Mutualism, the other kind, aimed at socializing the effect of Capital in trying to make its use beneficial to allinstead of a means of impoverishing the many to enrich the few.)
To consume more and more, wars would be fought and won, foreign lands colonized, resources cornered, puppet governments installed, lies told at testimonies. At each step of the way, the Remora all over the world be there doing their bit.
But that kind of consumption would inevitably lead to living beyond means.
Now, the need for injecting liquidity, a popular phrase in later times but an old concept nevertheless, would become necessary to keep pace with, and to stimulate that consumption: Plastic money and mortgage would be lent the high status of being equated with success.
But as the plot thickened, at the heart of all this, a kind of Parasite would be born, too powerful for even the Remora to do anything about.
In its early form, this Parasite would resemble a harmless entity known as Credit.
Later, it would grow into a demonic cancer the world would come to know as: Leverage.
This cancer would spread to all continents, the original homes of all the Remora.
Much later, as the Shark would engage in a deathly struggle against the Parasite, all the Remora governments would do everything to help:
Should the Shark sink, so would the Remora.
Mutualism, after all, is all about bettering the chances of collective survival, you see.
So now, we have so far seen the natural biological order of Mutualism degenerate and mutate into Parasitism.
Its time now to draw from the economic theory of Mutualism to tie up this piece.
We had reached the point of the cancer known as Leverage.
Well then, the cure for it was obviously known as: Deleveraging.
Typically, one condition caused by severe Leveraging is known as Recession.
Well actually, it is more a symptom of the cure rather than the disease itself.
Recession is primarily about an overdue debt reduction in the Sharklands non-government financial sector.
And so, here comes the rub:
Now enters the government, that terrible evil entity which is so abhorrent to the economic theory of Mutualism, with its kinder and gentler methods that resemble State Socialism. (Though Capitalist to its core.)
To alleviate the obvious hardships of both the indebted and the creditors, the government commits to buy the toxic assets, and inject capital into banks.
All very good.
But it is all quite toothless, as in this world there is no tooth fairy.
To begin with, the government doesn't create anything, it merely redistributes.
In other words, whenever the government bails someone out, its at the cost of another. The 700 billion bailout is not coming out of the magicians hat, but rather, out of the hat being passed around.
Were talking taxation here.
Add to that another 30% for getting the government into the picture, as it has its own overheads.
These actions increase the tax burden on the economy and do nothing to encourage economic growth.
Besides, all along, in a perversification of the economic theory of Mutualism, the Capitalist State had gotten into mutually self-serving cahoots with Joe The Hedge Fund Manager and others.
And to think that Joe The Plumber had nothing to do with either side of the Sub-Prime virus to begin with.
(Please recall this from earlier: If the state did not intervene, Mutualism believed, economic law would ensure that individuals receive no more income than what is in proportion to the amount of labour they exert.)
Borrowing from Peter to pay Paul doesn't bode well for the GDP. The stock market knows it.
To conclude, as the Shark and the Remora struggle with the cancer of Leverage by Deleveraging, they also need to deal with the fever of Recession:
There are many many trillions of Dollars in outstanding bank credit to be adjusted for starters, in way of Deleveraging.
But the combined GDP of the US and European economies is merely about $25 trillion.
In Socialising Capital, transferring Toxic Assets to the Public Sector does not eliminate indebtedness. On the other hand it has a negative impact on economic growth, the condition known as Recession.
In a magnificent if perverse show of Mutualism, the State has spread the cancer of Leverage into the hands of the Common Joes, whose hands have now been forced to become uncomplaining and persevering.
Why?
So that Deleveraging can be spread over Time.
Because Deleveraging in Price is a very scary thought indeed, as we have been seeing:
The wild dogs are on the run.
They have no place to hide.
Remember?
Amit sir, thanks for interesting column.I am eager to ask, should we do better if we adhere to The Austrian School of economics ? rather than what us selling to us ?
i yet not understand why is that austrian theory sounds perfect but those r poor ones and uncle sam is so rich ?
i am asking out of genuine confusion dont think otherwise.
i yet not understand why is that austrian theory sounds perfect but those r poor ones and uncle sam is so rich ?
i am asking out of genuine confusion dont think otherwise.
Hello Alex.
A couple of points for you to consider:
One, I am no Economist and neither for that matter, a Biologist.
I am primarily from a background of the Artsmusic, literature etc.
What I also do is analyse the markets/charts, and make a living off it.
In this thread I try to look at symmetry and a resonance that exists across various streams of disciplines and theories.
With some application of abstract and even tangential thinking, it is possible to make diverse theories converge.
It may often appear fictional, but that is not my concern as Art may also be seen as fictional.
But in truth, Art does resemble reality, albeit perceived from wacky perspectives. In this manner, this thread also is a bit of an outlet for my abstract ramblings. Those who have followed it in the past will understand what Im saying.
Im sorry but Im in no position to engage in a discussion on any kind of economic theorymy head is too dense for all that!
A couple of points for you to consider:
One, I am no Economist and neither for that matter, a Biologist.
I am primarily from a background of the Artsmusic, literature etc.
What I also do is analyse the markets/charts, and make a living off it.
In this thread I try to look at symmetry and a resonance that exists across various streams of disciplines and theories.
With some application of abstract and even tangential thinking, it is possible to make diverse theories converge.
It may often appear fictional, but that is not my concern as Art may also be seen as fictional.
But in truth, Art does resemble reality, albeit perceived from wacky perspectives. In this manner, this thread also is a bit of an outlet for my abstract ramblings. Those who have followed it in the past will understand what Im saying.
Im sorry but Im in no position to engage in a discussion on any kind of economic theorymy head is too dense for all that!
Separate But Equal:
Some more random thoughts.
Before anything else, I must atone for an unpardonable default I have committed.
So, belatedly, here it is now:
Salutations, Barack Obama, for being elected President of the US of A.
Allow me to highlight this for you from Martin Luther Kings I Have a Dream speech:
When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the "unalienable Rights" of "Life, Liberty and the pursuit of Happiness." It is obvious today that America has defaulted on this promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked "insufficient funds."
Now that check has finally been cashed by you.
And therein lies the greatness of the country you shall lead.
Sir, not just there, you are, in this glorious twist in time, also an adored leader to much of the word, where too live most of the oppressed, demorolised, brutalised, subjugated, tyrannised, suppressed, exploited, broken, powerless and crushed people of the earth.
May gods Angels guide your hand always as you go forth cleaning the messy aftermath of an unbridled and raging orgy of bigotry, fear mongering, smear mongering, war mongering, jingoism and greed and gluttony that lay your Big Apple rotten to its core. And beyond your Wall Street, there are many Main Streets across the world that lie devastated too.
In this hour I offer you a poem written by a friend, or rather a prayer perhaps:
If a past is grey and circumstances
seem black,
A future can still be distilled of white,
If the being fills with light.
Godspeed!
Now on Separate But Equal, a little.
Following the American Civil War, most legal slavery in the US was abolished.
What took its place was equally shameful.
Blacks were permitted the same public services such as schools, bathrooms, and water fountains, but the 'Separate But Equal' doctrine mandated different facilities for the two groups.
When they turned to the courts to seek protection for their constitutional rights, the courts challenged earlier civil rights legislation and handed down a series of decisions that permitted states to segregate People of Colour.
Very early on, in 1896, in one of the most shameful decisions ever issued by the United States Supreme Court, Homer Plessy, a part Black, lost his bid to be treated equally with white Americans.
In June of 1892, Homer Plessy bought a train ticket from New Orleans to Covington, Louisiana. Blacks were required to sit in a black-only coach. He refused to do that and sat in the whites-only coach. He was arrested, convicted and thrown into the New Orleans jail. Plessy and his advocates appealed to the United States Supreme Court. His suit was to prevent the trial judge in New Orleans where Plessy was found guilty, from carrying out Plessy's sentence - a $25 fine or 20 days in jail.
The Supreme Court of the United States determined that if legislation makes distinctions based on race, but does not deprive anyone of rights or privileges, it is constitutional. The Court seemed to believe that the practice of separation was an inconvenience, but not something that reduced the rights of African Americans. The Court also presumed that legislation was powerless to do away with racial instincts or to abolish distinctions based on physical differences. Segregation, the Court said, was not discrimination. Shockingly, the Supreme Court's opinion endorsed the idea of Separate But Equal.
Although not specifically written in the decision, Plessy set the precedent that separate facilities for blacks and whites were constitutional as long as they were equal. The Separate But Equal doctrine was quickly extended to cover many areas of public life, such as restaurants, theaters, restrooms, and public schools.
Blessed by the Supreme Court, for nearly sixty years America practiced legal segregation in some form or the other.
In 1954, in a case famously known as Brown v. Board of Education, the constitutional viability of the Separate But Equal doctrine was challenged yet again in the Supreme Court, and the court this time voted unanimously to overturn sixty years of inhumanity. Several other cases were fought and won ending all race based discrimination.
Oh but yet again, why all this talk of Separate But Equal?
First lets try and deal with that Separate part of the equation.
Lets for a moment recall the spirit of Mutualism in the Shark and Remora tale a few posts above, where the Shark engages in a survival struggle, and the Remora of the world scamper to assist. Like swim or sink together.
But what if the Remora want to break free, to go towards individual resilience, to demand and assert independent existence.
Why, that would lend a most splendid and noble interpretation to that despicable doctrine of segregation.
We are talking Decoupling here.
I not going to, nor am I equipped to get into crunching economic data of the world, but there is enough written that argues the possibility that the mutual and independent dynamics of emerging economies are well placed to cushion the blow of the recession emanating from the US. Ive got a few points I have come across and liked:
The popular argument is that economies and business would become more synchronised because in a globalised world everyone is in the same boat. It appears this notion rests on the assumption that poor countries mainly export to rich ones. But emerging economies' trade with each other has risen faster and now accounts for over half of their total exports. Emerging markets as a group now export more to China than to the US.
Another reason why globalisation and decoupling can co-exist is that opening up economies has not only boosted poor countries' trade, it has also spurred their productivity growth and hence domestic incomes and spending. In 2007 emerging economies' real domestic demand grew by an average of 8%, almost four times as fast as in the developed world.
In many emerging markets domestic consumption and investment quickened during 2007. Their consumer spending rose almost three times as fast as in the developed world. Investment seems to be holding up even better. Capital spending rose by a staggering 17% in emerging economies last year, compared with only 1.2% in rich economies.
Decoupling does not mean that the US recession will have no impact on developing countries. But the point is that their GDP-growth rates will slow by much less than in previous US downturns. Most enjoyed strong growth during the fourth quarter of last year, and some speeded up, even as the US economy ground to a virtual halt and its non-oil imports fell steeply.
Thats all Ill get into, for a point of view.
Where and how Barack Obama will steer the US economy is to be seen, but change is certainly on the way. What is striking, as we have seen during his campaign is his utter conviction in his economic policy, a more sensible and compassionate one than his opponents.
And what took the worlds imagination is the fearlessness with which he, an African American, engaged a largely white and traditionally conservative electorate as an Equal, and was not merely voted in, but exuberantly welcomed.
In the midst of the gloom and doom there, it seems in the last quarter, bits of US businesses have risen above their own economy. Possibly then, a lot of the world economy can rise above theirs.
It would need a lot of conviction, resilience and fearlessness.
And so, we too can talk Separate But Equal cant we.
As Obama would say:
Yes, we can.
Some more random thoughts.
Before anything else, I must atone for an unpardonable default I have committed.
So, belatedly, here it is now:
Salutations, Barack Obama, for being elected President of the US of A.
Allow me to highlight this for you from Martin Luther Kings I Have a Dream speech:
When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the "unalienable Rights" of "Life, Liberty and the pursuit of Happiness." It is obvious today that America has defaulted on this promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked "insufficient funds."
Now that check has finally been cashed by you.
And therein lies the greatness of the country you shall lead.
Sir, not just there, you are, in this glorious twist in time, also an adored leader to much of the word, where too live most of the oppressed, demorolised, brutalised, subjugated, tyrannised, suppressed, exploited, broken, powerless and crushed people of the earth.
May gods Angels guide your hand always as you go forth cleaning the messy aftermath of an unbridled and raging orgy of bigotry, fear mongering, smear mongering, war mongering, jingoism and greed and gluttony that lay your Big Apple rotten to its core. And beyond your Wall Street, there are many Main Streets across the world that lie devastated too.
In this hour I offer you a poem written by a friend, or rather a prayer perhaps:
If a past is grey and circumstances
seem black,
A future can still be distilled of white,
If the being fills with light.
Godspeed!
Now on Separate But Equal, a little.
Following the American Civil War, most legal slavery in the US was abolished.
What took its place was equally shameful.
Blacks were permitted the same public services such as schools, bathrooms, and water fountains, but the 'Separate But Equal' doctrine mandated different facilities for the two groups.
When they turned to the courts to seek protection for their constitutional rights, the courts challenged earlier civil rights legislation and handed down a series of decisions that permitted states to segregate People of Colour.
Very early on, in 1896, in one of the most shameful decisions ever issued by the United States Supreme Court, Homer Plessy, a part Black, lost his bid to be treated equally with white Americans.
In June of 1892, Homer Plessy bought a train ticket from New Orleans to Covington, Louisiana. Blacks were required to sit in a black-only coach. He refused to do that and sat in the whites-only coach. He was arrested, convicted and thrown into the New Orleans jail. Plessy and his advocates appealed to the United States Supreme Court. His suit was to prevent the trial judge in New Orleans where Plessy was found guilty, from carrying out Plessy's sentence - a $25 fine or 20 days in jail.
The Supreme Court of the United States determined that if legislation makes distinctions based on race, but does not deprive anyone of rights or privileges, it is constitutional. The Court seemed to believe that the practice of separation was an inconvenience, but not something that reduced the rights of African Americans. The Court also presumed that legislation was powerless to do away with racial instincts or to abolish distinctions based on physical differences. Segregation, the Court said, was not discrimination. Shockingly, the Supreme Court's opinion endorsed the idea of Separate But Equal.
Although not specifically written in the decision, Plessy set the precedent that separate facilities for blacks and whites were constitutional as long as they were equal. The Separate But Equal doctrine was quickly extended to cover many areas of public life, such as restaurants, theaters, restrooms, and public schools.
Blessed by the Supreme Court, for nearly sixty years America practiced legal segregation in some form or the other.
In 1954, in a case famously known as Brown v. Board of Education, the constitutional viability of the Separate But Equal doctrine was challenged yet again in the Supreme Court, and the court this time voted unanimously to overturn sixty years of inhumanity. Several other cases were fought and won ending all race based discrimination.
Oh but yet again, why all this talk of Separate But Equal?
First lets try and deal with that Separate part of the equation.
Lets for a moment recall the spirit of Mutualism in the Shark and Remora tale a few posts above, where the Shark engages in a survival struggle, and the Remora of the world scamper to assist. Like swim or sink together.
But what if the Remora want to break free, to go towards individual resilience, to demand and assert independent existence.
Why, that would lend a most splendid and noble interpretation to that despicable doctrine of segregation.
We are talking Decoupling here.
I not going to, nor am I equipped to get into crunching economic data of the world, but there is enough written that argues the possibility that the mutual and independent dynamics of emerging economies are well placed to cushion the blow of the recession emanating from the US. Ive got a few points I have come across and liked:
The popular argument is that economies and business would become more synchronised because in a globalised world everyone is in the same boat. It appears this notion rests on the assumption that poor countries mainly export to rich ones. But emerging economies' trade with each other has risen faster and now accounts for over half of their total exports. Emerging markets as a group now export more to China than to the US.
Another reason why globalisation and decoupling can co-exist is that opening up economies has not only boosted poor countries' trade, it has also spurred their productivity growth and hence domestic incomes and spending. In 2007 emerging economies' real domestic demand grew by an average of 8%, almost four times as fast as in the developed world.
In many emerging markets domestic consumption and investment quickened during 2007. Their consumer spending rose almost three times as fast as in the developed world. Investment seems to be holding up even better. Capital spending rose by a staggering 17% in emerging economies last year, compared with only 1.2% in rich economies.
Decoupling does not mean that the US recession will have no impact on developing countries. But the point is that their GDP-growth rates will slow by much less than in previous US downturns. Most enjoyed strong growth during the fourth quarter of last year, and some speeded up, even as the US economy ground to a virtual halt and its non-oil imports fell steeply.
Thats all Ill get into, for a point of view.
Where and how Barack Obama will steer the US economy is to be seen, but change is certainly on the way. What is striking, as we have seen during his campaign is his utter conviction in his economic policy, a more sensible and compassionate one than his opponents.
And what took the worlds imagination is the fearlessness with which he, an African American, engaged a largely white and traditionally conservative electorate as an Equal, and was not merely voted in, but exuberantly welcomed.
In the midst of the gloom and doom there, it seems in the last quarter, bits of US businesses have risen above their own economy. Possibly then, a lot of the world economy can rise above theirs.
It would need a lot of conviction, resilience and fearlessness.
And so, we too can talk Separate But Equal cant we.
As Obama would say:
Yes, we can.
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