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What will happen as a result of the Turkish Lira crisis?

Giancarlo Elia Valori

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As often happens in these cases, the financial structure of the current Turkish crisis was quite simple initially: as is always the case during an electoral period, credit to businesses and families was “pumped” to such a point that, before the outbreak of the crisis, the Turkish inflation rate had already reached 16%.

Again during the campaign for the general election of June 24 last, President RecepTayyp Erdogan promised strong investment in infrastructure.

It is the usual, old theory of Napoleon III, quand le bâtimentva, tout va – but currently investment in infrastructure has a relatively low multiplier (1.9 on average) and is increasingly capital intensive rather than labour intensive.

Furthermore, the return on investment over time and the future average return, if any, become technically unpredictable.

Certainly the modern economic theory tells us that also higher infrastructure costs lead to net increases in sectors which are not directly dependent on infrastructure – such as the classic examples of the ferry cost and the restaurant owner’s profit on an island. Nevertheless the money borrowed for these operations is little or is such as to create short and relevant returns -and this can never happen.

President Erdogan’s electoral promises, however, were inevitable: according to the latest internal polls before June 24, 60% of the people who traditionally voted for AKP (Adaletve Kalkınma Partisi, the Justice and Development Party) were already loyal and stable, above all vis-à-vis the Party’s Leader. However, 30-40% of the old AKP voters were dissatisfied, to the point of calling their vote for President Erdogan into question, and 10-15% were fed up with the AKP and its Leader.

It would be the end if, God forbid, the United States sought President Erdogan’s economic destabilization to punish “the tyrant” – ideological nonsense in which it only believes – or if the European Union thought to destroy the “fascist” Erdogan to free the Turkish people, thus destabilizing a ‘huge and essential area for the European security. The uncontrolled migration would turn into an invasion and the direct contact between the EU strategic nothingness and the Middle East jihad would become lethal, but only for Europe.

During the campaign for the general elections of last June, President Erdogan had also promised public investment (and nowadays the globalized economy is such as not to allow to make promises on private investment, without funding State’s investment). He was faced with an unprecedented united front of the four opposition parties against the AKP, which did not augur well for the founder of the first Party in power.

Hence “international markets” need to become aware of it in time: without promises you can never win elections and without some electoral public spending there is no consensus. This holds true for both the West and the East. The Jordanian uprising of last spring is acase in point: nowadays springs are economic  and destabilize a larger area than the purely political ones of 2011.

“Communication”, manipulative spin, and taking some extra erotic “liberties” are no longer enough to win elections – as still happens, but not for much longer, in some Western countries.

People want and will always want employment, security, infrastructure, wages and pensions, and above all stability.

The problem, which also applies to Italy, is that the current capital is post-national and pays taxes nowhere, while the average incomes have been falling for eleven years and cannot be further attacked by tax authorities.

Hence, since we cannot generate inflation – considering that the “markets” are only interested in it – we do no longer understand where we should find the resources, even limited, to give the masses what they have always asked from politicians since the times of Marcus Agrippa.

Hence there is also the Turkish leader’s electoral reference to the figure of Atatürk – that is strange even within a traditionally neo-Ottoman and Sunni project and narrative like the ones of  President Erdogan’s Party – which would have been impossible years before. During the electoral campaign, President Erdogan also underlined the further Turkish engagement in Syria, another clearly nationalistic and even secular factor that no one would find in President Erdogan’s initial storytelling. Finally he also referred to the Turkish ties with the European Union.

Clearly the European Union currently becomes the natural strategic and economic counterpart, faced with the crisis with the United States, an old tension due to the presence of Fethüllah Gülen in the USA.

Gülen is a Turkish preacher and political scientist, allied with Erdogan until 2013, but since 1999 he has been living in the forests of Pennsylvania.

With his movement, namely Hizmit (“Service”), Fethullah Gülenis supposed to be the figure who traditionally inspired the strong penetration of the Turkish AKP bureaucracies’ into the intelligence services and Armed Forces, in particular, as well as the Turkish coup of July 15, 2016.

Probably, the United States has always looked to the Western political scientist and sapiential preacher it hosts as a sort of threat to Turkey, a sword of Damocles enabling America to prompt an “Arab spring” in Turkey or even a “colour revolution” where needed.

Islamic esoteric sects, sapiential and secret networks, halfway between coup and Revelation, often connected with the most refined Western culture and politics, as well as relations between politics, intelligence and esotericism.

Nil sub sole novi: when Italy still counted for something, even the Grand Orient of Italy was the only cover chosen by the “Young Turks”, who organized their political and military action within the ranks of the Italian Lodges of Alexandria of Egypt, Istanbul and Thessaloniki.

However, let us revert to the economy: in spite of everything, the debt-GDP ratio – the obsession of the poor-quality economists so fashionable today – is very low in Turkey (a mere 28%).

However, Turkey currently records a high trade deficit of current accounts, which amounts to 6%. Hence the private debt has risen to over 50% of GDP, thus obviously putting the currency in difficulties.

In early July, all foreign investors expected a sharp rise in the Turkish Lira interest rates- and it was a “rational expectation”.

But obviously Erdogan, who is above all a politician, a leader who, like everyone else, seeks re-election – as the political scientists of the Rational Choice school of thought maintain  – blocked the interest rates downwards, with a view to avoiding impacts on domestic consumption and on the cost of loans.

Apart from Erdogan’s direct and institutional-family influence on the Turkish Central Bank, the idea is that the interest rate growth is generated by high inflation – as maintained by the neoclassical economic theories currently fashionable everywhere. And if the opposite were true? Here the arrow of time is of great importance.

The impact was predictably negative: inflation rose very rapidly, considering that many goods and services came from abroad. Investors got scared and only at that juncture  President Trump’s new duties materialized, just to top it all off.

Furthermore, Turkish companies have always been asking for money, especially abroad, to be considered reliable, given that – like all the recent dangerous economic success stories – the AKP-led Turkey has configured itself as an almost exclusively export-oriented country.

Einaudi’s economic wisdom would recommend a balance between the internal market and the external market dimension. Today, however, everyone superficially read the fashionable manuals, where equations seem to be written for theoretical cases, not for real economies.

Apart from President Trump’s duties, which kill a dead man– as we will see later on – the critical structure of the Turkish economy is made up of the following issues, which are all still on the table: a) the free fall of the Turkish Lira, the primary index of foreign investors’ sentiment; the Turkish currency that fell for twelve days in a row as against the dollar; the longest “fall” of the Turkish lira since 1999, the year when Gülen took refuge in the United States and the International Monetary Fund had to intervene with a bailout in dollars.

Considering that Turkey lives on many strong currency imports as against an export-regulated economy, which must be based on a weak currency to have the size necessary for reaching equilibrium and break even. Hence always keeping the Turkish currency artificially “weak”, a Weimarian inflation rapidly emerged.

  1. b) The financial burdens which, as always happens in these cases, have risen more than inflation, because investors are asking for a guarantee both to offset inflation and to be hedged against the collapse of the currency.
  2. c) As to the current accounts – another structural problem – it is still obvious that, under these conditions, Turkey must attract capital from abroad with very high rates of return – only to balance the economy and break even.

This triggers an imbalance that is resolved as in the case of a drug addict: much foreign capital marginally ever harder to repay, even only for the interest share.

Later, as in a well-known Dürer’s print, the scourge of the greater incidence of foreign debt materializes, just when buying  “good” currency only with the Turkish Lira has a higher cost. Other scourges materialize such as the growth of non-performing loans and the complete Turkish dependence on foreign oil and gas, which are sold in dollars and, incidentally, are increasing their unit price.

As already seen, apart from the current situation, the structure of the Turkish economy is strictly export-oriented, with domestic imports that depend directly on the oil and natural gas prices.

The steadily increasing prices of oil and natural gas rapidly led to a Turkish trade balance deficit equal to 57 billion US dollars in the period between March 2017 and March 2018.

There is virtually no propensity for domestic savings (whereas the high rate of domestic savings is exactly what is rescuing and will rescue Italy) and therefore the Turkish dependence on foreign loans has become chronic. This dependence feeds on the low value of the Turkish lira, which is however the main problem when debt must be repaid.

The foreign debt incurred in 2018 already amounts to 240 billion US dollars.

Obviously, under these conditions, the Turkish companies operating abroad do not repatriate their profits, which remain in the most profitable markets, while the solvency of Turkish banks is exacerbating.

Finally, however, the Turkish Central Bank reacted according to the too little too late classic rule, when the lira reached 4.9290 as against the dollar, thus restricting – only at that juncture – the monetary base and finally increasing interest rates.

Hence who is bearing the brunt of the crisis in Turkey? All the many people who have taken on debts in dollars or euros, but workers are certainly not better off.

Indirect taxation on employees’ incomes now accounts for 65% of their total salaries. Obviously unemployment (and hence the “cost of the politics”) increases and finally Turkish exports will also be devalued for a period covering at least the difference between the pre-crisis levels and those of the point in which markets will declare that the great Turkish inflation is over – inflation they have triggered off by taking advantage of Turkey’s mistakes.

Inflation resulting from the forced repayment of foreign debt, which was politically excessive. A precisely Weimarian structure.

The so-called Vision 2023, which Erdogan had made public in 2011, the year of the “Arab Springs”, will be probably put to an end.

Is it possible that after the stalemate in the Syrian crisis now won by Assad and Putin, the era of “Arab springs” has come, induced by the economic crisis rather than by the “democratic rebellions”, usually managed by the Muslim Brotherhood or by some fundamentalist group, with the agreement of the major Western democracies?

The Turkish crisis as if it were a sort of Egyptian, but only financial Tahrir Square, is a hypothesis not to be ruled out.

According to Erdogan’ statements, Vision 2023 aimed at a strong growth of average incomes and at an average per capita GDP of at least 25,000 US dollars, thus enabling Turkey to rank 10th in the world economy, to triple exports up to 500 billion dollars and create ten “global” Turkish brands (a good idea, which would apply also to Italy). Finally, the idea was to solve the long-standing issue of EU membership.

The Association Agreement between the EU and Turkey was signed in 1964.

The Final Stage of said agreement concerned a complete customs agreement between Turkey and the European Union. Later, in 1999, the “pre-accession policy” came, which imposed, inter alia, the constitutional change of relations between the Armed Forces and the political system, thus ensuring the rapid Islamization of the country. Was it a blind or silly strategy? We do not know the answer to this question.

In 2004 the EU still urged to open negotiations with Turkey – negotiations which are still underway. In 2016, a few days before the coup of July 15, there was a Declaration which “reaffirmed the commitment to implement the action plan as defined on November 29, 2015”, while the Parties agreed that the accession process should be “revitalized”.

Just lip service, as the opponents of the Soviet regime used to say, when they read the CPSU’s official statements.

Reverting to the economy, even the now unlikely Turkish plan for 2023 becomes possible only if a strong and long growth is recorded, or if we seriously increase – first and foremost – domestic savings. Investment and not consumption induced by strong currency regions must be generated, while the dependence of the Turkish lira on foreign capital must be reduced.

The shift between the dollar and the euro would be possible in Turkey, considering that now 70% of Foreign Direct Investment in the country comes from the EU, which is also a sort of legal, sociological and humanitarian minuet.

This will be possible if the Turkish economy is partially dedollarized and investment comes from areas such as the EU, in particular, as well as from the Russian Federation and its friends of the  Shanghai Cooperation Organization (SCO), and hence from China.

However, for the NATO’s second Armed Force, this means a radical change of strategic planning.

For China, Turkey should stop supporting the Turkmen jihadists of Xinjiang – something which, however, it is doing ever less. It should also seriously favour Russian operations in Syria, with the guarantee of the territorial non-continuity of the future Kurdish Rojava between Northern Syria and the Anatolian territory – but currently the Kurds fight together with the Syrians in Idlib. Finally, for the future Turkey, it should buy oil and natural gas in roubles and renminbi from China and Russia, with “branded” investment to enter the Central Asian and Far East markets.

A clear link between economic reconstruction and strategic repositioning, a new vision of the Atlantic Pact to the East, which would find itself bare vis-à-vis the Persian Gulf and deprived of areas enabling it to control the Russian Federation to the South.

A fundamental defeat of NATO, faced with the increase of US duties for Turkish goods. Pure madness.

Currently, however, Erdogan has also other certainties. He knows that we need to rely ever less on the Sunni Arab world (even if Vision 2023 seems to be almost similar to the one – bearing almost the same name – drafted by the Saudi Prince, Mohammad bin Salman), considering that Saudi Arabia has other things to think about and is already welcome in the world of high public debt held by foreign investors.

Erdogan is still convinced that Russia remains an unreliable and – in any case, considering the size of its economy – unable to support Turkey, which is floundering in a crisis. He is also convinced that China has other strategic priorities in the Mediterranean and that Africa, where Erdogan invested significantly, is still a tiny market.

There would also be the EU 18th-century-style minuet, but we do not see a way out between a declaration of intent and the other.

Hence is this game worth the risk of President Trump’s increase in duties?

Let us analyse the situation. Pending the Turkish lira crisis, President Trump stated that the US import duties on the Turkish steel would increase by 50% and those on aluminium by 20%.

There is also the usual issue of Gülen in the tension between the USA and Turkey, as well as the new tension regarding the detention in Ankara of a North American Protestant pastor, Andrew Branson, accused by the Turkish Police and intelligence services of espionage in favour of the Kurds.

Considering the US intelligence services’ long tradition of use of their religious sects, this charge may be plausible.

Besides President Trump’s unpredictable tariff geoeconomics, there is also the FED’s action.

Since the 2008 Lehman crisis, the Federal Reserve has been buying and stabilizing with derivatives the sovereign and major banks’ bonds and securities issued or deposited in a phase on the verge of bankruptcy.

In 2017, however, the FED decided to “normalize” the budgets, thus leaving to the markets the already acquired securities of sovereign or non-sovereign entities, still in danger but stabilized and hence having a higher price. It sells them at a low price, but it earns more.

The FED’s portfolio of such bonds and securities is supposed to decrease by 315 billion US dollars in 2018 and by additional 437 billion US dollars in 2019.

A mass of paper that will revive short-term investment and markets’ “hit-and-run” transactions and operations.

Hence there are obvious effects prolonging the general crisis and the high absorption of capital by entities such as FED – capital that could instead be used for the economic recovery of the current peripheral areas of the world market.

What about the effects on the euro? There will be many effects, considering the presence of European economies in Turkey.

Hence a strong and stable pressure of the dollar on the euro cannot be ruled out, which will have geopolitical effects that are easy to predict.

The time needed to recover from the Turkish crisis will be measured as against the time needed for the Turkish domestic savings to recover and on the basis of the possible shift of the Turkish debt between the US currency and the currency of the EU, which is only partially a payer of last resort.

When Turkey has more money, there will be another inflationary squeeze caused by the leaders’ often inevitable political choices. And the carousel will start again.

A ride that is structurally ready, especially for the EU Southern economies.

Germany’s position on the Turkish crisis, which is fully strategic and obsessed with the migration issue, makes us lean towards this equation.

Germany will help Turkey, but with a view to opposing the USA (which will soon attack the German trade surplus with the “markets”) and, in any case, by severely restricting the Turkish exporting area, which shall anyway adapt to the German “value chains”.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Economy

How War lead to the advent of Market Economy

Gulraiz Iqbal

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Evident throughout history is the belief that the bipolar divide of social reality has been between government and markets especially governments that wage war. Social reality is termed here in a sense to give an idea that how people place themselves in this context to either of the poles. That is to say that their political choice dictates their economic choices. Interestingly enough, the bipolar divide in its popular sense appears to be questionable. In fact, markets have appeared as a consequence of military adventurism led my governments.

David Graeber, an economic anthropologist at the London of School of Economics and Political Science aptly explores this historical anecdote in his book Debt: The First 5000 Years.In his account where he refers to the Axial age(600 to 800 B.C), a term coined by a German philosopher Karl Jaspers is a time period in which apparently all the major philosophical/religious movements came to the fore. What is most interesting is that it was the same period in which coinage was born. To keep things simple coinage was characterized by a set pattern of coins/currency being developed by local citizens and subsequently taken over by the government. This pattern followed in all the major regions such as Greece, China, and India. However, one thing of particular significance to this inquiry is that the first ever coins to be produced were in the Kingdom of Lydia which is the present-day Turkey.

Graeber argues that the Gold, Silver, and Bronze from which coins were made was initially only limited to the Kings and the nobility. That however started to change in an intriguing manner. Such precious valuables started circulating among the common masses which was how these coins were made. Here Graeber refers to David Schapsa professor of Classics: according to him, it was a period which he calls the ‘’generalized warfare’’. It is then of common sense to understand that in the aftermath and in the duration of war, loot and plunder is a consequential hazard. In such a circumstance it became inevitable that people were left with large amounts of precious metals. It is in this sense that Schaps argues:

‘’It may well have been the protracted wars among the states of these areas that first produced a large population of people with precious metal in their possession and a need for everyday necessities.’’

It is important to note here that at this point of time financial markets had virtually no relevance. It was only taken as war bounty initially but what’s fascinating to note is that it is in this very sense of material fulfillment that gave people both the want to diversify their economic life and as well the need to fullfil their basic necessities. Furthermore, in the context in which is discussed; war led to plunder and plunder led to the market trade based on exchange of valuable metals. Before dwelling deep into it, one should bear in mind that these metals and stones were not wholly looted for the fact of being simply precious but it had an added factor of being portable as well. As armies would mobilize according to situational needs, so their plunder would include such items which they can carry with them as well. Coming back to the central argument, Schaps further argues that:

 The constant warfare of the archaic age of Greece, of the Janapadas of India, of the Warring States of China, was a powerful impetus for the development of market trade, and in particular for market trade based on the exchange of precious metal, usually in small amounts. If plunder brought precious metal into the hands of the soldiers, the market will have spread it through population.’’(Pg 226)

As mentioned earlier the term ‘’generalized warfare’’ which engulfed the major empires did something which had no historical precedent; that is to say, it laid the foundations of a market economy. This might not be as straight forward as it may sound. The very fact that governments, the kings had the monopoly over national wealth and also the fact that the war was not a new phenomenon known to humankind and so the subsequent loot that would take place, the essential dissimilarity of the Axial age from the past was that during the times when coinage was born, the Greeks were improvising their war mechanics and sophisticating it.

This led to the demand of their troops world-wide and as obvious as it is, essentially a service of such sort demanded reward as well. Therefore, it is necessary to understand that these mercenaries were paid in diminutive value of what consisted as large-scale valuables. This leads to another factor explained above which is ‘’portability’’ of these items or to use an appropriate word, ‘’renumeration.’’ Any other form of exchange or barter would made it plausibly impossible for these mercenaries to carry them.

Governments had vested interests to monopolize this changing reality. On the one hand, due to the capacity it had, governments were responsible for distributing the newly formed currency/coins to the masses and on the other hand, due to this very fact it could regulate the flow of this currency internally by giving it an official value. This provided an eminent premise to create markets with the authorization of government subsiding all the other currencies which might have existed in one form of the other. Usage of coins as renumeration is believed to be a practice which started in the Kingdom of Lydia. Exploring the politically important regions of that time, Graeber concludes that as a practice of the day it was largely coinage which proved to be a solution to the prevailing debt crisis which happened to exist way before the coinage. Athens in this regard is an example of it where a crisis of such sort prevailed in 594 B.C. Any solution to curb the crisis would entail either being in servitude to landed elites or being a part of free- peasantry which would liberate the populace of debt servicing so that so their children would spend time training for the army. All the major economic activity of the time was centered around the distribution of looted goods in war and conflicts which has been repeatedly mentioned to be precious metals and stones. In Athens, it was not only limited to the distribution among the army but also the common masses.

A catalyst to this chain reaction was the phenomenon of slavery as well. With reference to Alexander’s army, Graeber describes that he had a long-standing army of more than 120,000 men which needed to be paid and since his attack on Persia resulted in large number war captive slaves. He directed them to mining fields in order to mine more gold and silver. Resultantly causing to formulate the ‘’military-coinage-slavery complex. ’’However, slavery is not of particular relevance to this inquiry but it did play a vital role in shaping the politico-economic landscape of that time. Exploring further, Graeber discovers the pattern to be similar in India as well. Divided in different forms of governments in terms of regions, the kingdoms here too held huge armies which were on the payroll of governing authorities. Simply put, those having control of the mines were able to sustain armies of large magnitude which would result in a more powerful assault on the enemy in case of war and the resultant cycle of subsequent war bounty. Eventually, the concept of the economic thought evolved. What is understood in modern terms as the public and the private sector find its ancestral roots in Axial Age. Governments reinstated officials on a fixed salary. The institutionalization took place in terms of establishing its monopoly of power and control. What started off as a consequence of war was extended to the entire governance system to establish economic monetization. The cycle of economic activity was established by having trading houses, warehouses etc. The aim was to put back into the treasuries the metals, stones and silver. This was the basis of economic commercialization.

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Pandemic Recovery: Follow the trail of silence

Naseem Javed

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When common sense becomes the enemy of state; deep silence slowly slips and slides, covering high and low competence in order to survive; gagging new ideas and killing change.  Discover hidden peaks of such fears, lack of skills and incompetency and follow the trail of silence and here to achieve a faster pandemic recovery engage in open discussions eliminating fears of change and encourage upskilling. Wake up the sleepy isolated Rip Van Winkle from the dreams as the world has already changed.

Now is post pandemic recovery time. Follow the silence and engage in constructive dialogue.

Trapped in post-pandemic paralysis of local economy facing restless citizenry; today, some 200 nations mostly in critical lack of digital transformation, without speed and efficiency to uplift the nation, all delayed for fears of change and lingering incompetency, already leaving some 100 high potential nation critically behind.

Digitization of Public and Private Bureaucracies of the world became critical necessity decade ago, almost free many years ago, but the deep silence never allowed any open bold debates on transformation for fear exposure of mismanagement risking job securities.

Today, stripped naked in public are broken economies of the world, buried under mountains of crumpled twisted paper, trying to figure out backlogs and deep losses. Nations without digitization will remain crumbled economies, businesses without digitization will not survive and individual office workers without advanced understanding on such topics may have no future. Any business model irrespective size, type, location to go forward must base on solid digitization to bounce of global stage.

When people stepped out of caves or from darkness into light, a time came when without electricity a business could not function.  Digital transformations of world economies during the last decade were at a snail pace. Now Covid-19 simply stepped on that snail. Calling nations to digitize or linger on bankruptcies. Institutions lagging behind, like Chambers and Trade Associations in old models and Public Private Sectors of the world all now openly challenged.

Pandemic recovery needs massive real value creation, calls for revitalized national SME base, digitized on global standards, capable and upskilled citizenry to produce quality, performance and profitability. Ability to dance on global digital platforms and showcase talents creating collaborative synthesizim.  Today, any absence of national mobilization of entrepreneurialism and upskilling of national SME on digital platforms for exportability is becoming number one national economic and political issue.

Trade wars mostly become issues when nations lack skilled citizenry with speed to earn exportability and create foreign exchange to boost economy and create grassroots prosperity….hence, chaos on the streets, towers of debts, broken economies. Today, the global masses are not waiting for The Fourth Industrial Revolution as what they need is ‘mental-industrialization’ a serious process of self-discovery gymnastics to liberate them from blockades of old mental-divides and enter into new digital-divides.

Daily Briefing 365 Days: Cold Facts and Harsh Realties

The world learned quickly, how national leadership could shine with daily LIVE briefings, regimented execution and presence with all hands on deck to tackle issues of national importance. The populace of the world is thrilled. Following are the current critical issues of national economy, craving for the national leadership to go LIVE daily and hold open and bold discussions with questions answers and shine. Make daily briefing a yearlong agenda to fast economic recovery.

The tectonic shifts, affecting nation by nation

Hastily, societies all over the world are losing addiction to endless consumption like repulsion; such shifts on buying behaviors will alter consumption based economic models and create new narratives. This may shrink Retail 50% in developed economies. Offices may shrink by 50% due to remote-work acceptance. Downtowns may shrink 50% in selected countries. The ‘cement-structure based retail’ as predicted decade ago will eventually give-in to ‘cyber-structured-retail’ now fully dressed up in cyber-windows with AI+AR+VR 24x7x365 a new thinking emerging.

What are the new game plans; how to bring all such calamities to calm and authoritative regional and global debates and Round-table discussions to achieve sustainable systematic solutions?

The global educational delivery system crashed decades ago; the value of education lost years ago, with heavy burden on society in times of crisis must try to save itself under new models, pricing and thinking. Now speed and execution skills with complex problem solving with entrepreneurial leadership flares are the top skill needed for future, national leaderships must create daily briefing on such special areas to uplift the smartness of working citizenry.

Where is the national umbrella to park all these conflicting ideas but open discussions with new discoveries?

The small and medium size business will play the most significant role on coming years. The national trade groups like vertical trade associations and Chambers of commerce of the world will all need new adjustments to deal with new and digitally advanced entrepreneurial centric world. Some 100,000-trade associations and 11,000 Chambers must come together on digital platforms to lead in the future.

How mobilization of all such institutions and trade bodies land on digital platforms with amazing results?

Metamorphosis of Coronavirus; hidden in the damage is a bright future, the isolation and break down of economies have shifted the cause and action;  The global populace has now advanced, metamorphism has new craving; as if a caterpillar pretending asleep but in reality learning fast to fly; now leaves chrysalis, spread colorful wings and fly…

Next Step:

Firstly, speak, boldly explore and claim your path to victory and change; create big and small discussions, internal or companywide podcasts, local, national or global webcasts, but always bold and open discussions. After all, any lingering incompetency is only a proof of new grounds in big need of fertilization to uplift and upgrade knowledge. Lack of skills only represents that the discovery and exploration process of new skills never occurred. The world’s greatest people were all lifelong learners. They openly explored their own levels of competency, changed and advanced. The more you realize how little you know the more new doors you open to new ideas with amazing new information uplifting skills to advance your future, try it, share it. Follow the trail of silence and help achieve fastest economic recovery for all…

The rest is easy

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Economy

The COVID-19 Pandemic and the “Phoenix” of the Globalized Technological Capitalist System?

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In the midst of the COVID-19 pandemic, it is important to acknowledge that three prominent intellectual figures spanning the 19th and 20th centuries forecasted the cataclysm of modernity. Thomas Carlyle, René Guénon, and Jacques Ellul provided reasoned accounts to justify their views that modernity is engulfed in a state of crisis on the basis that the not-mutually-exclusive hegemonies of technology, capitalism, and globalization are not invulnerable.

While each offered a slightly different viewpoint and a slightly different description of what they took to be the crisis, their views all coalesce around the general thesis that the continuous expansion of the material and technological built landscapes will eventually prove to be catastrophic. This is for two reasons. The first, because an ever-more complex system becomes ripe for error, an error which could cause the whole system to go haywire. Essentially, “the bigger it is the harder it falls.” The second reason is that in constructing an external environment as its hegemonic priority, humanity is neglecting giving attention to spirituality, philosophy, and developing the human inward nature. The external and material becomes the fog that humanity becomes ensconced in to such an extent that pursuing such things as the ascertainment of spiritual reality through intuition, the project Plato inaugurated academia with and inspired Christianity and Islam’s later development with, becomes wrested away wholesale from the consciousness of humanity. The two factors work in a type of synergy in that they mutually reinforce one another and precipitate cataclysm. The renunciation of the pursuit of constructing an ever vaster and more complex material system, which ostensibly implies a turn toward the spiritual as a premise, is the only means to stave off ever-greater cataclysms as the material system continuously grows more complex and more globalized.

Since the Industrial Revolution of the 19th century, technology, capitalism, and globalization have exerted their unquestioned domination only increasingly—until COVID-19. Technology, capitalism, and globalization have been unquestioned to such an extent that in hindsight it is obvious, in the midst of the COVID-19 pandemic, that a global emergency of major proportions was necessary to even entertain the question that they were bound all along to eventually lead to a breakdown and inflict unprecedented harm to global health and the global economy. World War II was a destructive moment, but in no way did it impede the post-war expansions of technology, capitalism, and globalization in the latter-half of the 20th century and the first two decades of the 21st. The COVID-19 pandemic is dissimilar even to the catastrophe of World War II because of the magnitude and the nearly-universal geographic scope of the economic toll it has taken in such a short time. Moreover, while there was room for technology, globalization, and capitalism to both re-emerge and expand following World War II, their room for expansion from their forms immediately prior to the economic contraction COVID-19 exacted is likely to be minimal and is more likely to be non-existent or even negative. The contraction of the technological globalized capitalist system would inherently imply the beginning of a new post-globalization era.

What makes Carlyle, Guénon, and Ellul interesting to entertain in the midst of the COVID-19 pandemic is the grand, global, and “esoteric” natures of their philosophies of modern history. It should be noted that the dominance of scientific rationality, mechanization, and materialist economy in the modern era itself was the lens through which enabled their philosophies to bereceived as radical and “esoteric,” or not based on empirical, positivist, scientific evidence. If their views had found a way to usurp the hegemonic position in the popular collective consciousness, they would not have been seen as radical or off-base.

Thomas Carlyle’s Sartor Resartus is an 1836 fiction book that essentially inaugurated and epitomized modern social criticism toward the blind commitment to the Enlightenment and the resulting emergence of the non-spiritual materialistic basis of 19th century European politics, economy, and society. It was a chief inspiration for Ralph Waldo Emerson and Henry David Thoreau and a foundational book for American Transcendentalism as an intellectual movement in general. In Sartor Resartus, Carlyle offers a cryptic diagnosis of the ailment of modernity during the midst of its advent, the Victorian industrial age.

Speaking through the voice of the book’s protagonist, Professor Diogenes Teufelsdröckh, Carlyle theorizes of a “phoenix” that can be forecasted to take place roughly sometime in the 21st century. Carlyle writes, “we are at this hour in a most critical condition; beleaguered by that boundless ‘Armament of Mechanisers’ and Unbelievers, threatening to strip us bare! ‘The World,’ says [Teufelsdröckh], ‘as it needs must, is under a process of devastation and waste, which, whether by silent assiduous corrosion, or open quicker combustion, as the case chances, will effectually enough annihilate the past Forms of Society; replace them with what it may.’” This is flowery language that communicates Carlyle’s view that the world is destined to be consumed and destroyed as a function of the domination of those who uninterruptedly pursue the “boundless” construction of the material economy single-mindedly as their highest/only priority in conjunction with those who are non-spiritual, the “Unbelievers.” The “Armament of Mechanisers” and “Unbelievers” are synergistic and largely synonymous in that they are those who acknowledge only that which is material and perceptible by their senses.

To Carlyle, the “Armament of Mechanisers” and “Unbelievers,” by promoting the material economy, are inherently ignoring the spiritual realm, a realm that would be a moderator and reign in all-consuming materialism by embodying the virtue of renunciation (a virtue in nearly every theological and spiritual tradition). Humanity loses consciousness of the spiritual because modernity inherently divests the world of its spirit. Such a process is unsustainable because the finite nature of the world and its finite resources cannot sustain the pursuit of infinite material consumption and the increasing chaos that inherently manifests with a system that grows ever more complex. Thus, the materialist economy is bound to come into its full being, just like the mythic phoenix, before returning to ash and emerging in a different form. Carlyle reflects, “what time the Phoenix Death-Birth itself will require depends on unseen contingencies” and that it is a “handsome bargain would she engage to have [it] done ‘within two centuries.’”

René Guénon, a 20th century intellectual and metaphysician, offered what is perhaps the most sweeping and all-encompassing critique of the historical trajectory of Western civilization. He is also noteworthy in the contemporary sense as an inspiration for Steve Bannon, a chief political and policy adviser to President Donald Trump and a prominent promoter of traditionalist conservatism through such channels as Breitbart News Network. For Guénon, the West is in precipitous decline and he forecasted that it will reach a breaking point since the world is progressively displacing the realization of the quality of what he called the “Essence” of the transcendental realm (i.e. what lies beyond time and space and is perceived through the use of Platonic/spiritual intuition) with the realization of ever-greater quantity of the substance of what is material on Earth. Essentially, the progressive development of civilization corresponds to a cheapening of it and what he refers to as a “reign of quantity” rather than a reign of the quality of what can be nominally cast as the timeless Platonic Forms. Rather than conceiving of an ideal (i.e. a Platonic Form) through the use of intuition and then pursuing its realization in the Earthly material realm, everything modern defaults to gravitating around what Guénon takes to be the lowest-common-denominator, which is the measurement of everything by its quantitative rather than qualitative value. In other words, we are losing our ability to grasp and realize by intuition the ideal incarnation of all objects, concepts, and phenomena that are timeless and unchanging in the transcendent realm yet ephemeral in the material Earthly realm.

In The Crisis of the Modern World, published in 1927 shortly after World War I’s explicit embodiment of the rejection of the narrative of continual progress in modernity, Guénon reflects: “the belief in a never-ending ‘progress’, which until recently was held as a sort of inviolable and indisputable dogma, is no longer so widespread; there are those who perceive, though in a vague and confused manner , that the civilization of the West may not always go on developing in the same direction, but may some day reach a point where it will stop, or even be plunged in its entirety into some cataclysm.”

Guénon parallels Carlyle in Sartor Resartus in that he acknowledges the deeply problematic nature of cutting material existence on Earth off from any transcendent/spiritual/divine reality, a phenomenon which is only increasingly taking place in the context of modernity and not in previous ages. Devoid of any collective consciousness of transcendent reality that may prove effectual to moderating the continuous expansion of materialism and the “reign of quantity,” Guénon thinks modernity takes on a dimension antithetical to the transcendent and thus can be deemed “satanic” in the simplest nominal and non-theological use of the term. This narrative, Guénon maintains, explains the eventual dissolution of the modern world, as “the reign of quantity” will maximize the realization of quantity to its farthest limits, before triggering a cataclysmic contraction. According to Guénon in The Reign of Quantity and the Signs of the Times, the “rectification” of modernity “presupposes arrival at the point at which the ‘descent’ is completely accomplished, where ‘the wheel stops turning.’” Guénon concludes that until such a breaking point is attained, “it is impossible that these things should be understood by men in general…”

Jacques Ellul, who was perhaps the foremost philosopher-critic of technology in the 20th century (and a chief inspiration for the Unabomber), largely reincarnated without citation Carlyle’s original criticisms of modernity. Ellul felt that modernity was synonymous with one vast global technical civilization that was autonomous and not subject to human control since its overall historical development as a system and long-term consequences are not subject to human control.Ellul defines what he takes to be technical civilization in his magnum opus The Technological Society, published in 1954: “technical civilization means that our civilization is constructed by technique (makes a part of civilization only what belongs to technique), for technique (in that everything in this civilization must serve a technical end), and is exclusively technique (in that it excludes whatever is not technique or reduces it to technical form).”

Ellul made known his theory that the technical civilization will have to perfect itself and sustain its perfection, as the only other alternative to perfection is the commission of an error, either small or large, that has the ability to cause the vast and interconnected system to go haywire. Ellul declares, “the technical society must perfect the ‘man-machine’ complex or risk total collapse.” For Ellul, technical civilization is a “Behemoth” and it can “rest easy” as nothing “will prevent him from consuming mankind.” Such an elucidation of the stakes involved in creating an ever-more complex and gigantic globalized and technological system are deeply relevant to the narrative of how COVID-19 wreaked havoc on global health and the global economy so quickly and so easily. Air travel and other forms of transportation infrastructure were technological developments that had reached a zenith at the time of the onset of the pandemic as a function of globalized capitalism also being at a zenith. The totality of the network of global transportation infrastructure manifested by technical civilization’s progressive global development since the Industrial Revolution was compounded by the growth in the levels of global travel on the part of the largest global population in history at the time of COVID-19’s onset.

Ellul denounces liberal political economy for providing the favorable climate necessary for the unquestioned manifestation of technical civilization and refutes prospective critics who would maintain that liberal economy and technical civilization are compatible for the long-term:

“It will doubtless be pointed out, by way of refutation, that production techniques were developed during the ascendancy of liberalism, which furnished a favorable climate for their development and understood perfectly how to use them. But this is no counterargument. The simple fact is that liberalism permitted the development of its executioner, exactly as in a healthy tissue a constituent cell may proliferate and give rise to a fatal cancer. The healthy body represented the necessary condition for the cancer. But there was no contradiction between the two. The same relation holds between technique and economic liberalism.”

Just as Carlyle documented what he took to be the crisis of modernity at its advent during the initial industrialism of 19th century Victorian England, Guénon documented in the context of retrospectively accounting for the catastrophes of both World Wars I and II, and Ellul documented in the context of the post-World War II exponential growth of technology, the COVID-19 pandemic provides another milestone with which to, at a minimum, revisit their mutually compatible theses with respect to the cataclysm of modernity. Whether COVID-19 proves to be the “big one” and arrests the hegemonic triumvirate of technology, capitalism, and globalization remains to be seen. At a minimum, what can be gleaned from Carlyle, Guénon, and Ellul is that modernity’s improvement of the material standard of living for so many globally needs to be balanced with a view toward moderation and long-term sustainability. Liberal political economy, science, and technological innovation have until now been single-minded seekers of continuous growth without acknowledging the need to at some point ossify or plateau the technical civilization they have each been instrumental in constructing so that it does not become a phoenix and burn to ash.

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