Gfk (an Austrian polling firm) performed on behalf of Swiss Life Select a survey about the use of tax saving starting with 2016: Only 25% of the Austrians want to spend their additional money for consumption immediately. The Austrian Government assumed in its calculations of the tax reform a massive consumption-plus to boost the economy creating additional jobs covering counterpart funding. The government intervention of cutting income tax may or may not increase consumption. In fact, it depends on the (individual) person’s time preference: the current one seems to be low compared to the future time-preference, and its tendency (probability) to keep the available additional money is high. In other words, the time-preference is indirectly connected with the relative propensity of a person. The conclusion is: a sustainable increase in quantitative and qualitative consumption level requires a change in the behavior of individual persons. More important than direct government intervention is, therefore, that the citizens trust the institutions (state, city, municipalities, government, ministries, judiciary, tax office, unions, commercial departments, social insurance, etc.) again. The biggest challenge for institutions to win back the trust of their citizen is to act “sustainable” (TBL: People, Planet, Profit) and to provide fairness and equal opportunities for all persons whether it is in a developed, not developed or emerging country.
Roland Leithenmayr, VfV
Saturday 17. October 2015 was the International Day for the Eradication of Poverty. Many experts believe that the UN Millennium Development Goals have not been achieved: in the Sub-Sahara region of Africa and other countries are still a lot of poverty, about 700 million people live on less than 1.90 dollar a day (World Bank) worldwide. China is a success story: through progressive liberalization and integration of world trade (Axel Dreher, a development economist at the University of Heidelberg), it has been achieved that only one (1) Chinese of ten (10) is undernourished today, – 25 years ago it was one of four. However, experts criticize the unilateral trade relations and that economic growth has been achieved at the expense of the environment and society: the Triple Bottom Line Approach (People, Planet,Profit) had too little consideration! They point out that the SDGs (Sustainable Development Goals) may serve as a valuable framework and reference, but the implementation of the SDGs has to be executed by national politics (which is often incapable and corrupt). It requires reliable institutions, which can be trusted, Rules of Law, good environment and conditions for companies and investors, and the fight against corruption. Alejandro Cunat, economist at the University of Vienna, views the SDGs skeptical: it makes little sense to put developing countries a list of required measures in their hand, because it depends on the will and the interest of governments too. There are many influential stakeholders in developing countries (not only in Greece) who are interested only in the trade of importing than exporting because much higher profits can be achieved not taking care of the economic and unemployment situation. Success stories of Singapore, Taiwan, South Korea and China cannot be transferred without adaptations, but it can be learned from them. In October 2015 received the poverty researcher Angus Deaton the Nobel Prize. He regards himself as “someone who’s concerned with the poor of the world and how people behave, and what gives them a good life.” Angus Deaton has enhanced this understanding by linking detailed individual choices and aggregate outcomes, his research has helped transform the fields of microeconomics, macroeconomics, and Development Economics. -> https://en.wikipedia.org/wiki/Angus_Deaton
Roland Leithenmayr, VfV
Source: Simon Moser, Erfolgsgeschichte mit 700 Millionen Ausnahmen, der Standard / Economics Sat. / So., 17/18. Oktober 2015
Contribution to CSD’s project 01: A Healthy Planet for Future Generations, Human Rights and Sustainable Development – Obstacles to progress in the present world economic system: High public debt in many countries.
On the subject of public debt, many known economists have different opinions and want to clean up several errors: (1) high public debt damages the economy, (2) A high level of government debt is the cause of unemployment, (3) A high public debt burdens future generations.
To deal with the subject in depth, the two subject “public debt” and “contracting debt” must be clearly separated to understand the different effects. Until the year 1970, the national debt was small in Austria. Chancellor Bruno Kreisky incurred high debt: but it worked and the economy began to flourish. 45 years later, Austria has a relatively high debt but the incurring debt is relatively low, the result is that the economy gets deeper and deeper into crisis. But even incurring debt (2012) to stimulate the construction industry brought very little. Many economists see a strong correlation between public debt and economic growth. Paul C. Martin, – not so well known as Paul Krugman – , presents in his book “Die Krisenschaukel (1997) ” his observation: “The higher the government debt increases, the lower was the economic growth. If the growth was below zero, – shrinking of the GDP -, the national debt will rise even faster. The state has to add the interest (in the Greek are high) to the public debt because the taxes can’t be raised in a crisis without exacerbating this even more. Also, the government wants to help (unemployed, etc.!). This economic growth will continue to plop – until finally all are unemployed ” Another effect is that the richer are getting richer earning the dividends of the state as “unearned income”.
Paul Krugman: Debt is Good! – http://economistsview.typepad.com/economistsview/2015/08/paul-krugman-debt-is-good.html
Public Debt and Economic Growth: Correlation ist not Causation!
See on this subject: http://www.oekonomenstimme.org/
Roland Leithenmayr, VfV
“If there is a magic formula for reducing poverty without growth, I would like to know!”
Jesus Crespo Cuaresma, Advisor to the World Bank, Professor at the Wirtschaftsuniversität Vienna, Institute for Money – and Financial Policy. Learn more about him: http://www.wu.ac.at/fileadmin/wu/d/i/vw1/CV_2015_Crespo.pdf
The UN NGO Committee on Sustainable Development (CSD) in Vienna/Austria elaborates on the project
“A Healthy Planet for Future Generations, Human Rights and Sustainable Development – 2 obstacles to progress in the present world economic system.”
how the current economic system can be positively adapted to gain sustainability.
Many (hobby) economists make the claim that their interpretation of economics is the only correct one. The discussions denigrate at the low level with the aim of trying to enforce their view and ideas about the economy. When analyzing comprehensive their contrary opinions, it turns out that there are numerous similarities.
Arthur Koestler’s describes in his book the “Sleepwalkers” how many great thinkers of the past seem to have wandered around and around the concepts they were seeking until they eventually stumbled upon them. Researchers, Hobby-Economics. Realists and Idealists and others are “sleepwalking” around trying to come up with concepts to solve the big problems of our time such as over- indebtedness of countries, resource depletion, economic growth and unemployment, climate change, the growing gap between rich and poor, etc.
Below is an overview of alternative economic and social concepts: (source modified and supplemented: RELEVANT, Das Magazin der Österreichischen Kontrollbank Gruppe, Sondernummer # 1a/2013)
Green Economy: The vision is the green transition of the economy leading to sustainable development; representatives of this vision are UNEP and OECD; it’s a political national and international approach, http://www.unep.org/greeneconomy/
Inclusive Growth: The goal is employing productively many people as possible to generate economic growth for example by means of endorsing education in all it’s alternative forms; representatives are EU, UNDP and others. The approach is political national and international; http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/WhatIsInclusiveGrowth20081230.pdf
Europe 2020: smart, sustainable and inclusive economy should help the EU and the Member States deliver high levels of employment, productivity and social cohesion; representatives are the European Commissions and European Council; the approach is political, European and national. http://ec.europa.eu/europe2020/index_en.htm
Enquete Commission für Wachstum, Wohlstand und Lebensqualität: concrete policy recommendations to create more prosperity and quality of life in Germany; 17 deputies of the German Bundestag, 17 external experts; Germany in international context, https://www.youtube.com/watch?v=C6B7LRc8PN4,
Blue Economy: The innovative use of waste and resources leads to a prosperous Zero Emission Economy; Gunter Pauli, Blue Economy Institute, Blue Economy Alliance; Applying internationally, scientific and entrepreneurial.
Cradle to Cradle: Closed material cycles make “intelligent waste” possible, Michael Braungart, William McDonough, International, scientifically and entrepreneurially, https://en.wikipedia.org/wiki/Cradle-to-cradle_design
Faktor X: More prosperity from less nature by increasing resource productivity by a factor of X; Friedrich Schmidt-Bleek, Ernst Ulrich von Weizsäcker, factor X Institute; on the national and international level; scientific, entrepreneurial and political; http://factor10.de/category/factor-10-club/, http://www.faktor-x.info/wissenschaft/schmidt-bleek-mai-2003/interview-schmidt-bleek.html
Degrowth: Downsizing of the economy for more social equality, environmental sustainability and well-being; many activists and scholars; local to global; science and civil society; http://www.degrowth.org/
Degrowth Society: An economy that leads to high standard of living within ecological limits without growth; Tim Jackson, Niko Paech, Peter Victor; national, scientific and civil society,
Buen Vivir: Economical Development model which leads to a good life; Alberto Costa, Eduardo Gudynas; South America, Ecuador, and Bolivia, national, civil society and enterprising, http://buenvivir.biz/index.html;
Common Welfare Economy (The Economy for the Common Good): economy based on welfare-oriented principles; Christian Felber, 500 pioneering companies, national, civil society and entrepreneurial;
Solidarity Economy: The variety of grass-roots democracy and needs-based forms of economic life: many actors, mostly locally, civil society, self-organized; http://socialeconomy.itcilo.org/en; www.unrisd.org/
Global Economic Ethic: approach on global understanding and ethical force (Principle of Humanity and Golden Rule) bringing the ethical framework into the heart of business, economic and management actions – Economic success (profit) and ethical action are not mutually exclusive; Hans Küng, Klaus M. Leisinger, Josef Wieland; national and international approach on all levels: political, economical and management; http://www.globaleconomicethic.org/
Value Based Economics (Wertewirtschaft) : Bridging the gap between “egoistic ” economy and for the called “values”; Austrian School of Economics; Institut für Wertewirtschaft (“Institute for value-based economics”) in Vienna/Austria), Rahim Taghizadegan, Eugen Maria Schulak; international, national, political, philosophical, economical and management.
“Social-solidarity economies” applying the concept of co-operatives (Genossenschaften): Appreciation and application of the “original” cooperative thoughts of co-operatives; local and internationally, scientific and entrepreneurial approach. Persons giving momentum in Austria: http://hefte.gea.at/brennstoff40/#p=13;
These are just some of the concepts of post-capitalism. The NGO Committee on Sustainable Development (SDG) would be pleased to learn about other existing concepts, or you represent your own.
Roland Leithenmayr VfV
Remember the lecture by Mr. Wolfgang Pekny, Footprint-Consult eU, at the meeting of CSD, October 8, 2013? He warned that the generation of our children has a poorer prospect for the future than their parents: the scarcity of resources, climate change, hunger, financial crises, and refugee crisis are symptoms of the same phenomenon: the planet Earth has become too small for the economies and lifestyles of the “Global Consumer Class”. A good measure (but heavily criticized) is the “ecological footprint”: According to this we currently need three (3) planets! For more information:
This is a contribution to the project of CSD (UN Committee on Sustainable Development):
A Healthy Planet for Future Generations, Human Rights, and Sustainable Development
indicates six (6) obstacles to progress positively in the present world economic system:
- Massive flows of financial resources that do not contribute to the real economy
- Illicit flows of finance, money laundering, and tax evasion
- Labour-saving instead of resource-saving technical progress
- High public debt in many countries (particular in developing countries)
- Lack of socially responsible/cooperative entrepreneurship
Because of the debt crisis worldwide, the actions and supposed neoliberal vision of the IMF are criticized: Is this justified?
Christian Felber recommends in his book “50 Vorschläge für eine gerechte Welt, Gegen Konzernmacht und Kapitalismus”, Wien 2006“, the IMF should be embedded in the UN system under the hegemony of the UN Economic and Social Council (ECOSOC); furthermore, the IMF shall involve NGOs, trade unions, churches, small business owners and farmers’ associations. Joseph Stiglitz (Die Schatten der Globalisierung, Berlin 2002) proposed that a democratically composed “Borrowers Committee” should check each loan before IMF approves it. Yanis Varoufakis sees the IMF as the gravedigger of indebted countries in his book (Bescheidener Vorschlag zur Lösung der Eurokrise, 2015).
Stiglitz, Varoufakis, and Felber criticize the neoliberal ethos, independence and the lack of democracy of IMF; moreover, they reject IMFs interference in economic policies of the debt countries in a form of stipulated structural adjustment programs.