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| June 20th 2007
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Welcome
to the Home Page of
Brussel's leading
Think-Tank
Anti-West complot takes over Wikipedia
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June 20th 2007
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WorkForAll
is a pluralistic and independent think-tank. We investigate social
models and structures on their efficiency in achieving social
objectives. WFA examines
with scientific methods and without prejudice
whether public policy is succesfull in realising
sustainable prosperity,
employment, solidarity and individual freedom |
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Can
the Putsch still be undone? Brussels,
June 20 th 2007
Wikipedia, the
interactive
Internet encyclopaedia is in an existential crisis. Launched in 2001,
the
formula was a great success thanks to its editing procedure allowing
anyone to
contribute in the most non elitarian manner. In the early years
contributors
reached consensus through fair debates in mutual respect and with
regard for
rules and etiquette. The rare conflicts were judged by
a commission of
arbiters. However the fair debates gradually degenerated in wild edit
wars where
brutal intimidation, tricks and deception became the usual rules of
engagement.
Today brutal bullies with the moral standards of downtown street gangs
rule Wikipedia. Ever more bona fide contributors fly their
harassment and
WP quality is degenerating fast.  Wikipedia
suffered a most serious blow last month, when it became victim
of a virtual putsch by a group of users organised in the Wikipedia
Spam Project. This users’
initiative initially had the declared
goal
of keeping Wikipedia free from irrelevant or untasteful links and
information. But the project soon degenerated in censorship of content
the spam
fighters disliked. Today only a handful of the original
spam fighters are
left in the group. A most remarkable coalition of anti-Westeners,
anti-Jewish, anti-Christian
fanatics and of bullies sickly enjoying the power of harassing bona
fide
contributors and vandalising their work now dominate the spam project.
Today
these spam fighters hold all Wikipedia's strategic positions. They do
not only
determine which contributions are spam and which are not. They
arbitrarily decide
which contributors are blocked and which websites are blacklisted. One
of their
leaders, honoured with the "spam-star" award is this self declared Hebrew communist
WP
User:El_C . A few days ago
he openly claimed full discretion about
Wikipedia's blocking policy
on
the administrators notice board.
The
anti-West coalition also controls and frauds the security system and
gained
full control over the most strategic administator's noticeboard. Messages alarming bona fide administrators about the
ongoing putsch were
erased within 30 seconds. Even the arbitration procedure is now flawed.
The
spam fighters obstruct arbitration procedures by simply erasing requests for arbitration even before an
arbiter could read them.
The fraud and cover-up operations including strictly forbidden erasals on user discussion pages,
transformed the democratic Wikipedia experiment into a dictatorship of
those most daring to infringe rules and procedures. Ever since
the Wikipedia
Neutrality project, which was caring for WP’s impartiality was
abandoned last
February, the road was free for communists and religious fanatics to
vandalise
and rewrite Wiki's economic and philosophical titles without
opposition. The
spam fighters rely on strong gang cohesion and have support of
anti-West
administrators, some of which teenagers, and act as if everything is
allowed. The
surprise was
great when a Brussels
think tank WorkForAll
dared to challenge their
superior forces and intimidation. WorkForAll
staff did not only defend their own
well established contributions against the communist vandalism. They
fundamentally
questioned the spam squad’s modus operandi, and gathered the evidence
proving the
methods of the spam fighters were incompatible with fair-play, with the 5 pilars Wikipedia is built on
and that the spam fighters systematically violated Wikipedia rules, procedures and the concensus principle.
Some of the spam fighters’
methods being
qualified crimes as to common law, their behaviour can indeed no longer
be
tolerated in a state of law. Spreading public slander intended at
ruining opponents’
reputation and privacy, their qualified intimidation, and the launch of
viruses
from the WP sandbox are simply unacceptable. The spam fighters have
indeed systematically
abused and compromised Wikipedia's reputation as a reliable source to fool search
engines and spread false accusations all over the web. They
already
ruined the reputation and privacy of too many users. Evidence of the complot and is still available deep in WP archives
It is
believed the anti-West putsch will mean the end of Wikipedia's
impartiality and
credibility. It certainly means a serious blow for WP's commercial
value. Six
years only after its launch, this unique encyclopaedia where users
democratically decided the content has reached a stage of existential
crisis. Unless
a coordinated action of bona fide administrators soon finds a way to
stop the putsch
and to restore the state of law in the WP community, collapse may soon
follow. Unfortunately
few administrators realise what is going on beneath the surface, and
have not realised
yet that the democratic experiment they once believed in, is now under
censorship of bullies. In the meantime the anti-Western putsch in their
virtual
world has the very real world consequence that the most referred to
source is now
organised to perpetuate a century of socialist fraud and deception.
This
awkward Wikipedia experience at least learns this lesson for would-be
anarchists: Wherever law enforcement fails, the criminals end up ruling
the
streets
als read :
Secret
mailing list rocks Wikipedia ( 04-dec-2007
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GLOBAL
WARNING
Al
Gore-ists and Kyoto-crats advocate
green Bureaucracy
 Hard working Yuppies have no time to think. Whenever they
get a few days off, their suitcases are packed to fly to Ibiza for a
weekend-party or for some pro-active off-road Hummer-adventure. Their
vacations are as hectic as their jobs. So even then there is no
opportunity to reflect on their lifestyle. This is a vicious circle:
pressed by the mass media and the advertisement industry the young
professionals do not get the chance to question their cultural image of
normality.
Politicians do not have the courage to tackle the squandering either.
Rather than simply taxing energy consumption they create a new
bureaucracy with thousands of inspectors and technicians to promote
‘ecological’ technology. A CO2tax
is much more simple and effective. Let the polluters pay the ecological
cost of their squander. High fuel prices can stop the madness and
encourage research without new bureaucracy. ...continue
reading Martin De Vliegere's analysis here... 
Worldwatch:
Shifting Tax Burden to Polluters
could cut Taxes on Wages and Profits by 15%
 Increasing taxes on pollution and
resource use while lowering taxes on
income and wages is a powerful new tool for protecting the environment,
reports a new study from the Worldwatch Institute titled Getting the
Signals Right: Tax Reform to Protect the Environment and the Economy.
Such a tax shift could also create millions of jobs and boost living
standards of the working poor.
Countries around the world are now
experimenting with environmental
taxes, says the report, which documents how five nations have made
revenue-neutral "tax shifts," using the money from environmental taxes
to cut the conventional taxes that penalize work and investment.
Continue reading the
Worldwatch views here. (Worldwatch is an Independent
research institute for an environmentally sustainable and socially just
society.)
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TAX
COMPETITION
The
Financial
Times attacks Brussels' misguided campaign
against
tax Competition.
The FT notes that tax competition between
nations encourages responsible behavior by the tax-authorities and that
low taxes promote growth. Unfortunately Europe's big-tax lobby will not be
satisfied until all such pro-growth tax policies are exterminated. The European Commission seems to
recognise no limits in its drive to
impose tax harmonisation across Europe. Having issued a sanction
against Luxembourg last July for its preferential tax regime on holding
companies, Brussels is now trying to put pressure on
a country outside
the European Union by targeting Swiss cantons' tax breaks
and low
business tax rates.
Such a move, if it succeeds, will hurt not only the
Swiss but all taxpayers in Europe. Tax
competition gives you - the
entrepreneur or citizen - the opportunity to escape fiscal pressure
from your own government by moving to jurisdictions with more
favourable tax regimes. It gives strong incentives for all governments
to lower taxes, allowing taxpayers to keep more of their money and
making markets less distorted.
Such
tax competition has existed for
some time in Europe and is being intensified by
globalisation. The EU harmonisation logic will inevitably lead EU
bureaucrats to attack other regimes that benefit taxpayers, be they in
the EU or outside. In Ireland, for example, the corporate tax rate is
lower than in Swiss cantons and in Estonia undistributed corporate
profits are simply not taxed. When can we expect pressure on Ireland to
raise its rates or on Estonia to repeal a system that has contributed
to its economic dynamism? Read
the FT essay here
More concerns over Europe's
attempted Tax Cartel here
and here
and here and here.....
Tax competition exists when people can reduce their tax burdens by
shifting capital and/or labour from high-tax to low-tax jurisdictions.
This migration disciplines
profligate governments and rewards nations that engage in pro-growth
tax reform. This process is good for the global economy since lower tax
rates increase incentives to work, save, and invest. Not surprisingly,
some high-tax governments despise tax competition and would like to see
it reduced or eliminated....
 Places
in the sun: the Economist Defends Tax Competition.
The Economist
has an entire section on the "offshore" world
in the latest issue. Among the
key findings are that so-called offshore financial centers promote growth and
discourage wasteful government:
…the most
vexing problem that highly mobile financial flows pose for governments
is that
when they cross borders they may take tax revenues with them. …As
companies
become ever more multinational, they find it easier to shift their
activities
and profits across borders and into OFCs. …Financial liberalisation—the
elimination of capital controls and the like—has made all of this
easier. So has
the internet, which allows money to be shifted around the world
quickly, cheaply
and anonymously. …tax, regulatory and other competition is healthy
because it
keeps bigger countries' governments from getting bloated. Others argue
that OFCs
may be an inevitable concomitant of globalisation. "Even if today's
OFCs were
somehow stamped out, something like them would pop up to take their
place," says
Mihir Desai of Harvard Business School. Some academics have found signs
that
OFCs have unplanned positive effects, spurring growth and
competitiveness in
nearby onshore economies. …International organisations have launched
various
initiatives to try to get OFCs to tighten supervision, co-operate more
with
foreign governments to catch tax cheats and, at least in Europe,
eliminate
"harmful" tax practices. OFCs think such initiatives are designed to
force them
out of business. The countries that set these standards "are an
oligopoly trying
to keep out smaller competitors. They are both players and referees in
the game.
How can they be objective?", asks Richard Hay, a lawyer in Britain who
represents OFCs. …the broader concern over OFCs is overblown. Well-run
jurisdictions of all sorts, whether nominally on- or offshore, are good
for the
global financial system.
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 Western
Europe and the United States are wealthy. Both achieved this
because of sensible policies and institutions. While much of the world
was and
still is crippled by the absence of functioning market economies,
Europe and the
United States have enjoyed remarkable growth thanks to property rights,
the rule
of law, and minimal government.
However over the last decades some European
nations allowed the burden of government to climb to depressing levels.
Government spending consumes more than 50 percent of GDP in
France and Sweden and more
than 45 percent in Germany and Italy.
Their
poor performance
provide useful lessons
about the economic
consequences of bigger government,
and these lessons suggest that also America is
on the wrong
track. The most important lesson to be learned is that GDP is linked
to policy.
Even a cursory review of
European economic performance shows
that excessive government has
serious adverse
effects: slower growth, higher
unemployment, lower living standards, and a bleak future. Bluntly
stated, the
United States is in danger of becoming a decrepit
welfare state like France. Find out
more here at :
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There have been increasing signs of
optimism from European economy watchers. After some years in the
doldrums, with slow growth and rising unemployment, things appear to be
looking up: labor markets are more efficient; growth was good for 2006;
and the euro is doing well against the dollar after years of weakness
following its inception in 1999. However these promising signs must not
be misunderstood as indications of permanent improvement, for the
conditions that caused Europe's decline—rigid and inflexible markets,
too-high public spending, and excessive taxation—are still there. The
long-term survival of the European "social model," with its massive
welfare spending, will ensure that the continent will lag behind
America, much to the chagrin of the chauvinistic French, and the
Germans who seem to have forgotten the Erhard doctrine and the secret
of the success which once made Germany the world's third-biggest
economy... Although there once was a radical freemarket
tradition in France, this is now but a distant memory. Formal Marxism
might be dead, but it still casts a long shadow. read the essay
article here
by Jan Krzysztof Bielecki
More social spending by EU governments
is not the best way to reduce inequalities, and can have unintended
consequences, says Jan Krzysztof Bielecki, a former Prime Minister of
Poland. He argues that the fastest route to cohesion both between and
within member states is freer movement of people, capital and services |
Zimbabwe's
Economy is at the end of its tether.
From Economist.com
Apr 5th 2007
 Judging
by the pot-holes, rusting street lamps, broken traffic lights and
pencil-thin residents of Harare, Zimbabwe's capital city, the former
model of an African economy is at the end of its
tether. The water supply
fails in much of Harare as frequent electricity cuts
hit. With each
passing month the city is darker, a bit more decrepit and home to more
child-beggars. Those with jobs are forced to walk for hours to get
home, as wages no longer cover the cost of public transport. Hunger is
spreading. Life expectancy has dropped to roughly 35 years as AIDS and
lack of food bite. More families skip meals entirely. Political tension
is rising high: divisions in the ruling Zanu-PF party; a series of
violent attacks by police on the opposition Movement for
Democratic
Change this month ....
One
more very sad example confirming Hayek"s law:
when dictators rule the economy rather than free markets
they only
create create artificial scarcity, inflation, and price- and market
distortions, economic stagnation and ultimately political
instability....
read
the full story from the economist here |
 The
OECD says Sweden should consider abolishing the state income tax
 In a
report on the Swedish economy, the Oecd the notes the problems
of
Sweden's high tax rates and excessively generous welfare
benefits. It
calls for the elimination of the wealth tax and reductions in punitive
marginal tax rates. It even suggests that Sweden abolish
the state
income tax alltogether.
Sweden's new government has will stick
to the target for general
government net lending of 2% of GDP over the cycle which is necessary
to keep public finances on a sustainable path. Underlying this target
is the assumption that taxes can be sustained at current levels which
could be difficult in the future, not least due to mobile tax bases and
international tax competition.
The share of 20 64 year olds who depend
on public income transfers has
declined to 20% in 2006, but it remains much too high. Sickness absence
among those employed and the number entering disability pension
increased rapidly from the late 1990s. The numbers are now falling,
although the stock of disability pensioners remains among the highest
in the OECD.
Letting people keep a bit more of the
value they create is vital to
encourage both labour supply and entrepreneurship. The plans to abolish
the wealth tax should therefore be endorsed as it might lead to
repatriation of capital, possibly making more investment capital
available for new small firms. Marginal income taxes are also
important. The combination of social contributions, income and
consumption taxes drives the effective marginal tax rate above 70% for
over a third of the full-time employed, helping to explain why working
hours for those employed are below the OECD average. In fact,
completely abolishing the state income tax would cost just 1½
per cent of GDP.
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Big
Public Spending
means
poor Growth.
Slow
Growth
results in Poverty.
These
are the key findings from our research
confirming the results of earlier
studies such as this
which compared the growth differentials of 30 OECD countries
over 45 years (
over 1000 data-pairs !!! )
Suggestions
and help welcome - Please give us a link on your webpage
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 The monetary union
drives the EU toward further political
integration. It sets in motion forces that are difficult to control
probably ending in a United States of Europe, a real federal
state with a central fiscal, social, educational, trade and foreign
policy. Martin De Vlieghere explains why this will likely happen, why
it is better to stop this development but why it is so difficult to
stop, and what the
history learns us about earlier monatary unifications.
It
could still go the other way. This means broadening
the European Union, but not deepening it, by accepting additional
member states (the more the better) without abandoning the veto-right
of each member state in matters such as fiscal and social
harmonisation. The ten new member states have had a beneficial effect
on European politics. They have caused mounting pressure to reform the
Common Agricultural Policy. Since the Poles joined, for instance, their
agriculture has gained access to an enormous market and it will grow
enormously. There are no physical restraints to the expansion and the
productivity rise in Polish agriculture. But under the current CAP
rules the numerous Polish farmers and the emerging big industrial farms
will devour the entire European budget. European agricultural policy
will simply collapse if it is not changed drastically. Continue reading. printerfriendly
version
by Paul Vreymans
 The
introduction of the Euro was an erroneous policy inspired by Europe's
haughty ambition speed up integration and to catch up with the US.
Europe's economies were unsufficiently synchronised for
justifying a common monetary policy. Today the consequences of
this political gamble disregarding economical reality are dramatic. 7
years only after the launch of common currency, European economies have
seriously grown apart. In just 7 years a fast modernising country like
Ireland gained 37% in competitivity relative to the OECD average,
whilst Italy lost 19%. This adds up to an intramonetary union
difference in competitivity gain of 57%. In a system with national
currencies the Lira would have continued its long term tradition of
depreciations and Italy would have maintained its competitiveness. With
this option now excluded, and international labour mobility lacking
Italy faces the risk of a deep depression if it stays inside the EMS.
Unable to set interest rates at an appropriate level for its fast
growth, Ireland now risks run-away inflation, and a sudden and sad end
to its uninterrupted quarter century success-story of fabulous
growth. ..... Find out more here
The
population in Europe is aging and declining. A trend that could have
been perfectly manageable with foresight could turn into a catastrophe
given the increasing unfunded liabilities arising from pay-as-you-go
(PAYGO) public pension programs, now more than 200 percent of GDP in
France and Italy, and more than 150 percent of GDP in Germany. This
situation is especially difficult in a continent where entitlements are
deeply entrenched in a welfare state culture. The European
Commission
recently stated, "There is a risk of unsustainable
public finances in some half of EU countries. Belgium, Germany, Greece,
Spain, France, Italy, Austria and Portugal are on this black list."
EMU countries with Unfunded
pension schemes may want to follow the old Latin American
recipe—namely, devaluation, so that the ensuing inflation reduces the
purchasing power of benefits. But "Funded EMU countries " will probably
oppose devaluing the euro. A clash may ensue amidst the centers of
decisionmaking in Europe, especially within the board
of the European Central Bank.
So, the PAYGO pension system could turn out to be one of the gravest
threats to the single European currency.
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In this paper
the European Central Bank (ECB) studies the performance and the
efficiency of the public sectors of 23
industrialised OECD countries. They compute public sector performance
(PSP) and efficiency
indicators (PSE) for the government as whole and for its core functions. When
deriving performance indicators they distinguish the role of government in
providing "opportunities" and a level playing field in the market process and the
traditional "Musgravian" tasks of government. The results
for Belgium are remarkable: Although
Belgium has the second best industrial productivity in the
world, it has the third worst public sector efficiency....
Read the full
study here:
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Great Myths of the Great Depression
Images of the 1929 Recession here
Cartoons
here
 Lawrence Reed explains how Governments and the Central
Bank catastrophically
mishandled a moderate slowdown of the business cycle, and so caused a
mild recession to
degenerate in the full blown 1929
financial crisis. He explains how the excessive money supply in
the late
twenties first caused the reckless stock market mania and a generalised asset
bubble. When the Fed finally decided to slow the asset inflation they unexpectedly contracted the money supply by a massive
1/3 in six months from August'29
till March'30. The market reacted most vigorously. Stocks plummeted
and asset
prices crashed. Governments then tried to remedy the
accelerating recession by raising import duties, causing reprisal trade bareers by
trading partners. The new tariffs slowed down international trade,
boosting unemployment. Facing declining revenues and increasing wefare
demands
President Hoover doubled income taxes in his 1932 Revenue act. In 1933,
Roosevelt
symply seized peoples gold holdings, abandoned the gold standard, and
devalued
the dollar with 40%....
 It was
in deed not free market failure which produced the 1929
depression. It was political bungling on a grand scale, with the one policy blunder succeeding the other: tradecrushing
tariffs, incentive-sapping taxes, mind-numbing controls on production
and competition, senseless destruction of crops, coercive labor
laws and not in the least the FED's mismanagement. The social cost of the political blunders
was the severest crisis in history.
Stocks fell
to 10% of their pre-crash value, income fell by 28%, car
production fell by 75%, banks failed in record numbers, dragging down
hundreds of thausends of customers. 13 million unemployed in the
US causing rumors of revolt even.
 The
author also impressively describes how massive public spending in Roosevelts' New Deal and the excessive dirigism in the National Recovery Act (NRA) rather than remedying the 1929 crisis, prolongued it well into the fourties.
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 Great Dane, Great Pain An analysis of the
Danish welfare State on TCS Daily.
"Denmark
is a country where few have too much, and even fewer have too little".
They seek to equalize the masses and prevent the accumulation of
wealth. This is presented as a noble cause. The failure of this thought
is what incentive to build and grow a business, take risk, does the
individual have in a society that both prevents his failure and limits
his success? The great success of America is the unlimited ability to
succeed. The ability to fail and succeed are as important to life as
air. Socialists in general apparently abhore risk. Hence they move to
create a risk free Utopia when in reality there is no such beast. I for
one would forgo all saftey nets for the chance to achieve greatness.
One final thought, name one great economic industry or product
innovation to come from Denmark? Which countries bring forth the latest
innovations, technologies, medicines? The free market is equality of
opportunity. Socialism is equlity of outcome and misery.
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Europe's Ailing
Social Model: Facts & Fairy-Tales. Martin De Vlieghere and Paul Vreymans
 Europe's
social model is unable to tackle the modern challenges of
globalization, and has left Europe with gigantic problems: an
unsurmountable public debt and pension liabilities, a rapidly ageing
population, 19 million unemployed, and an overall youth unemployment
rate of 18%. The unemployment figures may easily be doubled to account
for hidden unemployment. The untold reality is that Europe's real
unemployment stands at the level of the 1932 Depression. The very
essence of the welfare state is at stake.
A man-made
Disaster : Europe's social disaster is
unfolding while the rest of the world is booming at its fastest rate in
three decades. 2004 and 2005 were record years for China and India,
which have double-digit growth rates, and for the USA, which fully
enjoys the benefits of globalization. The world's economy is booming at
an average rate of over 4%, but Europe's growth has stagnated at an
inflated 1.5%.
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The
Economics of
Inflation by George Reisman
Mises
University Media ( 54:37 mins MP3 )
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Inflation
and the Business Cycle: The Collapse of the Keynesian Paradigm
Murray N.
Rothbard From the book "For A New Liberty" as read by
Jeff Riggenbach.
Mises
University Media ( 1h 13: mins MP3) |
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 Entrepreneurship is lucrative.... and
just.
BY
Edmund S. PHELPS - 2006
Economics Nobel Prize winner
 There
are two economic systems in the West. Several nations--including the
U.S., Canada and the U.K.--have a private-ownership system marked by
great
openness to the implementation of new commercial ideas coming from
entrepreneurs, and by a pluralism of views among the financiers who
select the
ideas to nurture by providing the capital and incentives necessary for
their
development. Although much innovation comes from established companies,
as in
pharmaceuticals, much comes from start-ups, particularly the most novel
innovations. This is free enterprise, a k a capitalism.
The other system--in Western Continental
Europe--though also based on private
ownership, has been modified by the introduction of institutions aimed
at
protecting the interests of "stakeholders" and "social partners." The
system's
institutions include big employer confederations, big unions and
monopolistic
banks. Since World War II, a great deal of liberalization has taken
place. But
new corporatist institutions have sprung up: Co-determination (cogestion,
or Mitbestimmung) has brought "worker councils" (Betriebsrat); and
in Germany, a union representative sits on the investment committee of
corporations. The system operates to discourage changes such as
relocations and
the entry of new firms, and its performance depends on established
companies in
cooperation with local and national banks. What it lacks in flexibility
it tries
to compensate for with technological sophistication. So different is
this system
that it has its own name: the "social market economy" in Germany,
"social
democracy" in France and "concertazione" in Italy...
read
more in the Wall Street Journal here. |
 There is something rotten in the welfare
state of Europe
The
time has come for Europeans to ask themselves the unthinkable: can
their vaunted social model endure? Something is
rotten in the state of western Europe.
The continent retains valuable assets from the past. But these are
showing symptoms of decay. The underlying cause seems increasingly
evident: the hypertrophy of the state. Symptoms are not hard to find:
this is a continent of high and persistent unemployment, declining
productivity growth, rapid ageing and growing fiscal strains; it is
also one whose once-proud role in knowledge-creation is in
decline.
But in one respect, western Europe
remains pre-eminent: its states are the taxand-spend champions of the
world. This is the heart of the European model. But it is no model for
well-informed outsiders.
Maybe they can see what Europeans will not.
The European state is maternal: protective but also infantilising. Its
high taxes and benefits discourage anybody from doing too well, while
ensuring that nobody does badly. Its services are available to all, but
are also mediocre and inflexible.
It is an example of what the journalist Andrew Neill, following
Friedrich Hayek, calls the "fatal conceit": the view that society can
be rationally planned and directed.
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One year after the NO-vote: Two thirds of
Frensh and Dutch voters want to either take back powers from the EU or leave it
altogether.
According to a new poll,
around two thirds of voters in both France and the Netherlands want to either take back powers from the EU or
leave it altogether. Detailed opinion polling
immediately after the Dutch referendum revealed that the top seven reasons given for voting no all
reflected opposition to deeper integration and opposition to losing control. The top
three reasons people voted no were over fears that "the Netherlands will have less
influence under the Constitution" (54%), that "large countries will determine the future
of Europe" (52%), and that "politicians will take decisions over our heads" (42%).
Results of the poll :
Do you want to :
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France |
Netherlands |
Give
more power to the EU
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18%
|
15% |
Keep
the current balance
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16%
|
17% |
Take
back powers from the EU
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53%
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5 |
Leave
the EU altogether
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10% |
14% |
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 The importance of Public Expenditure
reform for economic Growth and Stability
The ECB
names Ireland and Spain as examples of successful expenditure reforms
and concludes: "further expenditure reforms are needed in many
countries to reduce the level of spending on non-core tasks of the
public sector, enhance the efficiency and incentive effects of public
spending and prioritise productive objectives within public sector
activity. Spending reductions would alleviate fiscal imbalances while
also allowing for lower taxes. Such measures would support
macroeconomic stability, promote growth and create a better environment
for price stability."
read more: ECB Monthly bulletin page
61-73
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The Myth of the Scandinavian Model
 "America's social model is flawed, but so is France's,"
the Parisian
newspaper Le Monde recently wrote. According to Le Monde Europe should
adopt the "Scandinavian model," which is said to combine the economic
efficiency of the Anglo-Saxon social model with the welfare state
benefits of the continental European ones. The praise for the Nordic model comes from
Bruegel, a new
Brussels-based think tank, "whose aim is to contribute to the quality
of economic policymaking in Europe." The think tank is a Franco-German
government initiative and is heavily funded by EU governments and
corporations. In October Bruegel published a study
In 1970, Sweden's level of prosperity was one quarter above
Belgium's.
By 2003 Sweden had fallen to 14th place from 5th in the prosperity
index, two places behind Belgium. According to OECD figures, Denmark
was the 3rd most prosperous economy in the world in 1970, immediately
behind Switzerland and the United States. In 2003, Denmark was 7th.
Finland did badly as well. From 1989 to 2003, while Ireland rose from
21st to 4th place, Finland fell from 9th to 15th place. Together with Italy, these three
Scandinavian countries are the worst
performing economies in the entire European Union. Rather than taking
them as an example, Europe's politicians should shun the Scandinavian
recipes. |
Retirement Finance Reform Issues
Facing the European Union by
William G. Shipman
Changing demographics are forcing countries around the world to
reexamine their public pension systems. The EU nations are among those
facing the greatest social, budgetary, and economic challenges as a
result of their aging populations. Therefore, EU members will be forced
to rethink their public pension programs and move away from traditional
pay-as-you-go (PAYGO) pension models to new systems based on savings
and investment. Given
demographic trends, the current PAYGO pension plans of EU member states
are unsustainable.
Major
reform is, therefore, inevitable. This paper examines many of
the issues involved in reforming European pensions and reaches the
following conclusions:
1. Long-run data from many countries
show that the yield on market assets is sufficient
to provide adequate retirement income at a reasonable cost. Indeed,
such income is likely to be significantly higher than income that can
be provided through PAYGO systems.
2. A market-based system would not necessarily reduce the
redistribution that some Europeans consider an important characteristic
of EU pension programs. Moreover, those programs may be far less
redistributive than commonly believed.
3. Moving to a market-based pension system can help promote labor
market flexibility by more closely linking contributions and benefits.
In addition, a market-based system would eliminate incentives for older
workers to leave labor markets prematurely.
4. Although transition financing would be a complex issue, it is
cheaper to move to market-based systems than to continue current PAYGO
systems. It is possible to design a transition scenario that is a
winwin situation for all generations. Administrative costs in a
market-based system can be kept low. Market-based systems would
increase asset ownership and give workers greater control of the
wealth-producing assets of
society.
Full text of
SSP No. 28 (PDF, 24 pp, 232 Kb)
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Inflation and the
ineffectiveness of Monetary Policy
The dogmatic belief that loose monetary
policy can boost economic growth is increasingly being questioned. Ever more
empirical evidence is In deed pointing at total ineffectiveness of
monetary
policy. Two decades  of close to zero interest rates in Japan
and
Switserland have been unable to stimulate their
sluggish growth. Since over 30 years, Nobel-prize winners Friedman,
Lucas
and Phelps are expressing their doubts about the effectiveness of
easy money policy.
Most remarkable are
the recent empirical findings by prof. J-P. Chevallier
(2006). Chevallier found
that "Excess Money Supply"
(EMS: Growth of the Money
Supply M3 in excess
of the growth rate of the real economy) has a most remarkable
inverse relation to
the real economy's growth rate. High EMS coincides with low growth.
Chevallier's
study is based on over 550 data pairs covering 47 years of US monetary
history
from 1960 till 2006. read more here ....
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by Matthew Bishop, Liam Halligan, L.
Jacobo Rodríguez,
(2006)
We are facing a demographic time bomb: by
2050, there will be 2 workers to
every 1 retired person in most European countries. In some countries
that ratio
will be 1:1. The harsh reality is that current pay-as-you-go pension
systems are
simply financially, economically and socially unsustainable - without
reform,
pensioners will bankrupt the welfare
state.
It is time to defuse the pensions time bomb. This timely book offers
Europe a way ahead
Download the full study
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Taxation, tax reform and monetary
policy
The present Governor of the Bank of England, Mr Mervyn King, once
observed that "Central banks are often accused of being obsessed with
inflation. This is untrue. If they are obsessed with anything, it is
with fiscal policy."[1] I would not go quite as far as to call it an
obsession. But it is certainly true that central bankers in general,
and European central bankers in particular, take a close interest in
public finances. And this is hardly surprising. Perhaps it is not by
chance that having a strong public finance background -experience
either in academia or in government, or in both - is not uncommon
amongst central bankers.
I
would not elaborate
more on whether and how the professional career of central bankers
affect their interest in public finance issues. ....
Speech
by José Manuel González-Páramo, Member of
the Executive Board of the ECB. Universidad Complutense Madrid, 13 May
2005.
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 As Britain
watches the birth of the Euro and euro-integrationists advocate Britain
joining euro-land as soon as possible it is surely time for an honest
debate to begin? Many have forgotten the personal suffering and the
huge disincentives to enterprise and investment induced by a culture of
high taxation. They need to remember fast, before advocating such a
colossal folly. Whether by accident or design, many have misled
when explaining the meaning of EMU and the emergence of a European
Single Currency. EMU does not stand for European Monetary Union, as
they have tended to suggest, but instead stands for Economic and
Monetary Union. This is a crucial error to make and neglects one of the
key effects of the introduction of EMU: the harmonisation of nations'
economic and monetary policies and ultimately of fiscal and taxation
policies. As the current president of the Bundesbank, Hans Tietmeyer,
remarked in October 1995 "it is an illusion to believe that the States
will retain their independence in fiscal policy."
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The
Myth of Europe by
Russell Lewis
Contents :
- Undemocratic
- Overregulation
- Corruption
- Hostile to British Interests
- Not Bonkers but out of Date
- Europe as Economic Pace–Setter
- Historical Inevitability
- Evidence Against
- Euro–Mythology
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- Former European Supremacy
- Nationalism in the Dock
- Glory in Diversity
- Fortunate Failure
- Scientists Persecuted
- Unity Versus Capitalism
- Unity Hinders Progress
- Why not China?
- Meddling Mandarins
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- Why not India?
- Why not the Arabs?
- Soviet Arthritis
- Unconvincing
- Legal Serfdom
- Totalitarian Democracy
- Subsidiarity A Fraud
- Freedom Day Comes Late
- Don't Harmonize, Denationalize
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Economists and politicians agree that
Europe's economy has been suffering from a serious disease. In
2000 the Lisbon Agenda
identified
the symptoms of this disease – high unemployment and low economic
growth. In his presentation Peter mach argues
that the Lisbon Agenda misunderstood the real cause
of the underperformance of European economy, and therefore prescribed
wrong treatment..
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A New Road to Serfdom?
By hans H.J. Labohm
 Recently, I was invited
by the Ludwig von Mises Institute Europe to address an audience on what
Friedrich von Hayek would have thought about the enlargement of Europe.
I decided to reread his classic, The Road to Serfdom. Old hat, of
course, because since Francis Fukuyama's The End of History and the
Last Man, we know that after the collapse of the Berlin Wall,
capitalist liberal democracies are the end-state of the historical
process. So there is nothing to worry about. Yet, even before finishing
the introduction (by Milton Friedman) and the (three) prefaces of
Hayek's magnum opus, I realised that I was completely wrong. The Road
to Serfdom still contains insights that today are as visionary and
relevant as when they were published for the first time in 1944.
Imagine the
Zeitgeist of the thirties and forties! The free market economy was
under siege, because it was believed to generate chaos with its
business cycles and monopoly power. The planned society envisaged under
socialism was supposed to be not only more efficient than capitalism,
but socialism -- with its promise of social justice -- was expected to
be fairer. It was considered the wave of the future. Only a
reactionary, it was argued, could resist the inevitable tide of
history. In this context The Road to Serfdom appeared with a seemingly
anachronistic message.
But the
message was not obsolete. It had a profound impact on the development
of our economies and societies at large. In his recently published book
European Integration, 1950 - 2003, Superstate or New Market Economy?,
the American historian John Gillingham reveals that a few years before,
in 1939, Hayek published an article on a (classical) liberal project
for the integration of Europe. That is why Gillingham ranks Hayek
alongside Jean Monnet and many others as one of the founding fathers of
the new era..... read
more here
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Dignity and the Burden of the Welfare
State
by nils.karlson@ratio.se
The burden of the welfare state may be analysed from an economic as
well as a more normative perspective.
This paper attempts to do both things. By the use of the case of Sweden
the expansion and the costs of the welfare state is described, partly
in international comparison, and explained, largely in terms of
unintended consequences.
Special attention is given to the effects of taxes. Next, the concept
of dignity is explicated and used to evaluate the Swedish welfare
state. The overall conclusion is that the burden of the welfare state
is high indeed, both in economic terms and from the perspective of
human dignity.
Consequently, if we want to promote economic efficiency, growth and
dignity the size of the state should be radically decreased.
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Quando se
fala
do peso excessivo do Estado, imediatamente quem def(p)ende (d)a sua
existência clama que se responda, sem ambiguidades, qual deve ser
a dimensão do Estado. Vou hoje fazer algumas reflexões
sobre essa matéria, sublinhando todavia que não é
um problema de solução única. A
solução depende da eficiência do próprio
Estado, da «qualidade» do sistema fiscal e do
projecto que se tem para o país: Qual o doseamento entre
desenvolvimento e
igualitarismo.
Como eu
escrevi há
dias «Sem a existência de um governo suportado num
aparelho estatal está
instalada a anarquia e não é possível uma
actividade económica sustentável, nem
há condições para o progresso económico e
civilizacional.». Ou seja, se a
despesa pública fosse 0% (ou não houvesse impostos), a
receita fiscal seria 0 e
o PIB seria nulo. Haveria produção, para
subsistência, mas esta não teria
expressão monetária, visto que «a ameaça
de expropriação é real e
permanente. A actividade económica reduz-se à
subsistência». Esse seria o
limite inferior.
À
medida
que as taxas de imposto vão aumentando, os bens e
serviços públicos essenciais ao funcionamento normal do
mercado vão sendo disponibilizados – justiça, defesa,
infra-estruturas básicas, educação básica.
Nesta zona os efeitos destes aumentos em eficiência produtiva
vão contrabalançando os efeitos desincentivadores das
taxas de imposto para a actividade
económica.
A
Dimensão do Estado.....
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Is
the European "social model" doomed? It's a question that
comes up with
increasing frequency as unemployment across Western Europe has climbed
into the double digits and economic growth has ground to a virtual halt
across much of the Continent. Updated GDP figures for the euro
zone came out last week, and growth in the first quarter was a
disappointing 0.5%. Last month both the European Commission and the
European Central Bank cut their annual growth forecasts for the euro
zone to 1.6% from 2%, and that ugly word recession is in the air. |
 The
Nobel committee credits Phelps for clarifying the relationship between
inflation and unemployment. Indeed, he did make a contribution in this
respect. What he did not do is what most economists credit him for
doing: identifying the true causes behind the phenomenon of stagflation.
The
phenomenon of stagflation is characterized by the simultaneous
occurence of a strengthening in the growth momentum of prices and a
decline in real economic activity. A famous case of stagflation
occurred during the 1974 — 75 period. In March 1975, industrial
production fell by nearly 13% while the yearly rate of growth of the
consumer price index (CPI) jumped to around 12%. Likewise a large fall
in economic activity and galloping price inflation was observed during
1979. By December of that year, the yearly rate of growth of industrial
production stood close to nil while the rate of growth of the CPI stood
at over 13%....
read more here.... |
THE SIZE AND FUNCTIONS OF GOVERNMENT AND
ECONOMIC GROWTH
by
James Gwartney, Professor of Economics and Policy Sciences at Florida
State University
 This
paper shows that excessively large government has reduced economic
growth. These findings present a compelling case that rather than
devising new programs to spend any surplus that may emerge from the
current economic expansion, Congress should develop a long-range
strategy to reduce the size of government so we will be able to achieve a more rapid rate of
economic growth in the future.
The expansion of the U.S. economy has now moved into its eighth year
and it has been 15 years since there has been a major recession.
Despite this positive performance, the growth of real GDP in the 1990s
is less than half the rate achieved during the 1960s. In fact, the
average growth rate of real GDP has fallen during each of the
last three decades. The economies of other developed nations have
followed this same pattern of more stability, but less rapid growth.
The OECD
countries currently spend 15 percent of GDP or less on the
core functions of government-protection of persons and property,
national defense, education, monetary stability, and physical
infrastructure. When governments move beyond these core functions, the
empirical evidence indicates that they retard economic growth. The
reduction in GDP growth rates in the United States and in many nations
around the world can be traced directly to their increases in
government expenditures far in excess of the growth-maximizing
level.
read more
here....
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Taxes and Economic
Growth November
2006
by Gerald W.
Scully Senior Fellow National Center for Policy Analysis
 New study shows high cost of big
government. A thorough new study from the National Center for Policy
Analysis concludes that the size of government is far above the
growth-maximizing level. That's the good news. The bad news is that the
study indicates that the growth-maximizing level of taxes is 23 percent
of GDP. This almost surely is an overstatement, especially since it
implies that Hong Kong today would grow faster by increasing its tax
burden, or that the United States would have grown faster before World
War I by doubling the tax burden. In reality, studies such as this are
constrained by the absence of good data from nations with small
governments for the unfortunate reason that such nations no longer
exist. As such, statistical studies looking at the growth-maximizing
size of government generally conclude that it should be about the size
of the smallest governments in existence during the periods covered by
the study:
Beyond some minimum level, however, government becomes a net drain on
the economy. Empirical evidence shows that as the tax burden rises
beyond a certain level, the rate of economic growth slows. As
government grows, money flows to less productive projects (think
"bridges to nowhere"), and taxes are increasingly used to redistribute
income through transfer payments (such as Social Security and Medicare)
and to fund myriad special interest group projects. Whereas private
decision-makers tend to make decisions based on economic costs and
economic benefits, elected offi cials tend to make decisions based on
political costs and political benefi ts (as refl ected, for example, in
votes, campaign contributions and so forth). High tax rates reduce the
incentives of taxpayers to produce, while benefi ciaries of government
largesse are discouraged from additional effort. ...To maximize
economic growth, federal, state and local taxes combined should average
about 23 percent of gross domestic product (GDP). Tax revenues as a
share of GDP have not been at that level since 1950, and for years have
averaged between 30 percent and 34 percent of GDP. Real GDP increased
at a compound growth rate of 3.5 percent per year from 1950 to 2004. If
instead of rising to 30 percent and more, an average tax burden of
about 23 percent of GDP had been in effect throughout the 54-year
period, the growth rate would have been 5.8 percent per year
.
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DOES
OPTIMAL SIZE OF GOVERNMENT SPENDING EXIST?
Primož Pevcin - University of Ljubljana
 Growth
theory is an important part of modern macroeconomics. The analysis of
growth has long been based on the Solow (1956) "growth accounting"
approach, also termed as neo-classical growth theory, which has two
important predictions about growth in the long run. These predictions
are that economic growth occurs as a result of exogenous technological
change, and that income per capita of countries will converge. Since it
is presumed that all determinants of growth are exogenous, it is
obvious that government policy cannot affect growthrates, except
temporarily during
the transition of economies to their steady state. Consequently, the
role of government in growth process was usually not investigated in standard neo-classical growth models.
 Empirical work
on the
determinants of economic growth seems to present strong evidence that a
large government sector negatively affects economic growth. This result
has been confirmed in numerous studies (e.g., Barro (1991), Engen and
Skinner (1992), Hansson and Henrekson (1994), Gwartney, Holcombe and
Lawson (1998), Fölster and Henrekson (2001)). More specifically,
in
recent studies, the negative impact of government size on factor
productivity and capital formation has been stressed, resulting also in
lower economic growth.
read
the full study here....
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New !!!
Now free on-line:
2006- Update of our Main Study
comparing Effectiveness of European Social Models |
The
Path To Sustainable Growth
Lessons
From 20 Years Growth Differentials In Europe
Martin
De
Vlieghere and Paul Vreymans
Abstract:
While the rest of the world is booming, Europe lags behind. Europe's
performance is weak in
spite of high productivity and knowledge, high level of
development and good labour ethics. Growth is also remarkably
dissimular among regions. France, Germany and Italy are stagnating, and
so do Denmark,
Sweden and Finland. All gained less than 44%
prosperity over the last 20 years. The Irish
economy grew 4 times faster, gaining 169%
wealth over the same period. In half a generation Ireland so
metamorphosed into Europe's second
richest country creating jobs for all.
" Big government " is the main
cause of Europe's weak performance. The oversized Public-Sector lacks
productivity and undoes
the
entire productivity gains of the Private
Sector, eradicating
all of its outstanding performance and
productiveness. Europe can improve its overall performance by copying
the Irish
success formulas: Scaling down Public Spending, downsizing
bureaucracy, and shifting the tax burden
from
income on
consumption. This book demonstrates why the Lisbon
Agenda and decades of Keynesian inflationist demand stimulation have
failed. It devellops alternative and workable
supply-side strategies as well as effective cures
for humane growth and a financially sustainable social
security.
This book reads as a
step-by-step manual for economic
recovery.
It is a data-reference for students and politicians
interested in growth, wellfare and in social modelling. It is a
classic
for economists concerned about Big
Government, poor public sector productivity and for parents worrying
about their declining standard of living and their children's future.
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Suggestions
and help welcome.
Reproduction of our texts and illustrations allowed.
Please give us a link on your webpage |
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Henrik Rasmussen first lived in the Danish Wellfare State,
and then
under the American "Anglosaxon social model". He reports his ample
expericence. A testimony about two types of life-styles.
