Thursday, March 30, 2017

Brexit - Leaving EU

The United Kingdom triggers off its break from the European Union on the 29th March 2017, with two years to negotiate by 2019.

The original intention for the UK to break off is to be able to control its own borders. Rapid immigration has put pressure on its public sector especially in housing, healthcare and welfare services. It is inevitable that with common borders, workers from poor countries flow to rich countries in search of jobs and a better life.

The UK is forced to take this extreme measure of breaking off between the EU does not allow member states to limit the number of immigrants, a direction that was pursued by David Cameron. The EU said, "No, you take the whole package and cannot pick and choose." This forced the referendum and the population voted to get out.

Those in the cities mostly voted to stay in while those outside the cities mostly voted to leave. Scotland and Northern Ireland voted remain, while England and Wales voted leave. As democracy is in the end reduced to a simple major rule, the leave wins which then leads to the triggering of Article 50 of the Lisbon treaty yesterday.

The beauty of the EU is that it provides a common market for the goods and services of the EU member states. It may be envisaged that a mixture of rich and poor countries can provide all the necessary ingredients of a balanced and self-contained economy. As it turns out, capital does not easily flow to poor countries, but the people of poor countries easily flow to rich countries.

But why should the Europeans be so angry with the UK for trying to leave the EU, by being very difficult in the negotiation? After all, there is freedom and democracy in Europe and countries should be able to freely join or leave the club.

Maybe the EU is not a club, but like a religious grouping where once you joined you cannot leave with threats of tribulations.

The EU is a political grouping that is disguised as an economic club. While the immediate benefits are economic in nature, the ultimate purpose is to create a political entity that is a federation of member state that answers to a big brother in Brussels. The EU is an attempt by Europe to regain its former glory as a unified empire, in an apparent counter-force to Russia and China, and probably the US. Many say that EU has resulted in decades of peace in Europe.

If the EU were to break, then individual nation states may see themselves as vulnerable to attacks by their bigger neighbours, the biggest one being Russia. The EU can be seen as a continued ideological fight for democracy against the totalitarian state of Russia. In attempting to do, unfortunately, Brussels may have to act in a totalitarian manner with respect to their individual states.

Each European state may therefore have to choose to suffer in the hands of either friendly dictators or fearful enemies.

In trying to punishing the UK for leaving the EU, Brussels may be shooting its own foot. By destroying the UK economy, the EU may be destroying a potential ally in times of war should Russia decides to act. Putin is watching. Strategically, the EU should help and ensure that the UK be sound and strong so that they can collaborate politically if need be in future.

After WWI, Europe punished Germany by insisting on war reparations causing hardships to people and which led to the rise of Hitler and WWII. After WWII, the US supported Germany and Japan, the losers in the war, as economic giants so that they can be strong allies in times of war or to deter another war.

These are lessons that Germany should learn, when dealing with the UK.

Wednesday, March 29, 2017

Values for Modern Society

The question here is what are the moral values that we should adopt in order to live successfully and happily in the modern money society that we have today.

The modern society we have today is a drastic change - as a result of the scientific revolution where human beings have learned to conquer nature and gone beyond the confines of the natural environment (well, not quite) into an artificial world of the matrix which involves human activities that move money - from the very slow and mundane world of agriculture and natural self-sufficiency which managed to keep everybody in a community from starving but also from being too rich.

From the traditional agrarian society of the past, where economic fortunes laid in a delicate balance as mother nature (or some would call god) constantly threatened to upset things once in a while with either too much rain or no rain or violent wind, we learn that it is good to be humble and not too be proud because we do not know what tomorrow may bring and therefore we better not be too cocksure about ourselves and our abilities. Whatever skills we may have are nothing when considered in the context of the larger cosmos, the billions of stars in the skies and the huge expanse of the earth and everything that the sea, air and earth can hold.

Because of the vagaries of the world, humbleness is indeed the best insurance because when your luck is down, you need the help of your neighbours, and vice versa. If you were to boast and you happen to be in trouble, then you are on your own because nobody is going to help you because you put yourself above everybody else when you were lucky and now everybody want to see how you can get out of the quagmire you are in and if not to see you eat dirt.

And you don't blow your own trumpet because other people do not like the sound of the noise you are making about yourself because they could be jealous as a result of their own inadequacy or that they may be more superior to you and could come out in the open and challenge you in order to teach you a lesson on humbleness. It is okay for others to blow the trumpet for you and then you should be proud of your greatness. This is because in a small unstable society, a small fart will stink the whole place and it is better you do not let off that you are the culprit. Secrecy is key to survival, and all the skeletons in the cupboard better be properly hidden.

In modern society where Adam Smith declared long ago that the best thing to squeeze the best out of the best in society is competition. By which means, give everybody a chance to show off and be the best. The world wants to know who is the best - the fastest runner, the strongest weightlifter, the richest person, the richest company, the best technology firm, the best car maker.

The modern world is not a world of humbleness; it is a world of self-declaration (I'm the greatest, and you've better be) and self-advertisement (I'm not the best, but I can get it and you can't). The modern world is a world where everybody is the unique (hence the body tattoo) and the best in whatever little niche they have decision to hole themselves in. This is because in a competitive environment, you have to find the odd little space that is empty and you try to fill it in and capture a place in the busy market.

The modern world is no more dependent on the natural environment (though ultimately it must still do); it is dependent on how much money you have. As Joan Collins recently mentioned, to have the f--- you money, so that you do not have to kowtow to anyone anymore. With money and wealth in the mind, everybody is out to kill the competition and be the only one left standing (ask Bill Gates). The big ones crush the small ones and the world is run by the global monopolies who now have the power to twist the arms of sovereign governments - and threaten to move their investments out if they do not endorse a slavery policy and pay no tax and leave the ordinary citizens in every country they invest in unemployed and poor below subsistence. Human beings become inputs to the large industrial complex that controls the world economy, aided by the global money printing machine that is the US Federal Reserve which has happily been churning out paper banknotes in the billions over the last three decades.

So for the ordinary person in his little abode of whatever kind he and his family have managed to find themselves (read she as well, especially the single mother), how is he going to behave. If he is humble and doesn't blow his trumpet and waiting for his bosses or other people to recognise his talents and achievements, he will end up as a semi-unknown person pushing the keyboard in a little corner while his bosses take credit for all his work and allow themselves to be admired by other thieves of credit (that being their only major credit).

The bosses and managers (usually with soft skills in manipulation and lying) short change the skilled workers (with their hard skills obtained after many years of book study and brain cracking), because the skilled workers are humble and the bosses are braggarts. So the sons and daughters of farmers and fishermen, well trained in manners by their parents, languish in their little stations in life, desperately trying to pay back the mortgage on their house and car and putting food on the table everyday.

Worse still in a society of discrimination, where sections of society are either put in favour or being ignored, the values that are now being germinated are completely strange.

Among the well-to-do in favour, they are privileged and therefore everything deserved go to them.

Among the not-so-well-to-do in favour, they are being caught in twilight zone as they cannot cry that they are in trouble nor can they say that they are not good enough.

Among the well-to-do being ignored, they are really not being ignored but courted because they know how to make things happen and everybody love them.

Among the no-so-well-to-do being ignored, they are at the bottom rung of the social ladder, their parents literally sacrificed their own lives to provide a basic platform for their children to take a first step up.

Those who can't resign themselves to fate, abandon the formal society and enter into the world where no laws apply. Because the world has ignored them, they in turn ignore the world. They create a world of their own. They become rebels and rise in opposition to the government, the source of the injustice done to them. In this world, it doesn't pay to be humble, but be obedient to their code of brotherhood to fight together for survival, and probably at all cost to defend their right to live in this world.

In the meantime, the brighter world of the government officials who are employed not for their competence and who spend all their life in employment training to be fit for the jobs they were initially hired for and retired upon their graduation from education. They go on the escalation of promotion and privilege so that everyone has a chance to get the top scale upon which they can retire in luxury, never ever having to lift a finger to help their fellow citizens who are desperately in need of guidance of the rules of the societal game.

The civil service becomes bloated because those who are sent to school during employment have a replacement to do their jobs. Those sitting in position but are incompetent hire external consultants to do the job for them.

So what is the moral values that one must adopt in order to live successfully and happily in this modern world of ours? Certainly not the traditional values of self-restrained and self-righteousness. I suggest some here - kill or be killed, lie in order to avoid trouble, fake when you are can't do it properly, steal when no one is looking, steal openly when there is a policy endorsing it. Not forgetting, blow your own trumpet or rather blow with the trumpet you have stolen. Advertise your talents as there is always a demand by the incompetents who have access to funding.

The world has changed.

Tuesday, March 28, 2017

Bitcoin & Theory of Money

I was asked by a friend to write about bitcoin.

Not that I have been following bitcoin closely. I haven't.

But from what I have gathered from some headlines, it goes something like this:

Bitcoin is a computer algorithm, supposedly complex and is on its own after its creation and nobody can control it nor modify it. Its supply is created by some random successes in operations which is supposed to mimic the randomness of the success of mining. In other words, its supply is sporadic.

The key to getting this bitcoin scheme going is to create a demand for it. It has its own ecosystem whereby people with a hoard of bitcoin can exchange it with others. There is no point exchange it with another bitcoin unless of course you want to go into debt by borrowing. You want to try to exchange the bitcoin with other non-bitcoin items, so that from there, it is supposed to behave like money.

The other way to hip the demand for bitcoin is to create an exotic story out of it, like the Mona Lisa, in order to get people to desire bitcoin for its own sake. Or, to stimulate demand by creating a speculative fervour for it about its rising value in the future. All these things could be stimulated out of an environment of complete nothing better to do and boredom. One must just as well try to cultivate the black tulip.

In the bitcoin ecosystem, of course, by definition, the rule is to use bitcoin as a unit of account and a medium of exchange. Anything can be used to fulfill these two functions.

We can think of isolated places now or in the place where all kinds of stuff are used as a unit of account or medium of exchange - but in small doses. It could be favours (of a lady or man), graces in heaven, cows, shells, stones, metals, dusts. The most famous was salt which was used to pay Roman soldiers as "salarium" which becomes in English "salary".

The test of money as we now know it as money is the size of the ecosystem in which the item functions as money. If we think of the ringgit or any other national currencies, each ecosystem may not be very large. But if we think in terms of paper money or electronics money, it covers the entire earthly universe, almost literally - except for those few isolated places that still trade in wives or some other unfortunate creatures.

So a unit of account or medium of exchange is not sufficient a quality to be considered as money.

The store of value is also a necessary function but not sufficient. In Malaysia today, the ringgit is not considered a good store of value. People who are clever enough are proud that they are fully in debt and in possession of bricks and mortar called houses and condominium units. Better still, gold.

But however lousy the ringgit may be as a store of value, it is still the only means of final settlement.

No matter how rich you may be, but if you do not have the cash, you cannot buy anything. This is here that the banks do a roaring business, exploiting the difficulty of ensuring sufficient liquidity by people at very inconvenient times - only of course when you have collateral assets in real estate. Banks know from hundreds of years of operations that real estate is the only way to hold value because people cannot help but procreate and they all want to live in city centres.

What I am getting at is that the current economic theory despite the Keynesian revolution is still stuck in medieval times in the barter economy where unsold goods can be considered as savings and hence investment. Keynes got stuck at the savings equals investment and could get out; he insisted that there is hard truth no matter what. He was still stuck in the barter economy.

In the monetary economy - ie, a money-using economy, like we all are in the world today - no money, no talk. We all have debts and we must have the cash to pay the debts - you can ask the unfotunate wives of gamblers who borrowed from loan sharks as lenders of last resort. They just want their cash back.

So if you set up a company to produce apples, you have to have capital in cash to hire workers and machines. You have to pay the workers cash first before they would work. There are no apples to give them in the first place. But after you have produced the apples at the end of a production period or harvest, you want cash back for your apples. You are not happy if you sell all the apples to your workers and they give you back all the wages you pay them. You have your initial capital in cash back and have no more apples. If you keep back some of the apples for profit, and sold some apples to your workers, you do not have cash. Your profit must be in the form of cash.

The only way of is to sell your apples to your foreign friends for foreign curreny or your political friends who print money or your rich friends who have savings from their parents.

That why, all merchants clamour for exports rather than feed their workers. That's why governments print money. Or people spent their inheritance or borrow to the hilt. This is the way our modern monetary world works.

So, I don't think bitcoin is any bit a coin, not just yet.

Sunday, March 26, 2017

Supremacy

There is this constant search for supremacy in the world among human beings who are trying very hard to deny their mortality.

We human beings are nothing but tiny fry whose lifetime in this world when measured against the cosmic world is shorter than the blink of the eye.

But many of us are taken to illusion of grandeur, blowing ourselves out larger than we actually are. Many of us are shouting and trying to make ourselves heard in the noisy market place.

The reality is that most of us are anonymous, living our lives in quiet desperation.

We look at the media and see the glamour. We look at ourselves and see how mundane we are.

So what can we do to get attention?

We look for the most trendy things that are happening and we try to associate ourselves with them. We try to be a part in a bigger whole. Many of us subscribe to entities that champion our ideals. For the most ambitious individuals, they try to make themselves prominent and take charge of the whole.

In the world of competitive, the strongest wins. We see this in all the sports - the more civilised versions of war. In the arena of war, we see this in the display of weapons and technology being devoted to the destruction of fellow human beings. We are heading ourselves towards total self-annihilation. Of course, we should not be so surprised - after all, the whole should reflect the individual parts which always ends in death.

In the world of economic competition, the tendency is towards monopoly - the total destruction of the opponents so that only the strongest survive. It is not surprising that the world is composed of a handful of global giants who are controlling the entire world economy. Economic life has not been as boring before as it is today.

In the globalised world, we see the exact few giants in the shopping malls in our neighbourhood as we see them in the big cities of the world. We just see the same thing duplicating itself all around.

The diversity of the economic world has disappeared. There are no more little shops run by the old little couple who are champions of their little neighbourhood, with a unique that cannot be duplicated elsewhere.

And different parts of the world have their own unique little quirks that one cannot find anywhere else. This is no more.

The world we live in today is a world of great cultural diversity as the migration of people reach a larger scale as air travel is now a commodity and the immigration policy of any major growing economy is being dictated by big global businesses looking for cheap labour.

The greater diversity of culture in many urban centres are fostering great loneliness among people. As they try to find their own identity, in a foreign place, they resort to their own ethnic food and their own culture. If their culture is defined stronger by place, and if they are in the wrong place, their culture is then replaced with either a philosophy or a religion.

Among the masses, religion takes a strong hold on the individual because religion is the result of one's own conviction, by definition. Religion transcends the harshness of geography and enters the imagination of goodness and everything that is opposite of harshness.

From sheer desperation, desperate are called and religion becomes the rallying call for the disillusioned.

This is the world as we now see it.

In economic theory, the great wisdom is that monopoly is something that has to be fought because the world belongs to everyone. Everybody should have an opportunity to participate in the great activity of human survival and feeding one's own family.

This is why economic wisdom called for an authority usually the government to break up monopoly and ensure that others have a chance to enter the fray of economic activities.

In reality, the world we have today is a world where monopolistic structures are being put up to try to dominate a situation. While this is certainly going on in the economic arena, the same is certainly also going in the religious realm.

The great wisdom of some religions is the retreat of the religious from secular life. The great dread today is the attempt by some to bring religion forth to the foreground as the dominant force in life. To kill secular life by imposing a religious life.

But the great shame is that for most people like us who have been living an obviously secular life, because we never try to impose our life beliefs on others, we trying very hard to do that to ourselves, we may now have to contend with the madness of others as to how we should live life everyday.

Such courage to try to impose one's religious values onto others cannot be the act of one person, but the result of people at the core of modern government who secretly condone such creeping of religious views into secular government.

Treachery is all over the place.

As economic theory says, the best approach to the greatest welfare for everybody is the freedom to choose and competition. In a world of diversity, there should be freedom to choose and competition in diversity.

This may have to mean that there may be nothing that can be sacrosanct which cannot be debated in a formal manner. There must be the right of others to try to understand that which is so special about a particular position in religion, especially if it affects your neighbours.

There is now a debate in this part of the world that because a religion is the official religion, the religion edicts overrides the secular civil code of the constitution of a democratic society.

The word "official" is a simple word but not many understands. These words have a reference. In the diverse world of many religion, whenever there need to be mention about what is the religion to be referred to for this country, the answer is that which is the official religion.

The world has suffered a lot unduly unfortunately over the other statement the one supreme entity to you or me. In the world of many gods, I am the one for you - as you and one has to declare to our respective spouses. Unfortunately, human beings have fought over the oneness.

Supremacy is selfish and cowardly.