A PARADIGM CHANGE OF ECONOMY: FOR A NEW GLOBAL FINANCIAL ARCHITECTURE

© February 10, 2016, Alexander Sigismund Gruber, Germany, bluewinds44@gmail.com

 

A PARADIGM CHANGE OF ECONOMY: FOR A NEW GLOBAL FINANCIAL ARCHITECTURE

This manifesto for a new global financial architecture is especially written with an eye on the policy of the World Social Forum. It has a potential to unite the revolutionary and the reformist left within this Forum. The policy, which I describe in the essay, is meant as a minimum claim for a functioning capitalism, of course to be amended by many specific or specialized claims. Then one can say: “Either this policy or a non-violent revolution, patterned according to the Arab Spring!” This is my approach to overcome the differences between revolutionary left and reformist left. I would like this policy of a new global financial architecture being taken up by the World Social Forum as a joint approach. Please read it to form your own opinion. On my opinion this policy can combat poverty and hunger effectively on the planet and it would lead to a more ecological capitalism.

Table of contents:
INTRODUCTION
1. THE POLICY OF THE CHEAP MONEY
2. FOR A NEW GLOBAL FINANCIAL ARCHITECTURE
3. TWENTY FEATURES OF MY NEW GLOBAL FINANCIAL ARCHITECTURE
4. OUTLOOK ON THE PERSPECTIVES OF MANKIND WITH THIS POLICY

Let me say roughly speaking that Western industrialized economies are in a slight boom. Still criticizers have doubted this for the US-economy on the basis of this figure of 92 million US-Americans, who have no job, but are not registered as jobless [1]. If you inquire about this statistical figure, you make the find that 38% of these 92 million are over the age of 65 years and 20% are of an age between 16 and 24 years [2]. So 38% are explained, because these are pensioners and 20% are explained, because these are young people supposedly pursuing their education. Then there are the 15% age 55 to 64 years, who might not search for a job any more, because the labor market rejects them, because of their advanced age. In the end their might remain 20 – 30 million, for whom is needed an explanation. I asked my Christian, US-American friend on facebook, Sherry Dempsey, if she has a clue about that. She had a development aid project in Uganda, building a school. So I am sure of her humanist attitude. She replied: “The figures are distorted because people are working and getting benifits too.“ In the USA you are not registered as jobless, if you had not searched for a job within the first four weeks of your unemployment. So it is the question, how many of the remaining 20 – 30 million have just given up to search for a job in their specific vincinity or have a job and still receive welfare – or are working illegally and not receiving welfare? As a foreign observer I cannot further judge on this question. But with 3,1% of economic growth of the US-economy in 2015 I can imagine that US-president Obama is right, when saying: „Anyone claiming that America’s economy is in decline is peddling fiction.“ For Germany the number of jobless decreased from 3,41 million in 2009 to 2,79 million in 2015, indicating a slight boom or recovery of the economy after the crisis of 2008. Let me say that I only like to get clear on what status of the Western economies I have to explain in the next chapter about the „policy of the chap money“. I cannot go into all details here to make the essay not too long.

And why I am advocating a new global financial architecture, if joblessness is decreasing with the present policy? Let me first make some humanist statements. I think that people have a right to have their share in the benefits of industrial revolution. I am trying to capture this by proclaiming a set of substantial social human rights, as are the freedoms of: clean water, food, housing, clothing, health care, mobility, communication, information, culture, life projects, education, provisions for childhood and old age. Let me make a list of items with their prices to give these freedoms a number, to determine the minimum income, which supposedly allows people to share in the benefits of industrial revolution above the existential minimum.

List of the value of social freedoms (for one adult person monthly):
160 Euro for food
70 Euro for consume like tobacco, alcoholic drink, sweets
45 Euro for phone and internet
20 Euro for TV and radio license fees
20 Euro for a newspaper
30 Euro for cultural activities
550 Euro for a decent apartment
150 Euro for bus/subway, traveling
55 Euro for furniture and clothing
150 Euro for life projects
1250 Euro

Let me say something about the item of the life projects. Recently I heard on Radio Germany that in Taiwan the wages have been decreasing so much that people dare not any more to settle down and start a family. For myself as a mentally disabled person, I can say that the welfare money, which I am receiving, does not allow me to marry in Africa, as I want to, and it is even hard alone to support my West-African lady by our monthly “bush flower ecology” of 120 Euro. I am not accepting this, while the UN Convention on the Rights of People with Disabilities entitles me to have an “adequate standard of living” and while disable people should not be prevented from marriage by poverty. But the life projects item can also include to buy a computer or to open a non-profit shop or to pursue an ecological project, just what is people’s “life project”.
This list does not include the health care, which costs widely vary with the applied system of insurance. I don’t want to prescribe people their needs, but I like to make with this list a punctual estimate, what a surplus above the existential minimum means in prices of Germany, which would allow people to have their share in the benefits of industrial revolution. The existential minimum is around 800 Euro in Germany. For the USA I got the impression from Sherry that one has to double the prices of Germany. The existential minimum people had also during medieval times. This is no goal, for which we need an industrial revolution. So I think people have a right for these benefits in the industrialized countries, given their wealth of a few. Moreover the jobless are not jobless, because of their laziness, but they are jobless because of capitalist rationalization, the production of more commodities during fewer working hours. Hence the jobless have a right to be paid off for being the victims of this process of rationalization. They further have their share in the functioning of the economy as a reserve of labor force. And all this has not been realized yet by capitalism. Quit to the contrary. It is a striking feature of today’s capitalism that often people are overworked and underpaid within a highly productive system. On the other hand we have joblessness, poverty and hunger in the Third World, which problem is neither solved. And I will show throughout my first chapter (about the policy of the cheap money) that the present capitalism is not long term stable. To the goal to solve these problems my new global financial architecture is dedicated. It is dedicated to the goal to achieve a righteous surplus above the existential minimum for all people in the industrialized countries and to the goal to banish hunger throughout the whole planet.

 

1. THE POLICY OF THE CHEAP MONEY

The most important societal precondition for a life, which is in dignity, seems to me a functioning and just economy. The present system of the cheap money is only in a limited way effective for this goal. Let me analyze economy in a simple picture in two parts. There is a cycle of real economy. Within this cycle rotates money, while it is spent and re-earned with the clock of the wages. And there is money, which is not immediately spent again. This is the portion of the gains with any purchase, after subtraction of the payment of human labor, natural resources, taxes, preliminary products etc. The latter gains are collecting in a bubble of money, the bubble of the gains. And during recent years a larger part of this money did not return directly into the economic cycle by investments, but speculated on different markets. Real estate, currencies, mineral resources, food, everything can become the object of pure speculations. These are investments into financial derivatives of real economic production, which for example the banks sell. The real estate bubble did burst and as the consequence the banks were equipped with cheap, public credits (I mean in Europe by the European Central Bank). Precisely speaking the shortage of money of the banks had been far overcompensated by this policy, because the interest rate for private credits was lowered in Germany far beyond the level from before the crisis. The interest rate in Greece for example only remained on a high level, because investments there were not prospering and hence banks took a high risk to give credits. But that was not so much shortage of money. Where does the cheap money goes to, which is still handed out by Western central banks? I see two approaches or factors here:

a) From the productive side: Under the pretense to ease the shortage of money of the banks was made a policy, which made industrial production more profitable. This with an option to lower export prices and thus to boost Western export.
Production was made more profitable, because large investments into rationalization and new forms of production could be driven by the cheap money. The introduction of 3-d printing of construction parts in the aerospace industry is an example. Let me call all this investments into future competitiveness. And these investments were made cheaper by the low interest rate credits. This gain can be transferred then to the export prices.
b) From the consumptive side: Solvent clients get money to buy luxury goods. This excites a non-ecological hyper-cycle of the real economy, which is only open to the rich and well to do.

Therefor some additional specialized jobs were created by this hyper-cycle of real economy, especially in high tech start up business (compare [6]). The old firms are binding skills of the start-ups. This radiated also to the whole of the economy, but especially creating low paid jobs. The poor remained poor and the hungry remained hungry. Only little money was inserted into their layer of the cycle of real economy, which was sucked out by gains already before the crisis (causing pressure on the wages). That only little of the cheap money reached the ordinary consumer is clearly one reason, why that cheap money excites no measurable inflation. The other reason for low inflation is the going down of the petroleum price.

Before the crisis the gains had sucked out the cycle of real economy. At the same time this cycle was buffered again and again by public and private debts, which avoided a big recession. Money was borrowed and spent and again gained and re-lend, before the original credits had been repaid completely. Much of the present real economic cycle consists of borrowed money in this way. The volume of the global debts has reached 100 trillion USD by summer of 2013 [8]. Austerity policy is the indicator that this system stumbles over its own feet. It caused the missing of demand. The gains cannot be reinvested then in a profitable way, because the demand is missing to convert them again into the value of the means of production, the goods and new gains. Ten years of lowering real wages in Germany, while corporate gains were increasing. This means that real economic growth is becoming scarce then. Financial capital becomes “jobless” and begins to speculate. The policy of the cheap money has now lifted this hypertrophied system to a new level. Between the years 2007 and 2013 the worldwide public debts grew by 80%. Corporate debts grew at somewhat the same pace [8].

The so called “innovations” only shift the business activity from one segment of real economy to another one or from one product to another one. Instead of desktop computers, tablets are bought, instead of telephones, mobile phones. Therefore real economic growth is not there. The money within the real economic cycle cannot be spent more than one time. Actually for one new booming production others will be stagnating or shut down. Real economic growth can only happen, if the total volume of demand from the real economic cycle is increasing.
The real estate bubble was really a blessing in disguise, because it created additional demand by inserting investment capital from the big bubble of the gains back into the real economic cycle. It was a kind of business support program by the bankers. Now the European Central Bank (and the Federal Reserve Bank in the USA) does virtually the same. It floods the financial market with cheap money, which is inserted into the hyper-cycle of the real economy, which I described above. And it has to be paid back one day. And here is the flaw of the whole system. The cycle of real economy was already thinned by the extraction of gains before the crisis of 2008. There was not too little financial capital hunting for gains, but marauding, superfluous financial capital caused the crisis. Before the crisis was actually within the crisis (10 years of lowering real wages, while corporate gains were increasing).
And when the cheap money from the central banks, which now buffers the real economic cycle, would have to be extracted (subtracted) again from this cycle (to pay back the credits), then one would either have a big financial bubble bursting or at least would have the old crisis back. Then the cycle of real economy would have to be deprived of the whole volume of demand, which was now inserted by the flood of cheap money. Hence these credits can never be paid back totally. They can only be replaced again and again by new credits. The policy of the cheap money can never finish, without causing a financial crisis and a crisis on the labor market. Even on global scale one cannot extract more money from the cycle of real economy, as was previously inserted into the system by this policy.
The capacity of states of going into public debts to buffer the real economic cycle has globally reached at its limits. So also money volume of foreign currencies cannot be absorbed more. There will burst some other bubbles then, while the poor stay poor and the hungry stay hungry. The new bubbles will burst on the markets of shares. Because of the interest rate drop, the big money is rushing into shares. Much of the cheap money was invested into the buyback of shares [6]. Just now the bubble of mineral resources is bursting, wherein marauding cheap money was rushing only recently.
But it all means that the trillion Euro volume of credits of printed money from the central banks was practically a gift to the rich. A scandal on its own. No matter, if there was supported business activity with these credits. The rich subtract always their big share. It means further that the labor forth of the world is held toiling under unacceptable conditions for the repayment of these credits (because effectively there was not done anything against poverty).
There is only one way out within this absurd system. The real economy must be expanded by ever bigger cheap credits to pay back the old credits from the economic cycle. But at the moment, when interest rates are rising again and the flood of money is not any more increased, the system comes soon to its end. One must increase the bubble all the time to prevent it from bursting.
This constellation I called the “economy of non-existing money”. And I am not the only one, who calls it such. The German economic experts Weik and Marc Friedrich used the same term (source [3]). But I wrote my considerations in this chapter independently of them. I came independently to the same conclusion. I know it from a newspaper that they are using the same term. I am supporting my West-African bush flower with 120 Euro monthly. I am poor. I have not the money to buy their book.

 

2. FOR A NEW GLOBAL FINANCIAL ARCHITECTURE

Well I would have nothing against the system, described above, if at least poverty and hunger would be combated effectively by this system. But actually the big money circulates within a hyper-cycle of real economy, dedicated to non-ecological luxury goods. And this is too little, the crumbs, which fall down from the tables of the well to do or from the overladen tables of the rich and super-rich….that is too little to drive off poverty and hunger. This has shown now. Of the 795 million hungry on earth must be spoken first. And 12 million poor in Germany, this is not acceptable either. How many precarious jobs ever would be created and it is still not acceptable, if some skilled personnel is newly employed. This state of affairs cannot stay. As a mentally disabled person, I am entitled to have an “adequate standard of living” (UN Convention on the Rights of People with Disabilities). For me and my family! Sorry I like to marry in Africa. Where is the money for that? An “adequate standard of living”, this would be the average net income in Germany, which is around 2000 Euro. But also 1250 Euro would help the case. But not the existential minimum, which I am actually receiving. Within the 70 years after the Second World War capitalism has not succeeded to deliver in terms of the promises of industrial revolution for a better life for all people.

But let me express it more positively. A better capitalism is possible. In the above chapter we got to know a system that gives away trillions of Euro of printed money to rich people. The original problem was lack of demand. The cycle of real economy was sucked out by gains. Well printing money and giving it away can be done directly to the poor and hungry. There need not to be given away large amounts of money for that purpose to the rich to create some jobs to combat poverty and hunger a little bit. Money, which one never sees back, can better be given to the poor and hungry and never seeing it back. This is all the way more just and would boost the economy by the demand of these people, being effected most by the deficiencies of the present capitalism. This would be a very efficient business support program. With 2% – 5% of the GDP for each country I would start and test the new system. In Germany the welfare money and pensions could be risen by printed money from the European Central Bank to the 1050 Euro level, which The Left proposes. In Sub-Saharan Africa for example could with 5% of the GDP there the number of the hungry right away cut to half. And one and so many could find work and income within the agricultural business activities, which would be induced by these measures.
My policy would also give a perspective to the North-African youth, thus depriving the Islamic State of its recruiting basis. In fact population growth was high with the countries of the Arab Spring, between 1980 – 1990 for whole North Africa at an average of 2,70% annually, for Libya at 3,2% and for Syria at 3,3% annually. Note that a growth rate of 2,88% annually leads to a one third higher population number within one decade. Such wave of population was pushing on the labor market within the decade before the Arab Spring. Meanwhile economic growth rates were high too, between the years 2006 and 2010 for example Libya: At an average of 2,74%, Syria: At an average of 4,89% (source: Trading Economics). Compare comment [7] for the real growth. But is seems that population growth outgrew the tolerance of the local elites before the Arab Spring to invest in human projects, instead of increasing their own wealth. Now the average real GDP growth in the region declined from 4,2% in 2010 to 2,2% in 2011 and food inflation is today at 14% in Libya and at 40% in Syria. This makes the countries in the region so sensitive to the recruiting of the Islamic State.

The economic stress by gains that shrinks the money volume of the real economic cycle creates, as I said, a demand problem (of missing fulfillment of the basic needs of the socially lower classes, so called “mass consume”). This stress is transferred onto the working class by lowering or not appropriately increasing real wages and joblessness as causes of missing demand. If the real economy should grow, there must exist a matching money volume to buy the newly produced goods. The sucking out of the cycle of real economy by gains can only be buffered in three ways: Either money is printed or the taxes are risen or by going into public debt (generally going into debt returns a part of the big bubble of the gains into the real economic cycle). The latter two alternatives are rejected. Hence only the first remains. Without the generation of money, capitalism cannot expand. This is a question of the macroeconomic balance. The designers of the system of the cheap money seem to have understood this. But it is made totally unjust, non-sustainable and ineffective for the poor and hungry. This problem cannot be solved sustainably by borrowed money.

Let me introduce my system at this point as a new global financial architecture. What are the properties and consequences? I am actually proposing that not only some countries are printing money, but that all countries are printing money simultaneously and coherently. This should happen under the framework of a multilateral agreement within the UN or WTO. To each country would be designated a certain printing facility, a certain percentage of its GDP, which it is allowed to print annually. I would recommend 2% – 5% of the GDP as a rule. Thereby a certain inflation would be caused, but it should be done in a way that all currencies remain stable in relation to each other (retain their exchange ratios). This means, because all countries print the same amount of money in comparison to the productivity of their economy, currencies would not shift significantly in their ratio to one another. The inflation would be majorly a domestic phenomenon.
Additionally, I would introduce the Tobin tax within that whole economic area, this tax on all transactions (financial markets, resource markets) of 0,1% or so, which makes speculations unprofitable. And the producing countries of mineral resources should take part by 30% in the gains from the selling of their resources. That touches many third world countries, as for example the bauxite and iron ore exports of Guinea Conakry, where my girlfriend, my West-African bush flower, lives.

What I am essentially proposing here was done some times especially by the southern countries of Europe before the introduction of the Euro. The real value of the volume of money of their currencies was expanded by printing money, such that public debt could be repaid and real economic growth was induced. The problem thereby is always the devaluation of the currency of the respective country. That has advantages and disadvantages, but it always disturbs the economic relations (currency dumping). On one hand export is boosted, because the goods, which are produced by the country become cheaper on the foreign markets. On the other hand the buying power of foreign goods of the population of the respective country decreases, especially effecting the buying power of natural resources for production too. Therefor I propose a multilateral coordination of this policy, such that the negative effects are prevented, while the positive effect of inducing real economic growth is retained.
Anyhow the real economic growth of the world economy is driven today by those countries, which still go into public debt or print money. For all states to break even would be the end of real economic growth of the world economy (except by private debts). Without deflation more goods can only be bought within the closed, total system of the world economy, if there is created a matching money volume to buy them. There is no trade with extraterrestrials.
The industrialized countries compete to absorb money form foreign economic cycles to compensate the sucking out of their own cycle into the big bubble of the gains (to maintain their stock of jobs and welfare state by export). For this competition the supply oriented policy is designed (tax incentives, cheap money to boost export). But only those states, which go into debts or are printing money, inject money into the worldwide cycle as a closed system. Hence countries are driven into a desperate competition to absorb the scarce injections into the worldwide cycle. Present capitalism still lacks a coherent mechanism to expand the worldwide money volume (instead of absorbing money from foreign sources as an insular phenomenon). Such a coherent mechanism my proposed system provides. It would inject a “flood” of “cheap” money too, doing so in favor of the poor and hungry, instead of in favor of the rich, but not as an insular phenomenon and not on credit basis. Thus it would be just, worldwide and sustainable.
The present system instead is maintaining a policy of scarcity of the money volume within the real economic cycle (or of cheap money only in the hands of the rich), which gives the wealthy their power over the rest of society.

The issue of inflation is very important. To make a test on the ratio of inflation to real economic growth I experimentally tested the totally different economic periods for Germany from 1969 to 1978 and 2004 to 2013. The average of real economic growth during the first period, the boom period, is 3,6% and that of inflation 4,66%. The corresponding figures for the second period, the lean years, are 1,26% and 1,61%. If one computes now the ratios between real economic growth and inflation, one gets 78,3% for the first period and 77,1% for the second period. There seems to be a very constant ratio between real economic growth and inflation, if one selects the periods under consideration long enough to average out economic fluctuations, but short enough to compare enough periods. I have completed the investigation now, whereby I found a ratio of 78,0% for the period from 1979 to 1988 and 89,9% for the period from 1989 to 1998. The period after the reunion of Germany drops out significantly, but for the three other periods the ratio is very constant. See source [4] for the basic data.
This means that usually inflation is right away a natural side effect of real economic growth. This is also systematically apprehensive, because when the money volume is expanded, such that more goods can be bought, then the prices are rising, until the production has followed the demand. And for this phenomenon there seems to exist a quit constant long term ratio (so far under the conditions of the German economy), which I still like to take over as being typical into the following considerations.

If now there are printed 2% of the GDP annually and given to the poor and hungry, then happens the following: A part of it will be set forth into real economic growth, while another part is set forth into inflation. Still these 2% are circulating several times during the year within the economic cycle. With each cycle the money contributes to the GDP, but each time diminished by the gains from the last rotation. So the GDP rises in this way far above of 2%. This is the effectivity of this measure. I can think that this continual rotation causes an inflation of 5%. And therefor with the empirical factor of the last section, the world’s real economic growth would be 5% * 78% = 3,9% (for comparison, worldwide real economic growth was at 2,4% in 2015, according to the World Bank). So these would be the expected or intended figures for the world economy. If one spends additionally the usual development aid for education and health care, then hunger and joblessness would be soon extinguished by this rate of growth (still the Third World children need their daily food, which would be given to them through the printing facilities, to enable them to go to school). The world economy would flourish. The problem of the capitalist economy that it today always produces prosperity for a few on the cost of miserable conditions for so many would be overcome.

Another question is the long term stability of the system. There is a maximum size to which the real value of the money in the big bubble of gains can grow. When the melting away of the total money volume in the big bubble of the gains by inflation exceeds the inflow of money from gains out of the real economic cycle, the bubble will not grow any more. Also the real economic cycle has a maximum, when the inflow of printed money equals its melting away by inflation plus the outflow into the big bubble of the gains. The system is resembling a physical non-equilibrium system in floating balance. Alike all ecosystems it has a strong circular aspect. The inflow of printed money resembles the inflow of radiative energy from the sunlight and the inflation resembles the dissipation of energy.
The monetary system is overlaying the physical system of the planet. When the inflow of printed money does not excite more real economic growth, but only rising prices, this is an indicator that the monetary system has reached the boundary of physical resource limits.
Let me say something on Malthus’s theory at this point. If the population is growing exponentially, then also the work force and technology grow exponentially. Additional surfaces are cultivated and the efficiency of agricultural production rises, such that also the food production grows exponentially. This is what happened since the Second World War. The resource limit – the Malthusian trap – will be indicated instead of growth rate problems by a bounce at the resource limits of this process (rising prices, rising child mortality and famine in the Third World). So I am proposing to replace Malthus’s growth rate theory by a “bounce”-theory of the Malthusian trap.
Moreover with the depletion of mineral resources, especially of petroleum, the highly industrialized agriculture of the world would face a breakdown, leaving an overhang of population without food. This I call the “Malthusian gap”. This is in my eyes an even more severe reason for decarbonization, than climate change. Coal liquefacation seems to be no alternative, given its high carbon output and costs. In the end the goal should be a totally solar and circular economy (I mean from the physical side of human ecology).
I think that mankind with its continual population growth will run into a trap by a hard, unexpected bounce. But it is better for the poor and hungry to run into that trap with a just and functioning capitalism, than with the present unjust system.

 

3. TWENTY FEATURES OF MY NEW GLOBAL FINANCIAL ARCHITECTURE

These are the state, ecological, economic and social properties of my new system. In this way I can also reply to some vital criticism, which I received from different sides. And these features explain in detail, how that system is intended to work.

 

S t a t e s

1) Election-goodies would not allowed to be financed by the printing facilities. The multilateral agreement needs to determine that this money can only be spent for three aims (in the sequence of priority): poverty reduction, ecologic change, peace building measures. And the money must be given directly into the hands of the poor. Some kind of governmental spending, which would again only create underpaid jobs in the developing countries, would not allowed to be financed by the printing facilities. Note that poverty reduction is always a peace building measure in itself.

2) Hence the new role of the central banks would be poverty reduction or to control the use of the printing facilities for poverty reduction and to provide them.

3) Public debts would melt away with the 5% of inflation. This is a very positive effect of my system. So old debts, taken up with a cheaper interest rate than 5%, would melt away and new debts would be hindered by the interest rate barrier of 5%. All this is positive.
This is only the less sever alternative to a worldwide annulment of public debt, which really seems to be necessary, while considering the investment function of money by only expropriating the big, speculative money, not the small savors and middle class investors.

4) The contradiction between austerity policy and investment policy of the state would vanish with my system. The printing facilities would serve as an investment program, while the usual states budget, which runs separately, can be balanced. But what I don’t want to happen is that the printing facilities occupy the place of the welfare budget and the overall money for the poor and hungry is not increased at all. Within the industrial countries only a surplus above the existential minimum for the poor should be financed by the printing facilities (see point (18)). This would drive the economy as investment.

5) My proposal can only be realized within a framework of multilateral cooperation. If only some states are printing money, it has the usual advantages and disadvantages. If only some states are driving the world economy by printing money or employing governmental debts, they encounter mostly disadvantages. But I am especially concerned with that mankind develops – while still being involved in economic competition between countries – a cooperative global superstructure, a cooperative globalization. “Cooperation” is anyway the keyword, which needs to determine the future development of mankind, if it wants to deal with the challenges of depletion of industrial resources in a peaceful way.

6) The system of the printing facilities is in itself cooperation. Additionally a cooperative realization of the printing facilities is possible. They can be used as a steering system for positive human goals. For example countries, which take over refugees can be rewarded by a 0,5% – 1% of their GDP increase of their printing facility per million of refugees, which they host.
The printing facilities would consist of a mix of “strong” and “weak” currencies. Always both in such quantity that the ratios between all currencies remain stable (overall inflation of 5%). So not every country would receive its facility in its own currency. Strong currencies would support weak currencies to satisfy the stability criterion. This is the aspect of balance or of development aid with my system: It would be a system of solidarity of currencies.

 

E c o l o g y

7) Within this cooperation by steering policies there can be given a 0,5% – 1% of the GDP increase of the printing facility also for countries, which abolish coal-burning power plants and had favored them before, because of their own coal deposits. I am speaking of Poland here for example. There are many ways by which the dedication of the printing facilities can support ecological politics.

8) My system would take care that money, which is today printed and given to and used by the rich, is then given to and used by the poor. This excites real economic growth from the side of the basic needs of the poor and hungry. Hence it is qualitative economic growth, which is much more ecological, than with the same money primarily in the hands of the rich. The same amount of money in the hands of the poor and hungry does less ecological damage, than in the hands of the rich (compare my hyper-cycle theory).

9) The availability of the matching money volume, by which the goods of real economic growth can be bought, is a productive factor. This factor was not considered with the foundation of the European Union. Therefor some industrial countries monetarily suck out other countries or currencies by their export surplus. This is the dis-balance of international trade.
With my system real economic growth is shifted to the domestic markets, because the money in the hands of the poor and hungry will excite domestic demand primarily. This will cut down the length of transport pathways of the purchased goods in comparison to international trade and hence is more ecological (because transport emits CO2).

10) Naturally there are many fields, in which capitalism is not ecological. But this is especially due to the fact that with the argument of job creation can be justified almost everything. The problem is the political power, which the entrepreneurs have especially in times of high joblessness. My new global financial architecture would combat this lobbying for worst standards, because it creates jobs. Nothing is better against the ruthlessness of capitalists, than a functioning capitalism. With the social question solved, voters would be willing to introduce high ecological standards for capitalism. The problem is not capitalism as an economic system. The problem are the capitalists with their lobbying against social and ecological standards, their resource wars and their influence by money on the media and politicians. For example land grabbing is the result of bilateral treaties for the protection of investors after the failure of the Doha round in 2012. The objective on African side was the creation of jobs. Such unjust treaties (taking away the food basis from the local population) need not be engaged any more, when my system takes grip.

 

E c o n o m y

11) The 5% maximum inflation with my system and the printing facilities exhibit two driving factors of real economic growth. First a “push”-factor in that money, which is stored without being at work for gains, decays in real value with the 5% inflation. Therefor it will be pushed into the real economy to maintain the given value at least. Second there would be a “pull”-factor in that my printing facilities create demand and the production will expand, following this demand.
But with my system the rushing of money into any economy with an inflationary currency, which drives inflation even higher (like now with Brazil), is avoided. All currencies would encounter essentially the same inflation. So there is no interest rate advantage with single currencies, inflating singularly.

12) My new global financial architecture is really a “third way” in the original (economic) sense of Silvio Gesell, who proposed that money should continually lose its value to be pushed it into investments. Only this is not achieved by printing devaluation signs on the banknotes, but by controlled inflation.
This third way should not be mistaken for the third way of Toni Blair. My third way is a demand oriented policy, while his third way was completely supply oriented and is continued by the policy of the cheap money.

13) Thereby the new global architecture is of advantage for both, the working class, as well as the entrepreneurs. It saves the working class from the hazards of poverty and hunger. But by creating demand in the right extend, it also provides easily realizable gains for the entrepreneurs. Meanwhile they have to work with their money for their wealth of course, as the working class has to work for their share in the benefits of industrial revolution. The latter is caused by the controlled inflation within my system, the first by the use of the printed money by the poor and hungry.

14) Inflation is no law of nature. It depends on many individual decisions of purchase and offer. Especially, if the money, which causes the inflation, is given to the poor and hungry, they will more likely than the well to do tend to buy more different goods at a cheap price, than paying for the same goods a higher price. Hence the factor of inducement of real economic growth by inflation, the 78%, which I have computed above, would probably be higher with my system. Less inflation is expected to induce more real economic growth with my system. By the way this explanation of the behavior of the poor might also be the reason for the high factor of inducement after the reunion of Germany, which I got by my empirical investigation. The Eastern Germans were mostly poor after the reunion.

15) The matching money volume to drive real economic growth is one productive factor. But of course there are other productive factors, for example education and technology, as well as immediate equipment with investment capital. So the initiation of the process of growth for Africa needs to be carefully driven by the printing facilities, not to overdrive the economy and causing high inflation. An educational initiative in agricultural production and providing investment capital for sustainable agriculture should come first or together with lower printing facilities at start.

16) Printed or borrowed money flows from the periphery to the centers and replaces there continually the gap, which is left by a production, which is driven by rationalization (by this money the stock of jobs of the industrial countries is financed). Conversely money, which is borrowed at cheap rate from the central banks, flows from the centers to the periphery and invests there in the natural resources, which are needed by the centers to maintain their wealth. From both in the end the centers profit most. But decisive in my context is that this process solely drives the real growth of the world economy, because there is created the money volume, which is essential for growth. But this is done in an unjust and non-sustainable way, as I showed by the idea to extract the borrowed money again from the economic cycle. The role of the central banks must be set out to another method of regulating the money volume, than credits. That is the general conclusion of my observations.

 

S o c i a l

17) The problem of inflation would be of course compensated by a continual adjustment of wages, pensions and welfare money to the risen level of the prices. This was possible during the boom years in Germany, which I investigated in above. It is nothing totally unusual.

18) In as much, as the 1050 Euro, which I propose as minimum income for Germany to be financed partly by the printing facility of Germany, are setting a wage standard (serving as minimum wages) this is a wanted effect. The promises of industrial revolution are only realized, if people have a significant surplus above the existential minimum, which they can use for their own life projects (250 Euro or so above the welfare money with Germany). The gains and wages of the elite should only be as high, as they are today, if everyone gets this surplus above the existential minimum.
I mean the jobless are not jobless because of their own laziness. They are jobless because of rationalization. The operation of the capitalist system makes them jobless. Hence they have to be paid off for their task of serving as a reserve of labor with a surplus above the existential minimum (which they also should have, if they would be working). Compare point (5).

19) One and so many social disturbances could be solved by my policy, as for example the cuttings with the Greece debts crisis. Free trade agreements like the TTIP, which heat up the competition for the most underpaid jobs, would be definitely superfluous, as enough jobs would be created.

20) The policy of the printing facilities of course needs to be set forth such that the local food markets in Africa profit from that. It is not meant to boost Western agricultural exports, which are subsidized. If necessary, local agricultural production in Africa needs to be subsidized too. A kind of maximization of agricultural production is needed in Africa on local level in times of global warming to nourish the growing population.
In the future mankind needs to be prepared for that the Malthusian trap (exhaustion of agricultural lands), the Malthusian gap (depletion of petroleum) and crop losses due to global warming (tipping over or exaggeration of climate systems) might coincide.

 

4. OUTLOOK ON THE PERSPECTIVES OF MANKIND WITH THIS POLICY

Please let me start with a humanist statement: Good is, what is good for the working class. I mean throughout this chapter the working class in the wider sense, including the jobless and disabled people (so I say not just: “the workers”). The very few rich persons with disabilities I ignore here. This working class is the wide majority of mankind. The capitalists care for themselves. So we end up with: Good is, what is good for mankind.
If it is stated that rationalization makes labor superfluous, this is in fact a disadvantage for the working class within the present system. But essentially it is an advantage. This because rationalization means nothing else, than that for the same fulfillment of needs are needed less working hours, which conversely means that the working class could have more free time, recreation, social time, dream time. And this perspective is not inhibited by my policy. In especial the rejection of rationalization is besides the point, because I am really not fond of, if workers have again to paint cars in hard, boring manual toil with spray-guns at the conveyor belt for the only reason that there should be more work. I think that rationalization is an advantage, if it is set forth in the right way for the working class.
When German ex-chancellor Helmut Schröder said: “There is no right for laziness in our society!”, this is simply wrong. Of course the working class has the right to convert higher productivity either into more consume or into more free time, the two promises of industrial revolution. Within the the present system of continually high joblessness especially corporate gains are rising. If there is an alternative for the working class, present capitalism exhibits more consume. But this can be changed by struggle for shorter working hours. If one million workers produce all the goods, which fife to ten million workers need, then there must be fought for shorter working hours, if one wants that capitalism is functioning. Per wage volume there must be produced less again then. Of course the rich consume more and the state absorbs a part of the production or working hours. Otherwise joblessness would be much higher. But shorter working hours remain essential to avoid overproduction. Then the wage fraction in the products would rise again. And this is the problem of shortening working hours within unlimited international competition. Thereby crisis and boom of the labor market unfortunately exhibit always an anti-cyclic behavior to the chances to take up the struggle for shorter working hours. During phases of recession, when jobs are rare and the need to split working hours is most obvious, the workers movement has not the force to combat for shorter working hours. And during phases of boom, when jobs are abundant, the entrepreneurs reject the shortening of working hours most, because they need labor. Hence there should be struggled for shorter working hours still during a phase of boom (which my policy would exhibit). For this reason the global trade union movement needs to network even more.

Marxism has renewed itself by taking the ecological dimension of capitalism into account. The neo-orthodox argument concerning ecology I understand to be the following: In as much capitalism replaces manual labor by machine labor, mineral resources and energy are excessively used for that. The establishment of these resources destroys the environment.
But if one really computes, how much energy – and this means solar surface in the end – is needed for manual labor and how much is needed for the same mechanical work by machines, then electrical machines come out more than a factor of ten better (so there is still space for the overhang of capitalist industries). Hence rationalization is not so none-ecological in the end.
Let me give you a brief description, how I come to this figure. You have to multiply the solar efficiency to establish the source energy (40% with solar cells) with the efficiency of conversion of this energy into mechanical energy (90% with electric motors). With electric energy I further consider the storage loss (by a factor of 95% for lithium-ion batteries) and the harvesting factor (of minimally 90% by solar cells). The harvesting factor takes into account that there is an energy needed to produce, transport and mount the solar cells. Then one gets as the maximum solar efficiency of electrical energy: 40% * 95% * 90% * 90% = 31%. This means that 31% of the solar input are converted into mechanical energy with the best equipment. Let me make the same calculation for manual labor. The maximum efficiency of the establishment of food (as energy source) is given by the maximum efficiency of photosynthesis, which is 6%. And the efficiency of the conversion of the chemical energy from food into mechanical energy is 30% (skeleton mussels). Then I end up with a solar efficiency of manual labor of: 6% * 30% = 1,8%. Hence the solar efficiency of manual labor is more than ten times lower than that of electrical labor, as I said. To reach at realistic values, both figure can be cut to halve (20% solar efficiency for usual solar cells and 3% for the photosynthesis of food). So the ratio is maintained, if one goes from the maximum to practical values. I have roughly outweighed here the factors of the inefficiency of meat production against the lowering factor of production of the robots and vehicles, which are driven by electric energy, while in my result is anyway almost a factor of two space for the latter. By the way, let me compute the same figure for bio-fuel. The solar efficiency of the production of the chemical energy is 0,35% there and the conversion efficiency is maximally 40% (practically). So one ends up with a solar efficiency of bio-fuel propulsion of only: 0,35% * 40% = 0,14%. So bio-fuel is really the worst. It is again more than a factor of ten less efficient than manual labor.
Of course capitalism needs abundant mineral resources to establish its stock of machines. For this reason the future economy needs to be a completely circular economy, which is aimed at by the European Commission [5]. I don’t want to say that capitalism is ecological today. I only want to say that it is less none-ecological, than is generally thought and that it can develop into being more ecological. Left wing authors always treat the issue, as if manual labor needs no energy. But this is a big mistake. A manually hard working person needs more than 1000 Kcal per day more, than someone living at rest. With a consumption of 2000 Kcal per day at rest, this would need at large scale 50% more solar surface for the production of food.
In the end I have given four arguments within the previous chapter (points (7) to (10)) that my policy would lead to a more ecological capitalism. These arguments I have amended within this chapter by the argument of solar efficiency. But please take into account that the argument of the stimulation of local markets is within certain limits. The money given to the poor does not only one time contributes to the GDP, when they spend it, but it rotates within the economic cycle some times being spent and re-earned during a year and each time it contributes to the GDP. The poor person gives it to the rice seller, the rice seller to the rice farmer, the rice farmer to the equipment seller and the equipment seller gives it to his daughter to buy herself a smart-phone for example (from his accumulated gains). Today’s hungry could be next years employees. I guess that half of the West-African youth would be facebooking, if they only could. It would stimulate the whole of the economy. Hence in Africa the printing facilities would not only stimulate the food production, but cars and mobile phones and the like would be bought from the money earned with the poor. This would also stimulate the economies in the industrialized countries. It is not only this or only that. Both the local food markets and the international economy would be stimulated. Reality is multidimensional, multifunctional and multicausal. Orthodox Marxists often have problems with that, because they are used to think black and white in terms of class contradictions. The Swizz psychologist Carl Gustav Jung captured the problem by saying that people tend to exhibit a kind of “all or none reactions”.

Let me recall the history of present capitalism. Until the seventies of last century the Western markets were saturated by industrial products, which were lacking after the Second World War. This caused a first wave of rationalization. And until the eighties of last century the real economic cycle was sucked out continually by the gains, which vanished into the big bubble of that gains. This was buffered partly by public debts and progressive taxation. But with the upcoming of third world industrial production as a competition, foreign currencies were not any more so easily sucked out by export surplus, to maintain the stock of jobs of western industries and the western welfare state. Progressive taxation was lowered, privatization of public enterprises took place to balance the public debts, instead of being balanced by progressive taxation. With the money from the tax reliefs took place another wave of rationalization. Globalization led into investments in the outsourcing of labor. And in the end large amounts of financial capital were involved in speculative business. Rationalization, accumulation (of money in the big bubble) and globalization lead to competition for the worst conditions of labor. And in this situation the flood of cheap money came, which finances further rationalization and the race for competitiveness of product prices. Instead of this supply oriented policy, which majorly does not work, because the volume of the real economic cycle is not increased (that’s why no inflation is caused by this policy), I am advocating again a demand oriented policy. Generally my policy cannot hinder the above stated competition of labor for the worst payment and standards right away. The latter is a phenomenon of globalization. But the demand oriented policy of the new global financial architecture can enable the labor force to play a significant role again in the establishment of their circumstances of living and it would set a standard thereof. By the means of the printing facilities, given to the poor and hungry, my policy would provide a social globalization. A global, democratic cooperation of the working class is possible by these means. Against capitalist globalization, we need a social globalization, which takes grip from the side of setting social standards, which effect the macroeconomic parameters. And this social globalization could be driven by the printing facilities in that the printing facilities can carry social and ecological standards in their backpack. Even if the credits, given by the cheap money, can be repaid, my new global financial architecture is the more social, ecological and just system. It is the only system yet proposed, which can effectively finance the struggle against hunger on the planet. This because it allows to combat joblessness in the industrialized countries and hunger in the Third World at the same time. In the end it would do so, by combining to repair the lack of present capitalism to care for a coherent mechanism of global money expansion with making such policy in favor of the poor and hungry. From the printing facilities can be financed a Marshall plan for the hungry. I want in this way to establish an economy, which works for the needs of the people, instead of leaving them powerlessly exposed to profit making. It needs strong social movements to set forth such a policy against the class interests of the capitalists. For that reason my policy should be maximally published.

The billionaire Warren Buffet: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

Half of the worldwide cobalt production comes from the Congo, where the cobalt is won also by child labor. The latter is paid as low as 2,50 Euro daily. Cobalt is used to produce lithium-ion batteries. This is one of the excesses of present capitalism. That’s why I say that population growth needs to be stopped that the struggle for better labor standards is not blocked by competition among the Third World youth. That’s why I want the printing facilities to be established to combat hunger on another basis, than such child labor. That’s why I want to give the money also to the poor in the industrialized countries to motivate them to fully participate in democracy to abolish products, which are made by such child labor. That’s why I am proposing a demand oriented policy against joblessness to allow for a proper taxation of the super-rich to give development aid to educate the children of the Third World. And That’s why I propose the founding of a world union to set forth this combined policy for example by introducing globally harmonized top level income taxes (to stop tax dumping, tax evasion and tax fraud).

Again billionaire Warren Buffet: “If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end – people like myself – should be paying a lot more in taxes. We have it better than we’ve ever had it.”

To reply some left wing criticism on my policy, I think that a money economy should be maintained. Money is an efficient measure of effort on two sides (the buyer and the seller). Further money is a measure of access to natural resources, which are limited on the planet. Income determines for the individual, how much natural resources she or he may use in total, without determining specific commodities, which are allowed to be used, and in this way diminishing individual freedom.
The total volume of use of natural resources is given by multiplying the population number on the planet with the average consume. Yes this average is biased by the disproportioned consumption patterns of capitalism. But the problems are also still largely dependent on the population number, especially on local level. I agree that the progression of the ecological problems with population growth is not proportional to the present average income, because most of the population growth is expected to take place in the Third World (and there people have not the average income). But the influence of the poor multiplies by 2 billions until 2050 and it is especially vital on local level. So both factors are a problem, the uneven proportion of consume, which is due to capitalism, and the total population growth. As I said it is not only this or only that. The world is multicausal.
In fact Susan George is wrong, when demanding that capitalists want to kind of abolish superfluous population. This aim would only appear, if this hypertrophy of population on the planet would become a danger for the people of the rich and super-rich class themselves. This is almost nowhere the case yet. Moreover population growth results in harder competition of the youth for the few jobs in the Third World, which allows the entrepreneurs to press wages low the most and which makes the poor the more dependent on the wealthy. This is clearly in the interest of the class of the capitalists. This is the preference of the rich class, when outsourcing jobs. And this was recently recognized in the corporate centrals with feminist criticism on population policies. And that’s why they all support the feminist view now. Overpopulation is in fact no economic disadvantage (what feminists rightfully claim), quit to the contrary, by rising competition between the workers it is a factor of locational advantage, but at what price of underpayment and low labor standards?
Because this is an important point, let me put forward my argument here against catching up development as large-scale solution of the problem of hunger and poverty and on how to establish a system, which exhibits provisions for old age (to lower population growth):
If all countries are exporting industrial products and want to have a surplus of their trade balance only to combat the joblessness, which is due to their rationalization, then who will buy all their products? If all countries are exporters of the same kind of goods (also supplying their own country of course with such goods – I mean, what the people buy: cars, TV-sets, computers, refrigerators, the whole set of industrial mass goods), where are the countries of their buyers? That can never work. To explain it differently: Yes German persons can buy a Japanese cars, but also Japanese persons will buy German cars. But they are both exporters and this generates no surplus, it is only an exchange. As long as one worker produces during her or his working hours industrial products, which have the value of fife to ten times of the wages, which she or he earns during these hours, this system cannot work. It is as a whole always missing buying power (demand). Yes “innovation”, some specialized goods can be exchanged, but this concerns niches. The system as a whole cannot work for all countries, supplying all countries with the high surplus of the trade balance, which is needed to operate like Germany for example or China. As a consequence many countries can only be stabilized in their standard of living on the basis of a lower level of population density, than the industrialized countries have.
But of course some industries can be built up in Africa. I would favor a medium technology pharmaceutical industry, which transforms the local herbs into proven, modern medicines. Like my bush flower and I wanted to do by extracting the heavy metals from the Neem tea against malaria. The question of the standards I want not to decide here. Sometimes standards might be better lowered to achieve something under difficult (poor) circumstances. I would advocate a poly-technical education for Africa, a three years education in agriculture (one year), ecological engineering (one year) and medical skills (one year). It can be performed by a cascade of teachers, 100 specialists educating the first 1000 poly-technical personnel and these are educating 10 000 of poly-technical workers, which are send into the villages. The medical skills would just involve to detects and cure the 30 most widespread illnesses and prophylaxis by mosquito nets for example against malaria etc. etc. For any complicated diseases the people must be sent to a specialist, a fully educated doctor. Of course contraceptive methods would be a part of this poly-technical education. By such a cascade the situation of Africa could be improved very quickly by important skills, which are available then in every village. The Gambia for example goes another way. They are taking over Western standards strictly.
The problem of provisions for old age has to be solved on all hands independently of the individual number of children to enable to stop population growth. If Third World ladies are not aware of that many children are providing their income, when they are old, then this awareness should be risen by educational initiatives. My policy of the printing facilities is in the end some means to provide also for the old aged in the Third World, until they have developed their own system there.
The policy to stop population growth may consist of three components: provisions for old age, availability of contraceptives and political information campaigns about the consequences of population growth. “Act locally, think globally”, but first and foremost in reproductive behavior. It needs a strong informative counterpoint against traditional systems, which favor a hypertrophy of population to have combatants for the warmongering of their elites and to have provisions for old age. The point of decreasing per capita resources with population growth is no “abstract” dimension, but it is very concrete on local level with the competition between herdsmen and farmers for land resources in Guinea Conakry for example. Still the continent-wide land resources in Africa are not yet exhausted? But fine, then let’s try to stop population growth that it remains this way in anticipation of possible crisis (caused by global warming for example). Not only this or only that. Both problems have to be addressed, population growth as well as global warming. This thinking in exclusive alternatives, which are repressing each other, is so disastrous.

Basically we have a conflict of aims here: On one hand only the capitalist system can provide the technological resources to establish an ecological way of mass production of affordable products of advanced technology (computers and the like) as well as for basic needs and has the productivity to nourish the growing population on the planet. On the other hand this system establishes its hyper-cycle of consumption of non-ecological, superfluous luxury (big cars and the like). Maybe a compromise should be made, not too much consume, to stay ecological enough and not too little consume to provide the necessary incentives for a functioning capitalism. The Tesla company with its electric sports car seems to show a workable way (but flights into space with solid-fueled rockets for super-rich are ecologically unacceptable). And at this point also my system of real economic growth from the side of the poor and hungry would take grip (to minimize inequalities by real economic growth “from below”). But this system should not be overheated too, to save natural resources. Still sustainable agriculture and a growing population are a contradiction (for lack of productivity of the first). Hence the long term strategy should be to revert or at least to stop population growth and to fulfill the needs of the working class by my policy. Thereby I am on all hands concerned about a surplus above the existential minimum. A socialist economy of scarcity, which would be non-ecological at the same time, I would not accept. My economic theory is rather a philosophy of achievements for mankind, than one of only avoidance of crisis. It is rather a philosophy of reasonable surplus, than one of negligence and survival.

 

SOURCES AND COMMENTS:

[1] PewResearchCenter, Drew Desilver: “More and more Americans are outside the labor force entirely. Who are they?”, November 14, 2014, http://www.pewresearch.org/fact-tank/2014/11/14/more-and-more-americans-are-outside-the-labor-force-entirely-who-are-they/

[2] Alles Schall und Rauch, Freeman: “100 Millionen Amerikaner haben keine Arbeit”, May 8, 2012, http://alles-schallundrauch.blogspot.de/2012/05/100-millionen-amerikaner-haben-keine.html

[3] Mathias Weik and Marc Friedrich: “DER CRASH IST DIE LÖSUNG – WARUM DER FINALE COLLAPSE KOMMT UND WIE SIE IHR VERMÖGEN RETTEN” (“THE CRASH IS THE SOLUTION – WHY THE FINAL COLLAPSE COMES AND HOW YOU SAVE YOUR ASSETS”), Eichborn Verlag 2014.

[4] Germany, real economic growth for (1961 – 2009), www.wirtschaftquerschuss.blogspot.com, http://1.bp.blogspot.com/_4bEaRUYaLZ4/S1N04q7dIBI/AAAAAAAAEow/AYeXs7XggUA/s1600-h/1.jpg
For (2004 – 2013): Statista, das Statistikportal, http://de.statista.com/statistik/daten/studie/2112/umfrage/veraenderung-des-bruttoinlandprodukts-im-vergleich-zum-vorjahr/
Germany, annual inflation for (1956 – 2014), http://de.inflation.eu/inflationsraten/deutschland/historische-inflation/vpi-inflation-deutschland.aspx

[5] European Commission: “Roadmap – Circular Economy Strategy”, April 2015, http://ec.europa.eu/smartregulation/impact/planned_ia/docs/2015_env_065_env+_032_circular_economy_en.pdf

[6] Forbes, Steve Denning: “The Surprising Truth About Where New Jobs Come From”, October 29, 2014, www.forbes.com/sites/stevedenning/2014/10/29/the-surprising-truth-about-where-new-jobs-come-from/#13ad63e747d9

[7] Syria, GDP at constant prices. 2001: 950245 million SYP, 2010: 1469703 million SYP (source: Trading Economics).

100 / 950245 = x / 1469703 yields: x = (1469703 / 950245) * 100 = 154,7 %.

So during the decade from 2001 to 2010 the Syrian GDP at constant prices grew by 54,7%.

The annual growth rate one gets by the exponential approach:

1,547 = 1 * exp(y * 10 years),

wherein y is the annual growth rate, yielding:

ln(1,547) = ln(exp(y * 10 years))

ln(1,547) = y * 10 years

y = ln(1,547) / 10 years = 3,76% annually.

Hence the Syrian real economic growth was only slightly above its population growth of 3,3% annually (of the population entering the labor market during the decade before 2010).

[8] Die Welt, “Globale Schulden wachsen auf 100 Billionen Dollar” (“Global Debts Reach at 100 Trillion Dollar”), March 9, 2014, http://www.welt.de/wirtschaft/article125607192/Globale-Schulden-wachsen-auf-100-Billionen-Dollar.html

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