Tag Archives: sociopolitical model

2013 – 2018 EVT – Learning from Water Privatization? (Panglossy)

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This post, as many others in the Chronicles of Everstate, can be read both as part of the scenarios on the future of the nation-state, as explained below, or as part of the section on Global Water Security. This shows how all issues are intertwined, and that the multiple existing feedbacks should not be ignored.

Previously: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. The first years fail to bring back growth; the power of the lenders’ nexus and induced appropriation of public power continue unabated as the regulation of the international financial system does not progress. The initial efforts to fund  Green Growth through infrastructure investments show minimal and disappointing impacts. Worse still, the initial implementation of air commodification under the ISSIGE flagship project by the consortium Novair triggers a nationwide wave of outrage because the beliefs of Everstatans are denied at all levels, while the elite is surprised.   

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading)

The Everstatan elite, surprised by the new Air Revolt, continues applying to the situation a superficial analogy with water to estimate the severity of the outrage in the country and its potential evolution. Yet, analogy is not comparison and is often insufficient to inform proper understanding and thus decisions.

Margaret Thatcher with Ronald Reagan at Camp David

Margaret Thatcher with Ronald Reagan at Camp David (Photo credit: Wikipedia)

First, the commodification of water, in its second wave, is still a very recent phenomenon. It started at the end of the 20th century with the privatization of water utilities in the United Kingdom of Margaret Thatcher, and is far from being completed, assuming it is meant to follow an ineluctable path towards completion, which has still to be proven. Everstatan elite cannot thus easily draw any clear conclusion.

Second, some voices exist, even if they are not so numerous and have so far not mobilised masses, that underline the ethical problems linked to the privatization of water (e.g. 2008 Symposium) or criticise the whole commodification endeavour.

Third, the current and future various issues and problems surrounding global water security will most probably keep the matter of water services privatization and water commodification on the agenda, seen in an even larger perspective, where security questions and geopolitics will be underlined.* This is likely to lead to stronger stance taken by all actors, and open the door to any strategy including manipulation and irredentism. As a result, a complete and smooth commodification of water that would not generate rebellions cannot be taken for granted.

Sbocco della Cloaca Massima in Rome, sewer system started in 735 B.C by Ettore Roesler Franz, 1880 via Wikimedia Commons

Fourth, in countries such as Everstate, when water was privatized at the end of the twentieth century, it was done in a way that is very different from the way Novstate-Air intends to monetize air. Then, a public service dealing with water-related issues was handed over or sold from the state to private companies. This was only one episode in the millennia-long struggle of human societies to manage wastewater, sewage and obtain clean water (Jungclaus, 1998). Everstatans never went from free clean water, or free apparently clean water, free sewage, etc. to becoming suddenly aware of the extent and danger of polluted water and having to pay for being able to drink and eat safely.

1865 – New York City Sanitary Commission, via Wikimedia Commons

Furthermore, throughout the millennia old struggle for safe water, they have, at least dimly, become conscious of direct links between living beings concentrations and water pollution, thus of their own responsibility. This long process and history does not exist in the case of air. With water, there was thus no effect of shock, no sudden awareness triggering a feeling of injustice and moral outrage, when there is with air. This implies that the absence of initial reaction in the case of water cannot be used to deduce that Everstate’s air revolt is unimportant and will be short-lived.

Finally, timing matters, twice. The privatisation of water utilities itself is not always done nationally but according to the administrative organisation underlying the public service, most of the time municipalities. This implies that changes happen according to the timing of each town. This stops the creation of any nationwide reaction. The impossibility of such large reaction is strengthened by the diverse situations existing for each administrative division. However, here, had separatists feelings and right conditions existed, water privatization in Everstate would then have strengthened those sentiments (see the last posts of the Mamominarch scenario for an example of such dynamics). Those underlying processes could and should have been considered by Novstate-Air and the Everstatan government, as those lessons were applicable to air. Considering the current conditions in Everstate, Novstate-Air had thus the “choice” between triggering a nationwide protest and sowing the seeds for separatism.

Then, water privatisation has mainly been done before the crisis, before the rise of inequalities and decline of purchasing power became obvious, before the rise of tension, before the legitimacy of governments and actors and of the whole socio-political model started being questioned.

Walker, DEFRA, 2009

In the past, if water prices increased with privatization (Barlow, 2001), the share of the water bill in a household expenses (e.g. averaged to 335$ a year in the U.S. in 2012 by the American Water Works Association, CNN February 28, 2012, 339£ a year in England and Wales in 2009 according to DEFRA, with many local and individual variations) and the added cost were not such that a collective feeling of relative deprivation could be born. The unequal weight of water bills according to household income inequalities must however be noted (Smets, 2002). Then, water privatization has been done while respecting, to a point, and with (large) variations according to countries and actors, the human right not to die of thirst or because of polluted water. For example, the existence of public fountains, access to clean public utilities, etc. has been maintained, while in many OECD countries one scheme or another used to exist or was created to help the poorest face their water bills. There was thus little that could have triggered a nationwide outrage and related escalation.

The commodification of air is happening in completely different circumstances and with no such safeguards as those that were implemented for water. Actually, Everstate’s Air revolt should suggest to the government and concerned actors that they should actively revisit water related policies, be they public, private, or mixed, as circumstances have changed. True enough, the privatization of water has been done and thus it cannot be a trigger for a new rebellion. If matters continue to be handled carefully by all actors involved, if the impacts of the various global and local evolutions are properly foreseen, while adapted and timely preventive measures are implemented, then the risk to see water riots added to the air revolt will be minimized. On the contrary, lack of foresight and of caution, which, considering the overall level of tension and ideological polarization becomes everyday more plausible in Everstate, will most probably mean that water issues will soon be added to the escalating number of grievances.

Alas, neither Novstate-Air nor the Everstatan governing bodies even attempt to move beyond the analogy with a water privatization of the past. They thus decide that the air revolt is nothing more than the passing fit of a population that does not truly understand problems, and that an emphasis on communication and advertisement while local meetings with the population are organised by Novstate-Air and the local authorities will be enough to defuse the anger. Meanwhile Novstate-Air does not change the schedule according to which Air contributions will be collected.

To be continued…. after the Summer.

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References

* For more references, see, notably U.S. Intelligence Community Assessment, Global Water Security, 2 February 2012, and two previous posts as well as their bibliography: Water security: a strategic foresight and warning issue for national security? (1 February 2012) and Building upon the 2012 “Global Water Security” IC Assessment (27 March 2012).

American Water Works Association

Barlow, Maude, “The Water Privateers,” Blue Gold: The global water crisis and the commodification of the world’s water supply (International Forum on Globalization (IFG), 2001).

Ellis, Blake, “Water bills expected to triple in some parts of U.S.,” CNNMoney, February 28, 2012.

Jungclaus, Joyce Everhart, “1998 Congress Recap” published in the APWA Reporter, excerpt republished as “History of sewage management” on Bloomington Minnesota Cityweb.

Smets, Henri, Le Droit à l’Eau, Conseil européen du droit de l’environnement., 2002.

Symposium Proceedings: Common Grounds, Common Waters: Toward a Water Ethic, Panel I: Water Ethics and Commodification of Freshwater Resources, Diamond, Stephen (Moderator), 6 Santa Clara J. Int’l Law 15 (2008).

U.S. Intelligence Community Assessment, Global Water Security, 2 February 2012.

Walker, Anna, CB, Independent Review of Charging for Household Water and Sewerage Services, DEFRA, Department for Environment, Food and Rural Affairs (UK), December 2009.

Wikipedia, Criticisms of the commodification of water.

Wikipedia, History of Water Privatization.

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2013 – 2018 EVT – Unforeseen Outrage: Privatising the Commons (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. The first years, however, fail to bring back growth; the power of the lenders’ nexus and induced appropriation of public power continue unabated as the regulation of the international financial system does not progress. The initial efforts to fund growth through infrastructure investments show minimal and disappointing impacts. Worse still, the implementation of the ISSIGE flagship project on air quality by the consortium Novair triggers a nationwide wave of outrage as the struggle against air pollution is monetized.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading – Research/methodological note at the bottom of the post – see credits for the images in the references)

The monetization of the struggle against air pollution is perceived by Everstatans as nothing else than the privatization of air.  It generates such a strong reaction and mobilization because it creates a feeling of injustice, actually moral outrage, as it impacts and upsets all layers of beliefs of Everstate’s population (see Ideological Stakes in an Outdated Worldview).

by Tim Evanson

Most fundamentally, monetizing air is at once an appropriation of an essential element that has so far belonged by right to each living being by the simple fact of it being alive, and a desecration, both going against the deepest human beliefs as shown by symbolism, as air is an image often found in many cosmological, religious and philosophical myths, books and systems. Air is one of the four (or five if we include aether) elements of classical thought. It can be found in Hinduism, Buddhism, Bon (Tibetan philosophy), in the Japanese traditions, and more recently in medieval Western alchemy. If it is not present per se in the Chinese elements, breathing, notably in Qi Gong, is seen as fundamental. In the Bible, the “breath of life” is God’s power to create and give life to man (Genesis 2:7). Air and breath go thus beyond one religion to reach something that can be seen as archetypal, following Jung. It is the very relation to the Mystery of life (Mystery meaning “a religious truth that one can know only by revelation and cannot fully understand”), life’s origin, beauty, and continuation or termination, that is being upset by Novstate-Air.

At the normative level, more superficial although also crucial, the monetization of air is one more attempt at privatizing the commons, at transforming the public good into public goods that can then be transferred to the private, sold and bought in the name of any ideology, as recently denounced again, among others by Reich. This process is also known as commodification, for example the commodification of water or the commodification of nature. Indeed, in the real world, the latest failure of the 2012 Rio+20 summit (Montbiot, June 2012) is not lost on the private sector and, among other impacts, open the door even more widely to an all-out commodification, as underlined by a recent article in MarketWatch:

“So while it is a sad time for the planet from a policy perspective, the private sector has just been handed a golden opportunity.” Kostigen, 29 June 2012

The privatisation of the commons started in England, as early as the 12th and 13th century, then accelerated with the rise of capitalism – and modernization – through the centuries-long struggle over the right to use common land to graze livestock, which ended up with generalised enclosure and the disappearance of the commons. History shows that privatization leads to protests and revolts (e.g. Hardin 1968, Moore, 1966).

“In the case of the enclosure of the common lands, which was going on from about 1600 to 1850, the land-grabbers did not even have the excuse of being foreign conquerors; they were quite frankly taking the heritage of their own countrymen, upon no sort of pretext except that they had the power to do so.” Orwell, 1944

If, as underlined by Hardin, we must also be conscious of “The Tragedy of the Commons,” with air pollution as a perfect example, and one that he singles out, commodification and monetization of the air, paid only by consumers, may not be the best solution, even if this solution has worked beforehand for other commons. Indeed, the ideological battle that is actually taking place questions now this approach, and could very well emphasize that as, modernity, it is part of an outdated order.

One could also argue that Everstatans felt directly threatened too, as air, actually oxygen, is one of the most basic, fundamental elements for living beings on earth since the Great Oxidation Event, because cellular respiration depends on it. Being deprived of air means death within a few minutes for the strongest. However, historical facts and research, including the direst political phenomenon that is genocide, have shown that direct threat to life alone does not lead to rebellion or even to escalation, whilst feeling of injustice and moral outrage, in specific conditions, do.*

The Everstatan government and elite are surprised by the moral outrage that spreads because of their position within the ideological battle that is taking place. Moreover, during the last decades of economic, materialistic, technocratic, politician supremacy, they have forgotten the most fundamental political dynamics, or, if they know and understand, they do not care because they believe that those who will have to deal with the most violent side of political processes are not them but future generations. The analogy they used to create Novstate-Air and the monetization of air, the commodification of water, also plays into their inability to foresee Everstatans’ reaction. Privatizing water has so far not created such a moral outrage. Thus why should air be any different? Does the acquiescence to water’s monetization show that the air revolt will be short-lived and soon forgotten if Novstate-Air, backed up by the government, remains firm?

To be continued…

Research and methodological note

This post (and the next one) and the way the scenario narrative unfolds suggest that what the elite does, more precisely the way public power is appropriated matters. Here, however detailed our model (see Creating the model part 1 & 2) may appear, especially when it is described in number of variables used (compare with the 2 to 8/10 variables that are most often suggested as ideal for foresight), the means and processes of appropriation are not detailed.

The question is: should we translate those processes in terms of our model and add them to it, to the price of complicating the model even further, or should we, as I have done here, add further understanding only through the narrative, keeping the model as guidance?

The answer depends upon the degree of automation of the system and of the composition of the foresight team. The more automated the foresight system (let’s imagine it is computer run and can generate automated foresight scenarios through text-generation) , the more important to continuously expand the model, when some processes appear to have been underdeveloped as here. This begs the question of detecting such underdevelopments. The more diverse, knowledgeable and well-educated the team of foresight analysts, the more the model can be kept as such, being used as guidance.

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References

* Among others, Sambanis, Nicholas, “Using Case Studies to Expand the Theory of Civil War,” (World Bank, CPR Working Papers, Social Development Department Environmentally and Socially Sustainable Development Network, Paper No. 5, May 2003); James C. Scott and Benedict J. Tria Kerkviliet, Everyday Forms of Peasant Resistance in South-East Asia, ed.  (London: Frank Cass & Co.; 1986); Scott, James C., Domination and the Arts of Resistance: Hidden Transcripts, (New haven: Yale University Press, 1990) and Weapons of the Weak: Everyday Forms of Peasant Resistance, (New Haven: Yale University Press, 1985); Moore, Barrington, Injustice: Social bases of Obedience and Revolt, (London: Macmillan, 1978); Jeff Goodwin, James M. Jasper, Francesca Polletta, Passionate Politics: Emotions and Social Movements, (Chicago: University of Chicago Press, 2001).

Hardin, Garrett, “The Tragedy of the Commons,” Science 13 December 1968: Vol. 162 no. 3859 pp. 1243-1248 DOI: 10.1126/science.162.3859.124.

Kostigen, Thomas, “Rio+20 was a win for social investors,” MarketWatch, June 29, 2012.

Merriam-Webster Dictionary, Mystery.

Monbiot, George, “After Rio, we know. Governments have given up on the planet: The post-summit pledge was an admission of defeat against consumer capitalism. But we can still salvage the natural world,” Guardian.co.uk, Monday 25 June 2012.

Moore, Barrington, Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, (Beacon Press, 1993, 1966).

Orwell, George, “As I Please” column, Tribune, 18 August 1944. in Alex Peak blog.

Reich, Robert, “The Decline of Public Good,” 4, January 2012.

Images

Clerestory window – North Nave – National Cathedral – DC by Tim Evanson [CC-BY-SA-2.0 via Wikimedia Commons: The center pane depicts God (upper portion) breathing the breath of life into man (bottom portion). It is the breath of God which leads to creative inspiration (center portion).
A group of dissenters in Norfolk during Robert Kett’s rebellion of 1549 in Samuel Wale engraving of Robert Kett beneath the oak of reformation – 1785, via Wikimedia Commons.

2013 – 2018 EVT – Novstate-Air: Fighting Air Pollution for Profit (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. As the new international meeting group for the resilience of the financial system IRESFIS does not show any progress, the ISSIGE, the international fund to promote green growth through infrastructure investment contributes to reinforce the power of the lenders’ nexus and appropriation of public power. Moreover, its results are disappointing: selected projects are insufficient to catch up on late investments, and their impact is too small to bring back growth, to show a change towards sustainability, and to alleviate unemployment. Remains one hope, now vested in the ISSIGE flagship project on air quality.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

Global but unequal fight against air pollution

Air quality is crucial in terms of health and related costs, and a complex challenge as its pollution involves many chemical elements.

Despite efforts, notably within many OECD countries, to struggle against air pollution, air quality remains a severe global problem, all the more so that pollutants travel. Furthermore, much still needs to be done to fully understand the problem and to devise solutions, as detailed by the EPA for black carbon in its chapter on research needs. For example, synthesised global data are still difficult to gather. The array of means used to improve the collection of information, from sensors to satellite image, as exemplified on the US Air Quality: The Smog Blog, and to provide citizens with adequate daily measures and warning on all types of pollutants, as shown for example by the Daily Air Quality Index in the UK, exists, most of the time, only in OECD countries.

In Everstate, as in its neighbouring countries, the fight for air quality must continue and even be reinforced if more and better results are to be observed, especially as pollution does not diminish in other parts of the world, notably in Asia. This is the overall framework for the ISSIGE flagship programme.

The creation of Novstate-Air

Novstate creates a special structure to answer the proposal, called Novstate-Air. It gathers in a friends network covering Everstate and its neighbours, various industries, universities, research laboratories and health institutions, which are all involved at one stage or another in air pollution and air quality, either because their activity and products are potential sources of emissions, because they participate in the design, implementation or monitoring of sensors and models, or because their research or practice is linked to air pollution or to its impact on health.

In early 2014 EVT, Novstate-Air is awarded the ISSIGE contract and the funds. Besides the breadth of the answer, allowed by the variety and number of stakeholders, which thus fits perfectly well the framework programme, the originality of the financial proposal is what determines the ISSIGE to grant the contract to Novstate through Novstate-Air.

Financial boldness rewarded

Novstate-Air underlines first that what stops companies’ efforts towards air quality are the added costs to their products that changes and investments would create, when benefits would not only be delayed but also spread throughout a population that may or may not belong to their clients. Then, it stresses that if the overall effort were to be supported by the state, then the public deficit would increase in the short-term, while benefits, notably in terms of heightened health security and diminished related visible and hidden costs, would only appear in the longer term. Furthermore, it would be difficult to establish a direct link between investments and benefits, which may be unfavourable in terms of promotion and communication.

Novstate-Air thus suggests, to overcome this conundrum, to ask citizens, who are the final beneficiaries, to become directly involved in the effort by paying regularly a small contribution towards air quality. Looking for an analogy, Novstate-Air decides to mimic the way water is delivered and sold to citizens, but adapted to the specificity of air. The alternative was the creation of an indirect air tax, as indirect taxes are a perfect way to collect taxes without creating resentment. The air contribution is chosen over the tax because it allows for the monetization of the service as well as for profits, thus to the involvement of the private sector, which should contribute to growth and economic sustainability, two specific requirements of the ISSIGE.

Monetizing air quality

by William Adams, How Much Air Do We Breathe?

Novstate-Air, working hand in hand with local administrations will make sure the contribution is calculated fairly, while the data gathered to establish the amount owed by each citizen can be used for research purpose. To mimic at best the water system, Novstate-Air decides to estimate the amount of air breathed by each citizens, according to a specific survey of their activities. This quantity will be revised every trimester. Further research in this field will be conducted to confirm previous findings according to age and gender. Finally, the air contribution will be calculated according to the liters of air used by each family during one trimester. The contributions will be used to finance research, update sensors and all monitoring activities and to help private companies improve their emissions. In the name of transparency, activities and achievements will be given to each family, emphasising notably the improvement of air quality in their environment and the impact on their health.

Thou shalt be surprised…

By 2015, Novstate-Air is able to provide citizens with a preliminary factsheet on the status of their air quality, to start gathering data and, thanks to the use of internet-based facilities, to almost immediately collect contributions nationwide.

Novstate-Air and its network of associated bodies, the ISSIGE and Everstate’s government expect a strong positive reaction. They are thus extremely surprised when, on the contrary, a wave of outrage sweeps over the country, supported by Occupy Everstate, Anonymous, and various unions.

To be continued…

References

Adams, William C., Research Note 94-11: Topic = How Much Air Do We Breathe? California Environmental Protection Agency, 1994.

Dupré, Franck, “Pollution : le diesel, un danger mortel ?” Autonews.fr, 29 Mars 2012.

Durden, Tyler, The Benefits Of A College Education, Zerohedge, 05/21/2012, from Jed Graham, New Normal: Majority Of Unemployed Attended College, IBD, 05/17/2012.

EPA, Black Carbon Report to Congress, March 2012.

European Environment Agency, Chapter 4. Nitrogen emissions and threats to biodiversity, Environmental indicator report 2012 – Ecosystem resilience and resource efficiency in a green economy in Europe, Part 2. 2012.

Janssen, Nicole AH, Miriam E Gerlofs-Nijland, Timo Lanki, Raimo O Salonen, Flemming Cassee, Gerard Hoek, Paul Fischer, Bert Brunekreef, Michal Krzyzanowski, Health effects of black carbon, WHO, 2012.

Lehner, Peter, of the NRDC, Diesel Exhaust Does Cause Cancer, CleanTechnica.com, June 12, 2012.

The Guardian, Global air pollution: what is the most polluted country and city in the world? (WHO data), 26 Septembre 2011.

US Air Quality: The Smog Blog.

WHO, Air quality and health, Fact sheet N°313, Updated September 2011.

2013 – 2018 EVT – Green Growth in Action (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which begins the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. The first high level conference of the ISSIGE, the international fund to promote green growth through infrastructure investment, is hailed as a success. However, as the new international meeting group for the resilience of the financial system IRESFIS does not show any progress, the ISSIGE, in such conditions, also contributes to reinforce the power of the lenders’ nexus and appropriation of public power.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

The Everstatan delegates and members of the ISSIGE are conscious that its success is crucial. The highly unstable situation demands it. They thus start immediately working on the various framework projects’ proposals and their selection. Three more months, which is considered as a very short time-frame in a multinational governmental setting, are needed before the selected projects are publicised to allow companies to bid for them. The project themselves are due to start at the beginning of 2014 EVT, latest.

Meanwhile, the overall situation of Everstatans continue to degrade slowly. Every month now, one or the other area of Everstate is marred by some unusual climatic event. Those, however, are very localised and damages are relatively small. The overall world growth is minimal while energy and resources prices remain very volatile, contributing to a mood in see-saw. As a result, food prices continue to soar. Everstate’s public deficit remains as high as previously, and even rises as interests grow and as more borrowing is needed. The lenders’ nexus profits skyrocket. Many small companies that constitute the productive fabric of Everstate suffer from this environment and either stagnate or are forced to close down. On the contrary, a few well-connected companies, such as Novstate and its friends businesses, continue to be highly profitable, even though they complain that their rate of growth starts to be slow compared with the past. It is very high time that the overall boost expected from the ISSIGE takes place.

Considering the number of countries that are part of the ISSIGE and the relatively small amount of the overall bonds issued to fund them, the infrastructure investments that will take place on Everstate’s territory are few and far between. The very caution used, as this first year of funding must be considered as a test-case, tends to be self-defeating because of the considerable needs faced. The selected projects are not only insufficient in terms of catching up on late investments, but also their impact is too small to bring back growth, as well as to alleviate unemployment.*

WPA road project, Franklin D. Roosevelt Presidential Library and Museum, via Wikimedia CommonsCompared with the past, infrastructure projects are not anymore labour intensive. They are, however, knowledge intensive. Thus, considering the deficit of proper and fair treatment to the Everstatan educated population (see inequality statistics; Zerohedge, 05/21/2012 using Graham, IBD, 2012), the idea of promoting green growth investment, if set and re-imagined within a new socio-political model, might well be a way forward. Here, unfortunately, Everstate tries getting past-style results, when those cannot anymore be delivered.

Nevertheless, one of the infrastructure projects selected for Everstate is elected as ISSIGE flagship infrastructure programme for its deeply innovative character, the breadth of its environmental scope and its crucial character: Air Quality. Could this, at least, herald something really new and forward looking that could continue fostering hope among Everstatans, if overall general results are insufficient?

Starting most probably with the industrial revolution, air quality has degraded globally, notably in cities, but not only. Since its first report warning about those risks in 1987, the World Health Organisation has published its Air quality guidelines – global update 2005. In 2011, it underlines that

“Air pollution is a major environmental risk to health. By reducing air pollution levels, we can help countries reduce the global burden of disease from respiratory infections, heart disease, and lung cancer… Urban outdoor air pollution is estimated to cause 1.3 million deaths worldwide per year. Those living in middle-income countries disproportionately experience this burden…. The mortality in cities with high levels of pollution exceeds that observed in relatively cleaner cities by 15–20%. Even in the EU, average life expectancy is 8.6 months lower due to exposure to PM2.5 produced by human activities. ” (WHO, Air quality and health, Fact sheet N°313).

Among the pollutants singled out by the WHO, one finds notably: particulate matter (PM), ozone (O3), nitrogen dioxide (NO2) and sulfur dioxide (SO2). PM, includes PM2.5, also known as black carbon, which comes, among others, from diesel engines and vehicles, and contributes to both diseases – including cancer for diesel – and climate change (Janssen, et al. 2012, EPA, 2012). NOx contributes to various diseases and acid rain, which impacts negatively freshwater, forests and crops, and, more generally, biodiversity (EEA, 2012). The screenshot below of the excellent interactive and explanatory display done for the French ADEME (Agence de l’Environnement et de la Maîtrise de l’Energie)  summarizes the complexity of the challenge Everstate as all countries face (click on the image to access the interactive application – in French but the visual part can be understood in any language – PM are included in “aerosols“):

To be continued…

* Read on investment and more generally on growth in current conditions the excellent article by Michael Spence, Nobel laureate in economics, “Why Do Economies Stop Growing?” Project Syndicate, May 23, 2012.

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References

Dupré, Franck,  “Pollution : le diesel, un danger mortel ?” Autonews.fr, 29 Mars 2012.

Durden, Tyler, The Benefits Of A College Education, Zerohedge, 05/21/2012, from Jed Graham, New Normal: Majority Of Unemployed Attended College, IBD, 05/17/2012.

EPA, Black Carbon Report to Congress, March 2012.

European Environment Agency, Chapter 4. Nitrogen emissions and threats to biodiversity, Environmental indicator report 2012 – Ecosystem resilience and resource efficiency in a green economy in Europe, Part 2. 2012.

Janssen, Nicole AH, Miriam E Gerlofs-Nijland, Timo Lanki, Raimo O Salonen, Flemming Cassee, Gerard Hoek, Paul Fischer, Bert Brunekreef, Michal Krzyzanowski, Health effects of black carbon, WHO, 2012.

Lehner, Peter,  of the NRDC, Diesel Exhaust Does Cause Cancer, CleanTechnica.com, June 12, 2012.

The Guardian, Global air pollution: what is the most polluted country and city in the world? (WHO data), 26 Septembre 2011.

WHO, Air quality and health, Fact sheet N°313, Updated September 2011.

Images

WPA road project, Franklin D. Roosevelt Presidential Library and Museum, via Wikimedia Commons.

CNES-CNRS/INSU-MEN, Les polluants de l’air extérieur, Agence de l’Environnement et de la Maîtrise de l’Energie, 2009.

2013 – 2018 EVT – Investing for Green Growth without Liquidity (2) (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to boost growth through consumption. The second, longer term, policy, which promotes green growth through infrastructure investment, starts with the preparation of the first high level conference of ISSIGE. Notably, funding through the emission of bonds, which should promote a lever effect by involvement of the private sector, is decided. The new international meeting group for the resilience of the financial system IRESFIS also convenes, but with no progress as the lenders’ nexus is as strong as ever.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

Actually, the lenders’ nexus has even seen its position reinforced. The ISSIGE, by deciding to issue bonds, which go through the private banking system, and by hoping for leverage, has reinforced the dependency of the nation-states and its governing bodies upon the lenders’ nexus as well as upon any private actor with liquidity. The political weight that is put on the ISSIGE success, notably because it has been framed in terms of growth, which is crucial according to the past worldview, on the one hand, and, on the other, because of the global increasingly urgent need for investment, further strengthens the immediate power of the lenders’ nexus.

However, a large part of the investment deficit has been and is created by companies and lenders that have been seeing more (short-term) profit in not investing than in investing for years. This perception of the profits private companies and lenders could get – the return on investment – affects the perception of risks. It thus, most probably, contributes to lead private actors to ask the public (i.e. the nation-state) to bear the cost of all risks attached to green growth investment, from “where returns cannot be monetized or appropriated by the investor” to “risks that are more perceived than real, e.g. demonstration of a proven technology” (Global Green Growth Forum, March 2012, p.2). Actually, considering the overall investment deficit, it seems that it is not only green growth investments that are concerned.

Furthermore, all actors evolve within a paradigm that enounces that the private sector is best and knows best how to run everything and to provide for any goods and services. This favours the idea (even if it is never couched in such crude terms) that, if the private sector must contribute to invest, then it can do so only by obtaining the same high profit rates it could get by placing its cash surplus – the liquidity – elsewhere, i.e. notably in the bubbles of the financial market. It is thus up to nation-states to pay for the difference. Again, this leads to a blatant appropriation of public wealth and power.

Considering the existing public deficit, the private ownership of the related debts, the prevalent worldview and the various ideological and material stakes to keep it, there is, however, no other solution. To find another way would demand that at least one of the prevalent conditions change, so as to rebalance the negotiating power of actors (see, for a detailed explanation, “The powerful Everstatan elite under threat?” in Everstate, setting the stage (2) and 2012 EVT: Public Resources and Lenders).

Once the ISSIGE funding process is set up, the ISSIGE summit may take place. In a nutshell, the criteria the framework projects’ proposals will have to meet are as follows:

Arbutus menziesii immature fruit by Jina Lee GFDL or CC-BY-SA-3.0, via Wikimedia Commons

  • transboundary projects involving at least two countries,
  • fostering economic growth,
  • innovative,
  • green projects that are environmentally and economically sustainable,
  • improving or creating infrastructures that provide a service and/or allow overcoming identified and felt environmental threats.

Once the framework projects are selected, then a usual legal bid system to compete for and be awarded public markets will be used. Legally, the system of the countries where the project will be implemented can be used indifferently. The delegates, once the summit ends, have six months to define framework projects proposals. Some of those proposals will then be chosen by the network of delegates and become the ISSIGE framework projects for the year. The network will make sure that each member country receives the same value in terms of funding of projects.

The summit is considered a success by the various member states. The very identification and presence of the delegates, on the one hand, having been able to agree upon and set up the process, on the other, are seen as the very first achievement of ISSIGE. A strong communication campaign is organised around this theme.

Yet, in terms of everyday life, for Everstate citizens, there is no improvement whatsoever, besides the efforts of the various administrations they witness. On the contrary, the situation appears to grow worse, slowly and inexorably. The administrative time, notably when it involves the coordination linked to multinational governance, seems to be increasingly disconnected from and ill-suited to a real world where problems follow their own dynamics.

Because of the transparency surrounding the process that allows for proper information, because citizens know that green investments are crucial, while being aware of the complexity of the task and finally because Everstatans hope for a direct improvement in their lives once the projects start, as has been promised, they bear with their rising hardship and fear.

To be continued…

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References

For real life discussions on green growth investment & financing, as well as on investment deficit:

3GF, Global Green Growth Forum, FINANCING Preparatory Strategy Meeting, 26-27 March 2012.

Caranci, Beata  & Chris Jones, “Milking America’s Cash Cow: The Case For Stronger Investment Growth,”  Special Report, TD Economics, May 25, 2012.

Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance, October 2011.

Euractiv.com, “‘Project bonds’ launched as an experiment,” 23 May 2012.

European Commission, Europe 2020 Project Bond Initiative, Investment needs, last updated 19/10/2011.

Hutton, Will  Companies must stop hoarding cash and start investing instead, The Observer The Guardian, 19 February 2012.

Klein, Ezra, America’s capital investment deficit, Washington Post, December 31, 2010.

Pan European Networks, “‘Project bond’ plan approved by diplomats,” 22 May 2012.

World Economic Forum, Financing Green Growth in a Resource-constrained World Partnerships for Triggering Private Finance at Scale, 2012.

Zarroli, Jim,  Companies Sit On Cash; Reluctant To Invest, Hire, August 17, 2011, NPR.

Zenghelis, Dimitri, “Restoring growth and confidence through green innovation,” E!Sharp, June 2012.

2013 – 2018 EVT – Investing for Green Growth without Liquidity (I) (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. Dependent upon programmes created to face efficiently past challenges, prisoners of entrenched political groupings, the major parties campaign to come back to the order ante. Meanwhile, the polarisation and rise of a new opposition that took place during the election is temporarily frozen by the last hope thus created. The new Everstatan government, dependent upon past thinking, decides that a return to economic efficiency through growth is the key to the crisis. Its first measure, to raise the minimum wage, fails to bring back the expected result, to boost growth through consumption and thus to restart the engine.

(The reader can click on each picture to see a larger version in a new tab – a navigating map of posts is available to ease reading.)

As the first measure fails to boost growth, then the income of Everstate remains in the pitiful state into which it was before the elections. It even continues degrading as pressures and related costs do not relent. Meanwhile, as the need for liquidity does not stop, power remains in the hand of the lenders’ nexus.  Yet, the failure of the government is only about the first measure. Two longer term policies are meant to address those very problems that have contributed to derail the whole system: the pressures related to the increasing complexity of resources, including looming scarcity, relative and absolute, through ISSIGE, and the problem of liquidity through the new international meeting group for the resilience of the financial system (IRESFIS).

Those two policies show that, even if they are included under a label, “restoring economic growth,” that is still part of the outmoded worldview, some awareness of the real problems besetting Everstate has started to take place.

ISSIGE will convene its first high level meeting in Everstate’s capital, six months after the elections, to allow for the organisation, for the presentation of first recommendations and to make sure that it will be able to announce the amount of the overall fund. It is imperative that firm and consensually accepted recommendations follow from this conference, considering the urgency of the situation. Heads of governments of the various member-states will be present to show the high level commitment given to the project. Several hundreds delegates of all the countries involved will be present. They will constitute the ISSIGE network, backbone of the effort.

Each delegation prepares a draft determining the criteria for the framework projects they will have to propose in the years to come, the process according to which those framework projects will be selected and, finally, how those projects will be implemented, by whom, with which supervision, etc. Those drafts are, of course, widely shared, read, and amended among delegates over the six months preceding the conference. In this way, no surprise and no intractable dispute will occur during the conference. Considering the administrative work load those exchanges require, and considering the high level profile of the delegates, substantial emoluments are paid to those delegates who are not civil servants, while those civil servants who are now working full-time for ISSIGE within their mother administration are promoted to the rank of Director with corresponding salary increase.

In a wish to promote transparency and show Everstatan citizens the real and genuine efforts and progress of the new government, drafts, exchanges and discussions are precisely documented and uploaded on a dedicated ISSIGE website. Furthermore, a special platform opened to citizens is created, where Everstatans can give their input. This effort is quickly followed by other countries.

More difficult, ISSIGE must also find a way to fund the projects themselves, and decide upon a global amount. Considering the public deficit existing in most countries, the ISSIGE network, the governments and administrations behind them decide that the various members and the Regional Union will issue bonds to fund the projects, which should also, hopefully, promote private investment. The overall amount for the first year is set at EVC (Everstate Currency) 250 millions. ISSIGE hopes that a lever effect will apply and that the overall value of the projects thus funded will be much higher.*

This is a very small amount considering the global current needs existing in terms of investments. According to the Global Green Growth Forum using 2010 IEA estimates, “by 2050 US$ 1.2 billion additional annual investments just in energy supply and use are needed to avoid a temperature increase beyond 2°C.” Meanwhile, the economy needs in terms of investments “for transport, energy and information and communication technologies (ICT) infrastructure projects in Europe are estimated at €1.5 trillion for 2010-2020″ (Euractiv.com, 23 May 2012). According to the European Commission, “infrastructure investment needs” “are estimated to be of EUR 1.5 trillion to EUR 2 trillion to meet the policy goals of the Europe 2020 Strategy for smart, sustainable and inclusive growth.” However, this first ISSIGE funding is a start.

Meanwhile, the IRESFIS meets a couple of times, but each player camps on its position, and no progress is made. Those, which include Everstate’s government, who want more regulation, are immediately countered by most financial actors, who oppose it, as well as by some governments, who believe that more regulations will hamper financial transactions and thus diminish the power of their countries as financial centres.

As the income of the nation-state continues to be insufficient, the bargaining position of the lenders’ nexus is as strong as ever. It is even stronger because of the ISSIGE needs… to be continued.

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References

For real life discussions on green growth investment & financing, as well as on investment deficit:

3GF, Global Green Growth Forum, FINANCING Preparatory Strategy Meeting, 26-27 March 2012;

Caranci, Beata  & Chris Jones, “Milking America’s Cash Cow: The Case For Stronger Investment Growth,”  Special Report, TD Economics, May 25, 2012.

Climate Policy Initiative and the World Bank Group in collaboration with China Light & Power and the Organization for Economic Co-operation and Development, Inaugural Meeting of the San Giorgio Group: Expanding Green, Low-Emissions Finance, October 2011.

Euractiv.com, “‘Project bonds’ launched as an experiment,” 23 May 2012,

European Commission, Europe 2020 Project Bond Initiative, Investment needs, last updated 19/10/2011.

Hutton, Will  Companies must stop hoarding cash and start investing instead, The Observer The Guardian, 19 February 2012.

Klein, Ezra, America’s capital investment deficit, Washington Post, December 31, 2010.

OECD, Infrastructure to 2030, Vol.2, 2007.

Pan European Networks, “‘Project bond’ plan approved by diplomats,” 22 May 2012;

World Economic Forum, Financing Green Growth in a Resource-constrained World Partnerships for Triggering Private Finance at Scale, 2012;

Zarroli, Jim,  Companies Sit On Cash; Reluctant To Invest, Hire, August 17, 2011, NPR.

Zenghelis, Dimitri, “Restoring growth and confidence through green innovation,” E!Sharp, June 2012.

2013 – 2018 EVT – Increasing wages: not enough, too late? (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start, which starts the second scenario, Panglossy. Dependent upon programmes created to face efficiently past challenges, prisoners of entrenched political groupings, the major parties campaign to come back to the order ante. Meanwhile, the polarisation and rise of a new opposition that took place during the election is temporarily frozen by the last hope thus created. The new Everstatan government decides that a return to economic efficiency through growth is the key to the crisis. It chooses and starts implementing specific policies. 

(The reader can click on each picture to see a larger version in a new tab - a navigating map of posts is available to ease reading – research note before the references).

The logic underlying what presides to the level of satisfaction of Everstate’s population, or to any population for that matter, does not change according to the decisions of a government. Everstatans will assess the security that their government provides through the lenses of their expectations, of their constructed beliefs, considering all the pressures, present and anticipated, to which they are subjected and that impact, directly or indirectly their lives (for more details, see the whole series of post on 2012 EVT, starting with Rising Discontent).

All those pressures lead people to seek a security that becomes increasingly more difficult to achieve, which implies that the task of governing for any government becomes more complex, more demanding. Besides, the new pressures also directly affect the way to govern, contributing to make the task of governing even more difficult.

Meanwhile, the newly elected Everstatan government chose to focus all its policies on restoring growth, which means, in its eyes, the efficiency of the economy. The increase of the minimal wage, to start with, definitely gives a short breathing time to those Everstatans who are paid through wages.

However, it changes nothing to the anxiety and low-income created by imposed temporary employment and economic short-term employment, or to the fear to be laid off and only find back mini jobs, as is increasingly common in Germany.  It does not either impact this unknown share of the population who finds work only in unpaid jobs, such as the voluntary sector, internship, or the virtual “gift economy,” or in jobs where it is less paid than it should (wage dumping – Der Spiegel 2012).

Considering self-employed and temporary employment, rather than only full-time employment is indeed crucial. The OECD underlined this point in its December 2011 report (see figure below): when self-employed and part-time workers are included in statistics, the inequality rises. It is likely that if unpaid work were considered, inequalities would be even stronger.

OECD - Levels of earnings inequality are much higher when part-timers and self-employed are accounted for

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As young people are most often in those unfortunate categories, underpaid and under-recognised, their parents, worried, are more inclined to spare than to consume.

Other factors play in favour of cautiousness for Everstatans. The price of oil remains volatile and relatively high and with it the price of electricity. In turn, this has an impact on the general cost of resources, of trade and thus of manufactured goods.Besides, the price of most natural resources is increasing, be it because supply is reduced, because extraction costs increase, because demand rises, or because of a combination of those three factors.

Even more worrying, nothing has changed compared with 2012 EVT as far as food is concerned and food is increasingly expensive.

Real hourly minimum wages OECD countries (top line Estonia) – Online OECD Employment database

Media, concerned scholars, advocacy groups and social networks all relate, document, and monitor the rising price of all resources, and the inevitability of this trend. Thus citizens anticipate more and worse increases.

As the rise of the minimum wage is not as high as the past increase of prices for the products bought most commonly and frequently (which is very different from the inflation indices that include other types of goods bought much less frequently and for which prices decrease, as well as wages), then the new wages only allow to loosen the straitjacket into which Everstatans feel trapped. They do not permit finding back the level of consumption that existed beforehand, even less catching up, and, considering expectations of continuing soaring prices, the feeling of safety that use to exist remains absent. As a result, the expected boost to growth does not take place.

Meanwhile, the strong and rising inequality that has been at work in Everstate as in the other OECD countries (with variations according to countries) since the mid to end of the 1970s, and that went worse with the crisis in Everstate as in many countries will not change, and will only fuel the feeling of relative deprivation and injustice, despite the new government’s efforts.*

International Institute for Labour Studies (IILS), World of Work Report 2012, ILO

As the new Everstatan government has also planned other policies, could those, giving them some time to bear fruits have more favourable impacts? Yet, if more delays are necessary, will Everstatans accept and be able to wait?

To be continued….

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* Research note:

It is interesting to note that few questioned the rising inequalities not only until the financial and economic crisis but also – and maybe mainly – until food (and resource) prices soared or strongly rose according to cases and thus when the larger mass of citizens became impacted in its everyday life, as suggested by Timothy Harper’s finding in The End of Empire and the Making of Malaya, Cambridge University Press, 2001. Further research should be done on this phenomenon, building upon, for example, work already done such as Marco Lagi, Yavni Bar-Yam, Karla Z. Bertrand, Yaneer Bar-Yam, The Economics of Food Prices and Crises, New England Complex Systems Institute, 2012, but considering all countries, including OECD ones. Harper’s argument is larger than those focusing on food prices and protests.

Although those inequalities were pointed out in some reports on globalisation (including in internal reports of quasi-states organisations and IGOs) and by the initial anti-globalisation movement at the end of the 1990s (notably by ATTAC), it was far from being on the political agenda, outside the aid and cooperation world and, there, was limited to approaches to “the  South” or “the developing world” (see the excellent post by Jay Ulfelder on those outmoded categories). The crisis, with the fear of social unrest, changed this, and, for example, the OECD produced in October 2008 a complete report titled Growing Unequal? Income Distribution and Poverty in OECD Countries, followed by another one in December 2011.

References

Jay Ulfelder, There Are Two Kinds of Countries in the World: _____ and _____, Dart-Throwing Chimp Blog, 25 May 2012.

Eurostat, Unemployment statistics, Data up to March 2012.

Online OECD Employment database.

OECD, Growing Unequal? Income Distribution and Poverty in OECD Countries, October 2008.

Facundo, Alvaredo, Anthony B. Atkinson, Thomas Piketty and Emmanuel Saez, The World Top Incomes Database.

FAO, “The April FAO Food Price Index down slightly from March,” World Food Situation, FAO Food Price Index, 03/05/2012.

International Institute for Labour Studies (IILS), World of Work Report 2012 ‘Better Jobs for a Better Economy’, ILO, 2012.

OECD, Divided We Stand: Why Inequality Keeps Rising, December 2011.

The Local, Germany’s News in English, “Low-paid ‘mini-jobs’ on the rise,” 26 Apr 11.

Der Spiegel, “Millions Left Behind in Boom The High Cost of Germany’s Economic Success,” 05/04/2012.

Durden,Tyler  Europe’s Scariest Chart Just Got Scarier-er, Zerohedge, 05/02/2012.

2012-2013 EVT – Restoring Growth (Panglossy)

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Last weeks’ summary: In 2012 EVT, Everstate (the ideal-type corresponding to our very real countries created to foresee the future of governance and of the modern nation-state) knows a rising dissatisfaction of its population. Alarmed by the rising difficulties and widespread discontent, the governing authorities decide to do something when new elections start. Dependent upon programmes created to face efficiently past challenges, prisoners of entrenched political groupings, comforted in their vision by the BRICS’ success and renewed optimism, the major parties campaign to come back to the order ante. As a result, habits and the existing system, once the new national representatives are elected and the new government starts ruling, are even more entrenched, almost ossified. Meanwhile, the polarisation and rise of a new opposition that took place during the election is temporarily frozen by the last hope created by the newly elected government.

(The reader can click on each picture to see a larger version in a new tab - a navigating map of posts is available to ease reading).

The new government, thus, decides that it must restore an efficient economy, which is the only solution to come back to a balanced and propitious situation. Its main criteria and aim for this is to re-establish growth and more particularly the growth of the GDP, as the available models of socio-political order dictate.

With growth, the dissatisfaction of citizens will disappear as they will find jobs again and the capability to enjoy the consumer society to which they are used. Meanwhile, all elite groups will be satisfied as they will continue enjoying their status and privileges. Hence the tension will decrease and peace will come back.

Growth will imply wealth and as wealth increases again, debts will not mean deleveraging but, on the contrary, leverage. With the rise of GDP, the ratio debt-GDP will automatically diminish, which will satisfy the financial markets, while the cost of the debt will be much less burdensome. Thus, with growth, the crisis will be solved. Of course, for a short while, public spending will have to be harnessed, but nothing that could deter growth. This will be the opportunity to introduce more efficiency and rationalisation in state’s management, which will only be favourable on the longer term.

Now the vision is laid down, Everstate’s government, with its international counterparts, only has to implement it through sets of policies. Repeating as mantra that growth must be obtained is notably insufficient, especially as the legitimacy of political authorities, and not only of the previous government, is questioned as a result of the ongoing crisis. Trust must be restored, investment and innovation boosted, consumption re-established.*

To achieve this, Everstate’s government decides first to give a boost to minimum wages, which will restore consumption and restart the engine. Furthermore, it will immediately implement “growth mainstreaming” throughout all policies.** Although Everstatans, in general, have a high education level and a large part of the population holds university degrees (see the power of Novstate), education and training are singled out as some of the structural long-term policies that need emphasis to be able to improve Everstate’s competitiveness and thus growth.***

Then, Everstate spearheads the creation of a new international meeting group for the resilience of the financial system, linked to the G-20, and involving the major financial private institutions. The new financial meeting group must bring back trust to markets and allow for a return to a proper flow of liquidity. It is expected that the need for and extent of regulation of financial markets will be intensely debated.

Finally, Everstate participates in an International Special fund for Sustainable Innovation and Green Energy (ISSIGE) that will help polities harnessing the ecological evolution and the increasing complexity of resources, and transform those into opportunities. A specific instrument will be organised around the Regional Union and should “fund pan-Regional infrastructure projects.”**** High level civil servants and famous Everstatans of universities, the classical media and the private sector join their colleagues in this high level new fund, built as a network as networks are more efficient than top down organisations, to determine its strategy and policies, identify projects that need funding, etc.

What are the impacts of those policies on the level of satisfaction of citizens? Will Everstate’s new government succeed, not only in bringing back growth, but also, thanks to the growth restored, in overcoming the main challenges and difficulties its predecessor faced? To know it, we need to re-run the model used for 2012 EVT, while including what happened in 2012 EVT and the Panglossy conditions and decisions, i.e. a level of tension that is high enough to have created polarisation, loss of legitimacy, protests, rise of a non-classical political movement, even if non violent and frozen for the moment.

To be continued…

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References

* For a good summary of a specific, mainstream, approach to policies leading to growth, Tyler Durden, “The Keynesian Emperor, Undressed, ” Zerohedge, 05/21/2012. Contrast with a critical view, the excellent video of Prof Keen’s interview, as recommended by @Greentak: Megan Ashcroft, “In Conversation with: Steve Keen,” The Renegade Economist, 16 October 2011.

Interestingly as of 21 May, although now so many agree on the need for a “growth compact” or “growth pact,” we find few concrete policies and practical explanations regarding the how this will be done. Read, for example among many other, The Financial Times Editorial, “A pact for growth is vital for Europe,” FT, May 4, 2012; Martin Lowy, “The Soon-To-Be-Born European Growth Compact,” Seeking Alpha, May 1, 2012; Shai Ahmed, “‘Sexy’ Europe Growth Compact Inevitable; Greece to Stay: Pro,” CNBC, 17 May 2012; The Telegraph, “ECB chief Mario Draghi calls for euro ‘growth compact’,” The Telegraph, 25 April 2012; Debating Europe, “Will a “growth compact” go far enough?” 14 May 2012; Tyler Durden, “Overnight Sentiment: A Summit Here, A Summit There, A Promise Of Growth And QE Everywhere,” Zerohedge, 05/21/2012; Paola Subacchi and Stephen Pickford, “Broken Forever? Addressing Europe’s Multiple Crises,” Chatham House Briefing Paper, March 2012. Peter Spiegel, “Diplomats back EU ‘project bonds’ plan,” FT, May 21, 2012.

** See the example of “Gender mainstreaming,” as explained in Wikipedia.

*** Tyler Durden, “The Keynesian Emperor, Undressed, ” Zerohedge, 05/21/2012.

**** Adapted from Peter Spiegel, “Diplomats back EU ‘project bonds’ plan,” FT, May 21, 2012.