1.1 Employment - some thoughts

Employment and other economic phenomena reflect our way of life, mood and the system of values of the society. Ultimately, each one of us form the society and, hence, we are also creating these economic phenomena.

Regarding the relation with our way of life, for example, the workplace is in many cases very far from the living residence, as we enjoy now quick and comfortable transportation. Long hours and energies spent in trains, cars, time schedules and traffic jams, at the end, stress workers and also their families. Just imagine what happens when a commuter misses the train or the bus one day in the morning. This phenomenon has finally increased working hours enormously, since our mind is focused on work for quite a longer time and long away from home.

Mass media are the main channel through which mood comes to the stage. There is probably no family without TV, Internet or reading newspapers. What they are presenting is immediately and often strongly affecting everybody. They are quick and they easily create panic, likes or dislikes, to many events although there is no need to react to them, because in many cases we do not understand regional circumstancesand the context of these events. So what it very often happens is that without deep understanding we are taking part in the discussion, judging the behavior from one region to other and bringing imbalances in all aspects of life. Take, for instance, the bad image of very hot-weather countries in Southern Europe, as lazy nations, who do not want to work, which is held by people in Northern European countries who just see comments in TV and newspapers. But, in reality, they have never tried to work in such weather conditions. And, on other hand, countries with lower productivity which is fully determined by weather should understand, that they are not disused by and that they should not mirror those richest industrial countries as they are able to produce products with higher productivity. Some countries are better than others in doing different things, so we should not push all nations to pursue the same objectives, because what is easy for a given country is a challenge and contra-natura for others.

We are all consumers; we like to buy and to be surrounded by expensive and fashionable things. Our job should allow as to fulfill ours consumption taste. There are many people working long hours in a job they do not like just to get the best goods in markets. We do not think very often about moral rules or usefulness of our work. We are very often sacrificing our life in work just to have more and more things. But in reality we do not have time to enjoy what we can buy and we are very quickly tired of anything we buy. Maybe we should think more about finding a job where we can enjoy. We will probably discover that high profit will be not so important as our feelings and moral behavior. Subsequently, it will increase also overall quality of life.

Many people rely on government and believe in its declared power, to secure their work. It is useful to understand that people are learning and thatwhile some are wiser, some others are losing common sense. The world is changing constantly, what was working five years ago does not work anymore. For this reason any “active” government politics based only on past knowledge cannot be long-time effective. It is important to learn and monitor all the time changes in society and to try to understand them. It seems than mathematical and big statistical projects do not allow us to think, just to run procedures. Only concrete persons can be efficient, those who have open minds and attitudes towards new developments. Unfortunately very often, they are not accepted by any government and by the public; they are considered as crazy, pessimistic or too optimistic, because their only instrument is their mind, which sees and understands. But, again in a very structural society, it is very difficult to identify such ”clever” people; we are more or less used to bureaucrats, because we can easily evaluate their work. For this reason, it is maybe better to keep some works outside of governmentaction and listen to already existing non-government institutions, or universities, which are offering their analyses and studies.

In these days we are also very often forgetting that we are working in our households, that we are growing up our children or helping our older parents, disabled people and many other social or works for home. It is a lot of work we are doing and nobody pay us for it, so we do not work, because we do not have employer. Is it true? Value of this work is very difficult to assess, but probably we should think and find some social compromise, which and how to support such a kind of work. In these situations, it is really very difficult to measure efficiency. For this reason, we need to consider goodwill and possibilities of those whose money should be used (they could be taxpayers), or we can create social insurance. With the use of social insurance we are not able to cover everything, becauseit would be suitable to base the use of social insurance fund on previous contributions of later users, and such contributions are limited in quantity.

(c) Andrea Sánchez Bernáthová 

"Fragile like Glass" now in paperback

Our book is now available in paperback version at http://www.lulu.com/shop/antonio-s%C3%A1nchez-serrano/financial-crisis/paperback/product-21355468.html, for 11,85€. It contains 128 pages of discussion about the recent financial crisis with a very didactic and comprehensive approach.

No Econometrics included, promised!!!!

Laying the foundations

In this entry, please let us present briefly some basic ideas and principles of where our thoughts (and the subsequent entries of this blog) are going to be in the coming weeks.

 

Let´s move to a theoretical scenario where we have thousands or millions of human beings (economic agents), ready to offer their job capabilities to the economy (we could say also country) in exchange of money. The work of these human beings is used to produce goods and services which are subsequently bought by these economic agents with the money they earn working.

We do not have equal value for the economy as we are not equally valuable for economic processes (namely, for working in businesses). The value which the economy attributes to the economic agents is not constant but it varies within people. In other words, people do not have the same value, even if they have had the same education and are grown up in the same cultural environment: there are always differences among them. These differences are quantified via what we earn for (the price of) our labour. For example, think about your classmates in high-school or university: they do not have the same occupation as you reader, they may have got a better career or a slower career, but not the same. To sum up, some of the economic agents are able to provide something to the society, which, in economic terms, is valued differently than the average, whereas others remain under the average.

All economic agents have equal right for life, for which we need food, water, sleep, home, security of body, health and security of property. These are fundamental needs which should be granted to everybody. If we want to have a human life (slavery does not count here), we need all of them. Nonetheless, they are not for free and economic agents must acquire them in the market.

Measurements are at the core of economics; everything must be quantified in order to be introduced into the economic mechanism. We have seen that the basic fundamental rights above (food, water, sleep, home, security of body, health, security of property) are not free in most of the countries, they belong to somebody. For example, we in Spain have to pay money to get food, water, home,... We also pay taxes in order to have a State granting security, health insurance,... Therefore, economic agents need to acquire these basics (together with the other goods and services) in economic transactions, since nobody is providing them for free. As in every economic transaction, the equivalent to these basics must be of the same value. If not, the transaction does not take place. But we have said in the first point that the economic agents do not have the same value in economic terms.

Good working economies are able to produce products (including those fundamental rights above) which are accessible to everybody willing to pay for them, also to those with lower value of their labour. But this is not happening now in our world. A significant part of the labour force cannot access these basic rights because they are not enough diversified and are out of their possibilities. For example, it is possible to acquire cheap houses but some economic agents owning the land always decide to limit the supply of land available for houses. As a consequence of these (and of many others) forces introducing distortions in our economies, they do not produce enough products to allow all the economic agents to cover their basic needs, exchanging their labour for that purpose.

These are just four basic ideas which are now fixed into our minds. They will be the basis of further ideas to come, so stay tuned. We will be talking about the government...

To open your appetite

In the meantime, while we prepare the opening entry of this blog, the book "Fragile like Glass" can give you a first impression of where our ideas are. It has been written by me, Antonio, with tremendously useful comments from Andrea, so one can say that the book is really a common effort.

To open your appetite, the book tries to provide convincing answers to questions such as how did we get into this deep financial crisis? why "Europe is different"? is it enough with an increase in the capital requirements of banks? are incentives of everybody in the financial system aligned with the common good? are policies aiming at the right target? what should be done to mitigate the effects of this crisis? and to prevent the next one?

The book is written in a didactic way which also those with no economic background can understand and follow.

The book is currently only available as an e-book (for 5.45€), but, for those more classic, the paper version should be here soon. You can buy it by clicking in this icon