The global crises in the light of the theory of social transformations
EXCERPTS
Underdeveloped
Romania - the invertebrate East
I The crisis and the great civilizational cycles[1]
The evolution of
society in the last 400 years crosses four historical-spiritual horizons, which
are also the ages of capitalism towards its current phase. We call such a
crossing movements historical transformation. Any historical transformation is
substructally accompanied by social transformations. With each historical horizon, the convergence of
the three elements is recomposed: culture, society, economy. We may assume the classical distinction,
belonging to Chinese strategist Sunt Tzu, between “normal force” and
“extraordinary force” a given people may use in his competitions with other
peoples and/ or with different systems of domination (empires, first of all)
throughout a geographical area. “Normal force” is that which an army or a people uses to wage the
"war" ("battle"), “extraordinary force” is that with which
victory is won. The economy
and the condition of society (societal structure) are elements of the normal
force. The culture is the essential living element of the “extraordinary force”
on which a people can rely as the only one that gives him the real
"competitive advantage"[2].
In Huntington's vision, civilizations clash with each other, shaping the
destiny of the world[3].
In the present paper we revisit idea of historical transformations based on the
relations between social transformations, economic crises, and cycle
dependence, i. e., the cultural reshaping of historical becoming. Let's
recapitulate first the four-phase sequence model of historical transformation
process. "The first phase overlaps with what critics of capitalism have
called the age of primitive accumulation” (Postolache, pp. 61-62). The second
phase overlaps with the synthesis called state capitalism. The third is already
the phase of the first globalization of capitalism within a conservative
strategy and the fourth is one of universalized (not simply global) capitalism.
We have taken over this phasing through the suggestions proposed by the
Postolache’s theory of coexisting succession and we are already formulating the
hypothesis that the current criticism could be linked to the difficulty of
capitalism to move to its formula of universal capitalism based, the author
suggests, on the synthesis of science with faith and on the capacity of the
system to capitalize interstellar space and the resources of the universal
unconscious. "For the first time, capitalism is called upon to demonstrate
its intrinsic superiority not to 'real socialism', or to previous formations,
but to itself. His only resource in this case is his willingness to
continuously reform himself" (ibidem). “The third generation gives
criticism a new dimension: not only that of explaining and changing the world,
but above all that of preserving it” (ibidem). The problem of
fourth-generation capitalism is to find a new synthesis between the universal
market and a self-regenerating capitalism[4].
The novelty of Prof. Postolache's approach derives from the fact that for the
first time the systemic crisis is defined in relation to a final or
civilizational change, with a series of deep social transformations, which
involves everything: both critical generations (criticism of primitive capitalism,
criticism of modern capitalism, self-criticism of capitalism) and generations
of knowledge (knowledge practical, immanent knowledge, universal knowledge:
immanent-transcendent) and school generations (the three: local school,
national school and universal school)".[5]
Postmodern capitalism,
of the fourth generation, entered a creative deadlock so that the current
crisis is largely related to the delay in satisfying the demand of this type of
universal capitalism, with the term Academician Postolache. This demand refers
to the new synthesis between science and faith in the form of a new economic
ethos and therefore a new elite. The delay in this process is largely the
explanation of the current crisis. To this structural or fundamental cause is
added a regional overdetermination, in the vision of the same author, namely
the discrepancy of the two impulses - adaptive and creative - in the spiritual
formula of the Eastern elites. The phenomenon was early signalled by the theory
of forms without substance. The elites of the East have proven a great adaptive
capacity to the environment changed by the expansion of the Western world
economy, at the same time displaying an embarrassing creative impotence, a
repulsive energy deficit regarding the creative impulse. "The behaviour of
the great manorial properties, prof. Postolache tells us, drawn into the
circuit of the world grain market at the end of the 18th century and the
beginning of the 19th, can somehow be found in the behaviour of the large state
enterprises in the whirlwind of privatizations in the transition of Europe of
the East and of Russia from the command economy to the capitalist market
economy" (Postolache, p.59). Business managers used the environment
changed by the wave of communist overthrows to create advantages, not to
transform the economy. Instead of a creative transformation, he opted for an
adaptive (facade) change, proving a serious inability of the elites in the
eastern space to capitalize on their quasi-rent of identity. Instead of a
strategy that would have led to a strengthening of identity property, it was
opted for one that brought immediate advantages to members of the elite and a
dramatic distance from its own people, which is tantamount to a waste of
potential identity rent. In this way, the statement of the theory of coexisting
succession is verified: "an old-type social entity can adapt, in the
whirlwind of transition, to a new environment, ..., but it no longer has the
necessary internal energy to re-adapt to a second successive change” (ibidem,
p.58). This is the essence of the overdetermined crisis of the East. We see,
here, that the East accumulates a structural or system crisis, characteristic
of the inability of capitalism to pass to the age of its universalization and a
crisis of regional overdetermination due to the energy deficit of the elites in
this area[6]. We usually call this mix of crises impact
convergence.
. "An important,
primordial factor, a criterion allowing us to distinguish the beginning of the
decline of a civilization or a social entity, is the creative minority itself,
an indispensable condition of progress. This minority begins to degenerate into
a dominant minority which, at the limit, becomes a dictatorial minority
whatever the institutional forms. All the civilizations that disappeared had
this cause in their genes (to their inability to operate the harmonization of
the institutional framework with the new material and spiritual forms, their
inability to widen and universalize their own type of civilization is
added)" (Postolache, p.62).
From
dictatorship of development to “lumpen development”
After the Phanariot
era (1711 – 1774) and that of occupation Bolshevism (1948 - 1964), followed by
the short period of what was called the developmental dictatorship period (1964
- 1989), the current era of neocolonial capitalism is distinguished by two distinct
features: it is the era of the third peripheralization, the most serious in the
last 400 years, and the most dangerous substructal shock in the last
100-year-old. The last three phases of recent history are common to the whole
of Southeast Europe.
This phenomenon, that
I called substructal destruction, derives from the policies of underdevelopment
as defined by AG Frank. "What does the term, proposed by Frank, mean:
"the policies of underdevelopment" or "lumpen development"?
This concept is proposed by AG Frank to characterize the conduct and lifestyle
of the lumpen-bourgeoisie. Unlike the metropolitan bourgeoisie, the lumpen
bourgeoisie will adopt attitudes, orientations and policies that respond to the
needs of the metropolis, not the requirements of population. The set of
development policies that respond to a new conjuncture of the metropolis'
relations with the periphery is called underdevelopment policies. They do not
contribute to real development, in the sense that their effects on the population
are progressively negative, not positive, as expected. Lumpen development
therefore measures this gap between the increase in the development effort and
the degradation of the state of a population.
If we denote by S the
sum of that part of the powers of a society used, mobilized within the
so-called development policies and by R the sum of the " reproduction
" expenses of a "people" (a given population), we will notice
that the policy of lumpen-development has as characteristics the progressive
increase of S and the progressive decrease of R (both
quantitatively and qualitatively). It is true that lumpen-development is often
hidden by the apparent increase of R. In reality, it must grow at
the same growth rate as S. However, the lumpen-development policies
increase the S size at a much higher rate than the growth rate
of the R size and this relative gap is another indicator of
the lumpen-development policies (We realize that communist Romania adopted
justified lumpen-development policies par excellence through the dictatorship
of development. Romania of the post-December period entered the cynical phase
of lumpen-development policies because the increase in the size S no longer
even has the justification of the communist period, since productions stagnated
in all sectors of the productive economy). Here, if we take into account the industrial
development of Latin America between 1923 and 1969, we will notice, following
G. Frank's analysis, that although the participation of industrial production
in GNP "increases from 11% in 1925 to 23% in 1967, the use of force of
work in industry will be 14% in the first years, 14% in 1950, 14% in 1960 and
14% in 1969". "So, the industrial growth, Frank remarks, was unable
to provide employment opportunities for a large part of the
workforce" [7].
The post-cold war reforms, to return to the Central European area, did not
bring more development but more historical fatigue on the
scale of the entire East. The phenomenon of collective fatigue accompanies
substructal crises like a shadow over a person.
Historical
fatigue and sustainable underdevelopment
The theory of
collective fatigue[8] was
launched by Nicolae Iorga in a universal historiology approach to the
phenomenon of historical tension in an enterprise that goes beyond the powers
of a people at a stage of its history. Such tension brings with it a decline.
The examples provided by Iorga on a historical scale are enlightening. The
great historian explicatively links the fall of the Bulgarians and Serbs,
for example, under the domination of the Ottoman Empire to the great
"medieval tension" to which these peoples submitted with the idea of
"achieving world domination", i.e. to extrapolate their nationality
attribute over spaces other than those that make up the core of their
nationality. "For the Bulgarians, these struggles began immediately after
their settlement, from 760-780, and continued until 1400. If you do a
calculation, you will see that it is about so many centuries of tension on the
part of the Bulgarians, under special forms (...). What was chosen (...)? It
was chosen that, after they fell into Turkish captivity, they remained in
this captivity from 1390 to 1878. Why? Had the race declined? No, this
tension, which has been transmitted over several generations, is the reason why
the State has fallen and why the nation was tired "[9].
Straining beyond one's limits leads to fatigue and decline. "Why did the
Serbs, from the 15th century until 1864, until the uprising of Caragheorghe,
who re-established the Serbian state within very small limits and subject to
the recognition of the sovereignty of the pagan emperor of Constantinople, of
the Sultan, why did the Serbs, such a heroic people, who gave extraordinary
evidence of offensive energy and resistance, why did the Serbs live under
foreign domination for so many centuries? Because it had been the
medieval tension for so long for them to rule the world”[10].
In N. Iorga's view, the imperial tension causes both a decline of culture,
more precisely, of the spirit and therefore an illness of the "creative
destiny" of the peoples. "But why didn't the Greeks play the role
they used to play? Because of the tension made by the Greek race, helping
Alexander the Great to conquer Asia, Egypt and to found this world empire of
Hellenistic culture, which is called Hellenism"[11].
As soon as a people, or a group of peoples, assumes an imperial project, the
result is the same: decline. "The Greek race was worn out (...) not only
by the battles between cities, but by the fact that it put itself at the
service of a world enterprise" [12]. This
idea is not only valid for small peoples, as it might seem at first sight:
"So befall all peoples who strive for what can be achieved with great
difficulty but can never be kept. Think also of the French military decay
(...). This is because Napoleon I, with all the forces of the French
people, followed the idea of a universal rule (sn), extending over all
peoples: a world emperor, and went as far as 16-year-old recruits, from which
it followed that more generations were punished for what a man of genius, but
still a man who was wrong in thinking about his own future and the future of the
country he represented and the nation he used, because this man of genius
threw a nation beyond the possibilities between which any nation is
shut up and beyond which it is a triumph for a while, but in the end
it is, without any doubt, the disaster" [13].
Structurally, the
Romanian society is once again under threat, and such a risk comes from a new
wave of historical fatigue and the third edition of the substructal
destruction. The contraction of identity property and identity rent has reached
incomparable thresholds in the last 35 years. The rate of substructal
destruction on the scale of the entire Romanian people exceeded that achieved
during the Phanariot era and that of the communist occupation regime. Let's
review the visible part of the hidden process of substructal destruction of
Romania during the transition period. This time this process is seen on the
surface through its four expressions: sustainable underdevelopment,
decreasing complexity, historical fatigue and spineless society. Let's
examine just a few evidentiary data on such a persistent destructive process
threatening to ruin the structural balance of the societal order.
Accumulation but
not development
To the three causes of
the persistent crisis in the Romanian society of the last 35 years, mentioned
in the diagnosis of Academician Cătălin Zamfir - the gaps, the burden of
poverty and the small state -, we should also add the regime of
sustainable underdevelopment, established in Romania during the same interval, as
the fourth cause of the crisis. We realize that all these were and
are phenomena with a hidden unfolding, which allows us to place them in the
category of those that preface substructal destruction. The typical
effects of such phenomena and processes are the fall of the
complexity of the social system and the decline of a people’s
identity energy.
What exactly caused
such a substructal decline on the scale of the living space of the Romanian
people? Let's list the causes and therefore the facets of this decline using
the data taken from the database built by Florin Georgescu for his recent
studies on the eastern European transition, brought, obviously, in the
framework of the substructal theory. The first facet of the announcement of the
substructal destructions that will follow refers to the takeover of a type of
capitalism that allows accumulation, but not development. Profile
studies have called it "dependent capitalism ". This is
opposed to the competitive capitalism that ensured the
development of the West during two centuries until its full consolidation.
However, the service variant of dependent capitalism was reserved for the East[14]. Competitive
capitalism was thus countered by a dependent or coercive capitalism.
The proof is given by the typology of the privatization process. In the East
and to a greater extent in Romania, privatization was done by coercion and by
no means by the natural movement of the economy. The destructive effect was
anticipated and well camouflaged by the excuses of the reforms. In this
way, Romania was brutally eliminated from the area/space or
field of competitive capitalism (by destroying already capitalized
companies from the old regime phase).
The ruinous
phenomenon that hit the whole of Southeast Europe, marking its evolution, has
been the axial effect of the sustainable establishment of a dependent
capitalism, which the
previous regime tried to counter by paying the country's huge loan (which had
been used for the great development: industrial platforms, infrastructure
etc.). During the development dictatorship, Romania borrowed 10 billion dollars
and paid 18 billion dollars (about 8 billion being the interest and related
commissions)[15].
From this strain resulted an industrial economy, but also a special kind
of historical fatigue. This fatigue has been paying for 30 years
now with the loss of economic independence, the substructal destruction, the
establishment of a neo-Phanariot type regime.
Identity property,
on its turn, through the effect of the doctrine of coercive privatization and
therefore underdevelopment policies, suffered a brutal contraction, attested by the growing difference between GNI
and GDP, to the detriment of GNI: the difference evolved from around 2.7
billion euros in 2014 to around 4 billion euros in 2019 [16].
Parallel to the phenomenon of the contraction of the identity property, there
was also a forced (onerous, extortionate) transformation of the
identity rent into a corporatist rent: all the
country's advantages are capitalized by multinational corporations
supported, in the subaltern regime, by the western empire. The big rigs were
either taken over by foreigners or destroyed. The fertile lands as well as the
country's forests have been exposed to destructive exploitation, or to
extortionate alienation.
Another hidden
process was enrichment without development (concentration of wealth in the hands of
foreigners and capitalists without capital and therefore
without participation in the capitalization of their own companies). "40%
of the fixed assets accumulated between 1990-2019 belong to commercial
companies with foreign capital"[17],
emphasizes the first vice-president of the BNR, Florin Georgescu (FG, p. 50).
Fixed assets owned by domestic investors recorded a 51% decrease in the same
period[18]
The economy was less
and less creative and more and more consumerist: the difference is cashed in
through the mechanism of political capitalism, that is, of the
alliance between the capitalists with no capital, recruited from the native
political class, and the agents of colonial capitalism. The consequence was one
of substructal contraction of the industrial base of the economy. Industry's
contribution to GDP decreased from 42% in 1989 to 21% in 2019[19].
So, in all this interval the creative process in the economy decreased, because
industrialism is the created part in relation to the natural economy.
A face of fight
against sustainable underdevelopment: retro-synchronization
Another dimension that
attests to the extent of substructal destruction in the economy is the long
duration of Romania's retro-synchronization: it took Romania about 15 years to
synchronize with the level at which it was in 1989 both in terms of GDP and real
wages. During the 15 years, a regime of sustainable
underdevelopment was established in Romania. Florin Georgescu, the first
vice-president of the BNR, also highlights, in his book, the other hidden
process related to the dynamics of the substructal economy, namely the process
of peripheralization. In 2019, states the quoted author, "the ratio
between GNI and GDP reverses: residents earn much less than
non-residents. Both indicators, Gross National Income (GNI) and
Gross Domestic Product (GDP), show the amount of goods and services sold to the
final consumer in an economy, but the first one refers to the incomes made
by national individuals or companies, while the second one, much more often
used, for the incomes made on the national territory"[20]. In
the 30 years of sustainable underdevelopment, Romania registered a reversal of
the ratio between the two indicators, which led to a loss of economic
substance. Compared to 1989, when Romania had a higher GNI than GDP (43 billion
euros compared to 42 billion euros) [21],
the first 15 years of transition bring a reversal and therefore a sustainable
establishment of the trend of economic peripheralization of Romania (the
difference between GNI and GDP reaches 3 7 billion euros). The ratio
between the total added value (GNV) and the total
revenues realized on the national territory is, here, a sensitive
indicator of the peripheralization process, masterfully used by the first
vice-president of the BNR, Florin Georgescu. Finally, a relevant indicator of
substructal decline is peripheral productivity: the ratio of GVA to the number
of employees is low due to multinationals increasing transfer prices, which
illegally[22] increases
intermediate consumption (CI)[23],
associated with an undervaluation of own revenues (hidden by reported
costs). This leads to the separation of the dynamics of wealth from the
dynamics of savings. Fortunes increase and savings decrease, contract.
The third indicator refers to the industrial depotentiation of
the economy and the decline in the net investment position (as
a percentage of GDP). The rate of exclusion from the industrial economy is
perhaps the most reliable indicator of peripheralization and sustainable
underdevelopment. Post-December Romania was progressively excluded, at an
alarming rate, from the industrial economy, producing total added [24]value. The
rate of exclusion is given by the decline in the percentage of those
employed in the high added value producing economy (industrial economy), which
decrease by 63% compared to 1989 (their number was 3.8 million, i.e. 47% of the
total number of employees, and reach only 1 .4 million in 2019, i.e. 27% of all
employees)[25]
The rural and urban
exodus is another dimension of the substructal decline of integrated Romania: 161 cities out of the country's 263 have lost
20% of their population (usually young people)[26],
200 villages are dying (the number of villages dying reaches 200 and those with
a low survival rate and therefore with a high contraction index reach the
figure of 600. The natural growth of rural communities (number of new
communities – number of disappeared communities) is negative (0 – 200 = - 200).
Capitalism of
exploitation + political arbitrariness are two other alarming dimensions of the
processes that induce substructal contraction and sustainable underdevelopment
at the scale of a society.
Human
decapitalization (intellectual, genealogical etc.): indexes of scientific production take the
model of transfer prices so that the indexes of those who are part of the same
group are artificially increased and thus the productivity of the intellectual
capital of a country (Gross National Income (GNI) / number of researchers)
artificially decreases. The GVA in research is higher, but it is diminished by
indexation practices, equivalent to transfer prices in the general economy.
This mechanism causes the income to be calculated according to indexed studies,
not studies with representative value for society, history and local culture.
Thus, indexing diminishes the reflexivity of research, that is, it reduces the
ratio of reflection (mirroring) of real society in the dynamics of research.
VAB appears small because it is only calculated relative to ISI-indexed
studies, typically by the WOS counter. But the number of studies that produce
added value in the sciences is higher and this ratio is an undervalued one. As
such the VAB in the field of research appears much lower than it is. In
economics it has been calculated that a 10% drop in transfer prices in a steel
plant would increase productivity by 2/3.
Another form of
human decapitalization is the exodus (massive migration) and another is the
decline of progeny and therefore the contraction of the genealogical stock,
i.e., the number of families with children. When these processes take the form
of aligned threats, ready to hit a society in a package, it is permissible to
look at them as stormy floods that will compose the striking force of a
substructal destruction of frightening proportions. In other words, these
cumulative destructions will threaten the existential frontiers of a people and
even a civilization. Let's examine the types of threats that hit the system of
our world in this sense, convening, in a preliminary way, the analytical model
grounded in the theory of coexisting successions and substructal destructions
(the novelty part compared to the book dedicated to the theory of Academician
Tudorel Postolache). We will thus be able to establish whether the current
crises the world is going through induce usual imbalances or threaten the very
substructure of Europe, the foundations of European-type civilization. We will
further examine the crisis that stems directly from the decline of the
energetisme of the European elites that we have already referred to, only that
we will return the discussion within the framework of the theory of coexisting
successions.
The
Lorenz–Pareto model. The curse of underdevelopment. Economy without God versus
God's iconomy[27]
The vertical business
chain encloses a vector tension described by the aggregation of the two
opposite functions: Lorenz's equalities function (egalitarian income
distribution, cumulative curve) and Pareto's inequalities function (20 to 80
rule, curve inclined to the left) [28].
In a business environment, only companies that include both types of strategic
business units (SBUs) succeed: some that manage to generate quasi-rent -
described by the Paretian model - and others, the majority, that create added
value according to the Lorenz model (the so-called "cash cows"). We
will use the binomial of the two laws to clarify an essential issue in the
substructal theory, namely the issue of the relationship between the firm and
its specific environment of evolution. This relationship is governed by the
principle of the distribution with the highest probability, on an axial
continuum whose opposite poles are the two types of distribution, Paretian and
Lorentzian. These poles can fragment the relationship between the firm and its
specific environment or, on the contrary, harmonize it. When the whole economy
slides towards the Paretian pole not only in terms of the elites' contribution
to the realization of added value, but also in terms of the distribution of
income and effects in the mass of the population. In this case, strong firms
develop in the context of the weakening of their specific environment (local
communities, regions, entire peoples, etc.). Such strong firms evolve in
specific diffuse, poorly structured environments. The elites are getting richer
and the peoples are getting weaker. It is the case of corporations operating in
the peripheral areas of the capitalist world system. The company is strong, it
utilizes resources and workforce to the maximum, but the specific environment
(the local, national, regional community) is increasingly fragile, because the
effect, i.e. the over-added value, breaks with the specific environment, i.e. a
territorialized community, so that the people in such an environment have no
civilizational benefit from these corporations. They resemble cathedrals in the
desert. Otherwise, in their wake remains the desert, exhausted resources and
tired peoples. The relationship between the core firm and its specific
environment is, therefore, of two kinds. Some companies generate a beneficial
economy exclusively for the company's community of interests, while others
generate an economic civilization that benefits both the company's community of
interests and the people in the area where the company operates. Economic
geography reveals a division on the West-East and North-South axis of the two
economic models. In the north-western metropolis, companies create an economic
civilization in the environment of which strong peoples and creative elites
assert themselves at first and simply domineering, then. In the southeastern
periphery, companies only generate a dominating economy and not an economic
civilization, so in such an environment increasingly tired peoples evolve and
increasingly obedient elites assert themselves, alienated from their own
peoples, uncreative towards parasitism on a social body slurred. At one pole we
have creative elites and powerful peoples, at the other we have rich, obedient
and weakly creative or completely uncreative elites and weak peoples. In the
northwestern metropolis, the firm induces sustainable development, in the
southeastern periphery, the firm (most often the same corporation) generates
sustainable underdevelopment. In the metropolis, the increase in wealth is
accompanied by the increase in civilization (prosperous peoples), in the
periphery, wealth increases but national civilization decreases. The
relationship between the firm and its specific manifestation environment is
governed, in the metropolis, by the law of synergy between the Paretian
configuration of the contribution to the achievement of added value and the
Lorentzian distribution of income and therefore of added value. The
contribution to the creation of added value works according to the rule of 20
to 80 but harmonizes with a distribution according to the rule of 38 to 62. In
the Lorenz model, the added value is distributed according to the ratio 38 to
62 (i. e. 38% of the community members "collect 62% of the total added
value), while in the Paretian model, the distribution is made according to the
ratio 20 to 80 (i. e. 20% of the community members "collect" 80% of
the mass of added value). The distinction between the firm and its specific
environment is essential in the substructal theory because it helps us to
understand that the firm can be, we emphasize, strong in a weakly structured
environment (with a precarious economic civilization). In
other words, the effects of the economic process do not go beyond the borders
of the company to support a sustainable development, a prosperous social
environment and therefore a secure future. In the metropolis, the
added value owes enormously to the economic elite, but the distribution obeys
the Lorenz-ian model. In the periphery, the Paretian distribution
is dominant, and the Lorentzian distribution is almost annihilated. The
substructal theory is "sensitive" to the aggregation of the two
functions. If a Paretian-type configuration (of production) generates a
Lorentzian-type distribution, it means that that economy has a sustainable
substructal equilibrium. If the effect of the two curves does not reach
a state of harmony, which is designated by what we can call the Lorenz-Pareto
law of synergy, it means that that economy is threatened by a substructal
imbalance. For the law of synergy to reign, the Pareto law effect in the
productive process should metamorphose into a Lorenz distribution. Let's
remember the idea already stated, of the division between the two types of
elites: some create only "selfish" economies (based on the law of
profit), the others create economic civilizations, i.e., together with the
accumulation of wealth, they develop the entire civilizational apparatus of an
economy (commercial roads, warehouses, schools, hospitals, new skills,
intensive occupations, spiritualized economic ethos, etc.). The transition from
the system of the closed, “selfish economy” to economic civilization
(civilizational economies) occurred apogenetically, unpredictably, miraculously.
The historical study of the evolution of the European economy offers us the
view of a surprising mutation, apogenetically, in the north of the continent
when, without any materialistic explanation, the distribution with the highest
probability deviated significantly from its previous - selfish - pattern in
which the majority had income small, very low welfare, and the minority had
very high incomes and a life of luxury and ease (20% of the population collects
80% of the income, and 80% of the population collects the remaining 20%).
Something then happened to the rent of identity, something in the mental scheme
of the economic elite that caused the rich to seek poverty for themselves and
the growth of general civilization and prosperity for the many. This new
distribution acquired the highest probability, and the world destiny curve then
changed. Metaphorically, we can say that the two curves, Paretian and
Lorentzian, embraced each other, the poor and the rich became equal before each
other and all before God. This model persisted until the middle of the 20th
century, when the great depression of 1938 marked its end, announcing the great
decline and therefore the start of a cycle of progressive destruction
of the substructal balance of the world. The Good Samaritan was thrown out
of the way by the “rich madman” with his full barns. That moment marked the end
of the divine iconomy governed by the glory of God and the beginning of the
dysnomic economy governed by the vainglory of godless, money-worshiping man.
Consumption and money became the new god of thus deceived humanity and malls
became the new temples. Big corporations have become a kind of cathedrals in
the desert. They extract enormously and offer nothing to the peoples into whose
environment they have spread. They come into the expansion area, extort
resources and labor, leaving behind vainglory, the desert and the periphery.
Social “desertification”, “historical fatigue”, exhaustion of vital forces,
unfortunately, advances from the periphery to the core of the metropolis, so we
can prophesy the end of this world based on such idolatry. In the economic
history of mankind, the destructive era began, the cycle of the planetary
decline of mankind. So, let's remember that the entire hermeneutic of the
world's economic destiny is clarified by several key concepts: property and
identity rent, quasi-rent, the principle of distribution with the highest
probability, apogenetic evolution, etc. Let's make some additional
clarifications
Theories of the
third generation and the problem of crises.
Economics is, before anything else, a
"science of the ways of mastering and using human and material
resources"[29].
One of the central issues of economics is, therefore, the one related to the
identification of the rulers and the ways of rule. The modes of possession and
use directly affect the substructure of life, i.e. the perpetuation of peoples
and civilizations. Some of them strengthen the substructure of existence
through a civilizational contribution, others, on the contrary, shake the
existential foundations of peoples, prefacing the ruin of entire civilizations.
This planetary division of economic modes (Marx called them modes of
production) is the starting point in the substructal analysis of economies.
Economic theories assume this division explicitly. In the framework of the
second generation of economic theories, a new paradigm in economic thinking was
born, and it tells us that the valid diagnosis of any economic system must
start from the study of the processes by which the owners of the resources
appropriate the results of production processes.
Second generation
theories called this phenomenon economic imperialism. Their idea is that those
who control the economy have reached such a power that they can control the
material and human resources of the economic processes on a planetary scale
affecting wilfully and/or unwittingly the foundations of the world, the
existential substructure of the peoples. We will note, on the other hand, that
before manifesting in the field of reality, the economic patterns of control of
human and material resources took the form of systems of thought, more
precisely, of models of answers to the questions raised by the environment of
life, models that we call patterns, paradigms, etc.
"The current
crisis has reopened the issue of world order and established theories (in the
field of second-generation theories) do not seem to have an answer to the new
challenge. In this context, a new direction of thought has emerged that
includes suggestions regarding the exit from imperialism. The axial idea of the
new thinking is that the imperialist strategies of mastering resources are in
crisis, and this is transmitted to societies and economies in the form of the
world economic crisis" (ibidem and passim), that is, of the substructal
crises of human civilization.
Current studies
foreshadow a new paradigm, typical of third-generation theories, which consider
that "the exit from the crisis is only possible once and together with the
exit from imperialism"[30].
Among the theories of the third generation, we also place the new paradigm of
economic thinking linked, among others, to the name of Academician Tudorel
Postolache. The economic science promoted by the theories of the third
generation suggests precisely "the idea of the imperative of the world's
exit from imperialism as the only solution to the crisis"[31]. We
have found points of convergence between the substructal theory, the
civilizational economy and the perspective advanced by the theory of the
cultural economy and by several other directions of recent economic thought. I
will refer to all of these in what follows. The new approach stems from the new
type of social transformation. In general, we must distinguish between two
types of social transformations: a) a destructive one, that adulterates social
order, induces ruining effects, disaggregate the old structure without creating
a new other instead; b) an integrative transformation when two previous
elements become parts of a new unit. The notorious example is the one referring
to the birth of a new field in the dynamic of science when the two previous separate
elements, culture and economy, for instance, come to form a new denomination in
the system of knowledge, “the cultural economy” and, therefore, “the cultural
economics”. Of course, we must distinguish a third type of social and
geoeconomic transformation which in general is called the dismantling
(destructuring) process. Such a process was a dominant one in eastern Europe,
and it consisted in unpacking the values of an array leading to the ruining of
the old unity. To give an example we may refer to the destruction of the
previous great and well-integrated industrial platforms like, for instance,
“Electroputere-Craiova”. The dismantling of such a developing industrial unit
led to a separation of the two sustainable structural elements: the technology and
human capital. That first dismantling stage of what could be named
deindustrializing phenomenon unleashed a cascading effect the most serious of
them being the flight of workforce, the brain drains. Let’s clarify.
The Cultural
Economy: A Crisis Perspective. The specificity of the cultural
economy as an act of knowledge
The economy represents
the management of limited resources for purposes useful to the individual, the
organization, the society. Economists have been concerned since the beginning
of modern economic thinking to find the ways in which economic agents (entrepreneurs,
firms, specialized institutions etc.) allocate limited resources in an optimal
way to obtain the expected results. This is how the main currents of economic
thought appeared, such as: economic classicism, with J. B Say, Adam Smith,
David Ricardo, John Stuart Mill, Thomas Robert Malthus, as important
representatives; marginalism with its exponents: Leon Walras and Vilfredo
Pareto; Keynesianism; neoliberalism. We do not want to analyse each current of
economic thought separately, but only to draw attention to the danger of
building a separate sphere of social life called "economy", using for
this purpose economic theories such as those mentioned above: "Until soon,
heterodox approaches (…) focus their attention on conceptualizing a separate
sphere of social life called "economy", a sphere that has been
dominated by systemic and distinctive rules and driven by the imperatives of
production, allocation and distribution of resources"[32].
Recently, however, a new approach to social and economic life has emerged that
is not only based on those strictly economic imperatives that concern the
production, allocation and distribution of resources, but also "the
cultural specificity of Western ways of economic thinking"[33].
The new idea is that an economic way of thinking like the one mentioned can
substructally strengthen or weaken a society. Over time, formalism and
mathematical calculation methods have proven to be insufficient in explaining
economic phenomena, requiring a new approach that perceives and therefore
defines knowledge as an intangible factor for enhancing economic results.
"The production,
distribution and accumulation of resources - factors necessary to ensure
prosperity - have always been a cultural performance."[34] This
study tries to bring additional elements to support the hypothesis of the new
approach which argues that "prosperity assurance" is not a strictly
economic process, but is a "hybrid process of aggregation and ordering
that cannot be reduced to any of these terms ("spheres of activity called
culture and economy»[35])
and, as such, requires the use of a unitary term like that of cultural
economy"[36].
In our view, the cultural economy is, in fact, a facet of the substructal
approach because it investigates the foundations of the economic process,
which, moreover, it defines as a creative process of a specific profile. What
would be the specifics of this new approach and what would it bring for a
generalized or integrated substructal theory of crises. My hypothesis is that
the phenomenon of crises can no longer be explained by strictly economic
disciplinary paradigms, on the contrary, inter- and trans-disciplinary openings
are needed that bring this field closer to what was inspired by what was called
civilizational or substructal economics (because the analysis comes down
to the study of the foundations, i.e. to what gives strength and therefore
stability to an economy and a world). Such an epistemological novelty is a
facet of what we usually named integrative transformation.
"Contemporary
contributions in the field of cultural economy can be understood from the
perspective of the processes regarding the cultural and social relations that
make up what conventionally refers to the economy. No subdiscipline can claim
to be dominant in this emerging field. Rather, it is a hybrid field that is
composed of impulses from various disciplines, including economic sociology,
cultural studies, social studies of finance, management and business studies,
economic anthropology, cultural geography, and a whole series of equally diverse methodological
strategies, as semiotics,
ethnography, social studies of science and theories of practice. The beginnings
of this approach (…) were marked by the emphasis on issues characteristic of
the economic field with strong social nuances but weak cultural nuances, such
as trust, network sociology and transactional environments, including
markets."[37]
II Substructal
crises. Obstacles to civilizational advancement
The cultural
foundation of the geo-economic dynamics of the world
A society develops, it
is generally said, if the economy develops. This statement is a rather vague
one, because there are underdeveloped societies with economies in the
environment of which very powerful corporations assert themselves. Max Weber
clarified the matter by pointing out that social development exists only if
there is a civilizational advance on the scale of a society. Otherwise,
no. It can happen that
wealth increases, and society becomes poorer. The phenomenon was clarified by the famous Paretian law of the
"20 to 80" ratio (that is, 20% of the members of a society have 80%
of its wealth and 80% have the remaining 20%). A company that generates added
value, but not economic civilization, is rather a factor of sustainable
underdevelopment. Wealth can increase, and society can impoverish. Therefore,
we can state bluntly: the economy is not neutral to culture. On the contrary.
We can undoubtedly talk, in a first sense, about an economic culture that
includes the pattern of economic organizations, the type and doctrine of
property and profit, the institutional pattern of the economic process
(segment, organization, network, as expressions of institutional culture),
paradigms of economic and sociological, ethno-economic, ecological science,
etc. All of these have something in common. Through them and in their specified
expression are propagated the same exigencies of the whole and therefore of the
unity of the parts in their diversity. The economy of the classical era, for
example, consecrated a paradigm centred on the numerical idea of the average,
the labor-value theory, etc., while the middle cycle or corporatist era
consecrated the theory of "organic solidarity", the idea of unequal
exchange of equal values and therefore the idea of numerical proportion, etc.,
while the postmodern or post-corporatist era consecrated the institutional
pattern of networks, the flat world model, foreshadowing the idea according to
which the newly created value has three sources: human work, nature's work and
divine work[38].
Above all, the new configuration of the post-post-modern era established,
through the theory of orchestration, a new paradigm in economics and
organizational sociology, based on the model of the orchestra and the conductor[39].
The orchestration paradigm appears against the background of a curious twinning
between ecology, population science and the theory of the firm and
organizations, twinning from which organizational ecology was born in the
1970s. It researches organizations as specific populations, which are born,
live and die as things happen in the dynamics of any population[40].
On such a background, the eco-economy was also imposed, concerned with the
phenomenon of niches, weakly or strongly structured environments etc. There is
a latent-manifest solidarity between the systems of thought and the systems of
the economy, which, together with the political systems, the family etc., make
up the skeleton of the civilizational system of an era, area, and, in
perspective, of the entire planet. This is, in other words, the substructure on
which collective life is supported and perpetuated at all levels, from
individuals and families to civilizations, to humanity. The propagation of the
substructal principle of the system at each of its levels is shaped culturally
and therefore spiritually. We can talk, here, about cultural types of economies
given the solidarity of the economic process with a certain economic form
(mode, model, pattern, etc.), with the shaping of a society's economic life of
cultural and by no means natural (or economic solipsistic) origin.
Consequently, the economy is, like any cultural process, indebted to the
creative potential of a social class, of an economic elite, and when this
creative potential is in crisis, the economy enters a decline, a period of
sometimes prolonged interregnum which was recorded as a cyclical phenomenon by
the theory of Kondratiev cycles and as a great danger by the theory of
the substructal crisis or the end of the civilizational cycle.
Academician Tudorel Postolache noticed that there can emerge, in the middle
area of economic cycles, trends that can deviate the economic process from its
line[41].
We can, therefore, talk about a cultural foundation of economic crises, because
it is obvious that crises are intertwined with that curious phenomenon of
diminishing the capacity of economic elites to respond creatively to "the
challenges of the economic environment", as Toynbee would say[42]. In
other words, the substructal competence (to supervise and preserve the
foundations of a system) undergoes a process of progressive degradation, which
Georgescu Roegen considered illustrative of what he called the law of entropy
of any economic process. There are strictly economic crises, related to the
cyclical nature of the economic process, attested by the Kondratiev cycles, as
already stated, but there are also crises of the cultural foundations of an
economy, which can no longer be resolved within the strict framework of the
economic process. Such substructal crises can be solved but within the more
comprehensive framework of the succession or dynamics of economic elites,
economies and societies in their entirety (of socio-economic paradigms). This process
can be called a civilizational or substructal process. As its main
content is the very civilizational succession of the economy, we will talk
about a new economic science, which we will call civilizational
or substructal economy, a phrase suggested to us by the book of
Academician Tudorel Postolache.[43] The
economy of our era is both a post-corporatist and
post-informational economy (that is, nourished by the effects of the corporate
and informational cycle, but jumping over the thresholds of this cycle). Above
these features, we will notice, in the light of the mentioned theory, that the
contemporary economic system includes civilizational successions from areas and
typological frameworks of a wide diversity, which proves that such an economy
can be called a civilizational economy or, through a compound term,
world-economy, a distinct entity that includes civilizations in the dynamics of
the world macro-economy. The idea is that in the globalized economy we can no
longer talk about an economy as an entity within a single society, or a
regional territory, a continent, for example, or a civilization, but about a
system that includes in its corpus different civilizations, different
successions, different cultures, different states, etc. This new system is not
neutral to civilization, but it is a civilizational one, because it trains all
the elements of a civilization, and, horizontally, it unfolds on the scale of
the planet and, longitudinally, it includes different historical cycles,
different successions. All
of these together are substructally supported by a principle transmitted in the
form of substructal demands on the parts (the demands of preserving the
identity and unity of the constituent elements). How can simple sequences, so diverse, and areas
so different be integrated into a whole, whatever its essence? The successions
become co-existent under the substructal law, which causes that in all the
elements of a whole, no matter how diverse, the exigencies of the whole are
actualized, each time differently specified and yet always whole. When some
elements deviate from the principle of the whole, it is a sign that the system
they are part of has entered a deep crisis, a state of anarchy, of disturbances
and disorders, of turbulence, which all herald the end of a historical cycle.
The same effect occurs if the part substitutes for the whole, as it happens
today with money, as a part that tends to take over the quality and functions
of the whole to the detriment of its other constituent parts and even to the
detriment of the whole itself. The system shows signs of fatigue, its energy
diminishes, the once flourishing unity becomes anaemic, the brilliance fades,
the gravitational force of its core also decreases, the parts enter the sphere
of attraction of other systems. The whole disintegrates at an accelerated rate,
the edifice of yesterday begins to crumble. The place that marked his identity increasingly
resembles a landscape made up of both living ruins and frozen ruins, asleep
forever. The new globalized
economy, as it claims for itself the functions of the whole, is summoned to
coordinate societies situated within different historical cycles, diverse civilizational
dynamics, heterogeneous economic processes and rhythms (economies
of scale). The central concept of the new cultural economy is that of
orchestration[44]. "New
notions about work and profit collection are emerging. This is, for example,
the concept of work-flow, of outsourcing and insourcing, e- commerce, online
business, value chains, vertical boundaries of the company, quasi-rent,
identity rent etc."[45] We
will refer to each one in order to gain access to the substructal
approach to the current global crisis, for which economists admit that they do
not have an answer, leaning towards the idea that we can talk about crises
without an answer, to which, in other words, economic theory does not know what
to answer. We believe that the absence of the answer is related to the
inability of the thinking systems of the economy, which are still anchored to
the foundations of the old economic culture (the cultural cycle of the
intermediate or transition phase economy, which, like the Toyota company, had
all the elements of supply chains of a great diversity, in merged form, but he
had not yet integrated them into an overall process). The process of
integrating the new components into a new economic whole (a post-corporatist
cultural cycle economy) belongs to the orchestration of supply chains and
therefore to the orchestration of networks. Here we are talking about three
cultural types of structures of the economic process: segmented structures,
corporate structures, orchestrated structures. All are based on culturally
(spiritually) specified substructal competences, that is, on the ability to
remake the whole in the sequence of different evolutionary phases and stages.
The diseconomy of
agglomeration
An example of the
relationship between the cultural form and the actual economic process is
offered by the agglomeration economy. This is strictly related
to the urban cultural form, that is, to a certain community
culture that we call a city. We are obviously talking about the
urban economy, as, for the traditional economy, the dominant cultural form of
the economy was that of the rural economy in solidarity with the village as
a cultural-economic formation. The common definition for the
"economy of agglomeration" emphasizes precisely this effect of the
relationship between an agglomeration of companies (industrial clusters) and
the cities that appear around them and precisely because of them. The term
"economy of agglomeration" derives, therefore, from the
specifics of the urban economy and is used to describe "spatial
agglomeration of physical capital, companies, consumers and workers"[46] Organizational
ecology describes this phenomenon through the notion of "density" of
firms and its advantage ("low transportation costs, a large local market,
an ample labor supply, the accumulation of knowledge and human capital accompanied
by a rapid spread of knowledge between companies, etc."[47]).
In other words, when such industrial clusters appear (several companies placed
together in compact spatial frameworks), the beneficial effects are also seen
(network effects, economy of scale, cost decline, increased division of labor
and specialization, etc.). Functionally, we can talk about what economists call
the "advantage of agglomeration"[48].
Of course, together with the benefits, the disadvantages of this type of
economy also begin to appear [49],
emphasized as such by those who have studied the phenomenon
("environmental pressures, increased land prices, poor or overloaded
infrastructure, lack of reserve areas"[50] etc.).
The problem of the substructal balance of the agglomeration economy[51]comes
down to the question of the relationship between the dynamics of the capitalist
firm and the urban community threatened to turn into a massed agglomeration,
into a "lonely crowd". La foule solitaire (Lonely Crowd),
the famous book by David Riesman and collaborators foretells the substructal
crisis towards which the economy of agglomeration is heading. In traditional
communities, the relations between the various groups of sex, clan, caste,
professions, etc. they were consistent, registering insignificant changes over
time. Back in 1950, Riesman believes that "half of the world's population
lived in such a type of social order".[52] Modernity
suddenly amplifies those types of changes that "allow the individual to
live in society without conforming to any traditional order"[53].
The relationship between population and space, between economy and community,
between individual and society begins to be massively disturbed so that the
previous societal unit collapses, the individual becomes disinterested in
acquiring those substructal skills that had ensured in the previous historical
cycle the integration into the whole, the recompositing of the exigency of the
whole in his own life and inner organization (la vie intérieure). In
this transition from one type to another, something much deeper is produced
that will even shake the foundations of the old unity: "consumer tastes
are substituted for the label". In other words, the soul of the new
society is no longer internal order or etiquette, but consumption.
" David
Riesman dénonces à cet égard l'absence de sens de la consomption: les objets
culturels ont perdu toute signification humaine, car leur possesseur en fait
des fétiches qui doivent lui permettre de soutenir une attitude "[54]
Expressing ourselves
figuratively, we can say that in such a society, man does not consume to live,
but lives and fusses in order to consume. This upheaval is perpetuated with the
agglomeration economy. We note, here, that "cities are formed and grow to
exploit the economies of agglomeration". In this case the effect is double
oriented (bidirectional). On the one hand, the economic parameters change (the
cost of production drops significantly), on the other hand, new social
formations appear: large industrial cities, which develop their own culture,
and when it enters a crisis or is slow to consolidate (codification delayed)
appear critical effects in the agglomeration economy. Culturally, for
example, the increase in specialization, defining for the
economy of agglomeration, brings with it the risk of organizational anomie
(disintegrated or insufficiently integrated functions, etc.), but also of the
emergence of some forms of subcultures of aggression and frustration, which can
lead underground to deflagrations of anarchy as in the case of the famous urban
riots in a large western metropolis. Such riots are ready to
erupt from the moment when frustrations, latent aggressions etc., have
accumulated. The crisis, in other words, reaches the substructal level of
order. The explanation for the emergence of such waves of anarchy must be
sought in the emergence of subcultures of aggression and in the aggravation of
anomie beyond the threshold of correction (returns to scale [55]-
scale effects -, increasing or decreasing) etc. According to the substructal
theory, blocking the functionality of the correction thresholds (returns to
scale) is the first signal of the start of a possible substructal decline.
Socialist economies entered a phase of irreversible decline because the
philosophy of forced growth caused the blocking of correction thresholds and
thus the warning function of scale effects (returns to scale) was almost
suspended. Applied to the discussed case, of the economy of agglomeration, the
deregulation of this parameter and therefore the inability of firms to control
the dynamics of the system is called "diseconomy of agglomeration".
Normally, a decrease in the cost per unit of output leads to an increase in the
scale of a firm's operations (average cost decreases as output—the amount of
production—increases). When the effect of scale decreases (that is, the price
per unit of input rises above the level of output), we have what is called
diseconomies of scale. Something like this happened when the agglomeration of
cities grew above the critical threshold that can be assessed precisely through
the scale effect (returns to scale). Increased competition induces a decrease
in pricing power to which agglomeration and congestion problems are added and
thus results in what we call agglomeration diseconomy.
When, therefore, the
additional competition due to agglomeration leads to a decline in
"pricing power" and, in turn, the growth of cities induces
overcrowding and congestion effects, then the foundation of this economy is
threatened by what we call a substructal crisis, studied, in its
terms, by the theory of diseconomies of scale. The borderline between the
economy and diseconomy of agglomeration is deregulated and the growth process
of cities gets out of control (corrective mechanism). The conclusion mediated
by Marx's analysis is conclusive[56].
The increase in production without a commensurate expansion of the market leads
to crises of overproduction and therefore to the substructal deregulation of
the economy. The examples are numerous. We will dwell in a subchapter on the
phenomenon by using the example of the operation by which a large corporation
like Google bought Motorola in order to acquire a specialization that Google
did not have the power to procure by itself. A corporation that has accumulated
enormous economic power is suddenly disempowered in the face of the phenomenon
of specialization of some processes, which it itself, with all its enormous
economic power, cannot ensure in competitive terms and then prefers to buy. The
large corporation buys specialization (so it buys not raw materials,
not abstract labor, but intangible or intellectual capital, hyper-specialized
knowledge), securing an advantage due, in other words, to intangible assets
that have produced a specialization that is impossible to imitate, i.e. to take
over by imitation, or by simple expansion. This "competitive
advantage" is measured by what the new economy calls quasi-rent. Quasi-rent
beats, here, big capital or, in other words, culture beats the economy. It
is good to remember the utility of the two terms – effect of scale and
economies of scale – with their subtle distinctions essential to the
substructal analysis of an economy. As is known, the scale effect
(returns to scale) refers to the relationship between the inputs and
outputs of a firm or set of firms (a corporation, a megacorporation, etc.),
while economies of scale as a concept refers to the
relationship between the average cost of production and the size of scale [57].
These two concepts are useful in the analysis of substructal
crises. It is known, for example, from Schumpeterian theory, that innovative
ideas increase the scale effect and optimize economies of scale.
Let us remember from
what has been said so far that the answer to the substructal crisis must be
sought not in the economy, but in culture, in the spiritual dynamism of the
world and economies. If there is a lack of the ability to
orchestrate various processes, induced by the increase in the
complexity and size of an economy (generally a system), which would be the same
as the absence of substructal competence , we can
say that the small effect overturns the large economy, following
the model of the small log which overturns the great chariot. When the crisis
manifests itself on the scale of the global economy, we are talking about a
substructal crisis (a mega-crisis) of the civilizational economy, like the one
humanity is going through today and which is only at its beginnings. In
general, the economy of agglomeration brings cultural advantages, such as the
accumulation and intensification of "informational flows" (thus
creating the framework for the transition to the post-informational economy),
the assimilation of innovative ideas within companies, which really leads to
"growth scale effects"[58].
The disadvantages also appear (congestion, pollution, and other negative
effects induced by the expansion of the clustering of industrial companies in a
compact perimeter) in the form of negative influences on the culture of life
and on the circulation value (expansion power) of a world-economy, causing a
reduction in scale effects[59].
We are dealing with a typical substructal-cultural crisis of the
economy, not a "natural" crisis of the economy, as classical
theory taught us. The novelty of our approach refers to the hypothesis
according to which the phenomenon of crises can have
a substructal induction, i.e. it derives from
a vulnerability of the foundations of a system as a result of
some deviations from the substructal law (of the balance between the
core of the system and its specific environment of manifestation). The
method proposed in the studies dedicated to the substructal effects of the
dynamics of an economy allows us to highlight the triadic synergism of
risks, the phenomenon of the generation of triangular risks. This triangle
is the framework for the emergence of substructal crises. The risk triangle
method will help us prove that at the base of any crisis, including the current
crisis, we find a co -evolutionary triad of risks (for the
notion of co-evolution, you can consult the studies of Cătălin Mamali[60]).
Their property is that they co-intensify over a period and, when they reach
certain critical thresholds, the triad becomes pregnant, predominant on the
scale of the respective economy, which it thus throws into a lethal substructal
crisis. Behind the substructal interpretation of the dynamics of the
geo-economy we always find the three elements: the price revolution (and
therefore the explosion of consumption), the etiogenesis of plutarchies (the
prevalence of the plutocratic impulse), the supremacy of money, a vicious triad
that takes the the form
of co-evolutionary diseconomy of aggregate curves. We can call this regularity the law of
co-evolutionary or triadic diseconomy. It takes the form of a triad (a
triangle of risks). When this triad passes the critical threshold of the
decreasing returns curve (decreasing returns curve) we are talking about a
phenomenon of sudden degeneration of the economy, like the phenomenon of sudden
aging. The triadic co-evolution of the three risks induces a progressive
difficulty in breathing the system (the economy in this case). Her pulse is
getting heavier, which resembles the phenomenon of aging. If the aggravation is
sudden then the aging of the economic organism is also sudden, brutal. This is
the novelty of our discovery, somewhat shocking, for although as an economist
you are familiar with phenomena of economic decline, with processes of
degradation, with dysfunctions and with the whole cohort of states that
accompany the phases of cyclical declines in Kondratiev curves, you are
astonished to find that economies can enter states similar to sudden aging,
specific to shock phenomena. And yet, this is exactly what I discovered through
the risk triangle method. I called this phenomenon sudden aging of the
economy, but also global peripheralization or lethal fatigue of the
world economy. This phenomenon is the effect of an economic shock of
extraordinary proportions. I think that this shock is related to a mutation in
the “ethos” of the economic elites, which is evidenced by the sudden
degenerative reorientation of accumulated money (money is used as money in the
"speculative economy" and not in the productive-civilizational one).
The elites of the world no longer give the accumulated money a productiviste
orientation but prefer to use it in speculations with financial placements,
which we usually call the concept of hyper-financialization of the economy.
Today we find economically in the phase of maximum acceleration of the aging
curve of the world economy. It is obvious that no strictly economic solution
will get the world economy out of its state of chronic old age, of lethal
fatigue, without only a recompositing of the civilizational triad of the
economy, involving
reforms capable of inducing co-evolutionary triadic transformations. These alone will allow the simultaneous harmonization of the three
civilizational dimensions:
prices, the ethos of the elites, the vector of money (both the population's and of the
plutocrats). This is
the same as a transformation of the civilizational or cultural basis of the
crisis. The exit from the crisis, therefore, is the fruit of a process of
spiritual renewal of the elites and the population, which is not visible now.
Multiplying
"debt-money". Indebtedness and hidden inequality
One of the
macro-social problems of societies in approximately the same position as
Romanian society arises from the new form of manifestation of what American and
British sociologists call the "debt society". The peculiarity lies in
the fact that it modifies the phenomenon of money multiplication, which takes
on a new form in the debt society, namely the form of "debt-money",
that is, money without a labor-value backing in the sense of classical
economists. The multiplication of this new type of currency – debt-money –
brings with it an accentuation of imbalances and the transfer of today's
problems to tomorrow's generations. From the mechanism of money multiplication
in the account to the inflationary spiral bringing about a loss of well-being
is only one step. This step is equivalent to the emergence of the phenomenon of
hidden exclusion because it is transferred to future generations. Let's delve
deeper.
Any bank in the
banking system can issue, through the multiplier, money
or creditable scriptural monetary mass or debt money.
While the central bank is the only one able to issue coins and bank notes, i.e.
cash or cash commodity money, all other banks in the system, except
the central one, can issue "debt money". This does not mean
that the central bank is not a participant in the process of creating "debt
money". And it can, by virtue of its function as a creditor of last
resort, issue "debt money".
"Debt
money" "contaminates" the monetary mass formed by commodity
money in the sense that it causes an erosion of purchasing power,
having, in addition, the perverse function of maintaining and increasing
inflation. The effect of hidden exclusion is, behold, true.
From the beginning, the distinction must be made between commodity
money and " debt money". This distinction helps
us to understand more deeply the phenomenon of hidden exclusion. In addition,
we will notice that through this banking mechanism, entire peoples,
semi-continental geo-economic areas, etc. are drawn into the cascade of hidden
exclusion. Commodity money, in our understanding, means the
monetary mass that has a value correlative in the
volume of goods and services in the economy. The latter create their
own purchasing power through the wage value as
a reward for labor and profit as a reward for capital.
The salary value represents the nominal salary, and
the amount of goods and services that can be procured with the nominal salary
represents the equivalent of the real salary, that is
precisely the value-salary correlative of the goods and services traded on the
market. Goods and services create their own purchasing power on the market,
through trading, in exchange for commodity money from nominal
wages. While for commodity money there is a value correlative in the form
of goods and services produced with the help of the two dominant factors of
production, namely: labor and capital, in the case of debt money the only value
correlative is the promise that, in a certain period , the goods and services
that will be produced with their help will constitute the counterweight or the
value correlative of this money. Thus, while commodity-money circulates in the
economy, having as a value correlative a reality, namely the goods and services
that can be procured with the help of the nominal salary, the debt-money is
based on a promise, that is, an illusory value. This is also the measure of
hidden social exclusion. We will present below, the weight of this phenomenon
of hidden exclusion on the scale of Romania in a European or regional
(comparative) context.
Possession of
debt-money creates an illusion of well-being, being, therefore, an illusory
well-being. An asset bought on credit creates the illusion of an increase in
wealth for the one who purchased it. While the debt money (the principal or the
amount obtained from the bank as a result of lending) circulates in the
economy, being effectively transferred from one account to another, the asset
purchased on credit is not subject to a real increase in wealth for the debtor,
it (the purchased good) being, further, burdened with duties. In other words,
the debtor is not yet the owner of that good, being forced to either pledge or
mortgage that good until the time of full repayment of the contracted credit.
Not all commodity
money, however, is spent on goods and services. Part of the nominal
salary can be saved for future purchases. Therefore, part of the
commodity money is subject to term deposit contracts with one or more banks.
The bank, in turn, to be profitable, must have higher receipts from interest
on loans than interest payments on deposits.
According to the national and international regulations in force, banks are
obliged to establish deposits with the central bank in the form of mandatory
minimum reserves. Based on these reserves, banks can multiply their value
by a predetermined multiplication factor (10, in the case of our example), and
the value thus resulting from this multiplication mechanism takes the form of
bank loans or "debt money".
Since "debt
money" does not bring a real increase in productivity and,
therefore, implicitly, an increase in the real salary ,
therefore, in the power of purchase, then we can say
that the money multiplied in this way only brings other debts and, even, a
decrease in purchasing power (that is, hidden social exclusion).
This decrease in the
value of the real salary translates into an increase in the
inability to purchase certain goods and services. The effects of
this increase in disability mean nothing more than the
cause of social misfortunes. By social misfortunes we mean, in this
context, real losses of wealth or well-being and therefore hidden social
exclusion and, implicitly, a measure of substructal destruction. Here, on the
scale of Romania, is the extent of this exclusion from the European welfare
standard [61].
The difference and
therefore the scale of the hidden social exclusion of social Romania in the
European context is a systematic phenomenon, i.e. reproduced in all categories
of enterprises and therefore for all categories of employees. They have access
to commodity money and therefore to the procurement of well-being in a
proportion clearly lower than the European average and still lower compared to
the German average. The phenomenon of hidden social exclusion has been called
"peripheralization" by sociologists and economists who have analyzed
the gaps. Here is the graph of this gap we call vertical poverty (another name
for the phenomenon of hidden social exclusion)[62]
II Romania and the
beginning of the "debt society"
The first two
phases of the debt economy.
The Romanian economy
after the Second World War was marked in the first two decades of the communist
totalitarian regime by a process of abolishing the institutions of the rule of
law and the mechanisms of the market economy. Thus, during this period, a process
of wealth accumulation that began in the interwar period was put to an end.
Nationalization, collectivization, a centralist economic policy, largely
ineffective, represented as many brakes on the process of wealth accumulation.
While Europe was recovering after the war, Romania was faced with one of the
most devastating processes of cultural repression and institutional dissolution
ever imagined. The Romanian case is an illustration of a process of
massive substructal destruction that threatened the very being and
identity of this people. All the more exemplary is the resistance despite the
terrible social fatigue of the Romanian people themselves. Even if the
statistical figures indicate an economic growth since the first period of the
communist occupation, they cannot hide the devastating effects in terms of
spirituality, of the institutions of that time. However, the Romanian society
found human resources and structural imagination to change the terror in the
context of a new relaunch. Society had learned to use the new system in support
of a forced development, so that the seventh decade, after the declaration of
independence in April 1964, is the decade of economic relaunch and even of an
unexpected cultural renaissance.
And indeed, the beginning of the eighth decade marks the beginning of a huge
accumulation of industrial capitals, but, in large part, through a series of
debts of the Romanian state, outside, and not only through singular efforts inside.
This period overlaps almost perfectly with that context of the world economy
marked by the beginnings of the indebtedness process, the main cause of the
birth of the indebted society. Romanian society was, here,
economically synchronized with the rest of the world, which is in itself a
performance because this required access to external financing resources that
were all outside the camp and therefore were under special political conditions.
Romania had to legitimize itself politically in order to gain access to such
financing, which represents an undoubted argument of the performance of
Romanian diplomacy at that time. It is true that even then the banks were
interested in pumping the money accumulated by increasing the price of oil
(petrodollars) into countries willing to lend them. During that time, we can
record a sustained relaunch of the wealth accumulation process, at an
unprecedented rate in the history of the Romanian economy. Then the process of
accumulation of industrial capital was relaunched, and the process of
industrialization of Romania was resumed. If we were to stage the
industrialization of the Romanian economy in the 20th century, then a first
stage would be the one that overlaps with the interwar period, a second stage,
starting in the seventh decade, together with the effects of a developmental
dictatorship, combined, obviously, with the effects of the economic policy
imposed by the centralist economic system, typical of the communist regime.
Despite the extensive nature of the industrialization policy in the second
stage, even if some economic policy measures were exaggerated, with the effects
of an unrealistic oversizing of the existing economic capacities at that time,
the statistics show an unprecedented rate of accumulation of economic
wealth. Thus, in a single decade (1970-1980), the national income
increased seven times, in real terms . Normally we ask ourselves the
natural question: with what money? In order to obtain a high accumulation rate , an
annual average of 35.7% [63],
considerable financial resources must be allocated. The manifestation of a
certain external political openness of the political regime at
that time created the possibility of access to external financing. Without
consistent external financial support, Romania could not, at that time, achieve
such a high rate of economic wealth creation. It should be noted that Romania
had access to external financing in an extremely favorable context on the
international level: we recall the "rescue" operation of the American
dollar by lending to the countries of the world by important banks of the world
banking system. It was just the beginning of the world era of the
indebted society : importing countries and others began to accumulate
important debts towards financial institutions and creditor banks. Romania is
among them. It's just that the money obtained from outside was used, in the
case of the Romanian economy, for the creation of new industrial branches
bringing economic wealth. Due to an extensive policy and an inefficient
redistributive system at the level of the whole economy, much of the financial
results of the new industry, instead of being used for reinvestment and upgrading,
were spent on ambitious new investment objectives, which led to a weakening of
the competitiveness of the new industry apart from the decrease in productivity
and the obsolescence of industrial equipment. Under these conditions, the
repayment of the foreign debt from the beginning of the ninth decade
"throws" additional burdens on the shoulders of economic agents and
the population already tired of the tension of political mobilization within
the development dictatorship, implicitly. The decrease in external
competitiveness, obtained from the sale of products with a "specific
capital" coefficient below that of the world competitive threshold, only
"charged" an economy's bill to external creditors.
Unfortunately, this
period marks the considerable effort made by Romania to pay the foreign debt
bill. The new decade is the decade of the cruelest strain that the indebted
society can display. Thus, the perverse, destructive effect of a debt "not
treated" with due respect was known. The communist regime had neglected
the danger of the transformation of indebtedness into a state that maintains
devastating effects in economic, social and biological terms. The effects,
unfortunately, came to light and erupted in forms that are among the most
destructive for a nation, since the first phase of the new decade. The food and
energy rationalizations, the almost total neglect of the social protection
factor have led to one of the most serious threats to the existence of a
nation. The manifest economic inefficiency , coupled with the ambition to fully
repay the external debt, have "thrown" unbearable burdens on the
population. The example of Romania is illustrative of the metamorphosis of debt
into substructal destruction.
Thus, we can talk about two phases of the debt economy, with obvious
manifestations, especially during the eighth and ninth decades. The first
phase, that of the debut, with strong emphasis on the real accumulation of
wealth, had the gift of creating the premises of a camouflage of the perverse
effects of indebtedness. The perverse effects we are talking about refer to the
negative impact of indebtedness in financial terms (the increase in external
debt followed by the repayment effort, an effort that translates into an
increase in the fiscal burden of economic agents and the population, over a
time horizon that it can span several generations) and social (increasing the
tax burden has direct effects on the purchasing power of the population).
In order to
understand the possibility of canceling the perverse effects of the
indebtedness process, it must be said that from the moment an economy becomes
indebted, succeeding in inducing, thanks to the indebtedness, real effects
along the line of increasing economic wealth, implicitly in the plan of
increasing external competitiveness, from the same moment it occurs and a
relative compensation of the increase in indebtedness through the increase in
competitiveness. It is an effect similar to the one in algebra when the minus
with the plus cancels out .
In our case, the minus is represented by indebtedness, being a borrowed
financial resource that entails future repayment commitments, with an interest
that is added to them. The plus is represented by the increase in wealth, in
fact, by the accumulation of national income, created with the borrowed amount.
We are talking about a
cancellation of the effects of indebtedness from the moment the borrowed amount
produces an increase in wealth, which "covers" at least the borrowed
amount and the interest, and only if it produces it (such an increase). In
the eighth decade, the period that corresponds to the first phase of the debt
economy, the conditions were created to cancel the perverse effects of debt.
The high rate of growth of the national income during this period led to an
increase in the external competitiveness of Romanian products necessary to
overcome the costs of indebtedness.
The second phase, that
of maximizing the perverse effects of indebtedness, manifested itself in the
ninth decade. The ninth decade, more precisely the period 1982-1989,
represented the period of maximizing the perverse effects of
indebtedness contracted in the previous period. The factors increasing
the perverse effects of indebtedness were probably these: a) a defective
investment policy , consisting in the arbitrary and, implicitly,
ineffective redistribution of financial resources as a result of the increase
in national income from the past decade; b) neglecting the financing
intended for the replacement of industrial capital; c) forcing the
repayment of the external debt. These three factors led to the cancellation
of the increase in competitiveness of the Romanian economy, an increase due,
for the most part, to the high rate of accumulation of economic wealth,
especially in the industrial sector. This fact represented nothing more
than a relative increase in the value of loan repayments in the account of the
external debt, simultaneously with the decrease of the added
competitiveness . Thus, the minus, in terms of value, exceeded
the plus. In the latter case, corresponding to the second stage of the
indebtedness economy, there was a maximization of the perverse effects of
indebtedness and they were discharged in substructal destruction, i.e. in the
weakening of the foundations of the Romanian society as an ethno-economic
totality not enough of vigorous to face the perverse effects of the second
phase of indebtedness.
The moment of balance
The process of rapid
industrialization of Romania cost many billions of dollars, money coming, for
the most part, from external loans contracted by the Romanian state. The period
in which Romania borrowed massively from the international financial markets,
namely the eighth decade, coincided, as I said above, with the
"rescue" operation of the American economy from the precipice of the
trade deficit.
Despite the fact
that Romania entered the group of new debtor countries, at least during the
eighth decade, a minimization, if not a cancellation, as I said above, of the
perverse effects of indebtedness, following the process of increasing the
competitiveness of the economy through the industrialization of the country.
We can consider that
the "rescue" operation of the American economy was also the
beginning of the indebted society on a global scale . For Romania, the
eighth decade is marked by a transition from an economic mode of action
attached to agrarian economies to another specific to young industrial
economies (emerging, with the current term). It is worth noting that this
transition made by Romania overlaps with another turning point, this time on
the international level. This international turning point is equivalent to the
transition from an economic way of thinking and acting typical of the classic
industrial revolution, closer to the idea of a national economy, to another in
which the national economy, with its part of relative autarky, as the
foundation of economic governance , is gradually being replaced by the economy
of transnational corporations and, complementary, by the emergence of regional,
cross-border economic forms.
Fortunately, Romania
"caught" the last train of the industrial revolution, succeeding in
the transition from an agrarian economy to an industrial one, at the same time
"making" the beginning of the new era of transnational corporatism.
The Romanian state took advantage of the favorable situation on the
international markets and made the transition on the last hundred meters. Any
delay could have cost us dearly, given that the new era of transnational
corporatism brought with it the perverse mechanism of financial conditionality,
a mechanism induced by the process of the rise of the multinational corporation
to the world scale. Transnational corporatism will relaunch the phenomenon of
hidden exclusion, this time as ethno-national exclusion. The effect of hidden
exclusion affects the nations, so that the conditions of a sustainable
underdevelopment and therefore of the worsening of international inequalities
are recomposed.
Crisis and the
cultural foundation of risk: A hypothesis. The opportunity cost of the reform
and the law of the minimized effect
The crisis accentuates
social risks and exacerbates vulnerabilities. Recent studies have launched the
hypothesis of the cultural foundation of the intersection of the crisis with
adjacent phenomena such as the phenomenon of multiplying social risks. There is
a lot of talk about the social protection system, about its reform, about
vulnerabilities and about the accumulation of poverty and infirmities within
the population. A systematic examination of the whole package of these issues
is needed. We will try to separate the composition of this package of problems,
to highlight the spiritual foundation of their etiology, to check the
relationships between social risks, poverty, helplessness, on the one hand, and
the policies to respond to them, on the other. Thus, we will approach from
another angle the issue of the substructal level of order and
disorder in transitional societies (Eastern Europe) and equally the phenomenon
of hidden exclusion. The Easterners evolved during the transition period towards
a special psychological profile in which concern for many
and trust in few are combined. Romanian society, among the
societies of the East, displays the profile of a society that perceives itself
as a collectivity assaulted by risks [64].
The number of people unable to find a job has increased enormously and the
number of those who have lost faith in the ability of the system and
governments to solve the problems they face has multiplied. The vast majority
of transition assets had no other path than that of international migration. We
find in such a profile a confirmation of our hypothesis that an economic crisis
is primarily related to the depressive phases of economic
emotionality . In principle, this depressive emotionality submitted to
the law of substructal tendency, so that it quickly and thoroughly
fixed itself at the foundation of the collective conclusion: "in the East
nothing can be done. In the countries of origin, hope is dead". Such a
conclusion is half realistic, the other half is the effect of the law of
substructal tendency, that is, the installation of depressive emotion at the
foundation of the system of beliefs, perceptions and attitudes. The crisis is
always spiritually aggravated, so the policy response approach should not
ignore this foundation if an effective solution to the crisis is desired. The
diminished effect of government response policies to the problems faced by
social majorities has become such a recurring phenomenon that we are called to
ask about its causes. How is it that almost none of the response
policies of the governments that followed each other in the last
period managed to counteract the emergence of the phenomenon of the
minimization of the effects to insignificance ? Is this phenomenon the
consequence of the spiritual profile of those who seek solutions without being
able to identify them? Our idea is that this phenomenon is part of the class of
side effects or "perverse" (in R. Boudon's term) induced by hidden
factors that policies so far have failed to elucidate and therefore take into
account. This study aims to identify such factors and describe their
propagation mechanism, especially since the dynamics of these factors also
induces the phenomenon of hidden social exclusion. Right from the start, we
will say that their action is of a systematic type, subject to a subsystem law,
which I also called the law of the minimized effect . As in
other situations, we are also dealing here with a legal mechanism derived from
the specifics of some non-economic dynamism of the crisis. The law of the
minimized effect does not have an economic induction, but an extra-economic
one, we would say, spiritual-political or, even more rigorously, substructal.
Such a law is the expression of a more general one, the substructal
law of system dynamics.
Whoever examines the
current situation, however briefly, will rather find that between the social
problems, on the one hand, and the policies to respond to them, on the other
hand, certain factors intervene, with systematic action, generators of a perverse
phenomenon of the type: " one step forward two steps back". This
famous formula belongs to the leader of the Bolshevik revolution in Russia and
we mention it because it decrypts exactly what we mean by the law of
minimized effect . Looking ahead, we will note that although the
volume of "social rights" is huge (in Romania there are 202
"social rights", a report from the end of the second decade of the
transition tells us), the proportion of their accessibility is modest to
insignificance, which attests the discrepancy between the statements of the
governors and the realities generated by the act of governance.
In Romania, that
official report of the Ministry of Labor and Social Protection (from the time
of the former PDL government) tells us, " 18,436.5 thousand people
benefited directly or indirectly from social protection " (MMFPS, 2011:
1), but, on the other hand on the other hand, Eurostat's comparative data show
us that the share of average social protection expenses per capita in Romania
in the amount of average social protection expenses per capita in the EU is
around 5%. This is the sad and dramatic truth and on the basis of such a
frightening discrepancy I formulated the minimized effect
hypothesis to characterize the reduced effectiveness of social
protection policies in the East and, specifically, in Romania. We understand
that, in reality, "the influence of social transfers on absolute
poverty" [65]is
more than minimal and it is absolutely necessary to look for the factors that
induce such a diminution of the effect of social protection policies in Romania
in the second decade of the massively extended transition in the third decade.
In the official explanations, even in the opinions of some analysts, it is
claimed that such a reduced effectiveness of the response policies would be a
strictly economic consequence: Romania produces little, so it has nowhere to
allocate more for social protection. Our hypothesis is different and it will
examine the effect of overdetermination that social vulnerabilities (risks)
have on the response policies of governments and which gives the phenomenon of
exclusion-inclusion a hidden character (of camouflaged evolution). Among the
overdetermining factors, the most significant seems to be the one related to
the political redistribution of
socio-economic risks. Political redistribution refers to the assent of
governments to those regional and world system policies that have the effect of
exacerbating country risks, vulnerabilities and poverty in their own countries.
The phenomenon was researched by the Nobel Prize laureate, the economist Rubini
, who noticed that the great crisis doubled by an exported recession
(redistributed "politically" on a world scale, at the expense of the
most vulnerable countries) is the consequence of the behavior of the
"system managers". Referring to the crisis in Southeast Asia at the
beginning of the 90s, Rubini shows that throughout the 1990s, countries
"endured a series of grueling crises, centered on speculative booms and
excessive debt in various sectors of the economy. the economy" [66].
The powerful of the system do not serve the system, notes the great economist,
but use it, so that the very moment they come to the deluded companies as
investors, they unleash the fury of the speculative raid, proving to be
ruthless speculators. Control of the world system had made it possible for
investors from developed countries to come “with bags of money to Thailand,
Indonesia, South Korea and Malaysia igniting speculative booms in each.
Stock markets became overvalued, real estate bubbles formed; banks granted
increasingly risky loans; current account deficits swelled beyond measure while
excessive and low-yielding private investment overtook national
savings" [67].
Of course, the phenomenon would not have been possible, as I stated, without
the support of local governments, which thus contributed to the political
redistribution of the effects of the world crisis on their own peoples. It was
only natural that in the second act of governance, i.e. in the formulation of
government policies to respond to the crisis, no more than a minimized,
insignificant effect would be achieved. Returning the analysis to the scale of
a particular society and a country, we will try to highlight what is manifested
on the surface of the system, namely the extremely low effect of government
policies in response to society's problems, an effect in which the phenomenon
of the hidden political redistribution of vulnerabilities is reflected (risks).
In turn, they maintain the low threshold of the effectiveness of social
policies within society for quite long periods. In a study elaborated in
collaboration, we formulated as clearly as possible the statement of the
hypothesis applied to the study of the crisis. "The financial leaders of
the world seconded by subaltern government elites in countries with enslaved
economies want the world and its people to be at the service of money, not
money at the service of the world. They invest their money in speculative
investments, not in productive systems , so the money brings
with it the over- financialization of emerging economies, bankerism (see the
model of drafting bank lending contracts to unpaid clients), super-consumerism,
i.e. the stimulation of consumption on credits, on account of a future labor
already accrued, bought (which can be claimed anytime, anywhere, because the
effect of the debt translates further into the general burden of the taxpayers
of a country plus the debt of the debtor families, etc.)"[68] This
is the framework in which we place the analysis from this study dedicated to
the relationship between the redistribution of social risks in Romanian society
and the minimized effect of social policies in response to society's problems,
an effect that is further transmitted in the amplification of the phenomenon of
social exclusion. It exacerbates regional disadvantages and amplifies vertical
poverty (induced by international gaps). Let us summarize the interpretative
lines on the mutations that led to the eastern impasse. The eastern communist
system contained within it an immense potential chaos that can be measured by
the cost of the system's bureaucracy. The moment the bureaucracy, as a
self-regulating mechanism of the system, was disabled, the effect was twofold:
the chaos (disaggregation) of the system and the contraction/collapse of the
eastern market (the disintegration of the CAER). The phenomenon was aggravated
by the Western philosophy of shock therapy, which was supposed to lead to an
axial reversal: the transition from a centralized, planned system to a
decentralized market system. The first observation: shock therapy would only
work under the conditions of a massive injection of productive Western
capital (see tables on foreign direct investments in Romania,
Bulgaria, Hungary, Poland, Czech Republic). This almost did not happen (the
share of these productive investments was extremely
low) and, moreover, this philosophy was superimposed by several cascading
phenomena. Western capital that came to the East in the form of loans granted
through the banking system (IMF AND WB) bypassed direct
investment in productive systems, opting for the full initiative of
the financial-banking system and implicitly for the total liberalization of
prices. Against this backdrop, two other cascading effects emerged: speculative
booms and indebtedness. Another phenomenon in the cascade covers what I
called the resignation of the East in its two expressions: a)
the resignation of local entrepreneurs who, instead of a behavior of restoring
the companies, opted for the privatization (the
appearance of tick companies); b) the resignation of the active generations,
who instead of fighting back and therefore of the defensive strategy chose the
recessive strategy of "flight to Egypt", i.e. collective migration,
of huge proportions, to the West (the rich metropolis, the "new
Egypt").
These two reactions
are facets of the resignation of the East, which favored from the upstream the
option of the West for the implementation of peripheral capitalism in the East.
The two combined reactions: the offensive of the West and the resignation of
the East induced a regime of sustainable underdevelopment throughout the
eastern area of the continent. Russia was also drawn into the same process
of substructal destruction during the Gorbachev-Yeltsin phase, from
which it was extracted with great difficulty thanks to Gazprom [69],
an initiative due to the vision of the former Soviet Prime Minister,
Chernomîrdin, and then the interventions to eliminate the oligarchs after the
coming to power of Russian President Vladimir Putin. China reset its system
using the political mechanism [70].
What happened within society that resigned behavior occurred so quickly on the
scale of Eastern societies throughout their range? The first phenomenon that
occurred, after the two resignations, was the collapse of trust in the system
(in governments, in institutions, etc.). The depressed phase of
the economy induced the states specific to this phase: intropunitive
emotionality (aggression directed towards the inner, ethnic self), national
pessimism, social insecurity, unemployment, the collapse of hope . The
reaction of the governments was reduced to the escalation of
loans and therefore to the triggering of the mechanism of
inter-generational solidarity, i.e. to the transfer of the
burden of the debt to the next generations . This is the sure
indicator of the regime of sustainable underdevelopment and the establishment
of a long-term peripheral capitalism.
State
intervention, the "Davos man" and the law of double redistribution[71].
The hidden distribution and sustainable underdevelopment
Poverty has become a worrying constant in Romanian society that no
post-communist government of the last 30 years has been able to significantly
reduce. About 20 years after the fall of communism, 32% of Romania's population
continues to live in relative poverty [72].
How is it possible for the rich to appear in a society with many poor? This
paradoxical issue becomes clear to us when we examine not the accumulation of
wealth (as in the Marxist model, for example), but the accumulation of poverty
(and the falsification of wealth). When we study this process we discover a
strange phenomenon. Poverty arises mainly from economic causes, but
persists and even increases mainly from political causes . Eminescu
clarified this particularity, when he elaborated the superimposed blanket
theory, in his famous polemic with the Marxism of the Nădejde brothers [73].
He emphasized that it is not capital that is to blame for the accumulation of
social misery, but the moral degradation of the rich who show themselves
willing to live in luxury and abundance (to consume a lot), without producing
anything in return. The problem and therefore the evil is not in
wealth but in its use. In this matter, we find resolution in the
well-known line from Eminescu's Doina: "woe to the poor Romanian// he
keeps coming back like cancer". The phenomenon becomes clear when we
notice the dual use of the state as a redistributive tool.
The state is used for a minimal social redistribution for the purpose of social
protection, but immediately, it is also used to redistribute the fruits of
social labor in favor of a totally unproductive blanket. In this
case, the state as a redistributive tool is used to cover (protect) those who
amassed their wealth also through a redistribution, a hidden one, i.e. they
used the political tool of the state to make their wealth without any
compensation of work for the amassed fortunes. Visible redistribution overlaps
a hidden redistribution . Both redistributive channels are
political works, which makes it difficult to know the phenomenon of double
redistribution. It's strange, paradoxical, the theorists of the welfare state
would say. How is it possible that the mechanism invented to correct poverty,
by involving the political factor (that is, the state), amplifies it? Let's
clarify. The mechanisms of the "welfare state" intervention [74]are
used, in the normal case, to help disadvantaged people, but, in the case of
Eastern societies, these mechanisms are also used to redistribute the effects
of a very expensive way of life and without work compensation, which- it is
adopted by the wealthy classes. Their way of life is closer to the profile of
the leisure class [75].
I named this phenomenon double redistribution . Along with the
redistribution of risks that derive from the phenomenon of resource scarcity
and gaps (internal and external), in eastern societies there is also a
redistribution of the effects of a way of life based on uncompensated
consumption, passed on to social work, i.e. the majority of the population
with modest incomes [76].
The main mechanisms used by the ruling classes to be able to live in this way
and respond minimally to social pressure and the threats of the accumulation of
risks of social vulnerability could be designated by the notion of the
"state with excessive taxation" and with a ruinous effect. A state
with such a profile induces burdensome taxation and an underground economic
sector, failing, in reality, to solve neither the problems of relaunching the
economy nor those of social protection. The underground economic sector is the
one that frames the hidden redistribution including not only the forms of
predatory capitalism but also the "encroachment" of
"locals" with "foreigners" to usurp labor of its property
and equally to cover all forms of economic appropriation, those that dispossess
the national labor of her rights and bring, in return, earnings and thus
get-rich-quick, no-work, to the local overlay. Such a regime of using the state
leads to the fundamental ruin not only of the economy but also of society. As
we know from the picture of historiography, such a type of statehood,
historically met in the Phanariot era, certainly induces five processes:
flight, persecution, historical fatigue, boycott and abandonment. In such
destructive processes, the historical boycott can be read and the specter of
the ruin of a people can be glimpsed. Transitional governments have imprinted
such a profile on the so-called social state. The social policies promoted
by the post-communist governments in Romanian society failed
to reduce the social risks that derive from such a worrying phenomenon as that
of widespread poverty (a third of the total population) and from the European
scale of gaps. And this is because the social, economic and fiscal
policies promoted all these years have, unfortunately, turned into
risk redistribution instruments instead of contributing to their reduction. The
superimposed blanket phenomenon is one of the mechanisms that generate local
hidden redistribution. Gaps are also a mechanism through which a redistribution
of poverty and other risks can be carried out from the metropolis to the
periphery of the world system. This redistribution due to external gaps
superimposes on the internal gaps between the unproductive rich and the mass of
the population who are pushed to bear the uncompensated consumption of those
who have amassed fabulous wealth without work and without equity [77].
S. Huntington distinguishes such a phenomenon of double redistribution of
disadvantages on a world scale through the phenomenon of the rise of the
"Davos Man" (Davos Man), a kind of super-elite generated by an
increasingly integrated and increasingly indebted global economy .
The over-indebted, over-financed and hyper-taxed global economy has spawned a
"new global elite" that amasses vast fortunes through the effect of
the law of double or triple redistribution of disadvantage on a planetary
scale. "Davos Man" is the prototype and exponent of the "Egypt
of the cucumbers " (from the biblical account) and his dialogue is limited
to those like him, who compose what Huntington calls the "global
elite", with a pharaonic profile, cut off from God and the ocean of
peoples over whom they still "supersede". Their only contribution to
the factory of the world is the form of plutocratic governance based on
financial banking tools (derivatives, hedging funds, etc.) that generate an
over-financialization of the world, the building of towers of over-indebtedness
and therefore planetary redistribution of deficits and burdens, etc. “Being
labeled as 'Davos people', 'gold collars' or 'cosmocrats', this emerging class
is fortified by new notions of global connectivity. It includes academics, international
civil servants and global company executives, as well as successful high-tech
entrepreneurs…. Representing less than 4 percent of the American population,
these transnationals have little need for national loyalty, regard national
borders as obstacles, and view national governments as relics of the past whose
only useful function is to facilitate the global operations of the elite
" [78].
( "The rewards of an increasingly integrated global economy have brought`
forth a new global elite. Labeled 'Davos Men,' 'gold-collar workers' or... '
cosmocrats ', this emerging class is empowered by new notions of global
connectedness. It includes academics, international civil servants and
executives in global companies, as well as successful high-technology
entrepreneurs," Huntington wrote, citing an estimate that this elite would
total 40 million people by 2010. He said such global elites "have little
need for national loyalty, view national boundaries as obstacles that
thankfully are vanishing, and see national governments as residues from the
past whose only useful function is to facilitate the elite's global
operations" [79]).
The 2018 annual meeting had 3000 attendees, and the WEF membership and
attendance fee was extremely high. One of the favorite topics of the forum was
obviously that of social policies, in addition to those of inequalities,
climate warming, etc. These debates subtilize precisely the perverse mechanism
that we deciphered through the law of double or triple redistribution of the
structural effects of gaps, poverty, pollution, etc.
The paradigm of the
risk society should be redefined, therefore, to allow us to take into account
the specific situation of this type of society. In its standard formulation,
this paradigm refers to the solution of a distinct problem: "how can the risks
and hazards systematically produced in the framework of modernization be
prevented, minimized ( dramatized ), or channelized ...? How can they be
limited and distributed in such a way that neither the modernization process
suffers nor the limits of what is ecologically, psychologically and socially
tolerable are exceeded?" (Beck, 1992: 19) The situation of Eastern
societies, in general, is completely different.
As it emerges from the
book by professor Cătălin Zamfir dedicated to "exiting the
transition" [80],
post-communist societies have faced and are facing two series of problems: how
can they free themselves from the political constraints specific to the old
regime and how can they come to terms with the new political constraints and
with the risks of a way of life specific to so-called "transitional
societies", in which the seeds of substructal destruction
sprout, that is, of processes that can ruin a society from its foundations,
threatening the very existence of peoples.
With variations from
one to another, Eastern societies had to manage the effects of three
destructive processes, induced almost exclusively by political factors and
motivated exclusively politically and, above all, geopolitically.
The first ruinous
process followed the decision to disintegrate certain socio-economic structures
(such as, for example, cooperative agriculture, cooperation in general,
corporate possessions, labor ownership, i.e. the right to possess and use the
equipment of the former CAPs, of the irrigation system, of industrialism
itself, etc.) just because it would have been based on a centralized state
structure. These structures were disaggregated based on a strictly political
motivation without having been replaced in the meantime with other types of
structures capable of keeping the social system functioning, at least at its
minimum level. In this way, substructal risks, generally unknown
and anyway unexplored in their full amplitude, were politically induced.
Paradoxically, the destruction of the national economy was the framework for
the emergence of the rich class so that the process of increasing wealth was
accompanied by the process of destroying the economy and establishing a regime
of sustainable underdevelopment.
The second process
with a ruinous effect refers to the replacement of important cultural
institutions and subsystems just because they had been used by the people of
the communist period, although the people used them not to adjust to the
communist system, but to learn to live with fewer effects destructive for their
way of thinking and living. The abrogation of the Cultural Heritage Law, for
example, by the first revolutionary government represents the most eloquent
evidence in this sense, likewise, in other spheres, there were decisions based
on the same type of reasoning.
In the name of the
reform, the old certainties that had guaranteed the coverage of certain risks
and basic needs, the non-satisfaction of which would have threatened the
standard of living of the common people, were destroyed.
Thus, the premises of
a new type of society governed by the application of risk redistribution
mechanisms and policies were created, resulting in the emergence of a
threatened population segment representing 32% of the country's population.
This segment includes those below the relative poverty threshold (ICCV Social
Report no. 4, 2011). This is the basis for the activation of social and fiscal
policies to be used as instruments of risk redistribution. Strangely, as
stated, these policies, in addition to not correcting poverty, contribute to
the camouflage of the lifestyle of the new leisure class and, implicitly, cover
the redistribution of the effects of such a lifestyle on social work, as
stated. According to our own calculations, 96.8% of the Romanian population
benefits from one form or another of social protection. However, the social
protection policies did not manage to lower the threshold of the approximately
30% poor. According to the Report of the Quality of Life Research
Institute , 32% of Romanians are still in relative poverty. Both
categories of data have the same sad social narrative behind them: the
impotence and frozen insensitivity of some unproductive "political
elites", rolled over a society, forced to bet on the mercy and malice of a
"hypocritical" state or, otherwise, slide into oppressive poverty, or
to take the path of poverty, looking for their absurd ends and projecting their
hopes in the remittances of a migration for work in an already cramped world.
The social protection policies in the countries of origin are completely
inadequate for the pressing needs of daily life.
A look at the
evolution of incomes and the structure of total incomes in 2020 compared to
2003 reveals a certain decline in the proportion of incomes from social
benefits in the total incomes of the population, but in reality, as the data
shows, the dependence on these incomes of a large category of households it is
alarming. Here are the data first for the years 2003 and 2008, from which it
can be seen that the share of income from social benefits in the total monetary
income of the population is high (25.8% in 2003 and 26% in 2008). In other
words, wages and other wage rights, income from agriculture and independent
non-agricultural activities and other income cover about 75% of the
population's income. For the remaining 25%, the population is dependent on
income from social benefits. In other words, the welfare state suffered a
contraction, among other things, also because income from other categories
(wages, etc.) grew faster than income from social benefits (mainly pensions).
Here are situations in comparative data for the evaluated periods:
3.4. The
structure of monetary income in 2003 and 2008
Source: Statistical
Yearbook of Romania 2009
Let's examine the
situation for 2019 and 2020, that is, after about ten years
3.5. The
structure of total household incomes, by sources of training
Source: Anghel,
MG Et al. (2021). The
situation of total incomes and expenses of the population . Romanian
Statistical Review – Supplement no. 7/2021
The share of income
from social benefits in total income was 26% in 2008, however, this share drops
to 19% in 2020, signaling a contraction of the welfare state .
55.4% of all households whose head is represented by a retired person depend on
social benefits (see table 3.6.). The population that falls into this profile
(55% of the total in this category) represents the visible face of the effect
of double redistribution and also of the imminence of the risk of social
exclusion (if the state were to reduce this support below a critical threshold,
through redistributive mechanisms). The minimized effect of social policies is
as obvious as possible given that the share of pensioners' households that
benefit from income from social benefits remains at a high proportion (55.4%).
Overall, in the total income of the population, 19% come from social benefits,
but what the official statistical methodology leaves in the shadow, refers to
the very high weight (share) of dependence on state support in the group of
households whose head of the family is a pensioner. So that, even if the share
of income from social benefits in total income decreases (from 26% in 2008 to
19% in 2021), the dependence of pensioner households on these incomes is, as
stated, 55% in the total category. This is also an indicator of the potential
risk of social exclusion. The minimized effect of social policies is as obvious
as possible in the case of those households (55.4% of their total) whose head
of the family is a pensioner, who, although they benefit from income from
social benefits, cannot satisfy their "minimum subsistence needs" (
ICCV social report, no. 4 , 2011): "When the family of retirees only had
an average net pension, it could not even satisfy the needs of the subsistence
minimum (except for the years 1989 and 2009). Such a category of family,
however, could never afford a decent minimum standard of living," states
that report for the year 2011. For example, we will reproduce the graph
compiled by the rapporteurs of [81]that
year, which concluded the first decades of the transition. The conclusion is
clear: 20 years of transition have permanently established the mechanisms of
the law of minimized effect (convergent with the law of double distribution),
i.e. a type of social system that reproduces gaps and external and internal
disparities induced by the alliance between the globalist elite and the
superimposed blanket that consumes much and produces nothing in compensation
(it does not contribute to the reduction of the gaps, but to their
accentuation). Here is the chart:
Graph no. 3.6.
"The degree of coverage of the needs related to the minimum decent living,
respectively the minimum subsistence, in the family of pensioners with 1
average net state social insurance pension"[82]
Source: ICCV social
report no. 4/2011
Let us finally examine
the data on the level and structure of total incomes for the year 2021 to
verify the truth of the law of the minimized effect due to the redistribution
of the hidden effects of social gaps and inequalities. Here are the dates:
3.7. The level
and structure of total revenues, in the third quarter, 2021
Source: INS press
release, no. January 7/11, 2022
In quarter III, 2021 ,
the average household in Romania received salary income in a proportion of 70%,
while 19% of the same total was represented by income from social benefits
(which means 89%). On the other hand, the highest shares of expenses per household
are recorded in the chapters of consumption expenses (61.7%) and in that of
expenses for taxes, contributions, etc., which reach 33%. The average household
in Romania in 2015 (cf. Coordinates of the standard of living in
Romania in 2015 , p. 130) therefore spends almost 95% of its monetary
income to cover necessities and taxes. We find, here, a deficit in terms of the
degree of coverage of consumption expenses and those for taxes and
contributions from wage incomes. The average household in Romania cannot cover
these two categories of essential expenses from salary income. While almost 70%
of total income per household is income from wages, 62% of total expenses
represent, as stated, consumption expenses. Given the weight of necessity expenses
(95% of the total expenses of an average household) and the weight of 70% of
income from wages, a deficit of 25% results. The average Romanian, in other
words, can only cover 75% of his necessities from his wages. Even the income
from social benefits (18.9%), i.e. the support of the welfare state, cannot
compensate for this 25% deficit. Only the support of agriculture (revenues in
kind, 6%) come to fully cover the deficit. In the absence of the latter, the
household would have to resort to other sources of income, including those from
the sale of part of the personal wealth, and thus consent to the diminution of
personal wealth. The data (see graphs 3.7.1 and 3.7.2) show that this
development affected the vital infrastructure of individuals and households.
Here are the dates:
Graph 3.6.1.
Source: Press
release no. 7, of January 11, 2022, INS
Graph 3.6.2
Source: Press
release no. 7, of January 11, 2022, INS
The pressure of
obvious material needs, together with the "dictatorship of scarcity,
dominates people's thinking and action (present today in most parts of the
so-called Third World). In these conditions specific to a society of scarcity,
the modernization process claims to be able to open the gates to the hidden
sources of social well-being with the keys to technical-scientific development
..." [83]In
post-communist societies , however, the gates of hidden sources were also
opened in parallel of unusual risks , such as those closely related to
"deviant elites", i.e. that type of selfish elites, focused on their
own interest, to such an extent that their way of life (based on uncompensated
consumption) induces an effect negatively on the living conditions of other
social groups. The social support of a way of life specific to the
"deviant elites", who consume enormously and produce nothing in
compensation (for society), is equivalent to a phenomenon of hidden
redistribution of risks (above all the risk of sustainable poverty), given that
the deficit it induces a minimization of the chances of improving the living
conditions of the many. Social work takes the brunt of this deficit induced by
uncompensated consumption, so that every step forward for the rich means two
steps back for the rest of society. Overcoming this state requires more than
designing policies to protect the distressed. Such an objective calls for a
profound transformation of the spiritual profile of the ruling class, which is
a matter of utmost urgency for the Romania of tomorrow. Let's return with some
theoretical explanations, in this part dedicated to the conclusions, to the
question of the mechanisms of double reproduction. What do these mechanisms
refer to? One of them refers precisely to the perverse effects of the internal
and external gap. The neoliberal theory of the single market hides it with a
clever mystification. In reality, even in the environment of the so-called
"single market" the stratification between dominant and subordinate
markets persists. The energy market, for example, is stratified precisely
through the mechanism of price dynamics so that the price is dictated by the
dominant market for all consumers, and the rest of the regional and local
markets are summoned to harmonize their prices according to this price fixed by
the big negotiators and decreed "price of balance". In reality,
through such a mechanism a hidden redistribution occurs, because the prices
evaluated at purchasing power parity show that a consumer in a regional or
local market does not have the same PPC as the one in the dominant market and
is forced to take over the induced deficit of such a gap. In the case of the
price of energy, it should be noted, for example, that in PPC terms, the hourly
earnings of a German are equivalent to the hourly earnings of Romanians . As
such, any price harmonization makes this supplement equal to 6 x 1 to be borne
by the Romanian consumer (not the German one). Any gap is reflected in the
redistribution of vulnerabilities. Those on the bottom rung of the gaps will
continue to be exposed to renewed vulnerability pressure simply by reproducing
these gaps. Another mechanism concerns the internal gaps between the rich and
unproductive and the many, productive and poor. The difference between the cost
of the ostentatious consumption of the rich and their contribution to the
growth of absolute gross value is borne directly (prices) and indirectly
(taxation, indebtedness, material hardship) by the many. Social work is also
forced to support this deficit which is due to the hidden and destructive
inequality induced by enrichment without work, which is another face of the law
of double redistribution. It is obvious that the neoliberal theory of the
invisible hand hides a lie called "equilibrium price". In reality,
price harmonization should be based on another mechanism that we can call
"adjustment price" and it should reflect both the factor price and
the PPC gap between regional countries, markets and worlds. The state
discovers, here, a double face: it is, on the one hand, the instrument of
redistribution of the hidden effect of gaps (internal and external) on the
many, taking on, on the other hand, a function of return, that is, of relative
correction of the law of double redistribution.
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[1] In this study, we have taken over parts of
the volume published in Romanian, "The Economy and the World. Where Does
the Decline Come From?", published by Mica Valahie.
[2] Competitive
Advantage: Creating and Sustaining Superior Performance by Michael E. Porter,
1980 (see also Porter, Michael E. (1985). Competitive Advantage. Free
Press. ISBN 978-0-684-84146-5).
[3] Huntington,
Samuel P. (1993). "The
Clash of Civilizations?". Foreign Affairs. 72 (3): 22–49. (cf
also, Basil J Mathews (1926), Young Islam on Trek: A Study in the Clash
of Civilizations. The
root of this term stems from the concept “the clash of cultures” Here it is
what Robert Laffont wrote in Ecrits mémorables, t. I, Paris, 2009,
p. 629: "Après la venue de Bonaparte au Caire, le clash of
cultures entre l'ancienne Chrétienté et l'Islam prit un nouvel aspect,
par invasion (sans échange) de l'échelle de valeurs occidentales dans la
mentalité collective musulmane."
[4]" Recapitulating,
the theory of coexisting succession highlights three generations of criticism
of capitalism: the first generation is that of the historians who blamed the
era of primitive accumulation, while also creating a point of view favourable
to the capitalism of the 20th century; the second generation of critics of
capitalism: "economists tried to temper the excesses of historians
regarding the criticism of primitive accumulation, thus creating a premise for
the criticism of 20th century capitalism (the second generation of criticism,
which emphasizes the change of capitalism) in order to its reformation on a
national-statist scale; the third generation gives criticism a new dimension:
not only that of explaining and changing the world, but above all that of preserving
it. It is criticism that asserts a fusion of science and faith"
(ibidem, pp. 61-62). The peculiarity of these generations of criticism consists
in the fact that each of them contained in the composition of criticism
"different combinations of science with ideology, of science with faith
and of general interest with the particular one" (p. 62). The first outbid
class interest, the second generation "tries to reconcile antagonistic
interests on the basis of nation-states, the third gives priority to the
general human interest". The problem that arises in this case is that both
the universal market and self-regenerating capitalism cannot be born without a
transformation of the universal intellectual structure of civilization and
without the birth of a new school, the Universal School. This is the main
contradiction that feeds the current crisis, which thus shows us what it is: a
systemic crisis. The novelty of Prof. Postolache's approach derives from the
fact that for the first time the systemic crisis is defined in relation to a
final or civilizational change, which involves everything: both critical
generations (criticism of primitive capitalism, criticism of modern capitalism,
self-criticism of capitalism) and generations of knowledge (knowledge
practical, immanent knowledge, universal knowledge: immanent-transcendent) and
school generations (the three: local school, national school and universal
school)" (I. Bădescu, op. cit.).
[5] I.
Bădescu, op. cit.
[6]"The
system therefore suffers from a chronic energy deficit, which makes the new
class incapable of renovating the system and therefore adapting to a second
successive change. This bistadial model of
propagation of social change is perhaps the most interesting phenomenon among
those discovered and researched by the author of the theory of coexisting
succession. It is obvious that on the same background an identity crisis of
great proportions is manifested, because the deficit is one that aims at the
inability of the elites to assume the whole. The syndrome was called forms
without substance. The transforming energy is given by that spiritual formula
in which the ruptures are recovered, and which is also one with the identity
energy and with the Puritan-type messianism. The appearance in the middle zone
of the particular cycles, as well as in the middle zone of the secular cycle,
of an agent who deviates from the logic of the system and deviates the whole
society from its line of identity is, here, proven, and that agent shows itself
to be precisely the inorganic elite, devoid of identity energy, unable to
capitalize on the identity property to which it is entitled and the identity
rent that has proven saving in other situations. Rarely in history do you find
elites who refuse a potential of such great value, as the one offered by
identity ownership, as in the case of the Romanian elites of the last 20
years" (ibidem).
[7] Ibid .,
p.108.
[8]cf.
N. Iorga, New directions in the conception of the contemporary era,
courses held at the Academy of Commerce, Bucharest, 1940, p. 4
[9] Ibidem,
p. 13.
[10] Ibidem ,
p. 14.
[11] Ibid
[12] Ibid
[13] Ibidem pp. 14-15.
[14] Cf. Zeletin, Romanian Bourgeoisie,
Ed. National Culture, Bucharest,
1925, p. 135 and Şerban Voinea, Oligarchic Marxism . See AG
Frank, Dependent Accumulation and Underdevelopment, New York,
1979. Paul M. Sweey , The Theory of Capitalist Development, New
York, Monthly Review Press, 1968, p.307.
[15] Florin
Georgescu , Capitalism and capitalists without capital in Romania ,
Academy Publishing House, 2021, vol I, p. 76 and passim
[16] Cf. Ibidem, p 56-57 and passim. See also Dan
Palangean, The Difference between Gross National Income and Gross Domestic
Product - increasing by 40%. Implications in: https://www.piatafinanciara.ro/ The
difference between Gross National Income and Gross Domestic Product -
increasing by
40%. Implications - Financial
Market
("GNI can be higher than GDP, generally in the case of countries
that have companies that have invested in profitable operations carried out
abroad, but also lower than GDP, when part of the domestic result belongs to
foreign economic entities that have invested in the country. In the equation of
the net result, the sums transferred from the country by foreign citizens
versus those sent to the country by their own citizens working abroad also take
part" .
[17]Fl
Georgescu, op.cit , p 50
[18] Ibid
[19] ibidem
[20] Ibidem, apud
I Bădescu, Europa Trianonului in ... ( "In this
school, as in the University, I do nothing else, as in the conferences I hold
at the Cultural League about current issues, other than to try to enlighten a
nation whose ignorance, bad faith and all kinds of vested interests shake
this self-control, which is the greatest power of any nation", cf.
Nicolae Iorga, op, cit, p. 15) .
[21]On
the data cf. Fl. Georgescu, op. cit., p. 8 and pp. 56-57 and
passim
[22] “Transfer Pricing
– Definition By definition, transfer pricing is the prices at which
transactions take place between companies that are part of the same group (also
called affiliated parties - access "Frequently Asked Questions" for
the definition of affiliated party)". cf
www.transferpricing.ro/vreau-sa-inteleg-preturile-de-transfer
/what-are-the-prices-of-tra…
[23]" Intermediate
consumption is an economic concept equivalent to the value of those goods and
services, the purpose of which is their use in the production of other
goods" (https://ro.economy-pedia.com/11032675-intermediate-consumption)
[24] Gross Value
Added (GVA) is an important component of GDP and is measured
as the difference between the value of goods and services produced and
intermediate consumption, thus representing the newly created value in the
production process.
https://cursdeguvernare.ro/un-deceniu-de-schimbare-de-structura-a-economiei -romanesti-
[25] cf.
Fl. Georgescu, op. cit ., pp. 87-88
[26] On
the data cf. Fl. Georgescu, op.cit .
[27] Iconomy - the doctrine about the
manifestation of God's love in the world, i.e. i.e.
the organization of human activity in accordance with this plan (see also:
https://ro.orthodoxwiki.org/Iconomie)
[28] Cf. A
Theoretical Model Describing the Lorenz Curve And the Pareto Principle ,
by Bertram Scharpf downloaded from: lorenzpareto.eps
(bertram-scharpf.de) , on 14. 01. 2022
[29] See
the matter at length in the chapter (section two of the present work and
passim) devoted to the geopolitical theory of "rulers of nations" and
strategies of world and resource domination.
[30] Ibid
[31]The
author of the mentioned section believes that one of the solutions and ways out
of imperialism is contained in the theory of Academician Tudorel Postolache
regarding the "universal school" (ibidem and passim).
[32]Amen,
Ash; Thrift, Nigel. The Blackwell Cultural Economy Reader, Blackwell
Publishing, 2004, p. X
[33] Ibid .,
p. xi
[34] Ibid .,
p. xii
[35] Ibid .,
p. xii
[36] Ibid .,
p. xii
[37] Ibid.,
p. xviii
[38] Tudorel
Postolache, Vers un ideal pratiquable, Academy Publishing House,
2007
[39] Fung,
Victor K, Fung William K & Yoram (Jerry) Wind, Competition in a
Flat World. How to build a company in a world without borders (2009),
Bucharest, Publica com.
[40] Badescu, AI, Organizations and business
dynamics. From the ecology of organizations to the theory of networks .
PhD thesis, 2011 (mss)
[41]Tudorel
Postolache, Vers un ideal pratiquable , Academy Publishing
House, 2007
[42]AJ
Toynbee, Study on History , Synthesis of volumes I-VI, by DC
Somervell, Humanitas, Bucharest, 1997, II, 117
[43]See
also I. Bădescu, About the crisis in the light of the theory of
co-existing succession , Expert Publishing House, 2009
[44] Cf.
Bădescu, Alina-Ionela, op. cit.
[45] Ibid
[46] "Economies
of agglomeration" (Nicolae Sfetcu), https://www.telework.ro/en/economies-agglomeration/ (downloaded
on 15/01/2022)
[47] Ibid
[48] Ibidem ("Economies
of agglomeration applies in the study of commerce, in particular the land
evaluation with agglomeration effects of the stationary deals retail. From an
operational perspective is about the attractiveness, understood the
appreciation of a (micro) site, which results from the spatial agglomeration of
trade and service enterprises in a location as agglomeration advantage. From
single operational point of view, the increase in sales is a commercial
operation or business referred to as agglomeration advantage of by the
proximity to shops with a similar range of results")
[49]Cf
and N. Sasidhar, " Model Cities", https://www.scribd.com/document/58789346/Model-Cities [15.01.2022]
("The cost of providing further infrastructure in these cities is
exorbitantly high and also not remunerative. Many of these cities are
sustaining on real estate boom with the capital inflow from surrounding areas
and excessive government funding rather than on its own strength. The land cost
is exorbitant in these cities exceeding 3 or 4 times the construction cost of
the property").
[50] Sfetcu,
N, op. cit. Underpinning this concept is the junction between
network theory and the theory of economies of scale
[51] On
the effects of the agglomeration economy on the substructal balance of society
cf Oberhaus, Daniel (2019-08-12) . How Smaller Cities Are
Trying to Plug America's Brain Drain (downloaded on 15. 01. 2022)
"Congressional Joint Economic Committee found that
highly educated adults in their thirties were fleeing rural and post-industrial
states to major tech centres like San Francisco, New York, Seattle, and Boston.
The report, based on 40 years of Census data, said states in the southeast, New
England, and the Rust Belt were losing the most talent to these
"winner-take-all" cities. Vermont was one of the hardest-hit
states¬).
[52] La foule
solitaire by David Riesman | 1000 idées de culture générale (1000idcg.com ) cf.
original edition: The Lonely Crowd, 1950 by David Riesman,
Nathan Glazer, Reuel Denney. Riesman distinguishes three cultural types of
society: tradition-directed, inner-directed, and other-directed.
[53] Ibid
[54] Ibid
[55]For
representative studies on this matter, see: Cf. Gelles, Gregory M.;
Mitchell, Douglas W. (1996). Returns to scale and economies of scale:
Further observations. Journal of Economic Education . 27 (3)
: 259–261). Cf and Zelenyuk
V. (2014) Scale
efficiency and homotheticity: equivalence of primal and dual measures, Journal
of Productivity Analysis 42:1, pp. 15-24.
[56] Marx, Karl (1894). Das Kapital [Capital.
A Critique of Political Economy]. 3. Translated by Fernbach, David B.;
introduced by Mandel, Ernest. London: Penguin Books in association with New
Left Review
[57] On
this issue, Morroni, Mario (2006) can be consulted. Knowledge, Scale
and Transactions in the Theory of the Firm. Cambridge: Cambridge
University Press. Cf also Morroni, Mario (1992). Production Process and
Technical Change. Cambridge: Cambridge University Press.
[58] Cf. Gelles,
Gregory M.; Mitchell, Douglas W . Op. how
[59] Ibid.
Ferguson, CE (1969) can also be consulted on the issue . The
Neoclassical Theory of Production & Distribution . London:
Cambridge University Press
[60]Mamali,
Cătălin, Motivational balance and co-evolution , Scientific
and Encyclopedia Publishing House, Bucharest, 1981
[61]The
data were calculated in the framework of the study elaborated in collaboration
with I. Bădescu and published in the volume " Romania
soziale-fețele zabrici i", published by the Academy Publishing
House in 2022
[62]Cf. ibidem
[63]http://ro.wikipedia.org/wiki/ Economia_Rom%C3%A2niei
[64]A
model of the triangular relationship between poverty, risks and social
protection was proposed in the book coordinated by Prof. Elena Zamfir (Zamfir,
Elena, Bădescu, Ilie, Zamfir, Cătălin (coord.) State of Romanian society after
10 years of transition, Ed . Expert, Bucharest, 2000)
[65] Analysis
of the influence of granting the main social transfers on absolute poverty in
2009 , Ministry of Labour, Family and Social Protection, Directorate
of Inclusion Programs, 2011
[66]Rubini,
Nouriel; Mihm, Stephen, Economy of crises , Publica,
Bucharest, 2010, p. 57
[67] Ibidem ,
p. 58
[68] Badescu,
Ciprian; Bădescu, Ilie, Neo-imperialism of the world system and the
culture of crisis (ms), 2012
[69] In
August, 1989, Viktor Chernomîrdin restructured the Ministry of Gas Industry and
raised Gazprom to the rank of the largest state company . (" Total
number of personnel 436 thousand people; The state controls 50.002%
of the shares" cf: https://web.archive .org/web/2009012220
2622/http://eng.gazprom questions.ru/?id=10 (downloaded on 2/12/2022)
(" Gazprom is the legal successor of the proprietary rights and
obligations of State Gas Concern Gazprom, including the rights to use land,
subsurface reserves, natural resources as well as the rights and commitments
under the agreements concluded by the Concern. Gazprom holds the richest
natural gas reserves in the world, with its share in the global and Russian
total making up some 17% and over 60%, respectively").
[70] Through
the Belt and Road Initiative, which experts have compared to
the Marshall Plan, China has assumed an increased strategic role on a global
scale, especially after the rise to China's leadership of Xi Jinping. Cf.
and Smith, Stephen (16 February 2021). "China's
'Major Country Diplomacy'" . Foreign Policy
Analysis . 17 (2): orab002. two : 10.1093/fpa/orab002 .
[71]This
subchapter is the result of the collaboration between the two authors (Ilie
& Ciprian Bădescu) and was posted, in a first form, on www.sociologia azi,
online magazine of INSOC
[72]We
took into account the poverty rate according to the threshold of 70% of the
equivalent disposable income so that the proportion of Romanians who obtained
income below this threshold amounted to 32% of the total population in 2007. At
the threshold of 60%, the number of poor is lower , obviously.
[73]Cf.
Bădescu, I., European synchronism and Romanian critical culture ,
Scientific and Encyclopedic Publishing House, Bucharest, 1984, p.302, and
passim
[74] On
welfare state theories cf. Ciprian I Bădescu, The Welfare State Regimes
and the Regional Worlds , Pertinent Press, Oxford, 2019
[75] Cf
Veblen Thorstein , The Theory of the Leisure Class (1889) . As
is well known, Veblen deduces the profile of the leisure class through what he
calls conspicuous consumption , which costs a lot and does not
contribute either to the growth of the economy or to the production of goods
and services useful to society. As we notice, Veblen's notion almost overlaps
with the Eminesian notion of a superimposed blanket, which
consumes enormously and produces nothing in return
[76]The
matter was clarified by Eminescu, as Ilie Bădescu also shows:
"" Eminescu does not agree with the [socialist] idea shared
by the Nădejde brothers that, in itself, the organization based on capital is
the cause of misery. Capital generates exploitation, but not misery, in the
form of a whole range of processes of social degradation, all supported by
economic decay. In the West, capital-based organization did not lead to
economic decay, but the opposite. And then, says Eminescu, the true specific
cause must be sought, the one that first generates economic decay and then, in
close dependence on it, moral, religious, cultural degradation and even
biological degeneration"
[77] Cf.
Florin Georgescu, Capitalism and capitalists without capital in
Romania , I, Academy Publishing House, 2021
[78] The
notion of Davos-ian man was coined by S Huntington. The two quotes were taken
from Who
are 'Davos Man' and 'Davos Woman'? (cnbc.com) : "Davos Man and
Davos Woman, by Holly Ellyatt, in The Davos Agenda, on January, 23,
2018: " There has been a backlash against the globalization
representative of WEF and Davos men and women, however, with the rise of
nationalism and politicians such as Donald Trump who promotes an "America
First" policy, and public backlashes against big government, such as the
Brexit vote in the UK that was seen as a reaction against "the
elite," albeit an elusive and undefined one. See also S Huntington,
Huntington, S: Dead Souls: The Denationalization of the American
Elite, published in National Interest, March 2004
[79] Huntington, op.
how
[80] Zamfir,
Cătălin (2004), A critical analysis of the transition. What will be
"after"? Polirom Publishing House, Cf. and, " Exit
from the transition. " Towards a new theory of transition ”,
Social Innovation, 1 (2015), 1-13 and by the same author, What kind of
transition do we want? A Critical Analysis of Transition II. Bucharest , ICCV,
2012
[81] ICCV's
social report , no. 4 , 2011, p. 17
[82] Ibid
[83]Beck,
U., op. cit ., p. 20
