Wednesday, July 27, 2005

The European Dream

There's been a discussion on the so called EU-crisis in the mailgroup of my old DG INFSO friends from the traineeship with the European Commission. I give here's my view on the European Dream, something I like to champion as an alternative/complement to the more well known American Dream



Regarding my European Dream, I feel obliged to clarify my notion a little. Especially after having read a column by Ralf Dahrendorf (ex-principal of London School of Economics, ex-commissioner, etc.). To him many Europeans carry an unmeditated and very ill defined idea of a European social model as opposed to capitalism and globalization. This is a romantic and anti-modern view that is dangerous because it easily lends itself to different extremist movements. Furthermore?as has been expressed in this forum?the differences among the social models of EU member states is huge, so talking about a European social model is at best a very bland concept if not downright nonsense.

I am not anti-capitalist nor anti-globalist. In fact, in general I prefer to define myself as pro-something. I was not talking about social models in the ordinary sense, but something you could call a meta-model. I was talking about the ways of solving problems rather than the solutions. One of the differences I find important is the view of the state. I actually believe that the state is inherently something good. I believe parliamentarian democracy is an excellent system because it promotes cooperation, compromise and consensus of the politicians and participation and involvement of the people. I do not believe in immutable rights of the individual à la USA. I think these ideas are misleading. They can never promote social cohesion, something I find important. I believe that if we all get together we can establish laws that are superior to this thinking.

I believe that we in Europe can have republic states that are not based on ethnicity, religion or immutable rights, states that are inclusive and have a strong sense of belonging and affinity among the citizens, states that finds the balance between economic growth, social cohesion and political freedom. We would base these states on a pride in our political system, a desire to create something extraordinary together and a belief that peace and wealth can be omnipresent. However, I am afraid this is not the direction Europe is heading at present.

There are other interesting differences between political systems and I leave them for you to explore. I am but a humble engineer, not a political scientist.

Deflation

Everyone likes becoming richer, right? I remember learning that there are no free lunches in economy. Can deflation really be good for everyone? Inflation is a very interesting economic phenomenon. Nothing in the real world changes; a carrot is still a carrot; a car is still a car. Money is just paper, right? Nevertheless, inflation can have a devastating effect on economy.

Deflation can actually be problematic. Many economists with me believe that our economy needs a modest inflation because the way it is constructed. Inflation helps in the longer run to even out imbalances in the economy. The constant push of prices and wages is the lubricant of the economy. A simplified example: It is extremely hard to make workers accept nominal decrease of wages, but a real decrease might pass as long as they get a nominal increase. This helps industries with increasing competition and diminishing margins to survive, and thanks to the inflation prices and wages are slowly adjusts to the market and the relative size of the industry in the economy change.

Many of the economic theories in use do not work well in a deflationary climate. Furthermore, one of the big problems of the mature western economies today is that many have imported deflation and a domestic inflation. This is a new situation, and they do not really know how to handle it best. These imbalances, if allowed to grow might hurt and sever the economy. Well, we?ll just have to lower our prices and wages in the areas where the global competition is high you might say. Good luck, I say.

Tuesday, July 19, 2005

First blogg - NY trip

We'll see what this blog turns out to be. I guess mainly to keep in touch with my friends as I'm living in France from 1st of August. I was thinking of publishing it in Swedish but that would exclude a few people, but there will probably be a few posts in Swedish.

But as a start I'd like to publish some beautiful pictures from my NY visit in May where I visited Johanna who spent two months for a training with her job.


Look at those skyskrapes. Just amazing.

And the magnolia in bloom. Wow!
Look at how the flower stem directly from the trunk.

And of course some shopping. I think this coat was about $2000. We didn't buy it...

Central park morning jogs. A special treat possible only in NY. The park is huge.

Visiting UN with the security council room was really cool. Imagine all the decisions concerning life and death being taken here.