Strategien zur Revitalisierung des osteuropäischen Wirtschaftsraumes
In his statement “Sliding Doors: The Day US Democracy Almost Died” (see the blog on the homepage of Thomas Palley, Co-editor, Review of Keynesian Economics: https://thomaspalley.com/?p=1902) we find the following words:
“Sunday January 10, 2021. It is now four days since the January 6 mob attack on the US Congress which President Donald Trump incited. In a manner akin to a combat situation, the numbness induced by the overwhelming nature of the event is giving way to shock and anger. What is also becoming clear is just how close US democracy came to dying.
The film Sliding Doors begins with two different scenarios in which the course of the main protagonist’s life depends on whether or not she catches the subway by seconds. The events of January 6 have a Sliding Doors quality to them.
It now seems the attack has backfired for Trump and turned into a political fiasco. That fiasco resonates with Adolf Hitler’s failed 1923 Munich Beer Hall putsch (German for coup) – though lest we get carried away, let us not forget Hitler returned and took power ten years later, and we all know what followed.
Hitler’s failed Munich putsch is one scenario. The other scenario is the Bolshevik Party’s sudden seizure of power in St. Petersburg, Russia in October 1917. That coup succeeded and launched a totalitarian dictatorship that was to last almost seventy-five years.
It is easy to imagine a scenario in which Trump’s mob had been better organized and more ruthless, and in which they had seized Congress and summarily executed Democratic Senators and House members – along with Senator Mitt Romney, who has been heroic in his opposition to Trump. That would have left a rump majority of willing accomplice Republicans, plus a smaller group of Vichyssoise Republicans who meekly towed the line.
In that imagined scenario, Trump would have been able to declare a state of emergency which would have been supported by the military, under orders from his Secretary of Defence henchman. The rump Republican Party would likely have rubber stamped everything. In one swoop, US democracy would have been felled, in a manner similar to the Bolshevik takeover of Russia.”
Source: The Guardian, https://www.theguardian.com/us-news/2021/jan/06/trump-capitol-american-carnage-washington; Story: American carnage: how Trump's mob ran riot in the Capitol
In his E-Mail to colleagues Thomas Palley writes: “I have posted (see the PDF: Palley-Globalization, January 2021) a new research paper titled ‘National Policy Space: Reframing the Political Economy of Globalization and its Implications for National Sovereignty and Democracy’. The terrible political events of the last few months make it even more urgent that we unpack the political economy of the last forty years and its corrosive effects. I hope the paper can contribute to unpacking globalization’s contribution to the toxic brew.”
The paper is important as it shows that there are different alternatives to organize globalization to the benefit of the world economy, to the benefit of all geo-political regions, and to the benefit of the people, and that some alternatives are associated with the chance to preserve national sovereignty and democracy. When four economists published nearly 20 years ago an essay on the issue “How much globalization does the world bear?”, the collaborating economists had something like a political economy view in mind, although quite different theoretical views were prevalent in the group. A short summary in English of the study „Wie viel Globalisierung verträgt die Welt?“ is found below, an article written by Hans-Werner Sinn, Michael Rauscher, Rainer Bartel, and Karl Wohlmuth (Link to the article which is available for a download at: https://www.ifo.de/publikationen/2002/zeitschrift-einzelheft/ifo-schnelldienst-242002). The Abstract reads as follows:
“The term globalization has dominated the public debate for years. For some the opening of markets has not gone far enough, for others globalization has led to further inequalities between economies and has enlarged the distance between industrial and developing countries. Prof. Hans-Werner Sinn discusses the economic forces that have been released in the globalization process. In the opinion of Prof. Michael Rauscher, Rostock University, globalization will undoubtedly continue to progress, but it does not only need international co-ordination. On the contrary, in a globalized world there are good arguments for the subsidiarity principle: Problems should be dealt with and solved at the lowest possible level. Many problems that arise in connection with globalization can be managed at the national level. Also for Prof. Karl Wohlmuth, Bremen University, the structure of globalization is the determining issue. What is important for him is "the extent to which there is a willingness to adapt national and international framework conditions to the speed of globalization". For Prof. Rainer Bartel, Linz University, globalization must be "efficient" and "sustainable" but "scientists and politicians are still not ready for this". We now know that such analyses and recommendations remained confined to the academic circles; a real political shaping/reviewing/controlling/transforming of the globalization process was not done, neither at the national level, nor at the global level.
The Globalization Pentagon: Globalization traps, globalization trilemma, globalization dimensions (drivers), globalization phases, and globalization speed
Too many economists, political scientists and sociologists who were working on globalization issues followed the mainstream view that “the more globalization is enforced, the better the results for all will be”, assuming that the welfare effects will trickle down to all nations and to all people, But, neither the poverty of people, nor the poverty of regions were eliminated (SDG 1: No Poverty), and neither the lower middle class, nor the upper middle class have enjoyed stable jobs, social security, and sustainable income increases (SDG 8: Decent Work and Economic Growth). Increasing inequality within countries and between countries occurred and became a growing burden (SDG 10: Reduced Inequalities). We speak now not only about a “middle-income trap” but also about a “high-income trap”. And all this has a lot to do with the globalization process as it unfolds. It is necessary to study these globalization traps and to work hard along the lines of identifying the causes of the two traps as these are associated with a severe globalization fatigue. The globalization trilemma is a second area for studying globalization as the tensions between globalization, the nation state, and the democracy are prevalent. Also, third, it is necessary to work more on the globalization dimensions/drivers (global trade of goods and services, global technology flows, global value chains, global financial flows, and global labour flows). Fourth, the globalization phases have to become more deeply researched, as the turn from globalization 3.0 (with computers, automation, and robots) to globalization 4.0 (with digitalization, industry 4.0, and artificial intelligence) will impact heavily on the stability of jobs and the changes of income distribution. Lastly, a fifth factor of research interest is the globalization speed, observed by the rapid growth of scientific and technological developments in conjunction with digitalization; this process will change the outlook for globalization quite rapidly. In order to control populism and extremism in conjunction with globalization processes, such researches along this pentagon are urgent. Professor Karl Wohlmuth researches since many years on this globalization pentagon, on these interconnected five elements of globalization. But, policy action on the basis of the globalization pentagon is most urgent to avoid populism and extremism.
Das Land Bremen ist dabei, die „Innovationstrategie Land Bremen 2030“ in den nächsten Wochen fertigzustellen. Ein umfassender Strategieprozess ist seit Monaten im Gange. Dazu finden sich bemerkenswerte Aussagen der Initiatoren (vgl.: https://www.bremen-innovativ.de/innovationsstrategie-2030/):
“Im Jahr 2030 wird unsere Welt eine andere sein. Digitale Technologien wie die künstliche Intelligenz werden alltäglich in Industrie und Dienstleistungsbranchen eingesetzt, Fahrzeuge mit grünem Wasserstoff betrieben. Soziales Unternehmertum geht gesellschaftliche Herausforderungen neu an. Branchengrenzen verschwimmen zunehmend und der Wandel wird zu unserem stetigen Begleiter.
Eine Zukunftsvision, an der heute schon gearbeitet wird. Denn was wir heute behutsam pflanzen, wächst morgen kräftig heran. Das Land Bremen will überall, wo an diesen Veränderungen gearbeitet wird, zielgerichtet unterstützen und entwickelt dazu eine „Innovationsstrategie 2030“. Diese bezieht wichtige Zukunftstrends mit ein: das Älterwerden unserer Gesellschaft, die Digitalisierung oder die Energiewende, um nur einige zu nennen. Die Strategie soll zu einer Grundlage für künftige Entscheidungen im Land Bremen werden. Zum Beispiel in der Förderung innovativer Unternehmen durch das Land und die Europäische Union.“
Ein umfassender Planungsprozess ist in Gang gesetzt worden, und wichtige Akteure aus Wirtschaft, Wissenschaft, Politik und Gesellschaft sind beteiligt. Obwohl es schon über mehrere Jahre Überlegungen gibt, das aktuelle Innovationsprogramm 2020 und die Clusterstrategie 2020 weiterzuentwickeln, wird nun seit Juli 2020 intensiv an der Fertigstellung der neuen Strategie gearbeitet; im April 2021 soll die Strategie vorliegen. Nach einer Bestandsaufnahme wurde ein partizipativer Strategieprozess eröffnet und im April 2021 soll die bereits abgestimmte Strategie vorliegen (vgl. zu diesem Prozess die verschiedenen Hintergrundpapiere und Stellungnahmen: https://www.bremen-innovativ.de/innovationsstrategie-2030/; https://www.bremen-innovativ.de/hintergrundwissen-innovationsstrategie-2030/; https://automotive-nordwest.de/online-auftaktveranstaltung-innovationsstrategie-land-bremen-2030/; https://www.senatspressestelle.bremen.de/detail.php?gsid=bremen146.c.345782.de&asl=bremen146.c.19206.de; und ein relevanter Beitrag der Arbeitnehmerkammer von Steffen Gabriel aus dem Bericht zur Lage 2019: https://arbeitnehmerkammer.de/fileadmin/user_upload/Downloads/Jaehrliche_Publikationen/Lagebericht_2019_Gabriel_Innovationsstrategie.pdf). Die Kommentare der wichtigen Akteure in Bremen zeigen, dass nicht nur die Innovationsstrategie des Landes auf den Prüfstand muss, sondern praktisch alle Strukturprogramme des Landes neu vermessen werden müssen (Strukturkonzept, Masterplan Industrie, Maritimes Aktionsprogramm und Hafenkonzept, Wissenschaftskonzept, Fachkräftestrategie, EU-Strategie, Umwelt- und Nachhaltigkeitsstrategie, etc.).
Die meisten dieser Programme sind bereits im Jahr 2010 oder kurz danach vorgelegt worden. Es ist daher Eile geboten. Der Zeitfaktor spielt eine immer größere Rolle bei der Nutzung von Wachstumschancen. Erstens beschleunigen sich die globalen technologischen Entwicklungen rasant, und die Digitalisierung ist nicht nur ein nützliches Instrument, sondern zunehmend auch ein integraler Bestandteil der weiteren wissenschaftlichen und technologischen Entwicklung. Zweitens zeigt die COVID-19-Krise schon jetzt Langzeitfolgen für die Wirtschaftsstruktur in Bremen, denn die Navigation aus der Krise erfordert strategisches und taktisches Geschick, und zwar auf der Basis von Projektionen und Szenarien der Strukturentwicklung. In mehreren Beiträgen wurde bereits in Bremen auf diese Herausforderungen aufmerksam gemacht (vgl. vor allem die Universität Bremen/HWWI-Studie 2020: HWWI Policy Paper 128).
Jetzt liegt auch eine Studie von Professor Karl Wohlmuth vor, die in der Reihe „Globalisierung der Weltwirtschaft“ des IWIM als Band Nummer 45 erschienen ist. Der Titel der Studie „Die Innovationspolitik in Bremen – Herausforderungen durch die globalen Technologietrends und COVID-19“ verweist auf die neuen Herausforderungen und Schwerpunkte, die bei der „Innovationsstrategie Land Bremen 2030“ berücksichtigt werden sollten. Die Studie ist als Band 45 in der Reihe „Globalisierung der Weltwirtschaft“ erscheinen und ist als Download verfügbar (http://www.iwim.uni-bremen.de/weisse_reihe/). In der Studie werden in einem ersten Teil die Trends der globalen technologischen Entwicklung diskutiert, und zwar auf dem Hintergrund der Beschleunigung des gesamten Digitalisierungsprozesses. In einem zweiten Teil wird auf das Innovationsprogramm 2020 und auf die Clusterstrategie 2020 des Landes Bremen eingegangen, und es werden die Faktoren erläutert, die bei einer neuen Innovationsstrategie 2030 nun berücksichtigt werden sollten. In einem dritten Teil wird auf Handlungsfelder Bezug genommen, die dazu beitragen könnten, die Resilienz der bremischen Wirtschaft zu erhöhen. Fünf strategische Handlungsfelder werden für Bremen ausgewiesen. Die Studie ist auch als PDF verfügbar (Wohlmuth-Die Erneuerung - 2020).
A Follow-up Report by Professor Dr. Chunji Yun about his Sabbatical at the University of Bremen: New research reports were published on “Germany’s Export Growth and the Changing Demand Structures”
Professor Dr. Chunji Yun (from the Department of Economics, Seinan Gakuin University, Japan) was invited by the Faculty of Economics and Business Studies of the University of Bremen (at the initiative of Professor Karl Wohlmuth who was a host of the Japanese Professor already many years ago at IWIM) to spend his sabbatical in Bremen for a research on “Transforming the European Social and Economic Model in the Enlarged EU from a Viewpoint of the Production and Employment Regime”. Professor Yun was with his family in Bremen during the period of 1st September, 2017 to 31st August, 2018. It was agreed at the start of the research work in Bremen that Professor Yun’s work would more specifically focus on employment regimes and international production networks which are organized in automotive and electronics industries across Germany and the four Visegrád countries (labelled hereafter as V4). He has presented during his stay three Progress Reports and a Final Research Report addressed to the Faculty via Professor Karl Wohlmuth (see the Final Research Report to the Faculty of Economics and Business Studies at the University of Bremen).
Now he reports on the publications which were written recently at home in Japanese language (see below):
Yun, Chunji (2019) “Doitsu no Yushutsu- Seicho to Juyo-Kozo no Henka (Ⅰ): Posuto-Fodoshugi ‘Seicho-Model’- Ron no Kento,” Seinan Gakuin Daigaku Keizaigaku Ronshu, Dai 53 Kan Dai 3・4 Gappei-Go (Title Translated in English: “German Export Growth and Changing Demand Structure (Ⅰ): Review of Post-Fordist ‘Growth Models’,” The Economic Review of Seinan Gakuin University, Vol.53, No.3-4.)
Yun, Chunji (2019) “Doitsu no Yushutsu- Seicho to Juyo-Kozo no Henka (Ⅱ): Tayoka-Kohinshitsu-Seisan to Sekai-Keizai no Saihen,” Seinan Gakuin Daigaku Keizaigaku Ronshu, Dai 54 Kan Dai 1・2 Gappei-Go (Title Translated in English: “German Export Growth and Changing Demand Structure (Ⅱ): Diversified Quality Production and Reconfiguration of the World Economy,” The Economic Review of Seinan Gakuin University, Vol.54, No.1-2)
In his Third Progress Report (of June 19, 2018) Professor Yun gave details about his discussion of Professor H. W. Sinn’s Bazaar Economy approach to explain the export boom of Germany. Professor Yun is critically assessing the scientific positions of German economics and sociology professors on the role of the German manufacturing firms in global and regional value chains and the impact on value capture in the chains. His scientific interest is in the accumulation and financialization of profits, on the labour costs and wage structures, and on current and future industrial and employment relations.
See on the earlier (and somewhat related) studies of Professor Yun at IWIM in the three series of IWIM publications where he has contributed: http://www.iwim.uni-bremen.de/schriftenreihe_des_iwim/, and: http://www.iwim.uni-bremen.de/weisse_reihe/, and: http://www.iwim.uni-bremen.de/blaue_reihe/. Further studies from the Japanese Professor regarding his most recent research period in Bremen are expected also to appear in English language versions and translations. Also other Japanese professors have contributed to the IWIM Publication Series (see http://www.iwim.uni-bremen.de/index.php?content=316&lng=de). The cooperation between the University of Bremen and universities in Japan started with the Collaborative Research and Exchange Project “Schumpeter and the Asian Crisis” of IWIM at the University of Bremen and Aichi University in Toyohashi, Japan.
Development Economist Karl Wohlmuth from the University of Bremen has contributed two versions of a paper on “J. M. Keynes, Market Transparency and the Regulation of International Commodity Markets” to the Journal of European Economy, published by the Ternopil National Economic University (TNEU) in the Ukraine (see the link: http://www.tneu.edu.ua/en/). The TNEU is a cooperation partner for our Central and Eastern Europe activities.
First Essay (English Version), Journal of European Economy, Volume 17, Number 4, October - December 2018: BACK TO J. M. KEYNES IN REGULATING INTERNATIONAL COMMODITY MARKETS: AN EXTENDED NOTE ON THE "TRANSPARENCY AGENDA" (Access Links: http://jee.tneu.edu.ua/en/archive-en/2018-en/vol-17-no-4-december-2018-en/ and: http://jee.tneu.edu.ua/en/archive-en/2018-en/1133-journal-of-european-economy-vol-17-number-4-december-2018-pp.html (PDF: English Essay - Wohlmuth-Ternopil-pages 351-397)
Second Essay (Ukrainian Version), Journal of European Economy, Volume 17, Number 4, October - December 2018: МІЖНАРОДНІ ТОВАРНІ РИНКИ: ЛІБЕРАЛІЗМ ПРОТИ ДИРИЖИЗМУ (АКТУАЛІЗАЦІЯ ПОГЛЯДІВ ДЖ. М. КЕЙНСА)/ Internationale Warenmärkte: Liberalismus gegen Dirigismus (Aktualisierung der Äußerungen von J. M. Keynes) (Access Links: http://jee.tneu.edu.ua/en/archive-en/2018-en/vol-17-no-4-december-2018-en/ and: http://jee.tneu.edu.ua/en/archive-en/2018-en/1133-journal-of-european-economy-vol-17-number-4-december-2018-pp.html (PDF: Essay in Ukrainian Language - Wohlmuth-Ternopil-Ukrainische Version-4-20119)
Abstract: In this paper weak and strong forms of global governance of raw materials markets are compared. This is done by comparing the «transparency agenda» with the «structural reform agenda». John Maynard Keynes has worked for decades academically on commodity markets, on speculation and storage, on forward markets and buffer stocks etc., but he has also practiced commercial trading activity on various commodity markets; and he has written and/or influenced the Post-World War Two ICU/ITO (International Clearing Union/International Trade Organization) agendas which are containing detailed provisions for establishing
a world order on commodity markets. He was very much interested in the relation between price volatility of raw materials and its impacts on global macroeconomics, but he was also convinced that appropriate regulations of commodity markets and sectors impact positively on peace and development. He was convinced that strong global governance must be based on simple, stable, effective,
consensual and binding rules. Now the «transparency agenda» with regard of raw materials is so much debated but it is a rather weak form of global governance, while the «structural reform agenda» represents a rather strong form of global governance of the resources sectors. The «transparency agenda» is discussed in great detail in this paper while the «structural reform agenda» is considered in the Conclusions and Outlook section but needs further elaboration in a follow-up paper.
Key issues of this debate are increasingly relevant now as new supply and demand factors impact on the global commodity markets, on prices and quantities; and, strategic, technological, protectionist and military considerations affect more and more the global commodity markets. The markets are on the way of becoming less transparent despite of so many international organizations watching the commodity markets and caring for data and oversight. In the IWIM publications there are many studies dealing with the structure and the functioning of the commodity markets (see the links to Publications of IWIM: http://www.iwim.uni-bremen.de/publikationen/index.html and: http://www.karl-wohlmuth.de/publikationen/).
Professor Chunji Yun, Professor since 2010 at the Division of International Economics, Department of Economics, Seinan Gakuin University, Fukuoka City, Japan is since September 2017 Guest Researcher at the Faculty of Economics and Business Studies, University of Bremen; he will stay until August 2018. He was invited by Professor Karl Wohlmuth and the Dean, Professor Jochen Zimmermann, to do researches on the theme Transforming the European Social and Economic Model in the Enlarged EU from a Viewpoint of the Production and Employment Regime (see the synopsis of the research outline below under Research Purpose,..). This is the second research visit by Professor Yun in Bremen. Ten years ago Professor Yun was research fellow at IWIM for 18 months. He has published in the IWIM book series as number 13 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-jwt.htm) on “Japan and East Asian Integration” and in the White Discussion Paper series as number 33 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-white.htm) on “Production Network Development in Central/Eastern Europe and Its Consequences”. Based on these publications, Professor Yun was invited to international conferences and he was asked to submit papers for international publications. The contact between IWIM, University of Bremen and Professor Yun continued over the years.
Research Purpose, Analytical Standpoints, Previous Studies and Expected Research Results (a short summary of the Research Proposal):
With the deepening of the economic integration, and particularly since the recent Euro Crisis, there are heated debates over the social dimension of integration in Europe. The background of the discussion is if the European Union (EU) aims at an ‘Economic Europe’ or moves towards a reconstruction of a ‘Social Europe’. In this context, the research aims to analyse the transformative dynamics of economic and social models in the enlarged EU, by exploring how nationally organized employment regimes are forced to adapt to the deepening of an ‘Economic Europe’. More specifically, the national employment regimes are affected by changing cross-border production regimes which are characterized by processes of “fragmentation of production”, “global/regional production networks”, and “global value chains (GVC)”. Also, an investigation of the possibilities of reversing the ‘Race-to-the Bottom’ situation of social conditions within the EU is intended as part of the study.
The research will be carried out as mainly being based on two influential analytical perspectives, the “variety of capitalism” approach and the “global value chain” approach. The former approach has analysed various European economic and social models, focusing on the institutional complementarity among industrial relations, including collective bargaining, labour market flexibility or rigidity, the vocational training system, the financial system, and so on. This approach is also giving special attention to the interrelationships among the required skill specificity, the skill formation, employment and social protection systems, and the institutional comparative advantages of each national employment model. On the other hand, the latter approach, as a most influential analytical perspective on global manufacturing and service industries, has elaborated analyses of a cross-border division of labour featured as vertical specialization or vertical integration/disintegration. This latter approach is using a sophisticated methodology and is developing policy arguments for industrial upgrading within the hierarchical structure of the new international division of labour. And, most recently, its focal point is shifting from industrial upgrading to social upgrading/downgrading. The most important feature of the research is to figure out the interactions and/or the causal relations between GVC development within and beyond the enlarged EU and the transformation of economic and social models.
Research Outcomes by February 2018: First Research Report is available, Second Research Report is forthcoming
Professor Yun has presented a first report on his researches in December 2017. The second research report is forthcoming in February 2018.
In the first research report from December 2017 Professor Yun discusses four themes:
1. Starting Point or Background of Research (first draft)
There is a discussion about two prevailing myths. The Myth 1 is related to the Eurozone Crisis considered as being due to fiscal profligacy and being a sovereign debt crisis right from the start. The Myth 2 refers to the Eurozone Crisis as a crisis of (Unit Labour) cost competitiveness in combination with fiscal irresponsibility. These two arguments are evaluated.
2. Problematic Causal Chain of (Cost) Competitiveness, Imbalances, and Internal Devaluation (first draft)
There is a discussion of the role of the Unit Labour Cost (ULC), being considered as an a priori argument for labour market reform being inherent in the referred to competitiveness indicators. The drawbacks of the ULC analysis are presented. This is followed by a survey of recent researches on the regional imbalances in the EU.
3. The Germany-centred production network and the regional imbalances in the European Union (still work in progress)
There is a discussion on the contradictory neoclassical views on the German export surplus, then a discussion on the German position within the regional production networks (manifested by the GVCs), and finally a discussion on the changes occurring and the differences becoming visible in regard of Global Value Chain-GVC/ Global Production Network-GPN Structures.
4. Transforming the Employment Regime in terms of GVC/GPN: Germany and Visegrad (still work in progress)
The analysis starts with a discussion on social upgrading/downgrading in GVC-based development patterns, followed by an analysis of the erosion of the German Model interpreted as a Diversified Quality Production (DQP) model. Then the changes of this model are analysed, by looking at two kinds of modularization and the implications for the production networks, referring to the electronics and automotive sectors. Then for these two sectors the implications of the expanding production networks on the employment regimes are considered.
Professor Yun is doing intensively literature researches, but is also attending conferences, lectures and discussions with experts in the field. He is also considering to visit international enterprises which are located in Bremen, as these enterprises are valuable sources for information on global value chains (GVCs) and global production networks (GPNs) between Germany and the Visegrad countries. Professor Karl Wohlmuth is meeting regularly with Professor Yun for discussions of the issues. The study has high relevance also for the strategy of the German trade unions as globalization impacts differently on economic sectors in Germany.
The programme of the Conference of the Institute for New Economic Thinking (INET) in Edinburgh, 21-23 October, had the overall theme: “Reawakening. From the Origins of Economic Ideas to the Challenges of Our Time”. The Conference was a remarkable event. There were panels, main lectures and presentations, keynote lectures, breakfast, lunch and dinner sessions, on subjects such as the consequences of the financial crisis and the great recession afterwards; the future of the eurozone; the growth of the dual economy in the advanced economies; the causes of popular revolts and of the rise of populism; lessons from democratic collapses and the rise of Nazi Germany; the rise of Trump and the America First Agenda; the emergence of public and private debt traps; the role of fake news and the role of economists; new developments in various contested fields of economics and political economy; but also discussions on developing economies and emerging economies; on Adam Smith and the Scottish Enlightenment; on technology and economic development; on immigration and intergenerational issues; on gains from trade, and so on. Lectures and presentations by four Nobel Prize Economists were of special importance and insights. George Akerlof, James Heckman, Michael Spence and Joseph Stiglitz gave impressive presentations on methodology used by economists, on specific contested issues of the economics profession, and on the policy implications of the work of the economists in governments and international organizations (see the link to the event: https://www.ineteconomics.org/events/reawakening). See on the overall agenda of INET: https://www.ineteconomics.org/
For development economists the sessions about the growth of the dual economy in the advanced world were a highlight. The discussion about dual economies was for a long time a domain of development economics; the development economists studied the take-off and the catching-up issues. The original purpose of dual economy models was it to show how a modern sector can be developed through surplus labour from a stagnating traditional sector. Now top economists were discussing at the conference in Edinburgh the growth of the dual economy in advanced countries to understand the “high income trap” which is affecting the most advanced economies. At high average per capita income levels severe problems arise for growth, employment and distribution which create political tensions and social problems in many advanced countries (see on the need to analyse the “high income trap” of the OECD countries as deeply as the “middle income trap” of the developing countries the following viewpoint: https://asia.nikkei.com/Viewpoints-archive/Economeister/Time-to-talk-about-the-high-income-trap?page=2). A new class formation is presented which is resulting from the “high income trap”: the “precariat” is increasing, the “rentier class” is growing, but the “middle class” is vanishing. In two sessions of the Edinburgh Conference the reasons for the emergence of the dual economy in the advanced countries and the type of policies to prevent the further advance of the dual economy were discussed. The new class formation is associated with a growing income share of the upper 1% of the income earners, while an increasing part of the capital share is going to the rentier class and an increasing part of the labour share is going to higher level wage earners.
The middle class is described as increasingly vulnerable and vanishing, while the class of precarious income earners is rapidly growing. Figures presented by Lance Taylor at the Edinburgh Conference highlight the new class structure for the USA. The USA have a three-class economy, so that it is better to speak of a “trialism”, not of a “dualism” in the USA (and probably the same situation is in other advanced economies). Lance Taylor writes: “The main income sources of the top 1% of households are from capital gains, proprietors’ incomes, interest, and dividends. Including capital gains they have a 50+ % saving rate, and 40% of total wealth. Households between the 60th and 99th percentiles get 70% of their income from wages, ~10% each from fiscal transfers, finance, and proprietors’ incomes. They save less than 10%, and hold 60% of wealth (mostly housing). The bottom 60% get almost 50% of income from wages, and 45% from government transfers. They have negative reported saving (true for other OECD economies), and a negligible wealth.” The interactions of these three classes (assuming that these trends continue) are important for the overall dynamics or stagnation of the economy. The interactions determine also the crises to be anticipated. Therefore, the Edinburgh Conference discussed which type of policies could prevent the spread of dual or trial economies and the emergence of severe crises in the future (proposed interventions mentioned were: innovative enterprises to achieve sustained prosperity; wealth creation through state entrepreneurship; new policies for redistribution of wealth and income; a guaranteed minimum income plus a commitment of the society to full employment; gender-related policies to combat the dualism and trialism; etc.). Reforms to get out of the “high income trap” are possible, but the “policy paralysis” has to be overcome.
Professor Wohlmuth had the opportunity to participate as a guest observer at the conference in Edinburgh by invitation of INET. The participation at the conference opens new avenues for the work in development economics, but also in regard of international economic policy. The dual/trial economy approach as applied to advanced economies is also helpful to understand the rise of the populists all over the world, the danger of democratic collapses, and the decline of the Social Democratic Movement in Europe. Professor Karl Wohlmuth has written a Note on the reasons for the decline of the Social Democrats in Germany, which is based on the dualism/trialism concept and which is also relevant for an understanding of the decline of Social Democratic Parties in other countries of the Eurozone.
Zur Problematik der Ökonomie in der Ukraine; die Bremer Presse berichtet am 10. 3. 2015 über ein fragwürdiges Engagement in der Ukraine unter dem Titel: "Steinbrück und die Oligarchen": Link: http://www.weser-kurier.de/startseite_artikel,-Steinbrueck-und-die-Oligarchen-_arid,1075517.html
Die Forschungsstelle Osteuropa der Universität Bremen berichtet regelmäßig in ihren „Ukraine-Analysen“ über die aktuellen Ereignisse und Entwicklungen: Link: http://www.laender-analysen.de/ukraine/ . Die Ukraine-Analysen werden gemeinsam mit der DGO (Deutsche Gesellschaft für Osteuropakunde e. V.) herausgegeben.
Am 23. März 2015 fand am Fachbereich Wirtschaftswissenschaften der Universität Bremen eine Konferenz über die Wirtschaftsprobleme der Ukraine statt. Die Konferenz wurde vom Ko-Direktor des IWIM, Prof. Dr. Axel Sell, organisiert und vom Verein zur Förderung des Fachbereichs Wirtschaftswissenschaft der Universität Bremen wiwib e. V. finanziell unterstützt. Professor Sell führte in die Thematik der Konferenz ein und erläuterte das Programm (vgl. den Abschlussbericht von Professor Sell zur Konferenz). Professor Dr. Oleksandr Sushchenko, Vizepräsident der Kiev National Economic University (KNEU) und Professor Dr. Oleksandr Dyma, Vizedekan der Faculty of Human Resource Management and Marketing der Kiev National Economic University (KNEU), erläuterten in ihren Vorträgen die gegenwärtige Lage und die anstehenden Reformen. Dr. Stefan Barenberg, Doktorand am IWIM, ging auf die Reformen im Bereich Corporate Governance ein. Frau Professor Dr. Jutta Günther und Maria Kristalowa vom IINO erläuterten die besondere Situation der Ukraine in Bezug auf die Auslandsinvestitionen. Prof. Dr. Karl Wohlmuth ging auf die Prioritäten bei den Wirtschaftsreformen und auf ein Strategiekonzept für die Vollendung der Transformation in der Ukraine ein (vgl. die Kurzdarstellung und die PDF von Professor Wohlmuth zu den Reformprioritäten und den Strategieansätzen für die Ukraine). Frau Katerina Bosko von der Forschungsstelle Osteuropa der Universität Bremen leitete die Abschlussdiskussion.
Frau Katerina Bosko von der Forschungsstelle Osteuropa leitet die Abschlussdiskussion zur Ukraine-Konferenz
Die Kooperation mit der Kiev National Economic University (KNEU) wird von Professor Sell und vom Fachbereich Wirtschaftswissenschaft weiter vertieft werden. Die Ergebnisse der Konferenz zeigen, dass die Ukraine vor großen Herausforderungen steht und die notwendigen und weithin bekannten Reformen endlich umsetzen muss. Insbesondere in allen Bereichen der Governance sind Reformen notwendig, um die Strukturtransformation in der Ukraine erfolgreich voranzubringen und Kurs auf Europa zu nehmen. Das Abkommen Minsk II bietet nun wieder die Chance, in der Ukraine jene Weichenstellungen zu treffen, die eine Vollendung der Transformation und ein erfolgreiches Andocken an die europäische Wirtschaftsdynamik ermöglichen.
A Comprehensive Transformation Process has to start NOW in Ukraine – How to Speed Up Structural Transformation by Deep Societal and Economic Reforms?
Are the current problems in Ukraine due to ethnic and political tensions, or due to delays in political and economic reforms, or are the causes of the problems much deeper rooted? In a new study on the Axiological Foundations In The Management Of Socio-Economic Development Of Ukraine two researchers from Ukraine - Dr Vitaliy Krupin, Senior Researcher, Doctor of Economics, and Yuriy Zlydnyk, Ph.D. Candidate, both from the Institute of Regional Researches of the National Academy of Sciences of Ukraine, Lviv, Ukraine – present their views on the root causes of the problems and on steps towards inclusive, effective and comprehensive structural transformation processes in Ukraine.
After reviewing the socioeconomic characteristics and trends of the Ukraine, the authors highlight the problems of socio-economic development in the context of axiological principles, emphasizing spiritual values and ethical foundations in the Ukrainian society. Ethical norms and value systems have to be studied in order to understand the root problems in the Ukraine of our days. Such problems, as manifested by large-scale corruption, chaotic development processes, unorganized state actions and other failures and deviations in society, can only be overcome – according to the authors - by reforms based on axiological principles. Individual conduct and responsibility of the individual for his/her actions have therefore to be investigated in the context of the ongoing transformation and reform processes in Ukraine.
The axiological foundations for managing socio-economic development processes in the Ukraine were so far not considered as important topics in the researches on the transformation process in Ukraine. The two authors emphasize this aspect as crucial for effective further steps towards inclusive transformation processes. Analyzing the socio-economic indicators since the independence of Ukraine and the results of various corruption indices and barometers for Ukraine the extent of the societal and economic problems becomes obvious. The example of small business activity in Ukraine is presented as a case in point. The authors write that declaratively, small businesses are under minimal state control, but in reality, there are almost 40 different state authorities with rights to check and to suspend any activity of a business, inviting corrupt practices and so leading to widespread informal activities. But, as spiritual values of the people are at the root of these socio economic development problems, all reform policies to initiate a business-friendly environment and to fight corruption and other failures in the development process have to be guided by measures to overcome the lack of formed spiritual values. Informational measures and educational programs are recommended along with deep societal and economic reforms.
Professor Karl Wohlmuth has advised and supported the Research Group from the National Academy of Sciences of Ukraine in Lviv during the final phase of researches. The cooperation between Bremen and Lviv will be continued. The paper will be published in Issue 2, 2014 of “Berichte”, the journal of IWIM’s partner institute in Berlin (Forschungsinstitut der IWVWW e. V.).