1. Consumer Power And Restrictive Practices
Iso Economics is the equilibrium between enterprise and consumer powers. For now enterprise harvests the combined buying power of consumers to capitalise on economics of scale gains. The enterprises then may choose to pass down or not a portion of such gains in the form of lower prices, which resulted from such combined buying power. Yet more than often, we see that enterprises now days do not pass the benefits of mass buying power which is lower cost, to the consumer, unless they are forced to by competition. In the future we may well see the consumers harvesting their own buying powers through different means. At some stage then to use their combined buying power to at least gain some of the benefits of the economics of scale in one form or another.
In more plain language for those not acquainted with economies of scale: Iso economics is the move to an equalisation between the seller ( entrepreneur) and the buyer ( the consumer). Presently when a store sets up in a location it buys according to the number of buyers (consumers) who buy from that store. If it is a chain of stores then all the buyers (consumers ) who buy from that group of stores become the buying requirements of that store or group of stores. The single store’s like a small grocery has a limited buying power which results in weak buying power and having to buy from the producers, wholesalers, importers, distributors and agents.
The large groups of stores with the combined buying power of millions of consumers behind them have a greater bargaining power. In addition with such buying power the superstores and chains of, can buy direct from the producers, manufacturers at very much lower prices. The savings in the buying cost is then pocketed and in some cases small proportions of such buying savings is passed down to the consumer in the form of lower retail prices.
When the consumers decide to harvest their combined power then the stores will have to share in the form of passing down some of the gains, to the consumer. Imagine the residents of a town jointly deciding to stop shopping from a particular store. That store will automatically have zero buying power because it would have lost the combined power of the citizens of that town who used to shop from that store.
How and when, will the consumers evolve to harvest their combined buying powers will come in many forms. I will only try to indicate some suggestions further on. The process to get there, the structure, the activity I call Iso-Economics. I call Iso because gradually the entrepreneur and the consumer will get closer to each other than the pure capitalist system positions them right now.
The same basic and simplistic principle would then expand and develop to cover the whole sector of the economic activity from retailing to manufacturing, services, banking and so on.
Summarising in simple terms if we assume that the consumers of an area, let’s say a country elect not to use a superstore and stop buying from that store, the buying power of such a store will diminish immediately. Therefore in final analysis, the economics of scale which bring today’s superstores the ability to amass super buying powers, could not be there, if the consumer elects to take control of it’s own combined buying powers. This model of thought could expand to every market operation which relies on supply and demand.
The same we see in a state to state behaviour. When we see country leaders bargain for trade terms, conditions, tariffs and so on, they are using the combined buying power of their country’s consumers; nothing else. When America convince other countries to scrap, or reduce import tariffs for American goods, or else they will do same and worse, they only use the combined buying power of the American consumer. When George Soros buys into or out of a currency he does so using the combined buying power of the consumers who consume the services of his organisation by investing in his investment funds.
2. Self redistribution of wealth?
The evolving of Iso-Economics will eventually result perhaps in the optimum model of wealth share and redistribution. The Iso-Economic principle would expands and reach all sectors in an economy, local , national, global, aiming for or reaching the equilibrium between seller and consumer. Hopefully
3. Consumer Manipulation & Exploitation
Nowadays the consumer is being systematically manipulated, if not abused by the present economic systems. Irrespective of the system formation, whether is a free market, socialist or authoritarian; The consumer is economically isolated and perhaps unable to demand and gain the proportionate economic benefits of his power. The only difference from present day, system to system, is the degree by which the consumer is being manipulated, exploited or abused. The consumer of course is no other than the public at large, including you and me. Subsidisation in one region, or country and retaliatory import tariffs and controls in other countries, affect each and every consumer around the world.
Why? The same product or services are sold by the same producing or distributing companies, for much higher prices in different countries, or regions. Price fluctuations are so high, that they are totally unacceptable. We can now a days find products being sold for substantially lower prices, in a country with a high cost of living, than a country with lower cost of living. Taking transport and taxation issues out the case still remains the same. As these practices continue the market will force itself with the appropriate corrections, at least in the free markets. Authoritarian systems will have to decide whether they will want to pay the price of either collapsing or being left behind undeveloped.
4. How to Reach the Iso-Economics – Some Thoughts
In time ahead, we could see the local population, to be able to elect a store undesirable in their areas; even though the market location will be open to all, in local, national and global levels. In time ahead we could see practices where, fixed or guided profit margins, will be negotiated jointly by consumers, stores and suppliers / producers. The consumer will respect the right of the stores and suppliers, to make a profit. However the retailers and manufacturers will have to respect the consumer and pass lower prices to the consumer.
5. Partnering Of Consumers And Entrepreneurs
The store will respect and fear the power of the local consumer. If not, consumers could have the power through a local vote, to elect a store undesirable in their area; the consumers could then be able to withdraw the operating licence of the store in question, or impose heavy fines on them. It may now seem a bit on the extreme side. In the near future though, it could well be the norm, with information technology bringing people closer. Why should people have to pay higher prices, for the same goods in a local, regional or national area, than in other parts of the country, or in neighbouring countries?
In time we could see local or national consumers, have control of their purchasing powers. Local populations, could set up voluntary committees, or even paid consultant committees, who will have full access to the stores’ purchase invoices to inspect and verify the cost in relation to selling price and profit. A kind of similar organisation to the present day government appointed watchdog committees like the monopolies commission.
The stores will be rewarded, by being allowed to keep higher portions of their gains, brought about, by lower purchasing costs, which result through their own efficiency and effort. The rest, will have to be passed on to the consumer. Or at least a fair proportion of the mass buying power benefits will be passed down to the consumer in the form of lower prices. The merits for each case could be considered individually.
After all, the buying power the stores and especially the superstores accumulate, is only the buying power of the consumers; the store’s customers, combined buying power. In time we could see the consumers, exercising control of their combined buying power through consumer associations. At present the large retail organisations, thrive only on the combined buying power of their customers; the consuming volumes of the public, you and me.
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1st October 2002 22.19
8th July 2002 22.1
Imagine a situation where if a store exceeds the set profit margins. The local or national consumer population, will have many weapons to use, against such stores. Two of the mains which are:
First, and most important, the local or national population, boycotts jointly all purchases, from such stores elected undesirable. Either way, the store will be strangled, if it tries to abuse its powers to gain exorbitant profits. The advantage for the stores, is that by operating within set guidelines, there would be guaranteed a profit, which would take into consideration their investments as well as the consumer’s interest. Similarly, the local population, will have powers to punish those organisations, which get involved, in price fixing or restrictive practices.
Secondly, to elect such a store or merchant undesirable for the local area. Once a store is elected undesirable, the local authority can withdraw the store’s licence to operate in that area.
In the future, independent consumer association groups, could grow stronger on both local, national and global levels. An example of the consumer boycott power, is the new car sales in the UK. New car prices in 2000/2001, were as much as 90% higher, than for the same cars in other European countries. Even for cars manufactured in the UK.
After the car manufacturers, refused the consumer’s calls to lower the prices of new cars in the UK, the Which Consumer Association, called for a boycott of new car purchases. The results shook the industry. A couple of manufacturers, who reduced their prices, saw sales increase by 30% to 40%, whilst the rest, saw new car sales go flat. Sale figures got worse and worse, as the word spread around. Eventually even the government stepped in through the department of Trade and Industry with specific guidance actions to the car manufacturers. The prices continued to fall.
There are plenty of examples of restrictive practices; such as when a handful of established superstores in the UK, blackmailed the cereal suppliers, that they will stop buying from them, if the cereal supplier, continued selling their products to a German store company opening up shop in England. The reason was because the German stores were selling the same brand products at prices up to 50% lower, than the prices the established stores in England were selling. A classic example of exorbitant prices of course.
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6. The Threat Within The Present Day Capitalist System
The big question resurfaces in headlines, again and again: “Will the free market capitalist system ever work smoothly?” This question prompts a further question. “Can there ever be such a thing as a free market capitalist system?” I believe not within the present day format.
The present day market format, lacks market regulations in parts of the globe and suffers from too much market regulation, in other parts of the globe. Market interference and regulation is inevitable, if we want to avoid seeing the world being sent back to oligarchy, whereby a handful, can force themselves on the rest politically or economically. This can be a handful of persons or conglomerate corporations, forcing their policies on the masses; or a handful of countries forcing their policies, on other countries, if not on the rest of the world.
The mid and last part of the twentieth century, has seen the end of imperialism and the old style empire systems with the exception of some small parts around the world. What we are now in danger of experiencing, if not careful, is the new form of imperialism; a new form of empires or bitterly labelled vampires. The economic imperialism through economic empires. The global economic vampires.
7. The Global Phenomenon
With economic globalisation we are witnessing economics of scale without a major element. The element of politics of scale. We are already in the early stages of witnessing multinationals dictating policies to governments. In the absence of a matching political system of scales, the economic globalisation will inevitably lead to perhaps the destruction of globalisation. I believe globalisation has much to offer to human development. Therefore I believe a political system of scales is absolutely necessary. Isokratia and Iso-Economics, I believe can offer the politics of scales required for the enhancement of human life around the globe.
That is why I strongly believe, that some sort of market control and intervention, in a preventative form or another, is an absolute necessity. Indeed I believe, it has become apparent requirement, for the present day market capitalist system. Furthermore due to the human input, I believe preventative forms of market control and regulations, will always be a necessity. Otherwise, the handful of advanced economies, or even global giant corporations, the leading players of the newly formed global economy, along with the economic super powers of the new era, will repeatedly disturb the markets and hinder development.
Through the opportunistic profiteering, such organisations or groups, will be constantly bringing, both the collapse of small economies, as well as the economic model of boom and bust, within national economic frontiers. This in turn, threatens the global economy, as the effects are felt around. If you like we are already witnessing such events.
I believe that unless measures are taken, and balances imposed, that is exactly where we are heading. Such course of inaction will be the biggest threat, for the collapse, of the free capitalist system. I like to make a parenthesis here and say that, perhaps the label capitalist system, is not as appropriate as that of the free market. I believe it so, for the capitalist system is no longer what it used to be, a few hundreds years ago.
The system has evolved and developed and at least in the western advanced economies it has gone through a metamorphosis. I believe that the capitalist or free market system will continue to evolve. We are already hearing the academics using various labels; Such as American capitalism and socialist capitalism and so on. Skills and know how, can set individuals in business with the minimum of capital. Know how expertise, can attract the entire capital one needs.
The free market system no longer requires, an absolute capital input to enter the market. If you like, capital in many of today’s areas, is no longer the main factor in determining a market entrance. The classic example here is that of Bill Gates and his Microsoft Company. Bill gates input, which gave him entry, and rise to the biggest corporation in the world, was not capital, but know how skills. Bill Gates know how, was the factor that won him the world market.
We know there are many, many others, who became small medium and large market players with their skills and knowledge input, being the major and determining factor, whilst the capital input was secondary or of minimal importance. However, this is only a parenthesis and this book of thoughts is not the right place to indulge in the analysis of the new form of capitalist system.
8. Market Intervention, National and Global, Lead To Iso-Economics
Here, we must distinguish between the stabilising, preventative, collective measures, aim to stabilise and avert destruction and misery, from the politically motivated market interferences. For such interferences, whether in a close economy as that of the Ex Soviet Union, or in an open market economy, they have the same catastrophic effect. What’s the good of curing the illness, if the cure kills the patient?
The absolute power which the present democratic systems hands to the democratically elected leaders of a country, very often results in such leaders to interfere with the market of an economy for political reasons. As we have witnessed in the past such politically motivated interventions have resulted in hard, painful and catastrophic economic and social experiences. Unfortunately the hardest hit from such market interventions are always the masses of the employed people and the small business communities.
Examples are plentiful. History has demonstrated that even the leaders of free capitalist markets, such as the UK’s so-called Iron Lady, Margaret Thatcher, for political motives, have persistently interfered in the market; She interfered with both economic and political means.
Politically derived interventions, which have affected the markets, at both, the national and the international level. Even creating wars, be it economic, military, or civil wars. Her unorthodox politically motivated market interferences, with extreme monetary measures, caused the biggest economic depression or rather stagnation, since the 1930s depression, in the UK.
The pill she asked the British public to swallow was not just bitter. In many cases it was psychologically fatal. In other cases it was physically fatal. Millions of homeowners lost their homes. Thousands ended their lives by suicide. Recently ( towards end of September 2002) a London newspaper published a graph showing the Thatcher years to have had the highest suicides. Was it a co-incidence? I don’t think so. I lived right through it, I have witnessed it, I felt the pain. The worse thing was that such interventions took the hope out of the market and as such out of the individual. I was lucky to have manage to save my home by renting it out and move into a small flat. Yes I was lucky compare to the millions who lost their homes, their most precious position.
As a direct result of such I will say malicious market interventions, the British NHS system which used to be the envy of the world, is still suffering from such catastrophic market interfering policies. People are still dying because of destructively under investment in the health care system. The UK’s NHS system is now rated even below the standards of developing countries, despite massive re investment by the subsequent governments. For all we know Thatcher had all the best intentions. What she and her advisers fail to grasp is that the market though very tolerant is not forgiving and once it turns it can take a long time to settle.
Steps must be taken so that in the future such practices can never be repeated. I believe that the Isokratic system in combination with Iso-Economics may offer the solution.
At national levels, intervention takes the form of both monetary and fiscal policies. It was these interventionist policies, which brought the bitter recession of the ‘90’s in the UK. Rates of interest were used to manipulate the market. Millions of people losing not just their business, but even their most valuable and needed asset, their family homes. The final effect of these policies was that the few, gained and accumulated massive assets, taken away from the ordinary person, at even below repossetion prices. The suffering, which in effect, caused both real and psychological suicides, has marked forever, many ordinary people in the UK. Yesterday’s successful business became today’s business corpse.
On the international level, again we see enormous direct interfering and influencing of foreign investment, camouflaged under the label of regional incentives, and competition, to attract investment. Examples here, are such as that of the Japanese motor industry, whereby all the European countries, flirted heavily in their efforts to persuade the Japanese car producers, to station their production factories in their country. Again, intervention by the use of monetary favours, such as cash grants, provision of free sites, tax free incentives, as well as fiscal policies, provided by tax-free incentives such as tax relief, for long periods. Even labour governing rules and regulations introduced or scraped to attract the foreign investors.
The UK traded laws, capping the power of the trade union actions, as protection against strikes by making it illegal, or near impossible, to strike. Irrespective whether in some cases, such laws became a necessity, due to the extremism of some Trade Unions in previous years, the primary motive for the introduction of these laws, was to attract investment, by protecting the capital. These laws finally proved to be the determining factor, which prompted most of the Japanese car giants to set up factories in the UK, even though the UK’s productivity rates were many fold lower of the German work force.
9. Market Interference is not monopolistic
Governments do not have the monopoly in damaging market interferences. The extremist actions of the then unregulated powerful trade unions in the UK, is another form of market interference. The health government was forced to introduce a three day a week. Who paid the price? The ordinary citizens.
The reasons for the abusive interference, can sometimes be a combination of politico economics. Interference in the free markets, influenced by the few. The case that springs to mind here, is that of Tony Blair, where the liberalisation of the used car market, was in effect stopped due to the interference of pressure groups, such as those of the big giant car manufacturers, the likes of Toyota and Nissan and others who threatened to move production to other countries.
As a result, instead of the market being opened to free imports on the used car market, and even on the new cars, a quota was introduced, restricting only to 50 per model, per year, the cars allowed to be imported by individuals outside the factory system, and still full restrictions on the used car importation. Clearly, a case against individual freedom. Clearly a case against competitive markets. Clearly a case of government, politico economic market intervention. Clearly a negative governmental market interference, which results in artificially high prices in the UK car industry.
The victims, as always being the consumer, the public at large. The UK consumer is punished and forced to pay higher prices for identical cars, than the prices paid by their European neighbours, even for cars produced in the UK. Imagine what will have been the decision if the public at large were to have voted on the issue whether to free the market imports or not. An Iso-economic decision in the hands of the public. Could the public have voted against their pockets in this case?
10. Market Interference in the international arena
On the other hand, we see the international markets interfering in national economies, by injecting vast amounts of money through the IMF.. Absolutely necessary for the benefit of both the sick and the healthy, if the disease is to be stopped reaching the healthy.
Writing off massive national debts of struggling economies, by a co-ordinated action of the advanced economies, again is a form of market interference; However this is a healthy intervention. A preventative interference, preventing the collapse of these struggling economies, which otherwise would have lead to inevitable catastrophic results of both humanitarian and an economic nature, to the rest of the world. The secret here is prevent those other interventionist policies which have driven the struggling economies to the near distraction point.
In the USA nowadays, the government, through market interference, is examining whether to break up Microsoft, for it is claimed that Microsoft has abused it’s monopoly power. Another healthy market interference, with preventative and protectionist character, preventing monopolistic abuse and protecting the consumer from being abused, if indeed the case is proved so; For not everything that shines is gold.
In fact we know that on at least four occasions the international financial situation would have collapsed without the intervention of the monetary authorities; 1982, 1987, 1994, and 1997. Even so, international controls remain quite inadequate and lack the global substance required.
The international financial institutions and the national monetary authorities at times of crisis co-operate fully. However, there is no international central bank, no international regulatory authority to compare with the institutions that exist on a national level. The introduction of such institutions and regulations will not be easy, of course. It is widely accepted that both money and credit are connected with national sovereignty and national advantage. It does not have to be like this though.
Unfortunately, within the present system, nations are not easily willing to co-operate; simply because they believe that some kind of international regulations, are seem to compromise their sovereignty, which need not be. It need not be so, if we have a global system in place, like Isokratia, which will lead and enable Iso –Economics in a global scale, for the benefit of all around the globe. Such a move we see now in the EEC where with the introduction of the euro and the European central bank they are slowly but surely succeeding to set such policies I propose in a regional level within the E community. This can be an example to imitate and expand to a global level.
For instance, the role and factions of IMF can be changed to meet the new global requirements. The IMF factions as it stands presently, its primary mission is to preserve the international banking system, not the global financial market. The IMF and its present formation, lacks the sufficient resources to act as the global monetary stabilising force.
Lack of global regulatory bodies to regulate the financial markets, matched with the present inadequate multi-currency system, in a global economy, will continue to bring about financial shocks, to both, the central and peripheral levels. The fluctuation of the exchange rates, between the three or four major currencies, against each other, can only cause more and more complications. Changes in interest rates and exchange rates, import financial shocks.
We only have to look at the international debt crisis of 1982, which was precipitated by a drastic rise in the USA interest rates. The Asian crisis of 1997, was touched off by a rise in the US dollar. The intra-European currency crisis of 1992, was caused by similar exchange rates fluctuations, between Germany and the rest of Europe. By nature, such disturbances in the global capitalist system and financial markets, tend to have this proportionately larger effect, at the periphery than at the centre.
11. As we have seen, there is no such thing as a free market capitalist system.
The ‘free’ market trading is always interfered in both the so-called controlled economies, such as China, as well as the so-called free capitalist economies; Be it the Western advanced economy, or Asiatic developing economy, or even undeveloped economies. The flaws of the capitalist or free market system will always require some form of interference. The importance is to distinguish between the healthy and the destructive interventions. Of essence is to encourage the healthy intervention and discourage the destructive, politically minded, or self interest-minded interference, which will always be catastrophic in economic terms.
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30th April 2004 00.40
12. Global Finance
Global Capital Finance is yet another sensitive arena which eventually affects all of us. As we practise global economics, we see another important arena, which demonstrates the need for healthy preventative interference. The threat here comes not just from governments, but also from financial agencies, affecting the move of capital. Sometimes such moves can cause total paralysis of an economy, be it advanced or not.
This is best demonstrated in the international capital market, where we have another fearsome form of market intervention. This form o intervention, though artificial and unnecessary, it has interfered in the running of the world economies and as witness many times, has tremendously horrendous affects, on the global economy; all of which are unnecessary, artificial and parasitical. These are the so-called currency speculators and big financial institutions, with their vast amounts of investments.
We have seen the catastrophic effect on the United Kingdom currency, the sterling, when it was forced out of the European Monetary System by the speculative actions of George Soros. Such was the effect, that interest rates raised by the minute at levels higher than those imposed over a period of many years. It happened in other European countries, Scandinavia, Russia and so on and it was attempted with the Greek currency as well, though the Papandreou government at the time defended drachma successfully but not without a cost.
Radical changes and measures are required to avert the boom and bust of whole economies. In Isokratia Global I am proposing one such radical remedy which will cure many of the ailments of the capital , finance and banking systems of present day market operations. Some may find it shocking. Be patient though. Soon you will know. Let’s first have an inner sight of present economic activities n the global arena and their relationary effect between economies within.
13. Economic Colonies Versus Economic colonisers – the Struggle For Iso Economics
With the near extinguishments of imperial and political colonialism, the new phenomenon talked about more and more often is that of the economic colonialism. Advanced economies of the developed and developing world gain full or partial control of the undeveloped or third world economies. The paradox is that the Economic colonisation of the third world countries by the developed economies, is the only survival path and a sure way of such countries moving through to the developing and later the developed economy stage with a lot of luck.
Even more paradoxical, is the fact that the advanced economic countries, and multi-national companies, already wield the power. They have the power and seek to impose rules and conditions, through the present, inefficient close shop regulated bodies, that protect their global interests. These unbalanced rules, conditions and regulative bodies, in time will be the cause for the rise of the colonised economies, to the ranks of their competitors and colonisers.
Whether it is a few decades or a few hundred years from now, or even a thousand years from now, the economic empires, as we know them today, will inevitably one day either collapse, or lose their might. Mimicking the economic empires, the economic colonies cause will grow, as they advanced and spread their economic activities. The economic colonies through multi-national companies and political might, will gradually move their purchasing powers, from country to country in search of cheaper labour and material.
As colonies become developed economies themselves, the number of economic colonies will, be diminishing. Former economic colonies become developed economies. The demand for economic colonies will increase and the developed economies’ search for cheap labour and material will increase, and thus the number of economies with low-cost labour and material will start diminishing.
As the economic colonies diminish, the laws of supply and demand will pull them up, closer and closer to the developed economies. Closer to the centre as some prefer to call it. The laws of supply and demand will bring some reverse colonisation too. In some ways we are already witnessing this reverse colonisation. Asiatic economic colonies begin to set up production within some of the advanced economic colonisers. Japanese car manufacturers set up manufacturing plants, in undeveloped or assisted zones within the borders of advanced economies or economic colonisers such as the EEC and the USA.
Through these economic activities and the resulting revenues, economic colonies such as Greece, Bulgaria, some Far East countries, Cyprus, Hong Kong and so on, have made investments in sectors of other countries, which resulted in some of these countries becoming developing economies. Their labour cost rose, forcing the advanced economies to shift their production to other low-cost countries such as Rumania, Morocco, Syria, Turkey, Russia, Thailand, The Philippines, and China.
At this time we see the ex-colonies like Cyprus and Greece in their search for low cost labour, mimicking the economic colonisers. They are shifting their own production to the new low labour cost markets such as Rumania, Syria, Bulgaria, and Russia. Where Cyprus and Greece even as recent as 20 years ago were weak economic colonies offering low cost labour, they have now begun to move into the coloniser status in some effect. The same is happening in the Asiatic markets and all over the globe.
For example, Asiatic firms shift their production from the low-cost Asiatic countries and their own markets, (which used to be a source of low cost production), to the what used to be high cost economies like Britain, Spain and Germany. We have witnessed the biggest investments in the UK car manufacturing Industry to be from Japanese companies. Something, which was unthinkable, only a few decays ago, is happening right now. Are we witnessing a form of reverse colonisation?
Japanese companies, such as Nissan, Honda, Toyota now own half, the car producing plants in Britain; (if not more). Are we witnessing a classic example of an economic coloniser becoming an economic colony? The higher the cost is pushed in an advanced economy, the earlier the system will collapse, as the citizens take their purchasing powers to cheaper countries. In turn sooner or later other countries may take over the production means of such advanced economies with collapsed industries.
Economic colonisers will try to maintain their advantage, by directly and indirectly influencing events; Events which ensure that economic colonies remain just that. Eventually, however, the low labour cost market will catch up with the high labour cost of the advanced economic powers. Through advanced technologies of their own, or through the wealth of their natural resources, economic colonies will develop their economies and countries’ infrastructures.
Some colonies after they have gained their political independence, not only caught up with the empire, but also even surpassed their former colonisers and become as powerful, and even more powerful in some cases. For example, America only a couple of hundred years ago was a British colony and a wider European economic/trade colony. Now it is the world’s super-power, on both the economic and the military fronts, making Britain and the European countries look like midgets in the pot of global economies. The colonised has become the coloniser. Who will be next? Even more of a wise question should be. Why should there be a next coloniser?
European economies get the shivers down their spines, every time the American economy sneezes. Of course that is why the Europeans came up with the idea of a common market the EEC. Because they have been pushed aside. Because they have been pushed out of the centre and into the periphery. Because their biggest colony has become their coloniser; their economic master who calls the shots. And rightly so, the Europeans want to avert total take over by the Americans in the long term.
Then there are the Brazilian and Mexican economies, which became bigger than their empire masters, the Spanish. Another ex-British Empire colony (now India and Pakistan) though not economic colonisers as yet, they have become members of the family of nuclear powers. The examples are endless if we look around us.
14. The colonisation of single industries within a coloniser by an economic colony
Turkey versus Germany. Turkey has for long been a German economic colony because of close distance, and because of both low cost labour and raw materials. NAK was the world’s leader in printed fabrics covering all sections of industry. At one stage though operating 24 hours production shifts, deliveries quoted by NAK, were minimum six months from day of order. Then investment started to flow into Turkey. Ironically such initial investments were from Germany itself, though other countries came in later.
Eventually the Turkish fabric industry, produced equal quality as the Economic masters the Germans but at less than half the price. Even more cleverly Turkey mobilised the vast low cost labour market to set up production of the ready to wear garments. This move offered big transport savings as the raw material in the form of fabric can be deliver directly to the make up factories in Turkey instead of having to travel through Europe and back to Turkey.
The result was the destruction of the German fabric industry. Giants such as NAK closed down, whilst others alike in order to survive move production to Turkey. An economic colony at least in one industry, rose up and destroyed the coloniser’s industry and taken it over. A small transformation through the struggle for Iso-Economics.
Today’s advanced economies all incorporate economic colonialism ( others label it economic imperialism) in one form or another. These economies rely heavily on economic colonialism to secure cheap goods and low-cost raw materials, from the so-called third world, undeveloped and developing countries. Economic colonialism comes without a concern for global economy.
As we see the economic colonisation is not necessarily always negative and in a way it is also rather necessary for the raising of the poor and undeveloped countries. Economic colonisation does not have to have the shape and character of an imperialistic nature. Investing a low cost labour economy it can be a win – win situation for both the coloniser and the colonised. This is what Iso economics will be supporting and encouraging. The win- win situation where both parties gain.
All these turmoil if seen from a long-term prospect points to the fact that this reliance, of advanced economies on the low cost economic colonies, make their own economies artificially fuelled. Yet, the advanced economies have so far failed to see that their economies are based on artificial means or foundations.
Because low-cost resources, including human resources, labour and raw materials cannot last for ever, eventually countries around the globe will become economically strong enough not to rely on the few advanced economies like the group of seven (now group of eight), as we know them today. Some years ago I foresaw China to be a front-runner. It happened in 1999. China has become another member of the group of seven economic powers. One member with Iso-economic sharing. Which country is next?
Soon others will become economic powers of their own. Soon others will be as strong as, if not stronger than some of the group of eight. Russia with all its economic devastation is laying the foundations. Once they begin building up their economy, it will not be long before they become an economic supper power; for they have many of the elements needed, such as technology and natural resources.
The EEC is already banging on Russia’s doors. Another country with high potential to become an economic power is Turkey. Once Turkey joins he EEC, (which is just a matter of time as I understand it), it will put Turkey on the highway to economic advancement. Even now the investment flow is gaining momentum in Turkey. This investment, matched with natural resources and geopolitical positioning, will enable Turkey’s economy to make leaps, not steps, towards becoming an economic power.
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up to here 1st May 2004 02.17
15. Consumer Direct - Global Shopping
As more and more consumers from high cost advanced economies, spend their budget direct, with low cost economies, demands in the home market of high cost advanced economies will be sliding downwards. If demand slides down long enough, we all know what follows. It not need be the economic meltdown, or economic depression, as we used to know them, in the recent past. It could be that some sectors, will show economic growth, whilst other sectors, melt down within the same economies, national, regional or global. This may not happen over night, but it has surely began and as time goes by it builds up. Consumer Power is spreading it’s wings towards global Iso-economics.
16. Globalisation Versus Local Practices
We have seen tiny indications, of the demand shifting. Japan’s high cost, has posed a certain demand decrease, with its financial market meltdown. Diminished consumers’ confidence, forced the Japanese economy, the Miracle Economy it used to be called, not to just to fold down on its knees, but to be roll on the ground.
A state of disbelieve, where in order to kick-start the economy, the state would even offer cash to the people to spend. A state, which has forced some Japanese multinationals, to abandoned traditional values. To the extent, that they brought in top management from America. A totally reversed policy, from that of exporting management and production skills. A state of events, brought about by the forces of global economy.
17. Exportation Of Low-Cost Raw Materials
Exportation of low-cost raw materials to the super-buying powers, or vast economies, can only last until their need for such raw materials is met. Demand would peak, and then it would be slashed overnight. The results would be catastrophic for the exporting economies. A classic case here is the steel industry of Japan. Over 30 years through special agreements, the majority of Japanese steel was imported by the USA. America had bought that steel at super-low prices, which gave Japan the false impression and belief that this demand would be forever. As soon as the USA had filled its infrastructure with the cheap imported Japanese steel, demand almost ceased to exist overnight. Demand by Japan’s major customer was diminished overnight.
In addition to the diminished demand from the USA, the Japanese steel industry received a second blow. The USA imposed import duties on Japanese steel, to protect their home product. Japan now through the bitter pill, is learning and is fast trying to spread it’s customers around the globe, no longer to rely heavily on one, or a handful of national economies for the export of Japanese products and services. This will bring many economic benefits to other economies around the globe. Will Japan make the same mistake again? Or will Japan move towards the global Iso economics model.
18. Exportation Of Low-Cost Goods
In Europe we are witnessing the beginning of the car market collapsing to cheaper car imports, both new and used cars, from markets as far as Japan. The Japanese economic crisis pushed their used car prices to crash, millions of cars being sold at a fraction of their market price in auctions around the country.
Being right-hand drive, it triggered a demand from other right hand driving countries such as the UK, New Zealand, Cyprus, Asiatic countries. This economic activity resulted in the used and new car markets in such countries, taking a nose-dive, with new car sales reduced as much as 90% in small economies like Cyprus. Within a year or two years the second-hand market had collapsed too under the influence of cheap Japanese imports.
The used car market has made huge price readjustments. The same followed in the UK market with the so-called grey imports from countries such as Japan, new and used cars; and for Europe for new cars at prices well below the 97/98 market prices. As a result demand for home stock plummeted which sent prices tumbling down and caused factories to close, or be under threat of closure, such as the classic case of Rover. In this case Rover, now BMW owned, had shed thousands of jobs and won temporary reprieve by the UK government injection funds.
The Blair government was quick to respond to lobby pressure from the likes of car giants, who invested heavily in the UK car production such as Toyota and Nissan. By imposing limitations to the numbers of new and used cars, independent importers can import from Japan itself. Government intervention will not last forever Artificial regulations will always be smashed by the economic market force.
False protection is always short-lived. Through EEC moves the UK market will be forced to be open to greater attacks by grey imports, which will result in the lowering of retail prices of cars in the UK. This is happening right now. As a result sectors of the UK economy are being colonised by other economies.
Ironically this is the only sure way for the survival of the UK economy. Allow partial market colonisation, or face wholesale extinction of whole industries. To this effect, the UK was somehow lucky or clever, for if such industries as the giant car industry, were allowed to vanish, the toll for the rest of the economy would have been impossible to bear.
As this changing of prices and shifting of demand and spending continues, it pushes the cost of the advanced economies downwards, whilst simultaneously pushing the cost in low-cost countries upwards. Especially when the costs are calculated in a combined format, which includes, freight, distribution and import duty tariffs. This inevitably results in the closing of the gap between the cost of advanced economic empires, and the low-cost economic colonies.
Recently 18th July 2002, the newspapers publish a decision by EEC to allow free for all import of cars at lower prices but with a delay of three years after pressure from the car manufacturers.
19. Profit Maximising versus Social Values
Many top economists and financial gurus, keep telling us, that profit maximising, is the sole aim of the open market; That profit-maximising behaviour, follows the dictation of expediency of morality. Yet is proven, time and again, that profit maximising, need not be the goal. There is plenty of room to move around. Social values cannot be measured in monetary terms. I refuse to accept that there is no other measure of success and happiness than profit.
I believe that the euphoric feeling, which would be derived from the ecology given by the Isokratia socio governing system and the Iso economics, to every single citizen, will bring about the ultimate feelings of happiness to all citizens. A balance between profit-maximising and social values can be found, and this can only be found when those concerned are the decision makers, for whatever way it effects their lives. When the people, when the public at large have a say at whatever is affecting their lives. When the public at large respects and accepts the profit motive of the business. When the business society and the public at large respect each other’s rights.
This can only be brought about by the principles of Isokratia and Iso economics. If you like, competition will be enhanced because in its themes, elements of future competition under the Isokratia system, will include taking into consideration, the end user, the non user, the public at large. For example, we see the competition between organic and non-organic food. Organic food is supposed to be taking into consideration the values, the concern, the health of the end user, the public at large.
Even though organic food, sometimes it is two or even three times the price of non organic food, people choose to use organic food. This is a very clear example where profit-making and public satisfaction, even through competition, can exist and flourish for the benefit of all. A win - win situation. Both concerns, the business, make more money and the end user enjoys a healthier product.
20. Advanced Economies – Multinationals and Global equilibrium
There will never be equilibrium, as long as the concept of open society is partially practised around the globe. In contradictive practices, the advanced economies have claimed the right to open society, whilst at the same time, they have become the instruments that suppress open society in some other part of the globe in the peripheral. Here we must ask ourselves, why is the periphery less democratic that the advanced Western economies? Who is holding the democratisation? Is it the periphery countries themselves, or is it the Western economies? Is it religion or culture? Or is the multi-nationals? Sooner or later global Iso Economics will set in a balancing effect.
I believe if allowed to continue, the economic empires will forever tighten their strangle-hold on the economic colonies, forever keeping the colonies weak and under control. A bias regulated free market would enable the strong to get stronger and the weak to get weaker. That is why Isokratia is needed, on the global arena as much as it is needed on the local, regional and national arena in both the political and the economic arenas.
For example, which countries enterprises have the power to swallow corresponding enterprises in other countries through the takeovers? Whose countries banks can take over control of another countries bank through takeovers? Is it possible for one of the banks of an undeveloped African country to take over a European bank, or is it that one of the European banks can take over all of the banks of a whole region in an undeveloped area such as Africa?
Everyone around the world has come to recognise the need for greater co-operation globally. People are fast learning to distinguish between individual decision-making and collective decision-making. The Isocratic system would enable global co-operation around the globe. The isocratic principles would enable the global citizens to distinguish between individual and collective decision making.
Examples here are those of the environmental organisations which co-operate around the globe. Other examples include the need to prevent wars or to stop wars. The need to get communities together, like those of East and West Germany and now in the making, those of North and South Korea. They need to facilitate the stabilisation of economies in trouble spots around. They need to stop deleting our natural reserves, like those of fish by voluntary co-operation, preventing over fishing. The examples are so many and never ending, and they will keep expanding as global co-operation advanced.
The global citizen would exhibit great practice, great willingness to co-operate. The process has already started. We are already seeing a change of attitudes. This change of attitudes will gradually and eventually result in the change of policies. The elected representatives as a result, would be forced to change attitudes and advocate and practise what the Isocratic citizen demands; what the Isocratic citizens indicate with their change of attitude and co-operation.
Presently we are at the early stages of the global society. Based on the global economic activity. Yet we live in a society where the decision-making is based on nationalistic prerequisites, with little concept over the global effect. In both the imported and exported scenes.
21. You Can Contribute! Your Contribution to Isokratia!
Those of you who agree with the principle of the Isokratia thoughts, and will like to become part of, with your contribution, you can do so free, in various ways. Developing the Isokratia idea further and spreading the word, is the greatest and ultimate contribution you can make. You can contribute by dedicating time and effort, for the adoption, expansion, completion and establishment of the Isokratia as the new socio governing system in your country.
If you can afford it, and if you think it’s worth it and feel like it, you can also contribute with your financial contribution. If you believe that Isokratia offers value for many, feel free to subscribe your financial contribution whatever amount that may be. I put no price on this book of thoughts. I offer it for free, and I will accept voluntary contributions from those who can afford it You will find how to in the Isokratia web side www.isokratia.com.
A great way you can contribute, is by subscribing to the free, Isokratia newsletter. You can contribute, by merely subscribing and without even having to pay a subscription fee. The electronic newsletter is totally free by email at email@example.com. If we ever manage to publish a paper version, the postal version for those without Internet access, carries a printing, postal and administration charge.
The postal version for those without Internet access, carries a printing, postal and administration charge depending on your location. However, if you have no access to the Internet and if you are unable to meet the financial requirements, for the postal newsletter, do not worry. We will endeavour to post you all, free copies by finding sponsors to cover the postal and administration expense. Those of you who can financially contribute on a voluntary basis are welcome to do so. Those able to can also sponsor local areas, and poor regions by covering the printing and mailing cost, to help us distribute to those without financial means. You can contribute by finding and convincing such sponsors. Such sponsors can be your employer, your friends your local organisations and so on. Just direct them to the web side www.isokratia.com to make their contribution direct or to our postal address.
You can contribute by offering your thoughts and proposals to specific areas you feel you have the ability or expert input. Any well-thought-out idea, or suggestion, is welcome from anyone. If you are not a professional, remember this, ‘you don’t have to be a professor, to contribute an idea, a thought’. The best ideas of course, are always derived, from the combined efforts of heart and mind. Lets not forget, that the mother of all invention drives, is necessity. Your necessity to contribute can be a source of many thoughts and ideas which can formed the basis for further development.
You can contribute by sharing your ideas and thoughts. It could be that your thought may provoke an expansion upon it by someone else. However do not rely on me. Set up your own discussion groups and forums and advanced Isokratia in your area. To those who may like to share your ideas and thoughts with me, send me your thoughts on firstname.lastname@example.org or by post if have no access to the internet.
When submitting such ideas and thoughts, I beg that you keep them as short and as precise as possible, to reduce the cost and time of examining the content. If you have an idea, discuss it with someone else, or in a discussion group. Refine it, then submit it to me. I can only promise to examine as many as it is humanly possible for me within my limitations. If the volume is beyond me, I will try and get volunteers and if need be, hire paid assistance, to help examine your suggestions as early as possible.
22. Contributing by spreading the thoughts of Isokratia is the ultimate contribution.
Even better though, you can set up your own discussion groups, and develop Isokratia further, promote Isokratia to your area independently of any involvement by me. If your response determines it and means facilitate it, there should be Isokratia group web sides in every language, for each of you to work independently.
Let me repeat. Spreading the word, developing Isokratia further, is the greatest contribution one can make. Putting forward your suggestions for improvement, for enhancement of the Isokratia thought, is the golden, the optimum, the ultimate contribution. Informing your friends and contacts. Making them aware of the Isokratia thoughts. Asking your friends to contribute to the newsletter, which costs nothing, will give us marketing power, to gain financial advantages, to spread the word, to reach those unable to access the book, by the internet.
We need people, and the finance, to translate into all other languages. You can become a sponsor or you can persuade some one to sponsor such an activity. If you have the linguistic knowledge, you can contribute by offering to translate into your mother or another language. Then send us the translation and we will add it to the other languages on the Isokratia web side.
23. Fast Track Major Contribution
You can contribute by lobbying your local and central governments representatives to adopt the Isokratia thoughts. You can contribute by helping your political party, to adopt the Isokratia decision sharing principle. You can contribute, by campaigning for the acceptance of the Isokratia thoughts. Fighting from within a political party or other organisation for the adoption of Isokratia is a fast track action.
If you are a party activist you could be doing your political party a big favour by proposing to your political party to adopt the Isokratic system; for if your opposing party adopts Isokratia first your party may for be push to the sidelines for ever. That is exactly what happened in the early 19th century to the then governing Liberal party in England when it fail to adopt the new social policies which would have engulfed the Trade Unions and the public at large. The Labour party came in and adopted these social policies. As a result even after nearly a century later the Liberal party in Britain is still today a minority party; whilst the Labour party are back in power with landslide majority for a second term now.
16 April 2002 23.40
19th July 2002 01.30
3rd October 2002 01.15
29th December 2002 23.18
3rd January 2003
10th May 2004 finished 10th draft
Spell Checked on computer 16 April 2005