Tuesday, December 6, 2011

Of the nature of waves

Wind waves are one of those phenomena which suggest such a huge variety of concepts that are an unfathomable source for metaphors. Either if you're a poet, a journalist, a politician, you'll find the concept as a most useful tool; wave of change, wave of emotions, shock wave, ride the wave, heat wave..., it's so open a concept that I can't help using it too.

Shallow Water Waves

 When analysing the real shape of the trajectories that water particles follow in their motion, it's pretty curious to find that each one has a double movement: something akin to a circle in a vertical direction, but with a translational back and forth movement in a horizontal direction (two steps forth, one step back). It has to be noted that, the deeper the position, the smaller the circular motion becomes. The movement is finally reduced to a mere oscillatory movement, slow follower of the wind direction. When the waters are deep enough, total stillness reigns in the depth.
Deep Water Waves

And let me set here my analogy:
The horizontal axis is Time, and wind is Progress, either by scientific knowledge, by exchange of experiences of by creation of new philosophical or religious theories.
Depth is the variety of social environments in a society. The closer to the surface you are, the more exposed you are to influences, may it be education, commerce, social media, travel, migration, etc.
People "orbit" in circles around their own political/religious/social believes, but are dragged at the same time by the horizontal movement of progress. The closer to the surface, the more exposed they are to evolutions in thought. Each thought family evolves along time, moving forward with time, yet moving around their own varying dogmas.
In a "SHALLOW" society, the exposure to influences of any nature is easier (or at least possible) for all members, even those more isolated or less educated. Tradicions and ideas evolve, pushed by the wind of influences in the most open minded strata of society. Even the most traditional segments of the social body are dragged by the most evolved ones, and all the water body advances.
In a "DEEP" society, though, the exposure to influences is just impossible for many members of society. Although great (or small) parts of the people are exposed to evolution, they cannot carry with them the society as whole, and their own evolution is very limited.

Thursday, December 1, 2011


This might give us a good explanation of the nature of the western "decadence": most rich countries have been keeping their high standards of living by means of debt, just that easy. As huge borrowers, they are in the hands of others. This does not only refer to public spending, which always seems to be the greatest concern, but also private debt, held both by households and companies.
The terrific conditions that have been maintained in the US, Japan and EU in the last decade, giving the debt a condition of virtually real interests-"free" have boosted the speedy indebtedness. This has driven these regions in a risky territory, where any lack of credit availability after maturity of previous debt would make much heavier the load of interests on taxpayers, and would reduce the profitability of companies and also the familiar disposible income. The circle is closed, the consume falls, the aggregated demand falls, and the whole systems is caught into a downward spiral.
Now, how can that be stopped? The burden of debt is so huge in some countries that its reduction would remove such a quantity of resources from the economic cycle that would (and it's actually doing so in more than one place) sink the country into a permanent crisis with little or no hope of prosperity in the coming future.

Monday, October 17, 2011

Stepping Aside (I): The West is no longer The West.

As the El PaĆ­s newspaper declared a few days ago, this moment might be regarded in the future as the time when the whole West took a step aside, to let the famous BRICs and other emerging countries pass it by. This is what westerners should be getting worried about. It's not taking care about a temporary crisis as one might think this one is. It's about been present in one of those historical moments when the world does change.
It's been discussed lately that there were negotiations between the western "powers" and those BRICs, which were heading towards a "rescue" by the latter group to the former. Odd as it may look like, it's yet in the interest of those emerging countries to delay the fall of the current powers, as long as a great part of their growth is due to the pull that exports do to their economies. They must keep on developing their internal markets, which will gradually substitute the external sector as a motor of the economy. In the meantime, they must back up the EU, and to some extent, the USA. China holds such a huge amount of currency reserves in dollars and euros that they just cannot let those economies fall, and they can at the same time take advantage of that fact. Using those reserves to help recapitalize european banks might be done through simple adquisitions. That would give them more power, would balance the financial sector, and would also give a use to those inmense reserves. In any case, the future can be dictated by them.

Tuesday, October 11, 2011

The Dutch Lesson

By 1585 the city of Antwerp, in the rebel Dutch Seventeen Provinces, was the booming and flourishing center of northwestern Europe, a cultural, commercial and financial power, which had just suffered the Spanish Fury, and was about to suffer a siege by the troops of the current superpower, Spain, led by one of all times toughest armies, the Spanish Tercios, under the command of the Duke of Parma. And it was going to lose the battle.
At the beginning of that siege, the Dutch felt somehow comfortable with the situation, as long as they kept a free access to the Scheldt River, which was a natural and easy way for supplies. Even so, risks were to be taken to carry all necessary goods to the city under siege, and so it was done. A group of so-called “speculators” took their risks, in order to get a good profit through a great uncertainty and hazard, and launched a fleet full of supplies, in order to reach the besieged city and make business.
In the meantime, inside Antwerp, scarcity of food was on the rise, and so did prices, thus also raising unease among the population, and causing the Magistrate of the city to issue an edict regulating the price of goods. As most interventionist actions, it produced a non-desired yet expected effect: just the opposite of what was sought. As the poet Schiller would put in words:
“The magistrate, in order to avert an evil that would have pressed upon individuals only, had recourse to an expedient which endangered the safety of all. Some enterprising persons in Zealand had freighted a large fleet with provisions, which succeeded in passing the guns of the enemy, and discharged its cargo at Antwerp. The hope of a large profit had tempted the merchants to enter upon this hazardous speculation; in this, however, they were disappointed, as the magistrate of Antwerp had, just before their arrival, issued an edict regulating the price of all the necessaries of life. At the same time to prevent individuals from buying up the whole cargo and storing it in their magazines with a view of disposing of it afterwards at a dearer rate, he ordered that the whole should be publicly sold in any quantities from the vessels. The speculators, cheated of their hopes of profit by these precautions, set sail again, and left Antwerp with the greater part of their cargo, which would have sufficed for the support of the town for several months.”
Friedrich Schiller, “Geschichte des Abfalls der vereinigten Niederlande von der spanischen Regierung" or “History of The Revolt of the Netherlands”
The rebels lost a good supply, but it didn’t seem that important. But not too long later, and in one of those military moves that may look logical now, but that was quite a novelty at that time, the Duke of Parma set to isolate Antwerp by river, building a floating bridge thought the Scheldt River that would keep new fleets from reaching the rebels. After long fights and a true war of wit held by both parties, inventing or adapting most ingenious devices to destroy the opponent’s chances (such as the construction of the first floating fortified bridge, or the first submarine bombs), the city of Antwerp had to admit the truth of its weakness, and surrendered.
It is obvious that it cannot be charged the fault of the lost of the city only on the regulations that had been issued but, looking back at that moment, we feel it’s more than clear that the chances of survival were utterly reduced after the “speculators” left Antwerp with their loads. This measure had several effects, but it is interesting to observe how both supply and demand were altered at the same time by such a “social” measure:
-          The evil “speculators” refused to take any risk to get a profit just like the one they could get anywhere else. Thus, they didn’t supply.
-          The population, unaware of the situation, as long as they didn’t feel the scarcity of goods which is transmitted by means of high prices, kept on consuming as before, exhausting the remaining provisions far too fast.
Moral: as Henry Hazlitt taught in his book, Economics in One Lesson,
“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”