Escolar Documentos
Profissional Documentos
Cultura Documentos
Once you have read the book, you will understand the cover.
Summary
In addition to this, there are also some other urgent problems to tackle:
• Environmental problems, global warming, CO2 emission, more severe storms and
inundation’s like in France, Rio de Janeiro and Pakistan in 2010, more
subsidence’s due to heavy rainfall, more forest-fires due to extreme and long
periods of drought.
• Mobility problems around big agglomerations like Antwerp and Brussels in
Belgium and in many other countries, which could be solved by constructing more
roads, viaducts and tunnels. On the other hand, the Belgian government fails to
even maintain the present road infrastructure: due to the mildly severe but long
winter of 2010 the roads in Belgium are currently in a lamentable state. And the
government lacks the budgetary means to solve the problem in a fundamental way.
This seems to be a Gordian knot, which could lead to a social Armageddon. In most of the
articles one can read about this matter, economists and politicians say that the necessary
remedies will be painful for the public. But is this really so? Couldn’t it be that they do not
understand the real cause of financial and economic crises, and thus not the necessary
remedies?
2
Eight Days A Week – The Fourth Wave Author: Geert Callens
Furthermore, economists tell diverging things about the way out of this crisis, as most
economic theories are just “ideologies in disguise”. And politicians…, well politicians are per
definition ideological and they seem to know it either.
On the diverging or even conflicting stories economists are telling us about the crisis and the
ignorance of politicians, I can refer to the following rather funny historical anecdote. Edwin
Nourse was economic advisor of Harry S. Truman, the 33rd president of the USA from 1945
till 1953. Nourse had been fond of saying “on the one hand [statement 1]…, but on the other
hand [the negation of statement 1]…” After some of these “zero-sum-statements”, President
Truman’s reaction was: “Can’t somebody bring me a one-handed economist?”
Solutions for every single problem seem to be expensive or even unpayable. They will surely
lead to higher taxes and/or inflation, eroding the purchasing power of the people and thus also
the opportunities for future economic growth. Many of these measures will be a burden on the
environment (more roads, more industrial zones, less space for nature and leisure-time...) and
create new problems.
In an interview in January 2010 with a UN diplomat I heard that the UN Millennium
Development Goals set at the start of this millennium to reduce poverty in the Third World
countries and the developing countries with 50% by 2015 will not be met, among other
reasons due to the current financial and economic crisis in the western industrialized
countries.
Furthermore, the UN diplomat mentioned that in developing countries with a reasonable
economic growth the income inequality increases: the rich are getting richer, while the poor
are getting poorer. This phenomenon can also be observed in industrialized countries like the
USA, where the purchasing power of the middle class has dropped dramatically and
concentration of wealth has increased since the days of President Nixon.
In a speech given by Mr. Karel De Gucht, at that time Belgian Minister for Foreign Affairs,
at the 62nd General Assembly of the United Nations in New York, October 1st 2007, one can
read the following:
“We live in an increasingly complex world, facing increasingly diverse challenges.
Actions taken in isolation are no longer sufficient.”
This is indeed the case for the list of problems mentioned above. Looking for isolated
solutions for problems that are interrelated will not work: it is contra-productive and
expensive. On the website of the American activist G. Edward Griffin one can read the
following lines: “One of the most profound differences between dogs and cats is that cats
focus on effects while dogs focus on causes. If you toss a pebble at a cat, it will look at the
pebble. If you toss it at a dog, it will look at you. In this respect, too many people are like cats.
They are preoccupied with the details of their own problems, and they flutter like wing-
clipped pigeons, complaining about this and that without knowing why these things are
happening”.
So let us concentrate on the causes and their interrelatedness rather than the individual effects.
A comprehensive and holistic approach is needed in order to come to a lasting solution. In
this study Eight Days a Week – The Fourth Wave, I do not look for isolated solutions for
3
Eight Days A Week – The Fourth Wave Author: Geert Callens
isolated problems. I have included all the socioeconomic problems in an overall picture –
even war. By doing so, I have demonstrated that the current financial and economic crisis is
systemic. But to my own very surprise, all the problems can be solved in a very elegant and
human friendly way. We can avoid the social setback that most of the economists and
political leaders are advocating.
We will only come to the correct conclusion when we use the correct logic on correct,
complete and no redundant data. That is why in court, the witness has to tell the truth, the
whole truth and nothing but the truth.
Furthermore, deliberately telling half of the truth is worse than telling a lie, as the receiver of
the information can expose a lie by checking the facts, but he will not necessarily search for
the data that were (deliberately) omitted.
And when a problem is correctly and completely formulated, the solution is already half way.
That is the reason why I have used in this study a holistic approach rather than an
reductionistic one, which is doomed to fail anyhow.
In an article by Raghuram Rajan, Professor at the Booth School of Business in Chicago,
written as a reaction of Paul Krugman’s critique on his book “Fault Lines”, one can read the
following lines: “First, Krugman starts with a diatribe on why so many economists are ‘asking
how we got into this mess rather than telling us how to get out of it’ Krugman apparently
believes that his standard response of more stimuli applies, regardless of the reasons why we
4
Eight Days A Week – The Fourth Wave Author: Geert Callens
are in the economic downturn. Yet it is precisely because I think that the policy response to
the last crisis contributed to getting us into this one that it is worthwhile examining how we
got into this mess, and to resist the unreflective policies that Krugman advocates.”
Indeed, before one can start to improve things, one should first know what went wrong and
why it went wrong. A good starting point is to ask the question “Cui bono?”, as in a criminal
investigation. Who took advantage of the crime?
I think some free market adepts don’t like the idea of a thorough investigation of what really
caused the financial and economic crisis (as was done in the years after 1929, leading to
several measures to restrict financial speculations and to avoid speculative bubbles), not only
because this would lead to more regulation, or this would demonstrate that they have
supported and advocated a system that is inherently unstable and thus wrong, but rather
because some of them are very well aware what went wrong and why, and they don’t like the
idea that these mechanisms would become exposed to a broader public. “Cui bono?” Not the
public in general, but a small élite. The mechanisms that cause the recurrence of financial and
economic crises are indeed also the cause of the mass atrocities all over the world (wars, civil
wars, genocides, famines…).
A lot of people in the rich countries are just NIMBY’s, who are not concerned with
genocides, famines, wars, pollution and global warming, as long as these do not happen in
their back yard and are not too visible on TV. But these same people are also affected by the
financial and economic crisis.
So, if they could understand the underlying cause of their own material misfortune, then
maybe they could be willing to show some solidarity with the people in the poor countries
who are the victims of mass atrocities and the global over-cropping of natural resources.
Because one has started from the wrong premises, one will most likely look for the causes of
the failure and possible solutions in the wrong directions too. Otherwise one would have
started in the right direction from the beginning! One will make the wrong diagnosis. One will
even point to a scapegoat as a reason for failure1.
1
As professor Gar Alperovitz writes in the introduction of his book America Beyond Capitalism:
“Moreover, if the system itself is at fault, then self-evidently – indeed, by definition – a solution would ultimately
require the development of a new system… The conventional wisdom, of course, leaves us at a dead end. The
old ways don’t work but no one even imagines the possibility of systemic change.”
5
Eight Days A Week – The Fourth Wave Author: Geert Callens
When a society functions according to a paradigm that is not in accordance with reality, and
when, in spite of the crisis, it still follows the same line through, when it does not learn the
necessary lessons and when it does not adapt its paradigm, then that society will again and
again be faced with the same kind of crises - even with increasing intensity -, it will again and
again go through the same scenario just as the principal character in an ancient Greek drama:
“The tragic error in tragic drama is walking in blindness so that the tragic hero who intends to
accomplish a certain result with his actions accomplishes the exact opposite.”2
The cause for recurrence and periodicity in economy can be found in the fact that the current
socioeconomic paradigm is not in accordance with reality. The ever-repeating cycle of
economic crises (and wars) can only be interrupted if we succeed to transcend the limitations
of the present paradigm and if we can expand or even transcend our paradigm, cut the wrong
premises and add new correct premises to it, so it is more in tune with reality.
Does all this implies that events are predetermined and that we have to be their
helpless victims? Not really! All it means is that things move in terms of
predictable cycles that keep occurring time after time until their true cause is
discovered. Once we know their cause, we can stop them. After all, humanity
has broken disastrous cycles in the past and will do so in the future as well.
This is how all evolution occurs. We keep enduring recurring problems of one
sort or another, until they become intolerable; then someone discovers their
true cause and helps us break the cycle. Afterwards a new cycle takes over.
However, in view of the longevity of the patterns described in this work, it is
clear that disrupting them will not be easy. Nothing short of fundamental
reforms will work.
Ravi Batra: The Great Depression of 1990, p 94.
At the start of this millennium, United Nations Secretary-General Kofi A. Annan stated this as
follows: “We will have time to reach the Millennium Development Goals – worldwide and in
most, or even all, individual countries – but only if we break with business as usual.”
But “braking with business as usual” is very difficult. Change is indeed needed, but in what
direction and based on what socioeconomic premises? What are the wrong premises? And
what are the correct premises we are missing?
2
Claude Steiner, Scripts People Live, p 60-61.
6
Eight Days A Week – The Fourth Wave Author: Geert Callens
An injudicious feedback policy of the ‘profit-for-society’ towards the several economic and
social participants, based on the wrong economic and social premises, leads to the erosion of
the purchasing power of the “common people”, and thus to a decline of the economic growth.
A more judicious feedback policy, on the contrary, based on correct economic and social
premises, can lead leads to the increase of the purchasing power of the “common people”, and
thus to a higher economic growth, more ‘profit-for-society’ and thus higher profit for
companies, and even to a more peaceful world.
3
J. Rifkin, Entropy, A New World View, pp. 23-30.
4
J. Rifkin, Entropy, A New World View, pp. 23-30.
7
Eight Days A Week – The Fourth Wave Author: Geert Callens
• Thomas Malthus, who as central information-gathering agent kept statistics for the
East India Company, found that, as population grew with a geometrical
progression while resources only grew with an arithmetic progression, scarcity
would increase. There always would be a fundamental inadequacy of life support
on planet Earth, so only the fittest would survive economically resulting in an “Us
or Them” attitude.
In this study we will demonstrate that these three premises are wrong, they are
misconceptions. We will unravel the true purpose of the economic activity and the social
origin and purpose of profit in a way that is totally different from the point of view of
businessmen and economists, whether they are (neo-)classical or (neo-) Marxist.
As pure rationality, based on incomplete or even wrong socioeconomic premises, combined
with amorality and pure self-interest (read greed) can lead and has led to immorality, these
misconceptions have led to:
• Social Darwinism, social and economic exclusion of part of the own population
(cfr. the books of Charles Dickens).
• Colonialism and imperialism, exploitation of and even genocide on the local
population of the conquered territories.
• Concentration of wealth inside countries and among countries.
• The recurrence of economic crises.
• Social turmoil, violent revolutions, civil wars, wars, and most of all war-
profiteering and even warmongering.
• The erosion of the real wealth of the “common people” due to the creeping
inflation since the introduction of the Federal Reserve System in 1913 and some
other mechanisms like “engineered” financial crises and exploding speculative
bubbles on the stock market.
• An economic system in which a human being is only economically important in
two ways: as a production factor, generating added value for the employer; and as
consumer, with money to spend. The rest are considered, in the words of Henry
Kissinger, as “dispensable eaters”.
8
Eight Days A Week – The Fourth Wave Author: Geert Callens
World countries5, as well as the Kyoto protocol. The secret power of this proposal lays in the
fact that it focuses on man as man, and not as mere production factor or consumer.
My proposal is not at all painful for the public, on the contrary. It could very well be a win-
win-win situation for business, government and the public as well. I dare to say that there is
no dilemma at all, and a viable alternative road for a social Armageddon is possible, even in
the near future, but only if we start to concentrate on the real purpose of the economy (the
fulfillment of the needs of the people) and not on the consequence of quantitative economic
growth (making a profit and creating money out of nothing).
I sincerely hope that you will pay attention to this book. I know that a book of about 290
pages is rather long, but I guarantee you, it explains the economic process in a whole new way
you have ever read in the mainstream media or heard from economists and politicians. They
usually give a chronological account of what happened, and pinpoint the problems with
Lehman Brothers or the mortgages in the USA as the cause of the financial and economic
crisis. These phenomena are not the cause, just some catalysts that triggered the whole
process. In this study you will read the real cause of economic crises (and wars) plus some
solutions to avoid similar crises (and wars) in the future.
I would like to finish this summary with the remark that I wrote the first lines of this study
already in the early 1980s, after reading Buckminster Fuller’s last book Critical Path. Those
years were characterized by both a 2-digit inflation and high unemployment, which deluded
most economists, and a lot of financial volatility in the exchange rates of the major
international currencies versus the US$, as in 1971 President Nixon had unilaterally decided
to abandon the post World War II Bretton Woods agreement of 1944. Since the 1980s I have
been updating my study with new information and evidence, both from the years since then
and from the past 400 years of history. I think my book is now ready for publication and
distribution to as many people as possible.
5
Do we really need tsunamis, inundations and earthquakes before we can mobilize the conscience of
the political leaders and the public in the rich countries in order to organize massive aid to Third World
countries?
9
Eight Days A Week – The Fourth Wave Author: Geert Callens
Table of content
1 Introduction ...................................................................................................................... 14
1.1 Purpose of this book..................................................................................................... 14
1.2 Cause or catalyst of the present economic crisis? ........................................................ 16
2 Some striking economic recurrences................................................................................ 19
2.1 The evolution of the profit-ratio................................................................................... 20
2.2 The evolution of money-growth and inflation ............................................................. 21
2.3 The evolution of unemployment .................................................................................. 25
2.4 Relation between recurrence and paradigm. ................................................................ 27
3 Information in an economic perspective .......................................................................... 29
3.1 Matter ........................................................................................................................... 29
3.2 Energy .......................................................................................................................... 30
3.3 Matter and energy together .......................................................................................... 30
3.4 Information................................................................................................................... 31
3.5 Ratio and information................................................................................................... 34
3.6 Rationality, amorality and immorality ......................................................................... 35
4 Some strong wrong economic premises........................................................................... 37
4.1 Thomas Malthus and social Darwinism ....................................................................... 37
4.1.1 Malthusianism and colonialism............................................................................ 39
4.1.2 Malthusianism and imperialism ........................................................................... 41
4.1.3 Thomas Malthus was and is wrong. ..................................................................... 57
4.2 Economic misconceptions............................................................................................ 62
4.2.1 Gross National Product per capita........................................................................ 62
4.2.2 Economic growth ................................................................................................. 63
4.2.3 Positive balance of trade ...................................................................................... 64
4.2.4 Profit, the missing link in economics ................................................................... 65
Profit according to the businessman............................................................................. 65
What is profit? What is the origin of profit? ................................................................ 67
Profit according to a neo-Marxian economist .............................................................. 67
First paradox: higher wages for employees, higher profits for the employer .............. 69
Second paradox: is a positive cash flow for one company at the expense of the rest of
the world?..................................................................................................................... 70
Profit according to (neo-) classical economists............................................................ 71
10
Eight Days A Week – The Fourth Wave Author: Geert Callens
11
Eight Days A Week – The Fourth Wave Author: Geert Callens
12
Eight Days A Week – The Fourth Wave Author: Geert Callens
13