A few chapters of this bilingual book, newly launched at the Federação Empresarial de Portugal, presented by its President Antonio Saraiva, with foreword by the President of the Auditing Court of Portugal, Guilherme d’Oliveira Martins.
It was edited by our author Jack Soifer, supported by co-authors Francisco B.Weinholtz, John Wolf, Stefan de Vylder, Luis Silva, Armindo Palma, Henrique Neto and Viriato Soromenho-Marques.
Fifty Years of Peace and Progress - In “Part 1” we wrote about the political parties using Euro from the lobby to finance their election campaigns and thus representing it, not the electors. In Part 2 we wrote about their use of the media, social net-works, mobile phones and much clutter to occupy the mind of the citizen and focus it on the interests of the powerful. This makes people work as slaves without thinking.
In Part 3 we wrote that in the 18th century the laissez-faire, laissez-passez brought the “everything goes” except killing. In Part 4 we told about the difference between the practices of different democratic concepts after the Industrial Revolution, where in Europe the focus was in Equality and Solidarity while in the US was “what matters are practical results”.
In Part 5 we wrote about changing values from production to a mad misuse of resources, financial gambling and lack of moral, which brought the Great Depression, deep, long & world-wide. When Krueger committed suicide, recognizing the error of speculation on stock exchanges, the theory of the self-regulating market died with him.
In Part 6 we wrote about the WW 2 and the many innovations then used to feed de human and material needs in the front. The huge governmental budgets boosted production and economy.
History - 7: The Marshall Plan
To rebuild a Europe destroyed by war the Marshall Plan ensured billions was spent on infrastructure, and helped the entry of US industries into these markets. Europeans could only buy raw materials such as iron, steel, cement and wood pulp from the US and Sweden, and food from Brazil and the US, countries that had not been affected by the war. The Soviet Union invested in heavy industry, instead of consumption.The five-year plans did not work out because they assumed they all were honest, committed and competent. Again Keynesian practice has overcome chaos and crisis, focusing on the recovery of the destroyed industry.
A little capital, hard work, diversity in supply, raw materials, skilled labour, demand and free competition brought benefits to citizens. Hard and rational work generated income to all of those who wanted to buy products, which in turn generated more work for factories. The profits were reinvested in technology to reduce raw material use and /or production time.
The Soviet bloc offered industrialised raw materials such as cement, iron, steel and glass materials for reconstruction, with paper and petrochemicals sold at low costs to enable the growth of other industries and markets, and to meet the increasingly need for consumer goods. Private capital in the US did the same. In Western Europe governments were investing either in state enterprises, or those with private capital, buying many investors’ shares.
Large state-owned firms did the same in Europe as in the Soviet Union. Both with and without limited competition they were ineffective with many men and unions with increasing demands, and with too many strikes which affected the downstream industries. The failure with this practice brought Mag Thatcher to power, the Iron Lady, who instead of remedying these failures, decided to privatise them. She replaced the ineffectiveness of public monopolies with ineffective private oligopolies, operating at higher prices because the profit requirements were higher. Most of those managers were financial tycoons, with little or no knowledge of the particular industry. Same in Portugal.
The EU depended on the UK to fulfill the dream of politicians, to be bigger than the US, so Thatcher demanded amendments to the Treaty of Rome. The earlier forbidden promiscuity between banks and large firms, turned into praxis. Thus large cartels of a few companies in the UK, Germany, France, Italy or Holland and sometimes Spain, countries that dominate the corridors of the EU, bought small, more efficient competitors. Some invested in drugs. Salazar had biz with Krupp & Mercedes. In 1974 promiscuity reached football in Spain & Portugal and High Courts. This way huge cartels were built with a few corporations from Germany, Holland, UK, France, sometimes Italy. Also in the US. It is in the corridors of Central Banks & Brussels that the policies of the EU are decided.
There are differences between what is said and what is done. The Nobel laureate Kenneth Arrow tells us of the difficulty in the microeconomic theory of welfare when taking decisions based on the sum of the individual preferences. Why is it that social choice and the social contract are in opposing fields? Another Nobel, Amartya Sen explains it. The economy is not an end in itself. There are tight relations between drugs, arms and money flows. "A society that has no social justice, has no future" said he.
“Business is a noble vocation, provided that those engaged in it see themselves challenged by a greater purpose in life. Such men and women are able more effectively to serve the common good and to make the goods of this world more accessible to all. Nevertheless, the growth of equality demands something more than economic growth, even though it presupposes it. It demands first of all a transcendent vision of the person”.
Benedict XVI, Caritas in Veritate.