Tuesday, March 2, 2021

Robert Triffin: "Most economists are demagogues"

I have a niece in Wien (Vienna) who is an economist. She put a nice article on her facebook page about the need to clean up your house when it is crowded with stuff that you have hoarded and do not need. I read the article, which prompted me to give this comment:

"I have started throwing things away - if they could not switch ownership - about 14 years ago including books of which the antiquair (antiquarian?) opposite to my office in The Hague said he could have sold them a few years before but not anymore now - they included books I had inherited from opa Blink. So that was a good start.

How did I follow up? By realising that not all valuable stuff would fit into my room - the room you have been in when we looked at old family photos.

What progress have I made? Quite substantial, but not yet enough. How to speeden up before I die? By being rigourous and trying to shift ownership of my stuff...

Maybe the last thing is what the rich should do to reduce unequalIty, or the divide between rich and poor. Yes, indeed, more should be done to breach the divide, but this may be a good start.

How to do that? Well, it's not so difficult, progressive tax is one obvious instrument. There are more instruments.

During many years I was surprised the main criterion for success of economic policy was not the well-being of the citizens... but something economists considered important. But then a famous economist, Robert Triffin, told me what I knew already: economists tend to be conformists and many of them, including Triffin's friends, helped to wash white what was dirty."

I just added to my comment:
"To end my comment, let us, economists, do a sane washing by advising governments to make society healthy instead of continuing the white-washing and claiming success for neoliberal policies.

And let us change the training of economists. And let us be more honest with ourselves as social scientists.

Economics is just one of the social sciences, like psychology and cultural anthropology. Would any psychologist or cultural anthropologist dare to prescribe how citizens should behave? Or would he or she dare to dream that one day that would happen? And would they then still consider themselves "scientists"?

And would they be happy that people behaved the way they wanted?"

- The picture was taken at a conference in Paris where I held a speech saying more or less the same but with more words and references - Better Global Financial Governance – The Need for Reforming the System and Abandoning Free Market Ideology  

- You can read Triffin's remarks here: Robert Triffin: "Most economists are demagogues"

and here: Robert Triffin: "Most central bankers and economists are demagogues"

Wednesday, December 2, 2020

The most challenging book we've ever written

Aafke Steenhuis and I are concen-trating on finishing a book, The Big Rough Sea - World Ports and Globalization, due out in 2022. It will be a year of intensive work to get it done the way we want. It is the most comprehensive and challenging book we have ever written or edited (I have edited many books on the world economy, see FONDAD books - http://www.fondad.org/catalog/all.html).

We started the book in 2013, slowly, when we visited Latin America's largest port, Santos (Brazil), and Valparaíso (Chile). In the following years, we conveniently visited ports in Asia (Shanghai, Hong Kong, Singapore, Mumbai, Dubai), North America (Los Angeles and Long Beach) and Europe (Hamburg, Rotterdam, Barcelona, ​​Marseille, Genoa, Piraeus ). We have yet to go to Cape Town and Alexandria in Africa, and hope we can also visit Murmansk and Sydney - all in 2021. 

For the book, we have made a website: The Big Rough Sea - World Ports and Globalization.

Here is the pitch we wrote for our publisher in Rotterdam:

The Big Rough Sea - World Ports and Globalization (2022)
“We live in an age deeply influenced by maritime enterprise, but our percep-tions of its importance have shifted almost 180 degrees in only two or three generations. Today we see pleasure where our forebears saw peril, and we can savor the fruits of maritime commerce without being remotely aware of its existence, even when we live in cities that originally grew rich from sea trade,” says the American maritime writer Lincoln Paine, who is one of the many persons Aafke Steenhuis and Jan Joost Teunissen have interviewed for their book.

Thousands of years ago, international trade was conducted by land and sea from the ancient cultural regions of Egypt, Mesopotamia, China and India. In the course of time other peoples, such as the Greeks, the Romans, the Arabs, the Vikings took part in this early globalization. From the Middle Ages, international trade became entangled with powerful European city-states, sailing ships with cannons, the establishment of trading posts and the conquest of colonies, slave trade, industrialization and exploitation, steam shipping and diesel oil shipping. After the introduction of containers, around 1960, cargo ships became bigger and bigger, transport costs lower, with the result that production and labor moved to low-wage countries. Asian countries developed rapidly. The seven largest world ports are now in China. Rotterdam was the largest port in the world from 1962 until 2005.
The globalization of the last decades has created a global consumer society that is in the process of bringing about dramatic climate change and extinction of the species. Desperate efforts are now being made to turn the tide by making ports and ships cleaner and switch from fossil to green energy. This means that ports have become the pivot in the search for a better, cleaner world, because ninety percent of world trade is carried out by ship. 
How can the runaway global economy become sustainable? How can wild capitalism be tamed? 
Ports used to be the distributors of products, techniques, cultures, religions, as well as infectious diseases. They still supply oil, coal, grains, machines, cars, chemicals, smartphones and many other manufacturing and consumer goods. What is the history of these ports? How is and was life in these port cities? How do the people who work there view, for example, the rise of China and other Asian countries, climate change, the future of ports?  
With those questions in mind, Aafke Steenhuis and Jan Joost Teunissen traveled to port cities in Asia, North and South America, Africa, the Middle East and Europe. They visited fascinating and colorful ports such as Shanghai, Hong Kong, Singapore, Mumbai, Dubai, Piraeus, Genoa, Marseille, Rotterdam, Hamburg, Alexandria, Cape Town, Santos and Los Angeles. In The Big Rough Sea - World Ports and Globalization they map out the history and future of world ports and world shipping.

Tuesday, November 24, 2020

Hamburg - European Hub for China's New Silk Road

My wife Aafke Steenhuis and I recently visited the Port of Hamburg, for a book we are writing about world ports and globalization. If you want to know what the book is about, you can take a look at the website we created for the book: THE BIG, ROUGH SEA - World ports and globalization.

The port of Hamburg is one of the largest industrial areas in Europe. The port is located in the city itself, along the river Elbe, more than 100 km from the sea. In order for large, deep-lying container ships to arrive in Hamburg, the river must be constantly dredged.

The Port of Hamburg also wanted a deepening, 18 years ago. It created a long struggle with environmental groups and fruit growers south of the river. In 2020, the Port of Hamburg finally won the battle.

Perhaps the main reason the port won is its economic importance. It creates about 156,000 jobs and the port is Hamburg's biggest taxpayer.
Hamburg is the third largest port in Europe, after Rotterdam and Antwerp. One of the differences between Hamburg and the other two ports is that almost 50% of all cargo goes by rail to the hinterland.

China is by far the largest trading partner of the Port of Hamburg. Hamburg sees itself as the European hub for China's New Silk Road. Hamburg is an important rail hub for transport to and from China.

A few years ago, Greenpeace protested in the port of Hamburg against the arrival of a ship carrying coal from Russia. A banner said, "Global climate action means we must stop burning coal."

The port of Hamburg still imports coal, as do the ports of Amsterdam and Rotterdam. In 2016, 40% of electricity in Germany was generated from coal. Today, a third of the electricity in Germany still comes from coal. The use of coal is expected to end in 2038.

Hamburg has beaches along the Elbe, not for swimming but for sun-bathing and playing. It also has many nice terraces, with good coffee.

I made a short film about our visit to Hamburg which includes images of the Elbe river, tug and ferry boats, a long freight train coming from a container terminal, and the arrival of a COSCO container ship. I play the guitar music that accompanies it.

PS: The picture above comes from the online magazine of HHLA

Wednesday, July 22, 2020


A visit to a small city-state that is the second largest port in the world.

Monday, January 20, 2020

The Lessons of Hong Kong

Writing a book about port cities and being busy with two cities my wife and I have visited recently, Singapore and Hong Kong, I think about the international, global perspective that is much needed in matters such as political struggle (locally, nationally and internationally), human rights, labour conditions, wages, social security, food, education, income distribution, pensions, production, consumption, trade, transport, clean air/ground/water, the role of armies, economic growth, and, finally, although my list is longer: democracy.

I'd like to say a few words about democracy, inspired by an article I just read in the South China Morning Post of 19 Dec 2019, "Don't cry for Hong Kong. Say sorry and fix our problems", written by Bernard Yeung. Reflecting on the conflict between HK Government and HK citizens, Yeung advocates reconciliation and cooperation. He argues that a government has to balance the interests of all classes, including those of the future generation. "If that balance is lost," he says, "the state can be captured by tycoons or populists. The former leads to disparity and helplessness of the underprivileged. The latter leads to the mutual dependence of opportunistic politicians and special interest groups seeking instant policy impacts leading to costly, inconsistent policies."

Bernard Yeung also advocates "responsible and respectful communication" between the HK Government and its protesting citizens, a plea I support - in part because I have seen in Chile, where I lived during the last year of the Allende Government in 1973, how the lack of responsible and respectful communication, contributed to creating a climate that led to civic-military dictatorship and brutal repression during 17 years.

When I read the article by Yeung, I thought one could apply his plea for balancing interests and respectful communication also to western democracies in the Americas, Europe and elsewhere. The United States, Brasil, the United Kingdom (Britain) are sad examples. France, the Netherlands and Italy (and other European countries) have prominent populists too.

I just finished a short film I made about Hong Kong, which includes a civil protest action and images of the famous Star Ferry. You can see it by clicking on the link below.

Videothumbnail: Hong Kong Port
Hong Kong Port

Sunday, December 29, 2019

Financial Markets Fighting Climate Change?

An interesting article in the Swiss newspaper Le Temps about financial markets fighting climate change.

Fossils: the B side of the economy ... for how long?

Fossil fuels have fueled the economic and industrial development of modern societies. The fight against climate change will lead the market to ban them ... faster than the States


Fossiles: la face B de l’économie… pour combien de temps?

Frédéric Potelle*
Publié dimanche 29 décembre 2019
Les énergies fossiles ont alimenté le développement économique et industriel des sociétés modernes. La lutte contre le changement climatique conduira le marché à les bannir… plus vite que les Etats
La Conférence des Nations unies sur les changements climatiques 25 (COP25) s’est soldée à la mi-décembre par un nouvel échec alors que le consensus scientifique indique désormais, via le Groupe d’experts intergouvernemental sur l’évolution du climat (GIEC), que la probabilité du lien entre activité humaine et dérèglement climatique est de 100%. La gouvernance mondiale par les COP est trop lente à agir pour enrayer le scénario du «business as usual», qui conduira à une augmentation de la température moyenne d’au moins 3 à 4°C à la fin de ce siècle par rapport à l’époque préindustrielle. L’Accord de Paris vise un maximum de 2°C, au-delà duquel les conséquences seront incontrôlables et irréversibles, et suppose que les émissions de gaz carbonique (CO2) baissent de deux tiers à l’horizon 2050 et tendent vers zéro en 2070-2080.
Lire aussi: La bulle carbone ou comment investir dans des ressources inexploitables
Alors, qui pour accélérer le mouvement? La finance jouera un rôle clé pour réduire la consommation d’énergie fossile de manière volontaire pour la première fois de l’histoire. Mark Carney, gouverneur de la Banque d’Angleterre qui pilotera la politique Climat des Nations unies dès fin janvier, est explicite: «les entreprises qui ignorent la crise climatique feront faillite». Aux Etats-Unis, la valeur en bourse des producteurs de charbon a déjà fortement chuté. En Europe, Enel vient de déprécier intégralement ses centrales à charbon, pour 10 milliards d’euros, et la Banque centrale européenne demande aux banques d’évaluer le risque climatique de leurs portefeuilles. La mise en bourse à l’international du géant Aramco a été annulée et la performance boursière du secteur Energie (en pratique pétrole et gaz) aura été à la traîne toute l’année, malgré un rebond des bourses de 25%, un retour à la confiance sur le cycle économique et des quotas de production Organisation des pays exportateurs de pétrole-Russie prolongés. Quel investisseur prendra aujourd’hui le risque de valoriser des titres pétroliers comme si leurs flux financiers devaient être perpétuels, alors que le flux physique ne le sera pas?

Le dernier danseur à rester sur la piste

L’équation est simple: les émissions de CO2 doivent baisser. Elles résultent de la combustion des énergies fossiles. Donc le recours aux énergies fossiles doit baisser. Et l’investisseur qui résiste à cette idée s’apparentera au dernier danseur à rester sur la piste… du Titanic. Le rendement que lui procuraient ses actions pétrolières se trouvera dans les Utilities, qui ont pris le virage de l’énergie décarbonée (et que les pétroliers, qui en ont encore la surface financière, seraient bien inspirés d’acquérir), ou dans les Climate Bonds. La croissance que lui procuraient les mineurs de charbon ou les services pétroliers se trouvera dans les entreprises œuvrant à la transition énergétique. En accélérant la ré-allocation du capital dans ce sens, la finance continuera non seulement à remplir son rôle de recherche d’un rendement ajusté du risque optimal mais retrouvera aussi du sens.
* Directeur de la Recherche, Bordier & Cie

Thursday, December 5, 2019

"China sees Europe as a waning, decadent region"

Last night a friend of mine, a flamenco guitarist, said he was worried about the future of the world. He thinks that the dramatic extinction of the species and climate change will not be stopped. He is also concerned that China will first conquer the world economically and then politically and promote authoritarian and repressive regimes in Europe.

I said that I kept my optimism that we can do something instead of waiting for the worst to come, and that I had to stay optimistic because I have children and grandchildren who I love living in a beautiful world.

The next morning I received a long letter from a friend who lives in India and who I asked what he thought of my article about China and Europe that I published on this blog (Europe should see China as an ally).

My Indian friend said: "I liked your piece on Europe and China. It exuded all your ingrained friendliness, optimism about human and country relationships, presumption that all countries operated on sound, sensible lines and principles and saw value in cooperating rather than confronting one another in addressing the core, key issues of the day and the future -- especially the transformation of the world's economy and business model toward a greener future."

And then my friend explained, in a detailed way, why he did not share my optimism about China. One of the things he said was:

"China sees Europe as a waning, decadent region that is gorged on material consumption beyond its needs but with the capacity and desire to serve China's interests for eventual hegemonic power. It does not see Europe as a competitor but as a collaborator on China's terms. It sees European society as flatulent and unconcerned about anything other than maximizing its own immediate well-being and pleasure. The welfare state that Europe has created, and which has evolved considerably over that last fifty years, is not something China admires or wishes to emulate or propagate because it considers such a 'something-for-nothing' approach to welfare to be demeaning to the human spirit, creating permanent dependencies which must be avoided."

I am very happy with the long letter from my Indian friend and wonder what I will answer him.