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VIDEO Rising economic inequality casts a shadow on the WEF -SABC

Rising economic inequality continues to cast a shadow over the World Economic Forum, says GovInn director Lorenzo Fioramonti in a live interview on SABC news (22 January 2015).
Oxfam set the tone earlier this week in a report timed to the start of the Davos conference: it estimated that the combined wealth of the world’s richest 1 percent could overtake that of the remaining 99 percent by next year.
Will the WEF do something about it?

Redistribution the only way to stop the downward spiral – Business Day 21.01.2015

Business Day 21.01.2015This week on Business Day, South Africa’s leading business newspaper, GovInn director Lorenzo Fioramonti -drawing conclusions on Piketty’s research – discusses why redistribution is the only way to tackle inequalities in South Africa and worldwide: will the WEF listen?

“One does not need a doctorate in economics to recognise that SA is one of the most unequal societies in the world. We see it every day, when we drive through our cities and across the country, when we go shopping or take our kids to school.

While inequality is a fact of life (we are different people, with different capacities, interests and aspirations), it becomes a social malaise if it exceeds certain levels. And each society should democratically decide which degrees of inequality are acceptable.”

“Such a level of inequality also reinforces violence, frustration and crime.

In SA and elsewhere, economic growth has been employed as a magic wand to avoid a serious debate on inequality. The belief that the economy can grow infinitely and at a sustained pace has been comforting to the ruling elites, as this means the pie will continue expanding without the need to redistribute its shares.

Indeed, allowing the rich to become richer has been often presented as a precondition for the economy to excel for the benefit of all.

Nowhere has this been as evident as in the justification of the stellar salaries of top managers of private and public corporations.

The reality, however, is that this “trickle-down” vision of economic development is largely a dogma, as Piketty has now confirmed with his data.
Moreover, he finds no correlation between the pay cheques of “super managers” and the performance of the companies they lead.
In his view, the only thing that explains these skyrocketing salaries is the fact that managers can easily influence the scale of their remuneration, often with the support of complacent boards of directors, while common workers cannot.

Read full article on Business Day

Rethinking development seminar: Chinese Agricultural Investment in Africa

Rethinking Development Seminar Series

Chinese Agricultural Investment in Africa: Actors, Modalities and Assessment
27 January 2015

SPEAKER: Lu Jiang, London School of Economics and Political Science

Rethinking development Seminar 27 January 2015Against the backdrop of the high-profile “reencounter and reunion” of China and Africa since the new millennium, agriculture has been one of the most important cooperation fields between the two sides.
Different from its earlier, mostly aid-featured engagement with African agriculture in the 20th century, the Chinese government began to actively encourage and support Chinese companies to invest in the agricultural sector on the continent. The speaker will look back on the past decade’s practice of Chinese agricultural investment on the ground, examine the different actors and modalities involved in this process, and give an initial assessment as to the results and implications of the Chinese state-led agricultural investment policy in Africa in the new era.
Lu Jiang is a PhD candidate in International Relations at the London School of Economics and Political Science (LSE). She got her master’s and bachelor’s degrees from Fudan University in Shanghai, China. Her research interests revolve around China’s foreign policy and particularly Chinese foreign relations with Africa. Her master thesis was about China’s oil engagement in Sudan. She is now working on Chinese agricultural aid and investment in Africa with a special focus on the case of Mozambique.

Date: 27 January, 2015
Time: 12.30-13.30
Venue: Room L1-64 in the Graduate Centre, Hatfield Campus
RSVP and enquiries: thinah.moyo@up.ac.za

Download the invitation in pdf

“Creating a More Egalitarian Society”: introduction to the LEDDA partnership

“Creating a More Egalitarian Society”, by John Boik:  an introduction to the LEDDA framework and the LEDDA Partnership.

Houston, 7.12.14

Partnership to Explore New Funding Sources for Innovators

leddaThe European Social Innovation Research website features the LEDDA partnership this week.

This first-of-its-kind partnership is envisioned as a global, diverse set of academic, civil society, government, business, and philanthropy groups focused on ushering a new, parallel economic system through the development and pilot trial phases.

says Georg Mildenberger in his article.

“The economic system, called the Local Economic Direct Democracy Association (LEDDA) framework, or synonymously, LEDDA economic direct democracy, represents a rethinking of economic purpose and money. Among other things, it uses money as a democratic voting tool, and distributes voting power by increasing and equalizing incomes. This is a local economic system designed to complement and compete with existing systems within local (city or regional) economies.

A LEDDA itself is a membership-based, community benefit association open to residents, businesses, schools, nonprofits, local governments, public services, and others that choose to participate. Each LEDDA governs its own local framework through an online direct democracy process, and all LEDDAs are networked together within a global association.

The LEDDA framework is comprehensive, including as elements a novel local electronic currency, intellectual property pool, financial system, online direct democracy governance system, socially responsible business model, and buy local program. According to Boik, who outlines the framework in his 2014 book Economic Direct Democracy: A Framework to End Poverty and Maximize Well-Being, “the framework diversifies, strengthens, and infuses a local economy with democracy, and in so doing empowers residents to address local and global issues of interest.”

One key characteristic is that the LEDDA framework employs new motivations for economic decision-making. Rather than focusing attention on strict self-interest (by rewarding individuals who strive for higher corporate profits and investor returns), it focuses attention on cooperation, via a process of maximizing community well-being. A LEDDA assesses and forecasts social, economic, and environmental well-being using modern data collection and computer modeling tools. It uses the results to guide decision-making, especially in the LEDDA financial system, called the Crowd-Based Financial System (CBFS)”.

Know more about the CBFS and read the full article on the SIR website

How Moving Beyond GDP may Help Fight Poverty in Africa

In this policy brief for CROP (Comparative Research Programme on Poverty) GovInn director Lorenzo Fioramonti explains how alternative indicators are likely to highlight the important contribution of social cohesion and natural welfare to economic development, thus helping to eradicate poverty in the continent.

Click here to read the CROP Poverty Briefs in full

Modeling Dollar and Community Currency Flows in a Virtual US County

“Modeling Dollar and Community Currency Flows in a Virtual US County Using Python.” A general overview of the LEDDA framework and the LEDDA Partnership by John Boik, author of “Economic Direct Democracy: A Framework to End Poverty and Maximize Well-Being”.

To know more, visit the LEDDA page on our website.

Business by numbers can dull creativity of workforce -BusinessDay-

Fioramonti’s article this week focuses on the dangers on relying on simplified figures such as GDP to assess the development and the wealth of a country and make business decisions.

“When businesses base investment decisions on indicators such as the gross domestic product (GDP) they miss the forest for the trees. GDP is a very myopic measure of economic performance, which counts profits but excludes costs. Moreover, it flattens society and the market, thus giving the impression that growth affects all businesses (and people) in the same manner. In fact, there can be good and bad, equal and unequal, sustainable and unsustainable GDP growth.

“The “Africa rising” debate animating the investment community these days is a case in point, insofar as it does not pay attention to issues of sustainability and distribution, which are likely to hamper the performance of these “rising” economies. “

“Even good numbers can be misleading: indeed, numbers, by design, (over)simplify reality. In a numbers-driven world, only what can be measured counts. A metric-dependent business is more likely to forfeit long-term goals, which are harder to quantify, for short-term returns.”

Read it all on BusinessDay

Lorenzo Fioramonti at the Free University in Berlin

“How numbers rule the world” at Free University, Berlin

On 4 September 2014 GovInn director Lorenzo Fioramonti presented his latest book “How numbers rule the world” at the Free University in Berlin. The lecture was organised by The Berlin Forum On Global Politics

Charles Eisenstein

Gallery: Charles Eisenstein at GovInn

American author and de-growth activist Charles Eisenstein visited GovInn in August 2014. Eisenstein is known worldwide for his original writing and his criticism of the monetary system and of the patenting of seeds.