Category: economics

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La défense Végétale

Greening a metal and concrete block and buildings is a big challenge. The logic of unrealistic growth and big business has left liabilities for future generations. More vegetation in inner cities is part of our responsibility towards future generations. Therefore, urban planning has started in Paris to get rid of concrete walls and floors.

Eventually the district might have a more human touch which attracts citizens and new businesses and services. The adaptation of the infrastructure to facilitate mobility with bicycles and secured pedestrian paths has started but will take a lot of time before people adopt again these more healthy modes of transport. The big boulevards reserved for polluting transport is no longer adequate in combination with residential living spaces.

It will take a change of a whole generation to accomplish such a fundamental change. The reduced demand for office space due to more employees choosing to work from home contributes to such a change as well. Many other cities go ahead with similar changes (Copenhagen, Berlin). In combination with the „All electric society“ there are fundamental changes at work which will make inner cities more attractive again. Ease of clean transportation and other infrastructure for urban lifestyles ensures that cities remain strong points of attraction. They keep pulling people from nearby and far away towards them, if we like it or not.

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La Défense reframed

  1. The whole new business area „La Défense“ was a huge investment project with international speculators highly motivated to reap the benefits of a business location just next to Paris, which at best would even feel a little bit like being „intra muros“. However, being at La Défense you see „L’Arc de triomphe“ only quite far away and you don’t really get the impression that you are in Paris. The high rising buildings around there originally gave god reasons for expensive office space. Few residents spaces made the area uncomfortable in the evenings after office hours. After 2025 most office spaces no longer are attractive for businesses and lack behind environmental standards of the 2020s.  Many projects attempt to renovate the former office space into residential buildings with a considerable loss in the value of previous office space. For people working in the multiple shopping centers there this might be a feasible option if the rent is not excessively high. Students in transit through Paris might find this attractive as well. Families, however lack an adequate infrastructure as this area was built for an outdated business center and business model where families were believed to obstruct business efficiency. As the project developers have written off their investments over 25 years society can clean up the remaining space and repair. It will be another medium term project to re-create a convivial environment and community there as before the overriding device was make money there and run to a more human and diverse space.
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Hands-on AI

The use of AI in translation and to streamline texts and preparation of communication has become a common experience. The applications in medical fields are less well known. Scans and checking of skin cancer could be a game changer for many who live far away from the next medical doctor. AI assisted brain surgery is another issue, but a very specialized application. The interface of AI and robotics might be another game changer as such applications where you train the robot with for example weight lifting and transportation charges can contribute to alleviate human skeletons. Handheld devices can guide the robot and data from sensors will complement the learning of the tasks through assistance from AI. Applications are manifold and we have not even seen the most promising ones. The application potential in warfare are particularly troublesome as humans do not necessarily enter into the concern of AI-assisted weaponry. In the social sphere trust is a crucial behavioral and ethical concern. These issues AI can only learn from us. Any attempts to do without human input and control is doomed to fail. We are not indispensable yet, we are simply turning more and more into responsible, supervisory roles. 

(Image: Acatech exhibition with hands-on AI applications, Berlin in collaboration with IQZ and DTM, German museum of technology.)

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More eCooking

Cooking powered by electricity rather than fossil fuels like gas is an efficient and smart solution. Through the daily cooking activities over the course of a year the savings due to eCooking add up quite a bit. Even compared to an ordinary electric stove the eCooking by induction technology saves almost an additional 10+ percentage of energy as you heat the pot or pan directly rather than an in-between metallic element, which stores heat even after you have switched it off already for a while. In private kitchens the induction option is straightforward. In professional settings the change to induction eCooking needs careful planning. The health aspect of no burnt gas emissions in the kitchen is, however, a strong argument in favor of eCooking as well.
If we apply this logic to low-income countries and cooking in schools or other institutions as well as companies, the environmental and economic benefits add up quickly. In rural areas where no electricity grid is available or stable enough, the decentralized provision of electricity through for example solar energy creates a cost-effective alternative. In urban areas with high levels of various kinds of pollution the “clean” alternative could make a considerable difference as well.
The eCooking evidence is another pillar of the “all electric society” of the 21st century.
(Image: Rirkrit Tiravanija, untitled (Café Deutschland) and extract from “Freiheit kann man nicht simulieren“, Berlin Martin Gropius Bau, 2024-2025)

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Unwinding USA

Stock markets move largely due to expectations. Therefore, the mixing of economics and politics can create lots of signals, which are likely to raise price expectations. Inflationary pressures will call for central banks to increase interest rates which will reduce economic activities that are largely financed through the credit market.
The unwinding of the economy reduces turnover and most likely also profits of companies. The fate of Tesla cars in the last 2 months (Link) and the stock market value of Tesla shares (Link) have plummeted. The unwinding of shareholder value and inflation on the rise as well are a the effects of the MAGA narrative and Musk‘s appointment in politics as chief of GOPE.
The „home made recession“ in the US and the choice to prioritize own products might work in the long run, but the costs of the short-term induced inflation will affect vulnerable consumers more than the people who buy many products that show few price increases. The unwinding of the economy of the USA is likely to cause shock waves rippling through the global economy.
Image: Prices to charge e-cars with solar energy in Germany according to sunshine.

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Corruption Caught

In fraud or corruption it is primordial that the probability to be caught is very high to deter potential fraudulent activity. The new Trump administration has enacted as one of the first executive orders that the FCPA stops to take on new cases of suspected corruption as well as reconsider some of the running procedures. In the same vein, the Corporate Transparency Act (CTA) has been silenced so that American companies to not have to disclose ownership information that fall under the CTA until 2025-3-21 until a major reform will be published.
These policy shifts concern more than just US citizens. The competition between countries will be effected because as companies trading with the US which used US bank accounts were also liable under this legislation and subject to prosecution. The FCPA has been an important example for other countries to follow at least within the Member countries of the OECD. The shift in priorities of the Trump administration might open doors again to corruption which we believed were shut with lasting effect.
In conjunction with the rapid increase in military spending when the capacity for the production of military equipment is slow to increase might increase the risks of corruption talking hold again. Market economies build on fair competition, but less prosecution of corruption introduces a bias into negotiations which works against innovation and competitiveness. We have a hard time to understand any kind of logic in such economic and legal strategies.
Image: Bridge collapsed due ro material defects. Archive Berlin Tempelhof Schöneberg.

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Digital Visions

Urban planning has been digitalized for a long time. 3D modeling of places and buildings including their interiors are state of the art. As urbanization is also about investment, speculation and anticipation, digital imaging has entered the public spheres in form of cover up of building sites behind fences and in form of large digital prints for information, curiosity and advertising purposes. The inner cities are frequently an avantgarde and microcosm of societal developments. Some dream of full or total flexibility for office spaces (see image below), others experience the inner cities as the spotlight of inequality in society. The best paid executives are catered for by the worst paid delivery personnel. The photographers of the Landesarchiv Berlin, Grönboldt and Wunstorf, brought together a documentary exhibition entitled „Pixel aus Beton“, pixel made of concrete.

With a bird‘s eye view they reveal past, present and future details of how Berlin is experienced and envisioned by investors, architects and people living through the seemingly endless construction going on in the city. The keywords list as part of the exhibition creates a link to scientific literature and to the TU Center for Metropolitan Studies. Photography and even more so digital photography offers a social science perspective to the digital images exhibited. Cities are data spinning areas and a formidable place for digital visuals and visions.

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Betrayal Politics

Most economists would hold that in free market economics there is no room for moral statements. Betrayal, therefore, is left out of most standard text book economics courses. However, more advanced courses that include strategies based on so-called “game theory”, where actors may breach prior commitments, betrayal has entered economic science. A “tit-for-tat” strategy is frequently the best “game-theoretic” solution to such strategic behavior to deter also repetition of defecting on agreed rules or bargaining outcomes. For real world applications beyond the simple strategic advice, the maths involved are quite challenging. We’ll check soon, how AI is changing that game.
Another popular economic theory is one of “gift exchange”. You gift a sum of money (or weapons for self-defense to a country) with no explicit consent that the money should be repaid (through rare earths) in peace time. A betrayal occurs, if a country suddenly asks things in return for the previous gifts. For politicians that understand themselves as “market marker” and “deal maker”, there will be a tendency to claim back a gift in order to come to some kind of gift exchange rather than an altruistic donation.
William A. Galston wrote in the WSJ (2025-2-26) naming the US political action of the 2nd Trump administration a “betrayal of Ukraine and American values”.
If free markets mean making ruthless use of “tit for no possible tat” and “gifts are always a gift exchange”, we move back to mercantile and medieval practices, where settles could claim land at gun point.
What way out of this? Adam Smith, champion of classical economics, wrote before his famous book on “The Wealth of Nations” a lesser known, precursor book on “The Theory of Moral Sentiments”. Actually, he was convinced that the one would not work without the other.
Maybe, going back to classical economics is much better than a Trump administration version of neo-classical economics in a new era of political economy 3.0.

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More BRICS

The move towards a multipolar world order is in full swing. With the USA retreating from a primordial international role discarding UN institutions and the defense of major elements in the fight for individual freedom, the diplomatic order of the last 80 years has changed. The liberation of the concentration camps in Germany and the 80 years of the end of the 2nd World War on 1945-5-9 had forged an alliance in which the common enemy was defeated and the the next major confrontation in Europe or on the globe had to be warded against. 

The evolution of peace in Europe has been marked by the Cold War and a bipolar world order which confronted the USA and Russia at various places. The rollback of Russia has seen its high time with the Northern and Eastern extension of the EU and NATO. This goal of US strategic interests has been largely accomplished. 

In the shadow of this bipolar relationship the BRICS have moved towards greater economic power and therefore influence in the international arena. Economic data on the biggest economies in the world over the last years show the rise of the BRICS, bit mainly China and India. Their population sizes create enormous and largely shut off internal markets. All these developments create new challenges to the previously relatively stable world order. Technological advances have been narrowing more rapidly than before since the access to the best available knowledge spreads fast and more equally across the globe through the internet. 

The ugly face pf imperialism is returning front stage and attempts to change the previous versions of imperialism into a new hegemonic world oder. Updated views of economic power and influence zones let us look with a rational perspective on the new power play. Due to the containment of Russian influence, the USA has China as the major power to confront, a major shift as of the 2020s. The China-driven Silk road project with strategic landing points across the globe has „trumped“ American efforts to align BRICS to human rights values over the last decades. European diplomacy will have to recognize that we entered another phase of „Realpolitik“ due to major economic shifts over several decades. (Image: extract from Max Klinger, The walkers, ambush, 1878 in Berlin SPK).

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Blue Sky

In the period of romanticism the associations with a blue sky were very different from today. Getting out into the sun was a kind of privilege for the “leisure class”, of people who could afford to enjoy time outside for boating, walking or other pleasures. In our technology-driven 21st century the associations with Blue Sky are more like a technically enhanced view through for example “Windows” at the news and opinion platform or “Bluesky”.
Several scientific websites that report data on blue skies and air quality more generally across the world report indicators like ozone values O3, sun intensity, micro particles 2.5µm and 10µm, Nitrogen Dioxid NO2 to name the mostly quoted indicators. Hence, just enjoying the blue sky outside isn’t the same as it was before. People working outside in the sun or at times of a blue sky but with high air pollution levels are incurring severe medium-term health risks. The Ozon layers at very high altitudes protect our skin and eyes against high UV-radiation, but O3 on the ground is tough for eyes and lungs.
Technology has come with many blessings, but the negative effects on a global scale become also more evident. Getting used to a particular lifestyle, which produces lots of emissions of aggressive fine particles will make it more difficult to just simply enjoy a blue sky.
In consideration of all these background data with regional variations, we surely need an AI-system which we can ask for advice, whether we should go outside and enjoy the blue sky with or without respiratory mask.
Romanticism has led us all the way to Californication and dangerous enshittification of the air that surrounds us. Youth and the next generations will have very different associations with Blue Sky than we have the chance to, at least, have had.