Credit donations

“credit” stems from the original latin word “cedere”. In the 1st person you write “credo”, which means I believe. If said in a religious building or church you show with this pronunciation that you believe tbe narrative of the religious community. In the 3rd person “credit” stand for s/he/it believes. In the financial sense it is the receiver of money from your credit card who believes or trusts you that you made an honest payment. Now, banks take commissions from each of these exchanges of trust. You are credit worthy or not. In some churches you now make donations using your credit card to facilitate business. Credit card companies also charge you on your donation. Win win situation we call this. I keep asking myself, whether I still “believe in angles” or only business angles. (Image Église Notre Dame des Victoires Brussels 2024-7)

Adaptive Expectations

In economics it is important to understand the concept of adaptive expectations. We all form expectations about prices and inflation, but there is more than just simple expectations. These expectations guide our behaviors in many domains. If we expect a drastic price change for goods and/or services we shall most likely modify our behavior in response. We might want to advance a purchase to take advantage of currently lower prices in the expectation of higher costs later on. Most people would follow the price changes on a regular basis and adapt their expectations according to the updated information. It is an important process as there are millions of people who do this and this process drives price levels in many countries. In Europe we would like to see not only inflation, but also expectations about inflation to be around the target level of 2% per year. After the high price rises of energy and food (Putin’s war) as well as the disrupted supply chains (Covid-19 crisis) we were unsure, whether we would have to adapt our expectations for the coming years. The credit crunch in the last few years forced people to adapt spending plans and expenditures. We seem to have overcome these major crises due to rapid adaptive expectations. The crucial mechanism to achieve this is a timely and open communication of changes. Media have a role to play to not only spread the information, but to explain underlying reasons. This contributes to a widespread understanding of basic economic principles that helps countries to navigate stormy weather. It is like players of chess who adapt their strategy after the other player has acted or not according to their expectations. It’s simple, isn‘t it?

Sectoral Change

The long-term view of sectoral change in France, for example, from 1800-2022 (Cagé and Piketty, 2023 p. 128) allows us to zoom out of our narrow focus of the last few years of economic change. The decline of agriculture is the most remarkable. The reduction of employment in industry and construction has been an ongoing trend as well. Banking, insurances, property and consulting have seen remarkable expansion over these years. Public services, security and legal affairs are still on a moderate rise. Other sectors like education, health, commerce and transport manage to grow equally.
The merit of the comprehensive volume by Cagé and Piketty (2023) is that it is thoroughly data driven and based on quite unique long data series. The data on structural change and just the employment trends depicted below refocus our attention on likely consequences of these changes.
For the 2 authors we should redirect our attention much more to the implications of these trends (like rising inequality) on political conflicts and power struggles. Democracies are at risk, if we continue to ignore these seminal changes of industrial structures and shifts in employment. The traditional strongholds of trade unions and progressive forces in the manufacturing and construction industries as well as in public transport seem to have unaccounted implications for our political systems as well. The volume by Cagé and Piketty (2023) will soon be available in English and reach broader audiences just-in-time for the European Parliament elections in June 2024. Particularly the spatial implications and how the neglect to take into account the fundamental differences between the rural development and structural change needs urgent reconsideration. After the time for reading and working with the data (LINK) is the time for action to preserve our European Dream of peace and social development.

Food Change

Changing habits of eating is among the most difficult behavioral changes. We get so used to our habits to prefer certain alimentary mixtures that we tend to believe we can no longer change them. Depending on our will power we are able to command for more or less longer periods our food intake. Bodily functions of blood pressure or insulin levels play tricks on us of a powerful kind. Therefore it is interesting to see towards the end of a food market what kind of food is sold and what has been left over.

In the historic market of the food, wine and spice loving region of Burgundy in Dijon the ad hoc inspection of an étalage was surprisingly different from my expectation. ‘Paté’ containing meat was left over towards the end of the opening hours and the fish based ’Paté’ was almost sold out. A change towards a more healthy and somewhat more sustainable diet is slowly creeping into societies. This gives hope that food changes are possible and markets will adapt eventually as well. It is a change for the better for each person and our societies as well as the planet.

Put People First

Put people first is a natural claim of human beings. We tend to abstract from the fact that we implicitly rely on a sufficient biodiversity for our survival. Therefore, the natural claim to put people first has many preconditions itself and severe implications. The most obvious implication is related to our world of production and consumption. We need to build an economy that serves its people rather than one that uses up human resources and discards people to an inferior rank of importance. Externalising health and safety at work to save money in the process of production will only cost society much more later on. This needs to be part of the balance sheet of companies not only “national accounts” or relegated to some health statistics hardly known to the public.
Put people first in consumption, has come to our attention recently. With energy prices rising due to Russia’s war on Ukraine territory we have learned that energy prices may be grossly distorted. Firms’ versus consumers’ energy consumption became a thorny issue. Even legislation, like in Germany, that put people’s energy consumption before companies’ consumption of energy became subject for debate.
Same issue with artificial intelligence. Let’s put people first here as well. Discriminating use of language or biased conclusions due to wrong data input to train AI is not acceptable as excuse. AI may serve humans in their work or leisure, improve production lines through error detection or early onset of disease, but it cannot replace the human verification of a just or otherwise justified human intervention. Humans are not perfect, never will be either. This is a tough rule to teach the algorithms that guide AI. Put people first has a strong interpersonal or solidarity element enshrined in it. This is what matters, now, in the medium term as well as the long run.