For centuries have academics and politicians debated the merits and demerits of central planning. Central planning (or economic planning, or planned economy) is a mechanism that directly allocate resources. A central authority decides how and where stuff is produced and consumed. It contrasts with its ideological counterpart, the market mechanism, in which resources are allocated indirectly by buyers and sellers who make decisions within regulated marketplaces. Continue reading
A few weeks ago I got published with an article I wrote about the role governments can and cannot play in stimulating innovation. I responded to a piece that Rutger Bregman posted for the De Correspondent about the biggest inventor and innovator in the world: the government. He claims that governments are responsible for all major technological breakthroughs in the past 100 years and that they are the ultimate venture capitalists. The government should take a stronger role as a technological innovator at the expense of the free market.
Dangerous nonsense. Continue reading
Economists agree that countries should only have a monetary union if there is also a fiscal, economic, and political union. If you have a single currency, governments cannot print money to cover their debts, nor can they devalue their currency to regain competitiveness. Arguably, the EMU and European Union are unions with economic, political, and even fiscal elements. They, however, miserably fail to offer the necessary mechanisms to compensate for not having monetary sovereignty. Continue reading
Greece must leave the Eurozone. The only alternative would be to set a lethal precedent of using a public referendum as a strategic negotiation tool. It would blow up the Eurozone as it critically offends Spanish, Italian, German, and Latvian electorates. Leaving the Eurozone would finally put the power with the people, where it belongs, and enable the Greek people to decide what their story for the future will be. Continue reading
This week will be a turbulent one for the Eurozone. Greece will certainly default again on its debt, at least partially, after a first default in 2011. Here’s the cause of the problem in one picture: