1. The Global Man

Fortunato Da COSTA

Macau, 31/August/1998

[ Master's Degree Project of European Law ]

[ Professor Doutor Ernâni LOPES ]

Internet Home Page: http://www.fitini.net/fitini/ernani1.html
Internet e-mail: fitini@yahoo.com

1.1 Social Justice?

Power will always exist and it is also a form of potential energy. In physical science Power, energy per time unit, is equal to the Energy dividing by the time (P = E / T). And it can have many forms: financial, political, legislative, military, force, atomic, electrical, heat, ...

Nature clearly proves that power gaps, or potential energy differences are pure universal realities.
Life is also a permanent learning in how to interchange and profit from these potential gaps without being destroyed. In fact, civilization already knows how to convert some forms of very dangerous energies into more useful ones: atomic, water into electricity.

But, clever business men also know how to do it: Coca-Cola, for example is using the educational power gap, and they are successfully convincing the whole world that drinking colorful water and pay for it is great.
As a result, there are men (individuals, or organizations, or countries) with much more power than others.

Social Justice is a very beautiful word. In a very systemic definition, the Social Justice exists, probably,  to protect the less powerful entities of nature from the more powerful ones.

But is this Social Justice a pure energetic problem?
Anyway, what is the reaction of nature when there are very large potential differences?

Nature is Global in every sense.

Is there a political or economic frontier for a bird? In fact, at the very begging Man had no barriers, only the Family concept like in many basic animal life protocols... but, today, even that is becoming upside down.

For centuries Man made castles, frontiers and barriers, of any kind, to protect himself against animals, nature and other men.
One day (or cyclically in history) he finds that he is alone, inside its 'Black Box'.
So, he decides to open one window, later two... Then he completely opens the doors.
And now he is destroying the 'walls' of its home...
Is this good? For sure, but only if the other men don't go to his house to rob everything he has.

Globalization is a process to reduce economic borders, it is a condition that magnifies forces to break down barriers of any kind. But, there are negative effects on public policies and programs: employment, workers rights, health care, social welfare, education, ... Why? Simply because the competitiveness created at a very global scale creates restrictions:

• Limits the fiscal and monetary policies.
• Difficulties to raise taxes.
• Difficulties to lower labor standards and wages.
• Difficulties to stay competitive.
• Creates social dumping.

The truth is that the economy and society are not going well for the majority of countries.
(1) No economic barriers; (2) the increasing difference  between advanced countries and poor ones and (3) the despotic behavior of large multi-nationals that look into the poor countries as a bunch of aliens from another planet, but that are great potential customers...

The latent conflict is really speeding up and becoming almost ready to explode.
Using the words of Prof. Dr. Ernâni Lopes: "If the rich don't take care of the poor, one day the poor will take care of the rich...".

Schwartz, Peter,  The Art of the Long View, New York, 1991, is too theoretical in its 2005 world scenarios - New Empires, Market World and Change without Progress - but he also does not look very optimistic.
 
He sees the world controlled or by the New Empires, nationalist racial organized groups and bloc states; or by the Market World where the economy without frontiers or barriers created a entrepreneurial, multicultural, world full of hope and happiness; or Change Without Progress, a future of crisis and chaos, where the individual man as to fight against all the world.

Now, in 1998, all the three scenarios are already happening simultaneously. But he forgets the basic reasoning for conflicts between biological systems. Bio-systems always try to eliminate the opponent if there are not enough basic resources, specially food.

How does it feel to be a Bangladesh citizen that nature is trying to convince to turn into a fish? In August 1998, Bangladesh had two thirds under water. May be in Late November 1998, the last third is gone too… and probably in late 1999 we will have a new fish species: the Bangladeshi Fish? (What a stupid joke, I am sorry).

It seems we humans, forget very easily the lessons of nature and history. A few very basic lessons can help us to understand the major reason for the Arabic invasions since the last millenium or, for example, why the communism spread so easily worldwide in the actual millenium.

It is so simple: because there are millions of people in our planet without the very basic living conditions, and the majority even without food. Worse of all... this chaotic situation is increasing!
Smart and ambitious minds - political or religious ideologists - know very well how to use and manipulate hungry people. Poor people have nothing to loose. If they have to kill to survive they will do it... and it is much better if it is used a 'psychological condom' like a fanatic god, for example, or the Marxist red flag.

As mentioned by Schwartz, Peter,  The Art of the Long View, New York, 1991 p. 196: "It's a great time to be a stand-up comedian. Anyone that can be sardonic, cynical, and funny finds a willing audience everywhere in the world.".
 
On the other side the State is loosing existence inside this new global world. We see the rich United States on one side and the Islamic Nation (poorest countries in the World) on the other side of the barricade. European Union is some how in between, and Russia is somewhere, but in collapse. We are again facing the old conflict: the rich against the poor, also, mentally supported by the Islamic Coran against the Christian Bible.
But these time there are no defined countries in the conflict. It can happen any where: Mac Donald's, Planet Hollywood, ...

BIO-ECONOMY ENGINEERING ?

I don't believe that the mathematical models of the economic science are very capable of explaining what is happening today, neither historical science is capable to help humans with futuristic previsions. I apologize for my perspective, but I really believe it is time to implement Biological Genetic Models to society and economy.
A new buzzword must be invented: the Bio-Economy Engineering, some kind of a genetic engineering and economic science at the same time. Where large multi-nationals are seen as benign bacterias for our civilization, but, that can completely destroy us if we don't control them. Knowledge, information, culture are so fundamental as food, water, air; and like capital they must be quantified and qualified carefully because they are the blood of our Bio-Economic World.

In this 'new' scientific approach the citizen is the most important factor to analyze, specially when they turn into organized groups: religious, economical, political, ... They can totally destroy our civilization if you do not discipline them with severe regulations!

Freud devoted part of his work pointing out the importance of sex in the individual behavior. But when we move from the individual to the organized group, in normal conditions, the economic power is the first ambition of any group, and the second one is the geo-political power. Or vice-versus, but they are (in)directly related.
These ideologists can mask themselves of multi-forms: political, non-profit institutions, even sometimes with religion.

In the last week of August 1998, the television show, 60 minute plus (60 +), presented a very clear program about the kind of abnormal organisms that large organizations can turn into, if they are not controlled with discipline and severe rules.

There is a very expensive medicament called Immune Globulin (IG) that is fundamental to treat diseases such as AIDS and other forms of blood pathologies. The patients die if they don't receive this product. The product is produced in the United States using, precisely, blood plasma of the American citizens. But, because they can sell the product 15% more in Europe, and 150% more in Japan, the medicament doesn't exist in the normal American market, only with much higher costs in the American pseudo-black market.

How come they let people die because they are creating a fictitious shortage just to increase profits??. Smart organization purchased all the available domestic stocks and now they are keeping the medicaments closed in warehouses, just waiting for the increase of the product's price in the market…
 
This is pure Crime! And Governments can't, or don't want, to do anything about it...
How can a State that tolerates situations like these talk about Social Justice, or even Human Rights??

2.1 Political Marketing

According to Champalimaud, António, António Champalimaud Biography, José Freire Antunes, 1997, during the Salazar regime even the Americans with the President Kennedy were playing the game of the Soviet Union in the United Nations, in 1961. USA and USSR were together against Portugal because of Angola, Mozambique and so on. The "dreamer" Kennedy (JFK) only realized the danger of the communism when one day some one wake him up, saying: "Mr. President, we have Russian missiles in Cuba pointing out to our major American cities…".

We know now… very well what the Americans and Soviets wanted. The oil, diamonds, and other natural resources of the Portuguese colonies. Álvaro Cunhal was the Portuguese mind that had the control of the soviet expansionism in the Portuguese countries. And he did his job very well. Cunhal "offered" the Portuguese colonies to the Soviet Union. And at the end Cunhal was awarded with the highest Russian Award: The Lenin Order Medal.

In my opinion, today Cunhal probably had made a complete different life choice, as many others, such as Torres Campos ( in charge of the nationalization of the Portuguese Cement industry), or the great Spanish economist Prof. Ramón Tamames, …that later on, in their lives, discovered what was the real objectives of the soviet expansionism, and completely changed their political ideologies.

The Soviet power was precisely seeking worldwide for the most intellectual individuals of our societies. Specially very intelligent and sensible people with the great capacity to totally disagree with the suffering of the poor and homeless people, and capable of fighting for a better World.

In Champalimaud opinion: "If Cunhal was Russian probably he was an important member of the Central Committee or the Director of KGB…".
The worse of all these facts is that the Portuguese politicians and erudite personalities were completely blind at that time, or the ones that could see what was going on had no means to do anything, like the Porguese Prof. Adriano Moreira, …

People like Salazar, Caetano, Sá Carneiro, Mário Soares, Ernâni Lopes, … are part of our great History. They offered the best parts of their lives to our Country, Portugal. We MUST be proud of them all.
We humans, in our linear way of thinking, Taoism philosophy, are not perfect at all and we make mistakes depending on the circumstances of life.

But, we cannot tolerate that people that almost completely destroyed Portugal, like Cunhal, Melo Antunes, … had the courage to mention our recent Past, with cynic accusations when they did write the worst pages of our last fifty years of history.
Simply, because with the April 25, 1974, we could move from an autocratic regime directly into a full democracy, without writing History pages of stupidity (corruption?) and innocent blood.
Pages that we have to read now, when we talk about the nationalization of the Portuguese Economy after 1974; or about Timor, Angola, Mozambique, … or Guiné-Bissau.

The expansionism of the communist parties through out Europe was tremendous. In Spain the communist party (PC) had more than one million affiliates and two millions in the Italian PC. Even the Brazilian communist party was moving influences in Angola.

The Soviet KGB was controlling a very well organized network of almost one million persons worldwide in: cultural associations, folkloric groups, musicians, writers, artists, … this is why after April 25, 1974, Portugal was completely invaded by communists that no one knew were they were before.
The KGB was so well organized that only the Israeli Mussad had better performance than them.

Today, like since always…

Conflicts exist because there are very rich people, and the majority of the population survives without the very basic living conditions: no homes, no schools, no food...
No economic barriers between countries is creating a major problem, the rich countries are sucking the booms of the poor countries without re-distributing welfare and richness to the poor. The poor and less developed countries have no competitive chances in this global economy. Poor countries are poorer every day and the gap between rich and poor is widening!

… but we do not need to be a Communist, or a Socialist, or what ever… to fight for Social Justice, or for a more healthy green nature, or for a much better World.

In June 1997, Lionel Jospin, as any other politician knew very well that to be elected he needed to promise even more than what people wanted to hear. It is a pure marketing/sales strategy.
The employment crisis is a never ending story worldwide. Like Prof. Ernâni Lopes referred once: "In north Africa more than 50% of the population has no jobs and they have less than 20 years old".
So, let's agree that the European figures are still alright, but the politicians always use this subject to convince the poor citizens, and it always work.
Electoral periods and campaigns are the legal 'civil wars' that human kind created - similar to 'football wars' - where almost everything is possible. Marketing campaign leaders prepare carefully the speeches and critical points to focus whenever possible in front of the media. Taxes, Employment, health care, education, welfare are their favorite topic.
If afterwards they do, or do not, fulfill what they promised, it is another story. The time passes and the people forgets.
 
If one country starts to take into court the politicians that did not fulfill their promises, no one wants to be politician any more. Obviously, smart politicians will create the 'Political Party Associations' to turn over the problem, like they did in some countries with the sportive associations to save football clubs.

As referred by Prof. Tamames, Ramón, The Euro, Just Arrived, IEEM Macau, June 1998.

Giscard D'Estaign, Helmut Schmidt and Roy Jenkins, joined in the triad that pushed the European Monetary System, EMS, starting 1979; with the ECU as the first common basket currency unit, and as a reference for the floating of national exchanges.

Three great Euro-enthusiastic leaders, promoters of the Single European Act, 1987 - Spinelli, Delors, and Lord Cookfield - opened the process to the Delors Report, 1989, and to the Maastricht Treaty - signed in 1991 and ratified in 1993 - the real Carta Magna for Euro.

The tandem  François Mitterand and Helmut Kohl - that had the courage to accomplish the Maastricht Treaty to implement the Monetary Union (MU), against Euro-skeptical and anti-Euroactivists, so much from inside as from outside the European Union. And we must specially enhance the role of Chancellor Helmut Kohl, who with endeavor and resolution achieved the German reunification first, and the European Monetary Union afterwards. Without him, everything could have been more difficult, if not impossible.

As we can see the French are inside the European Union up to the neck. But it was a good electoral marketing strategy for Jospin to say that: "… under his leadership Paris will abandon the kind of austerity and reform policies imposed by the need for France to achieve the Euro Convergence Criteria…".

The convergence efforts were difficult for every European Country involved. The poor citizens were the ones to suffer it directly, with increasing unemployment and gradual loss of quality of life.

Political annalists and journalists have been trying to make their way of living and like the football journalists they speculate to attract  readers. How come there is people that believed that the Euro could be created with German or France outside of it? Europe has more than 40% of the European economy activities based on the German Mark. If that would happen there is no Euro at all.

The European structural reforms and "unnecessary welfare" cutbacks are always important to cut expenses and must be revised once in while. We know very well that people always find a way to take medicaments or to stay at home, even when they are perfectly healthy. A few years ago some cutbacks in the United States where made too, someone found, for example, a government project with a budget of millions of dollars every year, simply  to measure the moving speed of the ketchup, mustard, … when coming out of the bottle.

And it is also very understandable the 'dramatic' attitudes of the Bundesbank until the Euro comes up. The Euro is giving to the German Chancellor a very clever way to overtake the power from the German central bank.

Italy was the country that had more difficulties to join the Euro, besides Greece that staid out. But the Germans and French, believed that it was some how difficult to make the Euro without the Italians. There are too many industrial involvement between these three countries, specially in the car industry. So Mr. Prodi had to make a great effort in convincing the Italian public opinion to accept so rigid matters, precisely with the final objective of trying to achieve the Convergence Criteria

The Euro is going to be more than a European business. It will become a world currency with great incidence in the reserves of all central banks. On other words, what is the use of reserves handled by these institutions? At least, the importers are guaranteed that they will get the necessary means of payments; and the desired external exchange of national currency can be supported through interventions in foreign markets. Both functions will virtually disappear with the Euro: when buying abroad, Europeans will make use of the new common currency; and in order to regulate the rate of exchange Euro to Dollar, Yen, Swiss Franc, Dollar, and so on, the Central European Bank will have a Special Reserve of fifty billions Euros (a huge amount but much smaller than the one previously used by national central banks until now).

Euro will be a shelter currency for those citizens abroad that do not trust their weak currencies, with new investment possibilities being favored, with the consequence of the creation of more employment. And, also very important, the commodities oil, metals, computers, all kind of food stuff, at present priced in dollars, will be quoted also in Euros. Therefore, the Europeans will no longer depend on the American dollar volatility as is happened in the past.

The entering into effect of Euro is also going to mean a great reaction in all kind of purposes. If the proper advances are made and specially if one day the United Kingdom decides to join, many of the present problems appear impossible to be solved, may find quicker solutions. That will be a great chance for the envisaged European Union enlargements now.

Particularly, a few forecasts can be made on the extension of the Euro Zone trough one or another method.

Countries at present with currency boards based in the German Marks (DM) will have to adopt Euro, since 1st January 1999, as its only reference. This is the case of Estonia, Bulgaria and Bosnia, Herzegovina.

Of course, other countries trying to build new currency boards could also adhere to Euro since its very beginning. That could happen with the other Baltic States (Latvia and Lithuania), and even with Ukraine, Belaurus, the ex Soviet Republics of Central Asia, and the Russian Federation. All those nations that are in deep need to stabilize their very weak monetary systems, mainspring of a very much generalized use of Dollars and German Mark (DM) in all kind of day to day operations.

Other fourteen States, with global extension of some 9,5 millions square kilometers and 70 million inhabitants, that nowadays are associated through two African Central Banks (West and Central), constitute since long time ago a Monetary Union, with CFA Franc as a common currency linked to the French Franc. In the next future, they should also adapt to Euro as its currency patron at a fixed rate of exchange.

Moreover, countries now negotiating their access to European Union (Poland, Czech Republic, Hungary, Slovenia and Cyprus), could enter in the medium term the New Mechanism of Exchange Rates or the renovated European Monetary System (EMS), better known as EMS-bis; as a transition formula to the fol-lowing convergence period to MU.
As it has been said, it is true, that taking account of demographic trends, Dollar has a competitive advantage when compared with the Euro, because population growth and immigration are much stronger in the United States than in Europe.

But considering other factors, the possibilities of enlarging Euro Zone through, let us call them so, mergers and acquisitions, are much brighter. A process that probably is going to worry enough the Americans is how to make some kind of approach to promote new currency boards based on the Dollar. China will probably vacillate between the US dollar and the Euro, at least they will be more protected against the American Stock Exchange 'smart' speculators.

The possible inconveniences of Euro must also be analyzed. Such is the case of the so called loss of sovereignty in the field of foreign exchange. Let us recall the period 1992 I 1995, with its above mentioned strong currency turbulence and competitive devaluation's. At the end, what remained of the almighty state's capacity on foreign exchange? Only failures and fiasco, because of the inability to achieve greater productivity, quality and competitively on the right way. The only applied solution at the time was a most primitive one: to devaluate currency once in a while. That, fortunately, will be impossible in the future.

Sometimes is referred that with the Monetary Union, budgetary autonomy, which was used in the past to balance the downtrends of economy during recessions, is going to be lost. But this is rather fallacious, because as we have already seen, increased public expenditure does not necessarily mean more jobs. What usually happens is really the opposite.

Monetary Union is a mental, political and economic revolution, which sets new horizons not only for the European Union but also for the whole world. We can not forget when John Maynard Keynes - Bretton Woods, 1944 - in a visionary manner, proposed a world currency, the bancor, and a wofid central bank, the IMF.

In that historical occasion, it was the representative of the USA, Mr. White, who asked him what it was all for, since the dollar and the US Federal Reserve System already existed. Thus, the international hegemony of Dollar, as a currency superpower, was strengthened; against what could have been a more balanced and universal solu-tion. Now, things are going to change: Euro and Dollar will become competitive cur-rencies; and therefore, some kind of stable exchange rate ranges, will have to be ex-plored. That's why so many are already proclaiming the need of a Second Bretton Woods.

Euro is going to serve as one of the basis for a great new world concept. So that in the future, there will be again a new International Monetary System. Michel Caindesus and Prof. Ramón Tamames, had the opportunity to comment already this topic in 1994. Together they jointly reflected on the serious possibilities of a future world currency, starting with some kind of arrangements among Euro, Dollar and Yen. On the same line some prospects were previously made by The Economist, looking to year 2017, proposing even a name, the phoenix, for the future universal unit.

Are we going to wait for the Euro to solve all our problems?
Of course not. Economic growth is much more than a single currency.

Monetary Union is going to be a real Declaration of Independence, similar to the one the Thirteen States of the emergent USA made with the Coinage Act of 1792. Alexander Hamilton, promoter of that law, had the capacity to foresee that a single market needed a single currency, the US Dollar; with common coinage rules for the thirteen states.

We can make a forecast: with Euro, Europe will be much stronger, economically and financially, and that could help the growth of prosperity not only inside the Union, with all the necessary adjustments, but also improve new solidarity strategies regarding the countries of the Third World that are in mutual need of help and trade.

To finalize, I really would like to re-appreciate the vision of McRAE,  The World in 2020, Power Culture and Prosperity, a Vision of the Future, Harper Collins, London, 1995. He sees Education and Social Justice as key factors for development. But, I am not so simple... let's see why.
 
He sees the twenty century of as the American century, but he believes China will over take that position in the next millenium.

East Asian countries have some of the highest levels of incoming in the whole world, while the United States has the lowest. But both of them don't care about public welfare. On the other side, Europe is investing in their welfare systems, but they say it is in collapse because the working labor force is not enough to pay for the retirements of the old citizens, and for the health public costs of the rest of the society.

But, to what extent will the United States increase their savings? How will European countries refashion their welfare systems? Will the social overhead costs of most East Asian societies be able to remain so low?

The Argentina and Singapore cases can give us a clear perspective. Before the first world war the Argentineans where the second richest people in the world, after the Americans, in terms of income per head. But today their income is similar to the Hungarians.

On the other hand, Singapore that in 1950's had its economy completely stagnated, in more less one simple generation (ten years) jumped to the group of the richest countries in the world per head: full employment, budget surpluses, low pollution, a marvelous education system, and few social problems.

It took 75 years for Argentina to move from second into the fifty and it took ten years for Singapore to move from the under developed world into the group of five best economies in the world.

Why Taiwan and Singapore are so successful?
An authoritarian politician like Lee Kuan Yew from Singapore would explain their regional success in terms of self-discipline, hard work, and would also focus on the investment that they have made in education.

Well… we cannot forget the latent conflict in the Singaporean society, between the Malaysians (Muslims) and the Singaporean ethnic Chinese (Buddhists), they don't like each other. On the other side, young generations believe that the regime is too much autocratic…

Two simple examples about Singapore: (1) if one Muslim is in one banquet all the other Christians, Buddhists and so on, are obliged to eat Halal food (no pork etc.). (2) the Muslim pray several times a day, then the others have to do the whole work while the majority is talking to their god…

Probably, these aspects seem ridiculous to us, but believe me they are not to them.
This is why when we ask a Chinese Singaporean its nationality he says "I'm a Singaporean Ethnic Chinese" and the Muslims say: "I am from Malaysia…". Afterwards this is the reason why we don't see Malaysians in the higher positions of the Singapore Government, and also why Malaysian Politicians, or others that don't belong to the Governmental Party have no chance to win elections…

Let's look into the positive side of what they did in ten years…
In fact "No pain, no gain!" this is what we know also from sport activities.

But, simply investing in education is not enough, in my opinion: discipline is almost so important as knowledge.

In the last industrial revolution the road to richness seemed to be to industrialize as quickly as possible; in fact that decision, it frequently led to a complete economic disaster. The rush to built up industries in many less developed countries did not lead to self-sustaining economic growth, but actually inflicted misery on the people and did enormous damages to the environment.

This is evident in South East Asian countries like Indonesia, Malaysia, Thailand, ... and even China. They have been forgetting the social justice factor.

Manufacturing technology moves more and more freely across borders. It will become harder and harder for any country to gain a competitive advantage over another just by simply making products. Comparative advantage is coming very strongly from designing and marketing the products, instead. In low developed countries the agriculture sector occupies 70% of the economy, but in advanced countries it is the opposite, the Service sector over takes that slice of the GDP.

Economic growth has proper steps - agriculture, manufacturing and services - and these steps only can be achieved if the education and discipline of the population is ready for it. Specially if it is catalyzed by the Social Justice factor.
.
Of course, there are some very basic low cost services that are fundamental to maintain a society happy and efficient: banks, health care, schools, low bureaucracy, ... and public order.

And today, to keep a prisoner in prison is so expensive as installing him in a five star hotel.

Well…
I do believe we already have enough material and lessons around us to make a simple conclusion.

Education, ladies and gentlemen... Education and Serious Discipline for our children and all of us, are the solution for our countries.

Governments must concentrate, exclusively, on the Education and Social Justice of their country citizens. And in the legal frameworks to make the private organizations, specially the large multinationals, to pay for that Education and Social Justice 100%...
Even if these firms are operating directly from Mars.

AND WE WILL BE VERY KIND, WE WILL LET THEM PAY IN EUROS.

Macau, 31/August/1998

Fortunato Da COSTA