Monthly Archives: March 2012

The weekend allows people to preach their sermons.

(1) Ramsey Nasr, the Poet Laureate of Holland – though that function has not the same standing in Holland as it has in the UK, has a long article in NRC Handelsblad. His points are:

  • Holland is a country without norms
  • Holland blames others while it should become more critical of itself
  • Holland is isolating itself, and other nations are starting to dislike it
  • The TV show on cannibalism was a nadir in bad taste
  • Dutch people are selfcentered and cheap
  • The founding ancestors of the Dutch nation have become strangers to the current Dutch
  • If Holland behaves like this then it should not complain that it becomes a cultural wasteland
  • A crucial improvement is a Prime Minister with norms and values.

Perhaps he wants new elections ?

This discussion of Nasr’s article comes with an entertaining parody by the Flying Panthers of 2005, of a musical band with cheerleaders marching through a typical Dutch village, singing about the threat to Dutch society. Eventually the threat materialises and the scare-crow explodes.

(2) Bill Gates contacted Dutch TV (6 minutes interview in English) that he is worried about the rumours that the Dutch government would reduce development co-operation, from 0.7% of GDP to a much lower figure. The wealthy Dutch shouldn’t neglect the poorest on this planet.

(3) Caroline de Gruyter, Brussels correspondent, reports that Holland has lost most of its political credit in the EU. (“De firma Nederland staat te kijk” – “The firm Holland has a PR problem”.) The main point is that Holland follows a nationalistic policy that apparently is dominated by Geert Wilders, the unofficial partner in the minority government. De Gruyter cites various sources, all anonymous, who confess their astonishment about the Dutch volte face.

She quotes The Guardian: “If the Netherlands has traditionally been a europhile country, that has changed sharply since it voted down the European constitution in 2005. Wilders’ strength on the right is currently mirrored on the hard left by the Socialist party which is riding high in the polls and is fiercely hostile to the EU. Between the two of them – Wilders’ Freedom party and the socialists – the anti-European stream musters 55% in the opinion polls.” (March 13) Unfortunately, it is 55 of 150 seats or 33% (De Hond). De Gruyter doesn’t correct this, but I suppose that she still is a decent journalist in general (and De Hond may not be reliable).

Also The Guardian speculates on new elections: “The euro crisis could yet bring down another eurozone government – even in a country as prosperous and successful as the Netherlands.”

(4) My own sermon: The turning point came with 9/11 when many Dutch people got the impression that immigration might be related to violence, whence Pim Fortuyn soared in the opinion polls. We have nothing to fear but fear itself.

PM 1. The Book Sections this weekend mentioned (a) Tessel Pollmann’s book that shows that Holland in 1937 had real nazi’s with 4% of the vote in parliament. (b) Senator Sybe Schaap’s book that uses a philosophical angle to discuss current resentment in Dutch society. Schaap is of the same party as prime minister Mark Rutte, and reportedly Rutte asked him to delay the publication till the negotiation on the new budget cuts were completed – but Schaap declined.

PM 2. After the weekend, columnist Frits Abrahams wonders whether Ramsey Nasr will relocate to another country. Tabulating the options, Abrahams finds Holland still the best place to be. He neglects the possibility that people get settled in a place and that frequently severe wars are required to induce them to leave. I, on my part, take all these arguments on Holland with a grain of salt, since so much depends upon opinion and hear-say. Instead, there is an empirical case of censorship of science in Holland, and the argument for a boycott thus is convincing.

The new World Economics Association (WEA, started May 2011) holds an internet conference on ethics. Since my advice to boycott Holland is based upon professional ethics I submitted this paper. I was happy when it got accepted but disappointed when I received an email that there had been some misunderstanding and that it was finally not included in the conference. The paper was also rejected by the the Real World Economics Review (RWER).

In both cases no arguments have been provided so I am in to the dark where the analysis misses out on ethics and relevance for the real world. Perhaps I miss some crucial points but there wouldn’t seem any harm in discussing the advice to Boycott Holland. Ethics is a serious topic and it is important that such arguments get the chance to be heard. Electrons are hardly the cost nowadays. Yet the conference organisers and editors of the RWER now have managed to create a window of disopportunity, where some economists might not consider the whole internet but only their own fine little portion again.

The paper refers to my earlier discussion “Economics as a zoo” (2005). The abstract of this reads:

“The world has 6 billion people, and rising, and we like them all to know a little bit of economics. This means that there is a huge market for economic theory, economics textbooks and teachers. As groups of economists have the objective to get a little bit of the action, a key strategy seems to be to label oneself differently, say X, so that all customers can be told that if they want the real thing then they need X. What to think of labels like “realistic economics”, “heterodox economics” and the “post-autistic economics network” ? If you don’t join, are you non-realistic, orthodox and autistic ? Economics is in danger of turning into a zoo. As the animals have taken over the zoo too, there is nothing to control them but common sense. Common sense can be taxed needlessly. The preferred strategy is to provide quality, and then add proper labels that advance understanding.”

I still think so. I consider myself a neoclassical economist and I think that we can tackle the economic crisis building upon the work of Keynes and Tinbergen. This tradition and approach in economics has been very succesful and the conclusion for an Economic Supreme Court is based upon that success. If you think differently you need some very strong arguments. I wonder whether WEA and RWER have those arguments. The RWER is at the website of the post-autistic network and it seems that the WEA has some links to that. So I took some risk in sending in a paper to economists who should reconsider their branding label. But without communication there is no advance.

One of the editors at the conference now has an entry referring to say Alan Greenspan: “Given the extraordinary level of incompetence shown by these economists, one may ask. . . .” It seems to me somewhat shortsighted to discuss this. So what, when economists A, B, C think that e.g. Alan Greenspan was too optimistic about market processes ? This approach entirely misses the point. It remains in the realm of opinion and it neglects fact. The point is that in the case of the Dutch Central Planning Bureau we have the fact and can prove that there is censorship. The Dutch people and a fortiori the world gets wrong information.

The WEA and RWER are just as impervious as the IMF. I haven’t yet received a response to my email to the IEO of the IMF either. When there aren’t arguments and when there is no discussion then it isn’t science.

The synthesis in economic theory presented in this weblog includes the crucial role for National Investment Banks (NIBs), see DRGTPE or the Economic plan for Europe entry.

The role of the NIBs is a matter of logic and experience. During an economic downturn companies cut back investments and then NIBs implement prospects that they might sell off in a later upswing. Experience has shown government involvement in major changes in society, such as railways, electricity and so on. Such an approach towards investments is also part of the Rehn Meidner model for the Scandinavian economy.

You may be interested in the report by professor Mazzucato “The Entrepreneurial State“, see the PDF there, or the video’s on her website. I strongly recommend and support this. (Dutch readers may be interested in the article in NRC Handelsblad March 14 that caught my attention.)

What Mazzucato adds to the analysis on investments is a deeper discussion of (1) the US experience with the Defense Advanced Research Projects Agency (DARPA) and the Small Business Innovation Research (SBIR), (2) the confusions and myths of investment policies in the EU.

Thus, DRGTPE restricts itself to the main argument and assumes that this is clear enough both for who has studied economic growth and read Keynes’s General Theory about the animal spirits, and for who knows what to avoid from the failures of industrial policy. Now however “The Entrepreneurial State” provides details that many people may require to become convinced.

The main current confusion and myth is that the state should step back and leave investments to the market. There however is the sound alternative of state involvement that combines freedom with efficiency. DRGTPE uses the banking label and Mazzucato uses the network label.

Mazzucato recalls the argument in The Economist of April 28 2011: “(…) grappling with entrenched joblessness deserves to be far higher on America’s policy agenda. Unfortunately, the few (leftish) politicians who acknowledge the problem tend to have misguided solutions, such as trade barriers or industrial policy to prop up yesterday’s jobs or to spot tomorrow’s. That won’t work: government has a terrible record at picking winners.”

Mazzucato refers to the record and finds: “A look at the massive impact that government’s targeted large investments in industries such as steel, railways, air travel, silicon microchip manufacturing, automotive manufacturing, computer, biotechnology and the internet, and nanotechnology shows this is just not true. Without the government pursuing a targeted investment strategy, none of these industries would have come into being. And being first matters because of the strong economies of scale.” (p91)

The distinction between the USA and the EU is not clearcut by the way. America seems to forget that it invented efficient network models. Mazzucato: “Many of the problems being faced today by the Obama administration are indeed due to the fact that US taxpayers are virtually unaware of how their taxes foster innovation and growth in the USA, and that corporations that have made money from innovation that has been supported by the government are neither returning a signifcant portion of the profts to the government nor investing in new innovation. They are sold the idea that this growth occurs as a result of individual ‘genius’, to Silicon Valley ‘entrepreneurs’, to venture capitalists, to what they think is a ‘weak’ state compared with the European system. These battles are also being played out in the UK where it is argued that the only way for the country to achieve growth is for it to be privately led and for the state to go back to its minimal role of ensuring the rule of law.” (p110)

State involvement in investments is tricky, if only because of the ambiguity in the word “state”. The USA has an overall state but one vested in freedom. The former USSR had a state but vested in dictatorship and bureaucracy. If it is necessary to have state involvement in investments (insight 1) the crucial question is: are there forms that combines freedom and efficiency ? The answer is: yes, there are such forms (insight 2).

PM. That article in The Economist has a curious statement on Dutch disability pensions: “And there, strange as it may seem, America could learn from Europe: the Netherlands, for instance, is a good model for how to overhaul disability insurance.” Well, the system around 1990 was abused by employer and employee unions to label unemployed as disabled. Individual employers enjoyed the ease of dismissal and turned the costs over to the community. It was a silly system and we can learn nothing from its abolition. The current system for the disabled still is not targetted at keeping them employed, so still leaves much to be desired.

PS. See also the entry on the Keynesian years 1981-2007 for how much stimulus has been required in the conventional approach to generate investments.

Ai Weiwei designed the beautiful Beijing National Stadium, also known as the “Bird’s Nest”, that was used in the spectacular 2008 Olympics. The Chinese authorities locked him up for 81 days and after his release the artist expresses regret that he ever designed that stadium.

During his confinement Ai was accused of producing pornography and in protest there appeared pictures on the internet of people in the nude calling for his release. In an interview with the Dutch newspaper Volkskrant the reporter shows him that this newspaper also printed those pictures and Ai responds: “That you can print nudes just like that, shows that there is tolerance in Holland.”

I beg to differ. There is tolerance for nude pictures in Holland but there still is censorship of economic science by the directorate of the Dutch Central Planning Bureau.

Ai’s treatment by the Chinese authorities cannot be quite compared with my treatment by the Dutch authorities. There are some parallels in the abuse of power however. Ai observes: “They apparently had been instructed to use anything against me.” In the same way the Dutch government lawyers concocted all kinds of silly accusations to get me fired.

Ai: “I do understand it. These men have been given a task. I was supposed to confess to be guilty, on all charges. That is how they operate. They don’t have values, they just obey the commands. That makes them so dangerous.” This also holds for Dutch state lawyers. I was offered to leave the CPB ‘on good conditions’ but that also implied that I would accept the invented accusations and take the responsibility of departure and thereby forfeit any position of criticism. The difference between China and Holland is that China still uses the iron fist and that Holland uses a velvet glove around it.

The difference between Ai and me is that he is a famous artist while I am an unknown economist and remained unknown because of the censorship. Not unimportant, Ai also had his nudes. Ai has a better prospect to overcome his difficulties than I have for mine.

When I was in highschool in 1970 I read some good history books about China and was much impressed by Sun Yat Sen. China still is a dictatorship and struggling on the road from the old Empire and foreign invasions towards modern democracy. It is not entirely clear why the authorities don’t allow their artists to be impatient. Artistic impatience and the growth in human values help the transition. The establishment of the rule of law means a break with all of Chinese history. It was achieved in the West only after the French Revolution in 1789. It is still imperfect when the Dutch Court for Civil Servants allows a CPB directorate to censor science and dismiss a scientist by using untruths. One can imagine that change for China is not so easy. The examples of Taiwan and Hong Kong are inspiring but those smaller area’s cannot simply be extrapolated to the whole of China.

Besides, the West is making a mess of it itself. If we had full employment, low inflation, income equality, care for the environment and a steady rise in wealth and welfare, then it would be easier for other nations to opt for our economic and societal model. My analysis on the failure of the Trias Politica is intended to provide that better model, see the book DRGTPE. Alas, it cannot be discussed at CPB, the main advisor of the Dutch government. If you want to help China and Ai Weiwei, boycott Holland.

(1) Holland is a small country. There are 17 million inhabitants and perhaps there are 1000 economists who discuss economic policy and who see each other at conferences. I seem to have met most of them at one moment  though people age and there arrive new talents. Today, there seems to be a good reason to mention one of these contacts.

An acquaintance during student years in 1976, a friend of a friend in the AIESEC student body, was Marko Bos, now director of Economic Affairs at the Social Economic Council (SER).

Marko met Malgorzata from Poland, they married already many years ago, and Malgorzata now runs where she also discusses the PVV website on Eastern Europeans – see my note on the Dutch Taliban.

Her text shows that the climate in Holland against foreigners is worse than I thought.

There is also this report by ING bank that the economic crisis will cause more divorces. I hope that Marko and Malgorzata can stay together. They will be amazed to read these lines about them in this weblog.

(2) The Dutch Social Economic Council (SER) consists of Employer Unions, Employee Unions, and independent scientific advisors. The director of the Central Planning Bureau (CPB) is one of those advisors. As explained in this weblog, the directorate of the CPB censors science, and thus the SER has been producing wrong advises for 20 years now, and the last years under Marko’s directorship.

The SER has not looked at my economic analysis yet. Perhaps Marko should look into it. He was however only a friend of a friend back then, so I don’t think it proper to just call him and direct him to my book. It might also be a bit of a predicament that I would suggest that the SER takes a stand against the censorship by the directorate of the CPB, one of their advisors.

Marko was already at SER twenty years ago. I am having this predicament for these decades since the fall of the Berlin Wall. Dutch society could have resolved unemployment 20 years ago and the transformation of Eastern Europe could have been much easier. I hope Malgorzata forgives Marko for not noticing my analysis sooner. He and his SER have been helping to create the problems that she has been confronted with. Perhaps it was an error on my part not trying hard enough 20 years ago, but there was no reason to single out SER compared to other institutes in Dutch society.

(3) Geert Wilders, who promotes that website on Eastern Europeans, is married since 1992 with Krisztina Marfai from Hungary. I tend to think that Wilders’s objection on Eastern Europeans indeed isn’t racial but is targetted at crime and nuisances like drinking too much. But his followers appear to be less subtle, and Wilders himself in some of his texts has lost the distinction between muslims and terrorists.

Wilders was hired by Frits Bolkestein for the VVD because he fitted the hardline view on immigration and seemed to know about social security. Translated, VVD stands for “People’s party for Freedom and Democracy”, but it actually is rather conservative and not quite liberty-minded with respect to other views. When Wilders started his political career, he was first an assistant for the political party VVD and then a member of parliament for it. VVD is the party of current premier Mark Rutte. Wilders’s portfolio concerned social economic issues. In terms of my analysis, Wilders didn’t do so well.

The director of CPB who censored my work in 1990-1991, was Gerrit Zalm, who in 1994 became minister of Finance for the VVD and later its political leader. The VVD partly line was that Turkey should become member of the EU, Wilders disagreed, and Zalm forced Wilders out of the VVD, so that he started the PVV. Zalm is currently CEO of ABN-AMRO.

In my perception, Zalm and Wilders are not that tolerant of other views. Thus Zalm ousted me from CPB and Wilders from VVD but that doesn’t create common ground. For example, Wilders’s Freedom Party has not yet protested against the censorship by the CPB directorate against freedom of scientific thought.

(4) I don’t think we can draw many conclusions from this. Just that the world is complex. The world is fractal. The complexity at the level of the world can also be found in separate nations, in cities, in families.

Holland is hidden behind the dykes but also behind a language barrier. Few people in the world understand Dutch. Thus the nitty-gritty of my protest against the censorship is unaccessible to those who might consider to join the boycott. Economist Willem Buiter is Dutch by origin, the UK vice-premier Nick Clegg is half Dutch and might translate for the BBC, and also Financial Times economist Martin Wolf appears to be half Dutch. Of course EU president Herman van Rompuy is Belgian and speaks Dutch. Perhaps there are more of such connections that may help negotiate the language barrier.

German journalist Eric Bonse writes sharp reports on the EU, the crisis, and the role of Germany. He put an earlier text of mine on his blog Lost in Europe – and kept the English so that nothing was Lost in Translation.

People in Europe who could read and write historically used mostly Latin, from say 300 BC to 1700 AD. Isaac Newton’s Philosophiæ Naturalis Principia Mathematica in 1687 may well be the last major work in Latin. The period 1700 – 2000 may well be called the ‘crazy centuries’ where everyone started to use his native language, with the thus crazy idea that it would contribute to communication, and that the English could understand Dutch, and the Dutch Russian, and the Russian French, …

These last 300 years are only 15% of the 2000 years before, so there is a strong case to prefer Latin above English as the universal European language. Would it not be a suggestion to teach the own language, English and Latin at school again ? My Latin from gymnasium is quite rusty for lack of practice. If used generally again, we could read Cicero in his native language – except for the crooked point that the Romans for a long while used Greek as their language of culture …

History before 1700 AD looks foreign to us partly because of the language barrier. If we take down that barrier than it will be less strange, in particular in the humanities. But these are strange ages anyway, without computer and mobile phone and whatever. Possibly it isn’t worth the effort to jumpstart Latin again.

Latin was also used in Holland till 1700. Spinoza (1632-1677) used Latin. There are English translations but I haven’t read them yet. I tend to read about a historical author before I try the original, since the commentaries help to identify the important bits (but beware of prejudices). For example, I only read parts of the Discourse on the Method by Descartes (1596-1650) when I needed proper references for my book Conquest of the Plane. Hopefully I have time to look deeper into ethics so that I must look into the original Spinoza. He has this neat idea: If you list all properties of God then you end up with Nature. This would provide the evolutionary transformation of the Priest into the Scientist, discussed before.

The period 1700 – 2000 may also be seen as the crazy centuries because of the rejection of Spinoza, as his fan Jonathan Israel is fond of explaining. Currently Israel is professor at the Princeton Institute of Advanced Study with unreliable Robbert Dijkgraaf as the new director. The Spinoza house in Holland has been restored and it will be re-opened on March 24 by … Dijkgraaf. It remains a small world.

Dijkgraaf in this speech in 1999 calls Spinoza one of the great Dutchmen of his age – which speech is in Dutch and thus lost to most of the world. In a column that I cannot retrace on the internet, Dijkgraaf reports that he discussed Spinoza’s Ethica with his son, and concluded that the “one matter” theory was nonsensical physics. I don’t know whether Dijkgraaf then considers Spinoza still to be Great. I tend to regard Spinoza as a philosopher and not as a physicist, though his reduction of issues to Nature would imply a dependence upon physics. It remains dubious however to say that philosophers should shut up till physicists have sorted out the mess. My bet, overall, is that Dijkgraaf’s view on Spinoza is unreliable as well. Once I find the time to pick up ethics and Spinoza I can find out for certain.

Holland wouldn’t be Holland if even the alreay quite small Spinoza house wouldn’t be even too small. Economist and philosopher Wim Klever is a great writer on Spinoza. He discovered that some main themes in Spinoza had been discussed by his teacher Franciscus van den Enden. Part of the work by Klever is in Dutch and thus inaccessible to the rest of the world. Stan Verdult favourably reviews one of Klever’s books – all in Dutch. Unfortunately, the board of the Spinoza house seems to consist of a clique of philosophers who have developed some dislike of Klever, and here is his open letter of protest. I have read a number of books by Klever and none of the other authors, so I am biased in favour of him. Likely it will be foreigners who have to make sure that all of his work is translated into English. Why do users of small languages fall in their trap ?

For this blog, comments don’t seem functional. I don’t have time to monitor them. Comments on a certain topic might distract from the overall proposition (to boycott Holland and direct your financial flow elsewhere).

For example, a fan of Darth Vader might object to the association with Robbert Dijkgraaf, and then IAS members might object that they haven’t developed into the Evil Empire just yet. Plenty scope for comments, but distractive.

Yet it seems that 100 persons have seen this blog now and it might be nice to open a page with room for comments. I am particularly interested in suggestions for elaboration or new entries: where the proposition would not be convincing up to now. You might have plans to visit Holland for the holidays next Summer and this blog hasn’t yet deterred you yet: then indicate what would help to clinch the argument.