Monitoring progress

Wolfgang Münchau rightly concludes “Germany’s constitutional court has strengthened the eurosceptics” (Financial Times Feb 9 2014). That German verdict will cause new turmoil on the euro.

To complicate matters, a Dutch website wonders whether Germany really has a constitution. Their reasoning is a bit convoluted so let me try to reconstruct it.

  • The German Constitutional Court (Bundesverfassungsgericht) itself states: “The Federal Constitutional Court’s task is to ensure that all institutions of the state obey the constitution of the Federal Republic of Germany (Basic Law).” Thus, there are the two words “Constitution” (“Verfassung”) and “Basic Law” (“Grundgesetz”). Germany may not have a Verfassung yet, only a Grundgesetz. The Basic Law was imposed by the allies in 1949 and differs from a Constitution created by a sovereign people.
  • The German original uses only one word: “Das Bundesverfassungsgericht in Karlsruhe wacht über die Einhaltung des Grundgesetzes für die Bundesrepublik Deutschland.”  It subsequently continues with Verfassungswidrig (“unconstitutional”), while of course the very name Bundesverfassungsgericht indicates that the Basic Law is treated as a constitution. (Though perhaps like the “European Parliament” calls itself a “Parliament” while it isn’t.)
  • Egon Bahr relates that German Bundeskanzlers had to sign a document (elsewhere called “Kanzlerakte”) provided by the Embassies of France, UK and USA. Willy Brandt tried to refuse but then caved in (Die Zeit 21 / 2009). But this was before Moscow 1990 with the treaty of the Final Settlement of World War II.
  • After that treaty of Moscow 1990, Germany changed its Basic Law somewhat. One can argue that their changing of it, is the act of a sovereign people.

I am in favor of Real Politik and I tend to accept that the Grundgesetz functions as a Verfassung. The allied forces imposed the original Grundgesetz indeed but I would focus on the point that the new BRD changed it. Their act of changing the Grundgesetz showed that they had the sovereign right to do so, and since they treat it as their Verfassung, it is one. But it is not as protected as in other countries. Also England has no constitution but only a Magna Carta.

While that is my point of view, it will be useful to indicate the sources of confusion.

We find the Basic Law here. It indeed carries the same distinction in article 146: “This Basic Law, which since the achievement of the unity and freedom of Germany applies to the entire German people, shall cease to apply on the day on which a constitution freely adopted by the German people takes effect.”  Thus the Basic Law recognises that there is no constitution yet.

In this educational page on German history we find the same conclusion in question 17: “(The document is called das Grundgesetz, which means “basic law”. It is not called die Verfassung which is the normal word for “constitution,” but it functions in every way as a normal constitution.)” The latter may be too simple. A constitution is based upon a sovereign people. The Basic Law has been imposed. Quite possibly the Germans might change the Basic Law in fundamental ways once the conditions of article 146 are fulfilled: freedom from meddling by others. Perhaps when the Germans are really free again, they abolish basic human rights and such, won’t they ?

When Germany was unified officially on October 3 1990, it is telling that its president Richard von Weizsäcker claimed: “we accomplished the unity and liberty of Germany in free self-determination”. He suggested a condition required in article 146 of the Basic Law to transform it into a constitution. But, it may be only a suggestion and political ploy. What is the real sentiment of the German people about their (imposed) “constitution” ?

The very point that Germany doesn’t have a Verfassung yet, or a document that they dare to call this, may also indicate that it does not have full freedom in self-determination yet. One can imagine that the Germans didn’t use the tedious constitutional process in the hectic days of 1990, but there has been ample time since then, and that time hasn’t been used. Why not ? Germans are gründlich, aren’t they ?

In the Treaty of Moscow 1990 we have to distinguish (1) the old Federal Republic of Germany (the West, or BRD), (2) East Germany, and (3) United Germany. The wikipedia article explains that East Germany was absorbed into the West: “Although the treaty was signed by the western and eastern German states as separate entities, it was ratified by the united Germany (the Federal Republic of Germany) per the terms of the treaty agreement.” Thus legally: United Germany = new BRD = (old BRD that absorbed the East). But still without a Verfassung, as the old BRD only had the Grundgesetz.

Wikipedia explains: “The Communist regime in East Germany fell in 1990; the parliament of the GDR (East Germany) declared the accession of the GDR according to Article 23 to the Federal Republic of Germany, making unification an act unilaterally decided by the last East German parliament. East Germany’s declaration of accession (Beitrittserklärung) included the East German territories into the field of application of the Basic Law. After the accession of East Germany to the Federal Republic of Germany Article 23 was repealed. Rather than adopting a new constitution under Article 146 of the Basic Law, the Bundestag (Parliament of Germany) only amended Article 146 and the Preamble of the Basic Law.” The process is also explained by Britannica.

The Treaty of Moscow 1990 states in article 7: “(1) The French Republic, the Union of Soviet Socialist Republics, the United Kingdom of Great Britain and Northern Ireland and the United States of America hereby terminate their rights and responsibilities relating to Berlin and to Germany as a whole. As a result, the corresponding, related quadripartite agreements, decisions and practices are terminated and all related Four Power institutions are dissolved. (2) The United Germany shall have accordingly full sovereignty over its internal and external affairs.”  (US Embassy in Germany)

This may be so, but this does not preclude that there might be another hidden agreement between the USA and Germany that exists apart from the Allied Four, and that infringes upon sovereignty and blocks the possibility to actually adopt a Verfassung.

In 2007, a former head of the “German CIA” Gerd-Helmut Komossa published the book “Die deutsche Karte” (The German Card – like in poker) stating that there was such a treaty in 1949. This is a video in English. I haven’t read Komossa’s book, but the Dutch website suggests that Germany would be militarily subjugated to the USA, and would have to keep its gold stored in New York. Bloomberg reports that only 30 to 50 tons of German external holdings of 3,387 tons are “repatriated” in 2014.

The Komossa suggestion thus is that the “Kanzlerakte” mentioned by Egon Bahr continued after Moscow 1990. 

Patrick Bahners discusses aspects of actually creating a new constitution like in the USA  (F.A.Z. May 18, 2009). But there may be those hidden factors that he does not discuss.

There are two ways to reason to the awkward conclusion that Germany does not exist. (1) The old BRD didn’t have a constitution (witness Egon Bahr). The old BRD absorbed Eastern Germany. When something without a constitution absorbs something else, then it still has no constitution. Hence the new BRD is not a sovereign nation. (2) In Moscow 1990 the old BRD was abolished and the possibility of a new sovereign United Germany was created. But that possibility has not been used yet, since there is no Verfassung yet. Hence the new BRD is not a sovereign nation. Both ways of reasoning result into the awkward possibility that Germany indeed has a secret treaty with the USA.

The Dutch website that I referred to, and from where I take most of these data and weblinks, suggests that the secret treaty of 1949 has a horizon of 90 years, and that US & German policy would be to target European Unification by 2039, so that the issue of a German constitution with real German national sovereignty would not arise.

This is a nice and for me new conspiracy theory that provides another rationale for the German focus on EU integration. Another was the Red House Report in the Daily Mail 2009 for example. Perhaps we should make a list, next to the reality that Germany is too small for the world and perhaps too big for Europe.

However, this text in English suggests a horizon to 2099 rather than 2039. Another wikipedia article in German quotes Komossa and also mentions 2099 (but it is wikipedia ….). However, the wikipedia article admirably provides a link to an answer by Angela Merkel, that the “Kanzlerakte” belongs to the realm of “legends”. That is, since 1990. Legends may have a true core in history. Angela does not account for Egon Bahr. In my earlier analysis (here) Angela Merkel has misled the German people at the elections of September 2013 about the economic costs of her EU-policy, but I don’t think that she would lie about such a straightforward issue of the Kanzlerakte. Though a “secret treaty” is a secret of course ….

The Dutch website that I referred to, and from where I take most of these data and weblinks, suggests also that the current German constitution would be that of the Weimar Republic, which would automatically have been resurrected by the abolition of the Third Reich. This does not seem sensible (either). It is more reasonable to assume that the Allied Four started from scratch once Germany was conquered. It would be silly to assume that an old regime is automatically resurrected when you have conquered the territory. But I am no lawyer, of course, and those might argue anything.

These were the sources for confusion. I remain with my position that Germany has a functioning constitution.

Musing over these points, though, we arrive at these conclusions: (1) It would help when not only Angela but also Barack confirms that there is no such secret treaty of 1949 that would still apply after 1990. (2) It would help when Germany adopts a Verfassung so that they grow more aware of what they might lose from integration into the EU. It would also resolve this new “stab-in-the-back”-kind of conspiracy stories. (3) It would help when say 80% of the gold is repatriated by say 2015. See my 2005 paper that we would use the gold rather not for monetary applications. Give people medals for their contributions to society. (4) It would help when Germany would follow a more eurosceptic policy, see my other weblog entries. (5) With the upcoming turmoil that Wolfgang Münchau rightly predicts after the verdict by the German Constitutional Court, it would be useful when European countries consider my proposal for national Economic Supreme Courts. If would fit in a constitution. (6) For the upcoming turmoil, see this paper on money anyhow.

PM. Dutch readers may want to check the conspiracy theory Dutch website I have referred to. Bad economic policy breeds paranoia too. That these Dutch conspiracy theorists focus on spooks may also explain that they haven’t discovered the plain and simple censorship of science at the Dutch Central Planning Bureau yet.

Earlier I called the period 1981-2007 “Keynesian years“. Deregulation, liberalisation and privatisation released huge flows of money looking for investment opportunities. Investors threw darts all over, and if some missed then they didn’t mind since some hit. Still, the outcome of this was only modest growth and employment. Nothing really huge, even a productivity slowdown. Now we are re-regulating again, and we face high unemployment. My suggestion for a solution is in the books DRGTPE and CSBH – see the About page – and an element are National Investment Banks. 

Paul Krugman in his column A permanent slump ? of November 17 2013 refers to Larry Summers who at the IMF annual research conference apparently made the same diagnosis of 1981-2007. 

But without the solution of DRGTPE, CSBH and those investment banks. It is a confirmation, though only a partial one. Facing a permanent slump without a solution is rather depressing.

The Dutch king Willem Alexander (WA, 1967) will be busy next week. Most important is his visit to Russia and meeting with president Vladimir Putin (VP) on Friday November 8. This visit to Russia will be somewhat special since WA is likely the last remaining governing descendent of the Romanovs, via Anna Pavlovna (1795-1865). This year Russia and Holland celebrated a year of friendship but this celebration was marred by tricky incidents on freedom of speech and arrests and beatings in diplomatic circles. Dutch diplomats are crossing their fingers that Queen Maxima’s charm will cure all wounds.

A bit less important than Russia but not to be discounted is the event on November 6, when WA will present the Erasmus Prize to Jürgen Habermas (JH, 1929). Undoubtedly, JH will inspire WA to some Erasmian message to VP, though diplomats will try to induce him not to press the issue. But WA might say to VP: “Dear president, a few days ago I presented the Erasmus Prize to JH. I enjoyed this very much. Perhaps it is an idea for you to create a similar prize in the name of a great Russian author or philosopher.” Who knows.

JH will give his lecture Deliberative democracy and political crisis on the day before, November 5, at the Dutch Academy of Sciences, organized by the Huizinga Institute, with this programme and planned livestream. Some of his ideas are covered by an email-interview with the Volkskrant, this weekend (apparently not linkable), a book review, and here his book in English.

My sad observation is that JH doesn’t add to enlightenment and only adds to the confusion. He is a Grand Old Man in social research and philosophy, but he is not a mathematically trained economist, and he cannot really evaluate what happens both in economic theory and in the real economy and thus in society. For his data, he refers to a report in Die Zeit with statements of “leading economists”. His main complaint is that European politicians dodge the real issues. As if we would not know that. As if we would not have a crisis because they dodge the real issues. As if you can trust “leading economists” and the process how the powers that be and the media select those.

No, if you really want to understand the economic crisis and the failing of the Trias Politica model of democracy, read my books DRGTPE and CSBH and VTFD, see the about page here above. Please note that these books suffer from censorship of science, so that the discussion on November 5 at the Dutch Academy of Sciences is severely crippled.

JH comes from a tradition that looks at high theory and that neglects to study the real world. He is part and parcel of a new class of priests like those who Erasmus poked at in The Praise of Folly (1509). Because of his fundamental neglect of reality JH is anti-Erasmian.

The Dutch committee that awarded the Erasmus Prize to JH is similarly affected. JH supports fast European integration and the committee seems to associate this with the pro-European outlook of Erasmus. They neglect the shallowness and they fear real criticism of the European Project.

A charade it is, a scandalous charade. A corruption of thinking and ethics, in mentally sick modern Holland.

PM. There is another Romanov connection to Prince Charles, see here. But Charles doesn’t reign yet.

The Peace Palace in The Hague, seat of the International Court of Justice, was initiated in 1900 after the 1899 Peace Conference, and competed in 1913, just before the outbreak of World War I in 1914. On August 28 there will be centenary celebrations.

The Palace and its centenary party are low key. The Nobel Peace Prize tends to draw more attention, and annually. The Palace is a symbol of good intentions and impotence. The high ambitions and the low results create a great sense of imbalance. Perhaps it is okay that the Palace is located at some distance from the truly powerful capitals of the world, but it doesn’t seem okay that conflicts like in Syria can erupt and destroy the peace.

Steel magnate Andrew Carnegie donated a major sum to have the building and its library erected. People thought in terms of bricks and books and elites. A modern magnate would think in terms of the internet and reaching everyone individually. That kind of creativity will be required to prevent the next World War. But the building is beautiul.

The Peace Palace, The Hague, statue of Justitia (Source: Wikipedia commons)

There are some personal notes. My great-great-grandfather Gerrit Cool (1825-1896) started a marble stonemasonry in Sneek, Friesland. His son and my great-grandfather Thomas Cool (1851-1904) didn’t want to continue in the company and preferred to become an artist painter. See his daughter’s book The five of us in Rome that received a first prize as the best children’s book for girls 1928. When his father died, Thomas sold the company to its recent managers, the brothers Vlietstra. They actually provided much marble to the Peace Palace. But the company didn’t survive the world crisis following the 1929 Wall Street Crash. Thomas made some huge paintings, some two by three meters, of buildings in Rome like the Saint Peter. When Thomas died, his surviving family had a hard time finding a place for those. In the early 1960s a friend worked at the Peace Palace and got it arranged that the paintings could be stored in its attic. In the early 1980s Thomas’s grandchildren inspected them, judged them to be too deteriorated, and had them destroyed. The only remaining large painting is the Colosseum in Moonlight, and this had been stored by my grandmother more safely next to the bicycles.

My own work on world peace concerns the analysis that the Montesquieu system of Trias Politica fails, and that each democratic nation requires a national Economic Supreme Court. The ESCs of the nations would be in scientific contact with each other, and thereby create some co-ordination of the world economy. Hopefully, my book DRGTPE on this finds its way into the Peace Palace library at some time.

Who advocates a worthy case for a boycott also suffers the task of monitoring the onslaught. Today brought me to Britain and especially to the BBC pages on The Netherlands.

No report on the boycott.

One wonders why they take the effort. These pages are ridiculous. Royalty, dikes, tulips, painters, drugs, some formal elections results, and of course the anti-immigration hiccups of late.

They also mention “Mondriaan” / “Mondrian”. Originally I criticised the BBC for misspelling his name “Mondriaan” as “Mondrian” but it appears that the artist himself started to use that other spelling when he moved to Paris. The BBC turns out to be more accurate on (some) facts than I was, but I maintain that the country report is a cliché.

Piet Mondriaan and his model (Nelly van Doesburg), 1923. (Source: Wikipedia Commons, some colours added)

PM. The BBC HARDtalk program is recommendable, on the other hand, e.g. with George Papaconstantinou about his time as finance minister of Greece 2009-2011. A HARDtalk session with Dutch minister Jeroen Dijsselbloem on the Dutch censorship of economic science would be nice.

I am burrying bottles at the beach of Scheveningen with messages for the future.

If human civilisation develops in stable manner, perhaps not with 3% but 0.3% economic growth, then in the year 2345 the economic level would be 1.003^(2345-2013) = 2.7 as much as today. People aren’t likely to notice the difference. My impression is that there will be digital, nano, and bio revolutions to the (non-) human body and society. People and sentinel robots might be too involved to notice the difference nevertheless.

The point remains that a new director at the Dutch Central Planning Bureau (CPB) in the year 2345 might not be much concerned by a letter of a former employee of 1982-1991 about a new economic analysis. The new director in 2013 doesn’t care and it is hard to imagine that successors will do so. How many bottles do I need to dispatch to which distant future ?

At the time of Chaucer (1343-1400) the Dutch and Anglo-Saxons could fairly understand each other. When Chaucer wrote about a knight, he pronounced the k, and the Dutch understood knecht, which is still a modern Dutch word for a servant for some lord. Six hundred years later we need professional translators who are aware of the k problem. Modern computers help close the gap again and they might get increasinly better (until they refuse to be our servants). I might help readers to translate my communication with the new CPB director. But this is a tricky exercise. Some subtle elements of Dutch culture are rather difficult to transfer (and might no longer exist in 2345).

The new CPB director has no background in economic science. She is an economist who worked in the government bureaucracy only. This is like president Obama appointing someone to the chair of the Council of Economic Advisors who has no background in economic science either. Some Dutch professors of economics protested to this appointment but have turned silent. In my view, the Dutch cabinet of ministers abuses its power of appointment, so my protest is permanent.

There exists a particular Dutch culture of talking with each other. A protestant might meet a catholic and they might hate each other’s guts and pray in church for eternal damnation, but they would smile with some bitterness, and agree to repair the dike to reduce the risk of flooding.  When a protestant (catholic) son and catholic (protestant) daughter fall in love, their parents might howl of indignation, but some arrangement is found, so that at least some of the offspring end up in the proper church. A recent example are the protestant King and his catholic Queen.

Thus, when the new director of the Dutch CPB refuses to talk with me then this is serious.

The general message of this weblog is that the Dutch are not as tolerant and free-minded as the world thinks they are. The particular Dutch culture of talking with each other might be seen as fitting with that image of tolerance. Perhaps my message doesn’t seem so consistent but I still think that it is. Another Dutch habit is to neglect others, like protestants and catholics neglecting each other’s existence, till a problem arises, with the need to talk. Apparently the new director doesn’t see the problem (yet).

Below is the exchange in emails, where I invite the new director of the Dutch CPB to talk with me, and the decline by the directorate secretary. Translate and experience the horror.

Appendix A: Email to Laura van Geest, the new director of the CPB

Date: Mon, 12 Aug 2013
To: Laura van Geest (CPB)
From: Thomas Cool / Thomas Colignatus
Subject: Verzoek tot een gesprek

Geachte mw. Van Geest,

Nu u bent aangetreden als directeur van het CPB bent u ook verantwoordelijk voor de behandeling vanaf nu van de censuur van de economische wetenschap door de directie van het CPB sinds 1990.

Voor de volledigheid meld ik dat de huidige economische crisis de juistheid van mijn analyse sinds 1990 bevestigt, en dat die analyse wegen biedt om de crisis aan te pakken. Dat er op het CPB geen onderzoek wordt gedaan naar deze bevestiging komt wellicht doordat mijn analyse in de ban is gedaan maar dat zou dus niet juist zijn.

Gaarne verzoek ik u om een gesprek waarin ik u nader kan toelichten over het falen van uw voorgangers Zalm, Don en Teulings t.a.v. de integriteit van de wetenschap. Ongetwijfeld zal uw omgeving en met name de juristen van EZ en BZK u verkeerde informatie geven. Weliswaar heeft de ambtenarenrechter censuur en ontslag toegelaten, maar dat betekent niet dat de ambtenarenrechter voldoende rekening heeft gehouden met de integriteit van de wetenschap.

Hieronder nog delen van enkele emails die ik in verband met uw benoeming aan de onderdirectie zond.

Met vriendelijke groet,

Thomas Cool / Thomas Colignatus
Econometrist (Groningen 1982) en leraar wiskunde (Leiden 2008)
Wetenschappelijk medewerker CPB 1982-1991

[… parts of email …]

Appendix B: Reply by the secretary of the directorate of the CPB

From: “Edwin van de Haar”
To: “Thomas Cool”
Date: 14 Aug 2013
Subject: reactie van het CPB

Geachte heer Cool,
Namens mevrouw Van Geest wil ik hierbij laten weten dat zij geen prijs stelt op een gesprek met u. Ook de huidige leiding van het CPB deelt uw interpretatie van de gebeurtenissen die 22 jaar geleden tot uw vertrek bij het CPB hebben geleid in het geheel niet. Noch voelt zij zich geroepen of verplicht u de gelegenheid te geven uw economische opvattingen verder uit te werken. Natuurlijk kunnen wij ons goed voorstellen dat dit voor u heel vervelend is. Dit hebt u de  afgelopen jaren op vele verschillende wijzen aan ons en anderen kenbaar gemaakt. Voor zover daar  aanleiding voor was hebben wij er ook op gereageerd. Dat zullen wij in de toekomst echter niet meer doen, aangezien de verschillen van inzicht tussen u en het CPB onoverbrugbaar en inhoudelijk onveranderd blijken.
Namens het CPB wens ik u verder het allerbeste toe.
Met vriendelijke groet,
Dr Edwin van de Haar
Directiesecreatris CPB

There are at least two “Earth Economics” websites.

The first website is an off-shoot of Herman Daly‘s research in ecological economics, see here. Quote: “Earth Economics provides robust, science-based, ecologically sound economic analysis, policy recommendations and tools to positively transform regional, national and international economics, and asset accounting systems.” However, they neglect the work of Dutch economist Roefie Hueting on how to account for the environment in the UN System of National Accounts. The Daly-Cobb Index of Sustainable Economic Welfare (ISEW) allows one to substitute home maintenance for the destruction of the ecology, which is silly. Hueting’s index of environmentally Sustainable National Income (eSNI) is the only index in the world that is properly based both in economic theory and statistical practice. See my paper The Old Man and the SNI.

The second website concerns the new economics textbook Earth Economics by Peter van Bergeijk of the Institute of Social Studies (ISS) in The Hague. The ISS gets its students from all over the world and thus it seems warranted that it pays attention to the world itself. This is a YouTube presentation by Peter explaining that the world is a closed economy and that there is emergent world governance perhaps as we see emergent stability in chaotic systems. Paraphrased: “We see governments all applying the same economic policy (of austerity) and thus the effect is similar to how there would be only one government following that policy.” See also a summary at Edward Elgar’s blog and this longer paper at SSRN.

I tend to enjoy Peter’s work in economics. Peter is open to the importance of the arts, and not only since he paints himself. His Ph.D. thesis (now here) had the important conclusion that economic boycotts are counterproductive. The power elites have the power to insulate themselves and only the weak general population suffers, while it also loses the ability to oppose the power elites. A better policy is to integrate troublesome countries in the world economy such that the internal countervailing powers generate moderation. The only reason that I still dare to advise to a boycott of Holland is that Holland is a wealthy country where a boycott would still achieve the desired outcome, i.e. the end of censorship of science.

It is wonderful that Peter now focusses on world governance. In the past Jan Tinbergen already focussed on this but the subject has been slipping from attention, even though we have the ecological crisis of which climate change is only an aspect. (The two websites are linked, if not by HTML then by content.)

I have some misgivings however.

(1) Peter states that he introduces the global dimension because he wanted to teach about an existing closed economy. This is convoluted. We don’t have a world government thus the world isn’t an existing closed economy in the sense of the Keynesian model. In common definitions we still have countries that trade. In the Edgeworth box the boundary conditions of world resources are given, so there is no need to switch to a closed economy model.

(2) My book DRGTPE also discusses world governance and suggests that this will be improved when countries have their own national Economic Supreme Courts (ESCs). In my analysis economic theory is important as an own separate factor in policy making and thus it requires special protection. That countries nowadays tend to follow the same policy (of austerity) is not a sign of convincing economic science but a consequence of unscientific processes. 

(3) My paper Money as gold versus money as water (RWER July 2013) gives an amendment on the theory of the optimal currency area and suggest that ESCs are the route also for the euro and world money.

(4) My 2005 paper on a World Parliament suggested that people can already start on creating such a parliament as an NGO, by setting up world political parties, holding elections, having parliamentary meetings, and paying voluntary (tax) contributions. Eventually such a parliament might develop some countervailing power to the UN setup. The European Union might be a bad example how countries could co-operate but we could all learn from the experience.

Peter’s book suffers from neglecting DRGTPE. I told him a decade ago about the censorship of science by the directorate of the CPB but he has been neglecting it. Students from all over the world come to The Hague to learn about economic science and “Earth Economics” but aren’t given science and aren’t told about the key results.

Sic transit gloria mundi.