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*Mystic note* I know these INET videos are not very thrilling (unless you are really into them). I am really into them. I cannot recommend any of these presentations (Stiglitz...

*Mystic note*
I know these INET videos are not very thrilling (unless you are really into them).
I am really into them.
I cannot recommend any of these presentations (Stiglitz if anyone); but still I have listened to them all over 5 times (maybe nearer 10).

The bullet points can be considered Mystic jottings …. for when I will try and put together a bigger picture ……….. anyway -

The third session of day two was – `Is mercantilism Doomed to Fail?`
Peter Jungen (moderator) noted:-

• 1960 global exports were 12% of world gdp
• They are now 33%
• Exports are a big deal.

The Jungen video runs into the first speaker Paul Davidson -

• Talks of the `ergotic axiom` … that is, where it is taken that the future will be just like the past.
• Many economists have adopted this ergotic axiom as the basis for their models.
• Keynes and Soros say the world is non ergotic.
• *Mystic note*  Here we go again with economists doing stupid things …. Why~?
• People deal in money contracts and try and know how they are doing ….
• … so do countries … via balance of payments (surplus or deficit).
• As for people, when the balance gets out of whack …
• … it is the creditor that must take the/a good hit, because he is the only one that can afford it.
• *Mystic note*  The revulsion you felt at that last line is the revulsion that will take our world deep into depression~!

2nd up Heiner Flassbeck -

• Germany is the only real mercantilist country and its policy will fail.
• The 1999 policy was to put productivity improvements into keeping employment high.
• Unit labor costs dropped.  Inflation dropped.
• Current account went from deficit to surplus …. But
• … wages and retail sales stagnated …
• … as Germany out competed most everyone (notably other EU countries).
• He notes that it must be Germany to shoulder the weight of the balancing.

3rd up Norbert Walter -

• Notes that during unification Germany ran a decade of deficits.
• Also that Germany, an aging country, will need the surplus savings…
• … and all round, protesteth too much.

last up Joe Stiglitz -

• Basic trade identity … Exporks must equal Imporks.
• Problem is with … magnitude, persistence and pattern of deficiks.
• Multi-country austerity is a recipe for disaster.
• The US has been, and still is, the deficik / spender of last resort….
• … and this cannot be sustainable.
• Some other countries, like Spain also became last of the deficik spenders….
• … and this has shown it is not sustainable.
• *Joe note*  An economy is not to increase gdp; it is to increase the well-being of the people.
• Austerity stops imports, how~? … By destroying the economy~!
• Why are some countries in surplus~? …. 1/ to build up safety currency reserves.    2/ to get out of 3rd. world by cheap labor exports (everyone has done it in the past~!)  3/ Saving for a demographic aging of the population.
• Again – It must be the creditors who should be generous here.
• *Mystic note*  The world is getting increasingly aware, on many levels, of who is a debtor and who is a creditor …. A dangerous splitting~!

The QnA finished the session -

• All countries should be allowed capital controls.
• The US has kept the world going with her deficits.
• It would take 10 years of clever effort to balance German wages to rest of EU.
• To get growth in Europe, core countries will have to spend into periphery.
• Governments can’t control everything (demographics for one thing)
• Unions will continue to shrink …. Government minimum wage may have to be used
• Savings are done by the rich in any population.  The poor aren’t saving.