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Between Markets and the State Stavros A. Zenios President of UNICA University of Cyprus

Between Markets and the State Stavros A. Zenios President of UNICA University of Cyprus. Outline. The State of the World M arkets –and the seeds of their destruction States –and the seeds of their destruction The value of COOPetition

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Between Markets and the State Stavros A. Zenios President of UNICA University of Cyprus

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  1. Between Markets and the State Stavros A. Zenios President of UNICA University of Cyprus

  2. Outline • The State of the World • Markets –and the seeds of their destruction • States –and the seeds of their destruction • The value of COOPetition • COOP –and the seeds of their destruction

  3. Conclusion “Anyone can count the seeds in an apple, but only God can count the apples in a seed” Robert H. Schuller, 1926.

  4. State of the World: social • Constructed uncertainty • Technological innovation • Complex interconnectedness • Social reflexivity • Post-traditional societies • (Anthony Giddens, Beyond Right and Left)

  5. State of the World: environment • Global ecological footprint: 1.5 planets earth • “At the current pace of population growth and consumption, by the year 2030 we will need 2 planets earth to sustain us. And of course we have only one.” • Ecological footprint of regions: • Mediterranean nations need 3 Mediterranean seas • Cyprus ??? • (Global Footprint Network)

  6. Το Χρυσοπράσινο Φύλλο

  7. State of the World: environmental • World Bank Adjusted Net Savings

  8. State of the World: sustainability • Club of Rome--MIT • Limits to Growth, • 1970’s

  9. Since 1980’s Corrections = increasingly more costly No correction = Collapse

  10. Hysteresis • Societal attention deficit • Social choices • Lack of know-how Collapse Trap

  11. State of the World: economy • “World economy is undergoing seismic shifts. • This is partly because of the success in increasing productivity in manufacturing, so that a small fraction of the population can produce all the toys, cars and TVs that even the most materialistic and profligate society might buy” (Joseph Stiglitz, Freefall, 2009) • Huge trade imbalance EAST-WEST. • Manufactured goods automated-no job creation. • Manufacturing related SERVICES exacerbate the problem.

  12. Markets: the seeds of their destruction • Ignore negative externalities • Inequalities in distribution of wealth • Can not offer public goods

  13. 1. Externalities do not remain external • Environmental problems • Banks care about shareholders not about depositors • Management bonuses erode shareholder value

  14. 1. Externalities do not remain external

  15. 2. Inequalities in distribution of wealth “All animals are created equal. But some animals are more equal than others.” Animal Farm

  16. Increased inequalities:  Household debt Reduce savings Destabilize Social problems

  17. 3. Can not offer public goods • FIRST GENERATION: Healthcare, education, security, transport • SECOND GENERATION: Healthcare standardsQuality assessments Food quality Waste management Policing

  18. States: the seeds of their destruction • Non-innovative bureaucracy • Dependencies • Complacency • Inefficiency • Fiscal irresponsibility • Corruption

  19. The State of Cyprus • 300% GDP private debt • +70% GDP public debt • Competitiveness on a ride 34….40….50…. • Oversized banking sector

  20. The value of COOPetition Love economy: 16 trillion USD vis-à-vis 24 tr. global GDP Shadow economies: 34.5% of GDP = 8 trillion USD

  21. Genuine Progress Indicator Human Sustainable Development Index

  22. Social Capital TRUST • Honesty • Keeping promises • Reliability in performing duties • Professionalism • Reciprocity • Values have economic value added

  23. COOPs: the seeds of their destruction • Markets destroy social capital • Government interventions destroy social capital • Can COOPs destroy social capital? Diamond’s Collapse Trap?

  24. COOPs: the seeds of their destruction Causal link behind evidence that banks’ lending to owners and directors can result in “looting”. Looting occurs when controlling parties are at risk of losing control. Related lending is used to transfer profits only in localities where the incumbent politicians face significant competition for reelection. Where the incumbent party has a high probability of reelection there is no such evidence. Halling, Pichler, Stomper The Politics of Related Lending Institute of Advanced Studies, Vienna

  25. “Anyone can count the seeds in an apple, but only God can count the apples in a seed” • Karl Marx “Society poses itself only such problems as it can solve” • John F. Kennedy“Our problems are man-made, therefore they can be solved by men” • Stavros A. Zenios amendment “Our problems are man-made, therefore they can be solved by women”

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