Author Archive for Monkey

Ingrid Betancourt: FREE!

Published
by
Monkey
on July 4, 2008
in politics
. 0 Comments

I read the book of Ingrid Betancourt “La rage au coeur” when I was at high school. I was fascinated by that woman that appeared so sweet, but turned out to be so strong. I thought that nobody in our century would have been so brave to risk her life to express her ideas and to fight against of corruption.

Some weeks after I finished that wonderful book, on February 24th 2002, I heard she had been kidnapped by the FARC. Since then, I have been collecting all the articles and news I could find about her.

I have always thought that in politics it is always necessary to make compromises and that for most of the politicians it is impossible to give clear cut answers. But no, Ingrid was different. When she was a deputy, she was an ecception. She reporterd the involvement of Ernesto Samper (the Prestident at that time) with the narcotrafic of the Cali Cartel and she spoke out against all the other politicians that were involved. She continued with her actions even if her life was threatened and even if she had to depart from her family (that was also threatened). Her objective was to win the presidential elections on May 2002 and fight against drug cartels and corruption for the sake of her country. I guess she would have make it, because she is an hero.

Go Ingrid!

Clever people

Published
by
Monkey
on June 23, 2008
in business and politics
. 0 Comments

I spent the last weekend in St. Moritz (CH) and I have asked about houses there. No way the value of the houses there is going to suffer from fluctuations.

It is pretty hard to get a house there not only because of the high prices, but also because if you are a foreigner, you are not free to buy whatever you want. In fact, by law, only a percentage of the houses can be sold to foreigners. I happened to talk with somebody that has been waiting to get a house there for 5 years.

Indeed, very good policy to avoid indiscriminate construction investments with the consequent pillage of the landscape, but also a very clever way to exploit the existing structures (hotels, restaurants, etc) and to avoid that the place gets invaded, losing its reputation of high level holiday place.

These Swiss are clever!

Theater tickets

Published
by
Monkey
on June 1, 2008
in economics
. 0 Comments

I was reading a really interesting book about the economics of arts and culture. The authors (Baumol and Bowen, 1966) have noted that live shows are fairly insensitive to the technological progress and to the resulting increase in productivity. Performing a play nowadays requires approximately the same inputs that were necessary at Shakespeare’s times: a theater, scenography, technical staff and actors.

If the wage of the artists was calculated on the basis of the average wage that other workers earn in other sectors, the price of the theater tickets would increase much more than the price of other goods or services that benefit from increasing productivity, with the associated risk that the demand would decline dramatically. If instead the artists were paid on the basis of their productivity, today they would earn the same wage that they would have earned at Shakespeare’s times, becoming one of the poorest social classes. This dilemma is avoided because usually governments could pay part of the costs. 

However, the public intervention could create distortions in the natural evolution of the supply of cultural and art goods. In fact it might happen that, to obtain funding, the artists would tend to produce something than the politicians, rather than the public, would like.

 

 

Chinese products: are they really cheap?

Published
by
Monkey
on May 24, 2008
in economics
. 0 Comments

Producing in China is extremely cheap. At least, that’s the appearance, especially when we hear that western production units have been transferred in China. However, appearance is often misleading.

Manufacturing in China is cheap to the detriment of workers. Holidays, social security contributions, unemployment insurance and safety on the job are expensive. Since China is on his way towards development, it is hard to imagine that there could be any job protection or whatsoever insurance or social security.

If Chinese workers are hard-hitting machines, the machinery used substantially lag behind the international standards of efficiency and pollute more than plants situated in other countries. The laws to protect the water, air and soil exist, but the real problem is the enforcement of environmental regulations. Very often, the production objectives established by the local factories in an area have to be pursued at any cost and the environment has to pay the expenses. It has been estimated that 60 % of the precipitations are constituted of acid rains for more than 1/4 of the Chinese territory (World Bank, 1997). As a matter of fact, China is the world leader in production of SO2 and NOx. Taking a look at the lakes, we see that 75% of them are considered to be polluted. The drinking water available to each inhabitant is estimated to be just a quarter of the world average. The machinery and plants used in China use more energy and produce more waste and pollution.

Most worryingly, the products made in China are made with materials that are not in conformity with western standards of safety because toxic. Very often, the products are of such a lousy quality that you have to throw them away after two usages, thus augmenting the amount of waste existing on our planet.

Is it worth to produce such expensive and often useless goods that require a huge amount of labour and raw materials? Besides everything, China is very thirsty of raw materials, such as oil or steel. The boosting demand of raw materials from China is driving up the world prices. If prices increase, and firms want to keep margins, manufacturing becomes more expensive and many firms have to close down or to move their production units where something else (the labour- the environment) is cheaper. More and more people will lose manual skills and craftsmanship, thus production could be nowhere else than in China.

World eats from the same pie: if someone gets a bigger slice, then someone else has to grab smaller slices. A price is not just a tag that have influence on your wallet. If decisions are price oriented, they should take into account the costs of environment and labor rights.