When I free myself…

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

I cannot imagine my life as otherwise than it is. I have found resources of strength in myself which I believe would never have tapped if I would have been carrying on with my previous mindset.

 

There is a refreshing simplicity in grappling with realities rather than fighting in a fog, of being a perceptible fish in a small puddle rather than a rivet in a gigantic machine.

Societies may be rich with promises, sometimes forthcoming, sometimes with cost, always irreversible, and person can fall hard. I, by myself, promise nothing but accepting realities and keeping up hopes for achieving quality.

I may get little, but I always appreciate what I have. It will be mine. If I get nothing there is no place to fall so it helps creating power to catch up.

Inspired by “Ripples from Iceland” Amalia Lindaal’s book 1962 

China’s socioeconomic system: challenges ahead

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

China has managed a complex transition from centralized planned economy to some sort of open and dynamic economy with outstanding competence. China has exhibited an effective managerial style in adopting a series of realistic macroeconomic policies and foreign policies over the course of two decades. China’s governmental system has shown a quality for making quickly complex decisions in the context of globalization and when crises hit socioeconomic structure.

However it may be a question that China’s model a version for capitalism would be reliable and sustainable forever? Can it transplant in other part of the world with hopes to get the same outcomes?

It may be only a suitable model in regions inside East Asia where the Chinese cultural values are dominated. The model is strongly based on the Chinese political philosophy whose principle is embedded in government building and limited the people participation in macro decision making process.

The model cannot be sustainable in the long term. Neither export –driven growth nor the top-down approach to decision making will keep yielding positive and desirable results forever. By blocking open discussion about upcoming public policies, stopping any independent exploration and investigation on the failed public policies, in public, the socioeconomic system would not receive any feedbacks to rearrange itself. It translates that the entire socioeconomic system will lose its consistency and converges to its decay.

For more than 2000 years, China’s political and socioeconomic system has evolved around China’s chronic issue, lineage and kinship preference in social interactions. The Chinese moral philosophy had shaped around the objectives which could build, based upon a just, fair and quality government to address this issue. It was believed that then this government could guarantee a steady state for China’s socioeconomic system.  Now China is rapidly growing. The absence of public debate may be swept under carpet, power abuses committed in the middle and low level of the government’s hierarchy system. It can ignite the public anger which will cost the government. It should be kept in mind that the Communist Party has committed to equality with distribution of wealth over the society.

Economic growth will create middle class. If we assume the Chinese middle class, its number increasing, will behave in the way middle class do in other part of the world, this phenomenon will be another source of internal pressure. Middle class may not compromise social status and political participation with money.       

These arguments suggest that China’s model for socioeconomic system is not sustainable. It works in the time of crises, but not forever. It could survive, IF the export-based growth share lowers and replaced with more domestic consumption growth, however it puts the national security of China at stake (middle class pressure). Also China needs more cultural influences beyond its boarders. Besides being determined in foreign affair, a strong state should appear decisive and tough in collecting tax. In long term people will say “No Tax without participation”.  

Social norms resistance to change

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Social norms are evolved inside societies. The norms are being defined by specific group of people who share values, world view, principles and perceptions of new ideas. The norms are formulated based on the group’s real time needs, experience from past and cultural beliefs. When real time needs cannot be satisfied and societies cannot effectively adapt to new external forces, trust fades away from the effectiveness of norms. Frustration among the members of societies grows and pushes the societies to their limits. Society so often comes to a standstill. The phenomenon is so-called ideological trap happens. This situation drafts society from realm of realities and disables it to adapt to new contexts. To solve the issues, some members of society are basing their arguments on society’s glories in the past and strongly support a backward move to re-establish the old system structures. Among this group, some project the data in the past into future with taking into account the real time boundary conditions, and prescribe some sort of short term solutions. There is a group who looks for solutions out of the norms and view the norms themselves as obstacles for solving problems. They, at least in part, do not deny the dynamism of norms. But they believe the norms should be changed in the means to address the real time needs. Those of them who are radical reject the importance of norms dynamics and moderates keep searching for better norms to replace. The moderates usually fail to explain how society’s norms changes occur. What is the driving force behind the changes? What is the cost of the changes?          

Creating norm changes is triggered by changing the mindset of society’s population. Social progress requires a radical shift in society’s dominant value system and review the validity of the existing objectives in accordance with the new defined values. Norm change does not necessarily require breaking with the past. Infant norms rest over the outgoing ones and being consistent with the past. Shifting mindsets requires more than rational arguments and should bring about clear visions of a better life (Purpose) and are inspired to pursue it (Passion).

Norm change is a hard task. It requires a whole society commitment. It takes a big deal of time and has losers and winners. However it is unavoidable. Smart societies recognize realities and take action to change their value systems prior to external forces compel them to admit the changes 

Progressive ideology (Sustainable progress)

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Sustainable progress may look a weird term. Indeed the concept of sustainability has been one of key driving forces behind humankind’s advancement and progress. Sustainability has been pivotal to humankind’s survival strategies. It helps humans improve the ways they carry out their daily affairs, develop different ideologies and mindsets, create and find out merits in peace, law and regulation. By creating ideologies, humans facilitate the creation of different socioeconomic structures which in part respond their social interaction requirements.

Sustainability balances people’s interactions among their societies and benefits all members. It also balances societies with engaging communities in political systems to see their contributions in collective decision-making process in a broader context, and energizing members to pursue the grand vision. It keeps leaders accountable in societies and does not allow they impose their own interests on their communities. Instead, leaders must engage and cultivate new values based upon the culture values that already exist.

Sustainability does not halt humankind’s progress, unless the “ideological trap” appears and sustainability from a dynamic concept turns to a static one.

In the my next post I will discuss in brief about “ideological trap”

Powerful state capitalism - Chinese version of capitlism

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Economic redistribution, tax preference regime and austerity are new socioeconomic measures that politicians and people are circulating these days. They, with ideological bias, favour one these measures and claim that they get the fittest strategy to solve today’s crises. Some says “it is not rocket science”. Other put its blame on lack of political wills. One views Wall Street as the source of the crises.

Indeed. it is not easy as it may seem. I wish it would have been a rocket science, and then human being could quickly come up with a solution. The problem falls in the realm of social science and it should deal with a big variety of individuals’ interests and behaviours. It enormously contributes in the complexity of the problem.

It is a general consensus that Liberal democracy is the default ideology around much of the world today. In part because it is facilitated by certain socioeconomic structures. From liberalism perspective, one can formulate an abstract framework and prescribe based upon a straightforward solution such as tax cut. Or one with more sympathy to democracy may prefer taxing riches the most and one from the far-left advocates economic redistribution. Despite liberalism offers a well-built socioeconomic structure which has well performed in national and regional levels in developed countries, in our day’s challenges liberalism faces difficulties particularly when its socioeconomic structure is implemented in global scale.

Let me add the liberal foreign policy dimension to the standard assumption which is made by liberalism in regional level. The mobility of money and workforce has lubricated international investments and trade. It has contributed significantly in improving standard of life globally!! This move has generated enormous profits for investors and also increased the number of world-class milliners. It has generated middle class in developing countries while new classes in developed nations emerged in the vacancy of the past middle class. It draws new division lines in labour market.

They are all the fantastic side of a liberal foreign policy.

To analyse some implications of what liberals or liberal democrats prescribe, I take a global perspective and look into the issue in the context of globalization.

Liberals with far-right tendency prescribe tax cut. Giving the above mentioned context, when investors and riches can easily invest WHERVER they wish, at any points of the world (quite literally) where tax level is as low as zero, and can reside wherever they love,

§               HOW can an old fashion tax code in national level which does not accommodate the realities of our days, be effective?

Developed nations have long restructured their economies. New social classes have emerged and political parties are overwhelmingly polarized

§               How can an old fashion tax system guarantee distribution of wealth? Or in fact which wealth? (Liberal democracy advocators’ prescribe falls short)

One of the credits, in the idea of liberalism, is Strong State. It, side by side with the rule of law and accountability, has long proven the sustainability of states. No matter the size of government, strong state is needed to guarantee tax collection, existence of social benefits and services, and the solidarity of nation.

England’s Glorious Revolution was the starting point for modern liberalism. It created a strong state and the constitutional principle that state could not legitimately tax its citizens without their consent. And citizens without paying tax, were not included in.    

Given globalization and mobility of money, lack of a strong global governance and institution, political polarity (and all facts counted above),

§               Does one expect imposing/cutting tax would help to sustain economic growth in developed world?

§               Can one hope a strong state emerge with sufficient authority to collect tax?

§               Can one see a day when states would not owe any penny to private creditors?

Liberalism has always been the finest ideology that has provided a suitable platform for human beings to live up their needs and realize their dreams. It explains why liberalism has been and will remain the default ideology. HOWEVER there is a chronic problem with liberalism as the conservative economist Joseph Schumpeter wrote in his 1942 book Capitalism, Socialism and Democracy, that capitalist society was culturally self-undermining.  

So it won’t be easy to solve financial crisis with the means of tax in the context of globalization, unless capitalism can adapt with external forces…..It would be critical moment to chose, being Whig, China-like capitalism, adapt realism and…..or….. 

Irrational world and radical forces

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

“When economic distress reaches a certain point, the individual citizen no longer uses its political power (in a democratic system) to serve in the public weal, but only to help himself. Its ideal of political liberty pales before its ideal of economic equality. Once this sentiment has eaten its way into the hearts of majority of a nation, any political system is doomed to failure”.  They are words written by Erich Koch – Weser in 1931, the former minister of justice – Germany. He believed that it would be useless to put blame on leaders the responsibility of these misfortunes. He continued that it would be pointless to point out to individuals that a revolution with its attendant disorders would not improve their situation, but would hopelessly compromise it.

The world today faces the same troubles as it was in the 1920s and 30s. Financial crisis, shifting power, social class – conflicts and competition of states occur in a similar pattern. Despite the facts that our world has come long way since then with the dark experience of World War II, dozens of regional wars, ethnic clashes, ideological wars and consequently demise of communist system and the contraction of authoritarian regimes, yet it lacks a concrete and reliable global governance system.

Our leaders claim the fruits of globalization only in words. However the facts display contradictory achievements. It is expected that technology advancement and the expansion of human’s knowledge perpetuate the world toward an international peace, cooperation and sustainable growth. But again when security comes fore, the ideal system fails and it plunges in the same pitfalls as it did in the early twentieth century. 

The world is not thoroughly ruled by reason but passion influences when time is on its side.

When a man is driven to despair he is ready to smash everything in the vague hope that a better world may arise out of the ruins (E. K. Weser)  

Policy design in contemporary democracy

Shahab Sabahi

Energy and Environment for Development – Policy Analysis Research Group

Inevitably the idea of democracy has contributed in human beings' advancements over the course of times. With the demise of communism in the early 90s, the idea of democracy has been pivotal for shaping every political systems, ideologies and doctrines. the idea contains its merits which meet human beings' ultimate desires.
However a key challenge for democracy would be its resilience when time comes for the need of a strong, well-organized, effecient state. When accountability should give some room for subjectively policy goal setting.When time comes to accept altering preveiling institutions where there are polarized societies (politically) for the sake of the state.It is hard but it is reality

From system analysis perspective, a system should properly balance its external and internal forces if it is supposed to be alive. When rigidity (conservative views) wins resilience, and where the realism gives way to idealism (in time of trouble), no matter what system is called or is humans' favourable one, the system will be gone

It is time for realism