Tag Archive | Spain

The Arab Scholar Who Beat Adam Smith Economics by Half a Millennium*

The Arab Scholar Who Beat Adam Smith Economics by Half a Millennium*

By Dániel Oláh

In one of the most seminal works in the field of history of economic thought (History of Economic Analysis, 1954), Joseph Schumpeter argued that there is a “Great Gap” in the history of economics. The concept justifies the general ignorance in economics curricula towards economic thinking between early Christian and Scholastic times, emphasizing the lack of relevant positive (“scientific”) economic thinking in this period.

Statue of Ibn Khaldun in Tunis

 

Thanks to this self-created gap the most outstanding Islamic figure of the Middle Ages, the Andalusian scholar and politician Ibn Khaldun is neglected in mainstream textbooks (Screpanti and Zamagni 2005, Roncaglia 2005, Rothbard 2006, Blaug 1985). Several of these works often misleadingly start to identify the roots of modern theories with discussing the mercantilists or the Scottish Enlightenment.

The truth is that these weren’t the beginning of economic thinking at all.

Establishing social science in the 14th century

The biggest merit of Khaldun lies in his revolutionary methodological thinking. He completely rejected the methodology of his ancestors, which made him the first “social scientist […] in the strictest meaning of that term” (Fonseca, 1988). Before Khaldun, the role of islamic historians was limited to transmit knowledge without modifying, editing or adding any remarks to the tradition. They never questioned the validity of stories, but analyzed the credibility of the transmitter quite carefully instead.

Khaldun discarded the practice, stating the need for a new, scientific method which allows thinkers to separate true and fake historical information. But how to achieve that? According to him we should “investigate human social organization” to have “a sound yardstick” helping us to analyze society instead of accepting absurd stories of historians (Khaldun pp. 7-8).

Khaldun highlights that this is a completely new, original and independent science, which hadn’t existed before (Khaldun p. 8).

The stepfather of economics

Khaldunian thinking may be embarassingly familiar to today’s economists. He states that the division of labour serves as the basis for any civilized society and identifies division of labour not only on the factory level but also in a social and international context as well. Khaldun highlights on the example of obtaining grain that division of labour creates surplus value: “Thus, he cannot do without a combination of many powers from among his fellow beings, if he is to obtain food for himself and for them. Through cooperation, the needs of a number of persons, many times greater than their own (number), can be satisfied” (Khaldun p. 87).

His example of the division of production process is completely forgotten by economists and it’s not less expressive than the pin factory of Smith: “such include, for instance, the use of carvings for doors and chairs. Or one skillfully turns and shapes pieces of wood in a lathe, and then one puts these pieces together, so that they appear to the eye to be of one piece” (Khaldun p. 519). What is more: opposed to Smith, Khaldun doesn’t make any distinction between productive and unproductive work.

Based on this it’s easy to understand that Ibn Khaldun presented very similar ideas as Adam Smith, but hundreds of years before the Western philosopher. But Khaldun said even more about the economy.

He analyzed markets which arise based on the division of labor and examined market forces in a simple didactic way which is very similar to the attitude of Alfred Marshall. The invention of supply and demand analysis wasn’t invented in the 19th century: the Islamic scholar also described the relationship of demand and supply, and also took the role of inventories and merchandise trade into account. He divided the economy into three parts (production, trade and public sector) since the market prices in his theory include wages, profits and taxes (Boulakia 1971). At the same time he analyzed market for goods, labor and land as well. This structured approach led Khaldun to invent the labor theory of value, which makes the Islamic scholar a pre-marxian (or classical) thinker in this sense (Oweiss, 1988).

His idea, that the produced value is zero if the labor input is zero seems surprisingly classical, far ahead of his time.

How neoclassicals created a false story

In the dynamic Khaldunian model of economic development, the government plays a crucial role. Its policies, primarily taxation has a great effect on the development of a civilization. After the nomadic way of life tribes change to sedentary lifestyle, giving birth to urban civilization. The sedentary lifestyle demolishes the original group solidarity and creates a need for a new clientele. Creating a new group identity is costly and needs a new army as well.

So with the deepening of urban civilization, and thanks to the increasing luxurious needs of the dynasty, the ruler has to increase taxes. In the end, tax rates become so high that the economy collapses. “It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments” (Khaldun p. 352) – writes Khaldun, describing the micro incentives behind taxation as well. On  the other hand, he rejects customs and government involvement in trade since the economic-political power of government is disproportionately large.

These ideas are so unique in the Middle Ages, that even Ronald Reagan quoted Khaldun’s work stating that they had some friends in common, referring to Arthur Laffer. The reason for this was that even Laffer himself regarded Khaldun as a forerunner of supply-side economics and the Laffer-curve, although Khaldunian ideas have not much in common with the Laffer-curve. The reason is that these should be interpreted in time dimension rather than as a policy rule of thumb.

So this narrative is not only false but illustrates how neoclassical economics forms economic history to justify its existence. These are unhistorical oversimplifications to create the story of a glorious and direct evolution towards neoclassicism as the most developed state of economic thinking.

In this process, scholars of the past are neglected, tried to be integrated into the context of neoclassical history – or both.

Keynesian ideas from the 14th century North-Africa

Finally, the ideas of the Muslim philosopher anticipate ideas of Keynesian economic theories as well. Khaldun’s words are telling: “dynasty and government serve as the world’s greatest market place, providing the substance of civilization. Now, if the ruler holds on to property and revenue, or they are lost or not properly used by him, then the property in the possession of the ruler’s entourage will be small. Thus (when they stop spending), business slumps and commercial profits decline because of the shortage of capital”. “ […] Furthermore, money circulates between subjects and ruler, moving back and forth. Now, if the ruler keeps it to himself, it is lost to the subjects” (Khaldun p. 365).

These are strong arguments for government spending in the context of 14th century North-Africa.

Adam Smith as a Khaldunian thinker?

Not only Khaldunian ideas, but the methodology behind them is also truly original, since it relies on abstraction and generalization. Khaldun gives us the economics of 14th century North-Africa and numerous relevant issues. He addresses questions for which we don’t have a single solution even in the 21th century. Khaldun helps us to bridge the gap in history of thought showing the importance of medieval Islamic culture. He also helps to understand the relationship between Islamic economics and other schools of thought being a theoretical common ancestor.

It’s not known for certain that Adam Smith or any other classical scholar hadn’t been inspired by Khaldun’s work when developing their own theories. Among others we have to uncover this information – which lost in the Great Gap – as well, in order to discover a new narrative which is closer to reality.

But why do we need a new narrative, rediscovering our past? The answer is simple: to avoid such superficial beliefs that Adam Smith (or Ibn Khaldun) is the father of economics, the development of economics started in the New Age to culminate in neoclassical thought, Khaldun already invented the Laffer-curve, the financial market effectively regulates itself or a big government is always bad for the economy – among others. Economists have to exercise self-reflection: the crisis of 2008 proved that gaps in the mainstream transform easily into policy mistakes.

With a new, more plural approach to history of thought the Alzheimer’s disease of mainstream economics can be cured which is badly needed in the 21th century.

Source*

Related Topics:

Dear Future Generations: Sorry

Usury – The Root of All Evil?*

Making the Most of What You’ve Got!

Personal Freedom, or My Freedom vs. Yours?*

One Economy, One Government, Your World!

Anti-Austerity and Living on the Edge

The Revolution Will Not Be Televised

Love for the Poor*

Muslim Cordoba Going for a Song

 

Catalonia Independence Vote Rejected by Spanish Government*

Catalonia Independence Vote Rejected by Spanish Government*

People hold “Estelada” flags, a symbol of Catalan pro-independence, at the Catalonia Parliament in Barcelona, Spain, January 10, 2016 | Photo: Reuters

Regional head, Carles Puigdemont, is calling for a secessionist referendum in October.

In an increasingly bitter dispute, the Spanish government says it will block any attempt to further an independence process in Catalonia.

The northeastern region has called for a secession referendum on October 1.

A Spanish government spokesman, Inigo Mendez de Vigo said

“Any move that evolves from an announcement to a fact will be appealed …that referendum will not take place because it is illegal.”

Catalonia is a populous, wealthy region with its own capital of Barcelona and its own Catalan language

Previous independence challenges have been blocked by Spain’s conservative government and the Constitutional Court.

The Catalan government has yet to formally sign off on its announced referendum.

“The question will be: ‘Do you want Catalonia to become an independent state in the form of a republic’,” Carles Puigdemont, president of the government of Catalonia, said.

Puigdemont added that attempts to agree to the date and the wording of the question with the Madrid government had failed and left him with no other choice than to move unilaterally.

“We have always made very diverse offers and all of them have been rejected without any exception,” Puigdemont said.

Some 2 million people voted in favour of secession in a 2014 non-binding ballot, though turnout was relatively low.

It is not clear how far the legal wrangling may go this time as the Catalan regional government has said it would throw all its weight behind the vote.

Under Article 155 of Spain’s constitution, Madrid has the power to intervene directly in the running of Catalonia’s regional government, forcing it to drop the referendum.

This could involve sending in the police or suspending the regional government’s authority as a last resort.

Source*

Related Topics:

Why Catalonia Is Formally Breaking Up With Spain*

Spanish Banks, Obama et al Threaten Financial Meltdown if Catalonia Votes for Independence*

1.8mn Catalonians Rally for Independence from Spain*

Spain Follows Iceland and Arrests Top Bankers*

Spain Follows Iceland and Arrests Top Bankers*

By Ariana Marisol

Spain is following in Iceland’s footsteps by charging their top bankers for failings that led to the loss of millions of Euros for smaller investors.

Last year, Iceland jailed nine of its top bankers for a total of 46 years for crimes relating to the 2008 economic crash.

Last year, Spain’s Supreme Court ruled that there were “serious inaccuracies” in the listing that led investors to back certain banks. Because of this, the bank has had to pay out millions of Euros in compensation.

Wolf Street explains,

“As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV [National Securities Market Commission] (the Spanish equivalent of the SEC in the US).”

“The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was ‘unviable.”

The court is questioning why they allowed Bankia to sell shares in an initial public offering in 2011, less than a year before Bankia’s porfolio of bad mortgage loans forced the government to seize control of it. There is evidence the regulators had “full and thorough knowledge” of Bankia’s plight. After its nationalization, it reported a €19.2bn ($24.7bn) loss for 2012, the largest in Spanish corporate history.

Internal emails and documents played a huge role in bringing down the central banking officials to task for the failure of Bankia. Inspectors who brought issues to the attention of superiors were allegedly ignored.

While Spanish judges are generally reluctant to sentence first-time financial criminals to prison, actions are being taken against the wrongdoings and wrongdoers of Bankia.

Meanwhile, taxpayers in the United States have yet to see Big Bankers criminally responsible for the financial ruin of millions of citizens brought to any semblance of justice.

Source*

Related Topics:

Iceland Jail Top Bankers For 46 Years, Europe ‘Outraged’*

Five Spanish Banksters Jailed*

100,000 Bankers Lost Their Jobs in 2015*

Bankers Arrested In Nine Countries

Hiding in the U.S Ireland to Prosecute Top Banker for Destroying Their Economy*

Judge Calls for U.S. Marshals and FBI to Arrest Congress and the President*

Royal Bank of Scotland VP arrested on $10mn Fraud*

Occupy World: Blue Eagles vs. Racketeering Bankers*

Only 3 Countries Left Without a ROTHSCHILD Central Bank!*

Baron Rothschild Indicted in France for Fraud*

What Will Unfold as Greece Hires a Rothschild as Debt Advisor*

Hungary Becomes First European Country to Ban Rothschild Banks*

Rothschild Bank under Criminal Investigation over Missing $4bn in Global Corruption Probe*

Rothschild Bank Now Under Criminal Investigation*

Rothschild Demands Western Nations Invade Syria*

Rothschild Makes Dismal Admission — His Financial World Order Now “Threatened”*

Over 10,000 Weapons intended for Terrorists Seized by Europol*

Over 10,000 Weapons intended for Terrorists Seized by Europol*

By Jim W. Dean

A lot of details are missing on this story

[ Editor’s Note: My, my… it’s a good day for Europol. It seems unusual for a big arms gang to have a huge stash like this in one place. The alternative would be to have dispersed ones in out of the way places, with the trade off of the risk when moving them around.

There is not a word in the story about the serial numbers or origin of any of the weapons, whether they were reported stolen, where manufactured, etc., strange for this kind of a story where that information, at least some of it, would be included.

We don’t hear much about the arms trade in Europe. Gordon has described how the huge truck ferries on the Mediterranean, due to the speed of loading and unloading them, only rarely is anything searched. It’s a smuggler’s paradise and a major employer.  Turkey is a major small arms manufacturer, and Turks have had extensive smuggling networks all over Europe for a long time.

In the new world we live in, the long running crime operations only succeed in never getting broken up because at the top of the food chain you will find powerful political, military or security people. Sure, regular criminals are found at the bottom, but letting big time traditional crooks hoover up all of these endless millions on trafficking is something the well-connected elites viewed as “unfair”. As Gordon would say, “Welcome to how the world really works” … Jim W. Dean

More than 10,000 assault rifles, 400 howitzer shells, grenades, and anti-aerial machine guns — likely intended for sale to terrorists and criminals — have been seized in a joint raid by Spanish police and Europol.

Video footage released by Europol on Tuesday shows the massive cache of weapons, which the Spanish National Police seized in Bilbao, Cantabria and Gerona in January as part of operation Portu, which was supported by Europol. The haul was so great it took weeks to catalogue.

The European policing agency said in a statement that there was a “significant risk” of the weapons “being acquired by organised crime groups and terrorists.”

“Due to their characteristics, their calibre and their readiness for reactivation, the seized weapons had an easy journey in the black market and posed a significant risk of being acquired by organised crime groups and terrorists,” Europol said.

The stash contained deactivated firearms which were largely purchased legally, and were later reactivated. Firearms found at the scene were ready to be repaired and transformed back into working weapons.

Five people have been arrested and €80,000 ($85,000) seized along with the weapons, Spanish police reported.

The crime group was using a sports shop as a front for its illegal firearms distribution center. A workshop used to reactivate the firearms was also discovered, as well as equipment to create forged certificates of reactivation.

Source*

Related Topics:

Rothschild Makes Dismal Admission — His Financial World Order Now “Threatened”*

A Government Researcher Stands for Truth

Ukraine Forces Caught Shelling their own Citizens*

Will Deep State Agenda Replace Trump with Pence*

Honduran Farmers Sue World Bank for Lending Arms for ;Profiting From Murder*

U.S. Lawmakers Introduce Legislation to Unleash Nuclear Arms Race in Europe*

Imminent Starvation Resulting from U.S. Led Wars: U.N. Officials Warn of Worst Famine Crisis Since World War II*

Indigenous Mexicans Slam Misappropriation of Native Designs*

Indigenous Mexicans Slam Misappropriation of Native Designs*

Constanza Garcia Lopez, an Indigenous mother of Oaxaca, shows a traditional huipil dress embroidered by other Indigenous women. | Photo: EFE

 

“Stop the cultural and textile dispossession of our peoples!” said representatives of Mexico’s Indigenous Chinanteco community.

Representatives of Mexico’s Indigenous Chinanteco community in Oaxaca on Thursday publically denounced Spanish fashion company Intropia for misappropriating its native designs, El Imparcial reports.

“Stop the cultural and textile dispossession of our peoples!” the representatives said in a statement, according to the site.

“We oppose the textile plagiarism of our original peoples and want full recognition of Chinanteca culture.”

Textile artists, anthropologists, and historians held a press conference at the Textile Museum of Oaxaca where they criticized Intropia for allegedly plagiarizing Chinanteco huipil designs without giving them credit. Huipils are loose-fitting tunics with intricate designs that have been worn by Mexican and Central American Indigenous women for over a thousand years.

Intropia, according to the Indigenous representatives, sold replicas of huipils with Chinanteco designs as “mini embroidered Aztec dresses” and “mini dresses embroidered with zig zag details” without given proper credit. Chinantecos are a non-Aztec Indigenous group that allied with neighboring tribes to fight the Aztec Empire prior to colonization.

The Indigenous representatives said Intropia’s products and their accompanying descriptions show “a lack of knowledge of the iconography and elements of the daily huipil that narrates their entire history,” according to El Imparcial.

They demanded that the Spanish fashion company give credit for the designs they have already produced to the Chinanteco people, and end any future reproductions of their designs. They also took the opportunity to invite Intropia representatives to visit their community and learn about their Indigenous culture and history.

Criticizing the Mexican government, the Chinanteca representatives asked why they don’t take action on the mass plagiarization of Indigenous Mexican culture and intellectual property.

“What does the Mexican State do to protect the collective rights of Indigenous peoples?” they asked.

“Because they’re letting people plagiarize our art, traditional knowledge, plants, animals, and gastronomy.”

Intropia has not responded to these criticisms, El Imparcial reports. Chinanteco leaders are evaluating legal actions they might take against the Spanish fashion company.

Source*

Related Topics:

Rothschild did to India what China is doing to Ghana*

‘We will not buy what is ours’. Challenging terra nullius in the Courts of Guatemala*

ISIS Stealing and Selling Ancient Syrian Artefacts to Buyers from the U.S. and Europe*

Looted Palmyra Treasures Discovered in Geneva Warehouse*

A 55,000 year Old Artefact Found in Sierra Leone made Out of Oxygen?*

Rape, Jews, and Bollywood*

Greater Israel and the Tale of Two Temples*

This Week the ‘Arch of Baal’ Was Displayed For the Third Time in Honour of ‘The World Government Summit’*

 

 

In Spain a Restaurant that Charges the Rich and Feeds the Homeless for Free*

In Spain a Restaurant that Charges the Rich and Feeds the Homeless for Free*

A homeless woman in Spain sits with her belongings by the curb. | Photo: Reuters

A homeless woman in Spain sits with her belongings by the curb. | Photo: Reuters

According to estimates, there are about 40,000 homeless people in Spain, but official figures put it at 23,000. Another 1.5 million families live in shelter.

A Spanish restaurant is turning the tables on poverty by charging its breakfast and lunch customers extra in order to feed homeless patrons at dinner for free.

Appropriately titled The Robin Hood Restaurant, after the fabled medieval outlaw who stole from the rich to give to the poor, the establishment is run by a priest who says he simply wants to give people the chance to “eat with…dignity.”

homeless people eating a free dinner at the Robin Hood restaurant ...

homeless people eating a free dinner at the Robin Hood restaurant …

I want (homeless people) to eat with the same dignity as any other customer,” Father Angel Garcia Rodriguez, 80, told NPR.

“And the same quality, with glasses made of crystal, not plastic, and in an atmosphere of friendship and conversation.”

 Volunteers serve free dinner to homeless people at Robin Hood restaurant in Madrid. Pablo Blazquez Dominguez/Getty Images

Volunteers serve free dinner to homeless people at Robin Hood restaurant in Madrid. Pablo Blazquez Dominguez/Getty Images

The restaurant, which opened in December 2016, is in Madrid, and is reportedly a hit not only with its customers but with the hoards of celebrity-chefs and other personalities who frequent it. According to the broadcaster, it has managed to “poach staff from luxury hotels,” and celebrity chefs line up to cook weekly.

Its dinner menu features items like mushroom consommé, roast turkey and potatoes, and pudding.

Over 100 people in need attend the restaurant nightly, NPR reported, and they are looked after in two shifts. For paying customers, lunch is booked through the end March.

 A dinner patron chats with Father Angel (right), who says that he wants homeless people to

A dinner patron chats with Father Angel (right), who says that he wants homeless people to “eat with the same dignity as any other customer.” Pablo Blazquez Dominguez/Getty Images

Padre Angel, as he is more commonly known, has also converted a nearby abandoned church into a community centRE where patrons can hang out, watch television or even sleep.

According to The Homesless Worldcup, a social organization that uses soccer to reach out and help homeless people around the world, estimates there are about 40,000 homeless people in Spain, though official figures put it at 23,000. Another 1.5 million families live in shelter, the organization estimates.

A different restaurant in the U.S., in south Los Angeles, does something similar by charging its patrons what they can afford or up to $4.50, Business Insider reported.

Source*

Related Topics:

Immigrant Designer Goes From Homeless to Wealthy, Then Sells Everything to Help Others*

San Francisco Judges Dismiss 66,000 Arrest Warrants against the Homeless*

So ‘no one eats alone’ Muslim-owned Restaurant Offering Elderly and Homeless Free Meals on Christmas Day*

A Former Street Child in Mumbai Builds a Cafe-Cum-Library for Homeless Youth*

Homeless Are Being Abducted and Put into FEMA Camps*

 

Five Spanish Banksters Jailed*

Five Spanish Banksters Jailed*

Archive photo from a demo against bankers. Photo: AFP

Archive photo from a demo against bankers. Photo: AFP

Archive photo from a demo against bankers. Photo: AFP

A Spanish court has jailed five former executives who got millions in severance pay from a struggling bank that later had to be nationalised, a first in a country still reeling from banking bailouts.

“These are people who managed a savings bank that had to be rescued by the state,” Spain’s top-level National Court said in a ruling seen by AFP on Tuesday, adding it had taken the decision to avoid allowing former bankers to enjoying “impunity”.

The ruling could act as a precedent for the other, more high-profile trial of former economy minister and ex-IMF chief Rodrigo Rato over alleged embezzlement when he was president of Bankia, another bank that was rescued during the financial crisis.

In 2010, as the crisis raged in Spain, the five then managers and executives at Novacaixagalicia (NCG) left their posts, but not before obtaining compensation of nearly €19 million ($20.3 million) although they knew the bank was in dire straits.

The following year, NCG was nationalised to avoid bankruptcy as were other banks – and cash-strapped Spain eventually asked the European Union for a 41.3-billion-euro bailout of the banking sector in 2012.

NCG received a total of €9 billion in aid, and in 2013, Spain sold it to Venezuelan bank Banesco for €1 billion.

The five men, currently aged 59 to 85, had already been found guilty of embezzlement in 2015 and were then given a two-year jail sentence, which their defence asked to be suspended.

In Spain, it is usual for first offences for non-violent crimes carrying a sentence of two years or less to be suspended.

But the National Court said that in this case,

the gravity of the offence given its macroeconomic impact means it is necessary that the five go to prison, in the interest of avoiding impunity.”

They added that the former executives had not paid a fine owed, and ruled against suspending the sentence.

Source*

Related Topics:

Spanish Judge Makes Bank President and Former IMF Chief Pay for Financial Crimes*

Hiding in the U.S Ireland to Prosecute Top Banker for Destroying Their Economy*

Italy and Spain Have Funded a Massive Backdoor Bailout of French Banks*

Global Bankster Mafia Caught Rigging Markets to Destroy Middle Class*

Corrupt Icelandic Officials to Free Jailed Banksters*

Two British Banksters Go on Trial in Libor Interest Rate-Rigging Scandal*

Top Rothschild Bankster Pushes Corrupt Communist to Lead U.N.*

Banksters are Buying Baltimore’s Debt, Hiking Interest then Taking Families’ Homes*

The Clintons and their Bankster Friends, 1992-2016*

Once a Rothschild, always a Rothschild Bankster Replaces Hollande’s Economic Minister*

Iran Removes Chiefs of 4 Banks over ‘unusually high salaries’*

‘I’ for Iceland and Now Ireland Collaring the Real Criminals, the Banksters*