昨天收到一個email來自德國的Heidelberg University，題目是“call for papers PEIO 2013”，其中的PEIO是Political Economy of International Organizations的縮寫。我想肯定是寄錯了對象，第一這樣的會議所期待的對象一定是經濟學家，而我只懂哲學；第二我目前與任何學術界都沒有聯繫，所以也就不可能成為他們所期待的對象。但是，我這裡正好有一篇不久前在博客貼出的與政治經濟學有關的哲學文章，即“歐債危機背後的簡單哲學”一文，所以就匆匆將之用英文改寫並加入了一些關於解決方案的設想，按照email中給出了地址寄了出去。他們會不會錄用我不在乎，因為他們寄給我那份email本來就肯定是一場誤會，不過因為我藉此改寫的機會加了一些內容，所以拿出來與可能感興趣的朋友們分享：

Simple Philosophy behind Eurozone Crisis

The success of modern science has led to a great ignorance of the importance of philosophizing daily events, which finally starts to take some big toll from the global economy through a series of severe large scale crises across the world. If we look back at the causes of those crises, we could so often see clearly some very simple philosophical explanations which have obviously ignored by the top economists and elites politicians of the world. Eurozone crisis is typical of this kind.

When the Eurozone has been troubled by the crisis started around 2 years ago, the main concern of many around the world is not how to resolve the crisis in a way fair to all the countries involved but rather how to prevent the crisis from spreading to other regions. However, without a good understanding of the mechanism behind the crisis, there would be no guarantee that the crisis would not spread to other regions in some unexpected way; while with a good understanding of the mechanism we could even help to resolve the crisis in a fair way to people within the Eurozone. In this paper I would provide a simple metaphysical style philosophizing of the cause behind the Eurozone crisis and also propose some possible remedy from a high level point of view.

1.      Simple philosophical reason behind the crisis

If we could take a high level contemplation seeing through the dazzling financial figures presented to us by hundreds of financial institutions around the world towards the Eurozone crisis, we could see some very obvious philosophical reason that is rooted in the capitalist market mechanism itself. There are two important attributes of a capitalist market economy which are familiar even to nowadays middle school students around the world: 1) it promotes (nominally) fair trading with a respect of private interests of the public; 2) it encourages market based competitions. These two attributes are commonly acknowledged by economists and many ordinary people as the fundamental strengths that differentiate capitalist economy from other economic systems. The first of these two attributes is responsible for producing more to this world and the second is the key factor of rewarding the winner through distributing the products within the capitalist market system. Because of the free trading, capitalist economy could enjoy the greatest productivity over human history; however, because of the competition, capitalist economy would ultimately promote social polarization of wealth among people.

In a single country of capitalist market economy without any exchange with other countries, the social wealth would flow from some people to some other within that country constantly due to the capitalist competition.  As a result, without special social assistance to counteracting its consequence, the general trend could be expected with common sense to be that the rich would get richer and the poor would get poorer. During the past few centuries, one great achievement in the so called capitalist world is the establishment of social legal and benefit systems within a democratic political framework, which greatly helped maintaining a happy middle class so that they could avoid getting poorer and poorer in capitalist competitions.

Now if there are two that kind countries having international trading with each other, and one of which is more competitive than the other in almost all economic sectors, then based upon the previous discussion we could expect a one-directional overall wealth flow from the less competitive country to the more competitive country. To prevent this from happening, there are many conventional measures taken by countries around the world, including tariffs at border, foreign exchange surcharges, or some special taxes toward cross border international businesses, and more. These measures function like cash dams to prevent surge of cash flow out of the country while people could enjoy the prosperity brought by international businesses within the country.

Now if those two countries decide to remove any trading barrier between them and also use the same currency in their daily life, the less competitive country would no doubt lose their protection on the border to prevent a severe cash flow out to the more competitive country. Then one question arises: why should we even worry about this since all the countries have social legal and benefit systems to prevent the middle class people from getting poorer and poorer? The difference here is that the social benefit system of every country only serves its own people while the legal system of each country within a constitutional multi-country free market zone (e.g. Eurozone) is demanded to protect the free market business activities by people from all countries in that open market zone. Therefore, the two countries of free market business in the example here would face such an awkward situation that the competition mechanism of capitalist economy would drive the cash flow in the grand territory of all countries in the zone while the mechanism to counteract the wealth polarization of each country only function within its own territory. The poor in the less competitive country could only request help from their own government since the government of another country is not elected by them and not responsible for their welfare, and the politicians of their own government could not make use of the wealth accumulated in the any other country for the rescue within their own country.

Under certain economical condition, the imbalance between the polarization power of capitalist competition and the counteracting social assistance power caused by the scenario discussed in last paragraph could potentially drag the less competitive country into financial austerity whilst the total wealth continues to accumulate within the two country grand market due to the free market business in that market. That is indeed the simple philosophical cause behind the Eurozone crisis started about 2 years ago. With this philosophical understanding, we could proceed to the next step of contemplating the possible political and economical remedy to this problem.

2.      Proposed remedy at a high level point of view

From above discussion, we could see clearly that the root cause for potential financial crisis for the multi-country free market zone economy between two separate sovereign countries is the incompetent social assistance power to counteract the polarizing power of free market competition in the two country market. Therefore, a straightforward solution to the problem would be to establish a centralized mechanism to enhance the social assistance and to counter-balance the polarization power of free market competition.

A simple high level design could involve a centralized fund and a set of specialized financial indexes for monitoring the cash flows across borders within the multi-country free market zone, such as Eurozone. Once it is indicated by an index that the net flow across one border has exceeded certain flagged level, certain amount of cash from the fund should be dispensed to assist the economy in the country where net cash loss incurs. The source(s) of the fund money would be a subject of creative thinking for politicians and economists in those countries, which should somehow reflect two factors of the economy within that grand market: 1) the total productivity; 2) the level of the imbalanced cash flows. We could easily see the philosophical connections between these two factors with the two fundamental attributes of capitalist market economy I mentioned at the beginning of this paper.

Even though the proposed remedy could not guarantee to completely solve the problems to the countries in a multi-country open market economy zone, it could help to alleviate the difficulty cause by financial imbalance of the market to certain degree. It would definitely not be an absolutely fair design, but it is relative fair for all sides in the market economy. It is fair for the more competitive countries because it could help them to sustain the market within less competitive countries so that they could have a relatively stable grand market within the economic zone, and it is fair for the less competitive countries because it could help to lessen the damaging effect of the free competition power whilst enjoying the fruits of open market economy.