From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Mar 22 2006 - 18:03:26 EST
Well of course I'm prone to say something like "For America so loved the
world, that it provided lots of capital to the world so that capitalism
might flourish everywhere, and the world remade in the image of America,
this being the End of History".
But few people would probably believe that, since they would consider that
love is one thing, money another.
Seriously though - short-term, medium-term and long-term refer to
periodisations in historical time (hate that expression, but what the heck).
The point really is, that the relativisation of time-spans has to be
appropriate to the specific object of study and its specific attributes.
Take a few examples:
An astronomer might say, "what's a few light years, between friends?".
An historian might say, "at what point in time did incremental quantitative
changes culminate into a qualitative change which heralded a new era of
history?"
A politician might say: "a week is a long time in politics; short term:
within one term of government; medium term: within the next term in
government; long term; within one generation, or when I retire".
A gynecologist might say: "short term: the morning after; medium term:
monthly; long term: nine months".
A theologian might say: "short term: this instant; medium term: tomorrow;
long term: eternity".
This is just to say, a periodisation cannot be superimposed on the data or a
reality, its validity has to be proved through a mastery of the relevant
"stubborn facts" or realities being dealt with. Because only on that basis
can we make some intelligible statements about the length of time that real
processes take to realise themselves.
In social science, it is known that some things are amenable to change
(within the field of subjective action) and some things are not, because
they are aggregate effects nobody can do much about (objectively given
factors). We are, in part, creatures of our circumstances, and in part
unique individuals with an action radius. This leads to the idea, that human
action can hasten or retard by their actions many developments which are,
however, likely to occur anyway. To what extent this is consciously
understood is another matter; the young Marx remarked something like "it
takes experience and insight to separate out what is attributable to the
person and what is attributable to the age in which he lives'. If people
actively "make their own history" conscious of the broader ramifications of
what they are doing, the difference between short-term and long-term might
be truncated, abbreviated, or telescoped. They might literally find they
have more time than they thought they had (Chinese proverb: if you want to
get something done, give it to a busy person to do; in the psychology of
perception or psychophysics, it can be shown that the awareness of the
passing of time by an individual can be altered drastically).
The amazing thing about credit economy, as Ian Murray pointed out to me
once, is that you can displace the consequences of current activity in space
and time ("live now and pay later", or, as a variant, "live now, and make
somebody else pay"). This however should be viewed not statically but
dynamically, i.e. one keeps shifting the burdens of current activity around,
and elsewhere. In these days of globalisation, of course, the world's your
oyster. Obviously, the whole system requires that at least somebody repays,
i.e. somebody generates the income that begins to repay - but the trick is,
to ensure it's somebody else, not you. It's a question of strength and
weakness, the porosity for exploitation. In the end, the system is
fiduciary, and it relies on people having the idea that they have an
obligation to pay and repay, forcibly, or because of moral feelings of
guilt, shame etc. But as long as it is operative, and it works, you can
"stretch out" or alternatively truncate economic processes to a considerable
extent, affecting the very perception of short-term and long-term. The
important thing is, that people keep believing. It's when they stop
believing, that you have problems. But that also means a crash is more
difficult to predict - beliefs can, after all, change quickly or persist due
to innumerable different circumstances. This however moves us beyond
economics - it takes experience and insight into the condition of a people
to be able to judge at what point previous beliefs are shattered, and what
new beliefs fill the vacuum.
To give a specific example of national peculiarities: I will mention "Dutch
treat" - the saving behaviour of Dutch people is said to be not very
"rational", they are basically conservative. If their stock portfolio is
worth less, they compensate by saving much more, reducing their consumer
expenditure. But if their stock portfolio rises in value, they do not
proportionally spend more on consumption. Between 2001 and 2005, consumer
expenditure in Holland rose on average by less than 0.5% a year. The
existing econometric models could not explain that. The new explanation -
according to the Central Planning Bureau - is that the Dutch response to
losses in stock values was to save more (for every 1,000 euro in stocks
value lost, savings deposits increased by 217 euro on average). Gains in
stock values have the opposite effect, but much less strongly: Dutch people
on average save only 82 euros less, for every 1,000 euros appreciation in
stock values. The fraction of Dutch people who invested in stocks rose from
14% in 1993 to nearly 30% in 2001, i.e. it doubled. After the stockmarket
bubble popped, it fell back to 22% in 2005. In 2001-2005, the savings
deposits of all Dutch people ballooned from 140 to over 200 billion euro.
There is a male/female differential - with a loss of equity value of 1,188
euro, women regard it as a "large decline" and only mention a "large
increase" for an appreciation in equity value of 4,821 euro or more on
average. The figures for men are respectively 4,125 euro and 10,554 euro or
more, on average. Older Dutch people appear to be three times as sensitive
for losses in equity values as young people. If however you did the same
research in the USA, I would predict the results would be quantitatively
very different.
Jurriaan
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