The Sovereign Economic Model. A manifesto for rising nations. Stefan DemetzЧитать онлайн книгу.
enabler of cheap economic activity. Therefore, all businesses in the energy market sector should belong to the state. The rationale is to provide the population and business with the best mix of energy at convenient prices. Energy business should limit profit-taking to pass on savings to the economy. Or it should reinvest profits into other wealth creation industries, like capital tools and technologies, for the industry itself. Endless opportunities are available in mining, oil and gas extraction, transport, storage, power generation, and renewable energy technologies to add more R&D and innovation. Otherwise, only investments to build additional capacity and power stations to sell excess energy to foreign countries are alternative options.
The concept for the telecom sector should be identical. At least 51 percent of the physical infrastructure network should belong to the state, with market actors owning the rest. In the telecom context, state ownership can guarantee tighter national security and consumer privacy than private companies. Also, procurement decisions regarding equipment and suppliers are made centrally to manage costs and integration more accurately. The ownership of telecom companies can therefore be useful for building domestic technologies and to supply them with 4G or 5G equipment. That would start a new industry with a high level of value creation and manufacturing of medium-to-high-tech communication equipment and devices.
Banks are the foundation of all transactions for an economy. Payments are made via bank accounts of commercial entities while connected mostly via cards and payment systems between two parties in consumer transactions. A sovereign country should not only control the money via its Central Bank and regulators, but also have a significant stake in the system for stricter direct control. For systemic banks, the government should have the majority of shares or at least a golden share to veto some business practices. Payment systems, as in cards or other mechanisms, should likewise be under firm government control. In the best-case scenario, they should be local implementations instead of belonging to private hands or foreign corporations.
Media is not part of the business infrastructure per se, but is more of a government loudspeaker on the economy itself. So a government should have control of its media directly by ownership or regulation, or media should be a government-aligned business.
Transport and logistics are an important part of the business infrastructure because they move people and goods. Ports, railways, and airports are key facilities. As an economic sector in its own right, transport and logistics can give a boost to these infrastructure investments. This can foster industrial development of machinery, equipment, and industrial tools for various industries, from vehicles to tools and machines. Transport and logistics offer a high potential for automation and optimization by applying many technologies such as robotics, AI, and Big Data.
Any monopoly or rent-seeking business, if it is an unavoidable component of national economic development, should belong to the state. Then the state can run it as a state-owned enterprise and balance profits and services at the lowest cost possible for the population. That is the mindset in Europe for the health care industry, in which most essential services are free or cost only a symbolic fee. Alternatively, the state uses profits from monopoly state-owned corporations to provide free or subsidized services to society.
Specifically, control over all or most of the mentioned industries allows a government to further condition much of the economy and retain a big part of economic sovereignty. This gives it the strength required to impose additional economic policies beneficial to the country and its citizens. Despite state control of the business infrastructure, long-term well-defined strategic plans can also help private business to co-invest and build large value-added services on top of these industries.
Finance
De-financialization
Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over the economy and the government’s economic policies. Macroeconomic and financial hocus-pocus are just a panacea, but prudent financial housekeeping and long-term strategic economic policies better promote the well-being of an economy. Some financial tools are necessary and are helpful to finance new business ventures or expand current business. For example, IPOs help raise money for further development. Dividends are fair payouts that share profits and reward investors for their investments and the risks they have taken. Other tools, like bonds, are equally useful for raising additional money as long as they are reserved strictly for furthering the business and do not provide short-term profits for shareholders. Hedging reduces risks in production and can act as business insurance.
However, wealth-creating financing methods and tools make up just a small fraction of the investment world. Most merely involve trading existing assets by relying on appreciation to achieve capital gains. Any money movement that does not create wealth by increasing production is just a waste of resources and an inefficient, unproductive allocation of money. A sovereign country must strive to reduce finance so that it is applied in only a limited form, only for activities benefiting the country’s real economy.
Financing Growth
Liberal capitalist systems rely on the «invisible hand of the market» for economic development and growth. Nevertheless, it causes rushes of money to one part or another of the economy, where profits are greater. This situation is comparable to a boat tipping to the most weight-laden side. It clashes with the concept of balanced development of the economy, which should favor investments in either more undeveloped parts of the economy or those where it is more needed. When it comes to achieving balanced development, the Sovereign Economic Model and other forms of planned economics are superior in efficacy because they can influence, promote, and direct investments in those areas in need. That creates a more balanced, system-wide economic development and can raise under-developed parts of the economy. Such an economic development can be achieved with economic and fiscal policies, but also with state subsidies and favorable conditions offered to private investors. The state itself has various tools to raise money, such as bonds of different forms.
Government «people» bonds are a clever way to raise money benefiting the state and its citizens. Just before the euro appeared, many European countries sold government-backed «people mini-bonds» in local currencies and with good interest rates, allowing everyone to invest their savings in the short or medium term. This was probably the most stable and sovereign way for a state to raise money in local currency while giving its citizens an easy and safe financial investment with decent returns and keeping the debt local in local currency. They could help provide additional funding for infrastructure or other parts of the sovereign economy. The maturity of such bonds ought to be of variable length: 3, 6, or 12 months for short-term bonds. This would benefit small savers who put money aside, for example, to buy a car or a home, but want to wait before making a decision. They could invest the small capital in a safe and productive manner. Also, it benefits the local currency itself, as people are afraid of fluctuations and buy bonds in local currencies for only a short time to earn additional interest. Medium-term bonds of 24, 36, 48, or 60 months are issued in «safer» hard currencies, such as the euro or US dollar for medium-term investments. Bonds should start at 1,000 dollars or euros, maybe even less, so that normal people can earn a little extra interest on modest amounts invested. Bonds should have a low maximum limit equivalent to 100,000 dollars or euros to allow individuals to reap interest instead of large financial institutions. Similarly, accrued interest should not be taxed. Special development bonds are suitable for specific investment in market sectors. As part of the above described government bonds, some industry-specific bond types for development could be developed. Special «buckets» might be created for agriculture, e.g., storage, processing, seed production, veterinary medicine, and logistics, or for micro-electronics. Perhaps bonds could help the pharmaceutical industry to create additional factories and research centers or IT. This would allow these funds to be used in parallel to other public and private funds to make an industry sector grow, create employment, and progress.
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