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Seven Things the Suez Canal Incident Taught Us about Globalization
The recently resolved Suez Canal incident was the second high profile crisis in global logistics since the beginning of the pandemic. It underscored the significant vulnerabilities of an interdependent world in which supply and production chains are distributed over vast distances and are reliant on the near perfect and constant functioning of a complex transport apparatus through vulnerable bottlenecks. The Suez incident was caused by a super large container transport vessel becoming lodged in a sandbar and blocking the Suez Canal itself in one of its narrowest points. Until traffic could be restored, hundreds of ships were stationed outside the canal, waiting for their opportunity to cross, while racking up billions of dollars in global economic losses and contractual fines. More than 10% of global container shipping passes through the Suez Canal, which links the important Southeast Asian and East Asian producers to markets in Western Europe. It is also an important highway for energy transport, though land routes have been coming online to diversify these flows. The crisis came at a moment when the Egyptian Government is busy upgrading the Suez Canal, to enable it to accommodate 50% more traffic than it did in 2014. The growth in the intensity of the use of the Suez has several consequences – more traffic tolls for Egypt, greater importance for Egyptian ports and their attendant production and storage capabilities, greater geopolitical importance for the Suez Canal, which was the site of an attempted takeover by British and French forces within living memory. More
Professor Cezar Mereuță’s Paretian Odyssey Continues
A paradox confirmed by statistical data: the nodal analysis, used in economics to show that the strongest 10% of the players in a market generate 80% of the total sales in that market, also applies in the field of... the pandemic. This is revealed by an analysis made by Prof. Dr. Cezar Mereuță, who, for a year, monitored the parallels between the economic power of countries and the number of infections with the SARS-CoV-2 virus. The result shows that the two indicators are mirror-like: 9.35% of the countries of the world generated 80% of the world GDP in 2019; and 9.91% of the countries of the world accounted for 80% of all the contagions in 2020. Based on the results of the research, Prof. Dr. Cezar Mereuță provided a set of explanations and recommendations. More
A Few Considerations about the Gender Gap in the COVID-19 Impact on the Labour Market
March marks one year since Romania entered a state of emergency and remained on alert due to the pandemic. The Romanian state, like all of the states of Europe and the world, is still looking for solutions to limit its spread. The priority in the concerns of all governments remains health, but we cannot ignore the economic and social effects of the health crisis, and knowing that crises are seldom gender neutral when it comes to economic effects, this moment seems opportune for an analysis of the relationship between the health crisis and gender equality and its long-term consequences. More
Public Schools, a Rival for Racism and Xenophobia
Some believe that we live in a world that is advanced and effortlessly evolving in so many different ways, yet it is also stuck and old-fashioned in other ways. Paradoxically, the modern world that we live in is still exposed to racial conflicts. Combining different cultures, nationalities or ethnicities still brings anger and discomfort to numberless people. In this sense, I like to believe that such mentalities and lifestyles can be easily changed or adjusted during childhood, including through education and exposure to multicultural activities. Furthermore, I believe children should be constantly facing diversity from a young age. More
The 2020 GDP of Romania
The National Institute of Statistics confirmed the signal result of the economic growth for 2020 at the level of -3.9%, in the first preliminary version made public. The nominal value resulting from the overall calculation for the last year was RON 1,053,881.4 million, above the recent forecast and almost identical to that of 2019 (RON 1,053,884.8 million). However, it was lower in euro by about 4.22 billion, due to the increase in the average annual exchange rate (from 4.7452 RON/euro to 4.8371 RON/euro). The result – redistributed between quarters. Beware of base effect! More
The Long-Lasting Effects of Colonial Policies
Whenever we talk about Canada, New Zealand, Libya or Indonesia, we need to bring up the colonial empires which dominated much of the modern world up until the beginning of the Cold War. The periods under colonial rule differ, with the “scramble for Africa” taking place in the latter half of the 19th century, while American colonization began in the late 15th century, but the great European empires eventually had most of the world, at one time or another, under colonial rule. All those four countries share a similar past which involved being ruled by Europeans with varying degrees of autonomy, exploitation or even representation in democratic processes. However, the similarities stop there. Canada and New Zealand are both considered developed countries which hold economic and commercial power while Libya can barely be seen as a functioning state due to its internal unrest. Indonesia is somewhat in the middle, having an emerging economy status while controlling a loosely connected archipelago dominated by ethnic and religious heterogeneity. How did these countries turned up so different from one another despite their shared status as colonial subjects? More
A Reactionary Response to a Likewise Football
Context: TheChampions League (CL) is the greatest inter-club football competition in Europe and the entire world. Organised every year, it includes the best 32 European football club teams: 26 qualified in advance, while six of them have to go through a preliminary round, three qualifying rounds and a play-off round, all played over two legs (except in this “pandemic” year when only the play-off round was played over two legs). Eight groups are formed; each team plays every other team in its group twice (once home and once away). At the end, the first two teams of each group with the highest number of points progress to the knock-out stage, therefore 16 teams. The teams which finish 3rd in their CL groups relegate to the second-tier competition, the Europa League (EL), which works basically in the same way as the CL, except that the team that finishes third in its EL group goes nowhere (at least so far). Then, a draw takes place in Geneva. A kick-out style tournament commences, with double-legged matches until the last act of the competition is reached – the big final. More
The Evolving Identity of the Firm. Cognitive Peculiarities and Idiosyncratic Perceptions
Research into the theory of the firm began with the publication of “The Nature of the Firm” (Coase, 1937), which led to the appearance of four essential questions about the nature of the firm. Why do firms exist? Why are these organized the way they are? Why are there firm boundaries? Why are firms heterogeneous? These questions led to the emergence of many research programs starting with the 1970s, in the seminal works of Alchian & Demsetz (1972), Jensen & Meckling (1976), in transaction-cost economics (Williamson, 1981), in behavioral theory (Cyert & March, 1963), a theory that considers that firms create value by compensating for individual cognitive limitations, and so on. But the effort to integrate firm theory and entrepreneurship is relatively young, especially when we emphasize that modern firm theory was based on the “production function view” (Langlois & Foss, 1999), assuming a predetermined set of production possibilities, starting from a homogeneous interpretation of the firm, in a binary input-output relationship. The firm begins to become dynamic with the emergence of the heterodox Austrian perspective, suggesting that firms create value through their ability to combine the judgments of numerous individuals (Penrose, 1959). More
The Intersection of Religion and Economic Behaviour
The World Bank published two years ago a study conducted by two Bulgarian economists, Simeon Djankov and Elena Nikolova, which shows major differences in attitudes toward state authority and the adoption of new ideas between Orthodox, on the one hand, and Catholics and Protestants, on the other hand. Differences in attitudes between Orthodox and Protestant Catholics are rooted in major theological differences between these branches of Christianity. Western Christianity (which gave rise to Catholicism and Protestantism) emphasizes reason, individualism, and questioning authority, while Eastern Christianity is associated with mysticism, affection, and community spirit, with less emphasis on law, reason, and questioning authority. [1] More
Binding Leviathan: The Case for Institutional Liberty
In political theory, as in any inquiry, a question must begin with a perception or a premise. The question is this: How can the identity and integrity of a self-governing institution – whether a church, business, school, even a family – be maintained independently of the public agenda of a pervasively secular modern state? The perception that frames the question is that the American system of constitutional government, in particular, originated with specific reference to – and derived its essential character from – the covenant tradition of the Bible.[1] More
The Road to a Free Economy
János Kornai needs no introduction to our readers. He is an intellectual force to be reckoned with in the service of liberty. The following pages are an extract from his memoirs specifically selected from a time of great change in Hungary, to which he, working as a non-political man of science, brought a significant contribution. To his credit, he does not shy away from discussing his failures or from admitting the uncertainties regarding his true impact on historical proceedings. This thoughtfulness is found throughout the entire book. More
Realities and Perspectives of a New Social Paradigm
Society is currently undergoing a series of transformations, as a result of the effects of the global pandemic, with consequences in all areas of our existence. Approaching from a conceptual point of view the present reality, the concept of entropy returns to the forefront. More precisely, the specialty literature approaches this concept from a new perspective, namely social entropy based on social justice, founded on the very close, logical relationship between social order and social entropy. Thus, considering that the three pillars on which our form of society is based are self-respect or moral dignity, freedom and democracy, then the concept of social order can be defined as a normative combination of freedom and democracy, which offers a certain measure of individual freedom. More
