Emil Dinga
Emil Dinga
Economist, Ph.D., the Romanian Academy, President of the Romanian Society for Economics Philosophy, with expertise in the epistemology, philosophy and logic of economics
Defined Contribution Pensions, But Not Really

Defined Contribution Pensions, But Not Really

From a theoretical (and philosophical) point of view, the (defined contribution) pension in a pay-as-you-go system is an impersonal, non-coexistent, inter-generational, and mandatory quid pro quo. The referee which must assure that the quid pro quo is respected is the state (we have here a nice example of a hard core of public interest which would be desirable to be extended to others, i.e. national interests). As it is inter-generationally applied, such a “social contract” faces some accidents, some of which are objective, others not quite. For example, a current generation “i”, is paying social contributions during its active life to the generation „i-1” – I will do not complicate the discussion by taking into account that, in fact, there is an overlapping of generations both as paying social contributions and as benefiting from defined-contribution pensions (this would be useful if done for the public finance decision). In turn, the current generation “i” (which is the future “i+1” retired generation) will benefit for its pensions from the social contributions paid by generation “i+1”, and so on. This mechanism seems to provide a roughly fairness, because the pensions are calculated based on the effective social contributions paid during the active (that is, economically productive) life. Rawls, as pure contractarian, would say it should be designed and implemented in the legislative stage of making the social contract, not in the original position. Below, I ask myself whether such fairness is really effective and, if not, how we should to proceed. The discussion is inherently coupled to the debates regarding the increasing of the pensions in Romania. I will do not discuss the (judicial) fact that a normative act which was already been constitutionally enacted by the legislative authority leaves, I think, an extremely narrow room, if any, for doubts regarding its implementation, but, instead, I will deal with only some very simple economic and social questions (more exactly, of social justice).  More


Some Thoughts on the Criteria of Nominal Economic Convergence in the EU

Some Thoughts on the Criteria of Nominal Economic Convergence in the EU

In connection with the nominal economic convergence criteria, five comments can be made: a) on their completeness; b) on their representativeness; c) on their relevance (meaning); d) on their redundancy (non-synergy); e) on their effectiveness.  More


Give Us, God, Our Daily Experts (Part II)

Give Us, God, Our Daily Experts (Part II)

I continue now with the other remaining two classes of incompetency (or, equally, of incompetents), which give themselves the high title of expert. In other places and moments, I have spoken about the conceptual distinction between the politician (expert of purpose) and the expert (politician of means). Therefore, I wait for an expert to pronounce his/her opinion about the means (ways, strategies, programs, and so on) able to objectify purposes that, themselves, are proposed by politicians. Unfortunately, (too) many politicians talk about means, as well as (too) many experts talk about purposes. Although, of course, it doesn’t exist such a categorical separation between politicians from experts – so there is not a net line between the two categories –, thus, it is a good thing that everyone be careful to talk about its „reserved” field.  More


Give Us, God, Our Daily Experts (Part I)

Give Us, God, Our Daily Experts (Part I)

On the concept of expert, as semantically opposed to the concept of the politician, I had spoken many times before, including, if I remember well, under this heading too. More exactly, in principle, the politician is an expert of purposes, while the expert is a politician of means. Beyond the paronomasia involved, I want to say that the politician should be required to establish the purposes by ignoring the necessary means for their achieving, while the expert should be required to establish the means (most) appropriate for a given purpose. One consequence of such a Manicheism is the following: it is recommended to avoid the appointment of a (genuine) expert as a minister, for example, and, symmetrically, to avoid the appointment of a politician as an expert. Of course, the social practice usually ignores such a “normative” conclusion. However, essentially, this time, I do not want to take over this important distinction, but I would talk about the army of experts (some of which being genuine and some impostors), generally giving consultations through the TV screen on any issue you could imagine.  More


Ersatz Liberals (Part II)

Ersatz Liberals (Part II)

In my last communication, I have identified some issues based on which I would illustrate the weaknesses of those I called the ersatz liberals. I want to now add another issue, so I shall examine, below, five cases that are on the table of current political debate: a) a flat tax rate; b) tax adjustments; c) prices increases; d) social responsibility and solidarity on the part of the large companies; e) inter-dependencies between the private sector and the public sector.  More


Should the State Adjust the Market? The Case of ROBOR

Should the State Adjust the Market? The Case of ROBOR

The duel between state and market is an old story in the debates regarding the best way to run society. Of course, there are both extremists and moderates in this debate. I am not interested in covering the large array of opinions, but in exploring the essence of the issue. More precisely, I am interested in whether the state has a legitimate role in adjusting the macroeconomic variables generated by the free market and, to a finer degree, to see if we have thresholds or intensities or other contingencies in accepting or requesting the state's intervention in the market (viewed as a free market). More


Ersatz Liberals (Part I)

Ersatz Liberals (Part I)

(Too) many of today’s politicians in Romania claim an intellectual and/or moral affiliation to different political ideologies or schools. Ignoring the fact that such a claim resonates with the voters if and only if the population reaches an average level of political sophistication (or even general culture) at the minimum level required for such complex issues, the problem is whether those claims are justified, i.e., morally legitimate. Of course, we have here two ‘sources’ of information in solving the question: a) the politicians’ declarations; b) the facts, that is, the political decisions and actions (either as acts or abstentions) of the politicians in question.  More


With Regards to Government Charity for the Private Sector

With Regards to Government Charity for the Private Sector

In a market economy, which is also presumed to function within a free society, generally, the goods and services needed for individuals are acquired through economic transactions (regularly through work and the processes around it – saving, investments and so on). Part of these goods and services are delivered by the state (more exactly, by the public sector of the state), the so-called public goods. The present intervention is intended to advance some considerations about the phenomenology of the public goods. It must be mentioned that there are two categories of public goods:  More


What Kind of Innovation Do We Need?

What Kind of Innovation Do We Need?

The morality of capitalism is, without a doubt, based on the value called to have (money, goods, power, social position, and so on) – and to have-to be is intensely debated in social philosophy and in ethics. I will not examine this from an ethical standpoint, since it is generally accepted both by the supporters of capitalism and by its opponents. I will narrow my considerations to the issue of innovation, as a paradigmatic model of improving human life.  More


With Concern, Concerning Pensions

With Concern, Concerning Pensions

In a well-ordered society (in Rawlsian terminology), every person gains his social place and, consequently, his income (wealth) based on his objective merits – usually based on his work. Unfortunately, beyond a certain age, the physiology of humans does not allow people to engage in work activities anymore. In such a situation, some resources (usually in monetary expression) are needed to maintain the standard of living or, in more general terms, the wellbeing (no matter if all persons agree with a little smaller level of it, since, in fact, the general needs are, after the mentioned age, smaller). These resources form the concept of pension – that is retirement benefit. But who must provide the pension to retired persons? All logical judgements would tell us that the pension should be composed of savings on the part of the beneficiaries themselves, from their personal (or disposable) income gained during the active period of their life. Such savings should be the result of prudential behaviour in the long term. Since, in the real world, the prudential behaviour is not granted to all persons, the state took over the burden to fuel that “savings account”. Such saving has some features as follows (NB: I discuss here only the type of public pensions of the 1st pillar in the Romanian system, the pay-as-you-go public system):  More


The Efficient Wage and Its Challenges

The Efficient Wage and Its Challenges

The standard Economics states that the gross nominal wage which is consistent (that is, non-contradictory) with the criterion of economic behaviour of the employer – the gross profit maximization – must be at most at the level of monetary expression of the marginal labour productivity (such a level could be called the optimal-based wage – OBW). Let us presume, for the sake of discussion, that the employer does not wish to exploit the employee, so he does not pay less than the OBW. But what happens if he pays more than the OBW? Here emerges the concept of the efficient wage (EW), that is that gross level of the wage which is higher than the OBW. In the present intervention, I will discuss some issues related to the concept of EW, in the very context of Romanian economy where, quite recently, such a philosophy of remuneration was implemented.  More


The European Construction. Intellectual Project vs. Emergence

The European Construction. Intellectual Project vs. Emergence

Society is a component element of Popper’s third world, i.e., of the world formed by objectivizing the content of thoughts (ideas, theories, desirability, etc.), which is achieved mostly by social action. This means that the social “objects” (therefore the economic “objects” too) appear, become and disappear only by social action. One may say that the social ontology is, simply, the effect of the social praxeology, that society is a political product (supra-individual cause and effect). Therefore, the social construction is a teleological construction obtained by completing the universal causes (material, efficient, formal) with the final cause (purpose). Being a teleological construction, the social construction is an intellectual construction (intellectual project), therefore a normative process, not a natural process (as one of the parents of the European construction, Robert Schuman, believed). More


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