TheMarketForIdeas

The COVID-19 Pandemic – Changing the Paradigm Sir William Osler: “Medicine is a science of uncertainty and the art of probability”

No. 22, Mar.-Apr. 2020

Florin Paul

For almost three months now the entire world is in the midst of a very aggressive and rapidly evolving outbreak with new Coronavirus, that today is known as COVID-19. The origin of the outbreak is in China, the province of Hubei (Wuhan) and its surroundings. Coronaviruses are a large family of respiratory viruses with some causing less-severe disease, such as the common cold, and others more severe disease such as Middle-East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). Some transmit easily from person to person, while others do not. The first cases with COVID-19 virus were reported as “pneumonia/respiratory disease of unknown etiology” in the last third of December 2019. The initial symptoms were mild, which permitted many people to travel before stronger symptoms were detected. At that time, the incubation period had not been stated. More

The Race to the Bottom in Oil

No. 22, Mar.-Apr. 2020

Alexandru Georgescu

With the developed world in transition towards a short and medium-term economic self-flagellation as a means of reducing the impact of the SARS-COV-2 virus spread, there is little room for economic news that is not related to markets tumbling and toilet paper becoming contraband. While it started with the shutdown in Hubei province in China and the associated tough (but successful) quarantine and social distancing measures, the economic crisis has moved onto Western nations, where the collective impact of the virus has already exceeded that in China. The measures which the experts (and, reluctantly, and too late for comfort, the politicians) are calling for are throwing prodigious amounts of sand in the gears of a system that developed organically to thrive on mobility, access, just-in-time logistics and a global division of labor. Regardless of the terrifying human costs of the crisis, the economic consequences will be the making of the leadership and will unravel carefully synchronized supply and production chains, as well as industries on which the (precarious) livelihood of millions depends, such as tourism.  More

On the Self-Testability of the Minimum Wage Economy Near Us (XXVII)

No. 22, Mar.-Apr. 2020

Gabriela-Mariana Ionescu

As I have shown, in a previous intervention, in which I explained the conceptual difference between the minimum salary (the actual minimum wage, with the particularity that is generated by the market, rigorously called “minimum nominal salary”) and the minimal wage (administrative wage, with the particularity that it is administratively established, rigorously called “minimal nominal salary”) in the present intervention I will argue about the self-testability of the minimal wage. I have also shown, in the same intervention, that the establishment of the minimal wage without using a method by which it is methodologically anchored by a macroeconomic indicator, relevant for ensuring sustainable economic growth, entails the possibility of it functioning as an instrument of social protection only.  More

Brâncuși’s Endlessness and the Scarcity of Some Means To whom does his work belong?

No. 22, Mar.-Apr. 2020

Octavian-Dragomir Jora

The public subscription for Brâncuși’s “The Wisdom of the Earth”, to get it from private hands “back” to the Romanian state, failed not so long ago. In markets, big money is paid for his works, more than “all” Romanians managed to gather. The moral? Art may be a public good, but it is, above all, and shall stay so, a private thrill as beauty is also in the eye of the legit beholder.  More

Communicative Action, Subjective Perception and the Hermeneutics of Capital Structure

No. 22, Mar.-Apr. 2020

Alexandru-Ștefan Goghie

This article highlights the implications of the subjective communication and interaction between economic agents in the process of expanding individual and implicitly social knowledge. Each economic actor goes through a set of unique experiences, which facilitates the emergence of unique expectations and perceptions. As such, these perceptions will lead to a distinct allocation of resources. Therefore, I try to emphasize the importance of expanding knowledge in socio-economic evolution, as a mechanism of exchanging unique experiences.  More

Was the Islamic State a Real State?

No. 22, Mar.-Apr. 2020

Răzvan Munteanu

The self-proclaimed Islamic State, known to the international press under the ISIS moniker, became a true center of power in the Middle East in the period 2014-2017. Its success came with a background of instability generated by the Arab Spring, but is also due to the support from actors such as Turkey or a part of the Gulf states, as well as an unnatural alliance between Sunni jihadists in Iraq and the secular army of the Baath regime, marginalized after the downfall of Saddam Hussein’s regime.  More

Interstellar Rights Providing more legal support to companies to explore outer space brings benefits to all mankind

No. 22, Mar.-Apr. 2020

Olga Bodrug

The exploration of space is now shifting the paradigm as recent innovations put in light incredible discoveries. The space economy is undoubtedly the most captivating industry of the future. As it develops, dependence on satellite-based services considerably increases. Everything from weather forecasting, navigation and positioning application, the synchronization of transactions, of databases and financial markets, to telecommunications, television, and disaster management depends on satellite-based capabilities. New products and market segments are rapidly being developed, such as smaller, more affordable satellites. The competition between companies (and states) grows as well, as new opportunities emerge, such as global broadband, space tourism, colonization of planets, and asteroid mining.  More

Pandemic: Of Words, Beasts, and the Gates of Peace

No. 22, Mar.-Apr. 2020

Georgiana Constantin-Parke

The world is facing a pandemic. People are looking for ways in which to minimize its effects and defeat the virus. Some are taking all the necessary precautions. Some are treating the situation lightly. Some are panicking. And some… are spreading false information and fueling animosity.Of fear and consequencesOne of the most dangerous issues during this time of crisis is misleading information. It changes people’s behavior, and people’s behavior is the only way in which the spread of this virus can be halted, and, vitally, the way in which society’s future after this pandemic can be guided, for better or worse. More

Will the Coronavirus Amplify the Role of the Government in the Economy?

No. 22, Mar.-Apr. 2020

Lucian Croitoru

A defining phenomenon for virtually the last hundred years is the expansion of state influence in all areas. The extreme was reached in the communist and fascist countries, where, under dictatorship, all freedoms were altered. In Western democracies, freedoms made progress, but the struggle between governments and markets to play the central role in managing the economy has sometimes resulted in serious disruptions of market freedom. The alteration occurred due to serious economic difficulties. The drastic limitation of the freedom of financial markets after the crisis of 1929-1933 is known. More recently, the economic and social difficulties that emerged after 2008 have been used by governments to limit the freedom of financial markets and to increase the state’s role in managing the economy. Will a severe recession caused by the coronavirus be an opportunity for a renewed strengthening of this trend? The concern for the principle of market freedom contained in this question could be seen as injudicious, as the functioning of the society seems to be dictated by the rapid resolution of various situations that appear to us as urgent. However, neglecting the principles in decision-making could be a way that may go unnoticed of moving to a type of society that we do not want.  More

Mutating Mindsets and Contagious Behaviours (Part I): An Overview of the Coronavirus Outbreak and Its Insights for Economic Theory

No. 22, Mar.-Apr. 2020

Adrian-Ioan Damoc

It is no longer a secret that the new coronavirus outbreak is the most significant issue troubling mankind at the moment, generating a level of panic and uncertainty with powerful effects on all level of society, politics and the economy. What began as a biological curiosity in the city of Wuhan in China soon spread throughout the rest of the world through the travels of infected individuals and the virus’ extremely contagious nature. By the time its characteristics and potential lethality became more obvious to authorities, the virus (“baptized” SARS-CoV-2, the “author” of the COVID-19 disease) had already spread outside of China and the Asian continent. The disease it causes is not yet fully understood and how it came to be is still unclear, though scholars tend to agree that the virus was initially confined to a few species of animals before making the jump to humans in China.  More

Mutating Mindsets and Contagious Behaviours (Part II): Zooming in on Economic Decision-Making in the Time of the Coronavirus

No. 22, Mar.-Apr. 2020

Adrian-Ioan Damoc

As we have reemphasized, neoclassical economics, with all its shortcomings, is still considered to be the mainstream wisdom and the reconciliating synthesis of ages-old advances in economic science. Behavioural economics, for its part, is a rather recent school of thought that aims at incorporating concepts from psychology, sociology and cognitive sciences in order to gain a better understanding of the decision-making process of economic agents, largely as a response to the limitations of some of the tenets of the neoclassical school, several of which it directly challenges. Below are some of its key concepts:  More

Mutating Mindsets and Contagious Behaviours (Part III): Diagnosing the Geopolitical and Geoeconomic Risks of the Coronavirus Outbreak

No. 22, Mar.-Apr. 2020

Adrian-Ioan Damoc

In the previous parts, we argued why behavioural economics does a better job of explaining consumer and supplier behaviour in the time of the coronavirus outbreak than the neoclassical paradigm. Both approaches were discussed at a theoretical level and were then applied to the current situation as a case study. We can note that the common link between the demand-side behaviour and the supply-side behaviour is uncertainty – perhaps not so much with regards to the threat the virus poses for personal health, but rather towards the public policies and containment measures the authorities will implement which, decidedly, are not very transparent. More

Exploring the Transformation of Human Work in Relation to the Shock of the Novel Coronavirus Pandemic Economy Near Us (XXVIII)

No. 22, Mar.-Apr. 2020

Monica-Florica Dutcaș

Work is one of the concerns of our daily lives. Permanent, but often on very short-term, concerns about work issues are at the forefront of public debates specific to the economic or other fields of social sciences. Countless scientific studies and reports have referred to workforce, professional skills, working time, employment, unemployment, income from work, stress or happiness at work, well-being and work-life balance, their results firmly arguing that the nature of work has changed and that innovation in work can be a driver for sustainable labour productivity growth. As a result, a large number of strategies, policies, programs, measures, each of them regulated at national, regional, union, global level have been elaborated in order to know and control any type of imbalance between the demand and the supply of work. Regardless of the extent to which this has been achieved, or lack thereof, it can be seen that the solutions to the problems have been under the spur of the moment and nobody and nothing has been prepared for what is happening today with the workforce and could happen tomorrow or later on the labour market.  More

Free vs. Fair Trade – Pandemic Edition

No. 22, Mar.-Apr. 2020

Victor Hebert

At the beginning of studying economics, the two basic ideas every undergrad learns about are the theories of absolute and of comparative advantage, respectively. Ricardo, one of the most influential classical economists, claims that countries specializing in the production of goods for which they have a comparative advantage – meaning a lower opportunity cost in producing those goods – will be better off after engaging in trade with those countries that specialize in different products and services. A win-win situation results from the increased efficiency that derives from specialization of countries, regions or companies. This indispensable theory provides strong arguments in favour of free trade and, more importantly, of the freedom to choose whom to trade with. Its implications apply to all individuals and companies inhabiting those nations. Yet, according to the preacher of fair trade, there seems to be something amiss with Ricardo’s theory.  More

A Treatise to Challenge the World of Tweets “Information may be abundant, but knowledge remains scarce”. This is the message of a collective of scholars from the Bucharest University of Economic Studies, the Faculty of International Business and Economics

No. 22, Mar.-Apr. 2020

Nicolae Istudor

One may reasonably question any new… old-style opus, in times of “fast and furious” facts and figures, expressions of international economic relations (scientific literature markets here included): Isn’t it enough that we are now part of an unseen-before democratization of information, from which we can liberally extract what is of genuine interest for us? Cui prodest writing and reading another “scholastic” tome? What did its authors acknowledge that is so urgent to share and has not yet been tackled and “treated” by other scholars somewhere else or sometime else? Such answers are not at hand prior to or short of holding, opening and immersing into this impressive book entitled: International Economic Relations. Theories, Strategies, Policies, Tools and Case Studies [Gheorghe Hurduzeu and Luminița Nicolescu (eds.), ASE Publishing House, 2019]. We hereby call it a “treatise”. For it is one, by any standard.  More

The CORONAtion of Equality, the Abdication of Inequality Or viceversa?

No. 22, Mar.-Apr. 2020

Octavian-Dragomir Jora

We all are equal in front of death, but we are living lives in unequal ways, because of our deeply uneven endowments and unsimilar chances that Gods or odds reserve for us. We are (supposedly) alike in front of laws, while some (one-sidedly) legislate fake sameness. Among the many questions we may ask while getting bored in the tight safety of our lazaretto homes: is Corona an equalizer?  More

How the Evolution of ITC Shaped the Field of Diplomacy

No. 22, Mar.-Apr. 2020

Alexandru Manoliu

When looking at the historical evolution of diplomacy and foreign policy, for centuries they have ended up relying on the traditional establishment of delegations or ambassadors, formalizing bilateral and multilateral agreements regarding various issues.Today's diplomatic scenario appears solidly anchored to its legal ecosystem within the confines of the international community. The evolution of technology seems to have had a significant impact both on the way diplomacy is conducted and on the emergence of new, less traditional actors. More

Corona-Economy: From Crisis to Rebuilding Trust

No. 22, Mar.-Apr. 2020

Cosmin Marinescu

The Corona-Economy is already the grand economic challenge of the year 2020, but also of the political establishment. The latest developments are very serious, quite worrying for many sectors, which demand a coordinated response in terms of economic policy. The Coronavirus is the “black swan” that sickened the economy, rapidly and at a nearly global scale, like a tsunami starting from China that is washing away over all continents now. More

Taxation of Wage Earnings for Pension Purposes in Romania, since 1950 Some implications at present

No. 22, Mar.-Apr. 2020

Dan Pălăngean

The income tax has increased about four times in Romania since 1950, according to data published by the National Institute of Statistics (INS). The evolution of gross and net earnings shows that we have reached a doubling compared to the period before the political regime change, which occurred in 1989 (see data presented in extenso and centralized by decades in the table below).  More

The COVID Crisis and the 2nd Pillar of the Romanian Pension System

No. 22, Mar.-Apr. 2020

Dan Pălăngean

Far from the public attention, the value of the assets held in the seven private funds that manage the pension money in Pillar II for seven and a half million future pensioners decreased dramatically in the second part of February and continued to decline during March, with the minimum being reached on the 18^th of March 2020. More

Smith, Hayek and the Virus: Entrepreneurial Responses in Times of Crisis

No. 22, Mar.-Apr. 2020

Vlad I. Roșca

The world is struggling with despair in the face of an uncaring threat at the moment of writing these ideas: that word is not even worth mentioning any longer, since it is probably on the lips (and in the ears) of the majority of people worldwide. ‘Probably’ and ‘majority’ are only used here in order to respect a certain journalistic demeanor in writing which requires some precautionary – thus, not categorical – statements. Indeed, some children might not truly understand what goes on during the present time; so might some minority of people living in any given disconnected and remote settlement (if such disconnection still exists) and, unfortunately, so does some whimsical category of people – even grown-ups – who, although they have heard about the danger, behave as if they do not understand what is happening (which, again, with precautionary measures, might just be the case: their ignorant behavior simply denotes a lack – inability? – of understanding). Or, the more despicable, they did understand, but they simply want to make a spectacle of their ability to break the law (because, hey, isn’t it so, they are ‘smarter’, ‘wiser’, ‘brighter’). More

A Strategy of Subversion

No. 22, Mar.-Apr. 2020

Steven Alan Samson

Half a century ago the German sociologist Helmut Schelsky succinctly dissected the political strategy of left-wing radicals in West Germany and the West generally. His essay, “The New Strategy of Revolution,” remains one of the best summaries of an ongoing strategy of cultural subversion.Directed towards the “conquest of the system,” the revolutionary strategy depicted by Schelsky, which was inspired by the Italian communist Antonio Gramsci and implemented by Rudi Dutschke, is premised on destroying the most significant features of political democracy. It bids to root out the fundamental political and social ideals and the corresponding patterns of life of the major groups within the system by discrediting the values, intellectual outlook, and institutional foundations of these groups, their ideals, and even the most ordinary interactions of their members. A useful comparison may be drawn with what Thomas Farr calls “China’s Second Cultural Revolution,” where Xi Jinping’s government controls the commanding heights and is endeavoring to introduce a utilitarian, soft-power “social credit” system to fine-tune its control. More

COVID-19: Counting the Cost

No. 22, Mar.-Apr. 2020

Emmanuel Olusegun Stober

Fighting epidemics, or stopping them from spreading, has a cost. The direct costs of the COVID-19 pandemic are, of course, deaths and the sickness that prevents people from working. However, the indirect effect or Economic Cost include the labor supply of the people who die, the hours lost due to sickness, and the hours lost due to people caring for family members who are sick, and the hours lost due to preventative measures. This will lead to rising costs of doing business in each sector, due to disruptions of production networks, and shifts in consumption as a result of changes in household preferences.  More

(Corpo)Rational Person(ality)

No. 22, Mar.-Apr. 2020

Alexandru-Costin Udrea

It is perhaps characteristic of modern times to gather large groups of people who share the same perpetual quest for what is called freedom of expression and action within a free world, to make use of it with every single opportunity they might have. As such, and also due to the possibilities of assembly offered by the Internet, there arises the “popular” attitude that seeks righteousness and pretends a just and fair treatment from each of its components and especially from the big players on the world-wide stage. Over the last few decades, an antagonistic reaction has been artificially maintained against this borderless notion of “the People” and its supposed deadly foe that is conspiring against it – “the Corporation”.  More

No Way In, No Way Out

No. 22, Mar.-Apr. 2020

Alexandru-Costin Udrea

Scratching beneath the surface of socio-political matters results in a multitude of findings and novelties. It is time that enough answers were given to the everlasting questions which naturally follow the inquiry into the reasonableness of dominating conceptions and policies. Gone are the days of a vigorous desire to make up for the “barbarity” of the past and build up ideals on the fertile land of the human mind. Instead of this, we are witnesses to an open confrontation between the remains of this desire (becoming ruinous) and the emergence of a cycle which, although seemingly new, learns from the goods and bads of history and looks forward to putting a halt to the illusions of a well-intentioned world in its bulk, but not so as regards the elites behind it. Following these hypotheses and beliefs, the European and then the national perspective are considered in this article, fundamentally bordered by the individual perspective. We unapologetically dismiss any attempts to “total objectivity”, typical of a world of make-believe.  More

Coronavirus: Commission Hosts a European Hackathon to Develop Innovative Solutions to Fight the Outbreak

No. 22, Mar.-Apr. 2020

As of 24 April and throughout the weekend, the Commission will host the pan-European #EUvsVirus Hackathon, under the patronage of Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth. The hackathon, led by the European Innovation Council and in close collaboration with the EU Member States, will connect civil society, innovators, partners and investors across Europe to develop innovative solutions aimed at fighting the coronavirus outbreak. More