Geld, IEB en bedrijfsomgeving ---- Introduction to the global economy

Publication: Wolters-Noordhoff bv (2005, Groningen/Houten)

First insertion on Heterodox Gazette Sam de Wolff: 15 june 2015

Since 2005 your columnist participated for several years in weekly discussions on the internet forum of the German economy-association Attac. There a handful of idealist scientists had taken on the challenge to share their economic insights with the people. They wrote daily contributions, and also reacted on the comments of visitors. Everybody was welcome. Such a personal attention is perfect for laymen, who want to increase their own knowledge¹. Thus your reviewer became interested in mysterious terms, like M1 and M3, which apparently had something to do with money. The fascination led to the acquisition of Geld, IEB en bedrijfsomgeving, a year later. To prevent any misunderstanding, IEB is an abbreviation of "international economic relations".

The authors W. Hulleman and A.J. Marijs have established a good reputation as writers of introductory textbooks for higher education. The efforts of the duo are pedagogically sound². And also this book does not disappoint. Just like in their other books they succeed in finding the right mix of theories, statistical facts, and examples from practice. The whole is enlivened by flow schemes, tables, simple graphs, and pictures (the latter fortunately not too much). The reading of this book was sufficient for henceforth discussing on an equal footing on the Attac forum, at least about money matters. Incidentally, it also helps in understanding more about our modern world, where the speculation has been developed into an art, and where RTL News is dominated by the stock notations.

What contents can be found in Geld, IEB en bedrijfsomgeving? The book begins with an explanation of money as a phenomenon, including the damned terms M1 and M3. Here Dutch banking is also described, at least the situation of 2005, because since then the Great Recession has led to changes. Next some remarks are made about the monetary policy, which in the present Europe is dictated by the European Central Bank. In this chapter the well-known Euribor interest rate is mentioned, among others. After thus sketching the financial world, the authors address the theme of international trade. Here they also discuss the famous theory of the comparative advantages, which can be used by the state against his trading partners. International trade is beneficial.

Next the authors return to money, and describe the trade in currency. Free exchange rates tend to lead to instability. Conversely, fixed exchange rates require, that the monetary policy of the concerned states converges. The interested reader has undoubtedly noticed this in the recent public debt crisis, which is evidently absent in this fourth edition. After thus also explaining the international aspect of finance, the capital market is addressed. The reader is informed about exiting and mysterious terms, such as the private market. This chapter is followed by the fascinating theme of the international cooperation. Since the Great Depression of the interbellum there is a vivid debate about such cooperation and integration. Both scientifically and politically there are attempts to find the optimal policy, and this historic search supplies useful matter for those, who have time to spare³.

The final three chapters are devoted to risk control, of respectively the interest rate, the currency notations, and the economic development of states. There is a need for rules of thumb. Although recently much effort has been spent on the development of risk theories, these chapters limit themselves to presenting a global survey. Prognoses of the conjuncture are required, but these are notoriously unreliable⁴. Incidentally, the conjuncture itself is not explained here; for this the other books of the two authors must be consulted.

Some reflection leads to the concluding résumé, that Geld, IEB en bedrijfsomgeving is not really easy to read. The theme simply forbids this. But Hulleman and Marijs do try, and at least create clarity. This is laudable, because many of their colleagues fail in this respect. Therefore the book can be recommended to anybody, who is interested in the global economy, and wants to engage in debates with some expertise.

1. The mediators of the forum probably hoped, that a kind of popular university would emerge. But this ideal was too good to be true. With the exception of a wandering visitor like your reviewer and a mysterious continuous flow of entries on the list of participants, the forum remained a discussion between its founders. Moreover, these were not really congenials, with the exception of their discontent with what is. It turns out that very few have the calling to emancipate others from their ignorance without any payment. Gradually all mediators left, until finally your reviewer and several dreamy utopists remained. Apparently the internet is not suited as a spontaneous meeting place. Vivid fora do emerge, but they are usually an artificial façade, which is secretly filled by professional writers and their adherents. Yet the Attac forum was a pearl, which impressed your reviewer, and has even stimulated the foundation of the political forum Sociaal Vooruit, in 2011 (now defunct again). (back)
2. Somehow this is understandable, because education is a source of joy. Thus there is the joke of the cross-eyed woman teacher, who can not control her pupils. Or the teacher sighs: "If the students in the back benches would be so quiet as the ones who in the middle benches read their magazines, then the students in the front benches could sleep". Teachers are a rare breed. For instance, a teacher asks his colleague for some pills of acetylsalicyclic acid. The colleague replies: "You mean aspirin?" The first teacher exclaims: "That is it! I can not remember that name". It starts already during the study. During the seventies the cabaret performer Wim Kan referred to students as "people who break windows in established firms where they will later be the director". But other definitions are just as good, for instance "people who split their sides, when the kitchen is on fire". Or: "people who do not rise at six in the morning, but exhaustedly fall in bed". Or: "people who do not know who sleeps in their house". And "those, who believe that the best bottle of wine costs two euros". A failed students complains about the "unsatiable curiosity of the examiners". It is like the English poet C. Patmore wrote: "Nothing remains with man unless it is insinuated with some delight". (back)
3. The Ghent protest singer Walter de Buck does not trust it, and sings in 't Es al van macht: You ponder all alone / about getting euros and profit, / for the rest you do not care, / as long as you earn a lot / and whoever gives is your friend. / And when the world dies, / even then it does not bother you, / and better dead than red ... / It is all about power, it is all about money, / of smooth talk and of violence. / It is not about life, which counts here. (back)
4. And the cabaret performer Jaap van de Merwe writes in Daarom rinkelt het bij mij: Mister Prut, car-maker by profession, / you receive aid. / But who supplies the capital, / that you gamble away in the casino in Knokke at Sea? / Ah ... sometimes I import cars, / rumpled, dented, broken or so ... / Plenty of customers after an invisible repair! / I get the profit and they the rest of the risk. / And that is why it jingles with me / in the side pocket. / The income of being efficient and alert. / The lazy money which is not tainted by blood / (at least not mine). / The tax man does in on a large scale / and I moderately ... (back)