In days gone by, an outstanding event was held with the excuse of remembering 40 years of Democracy; It was evident to all attendees that the interest and central driving force was undoubtedly trying to decode the near future of the Argentine Economy. It was possible to bring together Pablo Gerchunof (economic historian), Domingo Cavallo, Alfonso Prat Gay, and Jorge Remes Lenicov (three important former Ministers), as well as very prominent colleagues such as Ricardo Arriazu, Daniel Artana and Carlos Melconian; At the same time, the audience in attendance resulted from a strange fusion between businessmen, economists, journalists, former politicians and aspiring politicians.
an economic program
With logical copyright, the organizers have published and will publish the excellent content of these presentations. In general, it was agreed that it would be possible to get out of the difficult situation in which the country finds itself, as well as the need to propose an economic program of comprehensive ordering with centralized coordination and the greatest possible political support; This is the only way to regenerate the non-existent social confidence in the currency, the institutions, the authorities and the independence of the BCRA.
As obvious serious problems to face: non-existence of reserves, inflation, debt, deficit and the calamitous social situation, as well as the problem of the “acquired rights” of different actors; Without the issue being clarified at the event, we can together with our readers imagine about thousands of politicians, trade unionists, officials from the three public powers (executive, legislative and judicial) from national, provincial, municipal and public company strata, as well as private businessmen who own small or large perks and of course also privileged retirees.
The conflict between the need or not to explain the measures that should inexorably be faced and obtaining the vote (The usual… if I say what I’m going to do, no one votes for me…).
Agreement with the IMF: why it is important for the government to close before the elections
Explain measures transdisciplinarily
Very emphatically, Melconian supported the need to outline the guidelines for a program, hoping that politicians will adopt it and trusting that society will surely give it its support.
Personally we agree with most of the ideas raised, however we do not share a evident self corseted vision; the world, all reality and therefore the sciences that seek to study and modify it, cannot be the object of limited disciplinary visions; as we have pointed out many times: also in this case there is a need for a transdisciplinary vision that totally differs from the unidisciplinary, the interdisciplinary and also the multidisciplinary. Epistemologically we emphatically support the need to understand the present world from the categorical imperative of the unity of knowledge.
Three key factors in agriculture that need to be solved
Assumptions of perfect information and full rationality
In the same way, plan and propose a future economic program on the neoclassical assumptions of perfect information and full rationalitynot only would it be a disciplinary problem, but knowing everything learned thanks to Kahneman and Behavioral Economics it would be utter nonsense.
For this reason we must reformulate many things based on Einstein’s two brilliant ideas: … if we want different results, we should not always do the same thing…” and perhaps the most sensitive for each one of us: “… the brain is like a parachute, it will only work if we manage to open it…”.
In the first place, we must better understand why everything attempted economically since 1930 has always ended badlynot only because of the sufficiently studied “Argentine macroeconomic stop & go” but also the reasons that have motivated it: essentially due to our autochthonous fictional interpretation of realitygenerator of so many frustrated and frustrating reforms and counter-reforms, as well as the pathological externalization of our responsibilities and guilt.
Uncertainty in the market: rising dollar while waiting for the closing of the agreement with the IMF
The incentive problem
None other than Adam Smith already told us about this in his work: “…if we are not satisfied with a particular activity or result, or if we want to change some behavior, looking at the underlying incentives and finding a way to change them can often produce a more desirable result.”
Some authors have misinterpreted this idea referring only to economic incentives when in reality, the central question is about all kinds of positive or negative incentives (social, cultural, political, legislative, economic, etc.) that end up formatting and defining the social and economic behaviors evidenced in the aggregate.
As a mere example, let’s briefly analyze inflation, its associated incentives and who may or may not be interested in eliminating it:
Politicians generally do not have no incentive to eliminate inflation : being able to spend more than real income is a constant ambition, together with the use of monetary issue to finance most of these expenses and as a powerful tool to reduce them in real terms (to the extent that expenses and salaries are indexed later).
Unionists enjoy the broad power than inflation it gives them to renegotiate labor agreements and generally receive direct funds resulting from that renegotiation.
Entrepreneurs often manage to anticipate prices (next in first out) and delay wage indexing, although this has historically been complicated by the autochthonous “stop & go” and the repeated correlate of non-existence of reserves to import inputs.
As has been repeated, the big losers from the most regressive of taxes have always been the low-income sectors and retireessince with higher disposable income it is possible to moderate the impacts of these pathological behaviors.
The professional obligation
Unlike the one raised in the cited event, our main professional obligation is not to convince politicians to change these and other policies, but explain to society all the need to change these behavior patternsso that it peremptorily demands it from representatives and rulers.
In line with this idea, we therefore propose to continue analyzing in this way the incentives in different areas that directly or indirectly have impacted and continue to have a very negative impact on our social and economic structures as a whole.
*Dr. Martín A. Morgenstern
Dr. UBA, MBA and Bsc. Professor and Researcher in Health Economics