Welcome to the works of Manfred Davidmann

Multinational (Global) Operations and
Financial and Economic Crises and Recessions:

Democracy under Attack: The Struggle for the Right to take the Decisions, and for Social Accountability


Fundamental reports relevant to today's problems and to a better future

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Multinational (Global) Operations and
Financial and Economic Crises and Recessions:

Democracy under Attack: The Struggle for the Right to take the Decisions, and for Social Accountability

Government and Management;
Of, By and For the People

Government has to make ends meet, has to bring about a rising standard of secure living, social security and an increasing quality of life for its citizens. There can be ups and downs but, says Manfred Davidmann, "failure to make ends meet is just as directly and surely the result of bad leadership and management as it is in any commercial enterprise." This is a severe criticism also of the kind of experts and consultants used, and of the way they are used. "The quality of one's experts and whether and how their expertise is used, and applied, are of decisive importance."

A crisis in an affected enterprise is likely to have been caused or aggravated by inadequate management and administration, so resources including capital are being used ineffectively and are often wasted. In such circumstances one looks closely at the quality of the leadership, of those who direct, of those who manage, one looks at the way resources are being used.

For example, reducing wages (cutting essential community services) merely makes the workforce (community) pay the bill for inadequate management, allows the management to carry on just as wastefully as before at the expense of the standard of living of the workforce.

Demanding a fair return for one's investment (shareholders' investment, bank loans, money provided by the community in various ways) wakens up management to its responsibilities, encourages and rewards good management.

From report:
Inflation, Balance of Payments and Currency Exchange Rates
(Including: Quality of National and Local Government and Worldwide Inequality)

Government Income and Spending

The government spends for the community the money it receives from the community, collecting it through taxation. If it spends more than it collects, then it has to make good the shortage, say by borrowing and/or by printing more money. Debts have to be serviced and repaid so that borrowing increases future spending, absorbs income, increases the difficulties. But it is clear that to reduce and eliminate the deficit we need to increase income or reduce spending, or both.

Governments which spend more than they receive, then attempt to reduce or to make up the difference by borrowing internally and by borrowing abroad. The remaining difference between what is coming in and the amount the government wants to spend can then be made up by printing more money.

See Figure 2 'Making Ends Meet' in
Inflation, Balance of Payments and Currency Exchange Rates.  

This illustration shows how printing more money increases the amount of money which is circulating and we can see that this, like increasing interest rates, causes inflation and how it does so.

In such circumstances there is usually much talk about reducing inflation by balancing income and expenditure. In other words, we are told that to reduce inflation we have to reduce the deficit and that the way to do so is to reduce government spending, that less has to be spent on essential services to the community such as on education, health services, unemployment benefits, social security payments and social care.

It is clear that to reduce government expenditure by cutting social services is one-sided. Why should community services be cut in preference to cutting the vast sums which are collected from the people, that is from the community, and handed over annually to a select few, to owners, shareholders and to those who control financial institutions? These enormous sums, which are handed over annually, increase the wealth and power of a very small number of people without any corresponding return to the community. They are generally given without obligation to repay, without a corresponding transfer of ownership and control to those who provided the money.
See   Understanding How Society is Organised for Controlling and Exploiting People

No banker, no financial institution, no shareholder would dream of giving away their capital without making sure of retaining ownership and control over this money, through the transfer of corresponding securities and ownership rights, and of direct and indirect participation in the resulting profits.

Very large sums are involved. The array of investment grants, depreciation allowances, grants in aid, tax allowances, tax-free benefits, tax reductions, loans at favourable terms and other ways of financial support to various enterprises in industry, agriculture and services, speaks for itself.
See   Understanding How Society is Organised for Controlling and Exploiting People,
and see   Taxing the Population for Private Profit

How come that the people's money is distributed in such a fashion? How come that corresponding ownership rights are not transferred to those who work in the enterprise, on behalf of the community?

Hence while on the one hand one can consider cutting essential community services, on the other hand one can also cut the flow of capital from the community to the select few and in any case can expect a fair commercial and social return to the community for the enormous sums which are annually handed over in this way.

And why is our government not making ends meet, balancing income and expenditure, which is supposed to be its duty? Why is the government continuing to borrow at our expense, why are they not planning effectively (budgeting effectivly) to make ends meet?

So-called 'Financial Crisis'

When some very large financial business institutions were apparently engaging in unsound business, commercial banks seem to have considered them unsafe and refused to lend them further moneys.

However, government officials and their experts then came in, seemed to throw the public's, the community's, hard-earned moneys at them, apparently to bail them out (make good their losses) and to keep them afloat, apparently burdening us and our future generations with debts which appear to have nothing to do with us or with our well-being.

So this so-called crisis, and similar crises, are not our, the people's, the community's, concern and not our responsibility.

Following in the footsteps of financial institutions, other large multinationals, professional institutions and even countries, began to ask for aid in what was then beginning to be called an 'economic' crisis, apparently so as to benefit from such vast government handouts.

Who or what is responsible for this crisis?

Absence or shortage of factual, objective and reliable information could lead one to suppose that the crisis (crises) may have been engineered for the sake of vast aid moneys, at our expense.

Government Officials and their Actions

Say 'money lenders' are those who are lending to the government the vast funds now being made available or distributed by government as 'aid' moneys. Then it appears that government officials are mortgaging the future of their populations, are handing over to 'money-lenders' the value of the future work of their populations, as it is the population who would have to pay the interest due on these 'loans' and would have to repay the loans, from future earnings.

One is reminded of the story once told by a high-level manager, that his Board of Directors had just spent an hour and a half discussing the quality of toilet paper in the staff toilets, and then nodded through a complicated, involved and risky multi-million GBP project in a matter of minutes. Reminded, that is, by the statements and actions of officials and experts who seem to have no real specific or clear information to give, or seem to have but little understanding of the consequences of their own proposals, or seem unable to communicate real information and understanding to us in clear language.

What stands out is that we were not asked to decide whether, why and how these aid-moneys should be borrowed and granted, and that our democratically elected government is not entitled to, has not been authorised by us, to commit our future and that of our children, in such ways and for such purposes.

Why should we, our future and the future of our children (following generations) be burdened on such a large scale by government without our having instructed government to do so, and without our agreement.

Mortgaging our National Future

Government will presumably have to borrow very large sums of aid-moneys which are now being requested by banks, public bodies, professional institutions and the like. And government would presumably have to pay interest on the moneys it borrowed, possibly even borrowing back moneys it had had to pay to countries from which it imported sources of energy.

Remember that the banks (and other recipients) of 'aid', that is of government funds, would be paying to the government any payments due on these aid-moneys. And that they would most likely first collect these payments from us, their customers, including them in what we are being charged for their products and services, before paying the government.

So we are apparently mortgaging our national future by borrowing the large sums which are to be handed out as 'aid', and would also in effect be paying the interest and capital repayments demanded from recipients of 'aid' moneys.

The government and its officials are apparently making available vast sums of money which are borrowed from money lenders, to unspecified people for unspecified purposes.

However, governments and government officials do not have the authority or right to hand over to money lenders the value of the future labour of the people, of the community, in this way committing the people to servitude and financial dependence.

We Need Factual Information

Ask questions, demand precise answers and information.

Do not allow yourself to be blinded by vague phrases!
See   Using Words to Communicate Effectively

And demand clear, specific, unambiguous answers in meaningful language.

What is needed is precise information and this does not seem to have been provided by the government or by others, to the citizens, to the general public, to those whose future income is being committed for no apparent good reason. Information in plain, clear, precise, unambiguous and meaningful language, giving relevant facts and figures to enable us, the citizens, decide whether we want to mortgage our own future and that of our children for the benefit of what appear to be a very small group of very rich and well-paid individuals.

For example, when financial and commercial institutions are asking us for enormous sums of aid-money (to keep them in business) from us, which even our governments do not have and would have to borrow, where precisely does the suddenly available wealth which our government borrows from unspecified sources, come from?

And under what terms are government officials borrowing such enormous sums and disposing of them in vague ways for undefined purposes?

Precise information is required on all counts. We need factual and clear answers to questions such as:

Tax Burden, Income Tax
1     'Who contributes how much?', to see how the tax burden is shared among different sections of the population.
2   Who should have contributed but does not?
3   Who ought to contribute more?
4   'Who benefits at whose cost?' from this system of distributing the tax burden and of handing out the benefits.
5   What is the cost to the community of the deficit which results from this way of distributing the load among the different sections of the population?
6   Can we afford to give away such large sums to enlarge the wealth, power and patronage of a very small section of the population at the expense of the whole population?
7   Can we continue to afford to do so at a time of crisis?

Sources of 'Aid' Funds

Governments are keeping interest rates down so as to keep share prices up, to prevent share prices from collapsing.

Their response to falling share prices has been to keep on lowering interest rates so as to boost share prices.

But why should people lend at such low interest rates, at interest rates which approach zero?

And yet our governments seem to have no difficulty in obtaining long-term loans, borrowing enormous sums from unknown (to us) lenders.

Who are the unknown lenders who so amazingly have the vast riches available to bail out the USA, EU, Germany, Great Britain, and the rest of the world?

Where precisely do these funds come from, who is lending them, and under what terms? In other words:

Who, dollar for dollar, euro for euro, GBP for GBP, are these nameless 'lenders'?

From whom, and at what cost, terms and conditions, are our governments obtaining (borrowing) the almost unimaginable vast funds they intend to borrow?

'Aid Fund' Receivers
What precisely were the risks which the commercial banks refused to accept when they stopped lending moneys to the financial institutions?

Where did 'lost' money disappear to?

Who are the real owners of these aid-requesting enterprises, organisations?

Who engaged in the risky business and are they being held to account for doing what they did or for not doing what they should have done?

Are we being asked to pay the enormous debts of business enterprises, debts perhaps caused by inadequate or incompetent individuals? And if so, who appointed them and let them carry on unchecked?

What are the terms and conditions under which the sums are to be provided?

Who receives, and who benefits from, these vast so-called aid moneys?

For whom precisely are these vast sums intended?
Who will receive them (by name and amount)?

Who decides what is to be done with the aid-money?

Why precisely are these moneys required?

What exactly will this aid-money be spent on?

How will the aid-money's spending, and use, its spending by whom and what for and for what purpose and for whose benefit, be checked and approved and by whom?

Aims and Objectives: The Social Struggle

for the Right to Take the Decisions which Affect Our Lives, and

for Social Accountability

What underlies democracy is decision-taking by the people at the level of the people. But what we see is top-level leaderships trying to take over decision-taking from the population.

A company, corporation, government or government officials, multinational organisation or multinational meeting, can serve as a front behind which those who take key decisions can hide, as a front for owners, directors or top-level individuals.

All multinational and so-called 'summit' meetings are suspect. Suspect are also multinational, international, global organisations, too often run by unelected self-perpetuating hierarchies, holding secretive meetings arriving at secretive social, economic or military agreements and treaties.

Secretive top-level multinational meetings and agreements negate democratic government and decision-taking, without having overriding authority or right to do so.
See   Multinational Summits and Agreements (Top-level Decision-taking and Democracy)

What we see are consequences of decisions made at the top, and the results of putting them into effect. Results and consequences which at times make the decisions seem so brutal that they appear inhuman.

No elected representative, government or government employee has the right or authority

  1. to hand over to corporations (that is to those who own and control them), or to any other organisation or to anyone else, an overriding control over the present or future, economic or social, welfare of the people, or

  2. to sign away democratic rights of their people for the self-determination of key fundamental aspects of their lives.

See   Multinational Summits and Agreements (Top-level Decision-taking and Democracy).

Socially responsible and caring governmental legislation has to take precedence over the profit-motivated activities of corporations (including financial institutions).

And representatives, governments or government officials do not have the authority or right to override, reduce or sign away the participative (democratic) rights of the electors, of the population.

Decision-taking by 'leaderships' has to be replaced by decision-taking at the level of the people.

The real struggle is not between political left and right, but is a struggle for participation (the right to take decisions).

Directors, top-level financial managers and advisers, and those whom they consider to have been responsible, should be held accountable for the present crises, for the decisions they took or should have taken, should be accountable for the problems their seeming lack of foresight caused and is causing for citizens.

Leaderships fear bad publicity, fear public awareness of socially irresponsible behaviour and consequent impact on sales and market share, on an individual's career or on an organisation's reputation and credibility.

So an effective control of corporate and top-level irresponsibility is publicity about what is being planned or being done, making the public aware of who did or is doing what, and of who condoned or omitted to restrain, antisocial or antidemocratic activities.

Particularly so when publicity names those responsible for making antisocial decisions, and those responsible for condoning, or for omitting to restrain, antisocial activities.

See   Understanding How Society is Organised for Controlling and Exploiting People

And see   Multinational Summits and Agreements (Top-level Decision-taking and Democracy)

To me it seems that the government should set an example of good housekeeping by giving each citizen the choice of opting out of contributing (donating) to the government's charitable aid-funds for needy privately-owned corporations and financial institutions (owners, directors, senior executives).

Sources, with Descriptions

Title   Description
Inflation, Balance of Payments and Currency Exchange Rates   For a full statement and discussion of the alternative ways of balancing national accounts, in meaningful language and with clear diagrams and illustrations, see this report. It is about National Accounts and the national Balance of Payments, in effect about good national financial management, and was first published in 1981. Its analysis and methodology are now widely accepted, world-wide, and can help a great deal when considering the causes and effects of these crises.

Describes, reviews and illustrates the underlying relationships. How inflation affects currency exchange rates and trade. How interest rates determine share prices and pensions, and thus also the extent to which pension funds are in surplus or underfunded. Discusses multinational operations such as transfer pricing, inflation's burdens and worldwide inequality. Clear diagrams and worked examples.

See 'Press Notices'.
Understanding How Society is Organised for Controlling and Exploiting People   Describes how corporations (companies) accumulate their capital and reserves from moneys taken from customers. Enterprises are allowed to collect, take over and control such moneys and co-operatives also take over moneys from their members. Describes how people's massive savings are placed under the control of others.
Taxing the Population for Private Profit   Shows how taxpayers' moneys are used in different ways to enlarge the profits of companies (corporations). These are in effect allowed to tax the population and to pass large parts of their operating costs to taxpayers.
Multinational Summits and Agreements (Top-level Decision-taking and Democracy)   Describes how secretive top-level multinational meetings and agreements (such as GATT and MAI) negate democratic government and decision-taking. Shows that publicity about what is being planned or taking place is an effective deterrent.
Using Words to Communicate Effectively   Shows how to communicate more effectively, covering aspects of thinking, writing, speaking and listening as well as formal and informal communications. Consists of guidelines found useful by university students and practising middle and senior managers.

Manfred Davidmann

Manfred Davidmann is an internationally well-known and respected scientist and author of a number of books and reports which have had and are having considerable impact. His work usually breaks new ground and opens up new understanding and is written in meaningful and easily understood language. Outstanding is that his work is generally accepted as factual, objective and unbiased.

Subject Index Pages and Site Overview

The Site Overview page has links to all individual Subject Index Pages which between them list the works by Manfred Davidmann which are available on the Internet, with short descriptions and links for downloading.

To see the Site Overview page, click Overview

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