I was reading an article on six ways a country struggling can fix her problems, but as we all know every step fowards has two steps back:


-Option 1: The British Model
-Smash special interests: Unions.
-Restore private enterprises freedom of movement.
-Neo-Liberlalist.
-Cons:
-Deep polarization of the population, and economy.
-Capital over Labour
-Deindustrialization
-Weaker public institutions.

-Option 2: The U.S. Model
-Giving American society hope, revivalist spirit, and confidence
-Labour conflict with gov’t employees and unions.
-Pro-Corporations, and favoured tax cuts as the best method to reinvigorate the economy.
-Cons:
-Volatile exchange rates.
-Very high budgetary deficits.
-Increase in debt.
-Intervention in the global trade system.

-Option 3: The Swedish Model
-Consolidating gov’t finances.
-Revamping and making the welfare state affordable.
-Strong emphasis on education
-Cons:
-The public may want a change and the consensus among the population is volatile.

- Option 4: The Dutch Model
-Agreement btwn management and labour: wage slowdown for shorter working hours and better conditions.
-Gov’t cut taxes through economic growth generated, so labourers could accept lower pay.
-Downturn of the Dutch economy showed model failed.

- Option 5: The Japanese Model
-Model was based on Industry not on the gov’t.
-Model stated that expanding markets (more exports) created more jobs at home.
-Japan is growing quickly and is getting out of deflation.
-Essentially keep Japanese industry ahead, productive, and hi-tech.

- Option 6: The German Model
-German model a mix of all other models.
-Germany adopted Swedish and Dutch models, created more flexibility with companies.
-Labour and management getting into troubles: like UK and US models.
-German companies are very competitive abroad, and use Japanese model.

http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=4064

So which model do you think works best, let's say you were a Eastern European state just joining the EU, and why?

every step fowards has two steps back

Do you really believe that? *Every* step foward in any economic endeavor has *two* steps back?

So what's the point in doing anything with the economy, ever?

Do you really believe that? *Every* step foward in any economic endeavor has *two* steps back?

Yes, just that it’s not the economy that suffers, its usually the social fabric of the nation, and role of government, or visa versa. Everything has its yin.

I've read that Sweden is actually "owned" by 14-20 families max. As a payment, those families support Sweden's welfare system. It's kind of crossbreed between the plutocracy and welfare capitalism. The problem with USA is that American plutocracy is not willing to pay high (rather right) price for their status. Instead, they prefer to invest much smaller amount of $ in the mass brainwashing campains and in the politicians (it works great so far).

Undecided
So which model do you think works best, let's say you were a Eastern European state just joining the EU, and why?

It has already been demonstrated that some of the Eastern European nations are inevitably adopting, predominantly, to the US model. As Rostow theorised, every developed nation has to go through certain stages in order for her to fully 'mature' economically (see: http://www.bized.ac.uk/virtual/dc/copper/theory/th9.htm ).

As mentioned on the website, the shortcoming, if any, of this particular model is that it doesn't quite fit into the pardigms of non-western nations (e.g., Africa), but since the question is of Eastern European nations, I think it suffices to conjecture in terms of Rostow's model as many Eastern Euro. nations ought to function in the context of Western Euro. nations' economy.

At any rate, in order to achieve a certain degree of economic competence, Eastern Euro. nations are now lowering their corporate taxes while increasing the indivdual taxes. This strategy is typical in formative years of Anglo-American economy; its primary purpose is to drastically increase the investement in capital in short time thereby to encourage the massive corporate spending (if not that of individuals). Since the corporate speding is much larger than that of individuals, a nation's balance sheet looks much vital and competetive.

The major con for this model, as seen in the States, is that the desparity between the poor and the wealthy has widened dramatically as the econmy supposedly 'matures' (but a nation in average, its economy is seemingly 'improving').

By the way, as for the option 4 - Dutch model - I am not quite sure whether Dutch model is as significant enough as to even mention vis-a-vis other nations in question here by virtue of the fact that Dutch economy is too small to compare vis-a-vis UK, US, Sweden, Japan and German model. So I would simply disregard the option 4.

As for option 3, 5 and 6: Option 3 is impossible as many of Eastern Euro. nations have not even industrialised. The Scandinavian welfare-focused system is a direct product of the rapid industiral growth. and its negative consequenses (e.g., exploitations of labours), so unless Eastern Euro first undergoes a major industrial rev., the welfare option simply is not available (with Rostow - in order to invest heavily in welfare, a nation has to have sufficient initial capital to begin with; the capital which is obtainable only via industrialisation. Once a nation is industiralised, then option 3 becomes an option.

As for option 5 and 6:

On German and Japanese model -


Model was based on Industry not on the gov’t.

The above is misleading as Japanese econmy IS based upon gov't. as major industries in Japan were/are based upon governmnet's investment: Mitsubish, Sumitomo, Mitsui, NTT, Panasonic (National), are/were all gov't based industries. Likewise, in Germany: Siemen, Volkswagen, Daimlar Chrysler, Krup, Skoda, etc are/were all gov't based.

This is inevitable as those two nations are economically, if not 'industirally', minor players (vis-a-vis UK, France, US) until 50's (70's in Japan). In order for them to fully function in the world economy, they first had to initiate the economic growth more or less politically.

The above option 5 and 6 has been possible for Germany and Japan insofar as they historically 'had' a major industry to begin with - the industry which Eastern Euro lacks.

Thus the answer is none of the options above. The only means to sustain Eastern Euro. nations' economy, sadly, is via foreign investment from Western Euro, Japan and the States (see the reason why Poland sent its troops to Iraq when being asked by the States [this makes me puke] ). We all know that all of the above nation's division of labour is internaionally allocated: A car made in Germay requires for Germans to invest in Truky, Poland, Czech, etc therein to buy cheap labours while boosting profits nationally; likewise, a camera made in Japan requires for Japanese to invest in China, Korea, Malaysia, etc.

Thus I don't think any of Eastern Euro. nation at this point has a choice over what kind of system they are to follow. Instead, the system will be given to them from already developed nations. So the question really is what kind of economic strategies by developed nations are to fit in Eastern Euro. nations. Then the answer, again, is via foreign investment in the sense of Anglo-American style - nothing more or less for now.

So, if I were an Eastern European state joining EU, my answer is: "I ain't got a choice."

Hence, this is rightly said:

. . . but as we all know every step fowards has two steps back:

kind regards,

What about the chinese model...?