Capital 2.0 capital formation and legal risk in a new global economic order from fiat to exit: including case studies of the proposed transatlantic trade and investment partnership between the United States and the European Union and the financing relation between the United States and the People’s Republic of China

Following the intrinsically linked balance sheets in his Capital Formation Life Cycle, Lukas M. Stahl explains with his Triple A Model of Accounting, Allocation and Accountability the stages of the Capital Formation process from FIAT to EXIT. Based on the theoretical foundations of legal risk laid by the International Bar Association with the help of Roger McCormick and legal scholars such as Joanna Benjamin, Matthew Whalley and Tobias Mahler, and founded on the basis of Wesley Hohfeld’s category theory of jural relations, Stahl develops his mutually exclusive Four Determinants of Legal Risk of Law, Lack of Right, Liability and Limitation. Those Four Determinants of Legal Risk allow us to apply, assess, and precisely describe the respective legal risk at all stages of the Capital Formation Life Cycle as demonstrated in case studies of nine industry verticals of the proposed and currently negotiated Transatlantic Trade and Investment Partnership between the United States of America and the European Union, TTIP, as well as in the case of the often cited financing relation between the United States and the People’s Republic of China. Having established the Four Determinants of Legal Risk and its application to the Capital Formation Life Cycle, Stahl then explores the theoretical foundations of capital formation, their historical basis in classical and neo-classical economics and its forefathers such as The Austrians around Eugen von Boehm-Bawerk, Ludwig von Mises and Friedrich von Hayek and most notably and controversial, Karl Marx, and their impact on today’s exponential expansion of capital formation. Starting off with the first pillar of his Triple A Model, Accounting, Stahl then moves on to explain the Three Factors of Capital Formation, Man, Machines and Money and shows how “value-added” is created with respect to the non-monetary capital factors of human resources and industrial production. Followed by a detailed analysis discussing the roles of the Three Actors of Monetary Capital Formation, Central Banks, Commercial Banks and Citizens Stahl readily dismisses a number of myths regarding the creation of money providing in-depth insight into the workings of monetary policy makers, their institutions and ultimate beneficiaries, the corporate and consumer citizens. In his second pillar, Allocation, Stahl continues his analysis of the balance sheets of the Capital Formation Life Cycle by discussing the role of The Five Key Accounts of Monetary Capital Formation, the Sovereign, Financial, Corporate, Private and International account of Monetary Capital Formation and the associated legal risks in the allocation of capital pursuant to his Four Determinants of Legal Risk. In his third pillar, Accountability, Stahl discusses the ever recurring Crisis-Reaction-Acceleration-Sequence-History, in short: CRASH, since the beginning of the millennium starting with the dot-com crash at the turn of the millennium, followed seven years later by the financial crisis of 2008 and the dislocations in the global economy we are facing another seven years later today in 2015 with several sordid debt restructurings under way and hundred thousands of refugees on the way caused by war and increasing inequality. Together with the regulatory reactions they have caused in the form of so-called landmark legislation such as the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act of 2010, the JOBS Act of 2012 or the introduction of the Basel Accords, Basel II in 2004 and III in 2010, the European Financial Stability Facility of 2010, the European Stability Mechanism of 2012 and the European Banking Union of 2013, Stahl analyses the acceleration in size and scope of crises that appears to find often seemingly helpless bureaucratic responses, the inherent legal risks and the complete lack of accountability on part of those responsible. Stahl argues that the order of the day requires to address the root cause of the problems in the form of two fundamental design defects of our Global Economic Order, namely our monetary and judicial order. Inspired by a 1933 plan of nine University of Chicago economists abolishing the fractional reserve system, he proposes the introduction of Sovereign Money as a prerequisite to void misallocations by way of judicial order in the course of domestic and transnational insolvency proceedings including the restructuring of sovereign debt throughout the entire monetary system back to its origin without causing domino effects of banking collapses and failed financial institutions. In recognizing Austrian-American economist Schumpeter’s Concept of Creative Destruction, as a process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one, Stahl responds to Schumpeter’s economic chemotherapy with his Concept of Equitable Default mimicking an immunotherapy that strengthens the corpus economicus own immune system by providing for the judicial authority to terminate precisely those misallocations that have proven malignant causing default perusing the century old common law concept of equity that allows for the equitable reformation, rescission or restitution of contract by way of judicial order. Following a review of the proposed mechanisms of transnational dispute resolution and current court systems with transnational jurisdiction, Stahl advocates as a first step in order to complete the Capital Formation Life Cycle from FIAT, the creation of money by way of credit, to EXIT, the termination of money by way of judicial order, the institution of a Transatlantic Trade and Investment Court constituted by a panel of judges from the U.S. Court of International Trade and the European Court of Justice by following the model of the EFTA Court of the European Free Trade Association. Since the first time his proposal has been made public in June of 2014 after being discussed in academic circles since 2011, his or similar proposals have found numerous public supporters. Most notably, the former Vice President of the European Parliament, David Martin, has tabled an amendment in June 2015 in the course of the negotiations on TTIP calling for an independent judicial body and the Member of the European Commission, Cecilia Malmström, has presented her proposal of an International Investment Court on September 16, 2015. Stahl concludes, that for the first time in the history of our generation it appears that there is a real opportunity for reform of our Global Economic Order by curing the two fundamental design defects of our monetary order and judicial order with the abolition of the fractional reserve system and the introduction of Sovereign Money and the institution of a democratically elected Transatlantic Trade and Investment Court that commensurate with its jurisdiction extending to cases concerning the Transatlantic Trade and Investment Partnership may complete the Capital Formation Life Cycle resolving cases of default with the transnational judicial authority for terminal resolution of misallocations in a New Global Economic Order without the ensuing dangers of systemic collapse from FIAT to EXIT.

Re-employment hazard of displaced German workers: evidence from the GSOEP

This study investigates the re-employment hazard of displaced German workers using the first fourteen sweeps of the German Socio-Economic Panel (GSOEP) data. As well as parametric and non-parametric discrete-time specifications for the baseline hazard, the study employs alternative mixing distributions to account for unobserved heterogeneity. Findings of the study suggest negative duration dependence, even after accounting for unobserved heterogeneity. In terms of covariate effects, those at the lower end of the skills ladder, those who had been working in manufacturing and those with previous experience of non-employment are found to have lower hazard of exit via reemployment.

Unnoticed apocalypse: the science fiction politics of urban crisis

The slogan ‘capitalism is crisis’ is one that has recently circulated swiftly around the global Occupy movement. From Schumpeter to Marx himself, the notion that the economic cycles instituted by capitalism require periodic crises as a condition of renewed capital accumulation is a commonplace. However, in a number of recent texts, this conception of crisis as constituting the very form of urban capitalist development itself has taken on a more explicitly apocalyptic tone, exemplified by the Invisible Committee's influential 2007 book The Coming Insurrection, and its account of what it calls simply ‘the metropolis’. ‘It is useless to wait’, write the text's anonymous authors, ‘for a breakthrough, for the revolution, the nuclear apocalypse or a social movement.… The catastrophe is not coming, it is here.’ In considering such an apocalyptic tone, this paper thus situates and interrogates the text in terms both of its vision of the metropolis as a terrain of total urbanization and its effective spatialization of the present as itself a kind of ‘unnoticed’ apocalypse: the catastrophe which is already here. It does so by approaching this not only apropos its place within contemporary debates surrounding leftist politics and crisis theory but also via its imaginative intersection with certain post-1960s science fiction apocalyptic motifs. What, the paper asks, does it mean to think apocalypse as the ongoing condition of the urban present itself, as well as the opening up of political and cultural opportunity for some speculative exit from its supposedly endless terrain?

Defining the nation, defining public television: discourses of publics on public service television in post-communist Latvia

Institutional and political economy approaches have long dominated the study of post-Communist public broadcasting, as well as the entire body of post-Communist media transformations research, and the enquiry into publics of public broadcasting has traditionally been neglected. Though media scholars like to talk about a deep crisis in the relationship between public broadcasters and their publics in former Communist bloc countries across Central and Eastern Europe, little has been done to understand the relationship between public broadcasters and their publics in these societies drawing on qualitative audience research tradition. Building on Hirschman’s influential theory of ‘exit, voice and loyalty’, which made it possible to see viewing choices audiences make as an act of agency, in combination with theoretical tools developed within the framework of social constructionist approaches to national imagination and broadcasting, my study focuses on the investigation of responses publics of the Latvian public television LTV have developed vis-à-vis its role as contributing to the nation-building project in this ex-Soviet Baltic country. With the help of focus groups methodology and family ethnography, the thesis aims to explore the relationship between the way members of the ethno-linguistic majority of Latvian-speakers and the sizeable ethno-linguistic minority of Russian-speakers conceptualize the public broadcaster LTV, as well as understand the concept of public broadcasting more generally, and the way they define the national ‘we’. The study concludes that what I call publics of LTV employ Hirschman’s described exit mechanism as a voice-type response. Through their rejection of public television which, for a number of complex reasons they consider to be a state broadcaster serving the interests of those in power they voice their protest against the country’s political establishment and in the case of its Russian-speaking publics also against the government’s ethno-nationalistic conception of the national ‘we’. I also find that though having exited from the public broadcaster LTV, its publics have not abandoned the idea of public broadcasting as such. At least at a normative level the public broadcasting ideals are recognized, accepted and valued, though they are not necessarily associated with the country’s de jure institutional embodiment of public broadcasting LTV. Rejection of the public television has also not made its non-loyal publics ‘less citizens’. The commercial rivals of LTV, be they national or, in the case of Russian-speaking audiences, localized transnational Russian television, have allowed their viewers to exercise citizenship and be loyal nationals day in day out in a way that is more liberal and flexible than the hegemonic form of citizenship and national imagination of the public television LTV can offer.

Be careful what you wish for: the legal parameters of EU withdrawal

Easiness with which the political circles talk about withdrawal from the European Union is rather surprising and proves that the legal parameters of an EU exit are not treated seriously enough. In theoretical terms Article 50 TEU allows for a unilateral exit as well as for a consensual divorce. Arguably, the first is an interesting abstract proposition, which, however, in practical terms seems to be an unworkable solution. Hence, the only realistic option is a proper divorce based on a withdrawal agreement. As per Article 50 TEU, it would be negotiated by the European Union with a departing country and should cover the terms of withdrawal and “take account of future relations” between the EU and the divorcee. It is submitted that in order to avoid a legal vacuum, this agreement should not only “take account of future relations” but actually deal with them thoroughly. This will make the negotiations difficult and, most likely, time consuming. One also has to envisage a scenario whereby a country leaving the European Union would join EFTA and become a EFTA-EU Member State of the European Economic Area. Should that happen the scope of a EU withdrawal agreement would be limited to the terms of exit, while future relations between the divorcee and the European Union would be mainly covered by the EEA Agreement. This chapter unlocks the mechanics of Article 50 TEU and the withdrawal procedure it provides for. It covers the issues that should be attended to by the negotiators and provides an overview of dossiers that are likely be covered in a withdrawal agreement.