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Patients are not Customers

Mainstream economics is always based on the idea of homo oeconomicus, an egoist who maximizes his own advantages. In economics, the extreme form of egoism is treated as rationality. This is problematic. Thought models shape perception and conduct.
July 30 was Medicare's 50th birthday and Friday August 14 is Social Security's 80th birthday. Millions were saved from abject poverty and hopelessness. Time to celebrate!

Medicine: The individual doctor-patient relation should be as free as possible from money relations and solvency

By Hartmut Reiners

[This article published on June 11, 2015 is translated from the German on the Internet,  http://www.fr-online.de.]

In economic jargon, patients are made "customers" and medical institutions "business models." This way of thinking g is completely wrong and aids and abets dangerous developments.

The German health system is a growth branch with over five million employees and 315 billion euros annual revenue (in 2013). The doctor vocation is at the top of the income scale which is in order given its high responsibility.

On this background, the widespread criticism of economizing the public health system is actually strange. This is not a normal economic branch that makes patients into "customers" and medical institutions into "business models." Whoever visits a doctor's office or lies in a hospital is sick and needy of treatment and not a sovereign customer.

Doctors move in the field of tension of "ethics and monetarism" with the oath of Hippocrates on one side and economic goals and pressures on the other side. Albert Schweitzer and Mother Teresa are not realistic models for health care providers who earn their livelihood by treating sicknesses and have legitimate economic interests.

No one demands poverty from them. However the individual doctor-patient relation should be as free as possible from money relations and solvency. Therefore the payment-in-kind principle is in force in legal health insurance. The negotiation and payment of fees is a part of health insurance schemes.

The German medical functionaries do not seem to adjust to this. In May 2013, the large majority of German doctors on Doctors' Day passed a manifesto that supported strengthening the dual system of private and legal health insurance, raising the co-payments of patients and replacing the payment-in-kind with the refund (of expenses) principle. In other words, private patients should pay more than double for the same service than health plan patients who should pay more out of their own pockets.

At the same Doctors' Day, the economizing of medicine and the writing on the wall of a creeping transformation of the public health system into a bazaar were deplored.


By Tom Berthold

[This article published on June 12, 2015 is translated from the German on the Internet,  http://www.fr-online.de. The author is a member of the Plural Economics Network.]

Mainstream economics is always based on the idea of homo oeconomicus, an egoist who maximizes his own advantages.

In economics, the extreme form of egoism is treated as rationality. This is problematic. Thought models shape perception and conduct.

Despite much criticism, mainstream economics is still based on the notion of homo oeconomicus, the egoist who hard as nails maximizes his own advantages. For a long while, it was argued the person is not so egoistic and economists answered they know this and are now researching where and when he isn't "perfectly rational."

Here the debate becomes explosive. The fictional radical egoist is regarded as perfectly rational and the task of science is to find out how irrational the real person is. So the homo oeconomicus is the benchmark and reflects the idea of optimal conduct. The question is whether the standard and reference of our conduct should really be this ethically dubious model. Human realities like morality or social relations can only be distorted one-sidedly by maximizing advantages.

Standards and models should be appropriate to reality. One could say: we assume a person is a cube of two meters and physiology analyzes whether a person differs from a cube. However no one would choose such an approach. Still that is made the reference although a person is hardly homo oeconomicus or a cube.


This approach of complex mathematics enables economics to appear as an exact science. Large parts of the mathematical edifice stand and fall with advantage maximization which can hardly grasp a significant part of reality. In addition, overall economic models and prognoses are based on the homo oeconomicus.

The normative thrust is obvious. The term "rational" is unmistakably positive. In economics, the extreme form of egoism is treated as rationality. This is very problematic. Thought models mould perception and conduct.

Whoever thinks of maximizing self-interest will observe other things and act differently than someone who recognizes the power structure, social structures and ethics. Therefore more space in economic theory should be given to other theories that set different standards and do not make the homo oeconomicus the benchmark.


By Gunther Moewes

[This article published on 7/10/2015 is translated from the German on the Internet,  http://www.fr-online.de.]

Many of today's crises are hard to understand because they are still interpreted with old clichés as "horizontal" national conflicts although they have long involved the increasingly intense global "vertical" war of capital and elites against populations. This is not seen as a war because it is waged silently with capital and not with cannons and tanks. Often this vertical war contributes to national wars.

The Greece crisis is a general example of such national thinking. This crisis was caused by the corrupt Christian- and social-democratic politicians and family clans of preceding governments who threw their country to the wild beasts by state indebtedness to their own global investor caste. Out of sheer selfishness, they did not develop any reasonable tax register which the current government criticizes. Everything should be healed by the same unelected creditor caste that bluntly represents its so-called "institutions."

In the past, speculation was allied with risk, not work. Now this liability risk should be shifted to Greek workers and pensioners and in the future to all non-speculating populations. These representatives of international capital elites are cynically palmed off as "rescuers" and their predatory attacks as "reforms."

German Christian- and social democrats are picking at the new government, not at their party friends of predecessor Greek governments. They know that weak population income and consumption always engender trifling investments and a downward economic spiral.

The old national thinking helps veil the overriding war of the capital elites, plays into their hands and is promoted with great relish by their media and think tanks. New rightwing populist "movements" are on the horizon...


By Daniel Stelter

[This article published on 7/10/2015 is translated from the German on the Internet,  http://www.fr-online.de. The author is a macro-economist and strategy advisor.]


If people understood the money system, we would have a revolution early tomorrow morning," auto-pioneer Henry Ford said. A survey among British delegates showed nine of ten think money is only created by the state.

In today's money system, banks can create a nearly unlimited amount of money. When a customer receives a credit, the bank - quasi virtually - posts money on his account. The bank does not lend him the assets of savers. At the same time the money supply in the national economy increases.

Since the last bond of money to gold was dissolved in the 1970s, the creation of credit and money has been more and more removed from real economic development. With that, commercial banks became the pivot for preventing crises in the money system.

All the measures taken since 2008 to make the money system more stable were in the right direction. However they stop at a certain point and remain a fig leaf given the enormous debt mountain in Europe. As long as banks still profit from an implicit guarantee of the state, they will continue using the credit machine to intensify the economic cycles.

The idea of "full money" (Vollgeld) offers an alternative. Discussed in academic circles since the 1930s, banks would only lend that money they really have as deposits in their books. In 2012, two researchers commissioned by the IMF analyzed the idea - and concluded the changeover to a full money system would work in the present time. In Switzerland, renowned scholars and influential politicians initiated a referendum about this. In Iceland, a commission charged the Prime Minister made a corresponding proposal.

This assumes the democratic cultures of such countries. Referendums build trust through a broad debate - in fundamental questions of the economic system. Trust is the crucial prerequisite for the functioning of every money system.


Campaign against Tax Evasion

By Sven Giegold

[This article published on 7/9/2015 is translated from the German on the Internet,  http://www.fr-online.de. The author is a spokesperson for the Greens in the European Parliament.]

The public still does not know how much taxes businesses pay and in what country. This must change but Germany blocks transparency.

The outrageous tax avoidance of several international conglomerates could be stopped with a little change of the rules of the game in Europe. Today big businesses publish their profits and taxes on profits summarized for the whole company. The public does not know how much taxes are paid in what country. We must begin here. Companies should be obligated to transparency for the specific countries. This is already prescribed for banks and raw material corporations.

Europe decides questions of business transparency in majority votes with the full cooperation of the European Parliament. Transparency is much less ideologically charged than tax harmonization in Europe. Everyone - particularly big businesses - is for transparency.

Transparency on tax morality would enable investors, journalists, business partners and consumers to punish extreme tax avoidance. The lobby of tax evaders hardly fears the plans of the European Commission to combat tax avoidance. The proposals are either toothless or hopeless thanks to several blockading countries. For Google, Amazon & Co, transparency is a red rag to a bull.

In the European Parliament, there is a narrow majority for country-specific tax transparency for corporations. In the council of member countries, the red-black German government is the harshest opponent of tax transparency. That the German blockade ministers Heiko Maas and Sigmar Gabriel are social democrats is very annoying. While social democrats in the European Parliament intensively support tax transparency, Mr. Gabriel does not lift a finger to correct the course of the German government in the sense of "working middle class" taxpayers.

This is really overdue after the scandals over the tailor-made tax deals for Wal-Mart, Google and Amazon & Co. The German government could simply act justly: for normal taxpayers and for small and medium-size businesses exposed to an unfair predatory competition.


By Heinz J. Bontrup

[This article published on 7/10/2015 is translated from the German on the Internet,  http://www.fr-online.de.]


Competition is the system-constitutive element of a free enterprise-capitalist system. Here competition strips businesses of power and forces them to constant efforts for consumers. So much for the theory. However economic reality is completely different. The empirical study of the Zurich Technical Academy (ETH) explains that 147 giant international corporations have long ruled the world with their gigantic power and that democratically-elected politics only acts as the auxiliary helper of profit interests. From 1995 to 2011, there were business mergers in the amount of $35 trillion. Over 45,000 businesses merged after the 1973 introduction of merger controls in German law.

Simultaneously bankruptcies are on the agenda in capitalism alongside mergers. Nearly 640,000 business bankruptcies occurred in Germany since the reunification. "One capitalist kills many others," as Karl Marx decried in the 19th century. The private economy concentrates and bequeaths more and more. Buyouts, takeovers or an aggressive destruction threaten vital necessities promoted by the state. We should not have any illusions about this.

On the other hand, businesspersons collaborate again and again with cartels. Important markets have long taken the form of narrow, non-competitive oligopolies. Pure misuse of power for enrichment exists here. The drive of capital for more and more profit and capital accumulation destroys the ideal foundations of an economic system allegedly geared for competition. What really remains is a hypocritical competition ideology.


By Dierk Hirschel

[This article published on June 11, 2015 is translated from the German on the Internet,  http://www.fr-online.de.]

Inheritance is not private. Whoever believes that has not understood the consequences of inheritance for German society. It is time for legislators to act.

Germany is becoming an heirs' republic. Soon up to four trillion Euros will change hands. Inheritance is not private. Through inheritances, the life chances of a whole generation will be redistributed.

The great wealth transfer runs according to the Matthew principle. Whoever has will be given more. Eight percent of the population receives two-fifths of the inherited wealth. Every second person ends up with nothing. So inheritances aggravate the social tension. 70,000 already have a quarter of all wealth. The achievement principle leads to more wealth in a few hands ad absurdum.

Politics promotes inherited inequality. In the tax haven Germany, heirs only pay seven percent tax on average. The rich inherit very favorably. The heirs of mammoth wealth only give three percent to the treasury. In the last years, over 100 billion euros in business profits was tax exempt or inherited. No wonder the inheritance tax only brings five billion euros per year.

The chance for changing this exists. Constitutional judges have told the government to recalibrate inheritance taxation. Wolfgang Schauble presented a bill... Only very great business heirs - from 20 million euros - should pay an inheritance tax after a needs test. Everyone else - around 99 percent - can bequeath tax-free if they are not job-killers.

Schauble's tax gift for firm heirs is economically ridiculous and socially unjust. According to the German ministry of finance, the inheritance tax did not ruin a single business between Freiburg and Berlin. Were there investment weaknesses or job losses\? This is termed an instrument error! The fiscal cultivation of family business succession is economic nonsense. The son or daughter is not automatically a better entrepreneur.

The tax havens for heirs must be dried up. Whoever inherits machines and work halls should pay taxes like yacht- or villa-heirs. Tax allowances, rules on deferring payments and installment payments are enough to avert economic damage. Higher revenues make possible more investments in daycare, schools and universities. This is socially just and economically sensible.

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Less is More 12.Aug.2015 18:23

marc marc1seed@yahoo.com

In a world where alternatives and radical thinking are encouraged and not made taboo, love of the future and confidence in human learning capacity can grow. The blurry future where most earn less than in the 1970s is the result of false assumptions, myths and fairy tales. Market failures and state failures are not identified and corrected. The homo oeconomicus, the egoist maximizing his advantages, is stylized as rationality. Long-term unemployment isn't really counted any more. Auditors at IRS are dismissed so fraud and business-friendly inertia and enrichment go unchecked.

A computer guru told me few people pay attention to my website because of the lack of original content. Most of the 800 translated articles are original and not "unoriginal" and would be unavailable to English-speaking readers. Hundreds of millions should be spent to train writers, translators and researchers so we're not forever "cooking the intelligence" or captive to one'dimensional McDonaldization thinking. The last question will be whether you've received your McDonald's uniform in the mail! While FDR created 4 million jobs in two-and-a-half years, prosperous countries seem ready to be "entertained to death" (cf. Neil Postman). Freedom on the quiet seems reduced to Ponderosa this and Mr. Cartright that! We must be super-human to be people of hope in a culture that dismisses alternatives as "unoriginal"!

Here's a link to William Davies' article: How friendship became a tool of the powerful: