The Wonderful Blog Which You ve Never Seen

With the rapid changes in society these days, behavioral scientists have put an increasing emphasis on the diagnosis and treatment of culture shock, those feeing of anxiety and disorientation that affect people who have to suddenly function within a new and different social environment. Culture shock affects individuals who move to another country or sometimes to a different state, for example, from rural North Carolina to urban Southern California. In the case of moving from one country to another, culture shock oftentimes takes on a severe form.

There are three main phases of culture shock and sufferers do not necessarily pass through all of them. They are explained here in layman’s terms.

The Honeymoon Phase is usually the first phase of culture shock. When someone is in this state, he considers the differences between his new environment and his old one as wonderful and romantic. He views his new surroundings as a welcome and pleasant change. He may fall in love with the new pace of his life, the new people he meets and the new relationships he develops. Overall, he embraces with open arms the lifestyle, environment, food and practically everything about his new environment.

The “Everything is Awful” phase sometimes occurs in a few days, but can also take weeks or even months. In this phase, the differences between the new environment and the old one have become irritating and tiresome, especially the minor differences. Al of a sudden, one finds himself longing for a taste of the food back home or for the friends that he left behind. Suddenly, the pace and lifestyle of his new life are either too slow or too fast. The habits of his new acquaintances have become annoying. The novelty of the new place has worn off.

The “Everything is OK” phase, like the previous phase, may take days, weeks or months to manifest itself. At this stage, one has learned to adjust to the new surroundings and overcome his feeling of homesickness. He has become accustomed to the new routines and rhythms of his new society. In fact, at this point, he may no longer consider it as a new society, but rather as his new home. His concerns now revert back to the everyday business of basic living, same as in his previous environment.

Finally, there is also Reverse Culture Shock, which is when he feels any or all of the above phases upon his return to his old environment.

Kadence Buchanan writes articles on many topics including Society, Gardening, and Religion

Share This

No Comments »

Margaret Thatcher started a world trend during her tenure as Prime Minister is Downing Street. It is called: Privatization. It consisted of the transfer of control of a state-owned enterprise to the Private Sector. This was done by selling the shares of the company. At times, the control itself was maintained by the state - but the economic benefits emanating from the ownership of shares was partly sold to privates. Such economic benefits are comprised of the dividend yield of the shares plus the appreciation in their value (due to the involvement of the private sector) known as capital gains.

But the privatization process was not entirely homogeneous, uniform, transparent, or, for that matter, fair.

The stock of some of the enterprises was sold to an individual, or group of individuals, by a direct, negotiated sale. A “controlling stake” (nucleus) was thus sold, ostensibly yielding to the state a premium paid by the private investors for the control of the sold firm.

This method of privatization was criticized as “crony capitalism”. For some reason, a select group of businessmen, all cronies of the ruling political elite, seemed to benefit the most. They bought the controlling stakes at unrealistically low prices, said the critics. To support their thesis, they pointed to the huge disparity between the price at which the “cronies” bought the shares - and the price at which they, later, sold it to the public through the stock exchange. The “cronies” cried foul: the difference in the prices was precisely because of privatization, better management and financial control. Maybe. But the recurrence of the same names in every major privatization deal still looked suspiciously odd.

Then there was the second version: selling the shares of the privatized firms directly to the public. This was done using either of two methods:

• An offering of the shares in the stock exchange (a cash method), or

• The distribution of vouchers universally, to all the adult citizens of the country, so that they could all share the wealth accumulated by the state in an equitable manner. The vouchers are convertible to baskets of shares in a prescribed list of state enterprises (a nonchash method).

But a smaller group of (smaller) countries selected a whole different way of privatizing. They chose to TRANSFORM the state-owned firm instead of subjecting them to outright privatization.

Transformation - the venue adopted by Macedonia - is the transfer of the control of a firm and / or the economic benefits accruing to its shareholders to groups which were previously - or still are - connected to the firm.

In this single respect, transformation constitutes a major departure - not to say deviation - from classical privatization.

Ownership of the transformed firm can revert to either of the following groups, or to a combination thereof:

• The employees of the firm, through a process called Employee BuyOut (EBO)

• The management of the firm, in the form of a Management BuyOut or Buy In (MBO / MBI)

• A select group from within the firm. Such a group uses the assets - current and future - of the firm as collaterals, thus enabling them to get the credits necessary to purchase the shares of the firm. This is called a Leveraged BuyOut, because the assets of the firm itself are leveraged in order to purchase it (LBO).

• Finally, the creditors of the firm can team up and agree to convert the firm’s debts to them into equity in the firm, in a Debt to Equity Swap (DES).

  Sometimes, the state continues to maintain an interest in privatized - as well as in transformed - firms. This is especially true for natural monopolies, utilities, infrastructure and defence industries. All the above are considered to be strategic matters of national interest. Some countries - Russia and Israel, for ones - continue to own a “Golden Share”. This highly specific type of security allows the state to exercise decision making powers, veto powers, or, at least, control over business matters that it considers vital to its security, financial viability, or even to its traditions. Israel’s golden share in the national air carrier, EI AI, allows it to prevent flights in and out during the religiously holy day of Sabbath!

  Until very recently the common (economic) wisdom in the West had it that Transformation was - in the best case - a sterile, make - believe exercise. The worst case included cronyism and corruption. One thing was to privatize and another was to privateer. But there were some grounds for some solid criticisms as well:

  (1) The main ideological thrust behind privatization was the revitalization of stale and degenerated state firm. Badly managed, wrongly financially controlled, applying an incoherent admixture of business and non business (political, social, geopolitical) considerations to their decision making process - state firm were considered as anachronistic as dinosaurs. Many preferred to see them as extinct as those ancient reptiles. An injection of private initiative acquired the status of ideological panacea to the corporate malaise of the public sector.

  But this is precisely what was missing in the Transformation version. It offered nothing new: no new management, no new ideas (were likely to come from the same old team) and, above all and as a direct result of this preference of old over new - no new capital.

  To this, the supporters of Transformation answer that the one thing which is new - personal capitalistic incentives - far outweighs all the old elements. Incentive driven initiative is likely to bring in its wake and to herald the transformation - in the most complete and realistic sense - of the state firm.

  Change, renovation and innovation - say the latter - are immediate by products of personal profit motivation, the most powerful known to Mankind.

  (2) The process of Transformation blurred the distinction between labour, management and ownership. Employees acted as potential managers and as co-owners in the newly transformed companies. The very concept of hierarchy, clear chains of authority (going down) and of responsibility (going up) - was violated. A ship must have one captain lest it sinks. It is not in vain that the management function was separated from the ownership function. Employees, managers and owners, all have differing views and differences of opinion concerning every possible aspect of corporate governance and the proper conduct of business.

  Employees want to maximize employment and the economic benefits attached to it - managers and shareholders wish to minimize this parameter and its effects on the corporation. Managers wish to maximize their compensation - employees and owners wish to minimize or moderate it, each group for its own, disparate reasons.

  This break in the “chain of command”, this diffusive, fog like property of the newly transformed entity lead to dysfunction, financial mismanagement, lack of clarity of vision and of day to day operations, labour unrest (when the unrealistic expectations of the workforce are not met).

  So, at the beginning, during the 1980s, the West preferred to privatize state owned firms - rather than to transform them. A fast accumulating body of economic research demonstrated unambiguously that privatization did miracles to the privatized firms. In certain cases, productivity shot up 6 times. Between 60 to 80 percent of GNPs in the West are private now and a vigorous trend to privatize what remains of the public sector still persists.

  But the same studies revealed a less pleasant phenomenon: only a select group of businessmen benefited from privatization. The paranoid allusions of the critics of this process were completely substantiated. Something was very corrupted in implementation of the seemingly wholesome idea of privatization. The public - as a whole - economically suffered.

  This led to the emergence of a new social consciousness. It was provoked by the unacceptable social costs of capitalism: more people under the poverty line, homelessness, a radicalization in the inequity of the distribution of income among different strata of society. But this trend was enhanced by the apparent corruption of the privatization process.

  This new social consciousness converged with yet another all important and all pervasive trend: the formation of small businesses by small time entrepreneurs. The latter functioned both as owners and as employees in their firms. There were 16 million such owners-workers in the USA alone (1995 figures). About 99% of the 22 million registered businesses in the USA were small businesses. No economic planner or politician could ignore these figures. Employee owned firms became the majority in the service and advanced technology sectors of the economy - the fastest growing, most lucrative sectors.

  In its own way, as a result of these two trends, the West was moving back to transformation and away from privatization, away from separation of ownership and labour, away from differentiation between capital and workforce. This is a major revolution.

  The OECD (the organization of the richer countries in the world) established an institute which follows trends in the poorer parts of the world, politely called “Economies in Transition”. This is the CCET.

  According to the CCET’s latest report, privatization continues in an uneven pace throughout the former Eastern Bloc. Some countries nearly completed it. Others have claimed to have completed it - but haven’t even started it in reality. Some countries - Macedonia amongst them - have sold the shares of state owned firms (=businesses with social capital) to managers and workers - but the managers and workers have largely not paid for these shares yet. It is by no means certain that they will. If the managers and workers default on their obligations to pay the state - the ownership of the company will revert back to the state. This is paper privatization, a transformation of expectations. No one can seriously claim that the transformation is completed before the new owners of the firms respect their financial obligations to the state.

  In all, privatization the world over, proceeded more rapidly with small firms. Selling the bigger firms was much more difficult. Most of this behemoths were composed of numerous profit centres and loss making business activities. A solidarity of accounts and guarantees existed between the various operations. The more profitable parts of a company supported and subsidized the less competent, the losing parts. This was not very attractive to investors.

  The official figures are heart warming. In parentheses - the percentage of firms privatized:

  Albania , Czech Republic , Estonia , Hungary , Lithuania, Poland and Slovakia all privatized 90% of their small firms. In Russia and Latvia, the figure is 70%.

  The picture is more clouded with the larger firms:

  Czech Republic (81%), Hungary, Estonia (75%), Lithuania (57%), Russia (55%), Latvia and Slovakia (46%), Mongolia (41%), Poland (32%), Moldavia (27%), Romania (13%), Belarus and Bulgaria (11%), Georgia (2%).

  But what hides behind the figures?

  The Czech Republic is infamous for its cronyism and for the massive transfer of wealth to the hands of a few people close to government circles.

  On the face of it, the situation in Poland looks a bit better: a universal voucher system was instituted. People were allowed to deposit their shares with 14 management funds. These funds also bought some of the shares, making them part owners. They control now 500 enterprises, which make up 5% of the country’s GNP.

  Some of these funds are 50% foreign owned, so their management and moral standards are Western. But, even there, rumours abound and not only rumours.

  So, what is better - privatization or transformation?

  Maybe the lesson is that we are all human. There is no method immune to human fallacies and desires, to corruption or to allegations of it. Transformation tends to benefit more people - so, maybe it looks more just. But long term it is inefficient and leads to the ruining of the firms involved and to permanent damage both to the economy and to the workers-owners. Is it better to be the owner of a bankrupt firm - or to work in a functioning firm, where you have no ownership stake? This is not an ideological or a philosophical question. Ask the employees of the Pelagonija Construction Group.

  Privatization, on the other hand, is much more open to manipulation - but at least it secures the continued existence of the firms and the continuous employment of the workers.

  Sometimes, in economic reality, we have to give up justice (or the appearance of it) - in order to secure the very survival of the workers involved.

  I, personally, prefer privatization over transformation.

  About The Author

  Sam Vaknin is the author of “Malignant Self Love - Narcissism Revisited” and “After the Rain - How the West Lost the East”. He is a columnist in “Central Europe Review”, United Press International (UPI) and ebookweb.org and the editor of mental health and Central East Europe categories in The Open Directory, Suite101 and searcheurope.com. Until recently, he served as the Economic Advisor to the Government of Macedonia.

  His web site: http://samvak.tripod.com

  Tags: economy, government, macedonia, News, politics, privatization, society, state, unemployment, unions, workforceeconomy, government, macedonia, News, politics, privatization, society, state, unemployment, unions, workforce

  Share This

  No Comments »

If it weren’t for the fact that people die and get killed, wars could be categorized as just another business venture - in grand style. Just like any other business venture, the purpose of going to war is to increase wealth and gain capital stock. Just like any other business venture, the act of war entails the manufacturing and use of goods and services in demand. And, just like any other business venture, war generates waste. Although rational, civilized individuals will abhor this concept, from a strict economic perspective it can be argued that manpower, whether military or civilian, is but another usable resource in the basket of commodities the consumption of which can be accounted for as well. So much for the dead

Empires and nations have fought wars always and invariably for the purpose of increasing wealth, but only two civilizations in the annals of history have acknowledged such purpose openly: the Romans in their conquest of the Mediterranean Basin and the Mongols in their subjugation of Asia. It was very clear to the Romans and to the Mongols that the sole, only purpose for marauding was to steal everything in sight, and such purpose was very widely acclaimed and publicized. It can be said, in fact, from an anthropological perspective that neither the Romans nor the Mongols - in their linear logic of thought and living - would have understood any other reason for going to war. All others have fought wars using cover ups of all sorts - from the melodramatic to the utterly laughable - with the precise purpose of disguising the sole, real reason. Nations in the Middle Ages almost invariably fought wars ‘in the name of God’, as if God had ever commanded any such deed, with the tacit or open consent and benediction of the ecclesiolatry. The Modern Era brought forward an innate anthropological sense on the part of conquerors, beginning with the Spaniards, who crossed oceans for the sole purpose, as they put it, of ’spreading civilization’ - as if anyone had ever asked for or appointed them to any such task. So did the British and the French. In more contemporary, post-romantic times it was the turn of the former enslaved to fight for ‘country and freedom’ and even more recently, and still vivid in the memory of some, it was the assertion of a ‘dominant race’ over well, everybody else. It is incredible to what lengths human hypocrisy can sometimes be stretched out.

Whereas, as aforesaid, wars have been fought invariably with one scope in mind, such scope has taken a political turnout in contemporary times. After WWII the three major wars of the Twentieth Century - Korea, Vietnam and the first Gulf War - have been fought with precise political motivations as primary aim. The danger of allocating economic resources to fight this type of war is that the use and consumption of capital stock is not replenished by victory. Or, to be more specific, victory may lead to political gains, which do not necessarily convert and translate into economic benefits.

Capital in a market economy is an essential element in entrepreneurial planning, an estimate of the market value at a definite date of a particular business plan. A given business or entrepreneurial plan implies a time structure of production for the individual enterprisea pattern of inputs (capital goods, labor and natural resources or land) applied at earlier dates followed by a pattern of outputs sold at later dates. However, the accumulation of capital - or capital stock as it is sometimes referred to - in wartime does not follow mere free-market laws. For one thing output, or most of it, is skewed towards manufacturing of items inherently useful for the purpose of war which, were it not for the particular time at which such output is manufactured, would not have widespread applications for civilian purposes. It is hard to imagine what could be accomplished by civilian enterprises and entities with all those leftover guns, munitions, tanks and fighting aircraft and arsenals. Hence, because of its very specialized and unique purpose, if not already destroyed or otherwise wasted during the war any such output is due to obsolescence after the conflict with the proximate result that resources, whether natural or man-made, are ultimately destined to waste.

Likewise, costs of manufacturing do not follow the regular capitalistic patterns of supply-side economics. As it is widely known, supply-side economics is a school of macroeconomic thought which emphasizes the importance of taxation and business incentives in encouraging economic growth, in the belief that businesses and individuals will use their improved terms of trade to create new businesses and expand old businesses, which in turn will increase productivity, employment, and general well-being. Such, however, cannot possibly be the case in an environment such as wartime when perceived military necessity counts heavily with those responsible for making government investments. In fact one can speak of ‘market socialism’ to the extent that there is only one single, large investor in a wartime economy - the government - financing industrial production of specialized goods and services to be used by only one single, large customer - the government, again. To the extent, therefore, that both production and consumption are monopolized one can factually speak of socialism within capitalism during wartime.

Military brass the world over are fond of casting their profound knowledge of economics on to the populace to justify, in terms of real value, the convenience of war. One such economic tenet so freely and lavishly dispensed by military establishments is that war creates jobs, both during and after wartime. On a critical analysis this statement doesn’t seem to hold much water. It certainly is not a novel populist theory, having been acclaimed by one form of government or another at any given time throughout history. For instance, job creation was what the fascist regime used to exhort and rally Italians in 1935 to invade Ethiopia. The allocation of manpower resources does not alter the pool of manpower if the same manpower that exists in peacetime is suddenly allocated for war. What merely changes is the action - soldiers do not typically shoot anybody in peacetime as opposed to wartime - but that hardly bears any economic benefit. In fact, switching to wartime will generate a waste of resources. Widespread conscription, on the other hand, increases the pool of capital stock but here again one can speak of socialism within capitalism, as there is only one employer. Furthermore, a general draft can hardly be thought of as a free-market manifestation by its own very nature. And as it relates to postwar job creation, if the workforce is employed to dismantle all the leftover specialized output - that can arguably be seen as an added and consequential cost of production or, more likely, as an added waste.

In conclusion, therefore, it doesn’t appear that war is a profitable allocation of resources. In a modern economy with an extensive division of labor and highly articulated production the capital stock consists of a vastly heterogeneous, intricately related collection of production and means of production. If the economy is to function effectively, the capital stock must assume a certain structure and this cannot be achieved in a monopolitarian situation or when capitalism acts and smells like socialism. In general, whatever the usefulness of the government’s wartime investment program for the immediate purpose of gaining military victory, it gives rise to serious distortions of the capital structure because of the specialization of output required and thereby has less value for postwar productive purposes than the sheer amounts spent on durable assets during the war might seem to imply. And, therefore, in spite of all justifications brought forth by politicians war is not a profitable allocation of capital resources, and the ever expanding budgetary costs of wars fought the world over and the waves of red ink they invariably ravages economies with are evidence and proof of it.

Luigi Frascati

Luigi Frascati is a Real Estate Agent based in Vancouver, British Columbia. He holds a Bachelor Degree in Economics and maintains a weblog entitled the Real Estate Chronicle at http://wwwrealestatechronicle.blogspot.com where you can find the full collection of his articles. Luigi is associated with the Sutton Group, the largest real estate organization in Canada, and is based with Sutton-Centre Realty in Burnaby, BC.

Luigi is very proud to be an EzineArticles Platinum Expert Author. Your rating at the footer of this Article is very much appreciated. Thank you.

Share This

No Comments »