Old-fashioned economists stand in the way of fundamental changes in the financial and economic system.
Barbara Baarsma, director of Rabobank’s Rabo Carbon Bank, old-fashioned ‘top economist’ and former crown member of SER, wishes in his book Green growth answers to three important questions in her opinion:
- Is economic growth still necessary?
- Is economic growth infinitely possible?
- Is the effect of economic growth not automatic distortion between rich and poor?
The answer she herself gives in the preface shows why old-fashioned top economists like Barbara Baarsma actually stand in the way of real fundamental changes in the existing growth-shell financial-economic system.
Her response in a few passages:
- ‘Yes, economic growth is necessary as long as we pay for things like education, health care, defense and justice from the collective resources. A few percent of economic growth on top of inflation is needed every year to ensure that (semi-)public services remain of good quality and accessible’.
In their reasoning and advice, old-fashioned top economists and influencers such as Mrs. Baarsma assume that public spending, including implementation costs, also known as ‘organization costs’, is a given. ‘These costs are simply incurred and must therefore be paid from somewhere’, reads the reasoning. The so-called full-costing or integral cost model is used. The consequence? You raise the rates: ‘pricing’ is what they call it, and that’s what she calls it in this article for ESB. The same flawed rationale lies behind the lobby for true pricing Moreover.
Target costs as basis
Are its principles and conclusions correct? So no. Since the early 1990s, during my executive MBA at the Wharton School, I learned that in any case Activity Based Costing and as an entrepreneur and government target costs must be taken as a basis: what are the customer and the citizen willing to pay for this? Putting the customer and the citizen first. The problem is that the government is a monopolist in a number of areas and continues to see all necessary and unnecessary costs as “given”.
The government therefore passes the costs in the form of time, money and energy (including the wage costs of the old-fashioned economy and otherwise financial professionals and professors) onto the citizens. As a result, many public or government-regulated services are no longer available to large groups of people. Just look at the deductible in, for example, the healthcare system. And that the state’s own implementation costs are the biggest financial setback at the moment.
- “So that our children can enjoy the same level of wealth that we do now, and it is also necessary to bridge the increasingly clear divide of wealth redistribution.”
Baarsma means children of people who belong to the same socio-economic classes (read the higher incomes, the middle incomes. The traditional supporters of the VVD, CDA, D66 and PvdA’s white-collar department) as herself and her surroundings.
Learning to borrow
Many children in the Netherlands do not enjoy the same level of prosperity or the same quality of education that her children have had, and neither do I. Something I experience every day when I help students and other young people to start their own business without going to Rabobank or other banks, while they learn that ‘it is necessary to borrow’. The real questions that Mrs. Baarsma should have answered in her book and that I answered in ‘To grow without growing’ are:
- Is there eternal old-normal economic growth?
- Is perpetual old-normal economic growth necessary and possible?
- Is old-normal economic growth desirable in the current financial-economic growth system?
- Consists corporate sustainability?
- How do we actually arrive at a structurally different sustainable economy together, and how do we prevent a further catastrophic dichotomy in society with all the associated socio-economic and political consequences?
Do I regret buying and reading the e-book? None. It clearly shows that nothing changes in the Netherlands and why. By applying fake expertise. Like many of her old-fashioned top economists, Ms. Baarsma is a fake authority (see the article Fake news, fake authority and fake expertise).
From the rain in the drop
Baarsma and her top economists and advisers still believe the earth is flat. By preaching these kinds of opinions and using outdated models and starting points, they help the Netherlands from the rain in the drop. Cosmetic adjustments to the existing growth-should financial economic system no longer help, and certainly not in times of a systemic crisis like now. The current financial-economic system is dead.
through Tony de Bree. He is the author of Growing Without Growing. Successful entrepreneurship in the opinion economy’, ‘Survival strategy for startups’ and ‘The scale-up blueprint’. Since 1997, he has successfully overseen companies such as Amazon, Bol, ASML, IKEA and PayPal. He is an ICT member of boards and has worked at ABN AMRO, as Dragon at corporate venturing and as global division head KYC.