The Value of Currency and Agreements - The Role of Flexibility in the
Success of Markets
When the economy was doing well, we were able to draw benefits from advantageous currency rates. Labor unions were able to negotiate employment favorable conditions and benefits. However, the collective agreements rarely provided tools to respond diminishing demand, and therefore the entrepreneurs and companies were often left alone to deal with diminished revenues. And the inevitable happened: the conditions accumulated to the level that the society was not able to come to terms with the situation. Businesses and jobs were lost, and the society was not able to provide new jobs for the laid off ones. What then followed was, I suppose, a kind of internal devaluation. At that time, the opportunities to create increase in value added were not very easily identifiable, though the efforts to achieve productivity gains concentrated on wage adjusted measures and many of the measures could effect in indirect and controversial manner (such as increase in working hours that does not automatically mean increase in value added, or reduction of the lowest social benefits that can bear risk for increase in health problems, accidents, criminality and permanently reduced productivity). The society’s support structure that includes e.g. legislation and public processes to combat the hardship could then and can still be interpreted as being designed to a rather stable situation, in which certain existing players are expected to provide growth and the distinction of roles between company, employee and customer are very clear and determinative in several ways; One either seeks a job or is an entrepreneur. The legislation and heavy tutelage structure form easily a strong hindrance for creation of new earning models and economic growth. Generally, currency rates correlate with export figures. Contrary to currency rates that can be interpreted in some sense as a product of competitiveness and “given” from e.g. labor market point of view, any agreements that have to be negotiated are likely to include complex set of aspirations and beliefs, including distrust in the motivations of opposite party. If we need to imitate the behavior of currency rates, could some level automated system in agreements through e.g. indexes provide a less painful way to respond rapidly to changes in demand without extensive negotiation rounds each time? If the indexes influence mainly payments that provide for value added and transfer payments, the effect for assets measured in specific currency would mostly be indirect or voluntary (this with remark to risks concerning any existing chains of agreements that are possibly influenced by changes in currency rates). Anyway, I think we should determine whether salaries represent an important problem for the competitiveness or should we sooner rely on the opportunities that our competence provides, and whether we wish to enforce the creation of value added only in certain modes that are familiar to us from before. I hope that we will keep concentrating on the creation of value added and be open new opportunities, instead of trying to preserve something that was already outstripped. 23.5.2017 23:29, Finland Johanna Sandman
© Johanna Sandman 2013-2023
The Value of Currency and Agreements - The Role of
Flexibility in the Success of Markets
When the economy was doing well, we were able to draw benefits from advantageous currency rates. Labor unions were able to negotiate employment favorable conditions and benefits. However, the collective agreements rarely provided tools to respond diminishing demand, and therefore the entrepreneurs and companies were often left alone to deal with diminished revenues. And the inevitable happened: the conditions accumulated to the level that the society was not able to come to terms with the situation. Businesses and jobs were lost, and the society was not able to provide new jobs for the laid off ones. What then followed was, I suppose, a kind of internal devaluation. At that time, the opportunities to create increase in value added were not very easily identifiable, though the efforts to achieve productivity gains concentrated on wage adjusted measures and many of the measures could effect in indirect and controversial manner (such as increase in working hours that does not automatically mean increase in value added, or reduction of the lowest social benefits that can bear risk for increase in health problems, accidents, criminality and permanently reduced productivity). The society’s support structure that includes e.g. legislation and public processes to combat the hardship could then and can still be interpreted as being designed to a rather stable situation, in which certain existing players are expected to provide growth and the distinction of roles between company, employee and customer are very clear and determinative in several ways; One either seeks a job or is an entrepreneur. The legislation and heavy tutelage structure form easily a strong hindrance for creation of new earning models and economic growth. Generally, currency rates correlate with export figures. Contrary to currency rates that can be interpreted in some sense as a product of competitiveness and “given” from e.g. labor market point of view, any agreements that have to be negotiated are likely to include complex set of aspirations and beliefs, including distrust in the motivations of opposite party. If we need to imitate the behavior of currency rates, could some level automated system in agreements through e.g. indexes provide a less painful way to respond rapidly to changes in demand without extensive negotiation rounds each time? If the indexes influence mainly payments that provide for value added and transfer payments, the effect for assets measured in specific currency would mostly be indirect or voluntary (this with remark to risks concerning any existing chains of agreements that are possibly influenced by changes in currency rates). Anyway, I think we should determine whether salaries represent an important problem for the competitiveness or should we sooner rely on the opportunities that our competence provides, and whether we wish to enforce the creation of value added only in certain modes that are familiar to us from before. I hope that we will keep concentrating on the creation of value added and be open new opportunities, instead of trying to preserve something that was already outstripped. 23.5.2017 23:29, Finland Johanna Sandman
