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The 2008 global economic crisis has been the most severe recession since the Great Depression. Notwithstanding its dramatic effects, cross-country analyses on its heterogeneous impacts and its potential causes are still scarce. By analysing the geography of the 2008 crisis, policy-relevant lessons can be learned on how cities and regions react to economic shocks in order to design adequate responses.

The post Austerity and the slow recovery of European city-regions appeared first on OUPblog.

Investment arbitration is a growing and important area of law, in which states and companies often find themselves involved in. In recognition of the one year anniversary of Investment Claims moving to a new platform, we have created a quiz we hope will test your knowledge of arbitration law and multilateral treaties. Good luck!

Investment Claims (IC) is an acclaimed service for both practitioners and academic users. Regular updates mean that subscribers have access to a fully integrated suite of current and high quality content. This content comes with the guarantee of preparation and validation by experts.

Oxford University Press is a leading publisher in arbitration law, including Investment Claims, latest books from thought leaders in the field, and a range of other journals and online products. We publish original works across key areas, from international commercial arbitration to investment arbitration, dispute resolution and energy law, developing outstanding resources to support practitioners, scholars, and students worldwide. For the latest news, commentary, and insights follow the Commercial Law team @OUPCommLaw, and the International Law team @OUPIntLaw on Twitter.

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Image credit: ICJ Robes, by International Organisation. Public domain via Wikimedia Commons.

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How do we address the problem of inequality in capitalist societies? Tom Malleson, the author of After Occupy: Economic Democracy for the 21st Century, argues that by making sure that democracy exists in both our economy and in our government, we may be able to achieve meaningful equality throughout society. We recently spoke to him about how economic democracy works and how viable it can be.

To start, give us a bare-bones description of what economic democracy is.

Economic democracy is the idea that democracy belongs not just in politics, but in the economy as well. There’s a paradox at the very center of our society: we call ourselves a democracy and yet a central part of society, the economy, has very little democracy in it at all. Workers do not elect the managers of their firms. Bankers do not allocate finance with any accountability to their communities. Investment decisions are not made with any citizen participation. That’s the philosophical paradox that After Occupy investigates. There are real, concrete examples of democratic alternatives in the economy out there, such as worker cooperatives in Spain and Italy, public banks in India, participatory budgeting in Brazil, capital controls in Malaysia, and so on. Ultimately, these alternative practices might be woven together to constitute a fundamentally different kind of society – a truly democratic one.

What exactly is a worker cooperative?

Worker co-ops are businesses that are owned and controlled entirely by the workers themselves. Workers elect the management on a one-person one-vote basis, just like we elect politicians into government. Probably the most famous co-op in the world is Mondragon in Spain. It started in 1956 with only five workers, and today employs over 80,000 people, with assets of over €35 billion. In addition to being far more democratic than conventional corporations, co-ops have two other important advantages. First, they have far less inequality of wages. In the United States, the average CEO makes 300 times the average employee of his or her company. For co-ops the ratio rarely exceeds 3:1. If co-ops spread, society as a whole would become significantly more equal too. In addition, co-ops also have far better job security. Instead of simply firing people in a recession, co-ops act in a much more humane way, usually by collectively agreeing to reduce their hours or take a pay cut across the board, instead of laying people off. That’s why in this last recession Mondragon has fired far fewer people than other Spanish firms. So if we had more co-ops here in the United States, the recession would have been far less devastating.

Are co-ops economically viable?

Absolutely. Economists have now been studying co-ops for over 30 years, and the conclusion is that worker co-ops operate with similar levels of efficiency to conventional firms. These results have been found again and again, in the United States, Uruguay, France, Italy, Spain, Denmark, the United Kingdom, and Sweden. Perhaps the most compelling evidence of viability is Northern Italy, where co-ops are more prevalent than in any other part of the world. In Emilia Romagna, for instance, they represent a substantial 12% of the region’s GDP, many co-ops have been around for decades, and the co-op sector dominates in a number of industries including construction, wine making, and food processing.

In After Occupy you argue that the current system of investment is undemocratic. What exactly do you mean?

The investment decisions that are made today — building highways or high-speed trains, condos or social housing, tar sands or green businesses — fundamentally determine the kind of society we will end up with tomorrow. Investment determines our future, which is why it must be accountable to us, the public. How could this happen? One important example is participatory budgeting, where local neighborhoods get to decide themselves on the kind of public infrastructure spending they want to see. In terms of finance, bank regulation is an obviously important first step. But over the long term, what is needed is a public banking system so that finances are allocated according to public need, not just according to private profit. Just like we have an electricity system and a post office that serves public needs, we need finance to do so as well (so that banks invest in poor communities or into green businesses – things that private banks will never do). At the end of the day, finance is simply too important for our future to be left to the banks.

Is having a true economic democracy feasible or is it simply a utopian?

Every proposal that is made in this book is based on real concrete examples. Worker co-ops already exist, as do public banks, participatory budgeting, etc. So we know there is absolutely nothing impossible about any of them – the institutions work. The difficult part, of course, is expanding them and bringing successful examples over from other countries. Some reforms (such as regulating the banks), are possible in the short-term; others, like building a large co-op movement, are the project of a generation. But the fact that we can see real-world examples of these things means that they are not at all utopian. With sufficient political will, a democratic economy is entirely within our reach.

Tom Malleson is the author of After Occupy: Economic Democracy for the 21st Century and is an Assistant Professor in the Social Justice and Peace Studies program at King’s University College at Western University, Canada. He is the co-editor of Whose Streets? The Toronto G20 and the Challenges of Summit Protest and the author of Stand Up Against Capitalism (forthcoming).

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1. Agents who ask for money. This is not how it works. A legitimate agent is difficult to come by, but worth the hard work. If they offer representation it will be because they want to work with you and they get paid by selling your work. Simple as that. 
2. "Publishers" who ask for money. Same deal. If you self publish, that's different. But if it's a legitimate press they should be the ones to front the costs for the editor, printing, etc. Publicity is a different story. Many authors do not get a publicist, or if they do, they still find themselves doing much of the promotion, but you can always negotiate this in your contract.
3. Don't quit your day job. I know, this isn't directly spending money, but you're definitely losing it if you do this solely to write. I know plenty of authors who still work and find time to write even with a family. Is it hard? You bet! But if you have to write, you have to write. Just don't forget you also have to eat and sleep somewhere with a roof over your head.

1. Editorial services. Is it necessary? NO. You might just have fantastic critique partners who are enough. You should have them no matter what. Mine are indispensable. But sometimes you're close, so close, but you need a little more help from a new set of eyes. OR sometimes you decide to self publish and then it's an absolute MUST.
2. Cover design. This is only if you ARE self-publishing. But a cover is very important. I'm in love with mine, but I know my publisher paid for it. It's worth it. 
3. Contests. I'm debating right now entering a few of these. But each one costs money and it adds up. I think in my case I will swallow the bullet and pick maybe 3 of my faves. I'll probably get some input and do a bit of research first though. Is it a guaranteed win? No. Of course not, but the more eyes on my book and the more possibilities the better.
4. Conferences and continuing education. I allocate myself several smaller workshops or one larger conference per year. Each one has absolutely been worth it for me. I get so much out of being with other writers and learning craft. I love it. You shouldn't spend this money though if you're expecting to meet someone who will instantly offer you publication. That's not what the networking is about. If you really can't afford it, you can always find online free conferences. There's Writeoncon, which is awesome and I believe there was (and hopefully will be) Indiecon online too. 
5. Books. You gotta read if you're gonna write. Libraries are good resources though! ;D

Figment, the writing community catering to young-adult readers, has raised $1 million from an unidentified investor. Figment CEO Jacob Lewis told paidContent that expansion plans include publishing its own works and creating a marketplace where authors and publishers can sell their titles.

On its launch day in December 2010, Figment attracted 4,000 users. The site now counts 35,000 users and 75,000 pieces of writing. In the fall, Figment will release author Blake Nelson‘s Dream School. Meet a Figment author at eBookNewser’s Digital Writer Spotlight today.

Here’s more from the article: “Lewis…said most of the money it’s raised will go to develop new sales, distribution and marketing models. At the end of this month, Figment will launch a writing contest judged by novelist Paolo Coelho, whose novel The Alchemist sold 65 million copies worldwide. Coelho will post the winning story on his blog.”

New Career Opportunities Daily: The best jobs in media.

Barnes & Noble began seeking buyers in August, but has yet to seal the deal. According to Reuters, the company stock price hit a two-and-a-half year low at the beginning of this week.

Chairman Leonard Riggio has said in the past that he would consider assembling an investment team to buy the company. In the article, retail analyst Mike Souers speculated that this kind of private takeover might be the only buying option.

Earlier this year, the bookseller suspended its quarterly dividend payments and made  staff lay-offs. Last September, the company survived a courtroom board battle.

continued…

New Career Opportunities Daily: The best jobs in media.

Internet-based bookseller, Thrift Recycling Management (TRM), has just received an $8.5 million venture capital investment from QuestMark.

The Seattle Times detailed how TRM assesses and sorts used books for selling, donation, or recycling–breaking a wasteful cycle. CEO Phil McMullin once worked at a chain of thrift shops, watching “nearly a million books a month” get trashed. His new company sold four million books last year, yielding $27 million in revenue.

Here’s a quote from QuestMark partner Tim Krongard, from the article: “They have very powerful sourcing infrastructure with a lot of potential for growth … We believe they can go a lot further, and we’re here to take the business to the next level.” (Via Publisher’s Weekly)

New Career Opportunities Daily: The best jobs in media.

President Obama at the White House Easter Egg roll, improving your business. Yes, YOUR business.

Less than half of children under five years of age in the US are read to everyday.  That more than anything helps cement a love of reading and prepare kids for school.  Even babies and toddler benefit from being read to.  Studies show that two year olds that are read to everyday have larger vocabularies, more developed cognitive skills, and better language comprehension skills than those that are not read to.  And that’s in kids that are only semi-verbal!

And the problems pile up over the years, resulting in kids falling farther behind with each grade.  These problems persist for a lifetime and cost the government (and taxpayers) trillions of dollars.  In some states they use the third grade reading proficiency scores to estimate future prison need.  Why?  85% of prison inmates cannot read proficiently. Simply increasing the graduation rate by 5% would save the US $5 BILLION annually in prison related costs.

Every 26 seconds, a kid drops out of school in the US.  Over their lifetime, each high school drop out costs the US government roughly$260,000.   In adults, 43% of people that are not proficient readers live in poverty.  Of those that are proficient readers, a mere 4% live in poverty.  Over the course of their lives, those with lowest literacy rates cost the government four times as much in health care costs as the most proficient readers. Annually an additional $73 BILLION is spent on health care for those with low reading proficiency due to low literacy skills in the form of longer hospital stays, emergency room visits, more doctor visits, medication errors, and increased medication. US businesses spend $60 billion annually on remedial training, mostly on reading skills.

One in seven adults in the US can not read this post, let alone anything complicated like list of side effects on medication or the fine print on a loan application.

What does all this have to do with bookstores?  The key to literacy is access to books.   In low income areas, 80% of preschool and afterschool programs have NO age appropriate books for kids!  In middle class neighborhoods, there’s roughly one age appropriate book per 13 kids between the library and private holdings.  In low income neighborhoods, the ratios is 300 to 1.

A bookstore by its mere existence improves access to books for all people in a community.  Even more than actually selling books,  a used bookstore is a major book distributor to those that cannot afford to buy books.  If you operate a used bookstore, you probably receive multiple calls per week about “will you just TAKE my books? I don’t want to throw them out!”  A used bookstore serves as a collection and redistribution point for books of all types.  Books that would never sell in the store and sell for pennies online often make it into boxes destined for prisons, schools, homeless shelters, literacy programs, and other places in desperate need of books. Even if you make faces at having a box of Reader’s Digest Condensed Books left on your doorstep, once they’re sent off to a new home at a school or prison, they can be a godsend.

Additionally, having various programs at the store can help boost literacy.  Story hour helps kids learn to love reading.  Even if they buy nothing that day, that can help boost literacy in your community which saves your business money (in the form of lower property taxes) in the long term and increases the market for books.

Obviously making kids books affordable and available has the biggest impact because of the ripple effect over time.  Yet many used bookstores don’t accept children’s books.  This is because they’re often hard to shelve, often are in terrible condition when the arrive, and often don’t fit the focus of the store.  (and that totally ignores the issue of CPSIA, another major problem) Where do those books go?  Some do get donated to places that need them, but even more end up thrown out.  If you have a store, take them.  Even if you give no credit or pay nothing for them, even if you don’t have space to put them on the shelves, many people just want to pass them on to someone.  You can find them a good home with a group that truly will put them to good use… and remember your largesse. (and may be tax deductable too!)

While giving away books does not seem like it really helps your bottom line,  that is because it has little to no visible impact when you focus on monthly or quarterly sales.  However, over years or decades, it ensures there’s an ever growing market for your product.  If you’re writing a ten year business plan, donations of books, services, or just plain money to local programs that increase the literacy rate should be part of that plan.  Even if you allocate no money to it, as you are simply redistibuting overstock, simply making the committment to give away X number of books per year and hold Y number of story hours, it will make a huge difference in the long term viability of your business.

Now obviously this applies most directly to brick and mortar stores, but online only places can play their part as well.  When you’re scouting books, consider buying some collections at a flat rate to take it ALL, even what you consider junk.  You may well be able to get a better price by agreeing to take it ALL than picking and choosing the few volumes you want.  Bundle up the rest and donate.

Schools and literacy focused programs are the obvious place to start, but adults need books too!  Improving adult literacy improves the outcome for their kids too.  Places like the local social services office, prisons, hospitals, rehab facilities, homeless shelters, and domestic violence shelters can all make use of these.  In many cases, these are places with captive audiences that would never read for pleasure on their own (or could never afford to spend money on books)… but give them a book to read while waiting and they just may find it’s fun.  Or may spend that hour in line sitting and reading to their kids.

If you’re willing to pay for postage and want to do something beyond the local area, sending books to military bases overseas is also an excellent option. A box of books can make a soldier’s day. They’ll be shared around, passed from person to person and unit to unit. Some units in low-conflict areas may also hand out children’s books to the local kids. When eventually the unit moves out, they leave the majority of the books behind.  That dogeared, highlighted copy of a classic may be worth pennies stateside, but when left in a fa away land it may take an honored place in the local library’s English-language collection.

And all that eventually comes full circle.  While book people consider books a neccessity, in many places they are a luxury.  By providing the books necessary to build an education upon, it increases the demand overall, worldwide.  Increased literacy decreases poverty… and so there’s money available to spend on books.  And lower taxes from increased literacy rates means more disposable income locally to spend on books…  And higher literacy rates translate to more kids learning to love to read and consider books a necessity, not a luxury… And on and on…

Make the committment to give books, money, or time to the cause of building literacy locally and worldwide and help ensure a better business climate for yourself for years and decades to come.

Megan Branch, Publicity Intern

David Bach is the best-selling author of the eight books in the Finish Rich series as well as Fight for Your Money and The Automatic Millionaire. In the latest book in the Finish Rich series, The Finish Rich Dictionary, Bach defines 1001 essential financial terms and provides 10 helpful essays with topics ranging from understanding a credit score to planning for retirement. Below we have excerpted five of Bach’s ten most interesting money mistakes people make. 

Mistake #1: Having a 30-year mortgage.

A typical 30-year mortgage at 8 percent inflates the real cost of a $250,000 home to more that $666,000. If you paid off your mortgage in 15 years, the total cost of your house would come to just under $493,000. That’s nearly $168,000 less than it would have been with a 30-year mortgage.

Make a small extra payment each month or fork over a larger lump sum at the end of the year. By making an extra 10-percent payment each month and then adding an extra month’s payment at the end of the year, for example, you can pay off your 30-year mortgage in about 18 years.

Mistake #2: Waiting to buy a house.

When you own your own home, you are building equity for yourself. When you rent, you are building someone else’s equity.

The number-one reason people put off buying a home is because they think they can’t afford it. But you don’t need tens of thousands of dollars in the bank for a down payment. All lenders will provide 75 percent of the purchase price of your house or condominium, and many banks will lend as much as 95 percent.

You can probably get a substantial home for the equivalent of your current rental payment. Say you pay $2,000 a month in rent. For that kind of money, you could get a $250,000 mortgage. In most of the country, $250,000 can buy you a lot of house.

Mistake #3: Putting Off Saving for Retirement

Almost 95 percent of Americans age 65 or older have an income of less than $25,000 a year. That means only 5 percent of us are in a position of financial security, much less comfort, when we reach our so-called golden years.

The best way to get started saving for retirement is to arrange to have your monthly contribution either deducted directly from your paycheck or automatically transferred from your checking account each month. If you’re not yet using your retirement account at work, go in to the office and sign up for your plan today. Make it a goal to save 10 percent or more of your gross income. If you can’t imagine saving 10 percent, start with 3 percent and make it a goal to increase that amount by a small percentage every month (you’ll barely feel it). By the end of the year, you’ll be contributing the maximum allowable amount to your retirement account at work.

Mistake #4: Paying too much in taxes.

When you are building an investment portfolio, it is absolutely imperative that you take into consideration your potential tax liability. Financial advisers call this “looking for the real rate of return.” The more you seek to minimize your taxes when investing, the more money you’ll keep. Start by making it a goal to fully invest in your 401(k) plan or retirement plan at work. No plan at work? Make sure you use an IRA account. Once you’ve maxed out your retirement accounts, look to investments that grow tax-free (like tax-free bonds).

Mistake #5: Giving Up.

People often make a financial mistake, get bad advice, and then give up on their dream of financial security. Don’t let this happen to you.

Yes, you should be careful, but don’t become overcautious. By learning to avoid the common pitfalls investors make, you can minimize your risk and put yourself on the road to financial security. The biggest mistake you can make is to not become an investor.

Edward A. Zelinsky is the Morris and Annie Trachman Professor of Law at the Benjamin N. Cardozo School of Law of Yeshiva University. He is the author of The Origins of the Ownership Society: How The Defined Contribution Paradigm Changed America.  In this article, Zelinsky discusses the federal government’s promotion of common stock investments for 401(k) participants. He suggests that, in light of the Crash of 2008, that promotion constitutes misguided paternalism.

Even as we contemplate the financial carnage of the Crash of 2008, the federal government sends a strong, paternalistic and, ultimately, misguided message to 401(k) participants: Invest your retirement savings in common stocks.

Congress, in the Pension Protection Act of 2006 (PPA), directed the Secretary of Labor to promulgate regulations specifying the “default investments” to which 401(k) funds will be directed if participants fail to make their own investment choices. Under the regulations issued by the Secretary of Labor, a plan fiduciary obtains immunity from liability for a participant’s investment decisions only if the plan’s default investment constitutes a “qualified default investment alternative.” Among other requirements, a qualified default investment alternative must satisfy one of three mandatory patterns: a “life-cycle” pattern under which “a mix of equity and fixed income” investments changes for the individual participant as the participant ages, a “balanced” portfolio under which each participant has the same “mix of equity and fixed income” investments “consistent with a target level of risk appropriate for participants of the plan as a whole,” or a “managed account” under which an investment manager allocates a particular participant’s account to “a mix of equity and fixed income” assets.

When one cuts through the bureaucratic verbiage, a strong message emerges: 401(k) funds, particularly the funds of younger participants, should be invested in common stocks.

At one level, the PPA and the DOL regulations which implement it reflect a plausible investment theory, namely, that common stocks, for the long run, do better than do more conservative investments. The PPA and the DOL regulations also respond, in light of this theory, to two accurate perceptions about the 401(k) world: First, unless participants direct otherwise, 401(k) plans have historically placed participants’ resources into conservative, low-yield investments like money market funds. Second, 401(k) participants often fail to diversify their holdings out of these conservative default investments.

Hence, the PPA and the DOL regulations channel 401(k) funds toward common stocks by effectively requiring that at least part of passive participants’ accounts be invested in such stocks.

Surveying the wreckage of the Crash of 2008, this looks like misguided paternalism. Many investors who buy common stocks in the current bearish environment are likely do well in the long run. But, as they say, past performance is no guarantee of future success. And some, particularly smaller investors, may sincerely and (from today’s perspective) rationally prefer to avoid the volatility associated with common stocks.

There is, as we have just seen, a reason that the extra projected profit associated with common stocks is labeled a “risk premium.” The passive 401(k) participant who leaves his funds in conservative, low-yield investments looks more reasonable today than he did when Congress passed the PPA in the bull market of 2006.

A defender of the PPA and the DOL regulations could retort that they do not require participants to invest in common stocks, but merely send 401(k) funds to equity investments unless the participants direct otherwise. True. But the PPA and the DOL regulations nevertheless reflect a father-knows-best attitude, taking it as the federal government’s responsibility to privilege its preferred approach to investing and enshrining that stock-based approach in the law.

Before the Crash of 2008, such paternalism looked plausible. At an as yet unknown date in the future, such paternalism may look plausible again. Today, it looks misguided.

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