Ten Commandments Of The Honorable Merchant

In September of 2010 Berlin Museum of Economics and Business administration: scholars rummaged up a yellowed cardboard with the inscription “The Honorable Merchant” in a dusty chamber named “Department of Stored Concepts.” Inside, they detected 10 tablets, each inscribed with a single sentence in ancient handwriting.

  • One goes: “The honorable merchant respects the interests of the owners.”
  • Another one: “The honorable merchant supports the common welfare in the society.”
  • This one’s also nice: “The honorable merchant aims his actions to virtues that create long-term confidence.”

Certainly, anybody today will define current incidents on each of these old-fashioned Words-Of-Wisdom: Hostile takeoversHouse banking scandalHealth care fraud … you can find seemingly endless lists of considerable companies that are convicted of felony offenses, and they’re still in business – or to say it in better words: still busy in corporate crime. In today’s markets economy the antiquated doctrines above seem to be not very useful. The moldy cardboard is probably at the right place, slowly rotting in the department of stored concepts.

Are practices that are morally reprehensible the contemporary vision of our global management caste?

The term “The Honorable Merchant” originates from the 12th century, shaped in the German Hanseatic League and Italy. It was a guiding principle in those ages, but buried in oblivion for the last centuries. Currently it is on everyone’s lips, i.e. the Humboldt University in Berlin (the guys who found the cardboard) now seriously wants to reintroduce the “Virtues Of The Honorable Merchant” in today’s faculties for Management and Business economics — as they declare, not for moral reasons, but because of the stability of society!

My two cents: As an entrepreneur, one should always be conscious about the virtues of decent trade and correct action, anyway. Who is cheating has no customers. But I’m just a bod, the man on the street.

Author: Mathias Roth
Published: September 29, 2010 at 5:32 pm

The Ukraine-EU Association Agreement

The rejection of the European Union association agreement by the Ukrainian president came as a surprise to many. The announcement was met with a huge wave of protests throughout the country, which have now turned into a broader outcry against government corruption and police violence. Even though the free trade agreement, which Ukraine has been working towards for many years, would have had some major associated costs, the long-term payoffs could have been huge – it would have provided support to unlock Ukraine’s immense potential, offered the possibility of EU integration, opened up the borders to commerce, eased travel restrictions, etc. However, the Ukrainian President, Mr. Yanukovich, claims that the EU wasn’t offering enough cash to offset the damage to trade with Russia, and slammed the IMF’s economic-overhaul conditions, such as raising the gas price for households, as unbearable for Ukrainians.

Moscow had strongly opposed the Ukraine – EU trade deal and even offered a lavish $20 billion bailout package to keep the former Soviet republic in Moscow’s orbit. This deal, much bigger than that offered by the West, gives Ukraine loans, enough to meet $9 billion in debt obligations for 2014, and cheaper gas supplies, which is favorable to Ukraine’s factories that are reliant on Russian gas. Nonetheless, this deal does not address the concerns of Ukrainian citizens, who want to live in a European country.

The US had also shown its concern with the revolution and the actions of the Ukrainian government by imposing visa sanctions against officials. The “Euromaidan” revolution itself has affected the economic expectations for 2014 in a way that there are no planned foreign direct investments being made into Ukraine in the short-run, and the inflation rate is supposed to increase to 5%, leading to a possible financial crisis. Since the purchasing power of people may decrease, Ukrainian businesses may suffer significant losses.

How could the European Union or the US assist Ukraine in its political revolution?

This text was written and presented by Mr. Vladyslav Kondratiuk, Student at the McDonough School of Business of Georgetown University in the course on International Business (STRT-261-01) on January 29, 2014. You can contact the author here.

The World Economy In 2014: Is The Recovery Really Strengthening?

By: Olivier Blanchard

The IMF’s January 2014 World Economic Outlook Update has three main messages:

First, the recovery is strengthening. We forecast world growth to increase from 3 percent in 2013 to 3.7 percent in 2014. We forecast growth in advanced economies to increase from 1.3 percent in 2013 to 2.2 percent in 2014. And we forecast growth in emerging market and developing economies to increase from 4.7 percent in 2013 to 5.1 percent in 2014.

Second, this recovery was largely anticipated. We have revised our forecast for world growth in 2014 by just 0.1 percent relative to our October forecast. The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened. The drag from fiscal consolidation is diminishing. The financial system is slowly healing. Uncertainty is decreasing.

Third, it is still a weak and uneven recovery. Among advanced economies, it is stronger in the US than in Europe, stronger in the euro core than in Southern Europe. In most advanced economies, unemployment remains much too high. And downside risks remain.

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