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Aurina and the construction of a logical course – Latest News, Breaking News, Top News Headlines

Things in Aurina got complicated and its Board of Directors was making decisions with controversial effects. Aurina had been a Fair that radiated prosperity. It brought together varied activities, from the exhibition and commercialization of useful and innovative merchandise to entertainment. It was a pole of attraction for the public and generated employment.

With the intention of improving the prospects, at one point strange decisions began to be made. Among them, the Council incorporated non-functional equipment and launched an outdated promotional campaign. Charges and procedures were added, seen as superfluous by those who were linked to the fair. Some stallholders were losing sales because they fell behind before modernizations introduced by their competitors.

Thus reduced the number of workers, who started with claims of incompatible conditions with current operation. To compensate for these effects and encourage more traffic, the Administration took employees who walked through the place. In addition, amid increasing tariff discussions, the electricity supplier reduced the maintenance and investments of the service, with consequences on the income of the vendors.

The lack of success of the initial measures stimulated proposals for « creative solutions ». Certain doors began to be closed to induce greater permanence of the public and, later, it was reinforced by charging for their exit. Longer permanence was supposed to generate higher income. The sale of certain products abroad was also prohibited, in order to induce their consumption on the premises, although there was not enough demand. These events served as a basis to affect Aurina’s reputation, discouraged investment and led to further retraction of its activities.

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By JOSÉ LUIS & nbspCETERI

From an initial situation in which the different participants coordinated actions and achieved acceptable results, it went into an environment of difficult management and recurring failures. In addition, alternative fairs began to flourish. Despite minor contentions, the income of employees, stalls and the Administration did not stop falling. Disagreements turned into confrontations, which served to channel frustrations and mark pseudo-culprits.

Although the end of Aurina’s story is not known, we can reflect on fundamental questions of her (fictional) functioning and apply it to our (real) experiences. We identify some elements that support the basis of some prosperity:

A global best proposal generates a result greater than the sum of individual results. To do this, it is useful to generate opportunities and encourage efforts and human ingenuity at different levels of cooperation.

In a dynamic context, it helps to handle yourself flexibly within predictable behavioral parameters. In this way, a dynamic would be generated in which the parties could share benefits and avoid conflicts, which would provide feedback.

Although the spillover of the improvements is not assured, there would be more than before for the whole and it could be discussed how to make it equitable and sustainable.Giving a development framework, where the members as a whole are considered, would be superior to proposals of some against Its design and management should try to minimize coordination failures that lead to individual and collective errors.

We also note that:

The dynamics that are generated tends to permeate, encompassing different dimensions – from the administration of resources to the fulfillment of contracts.

Coordination is more efficient with clear game rules and predictable behaviors. If not, it may translate into higher costs (real or perceived).

The accumulation of imbalances over time tends to worsen the possibilities of constructive order.

The articulation of a comprehensive solution passes predominantly through the Administration.

We can reflect on the dynamics of the Argentine economy from the fictitious evolution of things in Aurina. The resolution of challenges is multidimensional. It is not only thinking about fiscal matters, inflation -which generates loss of real income and makes it difficult to coordinate individual decisions- the trade surplus, labor reform, the value of the currency, the operation of the exchange market, the tax burden, the tax design or the pension system, among others.

Nor is it to ignore these aspects and, much less, the circumstantial challenges, such as the health emergency or the social emergency in segments of the population. It is about clarifying the course and generating resources to achieve a better transition towards a prosperous system.

Also to identify and quantify the imbalances to correct and how to do it without failing in the attempt, in particular to reach a point of price stabilization and avoid inflationary spillovers. As an initial correction of certain prices seems inevitable, to achieve this it is necessary to provide conditions of greater competition and reduction of systemic risks.

Monetary management, with its fiscal counterpart and the movement of reserves, would be less demanding if there were more reasons to bet on a positive scheme of use and possession of money. The exchange rate system would play in the same direction, since the multiplicity of exchange rates conspires against the order of conduct and feeds expectations of depreciation, arbitrage and inflation. Its simplification and the inertia due to retrospective updating of price corrections in certain contracts would lead to a gradual reduction in inflation.

Finally, it is necessary to have a simplified tax system compatible with competitive schemes, where regularization is encouraged, to have a pension system that provides a basic benefit and another linked to people’s contributions. Finally, achieve more flexible ways of operating the economy, where innovation is a factor that allows taking advantage of a changing world.

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