Professor Jorge Sá (PhD Columbia University; MBA Drucker University; Jean Monnet Chair; Peter Drucker speaker), an international speaker and author, has just published a new book that came out this August 16th launched by the international publisher Austin Macauley:
“Economic Myths and Economic Realities: five mistakes we are told every single day; and the real sources of economic growth”
This book that was written for large audiences but based on empirically researched articles published in academic journals (blind refereed/scopus), has three basic messages:
First: The importance of two types of values for economic development:
- 1 – Ethics (both work related and personal); and
- 2 – Freedom (economic) associated with transparency and accountability;
Second: The quality of management, that is to consider the countries as if they were organizations as a whole (private sector + public + social + non-working population at a given moment). The totality of a country is seen as a company;
And the third message is that without the above follows waste of taxpayers money both in:
- Internal economic policies (that is the part of the book on myths: Keynesianism, government to government funding, etc.); and also in
- External/foreign aid, unless it focuses on the real sources of economic growth which the book indicates (that is the book’s part on realities).
To know more about this new book, enclosed below is the cover, index, back cover, overall description and further detailed information.
OVERALL DESCRIPTION OF CONTENT
1. The book has two parts: one on economic realities and another on economic myths.
2. On economic realities:
- 2.1. For the first time ever, it is explained empirically 90% of the income variance among countries. The book uses solid analysis presented in very simple diagrams accessible to all;
- 2.2. That is achieved by considering whole countries (public, social and private sectors combined, including the non working population) as companies, assessing their business administration across areas like marketing, work culture, strategy and operations. After all, numerous multinationals are larger than countries;
- 2.3. Thus, there are no underdeveloped countries, only undermanaged ones. The wealthiest countries, are, overall, the best-run companies.
3. On economic myths: there are five ideas that are conveyed daily and are plainly wrong (in some cases), or there is no data, no empirical support for them (in other cases). And thus remain dubious, at best. Those five myths are:
- 3.1. Large funding from the richer to the poorer countries (e.g. within the European Union) or states (within the USA) promotes competitiveness;
- 3.2. Keynesian public programs promote growth;
- 3.3. Within economic blocks (European Union, USA, etc.) there is a trend towards the convergence of countries/federal states;
- 3.4. Gross domestic product is a good measure of a country’s wealth;
- 3.5. Industrialization, that is to increase the manufacturing sector, is the source to create wealth.
4. The overall conclusion of the book is that unless both external aid and internal policies are directed to the eight key variables (freedom, transparency, accountability, etc.) they are and will be as have been, a total and absolute waste. They target the irrelevant.
No wonder that the world’s ten richest countries have about 60 times the income per capita of the bottom ten. And that the gap between poorer and richer countries has been widening. And also some of the richer stall and don’t advance.
FURTHER DETAILED INFORMATION ON THE BOOK:
The book is divided in two parts: economic myths and economic realities.
1. Economic myths
The first part of the book (economic myths) presents a few diagrams (from official statistical sources such as EU, IMF, etc.) on five ideas that are conveyed daily and are plainly wrong (in some cases), or there is no data, no empirical support for them (in other cases). And thus remain dubious, at best. They are:
| Idea | Myth | Reality |
| First | Large funding from the richer to the poorer countries (e.g. within the European Union) promotes competitiveness | In the last quarter of century central funding not only has not avoided, as may have fostered corruption and hampered economic competitiveness, economic freedom and growth. |
| Second | Keynesian public programs promote growth | The impact of public investment programs is irrelevant in a country’s short term growth. |
| Third | Within economic blocks (European Union, USA, etc.) there is a trend towards the convergence of countries/federal states | It is the opposite that happens. Countries belonging to economic unions tend to diverge: their standard of living becomes more different. The wealthier countries become wealthier. Poorer ones, become (relatively) poorer. The same applies to the federal states within the USA. |
| Fourth | Gross domestic product is a good measure of a country’s wealth | GDP is an obsolete concept. National income should be used instead. However, most economists and institutions do not. The World Bank is an exception. Examples from Luxembourg, Ireland, Portugal, etc. explain why. |
| Fifth | Industrialization, that is to increase the manufacturing sector, is the source to create wealth | Aside exceptional cases, there is no (mathematical) relation whatsoever, between a country’s wealth and the importance of the industry in its economy. |
2. Economic realities
The second part (on economic realities) indicates empirically, using very simple but clear diagrams, what the real sources of economic growth are. Why the world ten richest countries have fifty-nine times the income per capita of the bottom ten. That is, it focuses on the causes of prosperity, which – according to the Nobel prize winner R. Lucas – are as important as elusive.
To demonstrate the sources of economic progress, the book assumes that the whole of countries (and not only the private sector, but also the public and social sectors) are companies. After all there are many multinationals which are far larger than countries: Walmart, State Grid, Amazon, UnitedHealth, Toyota, to name only a few.
And under that assumption one is able to explain 90% of economic growth, that is of the variance among countries wealth.
The book uses a sample of 33 countries (both developed and developing), during the five years period in-between the (end of the) subprime crisis and (the beginning of) the Covid recession and then evaluates the quality of those countries during that period in nine business administration areas: 1) strategy, 2) marketing, 3) finance/accounting, 4) human resources, 5) information systems, 6) operations/production, 7) R&D, 8) administrative area (security, hygiene, energy) and 9) general management (objectives, organization, control, coordination).
It is worthwhile to note that the book does not argue that the richest countries have the best firms.
It demonstrates (empirically) that the wealthiest countries are the best companies. The whole of the countries – not only the private sector but also the public and social ones, including the non-working population -, all together outperform the poorer countries in the business functions of human resources management (work ethics, personal ethics, instruction), marketing knowledge, strategy and so forth.
1. Jorge Sá is an expert on Peter Drucker and Philip Kotler, founders of modern management and modern marketing, respectively, with whom he studied and who offered letters of recommendation for his books and endorsements for his work.
2. Has a master’s degree from the Peter F. Drucker Graduate School of Management in California and a doctorate(PhD) in Business Administration, from Columbia University, in New York, where he was research, teaching assistant, and graduated with honors (always Dean’s list, Beta Gamma Sigma). Also holds two undergraduate degrees (in business administration and economics) and a graduate degree in Macroeconomics.
3. Was awarded the Jean Monnet Chair by the Jean Monnet Foundation in Brussels, and his books translated into twelve languages: English, Portuguese, Spanish, Chinese (Mandarin), Russian, Ukrainian, German, Lithuanian, Thai, Korean, Norwegian and Iranian, received endorsements, among others, from Peter F. Drucker, Cecily Drucker, Al Ries (author of the bestsellers Marketing Warfare and Positioning), Don Hambrick (Professor at Columbia University and The Pennsylvania State University), Karl Moore (Professor at Oxford and McGill University), Peter Starbuck (President of the London Drucker Society) and Philip Kotler.
4. Besides nearly forty articles published in blind refereed academic reviews and journals of economics, business administration and medicine, he has addressed conferences and given seminars at several institutions including TED USA (https://youtu.be/SOkjPVi1Fts), London Business School, Drucker University, IESE, Glasgow Business School, ESSEC (France), ESSAM (European Consortium of Business Schools), Manchester Business School, George Washington University, Oxford, etc. Has also addressed conferences and presented articles in academic and non-academic meetings, such as Academy of Management, Western Economic Association, Peter Drucker Society of Europe, at the European Commission, etc.
5. Has worked as private consultant, non-executive director or taught in the executive programs of multinational companies such as: Coca-Cola, SHELL, Unisys, IBM, Price Waterhouse, KPMG, Glaxo, British Petroleum – BP, Dun & Bradstreet, Deloitte & Touche, Makro (Metro group), Systéme U, I.F.A, Intermarché, Mini Prix Bonjours, Accenture, Watson Wyatt, Cap Gemini, Cesce, Scottish & Newcastle, Sara Lee, Total, Johnson & Johnson, Pfizer, Logica, Indra, Grandvision, Jafep, Euler Hermes, Cosec, Pestana Group Hotels, Tivoli Hotels & Resorts, Millennium Bank, Julius Baer, SGG, Henkel, Abencys, Broadbill, Volkswagen Group, McDonald’s, MiTek, United Steel Products, Base Group, UnitedHealth group, Inapa, Vodafone, IDC, Merck, BPI Bank, Milestone, Fijowave, Foxpak, ND Sports, LLR-G5, Horan, Prodieco, Dennison, Grid Finance, Bluemetrix, European Federation of Pharmaceutical Industries and Associations, Microsoft, etc. 6. His hobbies are History (wrote several books on the lessons of military campaigns for management) and football (degree as a professional coach). He speaks and writes (by alphabetical order) English, French, German, Portuguese and Spanish. He lives between Lisbon and Rio de Janeiro. And the office, Vasconcellos e Sá Associates (www.vasconcellosesa.com), provides support for research and other activities.
For more information on the books and conferences by Professor Jorge Sá please check our website at: www.vasconcellosesa.com or contact us at associates@vasconcellosesa.com .
– Peter Drucker expert
– Speaker on Peter Drucker
