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Executive Summary

The World Trade Organisation represents the unifying global association that brings divergent economies, legal systems, customs, internal policies and political systems into a sphere whereby a common ground in terms of a level playing field is established for all member nations. Favouritism, special interest, and other imbalances are eliminated to bring the term globalisation into a uniform as well as universal context. As is expected, the World Trade Organization has defined rules, regulations, procedures and processes to ensure this level playing field remains level, regardless of the size, influence or resources of its differing members. And therein lies the reason as to why it has been effective. And while there are critics who have their individualistic opinions and comments, some well-founded, and others not, no one has proposed another forum to improve upon and or replace the WTO, which dispute its imperfections, functions!

The preceding represents the organisation that the Russian Federation is seeking admission to. Such has been a process that has entailed over a decade and is still not concluded. The reasons for the aforementioned shall be examine herein, as well as the changes, modifications and other facets that the country is being called upon to modify in accordance with accession rules. Given the past history of the Russian Federation, the transition to a market economy has and does represent substantive changes with regard to internal policies and practices impacting upon all areas of the country’s economy. Such transitional changes have been successfully broached by China as well as Vietnam and other former communist states, so the challenge facing the Russian Federation has precedent. This examination shall delve into the aforementioned accession process with respect to the Russian Federation, looking into the country’s most dominant and important industrial sections to gauge the impact the process has, is having and will have in terms of impact.

Chapter 1 – Introduction

In order to understand the context of the World Trade Organisation as well as its impact on Russia, and its industries, notably oil, gas, and construction, one must delve into the broad area of world trade in general as a foundational understanding for this examination. Globalisation has been utilised as a format to discuss as well as explain many issues, world trade of course being a major component of the foregoing. Mann (1993, p. 9) provides a broad understanding of the complexities and context of globalisation through his statement “In major transitions the fundamental interrelations, and very identities, of organisations such as ‘economies’ or ‘states’ become metamorphosed. Even the very definition of ‘society’ may change.”

The broad reference in terms of globalisation as provided from the preceding points to the need to clarify this catch phrase as used by academia, politicians as well as journalists, and economists concerning its reference in terms of this examination to distinguish it in the context of utilisation. In its general sense, globalisation represents a short method “…of describing the spread and connectedness of production, communication and technologies across the world” (Smith and Doyle, 2002). The context that we utilise globalisation in this examination refers to the processes “…of reducing barriers between countries and encouraging closer economic, political, and social interaction” (Tabb, 1999). Globalisation is also described as “…the creation of international strategies by organizations for overseas expansion and operation on a worldwide level.” (BNET, 2007). As a word, and concept it, globalisation, entails the technological achievements in the fields of travel and shipping, airplanes, communications and data transfer, production and outsourcing, marketing and communications, regional trading organisations and trade blocks as well as economics that has called for the increased recognition of expanding the visions of countries, governments and multinational corporations to include the world view (Berger, 2005, pp. 33-38). It, globalisation, is the processes that refer to increased global interconnectivity as well as integration with respect to economic, social, cultural, political, technological, and ecological practices as countries and companies must utilise a common ground to make their products, goods, services, and ideals acceptable on the world stages in response to other countries and companies competing to expand their influence and economic power (Raskin et al, 2002, pp. 15-13).

Theodore Levitt is generally credited with coining the phrase ‘globalisation’ in 1983 through his book “The Globalization of Markets” (Harvard Business School, 2006), however, the term, globalisation, can be traced as far back as 1944 with the ending of the Second World War. There are historians as well as economists who indicate that the process of globalisation is a centuries old phenomenon that tracks the process of human expansion, and civilisation which over the past fifty years has intensified dramatically, taking on a more structured foundation that is underpinned by economics, and the needs for uniformity (O’Rourke and Williamson, 2001, pp. 1-7). An while globalisation, and politics are interrelated, as a result of governmental involvement, Shaw (1999, p. 1) advises that “…politics has been seen as secondary to globalisation; political institutions, forces and ideas are generally believed to be responding to phenomena which are located primarily in other social realms”. This view is also shared by Gray (1998, pp. 34-54) as well as Hirst and Thompson, 1996, pp. 23-41). They explain that globalisation is a reflection of economy, sociology as well as culture, along with philosophy, which has been demonstrated through history in terms of expansionism in the ancient as well as medieval worlds, with politics as the secondary facet. Nicholson (1999, p. 23) amplifies the foregoing in stating that “…there were big population moves from Europe to America, both North and South, followed by the equally large but involuntary movements of Africans to the Americas (prior to 1770, more African slaves than Europeans went to the Americas …”, and that “…Europeans opened up sea routes to India and interactions began even if they were not always welcome …”. The point of the preceding as well as what follows in terms of globalisation, is to illustrate how deeply embedded it is in the global economy as an historical fact that has taken on increased intensity in the twenty-first century.

The impact, in terms of increased trade, brought about by globalisation is illustrated in the decrease in poverty rates as shown by the following:

Table 1 – Decrease in Global Poverty Rates
(World Bank, 2006)

Area Demographic 1981 1984 1987 1990 1993 1996 1999 2002 Percentage Change 1981-2002
Less than $1 a day 57.7% 38.9% 28.0% 29.6% 24.9% 16.6% 15.7% 11.1% -80.76%
Less than $2 a day 84.8% 76.6% 67.7% 69.9% 64.8% 53.3% 50.3% 40.7% -52.00%
Less than $1 a day 9.7% 11.8% 10.9% 11.3% 11.3% 10.7% 10.5% 8.9% -8.25%
Less than $2 a day 29.6% 30.4% 27.8% 28.4% 29.5% 24.1% 25.1% 23.4% -29.94%
Less than $1 a day 41.6% 46.3% 46.8% 44.6% 44.0% 45.6% 45.7% 44.0% +5.77%
Less than $2 a day 73.3% 76.1% 76.1% 75.0% 74.6% 75.1% 76.1% 74.9% +2.18%

The preceding represents a critical facet in understanding the contribution of globalisation to the increase of living standards through trade, and increased economic activity, which benefits developed as well as under developed countries.

Within the context of this examination, the following points to the importance of world trade in terms of Russia in comparison with the rest of the world:

Table 2 – Growth in the Value of World Merchandise Trade by Region, 2000 – 2005
(World Trade Organization, 2006)

As shown by the above, the annual global percentage change in terms of exports during 2000 through 2005 averaged 1 percent, with Russia recording an average growth rate of 18 percent. More telling is that during 2004 and 2005, Russia recorded a percentage increase of 35 and 33 percent, respectively, while the global average increase during those years was 22 and 13 percent. The following Table provides closer insight into the foregoing.

Table 3 – World Merchandise Exports by Region
(World Trade Organization, 2006)

Russia’s share of world trade between 2000, and 2005 increased by 18 percent in comparison with a global increase of 10 percent, with the country’s increases during 2004 and 2005 recording increases of 36 and 28 percent respectively compared against global trade increases during those years of 22 and 13 percent. The foregoing is the backdrop in terms if understanding the importance of global trade as well as its impact on the country’s economy as shall be further discussed in following chapters.

Chapter 2 – Literature Review
2.1 The World Trade Organization

The World Trade Organization (WTO) sets forth governing principles and uniformity regarding “… the rules of trade between nations at a global level …” (World Trade Organization, 2007a). It represents the primary international organisation to aid in the promotion of free trade through its foundation of rules governing the process on an international level to provide an equitable playing field that is applicable as well as just, and fair to all nations (Free Trade and Globalization, 2007). Organized in 1995, the WTO is the outgrowth of understandings as well as practices that began from the failed International Trade Organization in 1948 (World Trade Organization, 2007b). That attempt was a result of the ‘General Agreement on Tariffs and Trade’ that was created as a result of the Bretton Woods Conference representing a segment of the larger plan for economic recovery in the aftermath of World War II (Hoekman and Kostecki, 1995, p. 1).

Its origin, GATT “…can be traced to the U.S. government’s Proposals for the Expansion of World Trade and Employment …” that was subsequently forwarded to all countries (Srinivasan, 1998, p. 9). The Soviet Union represented the notable exception in terms of accepting the preceding invitation, which had also elected not to join the World Bank (Srinivasan, 1998, p. 9). The council oversaw deliberations that resulted in a total of 123 bilateral agreements covering 50,000 items that were negotiated in over 1,000 meeting, which resulted in the General Agreement on Tariffs and Trade being adopted on 18 November 1947, and signed by 23 countries (Srinivasan, 1998, p. 9). The foregoing was formalised in 1947 at the first meeting of the Economic and Social Council of the United Nations held in Havana, Cuba, and said Proposals for the Expansion of World Trade and Employment were adopted unanimously (Srinivasan, 1998, p. 9). At that meeting the Economic and Social Council of the United Nations “…appointed a preparatory committee for the conference consisting of the United States, Norway, Chile, Lebanon, and the fifteen countries invited by the United States for tariff-reduction negotiations. The Soviet Union again chose not to participate in the deliberations of the preparatory committee” (Srinivasan, 1998, p. 9).

Between 1948 and 1994 GATT represented the only multilateral regulating body covering world trade in terms of uniform rules, requirements and measures, until it was replaced by the World Trade Organization in 1995 (Hoekman and Kostecki, 1995, p. 36). For the sake of clarity, GATT represented a set of rules for the conduct of international trade that operated without a solid institutional basis, having no provisional secretariat (UNESCO, 2007). In understanding GATT it is important to be cognizant that it, GATT, was a provisional agreement in terms of its legal status whereas the World Trade Organization, along with its agreements are permanent as well as mandatory (UNESCO, 2007). Another important distinction between the two is that GATT concerned itself only with the trade in goods, whereas the World Trade Organization covers trade in services, termed General Agreement on Trade of Services, trade related to intellectual property, which is called TRIPS as well as the trade in goods under GATT 1994, an updated version of the original GATT agreement of 1947 (UNESCO, 2007). In the World Trade Organization, its agreements are multilateral covering all member states, whereas under GATT the agreements were plurilateral, meaning selective (UNESCO, 2007). Finally, the World Trade Organization has a dispute settlement system that operates in a faster as well as more automatic methodology than the system under GATT, importantly, the WTO rulings cannot be blocked by any member states (UNESCO, 2007). The following provides a summarised illustrative timeline of GATT and the WTO:

Table 4 – Timeline of GATT and the WTO
(Crowley, 2003, p. 43)

Consisting of 150 member nations, from its original 23, the World Trade Organization oversees an estimated 97 percent of all global trade (Crowley, 2003, p. 42). The progress of the organisation in aiding in the increase of world trade as a result of the uniformity of its agreements, measures, and dispute resolution is shown by the following:

Diagram 1 – Growth of Trade Among WTO Members and Tariff Decline, 1946 through 2001
(Crowley, 2003, p. 44)

Reasons that are attributed to the foregoing success are found in the fact that the World Trade Organization represents reciprocity as well as non-discrimination. Reciprocity is the procedure in GATT negotiating rounds whereby a country offers to reduce a trade barrier, and a second country reciprocates through offering to reduce one of its trade barriers (Crowley, 2003, p. 44). Non-discrimination refers to equal treatment. The preceding means that if one country offers a tariff concession, and or benefit to another member of GATT, said tariff concession, and or benefit must be offered to all GATT members (Crowley, 2003, p. 44). The foregoing two principles, reciprocity and non-discrimination, are termed by Bagwell and Staiger (2001) as the key reasons why the WTO has been successful in its role as the international arbiter of trade.

In understanding the importance of the preceding, a brief discussion of tariffs within the WTO is in order. Tariffs are another form of tax, which raises the price consumers must pay for an item (goods), and either brings an imported item into price parity for a country’s domestically produced goods, or raises its price to make it more expensive in relationship to domestically produced goods (Adams et al, 1979, pp. 35-49). In the instance of smaller countries, they benefit from unilaterally lowering their tariffs as they are unable to affect the price of goods sold on the global market (Adams et al, 1979, pp. 35-49). In fact, raising tariffs for a small country would result in its being worse off as a result of the loss of welfare to consumers as transmitted by the higher prices resulting in a loss of efficiency in the market as a result of consumption distortion. In the instance of larger countries whereby their goods comprise a goodly share of the global market, a change in tariff pricing upward constitutes a different effect. This is reflected in the following figure:

Diagram 2 – Impact of a Tariff on a Large Country
(Crowley, 2003, p. 45)

The resulting scenario is more complicated. In the instances of a large country import demand represents a large share of the global market (Crowley, 2003, p. 45). As a result, the imposition of a tariff by a large country reduces import quantity demand, and causes global prices to fall (Crowley, 2003, p. 45). In terms of trade the preceding makes a country better off as it now can purchase imports at a lower price on the global market (Crowley, 2003, p. 45). While the consumer pays a higher price on the imported good, the total welfare of the importing country is better off as government earns tariff revenues, and import competing producers thus earn higher profits (Crowley, 2003, p. 45).

In terms of the preceding illustration, a key point that needs covering is the burden of the tax (tariff) resulting. The consumers in the subject large country pay a higher cost for the goods that are imported in this instance when the illustrative tariff is imposed, however they do not pay the full burden of the imposed tariff (Crowley, 2003, p. 45). The imposed tariff created a condition whereby the falling world price of the good impacts the foreign exporters who receive a smaller payment, thus the exporting country loses a portion of its purchasing power in terms of the global market in this scenario that worsens its trade (Crowley, 2003, p. 45). As a result some of the cost of the indicated tariff is off loaded onto the foreign producers in terms of the lowered price they receive (Crowley, 2003, p. 45). The foregoing is termed a ‘beggar tariff’ as the foreign producers suffer losses (Crowley, 2003, p. 45). The utilisation of this type of tariff by a large nation results in the importing country being better off, and thus the exporting country being worse off (Crowley, 2003, p. 45). Furthermore, the preceding produces what are termed as ‘inefficiencies’ in the global trading system that overall cause the net effect of said tariff to become negative as it produces inefficient distortions in production in both nations (Crowley, 2003, p. 45).

The net / net of the foregoing is that the imposed subject example tariff is not good for the global economy as a whole, however, it benefits the importing country. The end of World War II provides an example of the preceding as many countries had high tariffs, which did not benefit the countries, and or consumers (Crowley, 2003, p. 45). Cooperative action on the part of countries as found under the WTO has increased the balance of good actions in terms of the foregoing dilemma. GATT, represented and represents the mechanism via which the short sighted self-interest equation has been balanced. GATT, and its reciprocal tariff reductions provided and provide such a mechanism (Narliker, 2003, pp. 12-14). In understanding the picture of global trade flows Hoekman and Kostecki (2001, p. 9) advise “Global trade flows are dominated by exchanges within and between the three major regions of the global economy (the so-called triad): Europe, North America, and East Asia. The principles and disciplines of the GATT helped governments to liberalize trade and to resist pressures for protection” the foregoing has aided in fostering increased integration of the world’s economy as a result of heightened trade levels.

The centrepiece of the preceding is the World Trade Organization, which also works with the International Monetary Fund, the World Bank as well as Regional Trading Blocks, and member government nations. The complexities of world trade, developing nations, and nations ascending to membership in the WTO brings with it economic, social, institutional, policies, and monetary ramifications whereby the WTO does not operate in a vacuum. The process of globalisation in today’s terms means closer cooperation between various multilateral institutions in the critical roles of policy formulation as well as the differing elements constituting economic policy frameworks. The preceding means the participation and support along with assistance from the World Bank as well as the International Monetary fund in aiding developing, and ascension countries in meeting the rules, and policies to become a member of the WTO.

In understanding the role of the World Trade Organization it is important to note that it does not define, and or specify outcomes for trade policies, it establishes a framework (Srinivasan, 1998, pp. 38-41). An example of the foregoing is provided by Article XXIX, Article 4 of the WTO, which aims “…to clarify the conditions under which a regional arrangement, free trade area, customs union or interim arrangement that, after a transition period, may give rise to a customs union or free trade area that is compatible with the GATT” (Landau, 2004, p. 88). The Article continues “…any preferential agreement between developed countries or between the latter and developing countries containing tariff preferences on a defined number of sectors is, on principle, compatible with the WTO. These arrangements must satisfy Article 4 of Article XXIV, in that they have been created in order to facilitate trade and not to form new trade barriers against non-member countries” (Landau, 2004, p. 88). It, Article XXIV, aims at ensuring regional trade arrangements result in the creation of trade as opposed to diverting it, and seeing that adverse effects are reduced to their minimums (Landau, 2004, p. 88). In addition Article XXIV “…stipulates that customs duties and restrictive trade rules must be eliminated substantially on all sectors of trade originating from the territories of the regional area” (Landau, 2004, p. 88). The main objectives of the World Trade Organization are, 1). Transparency, 2). Coherence, and 3). Tariff Negotiation via which it guide the process.

2.2 The Russian Federation

The Soviet Union, now known as the Russia Federation, represents a landmass that is four times the size of Europe, but having less than half of Europe’s population, and by comparison it is as large as the entire continent of North America (Summer, 1943, p. 1). The Union of Soviet Socialist Republics came into being in 1917, signalling the “…Stalinist revolution of planned industrialization and collectivisation …” (Summer, 1943, p. 48). And while the change in regimes was dramatic, many things stayed essentially the same (Summer, 1943, p. 48):

the “… great centralisation of power …”,
the “… enormous range of state action …”,
the “… massive bureaucracy …”,
the “… extreme emphasis on the army …”,
the “… drastic use of force and the secret police …”, and
the “…semi-deification of the leader or sovereign …”

In understanding the Soviet Union, one must be cognizant of four major facets that aid in the explanation of the preceding (Summer, 1943, p. 49):

“…the problem of governing an immense area and a multitude of peoples with relatively low material and cultural standards …”
“… the problem of defence …”
“… the impossibility of a complete break with past customs, attitudes of mind and feeling, and ways of doing things …”, and
“… the communist view of the state …”.

Lenin’s contribution to Russia was the doctrine of communism that provided “…the goal of communism and the vision of man new made – and a revolutionary method – the dictatorship of the vanguard of the proletariat organized through the Communist party and linked up with the masses through the soviets” (Summer, 1943, p. 49). “The idea both of party and of soviets was new to Russia in 1917, but they are the two institutional bases upon which the revolutionary regime has been built up” (Summer, 1943, p. 49). One of the outgrowths of the new Russia was the development of the largest militarised economy ever seen (Gaddy, 1996, p. 1). The preceding is important in understanding the context of the former Soviet economy, and the implications inherent in its ascension to the World Trade Organization. The military represented a “…process that affected the very nature of the system in both its political and economic dimensions” (Gaddy, 1996, p. 1). The foregoing is explained by Gaddy (1996, p. 1) as supported and fed by “Continual references to a military threat from without, intensified immensely by the campaigns of glorification of sacrifice and patriotism surrounding the victory in World War II, played a major role in creating and perpetuating the climate of secrecy and control that was necessary to justify unquestioning acceptance of Communist rule”. It is important to understand that the militarist nature of the Soviet Union severely impacted, affected and underpinned the economic system within the country.

The post – Soviet era in Russia has changed that underpinning, most notably the removal of restrictions on individuals (Gaddy, 1996, p. 1). The military industrial sector of the economy has been drastically reduced, with the armaments sector producing a very small portion of what it did in 1991 (Gaddy, 1996, p. 1). The importance of the preceding is that two out of three Russian workers who were engaged in military, and or weapons production in a system whereby militarisation represented the manner in which the State restricted free choice and allocated the country’s resources into its priority sectors (Gaddy, 1996, p. 1). While the foregoing is seemingly an issue of the past, the fact is in economic terms it is very much a part of the present, and thus germane to this examination of Russia’s economy, and its accession into the World Trade Organisation. The foregoing understanding with regard to the lingering effects of public debt was brought forth by Shutaro Matsushita (1929, p. 5) in the late 1920s through his analysis of “The Economic Effects of Public Debts”, where he brought forth the concept of ‘forced loans’ or obligations. The preceding represents when the state undertakes to pursue a path of economic debt. The following reference does not specifically apply itself to the status of events in the Soviet Union, yet its implications in terms of economic consequences is apparent (Matsushita, 1929, p. 85):

“When these government notes are suddenly issued, there is an increase in the medium of exchange, without any commercial necessity for such an increase, — in other words, there, is an inflation of the currency. Prices will rise, commercial relations will be disturbed, and creditors will suffer severely. Prices rise because there is an augmented supply of money to carry on exchanges, without any necessary increase in the commodities to be exchanged. Commercial relations are disturbed because merchants and manufacturers must readjust themselves to the, sudden rise in the prices of goods. Creditors suffer, because the same nominal amount of money does not have as much purchasing power as before. Moreover, as is always the case in a period of rising prices, wage-earners suffer because the rise in wages always lags behind the rise in prices.”

The size of the Soviet Union provides the country with a broad breathe of natural resources. At 22.4 million square kilometres the Soviet Union is almost four times the size of Europe, and only slightly smaller than North America (countrystudies.us, 2006). Given its vast expanse of land the country traverses a broad range of topography, thus providing it with exposure to differing types of natural resources as a result of the preceding. The country accounts for an estimated 20 percent of the global production of oil and natural gas, with large reserves of both (countrystudies.us, 2006). These reserves generate hard currency for the country, along with its vast reserves of “… iron ore, manganese, chromium, nickel, platinum, titanium, copper, tin, lead, tungsten, diamonds, phosphates, and gold …” as well as huge timber reserves located in Siberia (countrystudies.us, 2006). This underpinning of vast natural resources is the core from which Russia is able to build its new economy in the face of the collapse of the Soviet Union.

From 1927 through 1987, the economy of the Soviet Union operated under the foundational premise as set forth by Joseph Stalin, “…with only incidental modifications made between 1953 and 1987” (countrystudies.us, 2006). The control of the Soviet economy under Stalin represented the utilisation of the ‘Five Year Plan’ that represented the means for the country to marshal its vast resources into materials for production (Ilin et al, 1931, p. 18). It was a backward country compared to Europe, primarily Britain, France, and the United States with relatively no internal infrastructure, factories, transportation systems, cities, and industry. The policies of the ‘five year plan’ have been argued as being one of the most effective means for pulling the then backward Soviet Union out of the eighteenth century, and into the twentieth century as it was such a vast undertaking (Ilin et al, 1931, pp. 27-31). In order to solidify their power the socialists had to find a means to implement real progress within the country as a demonstration of the vision, success, and foresight of their system in addressing the massive problems of the country In addition to the pressures from within, there were external pressures as represented by capitalists countries which were impacting upon internal pricing structures as a result of Russia’s inability to compete in terms of productivity, and market efficiencies (James, 1937, pp. 197-207). The ‘five year plan’ represented a means via which the state could plan the progress of the country as well as administer its control policies, and solidify its absolute power. It, the five-year plan, represented “…the chief mechanisms the Soviet government used to translate economic policies into programs” (countrystudies.us, 2006).

For over sixty years the Russian economy was controlled by the state under the principles of centralised planning, which represented virtual control over all aspects of production, investment as well as consumption (countrystudies.us, 2006). The central planning concept also served to enable the country to marshal its resources quickly, as demonstrated by the invasion by Nazi forces. But, the problems of centralised planning, and its abuses were also evident in that Soviet industry was able to purchase raw materials such as oil, coal, and natural gas at prices that were below the global market levels, thus encouraging waste, and inefficiencies (countrystudies.us, 2006). The appointment of Mikhial Gorbachev as the General Secretary of the Community Party in 1985 is hailed as the beginning of the demise of the Soviet Union as a result of his reform policies of glasnost, democratisation and most of all perestroika (Graham, 2007). Glasnost (1990) represented a policy that called for openness, maximisation of publicity, and transparency concerning the activities of the state, along with the implementation of freedom of information (Bettaux et al, 2004, p. 8). The preceding was put into effect by Gorbachev in an effort to reduce the internal corruption at the head of the Communist Party as well as government, and Central Committee (Bettaux et al, 2004, p. 10-14).

Democratisation in Russia, as brought forth by Gorbachev, implied increased public discussions, primarily on cultural as well as economic issues, along with the increased interaction of leaders of the Communist party with the populace, and some liberalisation of personal freedoms and censorship relaxation (Ross, 2002, pp. 18-20). Gorbachev stated in 1989 that the“… republics’ rights of sovereignty were largely formal in nature. Up to now”, and he noted, “Our state has existed as a centralized and unitary state and none of us has yet the experience of living in a federation” (Kux, 1990, p. 2). Of all of Gorbachev’s policies, perestroika is credited with becoming the unintended cat.

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Introduction

As economies continue to integrate due to globalisation and formally closed economies like India and China march toward total liberalisation, entrepreneurship is on the increase. A close analysis of developed and industrialised economies indicates a common denominator that stands out amongst all of them. This is the most important role played by entrepreneurship and entrepreneurs in such economies. This phenomenon has proved to us that if an economy is to develop fully, entrepreneurship should be allowed to flourish. Therefore it is the objective of this paper to critically analyse the impact of entrepreneurs in any given economy. In this paper the writer will identify and discuss the many benefits afforded to an economy through entrepreneurs and entrepreneurship and the disadvantages of the same and draw conclusions on the overall impact of the entrepreneurs.

Innovation

Individuals often resort to entrepreneurship for one of the following reasons; they find a market niche and have the solution to profit from such niche; they have been unable to find suitable employment or a suitable means of income and therefore have resorted to using their creativity to generate an income for themselves; or they have the technological know-how and the financial resources (or able to source all of the above) necessary to generate income by satisfying a need in the marketplace. Irrespective of which of the above led an individual to become an entrepreneur it is clear that innovation and creativity is the driving factor and therefore, it can be stated that the biggest impact of entrepreneurs to an economy is the innovative contribution that they make.

Job Creation

As stated in the previous section, one of the main reasons that individuals tend to become entrepreneurs is because they are unable to find suitable jobs. As a result, by being enterprising, creative and finding a market niche, not only are they able to generate an income for themselves but also to employ other individuals in their business operations. Therefore, one of the most positive impacts that entrepreneurs make on an economy is job creation and the reduction of unemployment levels. In developed countries we see that almost 40 – 50% of the workforce are employed in small and medium scale business enterprises that were started up by very enterprising individuals. Likewise in countries like India, we see that millions of women have been able to pull their families out of poverty through self-employment and entrepreneurship that has been made possible by different Non-Governmental Organisations and due to the availability of such resources through micro finance etc. Africa is another good example of small scale entrepreneurs helping to reduce poverty and helping many to avoid destitution. Therefore based on everything that has been stated above it is apparent that entrepreneurs can cause a great degree of impact on an economy through job creation and income generation.

Increased Competition

Another positive impact of entrepreneurship on an economy is the increasing level of competition as new entrepreneurs join the fray in existing domestic markets. While one may venture to say that this will only lead to market saturation, the upside of such a phenomenon is that it causes all the players in the market to re-evaluate their operational capabilities, increase value addition, lower costs and become more efficient. Thus it can be stated that competition reduces the likelihood of monopolies and oligopolies in the marketplace and is beneficial to the customer and the economy as a whole.

Increased Productivity

One of the advantages of increased competition in an economy is that individuals and firms continue to source methods that can better improve their operations, use resources more efficiently and most importantly reduce costs while adding value. All this often results in an increase in productivity in an economy and an increase in the gross domestic product (GDP), which is indeed a benefit for the economy. While opponents tend to state that when productivity increases the unemployment can often increase, thus reducing the positive impacts, it is the opinion of the writer that increased productivity leading to increased unemployment will then cause more individuals to be creative, find niche markets, become entrepreneurs and begin generating more employment opportunities, thus re-inventing the wheel and driving the economy forward.

New Markets

As stated in the previous section increased competition in the marketplace can cause saturation and as a result many entrepreneurs maybe driven to seek new markets for their products and services or adapt market penetration tactics. Either way such a phenomena of increased competition, which ultimately causes individuals to look for new markets, can be considered as a positive impact on the economy. Therefore, entrepreneurs can be considered to play a very important role in the economy. As integration of economies continues due to globalisation, entrepreneurs often tend to look for markets that are outside of their domestic sphere thus generating foreign revenue and increasing the prosperity of the economy as a whole. While this may be a very simplistic explanation of the impact that entrepreneurs make on an economy, it is also safe to say that the employment generation, increased competition, market expansion, market penetration and sourcing new markets all result in income generation that ultimately help an economy to become more prosperous, drawing millions out of poverty and generating funds for social welfare activities that ultimately uplift the living standards of its citizenry.

Negative Impacts of Entrepreneurs

The single largest negative impact of entrepreneurs on an economy is the plundering of resources, which can have a disastrous effect on the environment. While such negative impacts are mitigated to some extent in developed economies due to the enforcement of environmental protection standards and regulations, this is not the case in developing economies. Further entrepreneurship requires a certain degree of business knowledge and know how, without which entrepreneurial ventures can often fail, which can also cause many financial hardship that in extreme cases can even lead to destitution.

Social Entrepreneurship

Today we see the realm of social entrepreneurship growing exponentially which is a very positive sign and has helped to draw millions out of poverty, decrease unemployment, decrease the number of people dependent on social welfare and all in all uplift the living standards and quality of life of millions. Further social entrepreneurship initiatives are also often seen as ‘green initiatives’ that take into consideration the impact on the natural environment and therefore strives to keep this at a minimum. This increases awareness about such issues, avoids the plundering of natural resources and conserving the environment wherever possible. Therefore, it can be stated that the negative impacts of entrepreneurs on an economy can be mitigated to some extent through social entrepreneurship.

Conclusion

Based on everything that has been discussed above it is apparent that the positive impacts of entrepreneurs on an economy, far outweigh the negative impacts. Job creation, reduction in unemployment levels, increased competition, opening new markets, increasing productivity, foreign income generation and poverty alleviation are some of the positive impacts that entrepreneurs have on an economy. However, this is not to say that there are no negative impacts such as the wastage and plundering of resources, yet taken as a whole it is apparent that the entrepreneurs positively impact an economy.

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Question: The Herfindahl Index coefficient and Gini coefficient are tools used in the analysis of industry concentration. Giving examples, assess their respective contribution to our understanding of industry structure.

A numerical approach to understanding economic structures has been the basis for the development of the Herfindahl-Hirschman Index and Gini coefficient. The concentration and industry structure are easily conceivable from a combination of these two indexes. The Herfindahl-Hirschman Index measures the size of the top 50 firms in the industry relative to the market. This comparison is in the form of a sum of the squares of their market shares. The primary basis behind the index is to understand the existing market structure based on the relative market shares of the top 50 (or all, if less than 50) firms. The coefficient will tend to be very high in case there is an oligopolistic market structure in which a small proportion of the firms will be holding large market shares.

However, if the market is such that the top 50 firms have small and roughly equal market shares, the coefficient will be very low. The difference between the two market structures is easily understandable by looking at the value of the coefficient. An oligopolistic market will generally have an H-H index of above 1800. This would mean that the market is concentrated and the top 50 firms have a significant majority share of the market. An industry with an H-H index of between 1,000 and 1,800 is assumed to be moderately concentrated i.e. there is a fair degree of distribution of market share with a few firms standing out slightly above the others. A market with just one firm serving the entire market (monopoly) will have an index value of 10,000. The minimum index value is of course close to zero assuming a perfect competitive market. The differences in these index values explain a lot about the industry and are often used to estimate the division of wealth between firms.

The Herfindahl-Hirschman Index of the automobile industry in the U.S. is in between 1,800 and 10,000. This is because of the fact that the industry has a lot of large players with significant market shares. However, the use of the Gini coefficient is more pertinent in measuring the distribution of wealth between firms in an industry.

The division of the US automobile industry is also supported by the Gini coefficient. Intuitively, the Gini coefficient is a measure of the relative dispersion of wealth in an industry. It measures the level of inequality of distribution of wealth in an industry. A Gini coefficient of 0 signifies perfect equality of wealth meaning that all firms in the industry have equal wealth. However, a perfect inequality of wealth is denoted by a Gini coefficient of 1. While theoretically it is impossible to have industries with Gini’s of 0 and 1, the extent to which they are close to either of these benchmarks denotes the concentration of the industry.

The US automobile sector has a Gini well above 0.5 denoting that the industry is concentrated and there is significant inequality of wealth amassed by the automobile firms. The combinatory use of the two indexes gives a clearer picture of the degree to which different firms have a share of the market and the extent of income equality (or inequality) relative to a perfect equality of wealth distribution.

Question: In the market for air travel, why might a high degree of price discrimination lead to an improvement in both allocative and technical efficiency, and yet a reduction in consumer surplus?

A high degree of price discrimination in the airline industry results in an increase in the producer surplus. This is because of the fact that a producer is able to capitalize on the prices that the consumer is willing to pay instead of the equilibrium price for the market lying above the equilibrium.

is price methodology would raise allocative efficiency because the airlines will be using the appropriate consumption bundle on the consumers’ indifference curve. This would lead to maximizing utility in terms of each individual using the airline’s service; Instead of maximizing output for the airline, it would mean reaching the optimum production level.

The phenomenon of discriminatory pricing is also known as labelled as perfect price discrimination because of the fact that it matches a perfect competition market also completely. The optimum quantity for the airline would form the isoquant line while the budget line for the production would be denoted by the isocost line. The price discrimination strategy would mean that the budget line would meet the optimum production quantity i.e. the isocost would equal the isoquant. This would denote the optimum quantity which would however reduce the consumer surplus instead of raising it.

This phenomenon can be explained by the fact that the supply curve in this strategy would change for each consumer. The supply curve will be higher or lower for each consumer depending on the price discrimination level; they would be matching the customers’ characteristics. Thus, this would result in an increase in the producer surplus at the expense of the consumer surplus.

While the total surplus would remain unchanged, a portion of the consumer surplus would be converted to the producer surplus. This is the basic reason for a decrease in the consumer surplus even though technical and allocative efficiency may be rising. The technical efficiency would rise because of the price discrimination strategy: the output of the airline would increase even though the inputs would remain the same. This increase in technical efficiency is complemented by allocative efficiency. The rise in allocative efficiency can be explained by the fact that the consumers’ measure of the utility of the airline’s service would increase.

The price discrimination strategy would enable the airline to charge different prices to each consumer based on their utility. Since the prices would be matching the utility of the customer, the net utility derived from producing the optimum quantity (where isocost would equal isoquants). The following graph displays this phenomenon:

Thus, it is possible for an airline to improve allocative and technical efficiency using a price discrimination strategy and at the same time experience decreasing consumer surplus.

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Introduction

The migrant crisis caused by the civil war in Syria has been reported as causing a migration crisis for Europe (Troianovski, 2015; BBC News, 2015). It is forecast that in 2015, Germany, a country which has a compassionate history of welcoming refugees, will receive 1.5 million asylum applications, double the 2014 level (BBC News, 2015). With a record influx, the government has made a commitment to spend an additional ˆ6 billion to support the refugees; ˆ3 billion to aid with housing and a further ˆ3 billion for other expenses such as welfare benefits (The Guardian, 2015). These costs are being incurred while Germanys economy is in recovery following a recession and period of stagnation (Kollewe and Wearden, 2014), and critics are arguing that the refugees are a drain on the German economy (Froden, 2015; Scally, 2014). There is little doubt there are ongoing short term costs incurred providing for refuges; in addition to the 2015 refugee spending, the government has committed to provide an additional ˆ4 billion in 2016, allocating regional states ˆ670 per month for each refugee received (Reuters, 2015a). However, with initial estimates indicating only 450,000 expected arrivals (Reuters, 2015b), and economic forecasts indicating Germany could sustain an influx of up to 500,000 a year (Groden, 2015), the question becomes whether the support of the refugees is economically sustainable. In this context sustainability refers to the ability of the German government to continue with the current polices at the same level.

Short Term Sustainability

There are significant short term economic costs; in addition to the ˆ670 per refugee per month supplied by the Federal Government for 2016 there are the addition local costs (Reuters, 2015a). The refugees arrive with little or no personal possessions and many may need medical attention after a long and arduous journey, as well as accommodation (DW, 2015). The German municipalities receiving the refugees already faced a housing deficit; a recent report indicated at least 400,000 houses needed to be built each year (EurActiv, 2015). The increase in refugee arrivals exacerbates the existing deficit (EurActiv, 2015). Therefore, a significant short term cost is associated with the provision of emergency housing needs (Wagstyl, 2015). There are also welfare payments, education, and the costs of processing claims. A recent assessment has indicated the total cost for municipalities was approximately ˆ12,000 – ˆ13,000 per refugee per annum, including the direct and indirect costs such as housing, healthcare, and administration (CW, 2015). This appears to be a significant drain on the short term resources, and intervention of the Federal government with further aid indicates that the costs are not sustainable at municipal level (Reuters, 2015a).

The concept of the short term sustainability may also be impacted by public opinion, as the money provided comes from the public purse. In 2012 a survey of German nationals indicated that two thirds believe that migrants were a strain on the economy (Scally, 2014). This is often accompanied by local residents’ fears that migrants will take jobs from locals, driving down wages, as well as increased pressure on the public purse due to lower taxes, and increased demand for welfare payments to supplement low wages (Kerr and Kerr, 2013; Migration and Integration Research Department, (MIRD), 2005). If these perceptions are correct, then it would appear the current German policy towards refugees is unsustainable. However, the perceptions are not necessarily accurate. Therefore, it is necessary to look at the longer term economic impact of the refugees on Germany.

Long Term Sustainability

There is little disagreement that the refugees will cause short-term costs. However, while fears regarding the long-term cost of refugees and migrants were highlighted in past research, with the perceptions of an ongoing net cost, general research appears to indicate immigrants, including settled refugees, frequently make positive net contribution towards the economies in which they reside (Kerr and Kerr, 2013; Brucker and Jahn, 2011; MIRD, 2005).

The association with the short term situation of refugees, arriving with little, reliant on the goodwill of the state, is frequently assumed to continue (Jacobsen, 2005). However, after an initial settlement period, research indicates refugees are often positive contributors, finding long-term jobs and making net contributions towards the welfare state (Bonin, 2014; Jacobsen, 2005). In Germany, there are some additional long-term issues to consider. The existing German population is shrinking; Germany has one of the world’s lowest birth rates (Groden, 2015; Giugliano, 2015; Fitzenberger, Kohn, and Qingwei, 2011). This demographic pattern is leading to a disproportionate distribution of the population, with current official estimates indicating a shortage of younger workers to sustain the economy as older workers retire (Groden, 2015). Furthermore, the issue is not only a shortage of workers, but the crisis facing the budget and the state pension system. For example, it is forecast by 2060 there will only be two active workers to every one retiree (Groden, 2015). As the German pension system pays current pension claims out of current taxation, this exponentially increases the taxation burden on future generations (Evans, 2013). Therefore, the current demographic profile of Germany indicates that an influx of new young labour may prove significant in resolving an existing demographic imbalance in the current population (Groden, 2015).

The issue is not only the influx of the younger labour, but the type of labour entering the market; different workers may generate different levels of economic value based on their skills (Jacobsen, 2005). Where refugees arriving have few skills, they have few job opportunities, often entering into low paid jobs, generating lower levels of tax (Kerr and Kerr, 2013; Jacobsen, 2005). This scenario leads to concerns regarding job loses for nationals, low wages, and competition for low paying jobs resulted in declining wages (Papastergiadis, 2013; Jacobsen, 2005). Displacement of existing workers and lower wages may result in negative economic impacts, reducing aggregate income and the tax receipts. However, while this may be a problem with reference to some refugees, it does not necessarily apply to all, as many refugees may have economically valuable knowledge and skills, from engineers and technicians through to drivers, builders, and service professionals (Papastergiadis, 2013). In past research profiling Syrian refugees, it was found a significant level have a wide range of skills and experience, with approximately 46% classified as semiskilled, and 12% as skilled (ILO, 2013). From this profile, there is a great potential for many Syrian refugees to make significant long-term contributions towards, but there are some significant unknown variables, the potential value may be influenced by the skill levels of the refugees (Bonin, 2014).

In recent research undertaken by the Centre for European Economic Research for The Bertelsmann Foundation projections were made regarding the existing and potential impact of immigration on the German economy, bringing all these factors together, including the existing low birth rate, and consideration of the labour shortage and skills (Bonin, 2014). It was found that in 2012, the 6.6 million residents in Germany with foreign citizenship made a net contribution of ˆ147.9 billion surplus in taxes, after accounting for welfare transfers (Bonin, 2014). It was noted this surplus was created despite a substantially weaker position of the foreign nationals in the labour market, when compared to German nationals (Bonin, 2014), an assumption which may be directly comparable to the current Syrian refugee crisis. Importantly, when assessing the long-term sustainability, the study found Germany needed immigration. Without any further immigration budget deficits would rise significantly to a level equating approximately 146.6% of the GDP by 2060 (Bonin, 2014). This would equate to a requirement for additional lump-sum contributions of approximately ˆ1,082 per employee per year (Bonin, 2014). However, this deficit decreases with the presence of migrants (Bonin, 2014). It was estimated that if there were 200,000 immigrants per annum, where 20% of which had no skills, 50% medium skills, 30% high skills, rather than a deficit, the existing population would benefit by approximately ˆ406 per annum (Bonin, 2014). In addition, it was noted that despite these calculations, an annual net immigration of 200,000 people would not be enough to reduce the existing problems associated given the current population patterns and demographic changes (Bonin, 2014).

Therefore, it appears that not only is there the potential for the long-term policy for the Syrian refugees to be sustainable, but it would help to resolve an existing German problem (Groden, 2015; Bonin, 2014). Furthermore, when considering the long-term implications, it is not only the first migrant generation that should be considered, but the subsequent generations, where children gain a German education, skills, and themselves contribute towards the German economy, often gaining increased levels of skills compared to the previous generation, and gaining higher paying jobs (Papastergiadis, 2013). However, while it appears there may be some benefits, a greater insight to the outcomes and sustainability may be considered through an examination of previous experiences, looking at scenarios where Germany has already faced large influxes of refugees and migrants.

Past Experiences

Germany has a long history and culture of welcoming migrants and refugees. Drawing on past experiences may help to indicate the potential future outcomes.

An influx of migrants was seen following the collapse of the Berlin Wall. In 1990, a total of 397,000 people entered into Germany, 37% from the former Soviet Union, 34%, and 28% from Romania (Glitz, 2012). Notably, in the context of the Syrian refugees, all of these countries were relatively low income, with a generally lower skill profile (Glitz, 2012). Within a period of fifteen years following the fall of the Berlin wall, more than 2.8 million people had migrated to Germany (Glitz, 2012). These migrants were not refugees, but individuals wanting to live in Germany, often as a result of German heritage (Glitz, 2012). The strategy of the German government was similar to the current approach; with the migrants allocated across different regions (Glitz, 2012). In the short term, one of the fears regarding a greater prevalence to low skill work was observed, but it was also found that over time the level of skills of the migrant population increased, as in 1996 28.3% of the immigrant group were working in low skill occupations, but this decrease to 26.1% in 2001, with a corresponding increase in the semiskilled group, from 29% in 1996, to 31.5% in 2001 (Glitz, 2012).

A significant concern has been the impact on German nationals’ jobs. Increased participants in the workplace, resulting in increased competition for jobs is likely to result in a degree of displacement. However, displacement was not as heavy as may have been expected; for every ten jobs taken by immigrants, only 3.1 jobs for local German residents were displaced (Glitz, 2012). This displacement rate of 0.31 to 1, corresponds with previous research, when Campos-Vazquez (2008) found a displacement ratio of 0.3. Therefore, there is a net increase in jobs with job creation.

While there are jobs created, there was little evidence that the increase in the labour market resulted in any negative wage impacts, a finding which may have been influenced by the practice in German where wages are often determined through collective agreements (Glitz, 2012). However, Fitzenberger et al. (2011) did find a higher potential level of vulnerability to low wages for female workers in the non-unionised sectors. Likewise, small declines were found in the short term in the unskilled, non-unionised, labour market (De New and Zimmerman, 1994). However, while there were some wage decreases, the research of D’Amuri, Ottaviano, and Peri (2010) highlighted the fact that the wage decreases impacted primarily on the migrants, with little impact on native workers. Brucker and Jahn (2011), sought to create a general equilibrium model for integration across the entire economy, concluding that an increase of 1% in the labour force immigration would result in a wage decrease of 0.1%, research findings that were also aligned with international studies from areas such as United States and United Kingdom.

Overall, it has been concluded that this period of migration was beneficial. The MRID (2005) found that as a direct result of immigration in Germany, between 1988 and 2003, 85,000 new jobs were created, GDP was increased by 1.3%, and the public budget benefited from net contributions of between 25 million 35 million Deutschmarks per year.

Conclusion

The refugee crisis for Germany is creating short term costs, but may also create long-term benefits, with the potential for the refugees to become significant contributors to the economic well-being of Germany, increasing demand for goods and services, creating new jobs, as well as generating new tax revenues. This is particularly important for Germany, where there is an existing deficit due to the low birth rate, and recognise the need for immigration. Therefore, it may be argued that the current influx is beneficial, and that it is sustainable as current short-term costs may be seen as investment for the German future, to support not only self-sufficiency within the migrants, but the German economy as a whole.

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This paper discusses the extent to which international migration is likely to promote economic development. International migration may be both outward and inward. The loss of nationals is sometimes referred to as the ‘brain drain’ and suggests the loss of younger, talented professionals who will not be contributing to domestic development, and who, in addition, have taken money out of the developing economy through investment in their education and training. These individuals may send remittances back to their home country, which may provide more income (and foreign currency) than lower paid domestic employment or unemployment, and they may also learn skills that they bring back to their country of origin. Generally, however, ‘brain drain’ is thought to be detrimental to the home economy. Developing economies may experience a temporary inflow of employees of multi-national corporations (MNCs) and workers with aid organizations, which will raise productivity by introducing skills and knowledge to the benefit of the host economy. The outcomes of international migration are presented as viewed from the standpoint of a developed country.

International migration is an integral part of income growth for all countries, and is an important part of migration in many less developed countries, with the numbers of people involved in international migration moving from around 80 million in 1965, to upwards of 185 million in 2005 (Taylor, 2006). As international migration is now widely understood to have the potential to contribute to development, most governments and policymakers are looking for ways through which its benefits can be maximized. Migration is shaped by both economic development and economic underdevelopment, with migration, in turn, shaping economic development. For less developed countries, this interdependence is of interest, as policies could be developed to enhance the potential for migration to contribute to economic development i.e., to use migration as a development tool, by, for example, reducing the costs of remittance transactions or by leveraging remittances so that more of the remittances can be used for improving welfare and stimulating investment in migration-source areas (Taylor, 2006).

This use of remittances as a development tool is of particular importance, as remittances (i.e., the transnational flow of money earned by migrants abroad) are a major global economic resource, with the value of remittances having doubled during the 1990s to well over $105 billion annually , which is twice the total level of international aid (Vertovec, 2007). Nowadays, with the realization that remittances are a major global economic resource, policymakers have come to realize that transnational ties condition migration, and so migrant transnationalism has been a subject of much research interest, with a recognition that circular migration (i.e., the movement of migrants to-and-fro between their homelands and their foreign places of work) could be a win-win situation for both sending and receiving countries, with receiving countries being able to deal with labour shortages, by using immigrant labour, and sending countries guaranteeing remittances to help with economic development (Vertovec, 2007).

The United Nations (2006) recognizes that the understanding of international migration and its connection to economic development might be best understood in terms of circular migration, stating, “the old paradigm of permanent migrant settlement is progressively giving way to temporary and circular migration”, with obvious potential for development in the sending and receiving countries that this type of migration offers, with the International Organisation for Migration (IOM) suggesting that circular migration is a development opportunity for those developing countries which send migrants, and that, as such, as part of a program for development, migrant receiving countries should allow repeat, temporary migrations and should also give incentives to migrants, such as allowing them to return to the same job (Vertovec, 2007).

A case study from Morocco illustrates this idea. Available evidence from Morocco shows that migration and remittances have improved living conditions and income levels in migrant-sending areas, which has transformed these areas in to prosperous areas that now attract internal ‘reverse’ migrants (de Haas, 2007). However, the idea of remittances as a panacea for development has not played out in Morocco, as there are several structural constraints to the development potential of these remittances, namely that the impacts of migration change with time and depend on the socio-ethnic origin of the migrants, some of which use the remittances to retreat from, rather than to invest in, economic activities at a local level, such that development in migrant-sending regions seems to be, at least in the Moroccan case, a pre-requisite for return to an area, and investment in that area, rather than a reason for migrating in the first place (de Haas, 2007).

Thus, international migration cannot be seen as a panacea for development, especially as the link between international, and internal, migration is not yet well understood : for example, whilst it is expected that stimulating remittances and promoting temporary and circular migration will enhance home country development, it is also recognised that economic – and human – development increases peoples capabilities, and their aspirations, and that, as such, circular migration can increase, rather than decrease, migration, at least in the short term, with remittances being complementary to migration in the long term (de Haas, 2006), especially as demand for both skilled and unskilled migrants is expected to be constant.

There are, therefore, no short-cut solutions to migration, and, as such, sustained immigration to developed countries, from less developed countries, seems likely. From the developed countries point of view, this is often welcome, as unskilled labour is necessary, hence the flow of such migrants, and because there is a large amount of brain drain that occurs in these countries, and thus a concomitant need for skilled migrants , leading to the suggestion that selective immigration policies should be put in place in order to attract the highly qualified workers that are needed in innovative industries (Straubhaar and Zimmerman, 1993), especially as the amount of immigrants employed in export-oriented, research-intensive is generally weak across the developed world (Zimmerman, 1996).

Certain economic models have led to the suggestion that migration leads to an overall decrease in wages, and thus that migration leads not to economic development, in the host developed country, but rather to economic downturn. The new economic geography (see Fujita, Krugman and Venables, 1999) looks at the relative performance of regions in the presence of imperfect competition (i.e., scale economies and costs to trade and transport), and by incorporating these models in to classical models, such as the labour-flow approach, has shown that there is no consistent evidence that immigration causes a decline in wages and increasing unemployment in the receiving country, especially as unskilled labour by immigrant workers can provide complements to home labour, moderating unemployment problems, often independently of trade union wage flexibility conditions (Bauer and Zimmerman, 1997b). Thus, it is currently hypothesized that international migration, to developed host countries, is a beneficial process that can provide necessary labour to cover labour shortages.

Looking at international migration through the neo-classical/labour-flow approach, under which migration is viewed from the perspective of labour market disequilibrium, from a demand perspective, small firms are proliferating in developed countries, due to the increase in entrepreneurial activity, and, as such, there is an increasing demand for skilled workers to fill sub-contracting arrangements, for example, although issues of citizenship can complicate the ability of immigrants to obtain, and to keep, such positions. Looking at migration from the perspective of human capital modeling, however, under which individuals calculate their present discounted value of expected returns in every potential location (see Sjaastad, 1962), the net gains to a migrant are the increase in salary minus the costs of migration, with the ultimate decision to migrate being based on this calculation and individual characteristics, with younger, single, individuals more likely to migrate than older individuals. Decisions to migrate are thus based on individual characteristics, and skills, and on the prevailing economic forces, both in the sending and receiving countries, aswell as there being a strong evidence of networks of migration, as migrants follow other migrants, for potential support networks, for example, which leads to self-perpetuation of migration as migration becomes easier for subsequent migrants, leading to a higher net return to mobility and an increasing probability of migration (Bauer and Zimmerman, 1997a).

Thus, international migration is a many-faceted process, affecting both receiving and sending countries in ways that are not yet fully understood. What is understood is that, in some way, the gains from international migration can be used as a development tool for benefiting the less developed sending countries economies, in terms of the remittances that are sent home and the positive ways in which these remittances can be put to use by the families of the migrants still at home. This, in turn, can lead to local economic upturns, which can cause internal migration to these areas, which, in turn, can lead to less international migration from these areas. The actual effects of remittances on internal migration are complicated, and have been little studied (although see de Haas, 2007).

The concrete effects of international migration on the receiving countries depends on the economic situation of the receiving country and the type of labour that is being offered i.e., skilled or unskilled, and, in some respects on the type of model that is used to describe the situation. In some cases, migration of unskilled workers is seen as beneficial, by causing an overall increase in wages and by decreasing unemployment. In addition, the replacement of skilled workers who have left the country by skilled migrant workers can offer direct and indirect economic benefits: a concrete example of this would be the NHS setting in the UK, in which a large percentage of nurses and doctors are now skilled migrant workers, who, it is argued, keep the NHS running and therefore keep the workforce of the UK in work, and at work. Thus, the effects of international migration on the receiving country are many-faceted, depending on the economic situation of the country, the skills possessed by the presenting immigrants, and to a great extent on the policies regarding citizenship and immigration that are present in the receiving country.

Thus, on the issue of international migration and economic development, the only statements that can be made with certainty are that remittances are a huge global economic resource and that immigration is here to stay, as individual citizens of all types of countries (developed or less developed) assess their personal situations and decide, for themselves, that migration to a different country offers them, and their families, better economic prospects.

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Introduction

Despite widespread publication of a positive economic impact resulting from the Rugby World Cup in 2015, issues such as overspending, forecasting accuracy, and the focus of the reporting itself, suggests there are also factors which may materially reduce the overall impact. Because of this, it is possible the widely publicised outlook for this event is overly optimistic. This report will critically analyse the direct, indirect and induced economic impact of the Rugby World Cup 2015 for England. Beginning with a summary of the economic impact, issues will then be examined with reference to the stated impacts, relevant literature, and comparable events around the world such as previous Rugby World Cups. The analysis concludes that the economic impact of the 2015 Rugby World Cup, while sizeable, may not be as significant as predicted.

Summary of Economic Impacts

A report by Ernst & Young forecasts a number of economic benefits to the 2015 Rugby World Cup, including over $2 million in economic output, and a direct boost to GDP of $463 million (Arnold and Grice, 2015; summarised in Table 1). Media promoting these benefits is widespread, with the Ernst & Young report often cited to describe and support the positive impacts of the 2015 Rugby World Cup. The many media examples include Bergson (2015), Menary (2015), and Wilson (2015). Due to the credibility of the financial services firm Ernst & Young (Aubin, 2012), as well as the wide-spread publication of these results, the economic impact by Arnold and Grice (2015) will be used as the basis for this analysis, as summarised in Table 1.

Contribution TypeImpact CategoryImpact SourceAmount (millions)
OutputDirect

Visitor Spend

Ticket revenue (international)

Infrastructure investment

Fanzone spend

Stadia spend

$869

$68

$85

$5

$13

Indirect and induced $1,165
GDPDirect

Visitor spend

Ticket revenue (international)

Infrastructure contribution

Fanzone spend

Stadia contribution

$391

$29

$35

$2

$6

Indirect and induced $518

Table 1. Summarised from Arnold and Grice (2015, pp18-20)

For the purpose of this analysis, direct impact is considered to be initial spending stimulus arising from the event, including infrastructure expenditure and ticket revenue. Indirect economic impacts result from transactions that occur as a result of the initial spending, such as additional tourism expenditure in other areas. Induced impacts are the result of increased consumer spending due to higher income, such as greater support for sports and health overall. These definitions are outlined by Saayman and Saayman (2012, p223) and are consistent with the examples provided in the report by Arnold and Grice (2015).

Support and improvements for the Forecasted Economic Impact
Financial Stimulus

The publicity of a major sporting event is said to improve the local brand overall, resulting in additional foreign investment, including business and tourism. While arguably temporary, this publicity can stimulate activity during a time of economic slowdown, which in turn creates indirect economic impacts such as increased demand for manufacturing, and induced effects such as higher overall employment, in particular in the hospitality industry (Arnold and Grice, 2015; Statistics New Zealand, 2012).

While purely financial transactions are not included as part of GDP increases (McConnell et. al, 2010), some GDP growth may occur on the back of a strong financial market, driven by the Rugby World Cup. Increased publicity for the host country, coupled with high consumer excitement and mass sponsorship exposure may explain why share prices tend to improve during mass sporting events.

For example, during the 2013 Wimbledon, the 10 largest listed companies in Scotland experienced a 7.5% increase in share price, while the FTSE100 increased by 5.1% (Thanapathy, 2015). In addition, the first trading week following the announcement of a significant sponsorship agreement saw sponsoring companies in the U.S.A. experience significant share price gains (Harrow and Swatek, 2011). While not mentioned in the report by Arnold and Grice (2015), an induced economic impact to the Rugby World Cup may be increasing investment in additional goods and services, as business confidence increases due to the strong financial market.

The Multiplier Effect and Social Good

An additional contributor to GDP and output is the result of the multiplier effect, that is, the increase in investment bringing about a disproportionate increase in GDP via spending and re-spending (Saayman and Saayman, 2012; McConnell et. al, 2010). The multiplier effect during an event such as the Rugby World Cup is likely to be significant, not only through increased consumer and business spending, but in areas such as an increased interest in sports, which in turn encourages a higher focus on public health overall.

The social benefits of large sporting events are evident in the Comrades Marathon, where induced economic impacts included the benefits of increased income and spending reaching the poor. Saayman and Saayman (2012) note that their findings regarding the social benefits of the Comrades Marathon are consistent with broader literature, which also finds the economic impact of large scale sporting events reaches both rich and poor. Thus the direct impact of increased output and income generated by the Rugby World Cup is likely to increase GDP more than the initial investment, creating indirect and induced impacts via the multiplier effect.

Including both Domestic and International spend

When measuring economic impact, Arnold and Grice (2015) exclude domestic spend on sporting events because, it is argued, this money would remain in the economy regardless, being spent elsewhere if not on the Rugby World Cup. However, domestic spend may also be relevant as this recreational income could easily be spent in a different economy, were it not for this event (Saayman and Saayman, 2012).

Given the proximity of England to European destinations, and the cultural relevance of Soccer in England and Europe (Gibbons, 2014), it is likely that English income would be spent in other countries if the Rugby World Cup was held elsewhere – either to another destination for a holiday, or to the country hosting the World Cup. During the 2011 Rugby World Cup in New Zealand, the second most popular tourist origin was direct from the U.K.; a significant number of additional sports tourists from the U.K. arrived via Australia (Statistics New Zealand, 2011). Thus both domestic and international expenditure on the Rugby World Cup 2015 is significant.

Amending visitor and ticket revenue, and revenue derived from food and beverages, to include domestic consumers may be more accurate than focusing solely on additional international income. New Zealand, for example, note an increase in domestic household spending during the Rugby World Cup 2011, driven primarily by food and beverage, in addition to international spend (Statistics New Zealand, 2011). Similar to the Canadian analysis of Sports Tourism, domestic income may be included on a separate line for clarity and completeness (The Outspan Group Inc, 2009).

While this may serve to increase forecasted output by increasing overall predicted spend, as discussed under ‘Forecasting Ticket Sales’, it is also possible that international spend reduces the economic impact of domestic expenditure in some areas, as the two may net each other out.

Limitations and Challenges to the Forecasted Economic Impact
The tendency to over-estimate

Historically, the economic impacts of sporting events have been overestimated by host countries (Leeds and Von Allmen, 2008; Horrow and Swatek, 2011). For example, the economic impact of the 2002 World Cup fell significantly short of the estimated $31 billion (Leeds and Von Allmen, 2008). While GDP and consumption was affected during the 2011 Rugby World Cup, New Zealand reports that it “did not contribute to the New Zealand economy, as measured in the BoP and national accounts” (Statistics New Zealand, 2011).

The Super Bowl XL publicised an economic impact of $300million on the back of sports tourism exceeding expectations, however figures later released by the Michigan Department of Treasury suggest the actual economic impact was negligible (Horrow and Swatek, 2011). It is thus highly possible that the economic impact for England has been similarly over-estimated.

Economic Impact Intention

As a general rule, economic impact reports measure total, as opposed to net, activity or income (Saayman and Saayman, 2012), and for this reason may appear overly positive compared to more balanced analyses, such as cost-benefit, where expenditure as well as income is considered.

While economic impact is sometimes defined as net benefit (Crompton, 2006 in Saayman and Saayman, 2012), the more widely accepted definition is “monetary payments as they move through a regional economy” for the purpose of measuring the impact of an event as it relates to that economy (Tyrrrell and Johnston, 2006, p3).

While omitting additional costs is technically correct, it can seem misleading in journal articles written for the general public, who may be unaware of these definitions. The article by Menary (2015), for example, presents an unrealistically optimistic view of the financial viability of the Rugby World Cup, as the public is only made aware of gains. Direct economic impacts, such as the $68 million in ticket revenue noted in the report by Arnold and Grice (2015) may return a far lower figure once additional costs such as administration have been taken into account. It is possible that GDP and output will increase by the stated amounts, however for a complete picture, more than the standard economic impact should be considered.

Forecasting: Ticket Sales as Incremental Income

It is possible that locals would attend the Rugby World Cup in place of tourists, were it not for the “influx of football fans” (Leeds and Von Allmen, 2008, p233) – a possibility that nets out the impact of international spend on tickets to some degree, since the international income is replacing local income – not adding to it. Further understanding local activity – the propensity to travel and attend local events – is therefore vital in understanding the true economic impact of international spending during the Rugby World Cup in 2015. As noted by Saayman and Saayman (2012, p232): “in order to increase the economic benefit of the event, expanding both these markets might be worthwhile”.

Further, one way Arnold and Grice (2015, p8) forecast ticket revenue and consumer interest is by measuring the historic percentage of seats filled during World Cup Events. While these percentages have hovered around 95% for the past two events, it is not known how many of these tickets were paid for, given away, or scalped. In the 2000 Olympics, for example, questions were raised regarding the distribution of tickets to sponsors and hospitality companies, while in the 2012 Summer Olympics, London began distributing free tickets to fill stadiums during events (Freid et. al., 2013). Predicting public interest is not as simple as measuring seats filled, and it is possible that increased output as a result of tickets sales is overstated.

Timeframe: Impact of one-off vs repetitive events

A number of impact drivers for the 2015 Rugby World Cup are short-term, which may help explain why the estimated benefits, in particular the induced benefits and assumptions regarding the multiplier effect, may be overstated. While regular, local events use existing infrastructure, require lower levels of investment, and have ongoing effects (Higham in Ritchie and Adair, 2004, p135), it is possible that larger events experience more temporary economic impacts, as the related investment is for a unique, rather than an ongoing, event.

In Japan, for example, Saitama currently spends nearly $4 million per year maintaining a stadium built to host the 2002 Rugby World Cup, despite the venue now only drawing around 20,000 spectators for local sporting events (Leeds and Von Allmen, 2008). In the U.S.A., an “abundance of abandoned and crumbling sports places” exist, many less than 20 years old (Horrow and Swatek, 2011, p3). As noted above under ‘The Tendency to Overestimate’, New Zealand experienced increased economic activity during the Rugby World Cup in 2011; however the long term impact was not as significant (Statistics New Zealand, 2011).

When measuring the economic impact in England, Arnold and Grice (2015, p11) refer to an induced economic impact of further investment on the back of “a lasting legacy for the sport”. In addition, infrastructure investment is listed as the second most influential direct economic impact. However, given the results in New Zealand, the U.S.A., Japan and Korea, and the nature of large, relatively infrequent sporting events, it is possible these benefits have been overstated, particularly in the long term.

Conclusion

In conclusion, it is likely the economic impact of the 2015 Rugby World Cup, as outlined by Arnold and Grice (2015), is a good overview. Increased economic activity leads to direct impacts including increased output and GDP driven by higher foreign and corporate investment, such as sports tourism and corporate branding respectively. Indirect impacts include high intermediary activity, including increases in the hospitality industry and spend on food and beverages, while induced benefits are as far reaching as social support driven by higher consumer income and the multiplier effect.

While these impacts are positive, it is believed the magnitude of the results have been exaggerated, due to limitations including the tendency of host countries to overestimate the impact of sporting events, and the temporary effects of short-term events – even those as large as the Rugby World Cup. Further, due to the scope of an economic impact statement, many costs have gone unmentioned, creating a disproportionate impression of gains and optimism.

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This essay discusses the ability of the governments in developing countries to promote and manage economic development. In essence, the essay discusses the fact that the governments of developing economies understand the problems they face and have a set of priorities, and that the heads of government may have personnel educated and trained abroad who are familiar with recent economic thinking, plus the possibility of support from international institutions. However, they may lack the resources to implement policy, elements of the economy may be outside their control, they may have corrupt bureaucracies, may lack competence at different levels of government and may set anti-developmental priorities. In addition, the problems they face in managing their economic development may be the result of external factors beyond their control, and the narrow base of the economy may make them very susceptible to external shocks. In addition, policies once implemented may face conditions, either internal or external, which cause them to fail. In general, the essay considers that East Asian economies supply examples of competent economic management, while sub-Saharan Africa has a record of failed economic management.

Africa has heard calls for democracy for many decades, both from internal and external sources, and due to external and internal factors (Darga, 1997), however, especially in this climate, where nations go to war in the name of fighting for democratization, it is important to realise that governance and democracy are not the same thing. Governance, i.e., governing the people in a responsible manner which leads to equal economic prosperity for all inhabitants, is not the same as democracy, which can be defined, in its simplest terms, as “rule by the people”, and these two ideas have very different practical applications and outcomes, although they are interrelated, and both have emphases which can be political or economical. The World Bank defines governance as “the manner in which power is exercised in the management of a country’s economic and social resources for development” and it is under the terms of this definition that the present essay shall move forwards, even though this definition does not specify that democracy is a pre-requisite for governance.

As can be seen from any analyses of the present state of the economies of these two continents, Africa and East Asia are at very different developmental stages, in terms of social, economic and also political development, perhaps because, in Africa (for example, Zimbabwe), leaders have often failed to deliver on their promises for enhanced economic performance, with changes of regimes also failing to improve economic or social conditions; on the other hand, in East Asia, for example, in Japan, which came very late to industrialisation, under a Western framework, a market system was created which has led to sustained economic success for this economy. Further examples from East Asia, such as Taiwan and Korea show that strong governance, in the formation of rent creating avenues, such as fiscal incentives and protection and promotion, can lead to the formation of an environment that is conducive to private investment, which propels the country to economic success (Darga, 1997). Thus, governance is of fundamental importance to the economic success of a nation, and nations without strong governments cannot promote and manage economic development, at least not in the long-term.

Thus, the need for positive governance is fundamental, in terms of developing architectures which allow future economic prosperity, but it can be seen, across the less developed world, that even if the governments of developing economies understand the problems they face and have a set of priorities for tackling these problems, and even if those heads of government are assisted by personnel who have been educated and trained abroad and who are familiar with recent economic thinking, these governments may well lack the resources to implement policy, elements of their economy may be outside their control, they may have corrupt bureaucracies, they may lack competence at different levels of government and may set anti-developmental priorities. In addition, the problems they face in managing their economic development may be the result of external factors beyond their control, such as payments to impossible external debts, and, as such, the narrow base of the economy may make the country very susceptible to external shocks.

A case in point here to illustrate this is Colombia. Colombia is very rich in natural resources, and indeed the government has just begun the process of privatizing its oil resources, through Ecopetrol, but the country has massive external debts, which cripples its economic structure (Solimano, 2000). In addition, the country is beset by other problems which do not allow progress in economic development: it is in the middle of a civil war, between left-wing guerrillas (the FARC and ELN) and the right-wing paramilitaries, said to have been formed as counter-guerrilla movements by the current President, Alvaro Uribe (Solimano, 2000). On top of this, which does not allow the country to flourish, economically, as many people who are able to work cannot do so due to the fighting in large parts of the country, or due to the fact that working in the illegal drugs industry is more lucrative when you need to feed your family, the country is being coerced in to signing a free-trade (the TLC) agreement with the United States, which, under the guise of ‘free trade’ and ‘trade liberalization’ would basically mark the end of Colombian agricultural production in some sectors, due to the expected influx of massive amounts of highly subsidized goods from the United States (Solimano, 2000).

This situation, however complicated it is by the conflict over drugs, is not unique to Colombia: many less developed countries find themselves run by competent governors but unable to forge ahead economic development due to many adverse external factors which cripple any economic progress they try to make (Smith, 2007). Thus, whilst many in the West can blame the problems of the less developed world on the lack of adequate governance, this simply is not the case on the ground in many of these less developed countries. For some of these countries, Argentina, for example, which just passed through one of the worst economic crises of recent times, due to a miscalculation of its foreign exchange system, crippling levels of external debt, which have yet to be forgiven, mean that interest payments make up the bulk of the country’s expenses, at the expense of urgent social development programs. This leads to further problems for less developed countries: as social programs are ignored and left aside, through lack of funds, the youth become more disillusioned still, making it difficult for them to be educated fully, making it difficult for them to find work, and thus making it easier for them to enter in to crime, posing far greater social problems for the country concerned (Smith, 2007). It has been suggested that this vicious circle can only be broken when the full extent of the contribution of external problems to the problems of less developed countries is acknowledged fully, and acted upon, by, for example, offering debt relief.

Thus, the problems of governance and how these relate to the problems of less developed countries is an agenda to be taken seriously, but not as an agenda in itself, but rather as a means to an end, especially bearing in mind that good governance can only come about when the populace has a certain level of social coherence (Smith, 2007). It is a rather obscure form of negative cultural relativism that assumes that less developed countries cannot ‘manage themselves’ solely because of the problems of government. People in less developed countries, especially those who have been educated abroad, are as capable than people in developed countries, in terms of formulating solutions to the present problems and implementing these solutions. The ability of the governments in developing countries to promote and manage economic development is generally not a function of the personnel involved, although factors like corruption and lack of democracy are, often, present and highly negative, but rather a complex reaction to a range of factors, both internal and external, which usually mean that whatever government is in place in a less developed country cannot fully solve the problems present in that country at any particular time, due to the magnitude of those external and internal problems: the ability to solve those problems, to allow for the promotion and sustenance, of economic development simply is not possible, especially in those countries with no industrial development to speak of (i.e., many African countries) and those countries with other problems (i.e., Colombia or Afghanistan, for example, where civil war, related to drugs, prevents true economic development) (Smith, 2007).

There is no panacea for how to achieve sustained economic development in less developed countries, due to the myriad of inter-related problems facing each and every one of these countries, and the idea that the ability of the governments, alone, is responsible for promoting and managing economic development in less developed countries is naive, to say the least. Developed countries have a responsibility to the less developed countries to offer fair aid to these countries, so that they might be allowed to govern themselves, from a level playing field, towards sustained economic development.

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Discuss ways in which Richard Schechner’s ‘Performance Theory’ may be of use to contemporary practitioners. Illustrate your answer with reference to at least one dance or theatre performance which you have seen ‘live’.

The influence of Richard Schechner (b. 1934) on both theatre production and academic theory has been profound and, in some ways, revolutionary. Schechner has consistently challenged traditional practices and perspectives of theatre, performance and ritual for almost half a century. His principal contention is that drama is not merely a province of the stage, but of everyday life, and is a cross-cultural phenomenon. ‘It is important to develop and articulate theories concerning how performances a regenerated, transmitted, received and evaluated in pursuit of these goals, performance studies is insistently intercultural, inter-generic and inter-disciplinary’. (Schechner, 1995)

As with all academic studies, performance theory is founded on certain key principles, which include such terms as ‘presentation of self’, ‘restored behaviour’ and ‘expressive culture’, and incorporates social drama and ritual. His concept of performance, which contrasts sharply with previous, principally modernist, approaches to the arts, asserts the importance of different ‘systems of transformations’, which vary enormously from culture to culture, and throughout historical periods and movements.

The radical nature of performance theory is demonstrated by its all-encompassing, even holistic, approach to theatre and performance, with popular culture, folklore, and ethnic diversity incorporated into the cross-disciplinary mix. In examining the ways in which the theory can be useful to theatre practitioners, it is important to examine in more detail the main strategies it deploys, including the concept of ‘performativity’.

The word ‘performative’ was originated by J.L Austin, a linguistic philosopher, who coined the term for the first time during lectures at Harvard University in 1955. Expressions such as ‘I take this man to be my lawfully wedded husband’ are an example of an action in itself, rather than simply the description of an action. As Austin put it, ‘to say something is to do something’. (Austin, 1962)

‘Performativity’ as a concept is closely related to postmodernism. The postmodern view does not see the idea of ‘performance’ as intrinsically artistic or theatrical, but as something that pervades the fabric of the social, political and material world. It is an inalienable part of what constitutes power and knowledge. Teaching and lecturing, political speech-making and religious sermonising illustrates this characteristic of performativity.

The postmodern view of things posits a standpoint that culture has become a commodity in itself, rather than a critique of commodity. It is inseparable from the context of post-World War II Western society, where new goods and technology, and corresponding cultural developments, emerged from the rubble of post-war austerity. This shift from modernist to postmodernist thinking in the arts can be located in the 1950s, with movements such as abstract expressionism, modernist poetry and existentialism in literature and philosophy representing a high flowering of the modernist impulse. The postmodern world, originating in the 1960s, represented a blurring of distinction between high art and popular, mass-communicated mediums, formerly derided as ‘low art’.

‘Recognising, analysing, and theorising the convergence and collapse of clearly demarcated realities, hierarchies, and categories is at the heart of postmodernism. Such a convergence or collapse is a profound departure from traditional Western performance theory’. (Schechner, 2002, P. 116)

In the Schechner universe, the previously solid foundation of modernism, with clearly defined borders of reality and representation in performance, has been wrenched away, and many of the assumptions in the western artistic tradition, from Plato and Aristotle on, such as the notion that theatre reflects, imitates or represents reality, in both individual and social life. ‘Representational art of all kinds is based on the assumption that ‘art’ and ‘life’ are not only separate but of different orders of reality. Life is primary, art secondary’. (Schechner, 2002, P.116)

In Performance Studies, Schechner asserts that ‘performing onstage, performing in special social situations (public ceremonies, for example), and performing in everyday life are a continuum’. (Schechner, 2002, P. 143) His contention that each and every one of us is in some sense a ‘performer’ is difficult to dispute. Engaging in ‘real life’ is often indistinguishable from ‘role play’, and in today’s ‘surveillance societies’ of Western culture, with CCTV cameras seemingly everywhere, the scope for performance as an extension of simply being has never been wider. The evident logical development of this is the ubiquitous ‘reality TV’ show, as well as the do-it-yourself webcam and personal websites on the internet, both of which have contributed a new dimension to ‘the style of being’. 2

Pop artist Andy Warhol would surely have embraced the new media’s possibilities for exhibitionism, and reflected wryly on his own pioneering role in this phenomenon. His films of the1960s and ’70s were forerunners of reality TV, and his mantra of ’15 minutes of fame’ has never seemed more applicable.

At first glance, Schechner’s hypotheses appears to fulfil both Warhol’s philosophy and Shakespeare’s oft-quoted ‘All the world’s a stage, and all the men and women merely players’ as an approach to performance. The key concern of the drama ordnance practitioner is to place this into the context of performing a in a way beyond simply ‘being in itself’ to the portrayal of a self-contained ‘thing in itself’- an abstract presentation of a text or idea, for the purposes of entertain mentor education. (E.g. Theatre-in-education)

The actor or ‘player’ is not alone in presenting self-contained performances, with a beginning, middle and end. As Schechner observes, various figures in the public arena adopt strategies of performance and role play, such as politicians, religious leaders, and businessmen and women, conducting presentations at meetings: ‘Paid performers all seeking attention, adulation, re-election, and money’. (Schechner, 2002, P. 146) They all have their own strategies and scenarios to achieve effects, towards a specific goal, and, like the theatre/performing arts practitioner, their performances are predicated on self-consciousness.

‘ Across this very wide spectrum of performing are varying degrees of self-consciousness and consciousness of the others with whom and for whom we play. The more self-conscious a person is the more one constructs behaviour for those watching and/or listening, the more such behaviour is performing.’ (Schechner, 2002, P.146)

The application of role playing in many contexts, from psychotherapy sessions to teacher training exercises, follows similar approaches as drama improvisation classes, albeit with different objectives, but no less in addressing the self-conscious and unconscious impulses which lie at the basis of performance. It reflects the in-built routines, rituals and conventions of everyday life, instilled from birth, and through childhood experience. The Jungian theories of archetypes and the collective unconscious would suggest that the individual’s mind is not a tabularasa (blank page) at the time of birth – the implications of which are potent with creative possibilities for the practitioner/performing artist.

The concept of ‘performing in everyday life’ is a central aspect of performativity, as envisaged by Schechner. ‘Performativity is everywhere – in daily behaviour, in the professions, on the internet and media, in the arts and in the language’. (Schechner, 2002, P. 110) It is a natural progenitor of role play and improvisation. The expression ‘showing off’ is heard frequently throughout childhood, but is equally applicable to adult behaviour. Certain jobs and professions have evolved traditional codes of conduct, some of which have emerged as specific character traits, behaviour patterns and tones of voice. These have in turn been stylised into stereotypical representations: the roles of dignified clergyman, ardent reporter, solemn court judge, et al. They usually adhere to custom, but have evolved into modes of performance.

The implication is that many individuals, going about their ‘everyday business’ are not being themselves all of the time. They are acting out roles, predetermined to the point of being programmed in some cases. ‘Performing in everyday life involves people in a wide range of activities from solo or intimate performances behind closed doors to small group activities to interacting as part of a crowd.’ (Schechner,2002, P. 175)

Schechner observes that the social codes of our daily lives are adapted to greater or lesser degrees by everyone. The unconventional or rebellious resist the rules, but only revolutionaries seek to break them to achieve permanent change – a principal equally applicable to artists. The arts, and particularly the theatre, have always made use of stereotypes and archetypes, often parodying or subverting them. Those practitioners who set out to achieve truthful performances, to ‘get under the skin’ of a character, can identify with these typical representations, as role play exercises reveal, but the underlying personality lies a layer or two deeper.

‘In the theatre the actor and the audience both know that the actor is not who she is playing. But in real life a person is simultaneously performing herself and being herself. The matter is, of course, nicely complicated because in some methods of realistic acting, actors are taught how to use their own selves to construct theatrical roles’. (Schechner, 2002, P. 177)

In approaching the role of , for example, a science teacher, and avoid a one-dimensional portrayal, an actor must discover the character as not simply a teacher, carrying out a teacher’s role, but as an individual when ‘off duty’ during times, as Schechner puts it, when ‘the performance aspect of ordinary behaviour is less obvious, but not absent’. (Schechner, 2002, P. 177) 4

The actor can draw on his/her own experience, be it of a personal kind (i.e. they may have previously been a teacher) or from memories and observations based on an actual person, or persons. (E.g. a teacher who had taught them) Naturally, this approach places more demands on the actor, enabling him/her to enact a performance of a person who is also a science teacher, rather than simply a science teacher with no identity beyond his/her teaching duties.

A-Gender, produced in 2004 by Joey Hately, artistic director of Transaction Theatre Company, was a postmodern theatre piece that adopted many of the elements of new theatre and performance theory very effectively. Ostensibly a presentation of gender politics portrayed as a personal case history, A-Gender presented the issue of transsexualism in a powerfully theatrical manner, deploying methods of performance outside the restrictions of conventional theatre.

The use of the ‘one man (or one woman) show’ format (a prototypical popular cultural form) and the ‘stand up ‘routine, interwoven with visual media (video sequences) and other performance modes, enabled the artist/performer to convey the confusion, pain and anger of person whose gender identity causes them to believe that they have been born in the wrong body, the wrong gender.

A-Gender adopted a modus operandi of style and performativity that placed it squarely in the new theatre approach. Its subject matter determined this, and evident devices to unsettle, or even alienate, the audience were adopted by Hately effectively. Some of these devices were not exclusively of postmodernist origin, having close links to the Theatre of the Absurd and Brechtian strategies of alienation, but the multi-media technique of juxtaposing live theatre with pre-filmed video sequences, was pure new theatre.

In fringe, community, and street theatre performances, the scope for applying Schechner’s performance theory is virtually limitless. The roots of street theatre are varied and eclectic, having both a primitive, ritualistic dimension, with antecedents in ancient and tribal cultures, as well as avant garde origins of performance art at the start of the 20^th century (e.g. surrealism, dada, etc), culminating in the pop art, post-modern dance and ‘Happenings’ of the 1960s, a movement from which Schechner’s early work in the theatre emerged.

Street theatre performances contain some elements derived from Happenings, which Allan Kaprow outlined in The seven qualities of Happenings. (Kaprow, 1966)

There are essential differences. Street theatre is usually played out for the benefit of an audience, albeit one of a generally random nature, some of whom may become participants, but not in the same way as in Happenings – with everyone performing and no audience. One element they do share is the idea of the ‘found space’, which is crucial to ‘environmental theatre’. Kaprow stated, ‘it doesn’t make any difference how large the space is. It’s still a stage’. (Kaprow quoted in Schechner,1977) Schechner elaborated on this principle with his axiom that ‘the theatrical event can take place in a totally transformed space, or found space’. (Schechner, 1977)

Whereas traditional theatre restricts the ‘special place’ to an area (the stage) marked clearly as the space for performance, new theatre creates a space that is ‘organically defined by the action’. As in the Happening, and street theatre, space is transformed by the participants, who discover their own sets and scenery, using their surroundings, the various elements ‘found in the environment of the space, including decor, textures and acoustics.

Outdoor stage performances have adopted this principle, with many touring theatre companies using castle ruins, woodland clearings and riversides to stage Shakespeare’s Hamlet, A Midsummer Night’s Dream and The Merchant of Venice. This use of transformed space is perhaps a more conservative application of Schechner’s theory, as it retains many of the conventions of traditional theatre. The theatrical stage is simply substituted for its outdoor counterpart. Much of street theatre approaches adopt a radical use of space in the environment.

There are innumerable ways in which performance theory and new theatre are a useful alternative to traditional theatre. The application of other (visual) media has already been noted, as in the example of A-Gender. Schechner proposes others:

‘I suggest other tools, other approaches. Mathematical and transactional game analysis, model building, comparisons between theatre and related performance activities – all will prove fruitful.’ (Schechner, 1988, P. 27-28) This demands a high level of intense physical and mental rigour from the practitioner, as Schechner sees theatre as alive, experiential, organic, rather than something that merely replicates or reconstructs reality. His theory offers many practical methods for both student and practitioner to follow, in the form of both things to think about and things to do.

These are inter-disciplinary and encourage an expansionist outlook, which is cross-cultural, as well as making explorative use of the inner life of the performer. This dynamic and multi-faceted approach can be adopted by the full range of performing arts, which the theory so comprehensively reflects. For both actors and directors it creates new space and new possibilities, especially to the experimental and fringe theatre practitioner.

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Bertolt Brecht (1898-1956) was a German poet, playwright and theatre director. This project will look at the development of Brecht’s playwriting over time in response to the socio-political changes in Berlin, by evaluating Brecht’s work in the three periods of different political environments that Brecht was exposed to in Berlin.

These should reveal how historical context and political stance shaped his work. Some reference will be made to the plays mentioned, due to their content and the different times in which they were written. Academic and contemporary responses mentioned in this project were mostly acquired at the Brecht Haus archive in Berlin on 14th February 2008.

During the First World War, Brecht doubted in a school essay whether it was honourable to die for your nation and this feeling was heightened when he had to serve in the war as a medical orderly in 1918 (Rosenhaft, 1994). His first plays were written as the war ended; the working title of one of his first was Spartakus (later published as Drums of the Night), after the organisation of the German revolutionaries Luxemburg and Liebknecht.

Brecht’s radical side is clear in his early plays; he talks about the decay and corruption of the bourgeois society that he felt a part of (Meech, 1994). Yet arguably at this point in time, Brecht was “a bohemian rather than a Marxist” (Schoeps, 1992). The polarisation of the Weimar Republic and the rise of fascism that resulted in stronger political beliefs and works in the late 1920s (Fetscher, 1980). Saint Joan of the Stockyards, an allegory on the workings of the stock exchange, is an example of this (McCullough, 1994).

The Weimar Republic saw the increasing commercialisation of leisure activity with the rise of popular entertainment (cinema, sports, dance, jazz, etc) (Rosenhaft, 1994). The educated, bourgeois audience was being replaced by a broader audience. This cultural democratisation affected the role of the writer (Silberman, 1993). Some traditionalists sought new ways of asserting their elitism whilst others like Brecht began to develop a habit of production that submerged the author’s subjectivity within a collective (Meech, 1994) as seen with the adaptations of Marlowe’s Life of Edward the Second (1924) and Man Equals Man (1926).

The notion of aesthetic activity as production rather than creation, theorised by Brecht in his essay The Threepenny Lawsuit (1932) indicates this shift. Social changes have therefore directly impacted Brecht’s style of writing and theoretical concepts of theatre. Brecht was taught Marxism in the late 1920s twenties by Korsch and Benjamin, both anti-Stalinists (Esslin, 1959). Brecht supported the KPD, a mass party that to him seemed the only force capable of confronting Hitler, unlike the main Trotskyist organisation in Berlin with only 50 members (Windisch & Brandon, 2006).

He would not have had much opportunity to influence events otherwise. Brecht’s turn to Marxism changed his approach to theatre. He rejected the naturalistic style that presented the audience with a perfect illusion of reality. For productions of Drums of the Night, he suggested hanging a banner above the stage saying “Don’t Stare So Romantically!” Ironically, the need for a new form of theatre became obvious to him after his biggest financial success. The Threepenny Opera (1928) illustrated begging as an organised trade, with criminals working hand in glove with the police. But rather than shocking bourgeois audiences, the play was a huge success (Schmidt, 1992).

Audiences loved music, while Brecht’s critique of capitalism did not attract much attention. Brecht was involved in the conflicts at the end of the Weimar Republic. One month after the premiere of The Mother (1932), police ordered that the play could be recited but not played. The production of another play was stopped because Nazis were assaulting the actors (Windisch & Brandon, 2006). Brecht’s vision of a more humane society changed with the rise of fascism (Silberman, 1993).

He usually failed to represent convincingly the alternative order that could confront fascism, as seen in Fear and Misery of the Third Reich (1938), The Business Affairs of Mr. Julius Caesar (1938-39), and the Book of Changes (1935-42). As a Marxist, when the Nazis gained power, Brecht went into exile, staying close to the German border in Denmark and Finland to support the anti-fascist struggle until the war forced him to leave for the USA (1941). Until the end of WWII, Brecht’s plays rarely reached the stage.

Yet the plays written in exile are his most famous today. Brecht expressed opposition to National Socialist and Fascist movements in Galileo, Mother Courage and Her Children, The Good Person of Szechwan, The Resistible Rise of Arturo Ui, and The Caucasian Chalk Circle. Mother Courage, for example, is torn between protecting her children from the war and making a profit out of the Thirty Years War (Leach, 1994). Key themes in the play include war as business, virtue in wartime and morality.

None of those plays put simple answers to the moral questions they raise, and none of them are simple propaganda pieces. Rather, they show how the possibilities of the individual characters are limited by social conditions, and they force the viewer to think about the limits of “common sense” moral judgements (Windisch & Brandon, 2006). Brecht focused on new representation.

On the one hand, the formal reductionism of the parable plays from this period seems to function as a kind of protective shield against the impossible contradictions of reality, but on the other, the shift in subject and technique to more deliberate forms of distancing de-centres the text-audience relation by transferring the utopian imagination into the spectators themselves (Silberman, 1993). The prologue to The Caucasian Chalk Circle (1944) suggests the political and poetic utopia Brecht envisioned in his mature plays.

Brecht’s invitation to return to the GDR, enticed by offer of own theatre and company, shows that although Brecht was not a member of the Communist Party, his allegiances were sincere (Esslin, 1959). The impressive Berliner Ensemble, visited on 15th February 2008, solely for the use of Brecht’s work and directing, and his work still dominates the theatre today (fieldtrip, 2008). He spent his last years defining and reworking his ideas. Although towards the end of his life Brecht wrote few plays, some famous poems have emerged from after the Second World War (Rundell, 1980).

The Solution was Brecht’s commentary on uprising (1953) the GDR; he supported government measures taken to crush the uprising, including the use of Soviet military force, despite his concern for the protesting people as well. His allegiance to the communist regime is portrayed in The Days of the Commune, which is based on the proletariat revolution of the Paris Commune in 1871, which attempted to bring about a revolution through the working class. Brecht is often criticised for returning to the GDR (Fetscher, 1980).

In fact, exile gave Brecht first-hand experience of the ‘freedom’ of the West. He was blacklisted – out of 40 scripts he wrote, one was accepted for filming, and this was cut severely by Hollywood that Brecht withdrew it. Brecht’s commitments were leftist enough to provoke HUAC’s investigation in 1947 and the refusal of visas for travel to West Germany under US control (Kruger, 2004). Brecht also came into conflict with the Stalinist cultural bureaucracy. They forced him to make changes in several productions and even stopped two of them (Esslin, 1959).

Brecht received support for his theatre in East Germany but he expressed private reservations about SED policy, especially after the workers’ uprising on 17 June 1953 challenged the party’s claim to lead a “workers’ and peasants’ state” (Kruger, 2004). Brecht’s relation to the GDR regime remained contradictory. On the one hand, he said it would be better to have a bad socialism than to have none, he also disliked the dictatorship. When the Berlin workers uprising (1953) was repressed, he wrote a letter to the general secretary of the Communist Party in which he called for dialogue (Esslin, 1959).

Only his last sentence backing the government was published. Hi call for dialogue, I believe, had two aims. Firstly, to reinstate peace amongst the campaigning people, as it seems unlikely Brecht would have spoken publicly against the GDR regime, despite his dissatisfaction with the scenario. Secondly, because of his pro-GDR regime status and his status as a GDR icon, his words would be more trusted by both parties.

There is much argument over Brecht’s true thoughts regarding the 1953 uprising. In private, Brecht was more outspoken. In his unpublished poem The Solution, he ironically asks, “If the people had forfeited the confidence of the government, would it not be easier to dissolve the people and elect another?”

Brecht intended his theatre to be a critique of society, believing that theatre’s function was to educate, and to achieve this he created his epic theatre theory. “A play should not cause the spectator to emotionally identify with the action before him or her, but should instead provoke rational self-reflection and a critical view of the actions on the stage”. Brecht wanted audiences to use critical perspective to identify social ills and therefore effect change, having described his plays as a collective political meeting in which the audience is to participate actively (Brooker, 1994).

For this purpose, Brecht employed the use of techniques that remind spectators the play is a representation of reality and not reality itself called the alienation effect (Esslin, 1959). To achieve this, he ripped up the traditional five act structure of static drama. Inspired by Russian revolutionary theatre, he looked for ways to interrupt the main plot (Windisch & Brandon, 2006). For example, he used comments on the action directed to the audience, songs in between and projections of text with extra information.

To undermine the natural curiosity of the audience, he used an announcer to summarise the scene before it was shown. This allowed him to show that the course of events is not simply given, and therefore demands choices and active intervention. The political side of his plays became harder to ignore. A good example is The Mother, which is set during the Russian 1905 revolution, showing a mother who wants to free her Bolshevik son from jail – and how by doing so she gradually becomes convinced of Communism herself (Windisch & Brandon, 2006).

Brecht chose historical settings as another means of creating a distance between the viewer and the play. In Galileo Galilei, the struggle between the scientist and the Catholic Church served as the scene for a debate on the tensions between individual beliefs and the way our rulers try to control our thoughts (Weber, 1980).

Brecht’s has attracted immense controversy since his early theatrical successes in the 1920s, having been compared to Shakespeare (Laughton); Brecht is considered one of the great playwrights and directors of the 20th century. Over 50 years after his death, his plays – along with those of Chekhov – are the most frequently performed works (Fuegi, 1995). As Brook has emphasised: “Brecht is the key figure of our time, and all theatre work today at some point starts or returns to his statements and achievement”. But much praise for his ability and work is usually held up because of his Marxist views.

This political allegiance has annoyed some critics like Willet, who has chosen to look upon it as something unfortunate but incidental to his achievements. Bentley also expresses his disappointment: Brecht “would be a better writer if he gave up Marxism”. Others oppose his work on the grounds that it is propagandistic and lacks the subjective sentiments accessible only through a more personal theatre of individual experience. Inevitably, commentators are forced to approach Brecht by addressing not only his plays but also his writings on theatre as well as the way he directed productions.

Mostly they decide to deal with his technical expertise in isolation from his politics (Fuegi, 1995). Brecht is seen as a modern dramatist and poet worthy of careful study, and of no more particular interest except that he also happened to be political (Breuer 1992, Weber 1992). This purposeful attempt to neglect the political Brecht is frustrating because of its success in obscuring the relevance of his achievements, despite his surviving attempts by fascism to destroy its revolutionary content and undermine its significance.

Most commentators have failed to understand the rationale of the method involved. But Brecht was quite clear about what he wanted and how he proposed to get it. When he referred to Marx as “the only audience for my plays that I had come across”, Brecht was describing a primary focus that is lost on his many critics. He did not mean that only Marxists could understand his plays. Rather it was Marxists alone who could understand what he was trying to do. Brecht comprehended how controlling cultural production had become under capitalism. His response was to do something about it by creating a theatre that sought to redefine the relationship between audience and performance (Trommler, 1980).

Yet the historical illusions of modernism have become a problem of positioning oneself subjectively in a post-modern age when evaluating the subject of this study. Brecht was a communist without a party card. He could write only “on commission from the party,” their precarious status did not hinder him from criticising the policies of the party as well as praising its goals (Volker, 1987). His critiques were never simply blunt attacks, but were handled lightly with wit and satire.

However, the party officials did not appreciate his critical irony, but preferred instead the sympathetic tracts of bourgeois authors. Brecht’s communist allegiances have also led to numerous attempts by the mainstream art world to degrade his legacy – either by claiming that his plays are worthless Stalinist propaganda, or by claiming that they are worthwhile despite the politics (Windisch & Brandon, 2006).

Yet Brecht’s popularity has depended on misreading since 1928, when “The Ballad of Mack the Knife” song performed as part of The Threepenny Opera in Berlin became one of the most-recorded standards in the history of pop music. Brecht (and his composer Weill) might have wanted an art that hastens the overthrow of capitalism; instead they got covers from Darin and Sinatra (Tonkin, 2006).

Depoliticising Brecht, however, is a difficult job – he wrote plays with titles such as The Seven Deadly Sins of the Petty Bourgeoisie and Days of the Commune, and poems like The Song of the Class Enemy (Windisch & Brandon, 2006). Brecht’s period in exile was a fight against material want, persecution, betrayal, and political disappointment (Volker, 1987). The last years of his life were spent in the German Democratic Republic (GDR), because he wanted “another Germany” based on the principles of peace and socialism.

There, he was able to preserve his independence and artistic integrity. He welcomed the politicisation of art while vigorously defending his work against any state ideology (Volker, 1987). His theatre, the Berliner Ensemble, was opposed to the official GDR doctrine on art (Socialist Realism) and to the German Stanislavski tradition (naturalism) (Etkind, 1980). On principle, he rejected the use of art and theatre to conform to state requirements of taste.

Brecht’s main contribution, then, is to be found in the innovative ways he devised for examining history and making the processes of history visible as changeable ones (Trommler, 1980). Brecht’s impact is not to be found in any recipes he may have provided but rather in the possibility of his writings to enable our own creativity in thinking about historical truths and processes (Silberman, 1993).

This work was produced by one of our professional writers as a learning aid to help you with your studies

The nature of musical communication and the framework of thought, feeling and behaviour within which this communication takes place.

Musical communication is commonly associated with place or location; for instance a piece of music will often bring about a flood of memories recalling the place the piece was heard, perhaps the people in whose company the time listening to the piece was spent and certainly the mood of the piece. A piano recital is the cultural event we will focus on, using specific examples of piano recitals held around the world, drawing on reports about those recitals from performers and audience alike. The framework of thought, feeling and behaviour which takes place at a piano recital is different from any other cultural environment, primarily because it the most special and intimate of instruments, one which connects the player with the listener in intimate and unmediated communication, in a pure communicative act. The piano is an instrument which evokes extraordinary passion, requires considerable dedication and patience, together with skill and flair to bring about a perfect percussive performance.

There are a number of key players in a piano recital, not least the composer who communicates his art to the pianist and onwards, through the instrument, to an audience. The composer is the translator of musical ideas into a symbolic form, usually the twelve semi-tone scale on a musical stave. The standard Western musical notation is a treble clef and a bass clef. Each note can be between lines or on a line and the piece is given a time signature denoting the rhythm of the music. Other symbols signify changes in tone, pace, volume and feeling. The behaviour of the player is also communicated from the composer to the pianist using symbols, including Italianate adjectives, although with more modern piano pieces the Italianate is often replaced with words from the composers’ usual vocabulary. Examples include piano, meaning quiet and forte, meaning loud.

The nature of this communication is symbolic, or in the words of Roland Barthes, the literary critic, semiotic Barthes (Barthes 1977) views semiology as underlying all communication, an ’empire of the signs’ that extends over film and photography, music criticism and reading and writing as historically situated activities. He identifies two natures of music:

There are two musics (at least so I have always thought): the music one listens to, the music one plays. These two musics are totally different arts, each with its own history, its own sociology, its own aesthetics, its own erotic; the same composer can be minor if you listen to him, tremendous if you play him (even badly) – such as Schumann. (Barthes 1977, p. 149)

We will employ this distinction between passive and active to our discussion of the piano recital, where passive music is the music we listen to and active music is the music we play. Schumann is the composer we will focus on when discussing the cultural event that is the piano recital.

Robert Schumann was a significant figure in German musical romanticism. (Jensen 2001) Schumann specialised in writing lyrical piano music and songs, but also composed notable orchestral choral and chamber works. He literary output was motivated by his love of literature which informed his musical criticism and composition. He was forced to abandon his career as a pianist after critically damaging, with a strengthening device, a finger on his right hand. Schumann wrote piano works that were a linking of short sections, such as Kreisleriana and Carnaval. Linked together, these sections paid extreme attention to detail, forming an interlocking composition. A talented music journalist, he was editor on one of the most significant journals of his day, Die Neue Zeitschrift fur Musik. In 1840 he wrote over a hundred songs, a year that became known as his year of song, including the song cycles Dichterliebe and Liederkreise. Schumann suffered from depression and mental instability as a result of syphilis and died in an asylum.

Schumann believed that musical communication was under attack from virtuoso players who had little thought or feeling for music. His mission statement was given in his journal Die Neue Zeitschrift fur Musik, which, perhaps in spite of its name suggesting new music, promoted music proven by history – music which had withstood the test of time. His era saw the rise of piano virtuosity from players who wanted to become celebrities in their own right without recognition of whose music it was they played, going so far as to compose pieces without thought about the framework of the musical communication, preferring technical complexities over clearly communicated music. Their ignorance of the thought, feeling and behaviour of composers, said Schumann, was philistine. He thus founded the Davids bundler, or League of David, named after the biblical King David, who composed music, wrote poetry and slew the Philistines.

Barthes speaks of piano recitals as an active form of music that has declined in practice to almost extinction where the piano has been forsaken for the guitar recital:

The music one plays has disappeared; initially the province of the idle (aristocratic) class, it lapsed into an insipid social rite with the coming of the democracy of the bourgeoisie (the piano, the young lady, the drawing room, the nocturne) and then faded out altogether (who plays the piano today?). To find practical music in the West, one has now to look to another public, another repertoire, another instrument (the young generation, vocal music, the guitar). (Barthes1977, p. 149)

Barthes’ interest in the piano recital as a cultural event for a particular social grouping, the bourgeoisie, is part of his semiotic history, analysable through the distinction between active and passive:

Two roles appeared in succession, first that of the performer, the interpreter to whom the bourgeois public (though still able itself to play a little – the whole history of the piano) delegated its playing, then that of the (passive) amateur, who listens to music without being able to play (the gramophone takes the place of the piano). (Barthes 1977, p. 163)

We muster cognise that Barthes is writing from a French point of view and that his critique of the piano recital as bourgeois is not necessarily relevant to our discussion of the piano recital as an event instructive for an analysis of the nature of musical communication, although it does give some behavioural insights of the social roles of the performer and the audience at a cultural event, despite its over-politicisation of the framework within communication occurs. There is something more peculiar about Barthes’ role in the study of culture, namely that whenever a term is difficult to define, translators forget their native English tongue, as in this example, again discussing the piano:

The melody succumbed to its salon image, this being a little the ridiculous form of its class origin. Mass ‘good’ music (records, radio) has left it behind, preferring either the more pathetic orchestra (success of Mahler) or less bourgeois instruments than the piano (harpsichord, trumpet). (Barthes 1977, p. 187)

This is not biased criticism: the death of the French language is acknowledged by Barthes himself, therefore it seems right for us to acknowledge his language together with his semiotics as being nothing more than an exercise in textual ambiguity and irony. (Barthes 1977, pp. 187 – 188) The melody is not significant for the history of the piano recital and is perhaps more relevant to another form of musical communication, such as the voice, however. >From Barthes we do have one definable framework within which musical communication takes place: the political. What Barthes shows is that the nature of music is to some degree governed by the environment in which it takes place, namely the background and political situations of the participants, who in the case of the piano recital are, according to Barthes, middle class. As a descriptive fact, the piano player and the passive audience will behave according to certain middle class conventions or thought or feeling, though what such middle class behaviour might be is not discussed by Barthes, who confines himself to semiological vagueness.

How is culture to be evaluated ? According to its origin? Bourgeois. Its finality? Bourgeois again. According to dialectics? Although bourgeois, this does contain progressive elements; every one of them bourgeoisified. There are some who finally prefer to give up the problem, to dismiss all ‘culture.’ (Barthes1977, p. 211).

If piano recitals are to be dismissed as ‘culture’, then we would be obliged to reject Barthesian discourse as overly polemicized, concerned overly with the political and insufficiently with the communicative, because the music of the piano is not bourgeois. Far from it, as Schumann argued, the piano is an instrument through which thought, feeling and behaviour can be transmitted; and although Schumann was not completely apolitical, his compositions must be musical first and foremost.

Musical events such as a piano recital have a specific format. Firstly the audience is seated in front of stage upon which there is a piano. The stage marks the boundary between the active musician and the listeners, who with their programmes know the pieces that will be played, before the recital starts. Secondly, the pieces (whether they are by Schumann or another composer) are performed. Finally, the passive element joins the active element during applause, concluding the event.

Musical communication can take the form of quoting ideas from previous musical compositions in new ones. Schumann borrowed from Beethoven, Clara Wieck, and other composers. For the cultural event that is the piano recital, this is the nature of musical communication, because it is history and allows us to place Schumann, or other composers of piano music, in historical context. Continuing with the example of Robert Schumann, we can say that Schumann borrowed from Beethoven because he came afterwards. Schumann built upon the musical framework left behind by Beethoven in the piano recitals Schumann attended, so much so that he could incorporate Beethovenian thoughts, feelings and behaviour into his own compositions.

Amore prosaic framework of musical communication is the biographical context of Robert Schumann’s life. Schumann was born in 1810 and died at the age of 46, in1856. He was a major figure in German musical romanticism, amongst the leading composers of his day, whose communications are highly regarded. The descriptive term of the time was Neu-Romantisch, or Neo-Romantic, the earlier Romanticism being associated with composers of Beethoven’s period. We should not try to define the meanings of feeling, thought or behaviour within a discussion of German Romanticism. The movement is its own framework, with Schumann at its editorial front, writing for the Davids bundler.

Piano music is its own form of musical communication. The music played at a recital is not only a communication from the composer to the audience; it is also a communication of the ideas behind the music, such as in Schumann’s case from Beethoven, to the audience. An educated audience will be able to hear these audible messages. The programme notes may even identify an idea to the audience explicitly, for instance in a performance of Carnaval, where the final section is March of the Davids bundler against the Philistines. Similarly there is a quotation of a musical theme, also in Carnaval, called Papillons. (Jensen 2001, p. 83)

The mood of the piece Carnaval is quixotic, a description that may also be used of Schumann’s nature, because he loved to incorporate cryptic communication within his compositions. For instance, Schumann received the idea for the musical mottos that serve as the basis of Carnaval from the name of the home town, Asch, of a female correspondent. (Jensen 2001, p. 119) There are three combinations of Asch possible, in musical notation: S, C, H, A; AS,C, H; A, S, C, H. All but two of the twenty-one compositions that make up Carnaval use the latter two, which from the German musical system transcribe to the notes A flat, C, B, or A, E flat, C, B. Schumann decided to call the mottos Sphinxes. (Jensen 2001, p. 150) Each of the pieces comprises a musical representation of a masked ball during carnival season.

Jensen describes Schumann’s behaviour laconically and contradictorily:

It says much about Schumann’s naivete that he was convinced the sphinxes in themselves would create something of a sensation and sales of the work – as if there were widespread interest in such musical games. But for much of his life Schumann was fascinated by puzzles and ciphers, particularly if they could be applied to music. His interest in ciphers was one that was common to not a few writers andarti1sts associated with German Romanticism; Friedrich Schlegel, for example, described art as inner hieroglyphic writing. (Jensen 2001, p. 151, citing Dieckmann 1955, p. 311)

We should recognise this relationship between codified musical communication and German Romanticism. It was shared by other writers:

Schumann’s interest in cipher, number symbolism, and musical/word puzzles is frequently encountered in his writings. [] Such an approach permitted him to add both mystery and extra musical significance to his works. [] An entire section of Aesthetics is devoted to the creation of secrets and hidden identities, all for the delight of the unravelling of little knots for the reader. (Jensen 2001,pp. 152 – 153, citing Richter 1973, p. 195)

In conclusion, a framework of communication, we have shown, can be semiological, cryptic and political. Barthes’ semiological analysis of a piano recital tends towards the political, with his disdain for the bourgeois influencing his dislike of the politics of those attending piano recitals. If Schumann is played at a piano recital, there are semiological frameworks of musical communication derived from Schumann’s interest in musical code. What is certain is that the historical context for each, the composer and the cultural analyst equally, is of paramount importance Without musical communication with Beethoven, Schubert would not have composed vastly different piano pieces, not to mention the pieces he composed for other instruments; and without a French social milieu Barthes might have had more tolerance for the piano recital as an excellent cultural event through which to investigate the nature of musical communication. As an event, the piano recital will generate a flood of memories for the active player and the passive audience, whose mood will be affected by the communication of thought, feeling and behaviour of the composer and by the music. Therefore historical is probably the best discussion of the specific type of cultural event that is the piano recital, because the music is historical, as is the event, and the environment.