But what is behind all this? How can we judge soundness of our banks? In other words, how can we tell if our money is safely tucked away in a safe haven?

The reflex is to go to bank's balance sheets. Banks and balance sheets have been both invented in their modern form in 15th century. A balance sheet, coupled with other financial statements is supposed to provide us with a true and full picture of health of bank, its past and its long-term prospects. The surprising thing is that – despite common opinion – it does.

But it is rather useless unless you know how to read it.

Financial statements (Income – or Profit and Loss - Statement, Cash Flow Statement and Balance Sheet) come in many forms. Sometimes they conform to Western accounting standards (the Generally Accepted Accounting Principles, GAAP, or less rigorous and more fuzzily worded International Accounting Standards, IAS). Otherwise, they conform to local accounting standards, which often leave a lot to be desired. Still, you should look for banks, which make their updated financial reports available to you. The best choice would be a bank that is audited by one of Big Four Western accounting firms and makes its audit reports publicly available. Such audited financial statements should consolidate financial results of bank with financial results of its subsidiaries or associated companies. A lot often hides in those corners of corporate holdings.

Banks are rated by independent agencies. The most famous and most reliable of lot is Fitch Ratings. Another one is Moody’s. These agencies assign letter and number combinations to banks that reflect their stability. Most agencies differentiate short term from long term prospects of banking institution rated. Some of them even study (and rate) issues, such as legality of operations of bank (legal rating). Ostensibly, all a concerned person has to do, therefore, is to step up to bank manager, muster courage and ask for bank's rating. Unfortunately, life is more complicated than rating agencies would have us believe.

They base themselves mostly on financial results of bank rated as a reliable gauge of its financial strength or financial profile. Nothing is further from truth.

In mythology generated by capitalism to pacify masses, myth of intellectual property stands out. It goes like this: if rights to intellectual property were not defined and enforced, commercial entrepreneurs would not have taken on risks associated with publishing books, recording records, and preparing multimedia products. As a result, creative people will have suffered because they will have found no way to make their works accessible to public. Ultimately, it is public which pays price of piracy, goes refrain.

But this is factually untrue. In USA there is a very limited group of authors who actually live by their pen. Only select musicians eke out a living from their noisy vocation (most of them rock stars who own their labels - George Michael had to fight Sony to do just that) and very few actors come close to deriving subsistence level income from their profession. All these can no longer be thought of as mostly creative people. Forced to defend their intellectual property rights and interests of Big Money, Madonna, Michael Jackson, Schwarzenegger and Grisham are businessmen at least as much as they are artists.

Economically and rationally, we should expect that costlier a work of art is to produce and narrower its market - more emphasized its intellectual property rights.

Consider a publishing house.

A book which costs 50,000 DM to produce with a potential audience of 1000 purchasers (certain academic texts are like this) - would have to be priced at a a minimum of 100 DM to recoup only direct costs. If illegally copied (thereby shrinking potential market as some people will prefer to buy cheaper illegal copies) - its price would have to go up prohibitively to recoup costs, thus driving out potential buyers. The story is different if a book costs 10,000 DM to produce and is priced at 20 DM a copy with a potential readership of 1,000,000 readers. Piracy (illegal copying) should in this case be more readily tolerated as a marginal phenomenon.

This is theory. But facts are tellingly different. The less cost of production (brought down by digital technologies) - fiercer battle against piracy. The bigger market - more pressure is applied to clamp down on samizdat entrepreneurs.

Governments, from China to Macedonia, are introducing intellectual property laws (under pressure from rich world countries) and enforcing them belatedly. But where one factory is closed on shore (as has been case in mainland China) - two sprout off shore (as is case in Hong Kong and in Bulgaria).

But this defies logic: market today is global, costs of production are lower (with exception of music and film industries), marketing channels more numerous (half of income of movie studios emanates from video cassette sales), speedy recouping of investment virtually guaranteed. Moreover, piracy thrives in very poor markets in which population would anyhow not have paid legal price. The illegal product is inferior to legal copy (it comes with no literature, warranties or support). So why should big manufacturers, publishing houses, record companies, software companies and fashion houses worry?

The answer lurks in history. Intellectual property is a relatively new notion. In near past, no one considered knowledge or fruits of creativity (art, design) as "patentable", or as someone's "property". The artist was but a mere channel through which divine grace flowed. Texts, discoveries, inventions, works of art and music, designs - all belonged to community and could be replicated freely. True, chosen ones, conduits, were honoured but were rarely financially rewarded. They were commissioned to produce their works of art and were salaried, in most cases. Only with advent of Industrial Revolution were embryonic precursors of intellectual property introduced but they were still limited to industrial designs and processes, mainly as embedded in machinery. The patent was born. The more massive market, more sophisticated sales and marketing techniques, bigger financial stakes - larger loomed issue of intellectual property. It spread from machinery to designs, processes, books, newspapers, any printed matter, works of art and music, films (which, at their beginning were not considered art), software, software embedded in hardware, processes, business methods, and even unto genetic material.

Intellectual property rights - despite their noble title - are less about intellect and more about property. This is Big Money: markets in intellectual property outweigh total industrial production in world. The aim is to secure a monopoly on a specific work. This is an especially grave matter in academic publishing where small- circulation magazines do not allow their content to be quoted or published even for non-commercial purposes. The monopolists of knowledge and intellectual products cannot allow competition anywhere in world - because theirs is a world market. A pirate in Skopje is in direct competition with Bill Gates. When he sells a pirated Microsoft product - he is depriving Microsoft not only of its income, but of a client (=future income), of its monopolistic status (cheap copies can be smuggled into other markets), and of its competition-deterring image (a major monopoly preserving asset). This is a threat which Microsoft cannot tolerate. Hence its efforts to eradicate piracy - successful in China and an utter failure in legally-relaxed Russia.

But what Microsoft fails to understand is that problem lies with its pricing policy - not with pirates. When faced with a global marketplace, a company can adopt one of two policies: either to adjust price of its products to a world average of purchasing power - or to use discretionary differential pricing (as pharmaceutical companies were forced to do in Brazil and South Africa). A Macedonian with an average monthly income of 160 USD clearly cannot afford to buy Encyclopaedia Encarta Deluxe. In America, 50 USD is income generated in 4 hours of an average job. In Macedonian terms, therefore, Encarta is 20 times more expensive. Either price should be lowered in Macedonian market - or an average world price should be fixed which will reflect an average global purchasing power.