While on any given day with all the bad economic news I am prone to think that the situation is hopeless or at least that we will be in this recession (depression?) for a long time, I also realize that the world governments, particularly the richer westernized democratic ones, probably have the power to save us all.
(I know, conservatives will pounce on this and remind me that “government is not the answer”. And as a middle-of-the-roader I will remind them back that no government or anarchy is not the answer either. We can maintain our freedom and at the same time cooperate with each other through government to maintain some type of order.)
Overall there is no shortage of food and we have not destroyed our planet yet (the fact that Eskimos in Alaska are being flooded out due to a melting of the polar ice cap notwithstanding) and there is no shortage of work to be done. And as far as a lack of money or too much money owed, one must keep in mind that there is no intrinsic value in money, especially since paper money or computer accounts do not represent some specified amount of, say gold.
In an introduction to economics class I took we had a text that used hard-to-understand economic terms but also had simplistic but probably quite accurate explanations as well. It gave a little illustrative story about the nature of money. As I recall, it basically told of an island (this is fictional, of course) where the natives traded fish as money and then moved on to trading fish sticks because they were easier to handle and could be stored over time. The king kept the fish sticks in his bank, but then there was a fire and all the fish sticks were destroyed and all the islanders were in a panic because they thought they were all broke. But the king said not to worry because he would issue paper representing fishsticks and they could trade back and forth just as before and that he would by his authority guarantee the soundness of the paper fishstick currency (this is my recollection of what I read in Economics, the Science fo Common Sense, by Elbert V. Bowden, copyright 1977).
As I have blogged previously, I along with a lot of others grew up hearing and reading that a government could not successfully simply just print money based on nothing. It had, for example, been tried by Germany in the 1930s and failed miserably with a haus frau having to push a wheelbarrow full of marks to the bakery to buy a loaf of bread. In more recent times, people in Zimbabwe had to hand over millions of their equivalent of dollars to buy a loaf of bread.
But today in the United States of America our government is essentially printing make believe money which represents no more than the full faith and credit of the USA. And people still want dollars.
Part of the value of our dollars is based on money our government is borrowing from countries such as China and then giving it to the Federal Reserve to in turn give it to the banks who in turn loan it to businesses (or are supposed to).
I realize that anyone who is learned in economics realizes that I am already in way over my head here, but if you can show me how I am wrong, go ahead and comment at the end of this blog.
But really money is not bars of gold or silver or fish sticks, it has become a device we use as kind of tickets or coupons to divide and share our resources. In our semi-capitalist society we operate on the notion that the dividing is not done necessarily on an equal basis but a basis determined on what we do for each other. If you can do more for others than the next guy you have created more value and you get more coupons or tickets or dollars. But in our benevolence we also dole out fishstick paper to those who may not be able, temporarily or permanently, to put forth effort to create value.
If ever there was a pure dog-eat-dog capitalist society with no social safeguards or socialist type policies we have not had one in the USA since the at least Great Depression of the 1930s.
With Republican rule we did our best to move away from too much socialism (maybe) and promote more capitalism, but strangely it ended with Republican President George W. Bush unexpectedly in a financial panic moving our government to some form of what looked like national socialism (not completely unlike the Nazis if the 1930s, as far as the relationship between the government and big business).
And now the Democratic President Barack Obama has taken it a step further, essentially nationalizing the banking industry and the domestic automakers (minus Ford so far).
Some ultra conservatives might want to go back to a system in which some men simply put in a day’s work for a day’s pay and others who had saved up capital lived off the profits of their businesses and the interest they made on their capital and where for those who because of lack of talent or health could not make it depended upon the charity of churches and family.
And I am not going to say that what I just described in the previous paragraph is completely undesirable, but I will say that society seems to have decided long ago that it was not completely comfortable with that approach.
What we have in the USA now is basically an economic system based on capitalism but with some elements of some form of socialism, and we have a democratic republic for a government that incorporates some socialism, especially in terms of an economic safety net.
Right now our system has been severely damaged and we are trying to fix it. I think we can because in the end it is always a cooperative effort and I think that even if we disagree wildly with each other on the finer points of how our system should work, we have thus far agreed on preserving our nation and the ideals of individualism and freedom of expression and freedom of the pursuit to life liberty and the pursuit of happiness.
Now if we could just figure out how to divide up the fishsticks….
Please view my German-American blog at http://vonwalther.wordpress.com