Autumn of 2008.
The Bucharest Stock Exchange assembled a conference for the investors where some relatively junior guys working for the ‘Global Banking Establishment’ tried to uplift our mood by outlining their bosses’ envisioned reaction to the crises. Something which would later be known as ‘quantitative easing’.
I asked one of them:
‘The current crises is the straight consequence of money having been used improperly. Are you sure that throwing a fresh amount of it on the market would make things any better?’.
‘Well, nobody has come yet with a better idea…’
Almost ten years later, it seems that ‘throwing fresh money at it’ did revive the market.
Dow Jones has climbed through the clouds, unemployment is low, inflation is low, interest rates are also low…
“Some 120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010.“, according to the IMF.
Only the very same words could have been used to describe the 1990’s…
But there is something that at least some of us have noticed.
©Elliot Wave International (www.elliotwave.com)
Both major economic crises which have scarred us in less than a century have been closely predated by spikes in ‘income inequality’.
To make things worse, we are confronted by yet another fast moving development which pushes us towards uncharted waters.
Large scale replacement of ‘human capital’ by industrial robots, some of them driven by ‘artificial intelligence’.
Reaction has been mixed.
Some of the very rich have pledged to make available to charity important chunks of their estates while other ‘concerned parties’ promote heavier involvement of the government – ‘guaranteed universal income’, etc., etc…
All these in the name of an illusive ‘equality’.
‘On the other side of the isle’, where inequality is seen as being not only natural but also harmless, people are happy with what’s going on and see no problem in everything continuing to march to the same beat.
I argued earlier that ‘heavy involvement of the government’ has already been experimented. And failed. Check the fate of every communist dictatorship.
Actually, check the fate of all dictatorships.
You’ll find that whenever a society becomes too centralized, that thing alone considerably diminishes its survival chances.
Same outcome whenever people in a group/community evaluate things using a single yardstick/from a single perspective.
To make things worse, the speed of the degenerative process becomes catastrophic when decision making becomes centralized while the reduced number of decision makers are partially blinded by too many of them using a single yardstick to do their job.
We are fast approaching that situation.
Extreme wealth polarization means that economic resources become concentrated in very few hands. Hence economic decision making.
And since policies cannot be put in place without resources…
The funny thing is that this concentration of power/decision making take place regardless of property remaining private or communism taking over.
As long as those who control the whole system are too few, ‘who owns it’ makes no difference.
Absolute monarchies faltered in the very same way as their communist successors.
It doesn’t matter whether an universal basic income would be supported by a tax exacting government or by a small coterie of ‘concerned investors’, sooner or later any such arrangement would become sour.
One other thing.
Claims for equality might become so deafening as to impede clear thinking.
Just as money is a very good tool/servant but a lousy goal/master, equality is a commendable goal but a lousy tool.
Human beings ‘work best’ as autonomous individuals who cooperate freely inside what has been described as ‘free market’.
Whenever that market was cornered, either from outside – by the government, or from inside – too many of the players acting in ‘concert’/sync because they had been ‘mesmerized’, remember the ‘Tulip mania” of yore? – it had faltered. Sometimes abysmally.
Attempting to fit everybody in a ‘one size fits all’ mould would be catastrophic.
Just as catastrophic as when less and less people can develop and express their true potential. Remember that we haven’t changed, biologically, during the last 50 000 years or so. But, generation after generation, we’ve been able to do more and more things simply because each generation made it easier for the next one. Most of the times, anyway.
Let’s not change this.
nicichiarasa 