Wednesday, October 04, 2006

Tested on Humans

Economists have the tendency to shrink the world complexity into one single theory and then promote it around the world like a new religion. Thankfully history has shown that experiments that economists carry out on society last only approximately a quarter of a century.

Economists from Chicago area had two main goals for open market economy. First was to keep the American investment banks lucrative while LDC’s privatise public sector services. In a few Southern American countries went as far as to privatise water plants, as a result American banks took the money, new owners upped the price of water and the old owners ended up as the payers i.e. the thirsty population of the country in question.

Secondly economists want to lower the wages of the average American worker. This was quickly realised by moving production to cheap labour countries, such as China and India. This enabled companies to pressure their dedicated employees to accept small pay increases. Moving production over seas brought the price for the products down, which resulted the inflation and interest rates staying low.

Due to the lowered interest rates and cheaper prices, the workers were able to consume the same amount they did before even though their real wages had gone down. This model of operation would’ve lasted for longer, but moving production over seas dramatically increased the unemployment rate in the USA. And an unemployed person can’t afford to buy any products, no matter how cheap they are.

The Chinese, however have not submitted to the USA to produce components for their products. Instead they are now producing their own goods from their experience from working with the USA. In the USA’s eyes this disobedience is accelerating the unemployment rate even further.

The next great economical lesson comes after the collapse of the GDP of the USA. After the collapse the US will increase it’s trade embargos, devalue the dollar and starts to support local industries, referring to national security or what ever is the hottest topic at that point in time. It would be most pleasant if nations allow their own economists to carry out what ever experiments they do with their theories, in their own respective countries and that they do not get over excited and test them on the people. It’s not dumb to make mistakes, but it’s dumb if you don’t learn from them.


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