The news is frequently crammed with financial issues. A person day the imminent collapse of economies is predicted, yet another day a rosier look at is entertained. Statements on countrywide wealth, the place a country stands in this or that league desk, commonly look, primarily immediately after a governing administration declaration on the condition of countrywide funds. We take as point descriptions of how economies perform, never ever doubting the knowledge of authorities and their representatives. At stake is countrywide pride and affect, the particular contentment of citizenry convinced, with enormous justification, that inexpensive competitiveness is necessary to their and their beloved-kinds existing and upcoming nicely-becoming. Threats of unemployment, which are likely to hit unique employment locations, affirm this.
This article will contemplate the current technique to financial problems, debating how practical numerous of them are. It will search at the philosophic and historic basis of economic thoughts.
Aristotle’s knowledge of economics was primarily based on the house, jogging a single competently, tending orchards, servants and slaves. It did not encompass factory style creation apparent in Athens and widespread in the historical world. It was even then an idealised concept. In historical Mesopotamia females laboured in their hundreds to make fabric for the temple and city, for which the town/temple received metals and wood from other cultures. The finest utilisation of citizens for the premier amount of sources. The used citizens been given safety and food items. Afterwards, army conquest turned an recognized method of obtaining resources. Consequently two economic solutions prevailed, condition banditry used to purchase a hurry of [precious and non-precious metals and the continuous labour required for agriculture, husbandry and manufacture. Early cities, both in Mesopotamia and the Levant, had often focused upon production, not just settlement. In some early cities, this appears to have been a precursor to husbandry.
Economic activity therefore came at the beginning of recorded history dependent upon the use of large numbers of the population. Concerned with group security, it was also driven by the need for metals. The possession by kings of material wealth came later, emphasising both status and power. Pillage and extortion became the economic foundations of kingship from Sargon the Great onwards. All these early economic trends remain with us in one form or another. Economic trends are therefore based upon large-scale production, power, and exploitation.
Although this was considered enough within ancient societies, the invention of money involved the use of contracts to create wealth. Money allowed enormous private fortunes to be created outside of religion, royalty and communities. Its development has not been consistent until modern times.
Consumerism, pursued by the United States, and now the relevant world economy, has encouraged the distribution of wealth (understood here as desired objects), each family group or individual playing a significant part in an economy. Individual labour is the responsibility of the individual, not a religious or secular authority. The intense form of this is the entrepreneur, possible only when authority fragments. In ancient Mesopotamia, and later Assyria, merchants for example were under the court’s auspices.
Economic activity, then as now, referenced the nature of the state, its barriers and boundaries.
Consumerism reflects the federal nature of the United States and the historical relationship with Europe, especially Britain. It is the economy of the Free Citizen.
Common Economic Beliefs:
The first I will consider is the belief in continuance economic growth.
Of course, continued economic growth throughout the world is impossible without causing irreversible environmental destruction. Wealth generation dependent upon production and services requires a consistently expanding population, increasing use of resources, longer lives and expanding expectations. Everything, in an extreme scenario, must thereby become a commodity.
Wealth based upon increase of material objects and comforts or increase of services is a shared lifestyle paradigm. It concerns happiness through stimulation and living in the present, through the senses. Such a lifestyle has expanded throughout the world. The ability of small groups or individuals to access this lifestyle is gauged internationally as evidence of national wealth. Purchasing Power Parity, in a world with limited central authority, allows for prices on goods to be aligned, trade to be accomplished efficiently, based upon a stable, powerful currency. PPP is evident in the ancient world, with corn serving as the principal rate of exchange. Currency, more sensitive to contracts, human interaction and expansive wealth creation is preferred. It provides the essential parity for growth independent of resources. In a healthy economy, this equals the ability of limited amounts of national currency to purchase objects or services.
A wealthy country is further identified through the complexity and efficiency of its infrastructure, beauty and size of its buildings. In addition, individual citizens have a choice as to what they purchase, although their choice is limited. A decline in the purchasing power of currency, access to currency, access to goods and services, limitation of goods and services, greater restriction, political or otherwise, indicates loss of wealth.
Control of wealth creation, what it references, allows developed countries to direct the energies of undeveloped countries. As the latter learns more and more to simulate the infrastructure of the former, they will achieve parity. Allowing every citizen access to objects of wealth, consumer goods, equal opportunities, education, will create the necessary parity.
Clearly, competition over access to and acquisition of wealth must be finite played out over a further century or more. It will continue if there is a substantial decrease in human population or additional resources are discovered that can be easily traded. Alternatively, another lifestyle paradigm may take over, based on competition over other matters.
Inter-state banking, predicated upon the contracted understanding of currency, allows for interaction and the fiscal stimulation necessary to drive economies, the use of contracted negotiation essential to the health of all economies involved in the financial system. Described as mere gambling, in fact it is the process of creating wealth through human interaction.
Stagnation/economic and state failure:
It is believed that an economy, seen as an indivisible national whole, must continue to grow. Evidence is provided by PPP and GDP and also through examining service and production industries. If an economy does not grow, it is considered to have failed throughout the period of its stagnation. Rises in spending on public services could result in long time problems. Fixed notions of growth determine a country’s influence in the world and whether it can be seen as wealthy or poor. A country where most of the population have low GDP is therefore poor.
A country which has corrupt officials who absorb most of the wealth and often distribute it abroad is considered poor no matter how vast its resources. A demographic distribution of wealth is essential for a country to be considered rich.
In addition, unemployment is similarly noted. Unemployment is interesting in that it is viewed as the antitheses of production. The unemployed are viewed as not contributing to wealth creation, whereas in fact they play a part in stabilising the economy. Government control of currency through the provision of benefits is necessary.
What is state wealth?
So, what is national wealth precisely? It appears to be institutional and based upon individual and small group needs. Reference can be made here to Maslow’s Pyramid of Needs, irrespective of whether or not it is universally applicable. Institutional in that it depends upon banks and markets, finance gathered and applied purposefully. Hoarded finance, whether corporeal or incorporeal, is used to transact for more finance, providing a contractual, negotiating tool.
The development of financial institutions in Britain created a means of finding the money to build an infrastructure geared towards wealth creation separate from private or royal patronage. In essence, it created the public sector, a fundamental arm of liberal democracy. Subsequently, the public sector has driven many economies, although now it is made up of drivers (tax, government investment) and containers (housing, benefits). If the containers outgrow drivers economic imbalance occurs. In ancient Mesopotamia, they worked together.
Human needs are met or not met according to the state’s wealth. The need for shelter: money to pay rent or buy property, and money/finance to build houses and flats. Public money has on occasion and in some societies been used to finance building work. The need for security: regular or easily accessible paid work. Comfort (not a Maslow categorisation): that brings an additional sense of pleasure and provides freedom from domestic labour, involving commodities. TVs, CD players, refrigerators, washing machines have become necessities. Lives are formed upon the process of earning and production.
The belief in continuous economic growth has led to the short-term policies of the past thirty years, of allowing debt to accumulate in order to enjoy prosperity in the present. Competition from developing countries encouraged this approach coupled with the fear of economic decline. Modern economies are propelled by an ideology of wealth, framed on democratic beliefs, contingent upon the needs of the lowest common denominator, creating continuous connections through a multitude of small groups, each competing or connecting with the other.
The connections between these groups create wealth.
In this analysis, wealth creation concerns automatic human behaviour, extended interaction between groups, and the boundaries and activities of the state. The state in the neoliberal world of globalisation is one group interacting with others. World finance smoothes the interaction of states, global companies, and other independent or semi-independent organisations. Modern economies and present wealth creation are driven therefore by the need to connect and communicate.