The Global Economy: Is more better? [Part 1]
For poor people, More is usually Better. If your shoes have
holes, another, new pair is better. Two fish feed a hungry family
better than one fish, or no fish. Two rooms in a house is better than
one room, or no house at all.
But with three television sets in your house, is it even better to get
one more? If you're a pro baseball player with seven sports cars, will
another car, a $90,000 Ferrari really make your life better?
Is "more" better in fishing around the Island? If the Honduran fleet
doesn't grab those fish, the Japanese or the Koreans will. But what
happens when there are no more fish to grab? In business, more is not
only better, it's a necessity. In the world of global capital, a
business must grow or die. Competition is the rule. And when
everyone is grabbing for More, the little guys wind up with Less.
Everyone in the global economy is grabbing for a bigger share of the
great Pie of Wealth. How can the Pie accommodate all the grabbing?
And can that Pie grow big enough, fast enough so the poorest third of
the Earth's population get a piece of it?
Proponents of the global economy say everything is just great. As long
as the Giant Corporations keep competing and making profits, the
benefits will "trickle down" to everyday citizens. If we don't get a
job guarding the sports cars of the super-rich, at least we'll benefit
from lower prices of consumer goods.
Critics of global capital say that the supposed benefit of lower
prices is ridiculous when you balance it against the real costs in
this economy: 1) overuse of the world's resources, much of which is
critically limited; 2) wastes and pollution from the production of
consumer goods and energy; and 3) loss of jobs, essential in the
unending push for higher corporate profits.
By many measures, the world's top national economies are in trouble,
although the people of the US, Germany and Japan are still generally
wealthy. These economies are growing very slowly, and the US and Japan
have enormous debt burdens. China is the most successful capitalist
country today in that they can produce more-- of almost anything-- at
lower cost than anyone else. While China has a one-party Communist
political system, its well-trained workers have always had a
government financed education and health care system with low and
subsidized rents. Most Chinese workers can afford to work for very
low wages and still live a decent life. But most Central Americans
cannot.
The world's economic experts believe that US consumer spending drives
the entire world's economy. When US consumers even slow their buying,
the world markets shudder. US consumers have a serious spending
habit. The average worker makes about $28,000 per yearS(and spends
almost all of it. Net savings in the US is near zero: the average US
household is $22,000 dollars in debt (not including mortgages, money
owed on house and land).
This personal debt is distinct from the 7,000 billion dollar US
national debt (of a total $11,000 billion economy), an additional
$22,000 for every USAmerican man, woman and child. Most of the 50
States are either in debt or in financial crisis. Meanwhile, the
Bush/Cheney regime continues to run the US government on more borrowed
money, at the rate of $500 billion a year. All this is underlined by
the loss of 2.5 million U.S. jobs in the past three years. [The
entire Nicarguan economy generates about $2.5 billion total per year,
but carries a foreign debt of $6 billion. Unemployment in the
Caribbean coast regions (RAAN and RAAS) is considered to be
80-90%. The USA spends over $2 billion in two weeks of the occupation
of Iraq.]
Common sense leads us to ask: how long can the USA, the mighty engine
of all global commerce, continue to run on borrowed money? Anyone who
borrows money needs to put up "collateral", something of value to be
taken if the borrower is unable to repay the loan. In the case of US
national debt, the collateral is mainly the reputation of the US and
its printing presses for the almighty dollar.
Once the dollar was backed by gold. In 1971 this gold standard was
abandoned, but it didn't seem to matter: the US economy was hugely
productive, far more so than any other economy at that time. Since
then, the US share of global production has dropped steadily to where
the US now produces only 1/8 (12%) of all the world's exported
goods. In the past year, the dollar has lost 20-30% of its value
relative to other major currencies and gold, and there's no end in
sight. Go To Part 2
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