The problem is lodged mainly in the underlying premise of globalization’s advocates that in a complex world economy fewer barriers improve efficiency and profits rather than national wellbeing. It assumes that gains from trade outweigh costs and dislocations caused by global competition; or that self-interest alone of the private sector will insure a smooth functioning of the markets. In my opinion, Nazi Germany had a smoothly functioning economy built on slave labor and profit for Nazi Party members, but to survive it needed to gather more people to enslave.
Self-interest alone will not solve climate change or political dysfunction in global capitals or feed hungry and cure the sick or full employment. Self-interest is the second best solution because the world economy is just too complicated to be managed by some all-seeing central authority. The problem is that self-interest of one group, owners of capital (directly or indirectly through retirement accounts and investment funds) may not be in accord with the self-interest of workers or even nation states. It is this sentiment that sees NAFTA as a danger to American workers even if it insures the smooth functioning of a complex North American economy and lower prices in grocery stores and retail establishments.
In my novel, The Phoenix Year, set in 2016 with the backstory of the economy after the 2008 financial collapse, at least some of what has happened since its publication that form the plot details of the novel’s predicted economy – the collapse of oil prices from $110 to just over $30 is part of the novel predicted for 2015-16, along with a slowdown in China that leads to a drop in world trade during these years among other elements of the story. It included the surging nationalism throughout Europe and continued malaise and debt problems of the Southern tier of countries. It didn’t anticipate BREXIT, but it did include a rising nationalist politician in Germany calling for a renegotiation of Germany’s participation in the European Union. All these factors contribute to extreme volatility of stock markets helped by a fair amount of insider trading leading up to a series of events including the collapse of a overleveraged real estate empire, on a single weekend at the end of October of 2016. For good measure, the novel also included a real estate promoter from New York, who, at least, doesn’t run for President because he’s been framed for the murder of his wife and daughter. But the effect of multiple shocks to the system combined with the reliance on computerized trading algorithms by more so called money managers leads to a near total, 1928-32 collapse of equity prices. At the same time, the price of gold reaches new heights. At this point, the plan is to sell a huge stock pile of secretly accumulated Russian and African gold and buy control of more than 200 of the world’s largest, most influential companies with the proceeds.
Dr. David L. Blond works as a private economic consultant specializing in quantitative analysis of economic data. He began his career working for the United Nations in Geneva, Switzerland. During the period of 1978 – 1985, he was a Senior Economist in the Office of the Secretary of Defense in Washington, and after leaving that position worked for various major global economic forecasting and consulting firms in senior positions developing some of the largest and most complex global economic models ever developed for use by private sector clients. He lives between Washington and Santa Fe, New Mexico. www.davidlblond.com @davidblond2000
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