Index
1.
Extract
2.
A
partial vision of the economy
3.
Effects
of the austerity in Europe
4.
The
Greek case
5.
Money
is only an instrument of payment
6.
Conclusions
1. Extract
The founders of economics always
recognized that economy was a branch of politics. Therefore, Antoine
Montchrétien, William Petty, Antonio Genovesi, Adam Smith, Thomas Robert
Malthus, Jean Baptiste Say, David Ricardo, John Stuart Mill and Karl Marx
created the concept of political economy.
The modern economists separated
economy of politics and became economy in a mathematical discipline; they
abandoned the macroeconomic vision and concentrated its work in the micro
economy, the small parts, forgetting the whole. That is one of the causes of
the economic crises which affected the world during the 20th century
and currently, because governments, entrepreneurs and economists put their
attention in the benefit of the public treasure, the people and the enterprises,
it mean, in the financial benefits as main objective of the economy. This fact
became the economy in an activity whose principal purpose is the profit, the accumulation
of capital, placing the social benefit in the background. The economic liberalism
and now the neo liberalism have been used to justify the concentration of
wealth in some nations and in privileged social groups of those nations. This
phenomenon may be appreciated in the developing capitalist countries and also
in the most advanced capitalist nations like the United States, where exist
millions of poor people. The other ideology that has dominated the world, the
communism, neither resolved the problems of poverty and concentration of
wealth. On the contrary, in the communist nations all the population is poor;
the exception is the communist leaders and the communist rulers which appropriate
the social wealth for its own personal benefit. So that, until now, neither
capitalism nor communism has not attended the poverty and its antithesis: the
concentration of wealth in few hands. Therefore, it is necessary the creation
of a new economic balanced model, without ideological prejudices to attend the
problem of poverty, the wealth distribution and the preservation of nature and
the environment.
- A partial vision of the economy
The global vision of the society is
disturbed when the social phenomena’s is analyzed since a partial optic,
strictly technical or only for the benefit of groups or nations. A technical idea
is, for example, the balance between income and spending. This is logic and a
true idea but it is not applicable in all the circumstances. Certainly, a
people or an enterprise should maintain a balance between its income and spending
but the governments no. The first big difference between a people, an enterprise
and a government is that the government has sovereign capacity to issue money
while the particular people no. This fact gives to the governments the
financial autonomy that the particulars do not have.
The argument on the balance between
income and spending has been employed by the European Central Bank, the
International Monetary Fund and the governments of Germany and France to impose
the austerity policy to Europe in the last years. That policy has provoked an
intense crisis; Iceland, Greece, Portugal, Spain and Italy have been the
principal victims.
- Effects of the austerity in Europe
Six European nations decided to
create the European Union in the year 1957; the organization grew and currently
is integrated by 27 countries. The euro, the common currency, was issued in January
2002 and it circulates in 17 nations. Although in appearance the Union has an
economic goal, the truth is that, moreover, the union has an important political
objective: to overcome the traditional differences between the European
nations, which in the past led to wars and to build a new powerful
political-economic bloc. That objective has been reached and today Europe is a
united continent. However, some members of the Union has obtained more benefits
than others; that is the case of Germany, the strongest country of the region,
with a large export capacity, which has been the first beneficiary of the
common market creation, because so has found a non restricted market for their
exports.
Germany and France have become in
the leaders of the Union and exert a big influence on their institutions,
especially on the European Central Bank, a key organization that lead the
monetary and financial policy in the region. This has an important projection
over the global finances, because the euro is the second international currency
of payment, after the United States dollar. This means that an important volume
of financial and commercial transactions are realized in euro.
Germany, country that traditionally
has obtained surpluses in its trade balance and in their public finances has
imposed the policy of austerity to the other Europeans countries. The objective
of Germany is to guarantee the payment for the German banks and enterprises and
to dominate the market.
The European Union has adopted the
neoliberal policy designed by the International Monetary Fund, IMF in the 80s
years. The main objective of that policy is the promotion of capitalism and,
especially, the benefit of the financial capitalism; for achieving those
objectives the International Monetary Fund, IMF employ concrete instruments of
economic policy like the reduction of the public spending, the privatization
and the commercial opening. Those measures of economic policy seek to give commercial
advantages to the international corporations and banks which acquire the most profitable
enterprises and public services of the countries where is applied the economic
program of the IMF like currently occurs in Europe.
- The Greek case
Greece has been an example of the
neoliberal policy. Greece is one of the main buyers of the German exports; it has
a big debt with the banks of that country and some public services and enterprises
have been bought by Germany. To guarantee the payment to Germany and other
European creditors the European Central Bank and the International Monetary
Fund imposed the austerity program to Greece. Like Greece cannot accept all the
measures of austerity because of the reaction of the population, in some
moments has been considered the retirement of this country of the Union and the
come back to its national currency. So Greece would recover its sovereign
capacity to issue money and attending its internal commitments. Really the
European Central Bank, the International Monetary Fund, Germany and France are
not interested in the retirement of Greece because they know that it would be
the end of the commercial and monetary union.
Therefore they have given more money to Greece and other countries like
Portugal and Spain.
If the authorities of the European
Central Bank would adopt an inflexible position the situation might be
different because some countries like Greece might have no other option than to
withdraw from the Union. This would be the euro end. In these circumstances the
question is until where the European Central Bank can satisfy the financial
needs of the countries. The answer is explained in the following epigraph.
- Money is only an instrument of payment
Money is an instrument of payment and
not a wealth with intrinsic value. The European Central Bank can to issue the
amount of money that the economy needs. None international institution can
prohibit to the bank to issue more money. The reason is very simple: money is
only metal and paper without own value; money is only paper, nothing else. But
those papers should represent the monetary value of the goods and services that
circulate in the economy. If it does not exists enough money in the economy the
consequence is economic crisis, recession and economic paralysis.
The European leaders do a mistake by
preventing the emission of more money and the application of severe restrictive
monetary and financial measures. The exception is England, which keeps its
monetary sovereign because maintain its own currency, the sterling pound. Recently, the Central Bank of England issued
the amount of money necessary to guarantee the development of its economy.
Hence the situation in England is different to rest of Europe.
- Conclusions
-
Economics
is a branch of politics because all the economic decisions of general interest
are taken by the governments; in consequence, they are political decisions.
-
When
the political decisions are influenced by strict technical concepts the results
are not always good because the technique not ever coincide with the interest
of the society as a whole; the technical concept of balance between income and
spending is an example.
No hay comentarios:
Publicar un comentario