Wednesday, June 30, 2010

The Visible Hand # 2

One theory (addressed below) is that all European countries believe they can export their way to prosperity. Another theory -- which Michael Hudson sets forth -- is that European governments plan to impoverish their working classes, presumably because they want to break the power of ordinary people, make them so miserable that they will be unable to demand anything.

I know there are third world countries which have a rich ruling class, a small middle class and a vast underclass of desperately poor workers and peasants. Most of these countries are not heavily industrialized. Instead, they export raw materials. Their wealth comes from the needs of industrialized societies and the large groups of consumers in industrialized societies. If you turn all countries into third world countries, who will buy the raw materials?

This also is the visible hand. The third world oligarchy solution is not likely to work, if every country tries it at once.

In addition, countries with these vast gaps between rich and poor are often unstable, prone to coups d'etat, revolutions and civil war. They are often police states or failed states, with no working government.

I can imagine a world like this, and I can imagine how effectively it will face global warming and environmental collapse.


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