Economic Ramblings

Have you ever noticed that you are completely fascinated with something new? And after a few months, scratches, and bumps later it is just another one of your things that hold little thought. You have already moved on to something new, bigger, better. It is quite the vicious cycle. But despite the difficulties this could cause some budgets, it is the best product of capitalism. 

Even though capitalism sometimes promote unneeded expenditures, through this advancements are made at a rapid pace, society as a whole benefits from the increase in the quality of life. Capitalism has created the western world as we know it. With this economic practice, humans are living longer, eating better, wealthier, and freer. 

The free market is controlled by "the invisible hand" where supply and demand compete to achieve the best price for a certain product. This theory was developed by Adam Smith. It is ironic that even though Adam Smith came up with this train of thought, and ultimately the emergence of a free, and wealthy world, did not believe in a completely free democratic society. He came up with this theory cause he was basically pissed off at the governments/monarchies of his current time. He thought that they were corrupt and evil, and that the even "more evil" people would make better decisions.

Adam Smith lived during the height of mercantilism, where a country such as Britain had many colonies, and they owned all the natural resources of that colony. The people who lived on one of the colonies would collect and harvest the raw materials and ship it to Britain, who would in turn manufacture good from it and sell it back to the colonies at a high price. 

Because of Adam Smith you are able to read this blog on the amazing feat of technology, the internet. But a few precautions with capitalism, there are countless advantages of it, but regulations are a must for a truly profitable, and healthy society. Minimum wage, healthcare, pensions, employment insurance, age requirements, and safe walls incase of emergency are a must. Before 1929, it was absolute capitalism, and through abuse, caused the great depression. 

I am a big believer in the free market, and even in this time of great uncertainty, we have to remain level headed before we slap restrictions and control into the economy. What we do have to do is realize where we went wrong in the first place. And that started at handing massive mortgages to people who cannot afford it. 

Banks in the USA and partly in Canada were awarding people with mortgages that they could never afford. This de-stabilized the banking system and was the first cause of this financial crisis. This reminds me of something similar in the 1920's with the playing of the stock market, which toppled the entire world economy. Much like at that time, the stock markets crashed globally and AIG almost fell. If it did, and still might, I would full on expect another depression like the Dirty Thirties. AIG is so massive, it holds billions of dollars worth of financial protection for millions of corporations around the world. If AIG falls, every developed and developing countries economies would be so severely crippled that it could very well be years to recover. After mistakes have been corrected, let the free market reign.

I know this blog kind of wanders, but I almost wanted it to be that way, if that makes any sense. Again, if they're any topics you wish to hear about that you think would be enjoyable, please suggest in the facebook group. This is Amos13 signing off....