The Manipulation of Global Economies: A Critical Examination
Is the United States economy, or the global economy as a whole, being manipulated? This question has been a subject of debate for years, with many individuals and economists pointing to evidence that suggests government actions and financial market practices can distort economic outcomes.
Economic Manipulation: A Wider Phenomenon
About a quarter of a century ago, the global economy witnessed one of the most notable examples of economic manipulation through currency trading. George Soros, a renowned investor, nearly bankrupted the Bank of England during the U.K. currency crisis of 1992, known as 'Black Wednesday.' By short selling ￡10 billion sterling, he made a profit of ￡1 billion. This incident serves as a stark reminder that economic manipulation is not limited to a single country but is a widespread practice with global implications.
The focus now seems to be on which nation will be targeted next—whether Venezuela or Iran. While Venezuela appears to be the primary candidate due to its relative economic weakness, Iran's geostrategic position and its numerous regional allies make it a more challenging target. The political and economic repercussions of targeting Iran would be more far-reaching, thus making it a riskier proposition for economic manipulators.
Historical Perspectives on Economic Manipulation
The manipulation of economies is not a new phenomenon. In his speech, American politician Andrew Jackson highlighted the issue of economic inequality and the use of government to serve the interests of the wealthy. He argued that:
Distinctions in society will always exist under every just government. Equality of talents of education or of wealth cannot be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy and virtue every man is equally entitled to protection by law but when the laws undertake to add to these natural and just advantages artificial distinctions to grant titles, gratuities, and exclusive privileges to make the rich richer and the potent more powerful the humble members of society—the farmers, mechanics, and laborers—who have neither the time nor the means of securing like favors to themselves have a right to complain of the injustice of their Government.
Modern scholars, such as Ha-Joon Chang, have revisited similar themes. According to Ha-Joon Chang, the belief that wealth redistribution would stimulate economic growth has proven to be flawed. As he states in his book, '23 Things They Don#39;t Tell You about Capitalism,'
Since the 1980s we have given the rich a bigger slice of our pie in the belief that they would create more wealth making the pie bigger in the long run. The rich got the bigger slice of the pie all right but they have actually reduced the pace at which the pie is growing.
Critical Analysis of Free Trade and Protectionism
The notion that protectionism hampers economic development is a point of contention. Free trade economists argue that co-existence of protectionism and economic development does not prove that one caused the other. Ha-Joon Chang explores this concept in his work, 'Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism,' where he presents the argument that the success of today's wealthy nations can be attributed to protectionist policies rather than free trade.
John Kenneth Galbraith, a prominent economist, underscored the inverse relationship between financial capacity and political insight. He warned that long-term salvation through business intervention is not highly regarded if it means disturbing the present order. His statement, 'Financial capacity and political perspicacity are inversely correlated,' highlights the challenge of balancing economic stability with progressive policies. Galbraith's commentary in 'The Great Crash of 1929' further emphasizes the need for vigilance against harmful economic practices and the potential dangers of complacency.
Conclusion
The manipulation of global economies, particularly targeting emerging economies like Venezuela or Iran, is not an isolated incident. It is part of a broader strategy that involves the use of financial markets and government actions to achieve specific economic outcomes. This practice is critical to examine because it helps us understand the dynamics of economic power and inequality.
The underlying theme of these discussions is the inherent tension between economic inequality and the pursuit of fairness. As we continue to grapple with these issues, it becomes imperative to question the role of the wealthy and powerful in shaping economic policies. By doing so, we can work towards a more equitable and just global economy.