Free Enterprise Economic System Undergoing Meltdown by Kevin Parkinson – August 17, 2011

 

Cornwall ON – There are so many crises going on around the world right now, with uprisings going on all the time.  It’s hard to keep up to date with these global events and it is my sense that there’s a lot more to come. There’s an awakening going on and because of improved communications like social media, the people realize that they are not alone.  Globally, the huge gap between the rich and poor is at the heart of the discontent.

I think the first thing that people need to do is to realize how fortunate we are in Canada, and what a great country we have. We have never had civil war, were considered a peacekeeping nation until about 2000, and are known around the world as an ideal country to live. Actually we are considered the 7th best country in the world to live according to the UN.

The point is that our world is going through colossal changes, and we need to try to understand the causes. For example, what has caused the ripple effect of the so-called “Arab Spring” that has caused mass uprisings in Tunisia, Egypt, Libya, Syria, Israel/Palestine (ongoing since 1967), and recently in London, England?

My opinion is that the uprisings in all of the countries I have mentioned are being driven by unemployed and disenfranchised, young people. These people from the late teens to late-30’s have no jobs, no opportunities, and are living in poverty. They have become disillusioned with the capitalist society we live in, and walk the streets of cities seeing the wealth and power of the banks and the corporations. They see a society (like the United Kingdom) that has become a police state, which spends billions on security and illegal wars while the people are left penniless, and increasingly, homeless.

The young people understand what the banks have done to the governments, as the people have seen even more tax increases to subsidize the giant funnel of money going to the ‘banks too big to fail’ just as the United States has done.

What is happening at the street level in terms of looting and destruction in London, for instance, is a reflection of what is happening at the higher levels of government, where corruption is off the charts. People rioting in the streets believe they have nothing to lose! This mayhem is not the result of a few anarchists, as the media would have us believe. This is a mass movement and not likely to go away unless conditions change.

Our capitalist economic system is in a worldwide meltdown. There’s no question about that. The economy of the U.S. will fall sooner rather than later. You can’t keep printing money forever. People in the U.S will take to the streets when municipalities and state governments are unable to write the cheques. The unrest has already started. Tent cities are spreading; foreclosures on homes are said to be in the millions.

So, as the number of millionaires and billionaires increase in the world, as the rich get richer and the poor get poorer, we really need to understand that we are not untouchable in Canada, and our fate is always dependent to a large extent on our trading partner to the south.

If you agree with that, then perhaps you will agree that as a country we need to become more self-sufficient than ever before. We have all of the resources needed to sustain our 35 million people. We need to become pioneers in this new century and create a new economy.

Some of the biggest challenges will be energy and food shortages, erosion of government services such as health and welfare and housing shortages. To the young people out there, use your ingenuity, your skills and your creativity to help us adapt to some difficult years ahead.

Moustache Joes

4 Responses to "Free Enterprise Economic System Undergoing Meltdown by Kevin Parkinson – August 17, 2011"

  1. Garfield   August 17, 2011 at 12:38 PM

    Although I agree with the premise of what you say, I am a realist and thus curious how to entice people to pay substantially more to buy Canadian. Producing products in Canada and selling to a small market of 35 million is not competitive. It does not allow for scale of economics and thus cost prohibitive unless focused on a specialty market. Cost of wages, benefits, regulation, taxes and overhead versus price of imports is killing the Canadian manufacturing sector.

    I prefer to buy Canadian and to support my own when feasible. It took slightly over two years before I finally became a Wal-Mart Shopper. The savings in many cases was too great over Canadian Tire and other box stores. It all comes down to the money on a tight budget for many Canadians. For myself food is a exception and I refuse to purchase any foods from China… canned, boxed or otherwise. Same with most Mexican produce. When possible I will spend extra for food and buy Canadian and organic.

    We can not achieve scale of economics to compete with countries such as India, China, Mexico, etc. In addition with higher wages, benefits, energy and regulation costs. In some sectors we do not have free trade between provinces. There is a farm in Vermont for example that produces as many eggs as the province of Quebec. How do we compete against the economics of such? Our fate seems tied to the almighty dollar.

  2. Thorin   August 18, 2011 at 12:19 PM

    While I agree with your statements about becoming more self-sufficient, I think you have confused the term capitalism with consumerism. Capitalism is based on receiving money in proportion to the value delivered to others. Stealing, lying, and bribing are not capitalistic behaviours. Corruption in government is actually anti-capitalistic.
    Yes, the economy is in a meltdown – and it could be argued the meltdown is part of a normal and predictable historical cycle. Do not blame the ideology of capitalism for that meltdown while describing the results of cronyism, lobbying and back-door corruption, because they are two very different things.

  3. Kevin Parkinson   August 18, 2011 at 2:12 PM

    Thank you to Garfield and Thorin for your feedback. We are at a crossroads and the more people who start thinking about this situation, the better it will be for everyone. I would like to elaborate about two issues that have been raised: capitalism and rising costs.

    Capitalism, otherwise known as free enterprise, is an economic system that thrives on a free, mostly unregulated market. It is based on the assumption that market forces will drive the economy, and prices fluctuate according to supply and demand. In the United States, as with any country, the banks and corporations have a stranglehold on the government (Senate and Congress), whose politicians are beholden to them. This is a complicated topic, so let me just say that whatever system is used, the profit motive and human greed control human actions. I just rented and watched “Inside Job” from Blockbuster regarding the Global Economic Crisis of 2008. Millions of people lost their homes and jobs at a cost of over $20 trillion. The movie exposes what the system has become, and the people who committed these heinous financial crimes are still running the country. No one has been charged.

    As far as creating a new economy as I mentioned in the article, I was thinking more along the lines of the goods and services we need for survival, not all of the imported junk we can live without. For example, what is the tipping point for someone to refuse to buy an item at a certain price? I can buy a tomato in Cornwall for $1. and have done that. Will I buy the tomato for $2, $3. or even $4. I have read that when food prices rise 400% then people will try and grow their own.

    If we reach that tipping point, and I believe we will, then everything changes. You need land to grow vegetables, and people who have land have something of increased value. The same argument could be made for energy production, and the production of renewable energy sources.

    Grocery prices have already gone up a lot since last year, and the forecast is that prices will double over the next two years. This will mean more junk food consumption for families with declining wealth, more obesity and more health problems.

    It is true that we will not be able to compete with countries like China and India with respect to manufactured goods. However, with the unofficial unemployment rate about 20% in the U.S. and rising, some of those people might be willing to work for much less, and maybe some of those offshore jobs will return. It’s hard to say. However, the demand for such goods will also drop if people are struggling to put food on the table.

    There are so many things that can happen when there is an economic crisis. It will be quite a ride.

  4. Thorin   August 19, 2011 at 11:23 AM

    Hi Kevin,
    I agree with much of what you say and I really appreciate your insight. I guess my point is that many of the very real problems that you are attributing to free enterprise and capitalism are only made possible by either overt or covert meddling by the government to manipulate the so-called free market. This is not the place to debate which market ideology is the best or worst (I sure don’t know) but I just wanted to remind people that so much of what is called capitalism because of big business involvement is the furthest thing from it. Big business is not the equivalent of capitalism just as profit at all costs through lying, cheating and stealing is not capitalism.
    As an aside, I think you may find the book The Fourth Turning by Strauss and Howe a very interesting way of looking at the current financial collapse and how it relates to the rhythms of history.

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