Economics repeats itself

Published 05.11.2019 02:05
Updated 20.12.2019 01:27

Doyens like David Ricardo, the author of “The Principles of Political Economy and Taxation,” who approach the neo-classical economy and theoretical politics under the same light, have sought the answer for the question “what is the capital of labor” throughout their lives. While those who are in favor of Karl Marx support the idea that workers’ rights should be included in labor to a certain extent, there are hundreds of economists and thinkers like L. Althusser who claim scientific revolutions will only emerge through the power of capital.

The issue of value in today’s economical wars is not evaluated in terms of the total labor-time but a matter of reaching victory in average production conditions in the fastest way possible. We are going through a period when it is impossible for Western economies, which consider Adam Smith as the cornerstone of their capitalist-style production, to transform into human-focused economies. We so easily accepted what is taken from us for the sake of development that we continue to fool ourselves by calling this marginal satisfaction.

While benefit is measured by productivity in engineering, we directed economy solely to our preferences. When Adam Smith wrote the “Wealth of Nations” in 1776, there was enough capital, underground resources and scientific progress for everyone. The economists of the period did not know that this would last for centuries and the wealth of nations would lead to problems that would turn into a world war. People did not think that using steam trains would after a while become the basis for attacks on countries with coal fields. It is beneficial to mention the environment that people witnessed in the years that laid the foundation for individualism and market economy, when production increased thanks to geographical discoveries and everybody’s wealth increased through increased production in farming and industry through scientific/technological progress.

The point we are at today involves the exploitation of continents, cutting the last trees, and the chopping off of the black man’s left hand for the sake of colonialism. We solely talked about polarization for five decades. The grandchildren of Lenin and Peter the Great, who were barely self-sufficient, had no ability to say stop to U.S.’ imperialist expansion. The European continent, which only solved the issue of East Germany with assistance from the U.S. had no choice but to share. The gold and oil crises we went through when we reached the 80s set the ball rolling for a new change.

When we consider history and human nature together, we can better predict what would happen in the future. Although cultures deteriorate, the necessities of humans have been the same for the past thousands of years and our ambition is much more than before. Famous Ancient historian and Athenian General Thucydides was a thinker who lived during the 30-year-long Peloponnesian Wars that took place between Athens and Sparta.

“The Thucydides Trap” theorem, which explains what happened over the course of the war in a plain and fluent manner, brilliantly describes the conditions of our time. The only reason behind the fight between two city-states – which would not have fought if they did not interfere in each other’s affairs — was the sense of fear Sparta felt due to the rising power of Athens. Historians who explain the ridiculously founded “I am the greatest war” note that Eastern Europe could not recover for years due to the barbarity and human destruction caused by it.

As Harvard professor and political scientist Graham Allison cites this historical event, two “city states,” namely Beijing and Washington, divided by an ocean between them and do not precisely know the languages or cultures of each other, are busy fighting their own Peloponnesian War.

Historical research shows that 16 states who fell into the Thucydides Trap over fears that its competitor will replace it maintained its sovereignty and 12 of them surrendered their regional sovereignty to the states they attacked and vanished. It is happening under the name of trade wars today, in Normandy, Brexit tomorrow, in Stalingrad 80 years ago and in Syria, Iraq and Afghanistan today. We are getting a step closer to total destruction of countries under the name of global justice as a result of those who cannot control their alter egos.

It would be beneficial to add this to my initial words on humanity and labor: according to the world scale, peace and justice only prevail among equal powers because the powerful will do as they wish and the weak will suffer the pain they need to endure.

Economists who complain about a slowdown of global economies consistently refer to numbers, measures and graphics in their analyses.

Because they cannot say “we were able to exploit Africa 23% less compared to the same period last year, the world was only able to grow 1.3% this year,” they say there has been decline in demand. They are trying to find a pretext for the trade wars with China just so that the latter cannot triple the West in terms of capital stock by 2030. Because they are scared that the price of oil sold to India, China and Indonesia decreases to $50 to $70 through the Iran-Turkey basin, they try to turn the Strait of Hormoz into a fire scene and call this the Persian-Arab war.

Without a doubt history repeats itself. I certainly agree that economy is also a repeating phenomenon. Why? Because being close to the source of wealth makes you prosperous for only a specific period of time. For instance, being close to Germany does not make you extremely wealthy, but being close to a country with a foreign trade surplus makes you a capitalist and may turn you into an industry-based country. In the world of the gold standard, having an inflow of gold meant having lower interest rates.

Today, countries with dollar and euro inflows try to reset their interest rates to improve their countries’ standing. In the 16th century, gold inflow was the source of wealth for countries and they fought over gold. Today, countries are waging the war on how long a system allegedly adjusted with gold but is nothing but paper will last. The history and economy professors at Hudson Institute, who have warned those deceived by the Thucydides Trap in the past two weeks, are aware of what is going on. The only problem is that economists and lobbies are greedy.

* Ph.D. researcher in Private Company Economic Research Department MENA at Swiss Business School

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