Market Intervention, National and Global, Lead To Iso-Economics - PART 3 ISOEconomics / Isokratic Econommics
Here, we must distinguish between the stabilising, preventative, collective measures, aim to stabilise and avert destruction and misery, from the politically motivated market interferences. For such interferences, whether in a close economy as that of the Ex Soviet Union, or in an open market economy, they have the same catastrophic effect. What’s the good of curing the illness, if the cure kills the patient?
The absolute power which the present democratic systems hands to the democratically elected leaders of a country, very often results in such leaders to interfere with the market of an economy for political reasons. As we have witnessed in the past such politically motivated interventions have resulted in hard, painful and catastrophic economic and social experiences. Unfortunately the hardest hit from such market interventions are always the masses of the employed people and the small business communities.
Examples are plentiful. History has demonstrated that even the leaders of free capitalist markets, such as the UK’s so-called Iron Lady, Margaret Thatcher, for political motives, have persistently interfered in the market; She interfered with both economic and political means.
Politically derived interventions, which have affected the markets, at both, the national and the international level. Even creating wars, be it economic, military, or civil wars. Her unorthodox politically motivated market interferences, with extreme monetary measures, caused the biggest economic depression or rather stagnation, since the 1930s depression, in the UK.
The pill she asked the British public to swallow was not just bitter. In many cases it was psychologically fatal. In other cases it was physically fatal. Millions of homeowners lost their homes. Thousands ended their lives by suicide. Recently ( towards end of September 2002) a London newspaper published a graph showing the Thatcher years to have had the highest suicides. Was it a co-incidence? I don’t think so. I lived right through it, I have witnessed it, I felt the pain. The worse thing was that such interventions took the hope out of the market and as such out of the individual. I was lucky to have manage to save my home by renting it out and move into a small flat. Yes I was lucky compare to the millions who lost their homes, their most precious position.
As a direct result of such I will say malicious market interventions, the British NHS system which used to be the envy of the world, is still suffering from such catastrophic market interfering policies. People are still dying because of destructively under investment in the health care system. The UK’s NHS system is now rated even below the standards of developing countries, despite massive re investment by the subsequent governments. For all we know Thatcher had all the best intentions. What she and her advisers fail to grasp is that the market though very tolerant is not forgiving and once it turns it can take a long time to settle.
Steps must be taken so that in the future such practices can never be repeated. I believe that the Isokratic system in combination with Iso-Economics may offer the solution.
At national levels, intervention takes the form of both monetary and fiscal policies. It was these interventionist policies, which brought the bitter recession of the ‘90’s in the UK. Rates of interest were used to manipulate the market. Millions of people losing not just their business, but even their most valuable and needed asset, their family homes. The final effect of these policies was that the few, gained and accumulated massive assets, taken away from the ordinary person, at even below repossetion prices. The suffering, which in effect, caused both real and psychological suicides, has marked forever, many ordinary people in the UK. Yesterday’s successful business became today’s business corpse.
On the international level, again we see enormous direct interfering and influencing of foreign investment, camouflaged under the label of regional incentives, and competition, to attract investment. Examples here, are such as that of the Japanese motor industry, whereby all the European countries, flirted heavily in their efforts to persuade the Japanese car producers, to station their production factories in their country. Again, intervention by the use of monetary favours, such as cash grants, provision of free sites, tax free incentives, as well as fiscal policies, provided by tax-free incentives such as tax relief, for long periods. Even labour governing rules and regulations introduced or scraped to attract the foreign investors.
The UK traded laws, capping the power of the trade union actions, as protection against strikes by making it illegal, or near impossible, to strike. Irrespective whether in some cases, such laws became a necessity, due to the extremism of some Trade Unions in previous years, the primary motive for the introduction of these laws, was to attract investment, by protecting the capital. These laws finally proved to be the determining factor, which prompted most of the Japanese car giants to set up factories in the UK, even though the UK’s productivity rates were many fold lower of the German work force.