It’s a rare man that is recognized for his achievements during his own lifetime. Normally, the geniuses of the world have to wait until they are dead to get any sort of recognition, let alone strike it rich. We never like giving recognition to people as it makes our own status decrease.
Except, that’s more of a thing of the past, isn’t it? Our super-fast world at the press of a button and at our fingertips means that we no longer have the possibility of putting that off until the ones with the knowledge are forgotten bywords of a bygone era. It happens here and now, these days.
Joseph Eugene Stiglitz was awarded the Nobel Prize in Economic Sciences in 2001. We have constructed the world in which we live on recognition and awards. But, they are just for giving. They are not for anything else. We take no heed of what the ones that have been recognized might have to say or declare. They can go blue in their face, we have delusions of grandeur. Who gave them the prize anyhow?
In 2012, talking of the European Union’s austerity plans, Stiglitz had just one word to say. It was “suicide-pact”. He went on to say last year that imposing austerity on the citizens of the EU would do nothing more than lead to the collapse of the economies of those very same countries. Nobody listened to him then and nobody is listening to those words now. Politicians today in the EU are so hell-bent on retaining power that they have transformed themselves into economists, without any ability or reason. Politics is the governing element that will lead to the downfall of our economic structures because we are governed by flawed responses from people that have no idea what economics is about.
Isn’t it Keynesian economics that shows that austerity can only be put in place when the economy is on an upper? Didn’t Keynes say: “The boom, not the slump, is the right time for austerity at the Treasury"? Haven’t they learnt that a country was nothing like running a household? Margaret Thatcher got it all wrong. If we all reduce our budgets and we all stop spending at the same time, then where’s the money going to come from? Is it going to magic somehow out of the magician’s hat? Undoubtedly, it will disappear down the rabbit hole along with the white rabbit that Alice chased after. Chasing white rabbits, that’s what we’re doing.
Cutting our spending all at the same time can only bring about the paradox of thrift. Some may criticize it and say it’s not true. But, in order for their arguments to hold up, we would have to export our way out of the recession and that we are not doing today. It would also have to be done at the same time as currency devaluation. That we are definitely not doing…we just know how to put the modern technology that we have created to good use: printing new shiny notes and throwing them at the people.
Take the example of the UK. The British believe that they export more to the EU than they import. They don’t believe the figures that show the contrary. That’s because they are living on the lies that their politicians have constructed. In March (and this is just one example, but the past is just as true) 2013, the difference between the value of goods imported by the UK and the value of the goods exported stood at $6.1 billion. The UK has a trade deficit that is growing (March: an increase of 31.8%). Will this help the UK export itself out of their recession? Hope against hope, we might pull it off. But, the paradox of thrift has been around since the 18th century when Bernard Mandeville (another guy that has been forgotten) wrote The Fable of the Bees. But, the bees are disappearing too, aren’t they these days?
The EU is in a slump, austerity can only bring us down. Yet, the politicians that we have voted into power seem to believe that its austerity, contrary to what the past has shown us; that will get us out of that rut.
We have spent decades, even centuries, wishing for others to follow in our footsteps and create what we have built our societies upon. Now, they are on the cusp, on the verge of doing it and succeeding possibly even better than we were able to do in the US and the EU, we are floored. We are telling them that they are wrong.
But, Stiglitz was right; we have signed a suicide-pact. We have decided that we need to destroy everything and start again. That’s what normally happens when those that are lagging behind finally catch up with us, we change the boundaries, so they are lagging behind again. But, this time, it’s our own death that will come about. Our economies will die. The politicians are not economists. They can’t tell us what will happen and what bright new future they will construct. But, they are the ones that are the apprentice-sorcerers that are waving the wands, dressed in economists’ clothes.