October 09, 2018 Tuesday
Bedtime Story
Gesell Dreamt of Free and Fair Trade
For Gesell the idea of ‘Free Land’ was
critical in order for merit and talent to flourish since it would ensure
“equality for all” in its truest sense.
This would, in his view, eliminate the
legal and inherited advantages that ownership inevitably produces besides
taking care of the market distortions created by rent charges.
(3) Freihandel or Free Trade
This is something that to some extent has
become a widely accepted policy though even here there always local resentments
and resistance to which the disadvantaged side comes forth with.
It implies complete absence of any sort of
restrictions or government interventions regarding import and export though we
all know even the most liberal economies do not comply with this criteria.
Local demands force the governments all
around to offer some sort of trade protection to certain sections of industries
or agriculture in form of tariff to imports, export subsidies, import quotas,
taxes, regulatory legislations and so on and so forth which is an anathema to
the right-wing ideals of free trade.
Free trade also implies free movement of
people and labor which is widely applicable within nations but hardly followed
internationally.
In such an economic system there would be
absence of interest on currency which to Gesell’s mind would also help the
untalented or lesser talented as they would not have the burden either of rent
or interest.
In such a scenario the cost of any good or
service would reflect its true value, that is, its demand value, which in turn
will provide a feedback mechanism both to the producers and the consumers.
Lowering of the price would be a clear
signal to the producers that the demand has fallen and so production needs to
be curtailed.
When the production is cut down its price
would gradually gain because of the demand till it catches up with it.
This price system would be both self-stabilizing
and a true reflection of the demand of that specific good.
Mind you, this does not mean that any free
market economists such as Gesell or Keynes are against the ideals of a welfare
state.
In fact, most modern democratic states are
by definition welfare states as codified in their constitutions though how much
they are able to carry out their obligations can be hotly debated and disputed.
In my view, the very basis of segregating
nations into first world and third world ought to be based upon the ability of
the state to carry out its constitutional promise of a welfare state besides considering
the usual figures of GDP per capita income though I am sure both must be in
some way related.
What is the origin of welfare state?
Some historians consider the empire of
Ashoka in the 3rd century BC to be the first officially declared
welfare state.
Stay tuned to the voice of an average story storytelling
chimpanzee or login at http://panarrans.blogspot.com
Good night Mon Ami and my fellow cousin ape.
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Another great educator and a teacher that I am aware of is
Professor Subhashish Chattopadhyay in Bangalore, India.
While I narrate stories, Professor Subhashish an electronic
engineer and a former professor at BARC, does and teaches real mathematics and
physics.
He started the participation of Indian students at the
International Physics Olympiad.
Do visit him here:
All his books can be downloaded for free through this link:
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