Financial Institutions, Economists, deify money.
THE DISCIPLINE OF ECONOMICS is riddled with flaws. That is why economists in Europe, America, and Africa, as well as their students, are unable to effectively run any economy. Two of the flaws are especially egregious.
They are a lack of historical awareness and a knowledge of industrialization and development science. As a result of these two flaws, economists in schools, the World Bank and the IMF, central banks, ministries of finance, debt management offices, and other institutions in developing countries simply deify money.
In other words, they strive to show that the god of money is the answer to all issues. They are completely incorrect. There is no such thing as money as a solution to any problem. Economists and allied institutions such as the World Bank and the International Monetary Fund cause problems and institutionalize stagnation in poor countries in Africa, Latin America, and Asia by doing so. They do not provide a solution to any issue.
What do I mean when I claim that economists lack historical awareness? First, economists make the mistake of ignoring historical facts, lessons, and guidance. Second, economists do not include historical facts in their analyses. The ancient Gauls were the forerunners of modern-day Western Europe (Carrington and Jackson, 1954).
In 55 B. C., the Roman Empire enslaved ancient Gaul. In 406 AD, the western part of the empire fell apart. The various nations that make up modern Western Europe were founded by a variety of forces. Between the 10th and 13th centuries, the nations of Western Europe became more clearly defined.
Economics as a discipline arose in the early 18th century and continued until the early 19th century. In the era 1770-1850, England was the most progressive nation, and the country experienced the first modern Industrial Revolution, or IR. After England, other Western European countries developed the contemporary IR. Before the IR, all of Western Europe’s states were impoverished and anarchic. As a result, we may argue that industrialization is the fundamental source of Europe’s high productivity.
It is the solution to mass unemployment, poverty and insecurity. The infrastructure – roads and bridges, electricity generation and distributing systems, canals, airports, cities, riches (money), the banking and finance sector, and the diversified (many-sector) economy, etc., are fruits or aftermath of the IR. This is the history of the development of Western Europe. The wealth, including money in Western Europe, the rest of the West and Asia is a fruit of the industrialisation there.
What is the science of industrialisation which economists disregard? Industrialisation entails developing the scientific and technological capabilities of a people. All human beings are born as crying babies.The baby soon babbles (learns how to talk and speaks a language). All other capabilities are acquired through learning (education, training, employment and research).
The intrinsic value of the learning-man appreciates in a compound manner and may be modelled by the compound interest formula. Analysis of this basic formula showed that the rate of learning determines how soon the learning-person achieves a desired target. Scaling the basic formula showed that the growth of a nation in achieving sustainable economic growth and industrialisation can be monitored by five learning related variables. They are:
1) N – the number of people involved in productive work or employment in a nation; 2) M- the level of education/training of those involved in productive activities in the economy and of the people of the nation; 3) L – the linkages among the knowledge, skills, competences and sectors of an economy; 4) R – the learning rates or intensity in the economy and especially among the workforce; and N – the experience of the workforce and the learning history of the society. The higher are the values of the variables, the better is the economy.
A nation achieves modern indusrialisation when the five variables attain critical values. It is because industrialisation is a learning and capability-building process that any nation that learns and builds-up knowledge, skills and competences to critical levels achieves Industrial Revolution. Industrialisation is internal to a nation. Europe and Asia nations learnt very slowly and achieved the modern industrialisation in 2000-3000 years.
The economic progress of the United States of America showed evidence of a more intensive learning. By 1800 more than 90 per cent of Americans lived on farms or tiny villages. The farms and villages formed thousands of different economies rather than one economy. The subsistent farm was the characteristic unit of the American economy then; father and mother and children spent most of their time producing the basic necessities of life: food, fuel, clothing and shelter.
The belief that the future of America rests on sound public school was common among early American leaders, though they themselves did not have opportunities for good education. Consequently, Americans displayed fully the versatility of an educated people.
The New England states (Maine, New Hampshire, Vermont, Massachusetts, Rhodes Island, Connecticut) and Pennsylvania were the first to establish public educational systems to educate all young people. It was also in these states where sound and systematic education had been practised longest and where it was most developed that the greatest manufacturing development occurred first.
The young American learnt always at that time. Compulsory education laws of most the states and especially the New England states and Pennsylvania promoted high intensity learning. At the end of the 19th century, Americans looked back on the 35 years after the Civil War (1861-1865) with amazement.
The entire nation had been transformed in their life time. All around them were huge new cities, large population, bewildering array of new machinery, a vast railroad network, and thousands of new factories, mills and mechanised farms. Economists and the related institutions do not concern themselves with the science of human development and industrialisation. They talk of money, infrastructure, foreign investments, loans, intervention, etc. They have been planning for Africa for over 50 years doing what they do not understand.
The World Bank predicted that Africa will have most poor people by 2030. The World Bank in its Africa’s Pulse, a twice-yearly analysis of the issues shaping Africa’s economic prospects predicted that most of the world’s poor people by 2030 will live in Africa.
The Africa’s Pulse had stated that economic growth in Sub-Sahara Africa, SSA, remains strong with growth forecast to be 4.9 per cent in 2013. Almost a third of countries in the region are growing at six per cent and more, and African countries are now routinely among the fastest-growing countries in the world, the analysis revealed.
Africa’s Pulse also noted that, Africa buoyed by private investments in the region and remittance then worth $33 billion in a year – GDP growth, will continue to rise and peak up to 5.3 per cent in 2014 and 5.5 in 2015. Strong government investments and higher production in the mineral resources, agriculture and service sectors are supporting the bulk of the economic growth, Africa’s Pulse also said.
Africa’s Pulse also observed that as Africa’s growth rates continue to surge with the region increasingly a magnet for foreign investments and tourism, the poor nations in Africa, Latin-America and Asia will remain poor as long economists and related institutions continue to plan for them.
Source- Vanguard
