As unemployment reaches 30 Million (at the time of writing this essay), the world’s financial system edges toward a cliff. That cliff is steeper than the “cliffs of Mohair,” for if we fall off there is no return. The financial system collapses entirely as nobody, households, small businesses, corporates, or Governments can no longer afford to repay their debts to the very same financial order.
The current financial order is a debt-based order. Its currency is built upon the assumption of debt. In other words, debt ultimately bounds the amount of currency, and inflation, that circulates within the system. This certainly built off the previous Gold only backed order, which even William Jennings Bryant admits needed greater inflationary measures. However, in the 21st century the debt-based order is proving incapable of dealing with the rapid “creative destruction” or obsoletion brought on by technological and innovation-based displacement. In other words, the world’s economy is moving too fast for the debt-based order.
History teaches us all too well what happens when a financial system “melts-down.” The world should scare us because in the 21st century we are confronted with a wartime scenario that includes Nuclear Weapons. In history, the collapse of the economies of Nation-States leads to one of three scenarios: war, revolution, or both. The Great Depression exemplifies how a Global Depression fueled war as radical, socialist Governments swept to power in opponent Nation-States. The “Cliffs of Mohair” represent a steep fall into war and the evils that came with it.
We can, however, make a different choice, conscious Revolution. In using the term Revolution, one must be clear: this is not a Revolution to socialism, a fundamentally new system of economics and finance, this is a Revolution of the existing Order. It is therefore peaceful, expedient, and historic.
A peaceful Revolution must be built on sound economic and financial policy. Fundamentally, we must identify the problem with our current system, as aforementioned, is that the debt-based order cannot change fast enough for the 21st century. The speed at which the coronavirus pandemic spread across the globe is a result of our global economy and the increased travel afforded to players within that economy. The debt-based order simply moved too slow in dealing with the crisis. Bail-outs were misguided and couldn’t navigate Government bureaucracy effectively enough to get cash into the hands of business. Nevermind that bail-outs don’t work to begin with.
I call for a peaceful Revolution that Renovates our existing International Institutional order completely. This includes the replacement of the United Nations, World Trade Organization, International Monetary Fund, Bank for International Settlements, and the myriad of quasi-governmental organizations that circumnavigate the byzantine, incompetent, and ultimately obsolete world financial system. I call for a New, Global Economic Order!
We can do this by developing a new financial system under the framework of an equity-based economic order. I write about these specifics in my forthcoming book, The Post Pandemic Economy, where I chronicle in detail the foundation of a New, Global Economic Order. At heart is a new way to look at economics and world affairs. The driving force to economic growth is not the achievement of equilibrium with relationship to supply and demand, but the FORCE of ‘creative destruction.’ With that as a starting point, we can envision of a New, Global Economic Order that bolsters the sovereignty of Nations, increases the wealth of households, and protects the property rights of citizens.
As the war hawks circle, and in many cases with justice on their side, lets first attempt peaceful Revolution. REVOLUTION, NOT WAR!!!