All in Economics
What exactly is Growthism? It is a necessity for growth to occur endlessly. Growthism is the base of current economic conditions and the vital concept of the dominant worldview. The principal philosophy and force of this era are distinctly economic. The values that determine our standing today are capitalistic-defined concepts of growth, profit, and attaining the utmost efficiency. Without ends or limits, growth seems like the standard inevitable order.
Global inflation rates over the past year have been higher than they have been since 2012; similarly, inflation percentages in the United States (US), the United Kingdom (UK), and the European Union (EU) since the start of the second quarter have been staggering. In the US, the UK, and the EU, the primary driver of the recent Consumer Price Index (CPI) elevation, in the US, and the Harmonized Index of Consumer Prices (HICP) in Europe, is the rising cost of energy and consumer commodities. The rising cost of consumer commodities, especially food, housing, and petroleum products has struck the world into a tumultuous spiral, causing the cost of living to rise to a level not seen since the 1980s, resulting in the global experience of all three types of inflation. Typically, only one form of inflation is seen; however, this reversion to a 1980s economy is the result of many factors and is relatively uncommon. This spiral has fueled riots and protests across Europe, causing protestors and legislators alike to demand monetary reform.
In the United States, central banks and governments play a key role in the health of the nation. These institutions have been working in conjunction for many years to determine monetary and fiscal policy in an attempt to grow economies and mitigate inflation and unemployment. However, after the gold standard was abandoned in 1933, and the US moved to a floating currency, everything changed. Under the gold standard, the currency had to be tied to physical gold where it could be exchanged but now, countries like the US have a floating currency where the value of the dollar “floats” with its demand in the global currency markets. This has given banks and governments a lot more freedom with interest rates and policy and has made way for the longest-running bull market in history. However, this has allowed those entities to manipulate markets and push large underlying problems further down the road by embracing new macroeconomic theories, such as modern monetary theory. Unfortunately, since these new theories have never been battle-tested over a long period of time, the economic condition of countries that have embraced these new theories has yet to be fully seen.
If you watch the news about the current and future state of the American economy, you have likely heard nothing but depressing news. You have most likely heard that the American economy is heading towards a deep recession. You have also heard television news anchors and other commentators on social media platforms draw comparisons between the current state of the economy and its state in the 1970s and 1980s. These claims, while not entirely true, serve as a useful comparison to measure current developments in the U.S. economy. While this crisis is different from similar crises in the past, many of the same factors will extend the length of the current pitfall we as a nation are in. Nothing better illustrates the slowdown of America’s economy, among all sectors, than the recent hits to the the rental and for-sale housing markets.
Leaving your wallet in the car was once a big frustration, but now all you need is one plastic card to make it through the day. As businesses across the country get rid of their bulky registers and trade it in for a sleek and minimal monitor, having a wallet full of cash won’t get you as far as it used to.
Ethiopia is one of the few countries in Africa that pursues an active and comprehensive industrial policy. Ethiopia is looking to position itself as the new low-cost manufacturer of the world. To achieve its goal, Ethiopia needs proper industrial policies consideration which comprise “more particular facts than any brain could ascertain or manipulate” (Hayek 1973). The objective of the “Industrial Policies Series” is to examine current outcomes of Ethiopia’s endeavor to identify key elements in the Ethiopia-specific complexity that are pivotal to both success and failure. Targeted sectors used for our examinations are the leather sector, horticulture sector, and cement sector. In part A, a comparison between the leather, horticulture sector and the cement sector will be made to stress on the value of import-substituting policies.
Gloomy reports and predictions that technological advances will beget massive job displacements throughout the worldwide economy in the upcoming years have caused disquiet among many individuals. Technological advances will enhance productivity and lower prices, at the cost of high unemployment and consequently poverty caused by the lack of income to those unemployed. Artificial intelligence and robotics are expanding into transportation, manufacturing, retail, medical diagnosis, translation services, legal research, banking, financial services, and many other areas. A paper by the University of Oxford predicts that about 47% of contemporary US jobs will be automated out of existence in the near future (Frey & Osborne, 2017); and McKinsey reports that one out of three American workers are at risk of losing their jobs to new technologies (Manyika et al., 2019). This is not only a domestic issue, but a global one. That same McKinsey study asserts that 800 million jobs globally are at risk; and according to The National Bureau of Economic Research, increased adoption of robots in the US decreases employment and earnings for foreign workers as well (Kugler et al., 2020). Undoubtedly, technology will disrupt employment. Ideas on how to fight back are developing among academic circles and political parties. The most prevailing idea is that of guaranteed income. We shall examine this idea. According to economic literature, a guaranteed income program has (i) a positive financial, emotional, and physical impact, (ii) but a negative labor force impact. Further, forms of guaranteed income programs vary greatly in design, ranging from a Minimum Income Guarantee (MIG) to a Universal Basic Income (UBI), to a Negative Income Tax (NIT). We shall define each program, identify if they are useful in fighting technological unemployment and poverty, and determine which would be the most effective.
In Venezuela, the discovery of oil was an excitement for the fast and easy track it paved to wealth. Venezuela’s agricultural industry, on the other hand, was largely neglected due to over-emphasis on the oil industry. Such a tilted policy design deepened the tremendous gap between rural and urban areas, with only 12% of its population living in the rural area who produces food insufficient for the whole nation (Wilpert, 2007). Nevertheless, the greater demand for food did not fuel the welfare of the most fundamental supplier group – the farmers. Instead, it filled up the pocket of the elite class, the latifundista, as they had overwhelming property control over the key resources. Misallocation of property rights not only hinders the production power of the traditional farming class, it also causes a vicious cycle where incentives for relevant activities are nowhere to be found.
Leaving your wallet in the car was once a big frustration, but now all you need is one plastic card to make it through the day. As businesses across the country get rid of their bulky registers and trade it in for a sleek and minimal monitor, having a wallet full of cash won’t get you as far as it used to.
