3. Manage resource control effectively… important to understand that all the world resources can be classified as either belonging to an individual, the State, or the public
4. Ensure equitable distribution of wealth by making sure that individuals/ organizations don’t hoard wealth but rather use it thereby increasing wealth circulation (think of this as if a neighborhood is independently run as an economy and there are $1,000 worth of wealth and everything has to be run within itself, if people start hoarding cash and not using it, eventually, everyone will have cash but there wouldn’t be any means of earning for so many people who could have otherwise been employed to offer goods/ services for that advantageous site wealth)
5. Focus on productivity in creating a “real” economy _ Do not sell what you do not have (you can see how not following this principle has screwed the whole financial services industry and precipitated the crisis) _ Introduce the gold and/or silver standard to support real wealth creation and not just currency paper printing _ Eliminate interest from the economy and introduce profit-loss sharing in all financial transactions
Continuing from my previous post, I hope we all recognize that “poverty” is a real problem and a flagrant violation of fundamental rights of many of our fellow mankind.
1. Everyone in the multinational forums talks about reducing poverty by 50% by 2020… So, does it mean that millions of people (just 300 children die of hunger every hour) are destined to die of hunger since we cannot solve the problem soon enough. Nothing more to be said on this…
2. Capitalism… it’s just a virtual economy with no “real economy” fundamentals _ Dollar and the gold –> Back in the times, currency was tied to the dollar to ensure that we don’t over-inflate our wealth by just printing money. Just the other day, I was trying to do simple math that if an economy had real wealth of $1 trillion and is spending $1 million every day, it would take them
Now, that this linkage is gone, value of currency paper can be set by the whims of people in power
2,700 years to exhaust just that $1 trillion. _ Regulations –> Society has become more individualistic where rules have been changed as deemed fit for certain section of the society to remove all regulations and allow individuals to hoard wealth thereby taking it out of circulation. The power of a real economy is in the continuous circulation of wealth to allow for an equitable wealth distribution. _ Stock inflation –> Just because some analysts/ investors forecast great returns (remember, nothing is predictable), the stock price shoots through the roof… take some of the recent IPOs for example. There is no real alignment with what happens on the ground. _ Usury explosion –> In my opinion, this is at the core of this economic system menace… people with more wealth are able to rip off the not-so-privileged by lending money at unfair terms (high interest rates) which means a common man borrowing will have to pay more to afford the same kind of goods/ services.
Getting to the root of world’s real problem – Global poverty (Part 1 of 3)
Over the last few years starting with my pre-MBA job, then the business school, and subsequently my current occupation… I have heard and seen closely the issues facing organizations. More often than not, what happened since 2008 is easily blamed on the “financial crisis” without delving any thought to understanding what’s behind this so-called crisis and what the fundamental underpinnings on this issue are…