Economies without boundaries – a pitfall for all by Reinhard Koradi The financial and economic crisis relentlessly uncovers the shortcomings of the current state of the economy. An economic system which renounces all regulations and refers in principle to

by Reinhard Koradi

The financial and economic crisis relentlessly uncovers the shortcomings of the current state of the economy. An economic system which renounces all regulations and refers in principle to a “global world”, will inevitably lead the involved states to the national inability to act and violates their sovereignty. The different geographical, cultural, political, social and economic framework conditions are being rigorously hidden. The leveling associated with this process inevitably creates a power vacuum, which leads all too quickly to imbalances. The dominance of the strongest prevails and also includes many abuses of power.
Actually, the goal of an economy that is acting responsibly and serves the people, should be the creation of an equilibrium. In terms of foreign trade, the volume of exported and imported goods and services should be balanced between the various national economies. If a country exports more goods than it imports, then it is strengthening its economy at the expense of other countries. Likewise, in terms of employment policy, it is ultimately about reaching a balance between the supply and demand of jobs. Similarly, the compensation principle must be applied to monetary policy (money supply must not be extended arbitrarily) and fiscal policy (income and expenditure). The failure to comply with the requirement to reach a balance between outflows and inflows through regulatory intervention in the individual markets, together with the beneficiaries of deregulation and globalization of power concentration, are at least partially the cause of the current crises.
One of the main instruments for creating this necessary equilibrium is an independent national currency for each state. The common currency Euro has incapacitated the national economies of Europe and deprived them of the autonomous influence on their economies. New centers of power (WTO, IMF, ECB, Brussels, London, New York, etc.) dictate the economic order of the once independent national economies. The centralization of the organization of the economic order has significantly accelerated the breakthrough of the neo-liberal economic theory. The definition of the global market, deregulation, privatization of basic services and the rigorous application of cost management, weaken the nation state and rob it of the chance to correct macroeconomic aberrations. The present balance of power promotes the evasion of national states through comprehensive transnational FTA (TTIP, TiSA), etc..

Those who are presently preaching to Greece, should put their own house in order first

Ultimately, the Greeks are the victims of the global economic order. They should have never let themselves become integrated into this globally-oriented economic system. But also the growth policy, which was financed by an exuberant flood of money caused aberrations, which inevitably led to the debt crisis. Of course, the Greeks have committed macroeconomic errors at the national level – as have other countries as well. Blinded by the neo-liberal “gospel”, they have deviated from the course of the aforementioned economic virtues.
Greece has to find its own way. Adapted to the aforementioned conditions, the return to a stable and responsible national policy is to be implemented. But this also means: The Greek people must regain their freedom to decide how to structure the Greek economy.
But also the other European countries have no reason to point their finger at Athens. It is time that the national economies across the globe build on their specific skills and cultures and recognize the need to set up economies for the good of the people in their countries. The resulting diversity will lead to far greater independence and will stimulate competition to find the best solutions.
Future challenges can be solved neither by egalitarianism nor by demonstrations of power. Self-responsibility – and that includes the sovereignty of individual states – is the key to escape the global chaos that was caused by a small powerful elite. We must succeed in overcoming centralism by decentralized structures. Decentralized and regionally oriented structures do promote the capacity and the willingness of people to act and stand up for their common interests.