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How important is the economy?

I am an IB student in Sweden and I thought to myself the other day how important is the economy? I mean would the world be able to function without the economy system we have today which is all about producing in large quantities. How would the world be affected if all the banks were shut down, the markets were also closed what would be the result.

  • Avi Dey

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    Apr 14 2013: Thank you for this thoughtful topic. First, I think your hypothetical is a real possibility that needs serious thinking beyond what is known today. I have been looking at this topic from a slightly different perspective than yours perhaps. I am a long time student of econmics and I do understand the 1929-1932 Depression in USA quite well.

    What sparked my interest in this topic is a rather homespun prophecy I saw recently on a rather popular Utube presentation by "Patriotic Nurse" who is located I undersrtand at Appalachia. Her prophecy is that United States is due for a second Civil War, perhaps in a decade to two decades, ie, inevitable in fact.

    Ok so, it's easy to dismiss Patriotic Nurse as frivolous. But I didn't. I can clearly see her prophecy is not way out of line if another "Wall Street Meltdown" came, when the hands of the government to take action as was done recently was tied due to inablity to borrow money, even less abel now than in the depresssion years when America had relatively far less debt.

    But I disagree with Patriotic Nurse on one key point. I think the "inevitablity" of her prophey can be substantially reduced as the severety of the first American Civil War (1861-1865) could have been reduced substantially if not completely.

    I am glad to see that my counter-points to Patriotic Nures is doing well in in the internet platform where I just published my counter-points .

    The title of my Squidoo lense is as follows:

    "Dance For America Now At Hometown USA__Avoid Civil War Come Again 3rd Decade 21st Century".

    But I do respect Patriotic Nurse's homespun wisdom and considerable thoughtful presentation. Point _ Counter Point. I hope there will be thoughtfl consideration to both viewpoints for deeper wisdom and to avoid the scenerio that you have described which is very much what Patriotic Nurse has used as the main planck of her prophecy for another disastrous Civil War in America.
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    Apr 13 2013: this is the world without economy:

    hunting and gathering food, child survival between 25-50%, average life expectancy 25 years, hunger is frequent, serious illnesses are lethal, clothing is raw leather, tool is stone axe. just like 10000 years ago.
    • Apr 18 2013: Most people today live worse than peoples 10,000 years ago.
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        Apr 18 2013: that is the most arrogant statement i can think of
        • Apr 20 2013: Our hunter gatherer ancestors were much healthier than the first agriculturalists. This is archaeological discoveries. Scholars have also found that hunter gatherers had a much more leisurely life and what work was done were things that people do now for sport. Egalitarianism was the norm.

          Contrast that to the people that live on less than 2 dollars a day. Think about the number of people that are sick from hunger or on the opposite end degenerative disease. Which is how many million? Think about the massive disparity of wealth today. Think about the anger there is today about how we ought to live.. will we ever agree and what are the consequences for not agreeing?

          By the way, you can't just call opposing views arrogant. That's an emotional argument that accomplishes nothing.
        • Apr 20 2013: You need to inform yourself before you dismiss statements as "arrogant." Try reading some Jared Diamond. Pick up a book about hunter gatherers. Read some Daniel Quinn. This will help.
        • Apr 20 2013: Your progressivist views of human history need to be re examined.
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    Apr 13 2013: It depends on your worldview. My perspective is as follows ..
    There are two options
    1) We are more important than our neighbours.
    2) Our neighbours are more important than us.
    By & large we have opted for 1. We each strive for personal success. This success is measured in material terms; houses, money, prestige etc. Our economic systems reflect these goals & make it possible for any individual to out-perform their peers. Trouble is that we have let the tail shake the dog. Public servants (?) have been allowed to raise their status by giving away our money & the whole pack of cards is about to come down.
    We have little choice, we; & that includes me; are basically selfish; option 1 will always win.
    Jesus Christ said that whoever would be the greatest in the Kingdom of God must be the servant of all. He showed us how by his example. This is the way it is meant to be. Money would not be required, we would all look out for one another. Each would love his neighbour as himself. We see it in patches here & there & it's wonderful to behold.
    The Good News is that this is how it will be eventually; when the history of greed & selfishness has run it's course.

  • Apr 13 2013: The economy is important or better said, commerce is what makes the world go around. You could shut down the banks and the markets, but new intermediaries would emerge-moneychangers, traders in the casbah, coffee houses (Lloyds of London) or In Mad Max: Beyond Thunderdome--Barter Town.

    Commerce is what spreads the wealth. The city states of the Renaissance is where cultures were shared and business transpired. These locales grew because of it. Just like NYC, London, Hong Kong or Singapore today.

    Go back to Ancient Egypt, there was a division of labor farmers, traders, merchants all in the process of getting goods to market and into the hands of those who want/need them.

    Since ancient times we have had an economy , we have just become more efficient.
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    Apr 21 2013: .
    We do not need the economy
    for invalid (ineffective or harmful) happiness,
    which leads us to self-extinction.
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    Apr 14 2013: The most important part of the economy is a frame work that allow trade to occur. In other words the rule of law and a national defense. Anything beyond that is superfluous and much subject to abuse.
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    Apr 13 2013: I think big banks and multinationals make the greed grander than it would have been. On an obviously positive side, a world without the current economic system will have less of environmental degradation, Rhino poaching, large-scale whaling and other fatal consequences of desperation.
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    Apr 13 2013: To study this, you might want to look at countries that have very little in the way of a banking system and how they move resources and goods around, attract people to do what needs to be done, and so forth. I believe Myanmar is such a country.

    Another thing you could do is to look at how savings and borrowing and so forth work in countries that may have well-developed systems but among those who are largely not served by those systems. Many of the residents and communities in the poorer states in India would fall into that category.

    The reason I think this would be instructive is that it offers concrete information about how in the absence of these institutions people organize the sorts of transactions that allow them to move resources, to do things like buy seeds and fertilizer at a time when agricultural income is not coming in, and to allow for obtaining consumer and business durables.