Date of Award
Master of Arts
The economy is discussed as a unified whole, but the machine that is the economy is nothing more than the sum of its parts and like any machine sometimes the parts fail and need to be replaced. In examining the role of currency and trade in perpetuating economic crisis we find that four main concerns arise:
1. Currency valuation leads to speculation and market volatility.
2. Ideologies of free trade and trade liberalization are routinely flaunted by developed nations through the use of subsidization and bilateral trade agreements.
3. Economic competition is depleted through the loss of creative destruction and by export-oriented nations using developed nations as consumers of last resort.
4. The current problems create deflation tendencies in the market, which are lasting given the previous aspects.
Thus, this paper identifies the need to address four main points in fixing the economic system:
1. How to retain the ability for capital to be mobile and abundant, in order to continue the process of subsidization within and between nations, but avoid the volatility of a flexible exchange rate system.
2. How to incorporate practices of subsidization and bilateral trade into a new economic system which retains the advantages of traditional trade, but also addresses and corrects the trade imbalances which characterize the current system. 3. How to stimulate real market growth, namely through a process of creating sustainable consumer markets within developing nations and thus ending the `consumer of last resort' dependence.
4. How to replace the idea of creative destruction with a system that replaces accumulation in developed nations and austerity in developing countries with market opportunities that stimulate innovation and market growth in a sustainable manner.
By addressing these concerns, raised from an examination of the nation-state upheld system of flexible exchange rates, we truly see a possibility for the realization of economic change that will promote real, sustainable, and beneficial growth.
Joshua Michael Malay
Malay, Joshua Michael, "Freeing the World from the Free Market Economy: A Reexamination of Nation-State Based Capitalism" (2012). Graduate Theses and Dissertations. 12394.