On the other hand, virtual economy does not produce other than virtual values. Due to this reason, its flourishing is conditioned by the servitude of the real, productive economy. The result is the reduction of the economy’s financial resources and the recent multiplication of loans. By consequence, the very notion of the money has been corrupted; money no longer serves the exchange of commodities, but has become the key source of usurious profit. The aggregate debt of all countries in the world compared to their aggregate GDP attained 286% by 2014, and developed countries contributed ¾ of this amount
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Such situation has led to unprecedented concentration of the capital in the hands of the few. For instance, the annual income of the 200 world’s top corporations exceed the aggregate annual income of the 1.2 billion people living in extreme poverty. The large corporations control 27.5% of the world economy while employing only 0.78% of the world population. Between 1983 and 1999 alone, their profit grew 360%, while the headcount increased by 14% only. They do not simply control economy, they set its direction – they can afford it. It is therefore no coincidence that of the 200 corporations, 82 are located in the US, 71 – in Western Europe, 41 in Japan, 5 in South Korea, and 1 in Canada. The rest of the world has none.
That is why the combined fortune of the world’s 8 richest billionaires exceeds the assets of 3.6 billion people from developing countries. Wealth-X reports that 2,473 dollar billionaires alone possess $7.7 trillion. By 1998, the top 10% in the US owned 90% of business value, 88.5% of bonds, and 89.3% of the public stock. Similar situation is observed in modern Russia and many other post-socialist countries.
On the one hand, the nouveaux riches do not need to produce as many commodities for themselves, as the rest of the population need, which inhibits the social oriented production. On the other hand, this decreases the effective demand of the population, which impedes economic development as a whole. By consequence, the demand drops further and forces supplementary cuts in production, etc.
B. G. Shaw wrote, “If the wicked flourish and the fittest survive, Nature must be the god of rascals’6. However, following the liberal principles, the state must create ever more favourable conditions for the business to have a greater income. “What is good for General Motors, is good for America’, said W. Wilson, the President of the US. This is a cunning logic. Besides, businessmen’s “interest is never exactly the same with that of the public so they have generally an interest to deceive and even to oppress the public’ (Adam Smith).7 For this reason the flourishing of business and the wellbeing of the society do not coincide, in fact, they often contradict each other.
Indeed, in the end, business is a form of activity that generates personal income serving as a source of increasing personal fortune, not the public benefit. On the one hand, business encourages people to develop their talents, sparks energy in them, diversifies production and service forms, and creates new jobs. On the other hand, it promotes profit-making at the cost of Nature and society. In addition, it contributes to manufacturing and sale of low-quality merchandise, drugs, counterfeit medicines, surrogate alcohol, etc. Besides, such economy naturally contributes to gangsterism, corruption and unemployment.
In the current situation, the money that the financial elites have laid their hands on gives them the reign over all global processes, and allows to ruin entire states and social strata for their personal fancies. This weakens the human society, deprives it of the strength to protect itself from aggressions, shocks, phobias and attacks. A good example, here is what Louis McFadden, Chairman of the United States House Committee on Banking and Currency, wrote about the 1930s Great Depression: “It [the depression] was not accidental. It was a carefully contrived occurrence <…>. The international bankers sought to bring about a condition of despair here so that they might emerge as the rulers of us all’8.
But this is not the main point. To prevent people from protecting the values that they create from external encroachments, everything is done to deprive them of independence, render them powerless, psychologically and physically defenceless. Through mass media and the very lifestyle, deformed culture, education, perverted ideology and repressive religious beliefs are imposed on people. They are stripped of their human dignity, crippled by false stereotypes, alcohol, and pushed on the path of further degradation. People left without means of existence, property or good health. Deprived of rights, work tools, money, resources, they cannot provide for themselves any more. Otherwise, would anybody tolerate being a milking cow for the “the select few’? The humans are poisoned with unhealthy foods, admixtures, surrogates and hypnotized by ideology. Their environment is destroyed. However, all this is done in accordance with the liberal economic principles!
As the result, the society often loses the feeling of community, of common roots, as well as the reverence of the values earned through the sweat and blood of their predecessors. The harmonious vision of the world, the understanding of one’s place and purpose within it are gone. For instance, 26% of the Americans have no idea that the Earth orbits the Sun, and not vice versa. People have lost life’s purport and have become an easily mouldable material. They have accumulated suffering and spite, losing confidence and strength, belief and conscience, hope and kindness. And what is a man without them? The man does not live by bread only, not by gold or power. “No man can serve two masters’ (Gospels)9.
Against this background, wild propaganda is under way: human personality would be now freer than ever, human rights would be respected, and the omnipotent democracy would furnish everyone equal possibilities. But then, the human beings are deprived of their most basic right, the right for life. For their life is determined by the profit of the employers. The propaganda has been reinforced by coining of a series of clichés to worship, such as “freedom of personality’, “permissive behaviour’, “independent creation’, “tolerance’, or even “non-traditional sexual orientation’. They obscure the clear reference points, destroy the family, suppress the people’s inner aura, interfere with the link of generations, and let false values supplant the true ones.
Having thus crushed and crippled the person’s inner self, having diverted their energy towards pecuniary objectives exclusively, the present-day rulers have cut the supply from the true sources of well-being: kindness, respect and friendship. The lack of spiritual development is covered up by luxury, entertainment, and pleasures. Instead of love we get sex, instead of friendship – partnership, instead of respect – servility. Thus, spirituality, honour and dignity are being exterminated by all means available.
As the result, all contradictions accumulated in the past are aggravated, and the true values are substituted by the false ones. A considerable share of the fundamental concepts has come under the fire of ostracism; the previously undisputed truths have been questioned; the accrued experience has turned out to be unreliable, and the traditions – lost forever. That is why now it is hard to define what is erroneous and what is correct, where the truth and where the lies are, what the difference between business and crime is, what should be considered progress and what – regress. The society is revisiting the long-standing pillars of morality and culture, religion and science, physiology and psychology.
An unprecedented dissolution of manners has followed. Certain zealous and empowered persons and countries feel entitled to reshape the others’ destinies in accordance with their own petty ideologies and ambitions. The society has answered by the spread of social unrest, protests and revolutions, which claim lives and destroy cultural and material values. The result is the change among men of power, and the rotation of proprietors and social classes. However, as rules remain unaltered, these happenings have no significant consequences.
At the same time, it is widely proclaimed that the liberal economic model is the only possible one and that its key ideas are immutable. We seem to have returned to the Ptolemaic times, when they believed the Earth was born by whales, and no other version would have been accepted. In similar mode, the liberal economic theory is the very essence of the modern economics, while other systems are nothing but the fruits of ignorance. The numerous faults of this model are excused by the errors and the incompetence of the authorities, by the cupidity of certain individuals, and by the money grubbing of the proprietors and the government. Furthermore, there persists a naïve conviction that once these faults are eliminated, the existing economic system will provide for a decent living.
Such belief multiplies the ideas based on the liberal economic tools but used to change the situation and to get rid of some of its drawbacks. Nevertheless, in practice these tools are, as a rule, asymmetric and fail to bring any tangible advances on the existing issues. For example, if financing lacks, it is suggested that it be increased. If corruption ravages, new ways to fight it are found. These are just a few examples. In reality, it is impossible to eliminate the faults of the liberal economy through liberal methods, just as one cannot remove a spot with the substance that spotted the clothes. However, the theory of a different, non-liberal economics has not yet been worked out and, to tell the truth, it is not even visible yet.
The actual economics, as any other economics, is a rigid system held together by direct and reverse connections that make it integrated. All that conforms with the nature of the system flourishes within it, while everything hostile perishes. Indeed, every system has intrinsic qualities that cannot be eliminated as long as the model continues to apply. The fundamental concepts of the model will not survive any alteration, just as a cat will not grow to be a tiger whatever its food and living conditions are. A systemic crisis can only be cured by systemic measures.
In addition, the faults of the modern economics constitute its very essence. This means that we cannot get rid of corruption because it reflects a specific way of doing business. We cannot set up a comprehensive healthcare system as long as illnesses are a source of income for the pharmaceutical corporations and healthcare centres. And do not even consider having a child, as this is a risky investment.
These faults are inherent to this type of economics, wherever and whenever it is implemented. There may be certain deviations from the described system, but it is essentially the same. This economics cannot be different – a wolf cannot live on carrots, it has a different function. Nevertheless, all existing projects of mending the situation suggest precisely such type of measures.
In these conditions, the productiveness of the world economy steadily declines, despite the considerable scientific and technical progress. For instance, even though by 1998 North America, Western Europe and Japan were consuming up to 86% of the world’s natural, financial, human, and intellectual resources, their economies make no headway. Inflation aside, the salaries in the developed countries have not changed much in the past ten years. So, according to the official statistics, by the end of the past decade, almost 80 million EU citizens and over 43 million US citizens were not provided any means of existence.
To sum up, the well-being of the “developed’ countries is not attained thanks to specific qualities or organisation principles, to more efficient labour, superior culture or civilisation, but solely through large-scale redistribution of the world’s wealth. The developed countries succeed at the cost of ecosystems destruction and shameless exploitation of the natural resources and of the entire Earth’s population. For instance, the US consumes twice as many goods as it manufactures. This is the reason behind the high productivity of the American economy, which feeds the myth of the indisputable superiority of the American economic model over the others. At the same time, it is evident that the American path of development is unacceptable for other countries, as the Earth will not stand another such “golden billion’.
What can be said of the developing or underdeveloped countries then? Obviously, the rest of the world population have to content themselves with the leftovers. The World Bank estimated that 2.6 billion people, that is, over 40% of the total population live beyond the poverty line. In accordance with the UN-Habitat Report for 2003, the number of people living in the slums across the world reached 1 billion and continued to grow. This was the only true reason of the soaring massive crime rate, unprecedented surge of violence, crime and terrorism. And, as the situation does not improve, no methods within the liberal economic model are capable of turning this tide.
Summing up all said above, we may conclude that the liberal economic model has been exhausted, has become decrepit and obsolete. It is no more up to the challenges of the twenty-first century. This economic model is inefficient both in the emerging countries and the most developed nations. This means that the reasons of such a pitiable state are strategic and not tactical ones. It is not about the mistakes, the covert intention, or the low competence of certain persons, it is about the very model of economic development.
In addition, the situation is aggravated by the impressive progress of the modern science in the area of physics, chemistry, biology, informatics, and technology. If these innovations end up in the wrong hands, will be appropriated by any immoral person, the entire planet, and the humanity, may be destroyed. Under the present economic conditions, this is not only possible, but, in the end, imminent. Suffice it to remember George Soros, who inflicted terrible losses on many states and became the object of public outrage. Therefore, in order to save the life on our planet, a new organisation is needed, a new economic model, a new vision that will block the access to power and management to immoral individuals. Otherwise, the humanity will be doomed.
This is an essential point to be taken into account, for the current economic model, with its objectives and priorities conditions the way states and peoples live.
The economy of a state can be portrayed as a beautiful lake where a huge exhaust pipe dumps all kinds of waste and rubbish. The law enforcement, legislative, and administrative bodies are forced to fish the waste out to prevent the lake from becoming boggy. Obviously, this is a continuous process; it is inefficient, and little promising, too. Would not it just be easier to tap the pipe?