The Forces Holding the Economy Together and the Symptoms of the Economic Crisis: Then and Now
The predecessor of the current global economic crisis is the Great Depression. During this crisis, circa 1930, several pertinent and incredibly successful programs were implemented that, to this day, have held together the economy together. If it weren’t for programs such as Social Security, the Securities and Exchange Commission-serving as a regulator for more dynamic markets,-and the Federal Deposit Insurance Program (FDIC), which protects depositors up to a certain amount in the event that a bank failure were to occur, the current crisis would manifest into an uncontrollable behemoth and lead to total chaos. Juan Corradi’s second chapter of South of the Crisis: A Latin American Perspective on the Late Capitalist World discusses these solutions and juxtaposes them with the solutions necessary to save the planet from this current global crisis.
Interestingly, Corradi alludes to war as the main reason the economy got out of the Great Depression: “But we should not forget the fact that that large-scale war effectively got rid of the unrealized surplus of the economy, eliminated idle capacity in factories and enterprises of all kinds, fostered the full employment of the labor force.assuring its world hegemony for the next fifty years.” Now, it’s imperative to understand that Corradi does not advocate war. He argues that with the advancements made over the past fifty years in industrialization and the overall economy, a mass mobilization would not need to be put into effect.
Furthermore, Corradi suggests that this crisis is just the beginning. With “rising unemployment, customer diffidence, mortgage foreclosures, and the imperative need of retirees to return to work-if they can find work-in order to make ends meet,” all the indicators are signaling toward the collapse of the financial system.
Ultimately, the only constants of the economy right now are fear and uncertainty. Corradi adamantly states that the individual’s definition for economic freedom must evolve if a complete collapse is to be averted. Economic freedom can no longer be about “freedom from regulation and public intervention.” On the contrary, the crisis can be used as an opportunity to implement reforms that can help in its long-term sustenance.
Find out more about South of the Crisis by visiting www.juancorradi.com.ar