financial hierarchy in the modern economy.

In this post, I briefly want to investigate the question, how wealthy countries make money? One traditional view is that, they bring raw materials from other countries, and make some special processes, those can only be done by these wealthy countries, and then sell it back for much higher price. However, this is not the case always. For some technology products it may seem like that,  even then it is not all the story.

First consider the above mentioned scenario. It is important to see how the price of raw materials and price of products are being determined. I searched and there is no particular policy on that. The idea is to buy as low as you can, and sell as high as you can. So it is very advantageous just to keep the price difference as high as possible. Additionally, we could see that even the raw food which is coming from other countries, like Mexico, is being priced to a very much higher value, although no processing is made on the product. More disastrously, you could just make other countries to work for you on their land, and then sell them back what they have made for much higher price. For example, look at the diamond industry. Another way of making a lot of profit, is just to sell what they have and others do not, no matter how (un)important it is. You just have to learn how to sell it, and since nobody has it, you could sell it for whatever price. The E-product, movie, and music are in this category.

The bottom line is that: just keep the price difference high, no matter what. That is, the price difference does not have to (and it is not) reflect the amount processing done on the product. So, how do they do that then? Now politics comes handy. Either you are willingly accept to trade, or they make you to do so. Otherwise, you have to suffer harsh consequences. If it did not work, they finally come and get you. As you can see Politics, Military, Science and Technology (PMST) all are giving service to money, to maintain this price difference. You might naively expect that PMST could be used to improve sustainability of human and the environment he is living in, but unfortunately no it does not happen! On the other hand, the money itself is being minimally used to sustain its servants, that is, PMST. It is a positive feedback loop, if you know what I mean.

It is clear that the survival of this system relies on the price difference. Hence, this system never moves toward diminishing the inequality among countries. The whole world trade and global village is just another scam to maintain the profit.  Note that the same economical system operates even within the wealthy countries. Some suggestion is being made to what should be done, for example see here. However, the  main solution is to change the mentality of modern economy. After all, “it is not the creation of wealth that is wrong, but the love of money for its own sake.” (Margaret Thatcher)

One thought on “financial hierarchy in the modern economy.

  1. Right to the point. The point of Capitalism is not solve any problem, or to satisfy genuine humane needs, the point of capitalism is to make profit from the capital. The profit motive was not a means to an end, it was the end. The means by which this end is met, was no longer important.

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