From Ancient civilizations to the modern civilizations, economic models have born and perished at regular intervals. Economic upheavals have not been confined to modern Societies alone; they have been happening from time immemorial.
Let’s briefly look at the Greek economy around the 5th Century, the experience of the Caliphate in the 10th Century and with a hop and a step to the modern day economies of the last 100 years.
Greece flourished in the 5th Century B C; an economy driven by imported goods. Agriculture, Crafts, Pottery, metal working, Maritime commerce and Trade flourished backed with “slave labour”. The best known Greek Governance was Oligarchy; clearly indicating that it meant a give and take amongst the men who were the ruling elite. This economy collapsed, driven to a large extent by the rich and poor divide and the constant political rebellion amongst the Greek Colonies. It is also a fact the Alexander’s ambition of over extending his kingdom and his subsequent death, hastened this fall.
The Golden age of Islam was around the 10th Century with Baghdad as the Caliphate. Ibn Khaldun (A.D. 1332-1406) an economist from Tunisia writes:When civilization [population] increases, the available labor again increases. In turn, luxury again increases in correspondence with the increasing profit, and the customs and needs of luxury increase. Crafts are created to obtain luxury products. The value realized from them increases, and, as a result, profits are again multiplied in the town. Production there is thriving even more than before. And so it goes with the second and third increase. All the additional labor serves luxury and wealth, in contrast to the original labor that served the necessity of life.
Sounds very familiar? That’s the precise problem plaguing the world economy today.
With the hop and a step let’s come to the world in the last 100 years. Sound familiar isn’t it? The Rich and poor divide and the Copious Consumption of the Rich!
Many methods of governance and economic models have been the order of the day. Broadly classifying them; they are democracy, communism, monarchies, dictatorships; all of them with the sprinkling of capitalism/socialism or a combination of the two. But the problems appear to be the same. The Rich and Poor Divide and the Copious Consumption! Across continents this is the chant, as leaders grapple to find a solution amongst people who are getting impatient; with an economic order which gets the profits to private hands and the losses that go to the books of the state. Remember the 2008 U S financial crisis where the quantitative easing put money in the hands of the very banks which engineered the collapse and the state was left with the burden of debt.
What then is the solution for the future? It lies not of more of the same but in a radical change in economic thought which has to be born in the minds of the young generation, who do not carry the baggage of the failed theories of the past. For this new thinking to happen we need to create a political system which is not driven by money. Democracy which is not driven by money could be the first step towards a new economic model? Hope the rulers are listening? Nonetheless a new economic order will emerge as it is the law of nature; the old order shall die and a new order shall be born!