The Rise and Fall of World Commerce
Part 1a—In the Grip of Money Worries
“Though mothers and fathers give us life, it is money alone which preserves it.”—The Japanese Family Storehouse; or, The Millionaires’ Gospel, by Ihara Saikaku.
HAVE you ever needed money badly? Or have you found that you did not have enough cash to pay for something essential? Or have you ever seen your family go hungry or poorly clothed? Millions of people today can answer yes to those questions. They know what it is to worry about money.
Imagine the anxiety of an unemployed father with mouths to feed and bills to pay. Think of the state of mind of a weary mother standing in line for hard-to-get commodities only to find that the store shelves are bare or the prices are too high. Consider the stress on the business executive whose company is faced with imminent bankruptcy or the pressure on a government struggling to free itself of billions of dollars in debts.
In today’s world even certain words trigger anxiety. Our income (money, goods, or services received in return for labor or the use of other resources) may be so low that our standard of living (the economic level at which we are accustomed to live) is seriously threatened. This may be caused by unemployment, by recessions or depressions (periods of decreased business activity, the former mild, the latter more severe), or by inflation (a rise in prices that occurs when demand exceeds supply, so that our money buys less). With insufficient money we can no longer keep up with the cost of living (the cost of buying the goods and services we daily need).
The Power of Economic Pressures
The Great Depression of the 1930’s, says one authority, was an economic tragedy that “touched every country and every side of life, social and political, domestic and international.” By strengthening extremist political forces in Germany and Italy, it helped bring on World War II, thus illustrating the power of economic pressures. It was as John K. Galbraith wrote in his book Money: Whence It Came, Where It Went: “In Germany early in 1933, Adolf Hitler came to power. Much of his success must be attributed to the massive unemployment and the deeply painful contraction in wages, salaries, prices and property values.” Commenting on the inflation in the United States at that time, Galbraith adds: “Whatever the importance of money, none could doubt the importance of the fears it engendered.”
The political changes that swept Eastern Europe at the end of the 1980’s were largely influenced by economic factors. These are also frequently decisive in deciding elections in Western democracies, where people, it has long been said, vote as they are swayed by those issues that affect their pocketbooks.
Economic pressure is often applied in an attempt to force governments to change their policies. Thus, at times, modern economic sanctions have become the equivalent of ancient military sieges. In 1986, Europe, Japan, and the United States imposed economic sanctions against South Africa to protest its policy of apartheid, apparently with some success. In 1990 the world community, as represented in the UN, exerted economic pressure on Iraq, obviously with less success.
Nevertheless, the trend seems clear. Jacques Attali, French writer and presidential adviser, claims that ‘merchants are replacing warriors as the main actors on the world stage.’ And a newsmagazine commented: “[In many countries] economic strength has replaced military might as the measure that matters.”
Is the Grip Loosening?
Natural catastrophes, disease, and crime play havoc with the economy. So may debt and budget deficits. According to The Collins Atlas of World History, “international debt [in developing countries] is so enormous that the world, at times, has been close to an economic catastrophe of monumental proportions, and the rise of poverty, with all the despair and threats of explosion it implies, has been quite alarming.”
While some governments are plagued by runaway inflation, others are struggling valiantly to stave it off. Insecurity rears its head in the form of unstable stock markets. The sudden sickness of a political leader, or even baseless rumors, can destroy fortunes within a matter of hours. The Wall Street crash of October 1987—even more severe than the one of 1929—was called the worst week in financial history. Almost 385 billion U.S. dollars in asset values were wiped out. The market recovered, but many experts say the real crash is still to come. “The world had better hope it never finds out what that ultimate bust would be like,” wrote journalist George J. Church.
Far from loosening, the grip of economic pressures and the anxieties they produce seems to be tightening. So is it realistic to consider the possibility that an end may be in sight?