Come Wednesday, I need help tackling the problem of inflation that will arise from this concept.
Monday, November 18, 2013
Economic Reform in Underdeveloped Countries
There are many countries on this earth that are undeveloped, have a low quality of life, and are economically famished. There are many economic ideologies that I agree with in this chapter and far more I do not. One of the most important aspects of installing a new economic system in a poor country is not necessarily the way you do it, it's whether the people in that country are willing to, and in turn take sacrifices to make that happen. Say everyone does, what is the most effective way of improving the country? It's neither pure communism or pure capitalism. It isn't even socialism. It's multiple systems working together in a strategic pattern that can make it happen. Let's take India for our example country. The first thing was done and out of the way, that was making people want reform. Thanks to Gandhi and many other political activists; while their idea may have been wrong, they were none the less motivated. The first economic system that has to be implemented is a socialist control of the commanding heights of the economy. A proactive one that constantly grows the commanding heights rather than keeps them open using businessmen rather than bureaucrats to run the companies. In addition, there need to be socialist systems such as welfare and more government soup kitchens, etc. This will not be the final form of the economy as the countries who stay in this state crash and burn. This boost in economic structure is expensive for the government but will soon pay off. Once the commanding heights begin moving and they are strong and supported, the government will slowly exit the commanding heights market by incorporating and publicizing these giants by allowing shares to be purchased. You would need to allow roughly 5-7% of the shares to remain in the governments hands to provide a fixed income and added stability to the government who just spent a lot of money.