Published On: Wed, Aug 8th, 2018

The World’s Financial Crisis

Share This

By Mehenou Amouzou

History is repeating itself with a human desire to control or rule the world by any means. This obsession has created three categories of human beings: One that has chosen the route to rule, one that has chosen the role of servant and a third that considers themselves to be subordinate to all other humans.
For many centuries the world has been and continues to support the aspects mentioned above by the actions of its Governments and their failing policies to sustain the well being of its citizens. To conceal the failure of their policies, Governments have become more and more aggressive via using military powers and or financing muscle to intimidate, oppress and take over other less able countries.
From the past several centuries to 1884 in Berlin where European countries had decided to take over Africa and colonized the Africa continent to the war world I, war world II, Vietnam War, Korean War, Chinese revolution, all the proxy wars etc; to present. We are still facing the same scenario; the greed power hunger of few people to add to government’s economic & social policies failures to hide behind the wars and develop an imperialism approach due to three categories of humans being: One that is selected to rule, second to serve and the third is considered like to be less human. The World War I killed more than 37 million people and other causalities; the World War II killed 85 million and with other casualties.
European Economy between 1850 and 1884
For a time the European trade balance has shown a growing deficit, with shrinking exports and continental markets becoming increasingly protectionist because of the recession. Britain, Germany, France and other industrial countries thought the African continent to be an “uncivilized, barbarian continent” and open market for their trades’ surplus. Britain, with other European countries, had extensively commenced to run deficit balance of trade (which was more and more offset, on the other hand, by the oversea revenue). Still today most of Europe continues to take the stance that “we can import as much as we need and build and create nothing”-Oh dear!! Until someone eventually asks-“How do we pay for that??” Simple economics-you must generate more revenue than expenditure!!!!
As a result of an increased problem between European countries during the late 19th century, the partitioning of Africa may have been seen as a way for the Europeans to eliminate the war in Europe over Africa.
Britain became the first post-industrial nation in the world; the financial services sector became increasingly important to its economy. Invisible financial exports keep Britain in the red, especially investments outside Europe, particularly in the developing and open markets in Africa as colonies of white settlement in the Middle East, Asia South and Southeast prevailed.
Additionally, extra funds were time and again more beneficially invested overseas, in inexpensive materials, limited competition, and plentiful raw resources which made greater the best that was promised. A further encouragement for imperialism occurred from the need for natural resources that were not accessible in Europe, particularly copper, cotton, rubber, palm oil, cocoa, diamonds, tea, and tin, to which European customers had become familiar and upon which European industry had become dependent, the outdated industrial so called power house countries were damaging and were facing mounting resistance from other industrializing nations, comparable to Germany, who had newer plants and cheap labor.
Furthermore, Britain wished to retain the southern and eastern coastlines of Africa for harbor stopover on the way to Asia and its territories in India. The invasion, occupation, colonization, and annexation of African territory by European powers during the era of New Imperialism exploration between 1881 and World War I, (1914) had met some refusal in acceptance to becoming colonized. By way of the military supremacy, the Europeans were expecting to succeed, with the exception of Ethiopia and Liberia who remained independents, merely 10% of Africa was surrendered in 1870 and 90% by 1914.
The African imperialism expedition and domination started at the Berlin convention in 1884, European decided the partition and took possession of Africa and its natural resources, consequent to the economic, political, stayed away from warring and competition between themselves.
Wars World I
World War I was a disaster, tragedy on all fronts and destroyed humanity for nothing more that the goal of imperialism, nationalism, domination, being a war mogul, exercising economic prowess. The ongoing endeavors of nationalism had created other issues also such as the unification of Italy and especially Germany power, Germany rose as a military, political and economic giant.
The Industrial Revolution through Europe after 1850 had created consumer markets available for businesses to explore. It had grown the number of producers competing for those markets, triggering more competition for what was considered a stagnant economy by the turn of the century. The competition intensified in each country with fierce nationalistic feelings fostered by an expanding public schooling that preached its nation’s superiority over other nations and the dangers other nations posed. For example, Britain thought that it was the country’s obligation to “enlighten” barbaric or savage customs in Africa and Asia, Russia also exercised cultural motivations to validate its heaviness on the Balkans and Austria in the early twentieth century. The Russian Czar Nicholas II desired to follow what was identified “pan-Slavism” or an effort to bring together all Slavic-speaking population under the direction of the Czar. They would use of defensive levies (import taxes) to raise the cost of foreign goods and make the home nation’s goods likewise more interesting to its customers. Obviously, other nations did the same thing. Prices went up, commerce deteriorated, and unemployment rose, producing internal disorder and instability. As consequence, politicians looked for scapegoats and opportunely held responsible other nations. This led to more tariffs, lower trade, rising unemployment, unrest, blame, and so on.
This industrial revolution had developed new technologies which were not restrained to just peaceful consumer ends, but the building of new and enhanced weapons such as guns, marine vessels, and steel clad battleships. All this mixed with nationalist pride and an internal domestic worry about another nations ability to compete in an arms race like the world had never seen, this in association with an insatiable appetite for a/many countries desire to increase its wealth via the needs to grab someone else’s via military means. As soon as one nation started building armaments, its competitors would do the same and try to outdo the first nation. This would only alarm the first power, which would further increase its armaments, and so on. Each nation acted in what it felt and considered was self-defense, but to another nation this saw seen as an act of aggression.
Did World War I generate a key advantageous break in the United States? Did the U.S. financial system transform in some fundamental and durable ways as consequence of that war? The U.S. economy was in depression when the war started, the access of the US into war in 1917 let loose substantial US federal expenditure which changed national fabrication from civilians to war good. They were 3 millions of workers added up to the military complex and Five hundred thousand to the administration jobs from 1914 to 1918. The job loss dropped from 7.9 percent to 1.4 percent because of the manufacturing jobs creation. Europeans started to procure U.S. supplies for the war and later the United States itself enrolled in the combat.
According to Hugh Rockoff research associate at NBER, estimates the complete cost of World War I to the United States was roughly speaking $32 billion, or 52 percent of gross national product at the time. He rundown the financial support of the U.S. war attempt as result: 22 percent in taxes, 58 percent through borrowings from the public, and 20 percent in money creation. The War Revenue Act of 1917 taxed “surplus profits” — profits greater than an amount established by the rate of return on capital in a base period by some 20 to 60 percent, and the tax rate on income starting at $50,000 rose from 1.5 percent in 1913-15 to more than 18 percent in 1918.

Dr. Amouzou is a Public Affairs Analyst

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>