When it comes to the economy of our world and our society, I do not pretend to be any sort of expert. On the other hand, from the events of the last several weeks, my opinion of those who are claimed as most expert is much deflated. The interpretation they offered of recent events boils down to “I’m scared - make it the same as before”. Seems my understanding might not be much worse than the claimed “experts”.
Our current economic system is a fiction. The fact that it seems to work (with recent exceptions) is interesting, but not proof that this represents anything like absolute truth. If it mostly-works … great. When it fails should serve as a reminder that we mostly do not know what we are doing.
We live in an insignificant fraction of human history. (Yes, that assumption would make me an optimist.) It would take astounding arrogance (or more likely a complete lack of insight) to assume that how we organize ourselves now is economically or politically is the best possible solution for the entire human race for all of time. With any luck, the expanse of human history in front of us will be vaster greater than the brief time behind.
What we have at present is our approximation for what we think might be the best way to proceed. No reason to assume that approximation is the final solution. There is within that approximation a considerable diversity of opinion. :)
The American Experiment, presently two hundred-plus years along, is a remarkable departure from what came before. (Something easy to forget.) I think the Founding Fathers, as well-educated men of the time, got a lot of things right. No reason to assume that they got everything right, but good reason to assume they were not wide of the mark.
Back in the 1960’s there was a projection that improvements in productivity would make the 40-hour work week obsolete. We got the improvements in productivity, but instead we got both sexes working full time (in place of mainly the male sex working), and no change in the expected work time.
Over the past few decades we see increasing amounts of “capital” chasing too few places to “invest”. What we get is a series of “bubbles”, where a seeming “investment grade asset” gets over-valued due to far too much money looking for a place to sit.
As a kid I remember reading about the enormously smaller cost of living in the “third world”. How could the same goods cost far less there than in the United States? What would the transition look like, as their goods make it to our markets, and their economy rises towards ours?
Science fiction has long projected a future where only a fraction of the human race needs to work to provide enough for all. Within living memory (if only just) the main bulk of the population of the most advanced nation on the planet - the United States - has gone from living on farms to living in cities. Most of the rest of the world seems to be following the same sort of transition, but at a greatly accelerated pace. The old projection of science fiction writers seems likely to come true within a generation - but the difference between what was necessary in the past, and what will be necessary in the future is a difference in kind, not just a difference in numbers.
What does that transition look like?
The rise of the rest of the world is due in large part to the success of the American Experiment, and borrows from the same ideas. Oddly enough that same success is the root of our current economic success and problems. We are in the middle of a transition to a future very different from the past, and we do not know how best to proceed.
The first and perhaps most obvious observation is that we have too much money in “capital” that should be put elsewhere. Is this a symptom of the income gap where a small fraction of the population gets a large fraction of an economy’s wealth?
When the difference between the future and the past is very large, how well can we expect a theory of economics derived from past experience to serve us in the future?