Unit 1 Lecture
Developing countries give rise to an entire sector known as the global misery industry, wherein international financial institutions profit from the impoverished conditions prevailing in underdeveloped nations. The World Bank, as part of this industry, offers a solution to crisis-ridden countries in the form of increased dollar loans. These countries often borrow a substantial percentage of their total Gross Domestic Product (GDP), resulting in a highly centralized economic landscape. However, these centrally planned projects are prone to failure due to the economic calculation problem, which has been extensively discussed by Austrian scholars like Rothbard and Mises. Topics covered include: International Financial Institutions The World Bank IMF Economic Calculation The Global Misery Industry Utilitarian Economics Before watching this video, it is important to reflect upon the fact that money creation by international financial institutions does not impose an opportunity cost on the entities responsible for its issuance. These institutions lend money they create without incurring any associated opportunity cost. However, the repercussions of this practice are borne by the borrowers themselves. As they become entangled in the pitfalls of central planning, these projects tend to falter, leading to an inability to repay the borrowed funds. The proposed solution for developing countries caught in this cycle is often to borrow even more dollars, which perpetuates further centralization and deepens the borrower's political dependency. This unit aims to provide students with an understanding of the effects of a debt-based and centrally planned economy on the populations of the global south. It emphasizes the importance of exploring alternatives that promote economic growth, such as an economy founded on capital accumulation through saving and the adoption of free market principles. By examining these contrasting approaches, students can gain insights into the potential benefits of alternative economic models for the well-being of communities in the global south.
Source: Saylor Academy, https://share.descript.com/view/76ZKIYUQUYu
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 License.