Review of ‘Economy on Toambapics’
Classical liberal and Keynesian economic models argue that they solve all the problems of the system. This is true in theory at some points but in reality, This rules do not work in the real life. Capitalist economies suggest that especially with the competition in the free market, economic stability comes automatically. Because in a free market, all components of the economy act rationally and thus they act most efficiently. So they can use their highest potential in the market. This individual efficiency move us to the full potential and most efficient strong economy. Movements in the economy and changes are also automatically arranged by an ‘invisible hand’ because equations in the market always correct itself. Although these theories seems perfect in the books, they have a lot of missing parts. In spite of the fact that almost all the economies of the world are capitalist and they work, they have also a lot of lacks. So I consider that Jim Happystone is not a success economist. We can see the reasons of my perspective in several points.
In the story, although Mr Happystone used wrong solutions to increase production market diversity, he did something right also. At the beginning, it needs to observe the society’s structure. It is important that what is the current condition on the island, what is the practices of this condition and what they want to do about their economy. We must accept that he observed and read well the current condition on the island. In the island, there was a current problem which was the uniqueness of the market product. Their economy based on the production of Taro and also payments were through Taro. This was a non-monetary economy. There is no problem if there is only one product in the economy but the problems come when the production become diversified. All these were thought by Mr Happystone well and maybe at the beginning, his 6 point rules were the better solution for the island but he cannot predict the future dilemmas of the system. Although he wanted to use money only as a medium of exchange, he skip the other features of the money and of course of the a capitalist system. Money also has a function of “unit of account” and “store of value”. This functions and the social straums’s different roles on the production bring out new problems. These problems were which were the lacks of a capitalist economy. At the beginning even if the only problem is the uniqueness of the product later on it occurs a big “profit” problem. Before we explain the profit problem on the capitalist econmy, we have to look at the relations of the production. Even if Toambapics were a primitive society, there were different social classes which were owners of the means of production and the workers. And in a capitalist econimy, these classes’ interests always in a conflict. An economy which based on the capitalist rules and free market occur these conflict’s base. If the owners want to increase their profit, they will decrease the workers’ wage, if the workers wage increase, then the owners’ profit will decrease. To sustain the economic stability it needs to change some variebles on the economy. It seems that it brings the economic stability and gives us the equlibrium point in the economy as in the economy books but it is only an illusion. This all balances and the equlibrium points on the economy gives us more unemployment and more unfair wages.
The failure of Mr. Hapystone was starting at this point. While Toambapics wanted to diverse their products, they fall into a capitalist world’s dilemmas. At the first point, putting a universal money instead of a Taco as a unit of account was a rational decision. Because as Mr Happystone predicted, using the product as a payment unit, brings a lot of market and it will bring chaos on the island. The problems began at the second point or at the first problem of the economy. We see the first problem as the owners’ profit problem. Things were not going as Mr. Happystone suggested because he still provide that an ‘invisible hand’ will operate and bring to economy at the equilibrium point, but he did not know the suggested equlibrium point of the capitalist economy cannot bring well being whole the society. To being in a welfare, someones have to be in a poverty. This is the real rule of the capitalst economy. So this is the biggest mistake of Mr. Happystone because bringing the free market and competition will lead to change in the society’s both economic and cultural structure as Caduc predict. Changing structure will triggered new changes and it push the society and the economy in a vicious cirle. Instead of a competition, Mr. Happystone have to suggest that the expropriation of the propertiy’s. Because instead of an ambitious competition, a fair government and its distribution of the products with regard to eveyone’s needs, can bring the real welfare on the society.
After this point, every move to solve the problems born a new problem too, it is the inevitable consequence and nature of capitalism. In the economy, every component effect the other, we can see these effects consequnces both in the short run and in the long run. Between the period of balanced condition and change, some part of the society hurt by both these changes and balance. Especcially in a small island this consequences will be seen quickly and harshly. Because a worker’s unemployment means more percent of uneployment and it bring more cumulative problems.one person’s dismissing out of the market means both one person’s disappearing labor force and also purchasing power. As we see in he book “workers spend what they earn and owners earn what they spend”. This quotes first part work correctly but at the second part’s failure consist of the second problem of the Mr. Happystone’s economical policies and also Toambapic’s welfare. Equations in the economics books were not work like they predict. Because there is always another component in the society. Economy could not think without human acts and this gives more uncertanity. Expectations begin to gain more importance, before this point decreasing and increasing the prices consist of this expectation and prediction race. All these are the consequences of the competition on the market.
Thus we reach at the beginning point. In the first part of the book, we see the Walras ceremony on the island. Indigenious determine the supply and demand and real equlibrium point thanks to this ceremony. People who out of the market, can have an option to produce their needs with sea products and vegetable growing ın contrast to this primitive but effective system, when we use money sytem and free market do not give the same conclusion and the welfare as Walras ceremony gives. The other concepts which I argue that before and expectations and most importantly the changing acts of people in the competitive sytem effect the system worse. It distruct the nature of people and move us not to rational decisions and efficiency as they suggested but to a vicious circle. As we see at the end of the book, the most important issue must be the economical welfare of the whole society. Capitalist economy only looks at the GDP level but this level is not enough to give us the welfare level. The needs of people turn to needs of the profit and monetary wealth. However it is imporant that the peoples’ needs sufficiency in an economy. Capitals economies always suffer to te conflict between the classes and in the reality insufficiency of the needs. Because in a this kind of system, people always have to act ambitious and have to steal others’ benefit to survive.