Globalization or Democracy compares present day US concentration of wealth in the hands of the rich, a phenomena economists call capital divergence, with the poverty caused by the industrial revolution and loss of the middle class in England. Eighteenth century England achieved massive wealth through colonialism, empire and world trade. The book argues that a widely forgotten macro economic formula explained the tragic loss of middle class in England and in today’s US globalism.
Sectoral Balances equation by Godley and Cripps, a formula taught in first-year economics where S = domestic savings; m = imports; x = exports; I = investments; g = government spending and t = treasury revenue:
S + (m-x) = I + (g-t)
In reading Eric Cline’s 1177, Cline pictures a system of highly developed international trade that looks exactly like what we have now, great wealth, cheap foreign imports and a loss of middle class wealth. The collapse of 1177 involves a mass influx of migrants, pandemic, drought and war. Did the same capital divergence lead the way? And what about Athens? What about Rome.
Toynbee said civilizations die by suicide. They do it to themselves from within, not from conquest from without. Today America suffers all of the above with capital divergence, migrants, inflation, pandemic, war, food and energy shortages, fentanyl, suicide, and depression. We did it to ourselves.
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