INTERNATIONAL UNIVERSITY OF SARAJEVO

WRITTING ESSAY; COURSE: ECON101;
THEME: “WHO SHOULD CONTROL THE ECONOMY?”












DATE: 25th DECEMBER. 2013 STUDENT: EDIN EFENDID; ID: 130302010
Who should control the economy?

When it comes to discussing about the economical issues in 21
st
century it is quite hard not to
mention the residue and the abolishment of world’s past. The constant battle to defeat poverty
in day’s time we confront the news and such terms as “stocks exchange”, “inflation” , “market
failure”, “deposit” etc. The main poverty and social anarchy is deeply rooted in unsorted
economical crisis of present century. To each personal concern, world’s economy runs like
“wild horses” it has never been more wild and uneasy to capture in a firm grip. When it comes
to discussing about the control of economy, it rather sound like trying to control a raging fire.
Nonetheless, history has shown some great success in economical control but nevertheless all
good things come to an end, there have been some great downfalls as well.
Before starting it is very important to mention some of the key marks or more precisely
highlights of this essay, those would be: politics of government or political system, marketing
and its influence on free market, superfluity of income and outcome, wars, education,
industrial revolution, IMF, tax per income etc.

Politics of the government, or political system. Since the WWI several ideologies have
changed and intertwined across the world most of them have show some remarkable results in
the beginning, nonetheless they have failed to proceed its main ideology, to resist the futile
failure. The opposing question of this highlight is “why?” Ideologically speaking, humanity
ought to obtain power over resources to endure the possibility of high percentage of survival.
Almost every ideology has the same platitude, using certain paroles the ideology of
implemented in political manoeuvres .Ideology of communism shall be taken for an example.
Communism differs and opposes to every kind of religion, giving a quid pro quo for any
action. It just might sound very simplistic although the key parts of this political agenda are
hidden. “All for one and one for all” is probably one of most memorable paroles and
associations when it comes to talk about communism. Communism and its idea of economical
correspondence has been one of the major success formulas, it was flawless and it was very
simplistic. One simpleton could probably agree, economy of communistic regime had a
pyramid of manoeuvring over the goods and incomes. On the top of pyramid with its leader
the apparatus has reorganized whole value system of one certain nation (such as Yugoslavia)
producing only goods that are the most necessary ones to lead a decent life. Black market
existed event then but the same black market could not offer any goods for a lower price due
to the fact that the same product could be found for even less in regular market places. In
former Yugoslavia the most common thing was land confiscation, the government had
confiscated hundreds of thousands square meters of land in order to build factories to employ
the working class. The country exceeded on the back of working class. Even though it may
seem like a perfect formula for controlling the economical system of one part of the world,
there is always the “fine print at the end of the contract”. Communistic regime was partially
the oppression, controlling the free market the inputs and the outputs. The government valued
the system of efficiency; most of the importing was prohibited, non the less it was not
impossible, but the taxes for importing was very high. Communistic regime gave certain
boundaries, controlling the minimum wages an with it the consumption of its people.
Everyone was partially happy. With the trends coming from the west and the spread of mass
media, the youth was encouraged to revolutionize their living. Little by little, communistic
regime lost its control over the economy because the demand curve went right. The country
was not able to produce goods that were demanded and suddenly the migration of working
class exceeded in high percentage. Western countries were the main goal. The migration over
the seas has caused the lack of working class directly implying to less of production and
higher taxes. The economy crashed after several decades of imperfections. The damage was to
be seen in inflation, where thousands of “dinars” (currency in ex Yugoslavia) valued for one
euro. The other thing which is quite important to this matter is the marketing itself.
With the arrivals of pop culture and its advertisement, Andy Warhol and his and rows of
Coca-Cola, it was quite easy the guess the arrival of so called “over-consumerism”. Around
1920s with the fist appearance of “talkies” television marketing has emerged and rose to its
full extension. The psychological effect that was created upon the citizens was mesmerising,
over consumerism was born. United States of America, the land of the opportunities was
rapidly producing banking systems and packages of delayed payment. America was
blossoming. The parallel and utterly different vision was Yugoslavia, delayed payment was
not so popular due to the fact that the minimum wage could only support the highest of life’s
needs, electricity, bills and food. Everything else was an complete abolishment and
decadence. Banking was not so popular; even then people had no trust in banking and kept
their life savings at private establishments. That caused the black market to emerge and raise
to its full extent. Neither one of these of behaviours was a great formula for economy, the
oppression and liberty to its full extent made the worse. Looking from this perspective of 21
st

century, both of them have collapsed and still are suffocating in debts. Personally the main
influence of bad resulting in economy is actually the political ideology and the regimes. For
example, socialism had great ideas, people were encouraged to intellectual development but
the minorities were left behind leaving again the possibility of great black market to expand.
In both cases, the failure of economy was caused by several factors, nonetheless the main
factor were privatized small businesses, mostly illegal which lead to expanding the black
market causing the taxes to go high and discouraging small business owners to pay the fees,
logically if the high demanding fees were to be paid the business owner would go to
bankruptcy.
One of the most important and well heard of acronyms is IMF. In Bosnia it is the most well
heard of acronym in translation MMF. The leading problem of IMF is actually the fact that it
causes the higher debt per capita each year. Each year with the raise of value added tax, the
debt per capita it higher, in inefficiency of government to create more jobs citizens are
obliged to find their resources in the black market, taxes are not paid and still value added tax
is going higher. It almost reminds of enchanted circle, the maze that never ends. In deficit of
inputs, ministry of financial department takes financial resources from MMF prolonging the
payment debt and increasing the percentage of payment per capita. Democracy has brought
capitalism.
When all is taken in consideration, it is quite hard to give an adequate solution that could be
flawless. United States of America is a vortex of debts; it has created the domino – chain
reaction. If USA economy recovers, the rest of the world will recover as well and via versa.
There is no solution to what so ever that could influence the change of economical situation,
any extremity that could be taken to consideration is not the solution. Today the world is run
by oligarchy and concerns; much less it left out to citizens to think about. The ideal change
and economical influences should be run by people, idealistically speaking every country
should have its own currency, developed system of increasing of monetary fund so that in
time of need bank lawns are not taken. Economy should be run citizen, the ones who are
educated, but due to that voting should be a privilege not a legal right.

Battle Of Ideas; Episode II; Essay

As it has been mentioned in the first part, the importance of corruptive politics has demined
the world throughout ages of torture and political oppression by the dictatorial government.
The parallel visions where taken as an empiric examples of oppressive politics during the
blossoming of Soviet Russia and Eastern China.
The communistic regime of Soviet Russia has included several political strategies such as
dictatorial measurements and actions to improve ratings among citizens regarding the state
economy. Communistic ideology of improvement was in one had very violent, during the
WWII, the oppression and sadistic actions have been implemented in political apparatus to
improve over working hours of prisoners. Political regime of Soviet Russia failed to exceed to
its highest point at the ending, trough decades negative numbers have raised to a point of
bankruptcy. Among the political apparatus the agenda of highest chair has been dictatorial in
order to keep to the leaking truth out of governmental facilities. The pitch point of
communistic regime was telling the opposite of truth, the citizens were informed of high
economical achievements despite the inflation.
Despite the fact that communism was very productive, on silver lining, the political agenda
had a very restrictive measurements when it came to importing certain goods over the border.
The instalments were simple, no importing was allowed while the exporting was one of the
main goals of productive economical strategies. Soviet Russia was one of main exporters of
refined methane or domestic natural gas. The main product of Soviet Russia gave
monopolistic power over bordering countries. In the beginning of production process the
communistic regime failed to maintain the written course, the economy was simply the
reflection of Soviet Russia’s inefficiency to follow the strict rules. Imprisoning and following
the harsh order of main reasons the economy of Russia has failed to exceed to its maximum.
The black market in communistic regime of Russia appeared right on the boarding lines, the
official were usually bribed to import such goods as cigarettes, alcohol etc. to resell. That it is
the pitch point of Soviet Russia downfall. The regional economy growth was also one of the
main reasons why it did not exceed to its maximum growth, the communistic regime is
probably one of the most autocratic, dictatorial and blind-ambitioned regimes. It is well
known how regional and closed in the Soviet Russia in that period of time was. Communist
regime was ended by a cold war, despite the downfall the scheme was taken by India, the
Soviet-economy regime.
The proclamation of communistic approach to economical matter was deeply rooted in
several areas of Soviet Russia. Political agenda was quite simple, to control every segment of
individual’s existence. It was almost a massive population mind control. Economical advisors
have come up several times to a solution to repair such damage. The “shock therapy” was
proclaimed, it might have been the best solution at that time. Debts were growing and the
inflation was getting up to a point where banks were printing money every day to keep up to
inflation rate. Russia strongly believed in taking higher percentage out to GDP and investing
the same financial resources in military services. The common mistake of Soviet Russia it the
Soviet itself, Soviet as roughly translated as council of politicians were mainly guided by
communistic ideology. The reflection on economical values were catastrophically high, while
the ministry of financial office was created only pro form. The ending decision was made by
council. On the eastern side of the globe, China had a different approach to economical
resources. The main thing about Chinese cultural heritage is the concept of living person
being less greater than its surrounding. As it a very old civilization, Chinese people had a
different approach to economical solutions. As it has been mentioned earlier, the shock
doctrine, it was also recommended to Chinese due to the fact that Chinese nation was a very
passive yet skilful nation. In both cases the two extreme behaviours lead to disaster.
Economical bases of China were mainly secluded, due to the language and writing.
The economical control and advisory were mainly misguided and had not predicted the
influence of macroeconomy. In Soviet Russia, the shock doctrine was not implemented due to
the fact that the communist regime had a powerful impact on the citizens. While the rest of
the world had its upcoming changes, the secluded Russian politics lead the economy to the
downfall. The formula of economical growth in Soviet Russia, as it has been already said in
the former lines, was accepted by India. The following years had shown the same results
ending with zero. By year 1990 India’s GDP encountered the growth of 0 percent. Chinese
however accepted the doctrine of Capitalistic regime. In that time capitalistic behaviour was
more pragmatic, sufficient due to the failure in Communistic Russia. When all cases are taken
in consideration it is quite hard not to notice the flaws in regional economy. For example if
regional economy of Soviet Russia were to be applied for global economy, what would the
results be?
To oppose the Soviet Russia, China and India to today’s economical situation one must notice
that the same actions influenced their future-present economy. If the communistic approach
was applied to today’s global economy the consequences would be lethal. What could have
been done for example in Soviet Russia is very simple, the obtain power over economical
growth the strict border laws of import and export should have been rearranged. To take in
consideration that hypothetically import was not forbidden instead it was rationalized with
low taxes, the economical benefit would be on the both cooperating sides. The comparative
advantage of Russia and the comparative advantage of some other cooperating country would
have brought economical growth on both sides. The strict policy of border line has brought
problems to globalizing the economy. Today’s global economy is getting its downfalls as we
speak. The initiation of economical problems and especially third world countries had began
previously in the past. The agony of reform has majorly been a band aid to help cover the
temporary problems such as the problem of inflation during the inflation in Soviet Russia. The
debts from the past had majorly influenced today’s economical structure, the point of
observation is USA. The debt is estimated in trillions of dollars which proves that not only
American GDP was never stable, it almost never existed.

The principle of capitalist model such as America and Europe was expected to be positive.
Taking a loan, building, and returning the loan with interest. It had to be very simple like that,
but the major downfalls were the stock market, domestic loans and more importantly poor
households. The logic was for example to build a block of new business facilities, some
investors would buy it for a higher price, the company would profit a third of the earned
money, one third would be returned to bank and the last third would pay off the country
obligatory bills. The problem was that the bank loan was available to everyone with clean
banking history. Taking a lawn from a bank and giving it to a constructing company to cover
up the building lawn was not something that was expected to come up. The bank’s interest
goes up and soon nobody profits. Capitalistic approach is not the sample model for controlling
global economy, its unpredicted mistakes could be deadly for global economical growth. One
of the common misleading presumptions is that the price of goods will always stay the same,
it is known that the prices are shifting daily and most small companies are being closed at
daily basis.
Battle of I deas: Episode I I I ; Essay

The political ambitions of one’s country is always and nevertheless at the stake of well being
of its citizens. Throughout historical chronology it has been proven over several times that no
matter of what regime is given to rule the nation, the bureaucracy apparatus always works at
its best interest. The capitalistic model of economical management has been proven to be
functional in several occasion, nonetheless it had its flaws due to the inheritance of problems
from the past. The same problems from the past analogically effect the present situation in
matter of economical crash which is affecting every segment in the globe.

To recognise a problem in economical leakage it is almost the same to take glass of water out
of the Pacific Ocean and expect that the next person will know how much salt it contains. It is
impossible to rationalize continuous and almost lethal economical droppings that are affecting
the ratio of rich and poor. The empiric example was presented in the third part of this
documentary, American system of evaluating the nation growth income, GDP and border
laws. Surely, that matter shall be discussed in the following text. It is a common knowledge
that American system of banking is one of the first associations of American nation. The first
credit card appeared in 1980s, plastic and efficient. Cash was only a platitude. The American
banking system mostly relies on loaning to indefinite, if the loan is taken by singular person to
cover the domestic needs and bills, what shall be expected if the same is purchasing a living
facility? If only this rule is applied to half of the nation, then America is already, not
officially, on the verge of existence. As it has been mentioned in the part three the
documentary the American national debt it estimated to be over few trillions of dollars and in
electronic money it is over 200 trillions of dollars. United States of America is one of the
leading empires in economy, that is one of the main reasons why American face immigration
problems on daily basis. The borders between American and Mexican territory has been at
stake for many years. The solution that came up was quite simple, it was call NAFTA. It shall
be discussed later in text.
While American progress kept on stagnating, the financial advisors were interested
somewhere on the Far East. Japan had a different concept of economical growth, no importing
but severe measurements of exporting mostly technological goods. The comparative
advantage of Japanese production was flourishing the economical status, while Americans
where still fighting the border problems. The North American Free Trade Agreement
(NAFTA) was an agreement between North America and Canada over free trade with or
without taxing the imported goods. The principle of dealing with the economical crises
emerged out of this agreement; it was considered that free trade among neighborly countries
could actually improve the both economical income. American trade of goods was based
merely on production less on exporting and more in inside producing and spending. The
scheme was applied for several years and it had shown some downfalls. Erasing the fictive
bordering policies by implementing the agreement of NAFTA, the crisis had stopped to
falling in minus infinity. The European Union however had already had the same systematic
solutions in periods of crisis. European Union however has failed to exceed its plan and failed
also to keep some of the countries in the same Union. Why? European Union was formed to
act to financial crisis like NATO pact acts to situations of war. If one the country member is
hurting, all other members connect to help. Ideologically speaking it was the perfect formula
to resist to downfalls of American crisis. In past ten year, unexpected unfortunate events
occurred in European Union. In year 2010, United Kingdom has dismembered itself from the
Union with the politically “mellow” explanation that Euro cannot be directly attached to
currency of Pound. Another unexpected event was the bankruptcy of Greece. The event has
called to be one of the major damaged to economical situation in European Union. Greece
was saved from the bankruptcy by taking a loan from EU members. Slowly, in already shown
events other members of European Union had taken to consideration about dismembering
from EU. One, of course, the most influential factors of economical growth and downfall is
the presidential election in United States of America, which again is proven to be the “black
hole” of economical crisis.
When all factors and events are taken to analysis, it is nevertheless hard to find an adequate
solution and the answer to global economic politics. From a point of view of simple citizen of
the world it is almost impossible find a simple thought about controlling the economical
fluidity. However, were there is a problem there is way to a solution. If the global economy is
run my oligarchy and concerns, there is no logical way to influence such power. The only way
is to increase the awareness that global economy is not actually controlled by certain
individual, but that the global economy is actually reflection of domestic financial behavior.
Mostly and in general when global economy is taken in consideration, the first thought is that
the same is controlled by big governmental councils which is true. If we closely observe the
governmental politics is always somewhat subjective, so that the economy is always the
reflection of certain politics. For example if the global economy is influenced by capitalistic
model of running, then the segregation between rich and poor layers shall grow. That is
mainly the reason why the citizens should be aware that the changes are not possible if the
microeconomic situation is not stable. To control the global economy the starters should be
the citizens, firstly it is quite important to educate and to raise the awareness of bank loans, of
how they should be resolved and be taken in critical thinking. Firstly that should be done is to
organize seminars, free lessons trough mass media how endure with simple economical tasks
of one households. To influence global economy and make it a safe constant line, the most
important thing is to inform till it becomes common knowledge. In this year of 21
st
century
when the globe is faced with mass production of everything the generation of over consumers
are rapidly being born following the same paths and repeating the same mistakes. To raise the
awareness such as over consumerism the parole should be “Live one day at a time and work
to pay off your loans”. That is probably what people are not aware off, this is what we live
today. The major thing to influence the global economy is to cut costs and overspending, not
just temporarily but permanently. These next examples are only minor examples how one
family or individual can influence micro economy therefore if all joined together could
influence the global economy:
- Instead of buying overly priced 4x4 USVs that spend tens of gallons of gasoline, one
should invest in more eco-safe car.

- Instead of vacationing by credit card, one could spend the summer vacation getting a
part time job.

- Instead of buying and importing vegetables, one could (if possible) grow their own
vegetables.

Global economy is always managed but not controlled, the government releases the policies
but the actual power over the economical balance, poverty and crises is in the awareness of
citizens. It might sound impossible, however most ideas are, but they are not undoable.