The twentieth century is also the century of the market economy. The market
has existed since the dawn of civilization. Subsequent to the Industrial
Revolution, however, the market became one of the fundamentals of nation
state civilization, and has now developed into a global infrastructure.
Market economy theory maintains that raw materials, agricultural and
manufactured goods, consumer durables, labor and financing would be
properly distributed by market forces. This approach was challenged by
Karl Marx who alleged that such a market causes unpredictable violence and
who called for economic goods to be distributed by human reason. For
seventy- three years this grand scheme was implemented in the Soviet Union,
from revolution to collapse, only to result in an inflated bureaucratic
structure, which did function to some extent mobilizing the entire
population toward the waging of wars and certain other national goals.
The collapse of the Soviet Union does not necessarily authenticate the
legitimacy of the market. Offsprings of Reaganomics, such as financial
liberalization and electronic globalization have resulted in an humongous
financial market where $550 trillion was traded in 1998, forty times as much
as actual goods and services generated, creating a huge gap between money
and goods, a situation which appears to be out of control. The violence of
the market has grown to the point where even nation states may not able be
to alter its direction. The question then will become whether or not
economics can be instrumental in regulating this monster.
The economy moves around freely across national borders, while politics,
especially national politics, remain stuck behind borders and unable catch
up to economics. This is a natural problem at the end of the nation state
era, and the formation of EU is a grand experiment to attempt to deal with
this historical problem, as yet producing no clear answers. |
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