Myth or Fact?

               The argument is whether the great depression was caused by the free market economy, and fixed by government intervention is a myth or a fact.  I personally believe that it is a myth, at least the second part is.  Yes the great depression was created because of free market and the lack of control the government over it, however government intervention did not fix this terrible crisis.  Many believe the FDR’s New Deal was the main thing that brought this economy back up, but I believe that these government involvement actually made the great depression actually last longer.

                FDR was elected president in 1933, he promised many things of which the people of America thought was exactly what they needed, when in reality, they were wrong.  FDR’s plans, such as the New Deal or the monetary policy, made things worse in the nation’s economy.  Instead of getting America out of a recession, it dug a bigger pit that would be much harder to get out of.  For example, the banks started to fail, and then after FDR’s so called genius plans of making bank holidays and trying to spend more money nationally, 5000 more banks close, of which 2000 would never re-open their doors again.

                The monetary policy was supposed to create a system were money was spent in businesses to try to bring them all up, however this plan also failed and interest rates went up, expenses to run a business were demanding, and the profits of many were diminished.

                Government intervention, such as the New Deal, monetary policy, and many other acts, did not bring the American economy out of the Great Depression.  I believe that if the government did less, the recession could have been over in a very short period of time.  The original argument is a myth.  

Charter City

What is a free market?  What is considered a well-structured economy?  In The Success of an Idea (reading 2) it states, “…the right to property is the key institution to the establishment of a free market economy”.  A free market economy is an economy in which the prices of goods and services are determined freely, or in other words, by supply and demand.  Now for the second question, I believe that such an economy does not exist here on earth.  Many are close, but all have some sort of corruption within.  The problem is to create the perfect system that enhances opportunities and gives people brand new starts.  If someone were to ask me what I think would make the perfect economy, my answer would consist of three main concepts; good rules, uninhabited land, and choosing great leaders to form loyal partnerships between other nations.  This flawless economic system, as called by Ted, is the charter city.

First off, in my perfect system, we would need good rules.  Rules are the boundaries of an economy or government.  We couldn’t just tear down with the rules, we would need to find ways to make effective rules that make our economy better and build it up.  We need not to force, but encourage and uplift.  Rules essentially determine how citizens under them interact with each other.  Rules can be bad because the government is weak.  In some economies, also stated in reading number 2, “…rules are road blocks for entrepreneurs and crush creativity.”  Instead, “The system of rules in which entrepreneurs can flourish in and in which technological change results is often called economic freedom. Economic freedom is created by a system of rules where property rights are protected and the rule of law prevails. Countries with economic freedom have low tax rates, low amounts of regulation, and very little corruption.”  This is what the perfect system should be based on, economic freedom, where rules are limited to success.

Uninhabited land is key to a charter city.  To start on fresh land, away from others, will enlarge our opportunities to be innovative and isolated.  The land should be large enough but not too big.  If it is more of a town, too small, then you won’t get the benefits you need.  On the other hand, nations are too big, if you change a rule, it is far too hard to regulate it and we can’t have some abiding by old rules while others are going in a different direction.   However, cities are the perfect size, they give us new opportunities and new rules where everyone can follow to create benefit within the economy.  People can come live under the new charter, but no one is forced to.

Finally, we need to choose appropriate leaders.  To achieve these proper people, we need to be open to creating loyal partnerships between nations.  We can work together using our different strengths; we can get certain benefits that we could not get without them.  We need leaders that understand, listen, and are loyal.  We need not leaders of greed and lust, as shown in the video Greed; these characteristics harden people’s hearts.  We need a leader that only cares for the welfare of the citizens souls.  We need to be innovative and we need to share ideas.

We need to follow the market model, to create charter cities.  These cities would have great rules, that only uplift and benefit the market economy.  They would be in uninhabited lands where a new economy could come to pass.  Charters would also provide the perfect leaders who will guide these free market economies to success and well-being.