Welcome to Ireland! Our trip to Ireland began rightly so with some delicious Irish food Sunday night, and Monday morning we took a trip right around the corner of Fleet Street to the historic Trinity College. There we toured the campus, viewed the Book of Kells and the Trinity College Library, and attended a lecture on the Eurozone crisis from an Irish perspective. While we have been studying the European economic crisis since arrival, this talk provided a deeper look into Ireland’s response.
In particular, the professor offered an alternative opinion as to why Europe was hit so hard in 2008. Instead of the dominant view of a more prudent northern Europe versus the feckless southern Europe, he proposed that capitalism inherently leads to divisions in the economy. It requires the use of exploitation such as low wages to add value to products, and the producer can then sell the products at a higher price. However, this leads to divisions in the economy if consumers cannot afford these higher prices due to their lower wages. The professor’s conclusion is then that capitalism will always lead to crashes because of these divisions and as such cannot create a sustainable economy. A potential fix is to continue investment such as in the mortgage market, but this only postpones the crisis. As was seen in Ireland, the investment in the housing market did postpone the crisis but then inevitably led to a housing bubble and a crash. The professor left us without a solution but instead, a call to action to create a better system.
If capitalism is not the answer, a change in the system will require not just government regulation but instead an entire revolution in the mindset of the general population. I do not know if it can be called human nature or nurture, but humans are driven by gain. A new system that would work to decrease disparity may also result in a slower economy if people are not motivated to work hard for personal gain. In addition, if disparity is to be decreased, this may require government intervention, which would restrict the freedom of the individual. One of my colleagues raised this question in our discussion, and while the professor stated that decreasing the disparity does not hinder individual freedom more than supporting banks so that they do not default, that cannot be the long-term solution if the goal is to continue is to keep current democratic systems. Therefore, the solution must balance lower class disparity with higher motivation than a capitalist economy. If there was a higher factor of motivation, people would naturally tend towards this system, or generations would slowly have to change the mindset of people as to how the economy should work. I still am not sure what the answer might be, but part of me wants to see what system would be created if the economy was allowed to completely collapse. This would cause plenty of turmoil and struggle, and I doubt I would actually support it. However, if the resulting system managed to provide a solution to this proposed inevitable collapse of capitalism, would the end justify the means?
I like your analysis of the lecture that we heard! I agree that it is a really tense balance that needs to be made between this desire for gains and the need for more equity. Since the professor left us without a solution and only with a call to action, I suppose it is up to us to try to figure it out!
I think that is was beneficial to hear such a different viewpoint on how to solve. Generally everyone who has spoken to us about the EU has come from a Capitalist perspective, as the EU values and requires a capitalistic free market. His far left socialist viewpoint was unusual for many of us, upsetting some and exciting others, but I think it boosted everyone’s understanding.
Excellent work here Victoria. It was a challenging lecture, and you’ve captured the heart of it!!