Old monetary system

Another area of conflict in modern enlighted capitalist society is its antiquated monetary system.
Money is based on assumed value. We may laugh at tribes who set great value at sea-shells, which have become the basis of their barter-trade system. Yet, their securities are not much different from our pieces of paper, or mere figures, symbolising assets and liabilities in our financial system.

Our present monetary system of attributed values should have a function of regulating economy and trade. Yet, we see that it fails to check the continuing cycles of overheating and recession in the economy that affect the lives of people in society. It entails times of severe unemployment with misery in its wake.

The recent collapse of the IT hype and unfounded theories of a New Economy are another example of human shortsightedness. Greed fuelled expectations to such an extent that all propriety and sense of moderation were lost. Expert advisers repeating each other, brushing aside all economic rules, caused many people's savings being lost.

So did the urge to expand and profit from excessive bonuses make managements of some major conglomerates overstep all bounderies of propriety. Its effects were disastrous for employees, shareholders and the economy in general. Under pressure to perform banks set aside all traditional policies of caution in lending, resulting in the subprime crisis, the worst after WW2.

It is curious that novel (Keynes-like) approaches to world's monetary/economic policies are noted for their absence. The interest instrument seems to have lost much of its effect. Its wrong use contributed to the present financial situation.

Present-day economists, like scientists, are absorbed in specialist research, no one daring to overstep its boundaries to propose a new unified system to meet current needs. Only a major conflict might make world's wise men force to come up with a drastic solution. (This point seems to have been reached now by the disaster of the subprime crisis. It may lead to a complete re-evaluation of the financial system, returning to the basics of the monetary system: to facilitate the economy of nations: their industry, foreign trade and services, besides governmental administration.