By Steven Cinelli, CrowdFunding Beat, Sr. contributing Editor
The last couple of weeks have been quite provocative in terms of economic news and the ongoing evolution of a new world order. As background, I did my master’s thesis on what drives a society – politics or economics. While politics certainly address the governance of a society, in the end, economics is the linchpin. Politics, amongst its initiatives, do involve economic allocation, and possibly redistribution, but it’s the resources available and how they are created, dispensed, invested, controlled and manipulated, that drives the body politic and lays the foundation for advancement. Democracy and capitalism as earlier wrote has led to economic disparity so maybe it’s time to redress a few things. Possibly new societal models may just win in the end.
I frequently refer to China’s decision at the end of the Cold War to exert its global power, not through military might, bur rather via its pocket book. Now its position as the largest creditor of the US, and indeed the largest economy, gives it a significant lever in broader diplomatic legitimacy and participation. Today, there were missives dedicated to the concern of the West regarding the emerging trade relations between Russia and China, particularly the energy arrangements, which could have a debilitating effect on the EU. No need for military muscle to add pressure, rather just control, allocate and redirect economic resources to those you want to play with. Is there a “defensible” position from the West? Isn’t the mantra “free market” a raison d’être of the US and other NATO participants, but if the “environ” doesn’t include or enable the West does economic influence and free markets become suspect from a Western perspective?
Look as ISIS/ISIL. Whether a quest to underscore the mandate of Sharia Law to just avoid the inclusion in the Western economic construct, it has launched its own currency, and apparently, its growing economic resources, may just force its acceptance, regardless of political persuasion. It too, even with its egregious and immoral political stance, understands the economic means avails a fundamental enablement. Ultimately, will the EU forego purchase oil from ISIS controlled sites, if that is the only oil available and affordable? Do they acquiesce to get through the winter? Does this default into legitimacy? Economics vs. politics. Economics always will win. And will those in need of economic resource just look the other way politically? Recall great empires. There sustainability rested on economic achievement and discipline long term, keeping the socio-economic framework palatable for all constituents.
Japan too, in its quest to build its economic prowess aligned with Russia through its JCB bank card initiative, where three million new cards will be issued to the Russian populace. No need to for VISA or MasterCard in the mix. While the West created the all-purpose card to stimulate consumerism during the 70’s, and while recognizing stalwart card associations, the recent Ukrainian situation changed the activities of the Western intermediaries in Russia, leading to a huge opportunity for JCB. So what creates the clout?
Simply, we are witnessing economic evolution, where James Wolfensen (formerly of the World Bank) warned over five years ago, that the economic power and as such political might, will shift to parts of the world, that have heretofore been the lesser- or undeveloped parts. Population growth, economic growth, ubiquitous technology, and the shrinking world, gives everyone a shot. Now the old guard, led by the US and EU, seem pissed off and are looking at alternate actions to stem the shift in economic power. Really trying to use politics to change economic free trading. It has been the case of who has the money controls the game. Well, others now seem to have garnered a bit of economic might, and they want to play and compete, and if need be, exclude the historic major players. All is free game, in a free market, and the historic players, just need to either show up and compete or let new players lead the pack. Maybe the West just needs to get use to it.
Steve Cinelli is Founder, CEO of PRIMARQ Inc., a paradigm shift in the world of housing finance. Our goal is to bring prudence and opportunity into a fundamentally crucial segment of the US and world economies, namely homeownership. @