Consumerism Consummation

What drives our economy? Producers or consumers? Well, it is a mix of both. If the producers stop producing, then the consumers will have nothing to buy. Seems like they have all the power, right? Wrong. If the producers sell their products for ridiculously high prices, the consumers can stop buying. This shows the producers that they do not have all the power. They cannot do whatever they want, and us consumers are willing to fight back.

A good example of this was the "gas out" in April 1997. For one day in April, no one bought gas, worldwide. This was a huge determent to the gas companies, with them losing billions of dollars. Overnight, gas prices went down by as much as 30 cents a gallon worldwide.

A similar scenario took place in Toronto, Canada much more recently. On April 15, 2011, gas in Toronto reached prices as high as $1.39 a litre. Many people attempted to boycott buying gas for that one day. This, however did not work. Like many other attempted gas boycotts, it fell through. However, it had much potential, with the chance of forcing gas companies to lower their prices by as much as 10 cents a litre!

As you can see, consumers have just as much power as producers, if not more. As long as all of the consumers band together, and act in unison, their power is endless, in a free market or mixed economy, that is.

This cartoon is incredibly relevant to this week's blog. It is showing how unhappy many consumers are, and they feel that they must buy more to become happier, or to "fulfil their empty soul". Although as you can see buy his friend, consumerism and buying does not actually make you happier. Material objects do not make you any more content. Money can't buy you happiness.

Mixed Market Marvels! Part 2!

As promised last week, today I will be talking about an incredibly interesting and important topic in our world today: Capitalism versus Socialism. Today, I will be talking about a mixed economy, and why I personally believe it is the only way for our country to operate.

This is my preferred economic system. You cannot have a full capitalistic or socialistic economic system, you must find a balance. Canada has done a superb job of finding this balance, and that is why we currently have one of the best economies in the world.

This is because there are some great aspects of a planned economy, and some great aspects of a market economy. In order to have a successful economy, you must incorporate all of these aspects appropriately. Canada has done this. There are many privately owned companies, such as Booster Juice, but there are many great publicly owned companies, such as the Canada Lands Company,  and many great publicly owned services, such as our health care.

A big difference between Canada’s economy and the United States’ economy is that Canada’s economy values collectivism more, and the US’ economy values individualism. This fact is greatly represented by the two health care systems of the respective countries.

In Canada, we have socialized health care. This means that the government controls it, and the money of the taxpayers goes towards it. This enables people who cannot necessarily afford health care to still be able to access it, if necessary. This means that it serves the public need, and the community.

Whereas in the United States, they used to have privatized health care, a mere year ago. Under this system, private companies control the distribution of health care. This means that the health care system might be slightly better, because of competition. Also, it means that the doctors and nurses earn more money, because they are not being paid by the government.

Although this all seems fine and dandy, there are also the cons to privatized health care. Over 15% of the United States is below the poverty level, so they may not be able to afford health care. If they contract an illness, or injure themselves, there is very little they can do about it without money. This is why privatized health care values the individual much more than the collective.

However, it is not all about these examples. The numbers speak for themselves. The unemployment rate in the mixed economy of Canada is 7.2%, as opposed to the 8.3% unemployment in the free market economy of the United States. As well, last year Canada has a GDP growth of 2.4%, and the United States had a GDP growth of 1.7%

Clearly, from all of the information mentioned above, you can tell that a mixed economy is clearly the way to go. If there was an appropriate balance between socialism and capitalism, our economy would surely strive to its fullest extent. 

Mixed Market Marvels!

This week, I would like to talk about economic systems. Specifically - Capitalism. Although I, myself, am slightly biased towards Capitalism, I believe a mixed economy is the preferred system.

A capitalistic economic system, or  a free market economy, contains right wing ideology, and it involves minimal government intervention, such as the United States. It promotes capitalism. In a free market economy, all of the resources are publicly owned, and individuals make decisions about scarcity and resources, unlike in a planned economy. All of the resources are privately owned, and the consumers influence economic decisions by choosing what to buy.

This economic system has its many benefits. For example, free market greatly promotes competition. This ensures higher quality products, for less money. In order to benefit the consumer. An example of this is computer software. The main two computer companies in the United States and Canada are PC, which is run by Microsoft and Mac, which is run by Apple.

The fact that these companies are owned privately, and not by the government means that they can sell any product for how much they’d like, as long as the consumers are buying. Even further, this means that they must make higher quality, and sell them for a better price, which increases consumer benefits. This is a great thing for our economy, and competition is crucial.

However, there are many cons to free market economies, as well. If a company is doing much better than other companies, then eventually the other companies will begin to fail, due to the stronger company’s success. This will lead to a monopoly. Which is when  one company or producer is in complete control of all the production and distribution of a single resource. If it was a planned economy, there would be some government intervention, to compete with this monopoly. However, since it is a free market economy, there is nothing that can be done about this. As long as the consumers keep buying, the company will keep selling.

A good example of this is the De Beers Diamond Company. De Beers is a company that completely dominates the industry of diamond mining, selling and trading. Even though there are obviously other diamond sellers and distributors, the main source of all their diamonds is De Beers. De Beers is in sole control of diamond mining in the world, so there is no competition. If more minor diamond selling companies want to obtain diamonds, they must buy their diamonds.

This means there is know competition for De Beers, and they can potentially sell diamonds for whatever price they choose, because there is no other producer for companies to buy from. This is bad for the economy because it prevents competition, which is an economic stimulator.

To sum it up, capitalism is a good, efficient system, but, a country cannot rely on capitalism alone. There is a need for some government involvement, and this is why a Mixed Economic System is clearly the right choice in economic systems. Join me next week for an in-depth discussion about mixed economies!

The Privatization Conundrum

Privatization. Is it good or bad? I, for one, do not believe about complete privatization. On a large scale, it would be greatly beneficial, but today I am going to talk about a smaller scale. Alberta's healthcare, to be more specific. A recent article that I have read was measuring the pros and cons of privatization of healthcare. Before reading this article, however, I was greatly informed of how beneficial privatization of health care could be.

For starters, privatization would promote competition, which is the basis of our economy. Competition leads to good deals, which leads to an abundance of sales, which stimulates our economy. If health care was privatized, exactly this would happen. Competition would lead to better prices, with better options. As well, doctors and nurses would make significantly more money, because they are not being paid by the government.

However, on the flip side, there are many cons to privatized health care. First and foremost, it would not be the government's requirement to provide its citizens with free health care. This implies that we must pay for our health care. although this is not a big deal for many people, 11% of the Canadian population is under the line of poverty. This means that a significant amount of our population would likely not be able to afford health care.

Although this is an incredibly compelling argument, the Wildrose Party of Alberta is in complete disagreement. If you refer to the aforementioned article, their argument revolves around the privately owned hip and knee-replacement centre at Calgary's Health Resource Centre. The government wants this centre to become privately owned, but Wildrose leader Danielle Smith, claimed that the HRC provided "faster, better, cheaper service", and believes that the government should not be eradicating privatized health centres, but replicating them.

As you can see, there are many opposite opinions on this complex issue. As far as mine goes, I do not have a fixed opinion. I believe privatization of health care can be good, but too much privatization could potentially hinder rather than help. It is very hard to have a fixed opinion on topics as complicated and serious as this one, and I do not believe that one opinion is right. both opinions must be considered and acted upon, in appropriate moderation.

Intro

Hi!
This is a weekly blog in which I, Daniel, will be discussing worldwide economic issues. Economy is essentially what keeps our world afloat, and when the economy goes down, everyone is affected. For example, in 2008, when our world underwent a recession, hundreds of thousands of people lost their jobs. Obviously, this was an awful time, with many people not being able to obtain the necessary resources due to lack of income.

Until this day, the economy has not completely resurfaced, and people all over the world are affected by this. Although many experts argue that the economy is surging, the unemployment rate is at 7.2%, and this is unacceptable. Finding a job is not an easy tasks, but it is becoming easier and easier as time goes on.

Thanks for reading! Join us next week for the issues and benefits of privatization!