Choosing Unhampered Market Process

772 Words4 Pages
Analyse of what would happen if the steering (injection of money) would be abandoned and a return to the unhampered market process was chosen instead.

Systems exist to maintain the society and bring prosperity, the monetary system is one and have gone through different stages and uses in its development. Due to different needs, societies develop at different pace so, the advantages and disadvantages of monetary system varies from one society to another. Today, money is no more backed by commodity, not equal to gold reserves; it has only a promissory standard. Thus no standard can effectively determine true money value as it is constantly redefined by consumers with relative understanding of other products true values in the market.
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The problem is that it takes time to produce. The too much money injected in the economy is chasing outputs of lesser values. Thus, less valuable products are produced and then kept alive in the market with this artificial government money. The values of our commodities are now unreal making them to cost much less than they would have in the unhampered market process.

In Finland as well as well as other western states, most people that bought apartments with government backed loans could not have afforded it if the governments were not giving home loan interest tax deductions. Some profit calculations in the housing market investments are based on negative cash flow deductions and 100% deduction of the investment expenses. These types of investments would crash if we return to the unhampered market process, as the government will be unable to give those tax breaks or loan backups. All toxic firms that are creating ponzi schemes, and service providers like cleaning companies ran by people who would not be in the business without support money (startti raha) from the unemployment office will die off. There will be more unemployed people.

Finland as a social welfare state cannot be the same in an unhampered market process because government will not be a producer. Cheap public services like free education, cheap medical care and social insurance like Kela would be more expensive.

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