If every country’s’ money was suddenly not worth as much, wouldn’t there be no effect? Like if the whole word decided collectively to make everything 50% cheaper, but make peoples pay also lower as well. Wouldn’t the buying power be the same?
In: 65
Recessions are a feature of capitalism. Workers do not own the means of production but are paid by capitalists to do the work.
If a farmer who owns their own land and seed needs money, they work the farm. The grow crops to sell to get money. They have everything they need to do the work.
But if a factory owner and workers need money, the factory owner cannot pay the workers to do work and the workers do not have a factory to do work on their own. So work is not done and goods are not produced.
A recession is self-perpetuating. If factory owners lay off their workers, they buy less, so the factory owners have less money and lay off more workers.
Someone has to be spending or loaning money to make a capitalist economy work. When spending and loaning decreases, the economy slows down.
Latest Answers