"The current system is one of capital creation through destruction"--Michel Chossudovsky, professor of economics at the University of Ottawa, Canada

Some months ago I completed a course in System Dynamics sponsored by the Universitat Politecnica De Catalunya, in Barcelona, Spain. In this course I re-learned two concepts, first the appreciation of social and economic differences as they are part of our real world, and second the importance of the natural exponential curve as this curve describes the natural phenomena of our real world.

Yet, I am astounded to realise that these two natural concepts don't play a role in the setting of public policies. I have advice for all of the upside down economists, business people, politicians and academicians: get to know System Dynamics and use it! In fact, with the natural understanding of System Dynamics we have a tool to help us create social developments beyond the reach of our narrow focused experts.

The World Trade Organization (WTO) is having its summit in Cancun, Mexico, and again the concerns of poor countries who are getting poorer under Free Trade is resurfacing. Therefore, I want to emphasize the need to change our greedy conventional economic mentality which is the main cause of poverty in the world. Unconventional economist J. W. Smith purports that in a globalised economy it is impossible to bridge the gap between rich and poor countries when these countries experience a difference in their workers' pay, and he states:

Capital accumulation advantage increases or decreases exponentially with the differential in pay for equally productive labor: An equally productive worker in the poorly-paid Third World produces a unique model car, is paid $1 an hour, and produces one model car an hour. An equally productive worker in the developed world produces another unique model car, is paid $10 an hour, and also produces one model car per hour. Each equally productive worker likes, and purchases, the other's model cars... The $1 an hour worker must work 10 hours to buy one of the model cars of the $10 an hour worker but, with the money earned in the same 10 hours, the $10 an hour worker can buy 100 of the model cars of the $1 an hour worker. While in a homogenized market of many producers there is a 10 times differential in buying power, in direct trades between each other there is an exponential 100 times differential in retained wealth. If the pay differential is 5 ($10 to $2), the wealth accumulation advantage is 25 to 1. If the pay differential is 2 ($10 to $5), the wealth accumulation advantage is 4 to 1. When all have access to technology and markets and pay is equal for equally-productive work, the wealth retained (and available for accumulation or consumption) by each nation is equal.

American domestic and foreign policies affect every other country in the world as the United States has the biggest economy and the most powerful military. Therefore, America could provide a sound leadership to have peace and economic growth at home and abroad. Instead, the Bush administration has specifically endorsed a warrisome elitist domestic and foreign policy and it is consequential that the Bush administration is against the elimination of poverty and against the development of democracy at home and abroad.

References

Pertinent articles published in Ensign

Chossudovsky, Michel The Globalization of Poverty and the New World Order August 2003, Global Outlook, http://globalresearch.ca/globaloutlook/GofP.html

deSantis, Mario The tools of Statistics and System Dynamics: The first for private business, the other for public policies August 24, 2002 Ensign

System Dynamics Society http://www.albany.edu/cpr/sds/

J.W. Smith Economic Democracy: The Political Struggle Of The 21st Century An extract of the book, http://www.globalissues.org/TradeRelated/Poverty/EconomicDemocracy.asp

The Institute for Economic Democracy, about Dr. J. W. Smith http://www.ied.info/about.html