Various historical events have been cited by historians and economists alike as providing definitive examples of Hyperinflation. Weimar Germany, Mugabe’s Zimbabwe, and Venezuela have been cited as contemporary examples in the past century alone. These examples are well-known cases where there is an overwhelming amount of any Currency in circulation as Kapital and the Value plummets as a result. All three cases continue to be cited because each one has occurred under Financial Regimes not relying on the Bimetallism (the Gold and Silver Standards), but instead Chartalism (the Schuld or ‘Debt’ Standard). This is not to suggest that Gold and Silver are immune to Hyperinflation because neither are exceptions. Examples of Hyperinflation involving Bimetallism include the Roman Empire’s Crisis of the Third Century of 235-284 AD and the First German Reich’s Kipper- und Wipperzeit (Tipper and Seesaw Time) during the Thirty Years War in 1621.
Granted, it must be stressed that the Work-Standard is also not immune to its equivalent of Hyperinflation, “Burnout,” which is the technical term for its more literal shorthand: ‘Death-by-Overwork’. Before any serious investigation into how Hyperinflation is factored by the Work-Standard, two important questions deserve to be asked: Why do governments resort to rapidly depreciation of their Currency? Under what conditions does Hyperinflation (or Burnout) become justifiable as part of any monetary policy?
Most historical examples of rapid Currency Depreciation through monetary policy have often been the result of the nation-state running a budgetary deficit. They tend to occur during periods of political and economic crises, military conflicts, and social instability. The justification itself revolves around an emergency measure on the part of governments to create large quantities of Currency as a means of financing the nation-state’s budgetary deficits. The effects of rapid depreciation of the Currency becomes a secondary concern, eclipsed by larger ones like the possibility of being annihilated in a war or the government is forced to crack down on dissent as part of restoring order and stability. The consequences of such aggressive creation of Currency can be addressed later, when the government finally achieves a more tenable position to deal with the negative effects.
If governments can justify Hyperinflation on the basis of national survival or an emergency crisis, it can be argued that similar justifications will be made by nation-states relying on the Work-Standard. The political context by which they occur will stem from factors that exist beyond the immediate purview of monetary policy. Since the Work-Standard is capable of achieving proper Synchronicity between the nation-state’s political, economic and financial structures, the effects of Burnout cannot be discerned from the creation of Geld by the Financial Regime. Within monetary policy alone, the effects are factored by the overall creation of Arbeit across a given Zeit and how high the Mechanization Rate had been set. Outside the realm of monetary policy, the effects are more noticeable within the national economy, and that is where the Work-Standard differs from both Bimetallism and Chartalism.
The Work-Standard’s version of Currency Depreciation was known as the “Attrition Rate.” Having a governable amount of Attrition within normal bounds is preferrable because Burnout arises from the accumulation of excessive Attrition through unrealistic amounts of Arbeit within a short period of Zeit. Here, the contemporary examples over the past year alone actually extend beyond the usual cases of Weimar Germany, Mugabe’s Zimbabwe, and Venezuela. Given the Work-Standard’s distinct methodology regarding Currency Depreciation/Appreciation, examples like the “Great Leap Forward” of Maoist China, the “Lost Decades” of post-1945 Japan, and the major military conflicts of the 20th century such as the two World Wars. Even though an investigation into how the Work-Standard is able to function under the wartime rigors of conflicts as massive the two World Wars, the Great Leap Forward and the Lost Decades deserve to be understood as perennial cases of Burnout under extraordinary contexts.
In the Great Leap Forward, Chairman Mao and his faction within the Communist Party of China were trying to quickly industrialize the entire People’s Republic of China within the span of a single Five-Year Plan. Their more moderate rivals at the time believed that the industrialization of the PRC should occur gradually over a longer period, allowing the peasantry to be collectivized before any large-scale industrialization can occur. This occurred at a time when the PRC had won the Chinese Civil War against Chiang Kai-Shek and the Kuomintang, who retreated to the island of Taiwan, where their descendants still hold out today. Since the PRC needed to rebuild Mainland China and create an economy capable of sustaining itself, the Great Leap Forward was justified on those grounds between 1958 and 1962.
Entire populations in Mainland China were compelled by Beijing to form farming collectives and entire industries of workers were conscripted into the industrialization efforts. Chinese industries were to surpass the industrial capacity of the United Kingdom within the next fifteen years (1973, to be exact). The goal was really motivated by propaganda more than anything else, inspired by a similar Five-Year Plan under Nikita Khrushchev where the Soviet Union would surpass the United States industrially within the same timeframe. Since this Five-Year Plan was also the infamous “Seven-Year Plan” (for lasting seven years), the Great Leap Forward also fell short of its own expectations due to poor organization, timing, and coordination.
The consequences of the Great Leap Forward led to the PRC’s overall food production to deteriorate, which led to mass starvations by the tens of millions. It also led to its economy to stagnate, the effects of which lasted for the rest of Chairman Mao’s reign. Another consequence was the infamous Cultural Revolution, a years-long campaign by the CPC to consolidate its power after the failure of the Great Leap Forward. But perhaps the most pervasive and recognizable set of consequences has been the PRC’s gradual pursuit of market reforms initiated under the reign of Deng Xiaoping, which contributed to a swift economic recovery that resulted in Mainland China surpassing the post-1945 Japanese economy.
Post-1945 Japan, despite its Liberal Capitalist Market Economy, offers noteworthy examples into the negative effects of Burnout that can arise under the Work-Standard. While Mainland China was pursuing Dengist market reforms, the post-1945 Japanese economy entered the euphoria of an asset-price bubble created by the Plaza Accord of 1985. The debilitating effects of the faux-prosperity in the 1980s, including its gawdy influences on Japanese culture, manifested fully when the bubble burst at the end of the Cold War. The Lost Decade emerged to refer to the economic stagnation of Japan in the 1990s, the effects of which were exacerbated due to Japanese technology and financial firms being affected by the Dot-Com Bubble, the 9/11 Attacks, and the Great Recession. The absence of a coherent recovery in the 2000s, coupled with the subsequent earthquake and tsunami that led to a nuclear reactor meltdown in 2011, has led to the Lost Decade being extended to include the 2000s and 2010s.
Unlike the Mainland Chinese example from earlier, the post-1945 Japanese case included an economy suffering from rampant Deflation, Negative Interest Rates, an aging population, declining birthrates, rising deathrates, and depopulation of the countryside. Worsening these effects is a hellishly grueling work-culture centered around a worker’s absolute, blind loyalty to their Zaibatsu-like “Keiretsu” as “Salarymen.” The term “Karoshi,” from which the Work-Standard’s Death-by-Overwork originated from, has become a negative consequence of a work-culture that forces its workers to literally overwork themselves to the point of death or suicide.
The significance of the Japanese work-culture presents an interesting dynamic about the impact of excessive Attrition accumulating into Burnout. Had the Japanese Yen been pegged to the Work-Standard and provided that the work-culture refuses to change, it is doubtful that the Japanese economy will recover from the Lost Decades in a meaningful way. The Work-Standard, rather than being a source of redemption in alleviating the country’s Deflation Rate (which the Work-Standard registers as its Inaction Rate), may instead contribute to a higher than normal Attrition Rate tantamount to achieving literal Burnout. ‘Karoshi’, including the deaths it causes, no longer remains as a social issue divorced from economic and financial stressors; it becomes a matter of genuine governmental policy.
Categories: Compendium, Economic History
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