The problem of centralization
Presently, both political and financial authorities have reached an unprecedented level of centralisation, and this issue has manifested almost uniformly across the entire world. If there is one problem that the Covid-19 crisis has revealed, it is how centralised the world’s political and economic decisions are.
From the economic perspective, the only measure to overcome an unprecedented economic crisis was the decision by central banks to implement the helicopter money policy. Thus, the economy was saved and governments were proud of the recovery, but at what cost? The economic policy put in place resulted in money printing to the tune of trillions of dollars. With these trillions injected into the economy, the financial markets were the first to benefit, and are now reaching historic highs. This situation, however, has raised some concerns about the 2008 scenario repeating.
The inflation as a consequence of these centralised decisions can already be felt. Prices of everyday items, petrol and electricity are going through the roof. Then there are electrical component shortages across a number of industries, and the situation with international shipping is no better. Yet, on the other hand, the massive cash injections by central banks have been detrimental to the value of national currencies. So, what is going on? Has the democratic capitalist world reached its limits caused by centralisation?