How to Solve the Economic Crisis in Less Than An Hour
Once again there are fears about the economy. But the problem is not getting better. It is getting worse.
The solution, however, is found in this simple classroom experiment. Get an even number of kids on each side of the room. One side has money, a limited amount. Say $10. The other side has goods to sell. Say 10 apples. Now, tell the kids to ‘clear the market’ – that is, all apples must be sold at maximum price. When that completes, ask the students to give you the average price for apples in today’s classroom market. The answer should be $1 each. (Yes, I know this assumes all the money is spent on the apples and none of it is withheld for other purposes.)
Now start again, but this time, give the money people $20 instead of $10. Same rule: clear the market at maximum price. What is the new average? $2 per apple. In other words, the ‘price’ of apples has gone up. Or, you could say, the value of money has gone down.
One more time now. But this time there are $10 available with which to buy, but 20 apples available for sale. When the market is cleared, the average price is now 50 cents per apple. That is, the ‘price’ of apples has gone down. Or you could say, the value of money has gone up.
Since no one wants the ‘price’ of their assets to go down, the economic problem will remain unsolved. No one wants to admit that price is merely a ratio between available money on the one hand and available goods on the other. And people are only better off economically speaking, when prices of all goods and services go down.
But a classroom of 10-year old kids could figure this out and the solution to our economic crisis in less than an hour. An economist with a Ph.D. from an accredited university, however, or an elected politician, is unlikely to ever figure this out.
Maybe we’re expecting the wrong people to fix the problem.
Ian Hodge is an accomplished musician and music teacher, an executive manager and a management consultant to business owners.
Dr. Hodge began his working career as a professional musician. His interest in Christian economic theory, however, led to a move into the investment industry, where he made his way to the ranks of executive management. His first position as a CEO outside of his own company was a turnaround situation, and he found this was “his” place in the business world. For the past 16 years has been a business consultant to help turn around struggling businesses. He has clients in USA, Australia, New Zealand, and Canada.
He actively uses his consulting skills to help train church pastors, elders and deacons in leadership and church growth practices.
As a musician, he worked with several singers around Australia and the South Pacific as their accompanist and music director.
A current project is the development of SonCross Academy, an online school that starts with the Bible, providing lessons in music theory and piano, economics, business, history, philosophy and theology for ages 8+. www.soncrossacademy.org.
Ian Hodge received his Ph.D. degree from Whitefield Seminary in “Christian Intellectual Thought – Economics”. He has written over 500 articles on topics such as business management, economics, education, law, finance, health, philosophy, politics, theology, and music as he explores the application of a biblical world view. He runs his own blog at www.biblicallandmarks.com.
He is the author of:
· Why Would Anyone In Their Right Mind Believe the Bible? An introduction to the Christian Faith.
· Baptized Inflation: A Critique of “Christian” Keynesianism.
· Is This The End of Religious Liberty? The Declaration on the Elimination of All Forms of Discrimination and Intolerance Based on Religion or Belief.
· Making Sense of Your Dollars: A Biblical View of Wealth.
· How To Be Diabetes Free . . . For Life. An analysis of the biology of diabetes, and how this disease can be prevented and even halted.
· Ian Hodge’s Read, Write & Play Music, a self-teaching program that instructs young students on how to write (compose) music.
· Powerhouse Piano, online video and live lessons in classical piano.
· Publisher, editor, William the Baptist. A classic in Christian literature, reissued with an introduction by Dr. Hodge.
In his spare time, Ian can be found actively debating atheists on his city streets and elsewhere (anywhere) whenever the opportunity arises.