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New Netherland inflationary crisis: Difference between revisions
From Roses, Tulips, & Liberty
added mainstream Leyden school interpretation at the time
(New Netherland currency crisis (WIP)) |
(added mainstream Leyden school interpretation at the time) |
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The Daelder's strength against foreign currencies brought difficulty to New Netherland's export-oriented industries. While the strong Daelder initially reflected confidence in the nation's economy, it eventually became a hindrance. This, along with the soaring prices of New Netherlander goods, made New Netherland's exports less competitive on the global market, leading New Netherlanders to import most of their goods and led to more and more companies outsourcing manufacturing and high-tech industries to neighboring [[Tussenland]] to maintain profitability.
=== Impact ===
As inflation soared, purchasing power eroded. Financial instability and uncertainty became pervasive, contributing to unemployment and job insecurity. Social discontent and unrest surged, with protests and demonstrations expressing frustration with the government's handling of the crisis. The people of New Netherland also took a psychological toll, as anxiety over the economy loomed.
== Causes and explanations ==
==== Mainstream Leyden school interpretation ====
Economists of the mainstream economic school of thought at the time, the [[Leiden school of economics]], argued that the crisis ultimately stemmed from the divergence from free market principles, largely blaming the labor-friendly government of Edgar and Marieke Guman in the late 1940s to early 1950s. They argued that adoption of interventionist policies, such as expansive social welfare programs and wage regulations, set a dangerous precedent and distorted the market and led to unsustainable growth. They also criticized the consumer-centric policies of the Zeyven Party. All of this was exacerbated by the global energy crises in the 1970s, which put New Netherland's economy further into inflation. Leyden economists suggested that the government should take a more hands-off approach to the economy, allowing it to correct itself towards equilibrium.
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