Economics and Politicians

Whenever you see a politician conversing about economics and economy, you should know that you are in trouble. You can be sure that some awful decision is going to take place. Providentially for us, their nosy attitudes more often than not have a sluggish, gnawing outcome on the economy. But sometimes our rulers somehow announce some monstrous decision that not only takes them down, but the whole country with them.

History has a funny way of showing our great leaders’ past deeds which on hindsight amuses us little and leaves us sour, morose and peevish with them.

Roman Emperor Diocletian
Around 301 AD the Roman Emperor Diocletian issued a circular that selling food above the predetermined price or receiving wages above a prearranged amount invited the
death penalty. It was a catastrophe decision. Sellers withdrew their goods, unwilling to sell at the fixed price. They were also afraid of being accused falsely for selling above the maximum price and thus invite death. The workers vanished or sat around idly, doing nothing. In due course the circular was ignored and was scorned and ridiculed. It lowered the prestige and authority of the Empire.

King John of England
King John of England decided to try his hands in economics. Normally we are used to experiencing a tax policy which taxes the weak and provides relief to the strong and
powerful. Our King decided to try the opposite. He ordered the Knights to pay a heavy tax. The result was that thousands of these Knights attempted to kill him. Though he signed the Magna Carta in 1215, [Magna Carta was the first document forced upon him by a group of his subjects (the barons) in an attempt to limit his powers by law and protect their privileges.] which brought him some time, but after he lost his treasure while retreating from the French invasion, he went crazy and died.

Gaykhatu - fifth ruler in Iran
Gaykhatu (died 1295) was the fifth ruler in Iran. He reigned from 1291 to 1295. During his time in power, Gaykhatu was illustriously depraved and was addicted to wine, women, and sodomy. In 1294, Gaykhatu wanted to restock his coffers emptied by royal lavishness and a great cattle plague which devastated his subjects’ livestock. In response, his vizier Ahmed al-Khalidi proposed the introduction of a recent Chinese invention called Chao (paper money). Gaykhatu agreed and called for Kublai
Khan's ambassador Bolad in Tabriz. After the ambassador showed how the system worked, Gaykhatu printed banknotes which replicated the Chinese ones so closely that they even had Chinese words printed on them. The Muslim confession of faith was printed on the banknotes as a pacifier to local sentiment.
The plan was to get his subjects to use only paper money, and allow Gaykhatu to control the treasury. The experiment was a complete failure, as the people and merchants refused to accept the banknotes. He also did not fuss too much with technical details like convertibility and capital controls. Soon riots broke out, and economic activities languished. Gaykhatu had no choice but to withdraw the use of paper money.
He was deposed and assassinated shortly after that, strangled by a bowstring so as to avoid bloodshed.

Ming Dynasty
The Ming Dynasty in China assumed a strategy of importing and buying swords from the Japanese. Their objective was to deprive the Japanese of their swords. The Japanese
were occupying some islands and the Ming dynasty wanted to buy off the weapons from them. The Japanese were overjoyed and adopted the maxim – Buy all you can, we will make more! Disastrous decision by the Ming Dynasty.

Czar Alexander III & Nicholas II
The railroad technology advanced swiftly during 1880. Czar Alexander III took massive
foreign loans and started construction of the 5,000 mile Trans-Siberian Railway (the largest venture since the Great Pyramids of Giza). By the time the corruption ridden project was over in 1904, Nicholas II the son of Alexander III (who died in a train accident) became technically bankrupt. Wars and revolts infected the Empire. Instead
of carrying commercial and trade goods, the new railway was carrying political prisoners, soldiers and supplies for them. Russia rolled over in debts. The banking system was doomed. The economy became so weak that the country did not survive the coming war. Nicholas was executed on 16th July 1918.

Mengistu
Ethiopia had a crop failure around 1984. The country was then under the Marxist Junta called the ‘Derg’. The Junta controlled the Government. The Junta chairman, Mengistu borrowed a ‘brilliant idea’ from Stalin. Under this plan the scattered rural
population of Ethiopia would be gathered together in modernized villages with all the latest civic infrastructure and amenities. Villagers did not realize that these were the ideal utopian villages, so they had to be sent there at gunpoint for their own good. Unfortunately, the expected increases in agricultural production never materialized and millions starved. The country descended into a permanent state of civil war, which only ended in 1990 after the Soviet Union stopped supplying the Derg. Mengistu fled to Zimbabwe where he became an important advisor to that nation's rulers.

Mikhail Gorbachev
Great Leader! He announced around 1991 that all existing 50 and 100 Ruble banknotes would no longer be legal tender. They could be exchanged for new notes and only in small quantities – and that too only for three days. The effect was catastrophe. This
decision deleted large share of the savings and accumulated capital of private citizens. He followed up this genius move by ordering that the police had the authority to search any place of business and to demand the records of any business at any time. The union's economic problems accelerated into a death spiral. Gorbachev resigned that year and on the next day the Supreme Soviet dissolved itself and the Union of Soviet Socialist Republics.