What occurs when influential
economists and government officials lack a basic understanding of
economics. (See also
gold standard,
capital flight,
banking,
dollarization, and
prison-industrial complex.)
One of the problems with an economy that loses self-reliance is that it becomes vulnerable to fluctuations in market forces in other parts of the world. These fluctuations are often beyond the control of the local economy because of its limited influence in global matters. One alternative is to ensure that the economic situation of each area is as independent as possible from other areas - freely standing in case other houses of cards start collapsing around it.
In this way, a change in demand in other parts of the world has little effect on the consumption of local supply if the supply is primarily targeted at the local population.
One of the problems with a non-
anarcho-syndicalist structuring of companies is that survival of the company becomes dependent on an additional factor - the price of the stock. In
employee owned companies, only the sale of goods and services affect the survival of the company. In addition, such companies tend to be
less harsh on workers because they are the ones ultimately in control.
Survival of companies in a cooperative system depends not so much on competition for market share but demands for the given product. If demand falls naturally, former employees (or the companies themselves) become absorbed into other sectors of the economy providing the goods and services that people still need.