Failures of Our Economic Systems
I don't like Socialism or Capitalism. They're both very flawed politico-economic systems that restrict our freedom. Socialism destroys individual initiative, capitalism eventually destroys competition - neither are free market nor do they self-regulate - both lead to tyranny unless restricted by a greater social policy. They should be flushed down the toilet of history. Because I'm for individual freedom, I support free enterprise, the premise that anyone has the right to make a living in any honest way without interference from government or fellow citizens. Planned economies don't work. Restrictions on creativity and risk-taking don't work. Individual initiative works.
A free market has never existed. Because governments create and control currency, the market can't be free. We do not know whether a free market would self-regulate.
We've been indoctrinated that competition is the American way of life, but sometimes competition is inimical to the economy and society. It causes dissention and conflict, duplication and waste and can increase prices. Cooperation is often healthier, as long as it is not forced upon us. Humans do both, so an economy based on only one, namely competition, is skewed and unbalanced and unbalances our lives.
Government control is greater in regimented economies, as all developed nations have. You are tracked, logged, fitted to a plan of business and government, forced to participate. Alternative economies among people are eliminated. This narrows human possibilities.
Most modern economies are based on defense spending to drive growth. It employs lots of people from many industries. The end product is often not used, waste.
Defense spending is often increased to pay defense contractors who lobby government to buy their products. We're told that it's good for the economy. They're in bed with the military. Most spending on weapons is a waste - they aren't used and must eventually be destroyed.
We have been told that we are moving into an information economy, but primarily, we live in an entertainment, gambling and waste economy. None of it produces any lasting product for the future, but makes a lot of immediate money. It's a short-term thinking and effect.
The stock market has become the institution driving a gambling economy. Greed and speculation, rather than the desire to create better products and services, drives the market. The speculative nature of the market has lead to more ways of making money by manipulating money, rather than placing a calculated risk (bet) on the potential market of tangible and useful products and services. And that is why there was a dot.com bubble. There was very little real product to support the inflated speculation on its profitability. Such speculation is never economically sound and is a potentially disastrous way of running an economy. Betting on the performance of stocks should be illegal. Stock value should only be based on a tangible product or service.
More businesses should be worker owned. This would make business more democratic and help to redistribute wealth in a fair, noncoercive manner. You might think that this would have been a natural evolution in America, but capitalists have always feared this and worked against it, sometimes illegally or at least unfairly and underhandedly.
Unions have a rightful place as voluntary organizations of workers instituted to collectively bargain with employers - it's matching the power of one group against another that tends to equalize power - all that remains within the private realm and can be covered by contract law. But when unions step into the public realm they become problematical because they are powerful, political special interest groups that can get laws passed that favor them at the expense of those who don't belong. Why did we allow unions to become political? Is it because business was allowed to be political?
Greed and affluent insensitivity has corrupted America. Every time we have a boom economy we cease caring about the unfortunate. It takes a depression to bring us to our senses. It's time for one. It feels strange praying for a bad economy, but I do it every day.
Why should CEOs earn as much as 40 or even more times than the employee? Do they have that much more knowledge and capability? Is that even possible? Or is it just the position of power and a feeling of entitlement? A lowly employee with the right personality and drive might be as capable. There's something wrong with the system of valuation.
Regardless of how you may share conservative or free market/less government views, you should see that a society that considers itself civilized must provide for the unfortunate with some form of public welfare system, especially a wealthy one, such as ours. It is a duty to humanity. For all its idealism, private charity cannot suffice, because it cannot reach everyone in need and it can't treat everyone equally, nor does it have the organization and resources for large scale work, as in catastrophes or war. Only government, as the expression of the social will, is able to execute such all encompasing projects.
With the current hullabaloo over Social Security reform, our society is even more divided and confused about what we should do to save the system. Personal/private accounts won't solve the problems. If people didn't have to pay payroll taxes they'd have money to invest in their own private accounts or have more to spend. The responsibility to save for retirement should lie on the individual. Social Security should return to its roots as a purely welfare program for those whose incomes are too low or nonexistent. Now, it's an entitlement that even the rich must participate in. You can't opt out of it. A significant percentage of our population don't need it. It was never meant to be for everyone, and that's why it's in so much trouble. It's cost is a major part of our taxes. And don't think that your company pays half of the burden, it just passes it on by reducing the amount of your paycheck.
Government subsidies to any private individual or group should be illegal. They are unconstitutional, but our judiciary has ignored that for a long time. We should end all subsidies and most entitlements because they skew the economy and cost us untold billions in taxes. Most subsidies and entitlements go to private business, not to people who might need them. One of the most ridiculous and immoral subsidies is paying farmers not to grow certain crops. All subsidies are too easily manipulated for political gain. Why should government give anything to private businesses except in dire emergencies? That's just proping up a defective entity against the natural forces of the market. Nor should governments be allowed to offer incentives to entice businesses to move to their communities. It usually costs taxpayers more than gained from new employment opportunities and gives business too much political power. This practice has been popular despite its probability of being unconstitutional, and that popularity is why it hasn't been examined closely in constitutional law.
When should government bail out business? Obviously, when it would hurt the economy by causing thousands to lose jobs and create a negative domino effect on other businesses. Primarily, it should be in the form of low interest loans, rather than a gift. Well-planned businesses should have insurance against most disasters, but if the business isn't competent it shouldn't survive; that's what competition is about. So, government should be forbidden from bailing out any business that fails due to incompetence or other natural market forces.
We need to revalue many things. Cost and price are not functions of supply and demand, but of human valuation, which isn't always rational. For instance, if we didn't value the services of medical doctors so highly, then medicine wouldn't be so expensive. But to highly value our health is mostly rational, if it isn't overvalued. We don't value undeveloped wilderness sufficiently. To protect wilderness all we need do is revalue it so that only government - the people in public ownership - can afford it. We need to preserve wilderness for our own health and posterity. It is highly possible that we can't survive without it. It not for Mother Nature's or the planet's sake - that thinking isn't sufficiently self-interested to provide motivation to change our behavior and values.
Protectionism is bad policy and practice. It is counter to free market and free trade principles, hurts third world economies and raises taxes. Who gets the tarrifs and duties? Governments, of course. Business doesn't gain directly from tariffs and we consumers certainly don't by paying higher prices. Protectionism is a state racket and should be illegal. Free trade is a voluntary and consensual practice between trading parties. No one else need intervene. Protectionism is an act of piracy.
Americans work too much. The 40 hour work week isn't the norm anymore; work time is increasing, but not wages. It should have decreased. Compared to most Europeans, we have only a fraction of their paid vacation time, holidays and limited work hours. Shouldn't we have a four day work week? I don't mean four 10 or 12 hour days, either, but only four 8 hour days with the pay you receive now for five or six days. That would give us more time for personal life and family. We need more holidays, too. In the Medieval era there were over 60 holidays, but they didn't have le weekend, so perhaps there's some compensation. But more people are now working on holidays. Basic services can't ever close, therefore some people must work, so why shouldn't every holiday be two days so that half of the people can be off work on each day?
Our expectations concerning our worklives, business and the economy have been created in arbitrary manners by social conditions prevailing at times that do not always reflect sound economic policies and are actually impediments to a free market. Examples are that we expected businesses to be socially responsible: to pay taxes, to provide worker benefits and pensions and that the economic system provided for a social condition called retirement in which older workers were put out to pasture with sufficient income to graze through their golden years. Loyalty and commitment to and from the corporation was expected. A job with one company was a permanent condition. Having a job was almost guaranteed. Labor unions and their political power were another part of the economic equation that created more regulation on workers while ostensibly protecting them. The other part of that system was Social Security, originally a welfare program fashioned in the New Deal, that became an entitlement for everyone and a great tax burden. We expected this system to continue in perpetuity, but it is currently breaking down under changing economic conditions in part caused by the dysfunctions in that system, notably the demographic pressure of the baby boomers. This system that attempted to protect and provide for individuals throughout life was an aberration. There is no economically sound reason that business should provide anything other than quality products and services for a fee. For most of human history these economic conditions were not the case. Most people worked for themselves or for rulers. Business and government conceives of artificial categories of the employed, self-employed and salaried workers or management, each with their own tax obligation and regulation as to how they may work. Where was the freedom and flexibility in this system? The real profiteers of this system were a few business tycoons and government.
In the dot.com bubble and economic crash who ended up with the trillions of dollars? No money was lost or destroyed, only some people who invested lost money, but to whom? We don't hear of who gained, but someone did.
We need a public and open, nonprofit Internet, separated from the commercial net. This net should be publicly owned, allow no commercial operations: buying/selling, advertising, but open to all citizens to communicate anything that is their desire. It would have all the services that the Internet has now: the Web, email, newsgroups, file downloads, music, movies, everything except commerce. All commercial operations should be moved to another parallel network and funded privately. This private network could be available to us with advertising or for a fee.
The government should create a TVA or REA of broadband infrastructure to bring network services to all Americans, especially in rural areas. Two-way satellite, wireless or powerline distribution should be considered for remote, sparce populations. This would stimulate the economy by providing jobs and business growth for the ailing tech industries. Private industries would bid for government contracts to build, maintain and upgrade the infrastructure. Government shouldn't operate the net or provide maintenance, only set uniform standards.
Contents