(Concerning Some Modest Economic Proposals)
I invite you to step several paces ahead of current events by taking part in The Consensus Project. It won’t take much time—you simply read, rate ideas, and comment if you wish.
The accompanying 23-page essay (in four weekly blog postings) is about making free enterprise truly free for the first time ever. Nearly half our nation’s people seem unable to notice that our goose is getting cooked by our economic system, our overconsumption, our pollution and the runaway consequences, especially global warming. We, my friend—you and I—are responsible to get their attention and persuade a majority to fix the existential problems the essay addresses. If not you and me, who? Will you consider lending a small helpful push to my particular approach?
I am a retired 83-year-old who, through forty years of serving federal and state governance, grew dreadful tired of being told that my thinking was “ahead of its time.” Nuts to that. Obvious to all with eyes to see and brains not closed by blinding mindsets, our thinking as a society is in fact far behind the growing dangers on which we all should be intensely focused. The number agreeing that “we need some basic changes” may now have become a slight majority, but we still lack consensus on what those changes should be because the cause-effect links between our economy and our worsening environmental human habitat are seldom well or convincingly laid out.
Envisioning a drastically nicer, fairer version of competitive free enterprise, this essay conveys a unique combination of changes I believe will interest many people. Never mentioned in all the Left-Right silliness, these ideas are perfectly good third options with potential to generate interest across political and cultural divides. But that can happen only if they influence the influencers by spreading from local to state and national consideration. Will you please help me spread them?
CONTENTS Consensus Project Items
PART ONE (1st week): THE PROBLEM IN CONTEXT (1-4)
PART TWO (2nd week): ELIMINATING THE PROBLEM (5-10)
PART THREE (3rd week): PRECLUDING RETURN OF THE PROBLEM (11-23)
PART FOUR (4th week): LOCKING IN THE FIXES (24-50)
To participate in THE CONSENSUS PROJECT:
> Read PART ONE below; > Then state your thoughts about the numbered consensus items by clicking on “LEAVE A REPLY” at bottom of this page. At the least, please give each Consensus Item a score in the range of 1 to 5, where 1 = Hate it and 5 = Love it.
(NOTE: Further details on these and many other proposals for changing our economy are available in the book Populist Corrections accessible on this blog’s home page.)
> Repeat for PARTS TWO, THREE AND FOUR as your time permits.
If these proposals interest you please Invite Others into The Consensus Project by clicking on the media icons at the end of each Part (email is under the “+” icon). After 100 people respond, I will post summaries on fixypopulist.com for all to see. Thank You.
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PART ONE: THE PROBLEM IN CONTEXT
Projections from our best up-to-date science credibly indicate that our human civilization is not likely to survive on the depleted hot Earth one hundred years from today unless we very soon halt—and reverse—global warming…within mere years—decades are no longer available to us.
- But we cannot stop global warming until we stop dumping into our atmosphere and oceans the excessive carbon dioxide pollution that drives the warming.
- We can’t stop our inevitable polluting until we drastically reduce our profligate, unnecessary overconsumption that drives our pollution and makes it inevitable.
- And we can’t reduce our overconsumption unless we significantly change our economic system’s perverse incentives to over-consume and its built-in dependence on wasteful endless “growth”—of GDP, of vastly overproduced supply relative to demand—and the ubiquitous marketing that drives it all far, far beyond the basic adequacy every human being actually needs. The Earth’s resources are limited; our consumer wants are not.
- Moreover, if our United States had a fair and just economic system there would be no need for labor unions or welfare because everyone would receive income at least adequate to buy all of life’s basic needs and thus nobody would be underpaid or poor.
If these thoughts resonate with your values, your sense of what’s right, good and ethical, let’s talk about our present economic system—it’s called “global free-market capitalism.” In order to hold a sensible conversation, we first need to build a bit of context.
The Poor peasant. A poor peasant struggles to carry a bundle of sticks the size of a Volkswagen up a long hill to use for firewood in his village. His body bowed forward under the huge bundle’s weight, his outstretched arms precariously balance the bulky load on his back as he exerts great effort with each step in his slow progress up the hill.
An economist trots alongside, circling and peering into the great bundle from various angles, intent on figuring out why the firewood can’t be delivered more efficiently, more profitably—faster—to the village. He frets about how the sticks might be re-bundled so they could be more quickly delivered. He calculates that the bundle might be improved by pulling out this stick from here and re-inserting it over there. He is a brilliant economist with advanced degrees in stick bundling from the Chicago School, and he’s won many awards—from his peers. He is quite certain he could make the bundle arrive quicker—and make himself look better in his inherited role of advising politicians on how and when to command quicker arrivals—if his complex pseudo-mathematical modeling could but identify a more optimum arrangement for bundling the sticks.
From our superior vantage point, we of course observe that the economist is triply blind—he fails to notice the living peasant struggling beneath his burden, or the peasant’s obvious deficiency of the economic basics every human needs, or that both conditions warrant his own empathy. Not to mention his deficiency of common sense. Neither human needs nor empathy—nor common sense—received much attention during the economist’s years of exposure to what passes for an education in economics. His training prepared him only for top-down attempts to control large complex economic systems, leaving him totally ignorant that peoples’ simple daily needs are always bottom-up.
Abolish economics. Having long observed the wrongness of it, I propose to abolish the profession of economics. This pretender-to-be-a-discipline has well and demonstrably proved itself a dismal, abject failure. It has failed not only by declining to promote a reasonable semblance of income adequacy among all our people alike, but by instead praising its own priests who in their blindness revel in preaching inequality and advocating austerity that impoverishes people and makes their lives hard—oh so hard and unhappy. Clearly, economics must be replaced with something that is ethical. So our first Consensus Project question you are invited to respond to is this: [The Consensus Project #1] Do you agree that the economics profession should be abolished and replaced with something ethical?
What shall its replacement look like? What shall we name it? I nominate “Adequacy Science.” Adequacy, it seems to me, should be enough for anybody. Economics does not have to be based on greed and constantly growing biggerbiggerBIGGER. So that’s our second question: [The Consensus Project #2] Do you agree that “adequacy”—where everyone is guaranteed at least enough income to buy all of life’s basic needs—should replace unlimited wants, greed and (futilely) endless growth as our national economic standard of “how much is enough” for any one person to possess? No one will be guaranteed more than adequacy, though you may attain more on your own initiative.
With a few notable exceptions, economists as a group live in la-la faith that free-market dynamics equate to a magical invisible hand that will somehow produce economic adequacy for everyone. They keep insisting that we live in a self-correcting free-trade global economy, though in fact that worldwide hodgepodge of non-free shape-shifting trade machinations has not “corrected” itself to the advantage of anyone but the wealthy for over forty years. And so we moderns continue suffering the consequences of four decades of the screwball ideas of Friedrich Hayek and Milton Friedman, 19-century ideas already obsolete the day they were born out of the defunct Austro-Hungarian Empire—ideas on how a society’s wealth should accrue mainly to the elitist few…and then “trickle down,” maybe, to the commoners. Insult atop injury, modern would-be aristocrats have invented new labels to help them rationalize this unethical top-down arrangement as they speak of themselves as “makers” and of everybody else, derisively, as “takers.”
More than two centuries after Adam Smith—who they constantly misrepresent out of context—economists using words differently than everyone else understands them speak sagely of “efficiency” rather than the curse of Midas. With religious zealotry they believe in “the” invisible hand that somehow turns the market’s supply and demand into the good life for everybody…except when it doesn’t. Most seem blind to the maxim that money exchange exists as a means to an end which is adequacy—meaning the at-least minimal income adequate to enjoy what societal consensus deems “a good life” for every citizen.
Instead of starting at reality’s foundation by asking how every American will have enough income to buy adequate food, clothing and shelter (bottom-up), economists are well trained to think top-down by asking how those few “in control” can adjust interest rates to nudge investment, employment and prices this way or that—indirectly—maybe. Or maybe not. With bland neutrality they observe that the flow of money increasingly imposes distinctions of social rank, that self-perceived cultural superiority of the super-rich whose every maneuver increases the flow of our common wealth to themselves—with well publicized distractions of charity from the bottom one percent of their colossal riches. Abetting their distractions are the well-bought politicians who avert attention from this great social robbery by constantly stirring the pot of divisive hot-button issues such as abortion, immigration paranoia, gun “rights” and—perennially—states’ rights.
Change our economy. Immediately after abolishing the economists, I further propose to change the way our economic system works in these United States. Like our economists, our economy has failed us too. Economists’ off-the-mark stand-in for economic success has long been “GDP growth” or “productivity,” or—stretching subjectivity beyond the breaking point—“making (or keeping) America great.” These subjective terms don’t convey anything meaningful for ordinary people simply trying to make it in a nation dominated by corporations and their bosses. The real measure of success is whether our economy ensures “adequacy” for every citizen, omitting no one. A tiny fraction will always opt out, but no one should be forced out as a consequence of eviction, layoff, and never, ever having enough money to buy life’s most fundamental needs through a long, hard lifetime of poverty. The economic system we presently use never did, does not now and cannot ever prevent such wrongs. We must replace it with one that ethically precludes such wrongs in the first place. Do you agree? [The Consensus Project #3]
Having thought about this for quite a while, certain parameters to guide economic system changes have become prominent in my thinking and I encourage you to consider them prominently in your thinking too. Doing so just might enable us to act as the majority we are. Before getting into details on how I’d change the system, let me devote four whole paragraphs to why it must happen. Four are sufficient because this topic is so explored to death in every medium worth its salt that repeating all the sorry details here would only be redundant and further delay the great work we must get on with as fast as possible.
Reason 1. Since 1980 our nation has undergone a massive downturn toward economic inequality among us. Our compatriots who are moderately to desperately impoverished, including legions of working poor who struggle just to keep working, steadily grow in number while the middle class shrinks and the nation’s common wealth steadily moves away from this great majority to a tiny minority of extravagantly rich people who make Croesus look like a piker. In one breath, a great many Americans—lugging their stick bundles up the hill—possess little or no wealth and don’t earn enough income to buy anywhere near adequate levels of life’s basic necessities, while a very few people have vastly more than they need or could use in nine lifetimes. This is not the “social contract” we hear so much about, nor is it ethical in a society with pretentions to greatness.
Reason 2. We all understand that no economic system can or should be intended to make everyone completely equal in income, wealth, or the ability to acquire them—an ideal as unrealistic as was the Marxist myth that government would wither away as the “dictatorship of the proletariat” took over. However, we do need an economy that’s a lot less unfair than the out-of-control capitalist version we’ve now got. The extreme income and wealth inequalities it fosters, though still far from the extremes of Czarist and communist Russia, threatens our political stability and our democratic foundations—again, just as they were threatened by the desperation of impoverished people during the Great depression. The deep feeling in Okies and long soup lines was this: When hope is gone after years of loss and futile trying, what have you got to lose? Tear it down. Try something else. Start over.
Reason 3. This destabilizing economic inequality and the awful resentments it causes cannot be allowed to continue, much less continue getting worse. Yet that is exactly what is happening. Our economic system is capitalism, and corporations are its agents. These agents exist to generate wealth, that alone. They can never serve All The People. They must continually boost profits by inventing ways to increase sales and/or cut costs. Their foremost cost has always been employee wages, and corporations historically try to push wages as low as possible. The costs they’ve been cutting for the past forty years were the formerly good-paying American jobs they sent overseas where labor was cheap. The callousness so many rich supergiant corporation chiefs display in pushing their employee wages down, down, to the lowest possible level they can get by with lends credence to the prospect that if they could bring back slavery they certainly would do so.
As agents conducting capitalism’s imperatives for cost cutting and ever-higher profits, corporations must keep eating each other, growing ever more gigantic and eliminating competition, not to mention evading taxes by tele-hiding money across borders and avoiding meaningful regulation by any government. They’ll keep doing these things because they must—unless we change the rules of the trading system under which we allow them to operate. And achieving that requires changing our economic model.
Reason 4. To legally justify this fundamental change, we need but remember our Constitution’s mandates: “form a more perfect union” by promoting “the general welfare” and securing “the blessings of liberty to ourselves and our posterity”—the first, fifth, sixth and seventh” mandates in the Preamble. Though our union has never come remotely close to “perfect”—witness that second revolution we call the Civil War, perpetual bickering over federal unity versus states rights, ongoing racism and other discriminations kept alive in small and uneducated minds—the gap still challenges us as opportunity unmet. Lost in all the passion over political liberty or lack of it is the other side of the same yardstick—economic adequacy. Politics and economics are twins, always interacting together, such that if you lack basic economic adequacy you cannot be truly free politically.
Parameters for change. With all the above as context, let’s consider parameters for improving how our economy serves us—because serving is its job, that’s why any economy exists, to serve its people. A nation-size economy is a major force indeed, directly affecting everybody for good or ill. While ours ensured a much fairer sharing of income and wealth between 1932 and 1980, since 1980 we have permitted it to be hijacked by people who openly favor the gross inequalities of a small wealthy aristocracy over everybody else—an impoverished 99 percent. And for forty years they have succeeded. With eyes wide open, we sorely need a return to the fair mindedness and innovative attitudes that produced the egalitarian New Deal. With equal courage we must proceed once again to change our economy as they did then. Three well considered parameters to guide our changes are very clear.
1-All the people. Foremost, every systemic economic change must result in the greatest good for all the people, every one. This differs from the greatest good for the greatest number, because the “greatest number” thought attainable can still leave a very large number of U.S. citizens desperately impoverished. Under the “free-market” version of capitalism, leaving lots of people out of the good times is exactly what we now have that must be changed.
2-Adequacy. Second, we must proactively ensure that no American’s income is left below a level economically adequate to purchase life’s basic necessities beginning with food, clothing and shelter. These necessities are, or should be, every citizen’s economic rights. In the great American largesse there is a world of difference between “minimum wage” and income that is “adequate” to buy these economic rights. That difference alone justifies abolishing the minimum wage which at its grudging best only guarantees perpetual poverty. The concept of adequacy is going to take on important new meaning in the USA’s new economy. That’s two parameters: economic adequacy for all the people.
3-Competition. As we reshape our economic system to serve us rather than exploit us, let’s not throw out the baby with the bath water. Capitalism has an excellent feature called competition that we must maintain in any new way of doing things. Competition and cooperation are not mutually exclusive ideas. There are many ways in which people team up to cooperatively build things, manage enterprises and conduct trade, and none of those ways precludes competing—especially if the competition works to the advantage of buyers (i.e., all the people). A reasonable bit of competing keeps commercial enterprises on their toes, and price competition specifically helps hold down the prices of goods everyone must buy. Competition therefore is the third parameter for changing our economic system.
But that’s about it for capitalism’s good features. True, a capitalist economy can generate great wealth but, left to itself, that wealth invariably enriches only some of the people, mainly the few who can afford to play around with corporate stocks—win a few grand, lose a few—and those barons of power who run the corporations and receive salaries hundreds to thousands of times greater than their employees who do the real work. With such outrages in mind, let’s now go a tad deeper on why our capitalist economy must be changed. We need just a bit more context before getting into the details of change.
Capitalist harm. Though capitalism met our trading needs fairly well since colonial times—except for those ever-recurrent depressions, recessions and wealth-destroying busts in between the booms—it has now grown out of control and must be reined in. Remember: capitalism is the overall economic system; corporations are the vehicles through which it operates. Corporations have grown to such colossal proportions and power that, relative to governmental regulations, their international dealings, rompings and rapid cross-border shifting of vast amounts of money are beyond any government’s ability to meaningfully regulate, much less control. And this leaves them free to do as they please, ignoring the obvious fact that their actions are harming many people.
This moves them into my definition of sin. Sin is not just whatever some intransigent old religious guys say it is—maybe this today, maybe that tomorrow. No, a permanent definition of sin you can depend on is this: Sin is anything a person can do that harms someone else. This moves us into intent, since you can harm someone without intending to, so you need to pay attention to what you’re doing. How many corporations do that?
Corporate harm. No government in the world today, possibly excepting China’s absolutist controllers, has shown itself able to prevent manipulative shenanigans by corporate bright boys—for example, the 2007-08 subprime mortgage debacle that destroyed millions of innocent people’s small wealth and sent most nations’ economies reeling for much of a decade. Numerous media have reported on the taxpayer bailout money diverted into executive bonuses and high seller commissions. Nor, before the dust was even settled or the bailouts all paid (to the corporations that caused the disaster, not the people they victimized), did our government ever act to inhibit speculators from buying up the repossessed homes for a song, rebundling them as “derivatives” all over again, and profiting a second time by selling the same real estate to speculators in low-end rental housing.
It’s what they do. Corporations cannot stop growing and committing such harm—it’s what they do. Producing profits is a corporation’s sole purpose for existing. If it profits more efficiently by buying up competing corporations to eliminate competition, or by manipulating the allegedly free market—or hiding its money overseas to avoid its fair share of taxes—then that’s what it will do. Or more accurately stated, that’s what many of the individuals who manage the corporations will choose to do—pleading that they’re only following their mandate to maximize profit for the shareholders. Corporate purpose made me do it. Comparably, many instinctual gamblers cannot stop themselves from speculating in the stock market, intent on getting rich without working for it—buy low, sell high, it’s what they do. Corporate lords and stock speculators, doing what they must do, generate side effects that harm many people. Constantly trashing the golden rule—it’s what they do. These problems would not exist if corporations did not cause them. Or better said, if there were no corporations we would not have these problems.
We have options. Despite these greed-riddled degeneracies, we don’t have to totally throw out capitalism. But we can modify it however we want to. Capitalism—in any of its several different versions—is by no means a natural state of the way things must be. It’s not ordained by God, it’s not even a religion except to those most invested in worshiping it. We The People are in charge of this nation. We own whatever economic version we choose to serve us, and we can change any version as we damn well please.
Nor are we limited to a feebleminded choice between capitalism and the more centralized option called socialism. Many of our European allies have used the socialist model very effectively, raising them to rank among the most fair and economically egalitarian democratic countries in the world today. Americans are generally unaware of these laudable examples, just as most Americans don’t know squat about the difference between socialism and communism. Decades of capitalist propaganda have made both labels seem as if they were the same thing, which they most certainly are not, but many people honestly don’t know the difference.
You will even hear people rave about choosing “democracy over socialism”—revealing thereby their ignorance of political apples and economic oranges. Such important little nuances are rarely taught in our schools, so all our generations are graduated out into the world in full ignorance of economics and politics as they really are. In hope of mitigating such perpetuation, here are the economic differences briefly explained (keep in mind how those twins, economics and politics, intertwine and constantly affect each other).
Communism (extreme). Under communism, the government owns and controls all the means of production—no corporations, factories or farms are left in the private sector. The communist economic system is so profoundly unnatural and contrary to acquisitive human nature that political totalitarianism quickly becomes necessary to force people to live with it—as in the Stalinist Soviet Union and Maoist China. While communism claims equality for all the people, in practice a small party elite always emerges to reign as “communist aristocrats” who politically control the rest of the population. History holds no case of a communist economy that operated with a politically free people using democratic governance.
Socialism (regulated). In dramatic contrast, socialist economies can be both egalitarian and democratic. Under socialism the government owns some means of production—usually the big important ones—but leaves everything else in the private sector operating under regulations that carefully promote the public interest. Socialism is not just watered-down communism, it is a distinctly different breed that can work quite well under both democratic and undemocratic political governance of which both types are in wide use today. Sweden and Germany stand out as strongly democratic countries using socialist economies.
Capitalism (extreme). Under capitalism’s extreme version corporations control government, downsize it and abolish taxes to pay for it. Most governmental functions such as public education, roads, military forces and post office are privatized so corporations can operate them for profit by charging citizens who daily use or drive on them. Niceties such as Social Security, veteran benefits, education, welfare, public health, and inspections for food and drug safety are all abolished as unreasonable impositions on profits and corporate efficiency. Capitalism makes no claim of equality or fairness, and in fact a small aristocratic elite inevitably emerges to control the corporations, the government and the population. No examples of extreme capitalism exist in the world today, though many arch-conservative economists and corporate controllers are working diligently to bring it about in the USA.
Capitalism (regulated). Capitalism also comes in a milder “regulated” version that, like socialism, differs significantly from the extreme version. This version is pretty much what we have in the U.S. today, though it has moved closer to the extreme version as hundreds of regulations designed to keep the economy fair and just have been steadily abolished since 1980—and even more since 2016.
The Center. A fifth type economic system is a hybrid combining the most desirable features of socialism and regulated capitalism. While the German and Swedish examples roughly approximate it today, the United States’ closest approach was between the New Deal and Great Society years, 1932 to 1980, a period marked by high taxes and tight regulation of corporations. While popular socialized features from that period (e.g., Social Security, Medicare) remain in place today, many other governmental services such as protection of voting rights and the environment have been severely curtailed. Some agencies like the post office and national parks have long been deliberately underfunded with malevolent intent to make them “fail” and justify their privatization out to control by for-profit corporations.
Five models left-to-right. One hears much talk about political Left and Right. For the five economic models just described, communism is at the extreme left and capitalism is at the extreme right. Socialism is half-left and our semi-regulated U.S. system is half-right. The theoretical “ideal hybrid” system occupies the center. Democrats wish to push our existing system farther left toward the idealized center. Republicans seek to push us farther right, equate socialism with communism, and ignore an ideal center’s existence.
Theoretically, all five economic models can be conducted under either democratic or tyrannical politics. However, the closer you get to the unnatural outer extremes (pure communism, totally unregulated free-market capitalism) the more likely it becomes that the people will be forced to submit under tyrannous political control. The odds of economics working fairly, with maximum income adequacy, political freedom and democracy, are highest at the center—farthest away from the left-right extremes that attract extremists. Most Americans may never understand these simple distinctions because of the lasting effects of decades of capitalist propaganda demonizing socialism and its crazy big brother communism as practiced in the late unlamented USSR and yet crazier Communist China.
4-Maintain democracy. With these examples prominently in mind, we must conclude that maintaining democracy is an essential fourth parameter: Any new economic system must be harmonious with and support democratic government and the personal freedom it represents.
Four parameters. Distilling everything discussed so far, we now have four parameters to maintain while changing our U.S. economy: the changed economy must 1) serve all the people, leaving out no one; 2) it must ensure adequate income to every American citizen; 3) it must maintain bona fide competition among all merchants who use our economy to sell their goods and services; and 4) it must support and be harmonious with democracy. [The Consensus Project #4] Do you agree with using these four parameters to guide changing our global free-market capitalist economic system to a version that is more fair and ethical? If not, what parameters do you think better?
This discussion moreover should make it obvious to everyone with wits to think that changing our economy to be fairer for everyone is by no means limited to those familiar but limited models called capitalism, socialism and communism. We have just reviewed five models, left to right, and there are quite a few more perfectly good options that differ fundamentally from these five—but they aren’t even on the left-right scale, so of course they rarely get mentioned. Nobody knows about them. Let us change that.
Start over peacefully under law. We don’t need a revolution to force us to revise our economy, but revising it will mitigate the deep resentment built up all over the nation among citizens—rural, black, Latino, under-educated whites—all those hard-working Americans whose meager incomes have not enjoyed a genuine raise for forty years. Over four long decades they have been steadily, frustratingly, falling ever farther behind relative to our national wealth as it kept going up, up, up—but not for them, or their children. Indeed, the latter are now a burgeoning new underclass of poorly educated, poorly employed young people who have never known the old better way of life.
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Note: Readers desiring more details on the fifty proposals highlighted in this essay are referred to the book Populist Corrections cited on this blog’s home page.