The Godly Algorithm (105: Economic-Political Models)

An X-Y graph of economic-political models

To wrap this matter up, let’s summarize the models discussed above with a simple graph showing how deeply economic systems and political behaviors interrelate. From “left to right,” the sequence of presentation will be:  1) communism, 2) socialism, 3) mixed economy, 4) moderated capitalism, and 5) free-market capitalism. Left to Right.


Imagine a graph shaped like a big L. The vertical line is the political scale—at the top is freedom, at the bottom is tyranny, oppression, slavery. The horizontal line is the economic scale—on the far left is total governmental control, on the far right is total absence of any governmental regulation or control. Drawing the five economic-political models on this graph illustrates the spectrum of economic-political possibilities as a large inverted U, wide at the bottom, without the customary bottom-flared bell shape.


Model 1. Communism (extreme bottom left on the graph): 

Economic features:  Government owns or controls everything, plans everything, subordinates everything and everybody to the priority of its grand plan. In theory it is supposed to receive labor equally from every citizen and split the pie of wealth equally back to all citizens. In reality communism never came remotely close to equality for all. The top pigs who controlled everything were invariably more equal than all the rest.

Political features:  In every country where it was ever implemented, communism survived only through extreme military suppression. Totalitarian rule was necessary because the economics of communist theory are so contrary to human nature that few people will support it of their own free will, they must be forced. Murderous oppressions on an unprecedented scale have been perpetrated in the name of this utopian idea as if the idea itself were more important than the lives and wellbeing of the millions of people it was supposed to help.

Example:  The communist model passed from existence with the fall of the Soviet Union and the passing of Maoist traditions in China—except in North Korea where it remains, insanely, in grievous full force.  Estimated deaths directly and indirectly resulting from imposition of communist economic models are:  China 65 million; Soviet Union 20 million+; North Korea 2 million; Cambodia 2 million; Ethiopia 1.7 million; Afghanistan 1.5 million; Eastern Europe 1 million; Vietnam 1 million; Latin America 150,000.


Preface to socialism:  Many Americans, uninformed of the major differences between communism and socialism, completely fail to distinguish between the two models.


Model 2. Socialism (halfway between left and center; halfway up the page):  Economic features:  The government owns or controls most major means of production—especially monopolies and too-big-to-fail corporations—but leaves many other activities under private ownership. Government conducts major planning and regulation, and holds privately-owned production and commerce to consistent fair standards. Its major goal is equal economic security for every citizen through taxation and wealth transfers such as social security, social insurance and free health care.

Political features:  Typically free and democratic, this model places high priority on both political and economic rights. Government enforces the laws regarding features such as substantial taxes to spend on a broad range of social services that ensure economic adequacy and security for all citizens. With assurance that no one must live in poverty, no one who is able to attain wealth above the level of adequacy is prevented from doing so.

Example:  The Scandinavian countries most closely reflect this model, though versions of it are found worldwide. In the United States some examples of socialistic programs include the U.S. Post Office, public road construction and maintenance, food safety inspections, public health departments, EMS and fire departments, Medicare/Medicaid, Social Security, Unemployment Insurance, and the Veterans Administration.


Model 3. Mixed economy (centered at the top of the page): 

Economic features:  This mixed model draws the most desirable economic features from both the left (economic security) and right (competition) to construct the fairest, most equal economic structure among the five models. An example from the right:  Prices are held down for consumers when true competition exists;  however corporations constantly try to eliminate competitors whose existence forces them to constrain their own prices.  An example from the left:  Use of central planning by trained planners, a tool also favored by socialism and communism, enables government to set goals and objectives, manage budgets and activities toward achieving the goals, and avoid the stock market crashes that are inevitable under un-planned laissez faire capitalism. A mixed economy typically encourages cooperative employee ownership of workplaces, requires paying employees a living wage, and outlaws financial speculation that produces nothing but unearned profit. The size to which private businesses may grow is limited by law, and private enterprise is comprehensively regulated in the interest of the greatest public common good.

Political features:  Highly democratic, its highest values are personal freedom, human rights, and economic adequacy. Its paramount goal is “what’s best for All The People.”

Example:  No known examples of this model exist today, though several central features are variously reflected in Scandinavia, Germany, Spain and a few other countries. In the United States the New deal period, 1932 to 1979, saw the nation’s closest approach to it.


Model 4. Moderated capitalism (halfway between center and right; halfway down): 

Economic features:  Private ownership of the means of production is a high priority. Public-interest regulation of private enterprise is a low priority. It is widely assumed, with no slightest trace of verification, that unplanned market competition’s “invisible hand” will produce the best of all possible worlds, like Pangloss mentoring Candide. Monopolies and too-big-to-fail corporations are permitted to buyout, merge and grow unconstrained into multi-national behemoths that become uncontrollable de facto by any government. Government operates much of its large bureaucracy but increasingly contracts public governmental functions out to private corporations.

Political features:  Largely democratic but trending toward oligopoly accompanied by increasingly extreme inequality of wealth, steady decline of the middle class, and increasing impoverishment of ever greater numbers of citizens. Unconstrained corporate lobbyists wield decisive influence over legislative, executive and judicial branches of government.

Example:  Great Britain, Australia, Canada and the United States are prime examples of this model, though the U.S. and to some extent Britain are trending toward Model 5.


Model 5. Unrestrained free-market supply-side capitalism (extreme bottom right):

Economic features:  Corporations control government. Government has no regulatory powers and “owns” nothing but a few agencies which administer closely circumscribed public functions such as legislating, policing and the courts. Untrammeled corporate commerce reigns supreme, and most areas of “private” life are directly and indirectly controlled by those corporations that manage to grow the largest. A tiny minority of colossally-wealthy people own the corporations and thus control essentially everything in society. The remainder of the population is poor, struggling cradle to grave to obtain the basic needs of life which is brutish and short. A middle class no longer exists.

Political features:  Like communism, this model is down at the political bottom where tyranny, oppression and slavery are commonplace. The “public interest” is deemed to be whatever the dominant corporate rulers think best for untrammeled corporate commerce and further corporate enrichment. Citizens’ rights are a non-consideration, personal freedom is a non-priority that is coincidental in its rare occurrence. The highest civic value is commerce—unregulated and unplanned economic pursuit of ever-growing profits by corporations that grow ever larger. Nothing else has political value.

Example:  No nation has ever achieved a pure form of this model though, in several respects, Nazi Germany under Hitler, fascist Italy under Mussolini, Spain under Franco, and various South American countries have at various times come close.


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