For some reason unknown, American history is almost never presented as a fully interconnected dance of economics with politics—two co-equal dance partners—the way it really happens, and always did.
Instead, the economics partner, virtually always, is not mentioned. Not at all. All or nearly all scholarly books on American history, and (especially) the school textbooks that purport to inform our children’s foundational understandings, blather on and on about political freedom and simply omit substantive mention of the economics part…as if it weren’t equally—vitally—as important as the political part. Recorded U.S. history is all about the Fourth of July and rising up against the cruel political injustices committed by George III—but with rarely a word about the difficulty of acquiring food, clothing and shelter, those economic motives that truly drove our precedent-setting revolutionary ancestors.
Economics is all about how fairly (and unfairly) we share the great big dollar-pie that is our national common-wealth. Politics is all about how we behave (and misbehave) in the sharing of it.
The following 16 pages lay out an easily remembered
simple but highly accurate political/economic understanding that is
unavailable, to my knowledge, anywhere else in the joint perspective described here.
I can’t imagine why it’s not.
The economic continuum (endless confusion of apples and oranges)
There is in the United States a grievous ignorance of economics and politics, such that people constantly confuse the two, failing to distinguish between them if they pause to think about them at all. They mush them together like potatoes and gravy. Most don’t realize how important this confusion is, or the consequences of it. This ignorance is placing at great risk the future of the USA, and especially the ideals our nation represents—the greatest governance ideals in the history of the world.
Imagine a yardstick. Three feet long, cheap wood. Like all yardsticks it has two sides. On this unique yardstick, the front side is economics. Turn it over—the back side is politics.
They always go together, these two human institutions, they are opposite sides of the same…yardstick. Here is a fact: you will never find one without the other. They are inseparable, economics and politics. The one involves human needs, i.e., the things we must have just to eat and stay alive. The other involves how we behave in obtaining those needs, i.e., a constant study in human behavior—predominantly bad, some would say.
Economics is of course the “needs” side of the yardstick. It‘s a simple thing really, though professional economists have done their level best to obscure the simplicity and make economics incomprehensible to the ordinary people who bring it alive, which is all the rest of us. Simply stated, economics concerns what you need to stay alive—and, while you’re at it, to live life as meaningfully as possible. It ain’t rocket science, as they say.
Thus: to merely stay alive you need the basic essentials: food, clothing and shelter for starters, each in adequate measure respectively. Beyond these bare necessities, and in order to enjoy at least the potential for a meaningful life, you also need a few complementary essentials like transportation, health care, and insurance—particularly auto insurance the state makes you buy regardless whether you can afford it, rich or poor. Please note though, the state requires this in service to the public interest. Beyond that, you also must have “health care,” both prevention and curative treatment, as well as a dab of recreation and entertainment to support your mental health. You need enough income to afford these things all your life, including after you’ve retired from working. During young adult years you also need some savings or the price of higher education, though not both at the same time.
These human economic needs can be well understood as a hierarchy of needs, and a gent named Abraham Maslow gave us a good model for understanding them. Maslow’s hierarchy has five levels, stacked atop each other and shaped like a pyramid. The two bottom levels include all our basic economic needs as just cited above. In contrast, the top three levels address life’s other needs. These go beyond the merely economic, and include things such as loving and being loved, self esteem, and—at the very top—the really good stuff such as being creative and feeling that life is just really fun and I’m so glad to be living it!
Great blessings attend people who attain the top three levels, but there’s really no choice on those bottom two levels, you’ve got to have them in order to stay alive. Yet many Americans do not have them adequately—they barely manage to stay alive—hard working, malnourished, often miserable, yearning for such small joys as can be found. This in the world’s richest nation is worse than a disgrace, it is immoral. So are you and I helping to cause it? Or perpetuate it? Or failing to help stop it, and fix it? Exactly who is responsible to make life more fair for everybody, if not you and me?
Coming back down for the present economic discussion, our only concern here is with Maslow’s bottom two levels where you find food, clothing and shelter—the necessities of merely staying alive—plus a few niceties to make life worth living such as health care, retirement income, transportation, maybe auto, life and flood insurance—and suchlike. Not an excess of any of these, certainly not rich, but not poor either—adequate. Adequate. So many Americans don’t have adequacy.
So that’s one side of the yardstick, “economic needs.” These are sometimes called economic “rights.” This term—economic rights—is controversial among people who 1) lack empathy or 2) are quite wealthy. The idea of economic “rights” is better understood and appreciated by anyone who ever experienced being poor. Struggling to pay the bills is a great empathy teacher.
The other side of the yardstick is politics, i.e., how we behave in meeting our economic needs. It’s also fairly simple, though it may not seem that way when you’re reading the newspaper. In meeting their needs, people follow two basic modes of political behavior: 1) Help others or 2) Serve yourself.
Straight from The Godly Algorithm, your political choices, always, are to help others or serve yourself. I might mention these are also moral choices, but never mind that. These two potential modes of behavior stand in stark opposition. We choose between them in every hour of every day of our lives. This basic choice never goes away—it comes up constantly. Of course a third-option idea applies here too: nobody chooses all one way or the other all the time. We all serve our own economic needs to some extent, as we must—and in some measure, some of the time, most of us also help at least some others meet some of their needs. Do you know anybody who’s totally at one end all the time?
But what, in each of us, is the ratio? It’s never fifty-fifty. What is your personal political divide between serving yourself and helping others? Forty-sixty? Or sixty-forty? Maybe even ninety-ten? Obviously you can’t help others very well unless you’ve first served yourself sufficiently to become financially, intellectually, emotionally stable and able to help others. But as to meeting your own economic needs, how much is enough? How many people do you know who settle for “mere” adequacy? There are some, you know.
More to the point, why—at our economic extremes—do dire poverty and gross excess of wealth exist side by side in the USA? Why are there Americans at the economic bottom who can barely afford even the basic three of those economic life needs while Americans at the top buy whatever their whimsy wants, unconcerned with price?
If you want an indelible lesson in how the political choice to 1) help others or 2) serve self plays out, sit in on a few sessions of Congress. The flurry around all those purely economic questions is called politics, though it could be called alternatives to moral behavior. This is not to say that politicians, like the rest of us, don’t also spend some time arguing over “apparently” non-economic matters, such as foreign non-policy or how voting districts will be gerrymandered. But the real goings-on, ever and always, are behind-the-scenes machinations of those who use politics (i.e., political behavior) to influence economics—all too often to serve self and Get More Money.
At the foundation of things, most politics is a tension over how the “common wealth” we mutually generate will be distributed—i.e., who will get how much of the economic pie. That and that only, no matter what else they may allege to be talking about, is politics.
Economics and politics are two sides of the same yardstick. Everyone needs to understand this—though sadly most don’t, for reasons that are about to be explained.
The polar extremes model. Our two-sided yardstick also has two ends. Politically speaking, people who would prefer government to totally control economics—and perhaps everybody—are at the far left end of the yardstick. In pretty stark contrast, those who fundamentally don’t like government exercising control over anything—anything at all, particularly themselves—are at the far right end. Opposite extremes. Extremists, one might say.
The yardstick also has a broad middle section. Most sensible people—a majority of them in fact—are clustered all over this broad center. But ignoring this very large majority, as is customary, let’s focus first on the extremes so we may perhaps understand them better.
On the far left: Communism is a term used as an expletive in the United States, as politically incorrect as shouting shit in church. Under the extreme of communism the government owns virtually everything of value—all factories, all natural resources, all distribution systems, and anything else that can produce wealth. The government may also control everything else, such as employees’ job assignments and where they may live or travel, though these extremes are by no means required by communist theory.
In fact Marxism rather inanely assumes that the controlling state will somehow just “wither away.” Incredibly naïve that, but Karl Marx was a real strong-minded fuzzy thinker who got all his best fuzzy ideas while observing the worst that was in fact going on in early-industrial-revolution England. Marx meant well, he genuinely wanted to help people—and, be assured, life was pretty bad for English working people in those days. It would be reasonable to not judge the good intentions of the economist-philosopher Karl Marx by the insanely cruel behaviors of the Russian Bolshevic extremists who falsely claimed to be implementing Marx’s ideas, lest you reveal your ignorance of history.
Communism professes the ideological belief that all people can be “relatively equal” in what they contribute to, and receive from, the Common Wealth. This pseudo-religious belief is of course an obvious fallacy to anyone with half a brain. Every version of the communist model that has existed so far—and quite a few versions have been tried—is so exquisitely unnatural to acquisitive human nature that it can only be politically imposed by military force—from the barrel of a gun, as Mao said. Real communism—which is to say, a democratic version of it—has never been tried. Realistically, it would probably be impossible to try the pure theoretical form Marx envisioned, much less to make it work.
Ancient versions of communism were propounded by Jesus of Nazareth and others. The modern version that has caused so much trouble in the world was penned by Marx in 1847—the worst year of the great potato famine when starvation stalked the Irish people. Between 1846 and 1850, a million Irish men, women and children died of starvation or diseases associated with the famine, while another million survived only by emigrating—one-fourth of Ireland’s population in all. For several centuries preceding this event Ireland had been the worldwide British empire’s first colony. In London, the birthplace of capitalism, well fed businessmen argued that if the Irish could not be innovative in the matter of survival, then they deserved to fall by the wayside—even as well fed British capitalists continued exporting food crops out of Ireland—for the profit of course. “Free trade” in 1847 meant survival of the fittest. Has this changed? What is your opinion?
Marx was a lousy economist-philosopher. History shows that his biggest predictions turned out as fantasy. Government got much bigger instead of withering away, and his dictatorship of the proletariat turned out to be the dictatorships of Lenin and Stalin and Mao and Pol Pot and a zoo of lesser dominating little tyrannical pretenders. But as a critic of British economics and politics of his day (he never considered Russia, of all places), many of the reforms Marx called for include much that western societies today consider normal, even essential for democratic states that want to continue being democratic:
Complete separation of church and state; universal suffrage for everyone over the age of twenty-one; payment to the representatives of the people so that the working classes can participate in government; universal free education; prohibition of child labor; maximum working hours; minimum wages; a living wage for all workers; social welfare; a graduated income tax; curtailment of the rights of inheritance; creation of a state bank to control usurious forms of credit; and finally, state regulation of the modes of communication to prevent the billionaire class from having a monopoly over the newspapers and other means of communication, allowing them to spread the self-serving ideologies that kept the masses in their thrall.
Shadia B. Drury (in Free Inquiry, December 2015)
On the far right: At the yardstick’s other end—at the opposite extreme from communism—is the economic model called Free Market Capitalism. As practiced in modern America by mostly under-regulated corporations, this model has attained the undeserved status of an Eleventh Commandment. Under extreme capitalism the government owns almost nothing—except the armed forces, of course, which always gives government the last word. The private sector—which is to say corporations operating as capitalism’s delivery vehicles, the bigger the better—conducts virtually all the commercial activity required to supply the public’s demand. (Or over-supply it.)
Free market capitalism could and willingly would—for a hefty price—take over and run the post office, national parks and public lands, and most other functions of government including infrastructure construction and maintenance from bridges to potholes. Capitalist believers believe, with religious intensity, that if capitalism did so it could make a far better go of it than all those bean-counting bureaucrats could possibly be capable of, rigorous Civil Service merit exams notwithstanding. I have heard multiple politicians trumpet their conviction that “government should be run like a business”—thereby revealing they don’t know what they’re talking about.
In this conviction, ignorance hangs out for all to see. Government is not business, that’s not what it’s for, just as business is not governing, that’s not what it’s for either. Business and government serve two wholly different realms. Government’s purpose is to protect the common good, the public interest, the best interests of All The People—in a word, to help others. The purpose of business is to make a profit, however it may, and serve itself.
Cutting costs. Governmental agencies charged with little niceties such as environmental protection, public land management, labor protection, welfare and education, among other vital functions, would of course be abolished under extreme capitalism because, like its corporate agents, it favors endless cutting of costs. Cost cutting is easier than forcing consumers to buy more products, and there is no cost, they say, that cannot be cut or at least whittled down. Except profit, of course—the profit margin must never be cut—it is the purpose for existence, to generate profit and acquire wealth. Cut anything else, everything else, but not profit.
Under extreme capitalism many governmental functions are handed over—scot free if they can get away with it—to private for-profit corporations in a pseudo-religious ideological belief that 1) only avaricious corporate competition for profit can possibly manage any enterprise efficiently, and 2) wealth concentrated in a few people at the very top will trickle down to those below—or some of them, maybe—and thus create lots more nice fast-food jobs, thereby benefitting the whole of society with its blessings.
A tactical alternative to corporations running our government, as implemented in recent years by capitalist lords who hate government, has been to starve government agencies through the highly politicized budgeting process so that when those agencies no longer have enough dollars or employees to carry out their duties the government haters can shout “See, see, I told you government couldn’t do anything as well as corporations!
Exactly like communism, this religion-like faith in capitalism is of course obvious fallacy to anyone with half a brain. Both communism and capitalism, remember, are opposite extremes on the yardstick. But—capitalism has irresistible appeal to certain infantile acquisitive instincts such as selfishness and greed which never really grow up beyond the spoiled child-brat petulantly grabbing toys—You can’t have it, it’s Mine!
Free-for-all capitalism has prevailed throughout the entirety of United States history, including the long colonial period before independence. Its four-century record is a constant series of booms and busts—economic prosperity followed by crash and ruin, as inevitable as sunshine and rain. That’s how capitalism works. It romped with special intensity in the decades just before the 1929 Wall Street crash that precipitated the Great Depression, and similarly both before and since the Wall Street collapse of 2007-08.
Most Americans take these booms and crashes for granted, presuming this is just the way life is. But it is not. Completely unregulated capitalism has never been tried, though the legal bandits known as eighteenth century privateers and nineteenth century robber barons and late twentieth century corporate raiders came close. Enormous corporate pressure has leaned in the privateer direction throughout American history—except for the anomalous years of prosperity, 1946-1979. Those years saw the heaviest regulation of corporations by government in U.S. history, when we met and overcame the back-to-back traumas of the Great Depression and World War II—and the American people thrived.
Lest we forget, the opposite ends of the yardstick are far from the whole yardstick. The extremes of total-control communism and no-control capitalism are NOT our only options. There are other good options—Third Options.
Half-way right: Between the yardstick’s extreme right end and its middle, is a hybrid economic-political model we might call “moderated capitalism” if we had ever bothered to give it a name. Under this model the government operates most of its own bureaucracy but contracts out certain governmental responsibilities—especially military functions—to large private corporations such as, to list a few modern examples, Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, Halliburton and Blackwater.
Moderated capitalism places modest, always insufficient, controls on monopolies and too-big-to-fail corporations which continue to grow still bigger. It assures a partial social safety net to “quite a few” of the poorest people, but never anywhere near all the poor. Personal income taxes as a percentage of income are kept low, and corporate taxes even lower, in order to ensure insufficiencies in the social safety net. This half-right model idealizes competitive free enterprise to the level of sanctification. It purports to revere a theoretical equality of opportunity which it never achieves and largely ignores. And it values the symbols of nationalism higher than the real people who constitute the nation.
Moderated capitalism is pretty much what we have in contemporary America where a huge percentage of the poor, with no realistic prospect of ever rising out of poverty, live a continuously impoverished lifestyle, except where surviving programs of the Roosevelt New Deal and Johnson Great Society still manage to mitigate some of their relentless economic hardship in some—usually declining—measure. Such moral programs are under constant attack from capitalism’s cheer leaders, both extreme and moderated.
Half-way left: Between the yardstick’s extreme left end and its middle, is a hybrid economic-political model called “socialism” which might also be called “cleaned-up communism.” In this model the government owns and controls its own bureaucracy plus some of the really big private stuff, like monopolies and too-big-to-fail corporations.
Under socialism, government assures major economic basics (such as those economic rights laid out above) to all the people, and leaves all the rest to free enterprise. Taxes take up to as much as half of personal income, and turn it into guaranteed social services such as health care, education and pensions that are scot free to every citizen, leaving the other half of income available to buy food, clothing, shelter and recreation to at least a level of adequacy. Thereby, everyone is assured sufficient income that no one will go hungry, homeless or poor, and if you can manage to earn enough extra income to get just a bit rich, go for it. This hybrid is popular in Western European countries where “democratic socialism” is considered normal. In the United States, however, except for democratic socialist Bernie Sanders, most citizens are so indoctrinated they simply don’t comprehend the significant and important differences between socialism and communism. Many use the two terms synonymously because they don’t know any better.
The American antipathy to socialism has everything to do with the unknowing confusion of socialism with communism. Socialism is not communism—they are not the same thing. But, given many Americans’ insensitivity to semantic nuance—it didn’t help that the communist Soviet Union’s official name was Union of Soviet Socialist Republics. Socialism is a pragmatically fair, humane and mostly successful strategy by which many democratic countries have ameliorated the excesses of the capitalist system and as a result stemmed the potential for revolutions and civil wars.
The gulf between communism and socialism is the gulf between Marx’s failed revolutionary fantasy and the wisdom of his suggested reforms. Thanks to President Franklin Delano Roosevelt, even the United States institutionalized some of Marx’s ideas, in the wake of the Great Depression of 1929, which Marxists believed was the death knell of capitalism—but it was not. By overhauling the banking system, enhancing the graduated income tax, and introducing social security, unemployment insurance, maximum working hours, minimum wages, and a plethora of other measures to benefit working people and strengthen their bargaining power, Roosevelt saved capitalism.
Shadia B. Drury (also in Free Inquiry, December 2015)
The middle section of the yardstick—that broad section between (and including) socialism on the left and moderated capitalism on the right—encompasses most countries in continental Europe plus Great Britain and Ireland, Canada, Australia, New Zealand, South Africa—and in many respects the United States, though here it is degrading.
This economic middle ground of our yardstick has three dominant characteristics. 1) The political behavior that tends to go with it is almost exclusively democratic, but with increasingly frequent undemocratic lapses the hypocrisy of which embarrasses us before the observing world. 2) Its economics are a mishmash of socialistic programs blended with substantially regulated capitalistic commerce. And 3), it is an arena of perpetual struggle between people constantly trying to tug its economics/politics more toward the left and other people constantly trying to tug its economics/politics more toward the right. The left-tuggers mostly favor democratic politics, while the right-tuggers aren’t so sure.
At the present time in history the tuggers-to-the-right are winning this tug of war in the United States, and are somewhat less successful in other Western democracies. Primary indicators of their slow but accelerating ascendancy include: 1) unchecked growth of powerful corporations into multinational mega-corporations which command levels of wealth and power exceeding that of many whole nations and are uncontrollable by any one nation; 2) increasing inequality in distribution of wealth, in every nation worldwide, between an extremely wealthy few and everybody else; 3) successful strategic use of voter distractions, such as equating abortion with religious sin, for the practical purpose of concealing their economic machinations; and 4) slow but steady shrinkage of the middle class while the poor population grows ever larger and more impoverished.
These indicators are particularly evident in the United States. They developed as slow trends over the course of the four decades after 1980, and so are not especially noticed by those most affected—the young, and people up to age fifty. The people most alarmed by this overall trend—because they recognize it as detrimental to the better interests of the American people as a whole—tend to be older Americans with long memories and a relatively few others who happen to pay attention to long-range social statistics. The alarm, however, is gaining more traction these days.
“Communism or democracy?”
People who don’t know much about yardsticks invariably confuse economics and politics. How often, for example, do you hear someone blandly mouth the phrase “communism versus democracy”—fully unaware they’re mouthing apples and oranges? These high thinkers consummately do not know the former is an economic term, the latter political. The facts aren’t hard to remember, though rarely are they taught in school:
On an economic scale the true opposites are capitalism versus communism. On a political scale the opposites are tyranny versus democracy.
Economic capitalism can be either politically democratic or politically tyrannous. In the United States the trend since 1980 has been downhill toward a tyrannous form of extreme capitalism that is dividing and impoverishing the nation’s people. Economic communism likewise could be either politically democratic or tyrannous, though—on the record—tyranny has reigned everywhere communism has ever been tried. That’s probably because the “total sharing” it calls for is more alien to human nature than the selfish greed that so successfully drives capitalism. Perhaps that says something about human nature—or maybe about half the human natures—but I wouldn’t want to conjecture on that.
“Communism versus democracy” is now irrelevant worldwide, because almost every country has switched to the capitalist economic model since the ignominious fall of the communist Soviet Union. The successor government of Russia runs its version of capitalism with a semi-totalitarian model that contrasts sharply with more democratic western nations. China, another anomaly, governs the world’s fastest growing capitalist economy with an anachronistic still-in-control authoritarian communist party that so far has successfully used dictatorial decrees to compel things to go as the party desires. And of course there’s dreary North Korea, still propping up its obsolete dysfunctional communist economy with history’s most bizarre tyranny, which cannot be ignored because its petulant silly toddlers have nuclear weapons in their toy box and threaten belligerently, with great frequency, to use them against all parental critics who try to tell them No no, you must be nice, say please and thank you, feed your hungry people…
It is historical fact that communism has been almost exclusively tyrannous, probably because its incentives are so unnatural. Capitalism historically has been, by and large, more democratic than tyrannous, though it too has displayed more than a little tyranny along the way. Doubters should examine the history of corporations’ bloody suppression of America’s infant labor movement in the nineteenth and early twentieth centuries.
It also is fact that at no time in history has economic capitalism coexisted with anything remotely close to the political democratic potential that should accompany it. This remains true today because economic capitalism’s design, its functioning, its very DNA, is inherently undemocratic. It is inherent that corporations—the delivery instruments of capitalism—must grow too large to be feasibly regulated in the public interest; they must seek to out-compete and eliminate their competitors and become monopolistic; they must take unfair advantage of their customers, and underpay their own employees. Like hogs rooting as hogs must, that’s what corporations do. And if you think that’s pretty bad, communism’s record lacks even the potential to foster democracy. What a pair.
Be reminded, communism and capitalism are the extremes, not the broad middle ground from socialism to moderated capitalism. Extremes of any kind tend to foster extreme ideologies. An “ideology” may be thought of as an ideal without any compassion, and a prime characteristic of ideologies is that they’re often dead wrong but they prevail for decades causing much misery and trouble where there was no trouble. And naturally so: they typically represent muddled extremist thinking—closed mindsets. It is an economic ideology, roughly half a century old and now known as supply-side economics, that is causing so much of our current troubles in America—stagnant personal wages, extreme wealth inequality, political gridlock, and willfully blind social divisiveness.
There were no such troubles—at least none strong enough to degrade the overall prosperity—from 1946 to 1979, the historical record of which is crystal clear:
When we the people through our government 1) placed many strong public-interest regulations on corporations, especially those that produced nothing but financial manipulations, and 2) imposed steeply graduated income taxes that took little from the poor and quite a lot from the very rich, and 3) took a strong governmental lead in guiding basic research and initiating innovative new business activities, the resulting unassailable fact is that 4) the middle class was large, well off and growing, 5) the poor were far less poor and were a much lower percentage than now, and 6) Great Gatsbys were exceptions who mattered little.
There was little of this gaping income inequality that increasingly now sets the super-rich so far apart from the rest of us, fostering visceral deep resentment and the same seeds of revolution that haunted our Great Depression years—until the New Deal’s strong governmental initiatives restored our living incomes and saved our collective social butts.
Understanding Economcs and Politics as an X-Y Graph
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. Imagine a graph shaped like a big L.
The vertical line represents the political scale—at the top is freedom, at the bottom is tyranny, oppression, slavery.
The horizontal line represents the economic scale. At the far left is total governmental control of the economy; on the far right is total control of the economy by corporations and absence of any governmental regulation.
To illustrate the spectrum of economic-political possibilities, placing the five economic models on this economic-political graph results in these positions: 1) communism is at bottom left (total control by government, almost no freedom); 2) socialism is halfway up and halfway between left and center (partial control by government, limited freedom); 3) mixed economy is at top center (least control by anybody, virtually total freedom); 4) moderated capitalism is halfway down the right side and halfway between center and right (partial control by both corporations and government, limited freedom); and 5) free-market capitalism at bottom right (total control by corporations, almost no freedom).
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 to 40 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.
Model 2. Socialism (halfway between left and center; halfway up the page):
Note: Many Americans, uninformed of the differences between communism and socialism, completely fail to distinguish between the two models and misperceive them as the same thing.
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 high 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 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. An example from the right: corporations constantly try to eliminate competitors whose existence forces them to constrain their own prices, thus holding down the prices they can charge consumers. 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, Hungary and Russia are trending toward corrupted versions of Model 5.
Model 5. Unrestrained free-market supply-side capitalism (extreme bottom right):
Economic features: Corporations control government and exert most meaningful governance. 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. Worker wages are below subsistence level. 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 came close.
We are fortunate indeed that, in our time, the obscure subject known as economics is at last being opened up by a new generation of clear eyed thinkers, exposing it to the light of day. Some of their names appear in the Recommended Reading list at the end of this book. Actually understanding economics, they understand how desperately its simple, true fundamentals need to be laid out, examined and explained so that everybody can understand what’s going on. This is good because, assuredly, every person alive is profoundly affected every day by economics—most just don’t know it. Nor do most yet realize how economics is but one component of a unitary complex of human concerns that include the earth environment, political, spiritual and scientific perspectives, ethical choices and values, and a Godly mandate for all of us to attain knowledge, understanding, wisdom—and to help ourselves grow by caring for others, helping them grow too.
Excerpted from Chapter 12 of my book Renewal: Old Stories, a Godly Algorithm,
and Choices for the Earth Today, © 2021, William D. Coffey
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FREE BONUS READING
(your entertaining one-page reward for sticking with it this far)
The parable of 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 careful 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 stick-bundle arrivals—if his complex AI-assisted pseudo-authentic 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 deficiency of common sense evident in his ivory-tower insensitivity to the practical distinction between mass and inertia. But neither empathy nor common sense—nor human needs—received much attention during the economist’s years of exposure to what passes for an education in economics. His training prepared him only for passive hit-or-miss top-down attempts to control large complex economic systems, leaving him obliviously ignorant that peoples’ simple daily needs are always bottom-up.
A modest proposal
Having long observed the wrongness of it, I wish to abolish the profession of economics. This pretender-to-be-a-discipline has well and demonstrably proved itself an abysmal, abject failure. It has failed not only by declining to promote a reasonable semblance of income adequacy among our people, but by instead praising its own priests who revel in preaching inequality and advocating austerity that impoverishes people and makes their lives hard—oh-so hard and unhappy.
Economics must be replaced with something that is ethical. What shall its ethical replacement look like? What shall we name it? I suggest “Adequacy Science”—or something un-shameful like that.
We in the USA have a big problem to fix, and a good start will be ridding ourselves of amoral, whispering economic “advisors”—those dunderheads lacking any ethical foundation of their own, generation after generation of them ever failing to notice either the poor peasant struggling beneath, or the un-read but very prominent ethical content in Adam Smith’s Wealth of Nations. I am reliably informed that only 9.6352 percent of students majoring in economics survive their education with ethics intact, all others graduate with built-in permanent assumption that rational self serving is the human norm, that endless growth and greed are good. For a century now, since their profession “matured,” so to speak, that other ninety percent have been causing trouble where there was no trouble. Enough. May the mythical invisible hand point their way out the door, and good riddance forever amen. Following are some other opinions which bolster my own and thus are worth mentioning:
As John Maynard Keynes wrote in the conclusion to his General Theory of Employment, Interest and Money, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else.” Throughout history, bad economic ideas have led to misery for millions, while good economic ideas have been fundamental to prosperity.
Eric Beinhocker, The Origin of Wealth
The problem with traditional economics is that it has made things too simple and then compounded the error by treating the oversimplification as gospel. The bedrock assumption of traditional economic theory is that markets are perfectly efficient and therefore self-correcting. This “efficient market hypothesis” is hard to square with intuition and reality. And yet, like a dead hand on the wheel, the efficient market hypothesis still drives everything in economic policymaking.
Eric Liu and Nick Hanauer, The Gardens of Democracy
Evolution stays very busy, doing its quiet work as human culture unfolds, just like always. And by sheer unplanned chance, the Labor-Landlord-Investor economic model happens to have dominated the 19th and 20th centuries. It didn’t have to happen that way, it just did, so here we are coping with the deadly serious consequences that model has bequeathed us. Their deadliness isn’t clear to all of us, yet—maybe less than half—but it will be, it will be. The tragedy is we wouldn’t have these dire consequences if we’d used some other model—and not just the socialist variety. We have wonderful third options we’ve barely opened the lid on.
Elmore Bland, Social Critic
PS: If you read the parable of the poor peasant, please do mention to me that you did so. -Don