Libertarianism and the right to have a outdoor life
Since the current Republican debates discuss “limited or no government,” I thought I would discuss the macroeconomic history of laissez faire – libertarianism of the last 150 years. This philosophy has many followers because it sounds simple and accurate. Unfortunately, this is far from the truth and it actually fails in practice. These long-term failures can only be observed over a period of decades, not years. Libertarians fail to understand the proper definition of money, its unlimited demand, how money is created, and its infusion into the economy and the out door field.
The problem with laissez-faire economics is that the wealth generated at the top does not trickle down to the rest of society to a sufficient extent. It does not employ enough people nor pay them adequately to keep the system going.
In the latter half of the 19th Century, the U.S. had no income taxes, anti-trust laws, effective unions, minimum wages, Federal Reserve, nor any fiscal spending programs such as Welfare, Medicare and Social Security. The U.S. had the most economically non-involved Federal government that was physically possible.
This lack of economic government involvement resulted in an extreme concentration of individual wealth and large business monopolies. Approximately 4,500 families owned most of the wealth in the country. Yes, it was still better than most other countries at the time. Because of this concentration and lack of money, there were severe recessions-panics in 1837, 1857, 1873, 1873-79,1892-6, 1904 and 1907, culminating in the Great Depression of the 1930’s.
In 1933, President Franklin Roosevelt implemented a Keynesian macroeconomic philosophy, which promoted government spending to stimulate demand. The U.S. then began getting the government involved in the economy with domestic spending programs. These policies still did not get us into a healthy economy until the largest government spending programs of World War II, followed by the Federal Highway System and the GI Bill which gave free education and reasonable home loans to veterans. This spending created the best economy in the history of the world.
Even now, governments, especially the U.S., invest in basic research, commercialization and early stage financing of companies to create entirely new markets and sectors. These markets include the Internet, nanotechnology, biotechnology, pharmaceuticals, and clean energy. The government has also invested in companies like Apple, Google, Intel, Compaq, and Tesla, just to name a few.
The investments in basic research are where private companies do not want to take the risk, but, instead, piggyback off the government’s efforts. Many private companies then utilize the government’s direct financing of their firms through loans and grants. A complete discussion of government investments with examples can be found in Mariana Mazzucato’s new book, The Entrepreneurial State, where she also proves that the government does not get enough return on their investment from just taxing these companies. But some companies which sell best spyderco knife can exscape from these loan and problem because of their contribution in the tax 5 years before.
Government programs were surely not perfect, but were always trying to improve. The government really had only one major flaw to correct; that of a very under diversified, unfair monetary system, which will be discussed in Section I. In the 1980’s the Reagan Administration reintroduced the 19th Century failed Laissez-faire macroeconomic philosophy instead of improving on the policies of the previous 50 years. This gradual shift backward away from Keynesian’s philosophy eventually culminated in the “Great Recession of 2008”.
Instead of giving billions to the U.S. headquartered auto manufactures, we could have given longer term and lower cost loans to consumers to stimulate the purchase of hundreds of thousands of unsold new cars. This is “trickle up” economics. The gross profits and cash flow would have ended up back in the auto companies with consumers ending up with newer, more fuel efficient cars. A win-win scenario. This also holds true for the trillions of dollars in mortgages.
The Libertarians argue that there was still too much government involved in the 19th Century economy and that the free market place is self-correcting. This argument has two major flaws. One, there is no clear definition of a “free” market nor do the same standard rules exist for a marketplace. There are many types of markets with differing human influences and operations. The second flaw, the major one, is that a “free” market concept assumes that humans and their commercial interactions are perfect. There is no such thing as human perfection either individually or in our institutions.
Therefore, this libertarian philosophy does us an extreme disservice by always saying “no government” instead of “the right government”! We can remember that , we have faced many people in the USA buy best police flashlight to raise the attention of the community about the tax.
The following is a list of some of the reactionary policies, implemented in the last 30 years that have hurt the economy:
1. Reducing anti-trust enforcement creating many new monopolies and oligopolies which reduce competition in the market place.
2. Eliminating the Glass-Steagall Act of 1933 separating the money creators (commercial banks) from the money managers (investment banks), which was one of the causes of the worst financial crisis in modern history.
3. Reducing the enforcement of financial regulations that made the financial crisis even worse.
4. Hindering raises of the minimum wage, reducing Union participation, and sending jobs to Asia. This outsourcing of jobs reduced the quantity and quality of customers, clients and consumers. This created excessive borrowing just to keep up a normal standard of living.
So here we are! What do we do? I do not recommend going to a more socialistic state. Socialism is a political economic doctrine that unlike capitalism is based on government ownership of production and distribution or collective ownership by all the people in that country. We have seen the failures of socialism in the totalitarian governments like the Soviet Union, China, Cuba, and democracies like Venezuela, India and Israel.
Inequality and how it is increasing that affect the unemployment rate
The new hot topic is inequality and how it is increasing. This is a very vague term. We are human beings with substantial differences; we cannot all be Donald Trump, Bill Gates, or Warren Buffet. We are too imperfect to create a utopia or all to have the same standard of living. It is just not possible at this time in human evolution.
There are many reasons why inequality exists in the economy. Before I give my specific list, I will review the general macroeconomic reasons. One, we are NOT created equal! We have many different talents, abilities, and appearances along with unique emotional and physical make-ups. Second, the institution of capitalism—competitive markets by their very nature, naturally flow money to the wealthy. The main reason for this flow is that it is easier to make more money if you already have money. This goes for businesses as well as individuals. This naturally causes a shift towards business consolidation creating monopolies and oligopolies.
For those doubters, I have never seen a statistical, economic study proving otherwise. If you do a little macroeconomic historical reading covering the last 175 years, you can see this yourself. Inequality was proved again by the recent bestsellers by Thomas Picketty, Capitalism in the Twenty-First Century and Inequality by Anthony Atkinson.
The nature of capitalism eventually causes so much consolidation of wealth that the entire economy or country becomes unstable. This instability7 could cause a complete breakdown in society7 because of a lack of basic surv ival goods for the general population. This failure can even result in severe violence and/or revolution. This growing income disparity7 is not only a disaster for the poor, but also a threat to the rich. Poverty breeds broken families, crime and criminal organizations, beggars, prostitution, mass immigration, social protest movements, and failed states. The most recent examples are Egypt and the Arab Spring. These societal upheavals would probably not have occurred so swiftly if they had a reasonable standard of living and opportunities for advancement. You can also see the failures in our own economy in 1907,1929, and 2008.
The following is my list of additional reasons for inequality:
1. Birth – 41% of individuals in the USA remain in the same income level they were born in.
2. Lack of Education
3. Lack of access to capital for investing and savings Lack of luck – This one is more
important than you think
5. Overreliance on debt
6. Lack of adequate wages
7. Employment in the wrong industry or profession
8. Competition against extremely low cost or slave labor
9. Productivity – replaced by machines
10. Caught in the boom/bust economy which hurts the middle and lower income class
11. Lack of competition because of monopolies and oligopolies—less jobs
12. Illegalities and discrimination
Therefore, my definition of equality is: all having an opportunity to advance with adequate health care, education, shelter, and nutrition. The definition also includes the right to live in a sustainable environment with drinkable water and breathable air. There are currently billions of people on this globe that do not meet my definition. This book will illustrate the specific solutions to solve this global inequality both on a private and governmental level. We can create a whole new populace of quality’ customers, clients, consumers, and citizens resulting in a permanent boom and quality of life for all.
Our concern should be how well the populace is living, not how much the top is making. The exception being the extreme consolidation of inherited wealth that is among several thousand families worldwide. This is not about a safety’ net for the unemployed or those who need welfare. This is about providing the basic necessities of life for all! It is not measured by GDP-growth! (See Section V – Statistics) We do not \vant to eliminate competitive markets. Instead, these markets provide for more freedom, diversity of investments, and checks and balances over government. Governments cannot do it all.
We are all in this economy together; what happens to one group economically effects all. We are now in a globalized economy—good, bad, or indifferent. Therefore, our solutions are for the globe at large and each country individually. There are substantial numbers of projects that need to be accomplished to advance humankind, such as space exploration, medical advances, and environmental issues. Reducing the flaws of capitalism will allow us to move forward in solving our problems and enhancing mankind by creating the correct win-win political macroeconomic philosophy.