Saturday, March 21, 2009

What Right Wing Politicians Will Never Understand (Well... One of the Things...)

One of the things that right-wing politicians in this nation will never understand is how to properly care for the economic concerns of the middle and lower class. Historically, the political system that they run by today would have for the most part worked the best for them. That is, the idea of Adam Smith's invisible hand controlling the outcome of the economy. In short, what he claims is that the economy should be left to its own devices and that it will regulate itself. (Granted it's slightly more complicated than a one sentence answer, but that will suffice for my argument.) In his time, this was a seemingly viable option because of who was important and how they came to be such and how they almost always remained as such.

You see, that for hundreds of years in European hierarchies, nothing much had changed. Sure, the names varied (albeit usually just by a number or familiar name). But, generally speaking, the wealthy few stayed wealthy and the poor stayed poor. There was no real risk for the wealthy elite to worry about becoming poor. The world that Adam Smith wrote about was one in which the economy could shift from year to year, but in general the wealthy elite remained such regardless of what happened. In his world the invisible hand was good enough, because there was no real threat of a member of the wealthy elite actually losing their status.

Many reasons tell us why. Firstly, because they were landed. That is, they owned land and that land was birthright, and not used in economic dealings. Simply put, even if all else failed, a wealthy elite person could fall back on their land and use it and its labor (or potential army) to amass wealth. Secondly, because the world seemed to be a much larger place. Undoubtedly, the fact that communication was more difficult limited the danger of high risk / quick loss or gain investments.

Regardless of why however, the fact remains that Adam Smith wrote about a situation that was prominent at his time and one that is not particularly relevant today. Today there is a middle class whereas in feudal times and through the Renaissance the idea of a middle class as we know it today (one that has higher than subsistence income) was all but non-existent except in a few cases where it was still quite small. And certainly it was ignorable by Adam Smith and the wealthy elite in Great Britain.

Fast forward to today and the fact that we have a large middle class. While the wealthy elite of today may still (many times) ignore the fact that the middle class exists, many middle class people as well as working class people have taken up this Smithian invisible hand theory for themselves and at a detriment to themselves. For, you see, the middle and lower class today (and always) has something very real to lose under the system (free market capitalism) that Adam Smith describes. The fact is that free market capitalism does work, but it works solely for those who have nothing to lose, those that will always remain rich. The middle and lower classes don't have that guarantee. In fact, it is quite the opposite. The middle and lower classes depend (under free market capitalism) on a continuous bull market. But, when the bubble bursts (as it always does) they are the ones that feel the impact worst because they lose enough to put them back into or below subsistence living.

The fact is that free market capitalism was and may still be the best system for the very rich. But it is not the right system for the rest of the United States today. The middle class is an important part of this nation, because it is something that is decidedly "American". That's not to say that it is systemic of America, but that it is one of the things that we as a nation claim to support: the middle class. Because we are all equal under the law even if others claim we're not. There are those who use their desire for a free market system who claim that we are not because it is in their own best interest to do so. But they shouldn't speak for us.

There are also those who claim that communism is the way to go. Even that it is at the opposite end of the spectrum and therefore must be right. Unfortunately, they are just as wrong as those who are for free market capitalism. Both free market capitalism and strict communism fall to the same flaws: personal interest. Those with power are always looking out for themselves. In free market capitalism rich business owners have all of the power and therefore make all of the decisions that must be made. In strict communism, the government has all of the power and makes all of the decisions and incidentally are also the rich because they own everything. In reality, there is no difference between free market capitalism and communism EXCEPT THE TITLES.

Autonomous regulation, that is regulation by outside powers (i.e. a "separation of powers" or a "system of checks and balances") is the only solution to either system's inherent evil: greed. That's all. Regulation by those whose interest is seeing everyone share equally in the profits and debts of the economy of a nation is the only way that everyone is going to gain equality under any government system. In a capitalistic system, government must regulate business. In a communistic system, business must regulate government. Beneath all of that in both systems must be the voices of everyone else. The average person must give power to the regulator to regulate those who hold wealth.

American conservatives will never understand this because they remain stuck in a Cold War mentality. They will never see that not only are the abuses of each system the same, but in all but name alone, each system is identical down to their smallest flaws. Blame cannot fall on them alone however as American liberals/progressives have remained stuck in that Cold War mentality too. They don't see that they actually hold the same views in this respect as conservatives, but with, again, different names.

* On the graph above, all rights are reserved. FFF, 2009.

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