Economic Theory

Economics has to do with the production,  distribution,  and
consumption  of wealth;  and as such has been of intense
interest
to mankind throughout history.   The major economic systems
that
have   been  devised  are  private  enterprise,   socialism   and
communism.   For  much  of man’s history,  the system of
private
enterprise  was the norm,  with a wide gap between the haves
and
the have nots,  often with class distinctions, and often with the
rich getting richer and the poor poorer.   Because of the
truism
that  “human  wants  can never be  satisfied,”  and  the
unequal
distribution  of  wealth,  one  can readily  call  economics  the
“dismal” science.
Shortly  after the time of Christ,  the early church tried a
voluntary form of communism, with people contributing their
means
to  a  common  treasury,  which then supplied  all  their  needs.

Presumably it failed because, other than a brief mention in
Arts,
we hear no more about it.
With  the  advent of the industrial  revolution  in  western
countries  and  the  practice of laissez faire  free  enterprise
resulting  in the concentration of economic power in the
hands of
a few people, the ideas of communism and socialism were
developed
in the mid-19th century, and have been tried with limited
success
in the 20th century.   Strictly speaking, communism has only
been
tried  in the kibbutzim of Israel and the collectivized forms  of
so-called “communist” countries.
As for free enterprise capitalism in the late 19th and  20th
centuries,  it  has been subjected to anti-monopoly  legislation,
fair  trade  laws and other government efforts to create  a
more
“level  playing  field,”  and  to protect the  interests  of  the
workers and consumers.
Generally, this idea of fair competition has been limited to
within  a nation’s borders,  with tariffs imposed on  imports  to
equalize foreign competition.
Following  World  War II,  the free world’s leaders  decided
that  world  peace  would  be better  preserved  by  raising  the
standard  of living of all countries through freer  trade  rather
than a protectionist, isolation policy.
This  has  been  successful  for a  number  of  third  world
countries  like Japan,  Taiwan,  and Hong Kong,  and to a
lesser
extent for countries like Brazil, India, and Mexico.
Unfortunately,  most of Africa,  Asia, and Central and South
America  still  suffer (in 1987) from abject  poverty  conditions
except for a few countries with rich natural resources like
South
Africa  and  Saudi Arabia;  these conditions being caused  by
any
number of reasons,  such as choice of economic system,
government
policies,  over-population, natural disasters, lack of resources,
climate, wars, revolutions.
Europe  and  North America have generally fared  well  under
this  “freer” trade policy,  but the United States in  particular
has  undergone a major upheaval; from being a creditor nation
to
becoming  a  debtor  nation,  from carrying  a  relatively  small
national debt after two world wars to a doubling of this debt  in
7  years of Reaganism;  to horrendous inflation rates since
World
War II of approximately 1000% in 42 years, or 24% a year; of real
wages falling far behind inflation to the point where women
have
been forced to permanently enter the labor market to help
provide
for  the necessities of life,  particularly housing;  where good-
paying   manufacturing  and  mining  jobs   have  been
exported
overseas,  and  been  somewhat replaced by  lower-paying
service
jobs;  where  a larger percentage of the population  is  college-
educated,  but  the quality of college and high school
graduates
has  deteriorated,  and  there is a very high drop-out rate  from
high schools in urban areas;  where the federal government
lacks
the political courage to avoid budget deficits,  and continues
to
lead the United States on a path of national bankrupcy.
Very  few governments have repudiated their bonds and  other
debt obligations,  and even if we started next year with
balanced
budgets,  our  nation  will be saddled for years with paying  the
interest  and principal on our current two trillion dollar  debt.
For example, if we paid $100 billion a year to debt reduction, or
an additional $400 per capita in taxes, it would take us 20 years
to retire the national debt.

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