Economics

Economics

 According  to  an early passage in the Bible (Gen 3:19)  “in
the  sweat of thy face shall thou eat bread.”  Man’s  efforts  to
provide  food  and  other necessities for  himself  has  involved
arduous  labor  throughout history,  and even today  billions  of
people throughout the world engage in a daily struggle for food.

Probably the most idyllic life can be found in the South Sea
islands,   where  warm  climate,   low  density  population,  and
bountiful  ocean  and lands provide  fish,  coconuts,  and  other
fruits practically for the taking.

Isolated for centuries,  the people’s wants and desires  are
minimal, and they live a simple life little removed from nature.

Elsewhere,  the  struggle  for  existence has  usually  been
associated with ownership and control over land, leading to wars
over  territory  and development of legal systems  to  deal  with
private ownership of land.

Henry George, a 19th century American economist, expounds in
his  book Progress and Poverty that all wealth eventually can  be
traced back to ownership of the land.

In  modern  times,  several economic systems have arisen  to
deal  with  man’s  need  to  earn  a  livelihood   — capitalism,
socialism,  and communism.  Unfortunately, in most cases, none of
these   has  successfully  resolved  the  problem  of   equitable
distribution of the fruits of labor, or the equally daunting task
of motivating people to labor in the first place.

Communism  is  by far the most idealistic system,  with  the
motto “From each according to their ability, to each according to
their  need;” where goods are held in  common.  However,  selfish
human  nature has doomed almost all  communistic  ventures,  from
early  Christianity  to  communes and  the  modern  “communistic”
states  — none  of which evolved beyond socialism — and  needed
the “dictatorship of the proletariat” to survive.

An exception,  the Kibbutzim of Israel, have lasted for over
60 years as successful communes,  though recent reports  indicate
that  the  younger generation is reluctant to continue with  this
way of life.

Socialism  is less ambitious,  and strives only to have  the
means of production in collective or government hands,  and calls
for democratic management.

Sweden is thought of as the exemplar of socialist countries,
but  the  creation  of  a  welfare  state,  in  addition  to  its
socialistic  means of production has dimmed its appeal as a  role
model.   For the Swedes,  it seems to be satisfactory,  but other
countries,  notably India,  have abandoned socialism in favor  of
capitalism.

Capitalism, per se, comes in various degrees of purity, with
the  equitable  distribution of wealth in reverse proportion  the
closer one practices laissez-faire capitalism.

Countries  and areas where labor unions are the  weakest  or
non-existent are those that have the highest difference of living
standards between the very rich and the very poor.

Labor  unions  originated in Europe,  and are an attempt  to
equalize  the  bargaining power of the  capitalist/employer  with
that of the individual employee,  who has nothing to sell  except
his skill and his time.

They  have been reasonably successful in doing so in Western
Europe and the United States, but they have created a new concern
by their very nature of being a legalized monopoly.

Unscrupulous  union  leaders have in a number of  cases  de-
democracized their unions,  and after winning early victories for
decent wages, working conditions and benefits, are left with only
a program to press for higher wages and benefits,  even if  their
members  are  already  doing quite well in  comparison  to  other
workers.

One  of  the  biggest  drawbacks  to  labor  unions  from  a
management  viewpoint  is its accompanying job  descriptions  and
work rules.

Thus,  rather  than being able to use their workers as  best
suits  the  changing  needs  of  the  enterprise,  management  is
constrained  by  the  terms of the labor agreement  in  utilizing
their employees.

Particularly  government workers unions,  especially in  the
field  of  education,  are demanding and getting benefits far  in
excess   of   reasonable  compensation   for   their   expertise,
productivity, and hours of employment.

On  the other hand,  capitalists in the private sector  have
had  a  generalized lid on worker incomes  by  transferring  many
service  and  manufacturing  jobs to lower  wage  countries,  and
to countries closer to practicing laissez-faire capitalism.

Short-term,  this  has  caused many families to  become  two
income families to maintain some semblance of the good life.

Long-term, and we are thinking in hundreds of years, the low
wage, non-unionized workers may pressure their employers to grant
them better wages and benefits,  and thus improve the  world-wide
standard of living.

Much  as “free trade” is trumpeted by the media,  businesses
and government, the actuality is that numerous limits and tariffs
prevail.   For example,  the tariffs governing trade between  the
NAFTA countries — Canada,  the U.S., and Mexico — are two phone
books thick.

The  EEC,  the  European Economic  Community,  is  similarly
saddled with restrictive regulations.

As  for  GATT  II,  which has yet  to  be  approved,  (1994)
anything  that  took 27 years to negotiate can hardly  be  called
“free trade.”

The U.S.  Constitution covers free trade in several clauses,
such  as (1) “all duties,  imposts,  and excises shall be uniform
throughout  the United States,” and (2) “No tax or duty shall  be
laid on articles imported from any State,” etc.

Peter Kann,  publisher of  the Wall Street Journal , calls for
the free movement of goods and people world-wide; I doubt if this
idealistic dream will ever occur.

Given  the widely divergent levels of economic standards and
cultural diversity and values,  I do not forsee the day when  the
poverty-stricken people of Asia, Africa and South America will be
free to immigrate to the countries with more advanced economies.

There  is no doubt that capitalism,  free private enterprise
with the prospect of profit,  is a powerful motivator of  people,
but  it leads to wide discrepancies between rich and poor  unless
moderated in some manner by government and other workers.

With  millions  of  people  in  the  most  advanced  nations
unemployed  or  on welfare,  we are a long way from achieving  an
economic  system where the people have adequate purchasing
power
to  create  and  sustain full employment of the workers  and  the
means of production.

In  theory,  this  is imminently possible,  because  of  the
truism that “human wants can never be satisfied.”

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