The first part of solving American and global economic problems is to increase the role of international economic regulation. It is impossible for different groups to compete when each group is playing by different rules. Wealthy capitalists take advantage of economic disparity and differences in economic rules between countries to perpetuate economic disparity. Economic disparity between nations enables the ability of capitalists to buy labor at low prices in one region and sell the products of that labor in laces where labor is more expensive.
This is process is the heart of imperialism. It is this type of imperialism that has created the conditions of economic disparity that exist in the world today over the past 300 to 400 years of Western domination of global trade and the colonial system.
Americans need an honest understanding of the role of imperialism in the development of capitalist economies. This can be done in several ways. Either an entirely fresh look at history can be taken, or study can be given to the analysis of the Marxist writers, such as Lenin and his analysis of imperialism in the capitalist economic system. For obvious reasons Lenin's analysis of imperialism has been ignored by Western countries, because it was in fact an attack on Western imperialism. Most Americans economists today choose to ignore the continuing role of covert imperialism in its relation to the American economy. The idea of acknowledging American imperialism has become taboo. Indeed post WWII imperialism does not conform to the Leninist models of imperialism either, and for that reason a new an fresh analysis has to be under taken, yet it is equally important to study the role of imperialism in the creation of Western wealth up to World War II as well, in order to understand the foundation upon with Western wealth has been created.
It is important also to undertake this activity with the same level head that Lenin used in his analysis of the issue of imperialism, as Lenin stated, "
Vladimir Lenin's Imperialism The Highest Stage of Capitalism can be found here:
http://www. marxists. org/archive/lenin/works/1916/imp-hsc/index.htm
Another thing that sorely needs to be done is to throw away the past 50 years of propaganda about socialism and Marxism and take a new and fresh look at that issue as well. So much has happened with socialism during the 20th century that any study of the principles of socialism can easily be stigmatized by its detractors, as has typically been done.
Socialist ideology suffers from failures by both its detractors and practitioners to make honest attempts to understand it. The detractors of socialist economic ideology typically do not even give an honest analysis of the ideology, instead that simply setup false or poor socialist constructs and attack those straw-men from a safe distance. On the other hand many practitioners of socialist ideology have been less concerned with socialism and more concerned with consolidation of state power, merely abusing the desires of the people to develop a just economic system by claiming to uphold the values socialist ideology, when in fact they are doing no such thing, as was the case in Stalinist Russia and Maoist China. In these countries Marxism and dialectical materialism developed into dogmatic pseudo-religions that were riddled with errors because writers were not allowed to stray from establishment views and interpretations.
"There is no more cogent theory of fascism, for example, than that of Marxism:" [which is to say that Marxism offers the best explanation of what fascism is/was] "it was and is the politics of counter-revolutionary despair. Fostered by big business, but rooted among the middle class victims of capitalism, it was to do the job that the state apparatus could not – destroy the organized workers’ movements.
To the list above we should of course add Stalinism. Leon Trotsky, the last of the great 'classical' Marxists, fought a long battle against the rise of Stalinism. When we survey that battle from the standpoint of the current debate what is striking is just how sensitive Trotsky and his followers were to Stalinism’s corruption of Marxism as a theory.
From the struggle against proletkultism and the effects of bureaucratism on social life in the early Soviet Republic right through to the defense of dialectical materialism against the Stalinist professors, real revolutionary Marxism saw and resisted every attempt to turn Marxism into a 'meta-narrative'.
When Stalin declared that 'socialism' had been achieved in pre-1939 Russia, and that 'communism' was only years ahead, it was Trotskyists who held this up to ridicule. Meanwhile the liberal intelligentsia of the West crawled at Stalin’s feet.
The Trotskyists treated Stalin’s claim for Russia just as Marx treated Hegel’s claims for monarchic Prussia, Adam Smith’s claims for the capitalism of the 14 hour day, Robert Owen’s claims for New Harmony. They refused to accept it as the end of history. They roused the masses to struggle against it. They exposed the legitimizing theory as ideology.
This was not the case with the precursors of postmodernism. All accepted Stalinism as Marxism. Thus they experienced the crisis of Stalinism as the death of Marxism."
http://www. workerspower. com/wpglobal/postmodernism.html
In the place of Marxism in the West postmodernist philosophy has been developed. Postmodernism and the many other "modern" popular philosophies of today are really just reversions to the past, the ancient past from before the Enlightenment and the Age of Reason. Between the 1700s and World War II society was becoming increasingly scientifically minded. Marxism was one of the leading philosophies in viewing society and all aspects of life in a scientific and rational manner. The social view that has emerged after World War II in America is essentially no view at all. What postmodernists seem to do the most is simply rationalize the collective desires of society. There is no real analysis, it is simply a legitimizing of social wants. The postmodernists have essentially stated that the world cannot be truly known or described, and thus analysis of the world is always subjective and useless, therefore, whatever feels good, do it. This seems to sit well in America because of its apparent reinforcement of individuality, but in truth, by ignoring social realities postmodernism fails to provide the individual with social understanding and in fact leads to a degradation of individualism through lack of understanding of how individuals are a part of society. Lack of knowledge of the truth only serves to make one a victim of the truths that one does not understand, and so the individual has increasingly become a victim of society.
Essentially there is a lack of any philosophy being taught or understood at all, which is what is leading to increasing fragmentation of American society and confusion about the nature of reality in the American population. The modern "liberal" movement in America is rooted in postmodernism, and is therefore without direction and essentially without purpose, which is one root cause of why the Democratic party has been so weak since World War II, especially since the 1980s.
Albert Einstein worked extensively on the development of socialist ideology and was a devout supporter of socialist economic theory.
In 1949 Einstein wrote Why Socialism. In this article Einstein explains why he feels that socialism is the only way to a just a peaceful human existence. In selected quotes he states:
"For example, most of the major states of history owed their existence to conquest. The conquering peoples established themselves, legally and economically, as the privileged class of the conquered country. They seized for themselves a monopoly of the land ownership and appointed a priesthood from among their own ranks. The priests, in control of education, made the class division of society into a permanent institution and created a system of values by which the people were thenceforth, to a large extent unconsciously, guided in their social behavior.
But historic tradition is, so to speak, of yesterday; nowhere have we really overcome what Thorstein Veblen called "the predatory phase" of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases. Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future. "
"It is evident, therefore, that the dependence of the individual upon society is a fact of nature which cannot be abolished-"
"The time—which, looking back, seems so idyllic—is gone forever when individuals or relatively small groups could be completely self-sufficient. It is only a slight exaggeration to say that mankind constitutes even now a planetary community of production and consumption. "
"The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor—not by force, but on the whole in faithful compliance with legally established rules. "
"Insofar as the labor contract is "free," what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists' requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product. "
"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights. "
"Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an "army of unemployed" almost always exists. The worker is constantly in fear of losing his job. Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers' goods is restricted, and great hardship is the consequence. Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions. Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals which I mentioned before. "
"I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. "
"The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?
Clarity about the aims and problems of socialism is of greatest significance in our age of transition. Since, under present circumstances, free and unhindered discussion of these problems has come under a powerful taboo, I consider the foundation of this magazine to be an important public service. "
http://www. monthlyreview. org/598einst.htm
Now, as we can see, there are certainly valid points concerning capitalism that stand to be addressed. Einstein wrote this in 1949. It is now 2003. Is this commentary still relevant? Was it actually relevant at the time that he wrote it? If it was relevant then and it is not now, and we are still using capitalism, then how were these issues addressed by the American system in order to resolve all of the issues that Einstein brought up?
I believe that these statements are still very relevant today, perhaps even more so. The concentration of wealth in America in the hands of the top 2% is even greater today then it was when Einstein wrote this. As you can see though, there has been a real desire to develop a better system, not just a bureaucracy that oppresses people. The desire behind socialism is to promote economic, and thus social, freedom for a majority of the people in the world in a way that is fair to everyone. The question still remains, can this be done, should it be done, and if so, how?
In order to answer these questions two things have to take place, a better understanding of economics has to be obtained, and we, as a society, have to outline the goals of the economic system that we wish to create. Much of the conflict in America today about economic policy is not so much a conflict of how to do things, it is a conflict of what to do. What are the real goals of our economic system? Can anyone tell me? I have no idea. The truth is that different people have different goals and different agendas.
Politicians try to say that some economic policy is good or bad, right or wrong. In many cases this is not true. It all depends on what the objective is, if they do not like the objective then they claim that the policy is unsound. Building a wall that is not properly supported is bad, deciding where to build a wall is a matter of choice.
Designing an economic system is like designing a car. To say that a Ferrari is better then a Mini-Van makes no sense. If you have a car and you say that putting a larger engine in it will make it better that again makes no sense. The design decisions are all dependant on the objective that is trying to be reached. Clearly for going fast a Ferrari is better then a Mini-Van, but for carrying 6 people to the airport the Mini-Van is better.
Likewise, to say that one economic ideology is "better" then another also makes no sense unless you state the objective that the economic ideologies are attempting to reach . Once the objectives are stated then one can go about defining a structure that will attempt to meet the stated objectives.
What then is the objective that we want for our economic system? To provide prosperity? No, that is too vague, all economic ideologies have the goal of providing prosperity on some level. This is not a question that I can answer; it is a question that we as a society must answer.
Secondly, we must develop a better understanding of economics itself and the fundamental "laws" of economics.
I have developed what I call an Economic Ecosystem Model, which I feel helps to provide a better understanding of how economies work, and it can, in theory, be applied to all economic ideologies. My model states that an economy functions like a biological ecosystem. In this way many of the principles of ecology apply to economics, and information sharing can take place across the two fields of study.
There are many parallels between the concepts of biological diversity and economic diversity, the food chain, the cycle of nutrients within the system, evolution, competition, and patterns of growth.
Economic growth typically starts like weeds growing on a barren tract of land. Then larger and more hardy plants may take root forming shrubs, and then eventually small trees, which then may grow into a forest. As the forest matures the large trees shade out the ability for the smaller plants to grow, the weeds and grasses are no longer present, competition is directed by the environment. Biological diversity is typically lower in a mature forest of this nature, yet biological diversity is higher in boundary areas where ecosystems come in contact with one another. When a large tree falls in the forest a hole in the canopy opens up. This hole may be filled by the existing trees that extend their branches which then continue to shade the ground and prevent new growth of smaller plants like weeds and shrubs or new trees, but if the hole is too big then new growth will emerge because new opportunity has been created by the fall of the old tree.
This can be seen as similar to the way that small business may form an economic foundation in a region which then enables larger businesses to grow, and that then once those larger businesses do grow they in turn may shade out many of the smaller businesses that facilitated their own growth.
We can also understand that a given species may not evolve, and in fact not be able to evolve, in a given environment, yet a species may evolve in a different environment where they do not have direct competition and then they may enter another environment where they would never have been able to develop, but now that the species has developed it can now compete in new environments that it could never have developed in initially.
The concepts of niches and how niches become filled, and that by the filling of niches new niches may be formed, is also important in understanding economics. Symbiotic relationships: mutualism, parasitism, commensalism, neutralism, competition; all of these terms apply equally to economics and ecology.
We can see that a mature economy both prohibits growth and stifles competition, yet it also creates new niches and provides new, but different, opportunities.
For example we can look at car manufacturers in America. We see that Ford, Chrysler, and General Motors are the established Giant Redwoods of the American economic forest. It is virtually impossible now for a new car company to grow in America that can compete with these giant trees. Yet, it is possible for new car companies to grow outside America and then, once they have grown, to spread to America like an invading species. Now, if a company like Ford were to "die", then there is a possibility that a new American car company could grow to take its place, or there is the chance that the existing competition would be so great that new growth would still not have a chance to happen. These things can be analyzed and understood with ecological style models.
Likewise we see that businesses fill economic niches. As in the natural world competition for niches takes place and then typically one species will dominate that niche, the most successful species. Once that niche has been filled no other species typically occupies that niche. The same can be said of business, which is why foreign investment can be both helpful and harmful to local economies. Foreign investment fills economic niches, yet it also can create new niches. If foreign investment fills too many niches in an economy then local competition is starved out. As is the case with invading species, such as African Killer Bees, foreign businesses can be more competitive then the local businesses, and when this happens we see a situation like the problems that we have in South Florida where invading species are reducing biological diversity because the domestic species cannot compete so they are dying out.
This same thing happens economically, and this is why foreign investment can be detrimental to local populations. If foreign businesses fill too many of the economic niches without creating enough new niches, then business opportunities for the local population diminish, resulting is poor economic diversity and a stagnate economy where commensalism and parasitism become the way of survival for the local population. At the same time, invasion of species into new territory is also natural and productive in ways as well.
Additionally, wealth is in many ways like the nutrients that ecosystems depend on for survival. The cycling of nutrients within an ecosystem can be used to understand the cycle of wealth within an economy. Various members of an ecosystem collect, create, and store nutrients. ee a system like the Amazon rain forest and we see the diversity and complexity and the stability of the system. Understanding this structure can lead to understanding how to build economies in a similar fashion.
In addition we also have to consider domesticated forms of life and managed ecosystems. Understanding managed and domesticated ecosystems is like understanding how to domesticate and manage economic systems. Untouched, "wild", systems are like a free-market capitalist economic system. There are no rules, it is just the "law of the jungle" and pure competition that drives and shapes the system as well as all the members of the system. These "wild" systems are purely heartless; in the natural world there is no compassion, the systems work purely on things like survival of the fittest and natural selection.
With domestication and management it is possible to actually make more productive systems, as we have seen with agriculture. With management and domestication we have removed, in some cases, the harshness of the natural world and we have replaced that with compassion and nurturing, such as we give our pets and crops. Studying the role of management in ecology and agriculture can also provide insight into what the effects of management are in terms of economics as well, and what the potential rewards and tradeoffs are.
How we understand all of these types of conditions in economics can be greatly helped through the study of parallels between economics and ecology.
Post World War II economics in America has been greatly shaped by John Keynes and Paul Samuelson. While both of these economists could be considered liberal, neither were Marxist, and Paul Samuelson's ideas have been shown not to be accurate. Keynes developed revolutionary new economic formulas and models, but like Einstein's Theory of Relativity, Keynes' economic theories have been highly interpreted and have not actually been understood and adopted by many economists. Most economists don't actually study Keynes, they study interpretations of Keynes. Much of Keynesian economic ideology has been merged with the classical pre-Keynes ideology, forming what typically known as a neo-classical, or New-Keynesian, economic ideology.
I believe that this was done largely to make concessions for the desires of the establishment and to continue to provide a system that was able to continue to serve the special interests of the wealthy.
Paul Samuelson has been one of the major contributors to American economic policy and ideology, and, much of what he taught was wrong. His teachings have definitely affected the approaches that American policy makers have taken as can be seen by looking at the approaches American economists have taken during the past 50 years.
Keynes and Samuelson both promoted the idea of government spending to stimulate the economy, which is true, government spending can stimulate the economy. Samuelson has been the major proponent of the idea that savings can be detrimental to the economy and that deficit spending is acceptable and not problematic and can in fact be beneficial. These ideas seem counter intuitive, and in fact history also shows them to be false as well.
Samuelson also stated that war and price controls are not good for the economy, statements that again are proven to be historically false. In denying that war is good for the economy Samuelson failed to understand war, and he also failed in any way to account for imperialism, which, given the time of his study and publishing in economics (he first published in 1948) seems to be a total denial of obvious truths.
War can be very good for the economy. World War I and World War II were both very good for the American economy. War can be bad for the losers of the war, but its often very profitable for the winners, to ignore this fact leads to a failure to be able to build sound economic policy. Furthermore, even in loss war can be beneficial to an economy as rebuilding can produce more growth then an otherwise mature and stagnate economic would be able to produce. And lastly, we have the fact that in many ways war is in itself a product of economic trends, a product of capitalism and the need to expand the economic system and engage in new growth. Samuelson completely failed to address this aspect at all, and as a result is seems that many Americans today still fail to acknowledge the economic realities of war, the economic motivating factors that drive war, and the economic benefits of war. It's more of a complacent denial though. People like to pretend that war isn't relay an economic factor, that if there are any economic benefits from war then coincidence and not really something that needs to be factored into any overall understanding of the economy, or the war.
This is wrong, war is just as much a part of economics as any business is, war is a business.
Again, denial of this truth only makes us subject to it.
Overall Samuelson's economic ideologies seem to be a reinforcement of how he "wants" economies to work, not how they actually do work.
For more on Samuelson see:
http://www. mskousen. com/Books/Articles/perserverance.html
In contrast to Samuelson, and what had become the establishment economists of the time, the Supply-Siders developed and promoted economic ideas to counter the "stagflation" that had developed in the 1970s. The Reagan administration adopted the Supply-Side policies of these economic outsiders because it they were telling the Reagan administration what they wanted to hear, they had developed a policy designed to counter "stagflation" while benefiting the wealthy.
One of their famous lines was that, "The U.S. tax-and-spend system reduces potential growth because it penalizes success and rewards failure."
While the policies have combated "stagflation", they did so my violating the principles of the established economic agenda, which was to support economic growth that would benefit all citizens.
The Supply-Siders claimed that individual savings would increase, but it did not, instead debt increased and average savings plunged into the negatives for the first time since World War II.
What the Supply-Side policies are really doing is essentially redistributing wealth from the working classes to the wealthy. Supply-Side is essentially turning back in the direction of free-market capitalism, except with the way it has been implemented it actually favors the wealthy even more due to the loopholes and provisions written in for the wealthy.
Supply-Side economic policy rejects the idea of redistribution of wealth in general and simply does not take it into account as a factor. This is one major flaw, because redistribution of wealth is an intrinsic part of capitalism. As Einstein stated, labor wages are generally determined by the supply and demand of labor and by the degree of leverage of capital that the wealthy have. So, the more wealthy the wealthy get the more leverage they have, which means they are more able to lower wages. Furthermore, supply and demand can in no way determine the value of labor as it relates to its role in the overall economy. Just because someone is willing to take a job for $6. 00 a hour because they have no other opportunities and need money does not mean that the work they are doing is contributing to the value of the overall economic system at a rate of $6. 00 per hour. The work they are doing may be contributing more or less to the system then what they are paid. In most cases the employee is underpaid in the first place, and the excess value of their labor is the profits that are taken in by the employer. When both of these things are taken into consideration we see that wages are somewhat arbitrarily determined in the first place.
The traditional solution to this has been the use graduated income taxes to help redistribute wealth and keep the system relatively well calibrated. This presents a problem though because then the government is doing the redistribution of wealth through government spending. The Supply-Siders have proposed to cut taxes and cut government spending, even though they actually increased government spending under Reagan and Bush. This only solves one problem though, and that is the problem of government's role in inefficiency, but the problem of how wealth and wages are determines remains unsolved. This is the whole point of socialism really, to provide ways to control wages, which can in theory lead to lower taxes. If wages are set in a way that wealth is properly distributed among those that contribute to the economy then less redistribution of wealth has to take place through taxation. In short, the need for redistribution of wealth through taxation is a product of an imperfect system and the lack of social responsibility of private industry in the first place.
The Supply-Siders have addressed some the problems in the neo-classical economic school of thought, but have in turn created new problems, well, actually old problems, the problems that were being solved in the neo-classical school of capitalism in the first place, and neither school of thought has solved the fundamental problems of capitalism.
So, what we can expect is for the economic issues of the late 1800s and early 1900s to return under this type of policy, including class struggle, imperialism, and war.
The first step in tackling these issues is to honestly recognize the fundamental problems in our current system. This is not being done in American society today. The general sentiment in America today is that capitalism is the only valid economic system and that any perceived problems with the capitalism itself are really the fault of the observer, not the system.
Solving the problem of American exploitation of foreign countries requires solving the domestic economic issues that lead to foreign exploitation and finding ways for America to be more self-sufficient, which includes reducing the need for foreign oil. The American economy has grown so large that the labor and resources that are required to maintain the American standard of living exceed what can be produced here at home. This obviously means that it's currently impossible for every country to rise to the level of the American system because that would mean that every country would require an economy larger then they were able to maintain domestically, which means that there simply isn't enough labor and resources for the world to rise to the American standard.
A way to solve this problem it through increased mechanization and computerization. This presents a problem though because mechanization eliminates jobs.
The socialist revolution and socialist ideology is fundamentally flawed in its approach to labor. Socialist ideology dictates that workers are the most important element of the economic system and that systems should be designed around making sure that every person can be employed and do enough labor to earn a living. This may have been a good idea in the 1800s when socialist ideology developed, but it's no longer a good idea today, and in fact this has caused a great deal of tension globally.
Untied Airlines is a perfect example of the problems created with systems that focus on the worker. By trying to maintain a role for workers we are working against progress.
Instead what should be done is to look at the goal of socialism, which is to make sure that every citizen has a share in the economy so that no one is left out. How can we make sure that everyone has a share in the economy and also promote progress in a system where increased efficiency means the elimination of jobs?
The answer is fundamentally simple. The answer is through the use of investment, a. k. a. hyper-capitalism.
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