Friday, December 03, 2010

Socialism, Capitalism, Spending, oh my!

For a change of pace, I'm going to ruminate on the state of affairs as I see them.

(It's my blog, I get to exercise my First Amendment! ;-)

(Yes, I'm procrastinating. The cluster is down for maintenance, and I need a break from technical reading and writing.)

My Pop shared an interesting article during Thanksgiving, which noted that way back in the beginning of the direct founding of the U.S.A., colonists in the 1600's tried a form of socialism wherein the results of the season's harvest were shared equally amongst the colonists.

(The account was written by the governor at the time, direct citations anyone?)

The official noted that there were many deaths due to starvation, much inequity in terms of labor given vs. food received, and so forth. On the whole, the colony was in danger of perishing as the vicious cycle of famine made the remaining colonists weaker and less able to work, thus reducing the harvest, and so forth.

In these dire straits, the next thing they tried was that they divided the land up equally amongst the families instead. Each family was free to keep the results of their work, and if they had excess, sell it for profit.

The results were immediate: the next season's harvest was so bountiful that many families had excess, and those families that did not were able to buy from those that did. No one starved.

The official also notes the changes in motivation (paraphrasing): "Women who claimed infirmity and poor health when compelled to serve the community went willingly into their own fields with their children. The high (and unacceptable) costs that might have necessary to compel this behavior were no longer required ..."

Score one for capitalism, individual thrift and perseverance, and ....

But wait. Where did they get the land?

Oh, that's right. They were given it. Or, from another perspective, perhaps they stole it. (I don't want to get into those issues since there's even more controversy about that and it's incidental to my point.)

The point is: the colonists were given the tools to feed themselves, and they then were allowed to make their own way.

Capitalism is a fine system for efficient distribution of goods, services, and products. But it was an act of socialism (specifically, the land grant) that gave those first colonists the means to start on their new lives. (They had to supply the effort.)

We're no longer an agrarian society. We're an information one.

What are the tools needed to make our way today?

I'd argue for these, in descending order:

  1. Health
  2. Free flow of people, goods, services, and information
  3. Education
  4. Stability
I'd also argue that lack of any one of these items is problematic.

That last item may be even more difficult to quantify, except that you know it when you see it: wars, famines, natural disasters, stock market crashes, etc. Things too big for any individual or family to handle alone, something that requires a societal solution.

The world is chaotic. Trying to impose too much stability results in a dead/fragile/stratified society (see history for numerous examples). Too little, and no one can plan for the future.

We are a mixed socialist/capitalist society. Go towards any extreme for any of the above, and we will suffer.

Define suffering: again, you know it when you see it. Death, disease, famine, wasted lives, inability to meaningfully affect your own destiny, loss of freedoms, etc. These are broad brush strokes, individuals/society will naturally have their own values.

So how do we provide the above to our citizenry in our society? How do we give the tools to be successful, without redistributing the results of that success unfairly?

(This is not meant as an exhaustive analysis, but a mere framing of the problem.)

Government spending:

Now let me say from the outset, that like general relativity, I prefer solutions to be as localized as possible. I'd also like to remain as free as possible from any equations of constraint enforced by some larger entity. I don't dispute that some are necessary (anarchy is cool until you live in it), but I wonder if we are half as good at removing laws as we are at making them.

These entities need money to do their work. Right away that suggests a neat solution: don't give them any. Unfortunately, that only works if you already have the means to provide the 4 items mentioned above. Clearly, not all individuals do, so a society based strictly upon "to each their own" would be manifestly unfair, and I do retain the silly idea that the universe ought to be as fair as possible.

(Oh wait, we're already a plutocracy.)

Now spending itself is a moderately abstract formulation of reality: there are only so much goods, services, information, and time available.

Spend less than you make, and you have savings: for a rainy day, or to help someone else start something they couldn't otherwise do (perhaps with the hopes that you'll be compensated in the future for lending your resources today).

Spend more than you make (if you're allowed to), and you have debt, or future restrictions on your earning potential.

Pretty straightforward stuff.

It seems that Americans in general are now used to the consumption economy fueled by credit and debt, and we've passed that along to our government. Or perhaps it's the other way around.

That's a fairly common rant, and I'll not repeat it except to say: we've obviously hit the limit on how much debt (monetary, environmental, etc.) we've incurred, and we should be looking to pay it off instead of increase it.

This seems pretty simple to say and do, but let's watch how events unfold and see if the politicians actually realize that our government cannot continue to live beyond its means. At least the Fiscal Commission is a start, although of course there are economists who think it's not a problem after all.

I'm not an economist, but there seem to be some pretty instructive examples that indicate otherwise.

Okay, back to considering things I have somewhat of a clue about.




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