In this article, I hope to get others to think about what is really behind a thriving economy, whether my view is right or wrong. Then about how a thriving economy could be stifled and how our government reflects either the good or the bad in what makes an economy grow or decline.
Recently, I made a comment in response to another post on a political and economic news site . The person I was replying to said that "workers drive the economy." The more I thought about that "theory," the more I realized how easy it would be for many to "buy it. It reminded me of an article about the Marxist view of the economy and how capitalists pay workers enough for them to survive and create the next generation of workers. This relationship is often described as "explotaion" of the workers by the "owner" of land or factories or businesses.
It is as if they believe workers have no choices in life. They seem to believe the economy is only driven by the workers who are making things and doing things that are needed by the workers or wanted by the "ruling class," just to survive and procreate and make more workers. The workers are viewed as puppets who have their strings pulled by the "elite." The belief seems to be that workers would produce even more if they were in control of the businesses and their standard of living would be even higher than it is now.
Do workers really drive the economy? While workers are an important part of it, it isn't what I believe, drives the economy, as we know it, and where jobs are created. That relies on "some" workers who create jobs. The work they do and special skills they have are magnified through others.
For example caveman days, Og, the caveman, like all the rest of the cavemen in the area, works very hard just to find enough food and skins and other things to survive. But, Og, has developed skills the others don't have. He "works" in any spare time he has and as a result, has the best cave. It has crude furniture, a stone fireplace with a chimney and his cave walls aren't smoke stained and the air in his cave is clean. He even has "art" in the form of cave drawings on his walls.
The other cavemen would love to have those things but, don't have the skills so they ask Og to do those things for them and Og says, sorry, I don't have time. It takes most of my time to grow and catch my food and meet my other needs. So, the other cavemen say, well we have plenty of food because that is all we do, catch and grow food and dry skins, etc.
They ask Og, "would you do it if we give you food?"
Og agrees and a business starts where he is paid and the demand, for what he does, grows and he hires people and teaches them the skills he has. He can do this because now, he has so much food, skins and other things that he can devote full time to making the other caves better, plus sell excess food or skins when some can't get enough for themselves and also use the excess food and skins to pay his workers with.
However, he is running through tools like crazy, and Nog, another caveman makes good tools. Og, goes to him and makes the same deal with him that the cavemen made with Og and soon Nog is hiring people and training them to make tools and getting Og's excess food in payment. He also uses the food he gets to pay his workers with. This continues and the society grows and grows because of the innovators, more than just having workers, but the workers are needed. First thing you know, they create money to make trade easier. (Then they create a private central bank and the society begins to decline)
Think it is fiction? Just look to our early colonies (Plymouth Plantation) for a real life example.
"History of Plymouth Plantation," After the poor harvest of 1622, writes Bradford, "they began to think how they might raise as much corn as they could, and obtain a better crop." And what solution was decided upon? It turned out to be simple enough. In 1623 Gov. Bradford simply "gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit."
Did we always do it that way in early America? No!
The Mayflower Compact had required that "all profits & benefits that are got by trade, working, fishing, or any other means" were to be placed in the common stock of the colony, and that, "all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock."
Does that sound familiar? I thnk it is very similar to the redistribution of wealth talk we hear of, so often now. In simple terms this is how it is suppose to work.
A person was to put into the common stock all he could, and take out only what he needed - a concept so attractive on its surface that it would be adopted as the equally disastrous ruling philosophy for all of Eastern Europe, some 300 years later.
"This 'from each according to his ability, to each according to his need' was an early form of socialism, and it is why the Pilgrims were starving," Marbury explains.
Gov. Bradford writes further that without the incentive to work, the "strong" simply provided for their own needs and not the needs of others.
In historian Marbury's words, Gov. Bradford "abolished socialism" in the colony, "replacing it with a free market, and that was the end of famines."
The TRUTH about Thanksgiving
Should socialism be the best form of government where everyone always does all he can for the good of his society? Probably and that is what makes it so attractive. However, socialism doesn't and can't work because of human nature and human nature is what socialists have been trying to overcome since societies were first created. Socialism is nothing new. It is as old as mankind. Yet, in thousands of years, it hasn't worked because of human nature. Those young, strong men, in that colony and their view of work is as old as Man and is still the view of too many people today for socialism to work. Take away the incentive to produce more and you lose a lot, if not most of your productive labor. It doesn't matter if that is how it should be or not. That is reality.
At the same time, unregulated capitalism isn't good either as our founding fathers knew with their concerns about monopolies and the abuse of power, like Andrew Jackson warned when the banks held power during his presidency.
Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than the naval and military power of the enemy.
Andrew Jackson’s Veto Message Regarding the Second Bank of the United States
The whole goal of the international banking cartel, for centuries, has been to get a global financial system in place by getting both parties to destroy this nation's ability to survive on its own and become dependent on a central government. It has always used "parties" to drive a wedge between the people and class warfare for their gain. In my recent series of articles, Interviewing Past Presidents," President Washington warned of the danger of political parties and how they would divide the nation's citizens.
Early President after President and founder after founder and statesman after statesman warned what would happen if we did what we have done for the last 100 years.
Now we face a great depression (now or later if delayed with more "stimulus") we are not prepared for. Our nation's citizens don't have enough savings for a few years of depression and we have lowered our education standards, farmed out our manufacturing base, spend more than we have in national income and have a total debt that is almost 400% of GDP and $120 trillion of debt and unfunded liabilities. Worse, we have a voting population that doesn't want that portion of the $120 trillion in unfunded liabilities addressed because they depend on that spending for health care, pensions, disability, welfare, etc. Almost one in four jobs are dependent on government spending that is 61% of our national income because our citizens want more than they can pay for. Even more of our citizens depend on the government for income than just those one in four workers.
Slightly over half of all Americans – 52.6 percent – now receive significant income from government programs,......Mr. Shilling's analysis found that about 1 in 5 Americans hold a government job or a job reliant on federal spending. A similar number receive Social Security or a government pension. About 19 million others get food stamps, 2 million get subsidized housing, and 5 million get education grants.
As US tax rates drop, government's reach grows
While I disagree with his one in five jobs, and believe it is closer to one in four because of defense jobs alone, you get the point.
As the President's own Debt Commission stated, we can't tax or grow out of this. We have to cut spending and cutting defense even 50% won't do it. Our private sector is too small and cutting defense 50% with all the jobs dependent on it would cause a depression too. We have boxed ourselves in where doing what we need to do will cause a depression.
If we don't return to the system the early colonies and early states used, we will become a 3rd world nation where there never are enough jobs for the people. Just having a lot of workers can't create the jobs and every 3rd world nation proves that.
You have to a certain group of "workers" who save, start businesses, innovate, get investment money, sell goods and services and reinvest wealth and savings made from profits to create enough jobs for a society. AND, you have to continue to provide the incentives for those special "workers" to start those businesses and grow the economy or your economy will stagnate and go into decline like all great economic empires have in history.
However, even then, if you don't have sound economic and monetary principles to base your policies on, keep education standards high, or control immigration, you can still destroy even that potential. You can't flood the labor pool with workers and expect there will be enough jobs or decent wages.
Workers are people. They are very important people. They need to be treated with respect and not abused. They need safe and healthy work environments but, they can't drive the economy if nobody is buiding factories or taking the risks to start a business and hire people. They can't drive the economy if nobody is willing to be "different" and take chances and risk failure. Many workers are very hard working people but, they aren't willing to take on the risk of failure and start a business.
Some workers aren't willing to constantly develop new skills in the areas where demand for labor is high. Remember the Tech Bubble? Workers were being offered sports cars, special beneifts, higher salaries, higher benefit packages, etc. Find a sector where the demand for labor is high and develop those skills. However, if you have a government that is going to flood every sector they see a high demand take place, with "skilled" immigrants to keep wages artificially low, that won't work either.
There are too many factors at play for workers, alone, to drive an economy and with bad government policies, it gets even worse because it destroys the incentives for those "special" workers who do drive the economy and take the risks and start businesses and hire the rest of the workers. A business owner is a "worker" too. He is not just some "exploiter," though he can become one, just as a worker working for somebody else can be an exploiter too.
The worker who doesn't do the full job he was contracted to do, who wastes time, is less attentive to quality, is not "people friendly" with customers, is exploiting the "worker" who owns the business he works for and who hired him.
A simple statement "workers drive the economy," reminds me too much of Marx and others who tried to simplify things so much they tried to apply flawed theories that did more damage than good.
"Don't throw the baby out with the bath water." Thomas Murner (1475-1537)
