Having reached my forty-ninth year, I've observed a phenomenon that's been manifested in all of the "isms" that have failed. This problem unfortunately also has been festering in the United States for a long time. Now, I'm afraid that most of those who blame the isms for the failures of socioeconomic systems, have placed the blame at the wrong doorstep, and in doing so they've jeopardized our future, too.

         Before any ism can do anything, it must initially embrace some philosophy that's beneficial, or at least perceived to be beneficial, to a majority of the population of a nation. In every case, it promises economic security to the people, if only they'll embrace a particular form of government. History shows us that once the philosophy has been implemented, it appears to work for some number of years, then it fails!

         Could it be that all of these philosophies have essentially the same fault? Are all of the isms, yes Capitalism too, doomed to eventual failure because of this fault? The answer, I'm afraid, is an emphatic yes! The proof lies upon the pages of our history books, and the culprit stares us in the face almost every waking hour of the day.

         The laws of economics mirror those of nature, and they're not subject to change by decree or legislation. For any economy to be viable and prosper, its elements of production must be more or less in balance. This fact has been ignored by every one of the isms, and has or will result in the demise of each and every one of them.

         Production in any economy requires three basic elements. Someone's got to actually do the work, so there of course must be labor. Other than a single proprietor or a partnership, there must be people in management to organize and direct production and distribution so that they're efficient and effective. Before either of these can be implemented in an economy of any size, there must be land, facilities and physical resources to work on, in, and with. These are combined into the third element of production, generally referred to as capital.

         Communism and the other manifestations of Socialism avow that labor, those individuals who are the farmers and the workers, and who constitute the vast majority of the population, are the essence of any economy. As such, that ism states that the people must confiscate and own all of the resources, the capital of a nation, so that they can then share equally in the wealth generated. It also assigns the role of management to the government.

         The Socialist socioeconomic system in the U.S.S.R. has been failing for some years, and the economy of that nation is now disintegrating. Russia, as it was called, certainly had the capital to prosper, since it built a comprehensive military system as complex, sophisticated and powerful as ours. Its labor also must be quite capable and competent for this to have happened. A group of lazy fools could certainly not have built intercontinental ballistic missiles, even with all of the facilities in the world. The only element left is management, and by the process of elimination, therein must lie their problem.

         Our country is now said to embrace capitalism, but that philosophy was not an element of the revolution by which it was created. In fact, the United States of America has survived for over two hundred years only because of the wisdom and foresight of its Founding Fathers. They chose to embrace and institute a philosophy of individual freedom for each and every one of its citizens, from any tyrant or ism.

         The Founding Fathers asserted that each of its citizens had the right of self-determination, and that no individual, organization, or religion should impose his or its philosophy upon them. The roots of the problems we face today lie in the corruption of their philosophies by the Amendments to our Constitution and our Bill of Rights.

         Capitalism, the other of the two great isms, embraces the philosophy that capital, not labor or management, is the essence of any economy. Under capitalism the position of those individuals who own capital, large amounts of money, land, facilities and resources, are deemed most important. Under such a philosophy, the wealthy must control the government of the socioeconomic system for it to prosper. Note well that preservation of individual freedom is not a consideration in the philosophy and implementation of capitalism.

         At this point, one becomes aware that the role or position of management in these economic systems is not well established or defined, in either communism or capitalism. In the U.S.S.R., where the government assumed the management role, its economy has not prospered, and its socioeconomic system has collapsed.

         Under capitalism, as manifested in this country, management seems to have evolved into three not so distinct sub categories over time, and a new, fourth economic category has been introduced, the entitled. These conditions violate the laws of economics, and cannot be forgiven. Although little is being said about it, even now our socioeconomic system is approaching collapse.

         A portion of management in the private sector of this country appears to have been relegated to the position of labor, generally referred to as lower management. These people are most proximate to labor, are most directly linked to essential production, and receive the least compensation in their category.

         Those in upper management, on the other hand, supervise lower management. They deal directly with those who own capital, and are far better compensated. Only they have the potential to acquire some degree of tangible wealth, and actually reposition themselves into the category of capital.

         The third element of management is vested in government! Although government has an obligation to well manage those duties and responsibilities appropriate to governance, I do not think the constitution intended to give it the power to directly influence the economic success or failure of any of its citizens. In this respect the government of the United States of America has violated not only the Constitution, but also the laws of economics, and thereby has failed its people dismally.

         In the 1960's, government created the Great Society, founding a fourth element of production that does not produce anything. Although it seems obvious that any individual who owns no capital, manages nothing and does no labor is not a part of any viable economic system, we are none the less assured that this is the situation in our country. Into the viable and strong economic system of this country was introduced a fourth and new element of neo-production, the entitled.

         Large segments of our population, including the poor, the elderly, and most bureaucrats, have been coerced, forced or trapped into a segment called the entitled. Although those in this category contribute nothing to the active economy, on the whole they receive vast portions of the periodic wealth of the production of the rest of our citizens who are not, and many who will never be, entitled.

         When the government introduced the Great Society, they admitted that helping the poor entitled would cost the economy a little, but that this was compassionate and proper. They also promised that this noble program would lift all of the poor out of poverty, and turn them into productive, happy citizens. As all of us know, this philosophy has failed for thirty years, and we now have more poor than ever, at a cost of five trillion dollars!

         Long before the Great Society was envisioned, Social Security had been implemented as a program to ensure that our elderly would not face poverty when they could no longer be productive, and established a trust, funded from the economy, to provide this protection. In the past three decades, however, the government has not only spent all of the money in the trust, but has expanded the benefits (entitlements) to the poor and all of the elderly, until the costs to do so now consume two-thirds of the total tax revenues collected by the federal government.

         It is important to realize that if there really were any resources in any trusts that could fund these programs, they would indeed fit into a valid economic model. Unfortunately, that is not the case. For many years now, the government has been fooling itself and us about this fact. Those in power thought that by increasing taxes, or by some magic political potion that could enhance production, it could perpetuate this false, fourth element of its economic philosophy.

         Since the early 1970's, the government has tried to prop up its false economic model by borrowing, using inflation, and imposing ever-increasing taxes on the production of our country. Although they promised us that they could and would manage this system so that we all would prosper, there was, and is, really no chance of such a rosy scenario. Neither lead, nor ink on paper, can be transformed into gold.

         As we approach the end of the second millennium, most of our citizens are now taxed so heavily that they can only subsist, and cannot save or accumulate any wealth. Indeed, N.A.F.T.A. and G.A.T.T. are now the death knell of what was once the greatest economic system ever.

         Sooner or later, we will recognize that there are only three elements of production in an economy. The laws of economics may be flexible, but they cannot be broken without destroying those who violate them.

         Perhaps as we struggle to rise from the ruins and the quagmire of a failed socioeconomic system, we may realize the fallacies of the isms. The three elements of production in any viable economy must all be considered of equal importance. No government can act as a substitute for the individual responsibility that must accompany individual freedom. There is no way to guarantee everyone success and happiness!

         The government that will finally succeed in accomplishing what ours began, will be the first to recognize and respect the fact that each of its citizens must always be compensated according to his or her contribution to their economy and society. There is no equality in nature, only balance, and although no one of us is really equal to anyone else, every one of us should have the opportunity to be productive and to enjoy the fruits of our own labor.

         If we choose to build such a nation, we must quickly accomplish two very difficult tasks:

         First, we must un-amend our Constitution, and all of our citizens must re-avow that neither any individual nor any government has the arbitrary right to demand, to take, or to redistribute the fruits of anyone's labor or their property.

         Then, we must ensure that all of the costs and actions of our government be included in widely published, objective and honest analyses of our government and our economy, and we also must insist that our government return legitimate, economic value to the governed, equal to its cost.
Copyright © April 28, 1995 by D'Amor                                                                                                           All Rights Are Reserved

This page was created October 25, 1997 Copyright © 1997 D'Amor.

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