Before I go into today’s topic,I want to mention an editorial in today’s (3/21/17) Wall Street Journal by Bret Stephens. It is entitled, ” ‘Other People’s Babies’ “, and can be found in its entirety at https://www.wsj.com/articles/other-peoples-babies-1490050955. Basically, he expands on the points I made in the post on legal immigration, what it adds to our society, and how important it is to prevent a demographic disaster, like that facing Japan, Russia, Italy and others, where the population is aging and will be shrinking. Try growing GDP or financing old age entitlements in that scenario!
Turning now to political and economic systems, this is just a broad outline to make sure we are all on the same page. The two are different animals, at least most of the time. Sometimes we get them confused and intertwined in our minds, so this is an attempt to make sure they are separated. Except when they are not, as in a communist or fascist dictatorship!
Political systems are all about who has the power to make the rules that everyone has to live under. The rules themselves can be about economics, religion, human rights, how we live, any or all aspects of our lives. They can be democracies, monarchies, aristocracies, oligarchies, theocracies, plutocracies, empires, tribes, dictatorships, etc.
Economic systems are how we go about satisfying our physical needs and desires within a society. Economics has existed ever since humans began cooperating with one another, by division of labor between hunters and gatherers. Economic systems include barter, tribal, feudal, mercantilist, free market, capitalism, socialism, communism, etc.
Since we are dealing with 7 billion humans, we will never have a political or economic system that gets universal agreement. Therefore, no system is perfect. But clearly, some are better than others. The most important question to ask is this: Since any system will result in some mistakes (especially in hindsight), does the system have a built-in mechanism to self-correct, or can it only change through violent overthrow? Since most people in power tend to cling to that power, and rarely, if ever, acknowledge mistakes, the only way of correcting the mistakes in systems other than democracy is removal of the ruler, not usually a pretty sight.
Winston Churchill is reputed to have said, “Democracy is the worst form of government, except for all the others”. Democracies make mistakes, but they have the ability to self-correct. And the ultimate power of who makes the rules resides in the population who lives under the rules. We in the United States live in a representative democracy–with 320 million souls, direct democracy where everyone debates and votes on every rule is an impossibility. But we get to choose our President, our Governors, and Mayors, our Senators, Congressmen, state and city legislators.
Hybrid political systems also exist–constitutional monarchies that function as a democracy, purported democracies that function as a theocracy, Empires that functioned as a collection of tribal societies.
Economic systems can also be hybrids. Capitalism can be blended with some socialism to produce welfare capitalism. Blended systems also produced the economic aspects of fascist states–National Socialism.
Then political and economic systems can play mix and match. You can have democratic capitalism or democratic socialism. You can have monarchical mercantilism or monarchical free market capitalism. The worst case, we can all agree, is when the political system is a dictatorship that forces an unpopular or ineffective economic system on the nation–communism or fascism, for example.
This is all pretty simple, well-known stuff, right? So why am I writing about it? Because I have found that too many people get tied up in knots of confusion when discussing them. Friends on the right tend to confuse socialism with a loss of democracy. Friends on the left confuse capitalism with plutocracy. Capitalism can be changed to socialism, or vice-versa, as long as the political system is democratic. The Obama Administration, in writing 80,000 pages of new business regulation moved a few feet toward socialism, where the state controls economic activity, just as the democratically elected Trump Administration can roll those back again. You may agree with one side or the other, but the point is that the changes can be made peacefully, and changed back again in the future, also peacefully.
The next post will follow up with more on economics.