Education

Years ago a neighbor made a comment to the affect that since our kids are grown, why should we have to pay to educate children of others. I would like to think that the question does not reflect a common point of view but following are my thoughts on the topic. The question is aimed at public education and may boil down to why should the general population pay for something that is of benefit to an individual or a family and is of no consequence to the community?
Jonas Salk, the inventor of the vaccine that eliminated polio was not a relative of the masses that were spared the pain of the dreaded disease. Charles Manson was not the son of the Tates whose daughter he and the gang he led murdered so brutally in the 60s. The society as a whole benefits or suffers from the actions of other people’s children and thus it is to the benefit of everyone that we produce the “best”. In the industrialized world where we do not rely on our children to care for us in old age, the major benefit derived by the family of a well educated child comes down to “bragging rights”.
Though there are many factors that go into the quality of our next generation, education is certainly one of them. Public education was first came into being in China during the reign of Kublai Khan, the Mongol conqueror. It was introduced in England hundreds of years ago when the general population won the right to vote. It occurred to the powers to be that if they were going to have a democracy where everyone voted for the government that will run the country the population needs to have at least the ability to read and write so as to be somewhat informed. I have found that a lot of political nonsense stems not from the fact that the population in some areas is stupid but that it is uninformed. There was a pole conducted in one of the Carolinas recently where one of the questions was whether Hawaii is a State. More than 40 or 50% of the population and more than 60% of Republicans said it was not. Given that understanding, it is not totally irrational than to say that the President, born in Hawaii, is not a citizen. With today’s easy access to information one would think people would be better informed. I guess the issue is quality and not quantity of information. Unfortunately, most swords cut both ways and politicians often use the abundant channels of communication available to intentionally misinform their constituencies to advance their own cause.
The current administration has spent a significant amount of time talking about education. In fact last week I saw the president at a “back yard” meeting in Ohio where, when asked about our economic future, he reiterated the point that with advances in technology, a society will need a better and more technically educated workforce to compete. He also pointed out that whereas a decade ago we were first in people graduating from college, we are now twelfth. I believe he is correct in his assertion. Things that were done by brute force more and more are done using technologically advanced tools and methods and the nature of the workforce will need to be better educated going forward. Besides better educated, I believe the workforce will also need to be smarter.
In my experience educated does not necessarily mean smart though there is some correlation. Education, however, is used as an indicator that the probability is higher that someone is smart in the case of someone educated than not and the higher the education the higher the probability. Therefore we need to make sure that we have all of our “smart” young people available for the demands of the new economy. If we are depriving the poorest of our population the opportunity for a good education, we will decrease the number of people we can pick from for those tasks demanding the best thinking abilities.
I would like to use a sports analogy to clarify this point. Say I want to build the best basketball team in the world. Very great height or agility are strong assets in Basketball. Let’s suppose that the only kids I have to choose from are the inner city and rural kids who have not much else to do summers but play basketball. I am missing out on a great number of youths who are both tall and agile from the more affluent community because they never get seriously involved with basketball. Instead of being able to select a team of the tallest and most agile players from the entire population I am restricted to selecting from only a portion of the population and the team I put together will be inferior to one I could have had were I able to include the affluent in my selection of players.
In the same fashion by not providing a good K-12 education to the inner city and rural kids, they don’t go on to college. Since a degree is the stamp of approval for intelligence, They will never get into the pool of “smart” people needed for future economic success, thus decreasing the probability of our continued economic leadership. The gap between the wealthy and poor is widening with the population of poor growing disproportionately. If K-12 education continues as it is and college becomes more costly, with especially advanced degrees available only to the wealthiest, we will be playing with a team selected from an ever-shrinking portion of our population. (I don’t buy the argument that the wealthiest are also genetically superior so the pool of smarts is in that group anyway. At best the bell curve is shifted slightly if at all) Thus with education also the key credential for positions of leadership, we will diminish the strengths of our leaders and thus our great nation.

Taxes, Stimulus & The Broken Window Fallacy

A couple of days ago I received an e-mail from a friend directing me to a video snippet entitled “the broken window fallacy”. Its story line is that a hooligan throws a brick through a baker’s window and the baker has the glass replaced. The glassier replacing the glass now has a job and can buy more grain from the farmer who can use this money to buy something else etc., etc. Following that argument more hooligans doing more damage would be even a better economic stimulus. On the other hand, if the baker did not have to replace the window he would buy a suit from the tailor who would spend his money on produce thus also providing money to the farmer. In the later case, however, society would have gained a suit whereas in the former it was a zero-sum game with the farmer’s gain being offset by the baker’s loss. The snippet ends by reminding the viewer that to pay for a stimulus or a war, money is taken from people in the form of taxes thus reducing the amount spent and causing the loss of jobs.

I found the choice of a hooligan throwing the brick as a comparison to stimulus a very interesting if not too subliminal a political message. The economic argument could just as well have been made using, say, a limb from a tree broken by a storm breaking the window. The logic would work just as well without introducing political bias. But I guess it is hard not to make political hay given an opportunity when there is an underlying agenda to an argument. That’s the case for most of us (including myself).

If I got the gist of the message right, it is an argument for cutting taxes to increase business and get the economy out of a terrible slump instead of pumping money in through public works. In the current economic downturn there have been several tax cuts under the previous administration and one under the current one which did not turn into spending (a new suit for the baker) but resulted in increased savings (good stuff but not simulative). The examples in this video were at a level of consumer. There is a similar argument on behalf of the investor that increased taxes on the wealthy, through repeal of the “Bush tax cuts” will stifle investment and thus prevent a recovery. This is the current dialog.
There is an assumption here I think that money collected in taxes somehow is removed from the economy. The fact is quite the opposite. Government has a propensity for spending as conservatives rightly point out so the taxes go back out into the public in one form or another facilitating commerce. One can argue whether it is spent in a most productive way but it is spent. To put another spin on the snippet in the case of a stimulus going to the glassier, the money gets to the farmer in either case. The question is does the $30 dollars to repair the window move from the baker’s pocket and get to the farmer through the government or does it go to the farmer through the baker. The same $30 dollars gets to the farmer either way.
The “broken window fallacy” puts defense spending into the same bucket as the stimulus (must be a Libertarian cite) but the same can be said for money spent on defense. It is used to pay soldiers who or their families use it so buy stuff. (even overseas it is used in military stores to buy goods available at home). The making of uniforms, armament and munitions employ people in well paying manufacturing jobs. Much of foreign aid is military with the recipients using the moneys to buy weapons made in our factories.
Other foreign aid spending, though small, still leaves a significant portion of the money in the US economy. I saw Bill Clinton addressing a philanthropic convention where he related a story about the government donating $100 million to feed the hungry of a third world country. $75 million of the $100 went to US consultants paid to figure out how to distribute the food. He mentioned that that was not a criticism of the Bush administration because he suspects the same went on in his. At some level, as with the case of the window that didn’t brake, money was made available to businessmen that could be invested in job creation. The government spends the taxes. The question is to whom does the money go and will they spend it in a way that improves society?

In the 35 years I ran the company I spoke to about 50 different organizations interested in acquiring the enterprise. They ranged from venture capitalists, private equity enterprises and large public companies. These were all people looking to make an investment. It is interesting that not one of them ever asked how much tax we pay. I wonder if that suggests that how much taxes may not be an important consideration in their investment decision. However, every single one asked about where the customers are going to come from and how are we going maintain their demand along with what advantages can we create and maintain over others in our industry.

Expecting that my experience can be applied to other businesses, I can’t imagine a restaurateur hiring another chef or waitress without customers lined up at their door regardless of how low the tax rate is. Nor can I imagine, because the tax rate is too high, them not hiring when they are turning customers away. An appropriate influx of money into an economy creates more customers. I also cannot imagine an investor forgoing an opportunity for increasing profits regardless of how much of it they have to give up to taxes. More profit is always better. The tax increase, though fought vehemently before the fact, after the fact becomes just another reality and as long as all in an industry pay the same rate, none are advantaged and life goes on. Aha! What about international competition? Don’t taxes make one less competitive? Competition from lower wage countries creates competition and lowers profits, often to the point where there are no profits. Profits are taxed and enterprises struggling for survival from fierce competition or an economic downturn have no profits and thus no concern for taxes on them.

I realize the above is an oversimplification and does not go into all the nuances of hidden taxes and taxes, such as employment taxes, which reduce the profit and are part of the expense of struggling, as well as profitable businesses. An enterprise buying a commodity that it will transform and resell, does not pay a sales tax on that commodity. When arguments are made on the full amount of taxes paid, they often and correctly point out that included in the price, beside the cost of producing the item, is the profit and tax paid on the profit it generates and this goes on multiple times as things are bough, transformed, sold, bought, transformed, etc., etc. The taxes I have most often herd debated however, are the income, estate and capital gains taxes. This discussion is focused on these in particular because they are coming up for a vote soon.

One can further pick at the window example. For instance, there is a difference
between the glassier, out of work, buying bread and a backer still in business buying a new suit. But I digress. That gets into a whole other discussion. Who should get what and what, if any, is government’s role in that decision. In the spirit of oversimplification, I offer the following, also an oversimplification and open to many complex discussions. If I made $100 profit and paid $30 in taxes, but now have to pay $40, what is left is $60 in my pocket instead of $70. However, if I can make $110 in profit, though I now keep only $66 whereas I would have kept $77 before, I have a $66 profit that is still $6 better than a $60 one. The only reason I would not take an opportunity to make a larger profit from an investment is that I could invest the same money and get more profit from something else. Even there, if the amount I give up to taxes remains the same, taxes do not enter into that decision.

Patriotism

When I was stationed in North Eastern France in the 1960s, during my service as an enlisted man in the Army, several friends and I were in Luxemburg one evening. We were sitting in a sidewalk café, one of many that surrounded a small park in the middle of which was a gazebo where a band was playing. At one point in the evening the band struck up the Stars Spangled Banner and everyone sitting in the various cafes stood up. It was the 4th of July and we were most likely the only Americans in the area. My eyes welled up and as I beamed with pride.
I always considered myself a patriot. I enlisted in the Army and volunteered for service in Vietnam. I have always taken pride in the accomplishments of our great country. However, when I saw some of the flag waving and heard the rhetoric of members of groups calling themselves patriots, I started questioning my own patriotism because my feelings were so far removed from theirs. I started wondering if they indeed are patriots, then how can I be. Then, somewhere along the way I heard a distinction made between two different kinds of patriotism, “ethnic” and “inclusive”. I was relieved to find that I was no less patriotic than I had thought of myself but just not an ethnic patriot.
In the simplest terms, Inclusive patriotism considers anyone a citizen of a nation, regardless of race, religion or ethnicity a legitimate and equal members of the nation. Ethnic nationalism on the other hand, views one particular group as being more legitimate than another. I believe that the various vocal patriotic movements attribute legitimacy to different groupings. Some believe that we are a Christian Nation (a young Southern Islamaphobe, when confronted with a comparison of Islam to Catholicism, responded that Catholics are not Christian), others a nation of European descendents, others an Anglo-Saxon and some still stick to the notion of a white nation. Though the outward agenda of the Tea Party are less government and lower taxes, I believe deep down inside many pine for return to an era when they perceive their group was the Country and everyone else and outsider. I don’t think that most patriots at the Tea Party rallies recognize that the patriot draped in the flag standing next to them is imagining a different country than they and in that country they may be outsiders.

Illegal Immigration

Most acknowledge that illegal immigration is an issue of National concern, however, as yet there have not been any reasonable solutions suggested that are both practical and humane. Some argue that the economy (in normal times at least) needs the work force provided by illegal immigrants. Others point out the strain placed on communities providing social services to them. There is also concern that the logistics of rounding up and deporting many millions of people would be impractical. However, with the hours of dialog I have heard, very little is said about the enterprises who hire illegal aliens thus providing the incentive to breach our borders. And there are many more arguments on both the Right and Left. I propose a program that might mitigate many of the concerns on both sides of the isle.
One problem is that there are many enterprises that employ illegal immigrants at below local wages creating unfair competition for local labor and a strong incentive to come into the US. A major requirement for this or any program to work is a stiff penalty for hiring illegal workers. This would, if enforced, curb the strong desire to come here. Without this we cannot build walls tall enough to keep people out.
The issue of what to do with the millions of illegal immigrants already here is more complex in that deportation is impractical and amnesty is unfair. I propose that we temporarily establish a category for workers who are here illegally. There would be a defined period during which they must apply for a Special Work Permit (Let’s call it a Blue Card). Anyone with a criminal record would not be eligible. This Blue Card would be issued only during this time and only to those who are already here, not to any arriving illegally in the future.
Employers would be allowed to hire anyone who is a US citizen, or an immigrant with a green or blue card or any other legal Work Permit. All laws regarding wages and working conditions would apply to all. Workers with a Blue Card and their dependants could live as any other legal residents as long as they have a valid Blue Card. Beside the normal taxes imposed on all residents of the Country, they would pay an additional tax or penalty. I anticipate that criminalizing employment of illegal workers would increase wages of jobs currently filled by illegal workers. Therefore, after the penalty, their wages would be at about the level they currently are. In a sense, the penalty would be shared by the former employers of illegal aliens, in that they now would need to pay competitive wages, and the formerly illegal immigrants.
Workers with Blue Cards and their immediate families would be eligible to receive all services available to any legal resident as long as they are in possession of the Card. To keep the Permit, they would need to be employed and paying taxes and penalties. In the event they lose a job, there would be a reasonable period of time for the immigrants to find a new one. Should they not find new employment in this period, they would lose the Blue Card and need to leave the country on their own or be deported. If they leave, they would not lose their position in line for legal emigration.
Workers with a Blue Card could apply for permanent residency and go into the same line as others in their country of origin applying for legal entry into the Country. However, if they are deported for any reason, they would lose their right to ever return to the US.
This program is not perfect but I believe it can be implemented. Some issues would be survival of companies that hire labor below rate and the added burden on businesses collecting the penalties. Another problem would be devising a method for identifying and deporting the illegal immigrants without a Blue Cards. Regardless of which program is implemented, there will be many hurdles to cross but I believe that with the program I propose, they will be much lower and less costly and more just.

Free Market Capitalism - A Thumbnail Sketch

Several months ago I tuned into an interview of Michael Steel, Chairman of the Republican National Committee, in which he contrasted the Democrats and Republicans as Democrats looking to Government for solutions while the Republicans look to business. This may be true but it points out that there is a general misunderstanding of the roles of Government and business in a Free Market Capitalist System and for that matter a lack of understanding of free markets. The subject is very complex and people have spent their lives studying and writing about it. I am going to be presumptuous and try to relate my layman’s understanding of the Free Market System. My insight, though at best amateur, is based on 30 years experience as a CEO of a Manufacturing Company, almost 70 years of living in various socio- economic circumstances, books, magazines, broadcasts and a series of lectures entitled “Thinking about Capitalism” by Professor Jerry Z. Muller of The Catholic University of America.
We have been trading commodities in markets since recorded time. Most things were grown or produced for family consumption. To meet the family needs large varieties were grown in small quantity. About a millennium ago people found that they could produce things much more economically if they grew or produced fewer things but in larger quantities. To make this strategy effective there needed to be a place to bring ones surplus and trade it for another’s. As time went on more and more items were traded and new markets created. In the 17th century, the Dutch East India Company was formed to trade luxury commodities acquired by various means, some pretty brutal, from faraway lands. The undertaking was very expensive and required capitol from numerous sources. This created a new market where individuals could provide capitol to ventures in exchange for a share in the anticipated profits. The industrial revolution with its division of labor, created a need for ever more manufacturing workers and labor became another item brought to market. Prior to that and well into the 19th century in Russia, most workers were either slaves or serfs under the control of landowners.

A way to think of the Free Market System is to contrast it to one using central planning as was the case in the Soviet Union before its collapse a few decades ago. This collapse has pretty much invalidated Central Planning and even China is moving to free markets. (It is important to point out that free markets do not imply democracy. Neither China nor Singapore is a democracy but both, with Singapore with the freest markets, are practice free market economics. However there are no democracies that do not employ Free Market Systems.) In central planning, the planner, most often the Government, develops a plan (in the case of the Soviets it was a 5 year plan) and based on that plan decides how much of what to produce and when and at what price to sell it. The Free Market System, on the other hand, assumes that understanding what, how much, when and at what price is far too complex an undertaking and a more efficient way to achieve this is to allow the markets to guide these decisions with individuals and enterprises, motivated by self interest, determining what and how much to make and at what price to sell it.
The System counts on the individual self-interest resulting in a collective good for society. The actions of individuals and enterprises are not expected to be, nor indeed are, altruistic. The goal is to maximize the benefit to the individual and in a Capitalist system to the owners of an enterprise. The term capitalist indicates that ownership of the means of production is private instead of in the hands of the Government. One of the many broad societal benefits is the reduction in price. As the demand for a good or service increases and supply dwindles, prices go up and new enterprises come to life to meet this demand. This new competition brings down prices making more and more products and services available to a broader range of society. An example often cited is that of silk stockings, where they were once available to only the wealthiest ladies, with competition created through a Free Market System, they were made available to the “girls working in factories”.
At a point, equilibrium is reached when the prices start approaching the costs (perfect competition). The natural forces want to drive a market toward perfect competition bringing down prices but reducing profits. A way of increasing or maintaining profit, which is also beneficial to society, is to differentiate. The more differentiated a product or service the greater the opportunity for larger gains. This quest for differentiation leads to innovation by providing new, better and cheaper products and services. Another benefit (my favorite) of free markets is the creation of markets for more and more individual characteristics, skills and talents. There is now a market for large men in pro football, tall men in basketball, pretty women in modeling and news casting, antisocial individuals in computer programming (sorry computer fanatics), insecure people in the theater, and attention deficit disordered ons in upper management. As time goes by more and more markets will arise for what are now considered useless attributes or even shortcomings. The system works and the economic success of the United States proves it.
Other ways of maximizing profits, however, actually work against the general good. Some of these are driving wages down, eliminating competition through unethical means such as predatory pricing, conspiring to fix prices, and creating monopolies. Often actions that benefit the individual or enterprise like those leading to pollution, are also detrimental to society. A single small firm may not do any damage but the effect of large numbers of polluters can be devastating. I liken this to a family using antibacterial soaps. It is very good for the family in that it will decrease the number of ailments. However the overuse of antibacterial soaps broadly by a society leads to an evolution of new and increasingly more difficult to defeat bacteria which is bad for society and ultimately the family in question.
Following is an excerpt from Professor Muller’s notes regarding Adam Smith’s thoughts. Adam Smith is highly regarded by today’s business community though the fact that he was a Moral Philosopher and in his later years worked as a public servant, embarrasses many conservatives.
“Adam Smith (1723-1790) began his career as a Professor of Moral Philosophy, and he took his moral concerns into his study of what he called “commercial society” and the new science of political economy. The goal of the market economy, as Smith conceived of it, was to make possible ongoing rise in the standard of living of the vast majority of the population. In The Wealth of Nations (1776), he laid out a model that explained how a competitive market channeled self-interest in socially beneficial directions. It did so by making commodities available at cheaper prices, affordable by ever-broader portions of the population. This is the famous “invisible hand” – a metaphor for institutional arrangements that channel self-interest toward socially desirable outcomes.”
Today there is a lot of chatter about “too much Government”, “too little Government”, etc. At an intellectual level, the question should be whether the markets can indeed regulate themselves and what if any is the role and the size of Government in a Free Market Capitalist Society. Unfortunately, politics does not operate on an intellectual level. Following is another excerpt from Professor Muller’s notes regarding Adam Smith’s thoughts.
“Smith thought that commercial society had the potential of making people not only better off materially, but also of improving their character. It had a propensity to promote certain positive character traits, such as industriousness and probity (honesty). It held out the possibility of a society in which most people would be more self-controlled, prudent, and free. That was no small achievement. Under the right institutional conditions, a capitalist society could make people better, as well as better off. But where the rule of law was lacking – or where there was inequality before the law, as in the case of slavery or of colonial companies- commerce could lead to immoral outcomes.”
There are a number of broad categories of markets; a market for goods and services, a market for labor and one for capital. In each of these you have buyers and sellers. The providers of goods and services, besides buying other goods also buy labor. Because the higher their cost, the lower the profits, the buyers want to keep the cost of materials and labor as low as possible. The providers of labor, on the other hand, also for self serving reasons want to get the best price for their labor. The capital markets are more complex in that almost everyone in the industrialized world today is both providing and consuming capital. When a worker puts their savings in a bank they are in fact providing capitol and when they borrow, they consume capitol. Enterprises borrow money and exchange equity for capitol and uses profits to invest in means for increasing profits. An individual taking out a loan against their credit card or a mortgage is consuming capital as is an enterprise that borrows money from a bank or sells shares to an investor.
In general when people think of individuals selling labor they think of the factory worker. However the CEO, unless they are the owner of an enterprise, sells his labor as do the athletes or actors earning millions. Maybe it is better to think of labor as falling into two broad categories; workers and professionals. In fact the law treats the two groups differently. I don’t know if it is because workers are considered inferior or union activity, but laws are passed to protect them that do not apply to professionals. I also suspect that the general public does not think of professionals as selling labor and tend to lump them in with business people.
The sellers of goods and services should also be segmented. There are the owner operated businesses and the businesses that are owned by a diverse group of individuals through stocks in the enterprise. Generally small businesses fall into the owner operated enterprises and are thought of as entrepreneurial while large enterprises not operated by owners, though generally considered entrepreneurial, are in fact bureaucracies run by administrators. The person with a one man plumbing business, a farmer, restaurant owner a partner in a law office a doctor with their own practice all are entrepreneurs while the CEO of a multi-billion public corporation, a doctor working in a hospital, a corporate lawyer, a plumber working for someone, a policeman and a farm hand are all selling their labor. A case in point is the recent California Republican primaries won by Meg Whitman and Carly Fiorina. Both are painted with the same brush but Meg was the founder of e-Bey and thus an entrepreneur while Carly was the CEO of Hewlett Packard, an administrator, and not a particularly good one at that. (She was fired by the Board)
Getting back to Michael Steel, I don’t believe his comparison of government and business is valid. The government, however good or bad, large or small has as it responsibility the well being of the society which has put it into office. Leaders of business on the other hand are there to maximize benefit to themselves or in the case of administrators, to the owners and occasionally to other constituencies and any benefit derived by the society is strictly coincidental. The Markets are constantly attacked from both the left and the right, each vying for legislation to advantage their constituencies, the sellers and buyers of labor. When properly reigned in, the free market has proven to serve the general good effectively, certainly more so than the competing systems. Yes, Democrats look to the Government. Republicans however, don’t look to business but to the modern equivalent of aristocracy. The free market, unfettered, has no morals, respects no communities, and constantly innovates and destroys. It supports self-interest in whatever fashion and by whatever means. It is innovative and this innovation, often led by intellectuals and the “newly moneyed” has historically been considered a threat to the existing institutions. The responsibility for conserving them fell to the aristocrats in the early stages and their equivalent today. Following is another excerpt from Professor Muller’s notes.
Edmund Burke (1729-1797) offered a conservative analysis of the hazards posed by some forms of capitalism to the politics and culture of an already commercialized society. As a member of Parliament, he became the leading critic of the British East India Company. He argued that the company’s agents, in search of gain and unrestrained by the inherited culture of England, were riding roughshod over traditional Indian society. Burke then applied this analysis to the French Revolution in “Reflections on the Revolution in France” (1790), his seminal work of conservative thought. He argued that the revolution was propelled into dangerous radicalism by a combination of radical intellectuals and newly rich entrepreneurs who were oriented toward risk and failed to appreciate the existing institutions and their society.
The conservatives want to preserve the institutions, customs and mores but the free market with its innovation is always assailing these. Innovation is threatening in that its outcome is unpredictable and intellectuals who studied, discussed and encouraged change were suspect from the very earliest times. At the onset of Free Market Capitalism, the task of reigning in this innovation and the intellectuals promoting them was left to the aristocracy. It was up to them to preserve the institutions and mores. Here, where we have no aristocracy, that role is relegated to the old moneyed gentry who, to preserve their advantage preserve the institutions. In Burkes eyes the restraints must come from the “inherited culture” (aristocracy) and not the law (government).
Most swords have two sharp edges. There is a downside to all the innovation facilitated by free markets. As new things arise, old things die. As enterprises and industries are supplanted by competition or technology, in the wake they leave behind people in great distress. The slave labor that created a tremendous agricultural and great wealth to plantation owners in the south left behind a large population without means, a lost culture and tremendous obstacles to integration into society. Competition from abroad (remember that markets, if free, know no borders) devastated the textile and shoe industries leaving hundreds of thousands (it may be millions) unemployed. In the current times more and more well paying manufacturing jobs are being lost and there are new jobs emerging requiring totally different skills often paying lower wages. I was watching proceedings of an American Enterprise Institute, a conservative think tank and I heard Arthur Brooks, the speaker use a term I had not heard before when referring to the bottom of the socio-economic ladder, “free riders”. I believe that this suggests that these people through their choice, are along for the ride without contributing. When thinking back to the days of slavery, I wonder if the slaves or the masters were the free riders.
Republicans, being conservative want to restrain the market by conserving the existing institutions and providing an advantage in the market to the new aristocracy on whom they rely to maintain the “inherited culture”. Democrats look to Government, through its policies and laws to provide this restraint and to make sure that the damage done to the people at the bottom by the displacement caused by innovation is contained. Bothe in their way trying to make sure that the markets work for the general good, one for the good of community, the other for the good of society. I am not critical of self interest when properly guided. The System works. But we need to keep in mind that any societal benefit derived through business is strictly coincidental. In fact I suspect that any CEO of a public company who makes a decision to advance the public good at the expense of profits or future growth would keep a few law firms in business fighting suits by shareholders.