Honest People Built our Nation

“Not Gvt. but honest people built our nation” read the marquee in front of a beauty product wholesaler. I saw this a few weeks ago and assume it is in response to the Republican campaign against President Obama claiming he said that “you didn’t build your business”. That got me thinking about a couple of things. One is; what does it mean to “build” something, the other; what does being “honest” have to do with building anything including a business?

I will use the analogy of building a house for its simplicity. The process can be extended then to building a business or anything else for that matter.
· To begin with, there needs to be a concept of the house in the head of a thinker.
· Then, based on that concept, an architect needs to draw up the plans.
· Typically a bank provides the financing needed to retain the labor and buy the materials.
· A contractor manages the construction; taking the architect’s plan, he gets permits, hires workers, gets the materials and manages the construction.
· Workers with various skills put the materials together following the architect’s plans and the contractor’s instructions.
Beside the very direct activities listed above there are many tangential activities that the primary ones relied on for the finished house. Many of those required societies inputs to accomplish. The President spoke about the roads needed to transport the materials and labor, the education of the workers, and the system of governance that allowed all these things to happen. He stressed that, though individual effort is required, to build “it” there is a collective effort required on the part of society that makes the project possible.

Unfortunately we, and particularly the conservatives, take a simplistic view and pretty much ignore all but the effort of the heroic individual. Thich Nhat Hanh, a Vietnamese Buddhist monk writes about the difference between conventional thinking and “mindful” thinking pointing out that, for example, we think of our pulmonary system as primarily our lungs with other parts of our body participating. He says that in reality the system is much larger and more inclusive, extending well beyond ourselves. He points out that the air we exhale contains CO2 that is scrubbed by the trees returning the oxygen back into the air that we then inhale. So that as a minimum, our pulmonary system includes not only things internal to us but also external elements without which the process would not work.

Getting back to the building of the house. So who built the house? Was it the person with the concept; the architect; the contractor; the laborers or the banker? I think each would claim that they built the house whereas the fact of the matter is that it required all of them. Having approached the question in this fashion all would admit the other’s participation and the ensuing argument then would be their relative importance with each claiming their position at the top. (In the case of the beauty product wholesaler, he did non of the above, his parents having started the business.)

Now where does the notion of honest men come from? None of the interrelated tasks have honesty as a prerequisite for proper accomplishment. My guess is that in the mind of the individual displaying the sign, he may be thinking businessmen when he says people and attributing them with a virtue, which, though irrelevant, some may have while some don’t even know the meaning of the word. But he may be including the laborers in his “honest people”. Well the same can be said about them. There is no correlation between carpentry skills and honesty.

So, did honest people build our great nation? Ultimately most the activities required to build our nation were carried out by mepeople; the visionaries, architects, financiers, managers and not least, the laborers whether paid or as in the case of the slaves, unpaid (had to work the slaves in as a reminder). Those who think they built anything alone are delusional.

Did the government build our nation? We tend to confuse the terms government and society. There is a hierarchy that extends from the individual to family, community and society. At a philosophical level there is a difference between the order and more importantly, the degree of importance between the conservatives and progressives regarding this hierarchy. The conservatives put a strong emphasis on the individual and very little on society whereas progressives put strong emphasis on society and less on the individual. Once you get beyond the individual and family, to a community or society, they need governance. It is a system of setting rules and regulations and the means of enforcing them for the group to function. Gov Romeny wrongly stated that corporations are people. They are not. He should have said that their functions are performed by people and the profits derived accrue to people. In the same sense governments are not people but the functions are performed by people and the consequences of the activities, for better or worse affect people.

Government did not build our nation but people did. People built our great nation whether they worked for the governing bodies directly or for private enterprises. Whether they were writing the constitution, tilling the fields, creating businesses, building railroads and skyscrapers, allocating capital, picking cotton or teaching our youth.

Were the builders of our nation honest men? Were the slave owners honest men? Was taking the Native American’s land in exchange for trinkets or nothing at all an act of honest men? IBM during its early days competing with National Cash Register purchased their competitor’s cash registers, damaged them and then sold them as NCR products causing great damage to the NRC name. Was Thomas J Watson, IBM’s founder, who took the “traveling salesmen” who at that time had a reputation for lying, cheating and womanizing and dressed them in neat suits and ties without changing their behavior making them seem trustworthy, an honest man? Not all businesses succeeded using underhanded methods though many did. Government also had its share of shady characters.

So the marquee was partially right. Our great nation was built by people, some working for the common good of society and some driven by self interest with each including some honest and some not so honest people. And by the way along with a whole bunch of luck along the way.

Proposed New Capitalism

Today there is much discussion of income inequality. Though there are many complex reasons, most accept the argument that it is not good for a society, not just from the standpoint of justice but more because the loss of income for the larger portion of the population reduces demand affecting both business and labor. Following is a possible solution that may not be offensive to either end of the political spectrum. Capital is primarily risked on plant and to a slightly lesser extent materials. Labor then takes the material, using the plant and equipment, and converts it adding value. The resultant then is sold at a profit. Currently, the entire profit (with the exception of corporations with profit sharing plans) goes to the providers of the capital (owners)  My proposal would let the providers of capital reap the profit from its use on plant and materials and let labor claim the profit derived from the portion attributable to labor. (in labor I include direct, indirect, management and engineering and administrative) the distribution of profit to labor would be in proportion to base pay (the assumption is that there is some relationship between pay and contribution). Furthermore labor would have representation on the board of directors in proportion to the labor's input to the total cost.  Example: let's say there is a product selling for 10.00. The portion of the plant going into it  is $2.00, the material is $4.00 and the labor is $2.00. The $2.00 dollars remaining then is profit. Since the capital was at risk on the $6.00 and the labor was $2.00, let 3/4 of the profit or $1.50 go to the providers of the capital and 1/4 or $.50 go to labor.  A company with sales of $100 million with 500 employees making a 15percent profit and 50 percent of costs being labor, would have $7.5 million of profits divided  Between the 500 employees. The average employee would get $15,000. So if there are 400 workers earning $30,000 they would get $11,400 each, 90 engineers supervises and managers earning $70,000 get $26,000, 9 executives earning $100,000 would get $37,500 and the CEO earning $1,000,000 gets $371,000. Furthermore, to retain profits for growth,  regulations could be created allowing the corporation to pay some predetermine portion of the profit in shares of the company. This way everyone participating in the enterprise works toward the profit goal and shares in the success.

Conservatism, Religion and Status of Women

In recent months both Right and Left have entered into heated debate affecting society as a whole and particularly women. The left argues from a standpoint of women’s rights to contraception and the Right, religious freedom. This debate made me ponder a possible historic basis underlying the two positions.

Agrarian societies are by their nature patriarchal. One can think of a farm as a business enterprise requiring a number of chores and responsibilities. Because of man’s strength and aggression along with the fact that a woman is somewhat restricted before and after childbirth, the chores in the fields tended to go to the man. For maximum efficiency, in an undertaking involving a number of individuals there needs to be someone to organize the tasks. Because of their stronger involvement in the actual task of faming, the role of manager went to the man. The man became the head of the enterprise, the farm, and by extension, head of the household.

As societies evolved men left the farms and went to work in enterprises (factories etc.) where someone else was the manager and though they maintained the title of head of household, they did so out of custom only. The role of manager no longer had a natural rationale. (I guess some would argue that a household is an enterprise needing a manager. But if that were the case, for the same reasons a man was suited to manage a farm, the woman would be more appropriate.) Today the bulk of the Social Conservatives come from rural areas and not only tradition but their experience, tends to supports an inferior position for women.

Religion is another factor that influences thinking regarding women’s issues. As societies grew, with larger numbers of people living in close proximity, it became necessary to constrain some natural human behaviors and religious institutions became the law-makers. A key issue requiring laws was the transfer of lands from generation to generation and it became imperative that paternity was clearly established. The only way to do this was to make sure that the woman mated only with the head of the farm so any offspring were surely his. Therefore a major role of religious establishment became control of sexual behavior, particularly of women, pretty much banning all sexual activity except that required for procreation. Since most, if not all, modern religions had their origins in primarily agrarian societies, and early societies being patriarchal, it only made sense the religious institutions not only controlled sexual behavior but reinforced the position of man in the family. Beside coming from rural cultures, Social Conservatives tend to also be more religious and more fundamentalist all of which reinforces not only the belief in the naturally inferior position of women but also in restricting their sexual activity.

Nuclear Fusion-Energy Source of the future?

With this being the anniversary of the nuclear reactor meltdown in Japan, there has been a lot of talk about the future of nuclear energy. This made me think about nuclear fusion about which I have not heard nor seen anything in the popular press.

About ten years ago I visited Japan’s nuclear fusion facility. There were large power lines going into and out of the facility. I was told by my hosts that the surrounding villages were actually powered by electricity produced with nuclear fusion. The only problem was that more power was consumed than created. At that time scientists there were projecting that 2016 would be a pivotal year where the amount of energy produced would start becoming larger than the energy consumed in the process.

Following is a little background on nuclear fusion from a layman’s perspective. The current atomic energy and the atomic bomb for that matter, rely on fission, which essentially splits an atom of one material into two separate materials of a slightly smaller combined mass. The mass that is lost is converted into energy. As the meltdown at Fukushima demonstrated, fission is a risky process with heavy costs in obtaining, refining, containing and disposing of the source material. In fusion, on the other hand, two separate materials are combined at an atomic level with the resulting material also having a little less mass. The lost mass, as in the case of fission, is converted to energy. Fusion (the hydrogen bomb relied on fusion instead of fission) has many advantages over fission. First of all, the fuel used is seawater. Though there is still radiation involved, the ½ life of the waste material is very short compared to that in the current atomic energy process and therefore the containment and disposal become much less of a problem.

At the time I visited the Japanese facility, there were also fusion reactors being refined in a number of facilities around the world. Before I retired, our company made a component that went into an instrument that measured temperature gradients in the reactors. Beside Japan we made components for Princeton University and general Atomic here in the US, Hydro Quebec in Canada, the Max Plank Institute in Germany and the French atomic energy organization. I had an opportunity to interaction with scientist involved, though not often and not on a deep technical level and had formed the impression that nuclear fusion, as a source of energy, had long transitioned from the feasibility stage to an engineering stage. I believe engineering problems are solvable. The question comes down to resources and time. In looking toward renewable energy in the future, our government is adequately funding this development.

Santorum's Family Values

Last week I heard Rick Santorum, the GOP Presidential Candidate, talk about the importance of family to the well-being of our society. I agree with much of his commentary, though I would not put the value of family in the context of religious morality.

In his discussion he mentioned statistics supporting family structure indicating the difference in poverty rates and incarceration rates of two parent households versus single parent ones. The statistic that jumped out at me was one that indicated that 79% of individuals behind bars come from single parent households. A couple of years ago I saw a PBS program that highlighted kindergarten students in a Harlem school and then showed the same students as young adults. The thing that struck me was that, though they were very poor, the students that came from two parent homes on the whole did about as well as the general society, most going on to college, some post high school education or working in “good” jobs. Few of the kids from single-family homes continued education past high school with some dropping out and a number winding up in jail. This story, though only one “data point” supports Santorum’s argument for the value of a family.

Last decade there was a controversial book written, I recall neither the name of the author or the exact title but the thing that made the book controversial is that the author looked at IQ as a function of race, braking it up into people of African, Asian and European roots. He concluded that though they all fell into “normal distributions”, the peaks of African descendants was shifted to lower and Asian to higher levels. As a sidebar he also found that the IQ of the prison population was at the lowest end of any of the distributions and not accounted for by the fact that there is a higher percentage of African descendants in prisons. Intuitively this made sense to me. People who wind up in jail for the most part have either not figured out the risks of committing a crime or have not figured out how not to get caught.

Since Santorum’s statistics show that the bulk of prisoners come from single-family homes and the above author that the bulk of prisoners have low IQs, should one conclude that people from single-family homes have lower IQs? That may be the case but there may be factors other than family structure to consider. Tabor Mata, a Canadian physician who wrote several books on addiction and childhood development, postulates (I wrote about this in an earlier post on my blog “Society’s Impact on Good Parenting) that when we humans enter the world, our brains are not yet physiologically fully developed and need another year or two to finish this development. To do so properly, infants need a stress free nurturing environment. In the last couple of decades there has been a stagnation of wages and increasing costs for lodging and food. This situation puts many households under a lot of stress, I would think particularly single families. If Dr. Meta is right, this “stress” in the household interferes with proper childhood development and it is the reduction of stress with two people sharing the parenting not the esoteric nobility nor religious virtue of family that has a positive affect on our society. I suspect that children raised in a two parent setting where both parents work and struggle to survive, would also suffer and children raised in a stress free single parent environment would do just fine. Government policies have an impact in that they can affect childhood development. For example, the affect of the Welfare Reform of the 90s I believe, though it looked good on paper, was catastrophic for childhood development and we as a society will suffer the consequences. The reform essentially limited the time a mother on welfare could receive benefits, forcing her into the workplace instead of tending to the children.. Another policy issue is the low minimum wage we have in this Country. It does two things. First it can force both parents to work and second, the low wages makes childcare affordable, making it easier for both parents to work. I believe in the long term, the answer is to create an environment where all children can properly develop be it through encouraging two parent households or otherwise. A two parent family is a help but probably is not the only answer. The key is to reduce stress allowing a parent to calmly see a child through the first few formative years.

Santorum also attributed (though I may be stretching things a bit here) a certain nobility to family, church and community with government trying to diminish it. Here Rick and I part company. Though I will admit that in many cases, a family structure can have advantages to a society, there is no evidence that it has any ethical advantages. After all, the slave owners were good family men who I am sure went to church and were upstanding members of their communities. The communities in the South that forced people of color to ride in the back of a bus and drink from separate fountains were made up of good churchgoing families. Following passage of the Equal Rights Amendment, the white congregations that established parish schools to continue segregation were made up of families. These acts were far from noble and no different than what I am sure single individuals at that time and in that place did.

Under Nazi occupation, France’s motto was changed from “Liberty, Equality, Fraternity”; to “Work, Family, Country” (I wonder how that motto would play on the Right today in our Country?). I am sure that the Nazi Storm Troopers imprisoning and killing countless Jews came from good German church going families. Stalin, who murdered more than a million of his own people, though an atheist, was a family man. There probably are no stronger family ties than exist within primitive Islamic countries like Afghanistan and Pakistan yet they oppress women. So where was family nobility?

Yesterday Santorum went further, criticized President Obama for wanting to expand attendance at college claiming the President wants to brainwash our children molding them in his own image whereas Rick would want them to be made into the image of their parents. Though I doubt that the President really wants a country full of people like him, he certainly would not want a county peopled with children carrying over the values of the segregationist South. Fortunately most of the families were not fully effective in passing these values onto their children and we as a society are better for it. Unfortunately a few families were successful. Old beliefs need to be challenged and often discarded and replaced by ones that advance the prosperity and quality of our whole society and not just their family, church and community.

“Politics Based on the Bible”

In a speech last week Rick Sentorum, front runner for the Republican nomination for President severely criticized President Obama, stating that his policies are not “based on the Bible”. If not basing policies on the Bible is very wrong, I assume a President basing his policies on the Bible would be a very right thing to do, and Sentorum certainly promises to do so.

If a President made policies based instead of on the Bible, the Torah, would that still be the right thing? How about the Qur-an? What about the Bhagavad-Gita or the writings of Confucius? Sentorum would argue that the Founding Fathers intended for our great Nation to be based on Christian teachings even though there is nothing to support this. There was no need to mention it in the Constitution because Christianity was assumed, and furthermore, the term“ Creator” in the Declaration of Independence really meant, not only the God of Abraham but the Christian interpretation of the God of Abraham.

We are rightly critical of the theocratic government existing in Iran and apprehensive of a
reinstatement of one in Afghanistan so let’s not go down that path and establish a theocracy here. A theocracy whether an Islamic or one that the very Orthodox Jews in Israel struggle for or one aspired to by Fundamentalist Christians here in the US, is still a theocracy and anathema to our most basic principles. I can’t see how Sentorums rhetoric can be interpreted other than a promise of a State governed on Biblical principles. Rick, that’s a theocracy! Sentorum was critical of the Government imposing its ideology on Churches during this last healthcare/contraceptive debate but apparently insists on the establishment of policies based on a religious writing by which all the people, regardless of religious preference would have to live.

If a tree falls in the forest - revisited

In one of the early posts I wrote about my answer to a Zen riddle. If a tree falls in the forest and there is no one to hear it, is there a sound? My answer was that sound needs both an originator (the vibrating air created by a falling tree) and a sensor (our ear) along with the ability to process the sensation (the chemistry of our brain). In the post I expanded the answer saying that without someone there, not only is there no sound, there is no forest nor tree, only empty space with tiny bits of matter and energy swirling around. The other day I was pondering emptiness and thought of a more tangible example of there being nothing but emptiness without a sensor and a processor.

We are surrounded by a multitude of vibrating photons zipping all around us. A small segment of these we can see with our eyes (visual spectrum), others we can feel on our skin (infrared). Also zooming around us are photons of longer wavelength (radio waves) which we neither see, smell, hear nor feel. The sources of this long wave radiation are varied, some known and others unknown. A certain portion of these waves we have generated ourselves in the form of radio and TV signals. Because we cannot sense them, though we may be in their midst, we are totally unaware of their existence. However, out of this jumble of energy, with a proper antenna we can detect these photons and with the aid of the processor in a TV set and a screen, we can view what to our eyes and mind appears as scenes of amazing clarity. In this context, the question would be; if a TV station sends a signal and there is no antenna nor TV is there a picture? The picture is made when the waves are captured with the antenna, converted in the TV receiver and picture projected on a screen. No TV, no picture. Without a TV, though there are signals emitted in some orderly fashion, they are still only waves.

So if there is no one or nothing to sense and process information, just as without a antenna and TV there is nothing but empty space with subatomic bits of matter and energy zipping around and no sound, no tree, no forest and certainly no picture. My feeling is that in the greater scheme of things, our sensing and processing capability is very limited as is our understanding of the universe and its origin. How does a chimp see the world, a fish, a worm? How much further from the truth are they?

In relatively recent times, as with the example of the TV, we have developed numerous sensors and converters that translate un-sensed activities within our “emptiness” into ones we can indeed see, smell, hear or feel moving them into our realm of consciousness. As time goes by, more and more such will be devised and with that our understanding of the universe will continue to expand. However, I believe that because of our brain’s capacity and the limitation of our reasoning abilities we will probably still only come to know at best only one billionth of what there is to know. Or will we evolve to where it grows to two billionths?

Transformation of Capitalism

Today there is much said about the rise of “State Capitalism” given the recent economic successes in China, Brazil and Singapore. In essence, over the next several decades traditional Free Market Capitalism will be competing with the new version for world dominance. The hope for the West is that the predictions of the disadvantages of government involvement will start to show once the novelty has abated. My own feeling is that some transformed version of traditional Capitalism, other than State Capitalism will evolve and endure through the twenty first century.

Over the last several millennia the proceeds of enterprises have gone to different segment of a society depending on the technologies, major contributing factors to the success of enterprises and the sources of power at the time. During the medieval era with city-states and baronets fighting each other for wealth and power, the excess output of a society went to heads of armies. They were the ones providing the key element, protection from other warlords. In time the feudal system faded and city-states were replaced by national governments. Farmers no longer needed protection from the neighboring lord and the value of protection declined. The Free Market expanded and the industrial revolution matured. Countries produced beyond their needs and trade between far corners of the world flourished. The key element for a successful venture now, instead of protection, became capital. There was an overabundance of labor and skills required of factory workers were low, the population was growing and markets were expanding. If you could find money for plant and inventory, if a manufacturer, or for a ship and crew you were in business. Without capital, no matter what your skill you would have a hard time getting things off the ground.

Over time two primary economic systems evolved, the Free Market and more recently the Socialist System with Communism at its extreme. The free market, as it churns, building and destroying, leaves in its wake a segment of the population in poverty. To ensure the markets continued viability, governments with functioning market systems developed “safety nets” in the form of assistance for the impoverished. Therefore today there are no truly Free Market States but in reality Free Market Capitalist Welfare States. Each of the market system practices some degree of Socialism. It varies in degree from that of the United States at one end to the European countries at the other. In both the Capitalist and Socialist systems the main ingredient is still capitol and proceeds go to the providers of the capital, however the sources of capital differ. In the Free Market System capital is provided by individuals, whereas in the Socialist System, by the entire population through the states. The proceeds in one case go to individuals and in the other to the population as a whole. From the standpoint of the workers inside an enterprise it looks pretty much the same since the result of their efforts go to others. (As a practical matter the statement that things look the same is an obvious exaggeration because the management styles employed by the two are vastly different. Though in both cases the workers are paid to work for someone else’s benefit.)

The biggest difference between the two, and it is a big one, is that the market system counts on market feedback for business decision whereas the other counts on governmental central planning. All of the interdependencies affecting business decisions are too complex to try to plan. If you think about what is involved in putting a simple thing like a chicken on a dinner table, it is astounding. A large component of chicken feed consists of anchovies that come from the Pacific. So when there is a period of an active El Nino, waters warm, plankton disappears, anchovies move and the price of chicken goes up. If you add to this the farm implements requiring various materials and technologies not to mention the mining to extract the materials and what goes into the boats catching the anchovies and the trucks and trains transporting, not only the chickens and the feed but, all the other stuff. The argument that the market, giving its feedback mechanism and ability to respond quickly to establish how much of what is needed, and at what price is much more affective than a human plan, has great merit. However, with today’s great advances in computer science, I am not sure for how much longer the argument will be valid. A couple of decades ago it was thought that, given the complexity of variables in the game of chess, no computer will ever beat a true chess master. Big Blue proved that assumption wrong.

In the competition between the Free Market System and the Communism of the Soviet Union, the markets won though there are still pockets of Communism remaining, they are fading fast. Over the last several decades a new system is evolving, State Capitalism. Here basically the state is a primary investor in an enterprise but instead of relying on central planning and being the only provider of capital, it opens the enterprise up to market forces. In countries practicing State Capitalism, though private enterprises may be allowed, they must compete with the much larger government supported ones. Time will tell.

As discussed above, over time the proceeds of the enterprise have gone to provider of the most important element, protection during feudal times and capital during more recent industrial times. If there is merit to that reasoning, than what is the next precious element to supersede capital? Toward the end of the last century there came to be what was called the Dot-Comm bubble. Large numbers of enterprises erupted, many of which have since faded. The driver of the exuberance was technology. Intellect started to seriously compete with capital. Though capital still remained a requirement, an enterprise was not expected to get off the ground without the brainpower of creative “nerds”. There were a number of reasons the bubble burst. The fact that the structure necessary to support the rapidly evolving technologies was not yet in place certainly was one. Another was that as with any revolutionary development more players jump into the game than it can sustain and a number fall by the wayside. There are also a number of conspiracy theories that I don’t subscribe to and won’t get into here.

There is another piece of evidence that intellect is not only competing with, but starting to surpass capital in value. Several decades ago the average pay of a CEO was about 25 times that of the average worker. Today it is 250 times higher. Part of the contribution to the rise in the cost of healthcare and education is a similar rise in income for doctors and educators. The income of professional athletes and entertainers has grown much more rapidly than the factory and service workers. This all is a result of capital yielding to individual talent.

A move needs to start somewhere and here it has started at the highest level of skill and I believe that this transfer of power is going to continue and expand to include the individuals working in factories and in service positions. As capital starts losing to intellect and is surpassed as the more important element to the success of an enterprise, with it will come a shift in the beneficiaries from the providers of capital to providers of skill. Innovation will continue as the driver for differentiation and thus profits and already I see signs of recognition that a significant portion of innovation comes from the workers on the floor. I have noticed in a few discussions about keeping jobs in the US where the proponents argue that having manufacturing done overseas allows workers there to learn the processes and their experience will leads to innovation. In the Wealth of Nations written in the seventeen hundreds, Adam Smith also talks about many of the ideas leading to technological improvements originating with the workers. A couple of years ago I saw Jack Welch on a cable news show where he talked about the necessity of shifting the priority of an enterprise from the stockholders to customers and workers.

In the immediate future, I believe Free Market Capitalism will coexist and continue competing with State Capitalism and in time both will evolve to a system that primarily values and rewards skills. This is not the Socialist system where the proceeds go to the state or the Capitalist system where again the proceeds go to individual owners. (In both cases proceeds go to the providers of capital.) In the newly transformed Capitalism, the benefit will be shared between providers of capital and those of skill with capital taking the back seat.

Job Creation Contradicted

All election campaigns are fraught with contradictions. An enormous one I’ve noticed in this presidential contest relates to “job creation”. The point that the Republicans are trying to make is that, to cut unemployment we need less government since it is the private sector and not government that crates jobs. Government only interferes making it harder. So the mantra on the Right is “government can’t create jobs”. Having repeated this, with the next breath Governor Romney talks about all the jobs he created while Governor of Massachusetts and Speaker Gingrich takes credit for the jobs that he created while Speaker. Maybe I’m missing a point but, if while you were in government, under your leadership, jobs were created, then it is not much of a stretch to conclude that at least in your mind, governments do indeed create jobs. Very many, in fact, when you were in charge and even more when again you take the reigns.

My disappointment is not with the contradiction as much as with the media. When interviewing a candidate who makes contradictory statements, the interviewer doesn’t require that the contradiction be explained. In this case, does or does not the government create jobs and in either case, how? This would be called a “gotcha” question and the interviewer criticized by the proponents of the candidate for asking it. Unfortunately there is a tacit understanding that the interviewer will not ask tough questions of their interviewees for fear that if they do, no one will agree to be interviewed by them. So the politicians will continue spewing talking points no matter how contradictory without challenge.

Our Two Party System

A number of systems of governance are employed throughout the modern world. There is the one party system used by the former Soviet Union where delegates are elected to a ruling body, which in turn selects the country’s leaders. The people have a choice in that they select the delegates or so the theory goes. In a parliamentary system representatives of many parties are elected to the ruling body. Most often there is not a single party that claims the majority and a coalition of various parties is formed to select the leaders.

Here in the US, though in fact we have candidates from various parties (Socialist & Libertarian for example) running in elections, as a practical matter we really have only two major parties that represent the entire electorate. Whereas in the parliamentary systems there are very many small groups representing special interests, Israel for example has 14 parties with seats in the Knesset and some of the smaller of these are made up of multiple parties and in Germany the ruling coalition headed by Angela Merkel is made up of the Christian Democratic Union and the Christian Social Union in Bavaria with the Social Democratic Party of Germany, The Left and the Alliance ‘90/The Greens the minority parties, in the two party system all the various special interest somehow, with ease or difficulty, need to be “shoe horned” into one of the two major parties. This represents a challenge to the candidates as is evidenced in the current primary battle for the presidency where, to attract primary voters, they have to take positions which will potentially alienate the majority of voters in the final election.

In our Free Market Capitalist System there is a natural competition between those selling and buying labor with each looking for advantages over the other. The major function of government is ensuring the prosperity of “we the people” (society) and in so doing try to even the “playing field” between these competing entities. From the most basic perspective, our two parties have aligned themselves, the Republicans with those earning their living from profits and rent and the Democrats with those living on wages. That is the principle difference between the two. Adam Smith in the Wealth of Nations writes about people’s subsistence coming from one of three sources, profits, rents and wages. Even during his simpler times there was some intermingling of the three. (Part of a shopkeeper’s earnings was in essence wages from his labor in the store with the balance coming from profits on capital he has invested in facilities and product.) Corporations were few and primarily made up of trading companies like the East India. Only a very small part of the population held shares in corporations. Most other businesses were either sole proprietorships or partnerships.

Today, though there still are small businesses like the one described above with income coming from a combination of wages and profits, there are a very large number of corporations many of which are publicly held. The ownership of the shares ranges from a large number of shares owned by an individual to institutional investors representing large numbers of individual each owning a small number of shares. It becomes a bit more difficult to place people into Smith’s three groupings of income from profit, rent and wages. Because of this complexity, in the following discussion relating to political parties, I will put those living primarily on profit or rent and the self employed in the “business” category and those living primarily on wages paid by others into the category of “labor”.

Beside the issue of how one makes a living there are a number of other considerations like freedom, equality, justice, opportunity, fairness and the environment to mention a few that tend to unite people. In a two party system, as mentioned above, these other interests need to find representation in one of the two parties.

In the Free Market Capitalist system businesses are driven by profit. Anything that adds to the cost of business, unless it results in greater revenues takes away from the profit. Businesses for the most part want to minimize any restrictions on their ability to make a profit. Though they do favor some regulations, these tend to fall more into the realm of monitory policy, government subsidies and more industry specific regulations minimizing competition like licensing requirements (liquor license requirements granted under the guise of public morality, as a practical matter, really limit the competition for bars and restaurants) and in the case of local businesses but not global ones, restrictions on foreign imports. The majority of regulations however, are intended to improve the prosperity of the society as a whole and tend to interfere with business and thus reduce profit.

The Republicans as representatives of business, having assumed the role of protectors of profit, properly become the “party of no” because at the most basic level most regulations, laws and expenditures, other than those related to protection of property and property rights, though they may benefit society, interfere with business activity. The Democrats, representing those selling labor want to implement policies that improve working conditions. They then become the party of regulations when viewed strictly through the lens of business and labor having pushed for workplace safety, restrictions on child labor, overtime pay, minimum wage and ability to collective bargain through unions.

Beside the basic there are tangential issues that “naturally” fall into the realm of either Democrats or Republicans. As the free market churns, creating and destroying, those most devastatingly affected tend to be the laborers. When the shoe industry moved offshore, workers in that industry often fell into poverty. Owners of the factories may have also suffered but more at the level of a change in life style. So social welfare naturally became an agenda of the Democrats. Having struggled to maximize their profits, people making their living from them don’t want to see their profits being eaten up by taxes especially where a portion of them may be used to increase regulations and thus further reduce profits. As representatives of business, the Republican’s effort to maximize the retention of profits also attract wealthy wage earners such as hedge fund managers, entertainers including athletes, CEOs, doctors and lawyers. All laws and regulations, by their very nature limit personal freedom. One challenge is to balances individual freedom and societal prosperity. The Democrats, representing the wage earners enact more regulations. therefore those leaning in favor of the individual (supporters of the NRA fall into this category) will turn to Republicans leaving those leaning toward society to the Democrats. The above are “natural” tendencies consistent with basic positions of the parties.

Having said that, demographics even with the addition of some “naturally” aligned special interests, still leave the Republicans short of followers relative to Democrats. The challenge becomes enticing wage earners to join their ranks with promises of something they value more than their own material well-being. The “trickle down” theory is one way to convince them that the advantages gained by the wealthy (“job creators” in conservative speak) will indeed flow down and enrich them. Another way to entice the wage earners is by dawning the mantle of conservatism, which at its core relies on the established wealth to maintain existing institutions. Up until the Civil Rights regulations passed during the sixties, the Democrats held a strong position in the formerly Confederate South. The southern segregationists, feeling betrayed by the Democratic Party turned to the Republicans who to this day woo them with subtle racial innuendos (the “Southern Strategy”) and an appeal to a new bigotry by stoking fear of Islam. To gain a numbers advantage, another group courted by the Republicans is the Fundamentalist Christian. A few decades ago their churches stayed out of politics. The Republican Party as a strategy decided to bring this group into their fold with three enticements all lumped under the category of “values”. Prior to that time, abortion was viewed as mostly a Catholic issue until a strong campaign by the Republican Party made it into a Protestant “right to life” issue. There was already an aversion to homosexuality in that community but the Republican effort made it a “family value” issue and gave it a means of expression. The third was the promise of a Christian Theocracy. Today on the campaign trail candidates routinely invoke God and if not outwardly than at least hint at a Christian God. Knowing that for the most part the Founders were Deists, Republicans still suggest that the founders had a government based on Christian principles in mind, citing the reference to the “Creator” in the Declaration of Independence as if it not only said “God” and not even the God of Abraham, (Christians Muslims and Jews all recognize the same One) but an exclusively Christian God. I believe the Founders intentionally left the interpretation of Creator to the individual. Had they meant God they would have said God and furthermore had they intended this to be a Christian country they would have invoked the name of Christ.

Republicans claim to stand for a Capitalist Free Market economy, which in its purest form, drives innovation and thus change, knows no boundaries and recognizes no racial, ethnic or religious differences. Their challenge is to rationalize this with the conservative desire to stand still, the patriotic drive for nationalism and the dream of returning to a white Christian past. The Democrats, for their part, play to the black and immigrant voters, who for the most part are poor, as the party in favor of social regulations. Also as the party of society and therefore regulation, they pander to the Environmentalists whose extreme agenda’s benefit to society may be questionable. Their challenge is to not get lost in the tangential details and focus on the primary role of government, which is to ensure the prosperity of its society. To do this they must continue to facilitate the operation of the Free Market while making sure it not only serves the self-interest of business but society as a whole.

In a Two Party System we as individuals need to balance and prioritize our personal agendas, determine what are our most important issues and select the Party that will support them. It becomes a challenge full of large compromises. Having said that, items that naturally fall into the Party become its platform, however the artificial ones tend to be spoken about and highlighted during the primaries and then forgotten anyway. In a Multi-Party System, representatives are chosen based on narrow agendas and throughout their tenure negotiate with other interests to advance their issues. I really had no interest in politics until I started following the Presidential race four years ago. I was of the opinion that there was no real difference between the parties. Now having listened and read more, not only have I become convinced that there is a great difference but I am starting to think that it may be irreconcilable.

Yes Virginia, Laws Interfere with Individual Freedom

There is much discussion today about more government or less, more regulations or fewer, too many laws or not enough. Much, though not all, of the discussion really can be boiled down to two issues; the cost of government and who should pay for it and the restrictions on business activities and personal freedoms. Success here and in fact in most of life’s endeavors comes in great part from the ability to balance disparate issues such as these. The beauty of our system is that until now we have been able to achieve a reasonable balance. The pendulum swings to the left and right and for short periods rests in the middle and as long as it is allowed to return, we as a nation will be fine.

The Buddhists call this traveling the middle path (I think). Socrates spoke of individual virtues with bravery being the balance between cowardice and brashness. Jumping between two twenty story buildings separated by fifty feet to save someone is stupid. Not jumping between two buildings separated by ten feet is cowardly but jumping when buildings are separated by twenty feet where there is a real chance, however slim, is bravery. In family life there is a need to balance time put into work with time spent with family and a bit of time for independent personal development and pleasure. Inability to strike some sort of balance leads to divorce or familial misery. To be truly successful, a football team needs to balance the running and passing games. Can’t get into the Super Bowl without it. And so balancing the drive for individuality with the needs of society is a government’s major role.

Genetically we humans are programmed to ensure our survival and that of our offspring while satisfying our urges for pleasure. This instinct obviously served us well before we started living in communities extending beyond our immediate families. As the number of us grew, we had to gather into communities to survive and to survive within a community, be it a village, a state or a notion, some basic instincts had to be compromised. The challenge become balancing individual freedom with the well being of society. Since man started living in communities this challenge has existed. At the extremes on either side of the middle are totalitarian regimes such as existed under Stalin and Hitler at one end and a Libertarian Utopia that to my knowledge has yet to exist, at the other.

Basically all laws, be they just or unjust, restrict someone’s individual freedoms. Nature has prepared females of our species to bear children at the age of 12 or 13 (and getting alarmingly younger) but over the years society had decided that for a variety of good reasons that was too young and in the industrialized countries laws exist that have elevated the age of child bearing to the late teens and custom to the twenties. Humans by nature may not be loyal mates so laws came down in the form of one of the Ten Commandments not to covet thy neighbors wife or governmental laws in some primitive Muslim societies punishing infidelity by stoning a woman to death. We cannot decide to drive on the left side of the road or up a one-way street. I imagine very few would argue against such an abridgment to our liberty. Other laws that infringe on freedom are open to debate. Should the government restrict smoking in a private facility even though it is used by the general public? Should government dictate what sex and between whom should be allowed? There are other laws that most people today would have issues with such as the law against interracial marriage. (There was a survey conducted in Mississippi last year asking whether such a law should be reinstated. Less than one half of the respondents thought it should not. The majority either thought it should or didn’t have an opinion.).

In a primitive village it is the chief or the council of elders who shoulder the responsibility of this balanc. In Medieval Europe or in today’s backward societies, much of the balance was in the hands of the clergy. In nation states today, the chore falls to the governing body. Our governments set the rules that interfere with our “freedoms”, some out of necessity, others out of custom or in response to screams by the general society or unfortunately, by special interest of smaller groups with loud voices. It is “common wisdom” that the conservative want fewer laws and the liberals more. The fact of the matter is that they both want laws, but ones that support them and their understanding of how the world turns. All laws whatever their end intent is, do interfere with individual freedoms. If we all, by nature drove on the right side of the road, or had no sex drives or any genetically driven instincts contrary to the interest of society at large. there would be no need for a laws whether mortal or divine.