Economics

The American Caste System

July 5th, 2011 // 6:57 am @ Oliver DeMille

The American framers overcame domination by an elite upper class by establishing a new system where every person was treated equally before the law. This led to nearly two centuries of increasing freedoms for all social classes, both genders and all citizens—whatever their race, religion, health, etc.

During the Industrial Age this system changed in at least two major ways.

First, the U.S. commercial code was changed to put limits on who can invest in what. Rather than simply protecting all investors (rich or poor) against fraud or other criminal activity, in the name of “protecting the unsophisticated,” laws were passed that only allow the highest level of the middle class and the upper classes to invest in the investments with the highest returns.

This created a European-style model where only the rich own the most profitable companies and get richer while the middle and lower classes are stuck where they are.

Second, the schools at all levels were reformed to emphasize job training rather than quality leadership education. Today great leadership education is still the staple at many elite private schools, but the middle and lower classes are expected to forego the “luxury” of opportunity-affording, deep leadership education and instead just seek the more “practical” and “relevant” one-size-fits-all job training. This perpetuates the class system.

This is further exacerbated by the reality that public schools in middle class zip-codes typically perform much higher than lower-class neighborhood schools. Private elite schools train most of our future upper class and leaders, middle class public schools train our managerial class and most professionals, and lower-class public schools train our hourly wage workers. Notable exceptions notwithstanding, the rule still is what it is.

Government reinforces the class system by the way it runs public education, and big business supports it through the investment legal code. With these two biggest institutions in society promoting the class divide, lower and middle classes have limited power to change things.

The wooden stake that overcomes the vampire of an inelastic class system is entrepreneurial success. Becoming a producer and successfully creating new value in society helps the entrepreneur surpass the current class-system matrix and also weakens the overall caste system itself.

In short, if America is to turn the Information Age into an era of increased freedom and widespread economic opportunity, we need more producers.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of the New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Aristocracy &Blog &Business &Culture &Economics &Entrepreneurship &Featured &Generations &Liberty &Mini-Factories &Mission &Producers &Prosperity

Property and Freedom

June 23rd, 2011 // 11:38 am @ Oliver DeMille

We can learn a lot about freedom by understanding how Marx wanted to establish communism. One of his ten planks of establishing communism was this:

1. Abolition of property in land and application of all rents of land to public purposes…

Take away property and you take away freedom. If a man or woman cannot own land, a house, his or her own things, freedom is gone.

Note that there is more than one way to abolish property and ownership. One is to make it illegal, to not allow ownership. This is extreme, of course.

But there are other ways that are less obvious.

For example, what if it is legal to own property but only those who can afford a license, taxes, filings and attorneys to implement these things can actually own land.

This is an “abolishment,” but it is of the right rather than the left. To the person who can’t own the house, the land, or the car, however, the reality is the same.

Another way to abolish land or house ownership is simply to establish a legal-economic system where the majority cannot afford such ownership without advanced education and/or the careers which require such education.

Another is to disallow immigration so that the poor of other nations have no change to come to your nation and benefit from a system that allows ownership.

The left can abolish property ownership simply by taxing at rates that keep those with money from investing in real estate development and keep those with little money from seeking ownership.

There are many other ways to in effect abolish property ownership. Any of them hurt freedom.

Whatever your politics, it is important to evaluate each policy to ensure that you are not unknowingly supporting a Marxian reduction of freedom.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Culture &Economics &Family &Featured &Prosperity

A New Call for Free Enterprise

June 22nd, 2011 // 1:13 pm @ Oliver DeMille

A review of Beyond Capitalism and Socialism: A New Statement of an Old Ideal, edited by Tobias J. Lanz

The message of this excellent book, Beyond Capitalism and Socialism, is straightforward and timely: both socialism and capitalism are lacking. But the book goes a step further, offering suggestions for what type of economy and society we should adopt in the twenty-first century:

“There must be a better way. And, of course, there is, and has been for a very long time. It is a society based on small self-sufficient regions, empowered communities, vibrant neighborhoods, gainfully employed families, individual self-satisfactions, decentralized politics, local economies, sustainable organic agriculture, cooperative work, environmental humility, and careful nurturing of the earth.”

The entire book outlines these basic ideals in a realistic and real-world, even anti-utopian, way.

First, it notes that through history humankind has faced on ongoing series of major crises. These are simply the reality of history. Every generation faces challenges, and some are bigger than others. We have enjoyed a period of relative peace and prosperity which is rare in human history. Crises of some kind will come, and at some point they will challenge or end the ability of big government to solve the world’s problems.

Second, the book argues that truly sustainable society depends on something more than dependence on big institutions:

“As James Kunstler puts it in The Long Emergency, when these [inevitable] crises hit, national and supranational economies will disintegrate and ‘the focus of society will have to return to the town or small city and its surrounding agricultural hinterland…’”

“’It will require us to downscale and rescale virtually everything we do and how we do it…’”

“’Anything organized on the large scale, whether it is government or a corporate business enterprise such as Wal-Mart, will wither as the cheap energy props that support bigness fall away.’”

This is an extremely important point. Towns and cities along with families could, and indeed should, at some point become once again the central institutions of human society. As a society, we have given far too little thought to this eventuality.

Third, if any or all of these changes—or others like them—occur, we will see our world drastically altered. Unfortunately, little of our modern schooling, scholarship, career training or leadership preparation is geared in any way to dealing with such a possibility.

“And then, of necessity, the world will reconstruct itself on the lines of a more human-scale, community-based, local-resource-dependent societies…”

I don’t know if this forecast will come as predicted here, but it certainly could. And if it does, we need leaders who are prepared. In fact, even if this prediction doesn’t occur, such an increase of leadership on local levels could only help our society. Even if our major institutions remain big, even global, strong local leadership is vital to success—economically, politically and on a societal level.

A Breakdown of Local Leadership

In fact, it is the breakdown of exactly this kind of local leadership, I believe, which has caused such drastic growth of institutions that are too big and such widespread dependence on these institutions. Any organization that is too big to fail is, put simply, too big. Period. If it is too big to fail, its failure is a major threat—because all man-made institutions eventually fail. Most do so earlier rather than later.

The authors of Beyond Capitalism and Socialism get it right that the answer to our major current problems are rooted in our citizens and community, and that until we build strong local foundations across society we can only expect to witness further economic decay. They are also correct that neither capitalism nor socialism hold the answers, that a return to true free enterprise is essential, and that we must get started in this process rather than wait for some crisis to force such changes.

At times the authors get caught up in denominational debates from the Catholic perspective, but this tends to deepen the benefit of the book rather than detract. Readers do not have to buy into any religious themes to learn from the numerous commentaries on the potential of free enterprise society.

The book is invaluable reading for American, and all freedom-loving, citizens. As one of the authors wrote:

“Given a society, in which men, or the vast majority of men, owned property and were secure in their income, the myriad interactions of free men making empowered choices really would balance supply and demand. We would be astonished at the variety, the non-servility, and the creativity of our neighbors.”

I am convinced that this is both true and, especially in our modern world, profound. Still, I found the book lacking in one major detail. I prefer the term “free enterprise” to “Distributive,” first because I think it more accurately describes the philosophy for which it stands and second because I’m not convinced that free enterprise and distributism are precisely the same thing. They share many ideals, it is true, but there are differences.

For example, both free enterprise and distributism agree that:

neither capitalism nor socialism is the ideal
capitalism, in which those with wealth are treated differently by the law than those without wealth and the level of one’s wealth determines which laws pertain to each person, is flawed
socialism, in which the government owns the major means of production and levels incomes and work assignments in an attempt to create long-term equity between all citizens and where one’s status is determined by one’s government position, is flawed
the local society, economy and government is more important than the state- or national-level economy and government and should be treated as such
families are the central institution of society, and they are more important than markets or governments; markets and governments exist to help families, not vice versa
money is an important consideration in making choices for family, career, business and society, but it is less of a priority than relationships, spirituality and morality
we have reached a point in the modern world where our societal dependence on big institutions—both government and corporate—is a serious weakness in our culture and causes much that is negative in our world
a return to society that is more ideal, more locally-oriented, and citizens that are more independent and entrepreneurial is overdue. In such a society, most families would own their own businesses rather than remaining dependent on government or corporations for their jobs and livelihoods

Free Enterprise and Distributism

The big difference between free enterprise and distributive thought hinges on how we should move toward such a society. Dale Ahlquist, one of the authors in Beyond Capitalism and Socialism, suggested the following:

“The dilemma of Distributism is the dilemma of freedom itself. Distributism cannot be done to the people, but only by the people. It is not a system that can be imposed from above; it can only spring up from below….If it happens, it seems most likely that it would be ushered in by a popular revolution. In any case, it must be popular. It would at some point require those with massive and inordinate wealth to give it up.”

The desire for popular support is normal for all political groups, but the idea that Distributism “would at some point require those with massive and inordinate wealth to give it up” is alarming at best. Why would the wealthy have to “give it up?” Why is that necessary in free society? The word “required” is the problem. Fortunately, Ahlquist clarifies that this would be voluntary, so it isn’t Marxist, but it still makes me wonder, Why?

Nor is this the isolated view of just one author. Here is how another of the authors put it (and for this author voluntarism is replaced by government force):

“For instance, if I own one or several stores (say pizza restaurants) I would have a reasonable and normal rate of taxation, but as soon as I begin to assemble a chain of such businesses, then my rate of taxation would rise so sharply that no one of a normal disposition would seek to continue to own such a chain….A similar scheme of taxation would attack ‘multiple shops,’ that is, stores selling many lines of goods, such as a mega or ‘box’ stores, and stores with ‘large retail power.’”

Again, the obvious question is, why? The answer is that no big institutions can be allowed, that everything must by force remain small. This makes the same mistake as Marx, who taught that government would take from the rich and redistribute equally to all. The mistake was to think that those running the government wouldn’t keep a little (or a lot) extra for themselves and their families. In the Distributive ideal, where no institution can be allowed to be too big, the clear flaw is that any institution powerful enough to keep all the others small will have to be, well, big.

That means big government. The Distributists would presumably want the government to be local, but strong enough to keep all the other institutions small. The American founders already dealt with this and wrote about it extensively in the Federalist Papers. Madison, for example, said that nearly all of the colonies in the late 1780s suffered from local governments that were too dominant—they nearly all had corrupt and anti-freedom practices. This was one of the strongest arguments in support of the U.S. Constitution: a central entity would help reduce oppressive, intrusive and unfair governing fads which always arise in small (and therefore inbred) governments.

Clearly government has become much too big today, but a return to locales dominated by a few powerful families that ignore the needs of the rest of the people is not the answer—though it is precisely what would happen to most local governments if left to themselves. History is clear on this point.

We certainly need more local leadership, independence and a lot more entrepreneurialism and real ownership. We need good local government to make it work, and ideally a federation of local governments to maintain real freedom.

Is Taxation the Answer?

But back to the main point: Why would we want to use government taxation to keep any business from growing? If it offers a good product at a good price and people prefer its offering to those of other businesses, why should we drastically increase its taxes so that it remains small? Is smallness the central point? If so, this is the reason I prefer free enterprise. One more quote will suffice to further my point:

“Of course, a suitable period of time would be necessary to complete an orderly sell-off of property from excessively large owners to small owners before the new tax system came into full effect. Moreover, if this is instituted at a very reasonable pace, with tax rates on concentrations of property increasing gradually each year, this would give owners more time to prepare and help prevent a ‘firesale’ of their property. Similarly some form of guaranteed loans would have to exist to allow those without property or money to purchase the excess property that was being sold.”

My first thought when I read this was, “Who gets to determine what ‘excess’ means in such a society? Whoever it is, they’ll eventually keep more of the money and power than everyone else.” This one flaw in how the book describes Distributism is a serious problem. It proposes stopping one capitalist from getting too much wealth and power, but it doesn’t seem to realize that it also proposes taking the “excess” money from the capitalist and giving it to the socialist.

In contrast, free enterprise takes a different route. It establishes good laws that treat the rich, middle and poor the same. Period. That is freedom.

Is the U.S. a Free-Enterprise Economy?

Some people may believe that this is the system we live under in the United States today. Such an assumption is incorrect. The U.S. commercial code has numerous laws which are written specifically to treat people differently based on their wealth.

For example, it is illegal for those with less than a certain amount of wealth to be offered many of the best investment opportunities. Only those with a high net worth (the amount is set by law) are able to invest in such offerings. This naturally benefits the wealthy to the detriment of wage earners. This system is called capitalism, and it is a bad system—better than socialism or communism, to be sure, but not nearly as good as free enterprise.

In a free enterprise system, the law would allow all people to take part in any investments. The law would be the same for all. If this seems abstract, try starting a business in your local area. In fact, start two. Let the local zoning commissions, city council and other regulating agencies know that you are starting a business, that it will employ you and two employees, and then keep track of what fees you must pay and how many hoops you must jump through. Have your agent announce to the same agencies that a separate company, a big corporation, is bringing in a large enterprise that will employ 4,000 people—all of whom will pay taxes to the local area and bring growth and prestige.

Then simply sit back and watch how the two businesses are treated. In most places in the United States, one will face an amazing amount of red tape, meetings, filings and obstacles—the other will likely be courted and given waivers, benefits and publicity. Add up the cost to government of each, and two things will likely surprise you: 1) how much you will have to spend to set up a small business, and 2) how much the government will be willing to spend to court the large business.

This is the natural model in a capitalist system. Capital gets special benefits. Apparently, in contrast, in Distributist society the small business would pay little and the big business would have to pay a lot more. Under socialism, neither business would be established at all—at least not by you. A government official would do it all, or not do it.

In free enterprise, the costs and obstacles would be identical for the two businesses. In free enterprise, the operative words are “free” and “enterprise.”

Some Distributists seem to share the socialist misconception that unless government forces smallness, every business owner will push to become too big. Wendell Berry, a favorite writer of mine, often took the same tone. In reality, however, the evidence is clear that American business and ownership stayed mostly small—with most people owning family farms or small businesses—until the 1960s. It was government debt which wiped out the farming culture that dominated the South and Midwest, and the rise of big corporations over family-owned businesses came after the U.S. commercial code was changed by law to a capitalist rather than a free-enterprise model.

Give Freedom a Try

Instead of using government to force businesses to remain small, let’s consider giving freedom a try. It has worked for us in the past. If we altered the laws at all levels so that government entities treated all businesses and citizens the same, regardless of their level of capital in the bank, the natural result would be the spread of more small businesses. Freedom, not government control, is the answer.

With all that said, I’m convinced that at least some, maybe many or most, of Distributists in general and the contributing authors to Beyond Capitalism and Socialism specifically would agree with this point, that in fact their view of Distributism coincides with free enterprise. For example, Ahlquist’s chapter appears entirely supportive of free enterprise.

Still, I am concerned by this one thread of thought among some of the authors that seems to see government as the way to keep business from growing. Free enterprise gives no special benefits to big business like capitalism does, but it also does not force businesses to remain small. If this is the view of most Distributists, I agree with them. Even if we disagree on this point (and I’m not certain that we do), I find much to praise in this excellent book.

Quotable Quotes

Beyond this one concern, I can’t say enough positive about Beyond Capitalism and Socialism. It is greatly needed by our citizens today. Everyone should read it and ponder its application to our current world. Consider the following thoughts from this thought-provoking book:

“Home and family are the normal things. Trade and politics are necessary but minor things that have been emphasized out of all proportion.” –Dale Ahlquist

“What then is Distributism? It is that economic system or arrangement in which the ownership of productive private property, as much as possible, is widespread in a nation or society. In other words, in a Distributist society most…would own small farms or workshops…” –Thomas Storck

“As Political Economy is the child of Domestic Economy, all laws that weaken the home weaken the nation.” –Joseph McNabb

“The family, not the individual, is the unit of the nation.” –Joseph McNabb

“We don’t want to work hard. We don’t want to think hard. We want other people to do both our work and our thinking for us. We call in the specialists. And we call this state of utter dependency ‘freedom.’ We think we are free simply because we seem free to move about.” –Dale Ahlquist

“The conservatives and liberals have successfully reduced meaningful debate to name-calling. We use catchwords as a substitute for thinking. We know things only by their labels, and we have ‘not only no comprehension but no curiosity touching their substance or what they are made of.’” –Dale Ahlquist

“The real purpose of traveling is to return. The true destination of every journey is home.” –Dale Ahlquist

“[T]oday here in the United States of America, and in all industrialized countries…there is a class of men and women, perhaps the majority, that…is unfree….I mean, all those who subsist on a wage, the price paid for the commodity they have and who have no other means of maintenance for themselves and their families. I mean…all those who subsist on a wage that is paid to them by those who are, in actuality, their masters; a wage that may be withdrawn at any time and for any reason, leaving them on the dole, or to starve, if they can find no new job…These are not free men in any rational and exact sense of the word.” –Ralph Adams Cram

“Every man should have his own piece of property, a place to build his own home, to raise his family, to do all the important things from birth to death: eating, singing, celebrating, reading, writing, arguing, story-telling, laughing, crying, praying. The home is above all a sanctuary of creativity. Creativity is our most Godlike quality. We not only make things, we make things in our own image. The family is one of those things. But so is the picture on the wall and the rug on the floor. The home is the place of complete freedom, where we may have a picnic on the roof and even drink directly from the milk carton.” –Dale Ahlquist

“The word ‘property’ has to do with what is proper. It also has to do with what is proportional. Balance has to do with harmony. Harmony has to do with beauty….The word ‘economy’ and the word ‘economics’ are based on the Greek word for house, which is oikos. The word ‘economy’ as we know it, however, has drifted completely away from that meaning. Instead of house, it has come to mean everything outside of the house. The home is the place where the important things happen. The economy is the place where the most unimportant things happen.” –Dale Ahlquist

“Caveat lector! For there is little resemblance indeed of the real ownership of real property…to the ‘rent-from-the-bank’ home ‘ownership’ (sic) of most American families.” –John Sharpe

“Our separation of economy from the house is part of a long fragmentation process….Capitalism has separated men from the home. Socialism has separated education from the home….The news and entertainment industry has separated originality and creativity from the home, rendering us into passive and malleable customers rather than active citizens.” –Dale Ahlquist

“In the age of specialization we tend to grasp only small and narrow ideas. We don’t even want to discuss a true Theory of Everything, unless it is invented by a specialist and addresses only that specialist’s ‘everything.’” –Dale Ahlquist

“In material things there can be no individual security without individual property. The independent farmer is secure. He cannot be sacked. He cannot be evicted. He cannot be bullied by landlord or employer. What he produces is his own: the means of production are his own. Similarly the independent craftsman is secure, and the independent shopkeeper.

No agreements, no laws, no mechanism of commerce, trade, or State, can give the security which ownership affords. A nation of peasants and craftsmen whose wealth is in their tools and ski and materials can laugh at employers, money merchants, and politicians. It is a nation free and fearless. The wage-earner, however sound and skilful his work, is at the mercy of the usurers who own that by which he lives.

Moreover, by his very subjection he is shut out from that training and experience which alone can fit him to be a responsible citizen. His servile condition calls for little discretion, caution, judgment, or knowledge of mankind. The so-called ‘failure of democracy’ is but the recognition of the fact that a nation of employees cannot govern itself.” –John Sharpe

Whether you agree or disagree with the details, this book is a treasure of great ideas to consider, discuss, ponder and think about. We need this book today, and we need a society that has read it and deeply contemplated its numerous profound concepts.

Whether or not the ideas in Beyond Capitalism and Socialism become necessary to all of us through some major crisis ahead, a national consideration of these topics is long overdue. We do need to move beyond capitalism and socialism. We need a rebirth of free enterprise, for our nation, economy, freedom, prosperity and above all, for our families and communities.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Book Reviews &Economics &Entrepreneurship &Featured &Government &Liberty &Mini-Factories &Producers &Prosperity &Tribes

A Battle Ahead

June 18th, 2011 // 11:16 am @ Oliver DeMille

A review of The Origins of Political Order: From Prehuman Times to the French Revolution by Francis Fukuyama

Francis Fukuyama’s recent book is an excellent commentary on the history of politics and the underpinnings of our current political systems. Readers may find things to disagree with in a book that covers so many periods of history, but this well-researched work sparks a lot of deep thinking about important and timely topics.

Three Major Advancements

Ultimately, Fukuyama sees the development of political society from tribal through modern times as the result of three major advancements. The future, he suggests, belongs to societies that maintain and effectively institutionalize all three of these organizational advantages. This view flies in the face of some widespread views, but Fukuyama’s arguments are compelling.

Consider, for example, the following likely characteristics of the decades immediately ahead:

1. The invention of centralized governments which allowed societies to grow beyond families and small tribes

The industrial age created an expectation (especially in the British and American worlds) of “sustained intensive economic growth.” Today we feel entitled to unending economic expansion. Any downturn in the economy is seen as a reason to blame our political leaders. We seem to believe that a high level of consistent economic growth is our birthright.

This is a significant development. Never has a generation in the past held such expectations. No longer are citizens content with the up-and-down economic cycle that has characterized all of history. Whether this new expectation can be maintained remains to be seen, but this is our expectation now, and we’ll continue to punish any government official who doesn’t both promise and deliver sustained economic growth.

If it turns out that constant growth is unrealistic, that there really is a natural economic cycle of ups and downs, we’ll consistently elect and then dump every politician from every party—the voters will never be satisfied. With such feelings of entitlement, we’re destined to be perpetually angry at and disappointed with our government.

Globalization has created a world of independent international elites and locally-dependent middle and lower classes.

“In the days when most wealth was held in the form of land, states could exercise leverage on wealthy elites; today, that wealth can easily flee to offshore bank accounts.”

2. The establishment of “uniform laws that apply to all citizens

This is a world-altering event in human history. The advent of widespread human freedom and prosperity came as a result of uniform laws that applied to all citizens—regardless of status, wealth, race, gender, ability or religion. Globalization trumps all this, allowing a global upper class to operate largely above the law while the masses are required to follow the laws of their local nations.

The economic benefit of being in the upper class under such an arrangement is huge—the gap between rich and poor will drastically increase as this reality grows.

Hardin Tibbs wrote:

“The proportion of people in cities is growing rapidly, and the numbers of people left in the countryside are falling. The sprawling urban megacity—somewhere like Sao Paulo, where you’ve got densely populated shantytowns right next to the enclaves of the super-rich—is a growing phenomenon around the world.” (EnlightenNext, Issue 47, 2011, pp 29-41)

3. The creation of governments which are “accountable to their constituents

Two groups will be the winners in the new system: mostly the mobile global upper class, and secondarily the masses in nations where the government is truly accountable to the people. This will impact nations around the globe, as we are already witnessing in the Arabic world.

For China, this is either good news or really bad news. If China’s government remains unaccountable to the people, its economic and military strength will at some point become a weakness. If, on the other hand, the Chinese government reforms and becomes accountable to the people, China may well become the great superpower many have predicted.

According to Fukuyama, the centralized structure of an authoritarian system can seem to “run rings around a liberal democratic one” for a time, because the leaders face little opposition from checks, balances, or other obstacles to their decisions. But this is a frailty if ever the leaders make bad decisions.

A few bad leaders or choices can bring down such a system very quickly. Societies with effective checks and balances on the centers of power are more resilient and less prone to huge decline in a single generation or even decade.

As for the United States and Europe, they must reverse the decades-old trend of centralizing power away from the people.

In short, we are seeing the rise of a global class system with increasing divisions between the haves and the have-nots. Major characteristics of this new reality include the unrealistic expectation of constant economic growth, a global upper class that is increasingly above the laws of nations, the growth of drastically divided cities, and governments that are widely controlled by the wealthy.

One great battle of the 21^st Century will likely be about who controls government, the wealthy class or the people as a whole. As Fukuyama shows, through history the nations where government was accountable to the people ultimately achieved the most social success, freedom and prosperity.

The Origins of Political Order is the first of a two-volume set, and hopefully the second volume will tell us more about how the people can win this coming battle.

As the mathematical cosmologist Brian Swimme wrote: “the universe is not a place, it’s a story…” (EnlightenNext, Issue 47, 2011, pp. 52-63) The same can be said of the 21^st Century, and our story will likely hinge on whether government is ultimately accountable to the people or to a small group of elites.

This is an old battle, but this is the first time it is global in scale. The challenges are thus increased and the stakes are high.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Aristocracy &Blog &Book Reviews &Business &Community &Economics &Tribes

A Big Problem

June 17th, 2011 // 11:11 am @ Oliver DeMille

Be Afraid

We have a problem. We have a big problem. Or, as the old quip put it, “Be afraid. Be very afraid.”

As an optimist, I am usually skeptical of anything that sounds overly negative. However, I recently read a list of statistics in the Harper’s Index that I think is cause for serious concern.

Two items on the list have received a lot of press:

Standard and Poor’s “revised its U.S. debt outlook to ‘negative’” on April 18, 2011.
It has never before ranked the U.S. anything but ‘stable.’”

This should give us all pause. But this is a fixable situation, one which can be solved by a return to American entrepreneurialism, initiative and ingenuity.

The increase of unemployment once again in May 2011 can likewise be effectively overcome by government policy changes that incentivize private investment and spending. Many corporations are sitting on significant surpluses right now, but they are loathe to spend them without a real change in the way the U.S. government spends money and treats business.

In short, our current economic problems can be dealt with by the principles of freedom and free enterprise—if only Washington would give freedom a try. Note that neither Republican nor Democratic presidents have taken this approach for over two decades.

American vs. Chinese Views on the Free Market

But these aren’t the statistics that should worry us most. The figures which really concern me have gotten little media attention:

Percentage of Americans in 2009 who believed the free market ‘is the best system on which to base the future of the world’: 74
Percentage of Americans who believe so today: 59
Percentage of Chinese who do: 67

If this trend continues, we’ll face drastically worsening major problems.

Unease about the growth of China’s power has been increasing in the U.S. for some time, but the concern has mostly centered on America’s economic decline versus the growth of China as a major totalitarian world power.

Add to this the knowledge that over two-thirds of Chinese believe free enterprise is the key to the future—at the same time that American belief in free enterprise is waning—and our sense of what the 21^st Century will bring takes on a new direction.

In the United States, youth are widely taught that the key to life and career success is getting a good job, while in China an emphasis for the “best and brightest” in the rising generation is to engage meaningful entrepreneurship.

If this continues, the status and roles of these two nations will literally switch in the decades ahead: China as superpower, the U.S. as a second-rate nation with a stagnant and struggling economy. Many experts point out that China has a long way to go to “catch up” with the U.S. in military strength, but how long will this take if the U.S. economy continues to decline while China’s booms?

I have two main thoughts on this: First, good for the Chinese people! If they can consistently nudge their society and government in the direction of increased freedom, they will join or possibly even become the world’s most important leaders. The truth is that freedom works—in China as much as everywhere else. Second, and most importantly, America needs to give freedom a chance.

A majority of Americans believe in free enterprise, but many in Washington seem convinced that the government can do things better than the American people. The future of our freedom and prosperity depends on a flourishing environment of freedom.

Government can do us all a great service by altering its current policies and removing the numerous obstacles to free enterprise. This one significant shift is vital. The fact that many of our national leaders seem committed to avoiding such changes is a big problem. The longer this lasts, the bigger the problem becomes.

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Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

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