Featured

Capitalism vs. Capitalism

March 20th, 2012 // 11:19 am @ Oliver DeMille

An Essential Debate for the Future of Freedom

There are two major types of economies: market and command.

Within these two branches there are a number of subtypes, including various command-style economies such as socialism, communism, fascism, collectivism, authoritarianism and totalitarianism.

The market-economy subgroups are sometimes more confusing to people from free societies, because most of us have been trained to evaluate politico-economic issues in binary mode where we narrow any debate down to only two sides (e.g. socialist or capitalist, democratic or totalitarian, good or evil, free or not free, etc.).

That said, we live in an era where the various subtypes of market economics are in conflict.

During the Cold War the world was divided between two great camps, with market economies of all types firmly allied against all command economies, but in the post Cold War and post 9/11 world this has dramatically changed.

There are forces supporting each of the various subtypes of market economy, and often these are pitted against each other in ways unthinkable before 1989.

Differentiating between these subtypes is important for anyone who wants to accurately understand what it happening in today’s world:

• Mercantilism: the law gives preference and special benefits to the sector of the economy owned by the government.

• Corporatism: the law gives preference and special benefits to the sector of the economy owned by big corporations within the nation (sometimes referred to simply as “Big Business”).

• Capitalism: the law gives preference and special benefits to the sector of the economy owned by big capital (including big corporations like in Corporatism, but also wealthy foreign and multinational corporations and non-corporate institutions, wealthy foundations, wealthy trusts, non-profit entities, wealthy families, moneyed foreign investors, and others with mass amounts of capital).

• Keynesianism: the law gives preference and special benefits to companies and institutions (corporate but especially non-corporate) that are so big that they care more about their public image for societal responsibility and promoting social justice than about profit(s), market share or stock value.

• Free Enterprise: the law gives no special preference; it protects equal rights for all individuals and entities and leaves initiative and enterprise to private individuals, groups, businesses and organizations that are all treated equally and with minimal legislation by the legal code.

All of these subtypes are market-based, though according to Keynes himself Keynesianism “seeks the goals of socialism through market means.”

For the last three generations these five subtypes of market economics have all been lumped together under the label of “capitalism.”

While this is technically inaccurate—because capitalism is a subtype rather than the whole of market economics—it is the way the word “capitalism” has been used by most people.

By this definition, capitalism is synonymous with “market economics” and is a label for the entire market-style model.

So we have two definitions of “capitalism” in the current usage: one a title for the whole market field of economics (we’ll call it capitalism Type 1), and the other a specific type of market economics where preference is given to those with large amounts of capital (capitalism Type 2).

These are frequently confused in our contemporary language.

Supporters of freedom get understandably frustrated when anyone questions the superiority of Type 1 over command economies, but it is vital to understand how Type 2 differs from free enterprise.

Adding to this confusion, corporatism is not the same as Type 2 capitalism.

Corporatism doesn’t include capitalism Type 2 at all, but capitalism Type 2 always includes corporatism as part of what it calls “capitalism.” (Corporatism is to Type-2-capitalism what apple is to fruit.)

In short, Type 2 capitalism is much broader than corporatism, as shown in the definition above.

Again, this is confusing to most people, but understanding the details and nuances of how these words are used is extremely important.

Note that the American founders dealt with many similar language challenges, such as when Madison spent Federalist papers 10 and 14 explaining the important differences between democracies and republics, or when he used papers 18, 19 and 20 to elucidate the differences between federations, confederations, national and federal government.

Without such clarity, the Constitution would have been confusing to many Americans who were deciding whether or not to ratify it.

There are numerous similar examples, and part of being a free people is taking the time to understand the nuances of economic and political freedom.

Note that few things are more essential for free people than clearly understanding what type of economic system they want.

Based on the definitions above, consider these three conclusions:

1. All of the market subtypes are better than all types of command economies. Even the market approaches with the least freedom (Keynesianism and mercantilism) are significantly better (with more freedom, opportunity and prosperity for more people) than the command system with the most freedom (collectivism).
2. On the subject of the five subtypes of market economy, free enterprise is significantly better (with more freedom, opportunity and prosperity for all), than mercantilism, corporatism, capitalism Type 2, and/or Keynesianism.
3.  The United States today has far too much mercantilism, corporatism, Type 2 capitalism, and Keynesianism and not enough free enterprise.

Many moderns say we are a “capitalist” nation or vote for the “capitalist” candidate and conclude that all is well, when in fact free enterprise is under attack from socialism but also just as strongly from mercantilists, corporatists, Keynesians and Type 2 capitalists.

Voters and citizens must know what to look for when a policy or candidate claims to promote “capitalism.”

***********************************

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

He is the co-author of 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 : Blog &Business &Economics &Featured &Government &Liberty &Prosperity

Two Kinds of Voters

February 25th, 2012 // 8:34 am @ Oliver DeMille

There are two kinds of voters: Traditionalists and Pragmatists.

Knowing the difference is vital—especially during election years. It helps us be better voters and guardians of freedom.

The 2012 elections—local, state, and national—are pivotal to freedom.

If we learn to understand the differences between these types of voters, we can work together more effectively to ensure a positive result—no matter who wins.

Traditionalists

Traditionalists have strong allegiances to a party or political viewpoint. They tend to see all politics as Left versus Right, Republican versus Democrat, or Liberal versus Conservative.

From this perspective, politics is a battle between the “righteous” thinkers and statesmen on your side and the “evil” ideologues and self-serving politicians and bureaucrats on the other side.

Traditionalist voters on each side have their own lexicon of highly-charged key words and a stable of trusted writers, news analysts, and pundits. Most importantly, Traditionalists have a list of key issues which define their political views and drive their political emotions.

Such issues include abortion, immigration, welfare, health care, national security, education and many others—including, most recently, the Keystone Pipeline, religious freedom, class warfare, and contraception.

Again, such voters take strong sides on these issues, vehemently support one side and listen to little debate from the other side. Often they go to extremes, overstating the morality of their side and vilifying any who disagree.

Liberals and conservatives often dislike each other, and usually disagree on the issues, but they basically understand each other.

They are warriors for (or at least supporters of) their political views, and so they “get” other Traditionalist voters even when they are on different sides of the aisle. They think the other Party is wrong, but they are somewhat similar in the way they approach political life.

Pragmatists

Instead of being “warriors for truth,” Pragmatists view politics as managers. For them, political battles are routine decisions that citizens must make—just like administrators must show up for work, deal with the challenges that arise, and then go home to their private lives.

This professionalism in their voting role is one of the reasons political polls are often wrong in predicting how elections will turn out.

Polls of Traditionalists are mostly accurate, but surveys of Pragmatists are usually misleading.

Pragmatists frequently answer surveys with the goal of impacting them, and this isn’t an accurate indication of how they’ll actually vote.

Such voters are very literal about their citizenship: every civic action they take is done with a deliberate attempt to impact the outcomes and results.

Indeed, Pragmatists have no worries about just skipping an election if they don’t think their vote will change the outcome (such as when one candidate is clearly far ahead). They don’t see voting as an important civic duty, but as a pragmatic opportunity to impact things.

This doesn’t mean that Pragmatist voters who don’t bother to vote will ignore the election.

They’ll write blogs, try to impact polls, or help fund the candidates and causes they support. But they’ll only do things they think will actually make a difference.

Comparisons

Where Traditionalist voters support a candidate because they feel he or she is “right” or “best” for America, Pragmatists vote for what they think is the most desired election result.

For example, a Pragmatist may well vote for one party in the Presidential race and another party in a Senatorial campaign because she thinks the best governance will come from the White House and Senate being run by different parties.

Or consider the voter who told CNN that he would vote for Ron Paul, but that if Paul dropped out or didn’t get the Republican nomination he would vote for Barack Obama.

From a Traditionalist perspective this comment makes no sense. Why would anyone choose the two extremes and reject everyone in the middle?

For Pragmatists, this makes sense in several ways. First, it is a strong way of voicing support for Ron Paul and maybe convincing a few voters to change their vote to Paul. Second, it makes everyone stop and think, which is a high priority for Pragmatists. Third, and perhaps most significantly, Ron Paul and Barack Obama are both Pragmatists, while the other candidates are more Traditionalist.

Pragmatists can be just as strongly supportive of any given issue as Traditionalists, but they approach it differently—they are interested in real change on the issue.

Traditionalists, in contrast, tend to emphasize winning the election and then hoping the elected officials will do better than their opponents would have.

To reiterate: Traditionalists emphasize candidates. Pragmatists focus on real policy change.

Many Pragmatists are independents because they don’t believe party politics are good for the nation (except when they decide to personally run for office, in which case their pragmatism kicks in and they join a party).

Both major political parties have their share of Pragmatists, many of whom are political professionals, activists on the far Left and Right, and party insiders who have great influence in elections. Still, many Pragmatist voters dislike institutionalism and distrust big organizations.

Pragmatist voters tend to find the Left-Right bickering over the issues both annoying and wasteful. They enjoy a good debate, however, as long as it deals with real issues and detailed solutions that can really work.

Pragmatists also give kudos to any good debater on either side (something Traditionalist voters hardly ever do because they tend to think the candidates on their side are doing well while the politicians from the other side are wrong and therefore debating badly).

Traditionalists tend to band with other people who agree with them on either conservative or liberal values. They seldom talk politics with people of different views, and when they do they frequently get upset.

They dislike arguing about politics and find themselves angry and frustrated when others directly challenge their political views. They like rallies and debates where their side trashes the other side.

Pragmatists, in contrast, often genuinely like political arguments. They enjoy debating with people from other viewpoints, and also take pleasure in learning new ideas from people and sources that are both allies and opponents.

Pragmatists tend to think about politics on their own or in discussions with a few close friends rather than in big groups or official events, and many like to take different sides of arguments to see how others respond.

Pragmatists seldom like political events where someone lectures; they prefer to discuss and debate. They’ll support liberal views in an argument with a conservative father-in-law and later that same day promote conservatism when arguing with a liberal professor.

The father-in-law will be convinced that his daughter has married a “flaming liberal” and the professor will swear that his student is a “wild-eyed conservative.” In fact, they are both Traditionalists dealing with a Pragmatist.

The Pragmatist son-in-law/student just wants to fix what’s broken—as efficiently and effectively as possible, and the sooner the better. He also likes to argue about politics and to make people stop and think more deeply.

Many Pragmatists don’t really know how to be conservative or liberal. They see too many issues on both sides where the typical progressive or conservative dogmas are shallow or flawed.

For example, many Pragmatists who grew up in liberal families or communities just can’t condone (or understand) the liberal penchant for compulsive government over-spending.

Similarly, a number of Pragmatists from traditionally conservative backgrounds find it ridiculous (and even immoral) that many conservatives give seemingly constant lip-service to freedom from the excesses and bureaucrats in Washington D.C., while they simultaneously want to deny the opportunity for freedom to foreign-born immigrants—without even seeming to realize that this is a contradiction.

Traditionalists see elections as a choice between competing liberal and conservative values, while Pragmatists tend to summarize each election around the most important central issue.

In short, Traditionalists tend to think that elections are about liberal versus conservative values, issues and candidates, and they hardly realize that Pragmatists exist.

In fact, most conservatives and liberals categorize Pragmatists simply as members of the other side. “If you’re not with us,” many Traditionalists assume, “you must be with that other party.”

For their part, many Pragmatists are annoyed by Traditionalist politics and content to stay uninvolved in supporting certain issues and campaigns.

As a result, many who could work together remain alienated even though they actually agree on nearly all goals and could be effective political allies.

How This Applies in 2012

This year will be a Pragmatist election. The question is the same as 2008 and 2010: Which party is most likely to get our economic house in order?

Only a major world crisis is likely to change this focus, though President Obama’s campaign is trying to swing the narrative away from the economy and make this a Traditionalist party election.

In short, if independents in the battleground states vote Traditionalist in 2012 (based mainly on social issues), President Obama will be re-elected; if they vote Pragmatist (with a focus on freeing up the economy), he will be unseated.

Second, while many people on the Right tend to see President Obama as a far-left liberal and those on the Left most often see him as a centrist (note that both “liberal” and “centrist” are Traditionalist labels), his record and modus operandi is clearly Pragmatist.

President Obama has genuinely progressive goals, to be sure, but his personality, approach and methodology is strongly Pragmatist.

The other strongly Pragmatist in the campaign is Congressman Paul. Some would call him a Traditionalist because he has long promoted issues that had little chance of winning, but to do this would be to misread his efforts; he has always focused on bringing real change to his agenda items, not just symbolic support.

Ironically, however, though Ron Paul has taken a Pragmatist approach for many years, a lot of Pragmatists don’t support him because they don’t think he can win.

Rick Santorum is the most Traditionalist of the current candidates. The one exception in his otherwise Traditionalist stable of issues is his strongly Pragmatist stance in support of the manufacturing sector.

Interestingly, both Mitt Romney and Newt Gingrich swing between Pragmatist and Traditionalist approaches. Romney has taken a Traditionalist voice while his history is more naturally Pragmatist.

Gingrich is a strong Traditionalist in his long public life, but seems to take a Pragmatist tone in his private and business life.

Depending on whether either of these candidates becomes the Republican nominee, in the general election expect either Romney or Gingrich to focus nearly his entire campaign strongly on one Pragmatist issue: Who can best fix the U.S. economy.

This election will be swayed by Pragmatist voters, which gives President Obama a natural advantage unless his opponent can convince Pragmatists that a Republican can more realistically and effectively renovate the economy.

The Greatest Need

A key to winning this election (at the local and state levels as well as nationally) is to create effective coalitions of Traditionalists and Pragmatists with shared election goals.

This is not an easy marriage. The two types of voters see each other as part of the problem. Even when Traditionalists and Pragmatists accept the need to work together, they generally approach their relationship with basic mistrust.

Conservative Traditionalists almost always have a hard time believing that conservative-leaning Pragmatists are really on their side. In most cases, they have been warriors of conservatism for a long time. They have come to associate conservatism with certain catch phrases, key words and mutual affection for iconic media personalities.

Pragmatists loathe what they consider shallow and mindless partisanship. As a result, they dislike catch phrases, key words and iconic personalities. The same problems exist between liberal Traditionalists and liberal-leaning Pragmatists.

Ironically, politics requires us to get outside our comfort zones and work with people from differing views in order to obtain the best results for our locales, states and nations.

It may well be this very process of political interrelationships and personal citizen involvement that keeps us free in the long term.

When a free nation is in decline or struggles, the greatest need is simply for better voters.

We need to become such voters, and we all need to reach out and work more effectively with people who are different in order to accomplish real change in modern America. If we do this, the 2012 election will be a success, whatever the electoral results.

Who we elect is ultimately less important than how we elect, because our citizen involvement beyond the voting booth is determining our national future.

As the major campaigns continually amp up the negativity of their attack ads, this is increasingly true. Our leaders now seldom set the example of civility and honest debate, and if our citizens follow their path the future of freedom will continue to decline.

Fortunately, each of us can directly impact this sad trend. We must push through political barriers and have honest and friendly dialogues with people from all political viewpoints.

This takes maturity—a characteristic of free people.

Our freedoms, or their lack, are less a result of the leaders in society than of the citizens. In our time, better voters and better citizens are needed.

Each of us can do better. There are many in our society that divide, criticize and attack. More citizens are needed who build bridges and promote unity.

Whatever kind of voter you are, it is essential to realize that in the current environment the citizens are the true leaders. It is time for each of us to lead.

***********************************

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

He is the co-author of 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 : Blog &Featured &Government &Politics

The Elephant in the Room

February 11th, 2012 // 8:52 am @ Oliver DeMille

Who are the local lynch-pins that would benefit from your support, input and participation?

Category : Featured

What to Look for in 2012

January 3rd, 2012 // 11:26 am @ Oliver DeMille

Here are some things to consider in 2012, several possible trends which could make significant changes in our world by the end of the year ahead:

1. Barring major events, the news of 2012 will most likely be all about the election, especially the presidential election.But the real potential for election change will be in the Congress.The most important determinant of how America will run after the 2012 election will be whether Congress remains split or if one party gains control of both houses—regardless of what happens in the presidential race.This won’t be the media focus, but those who understand American politics will keep their eye on the coming changes in Congress.
2. More Democrats are arguing for less government spending.[i]This shift in thinking is getting very little press because the election story is so dominant in the current media.Since few Democrats are using this frustration with government spending as a reason to vote for non-Democrat candidates, it receives sparse coverage.But it is a significant change, regardless.Many Republicans and most independents and moderates believe that Washington spends too much already.

   If more Democrats continue to adopt the same view, it may become a major story in the years ahead.

3. The credit rating agencies that downgraded the U.S. credit rating in 2011 are still very closely watching the U.S. economy and some indications are that further downgrades could be ahead if the economy continues to struggle.Along with this, for the first time in many decades, U.S. securities are less stable than some other investments,[ii]and money flow away from the U.S. is increasing—especially since the middle of 2011.If these trends continue, U.S. economic challenges could drastically worsen in the next twenty months.
4. Some leaders in Saudi Arabia have voiced concerns about how the U.S. handled Egypt, especially President Mubarak, during the 2011 Arab Spring.[iii]As the popular uprising grew, the Obama Administration eventually suggested that Mubarak step down.Regardless of whether or not this was the right approach, the sentiment among some Saudi and other Middle Eastern leaders goes something like this: “If that’s how the U.S. treats its allies, do we really want to trust Washington for anything?”Ironically, many in Israel are feeling the same emotion.Add to this the under-reported influence of Saudi investors in major European and U.S. businesses and banks, and this trend may be the most impactful in years to come.

   Western economic dependency on Middle East oil is well known, but the bigger danger may come from direct investment in businesses and banks.

   If massive sums of Petro Dollars were pulled from Western banks, for example, the term “too big to fail” would take on a whole new meaning.

5. We have been warned about cyber terrorism for some time now. Is 2012 the year?
6. Will Israel bomb an Iranian nuclear facility?[iv]If so, how will the Obama Administration react?
7. Ironically, a focus on jobs may finally become a focus in Washington during the election year of 2012. The bad news is that the parties are unlikely to work together to make real changes.Hopefully, this turns out to be untrue, but if current trends continue little will actually occur.

The good news in all this is that a relatively few changes would bring a drastic positive change in momentum and infuse the nation with positive innovative energy.

For example, four changes could establish a massive change of direction and rebirth of American success (like the shift in American perspective which occurred when Reagan took over leadership from Carter).

The four include:

1) a rollback of all federal policies since 2000 that have hurt small business and dis-incentivized innovation, growth and hiring

2) an effective long-term policy to fix the problem with entitlements, balance the budget and get control of our national debt

3) a restructuring of American education funding to support technical training, community colleges and other non-traditional methods to increase the competitiveness of our workforce

4) a move away from international invasions and wars abroad while maintaining a strong national security presence

I am not predicting that these will occur, but they would be greatly beneficial to the nation if they did.

Finally, each year brings its share of surprises.

For example, who could have guessed in 2010 that the year ahead would bring the death of Osama bin Laden or the refusal of the White House to take leadership in a serious jobs plan?

Whatever comes in 2012, America needs to get its financial house in order and re-incentivize business growth and hiring.

These are vital priorities.

***********************************

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

He is the co-author of 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 : Current Events &Economics &Entrepreneurship &Featured &Government &Leadership &Politics

The Big Debate on American Education

November 4th, 2011 // 4:39 pm @ Oliver DeMille

Home Schools, the New Private Schools, and Other Non-Traditional Learning

The current national commentary on American education is split by a major paradox.

On the one hand, nearly all the experts are convinced that our schools must find a way to effectively and consistently teach the values and skills of innovation and initiative.

If we fail in this, everyone seems to agree, the competitiveness of U.S. workers and the economy will continue to fall behind other nations.

As Gary Shapiro wrote:

“Our nation is looking into the abyss. With a blinding focus on the present, our government is neglecting a future that demands thoughtful action.

“The only valid government action is that which invests in our children. This requires hard choices…

“America is in crisis. What is required is a commitment to innovation and growth. We can and must succeed.

“With popular and political resolve, we can reverse America’s decline…. America must become the world’s innovative engine once again; we cannot fail.”

And education is the key.

On the other hand, many of the top education decision-makers seem committed to only making changes when there is a consensus among educators, parents, experts and administrators.

They adamantly criticize any who take bold, innovative initiate to improve the situation.

In the meantime, they wait timidly, albeit loudly, for a consensus which never comes.

Because of this view, the innovative success of many parents in home schools, teachers in small private schools and other non-traditional educational offerings go unnoticed or undervalued by the national press.

The reality is, as Orrin Woodward put it: “If everyone agrees with what you’re doing, it isn’t innovative.”

The growing Global Achievement Gap in our schools, as outlined by Tony Wagner’s book of this title, presents an ominous warning for Americans.

We can change things if we choose, Wagner says, by adopting the following values and skills in our school curriculum: critical thinking, agility, adaptability, initiative, curiosity, imagination and entrepreneurialism, among others.

Secretary of Education Arne Duncan quoted Wagner in Foreign Affairs:

“…there is a happy ‘convergence between the skills most needed in the global knowledge economy and those most needed to keep our economy safe and vibrant.’”

He also foreshadowed the decades ahead by quoting President Obama:

“The nation that out-educates us today is going to out-compete us tomorrow.”

It is difficult to imagine our public schools meeting these lofty needs if our teachers are expected to be anything but entrepreneurial, innovative and agile, when they in fact work in an environment that discourages and at times punishes precisely such behaviors.

It is even more impossible to make the needed changes to our education system if we must wait for everyone to agree on a consensus of action.

Change always comes with a few courageous souls taking the lead, showing what can work, and helping others follow their innovative path.

The only way we’re going to see a burst of innovation and initiative in American education is to start paying attention to the myriad exciting educational innovations already occurring.

As Malcolm Gladwell suggests, the leadership right now in many arenas—including education—is occurring outside the mainstream, led by “Outliers” who just forget the experts and create new and better ways of doing things.

If you are one of these educational innovators—at home or in the classroom—keep taking the lead. You are the future of American success!

Category : Education &Family &Featured &Leadership &Liberty &Mission