0 Items  Total: $0.00

Producers

A New Call for Free Enterprise

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

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.

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

odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver 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 : Blog &Book Reviews &Economics &Entrepreneurship &Featured &Government &Liberty &Mini-Factories &Producers &Prosperity &Tribes

A Big Problem

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

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 21st 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.

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

odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver 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 : Blog &Culture &Current Events &Economics &Entrepreneurship &Foreign Affairs &Government &Producers &Prosperity

A Case for Innovation

May 3rd, 2011 // 2:21 pm @

A Review of The Comeback: How Innovation Will Restore the American Dream by Gary Shapiro

There are two great modern visions of how to help our economy grow and flourish. One holds that the government is the center of economic prosperity, the other believes in innovation. The first attempts to tax and spend, the second believes in the power of free enterprise.

The Republican Party sometimes tries to present itself as the promoter of the second view, and at times the Democratic Party attempts to make this same argument a criticism of Republican policies, but in actual policy both major political parties tend to legislate for the first view. In contrast, Gary Shapiro’s important book The Comeback outlines what Washington needs to do truly bring the economy back. This includes:

  • Stop penalizing investments in start-ups.
  • Direct any public funding of start-ups by private investors, not by government bureaucrats.
  • Let any company fail, according to the rule of the free market.
  • Make economics, business and entrepreneurialism studies part of the public school curriculum.
  • Ensure that business tax rates are transparent and predictable.
  • Change tax laws to favor investment over debt.
  • Reform immigration to encourage entrepreneurial risk-taking.
  • Pass more free-trade agreements.
  • Reform education by allowing teachers to teach.
  • Measure all government spending by how well it is working.
  • Measure all government spending by how it meets serious national needs.
  • Link the compensation of our federal legislators to our annual national deficit.

Shapiro includes a number of other specific proposals for an American comeback. Not every reader will agree with every policy proposal. I found myself disagreeing with a number of points. For example, Shapiro’s argument that, “You can’t legislate progress” is clearly too narrow—just consider the legislative successes against racist and religiously-bigoted behavior.

On the whole, however, Shapiro’s voice is an important contribution to the ongoing debate. More citizens and government officials need to read and internalize his book. Shapiro shows a mature appreciation for the important role of the government in the economy, and simultaneously notes that without real economic freedom no significant American comeback is likely.

He ultimately pins the future of America on innovation, not on either major political party or on any government policy. The government can do much to encourage a flourishing economy, but the innovators will primarily determine our economic future. Shapiro writes:

“Innovation is America. It is our special sauce, our destiny, and our best and only hope for escaping the economic malaise…. Our best hope is for government to foster innovation by creating a fertile ground for innovation to flourish.

“Innovation is the natural by-product of the free market….

“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. We cannot leave the rising generation with a mountain of bad debt. This will require suffering in the present….

“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. Only then can I return to China and tell that Communist Chinese official that America is back.”

Shapiro’s voice is important, and the voice of innovation is vital to America’s future. Unless we find ways to reinvigorate our national penchant for innovation, the future of our economy and nation is bleak. More of us need to join Shapiro in discussing ways to refocus our nation on innovation. Government certainly has a positive role to play in successful society, and only by encouraging widespread innovation can we hope to see sustained growth and an economy that is the envy of the world. Two centuries of American leadership have proven that freedom works. It’s time to remember and more vigorously apply freedom in our modern economy.

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

odemille 133x195 custom The Clash of Two CulturesOliver 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 : Blog &Book Reviews &Economics &Producers &Prosperity

The Declining American Dream

January 31st, 2011 // 9:55 am @

We still hear about the American Dream. But more and more it seems we’re in a Matrix-like dream state where our perceptions are being manipulated. It’s actually a pretty common plot in cinema: The Minority Report, The Sixth Day, Total Recall, Inception, The Adjustment Bureau and others riff on this theme. We’re living in a reality out-of-synch with some truth we’ve lost, and we don’t even realize it. Somehow our collective memory and our assumptions of “normal” are slowly morphing, and our definition of the American Dream at present is so far removed from the original concept as to be a pretty fair Doublespeak[i] idiom.

Back when the Cleavers[ii] and even the Bradys[iii] were the icons of American families, what was the definition of “The American Dream”? What did it mean to be “middle class”? There are some features of it that were fairly well accepted once upon a time:

1. Home Ownership I

Perhaps the most traditional measure of middle class and the American Dream is the ability for every man to be the king of his own castle. In this the U.S. was a beacon to the world, and other countries even began to adopt the value that every person might aspire to own his own dwelling. The historical and sociological significance of home ownership includes the moral and political empowerment of being “landed,” and affiliation with the natural aristocracy. Homeowners were believed to have a deeper sense of responsibility to invest in their property improvement, an elevated pride in and loyalty to their neighborhoods and communities, and a higher commitment to the good of society in general.

2. Home Ownership II

Now we have to dig a little deeper into our genetic memory. Home ownership a generation or three ago meant not only that you weren’t renting from somebody else, but after a maximum of thirty years in your home you weren’t renting it from the bank, either. A 30-year mortgage left the likes of Ward and June Cleaver without a house payment right about when the grandkids started showing up, and they were able to be a boon to their young married children as they were starting out. If the idea of Home Ownership I as a definition of “The American Dream” is still generally accepted (and I believe it is), the Home Ownership II definition has been deleted from our collective memory. Not only do we have a 30-year mortgage that gets refinanced ad infinitum, but we have seconds on our vanishing equity—and our seniors are living on the funds derived from reverse mortgages.

3. One Income

For the Cleavers and the Bradys, Home Ownership I and II were accomplished on one income. Dad had evenings and weekends for leisure; mom could volunteer with the PTA and community service organizations. Both could participate in book clubs, bowling leagues, gardening and other vocations. The Women’s Lib movement sent the modern woman into the workforce by choice; now Home Ownership II is entirely out of reach for the middle class, and Home Ownership I requires a minimum of two incomes—and often multiple jobs for an individual worker—in order to be a reality.

4. Two Cars

The family had a car—and later two. They were American made with pride, and they were built to last. Paid with cash from savings, or with a little help from the local bank, they were paid off long before they were sent to the salvage yard. Some families even scandalized the neighbors by giving each of their teens a car as soon as they were legal to drive.

5. College for Kids

Part of the understanding for middle class families was that they would be able to pay for their kids to get a college education. Now all that’s left of that understanding is the guilt for failing to live up to it. No one seriously expects one-income families to be able to pay off the house and cars and simultaneously send several kids to the University. Scholarships, loans, grants and lingering debt into the career years are now the means for those who want a college education.

6. Discretionary Income

With all of the above, it was still an expectation that a married couple could live within their means and have savings, investment, yearly vacations with the whole family at some destination spot, and still have a few dimes to rub together at the end of the month.

7. Retirement

Ah, and after all this came the golden years. The Cleavers could now spend their expanded leisure time, afforded by an empty nest and the retirement from the company (complete with gold watch honors), in community service and nurturing the rising generation. They had savings, investments and retirement income to fall back on, a house and car paid free and clear, and the greatest resource: Leisure Time. They were elders in their community, and relied upon for wisdom.

The percentage of families enjoying these luxuries shrinks every year. Where did our American Dream go? Somehow, point by point, it has slipped away from us, and taken with it our definition of “middle class.” Would that we could wake up and reclaim the best of that dream; instead, we’ve awakened to a reality where our elusive American Dream is just out of reach; and these seven points that were once considered the legacy of any hard-working family are being deleted from our list of aspirations. If they are middle class expectations, the majority of America is no longer middle class.

[For a follow-up article on the how and why the middle class is shrinking, and how to reverse the trend, read Oliver’s article, “The Rule of Leisure,” featured in the February 2011 monthly newsletter for The Center for Social Leadership.


[i] See Orwell, Nineteen Eighty-four.
[ii] From the 1950 – 60s classic sitcom about the traditional nuclear family of Ward and June Cleaver, “Leave it to Beaver”.
[iii] From the classic 1970s sitcom about the non-traditional nuclear family of Mike and Carol Brady, “The Brady Bunch”.

Category : Blog &Community &Culture &Economics &Entrepreneurship &Family &Generations &Politics &Postmodernism &Producers &Prosperity

The Anti-Federalists, Entrepreneurship, & the Future of Freedom

September 28th, 2010 // 4:00 am @

Click Here to Download a Printable Version of This Article

Like Gladstone, I believe the U.S. Constitution to be “the greatest work ever struck off by the mind and purpose of man.”

Even though it had its flaws—especially slavery—it actually provided for the fixing of these flaws.

The U.S. Constitution, both directly and indirectly, is responsible for the freedom of more people than any other government document in the world’s history.

That said, the anti-Federalists had a point. In fact, they had several.

They were mistaken to oppose ratification of the Constitution, but we would be unwise not to listen to the concerns voiced through their loyal opposition.

They were right about some critical details. In fact, we are dealing with exactly these concerns today.

Entrepreneurs Change the Debate

The brilliance of both sides of the Constitution debate—the Federalists and the anti-Federalists—is an example of how the producer culture and entrepreneurial mindset accomplish the highest quality in citizen involvement—regardless of party politics.

Even in the midst of deeply divided partisan battles, the Federalists and anti-Federalists produced a level of depth, detail, nuance, and excellence in citizen debate that is perhaps unsurpassed either before their time or since.

Today’s citizen dialogue seldom measures up. This is a direct result of that generation’s lifestyle of entrepreneurship, producer-focused education, ownership, initiative, and enterprising mindset.

When a nation of entrepreneurs debates on topics of freedom and leadership, the quality is deeper and richer than when lower classes are uninvolved (as in 1780s Britain) or when most citizen-employees defer to the experts (today’s America).

Anti-Federalist Predictions

The anti-Federalists scrutinized the U.S. Constitution and the federalist papers, and, based on the structures of government, they looked ahead and warned of some of our biggest problems.

They also, in most cases, recommended solutions. We need to heed their words.

What are these challenges, and what can we do about them? To answer both questions, consider six issues the anti-Federalists warned of more than two hundred years ago:

  1. The executive branch will increase influence over the national budget.
  2. National expenditures will increase and eventually bankrupt the nation.
  3. Power will flow consistently away from the states.
  4. The courts will eventually have too much power.
  5. Justice will be lost as government grows.
  6. The treaty power will be abused.

Anti-Federalist Prediction #1: The Executive Branch Will Increase Influence Over National Budget

Prediction: The Executive Branch will increase its say over the national budget and then drastically increase debt, run harmful deficits, engage in unconstitutional military actions, and otherwise run the economy toward ruin.

Unfortunately, this has proven to be accurate. We have learned over time that the people don’t hold the White House accountable for this behavior because every president blames the last political party (in Congress and the Presidency) for the problem.

Both parties use the Executive Branch to commit funding for their projects, even as taxpayers are funding the projects of past administrations.

The Federalists responded to this anti-Federalist warning by correctly pointing out that the Constitution only gives the House of Representatives power over the purse strings.

The Federalists’ “solution” worked for more than a century, but unfortunately for us the Cold War brought secretive and expansive government, and the role of the presidency significantly increased.

Today we are dealing with a system where the House tinkers with and has the final say on national budgets, but the political environment has turned over to the presidency responsibility for proposing, gaining the votes for, and then administering federal budgets.

The House still holds the authority to slow or reject budgets and spending, but it has generally lost the will to use this power. The Executive Branch usually runs the budget.

The result is drastically out-of-control spending. Simple interest payments on the national debt are a huge expense to the taxpayer.

Social Security and other entitlement liabilities can never be fully met without continuing in debt and deficits, as well as drastic and progressive increases in taxes. International military involvement is a mounting problem.

Both political parties like to blame each other for recessions, unemployment, and other economic challenges, but U.S. budgets and spending beyond our means is the underlying problem.

As Larry Summers asked before he joined the Obama Administration, “How can the world’s biggest debtor nation remain its biggest power?”

Note that China, the second largest economy in the world, has huge savings (unlike the former Soviet Union or the current United States) and is a major buyer of U.S. debt.

China has three of the world’s four largest banks, the two largest insurance companies, and the second largest stock market. (See the article “Red Mist” in The Economist.

With all this, the Communist Party remains in control; it also remains firmly communistic in philosophy and is, if possible, increasingly totalitarian.

As for the United States, neither party seems serious about reducing spending. With the Executive Branch running the budgets, spending just keeps increasing.

The Reagan Administration greatly increased spending. Presidents Bush, Clinton, Bush and Obama all followed suit—just as predicted by the anti-Federalists.

 

Anti-Federalist Prediction #2: National Expenditures Will Increase

Prediction: Expenditures and taxes will generally increase over time until they bankrupt the nation. They will become massive, and never be significantly reduced.

This has not yet entirely occurred, but we certainly appear to be on track toward these results.

As mentioned, whichever party is in power finds ways to promote more expensive projects while we are still paying off past expenses.

Anti-Federalist Prediction #3: Power Will Flow Away From the States

Prediction: Power will flow consistently away from the states and increase the scope, size, and power of the federal government. Only major crisis, where the federal government falls, will ever send significant powers back to the states.

Again, we are perfectly on target for this even though it has not yet fully matured. Federal budgets now dwarf state costs, and many state programs are funded by federal money.

Indeed, this has become a major misunderstanding in modern America.

The media constantly pounds the populace with the message that government is broken—Washington is in gridlock and accomplishes little. In reality, however, this is highly inaccurate.

Each year Washington manages to drastically increase the budget, debt, and deficit. It is spending more and more annually, and each year Congress authorizes many new programs.

A lot is getting done—many would argue too much!

Perhaps we could learn from the British-published magazine The Economist, which wrote in February 2010:

“It is simply not true to say that nothing can get through Congress. Look at…TARP…The stimulus bill…The Democrats have also passed a long list of lesser bills, from investments in green technology to making it easier for women to sue for sexual discrimination…

“America’s political structure was designed to make legislation at the federal level difficult, not easy. Its founders believed that a country the size of America is best governed locally, not nationally…

“The Senate, much ridiculed for antique practices like the filibuster and the cloture vote, was expressly designed as a ‘cooling’ chamber where bills might indeed die unless they commanded broad support.

“Broad support from the voters is something that both the health bill and the cap-and-trade bill clearly lack.”

The Senate has killed bills from Republican and Democratic presidents through the years, but this should be seen as the success of our mixed democratic republic with checks and balances rather than as government not working.

If the Senate had killed more bills in the past century, the power of the states would not have diminished to such a weakened place.

Both major parties often make the ingenuous mistake of claiming to be carrying out the “democratic” will of the people when they have broad voter support, and then when such support is lacking of blaming the Senate and Congress for gridlock, partisanship, and a system that doesn’t work.

When there is widespread dislike of certain proposed policies, not being able to pass them isn’t gridlock, but good government.

The Senate was designed specifically by the founders to protect the states, to leave most things to the state level and only allow issues to receive federal support when they were wanted by a large majority of Americans and needed to be accomplished at the national level.

Indeed, the system works more often than the modern media gives it credit.

Anti-Federalist Prediction #4: The Courts Will Eventually Have Too Much Power

Prediction: The courts will not only be independent but will eventually have too much power because there are really no effective checks on their decisions.

This has happened and is still increasing in its impact. Without checks on the Supreme Court, states have little recourse against growing federal controls over powers previously (and constitutionally) held by the states.

Our freedoms consistently decrease as the Court expands its interpretation of the role of the federal government in our lives.

Anti-Federalist Prediction #5: Justice Will Be Lost as Government Grows

Prediction: Governments will become so big and impersonal that even juries won’t know or care about the accused; enforcing the rules will be more important than true justice. Freedom will significantly decrease as a result.

This has occurred and is still happening.

Before 1896, a jury of peers was not some nominal, demographical designation. The “peers” often actually knew the accused and even the victim personally.

As a result, they not only were quick to put away those who were truly dangerous to society, but they also used their power to oversee the laws and protect citizens from government.

Not only could juries declare someone innocent, they could also nullify laws they considered bad or against freedom.

This system was altered at least partly because it was frequently used in a horrible miscarriage of justice as racist juries ignored the law and both freed white criminals and jailed innocent people from minorities.

It is unfortunate that in response to such abuses we threw out not only racist dominance of juries, but also the concept of juries of known peers.

In fact, the best remedy for discrimination by the justice system could have been juries of true peers, who not only could have protected those falsely accused, but with such empowerment would have been the most motivated to hold accountable the true criminals among them.

When all are equal before the law and are subject to the admonishment and reprisal of true peers, racism is more readily weeded out.

This would have been a great support to abused races, and could have greatly advanced the cause of civil rights in America.

We have never found a way to re-balance this loss of freedom or for the people to quickly overturn the effects of bad laws.

California responded within a few years of the 1896 change in jury power by adopting Recalls and Initiatives, but these still left the people with less power than before.

Anti-Federalist Prediction #6: The Treaty Power Will Be Abused

Prediction: The treaty power will be used to change the Constitution in ways the people don’t even know about and that benefit the rich at the cost of the people’s freedom.

This has happened and still does. In fact, it may soon be a major concern.

For example, when banks fold and endanger entire nations, government can bail them out. The same is true for huge businesses and even state-level governments.

But what happens when nations fail financially?

The old answer was that they became open to attack like Western Europe during the Great Depression. The result was devastating.

To prevent such a disaster from being repeated, the Allies met in 1944 and crafted the Bretton Woods organizations, including the International Monetary Fund (IMF) and the World Bank.

Since then, nations who couldn’t pay their debts have been bailed out by the IMF.

In return for such benefits, the borrowing nation submits to “Austerity Measures,” under which the IMF closely watches national policy and government institutions to ensure that the nation does nothing to jeopardize its ability to pay back its loans.

This system has certainly had its share of successes.

But Austerity also amounts to a virtual transfer of sovereignty from national government to IMF regulators—well beyond the power of the citizenry to require accountability or to effect remedies.

So far the United States and most Western European nations have been lenders to the IMF, not debtors.

But if the U.S. ever needed to become a debtor nation, Austerity Measures would prove the anti-Federalist prediction devastatingly true.

For example, when Greece defaulted on its debt payments in early 2010 and Spain threatened to do the same, the European Union came to the rescue.

The IMF was called in to advise the EU, and Austerity was established over the Greek government.

Many citizens (including a huge number of professionals and managers) took to the streets in protest.

But instead of protesting a drastic loss of freedom to Austerity, they were upset because of wage freezes.

There are three ways the U.S. can avoid Austerity at some point in the future.

First, we can tighten our belts, reduce government expenditures, and deregulate and lower taxes on small businesses, which historically make up 80 percent of our economy’s growth.

This would convince many employers to hire and consumers to spend.

Second, we could borrow from other nations. China has a huge surplus of government and also private savings, and it wants to invest in the United States. Indeed it is our largest creditor now.

Other nations may also be persuaded to keep supporting our spending habits. But one has to wonder why our philosophical opponent (communist China) wants to invest so much.

Are its motives pure? What if they’re not? Is it a simple profit motive? What if it’s something more?

As Peggy Noonan wrote in The Wall Street Journal:

“People are freshly aware of the real-world implications of a $1.6 trillion deficit, of a $14 trillion debt. It will rob American of its economic power, and eventually even of its ability to defend itself. Militaries cost money. And if other countries own our debt, don’t they in some new way own us? If China holds enough of your paper, does it also own some of your foreign policy? Do we want to find out?”

A third possible method of solving our debt problem is to borrow from huge international corporations. This carries the same problems as borrowing from nations.

Note that if we do eventually take IMF loans, they will only pay the interest on the debts. We will have to pay back the original loans, and an international team of regulators will run our national economic policy and make our economic decisions.

If Americans are frustrated with Congress, imagine their frustration with a group of international bank officials running our economy—bankers who may not have as their motive either to see us out of debt to them or to strengthen our economy, society, international influence, or other elements of our way of life.

The rule of international borrowing is simple: The lenders make the rules.

Method one of facing our economic reality—returning to an incentivizing free enterprise system and living within our means—is hard.

Neither political party wants to promote it, and whoever does implement it will probably be blamed for higher short-term unemployment, stock market losses, and a worsened recession.

In the long term, however, this course will revitalize America’s economy and free lifestyle.

The other two options keep America in economic decline and will eventually result in reduced political power, weaker national security, and fallen status.

They will also, most importantly, lead to a significant decrease in our freedoms and the prosperity of our children and grandchildren.

This is our choice: Make the tough decisions now, or lose freedoms and prosperity for generations. So far we have passed on making the right choice.

No wonder independents, tea partyists, and the far left are so frustrated with both Republicans and Democrats.

Moreover, economic downturns are three-headed dragons; and to this point we have only faced recession and high unemployment.

Inflation is likely to be the next crisis, and it may very well rekindle and worsen the first two.

Whatever we decide to do economically, we should, like the Federalists and anti-Federalists, clearly understand one thing: Economics and freedom are directly linked.

A debtor nation is less free than when it was solvent.

Solutions Old and New

The anti-Federalist solutions for these problems may well have helped. They proposed that the people amend the Constitution, specifically in the following ways:

  1. The Bill of Rights would include the requirement that juries consist of local peers who know the accused and can protect citizens from government.
  2. Treaties would require full debate in and passage by Congress—just like laws.
  3. Any decision by the Supreme Court could be overridden by a majority of the States.

How effective these amendments would have been is debatable.

But the answer may be found in another proposed anti-Federalist amendment which actually did get passed.

To counter the danger of huge expenditures and taxes by the Executive Branch, loss of power from the House to the Presidency, and transfer of powers from the States to the federal government, the anti-Federalists wanted an amendment clearly stating that all power not specifically given by the Constitution to the federal government would be retained by the states.

The anti-Federalists got their way in the ratification of the Tenth Amendment:

“The powers not delegated to the United States by the Constitution, nor prohibited to it by the states, are reserved to the states respectively, or to the people.”

Unfortunately, these were weakened by Court cases between 1803 and 1820, and later by treaties adopted between 1944 and 2001.

We the People

It turns out that Constitutional limits and language are only guaranteed to last as long as the people are vigilantly involved.

No matter what the Constitution says, it won’t endure if the people don’t closely read it and demand that it be followed.

In this sense they are the fourth branch of government: The Overseers.

When the people stop requiring officials and experts to adhere to the Constitution, those in power alter the Constitution, redefine its precepts, and sometimes mutually agree upon a revisionist and opportunistic definition of its language.

The people are left out of the decision, and their freedoms decrease.

At times, as designed, constitutional checks and balances keep one branch from usurping power even if the people aren’t involved.

But the greater danger occurs when a collusion of branches agree in taking away power from the states or the people (this happens too often, especially since Butler v. the United States in 1936).

Arguably the most important document for freedom ever created by mankind was established and ratified by those who supported the U.S. Constitution.

The second deepest freedom analysis of government was provided by their opponents, the anti-Federalists.

This second group saw that whatever a Constitution says, as important as it certainly is, the people simply must stay actively involved or they will inevitably see their freedoms decline.

The Producer Perspective

The fact that both groups came from a society of owners and producers is neither surprising nor insignificant.

Owners value freedom over security, see the most decorated experts and celebrities as merely other citizens, and see their own role as citizen as vital to society.

Producers think in terms of protecting society’s freedoms, and they simply don’t believe this responsibility can ever be delegated or ignored.

Successful ownership, farming, and entrepreneurship are all about keeping track of all the details; taking action whenever it is needed to achieve the desired results; listening to the counsel of experts and authorities—and then leading by making the best decisions even if they goes against expert advice; and building effective teams that work together without depending too much on those at the top.

People trained and experienced in such skills are truly competent in handling and preserving freedom.

What we need in our day is not necessarily more specific proposals from the Federalists or anti-Federalists.

Rather, we need a return to the producer-entrepreneurial style of thinking and expertise that founded and built the freest nation in history.

If we want a society of freedom that lasts and prospers, we must as citizens become talented and practiced in the arts of freedom.

America was created on the basis of freedom, and until we choose to become a citizenry steeped in freedom principles and actively involved in their promotion, freedom will not likely increase.

Click Here to Download a Printable Version of This Article

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

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

He is the 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 : Constitution &Entrepreneurship &Government &Liberty &Producers

Subscribe to Oliver’s Blog