Saturday, June 30, 2012

Economis Systems


There are three types of economic systems that all countries fall into.

1.   Socialism

2.   Cronyism

3.   Capitalism

Most countries are made up of a combination of all three, with an emphasis on one of them.


Socialism is where the human beings in the government offices control the market. They decide who needs what and at what price. They may actually take ownership of the businesses or they may simply pass laws controlling them. Same results.

With socialism we are at the mercy of the intelligence and good will of the very-human bureaucrats in office. If they make a mistake, have the flu, have a fight with their spouse, or whatever, we are pretty much out of luck. If they are book-smart (can pass tests well), but real-life stupid (as many “smart” people are) we are pretty much up a creek without a paddle.


Cronyism is where businesses “bid” (usually informally or even under the table) for politicians. That business that gives the most to the politician’s election fund gets to have his say in the laws. Big Business loves this system because they can get all sorts of laws that eliminate the competition, usually in the name of “public safety” or “fairness.” So instead of improving their product or service in order to stay competitive, they simply “donate” to a politician.

(Unions are often the best “Big Businesses” at doing this, by the way. The number one donator to the Democratic party is unions.)


Capitalism is the system where everyone has goods or services and everyone needs goods or services. The two groups get together and agree on an exchange and everyone is happy. (Everyone has something to offer and everyone needs something)

Example: My Hubby has time, labor and expertise in running a warehouse. He trades these to BossMan for a certain amount of money each week. Then we trade that money to the grocery store for food. BossMan is happy (he has the warehouse manager he needs). GroceryStoreMan is happy (He has money to trade for the things he needs). We are happy (we have food to eat). Everyone’s needs are met.

If someone wants more for his goods or services than anyone wants to pay, he won’t be able to sell them. He will have to either lower his price or find something else to trade.

If someone comes along and is able to make the same goods cheaper and/or better, the first man either changes to compete or finds a different line of work. If he petitions the government for regulations that would cost his competition money, he has slipped into Cronyism. If he gets laws passed that force people to buy his product (like insurance), he has now slipped into socialism.

Capitalism is actually the most compassionate system there is. You are directly rewarded for meeting people’s needs. Bill Gates, for example, became a multi-millionaire by finding a way to meet our “need” for idiot-proof home computer systems. Now that’s not saying everything he did was honest or moral (don’t really know as I haven’t studied it), but his main source of income was simply meeting our need for computers.

Capitalism is dependent on the right to property. If you don’t have the right to control your own property, you have nothing to trade for what you need. Both socialism and Cronyism steal your property (labor, time, skills, tools, land, raw materials, money, etc) leaving you dependent on bureaucrats and either Cronyism or Socialism to get what you need.


Capitalism is obviously the best system around, but it is extremely fragile. It is way too easy for a country to see the riches some gain by meeting people’s needs and taking risks, and envy them. It is way too easy to justify taking that property (money) “for the common good,” starting us down a slippery slope towards both Cronyism and Socialism.  

I am afraid America is way too immersed in Cronyism and the backlash is now we are heading into Socialism. This is not good for Mr. CommonMan, though it is great for bureaucrats and Big Business.

What’s the solution? We must first recognize the enemy (selfishness and envy) and that Cronyism has masqueraded as “Capitalism,” giving the later a very bad reputation. Then we need to band together against the humans who have declared themselves better than us and, thus, better able to decide what is good for us (politicians, bureaucrats, and Big Business). We need to vote on principle, not personal self-interest. We need to take our country back.

1 comment:

  1. I really enjoyed this post. Thank you for summarizing what is happening to our country. I will be adding a link to your post on my Learning Log of August. :) I usually post on the first days of the month. God bless,Tereza


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