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LAISSEZ FAILURE
-- What ever happened to good, ol’ capitalism? Why is it dead?
Laissez faire, the mantra of the rich, powerful, well-connected, has been used as a drum beat for generations of entrepreneurs who would ride to the realms of riches on the backs of low paid workers. We have witnessed the Enron’s, World Com’s gather in the wealth of stockholders, customers, workers and hand it over to a select few top dogs (some of whom are in jail and other facing prosecution and lawsuits galore).
We know the Federal Government has been operating the longest running, largest Ponzi scheme, and doing so openly, grandly, and in the face of a cowed public and muted press.
Consider this: all of the taxes collected on personal income is not enough to pay the interest on the 14 trillion of combined Federal and state debt. The Federally admitted debt is 5 trillion (more like 9 trillion and growing). The expansion of currency by the U. S. Mint printing presses simply throws more fuel on the fires of inflation as evidenced by the gradual rise in the Fed discount rate by Greenspan et al.
Personal debt is growing, fueled by the high inflationary prices of homes, which “growth” is supported by the low Fed discount rate and other Federal subsidies to the banking industry. As new home owners and those “moving up” bid against the available supply of housing, the price gouge by all players in the construction chain accelerates. A “medium price home” in So. California is now over a half-a million.
Folks who “down size” and pull out considerable capital gains, are free of capital gains taxes for the first half mil of profit. They use this tax free money to satisfy their consumeritis. Thus, on the basis of GNP, the U.S. is doing OK. The trouble with this conclusion is that it is based in large part on the Federal money printing press and the ballooning Federal deficit.
A slight down turn in the economy could trigger a massive financial landslide. Banks will stop lending to and refinancing the housing market and other industries which are tied to the Federal cow’s teat. Consumption will drop, retail jobs will evaporate, small business will bite the dust and massive lay-offs at all levels of the economy will take place, not unlike the dot com melt-down, only larger, wider, deeper and more pervasive.
Causation can be fixed on two main basis:
Now, don’t go saying that the only alternative is the socialist economy which, we know does not work. Socialism does not work for the same reason that the current economy of the U.S. does not work -- because the rulers are the same—greed, contempt for the workers, stupidity and ignorance of the real economic forces which drive a profitable and stable economy.
There is nothing wrong with making a profit – we all have to make a profit whether we are in business, as a worker or government employee. Simply put a profit is the difference between the cost of living and working and the net after tax income to the person or enterprise. What is wrong with the current economic theory of laissez faire is its twisting and mis-use as a mantra for supposed justification of excessive profits garnered by the captains of industry and government. These excessive profits are extracted from and at the expense of the those who are unable to defend themselves against the avarice of those who control our economy and government structures. In short, laissez faire has become laissez failure.
The solutions are not as profound as one might expect. Simply put, the control of the economy of the nation must removed from the few at the top and must be dispersed geographically and among all levels of enterprise and workers. Don’t get me wrong. I’m not advocating the violent overthrow of the government or a “damn the capitalist nation”. Actually, the mechanism is true, old-fashion capitalism in action. Basically, we form cooperatives of the willing and capable workers, who over time, gain control of their own economic spheres and, to the greatest extent possible “bypass” the current economic and governmental infrastructure. We have to gain control and ownership of the means of production and commerce, leading to some greater say in the way government rules, regulates and functions.
The Mondragon model is a good place to start. Of course this transition will not happen overnight or be accompanied by the beating of drums and the clanging of symbols. As a matter of strategy, the change should take place under the radar, out of sight, quietly, and with some stealth. Once we have the means of production in our hands, the competition (captains of industry, robber barons, government officialdom) will wake-up some morning and realize we now have their lunch bucket.
How will this marvelous transition take place? For lack of a better metaphor, by a form of “economic togetherness” – or in legal terms a cooperative corporation operated under general partnership rules. This approach is hardly new – just a few new twists will place this form of enterprise into first place in our economy.
We have many examples – large accounting and law firms have used the partnership form extensively. Many intentional communities have partnerships – regardless of the exotic labels they may have attached. However formed and called, the enterprise succeeds because the assets of the business and the profits and losses are owned by all of the workers. The model is not an “employee owned business” because there are no “employees”, only owners.
The best example of a highly successful worker owned business is Mondragon Cooperative Corporation. This company originated in the Basque region of Spain over forty years ago. It was started by five engineering graduates who designed and built a paraffin stove. Mondragon now consists of over 150 associated companies and grosses over two billion dollars a year. It is one of the most profitable companies in Spain. We would do well to emulate Mondragon by creating a similar model suited to U.S. law and its economy. Take a look at the following websites and find out for yourself, how good a model this is to solve the problems of laissez failure.
Submitted by Jim Miller Sunday, July 06, 2008
Laisefailure.doc
By Jim Miller
Laissez faire, the mantra of the rich, powerful, well-connected, has been used as a drum beat for generations of entrepreneurs who would ride to the realms of riches on the backs of low paid workers. We have witnessed the Enron’s, World Com’s gather in the wealth of stockholders, customers, workers and hand it over to a select few top dogs (some of whom are in jail and other facing prosecution and lawsuits galore).
We know the Federal Government has been operating the longest running, largest Ponzi scheme, and doing so openly, grandly, and in the face of a cowed public and muted press.
Consider this: all of the taxes collected on personal income is not enough to pay the interest on the 14 trillion of combined Federal and state debt. The Federally admitted debt is 5 trillion (more like 9 trillion and growing). The expansion of currency by the U. S. Mint printing presses simply throws more fuel on the fires of inflation as evidenced by the gradual rise in the Fed discount rate by Greenspan et al.
Personal debt is growing, fueled by the high inflationary prices of homes, which “growth” is supported by the low Fed discount rate and other Federal subsidies to the banking industry. As new home owners and those “moving up” bid against the available supply of housing, the price gouge by all players in the construction chain accelerates. A “medium price home” in So. California is now over a half-a million.
Folks who “down size” and pull out considerable capital gains, are free of capital gains taxes for the first half mil of profit. They use this tax free money to satisfy their consumeritis. Thus, on the basis of GNP, the U.S. is doing OK. The trouble with this conclusion is that it is based in large part on the Federal money printing press and the ballooning Federal deficit.
A slight down turn in the economy could trigger a massive financial landslide. Banks will stop lending to and refinancing the housing market and other industries which are tied to the Federal cow’s teat. Consumption will drop, retail jobs will evaporate, small business will bite the dust and massive lay-offs at all levels of the economy will take place, not unlike the dot com melt-down, only larger, wider, deeper and more pervasive.
Causation can be fixed on two main basis:
(1) the Federal spending engine mentioned above, and
(2) business ethics (or lack thereof), namely the doctrine of laissez faire, or “do unto others before they do it to you” or the golden rule, “He who has the gold, rules”.
Now, don’t go saying that the only alternative is the socialist economy which, we know does not work. Socialism does not work for the same reason that the current economy of the U.S. does not work -- because the rulers are the same—greed, contempt for the workers, stupidity and ignorance of the real economic forces which drive a profitable and stable economy.
There is nothing wrong with making a profit – we all have to make a profit whether we are in business, as a worker or government employee. Simply put a profit is the difference between the cost of living and working and the net after tax income to the person or enterprise. What is wrong with the current economic theory of laissez faire is its twisting and mis-use as a mantra for supposed justification of excessive profits garnered by the captains of industry and government. These excessive profits are extracted from and at the expense of the those who are unable to defend themselves against the avarice of those who control our economy and government structures. In short, laissez faire has become laissez failure.
The solutions are not as profound as one might expect. Simply put, the control of the economy of the nation must removed from the few at the top and must be dispersed geographically and among all levels of enterprise and workers. Don’t get me wrong. I’m not advocating the violent overthrow of the government or a “damn the capitalist nation”. Actually, the mechanism is true, old-fashion capitalism in action. Basically, we form cooperatives of the willing and capable workers, who over time, gain control of their own economic spheres and, to the greatest extent possible “bypass” the current economic and governmental infrastructure. We have to gain control and ownership of the means of production and commerce, leading to some greater say in the way government rules, regulates and functions.
The Mondragon model is a good place to start. Of course this transition will not happen overnight or be accompanied by the beating of drums and the clanging of symbols. As a matter of strategy, the change should take place under the radar, out of sight, quietly, and with some stealth. Once we have the means of production in our hands, the competition (captains of industry, robber barons, government officialdom) will wake-up some morning and realize we now have their lunch bucket.
How will this marvelous transition take place? For lack of a better metaphor, by a form of “economic togetherness” – or in legal terms a cooperative corporation operated under general partnership rules. This approach is hardly new – just a few new twists will place this form of enterprise into first place in our economy.
We have many examples – large accounting and law firms have used the partnership form extensively. Many intentional communities have partnerships – regardless of the exotic labels they may have attached. However formed and called, the enterprise succeeds because the assets of the business and the profits and losses are owned by all of the workers. The model is not an “employee owned business” because there are no “employees”, only owners.
The best example of a highly successful worker owned business is Mondragon Cooperative Corporation. This company originated in the Basque region of Spain over forty years ago. It was started by five engineering graduates who designed and built a paraffin stove. Mondragon now consists of over 150 associated companies and grosses over two billion dollars a year. It is one of the most profitable companies in Spain. We would do well to emulate Mondragon by creating a similar model suited to U.S. law and its economy. Take a look at the following websites and find out for yourself, how good a model this is to solve the problems of laissez failure.
Submitted by Jim Miller Sunday, July 06, 2008
Laisefailure.doc
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