This is based on an article that first appeared in March 1993. Since that time, millions of Americans have invested in a booming Stock Market. However, during the same period, student test scores for math and economics have plummeted. A basic understanding has become more important than ever.
I used to think economics was boring. The constant barrage of "figures and indicators" can be mind-numbing. George Bernard Shaw once said: "If all the economists were laid end to end, they would not reach a conclusion."
Then I heard a speech by a famous investor, who actually made it all rather interesting. Still, as Will Rogers said, "There are lies, damn lies, and statistics." Hence, in this article I’ll try to avoid numbers altogether.
There are many types of economies, from primitive bartering through caste systems, to modern information networks. Each is intimately tied to the particular tradition and government of its host nation.
The United States has the most successful economy in the world; in fact, in all history! We call it the "free enterprise system." The best description I’ve ever seen appeared as a popular office poster. (See illustration.)
Ironically, few realize that it was Karl Marx who coined the term Capitalism, referring to "a system of greed and exploitation, doomed to fail." Many people still believe this, but now they go by other names.
The United States was founded with a unique, untried system. It featured individual rights and responsibilities. Also, limited government. These gave people a chance to succeed -or fail- on their own initiative. Americans had a chance to profit from their own inventiveness, as much as from their skilled, traditional labor.
People were able to innovate, and advance themselves, without caste or regulatory limits. Thus America went from tallow candles to electric lights, from horseback to air flight. We advanced further in a few short decades than humanity had in the thousands of years before! (Read The Mainsprings of Human Progress by H. G. Weaver.)
Yet, even now, those with Marxist ideas are blaming America, and Capitalism, for all the world’s ills. Every drop of our wealth was supposedly wrung out of some hapless slave, or "banana republic" laborer. Recently, we’ve been blamed for the "doom and gloom" of allegedly impending planetary destruction.
Did forced labor perfect the VCR? Did Central American bananas fuel our Apollo moon rockets? Will your lawnmower destroy the Earth? Some prominent people want you to believe it!
Business Ethics
A society can only prosper when both its citizens and government are "on the right track." Workers must be reasonably honest and reliable; willing to "work smart" and "until the job is done." Just ask Boris Yeltsin how it is when people haven’t learned this yet . . .
Government must perform certain vital functions, such as coining sound money, verifying weights and measures, and ensuring safe goods and transportation. (Opposite this, extreme Libertarians want to "privatize" the freeways, parks and rivers, and even the military.)
For the economy to advance, there must be free and fair competition. Better quality and service, lower prices; building a better mousetrap.
There must be protection for risk-taking inventors, in the form of patent laws. The best incentive is still the chance to make a decent profit! Great advances have come from the unlikeliest people.
Government can set standards for practical things, from lumber sizes to motor oils, to measures and signals. Imagine the confusion if things didn’t "match up." That’s what earlier societies had to contend with!
Government plays a key role in "worker’s rights." My grandfather was a longshoreman, working on the docks, and he encountered some of the corrupt Big Bosses of his day. We must never tolerate the horrible "sweatshops" described by Jack London and others.
New businesses must be able to open up in various fields. Thus, there must be Anti-Trust Laws against exclusive "monopolies" and gigantic "cartels." Such have often used their power to crush an upstart, no matter how good it was. One true instance is dramatized in the movie Tucker.
There are modern examples. This author owns a rugged, sophisticated computer watch that cost $80. I’m rather deaf, but a strong hearing aid (using similar electronics) costs more like $1,000. Ranchers can buy antibiotics for a few dollars a pound. Doubtless the reader can think of other examples.
Unfortunately, well-intentioned government regulations can become outdated, overly complex, or just plain ridiculous. "Excessive taxes and regulation" have ruined or driven away thousands of businesses, and thus millions of jobs.
A good depiction of this appeared in the comic strip Broom Hilda. One of the characters decided to start a "shoelace repair" business, tying broken ones back together. He was immediately mobbed by officials wanting to examine every conceivable aspect of his business. He was told to get permits, meet zoning requirements, pay fees, submit written plans, file a steady stream of reports, etc., etc. He quickly gave it up, and declared his business a failure.
Again he was surrounded, this time by officials who offered him aid, relief, compensation, unemployment payments, retraining, and more. (Note that all of these are tax funded-by your taxes.)
State Run
Sometimes governments decide to operate their own State Run Industries. This is more common in other countries-luckily for America. These are true modern dinosaurs: huge, slow, stupid, and dying out. The best American one I’ve encountered is Amtrak, and it still requires a tax subsidy.
In America there are many local-level creatures of this type. They are usually "municipal" or "regional" operations, such as buses and subways. These sovereign fiefdoms need not make a profit, and receive a hefty subsidy. They feature large, well compensated Administrations, who hire their pals, go on lavish "business" trips, and so on. They always have a unionized work force, who naturally push for higher salaries, benefits, pensions, etc.
Last in priority come the actual customers. They’re always cowed by fare hikes, service cuts, aging equipment, strikes and other difficulties. (And some people wring their hands, and wonder why we keep traffic-jamming in our own cars.)
You can find similar "little kingdoms" in other public spheres, such as University, Prison and Power systems.
America became the most prosperous nation in history thanks to her freedom: political, economic and religious. She became the best place for the free enterprise system to flourish. The benefits have been immense. Even our poorest slum dwellers usually have a car, hot water, a TV, and plenty of food and medical care.
Corporations
Much of America’s wealth comes from her large, privately-run corporations. Mass production has brought America cheap prices, wide availability, and simple maintenance for appliances, electronics, cars and more.
Marxists are always denouncing these corporations, regarding them as the very embodiments of evil. Greed, waste, pollution, exploitation-you name it, they’ll blame the "military-industrial complex" for it.
Some go even further, saying "wealth itself is evil," so we must "soak the rich." This has gone well beyond rhetoric. Recently a Luxury Tax was passed, but instead of extracting piles of money from the rich, it threw thousands of boat, light plane, and other "big ticket item" makers out of work. Within a few years it was actually repealed! (It’s been replaced by a "marriage tax penalty," but that’s another story.)
Several years ago, this author met an Islamic scholar. He explained something he’d learned from his Koranic studies, which we agreed is quite relevant today:
Suppose you have one million dollars. You wish to do as much good as you can for the poor families in your area. You could give it out, in a socialistic "wealth redistribution." Say, $5,000 apiece to 200 unemployed workers. They would soon spend it, and it would be gone.
Alternatively, you could give the entire million to one competent, wealthy businessman. He could use it to start a new business. It would grow, and soon he could hire those 200 workers, at a good salary-and pay them for years to come. The Bible says much the same thing. (Read Proverbs 31 and Jesus’ Parable of the Talents.)
Clearly, the Economy prospers when run by decent, reliable business people, with the right amount of regulation. Too often, we’ve seen people try to "make a quick buck," rather than build for the future.
Government can encourage research into new technologies. The Divine Principle speaks of technology bringing a better standard of living. However, it also warns against "empty materialism."
Almost everyone aspires to prosperity. In every nation, people envy and seek American culture and wealth. (Hopefully, its more positive aspects . . . )
I’ve read countless Science Fiction stories about possible futures: amazing high tech, but used in crime and war, not just in constructive things.
Imagine if we could restore our original natures, and fulfill that which God always intended. Few writers have even considered this, either in fiction or in "think tank" speculations.
Science has often opposed Religion, and sometimes visa-versa. When they finally harmonize, we’ll enjoy tremendous freedom and prosperity. Thankfully, our True Parents are leading the way.