Tuesday, August 26, 2014

The Harvest of Liberalism:Part 2

According to the author and thinker George Gilder knowledge is wealth. What does that mean? It means that someone like me who has the knowledge to architect computer networks has literal wealth at my keyboard worn fingertips. I turn my knowledge into monetary gain by building networks for those who need them. Simple as that.

So, when I have a toothache I seek the person who has the knowledge to extract it (safely) and he or she trades that knowledge for some of my wealth. Econ 101.

Gilder, a capitalism proponent, dismisses the well worn notion that capitalism is an economic system based on incentives and greed. It's not to say these are not part of capitalism, they are, but not unique to capitalism in any way. The communist system had its incentives - in some cases they were do what your told or die. Now that's an incentive. The farmer in the communist collective greedily took the best crops for his family and sold what he could on the black market before the "party" came and took the product of his labor for the greater good. The socialist citizen gladly "sells" his services or expertise off book to avoid paying exorbitant taxes - this is also incentive (and greed) at work.

The heart of capitalism is creativity, competition and the arc of the learning curve. The entrepreneur with the better mouse trap goes through the learning curve process as he perfects the manufacturing of  his product, slowly bringing the unit costs down as his knowledge increases. The material costs, marketing costs and transportation costs are mostly fixed and out of his control, but the knowledge of how to create efficiencies and streamline processes is the difference that gives the him the edge over his competition, therefore turning his knowledge into wealth.

It's a beautiful thing.

For Gilder the true essence of capitalism is surprise. Again, what does that mean? Take the Internet itself. What started as a method for the Defense Department to share knowledge (there's that word again) electronically across the vast expanse of the nation has evolved into the surprising economic engine of the 21st century. In my industry the Internet was at first dismissed and then viewed with suspicion before it was completely embraced as an integral part of the business. A surprising outcome to say the least. Look at the Apple iPod and how this marvel of engineering has transformed music delivery - clearly surprising the entire entertainment industry. We could go on by citing Netflix and Facebook and Amazon.com each through the process of creativity and the arc of the learning curve have transformed entire economies and cultures. These are all fantastic, surprising things, mind blowing really. These things and countless other surprises of the twentieth century were brought forth on a capitalist foundation, not a state controlled economy.

So why would we want to tear this down and install liberalism's system of choice, socialism? I have my theories and all of them boil down to one word - control. The intellectual class with its entitled desire to wield power wants to control everything, including your life and mine. Couldn't the same thing be said of the capitalist oligarchs? Talk about controlling society... I venture to say that the oligarchs are where they are precisely because of the unintended consequences of socialist controlling intervention. They are the byproduct of a kept ruling class.

Control is the goal of liberalism. Platitudes like fairness, equality of outcomes, and my favorite, tolerance are their buzz words, the salve soothing the aggrieved be they real or not. Leftist politicians who spew this rhetoric while guaranteeing economic growth by installing artificial controls via regulations, tax codes, bailouts and stimulus deliver just the opposite. This approach may work for a while, but it is unsustainable without the spontaneous surprise of creativity.

It should come as no surprise then knowing all this that the socialist based countries in Europe and Eurasia are dying. They have lost faith in the future - they have lost faith period. So many have stopped having children, the ultimate expression of hope for the future, that entire ethnic identities risk disappearing by the turn of the century. They only grow in population and economically by importing millions of young immigrants. Further, by culturally turning being female into a slightly softer version of being male they have effectively killed the family. A man without family reverts to being a brutish thug or a lazy lout and a woman is forced to turn to the government to support her and the children she does have.

Try to deny this happening right here in our own country.

The collapse of the family is a result both continuing socialist welfare policies and and the globalization of the labor force. The two are linked. The social welfare state costs a lot of money. It keeps taxes high which in turn forces wages up. Couple this with failing schools and drive for companies to move low skilled high wage jobs to cheaper labor pools and you see the collapsing of the middle class and with it the destruction of the family.

The liberal stands on his soapbox promoting the very policies that lead to this dire situation, to the point that we have an entrenched and growing welfare state to take care of the women and children and a police state to take care of the young men. The society now exalts independent, self-sufficient women and jails its unwanted, useless men. Unfortunately it will take decades to unwind this. This is the harvest of liberalism.

In America we still see twinkles of creativity and economic growth. We still see new families, new houses and all the economic activity that surrounds a growing family. We still see new companies being born through the haze, but they struggle and often fail needlessly. Everything is being choked. The confluence of a maze of the regulatory rules of government encroachment along with the cronyism of the big business/government cabal is robbing the young of their futures and killing creativity. The cost of participation is becoming prohibitive so that many refuse to even try.

The sad thing is that it doesn't have to be this way. Creativity, knowledge and wealth creation is the American way. The powers that be in government, the environmental crowd, foreign interests and big business refuse to unshackle the dynamo that is America.