Headline, April22, 2014




THE TRUTH is the more protection one has the more one needs. Protected industries almost never reach the point where:

They can throw off their protection and reenter the competitive marketplace. Instead they drag others down with them. And the growth of large economic institutions-

Also forces government to take many protective actions. At the heart of any concept, say capitalism and competitive markets lies the doctrine of failure. The inefficient are to be driven out of business by the efficient.

But governments cannot tolerate the failure  of  large economic  actors. Neither GM nor New York City can be allowed to fail, since the disruptions to the integrated economy would be too large to tolerate.

Needed military goods would not be delivered, and millions of bondholders would lose substantial part of their wealth.

But if the governments rescue large economic actors, this creates a demand for rescuing the local grocery store or the small town from its mistakes. Unless we do so-

We have a double standard for the large and small when it comes to failure.
But to rescue is to control. It is also to undercut the whole doctrine of competitive marketing forces. Those who fail won't be punished economically.

If we could simply buy economic security, as one buys an insurance policy on one's life or house, economic security would not be a difficult problem. But we cannot. Instead, we give people economic security:

By guaranteeing them that their current earning opportunities will not disappear. But this guarantee locks us into current activities and makes it difficult to shift to the new product and processes that are at the heart of economic progress.

The problem is to combine economic progress with economic security when to a great extent they are   "mutually incompatible" . Everyone wants both, but everyone cannot have both.

Economic progress always tends to be thought of in terms of bright new products and processes, but we forget that every new product replaces some old product and every new process replaces some old process.

Economic construction is based on Economic destruction.

In the process of destroying old products and old processes, say, some Americans will suffer large economic losses even though other Americans will make even larger economic gains.

Only very seldom is economic growth a process without losers. Average real standards of living rise, but this gain obscures many losses.

Losers naturally want to eliminate their losses, but this can only be done by stopping the economic progress that threatens to cause their losses. As each of us, individually and in groups, searches for economic security:

We collectively reduce the rate of real growth and produce an ossified society that is incapable of adjusting to new circumstances.

One simplistic solution is to give up on either economic progress or economic security. There are advocates of both positions. Conservatives, from what they believe are impregnable economic positions, generally-

Recommend that everyone else should give up on economic security and live in a rugged, dynamic, competitive, free enterprise economy.

In practice, those same people run to the government for protection if they see their own incomes threatened. So, none of the industries that are now protected would have been protected if the managers of those industries had not wanted protection.

Others, with equally advantageous positions recommend giving up on economic growth under the cover of environmental quality or natural-resource allocation.

The economy is to be frozen so that they can enjoy their current advantageous  positions without fear of competition for the indefinite future.

IN PRACTICE, neither of these solutions is a solution. Too many people are not satisfied with what they have; they want much more. They are not about to turn the economy off and freeze themselves into a position where there is no hope of economic security.

Each of us, when threatened, wants security. And in a democracy, we will organize to get what we want. The obvious goal is to deliver economic security without stopping economic progress. But how, how?

The demand for economic security also heightens the tension between our ideology and individual decision making and the practical necessity of collective decision making.

No individual can guarantee himself economic security. Economic security is only possible if some other individual, or group of individuals, agrees to share income with you under some specified set of circumstances. By its very nature:

Economic security, is  a collective action requiring collective decisions and collective coercion. For example, in America, those who make televisions sets, can only have their income protected if the rest of the nation is forced to buy U.S. -made  TV sets.

In an economy with only individual decisions, there is no individual economic security!  As simple as plain as that.

The honour and serving of this post continues at regular intervals in the future. We hope to produce continuing research.

With respectful dedication to the Leaders of the World.   See Ya all :  " Your Excellencies"    on !WOW!  -the World Students Society Computers-Internet-Wireless:

"' The Importance Of Being Great "'

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless


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