Commentary By Rick Rodriguez
In a time of turbulence, I often think of an extraordinary book, Secrets of the Temple by William Greider, and since that time I've been hooked on Economics/Politics. The book gave me the opportunity to examine who really runs this country (Federal Reserve), and who doesn't (the President of the United States), as most people assume. Surely, I understand that the Commander-in-Chief is still the President of the United States, and is considered the leader of the free world; however, the President's/government's influence here is more related to fiscal policy predominately spending and taxation, and have we been on a tear lately (7/2011)! However, Greider's book taught me how monetary policy plays an enormous role in our everyday lives, and how the Federal Reserve has the power to control the economy with its influence on it.
A note on Monetary Policy: "
"Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary theory provides insight into how to craft optimal monetary policy.
Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in hopes of avoiding the resulting distortions and deterioration of asset values."
The Secrets of the Temple chronicles the tenure of Paul Volcker, the Fed chairman prior to the more familiar Alan Greenspan. So, having recently read Alan Greenspan's The Age of Turbulence, another groundbreaking expose on the Federal Reserve seen from the perspective of Alan Greenspan, I thought it necessary for me to gain a perspective on another form of managing an economy--communism.
Certainly, I'm not going to declare Communism as comparable to capitalism in a superior fashion, or that it could exist in today's world; history has already proved that communism has, at best, failed in places like the Soviet Union and to some extent China.
Let's think about this for a minute! "Some critics of utopian or egalitarian socialism argue that income sharing reduces individual incentives to work, and therefore incomes should be individualized as much as possible. Critics of socialism have argued that in any society where everyone holds equal wealth there can be no material incentive to work, because one does not receive rewards for a work well done. They further argue that incentives increase productivity for all people and that the loss of those effects would lead to stagnation. John Stuart Mill in The Principles of Political Economy (1848) said:
"It is the common error of Socialists to overlook the natural indolence of mankind; their tendency to be passive, to be the slaves of habit, to persist indefinitely in a course once chosen. Let them once attain any state of existence which they consider tolerable, and the danger to be apprehended is that they will thenceforth stagnate; will not exert themselves to improve, and by letting their faculties rust, will lose even the energy required to preserve them from deterioration. Competition may not be the best conceivable stimulus, but it is at present a necessary one, and no one can foresee the time when it will not be indispensable to progress."
Frankly, that is an amazing statement and in my own life I have found that to conform with my thinking. What incentive would I have to work harder and produce more when my doing so meant nothing to anyone or I was not rewarded in any way for doing so? As a competitor, I am driven to improve in almost all facets of my life. Admittedly, this is a pain in the rear at times; it's almost like a harness that holds me in place and yet pulls me toward better experiences and feelings.
Here are some excerpts and paraphrases of MARX by Gil Hands:
According to Hands (2007) "Karl Marx is considered to be one of the greatest thinkers in the last thousand years. Born in Germany in 1818, he was a great philosopher, historian, economist, and social theorist. His writings led to revolution and to a total change in the political structure of the world."
Hands (2007) states " that Marx's main contribution to the development of philosophy was historical materialism: a way of studying the relationship between the material world and the world of ideas." He further states " the capitalist economy needs costly machinery to produce goods. Only those who can afford to invest capital in the economy can profit from it."
From the COMMUNIST MANIFESTO " The proletarians will eventually rise to power through class struggle: the bourgeoisie constantly exploits the proletariat for its manual labour and cheap wages, ultimately to create profit for the bourgeois; the proletariat rise to power through revolution against the bourgeoisie such as riots or creation of unions. The Communist Manifesto states that while there is still class struggle amongst society, capitalism will be overthrown by the proletariat only to start again in the near future; ultimately communism is the key to class equality amongst the citizens of Europe."
Most of us, including me, have just assumed that we can get job, start a business, make money, and someday become rich. However, there are some people that have a head start, and are in positions which according to my understanding of the book exploit others for their labor. In other words, it's always been that way and always will under capitalism.
Another key idea according to Hands (2007) is Marx's description of "how fetishisms of money, capital, and commodities alienated people." Here, my understanding is we (capitalists) are so focused on materialism that we become alienated from each other because in many ways we are competing with each other, and are always trapped by materialism; yet material possessions somehow serve to assuage our alienation.
I gained a new perspective, and though I certainly don't believe the system (communism) could ever work, some of the ideas Marx describes about capitalism, good and bad, have come to fruition. I alos learned a lot about the inculcated beliefs that I hold or I have adopted through extraneous social and cultural influences.
I leave it to the reader, learner, and individual that questions the way things are to continue the quest of discovery. I value the accomplishment of challenging my mind to gain a new perspective, and to further aid me in evaluating the world we live in.
MARX by Gill Hands is 178 pages. I read this book in May of 2008.
Rick Rodriguez is a writer and is frequently published in opinion/editorial sections in local and national newspapers. Rick, a San Francisco Bay Area native and graduate of Saint Mary's College lives in Danville, California with his two children. Contact Rick at rrodriguez@pacunion.com or (510) 326-4795.
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