Posts Tagged ‘redistribution’

Chimerica and the Global Economy

Thursday, September 9th, 2010

Dear Friends,

It seems to me that the Chimerica analogy is apt but misses a critical point.

The Chimerica analogy is… That the growth we saw during the first decade of the 2000‘s was a result of China producing products, Americans purchasing those products and borrowing the money to buy those products from China. The collapse of the American home market translated into a collapse in the American appetite for Chinese products.

Where it misses the point is the part where China loans Americans money to buy Chinese made goods. The largest consumer of Chinese goods is the United States Government. In the form of debt. Take the US debt out of the equation and the American Chinese picture changes.

Today we hear rumors of sovereign insolvency. The news reports that Harrisburg Pennsylvania has gone insolvent. Another example of Sovereign insolvency. We find out Greece hasn’t come clean on it’s debt yet. Rumors abound, about the other countries in Europe teetering, even as Germany reaps huge profits from the devalued Euro.

Governments are spending money as fast as they can to “prop up“ their economies. Especially the American government. Spending to “Improve” the economy and drive up aggregate demand. Some are cheering the spending claiming that as long as the bond market keeps interest rates low government can keep spending. Ignoring the fact that most people thought Lehman Brothers was a good investment… until it wasn’t. So is government borrowing. There is a brick wall somewhere in the fog out there. No one knows where it is… So might it not be prudent to slow down?

Government borrowing also has the pernicious attribute of raising the expected level of government spending. People get more money from government and expect that money to never stop coming in. Look at the mohair subsidy. The US stopped putting mohair into military uniforms after the first world war.

The Obama administration believes, publicly, that there is a multiplier of .8 for government spending. So a dollar of government spending stimulates $1.80 in the private sector. If this were true then all spending should be channeled through the government. It would be a win win. This is exactly what some in the administration believe. That the government is in the best position to determine what should be bought and sold in the economy. Added a .8 multiplier and it makes it seem, to them, a no brainier.

Of course reality has to stick in it’s ugly head. Empirically, if that were true the 3 trillion dollars the US government spent on stimulus should have generated 5.4 trillion dollars in economic output. At a tax rate of 33% that aggregate demand should have generated 1.78 trillion in tax revenue. We clearly see that it did not. In fact government spending has a negative economic multiplier.

Now the money is spent, (on everything BUT infrastructure), and we nothing to show for it. The national debt load to foreign persons and nations has dramatically gone up. Driving up the aggregate balance of trade deficit, Soaking up capital for industry and creating fear of future taxation. All have a negative effect on any economy.

So the American economy is faltering. Due at least in part to the unrestrained spending. The US budget deficit is slated to be 100% of GDP this year. The last time this happened was during the FDR administration when we were fighting the Second World War. With no such existential threat the US government is spending like it is fighting an all out war.

Maybe it is… Against the American People, our children and our grandchildren…

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Romantic Anti Capitalists

Thursday, August 26th, 2010

Dear Friends,

It seems to me that the integration of African Americans into White society was as much a factor of capitalism as it was political.

Take the example of Jacky Robinson into the major leagues. What today seems obvious is not so obvious before it has been done successfully. We look back and think that it is absurd to exclude people from an activity due to the color of their skin. But, in the day, people were afraid of public opinion. They didn’t have a good read on whether or not it would be tolerated.

That is the role of the entrepreneur… to see an opportunity and seize on it. If you reduce baseball to it’s capitalist roots you see that each firm vies to have the “winning team.” the more winning your team the more profit there is in owning it. With this as the incentive it is in the best interests of the owners to put the very best players on their teams… that are available.

The entrepreneur notices that the available players are not necessarily the best players alive. So in his evil way the entrepreneur changes the parameters of what attributes are allowable. In this case erasing skin color as a disqualifying attribute. The entrepreneur who makes the leap first… successfully makes monopoly profits until the rest catch up. But in the interim the entrepreneur has bought up the best players at the beast prices. Monopolizing them to his evil ends.

Take the example of the wicked factory owner. He wants access to the cheapest labor he can get. Cheap in the smart capitalist terms… Lower labor cost per unit produced. Cheap cost is not necessarily cheap labor. Labor that is very inefficient is not cheap at any price… He sees that there is a segment that is excluded from his factory. If the exclusion were removed the available pool of labor would go up and his labor cost would at least stabilize if not go down. So the self interested entrepreneurial factory owner will seek to open up the formerly excluded people to his labor pool. It is in his self interest.

This is a fundamental attribute of capitalism and the market system. The very thing that make capitalism so hated by the romantic anti capitalists. Like Moser and Freyer worrying about the market system’s effect on community and the loss of ethnicity. To Marx and (in his own way) Schumpeter, on the imminent demise of capitalism… In the case of Schumpeter his book might have saved us all decades of stagnation at the hands of the progressives… One uniting attribute of all the anti capitalists is that they have a fixation on groups.

They love to group people and think about them in groups and as members of groups. Like meteorologists use blocks of data to represent large volumes of air in their computer simulations. It makes the computing task much easier. But introduces a huge amount of discrepancy. That discrepancy is why the weather man claims it will rain and it actually is clear and sunny. People are people. We react as individuals. Our actions then aggregate into societal action. But to try to represent human beings as groups looses a huge amount of data. This is a case of arguing from the specific to the general.

Because capitalism has introduced the ability of the individual to follow a path according to his or her desires and propensities. Allowing people access to the means of human improvement. The very thing that the original conservatives like Burke wanted to protect. That genie or djinn is loosed from the bottle. It will wrought what it wrought. But it is loosed. The internet only exacerbates the situation for the anti capitalist.

As more and more people follow their own paths and free themselves from group attachment we will see an improvement in the reactions of people to those that are different. As we have said before the sofa salesman cares nothing for the color of the customer’s skin he only frets over the color of his money…

But this vanilla-ing of society infuriates the romantic anti capitalist. They look at people doing their own thing and never fail to find fault. The planet cannot sustain it! Is a modern cry. But it has echoes from the past as well. During the 1930’s the Elite were claiming the Depression was caused by the diminishing of the Earth’s natural resources. As we have seen, empirically, that was not the case then, nor is it the case now.

It is romantic, to be anti capitalist, but romance is blind, and it is often foolish.

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Why Has the Stimulus Failed Us?

Sunday, August 22nd, 2010

Dear Friends,

It seems to me that anything that quenches the natural dynamism in the market system, results in lower economic growth, to the point of recession if the anti stimulus is sufficient. I contend that is exactly what is holding back the US economy now.

As Schumpeter said, everyone hates the entrepreneur. His innovations result in the destruction of whole industries and ways of living. But that dynamism, the “creative destruction” is what continually builds up the economic standard of living of society. Nations unwittingly quench the dynamism that drives economic growth. With regulation aimed at stifling the negative externalities that result in free entrepreneurial enterprise.

Much must be controlled else the markets would seize up. There must be accountability when dealing with people’s money. Especially money someone has saved over many years to have for retirement. Such funds are the most precious that a banker, broker, etc…. will ever handle. Someone went without, to put those funds in the hands of a person, so the capital can be invested effectively. That capital should be invested in the means of production resulting in a short and long term capital gain for the saver. Anything that misappropriates the money of investors must not, under any circumstances, be tolerated.

But regulation too often benefit’s the people regulated at cost to potential competitors. Existing companies get deferrals to upgrade to the new regulation. New businesses don’t. This keeps entrepreneurs from competing with established firms. The established firms then grow larger, taking up more market share and monopolizing their business sector.

Japan is an example of this type of corporatist regulation and banking. We see that when The Japanese corporations were growing entrepreneurially the Japanese economy grew at a fast pace. But for the past few decades the corporatist economy has shown it’s weakness. Once the corporation grows too large it becomes inefficient. In part due to the ever burgeoning bureaucracy. In this way the lack of entrepreneurial competition slows economic growth.

Japan’s embrace of Keynesian economic theory… Japan’s corporatist economic system is the most effectively stimulated by Keynesian economics. Large corporations have the in house legal ability to navigate government bureaucracy. Entrepreneurial companies do not. Even though the Japanese model is best suited for Keynesian intrusion Japan has stagnated, despite huge amounts of government spending, for decades. To the point of turning Japan’s huge government surplus into huge government deficits. I have heard that Japan pours more concrete than the US. That is a lot of government spending… Having produced economic stagnation.

The US economic system is far less responsive to Keynesian style stimulus for exactly the reason Japan is better suited for it. The US model is more entrepreneurial based. Except for some highly regulated sectors the US economy in which corporations are encouraged to grow too big to fail the US model is more free wheeling. Entrepreneurs are heroes in America. (To most people except romantic anti capitalists). But entrepreneurs are far less able to tap into government stimulus.

Entrepreneurs have some specialty. They obsess over something the rest of us overlook. In doing so they come up with a new way of organizing business, manufacturing a product or process for the delivery of goods. They are not good at changing their focus on governmental minutia. Rules to keep fraudsters from bilking the system.

So that is why the Keynesian economic stimulus that the Obama administration has been implementing has not worked. The US economic model is far too entrepreneurial in it’s nature. That nature will have to be changed for Keynesian stimulus to have any effect. But as we see with the Japanese model even under nearly ideal conditions Keynesian economics are no panacea. They still lead to stagnation. So why keep ignoring the obvious.

Take the brakes off the entrepreneurs.

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What Metric to measure the Moralality of an Economic System?

Thursday, August 19th, 2010

Dear Friends,

It seems to me that the statement “I find it morally wrong that some people have so much while others have so little.” is comparative. It compares that which the speaker knows nothing to that which the speaker knows little. And so, it says more about the speaker than it does society.

Because how can anyone actually know the heart and the true worth of another? Is the person the speaker has in mind about to go bankrupt. Is a terrible accident about to happen to a loved one of the person with too much. Or is the person with too little actually a miser?

Groups are ever more slippery. Because statistics are so poorly done. They are wielded like scientific certainty when there is increasing evidence, (scientific evidence) that statistics are misleading at best. If they are done right they can be informative but they are so rarely done with the proper scientific scrutiny that most are useless. Since groups must be compared statistically the comparison is ever more flawed.

The assumption is that material wealth is the paramount attribute. All others are tangential to it. And so a large difference between the top ten percent and the bottom ten percent is seen as a metric on the moral value of society. But if that is so then they must believe that a society with perpetual want is preferable to one where obesity is a constant threat to the impoverished.

The Desiderata says, “If you compare yourself to others, you may become bitter or vain, for always there will be greater and lesser persons than yourself. “ How much worse comparing others to others?

If a metric to apply the morality of a system is needed then take the lowest segment and compare their lot with the aggregate world standard of living. If the impoverished in a society live at or above the average standard of living in the world then we can say, empirically, that society is moral.

On the other hand if the average standard of living in a society is lower than the world average then we can say that this society is less moral. There is some roadblock to that societies effective use of the market system.

In both cases we look at the fruits of a given economic policy not the intentions. If the results are a high standard of living for the lowest 10 percent then the difference between the lowest and the highest is irrelevant. If the intent is simply to make the economic outcome equal for all players then the only workable means is to lower everyone’s.

I cannot ski that well. It is too late for me to learn to ski at more than a remedial level. If skiing were economic outcome then the socialists, progressives and communists would have to break the legs of those that ski well. So I would n’t feel inferior to them. Because it is impossible to raise me to their level so it is only possible to lower them to mine. But there are people who cannot ski at all…

But, like most things romantic anti capitalists say, it sounds great until you actually think about it. Then it sounds pretty silly.

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Capitalism

Thursday, July 22nd, 2010

Dear Friends,

It seems to me that there has always been capitalism. The market system may be a relatively new invention but capitalism is as old as humanity. From the first time Ug traded Grug a spear head for a dear head there has been capitalism.

The market system has it’s roots in the time just before Adam Smith. It was the invention of the factory and the division of labor factories brought about that made production cheap and of higher quality. These innovations along with a capitalistic ethos have made our modern society so prosperous.

Imagine if the Romans had discovered the market system. Today Humanity would be striding among the stars. But they didn’t. It was after the last gasp of Roman Civilization (about a century after the fall of Constantinople) that the market system was being born in Denmark. The market system has evolved and devolved in steps since then.

But capitalism is a consequence of mankind’s social nature. It is a fact of our sociability that we mingle and trade. Each getting a need met in the trade. The one a plow and the other funds to build another plow and to feed his family for the day. Each getting more than he had before in the trade. No matter if the product or service is a spear head or fiber optic service the result is the same. It is a win-win.

That is the driving force of capitalism. That we all win when we engage in it. The buyer gets a good or service that in some way enhances his life and the seller gets to make a livelihood. Both have a positive outcome from the transaction. The small personal gains translate to huge societal gains in the aggregate.

Taxation lowers the good for each person. Some profit is diverted from new production or personal wealth to government use. Or some good or service costs more than it otherwise would, The good is lessened by taxation. Regardless of the societal good gained by the service paid for by the tax. There is a cost to a tax.

It is a valid role of government to protect the persons and property of it’s citizens. To that end taxation is a necessary evil. But it is never stopped at that end. Taxes are like an unstoppable tide. They rise and rise until they have drowned economic progress. Then the lawmakers responsible lament the lack of economic progress. But more importantly… the Elite lament the lack of tax revenues. So they raise taxes more…

This is because; if taxation lowers the good to the point that it is equal to or greater than the positive effects from all transactions, transactions will only go on, “under the table.” Off balance sheet transactions become more and more prevalent, when government taxation or other interference in markets are too onerous, erasing the benefit of a free exchange transaction.

If, a country want’s to measure how much it’s interference in the markets effect their markets, they need only compare the size of the black market to the legal market. If there is almost no black market the government is doing a good job not interfering in the markets. If there is a large black market then the government must look into it’s policies else it will face poverty and hunger in the future.

Capitalism is like air. The level of economic activity being like the pressure… The positive outcome is like the oxygen in the air. You can have plenty of air pressure but if there is no oxygen, (Because of government interference) then you cannot breathe. But if there is plenty of oxygen but little pressure you can breathe… If labored.

In other words… Business can go on in a poor country if the government doesn’t, tax too much, impose unnecessary rules, licenses, or other ways governments cause friction in their markets. The profit motive is still there. Even though business conditions are poor. But when government makes doing business too expensive to make a profit…

The point being that government policies have a direct bearing on the state of their economies. To blame capitalism for poor performance is like knowingly depleting the oxygen in a closed room then blaming the inanimate oxygen itself for our shortness of breath…

… if you use rhetoric, like “capitalism is dead.” no one points out the idiocy of the statement, and I believe it…who‘s the fool?

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Calderon’s Hubris

Sunday, May 23rd, 2010

Dear Friends,

It seems to me that Felipe Calderon should be deeply embarrassed. To be the head of a government that has done such a poor job that people want to leave in droves. Fleeing the violence, poverty and government corruption. A human hearted man would be ashamed…

But Calderon is not. He is unabashed. In fact, he even has the gall to go to the nation that is feeding, clothing, housing and otherwise providing for his citizens, and chastising it. Chastising it for not being friendly enough. This guy is the stereotypical hypocrite.

The laws against illegal immigration in Mexico are draconian. The laws regarding legal immigration are draconian as well. Add to this the utter corruption in the Mexican police force. Immigrants cannot receive welfare in Mexico. Especially illegal immigrants. Immigrants in Mexico have to have outside income or be employed by the Mexican state. They are not allowed to have jobs in Mexico.

The US media have been rife with stories about older people going into Mexico to buy prescription drugs. (That were prescribed to them). After the pharmacist sells the US citizen the drugs the pharmacist then calls the police. The police intercept the old folks. Arrest them. Then ransom them back to their children.

The total lack of opportunity in Mexico is directly related to the utterly corrupt and (fortunately less) socialistically inclined government. One example of the foolishness is that the Mexican government has nationalized all it’s oil. The Government run extraction company is extraordinarily inefficient. The ready access to oil money funds more corruption in the Mexican government.

Had the Mexican government went the capitalist route a (possibly Mexican) company would lease the land from the government to extract the oil. The company would be held responsible for environmental problems. The company would be responsible for cleaning up after the oil has been extracted and the company would be responsible to keep the infrastructure up to date. Another advantage of the capitalistic approach would have been better and more thorough geological research. More importantly… less money would be underground to contribute to governmental corruption.

The violence in Mexico is the result of the utter corruption in the Mexican government. Even as Calderon pointed his finger at the US for problems his government has created he disregarded the three fingers pointing back at him.

Put it this way… If the easy access to weapons in the US leads to violence in it’s neighbors… why is Canada so quiet? If keeping drugs illegal creates violence in neighboring countries… Why is Canada so quiet? Huge amounts of Marijuana come into the US from Canada.

So is the problem really somewhere else Mr. Caldron? Or is it closer to home?

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Progressivism and Education

Sunday, May 16th, 2010

Dear Friends,

It seems to me that the way our children are taught has a great influence on them in their adult lives. Education is a means to not only teach children to read, write and do arithmetic but is a means to civilize them.

American schools today have taken a new path. They have eschewed teaching reading, writing, arithmetic and logic and have replaced them with progressive propaganda. Anti American adjectives like imperialism are often used to describe the USA. These are definitions taken directly from the Manifesto of the Communist Party and anti American Soviet handbooks. The schools teach homosexuality and the mechanics of it. They teach that God is dead. One of their favorite lessons today is that the American Constitution is a living breathing document. What do all these new evil societal myths have in common?

They serve to demean the children. They all serve to make children believe that simply the color of their skin determines if they are good or evil. This is not a very inclusive philosophy. But it has always been the philosophy of the progressives. Propaganda to the contrary aside…

I watched a show on PBS today, Need To Know. The show had a long segment about the Texas school board’s revue of new textbooks. The thrust of the piece was that a few members are wrong and bad by trying to force their conservative view of society on the whole country. Because Texas buys so many textbooks that the whole industry caters to their needs and wants. The news story never mentioned if California or New York have a similar effect on the textbook industry… At least that angle was never explored. I wonder… Would California drag the industry further to the right or the radical left… And if that had any bearing on the coverage of California’s effect on textbook slant.

Of course a hit piece on a conservative in the unbiased media is proof of their lack of bias. The show, Need To Know, also talked about the Texas Freedom Network, an organization that monitors the right’s effect on school curriculum. Amazingly this progressive organization agrees with the unbiased PBS and thinks America should be characterized as imperialist. PBS didn’t mention if there are any organizations that monitor the left… Why would there be?

The unbiased media today use evolution as a straw man argument. They constantly hammer that people of faith are bad because they deny evolution. They equate evolution deniers to holocaust deniers. The argument is used to as a means to disqualify any argument made by the right whether or not evolution is brought up. If I argue that The United States has liberated almost as many people in the twentieth century as the communists have murdered… The left argues that I deny evolution. The unbiased media agree. And the argument is changed to whether or not I believe in evolution. It has become a tool of the progressives to change the argument.

Changing the subject is a underhanded way to keep an opponent in a debate off his feet. It is the job of a good moderator to keep arguers on point. But unfortunately with the media being so unbiased only the right is kept on point the left is given free reign to move the debate as they see fit.

What is the inevitable outcome of this? The lowering of debate. Which leads to keeping the people in the dark. Which leads to the lowering of the quality of decisions made by the American people. (Exemplified in the last election). Which leads to the lowering of the lot of the American people. Which leads to the lowering of the lot of all Mankind. Because, in this World, we are all economically connected .

As long as the progressives control, the media, education and both political parties, our fortunes will continue to go down. Only until we have a media that is actually unbiased instead of pretending to be unbiased will the cancer that is progressivism be exposed by the light…

Only foul things grow in the dark… Progressivism withers in the light…

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Poison Ivy in our Gardens

Monday, March 15th, 2010

Dear Friends,

It seems to me that all legislation that makes the citizen get services from government are like poison ivy in our economic and legal gardens. It takes up space but produces nothing of value. It is intractable and very hard to eradicate. And whenever anyone brushes against it they sustain injury.

The faction in power in the USA today follow Machiavelli’s maxim that, “The wise Prince makes his people depend on him for everything and in every way, thus he will insure the loyalty of the people.” As the Elite make more and more people dependant on government they make more people dependant on their benefactors in government. The vote of a dependant is assured. The democratic system can and has been, (many times), undermined buy this very tactic. Many people have happily voted in their tyrants.

The legal system is under attack in such a case. Government does not allow itself to be sued unless the Elite have a political agenda and allow it. So if government does not deliver on planned services there is no legal recourse. Moreover if those that need the services that by legislation only government can provide, but government is not providing, have no recourse at all. Unless they find a political patron. Those that run afoul of bureaucracy find it increasingly stubborn as they place more pressure. There is simply no leveraging a bureaucrat. Except with a political patron.

The unwise politician who correctly sees the natural weaknesses in government delivered services, that dares threaten the gravy train, is always wounded… sometimes badly. All government programs set up current flows. Like water current these capital currents form a channel. It forms to the level of the capital and then simply moves funds along it‘s course. Trying to change the course of water… or largess, is difficult and dangerous.

Anytime any legislation that moves government in that direction is dangerous and should be though through very carefully. Stopped if possible. Especially under a government that has no NUMA. As we have mentioned above, when government delivers services, and they are delivered poorly or not at all, there is no recourse. Couple this with the fact that, like poison ivy, this type of legislation is very hard to get rid of, anyone who wants to spread this must be nuts.

The Healthcare legislation is the worst manifestation of this principle possible. It is nothing but two thousand pages of seeds to be planted in everyone’s backyard. They will have ten tears to sprout and grow before we will reap their real fruit.

Trying to get healthcare will be like mowing a lawn infested with poison ivy. The results will be similar. Elevated blood pressure. Elevated temperatures, Elevated pulse rate, a stinging rash and time spent with sticky ointments (bureaucrats).

The Elite keep trying to convince us that it will be great when the government runs our lives. Healthcare is the narrow end of the wedge. Let it in and there is a whole wedding party behind. The mess will be left for our children and grandchildren to clean up.

We need to ask ourselves… How much closer do we want to get to 1984? Or are we already there and just don’t know it?

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Legitimate Role of Government.

Sunday, November 22nd, 2009

Dear Friends,

It seems to me that redistribution of wealth is not a legitimate role of government.

It presupposes government has the right to the property of individuals. When government can legally take your property and mine it is no different than enslaving us. Property represents labor. That is how the vast majority of us get the money to buy our other property. When government has taken up the legal right to seize at their discretion, our property, they have in fact seized the time from our lives we gave in labor to purchase that property. So Taking property from a working person is tantamount to enslaving him or her for the time he or she put into acquiring said property.

The premise of redistribution is undermined by the nature of government. Money will not flow from those that have too much to those that have too little it will flow from those that are politically weak to those that are politically strong. That is undeniably the nature of government. As Bastiat said in his treatise on Law, people see government as a means to plunder the wealth of others and to protect their wealth. That is why politics are so factious.

Government is controlled by the politically strong and is only constrained by a constitution. The power of the Elite, that make up the politically strong , is inversely proportional to the power of the constitution that restrains them. If the constitution allows for the redistribution of wealth it gives the Elite, not only the power to tangentially enslave the nation but it will give them, a tool for the wielding of the masses to unambiguously nefarious ends.

In the past, when government acted the Robin Hood, it has always ended badly. Julius Caesar used the masses as a tool to destroy the Republic. He gave freely to the poor to buy their loyalty. As Machiavelli said, when faced with the choice of having the people or the aristocracy on his side the wise prince chooses the people to be on his side. The aristocracy are few and can be bribed the people are many and can fall like a scythe on the few. Many other times the ability to redistribute wealth has been used, by the would be tyrant to gain the trust of the people… before enslaving them.

The true role of government is to protect individual property. Why else have government? If not to protect our property from those would be Thrasymachus’s (unjust politically powerful people) that would seize our property. Which includes protecting us from foreign thieves of our property.

It is by this means that government promotes prosperity. When people are given the just use of property they have acquired by their own labor the lot of man is bettered. When people are comfortable in their possessions all people seek to acquire possessions. We put more energy into making than in protecting. Thus society is bettered. More and more is available for people to have better lives.

When we fear for that which we have got from our labor, the opposite is true, we put more energy into protecting our property than in building. The lot of man is lowered. Less is available to people to better their lives. Less and less is produced. The standard of living is reduced and reduced. It is all about incentives. Redistribution is nothing but perverse incentives. Incentives that put too much power in the hands of government.

Even a cursory look at history shows the folly of too much power in the hands of government. But the sirens keep up their song and the masses listen. Nation after nation is swept against the shoals of redistribution… I wonder if that last crunch was our economic keel snapping?

Maybe someday, people will have matured to the point they will simply laugh when the Elite are crying for redistribution, and will see them for who they are. When that happens, and it will happen, prosperity will be rampant. Until then we might have to swim for it!

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Capitalist Holiday

Sunday, August 2nd, 2009

Dear Friends,

It seems to me that if a small percent of vacationers went on “Capitalist Holiday” the lot of man would be greatly improved.

A capitalist holiday would be a person going to some impoverished country. Bringing with them some tool or implement. So instead of spending $10,000.00 on some hedonistic spa we would take a cement mixer to Haiti and give it to some poor person. We would spend a day interviewing people for the gift. Then when someone suitable is found we give the recipient 50% ownership of the tool or implement. Preventing the gift from being sold. They then use it to make money. If their net profit is greater than $5,000.00, or some other agreed upon figure, the recipient pays the gifter 10% of the net profits above the figure.

This could be done with land, different crops, tractors, or anything else that would conceivably be of use to impoverished people. This would not only give people in impoverished countries a means to better their lot but would create an entrepreneurial ethos in the countries that received the largess.

If the gifter wants he or she could supply raw materials for the enterprise. Buying Portland cement for the mixer for example. Or gasoline for a pickup truck mounted back hoe. These things that are cheap in the US would help people, in impoverished countries, build infrastructure. When things are happening around us we all want to be a part. When people in a destitute village in Haiti see sewers being dug for people with a tiny bit money on one side and people having the holes patched in the walls of their homes, keeping out malarial mosquitoes on the other, they will want to improve the place they live as well. The productive movement will garner momentum….

Every time a tool or implement is gifted the GDP of the country that receives the gift will go up. Not only for the day the gift is given but as long as the gift is used. If a tool has a 5 year lifespan it will increase GDP for 5 years or more. Where people are living on less than a dollar a day an increase of a few cents is huge!

Issues of permits and indigenous corruption would need to be addressed by national governments. Countries that want to be involved in the program would have to sign an agreement to the effect that they would stamp out corruption that extorts money or otherwise hinders the bilateral enterprises. Permit and regulations should be clear and universal as possible. This would encourage international cooperation and improve the standard of living in those countries, that would, in turn, lower the tensions that lead to war.

I believe that many people in the developed world would do this. Because even if the governments in those nations are not civilized… some of the people are. Helping others is a sign of civilized people. The want, and in fact need, of civilized people to help those less fortunate is presupposed. If only a small percent of people who vacation would indulge, every few years, in a capitalist holiday, they might not only find themselves with a bigger heart but in time bigger pocketbooks… All around.

In time, this program would necessarily get infrastructure, to people that need it. The people in towns that had a great deal of interaction with the program would become tinkerers and entrepreneurs. They would be the seeds that would sprout into a healthy capitalist system. One that would raise the standard of living bar for the people in those nascent nations, much higher, much quicker, than any socialistic redistribution of an ever shrinking pie…

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