Democracy Reform

Sir Winston Churchill once said that democracy is the worst form of government except for all the rest. He is right. Its the best form of government but it also has its flaws. I think that its flaws endanger democracy and needs to be fixed. This blog is for like minded people who want to see democracy improved. I invite people to sumbit essays. I will publish even those I do not agree with so long as I find them interesting.

Tuesday, October 28, 2008

The Capitalist Manifesto

Now that Senator Obama has won the elections amidst a crisis in capitalism, it is timely to write what I call the Capitalist Manifesto. Senator Obama is without a doubt a Socialist with long time ties to the radical left in America. He has talked about "spreading the wealth". The Democrats are poised to expand their control in Congress and will be able to pass any law they wish.

As Thomas Sowell said, an Obama victory will likely bring America to the point of no return. America is going Socialist like most of western Europe. It will have a welfare state inspite of the fact that Europe's welfare state is not sustainable given its ageing population and lavish welfare spending.

Therefore, it is timely to write about the inherent injustice of Socialism and make the case for capitalism. Socialism seeks a redistribution of wealth from its most productive citizens to the less productive ones.

This is usually done by progressive taxation and creating a welfare state. Those with higher income pay more taxes than those with lower incomes, some of whom don't pay income taxes at all. During the American Revolution, the slogan was "Taxation without representation is tyranny".

But representation without taxation is also tyranny. In today's world it is the more productive citizens that are oppressed. As I said in an earlier article, if 60 citizens in a country of one hundred rob 40 others, its robbery. But this is no different if the 60 elect someone who promises to tax the 40 and redistribute their property to the other 60.

It is time for all citizens to be treated equally. By this, I mean that each citizen must contribute equally to his nation and derive the same benefits from it. Under the present system some citizens contribute more in the form of taxes and others receive less from it.

This violates the principle of equality. There should only be one tax rate for everybody. The problem with democracy is that votrepreneurs (politicians) get elected by promising to redistribute other people's money through discriminating against one group of voters (the more productive citizens) by taxing them more and spending the money on their favored voters, many of whom do not work.

As Benjamin Franklin said, "Democracy is two wolves and a lamb voting on who to have for lunch."

Ben was right and that is why nearly all western democracies have evolved into welfare states. Europe is ahead on this and America looks like is about to follow. The nanny state reduces the incentive to work. It is not sustainable in the long run andwill turn citizens in adult children, always dependent on the state. Imagine a CEO deciding to reward his worst salesmen and penalizes his best. His company will go bankrupt.

The welfare state is also not fair because its citizens are not treated equally. For all citizens to be treated equally its time to end the discrimination against the more productive citizens in favor of the less productive. I propose that each citizens be taxed at the same rate and get paid the same monthly income from the state. All welfare payments and entitlements currently in place must be scrapped. The monthly income from the state will take care of the most vulnerable members of society without violating the principle of equality for all citizens since everybody gets it too. Also, it would be helping the weaker citizens without weakening the incentive to work. For example, all citizens will be taxed at say 20% of income and receive $1,000 in monthly income from the government.

Therefore the Capitalist Manifesto demands:

1)All citizens must be treated equally. This includes matters of taxation and state derived benefits. Each citizen must pay the same percentage of income to the state and receive the same income from the state. All other entitlements and welfare payments will be abolished.

2)An end to class warfare where less productive citizens use their vote to acquire the property of the more productive ones.

The Manifesto may be boiled down to two catchy slogans:

i)From each citizen, the same tax rate,
To each citizen the same benefits.

ii)Representation without taxation is tyranny
Using your vote to get other people's property is robbery.

Monday, October 13, 2008

Britain's Labour Party wants to lower Oxbridge's standards to favor their voters

Recently, Oxford University's chancellor, Lord Patten attacked the Labour government for pressurizing Britain's top universities to admit students from low performing schools and deprived areas.
He accused the government of using universities to compensate for the failure of state schools. This is a good example of how the democratic process screws things up. As I explained elsewhere, every democracy has two major parties. One represents the winners of society and the other the losers. Both parties fight for the welfare of their voters. Much of the politics in democracies revolve around this. In the case of Britain, the party for losers is the Labour Party.

Thus it is not surprising that the Labour Party is pushing top Universities to lower standards for their preferred students even though they get poorer grades. This is similar to the Democratic Party in the US who pressured banks to lend money to their preferred borrowers who really cannot afford to buy housing but of course happened to be their voters. See my earlier article, "The political roots of the Financial Crisis" on how the sub-prime loans came about.

If the Labour Party gets its way, it would lower the standards of Britain's top universities. Instead of getting the best people to make the country more competitive, it will end up with second rate graduates and a second rate work force.

Of course the votrepreneurs (politicians) don't care because it will help them get elected. The success of their nation is secondary to their political careers.

Don't know much about history, Don't know much biology.
Don't know much about science books, Don't know much about the french I took.
But I know if you vote for me,
And I know that I'm elected,
What a wonderful world this would be.

(Sung to the tune of Wonderful World)

In Organizational Behavior, a topic taught to MBA students, we learn how to devise a reward system that leads to the success of the business organization. If business executives are rewarded for behaving in a manner detrimental to the company, we can expect the company to go broke over time. So it must be the same for a country.

I am afraid that the reward system in democracy leads to the failure of the society. That's because the reward system (ie electoral success) in a democracy rewards at least half of the votrepreneurs if they behave in a manner detrimental to the country such as by asking for lower standards. So what can we do about it?

How do we devise a system where the votrepreneurs are rewarded for coming up with policies that will lead to the success of the country? That is the question that we must successfully answer or some day democracies will collapse, ushering in dictatorships.

Wednesday, October 01, 2008

Danger from the Left

The Left (both in the USA and Europe) has always portrayed the Right as neo Fascists, who if they have a chance will take away our freedoms. This is false. In this essay, I shall prove that Fascism is really a leftist phenomena. The danger of dictatorship comes from the Left, not the Right.

Firstly, what is Fascism? Most people can't define it. They assume its some right wing ideology which they associate with Mussolini and Hitler. Its true that Mussolini was the Father of Fascism. So we should start by examining him and his policies to see if he was a creature of the Left or Right.

Benito Amilcare Andrea Mussolini was named by his Socialist father, Alessandro Mussolini, after Benito Juarez, the Mexican revolutionary who toppled and executed the emperor Maximilian. The other two names were inspired by then Socialist icons, Amilcare Cipriani and Andrea Costa. Alessandro was a member of the First International along with Marx and Engel and read passages from Das Kapital to the young Benito Mussolini.

When he grew up, the young Benito became the editor of "La Lotta di classe" (Class War). He belonged to the extreme wing of the Italian Socialist Party. When the First World War broke in 1914, he at first hewed to the Partly Line.That is to say he was anti-nationalist (like the anti-American radical left in America today) and opposed the war. (That, by the way, was why Barrack Obama initially refused to wear an American flag pin lapel or swear allegiance to the USA.)

In this picture, I believe that Obama was signalling to America's Socialists that his loyalty was not to the USA but to the Socialist struggle. Anti-patriotism has deep Socialist roots.

War was a matter for the bourgeois and need not involve the working class. Only a class war was acceptable to him.

But that did not last long, given his opportunistic nature. He saw that the majority of Italians were patriotic and supported the war effort. Soon, he broke with his Socialist comrades and supported the war too. For this sin, he was expelled from the Socialist Party. But he regarded himself as a Socialist albeit a Nationalistic Socialist (like Hitler) till his last breath.

After he was kicked out of the Socialist Party, Mussolini said, "Socialism is in my blood."

He added, "You think you can turn me out, but you will find I shall come back again. I am and shall remain a Socialist and my convictions will never change! They are bred into my very bones."

Realising that the idea of an international "working class" cannot trump the call of nationalism, Mussolini and his comrades founded the Fasci di Combattimento (the Fascist Party) in 1919 based on the fusion of nationalism and Socialism.

The word Fasci itself betrays Mussonlini's leftist or Socialist leanings. Fasci means union or bundle. The simple idea was that just as one stick can be broken but a bundle of sticks cannot, workers must unite themselves into an unbreakable union. The difference between his party and his old comrades was that his Fascist Party consists of pro-war leftists whearas his old comrades believe that the only war worth participating in was the class war. See the book, "Liberal Fascism" by Jonah Goldberg.

His party platform included calls for a minimum wage, an eight hour work day, government bodies run by workers' representatives, appropriation of land from land-owners (except those personally cultivated by them) and giving them to workers' co-operatives, a large tax on capital amounting to a partial confiscation of wealth. Naturally, as a leftist, Mussolini was opposed to Christianity just as leftist parties are today. His program also called for the establishment of "rigidly secular schools" for the raising of "the proletariat's moral and cultural condition."

It also calls for the seizure of goods belonging to religious congregations and the abolition of episcopal revenues. Thus in spirit, if not in actual details, his program is similar to most leftist parties in the west today, including the Democratic Party of the USA.

Hitler too was a creature of the Left. After all, the Nazi Party was officially known as the German Workers' National Socialist Party. I will not elaborate further since I have written in detail about Hitler's Socialism in an earlier essay, "Why are the worst mass murderers from the Left." But that's enough for the history lesson.

The purpose of this essay is to explain why the danger of dictatorships come more from the Left than the Right and why Leftist dictatorships kill more people and last longer than Rightist ones.

Rightist dictators like Pinochet or Chiang Kai Shek allowed and encouraged free market capitalism. This means vast portions of the economy are in private hands. The dictator does not have absolute control over the country. If he does dumb thigs, private businesman can take his money elsewhere. The feedback to any wrong move is immediate.

That is why right wing dictators kill less people. A dictator of a free market economy does not have as much power as a Socialist dictator. He needs the co-operation of private enterprise to keep his country prosperous. Free market policies create wealth. With growing wealth comes demands for political freedom. Thus free markets always lead to political freedom. Today, Chile and Taiwan are democracies. But Cuba and N Korea are not.

On the other hand, Hitler, Stalin, Kim Jong Il, Pol Pot and Castro killed more people simply because they had or in the case of Kim still has total control of the country. In a Socialist dictatorship, the entire economy was controlled by one man. Once in place, such a dictatorship can last a long time. Witness Castro's hold on power.

In Hitler's case, he did not abolish private property nor did he wipe out the capitalist class like the other Leftist dictators did. Instead he co-opted them. But as I explained in the earlier essay, the substance of ownership was passed to the state. The government controlled nearly every aspect of the production of goods and services in the economy. It sets price controls, told the nominal "owners" of businesses how many workers to employ and how much to pay them and what price to sell their goods.

This was in fact what happened to a lesser extent during the Roosevelt years in the USA. He made laws telling people how many hours they can work, what to charge for their goods and services. Gone was the idea of letting the free market decide such things. One man, Jacob Maged ran foul of such a law and was jailed for three months.

Jacob charged 35 cents for pressing a suit instead of 40 cents as decided by one of Roosevelt's bureaucrats. It was not much different from what Hitler and Mussolini did. Its basically state control of nearly everything and Americans lost some of their economic freedom. The goal of Roosevelt's New Deal was to drive prices up by deliberately creating scarcity which was stupid economic policy. Bountiful crops were burnt, pigs were slaughtered and farmers were paid to leave their fields empty. That was why the Depression lasted so long.

In fact, Roosevelt's administration got many of his ideas from Mussonlini, a fact acknowledged by former Democrat and New Dealer, Ronald Reagan. Reagan said in 1976, "Fascism was really the basis for the New Deal."

While Fascists did not obliterate the capitalist class like what Stalin did, they co-opted them. Their idea was that labour and management work together for national goals that they set. The tendency of that is that big business gets bigger. Laws will be passed that only the bigger companies can afford to comply. Smaller companies will find it too costly to comply. Small companies go under as a result.

The political leaders will favor this as it is easier to deal with a smaller group of large companies than with thousands of smaller companies. Big business will favor the arrangement because they have less competition. The collusion between big business and big government will create a marriage of convenience that will not benefit the small guy.

It is ironical that western Socialists claim to be the friend of the little guy. But their Socialist policies of government intervention gives rise to larger companies and the decimation of the smaller ones. In the end, big business and big government will co-opt each other.

The businessman is like a bee-hive. If you leave them alone, they will leave you alone. But if you throw a stone at a bee-hive, they are going to swarm over you. Bill Gates did not bother with Washington till Washington bothered him. The votreprenuers thought that breaking up a large company might make them more popular. They claimed that Gates' company, Microsoft was being unfair to the competition. Soon an army of lobbyists hired by Gates swarmed Washington. The industries with the least government interference also hire the least number of lobbyists.

What happens when business goes to bed with government? Corruption will come into the picture. Take a look at the current Financial Crisis. Fannie Mae and Freddie Mac were established by Congress during the Roosevelt era to encourage home buying.

Together, they dominate the housing loans market. These are Government Supported Enterprises. Invariably politics come into the picture as explained in my previous article. Fannie Mae's former CEO, Franklin Raines was Bill Clinton's budget director and has close links with the Democratic Party leaders. Under him, Fannie Mae bought up sub-prime mortgages and he also donated generously to Christopher Dodd's and Barrack Obama's election campaigns.

Was he acting for the benefit of his political masters to win votes from people who were unqualified to acquire housing loans? Very likely and in the process, he also enriched himself. Had there been 10 or 20 much smaller Fannie Maes and Freddie Macs instead of two giant ones, it would be more difficult for the votreprenuers to influence the mortgage markets. Hence they would have done less damage in their pursuit of votes. Thus we see how votrepreneurs and big business corrupt each other and damage the country.

Making things worse is the Community Reinvestment Act which I have written in greater detail earlier in an article called, "The Political Roots of the Financial crisis."

The Act compelled banks to make sub-prime loans to unqualified people who were the regular voters of the Democratic Party. These loans were packaged into Mortgaged Backed Securities which were bought up in large part by Fannie Mae and Freddie Mac whose top executives were friendly to the Democrat Party.

The result of the current financial crisis is that Americans are lurching to the Left just as they did in the 1930s. The Great Depression of the 1930s gave power to Leftist movements like the Italian Fascists, German Nazism and Roosevelt's New Dealism where Socialist solutions were advocated. Greater government control of the economy actually favors big business.

Concentration of power in the hands of the governments leads to abuses of that power. That is why the greatest mass murderers were from the Left as I explained before. Could the current financial crisis lead to a loss of our economic as well as political freedoms? The danger is there that history repeats itself. Contrary to what Leftists say, the danger to our freedoms comes, as before, from the Left and not the Right.

As of this writing, Barrack Obama leads in the polls. With the financial crisis and an unpopular war in Iraq, he could well be the next President. From all indications, he is from the Far Left just as Mussolini once was. According to the National Journal, Obama is the most liberal Senator in 2007. Besides that, Obama has the penchant of having friends and acquantances from the Radical Left. There is Bill Ayers, who was a terrorist in the 1960s. Then of course there is his ex-Pastor Rev Jeremiah Wright whose sermons condemn his own country, America.

This is a red flag that his organisation is really a front for a Socialist or Marxist group. As in Mussolini's day, the Socialists or Communist groups are anti-patriotic. (Recall that Mussolini was booted out of his party for supporting the war.) Their loyalty is not to their own country but to the so called "oppressed working class". Rev Wright's church is a black power church and black power groups have Marxist roots. Obama's brief career as a Community Organizer is another red flag.

Community Organizing was a technique developed by Marxist, Saul Alinsky to further the Socialist Agenda. In Alinsky's words, "... the community organizer ... must first rub raw the resentments of the people; fan the latent hostilities to the point of overt expression."

In other words, get the people to riot by making them angry over real or imagined injustices in order to bring about instability. When the country looks like its going to the dogs, they will be ripe for a Marxist revolution.

That was why Fascism made such inroads in the 1930s. Roosevelt, Hitler and Mussolini were Leftists who acquired power when people in their countries were disenchanted and demoralized. The three carried out similar economic policies. Each gathered power in their own hands, stifling to varying degrees freedom in their countries.

One of them committed mass murders. Another interned Japanese Americans. Today, we have the same mood in America with markets crashing and a recession looming. Faith in the free markets are at a low and America is ripe for a turn to the left. Today, a Far Leftist, Barrack Hussein Obama is, as of this writing, ahead in the polls and may take power in America. Could history repeat itself? We are living in interesting times.