Saturday, January 30, 2016

70/30; Not Right or Wrong, Left or Right, but The Right Proportion


My friend Dr. Val Malin, PHD, risked his life escaping Communist Russia and came to America after his mother died.  It occurred to him one day when he saw his granddaughter repeatedly trying to jam the pieces of puzzle together the wrong way, even after he showed her the right way, that we are born with a suborn desire to force nature to our will, even though doing so is impossible.

The idea of socialism is a construct of human imagination; we as a people trying to jam the pieces of an economic puzzle together in a way that defies the laws of nature.  Man, at his absolute best however, can only poorly mimic nature.  Man has never outdone nature, or even come close to nature’s efficiency, at anything.  Val proved this to me as only a man of his genius could, and went on to explain his time tested theories in his book Nature vs. Man.

Socialism is work of the mind, whereas free market capitalism actually works, because its construct allows people with different mindsets to find a common value on which to agree.  This happens because whatever good or service, and barter or money being offered, is mutually beneficial, and not because anyone was forced.  This is equilibrium.  Nature seeks equilibrium.

Absolute free market (laissez faire) capitalism however, allows for too much criminal behavior and advantage taking of the masses.  And this is where mankind’s socialist imagination can be useful.

An economist I listened too decades ago (80’s) explained that America is a mix of capitalist and socialist systems, and the maximum ratio where the two systems coexist without the system as a whole breaking down is 70/30.  Seventy percent free market employment and revenue generation to thirty percent socialist employment and income generation.
 
70/30

As of today, it is my conclusion that capitalism and free market economy is a construct based on the laws of nature, and that socialism is construct based on the imagination of mankind.  The ratio at which these two systems thrive is around 70/30, and any economic system that goes far past that ratio will break down.







---CAM

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