Hatch Act there for a reason

This is a letter to the editor that I just sent to the local paper in Logan, Utah. Though more political than economic in nature, it does deal with underlying legislative conditions that need to be in place to design and implement appropriate policies.

Dear Editor

Ed Redd showed a rare level of insight and integrity when he recused himself from a public, professional assignment due to his political campaign for the state legislature, citing the Hatch Act. Though that Act most likely only applies directly to federal employment and political activity, the principle involved certainly applies to state politics. The point is, conflict of interest by those who governmental and legislative powers, given intertwining budgetary and administrative controls, opens the door to private malfeasance in public places. On the surface, it allows for a perverse kind of reciprocity. "You approve my budget and I will approve yours" can cover a multitude of sins. That is why the Hatch Act exists in the first place.

Of course, in our day and age, ethical protocol would call for a declaration of conflict of interest. In the case of state employees voting in the state legislature, much if most of what occurs would involve such conflicts and set up a bargaining regime among state-employed legislators and the instruments of government that could leave the interests of the people well off the table. How would reform take place in an environment where reformers and reformees are one and the same? Of course, this is the common practice, as the spirit of the Hatch Act has been quietly ignored in Utah for some time, particularly in higher education.

Richard Morris in his excellent 1973 book, Seven Who Shaped Our Destiny, points out a profound irony. The tiny colonial culture of early America produced a cadre of political and economic reformers that changed the world for the good in enduring ways, while we suffer in our times without equivalent leadership. So the Hatch Act Modernization bill, would undo yet another protective instrument with little debate or public outcry. The bill is presented in the name of modernization, which is, of course, an unassailable objective in our stilted mindset. I am surprised that it would not be called the Hatch Act Reform bill, because it would serve to reform one of our primary instruments of reform by eliminating it. This is how we think and act in our day. This is why we suffer from economic and political crises of our own making.

Beaver dams and the fiscal cliff

We are of this earth, but we pretend we are not. I know, there is the religious argument that we are apart from the animals, which allows us to "dominate" them while we "tame" the earth. True. Ok, although many are not, I am a believing man in such matters. The divine directive I know about does not say that we are licensed to pillage and pollute while we are here; on the contrary. We are here as stewards. We are to be responsible.

I have all of the credentials of a conservative and a capitalist, but I must say that we need to be far more responsible from an environmental standpoint. I hear all the time from people around me that they believe that nature is so vast and the planet has such inexhaustible resources that we couldn't possibly be doing much meaningful harm to the environment. I find it hard to comprehend such a statement. How could anything be more wrong? I am reading the synthesis of the Millennium Ecosystem Assessment. There are a lot of smart, committed people working on the problem that are way off base.

Even if they are not, the logic escapes me. This is like saying that it isn't important to clean your house because it will not fall down if you do not. Furthermore, by being reckless, we are likely to stumble into serious problems at a micro level. Fracking, for example, is so fundamentally invasive that it surely should be applied only as a last resort. I read last week that fracking companies in the rush to obtain oil are pushing chemicals with known carcinogenic properties underground, near groundwater sources.

There is another important reason to keep environmentally aware, apart from avoiding pollution and environmental degradation. We can learn much from nature in the cycle of life. [Please, don't roll your eyes. There will be no background music here.] In all things, there are periods of growth, maturity, and decline. This is a fundamental tenet of capitalism, of course, but we forget the last of the three stages from an economic perspective, an oversight with enormous negative consequences. Poor economic policy with regard to large-scale enterprises with declining revenues has a direct impact on the famous "fiscal cliff" facing U.S. politics in this, the last month of 2012. It is a major contributor to the perilous economic conditions which we face currently.

The growth process is cool, right? This is the domain of entrepreneurs, new ideas, and raw competition for better things and better ways. Such a sanguine assessment is ill-suited. Unfortunately, as was pointed out recently in the congressional debate over trademark laws, future companies have negligible constituencies. Fighting for their rights involves abstract concepts and coherent policies. Politics "in the raw" typically ignores such niceties in lieu of porkbarrel bills and special favors. The growth sector and its needs go woefully ignored.

The mature sector is where we all live, or hope to. This is the world of good jobs, consistent government revenues, and social justice. Oh, that we could all always live in this world, characterized by white picket fences and dinner at five each evening. The problem is, prosperity does not last forever. Tastes change. The new can undermine the old. Even longstanding success can slowly fade. Sometimes success can fade quickly, as the makers of sliderules -- Keuffel and Esser -- found out in the early 1970s when inexpensive calculators were introduced into the market.

Dealing with the declining sector is where we fail the most. Nature naturally accommodates such change. My favorite example in such matters is the beaver. Don't ask me why. Beavers represent rationality to me. What do they do when their dams, their homes  and workplaces, no longer are viable? Beavers evaluate such situations, given their excellent engineering minds, and move to build new ones.

What do we do under such circumstances? Not always that. Well, in a sense, we do, at least in smaller cases. Mainstreet business, for example, are defined by their cash flows. If they don't get ongoing business, they can't be in business. Hometown bankers famously only loan money where it is not needed. Well, that was up until the Banking Act of 1980. Since then, the banking system has been progressively corrupted, first giving credit cards to people that shouldn't have them, then mortgages to people that wouldn't be able to meet associated payments, then lending money to no one in particular in a fancy set of transactions based on "derivatives", highly complex models of economic relationships. I write about this in my book "It's the Necronomy, Stupid", a book that has successfully avoided notice from its perch on Amazon.com.

It can be said that we have ceased to be as smart as beaver. To be fully truthful, that is exactly what I am saying. We have embraced the "too big to fail" phenomenon, to be sure. The issue runs deeper than this, however. Remember my statement earlier about the lack of basis for political support for the growth sector? The companies of the growth sector do not yet exist or they are cash-poor and preoccupied. Thus, they have no grounds for political power. Companies, particularly big ones, present the opposite. As their revenues fade due to sagging market demand, such organizations tend to turn up their pressure on Washington. They hire more lobbyists. They hire more attorneys, more expensive ones, the kind with political access. They investigate ways to influence politicians. They work hard to find ways to "tilt the table" in their favor.

This process is far easier than it was meant to be. Think about it, they only have to get some proportion of 536 people on their side, at least for legislative purposes. You know of the mystery of politically-derived wealth. I will use Lyndon B. Johnson as an example. He gained office as a poor young man. By the time he retired, decades later, he was a multimillionaire, with a communications empire, substantial land holdings, and associated perquisites. This in spite of the fact that he was in office all of the intervening time. On the surface, you can make the case that he was an astute time manager and entrepreneur during the recess periods. Surely he was. However, the numbers do not really add up.

Am I accusing him of being dishonest? Of misuse of public funds or embezzlement? Of illegal behavior? No. I have no idea of the details of his history -- though I have some books somewhere should I decide I need to know. I am sure that there is no public record of "tit-for-tat" deals or of obvious distortion, if that is what you might mean. There were likely situations involving "winks" and "mutual understandings" and amazing coincidences. It was probably easy for him to close the deals that resulted in his wealth.

The point is, the decline sector is rife with such situations, particularly with regard to the politics of power. With rule changes or legislative mandates originating in Washington or in other political venues, markets can be redefined, entrepreneurs can be wiped away, and valid new opportunities can be converted to hopeless causes.

Let me provide an anecdotal example, trivial, really. This weekend, I spent time with an old friend. We are both in our sixties. When he was a little boy, he got a toy car that was solar powered. It was a pretty large, powerful toy. He had it for years and years. It was very durable. It ran and ran and ran; didn't need a battery as long as there was sunlight. The toy car still worked when he went off to college in 1969. In 1970, he went to Central America on a mission. He was sure that when he returned in 1972 that there would have been a massive conversion to similar full-sized cars by the time he got back.

Instead, the early 1970s brought gas shortages, rationing, and generalized crisis, a condition that has repeated itself on occasion, bringing with it fear and concern on the part of the populace. We could make the case that the gasoline-powered personal transportation vehicle is in a state of decline but by means of tactics as outlined earlier the market is not allowed to "die". As I often remind readers, Ford Motor Company did indicate in 2007 that the company had an archive of ideas and innovations dating to the 1940s that they could use to turn the company around. We might ask about such ideas. Could some of them possibly help to alleviate pressures brought on by the widespread use of fossil fuels?

I will not belabor the point. There are many industries about which similar comparisons can be made, not just in finance and gasoline-powered vehicles. Such industries develop strong lobbies. They gain substantial expertise in such matters in Washington and in the political capitols of the world. Such organizations have had a good deal of time to prepare their case. Without question, such conditions have political implications. Surely, such relationships will tend to bend, if not break, notions of democracy in our society.

There are a number of techniques that can be considered as ways of "bending" democracy, techniques that can be employed by corporate and political schemers. My favorite is the two-party system itself. I have long held that our main weakness as a society is our love of a scuffle. We relish fights. If we do not engage in them, we love to watch them. Such interest in hostility is played out in several ways. Perhaps it fulfills a need to work through aggression and is a result of several millenia of competition for resources. My observation is that the liberal vs. conservative political dialog as it plays out in its many ways provides a great distraction for individuals and organizations who have the objective of "bending" the system to avert market decline. While we play out our worries about what the "right" says about the "left" or visa-versa in the press and in the media, backroom deals are surely being arranged to meet the needs of specific petitioners with specific requests that will serve their needs, often to avert open market conditions that would favor new ideas and make opportunities available for new innovators. We have fallen for the magician's trick of averting the eye.

As we consider the ecological underpinnings of our success, the demands of growth when compared to maturity and ultimate death are undeniable. There are limits to how far we can "bend" such things. Do I have a problem with the idea that there is an elite? No. I think that such a thing is a part of human nature. Do I have a problem with the fact that they work to have more than their typical share of political influence? Similarly, this has always been the case. All political systems and in all forms of society and government share such behavior. Such efforts to avert the natural order of things must be judged as a matter of degree. We are steering ourselves close to the edge with regard to consolidation of power and wealth to be sure. This should be a matter of concern for all, particularly for the elites should the balance of political power shift to favor democracy.

What I criticize here is the overt attempt to manipulate markets and forestall innovation beyond reason as we can currently observe. In energy, for example. Would it really hurt to truly usher in a new, more rational age of energy? Couldn't you establish legitimate financial instruments to reward the few entrepreneurs who can put viable plans together? There is some risk in this, but you have a good deal of capital. Buck up and drink the Kool Aid. Spend more time with young engineers and enterprising MBAs and less time with attorneys. It isn't going to hurt your prospects to usher in this new age.

I know of the story of J.P. Morgan and Nicola Tesla. It may be apocryphal, but I mention it to make a point. Tesla showed Morgan how the earth's energy could be tapped with a few rods placed into the ground. Morgan asked where "meters" could be placed to measure usage and charge for the energy. Tesla indicated that they wouldn't be needed, as the energy generation was automatic and natural. He offered his opinion that the resulting electricity should be free. The story goes that Morgan thus decided to freeze Tesla out. He slowly cut back on Tesla's funding while promoting the plans of Thomas Edison to good commercial effect. It worked. The resulting company is General Electric.

Is the story true? Is economic prosperity dependent on having usage meters on everything, forcing payments for things that may be somewhat arbitrary? Is this why obviously improved approaches to personal transportation, medicine, nutrition, etc., do not present themselves? Is artificial scarcity necessary? Perhaps it is, but couldn't we maintain currency with science and arrange business according to facts within decades of when such innovations become known? While that would result perhaps in more distribution of income and wealth, there would be many improvements to society in the process, not the least of which being stability.

Finally, we have a current view of a critical tactic of "decline sector" or, more descriptively, "anti-decline" people. They like to arrange for crises. Such conditions allow for diversions and sleight-of-hand. The fiscal cliff, is it indicative of a real crisis, or is it an artificial device to draw our attention away from something else? We would be well-advised to watch "both hands" as events play out. What may be under way to preserve prospects that have otherwise passed their natural life cycles? How can such acts be averted in favor of new and improved innovations that will have the added benefit of spreading wealth around and stimulating still more innovation? We need to be busy little beavers to ensure ongoing reestablishment of economic prospects.

Laziness

Wow, this was the election that woke up white, er "traditional" Americans. The party, literally and figuratively, is not about them any more. I should say us, as I am as I fit the demographic.

I was raised in Utah so I came late to the racial integration issue. My parents had lived in the South and Midwest in the 1930s and 1940s, as my father was a government surveyor and engineer. They told me a number of stories with racial overtones. Actually, they ran in many directions, as my parents absorbed some social blows from being Mormons from Utah. My grandmother was a poet. She wrote a number of poems in dialect, many in what is termed "Negro" dialect. I don't know of the propriety of such a term now, but that is what they were called. My mother taught us a number of poems and stories that made use of many dialects. They were overwhelmingly enjoyable and, I think, oriented toward understanding and acceptance.

I remember in the 1970s or 1980s watching the movie High Road to China with Tom Selleck. I liked the show very much, but from what I understand, I was in the vast minority in that. The point is, about halfway through the movie it came to my attention that an inordinate number of brown people were being killed. Scores. In the face of this, Mr. Selleck's character and the others were conspicuously unscathed.

This election involved some famous, even funny responses to the democratic reality. "Taking back the country" really does not look like a viable plan. The fact is, you are not going to be able to "out-baby" the minority races. That demographic fact was established long ago. As an aside, it is more than a little ironic that the representative of the dwindling establishment in the U.S. presidential election showed himself as a world-class paterfamilias while his opponent, representing the burgeoning classes, not so much.

The "givers" vs. the "takers" dichotomy in the minds of the "whites" with regard to economic benefits also faces difficulty. There was a moment in one of the television broadcasts when it was lamented that "brown people" also "want things" and see government and politics as was of getting them. This conjured up, surely, images of the purity of capitalism vs the dank ugliness of socialism, as it were. Socialism won. Capitalism lost. Lazy minorities will thus be able to cream off the excess work products from hard working, hapless white people.

The tide will thus have turned; slavery will thus have reversed itself. Those whites who are left will need to look for another haven to be free. Could that be Canada? Uninhabited islands of the South Pacific? The latter is not likely if only because of the rising sea which just gobbled up the New Jersey beach. Its not just that they are not "like us" (wink, wink), "they are ... lazy".

We need to revisit the concept of laziness. Yes, this is a white people thing, too. In an era where technologies bring unprecedented levels of productivity, what does laziness mean? Unfortunately, this has become an existential question, as a person's social standing is determined by what he or she does. It isn't necessary that the job be done well. Scott Adams has become famous due to his ability to depict the truth couched in comedy. Indeed, the pointy-haired manager often is clueless.

When we consider the various concepts around which economic activity is rewarded, we find a good deal of leeway when it comes to work effort. For one thing, we can measure energy expended, you know, foot/pounds of energy expenditure, joules of energy, physical measures of activity. I had an owner of a company make reference to this as a measure of whether people were contributing. This has been called the "asses and elbows" approach to productivity. Is this what the white people mean when they saw that the brown people are not working to suit them?

When it comes to the expenditure of joules, there aren't very many of us that are working very hard. Certainly there are professional athletes, whose efforts are curiously protected by monopolistic fiat of Congress, a governmental corruption of pure capitalism that we somehow don't mind. Socialism in the service of capitalism, I think. We are a curious breed indeed.

Of course, there is the grand definition of work, the Megamind definition. We love this, the industrialist worker that makes all the wheels turn and the accounts balance. This is mental work, good work. In fact, the last few decades have resulted in an integration of brown and white in terms of the professions, perhaps not all, but most.

I know that many of our time have forgotten the sages of the past, particularly with regard to management of enterprises. That world has long suffered from the "next big idea" syndrome, which itself is fueled by the business press' desire to present ideas about how they can do better. The problem is that in the roller coaster of managerial ideas, real science and its implications have been muted. The point is, W. Edwards Deming wasn't simply presenting nice ideas in his time. He was presenting groundings for a science of management, an elixir for the problems outlined by Scott Adams and his Dilbert crew.

Dr. Deming famously said that the biggest problem faced by enterprises was "best efforts". This is to say that the biggest problem with regard to productivity and prosperity is people that don't know what they are doing within organizations but that do it with great vigor and in many cases with endowed authority. In this light, work becomes counterproductive. Work in this sense becomes the enemy to good economic and social outcomes.

Can you see the political and societal implications of such an insight? We need more merit in our meritocracy, merit defined as the reasonable application of effort. There is great waste in the misapplication of energy and of resources. In a sense, it can be said that we have an over-employment of resources and of people. The "best efforts" people that Dr. Deming mentions may be educable in their current state of employment, but it is possible that they are wielding power in places they shouldn't even be. Responding to the requirements of a demand-driven employment model, many of them are likely faking it, applying themselves to tasks as they are presented to them irrespective of their inherent talents.

I watched a typical recitation of the requirements of our demand-driven approach to employment a couple of days ago. The presenters were outlining what subjects people should study to get employment and where they should move in order to contract such work. I see no problem with this in principle, as the labor market is well-served by taking on market characteristics. The problem is in how late in the game people are being forced to make such decisions. The commentators were making comments about useless college degrees and the need to make drastic adjustments to resumes and job histories in order to meet the demands of the market. Another problem is the inherent loneliness of the process. People must engage in what the employment people refer to as the "crosswalk" when crossing the divide between their talents and interests and what is generally available in terms of jobs in their general geographic area.

A bigger loss to society than personal "laziness" is the inability to benefit from the inherent talents and skills of the people. Oddly, we reward the efforts of people who don't do their jobs very well when they could make major contributions in other ways that are not similarly rewarded. This is an enormous source of waste. The educational system is definitely a contributor to this dilemma. There is a concerted effort to identify and reward only a certain subset of talents at the expense of the rest.

What if the educational system and associated employer organizations were oriented toward recognizing and nurturing talents of all kinds early in our lives, associating talented children with experts and educators in their unique areas of skill in a lifetime association? This is to say, if musically talented individuals were brought together with others with similar endowments based on verifiable data, recognized by leaders and educators in those specific areas. The same for literary, athletic, scholastic, mechanistic, philosophical, mathematical, and other areas of human endeavor. A general education would also be needed, but a much more involved process of integration, once again, guided by personal data with regard to inherent talents and abilities, would ground people in their careers and areas of endeavor throughout their lives. When career and life adjustments were needed, they would be more grounded in a community of like-minded people to help them improve on their talents and enhance their contributions.

Dr. Deming's "best efforts" people live in a state of delusion. By association, it can be said that they suffer thus. If they are not overtly aware of their state of at least partial insanity, they likely suffer from mental or physical trauma of some kind. Regardless, resulting chaos leads to stress, to chronic aberrations that affect their mental and physical health. There are direct associations with hormonal imbalances, for example, and many disorders, including heart disease, metabolic syndromes including obesity and diabetes, and cancer. Equally important, they are missing out on the lives they could be living where they could be excelling, receiving ongoing reinforcement, and being happy generally. I recall the story of a high-powered executive who, when informed of his high chances of death from stress-induced heart disease, moved to the country to concentrate on playing the cello.

The economy as currently understood is deeply delusional. White people, as it were, have pulled the economy deeply into what even they would call socialism, but in the name of capitalism. It isn't capitalism, though markets are involved. Capitalism in the true sense would destroy the very enclaves of wealth that the white people are trying to protect. Capitalism is steeped in commercial revolution. The fact is, fear shouldn't be grounded in the darker races, but in the possible efforts of entrepreneurs that could, and theoretically should, render the old industries in their wake.

Of course, if Dr. Galbraith were to have his way, and Dr. Deming for that matter, it would be the corporations themselves that usher in the new order. They have the resources. They have the knowledge. In some cases this is happening. In others, there is little progress; indeed many of them go to great lengths to forestall meaningful progress. Among other things, this phenomenon can be attributed to ... wait for it ... laziness. This is a laziness of another kind. Rather than instigate a new program, for example, it might seem easier to talk to a senator and get a bill passed that makes the program unnecessary, at least for the time being. This kind of laziness is often of the cerebral kind. People in authority can tend to get "slotted" in the way they think, particularly when they feel threatened by change.

Problematically, given current expectations, we are not seeing an overwhelming desire on the part of private businesses to hire a lot of people. As it turns out, talented engineers and production experts are good at automating things. This is what they do. From their perspective, why should they arbitrary hire people that they do not need, that actually will often "gum up the works" with "best efforts"? All other things being equal -- apart from the fact that the people in question do not have jobs -- isn't the economy better off by empowering the engineers and production experts to exercise their talents to the max? Ok, and environmental engineers, too. I don't want us to start an environmental discussion right now other than to say that good production is not wasteful.

That person that would "move to Cleveland" or someplace to get the job that they were not necessarily suited for because it was available and no one was willing to pay for their true talent (that may may not even be aware of because the school system chewed them up and spewed them out when their weren't math geniuses) could have better things to do. Appropriately identified and coached, especially early in life, that person might be a perfect counselor. Maybe a forest ranger. Perhaps a biologist, with innate talents perfect for the job. Perhaps a brilliant painter or a social commentator. Maybe a comedian. It is possible that that person would be the very best president the country has ever seen. We could certainly use one of those.

How to pay such people? Let the "talent guilds" help to decide. They should be encouraged and supported. This is to say that we should be encouraged and supported. Let's look at this question, white and brown together. This is the question on which our future prosperity is to be determined.

Why no one can have a productive conversation about the economy any more

The White House Hedge Fund

There was a recent, interesting blog by Mark Cuban, in part on the prospects for turning the U.S. economy into a hedge fund to benefit from the private capital skills of Mitt Romney. As President, he could do leveraged buyouts in the name of the country, something that he did earlier with great success. As President, he could listen to the great plans of American entrepreneurs and pick a few. This could be a way of lifting us from economic doldrums. This could be an excellent way of leveraging Mr. Romney's obvious business skills.

This is not a new idea. I don't know that I would espouse it in any way. It has proven itself in a few cases, at least from an economic if not a social perspective. The problem is, such an approach has a name. If I were to repeat that name, you would be repulsed, because it has obvious negative connotations.

Most economic ideas are overladen with negative social and economic connotations. The last century in particular was a boon to economic thinking and to an improved understanding of relationships among the economies and societies of the world. Many unimaginable things happened during the period, of course, in the name of some of those ideas. Major lessons were learned and famously applied, to the benefit of us all. The United States led out in such efforts, speaking principally of the post WW II peace provisions and the multilateral arrangements that saw us through the Cold War to settlement of most issues, apart from a shaky ongoing connection between the Middle East and the rest of the world.

What we are left with is a panoply of words, of phrases, that convey social as well as economic meanings. Many of these descriptive phrases are associated with the American order, though not all. The problem is that virtually all of the vocabulary of economics, society, and politics has taken on connotations that are rigid and not always clear and descriptive. This rigidity has resulted in a public discourse that is often devoid of meaning, leading to misunderstanding by all parties.

My personal opinion is that the main problems leading to the warmongering of aggressor nations in the last century had to do with a loss of government legitimacy, leading to takeovers by groups of renegades and thugs, not with any particular economic or political theory. We should be particularly concerned about understanding the conditions that allowed Stalin to hold sway over Russia and the Nazis to control Germany than particularly the ideas of the left or the right which they ostensibly represented. Perhaps in either case, the relative nonexistence of political depth was at fault. We must ask why such civic societies were so fragile, as many have done. In the former case, extreme provisions of the Versailles peace agreement are understood to have stunted prospects for any German government. In the latter, civic society was vastly weakened by WW I, compromised though it had already been under the Czars. No one was able to understand and counter the subtle shift in legitimacy from Lenin to Stalin, a change of considerable consequence with regard to Russia's prospects at the time.

The problem with any current economic debate is that most of the alternative concepts have now taken on toxic connotations. Only a circumspect dialog is possible. As a result, such terms cannot be used in a civil discussion about the political economy of the world and its nations, as they serve as springboards to well-worn, but counterproductive arguments. Even the concepts we use daily take on vague, if not dangerous connotations. Here I list and discuss a few.

Fear of capitalism

Americans in particular love talking about capitalism, but there is great fear of its implications in this country. The point is, markets are harsh, or at least they can be. Though we brag to the world of our commitment to markets and competition, our policies show stark contrasts. We don't allow competition in transportation. We don't allow competition in energy, not really, and not without breathtaking favoritism granted to existing enterprises in many longstanding industries. There is very highly managed oversight over markets for food and agricultural products. We don't even allow for open competition in sports.

We like our economics to be tidy, so much that Congress sees fit to ensure that Twin Falls, Idaho or any other sports-crazed community cannot field a champion football team. Industries, once established, can count on overarching support of government to kill off any competitive challenges. Why was the US automobile vulnerable to the Japanese a couple of decades after the war? For one thing, they had become soft, not having any measurable domestic competition, apart from, ironically, Mitt Romney's dad's company, American Motors. Ford Motors has recently disclosed that they have withheld innovations from the market dating to the 1940s, an admission that didn't seem to raise anyone's eyebrows.

For some reason, business organizations in the United States avoid the "socialist" label when they appeal to government for favors. These can include tax breaks, price supports, investment credits, regulations that stifle competition, outright monopolies, infrastructure favoring their particular needs, and either emphasis on or ignoring of intellectual property rights. In the final analysis, a capitalist system would let such enterprises suffer the consequences of the market, to "let chips fall where they may" in spite of political power and influence that they might have built up.

Loathing of socialism

Socialism would be in large part the distribution of goods and services based on criteria other than the open market. Many consider this an idea that hostile to the American way. We hear a lot about people on welfare when the term is used. When government makes use of its powers to support existing businesses in ways only governments can, forms of socialism result that is not really looked at in these ways.

You may understand the basic set of alternatives. The "right" favors business at the expense of the people. At its extreme, a rightist system involves a merger of such interests, of business and government, at least in theory. Such is the "hedge fund run out of the White House" idea. The "left" favors the people, an approach that extends to complete democracy in the form of full public ownership of everything. As history has shown, this also results in a ruling class that many have criticized as appearing similar to the "rightist" bosses. Based on such thinking, the "left-right" continuum is not a flat yardstick, but a circular ring, meeting in the back, where a ruling class exists in either case.

The US as headge fund idea: Making the trains run on time

There is a name for a merger of interests between business and government, at least from the rightist perspective. I will not introduce it yet because it sounds ugly to the 21st Century ear. It might seem to be good idea for us now, given the state of our economic mess. There was a time when such a merger was considered as beneficial to a society. It was said of the leadership in question that it caused "the trains to run on time".

Governments are known, of course, to be poor at delivering goods and services. In most cases, such activities are reserved for private initiative where gains and losses can be enjoyed and suffered by willing competitors. The idea is to provide an environment in which such competition can be readily carried out.

Such an environment has shown to be effective not only in establishing strong economic performance, it has also demonstrated an ability to create vibrant, pluralistic societies. The problem we face it that such societies are also revolutionary in nature. This is to say that existing upper classes whose prospects are tied to existing organizations are at risk for economic and societal demotion if capitalism is allowed free reign. Entrepreneurs that are allowed free range of the market may in fact find something better than trains to run, making such efficiency irrelevant. They may undermine any and all markets. They may throw chaos into such markets as they provide better, more appealing options for the consumers of the world. A vibrant entrepreneurial environment has certainly shown an ability to even out incomes and stores of wealth. We created the GINI scores that bear such things out. The fact is, our GINI score of late is not that great.

Freezing out the most toxic of terms

I am going to list a few of the toxic terms here. There is some concern that by including them, the search engines will get me branded as something bad. OK, but rest assured, my beliefs in this regard are pretty well documented in the Model Economics approach. That is, most ideas have some validity if applied under appropriate circumstances. The question is in what society can bear and if leadership exists to ensure that it can be renewed and invigorated.

Fascism is, of course, the result of business/government merger of interests. This we saw in Italy and Germany in the last century. Communism was the rallying cry that let to the takeover of Russia almost a hundred years ago, though many purists insist that this was not a valid example of the Marxist ideal, certainly not after Stalin assumed power at the death of Lenin. Certainly ours is curious world in which the Chinese government and its people demonstrate such obvious commercial skill when they are supposed to be communal.

It is interesting that events of the past several decades, the last hundred years or so, saw use of these terms in ways that largely missed the mark. My observation is that the concepts they represented have valid implications, but they should be applied under specific conditions by a government that is above the fray. This may doom the attempt in the first place. The study is worthwhile, as it may underscore our survival.

When should "power to the people" hold sway? When large organizations cease to be legitimate. They should be allowed to die in the way of the market, by running out of money. When should governments support the needs of business? By policy, governments should allow for conditions favoring competition -- especially competition of financial weaklings against their corporate rivals whose products and services they call in to question. Openly, publicly, new enterprises should be able to make the case for their offerings without fear of reprisals, unfair conditions, and private, backroom collusion.

When longstanding corporations cease to be legitimate as per their competitive offerings, government may have a role in supporting the needs of their people. This is a form of personal socialism that most would agree with.

Is good governance even possible?

Is it possible to overcome abuses of the left or of the right, or of the back channel consonance between the two that makes itself known to the back of the circle where the elites of left and right meet in the middle? Now, this is what we should really be talking about, not only in this election, but in general. The fact is, what vocabulary would we use? How would we overcome the backroom power of the elites? Mao ZeDong, one man to obsessed over this issue, made reference to the power of the firearm in the revolutions of his era. What we face is more a matter of the power of the checkbook, if not the social club membership. The point is, the answer is the establishment and protection of a real form of capitalism and an associated churning of society. This would resolve our current and future problems if anyone was brave enough to allow for it.

Prosperity as a function of coersion

Reading the current issue of The Economist this morning was pretty weird. The main theme, true progressivism, makes a call for something that purportedly does not exist: A conceptual structure for a new economic paradigm, one that is capable of supporting realities faced by individuals, organizations, and states in our time. Hmm. I do that, but no one seems to care. I will just continue to consider issues based on my Model Economics approach with the idea that someone with some clout in the market for economic ideas recognizes it and gives me a tap on the shoulder.

Meanwhile here are some answers to the question that may call attention to solutions. True progressivism is an interesting phrase. I am reading Amity Shlaes' "The Forgotten Man". Nothing there but thinly-veiled contempt for progressives of all sorts. I learned of such contempt for thinking people from a recent conversation from a young "tea-partier". This is borne of a vague call for return to a more amenable state. It cannot be that of Hoover. More likely it is to the time or Reagan. Not a man of ideas, but an expert in the sure quip. He ruled the world out of a mastery of the catalog of popular cinematic dilemmas of the time. He understood the outcomes and the words that made them happen. I remember the day. But the questions of that time and this were swept under the carpet, where they continue to fester, though some have emptied out into the street, as it were. Famously Wall Street, but infamously Main Street. Our crisis has been long in coming.

The unstated argument is that we do not need more ideas. This is not a time conducive to thought, or so it would seem. The same young man that informed me of a successful local purge of an educator who was found to be a "Marxist". It was not clear in the discourse just what a Marxist was, though the man was clearly of that persuasion. As a result, he lost his employment and I guess was run out of town. I mentioned to my new young friend that in the context of the early stages of the Industrial Revolution and in the overwrought behavior on the part of commercially-supported thugs of that Age, much of what Marx said made sense. He assured me that I should never let that opinion be known or I too would be found wanting. My prospects would be dire indeed.

Just a thought, but what if in the vast array of that man's work, the scholar in question, an idea or two exists that could shed some light on our dilemma? Would be it possible that we could make use of a notion thus tainted? Perhaps we could use it, but indicate that it came from another source, perhaps the sainted Adam Smith. Better yet, someone not known for thought at all. Perhaps a neighbor. Such an idea, fully untainted, could be taken into the fold and embraced. Problematically, the idea would suffer from the ignominy of newness. Also, your neighbor is likely not from the famous philosophy school. Rats!! It probably wouldn't work on that count alone.

By the way, what ever happened to the famous philosopher profession? People in position to make a difference seem to have become politicians, listening to the radio a good deal.

One of the main problems with prevalent market structures is that they are dependent on coercive markets. This is to say that economic security if not general progress is dependent on the existence of markets that extract resources from and require participation in markets whether they want to or not. Such markets, based on their fundamental nature, sustain economic activity and support growth and concentration of wealth through force. In such cases, there is a lack of infrastructure supporting alternatives. There may be incomplete supply networks for necessary items. There may be regulations that make use of the goods or services illegal or impractical in spite of their native benefits.

Coercive markets, it can be said, provide economic security and consistency from their very nature. If people must pay, they will pay. Such compliance and the consistency that it seems to provide serves as justification for a lack of options that might otherwise exist. President Obama made a comment that infuriated members of the right-wing, particularly from the extreme right. They were infuriated because of the unfortunate way he made his case in saying "you didn't do that" with regard to infrastructure, when it almost sounded as if he meant to say that business people did not create their own enterprises. His original point is a good one. Commercial success, real commercial success, requires some government support at some level. Roads? Public networks? Airwaves? Commercial codes? Courts of law? Policing functions? Electrical sockets? Private business could not exist without some combination of these and many more.

We can classify markets in three categories with regard to coercion. The first is "necessary", non-elective, organic markets. Such markets involve the exchange of necessities, food, basic clothing, shelter, possibly transportation. This would include items that are needed to support income-producing. From a budgetary or financial planning standpoint, such necessities may not be high end solutions, but items and services at a basic level.

The second would be coercive markets, where the purchase of necessities involves limited options, excluding other options that may be more preferable. In a sense, such markets involve outdated choices, limited options where substantially better alternatives would be preferred if it were available. The point is that the market is very narrow, is in some way mandatory, and it capable of extracting adherence, even compliance from the people at large. Some of these are de facto monopolies; others are certified as such.

Elective markets are the third category. These are markets for services and things based totally on preferences. Such markets may be somewhat large as in sports and entertainment markets (though keep in mind that many sports markets are Congressionally-mandated monopolies). Elective markets may be small and, indeed many of them are, such as esoteric markets for unusual, elective items that do not appeal to most consumers. I know of a young man that jokingly aspired to distribute "a bassoon to every home". This, of course, will not happen. Many elective markets are local and limited prospects are a function of geography. Production and delivery of crafts and home-grown produce may be limited by geographic and population factors regardless of their uniqueness and desirability. Only a few customers buy as a result of such limitations.

The really interesting question is one of the elective markets. Will they hold up were coercive markets to fall prey to competition and to productivity gains? Can transactions not motivated by force serve as the basis for an economy? Can enjoyment fuel consistency as does desperation? The famous dictum of marketing is this: Will the dogs eat the dog food? In the current case, we would ask, will the dogs eat the dog food simply out of enjoyment? Will they pay to go to a show?

The point is, again, that we do not have a production problem. Rather, commercial interests often need to be reigned in as hounds at bay. Overproduction lurks at every corner. Heaven forbid that inventories should be found and not used. There is a legend that a unsold mountain comprised of Apple's Macintosh predecessor, the Lisa, lies at the base of my community's landfill. This the result of some extra-market deal with the devil to make the overage go away. What's a little junk in the back yard anyway?

The story of Nikolai Tesla's inability to bring his ideas to market in his time is that he offered a way to provide electricity universally directly from the ground. J.P. Morgan is held to have asked where the usage meter would be placed in order to submit a bill for the service. Tesla's response is to have been that no such device was required, as the answer lay at everyone's feet. Thus, Mr. Morgan directed his efforts famously to Edison, who knew how bread was to be buttered, though he wasn't a shadow of the intellect of Tesla.

This raises the "music teacher" problem. How to make a living following your love and your talent? Become an employee of the state. Teach school, where property tax is pooled in support of an activity that no one would otherwise pay for. It is not the same thing, but close. Even that system is straining at the bit; schools are shedding themselves of the artistic function in lieu of standardized test scores. In our stressed times, the argument seems to be making itself. We all must do what we must do and not what we want. We cannot make something of ourselves, we must betray our better selves to participate in coercion to one extent or another. Ronald Reagan would have an instant example or metaphor from the movies. I can think of "Joe vs. the Volcano".

Think of this. If we were not all "chained to a desk, doing something [often poorly] because that was where the money was", wouldn't we be better off doing what we were good at? For one thing, if we had more time on our hands, wouldn't we go to see more of what each other did? Wouldn't generalized freedom from the grind prove to be a self-fulfilling prophecy? Wouldn't we want to see each other's "stuff"? If we had the money, wouldn't we pay to see it?

The argument to be made is that of the "full enjoyment society". In part, that is our solution. Growth, maturity, and decline is a reality of modern economic life. We don't let organizations die, though, and we are little aware of the ways that they kill their competitors before they get a chance to start. We need to be an Age where we acknowledge and foster talent wherever it can be found. Most importantly, we need the expression of that talent in new markets and in new sectors of society. Competition will eradicate the dead spots if we let it. In the place of corrupt commerce and unproductive employment, we should encourage high productivity and foster non-coercive markets. We do not have a production problem. It is time that we stop acting as though we did.

Economic cancer

Cancer is not a mysterious thing, coming out of nowhere. In fact, it lies at the core of our being, a part of our basic health. We are constantly generating new cells in our bodies, billions, even trillions over time. We need this form of refreshment to remain healthy and active. Every so often, however, errors occur in the cell division process. Our bodies have the amazing ability to detect such errors and destroy the cells in question. In order for cancer to form, the error-detection and cell destruction process must be compromised.

From an economic standpoint, we can say that entrepreneurism is a form of growth, similar to the growth of cells and organs. Entrepreneurism involves, to continue the biological example, growth and development. Entrepreneurism and its resulting condition, new enterprises, are generative phenomena. Businesses are like the growing cells and organs of the politico-economic system, of our society. As they grow and develop, we are all enriched, as they provide the goods and services that renew and refresh our lives. Such new enterprises grow to the extent that they serve as means of extracting money from the rest us as we justify such transfers in light of available alternatives.

As indicated earlier, such new enterprise growth is similar to the development of new cells and organs in the body. As new organs and tissues grow within the body, they need sources of nourishment and support as are supplied by the body's various circulatory and communications systems. Such benefits are cut off when cells and the organs they come to build are judged to be nefarious and not worthwhile.

Our economic problem is that we lack the mechanism if not the will to allow large organizations to wither and die when they cease to be justified by market means. This is mostly due to the size and political influence of large public and private organizations. In this sense, our economy has cancer. We have big, bloated tumors where we should have valid, fresh, new, and functional economic organs that have formed, evolved if you will, to meet current needs and preferences. Similar to established biological cancers, the big, bad proto-organs (big, politically-propped-up companies) starve out new, more valid enterprises. In fact, they exercise unlimited license to forestall new competition. This is often done in the name of competition.

Unfortunately, given the persistence of cancer as a source of disease, pain, and death, the biological example does not point to obvious solutions with regard to cancer of the economy. The same principles surely apply, however. Some systematic approach to supporting economic constraints is in order. Allowing flailing, but large organizations to subvert the system by political means is clearly counterproductive. We should be especially vigilant in seeing that this doesn't happen.

Getting more from our aristocracy

Downton Abbey, the Jane Austen works, and the riveting collection of historical dramas from all over the world include the keys to our economic and social future. These stories, rooted in the concept of entail, contain the elements of political success. We, most of us, do not even know that such keys exist. Imagine the study of mathematics without the modulus or investigation into biology without knowledge of genetics. The same goes for the study of disease ignorant of the characteristics of bacteria and viruses. Without understanding such core issues, we are left flailing around, buffeted from left and right, ignorant of the source of our problems.

We learned so many lessons in the last century, but we lost sight of the major victory of a previous era, the partial conquest of aristocracy and entail in the eighteenth century. In terms that we may understand, how was Downton Abbey rescued in the late nineteenth century? By a marriage between the daughter of an American industrialist and the scion of a great British family. Why was this necessary? Because the failure to transfer aristocracy and entail to the British colonies and the resurgence of new economic classes in Britain and the colonies from manufacture and trade upset the centuries-old balance of power. As a literary example, Jane Austen's elites were not at risk; as the decades played out, they were.

In our time, wealth is no longer principally derived from the land. On the other hand, that is where much of it ends up. John Kenneth Galbraith declared about a half century ago that principal economic and political power was represented by corporate assets, by the wealth and power of large, entrenched corporations. That opinion was held in question at the time. George Gilder and others, including Peter Drucker, declared that entrepreneurial successes were effective at redistributing and recycling economic and social power. The whole venture capital mystique from the 1970s on grew out of the ashes of Galbraith's declaration to the point that he reversed himself.
With the notable exception of the electronics industry and its novel funding community, we must take another look at Galbraith's 1960s view of the economic arena. Wealth concentration of recent decades has to be viewed in the light of a lack of competition and dramatic concentration in key economic sectors.

I had an interesting conversation with one of my children last week on this point after watching one of the popular "time capsule" movies. Many of the areas when I was a boy that we thought were susceptible to great change are fundamentally the same, though some predicted gadgets such as picture phones have appeared. Ford Corporation's admission of its seventy year old "archive" of potential, but unused innovations attests to this fact. There is no chance that the political and economic elites of our time, from either of the prevalent political parties, will relinquish their holds on these longstanding markets. Whether it be laziness or a preference for manipulation in lieu of risk, their white-fisted grip is fixed on the necks of any that would upset the current economic apple-cart.

Buying up politicians? Nothing could be easier for these people. They have been at it for a long, long time. They can be very subtle. As Fussell has indicated, if the families of great wealth were frightened by the French and American revolutions, they were highly informed by the Great Depression, which taught them the importance of invisibility.

Inheritance is the issue as much as it was in the time of the Downton Abbey tale, which does have its historic roots. This is not the modest inheritance that allows you to provide for the basic needs of your spouse and children. This is inheritance on a scale that transfers the reins of wealth and power from generation to generation in the form of interests in longstanding stores of wealth.

I live in the American West. Most of the people around me could be considered tea party conservatives. They profess a hatred for those labeled as progressives. They call for a return to the past, a message thick with references to the American Revolution and the American Constitution. They quite adamantly believe in American exceptionalism. Nonetheless, when I point out the structural changes brought on by the American political innovators to disallow entail and the aristocracy, they tend to fall silent. It is, ironically, an idea that does not resonate with them. Rather, it is new to them, and they have a professed resentment for new ideas. This is one of the chief complaints they bring forward with regard to their political opposites, the progressives.
Just because the entail issue is new to them, however, it does not mean that the idea itself is new. On the contrary, there is overwhelming evidence of the effects of entail and aristocracy. Britain alone had almost a thousand years of it. Reread the great books of the time. The intelligentsia of Europe was  obsessed with the issues. Even Adam Smith had a few things to tell.

As a result of our ignorance and inattention to the issue, we have a kind of half-baked entail and related aristocracy. We continue to call for social equality in the United States, but we do not search out meaningful ways of resolving our fundamental systems of inequality. Questioning inheritance on almost any level would be a form of political suicide of untold proportions, alienating parties from the political left as well as from the right. It seems we would all like to establish something of an aristocracy of our own. In fact, this can be said to be one of our greatest motivations, particularly when we see the ineffectiveness, the corruption, and the cupidity of our government and its agents. Until government can show to be more reflective of the needs and interests of individuals and of families, voluntarily abdicating power by a family of wealth truly would be suicidal.

Nonetheless, more transparency is clearly needed. Is it possible that we could make a more explicit deal with the families of wealth and power that so clearly are controlling political and economic affairs in our time? We need to dispense with the trappings and the distractions of our current politics and open up a clear and definitive dialog with the "invisible" powers Fussell refers to. They need to purposefully and expertly build new industries to replace the old in energy, in health, and in transportation. These new industries need to use existing science, not subvert it. They need to dismantle the old models -- never an easy task. As in biology, when a healthy organism encounters a cancerous or no longer useful cell or tissue, it kills it in favor of a new replacement. Our bodies constantly do this in order to maintain our health. This needs to be done to the body politic by the elites themselves, even when existing stores of wealth will likewise be ruined. To the elites, we must say, "You have wealth and influence. Use them to build up new, more valid stores of wealth. If it is your wealth, that is OK, as long as we can get along with our lives as we wish to live them."
I might add a little sarcasm here, pointed at the masses of our society that do not really aspire to more in life. Your opiate, your Great Distraction, is none other than cable TV. Perhaps that is a good thing, better than other options. It seems something of a shame, however.

If you look at the last time the fundamental wealth of American elites was seriously in jeopardy -- well, not counting the energy and inflation crises of the 1970s -- that was the combined challenge of the Great Depression and World War II. Tax rates on wealth were substantially higher for the period. I looked this up years ago and have the documentation somewhere. The wealthy families made an unprecedented commitment to preserve the status quo and the structure of our economy by supporting economic reform and the war. We need a similar commitment now. Somehow, for example, we should be able to adjust to inexpensive personal vehicles that create minimal pollution and other substantially improved transportation. We should be able to eliminate the bizarre medical system that is dependent on high levels of chronic disease to sustain itself. The technology and the science exist to resolve such issues and many more.

To follow the Downton Abbey example, the upstairs family needs to get its affairs in order so that the downstairs crew can continue on. Personally, I would like to see something more egalitarian and, well, progressive, but I don't see the will, the commitment, or the understanding of these issues to even begin to imagine something different.

Mitt Romney, David Koch, and the consumption of cake

There has been considerable concern over a recent elite fundraising event in support of Mitt Romney's presidential campaign by David Koch. Justin Ruben lists several potential problems with such a collaboration as he imagines will result from a Romney/Koch alliance. His concerns are most likely valid. With support from like-minded individuals, Romney is likely to assume what can be characterized as a "business-friendly" approach to politics that is highly skewed in favor of certain kinds of businesses, against their rivals and against parties that may otherwise lay claim to sources of profit and power -- labor, local government, environmental causes, etc. This is basically an old school approach, what have been historically considered "robber baron" and "union buster" politics.

They wield power that they never had to earn. In their attempts to consolidate and extend their family empires, they run roughshod on our political and economic institutions with little knowledge or concern for the implications of their actions. By living out an aristocratic-oriented version of the American Dream, they trample on the republican one. The problem with entail is that the math doesn't work.

I recall a question in a debate addressed to Steve Forbes when he was seeking the Republican Presidential Nomination in the late 1990s. The moderator asked Mr. Forbes whether he personally had a mortgage on his home. When Mr. Forbes answered in the positive, there was almost a general sigh of relief. One commentator noted that Mr. Forbes was thus "one of us". The question of inherited power and influence runs much deeper than this. A mortgage is sign of astute financial management. He could have signed one over to himself if he so desired. A more meaningful question would have been whether he had ever been turned down for a mortgage, for example.

The point is that such a childhood and youth could never be equivalent to that of a typical youth who knows from the outset that he or she is going to have to make a way for himself or herself. This is obviously one of the most galling shortcomings of Mr. Romney politically; he is wholly ignorant of the ways in which he is entirely different from the rest of us. In medieval times and in many countries in the current environment, Mitt Romney and David Koch would most likely have aristocratic titles. They would be "dukes" or "barons" or "lords" or the like. They would surely have been knighted by now. They would have explicit political position, with preferential access to others within the aristocracy or monarchy. They wouldn't be shy about the perquisites of inherited power.

In the United States and in most industrial nations, there are no traditional or formal aristocracies or monarchies. We cringe at the idea of an inherited title. Such things run counter to our sense of justice and equality. Though many of us enjoy the occasional royal wedding, we scoff at the notion that the opulence of the few makes up for economic deprivation of the rest of us.

It is more than a little curious that much of the public opposition to a Romney/Koch collaboration is made up of people steeped in business, be they MBAs, finance specialists, commercial attorneys, accountants, etc. Such people can hardly be characterized as being anti-business. Their opposition is more nuanced. These people paint a much more subtle, more sophisticated picture than has previously been presented as commercial criticism in the arena of politics and economics.

Much has been learned in the last century about the many connections between society and the economy. Lessons thus learned continue to inform our successes and help to maintain cohesion and civility. Much of this extends into international economic relations. Nonetheless, something is wrong. Something is missing in the discourse, in the economic relationships among people, and within civic and commercial organizations on a national level. It may also extend to the international dialog with regard to political and economic policy. Though the Occupy Movement and the Tea Party initiative provide bookends of criticism, something is missing in that analysis that is not an explicit part of either message.

The Romney/Koch situation represents a key to understanding the problem. There is something curiously awry with what Romney and Koch are up to, but prevalent criticism rings hollow. Cronyism in politics should be a given. "Spoils to the winner" is the point of politics. Parties in agreement with one another, who have a common rival, should be able to form alliances. They should be able to work for some form of shared success by neutralizing the efforts of a common foe.

The democratic ideal is that all parties in play enjoy some level of equality and influence in such a process. The point is this: The Kochs and the Romneys are not equal with the masses. Members of both families benefit from their inherited wealth and position. The nature of their inheritance extends beyond comfort and security, they have inherited the underpinnings of great political and economy power. They were raised as "taipans", as future presumptive social and economic leaders. The waters always have parted as they passed. They have received every privilege. They not only benefited from the wealth and prestige of their parents, the groundings for their current power were given to them without having had to earn them.

This is not to say that they haven't done good things with the gifts thus received. In both cases, Mitt Romney and David Koch have expanded on the wealth and influence of their family estates. Such has been the challenge of all of the great families since the beginning of society itself. The question is in how such economic dynasties work to achieve these objectives, particularly given the typical stages of development of the family's sources of wealth. In second and third generation estates, there is much work for family member/managers to carry out. Based on the original success of their founding fathers and mothers, they are typically required to branch out into new and different markets, to establish positions in new industries. Dynasties extend themselves in different ways from how their original entrepreneurial successes occurred. They use their influence and prestige. They become much more active politically. They make every social, legal, and political effort to extend the franchise.

In the case of Mitt Romney, he did so by joining the circles of business and political elites of Harvard and Boston. That world serves as a global magnet for business challenges and opportunities, benefiting from marriage between consulting and finance. There was no opportunity at his father's firm, American Motors, but the family position and resources were very applicable in the super-heated culture of Bain and in the Boston consulting culture. Mitt Romney found himself in a veritable land of lost [corporate] toys, many of which brought opportunities if not unfulfilled value. Bright young know-it-alls with the money to back up their hunches are in position to expand on family wealth in a hurry, which is what Mr. Romney and his friends did. As to the Kochs, they were able to continue right on where their father left off. After buying out their siblings, they have extended the firm outside of its base in petroleum in true taipan fashion.

Were these successes to have occurred in England, the growth of the dynasties in question would have been accompanied by aristocratic titles -- knighthoods to be sure, and possibly baronies and dukedoms. They would likely have "married in" to some of the great families, which is one way that Briton's aristocratic families survived in the nineteenth and twentieth centuries.

In the United States, we profess abhorrence to the trappings of aristocracy, yet we wholly embrace its substance. Though entail and the failings of primogeniture were hotly debated in the time of the American Revolution, we hardly know the meaning of these terms in our time. We do know that there were Tories at the time of the Revolution, but we do not understand what they represented. They were the aristocratic young lions, the Kochs and the Romneys of the time who objected at being stripped of the trappings of power and privilege earned over the generations by their families. They had wanted the aristocratic model to prevail in the American colonies and were most upset with the alternative plan offer up by the locals. The American Revolution was about the dissolution of entail and aristocracy more than it was about home rule.

Of course, in those days, power and privilege was more closely associated with property than corporate, productive assets. Based on a layered social structure, the elites depended on the work product of their poor neighbors who were impressed into service by a legal system that favored inherited wealth in the form of lands. The democratization movements around the world that decimated most monarchies turned much of this around. In the United States in the nineteenth century in particular, with a continent to conquer, the inheritance issue was put to sleep. In the early twentieth century, an economic and social elite surfaced, but the Great Depression drove them underground. Paul Fussell in his seminal book, Class, documents this development. If you can get a copy from an old bookstore, it is an excellent read. Actually, it does get a bit "catty". I got the point about 2/3 of the way through and put it down.

Class in the United States is a most subtle thing, but ever-present and highly nuanced. Though the dynasties exist, they have learned to hide in plain sight. As documented by Fussell, the flashy ones are not the elites, but their representatives. The Kennedys, for example, seem to have finally worked their way in based on the family's service to the cause in the last century. They will likely join with the anonymous ones as they assume their place in the ranks of the highest order. The Romneys and the Kochs are the new second generation. There is much to be done before they will be granted entrance and anonymity. It will happen to their descendants if things go well.

If there is a problem with the rule of the elites, it is that they are resoundingly conservative. In this, I do not mean conservative in a political sense, because many of them are liberal activists. They are conservative with regard to risk and market position. Though they may publicly appear otherwise, they do not have the least interest in anything new, new markets, new technologies, new opportunities. In part this is because the affairs of the economic elites are mostly taken care of by trustees and managers who are hired for the purpose of continuation. Attorneys, accountants, and the sort, such people are not in the least interested in "adapting to changing realities". They are highly motivated to bend realities to their will. They exert overwhelming effort to forestall innovation and new market development. In the early days of my career as venture capitalist, I remember being thrilled to learn of venture efforts by the Hillman and Rockefeller families in venture capital. They invented the concept, at least in the modern era. "Out with the old and in with the new", replacing old equities with new. That, it turns out, is very much the exception to the rule.

The dynasty builders have learned to function in most subtle ways to subvert markets to extend the franchise. How do they keep new markets from developing? They organize venture funds to capture entrepreneurs and water down their messages. They wear them out as they construct artificial barriers to entry to the markets in question. How do they stop scientific innovations from being commercialized? They fund scientists, consistently, just enough to keep them going. The scientific findings thus derived typically "fall off the end of the table" for lack of support. Such techniques were very effectively used by JP Morgan, for example, to keep Nikola Tesla from implementing his best ideas.

I believe that economics and politics are outgrowths of our biological foundations. This is also the case with regard to organizations. In nature, growth, maturity, and decline occur as the result of constraints. These include available sources of food and energy, the weather, and other necessary elements. All life thus exists "in a box" represented by constraints. Our economic world, our society, is an outgrowth of this. The problem with the elites is that they tend to exert their power to distort the economy and society to meet their preferences for continuity without risk. In this sense, our aristocracy views its corporate wealth in similar fashion as the great landed estates of baronial Europe of the Middle Ages were valued by their holders, as static property. Nothing should change. The status quo is to be achieved at all cost. The elites of our time have shown to be highly committed to distorting such constraints to extend their organizations, the ones that house their wealth. This is the problem with the Romney/Koch collaboration. They represent very public manifestations of this phenomenon.

It is only natural for an organization to do everything at its disposal to preserve itself as its prospects for success begin to shrink, all else being equal. This is a biological reality. In the Western United States, we have the general infestation of Dyers Woad as a reminder of this trait. Unbridled growth, however, becomes a cancer. Extending an organization, even an industry, beyond its natural life conveys cancerous outgrowths as well, a condition I have referred to as necronomy. What is wrong with a Romney/Koch collaboration? They will use every available resource to subvert innovation at all levels. They will do anything to continue and extend their dynasties.

Lets say, for example, that someone were to develop a technology that overnight were to invalidate the entire petroleum industry, a source of energy that resolved all of the economic, political, environmental, pollutive, and health-oriented problems associated with widespread use of fossil fuels. Interestingly, this is similar to an opportunity Tesla brought to Morgan, a means of using the earth as a resource for generating and transporting electricity pervasively and inexpensively. Morgan killed the deal for want of a meter that could be used to charge people for the service.

How would a Romney/Koch collaborative deal with such a development? Would David Koch say, "Well, the gig is up, I guess we should get out of the oil business"? On the contrary, he would kill the deal so dead that it would never see the light of day. What about associated opportunities on the other side of the equation? The big ones, the important ones, will never see the light of day. Remember, it was Ford Corporation that recently predicted that it would rebound from recent problems because it could call upon seventy years of innovations "in their archives" to turn things around. Isn't that an admission that they had been killing innovations for at least that long?

You may have an idea by now of the issue in question. It is this: inheritance. This is the key issue. This is what is potentially wrong with the Romney/Koch alliance. In this, I am not making reference to your hand-me-down golf clubs from your father -- or insurance policies or homes or summer cabins. In this, reference is made to the inheritance of corporate controls, powers, and authority. Along with this, large stores of wealth. We need to understand the policy implications here. To decide in favor of such multigenerational transfers of power and wealth, we are voting in favor of entail and aristocracy, at least to a degree. We also are deciding that we must grant some space to these people to "do their thing" in spite of the fact that the implications of this are not in our best interests.

What we decide in this regard should be an explicit policy decision. It should not be a happenstance matter, given its importance. If we are in favor of supporting dynasties pretensions of families, we should hold them to a higher standard. For one thing, we should be better at understanding their objectives. They should be limits to how much they can pervert our economy and our social structure in their efforts to extend their economic preeminence.

The Romney/Koch alliance represents second generation, inherited power. This is not inherently a problem, but we need to be able to hold such people to a much higher standard. How do we do this is the question. Think of the relationship between the Starship Enterprise crew and the Ferengi, the inimitably commercial race with the big ears. The crew knew what they were up to. They were able to work with them. They knew what they were about. The Ferengi were not able to subvert the system, though they tried.

How do we know that David Koch this very day didn't buy off or otherwise economically eliminate an innovator that would provide us with very cheap transportation for $1,000 per vehicle? What reward could we give him for putting a $100 billion enterprise at risk for the simple reason that its technologies and products are no longer the best available option?

These are difficult questions in an open society that reveres private initiative. In an ideal situation, utmoded approaches shrivel up simply because no one is willing to pay for them. When necronomy enters in, however, opportunities are killed before they made the light of day. You never get the chance to buy that $1,000 vehicle that runs on solar power.

Some things could be done to mitigate the development of overly powerful dynasties. Why shouldn't they be made to buy companies rather than simply to inherit them? There is a brisk business in leveraged buyouts. This would possibly make them more market-oriented. The requirement to be sold could also free up capital and give others the opportunity to direct their activities.

Directing attention toward inheritance is surely equally odious to the political left as well as to the right. The fact is, current politics does not factor this critical phenomenon into the equation. For one thing, who doesn't want to start a dynasty? Isn't that an important objective of aspiring entrepreneurs in all fields, from technology to farming. We all would want to leave our descendants off better than we have been, if not at least equal. There is the enormous challenge brought on by government itself and its lack of institutional legitimacy. It would be nice to be able to say, "Let's tax the dead to relieve the burden on the living", but with our government, that comes out as more than a little creepy.

We should recognize Mitt Romney and David Koch for what they are. Economically and politically, they are the Kennedys of our era. We should form explicit pictures of their objectives and strategies. This is one disadvantage we have to the British. Their House of Lords is much more explicit than is ours. We have this weird red/blue dichotomy that seems eerily the same, campaign to campaign. We should be able to negotiate with these dynastic representatives. We should be able to get what we want and we allow them to get what they want as long as the two are compatible. Can they give us better governance? The red/blue political cadence that is so well depicted by Ben Garrison is really wearing thin. Can they fix the financial sector? This is something they know about. Can they restore the perquisites of growth? Can they bake us a fine cake, one that we can eat with a smile? Then we can help them to pay their dynastic dues and join the club of all clubs.

Just keep in mind that from a Revolutionary War point of view, if we choose to support the transfer of economic and political power through inheritance, we are Tories, too.

The full enjoyment economy

This post should actually be a book, but I don't have the time right now. I will work on it. The message is a timely one, however, and needs attention.

The current national political battle is largely based on the stated challenge of creating jobs. Each political party is pointing fingers at the other, drawing attention to perceived shortcomings in their job creating programs. This is for good reason. In the last several years, the employment record in the U.S. and in the other industrialized nations has not been good. There are some subordinate themes, outsourcing and globalization being two of the more predominant perceived threats to full employment.

Unfortunately, the condition seems to be somewhat permanent. This is a problem with potentially catastrophic implications for many, individuals and institutions, further stratifying society and transferring financial burdens to governments, the payers of last resort.

The condition as we understand it is nested in our history, in the longstanding challenges of supporting life on the planet for individuals, family groups, and other associations. For thousands of years, our ancestors have lived in need and in want. They had a production problem. Survival was achieved on the most atomistic of levels. If they didn't work, they didn't eat.

Safety and security were outgrowths of the scarcity problem. There has always been a tendency for some to extort others, to take away their goods, including their food, their productive capacity, and the fruits of their labor. For this, military, political, and social steps were taken for protection beginning husbands, wives, and their families. This is a primary reason for male dominance as it has existed through time. Fathers and grown sons could be counted on to give families the best chances at survival. It was groups of men that fought to protect or to destroy.

We do not now have a production problem. Well, actually, we do, but the problem is not one of production limits; it is something of the opposite. In virtually all sectors, we can produce far more than is consumed. The commercial challenge now is to not produce more that you can sell. If productive enterprises do not assiduously manage their inventories, they are going to incrementally impoverish themselves and lose their competitive edge.

An example of our lack of a production problem is in the food stamp situation in the United States. Since the 2007 economic correction, food stamp distribution has increased from something like twenty million subscribers to almost fifty million system users. Under such a system, food is available without cost, paid for my government. The fact is, no one expresses concern that such food cannot be made available by commercial producers. Fulfillment is made through existing food markets that consistently produce to meet current levels of demand. Without the food stamp program, they would have produced less. This would surely have resulted in industry hardship, not to mention personal and familial need. If the food stamp program had resulted in seventy-five million subscribers, with some challenges in terms of adjusting to the need for increased capacity, there is little question that such demand could be met. Obviously there are limits as to the productivity of the earth. Population control proponents tend to lose sleep over them. On the other hand, there are many untried innovations and untilled acres that could be brought into production to meet the need if production demands were higher.

This is true of many if not all industries. They function in a state of suspended control. We could have more of everything if there is someone available to pay. Two industries I believe are special cases, both of them counter to the best interests of society. First is the medical system, particularly that in the industrialized world. In many studies, this sector is considered to be the only dependable job source. If this is the case, it is indeed a pathetic example of economic failure. Is our economy is dependent on people becoming ill? Wouldn't we be better off by eradicating all diseases, particularly the chronic, ugly, life-sapping ones? I do not believe that we are really trying. The second particularly problematic industry are those that encourage dependence on petrochemicals for common energy use. There has been precious little effort to improve such sectors for at least half a century. Both of these sectors are galling examples of necronomy and levy unnecessary economic burdens to us all. In this sense, we suffer from such economic parasites that have been positioned as employers and economic drivers. We are a clever race. We should be able to derive better solutions.

What if the full employment problem is intractable due to a newly-achieved reality? What all of us do not need to work in order to meet the requirements of life? What if lower employment levels as defined by government statistics and supported by our educational, economic, and social institutions are permanent  conditions? What if the reason employment levels do not increase is that productive organizations do not and will not again need to achieve traditional employment levels?

Related to such possible queries, there is another potentially shocking consideration. If we were to not need to employ ourselves in extended employment activities in the form of time-intensive "jobs", what would we do with our time?

I have spent decades now in either the private or the public sector. In my experience, most organizations suffer from significant levels of over-employment. In fact, many organizations are peopled with workers, managers, executives, etc., who "gum up the works" with bad attitudes, poor habits, caustic behaviors, and a constant flow of misrepresentations. They are miserable and they want to make sure that everyone else is miserable. They come to work for one thing and for one thing only: Money. Well, there is a related factor: Power. Typically they are related. In most cases, you can see that those who are least happy at work are fixated on money and power to the detriment of the organization as a whole. As they say, the happy professor and the good one teaches; the unhappy one goes into administration.

Given the need to present themselves for "work" as a social prerequisite regardless of a real need or an adequate match with their interests and natural talents, people obsess over money and power, their abundance or scarcity. If they have to present themselves, if they have to do what they are told, if they have to work in their job to get the money they need, they are surely going to insist on extracting every last cent. Everything else (and everyone else) be damned!

My observation is that society, and especially the educational system, have failed many if not most people in this regard. Because of the need to have a "job" and the poor showing of the educational system in helping people find and leverage their natural talents in a timely manner, people come to believe that they must "grind it out" for life. If you have seen the movie "Joe vs. the Volcano", you know what I mean. In fact, you needn't have seen the show to know what I mean. Except for the fortunate few, the working world is a hellish place.

What if there were an option to follow your dream, to follow your inner talents and ambitions? First off, there would need to be a far better way of systematically evaluating what these are. Dell Allen, my mentor in many ways, pointed me in this direction about three years ago by showing me a long-forgotten literature in the definition and evaluation of native talents. There, you can see available instruments to identify about two hundred human abilities. These could well form the basis for a new, more meaningful and successful educational system. We should have "Talent Olympics" in the schools and in society at several stages, identifying, encouraging, and educating children as well as adults based on these natural talents. They should be matched up with others with similar talents for learning and encouragement.

The fact that we are not doing this in a systematic way constitutes a vast waste. This is not just a science and technology issue, every unidentified and unsupported natural talent is a personal and a national catastrophe to some degree. As a result, we are largely wasting our lives. Related to this is untold economic loss. Possibly more importantly, we are thus overwhelmingly and unnecessarily unhappy as country and as a race. I believe that these losses result from policies and traditions that force people into work arrangements that they do not enjoy, and that they are not very good at. In many cases, these jobs are not needed for legitimate productive purposes.

As to the needs of the productive sector, Deming probably said it best. We are suffering from a "best efforts" crisis in our productive systems. People are doing their best although they don't really know what to do. As a result, things come out poorly. Such unproductive people, education aside, should not work in the productive sector, in the manufacture of goods and services that meet peoples' basic needs, such as food, energy, construction, and transportation. They should be doing what they do best as identified in the "Talent Olympics" using effective instruments and the support of people in those sectors.

Yes, I have read Kurt Vonnegut's "The Piano Player". It was required reading in my MBA thirty years ago and I reread it last year. In a way, it makes the case for what I am talking about here.

Several years ago, I had a good relationship with the department head in my doctoral program. He was well into his seventies and he wielded a good deal of power, particularly the power of the budget. He had put together a sizable personal net worth in the process. We worked together quite closely for a few years. At one point he confided in me with regard his career. He hadn't really enjoyed it. The fact is, what he had always wanted to do was to be a groundskeeper for the Los Angeles Dodgers. That, he said, would have been a wonderful life, better than fighting in the trenches at a university.

Of course, this could have simply been an idle comment. With age, we can all think of such turns in the road. At the time, I said to him, "Do it now. I'll bet they would take you on, especially since you don't need their money." He said that he should and that he would think about it, but he didn't take that step although he had a winter home near the training camp. Sadly, he died within the year.

In a way, this isn't really what I am getting at, but it kind of is. There is an apocryphal country music song that goes, "I would rather be miserable with you than happy with somebody else". The full employment mantra that underscores the current economic structure is probably based on a false assumption, that we need the productive efforts of too many people to meet our basic needs. Rather than requiring that such rewards be funneled through made up jobs created for just this purpose, we should be working to assure that our people are actively fulfilling their talents and are thus more happy. We will likely find that the greed index, for one, will come way down. As to the talents that are not being identified and encouraged, I think that we will enjoy them very, very much. This will in turn help us to overcome that greatest fear of all: A populace with time on its hands.