World Leaders Condemn Capitalism. Africa Or Liberia, Which Way?

By J. Yanqui Zaza


The Perspective
Atlanta, Georgia
June 26, 2017

                  


Karl Marx Adam Smith

Is capitalism having a bad coverage? Well, many voters under capitalism are having more doubts about the benefits of this economic system or “trickle down theory.” In a 2016 Poll, Harvard University found that 51 percent of young American voters rejected capitalism and have positive views about socialism, similar to the conclusion of the 2011 Pew Poll. President Donald Trump, then U.S. presidential candidate stated that, “America’s economic system is rigged;” U.S. Senator Bernie Sanders stated that had Americans been under socialism the price of a medicine would not have increased from $40 in 2001 to $40,000 in 2016. In the 6/14/17 NY Times newspaper, he concluded that capitalism “is a dismal failure.”

In Europe, French Democratic presidential candidate Mr. Jean Luc Melenchon wants his government to have a role in the economy; current German Chancellor; Mrs. Angela Merkel stated that a government’s ownership in corporations does not only increase government revenue, it also discourages outsourcing of jobs as well as reduces the practice of violating laws. The current Prime Minister of the United Kingdom, Ms. Theresa May was quoted as rejecting the “free market ideology of Thatcherism,” and reminded British voters that her “…Party still believes in a post-war Keynesian consensus of government intervention…”

The result of capitalism in Africa is even worst. Living conditions within its oldest Republic, founded in 1822, Liberia, with enormous natural resources, is a nightmare, especially for those residents living on $2 a day. Why is Liberia a sad story? Well, when capitalists offer bribes to bureaucrats, they (capitalists) end up paying to the government minuscule revenue earned from natural resources and inflating prices of goods and services such as housing units. President Ellen Johnson Sirleaf and the World Bank introduced the idea to pay excessive salaries to a few advisers in order to dissuade them from accepting bribes. Ironically, the rate of corruption has increased because the anti-bribery measure, a disparity in salary, in itself, is a source of corruption, while bribery, one of the lifelines of capitalism, has continued.

If Africa or Liberia wants to prosper, should it reform capitalism? By the way, what is the difference between the idea of public-profit-making (socialism) and private-profit-making (capitalism)? Capitalism is the economic system that allows private-profit-making investors to own and, or manage lucrative resources, while socialism allows government bureaucrats to make profits for society from owning and, or managing major lucrative assets. Proponents of socialism say a majority of society benefits when governments build housing units, manage utility entities, mine diamonds and, or cut and sell logs for profits. On the other hand, capitalists, because of  greed to make more profits, will always use any means, including practices against the tenets of fairness, honesty, transparency, etc.

The debate about the benefits of government-profit-making activities versus the benefits of private-profit making activities has been around for centuries. However, the European leaders’ denunciations of capitalism and their positive view of socialism came at a bad time for capitalism. It came at a time when the African Union Committee accused big business of siphoning $50 billion out of Africa yearly because capitalists coerce or bribe African leaders into signing flawed concessionary agreements. Additionally, the report that capitalists, and not government bureaucrats, promote bribes offering is another bad news for capitalists. This second bad news is not only reported by John Perkins, in his book called “Economic Hit Man;” but it is also reported by International Transparency (IT). Big business is the key promoter of bribes offering, IT Study concluded.

This latest rejection of capitalism is pale as compared to the condemnation expressed by other European leaders after the 2008 financial economic meltdown. France former President, Nicolas Sarkozy stated "either we re-found capitalism or we destroy it…because Financial capitalism is  irresponsibility." British former Prime Minister, Tony Blair said modern-day capitalism based on speculation had been "perverted" and was "an immoral system.” Mrs. Angela Merkel, Chancellor of Germany stated that capitalism should be reformed.

Is capitalism redeemable, or do the past and current shortcomings of capitalism indicate that the century-old economic system is irredeemable? For this article, let us review how profits of lucrative assets are distributed between government and private-profit-making investors since profit is the residual of the total economic activities of communities or countries. For example, how come governments operating under capitalism continue to experience budgetary problems, while those operating under socialism do not? Or why government such as the United States and United Kingdom charge higher users’ taxes, but Germany does not because it receives other types of revenue such as dividends from T-Mobile International, 400 Banks, Volkswagen, Airbus, etc.? Alternatively, the United States of America ($18 trilion) and United Kindgom ($8 trillion) owe 34.0% ($26 trillion/$69 trillion) of the total $69 trillion debt owed by 147 countries, all because these countries do have limited role in the economy.

If none of the above explanations is convincing, let us review the public-profit-making entities of China, which have generated $3 trillion reserves. Chinese state-owned entities do not only make huge profits for society, but they are efficient, according to 6/16/2017 NY Times. The Editorial stated, “…Interestingly, when Britain handed control to private companies to upgrade London’s subway system more than a decade ago, the result was substandard, budget-busting work, etc. By contrast, China, under socialism, has engineered one of the most effective economic transformations in modern history in part through relentless investment in infrastructure, traditionally financed…” all because state-owned entities own and, or manage lucrative assets.

Finally, if Liberia were to reduce its reliance on the practice of taking more money away from the pockets of its citizens in the form of users’ taxes and, or reduce its reliance on borrowed money form lending institution such as the World Bank, then it should at least adopt the Botswana’s economic policy and play a role the diamonds industry, gold, logs, etc. It could also accept certain aspect of New York City’s Rent Control Policy, for example, by constructing affordable housing units near the proposed government ministerial office-complex to be built by the Chinese not only to reduce the cost of living, but also to retain skilled manpower.

Well, yes, profiteers such as the World Bank, Monrovia-landlords, diamonds dealers, etc., will insist that capitalism is good and socialism is inefficient. But remember, the World Bank would not survive if countries become solvent such as Botswana, which covers about 50% of its budget from revenue of the diamonds industry. Equally too, Monrovia-landlords would not be in the position of influence to dictate national policies if government had ownership of buildings for government offices and for employees to use as personal homes. Remember also, an insolvent country cannot dictate its own destiny, a recipe for chaos. 


(jyanqui@aol.com)


Andrew Worth
1. Capitalism is not "trickle down theory".
Capitalism is an economic system built around the free market,"trickle down theory" is a purgative term used by opponents of Supply Side economics to describe the Supply Side approach to implementing market economic theory. The term "trickle down theory" has never been used by any economist to advocate their economic theories. The term itself is a myth.

2. “America’s economic system is rigged;” There are numerous different ways in which Governments can manipulate the free market, Trump was not suggesting Capitalism itself was at fault, merely that the Government was influencing the free market in ways that he believed was unjust for his constituents, in fact Trump was speaking out against the more socialist aspects of the Obama Administrations policies.

3. "Bernie Sanders stated that had Americans been under socialism the price of a medicine would not have increased from $40 in 2001 to $40,000 in 2016. In the 6/14/17 NY Times newspaper, he concluded that capitalism “is a dismal failure.” "
Bernie Sanders Cherry Picked one obscure example in which government policies had perverted the free market allowing a company to exploit its legislation enforced monopoly. There are numerous examples in which Government policies have far less effect on the free market so that the competition in the market place is closer to the free market ideal: Car manufacture and distribution, aircraft manufacture and distribution, electronics manufacture and distribution, food production and distribution, etc, etc. If the manufacture and distribution of these goods were as perverted by Government policy as the drug Sanders refers to is these goods and the services that use them would be far more expensive.

4."In Europe, French Democratic presidential candidate Mr. Jean Luc Melenchon . . . "
All European economies rely on free market capitalism for the majority of the goods and services produced, government ownership can be profitable AS LONG AS THE CORPORATIONS IN PART OWNED BY GOVERNMENT STILL OPERATE IN A FREE MARKET, so the examples you give are not true examples of socialism, which is where there is no free market.

5. "The result of capitalism in Africa is even worst. . ."
There are few examples of free market capitalism in Africa in which Government meddling does not pervert the operations of the free market. Liberia's problems do not stem from the free market, they are a product of endemic corruption amongst Government politicians and employees, bribery is not part of a correctly functioning free market. It is the responsibility of Government to set the rules and enforce those rules fairly.

6."President Ellen Johnson Sirleaf and the World Bank introduced the idea to pay excessive salaries to a few advisers in order to dissuade them from accepting bribes. Ironically, the rate of corruption has increased because the anti-bribery measure, a disparity in salary, in itself, is a source of corruption, while bribery, one of the lifelines of capitalism, has continued."
Isn't that obviously a failure of Government? It's bizarre that you see corruption in Government as the fault of the free market system.

7."If Africa or Liberia wants to prosper, should it reform capitalism?"
You appear not to get the most important aspect that makes free market capitalism superior to Socialism: Free Market COMPETITION. In the free market enterprises compete to produce the maximum of what the market wants for the minimum expenditure of resources and as a result it produces a lot of goods that must be affordable for the people to buy. Socialism does not have this efficient mechanism for producing the goods and services that the average person wants, though it can be pretty good at producing goods the the socialist rulers want.

8. "The debate about the benefits of government-profit-making activities versus the benefits of private-profit making activities has been around for centuries. However, the European leaders’ denunciations of capitalism and their positive view of socialism came at a bad time for capitalism." The examples you give are not instances of European leaders "denouncing capitalism" and espousing "positive views on socialism", they're critical of financial manipulation and espousing Government investment in the free market system.

9. "For example, how come governments operating under capitalism continue to experience budgetary problems, while those operating under socialism do not?" That claim is a total fiction, the US and Britain are not more capitalist than Germany and there are numerous other and better examples of more capitalist (Singapore, Australia, Switzerland, New Zealand and many others) and more socialist (North Korea, Venezuela, Russia, Cuba) examples that you choose to ignore.

10. "If none of the above explanations is convincing, let us review the public-profit-making entities of China, which have generated $3 trillion reserves."
A truly priceless example, over the last 40 years the Chinese economy has shifted from socialism to an over regulated market economy, and as a result the Chinese economy has boomed.
You couldn't find a better example of the evils of Socialism and the merits of Capitalism, and you insanely, manage to twist the Chinese example as an example of Capitalism failing. Again bizarre.


There are, without doubt, problems with how capitalist market economies are controlled throughout much of the world. There IS a problem in that the rich get richer while the poor continue to struggle, always getting enough to survive (in the western market economies) but never enough to really prosper. You suggest that Government minority investment in large companies operating in the free market (which you mistakenly believe to be Socialism) is a solution.
There's another option which you are probably not aware of which is based on one proposed by an American called Henry George about 100 years ago. His idea was to shift taxation away from income and transaction taxes and onto property, this is an idea that has the support of a surprisingly large range of economists. They support it because it:
a)Shifts taxation onto the asset rich and away from the asset poor.

b) Is less economically distortionry compared to other taxes(investments are made in areas of the best economic return, asset owners are more strongly motivated to maximize the productive return on the assets they control).

c) The compliance costs can be a lot lower than for other taxes, compliance costs are a drag on the economy and reduce overall economic output.

d) Removing income taxes reduce the cost of employing people, without reducing the income of those employed, so income tax acts as a disincentive to employing people.

e) Not only is the cost of employing people reduced, but the ease of employing people is reduced, each time a person is employed in an economy that collects Government revenue via income tax the employer is required to collect the details of the person employed or the person employed is required to keep their own detailed records of the income they earn, in this way the employment of people on a casual basis becomes ridiculously complex, but for those new to the workforce(the young)casual employment is often the most convenient, giving them greater freedom in how they choose employment and selecting their preferred career.
Andrew Worth at 04:59PM, 2017/06/26.
Andrew Worth
An error in my last paragraph:
"Not only is the cost of employing people reduced, but the ease of employing people is reduced" should read: "Not only is the cost of employing people reduced, but the difficulty of employing people is reduce".
Andrew Worth at 05:19PM, 2017/06/26.
Martin K Scott
Andrew, thanks for schooling Comrade J. Nikita Zaza. He's an avowed socialist and economically illiterate!
Martin K Scott at 12:29AM, 2017/06/27.
Andrew Worth
MARTIN K SCOTT, yes, I've just had a look at J. Yanqui Zaza's previous post and the subsequent discussion you two had.

He certainly demonstrates an inability to understand the basic principles of the law of Supply And Demand, choosing to offer examples of markets in which Government meddling upsets the basic market principles as examples of market failure, rather than focus on examples in which there is far less Government meddling with the result of far more stable and competitive markets.
His use of the New York cabbie cartel as an example of market failure is just weird, it is only now, with the arrival of Uber that the cabbie cartels, which are a world wide product of government regulation to restrict those able to compete in the cab industry, that we are finally seeing something approaching market forces at work in that industry - with the well publicized reductions in prices to the customers being the result.

Andrew Worth at 01:34AM, 2017/06/27.
k
The idea that either capitalism or socialism is the answer to the situation in Liberia is absurd. What you have to remember is that whether in the United States, Europe or Asia, there is continual renewal of the systems. In large part of Western Europe and now some of the Eastern European countries, there is a mix of capitalism and socialism. It is important to remember that there is a difference between socialism and communism.

What Liberia and Africa need is finding their own system maybe model on the great economic and political thoughts that already exist but one that is also culturally sensitive. We should not just be followers. Where are the great thinkers and philosophers of Africa, Liberia?

Because we are mere followers, we have no voice. We will only have voice and respect when we can develop systems that take the best from other places around the world and within our own cultures and make them work for us. See the example of the People's Republic of China. During the days of Chairman Moa, they had a system. The new generations of leaders have realised that a new capitalist-communist system would give China the voice it needs, so they have developed it. China is not following just any Tom, Dick or Harry. China is following its own system.

Where is the African system or the Liberian system that has been researched rigorously to fit the Liberian or African scenarios and that is being reformed to fit what we need.

Once we continue to follow and quote Adam Smith and the rest of the world, we are 'nothing'.
k at 03:49AM, 2017/06/27.
j. yanqui


Hi Mr. ANDREW WORTH,

Thanks to you for the efforts on your part to determine whether Liberia should institute Botswana's economic system in order to generate more revenue from the diamond industry, for example, and abandon the current economic system which creates an environment conducive for diamond dealers to spirit diamonds outside of the country at the expense of society.

Sir, Under our current economic system, Liberia awarded about 90% of the concessionary agreements to profiteers, all because investors continue to offer bribes to government officials, the head of the country, President Sirleaf embraces capitalism, and Liberia's economic adviser, the World Bank, is an agent of big businesses (profiteers).

Tenants (Government, business people, foreign experts and ordinary Liberians) continue to pay inflated rent to Monrovia-Landlords, all because Liberia is operating under a capitalistic economic system. For instance, Monrovia-landlords continue to include replacement cost in the rental payment of properties that have been placed in business over fifty years, which is in violation of Generally Accepted Accounting Principles.

Donors' contribution for development: Capitalists using the tools of exploitation usually siphon a significant portion of the donors' contributions, leaving the intended donees with minimal amount of the donations. These non-governmental agencies lobby for the contractors and do demand exorbitant royalty fees from sub-contractors who are responsible to perform the services.

What is "trickle down theory?" It is not a myth, as you stated, rather it is an explanation of how capitalism is proposed to operate. The phrase implied that capitalists will distribute a reasonable portion of the profit they earn by efficiently managing the goods and services without government intervention. Sir, over the years, capitalists have used bribes to keep a significant portion of the profits they generate from lucrative natural resources.

By using bribes, capitalists end up determining those political candidates who will be in the positions of influence. In short, capitalists dictate the policies and write the legislations that determine how to distribute the dividends of the resources of a society.

Sir, if capitalistic economic is efficient for both profiteers and society, why is America facing the following issues:

1) Why is America relying on technicians such as physicians from other countries to meet its need even though it operates $20 trillion economy and has a population of about 300 million plus? Sir, under a socialistic economic system where the government(i.e., Cuba, for example) invests in education, there will be a significant number of technicians available, thereby forcing those technicians to lower the prices related to their services.

2)Why are residents of the United States paying higher prices for medicines than the residents of Canada, for example, even though U.S. profiteers manufacture those medicines within the United States of America? Drug manufacturing corporations dictate the legislations and price policies by financing the election of lawmakers.

3)Why is the United States government (i.e., federal and, or states) finding it difficult to finance the construction and management of an efficient public transport such as train? This is because the steel industry, car industry, insurance industry, money lending industry, etc. do not want to have a reduction in their profits.


4) Food produced in the United States is expensive, and at the same time, it is significantly contributing to the increase in obesity. Education is expensive, but American students are not doing well. Housing is expensive. Transportation is expensive. Insurance is expensive. Sir, profiteers control many of these economic activities and the government has limited role.

5) "We are $20 trillion in debt. The Congressional Budget Office projects an additional $129 trillion of accumulated deficits over the next 30 years," stated by Ron Johnson, a Republican Senator from Wisconsin. (NY Times, 6/26/2017).

6) David Brooks stated that "There is a structural flaw in modern capitalism. tremendous income gains are going to those in the top 20 percent, but prospects are diminishing for those in the middle and working classes." (NY Times, 6/27/2017)

Sir, your claim that taxing capital (property) and not taxing income would help resolve the budgetary problems of capitalistic country is questionable. In any case, profiteers will always exploit any taxing theory in order to grab more profits. This is a part of the reason why the promise by profiteers that they are good at remitting a reasonable portion of the profits from managing lucrative assets as long as government does not play a role in the economy has not come true.

Now let us review your claim that taxing property of the rich is a better approach of passing down a reasonable portion of the benefits of the efforts of capitalists.

Real estate (property): State and local communities do tax real estate owned by individuals and certain entities such as corporations yearly. In addition, the capital gain earned is taxed, with the exception of a limited amount that is re-invested in the purchase of a domiciliary residence of an individual.

Stock/bonds (property): Federal, State, and local communities tax income (dividend and interest income)taxpayer (individual and, corporation) earn yearly. The capital earned is also taxed.

Other personal property (machinery, equipment, vehicle, tools, etc.): An individual or a corporation does pay tax on the gain earned from the sale of business and, or personal property.

Further, the States of California, New York City, etc. do tax total capital assets of corporations in case the tax on income is lower. More so, in addition to tax on income or tax on capital assets, these taxing jurisdictions also collect tax on capital assets of the subsidiaries of the taxing corporations.

New York City has other taxes: 1) It collects tax when a taxpayer (individual or business entity) transfer a real estate property. 2) It collects tax on rent payment for the use of the property within certain parts of NYC. 3) It collects tax on the amount paid for the use of a hotel. I could go listing other taxes that NYC imposes.

Nonetheless, NYC is trying hard to make ends meet, all because it operates under capitalism.
j. yanqui at 08:12AM, 2017/06/27.
Theodore T. Hodge


A good start to an old debate: Capitalism vs Socialism. Brother J. Yanqui makes some bold and broad observations, perhaps in an attempt to establish a credible thesis. The response is swift: Mr.Worth takes the opposing view, delivering some serious head blows and some punishing body blows...with Mr. Martin Scott, jumping in as tag-team member, and delivering his usual low blows, his signature low blows. But is Yanqui down and out? Not by a long shot. With his back against the ropes, he comes back defending his position. He does a marvelous and remarkable job in pushing back the challengers. Is this fight over? Not by a long shot. This is only Round One and the debate has just begun, barely scratching the surface of an old fight. Perhaps others will weigh in? Standing by at ring side....
Theodore T. Hodge at 12:11PM, 2017/06/27.
Sylvester Gbayahforh Moses
I would confess to seeing no major reason for the storm in a tea cup, so to speak, over this worthy take of Mr. J Yanqui Zaza.

After all, he is echoing what’s been said by many economists and scholars since World War 1, to wit - that unregulated capitalism is its own worst enemy. More especially now when technological advances in robotics/ artificial (AI) is shrinking the global workforce with the resulting anathemas of concentration of more wealth in fewer hands thus widening the gap between rich and poor people, and rich and poor nations; and triggering risky migrations from one to the other, including stoking terrorism.

For heaven’s sake, let’s adopt the attitude of a literary reviewer by first looking at his core points, for example, the topic “World Leaders Condemn Capitalism…”, and the question, “If Africa or Liberia wants to prosper, should it reform capitalism”? The meat then becomes: was he able to satisfactorily address those?

Not to mention that at no point is he totally touting socialism as the better economic system of the two. Perhaps, in our rush to sanitize the opinions of the author, we’ve forgotten that an argumentative essay never proves a thesis conclusively. Folks, if it did, there won’t be any argument. The best as essayists we can establish is a high probability that a thesis is correct, or reasonable enough to convince whomsoever our targeted readers are.

And to the advantage of Zaza’s there isn’t any country in the world - not even the US and EU countries – actually practicing undiluted capitalism or undiluted socialism. Instead, it is a combination of both, or something resembling them. None is perfect, but together, in the hands of farsighted, responsive, and responsible leaders they should ensure the ends of human preoccupations: food, shelter, safety and peaceful coexistence, in short, happiness, in spite of location, place of origin, status, or race.

On that note, thank you, Mr. Zaza, for starting a conversation on an economic principle that henceforth would best serve Liberia, and the continent. By the way, that need did flummox Harvard Economics graduate Ellen Johnson Sirleaf.

All she ever said on the topic, in a nutshell, was “I’m an economic conservative, the markets, and not government should create jobs” while Finance Minister Konneh was spewing “trickle – down” bank accounts during an unhinged “vulgarization of corruption”. And surprisingly at a time King Capitalist US was planning on architectural development to not only upgrade roads, bridges, and so on, but also to absorb a growing number of unemployed Americans.

Mind you, I’m not claiming by any stretch of the imagination to be an economist, or to have the deciding vote on this economic theory discussion. However, in today's world, an African national security professional without a sense of history and social awareness can’t contribute to the search for solutions to the multiplicity of problems confronting Liberia and the continent.

May be, this would explain my serious engagement with the hot button issues as an advocate for genuine reconciliation, long – term stability with justice, and sustainable voluntary peace in Liberia. Thank you again Zaza, and don't forget that to induce long comments like theses means one thing. the article aroused interest for and against. It is a positive outcome: Writers of every grade crave the rage, good or bad.
Sylvester Gbayahforh Moses at 02:39PM, 2017/06/27.
Sylvester moses
Correction, meant to say "Thank you, again, Mr. Zaza, and don't forget that to induce long comments like these means one thing: The article aroused. ..."
Sylvester moses at 03:43PM, 2017/06/27.
Andrew Worth
J. Yanqui Zaza, you state "Thanks to you for the efforts on your part to determine whether Liberia should institute Botswana's economic system in order to generate more revenue from the diamond industry, for example, and abandon the current economic system which creates an environment conducive for diamond dealers to spirit diamonds outside of the country at the expense of society."
There must be some mistake, I have not expressed an opinion on the nature of the ownership of a countries mineral wealth. In my country ownership of mineral wealth remains with the State with anyone extracting minerals paying royalties to the State.

You obviously think that Liberia is a poster boy for capitalism, it is not, in fact Liberia is a very long way from being a good example of a Capitalist economy.

For all of its history up until the 1980 coup the political - economic system that Liberia operated under could more accurately be described as a feudal system with an elite aristocracy ruling over a poorly educated peasant population. I imagine that since the end of the civil wars many Liberians including you think that capitalism has arrived in Liberia IT HAS NOT! Liberia remains predominantly a feudal society with an elite, most of whom are closely connected to Government ruling over a poor peasant population, the shift in the ethnicity of many of that ruling elite has done nothing to alter the fact that the ruling elite still exists with its hold over the Government and wealth of the nation.

In a true free market capitalist society it is not the government and those that control it that get to pick which businesses get to survive and which fail, in Liberia that's exactly what happens, businesses that are on side with those in power, either through family connections or through having the resources to buy the cooperation of government officials get the valuable contracts, other businesses that endevour to compete simply through operating efficient businesses and offering the best value for money fail without those valuable connections to the powerful.

You state that "trickle down theory" is an explanation of how capitalism is proposed to operate.
That is simply nonsense, perhaps your belief that that is what capitalism is is an example of how you confuse the feudal society of Liberia with capitalism.

I live in a country with a population of around 4.5 million people, it has a free market economy with the backbone of that economy based on the agricultural sector, and though the economy, along with the economies of other Western countries is usually described as a "mixed" economy, the country's "trade and industry are controlled by private owners for profit, rather than by the state", which is the definition of capitalism.

Believe me, Liberia is at least as far from being a free market capitalist economy as it is from being a socialist economy, in fact, with the elite so closely linked to the powers of the Government, I think it's obvious that Liberia is more socialist that capitalist.

Throughout this discussion you've demonstrated a lack of understanding as to what capitalism and socialism actually are, I note that in your last comment you're now giving Cuba, rather than some West European countries as an example of a Socialist country, which I'll take as progress, but you've still got a long way to go.

Regarding your criticisms of the US, I obviously need to point out that the US health care system, along with education, are the most socialist sectors of the US economy, with massive Government control over the education and registration of medical (and educational) professionals, and with substantial Government involvement in the financing of those sectors. In my country we have exactly the same problems; government control over much of those sectors with those sectors massively under-performing compared to sectors without such excessive levels of Government meddling.
Andrew Worth at 08:49PM, 2017/06/27.
Andrew Worth
J. Yanqui Zaza, you ask why is financing public transport difficult in the US, why is food expensive in the US, etc. The answer is that public transport construction and food are expensive in countries with high per capita incomes, rather than asking why these things are expensive you should be asking why the free market capitalist countries have the most sophisticated transport systems on the planet and why food costs, as a fraction of household expenditure, is so low compared to socialist countries and why hunger is so rare in the free market capitalist countries and so much more common in socialist countries like Venezuela.

Regarding the various taxes you mention, I can only point out that you obviously struggle to understand the difference between taxes on transactions, income and assets/property. You also assert that I claim that that "taxing capital (property) and not taxing income would help resolve the budgetary problems of capitalistic countries" which is incorrect, I made no such assertion, I only claimed that shifting taxation onto assets/property and away from income and transactions would benefit poorer people, simplify the tax sysem and reduce compliance costs.
Andrew Worth at 09:20PM, 2017/06/27.
Theodore Hodge


"Believe me, Liberia is at least as far from being a free market capitalist economy as it is from being a socialist economy, in fact, with the elite so closely linked to the powers of the Government, I think it's obvious that Liberia is more socialist that capitalist." Andrew Worth


Mr. Worth, you do win very high marks for your latest comeback, specially for the comment above. I do wholly agree with you. As a matter of fact, my initial reaction to Comrade Zaza's article was to observe that he did himself a disservice by mentioning Liberia among the core group of countries he describes as "capitalist". In theory, nothing could be further than the truth. Liberia may be described as a capitalist country, but in theory and practice, it falls short of that distinction. It would clearly be an interesting case study to determine and correctly define what the Liberian economic system is, but in technical terms, to call it "capitalism" is clearly erroneous and misleading.
Theodore Hodge at 12:21AM, 2017/06/28.
j. yanqui
Mr. Editor, please post this response.

Hi Folks,

Many thanks to you all for your contribution to this important debate. Well, brother Sylvester Moses, I assume that Mr. Andrew Worth does not share your view that many countries have instituted a mixed economy. For instance, the United States provides welfare programs for the poor and it also assists big businesses through cash contributions during financial meltdowns (i.e., 2008 financial debacle) or it initiates and, or finances research, which ends up generating huge profits for companies such as Microsoft.

For reference, read David Cay Johnston's book called "Free Lunch...How the wealthiest Americans enrich themselves at Government expense..and stick you with the bill." Or read Thomas Piketty's book called "Capital ...in the twenty-first century." You can also read "The Microsoft Monopoly: the facts, the law and the remedy," by Jeffrey Eisenach and Thomas Lenard.

Mr. Andrew Worth, I have included a chart for your review in an effort to share with you my understanding that a government can improve the living conditions of its residents if it plays a role in managing lucrative assets (banking, diamond, gold, timber, education, utility services, etc). Many of the African countries are reporting huge deficits and owe significant amount debts. Please visit the 2016 budgetary documents, of South Africa, Sierra Leone, Guinea, Ghana, Uganda, Kenya, etc. Or visit the 2016 budgetary document of the state of Israel, a country where government bureaucrats did produce consumer merchandise and export armaments to neighboring countries many years ago before it privatized many of the state-owned entities during the privatization campaign by the World Bank and its allies (former U.S. President Ronald Reagan and former British Prime Minister Mrs. Margaret Thatcher.


Russian State Budget (in millions)

2006
Total Rev. $6,276.20

Oil & GAS REV. $2,954.40

OTHER REV. $3,329.00

EXPENDITURE $4,283.30

SURPLUS $1,995



2007
TOTAL REV. $6,614.2

OIL & GAS REV. $2,471.1

OTHER REV. $4,143.1

EXPENDITURE $5,615.5

SURPLUS $998.7



2008
TOTAL REVENUE $6,644.2

OIL & GAS REV. $2,383.1

OTHER REV. $4,261.3

EXPENDITURE $6,507.3

SURPLUS $74.1



2009
TOTAL REVENUE $7,465.4

OIL & GAS REV. $2,351.9

OTHER REVENUE $5,113.5

EXPENDITURE $7,451.2

SURPLUS $14.2


The United States of America's 2006 Budget.
Total Receipts[edit]


Receipts by source: (in billions of dollars)

Actual[8]

Individual income tax $1,044


Corporate income tax $354


Social Security and other payroll tax $838


Excise tax $74


Estate and gift taxes $28


Customs duties $25


Other miscellaneous receipts $45


Total Revenue $2,407



Total Spending[edit]
The President's budget for 2006 totals $2.7 trillion. This budget request is broken down by the following expenditures:

$544.8 billion (20.90%) - Social Security


$512.1 billion (18.00%) - Defense


$359.5 billion (13.79%) - Unemployment and welfare


$345.7 billion (13.26%) - Medicare


$268.4 billion (10.30%) - Medicaid and other health related


$211.1 billion (8.10%) - Interest on debt


$88.7 billion (3.40%) - Education and training


$70.7 billion (2.71%) - Transportation


$68.4 billion (2.62%) - Veterans' benefits


$43.1 billion (1.65%) - Administration of justice


$38.4 billion (1.47%) - Foreign affairs


$31.2 billion (1.20%) - Natural resources and environment


$26.0 billion (1.00%) - Agriculture


$24.0 billion (0.92%) - Science and technology


$19.1 billion (0.73%) - Community and regional development


$17.8 billion (0.68%) - General government


$23.4 billion - Energy
Adjustments[edit]


-$698 billion (2.68%) - Undistributed offsetting receipts


Sir, the breakdown of the revenue of the United States indicates that the government did not receive any profits from the production and sale of medicine as you indicated, while the State of Russia did include revenue from oil and gas. The State of Russia has surplus in each year, all because it received revenue from its oil and gas. Also, Russia's total external debt is less than $1 trillion, but America owes $17 trillion. Why is America's economic position looking bad? The United State does not have shares in its lucrative assets (banking, oil, gas, gold, etc.), but private-profit-making investors own or manage the lucrative assets.

I am aware that many individuals might conclude that capitalism is efficient and socialism is inefficient, because they might not have a complete picture of the two economic arrangements. More so, proponents of capitalism did wrongly inform the world that government bureaucrats do demand bribes before they perform their duties. They also stated that poor people are gullible to corruption, while rich people have limited motives to steal because they have sufficient resources to finance their needs and wants.

That was part of the rationale why the Liberian government, in 2004, consented to the recommendations of the World Bank that Liberia should privatize all state-owned entities, the economic activities that the government controlled. I guess, it was the basic rationale why President Sirleaf and the World Bank appropriated excessive salaries for a few privileged advisers to President Sirleaf.

However, economic activity such as the 2008 financial meltdown has refuted the false story that the rich does not steal. Also, Transparency International investigated and reported that it is big business that promotes bribes offering in order to increase profits, exposing the false story that government bureaucrats demand bribes. Further, the Report by the African Union Committee headed by the former president of South Africa, Mr. Thabo Mbeki, stated that of the $60 billion that is siphoned out of Africa yearly, multinational corporations are responsible for 95% of the amount. The report also stated that local officials are responsible for 3% to 5% of the $60 billion siphoned out of Africa.

Again, Liberia will not have adequate resources to finance its needed programs as long as it continues to award flawed concessionary agreements and allow diamond dealers, for example, to spirit diamonds outside of Liberia. Neither will it reduce the cost of living if, for instance, it does not institute real estate reform, including, but not limited to providing affordable housing units near the proposed multi-complex office buildings that the Chinese have agreed to built.
j. yanqui at 10:49AM, 2017/06/28.
Theodore T. Hodge


ANDREW WORTH: "Regarding your criticisms of the US, I obviously need to point out that the US health care system, along with education, are the most socialist sectors of the US economy, with massive Government control over the education and registration of medical (and educational) professionals, and with substantial Government involvement in the financing of those sectors."


J. NYANQUI ZAZA: " I assume that Mr. Andrew Worth does not share your view that many countries have instituted a mixed economy. For instance, the United States provides welfare programs for the poor and it also assists big businesses through cash contributions during financial meltdowns (i.e., 2008 financial debacle) or it initiates and, or finances research, which ends up generating huge profits for companies such as Microsoft."

It is unfair to miss-characterize the points made by a debater by another, just to score points. As is quoted above, Mr. Worth clearly understands that although the principle economic system of the US is capitalist, it does incorporate aspects of socialism; the example above establishes that. For Comrade Zaza to accuse Mr. Worth of not understanding or recognizing that is unfair.
Theodore T. Hodge at 11:50AM, 2017/06/28.
j. yanqui
Hi Mr. Theodore Hodge and Mr.ANDREW WORTH,

Expensive products and services:

Brother A. Worth, I think that when a system is efficient, as you claimed capitalism is, then capitalists' products and services should not be expensive. Manufacturers and consumers prefer products and services outside of the United States, all because products and services made in the capitalistic U.S.A. are expensive.

Sophisticated Transportation:

Sir, a significant number of residents of smaller cities in the United States do not have access to transport system, much more to say it is sophisticated transportation system. In the absence of public transport, poor residents within these smaller cities are forced to obtain debt in order to finance the purchase of a vehicle to get to work, school, etc. The interest, the repayment, cost of registration, cost of repair and cost of insurance take away their meager resources and some of those payments end up into the bank accounts of the elites. In socialistic countries, the government does provide a transport system that cost less, thereby, allowing a poor guy to keep into his/her pocket insurance cost, repair cost, interest cost, and loan repayment.

Surplus and expensive Food:

Food is not only expensive, but it is also contributing to the health problem of citizens of the United States. Years ago, the Beef Industry launched a law suite against one of the most successful female radio hosts, Ms. Oprah Winfrey. The Industry did not want the radio panelists to discuss the danger of the American food system. Yes, food is plentiful in the United States, but it is not healthy.

Venezuela:

Sir, Western economists have reported that citizens of Venezuela, Ecuador, Bolivia, Brazil, etc., did benefit from socialistic policies instituted by their leaders during the oil boom period. In fact, these benefits are dwindling only because the price of the natural resources continues to decline.

Taxation, income/assets:

Sir, I am not sure that I know how to comment on your posting. This is because I indicated in my article that government's revenue generated from taxing income and excise taxes would be inadequate to finance needed programs. In your response, you indicated that taxes on income should be replaced with tax on assets. Such a proposition indicates that tax on assets would generate sufficient revenue for the government and at the same time leave more money with the poor since their assets will not be taxed. In my response, I stated that profiteers will always minimize their tax liability, therefore, taxation (i.e., whether tax on income or tax on assets) without some revenue from lucrative assets can not provide the needed revenue for government.

Brother Theodore Hodge:

Let us list the number generating revenue activities:

GOVERNMENT CONTROLS THESE ASSETS:
1) UTILITY- NPA, LPRC, LEC, WATER AND SEWER,
2) MARITIME,
3) NOCAL
4) NATIONAL BANK (MONITORING INSTITUTION)
5) ELBC
6) NATIONAL HOUSING AUTHORITY (ONLY RESIDENTIAL UNITS)
7) NATIONAL HOUSING & SAVING BANKS
8)LIBERIAN TELECOMMUNICATION AUTHORITY
9) NATIONAL SOCIAL SECURITY



PRIVATE-PROFIT-MAKING INVESTORS CONTROL THESE ASSETS
1) REAL ESATE (GOVERNMENT & BUSINESS OFFICES, STORES, RESIDENTIAL BUILDINGS)
2) DIAMOND INDUSTRY
3) GOLD INDUSTRY
4) TIMBER INDUSTRY
5) COMMERCIAL BANKING INDUSTRY
6) IRON ORE
7) RUBBER INDUSTRY
8) COFFEE INDUSTRY
9) PALM OIL INDUSTRY
10) TRANSPORTATION INDUSTRY
11) CELL PHONE INDUSTRY


Brother Hodge, many of the entities under the government rely on government's appropriations or subsidies in order to perform their functions. More so, those lucrative assets under the control of private-profit-mailing investors have a significant economic value as compared to the economic value of those assets that are under the control of the government.

Sir, are you implying that the relationship between a private-profit-making investors and government bureaucrats would in one way or the other determine how much revenue (i.e., not profit) a government could get from the lucrative assets? I do not think any relationship would change the number owners and, or shareholders of a company and, or partnership. But, your comment about the issue of relationship between government bureaucrats and private-profit-making investors do support my position that government will continue to receive minimal taxes, therefore the "trickle down theory" will not come true as promised.

In many poor countries such as Liberia, it is difficult for government regulators, even when lawmakers have enacted effective legislations, to enforce those laws and rules. For example, President Sirleaf stated in a speech that she found it difficult to disciple her lieutenants who have violated laws, all because in Liberia, everyone was a member of the Liberian family. In addition, Mr. John Perkins provided narrative in his book called "Economic Hit Man" why heads of government and their subordinates are coerced in accepting bribes from big business. Therefore, awarding ownership to diamonds dealers will not help our government to get a reasonable portion of the profits because the dealers will spirit the diamonds outside of Liberia.

Once again, thanks for your input.

j. yanqui at 03:01PM, 2017/06/28.
Andrew Worth
"Sir, the breakdown of the revenue of the United States indicates that the government did not receive any profits from the production and sale of medicine as you indicated,"

Again, I said no such thing.

The issue of what constitutes a "mixed" economy is interesting.

Over the last 120 years the size of government spending as a proportion of GDP in Western countries has increased considerably, figures I've seen for Britain are that around 1900 Government spending amounted to 10% of GDP, which had increased to 15% by 1920, today Britain is typical of Western countries with Government spending weighing in at nearly 50% of GDP.

A Index of Economic Freedom might leap on those figures and point out that Britain (and other Western countries) are far richer today than they were 100 years ago and see these statistics as proof that socialism works, that more socialism = greater wealth.

It is these figures, typically government spending of between 40 and 60% of GDP that is one of the reasons why Western economies are described as mixed.

Our naive person with a socialist inclination is also likely to leap on the statistic that in poorer countries Government spending is usually a far smaller proportion of GDP, according to the Index of Economic Freedom Botswana is at 32%, Liberia at 31%, these figures being typical for middle to lower income countries.

So, having more Government spending leads to richer countries? Nope, that's the cart in front of the horse, it's actually richer countries can afford more Government spending.

The big factor our hypothetical naive person with a socialist inclination has overlooked is the role advancing technology has played in the equation. Technology is a multiplier of the productivity of each person in the workforce.

As a country becomes wealthier through technological advances the ability of it's population to support increased Government expenditure on promoting social welfare and "equality" increases, and because once their basic needs; food, shelter, entertainment etc. are met most people become more satisfied with their own well being electoral resistance to greater Government spending on the welfare of others declines. The result has been the trend I've described: more people are willing to vote for Government policies of increased welfare expenditure on the poorest in their society.

I now think I need to again draw attention to the standard definition of capitalism: An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

Despite the huge increase in Government spending in Western countries over the last 120 years from 10% to ~50% by that definition Western countries have NOT become more socialist, trade and industry continue to be controlled by private owners for profit, Government has increased in size because the sectors it specializes in: Health, Education and Social Welfare have grown enormously.

What we have actually seen over the last 50 years in Europe and most other Western countries is a withdrawal of Government ownership in industry, 50 years ago sectors like: power production and distribution, banking, postal services, production of coal, rail, telecommunications, ports and airlines has DECLINED!

So I contend that whether or not we've seen a trend towards socialism depends on the definitions used.

Just to reinforce my point, the reality is that if Europeans of 120 years ago were taxed to the same level as they are today most of them would starve as a far higher proportion of their incomes were spent on the basic necessities of food and shelter.
Andrew Worth at 03:42PM, 2017/06/28.
Andrew Worth
J. YANQUI: "Manufacturers and consumers prefer products and services outside of the United States, all because products and services made in the capitalistic U.S.A. are expensive."

Firstly you like to use the US as an example of capitalism, there are other countries that the statistics suggest are better examples, Singapore being an example, the US is ranked seventh on the Ease of doing business index, the US suffers as Liberia does through Government - central, local and state playing favorites with tax breaks and pork barrel politics.

You argue that US products are expensive, point out that other countries are challenging the US on the basis of the cost of production but ignore the obvious fact that those countries have recently shifted their economies towards the more capitalist market system and that they produce goods cheaply because their per capita incomes are yet to catch up with those in the US, a catching up they are Singapore was the first of the Asian Tigers and now has a per capita income far higher than the US, now China and others are following Singapore's example, I pray that Africa too will pick up on where others have lead.

As I said earlier Western Government spending is concentrated in the areas of Health, Social Welfare and Education.

It's fair to ask how efficient those services are and what is the quality of the service being provided. My personal experience is that the services are poor, there's much wastage, the adoption of technology is slow, in fact the Government Health and Education services are slow to take up any changes that improve efficiency and quality of service. For personal experience if I had the choice between a Government hospital in this country and a private veterinary practice I'd choose the vet, service is far faster and the staff typically more caring.

Looking at Government education services the story is the same, classroom education has changed little in over 200 years, look at all the technological changes that have happened in that time and look how slowly those changes have been to filter into the Government schools.

While on the topic of technology compare the advances that have been made through the competitive free market with those that would have been made under Government controlled industries, what do you suppose todays cars, aircraft, phones, appliances would look like if their development had been in the hands of Governments? How expensive do you think they'd be? My observation of Government innovation and efficiency in socialist countries is that if the development of those technological products had been in Government hands they'd all be crap.

Andrew Worth at 04:17PM, 2017/06/28.
Andrew Worth
J. YANQUI, to some extent we have been talking past each other, this is illustrated by your preference for the term "capitalism", while I prefer the term "free market capitalism", you see "capitalism" in terms of the big corporations that have moved into Liberia often gaining "concessions" through negotiations with the Liberian Government, I see "free market capitalism" as including big companies but as primarily the small and medium businesses that compete in the market place with so many others.

I'm not a fan of the big foreign corporations in Liberia, in a free market all players compete on an even playing field, it's apparent that many of those foreign corporations that have moved into Liberia have run rings around the Liberian government gaining advantages over local businesses that are simply not what the free market is about, there are many examples of Government favoritism, the most resent I've heard being the tax concession to the Farmington Hotel.

As I said, in a true free market Government does not play favorites, but that's exactly what is happening in Liberia under a system that's corrupted.

An analogy of the free market that I like to use is how competitive sports operate, there is a governing body (Government) and competing teams (vendors in the market) the governing body MUST treat all the teams equally for the sport to work, and the quality of play is far higher if the competition is fair and reasonably even. How good would European football be if it was run under a socialist model: One franchise run by the governing body with no competition?
Andrew Worth at 04:38PM, 2017/06/28.
Andrew Worth
Arghhh, I just noticed that while cutting and pasting I stuffed up in the first of my three comments immediately above. The paragraph starting "A Index of Economic Freedom might leap on those figures and point out that Britain (and other Western countries). . . " Should have been "A naive person with a socialist inclination might leap on those figures and point out that Britain (and other Western countries). . . "

Sorry, very embarrassing.
Andrew Worth at 05:17PM, 2017/06/28.
Bai M. Gbala, Sr.

It is argued, reasonably, on the basis of evidence overwhelmingly validated in Liberia, on the African Continent and other poor, developing Third World countries that the ever-present political/economic problem is not so much about Capitalism versus Socialism, but the pervasive, profound injection into and abuse of the political/economic process by lies, deceit, bribery, thievery, dishonesty or corrupt practices, variables(?) that are foreign, external and inapplicable in both Capitalist and Socialist analysis. For support, see our Donors, EU, IMF, UNDP, USAID & WBank . . ., The Perspective.org., June 28, 2017.
Bai M. Gbala, Sr. at 09:21AM, 2017/07/01.
Andrew Worth
BAI M. GBALA, SR. I don't think there is any doubt that lies, deceit, bribery, thievery, dishonesty and corrupt practices are the biggest of the problems causing the hardship and poverty in Liberia, on the African Continent and other poor, developing Third World countries and I think J. YANQUI will agree with us.

I will contend that the best way to combat those problems is through a reduction of Government meddling in the economy, if decisions that can be made by market forces are made by market forces rather than by bureaucrats seeking brown envelops and cold water an avenue for corruption simply disappears.

If we ask the question, which form of organization is better at rooting out corrupt employees within them, Government sector or private companies isn't the answer obviously the latter?

In my opinion the primary reason why countries like Liberia do not progress is because Government actions and the actions of corrupt Government officials destroy the ability of creative people to build, if someone is doing something great that builds wealth, Government bureaucrats are soon circling like vultures looking to line their pockets.
Andrew Worth at 03:57PM, 2017/07/01.
Large variety of online marketin
This was definitely one of my favorite blogs. Every post published did impress me. dissertation help Large variety of online marketing services
Large variety of online marketin at 03:20PM, 2017/07/04.
Ergo Manning


Socialism is a feeble human attempt to play God.

Capitalism is the practice and acceptance of voluntary slavery by one person over another.

--an Anonymous contributor EM tbw

What's more the norm in Heaven? Socialism not Capitalism, in my humble opinion.
Ergo Manning at 06:07PM, 2017/07/06.
kinario
His form has been filled. Thank you friend
obat untuk sembuhkan penyakit beri-beri basah
kinario at 01:00AM, 2017/07/18.
Sugar Mama
Sugar Mama at 05:11AM, 2017/08/24.

Post your comment

You can use following HTML tags: <a><br><strong><b><em><i><blockquote><pre><code><img><ul><ol><li><del>

Confirmation code:

Comments script


© 2017 by The Perspective
E-mail: editor@theperspective.org
To Submit article for publication, go to the following URL: http://www.theperspective.org/submittingarticles.html