Monday, December 6, 2010

Nudging, Part 2, end of preface.

My usual mistake is to start a conversation about economics without fully explaining my understanding or usage of the terms involved. Of course no one every prefaces their conversations with a glossary. So, I thought I would go ahead and do just that.

Democracy - "rule of the people"  a Greek term. A form of government. There are three forms: consensus, direct, and representative. We have none of these in the United States in a pure form, but we tend towards a representative democracy which ebbs and flows as to how representative it is. There are all kinds of checks and balances with a constant changing of the rules. My definition of democracy is simply "rule of the people" regardless of what form, and I think of it as an ideal rather than a concrete term. That is, I believe it is a far end of a continuum which we can only try to approach.

Capitalism - economic system in which there is private ownership of the means of production for individual profit. This is the simplest way to explain the concept but with this simple definition comes the ideas of profit and decisions being made by private individuals not at all affected by government. The continuum here is easy to see as American economists understand we do not actually have a capitalistic system unless they modify the meaning. They might say we have a mixed economy in the USA. Again there is a continuum, and my definiton of capitalism would be that end of the continuum which is completely laissez-faire, or free from government interference. Otherwise it is mixed.

Before I go on to my final two terms, let me bow before you, my dear reader, in an attempt to nudge you into following my musings without prejudice. I am simply your servant here in my blog and do not wish to be judged a bad servant. I humbly bow and lay before you groveling....  oh you get the idea, nudge, nudge.

Please don't judge me harshly as I now stray away from common thought and twist the definitions just a bit. Maybe you, my dear (nay not just dear but intelligent cute and my that's a nice shirt you are wearing there) reader, won't notice.

Socialism - an economic system where the means of production are owned commonly. Sound right? Nope, I must be in serious error. Check Wikipedia entries:  Socialism vs. Capitalism   Notice anything different? Socialism is also a political theory but capitalism is not. Huh???  This seriously screws up my continuum of the ownership of the means of production, stretching from individual to common. Could capitalism exist in the absence of government?  Well, I guess, but imagine the completely laisez faire world. I could just shoot you and take all your money for profit, job done. I could enslave you to work for me, job done.

No, there is a problem here and I intend to rectify it, prostate as I am before you. - wink- But I won't be behaving badly and just type the definition I want into Wikipedia. I'll just explain it for you here where nobody reads or cares to correct me.

 I was in junior high when I was given a book by my social studies teacher. It was different from any other school book because it was given to me in addition to my regular social studies textbook and I could keep this one if I wanted to. I remember that it was red and told about the menace of Communism. A cold war for librarians. Oh, before I go on, my fourth term:

Communism - something I will not be talking about even though you might think so because of the mass confusion of the word "socialism" with the word "communism" especially if you live in my area of the country. Communism is a form of government, socialism is a form of economic system. Job done. :)

I see it like this. Democracy is something to be striven for but is incredibly flawed in our country. Because of this nothing works well. Arguments that it is the best system that exists fall short with me and always cause me sinus headaches.

Capitalism, the best system we could have ever come up with, (oh my head), exists on a continuum where the opposite end is socialism. We exist somewhere in between. Socialism actually exists as a set of laws to modify lasaiz faire capitalism. Please trust me, it's there.

Basically, my dearest reader who was ever on the face of this earth, I cajole you with all the powers of pandering I can muster, just keep in mind that when someone, particularly me, says "democracy," "socialism," or "capitalism," it's much more complicated than just saying the word. And the complications are what I wish to write about in my upcoming grand economic theory, which you are going to skip if you know what's good for you. I'll warn you what to skip with appropriate cues in the chapter headings.

By the way, if I were to say a simple word like "tree," what would your mind-picture be?  Pine, tall oak, short maple, maybe an ash, or coloring book stick figure with brown trunk and green top? No answer? Speak up! Now my hearing is affected. I'm taking an Allegra and going to bed. Nudge nudge, wink wink.

The words of truth are always paradoxical.
                                                      - Lao Tzu