Capitalism And Socialism: A Balanced Approach

I am fascinated with the country of Argentina; and I have come to the conclusion that I adore the Latino culture. I really enjoy going to Mexico, Honduras, and hopefully some day Chile or Brazil. However, we in the US of A can learn much from the Argentinians. The country is becoming a hotbed of protest concerning the financial crisis created by its Socialist government. “Eleven years after a debt and currency crisis that brought down the government of President Fernando de la Rua, Argentina is once again threatened to boil over in discontent.”  The current President, Cristina Kirchner who was elected to a second term in October of 2011, is in deep political trouble. The WSJ reports today that the reason for this is what Margret Thatcher identified as the problem of socialism which “always runs out of other people’s money.”

Due to Argentina’s economic model of protectionism, confiscation of private property, capital controls, broken contracts, and high taxes, the economy of Argentina has contacted by 1.4%, while inflation continues to grow at 25% annually. If you add political corruption and rising crime rates to the equation, it is not hard to see why thousands of people in Buenos Aires are protesting Kirchner’s reign. Just eleven years ago the Argentinian peso was equal to the US dollar.  Now $64,000 US is equal to about 405,000 in pesos, due to continued hyperinflation as a result of Kirchner’s Socialist economic policies.

The lessons of protectionism and high taxes continue to demonstrate to me the importance of free enterprise. However, the antithesis is just as true when we review the abuses of Capitalism: exploitation of workers, unfair distribution of wealth, and the oppressors continuing to take advantage of the oppressed. There needs to be a balance. My fear, however, is the move to an imbalanced economic structure.

I believe that to whom much is given much is required. Therefore taking care of the poor is a responsibility that will never go away. However, if my relief efforts do not create opportunity for people to better themselves, then all I am doing, under the heading of taking care of the poor, is to perpetuate a system of oppressed and oppressor. An example of this is the EBT card system that provides groceries for people living in poverty. EBT cards are government issued “debit cards that allow recipients to spend taxpayer money for their own groceries.” However, these cards can be used to buy processed junk food as well as food staples.

The article I read, thanks Debi Jack, assumes that the poor are uneducated and will use this card to buy cheap food. As much as I want to discount this statement I think the truth is that junk food is cheaper and filling. Thus people who are living at the subsistence level will be more inclined to buy junk food, which is allowed when using the EBT card. I noticed last night that the little Corner Market by my house has a huge sign that says we accept EBT cards. I looked at all of their offerings and it was all junk food and very expensive. Looks like exploitation to me.

According to the article I read last night, EBT has more than doubled over the last four years. That seems logical with the increase of people living in poverty. However, all this system does is create relief, which is good, but it does not rehabilitate, nor redevelop. In fact, the EBT system maintains the oppressed mentality. It does not set people free, it perpetuates the problem. Don’t get me wrong, I feel we need to help people, but if my EBT system allows buying junk food, but disallows the purchase of vitamins, then it is perpetuating the stereotype of unhealthy poor people.

A couple of weeks ago I went to a Social Business Conference at the PDX Convention Center. A young lady presented her Social Business endeavor. She recognized the problem with the poor buying junk food, and created an entrepreneurship that provided healthy lunches at a cheaper price than McD’s. It was incredible. Dealing with this problem requires looking at the problem with new eyes, but instead we maintain the status quo of oppression via our entitlements.

One last thought on this. The article calls the entitlement system, as illustrated by the EBT card, as a Ponzi scheme.  A Ponzi scheme is a process of using current investment money to pay previous investors off. Eventually it fails. Bernie Madoff found that out the hard way.  The article states, “The US government is running the largest Ponzi scheme in the history of the world, and just like every Ponzi scheme that has ever existed, it will sooner or later collapse.” Interesting thought!

We continue to try and deal with our problems using the same techniques, while expecting different results. We all know that this is the definition of insanity.

And that is my thought for the day!


2 thoughts on “Capitalism And Socialism: A Balanced Approach

  1. Roger, We need our lawmakers to actually understand our impoverished people. You know a 99 cent Banquet frozen dinner is easier and cheaper than buying the ingredients for a more healthful meal. You have to have electricity or gas to cook with. A micro wave is cheaper to use.
    I think we need a strong mesh of capitolism and soclialism. Can’t move products with out a transportation system, now can we. Health care is must for a stong economy. With out healthy workers where is your business.
    Come on back
    Bryan Mills

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