The US economy consists of 315 million people, millions of goods and services, and hundreds of thousands of businesses all interacting constantly and continuously. There are billions of transactions and interactions between these economic entities occurring daily. The aggregation of all of these entities, interactions, and transactions constitute the economy of the United States. Can such a gigantic and complex system function efficiently and effectively without oversight, management, and regulation?
Imagine what would happen if one million people were gathered together for one year in a very small area without any direction, without any rules, without any laws, without any kind of supervision and without any management. What would happen? Would there be order or chaos? Would there be harmony or conflict? Would all of the interactions and transactions between the one million people be fair and balanced? Would everyone treat everyone else as equals? Would the vast majority of the one million people be happy? Order, harmony, equity, balance, respect, and happiness cannot come about without rules, laws, and supervision. These rules and laws and this supervision must come from an impartial third-party which the majority agrees to or selects through a fair election process. And this is what is called government.
An economic system cannot function efficiently and effectively without rules, laws, supervision and management. At the same time, there cannot be too many rules and laws or too much supervision and management. Micro-managing people and their activities are almost as bad as no management whatsoever. Rules, laws, supervision and management must be moderate not excessive—but rules, laws, supervision and management have to exist to achieve and maintain order, equity, efficiency and effectiveness. In addition, government should only manage by exception. Management by exception implies that action is only taken by management when there is an imbalance or something is not working. Applied to the government and the economy, the government should only take action when there is an imbalance or problem in the economy, otherwise it should allow the economy to function on its own.
Many of the factors that caused the Great Depression exist today, especially the unbalanced distribution of wealth and the lack of regulation of the financial industry. However, currently there are also many other factors undermining the efficient and effective functioning of the US economy that did not exist at the time of the Great Depression. The US economy is burdened by an enormous trade deficit caused by the imbalance between imports and exports and excessive government spending on foreign policy ; military bases, military engagements, foreign aid, and intelligence operations. There are more and larger multi-national corporations today than at the time of the Great Depression and they exert a far greater influence on the US government than the corporations that existed at the time of the Great Depression. The aggregate effect of all of these factors have the potential to cause a much more severe and lengthy depression that the one that started in 1929 and severely impacted the majority of the population. In fact, these factors have the ability to totally ruin the United States economy.
Consider what would happen if the US economy was totally ruined? Most local and county governments would go bankrupt, and it is probable that the Federal government would also go bankrupt. As these governments go bankrupt, public and social services would be greatly reduced. Social security, Medicare, Medicaid, unemployment insurance and social services would either cease or be drastically reduced. Many if not most public institutions such as schools, hospitals, libraries, and parks would close. Those employed by the various levels of government would be laid off. Basic services such as police and fire protection, and sanitation services would be severely reduced. Private companies would take over these services and charge whatever prices that they want. The Federal government would have to significantly reduce the military. The thousands of businesses whose major customer is the government would probably close. In a domino fashion, thousands of businesses would close and tens of millions of people would be out of work with no income whatsoever. Imagine unemployment at seventy percent. That would mean over 100 million people out of work. Imagine senior citizens who no longer receive social security payments every month (there are 65 million people on Social Security). Imagine people not having money to buy food, to pay their utilities, or to pay for their housing? Imagine students not being able to attend public schools because they were closed (there are 70 million students attending public schools). Could this happen? These things certainly could happen for the underlying factors that could bring about the collapse of the US economy exist, are operating today, and are increasing in their effect on the economy?
All economic systems involve consumption and production. Production generates goods and services which are consumed and or utilized through consumption. The economic cycle consists of continuous production and continuous consumption. The major economic systems within history have been capitalism, socialism, and communism. At the same time, the type of government that exists and operates along with the economic system (capitalism, socialism or communism) needs to be considered since the government and the economy are intimately related within a nation. The primary difference between capitalism, socialism, and communism as economic systems has to do with the ownership or control of property: land, natural resources, artificial resources (buildings, machinery, equipment, materials, energy, furniture, etc.) and intellectual concepts (theories, models, designs, formulations, recipes, music, artistic expressions, and literary expressions), human labor, human activities, and communication. All of these things are property.
In a purely communistic economy, the government owns and controls all property. The government owns and controls all of the land, all of the natural resources, all buildings, all machinery, all equipment, all materials, all energy, all furniture, all theories, all models, all formulations, all recipes, all music, all art, all literature—the state owns and controls everything even people. Because of the extreme nature of communism, the government that promotes and supports communism must be virtually totalitarian, that is, it must control every facet and activity of society. Communism is wrong because it denies the natural and personal rights of life, liberty and private ownership of property. Communism also denies the principle that the benefits of society received by a person should be proportionate to the contribution made by the person.
Radical capitalism or pure and total capitalism is completely opposite to communism. In a purely and totally capitalistic economy, all property is privately owned or controlled. All land is privately owned or controlled. There are no public forests, public forest preserves or public parks. All roads and streets are privately owned or controlled. There are no public highways whatsoever. All natural resources are privately owned or controlled. All trees, water, coal, ore, natural gas, petroleum, and chemical deposits are privately owned or controlled. There are no public lakes or rivers. Theoretically, even space and the air could be privately owned or controlled. All buildings, all machinery, all equipment, all materials, all energy, and all furniture are privately owned or controlled. There are no public buildings. There are no public schools. There are no public museums. All theories, models, designs, formulations, recipes, music, artistic expressions, literary expressions, manual labor and communication are privately owned or controlled. From a theoretical point of view, even human beings could be privately owned or controlled in a purely capitalistic economy. The government in a purely capitalistic economy provides virtually no public services. The military is privatized, law enforcement is privatized. There is no Social Security, no Medicare, no Medicaid, no unemployment security program.
Radical capitalism minimizes the role of government and makes governments virtually powerless. It is based on the false principle of ‘survival of the fittest’ and allows individuals to accumulate property without any limit or constraint. If further denies the universality of the human right to own private property and it denies the equality of human beings. Radical capitalism holds that private property should only be held by the most elite members of society and not by everyone.
Imagine a society in which everything was privately owned and controlled. There would be no public roads, no public services, no public education, no public fire protection, no public emergency services, and no public