so⋅cial⋅ism 1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. 2. procedure or practice in accordance with this theory. 3. (in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles.
cap⋅i⋅tal⋅ism an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.
com⋅mu⋅nism 1. a theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state. 2. (often initial capital letter) a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party. 3. (initial capital letter) the principles and practices of the Communist party.
Social Capital Communism
In an attempt to gain a better understanding of the Socialistic system of economics I have traveled to South America to not only see the system with my own eyes but to also to interact with the people who live under it. First let me give thanks to all of the people I have met in Venezuela and Columbia who have treated me has family and not has an ignorant North American. In the months that I have been here I have seen many things that have re altered my visions of not only Socialism but our own system of Capitalism in the US and most of all the social structures that are all of our true foundations. The effects of the North American system of capitalism are just has far reaching as religion and may be in some cases more influential. Christian and Muslims alike through out the world learn values and morality from the teachings of the Bible and the Qoran. These teachings give us our views on right and wrong, our understanding of the institution of marriage and countless other truths that guide us on our journey through life. Now in this time we have begun to see another trend that is not only restructuring our religious views but contradicting all that we have been taught. This diversion of our religious teachings comes directly from our economic systems and there is none more powerful and wide spread than the dream of the capitalist system. In this system all are considered equal and given the same chance in life to attain prosperity. This is the promise of capitalism and one of the greatest flaws in the system of capitalism. We outwardly view this system has a personal way to get ahead in life and rarely see its effects on the world at large. There is a saying I have come to see that is sad but true, "men lie, women lie but numbers do not", the since of the negative nature of this system comes out in numbers and 3% of the population hold 97% of the nations wealth the numbers tell the truth of all profits move to the top. Think about this, in business school you will learn that capital always the profit margin, this being said, use this example to gain a better understanding of my point. When a company or corporation profits it expands and contracts when profits decline. This means that when you are dealing with thousands of business and a limited amount of currency and/or capital at some point the capital all moves upward to fewer and fewer hands. Has a small business owner your relationship with your company is symbiotic to your life, if the business is prosperous you are and the opposite is also true. In a major corporation you raise the amount you are paid when profits are high and only use corporate assets when profits are low. This means that instead of taking away from your own personal resources, you take away from your employees, corporate assets, reduce personal, or just shut down or sell the corporation whole or in parts, so in the end the corporation may go under but the ones at the top are still hold the wealth. This is well known to anyone in corporate America and sad to say the rest of the world is under the same system yet they may not know it. Look at the world around you or just turn on your TV, then think, every thing do see and hear is geared towards telling you what to buy and from who. The movies you watch all have some degree of marketing, children are bombarded from the time they open there eyes to desire more and more things that have no foundation in the necessities of life and this continues until the time they finally close them. To want nice things to make life easier is not a mal-adjusted practice, by any means , yet at what point does this practice lead to greed, and at what point do we begin to lose the since of the betterment of the human race as a whole and only view the advancement of the individual. This is a view I have held prior to living in a socialistic country, this view is what made me desire to have a better understanding of socialism. Now, though my views may not have changed on capitalism they have changed on socialism. Go any where in the world capitalistic, socialistic or communist, you will still see the same aspects of life. The TV will still be sending you the same message, buy, sell and gain more. This all leads to individualistic adherence to greed promoted by main stream media and the sad fact of the matter is that no economic system is flawless and all systems merely promote advancement to the highest levels of society. We have all heard the adage "it is not what you know it is who you know" and this is still true to this day. Though I hold no true allegiance to any economic system I must still live with them. This is an issue we all have to come to grips with and either work to reform or to create a completely new system.
The wide reaching effects of capitalism will never allow any other form of economics to flourish and in the end they all are self destructive and after a certain breaking point the system can only survive with more currency being add to the system or the redistribution of wealth, neither of which is healthy to the economy or to the people. We see evidence of this in every country in Europe, which eventually led to the European Union and the loss of sovereignty of all nations within it. Now we see the emergence of the African and Asian Union. All of this points to the economic collapse taking place in the United States, this is now causing many states to claim there own sovereignty and pull away from the federal government. Most likely history will yet again repeat it self and our government will say the answer is a North American Union which has also been widely speculated in the last few years and this has also been suggested by Hugo Chavez for the answer to fixing struggling South American economies. Giving way to all of these unions is once again focusing wealth in the hands of fewer and fewer people. In essence in the coming years we will most likely see the death of the middle classes in all nations and a new system primarily based on the wealthy and those who do their bidding.
In my research of all systems, I am led to believe that the only way to heal our economic systems is to create new ones. History has shown us that all civilizations have fallen due to decadence and poorly defined systems based on value. What is value? The Webster's dictionary describes value in economic terms has 1: a fair return or equivalent in goods, services, or money for something exchanged 2: the monetary worth of something. In each of these definitions we can see a definitive flaw in our economic systems. Starting with number one, it is easy to see the value in goods and services but what about currencies. What is the value of your currency based on. The following is an excerpt from Modern Money Mechanics A Workbook on Bank Reserves and Deposit Expansion distributed by the Public Information Center of the Federal Reserve Bank of Chicago. It states, "In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value. What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so" Now in this statement we should automatically ask our selves if money is just based on the confidence of those who use it, what happens when we lose faith, this also nullifies definition number 2. Now this is where we find the North American economy right now and the rest of the modern world will follow us in our economic collapse because they all have done much of their country's business with US dollars. So, this provides for a world wide domino effect. Let us not forget the Great Depression, here are what many consider the five major causes; 1. Stock Market Crash of 1929 Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression. 2. Bank Failures Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exacerbated the situation leading to less and less expenditures. 3. Reduction in Purchasing Across the Board With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation. 4. American Economic Policy with Europe As businesses began failing, the government created the Hawley-Smoot Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation. 5. Drought Conditions. While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. This was the topic of John Steinbeck's The Grapes of Wrath. Now take these examples and deduce how many of them are at work right now on the US economy.
Last lets address the amount of US currency in circulation and the amount of the national debt. The Federal Reserve releases a document on the amount of currency and it is explained in two categories: M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of non bank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, traveler's checks, demand deposits, and OCDs, each seasonally adjusted separately. M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000), less individual retirement account (IRA) and Keogh balances at depository institutions; and (3) balances in retail money market mutual funds, less IRA and Keogh balances at money market mutual funds. Seasonally adjusted M2 is constructed by summing savings deposits, small-denomination time deposits, and retail money funds, each seasonally adjusted separately, and adding this result to seasonally adjusted M1. This document shows total currency for Jan 5th 2009 at 818.2 billion dollars now if we look at the national treasury site for today 02/05/2009 it shows Debt Held by the Public 6,410,020,405,165.47, Intergovernmental Holdings 4,307,977,718,122.23, Total Public Debt Outstanding 10,717,998,123,287.70 and lets not forget the national debt which is currently at $10,726,025,421,778.95. The estimated population of the United States is 305,607,259 so each citizen's share of this debt is $35,097.42. The National Debt has continued to increase an average of $3.45 billion per day since September 28, 2007! This means in the time that it has taken me to write this article the debt has gone up almost 1 billion dollars. I will ask you to do the following, take the total amount of currency and subtract it from the civic and national debt and if you get a positive number please do not teach anyone how to do math.
In closing all of the countries are adapting or adopting economic systems that have historically been prone to failure, communism of the Soviet Union, capitalism in both Europe and the United States and Socialism is just a transitional period from one to another. I pray these views encourage you to take a deeper look into your economic system regardless of where you reside, and demand of your governments an evolutionary change in economics.