Sunday, March 3, 2013

Political Systems

If I had to rate at a high level, the political-economic systems in order from those that are most prone to disaster to those that are most likely to foster a productive society, I would come up with the following:
  1. Dictatorships: An unaccountable few who have taken control over a country's resources. Historically this form of government has been our most common and the cause of so much suffering - from communism and fascism to the traditional dictatorships of ancient times. If you get lucky, a dictator will be competent and fair, but nobody is really smart enough to effectively control something as large and complex as a country, so even the benevolent dictator causes unnecessary suffering and waste.
  2. Corporate monopolies or oligarchies: Corporations that are able to control parts of the economy that either collude with competitors or eliminate competition altogether are almost as unaccountable as dictators. Their control doesn't tend to reach as broad, but they tend to also be more opaque. The damage of such are immense. They charge high prices, enrich themselves and have little incentive to really meet the needs of their consumers. There are so many examples of this today (of variable degree): cable and cell phone providers, hospitals, drug companies, energy companies, big banks, etc.
  3. Democracies that impose regulatory control over parts of the economy that suffers from a lack of oversight and competition. Medicare has been such an important part of our country because no private insurance would ever agree to insure people near end of life and hospital and health care providers have all the leverage when someone requires health care - a patient facing death will pay almost anything to get the required care. Health care requires regulation. Medicare works because recipients of the benefit are engaged and informed and hold their democratically elected politicians accountable to make sure the sytem works, is funded, and operating efficiently.
  4. Free Market Capitalism: There is nothing so efficient and innovate as an industry where the barriers of entry are low, where companies are at the mercy of their customers, and where pricing is transparent. Customer driven innovation is a beautiful thing to be a part of. To discover pain points, deliver products that delight, and get paid by appreciative customers for services rendered or goods delivered.
The problem with today's political environment is that the Republicans too often mistake 2) for 4) and Democrats mistakenly push industries in 4) into 3). Worse, today's Republicans have spent the last couple of decades assuming Democrats are the party of 2) when they are really support a complicated mix of 3) and 4) (which is the ideal). As a result, Republicans and the media that serve them, have become incoherent and paranoid and a result, good compromise has become impossible.

The sweet spot is for Democrats to push category 2) industries into category 3) and for Republicans to prevent categories in 4) from becoming 3) or 2) and to find ways to expand 4) into as many industries as possible.

In a sane political system this would be a relatively straight forward thing to do and ripe for all sorts of compromise and cooperation in doing so. To bad we don't have a sane political climate today.

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