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For the most part I sympathize with the philosophy of Ron Paul, republican representative from Texas and member of the House Finance Committee.
I am particularly in favor of his positions on no need for war, elimination of the Federal Reserve and abandonment of America’s money policies, specifically fractional-reserve banking, and the practice of printing money at will -- fiat money -- and a return to the gold standard. I also believe that Misesian or Austrian economic conditions serve America much more efficiently and with greater viability than one that is based on Keynesian economic theory and central economic planning.
I am a libertarian at heart. That being said, however, I do have real-life concerns with what is essentially Ron Paul’s libertarian philosophy.
Dr. Paul is squarely against government regulation. Dr. Paul believes that an authentic free market can regulate itself. In our Keynesian free market, that has not worked. I doubt it could work in a free market without government or some authoritative agency regulation. After all, an authentic free market, to my knowledge, has never been experienced, and so therefore Dr. Paul’s vision is simply hypothetical.
Dr. Paul asserts that an authentic free market would set the cost of labor, and consequently there would be full employment -- wages do not need to be governed with minimum wage standards or other government regulation. The question is, what would be the minimums and maximums of those wages? For those at the bottom of the labor force, would they be compensated with a living wage? Does anyone truly believe that a free market capitalist would be willing to pay a living wage or have any concern for the general welfare over or equal to their concern for profit? There may be full employment, I will give Dr. Paul that, but Americans would still be living in the streets and in greater numbers than now; most Americans certainly would not be capable of purchasing healthcare, adequate nutrition would be greater problem, and there would be many more like problems as well. Maximum wage earners and the wealthy would monopolize the market. This is, maybe, to the extreme, but someone at the bottom making a dollar or two an hour cannot compete in the market place with someone whose income is one million dollars a year. That is because there will be an adequate number of wealthy and high-income consumers who will keep the price of goods and services high simply because they can afford to pay the prices, and markets would focus on those high earners, not those at the bottom who cannot afford to pay.
It has been reported that in 2008 the compensation for Aetna’s CEO was twenty four million ($24,300,112); other CEO compensation: Cigna - $12,236,740; Health Net - $4,425,355; Humana - $4,764,309; WellPoint - $9,844,212. These companies certainly do not have any concern whether someone can buy health insurance. All they are interested in is high compensation, in salaries and in profit. There are ample high-end earners to satisfy their profit expectations without any reliance on purchases from lower-income earners. Therefore, healthcare insurance providers can operate at-will.
Dr. Paul believes that management and funding for healthcare, security, highways, railroads, public schools, etc., should be left to the individual States. That the federal government has no constitutional role in providing or controlling these activities or services. Some States are doing some of these things to one extent or another now. However, to expect each State to effectively step up to the plate, and be consistent with other States, is an unreasonable expectation; for example, what would happen if a citizen had health insurance in one State and then moved to another?
Dr. Paul’s assertion regarding no taxes is not possible. Of course, Dr. Paul is talking about federal taxes. However, there would still be federal taxes for national defense and national security. If there is a shift from federal to State for services the federal government now regulates, there would simply be a shift from federal taxes to State, City, Town, County, and/or some other community based tax to fund those services. Therefore, the incumbency of paying taxes will not be eliminated, and in the end, they may even be greater.
Dr. Paul believes that the free market in-and-of-itself would intrinsically manage the failures of financial institutions, the automotive industries, and all of the things that the government otherwise chose to manage with the economic stimulus and bailout of the U.S. financial system, saying that businesses should be allowed to collapse into bankruptcy or otherwise simply go out of business. He said that for Americans it would be painful for about a year, but that the recession would not last as long. In consideration of his previously stated philosophy on wages and no government interference, I assume, therefore, he would not support federal dollar allocations to the States for extended unemployment insurance benefits. Since under these circumstances, unemployment would most likely be greater, would Americans put up with the conditions following corporate bankruptcy or failure? After all, we tout government of the people, by the people, and for the people, and if there ever were a President Ron Paul, he would need to respond to their outcry.
Furthermore, If Ron Paul was President of the United States, with a Republican controlled congress, and he actually was able to accomplish his conservative goals of no federal government interference, just what do you think his ratings in the polls would be? Would he simply ignore American dissatisfaction?
The most significant concern I have is with the nature of money, and especially that of profit itself.
We need to take the need for profit, and for the time being, at least, excessive profit, out of our way of life. Essentially, over time, we need to discard money-based policies and replace them with resource-based policies. I suppose it is with some incongruity, taking my adverse stance on profit and money that I think of myself philosophically as libertarian. Incongruous because, libertarianism, conservatism, and liberalism are as such only because of our money-based system and Keynesian economics, and so, in a resource-based system those designations would have no meaning -- I don’t even see a need for political parties, Democrats, Republicans, or Independents. In a resource-based system, I believe society would be fundamentally libertarian: in the essential meaning of that word: i.e., the maximization of individual rights and minimizing the role of the State.
The real-life issue, which I have pragmatic concern, is how we move forward within the realities of present day circumstances. Do Americans understand and are they willing to accept the conceptual process of evolutionary change, or is their insatiable desire for immediacy going to prevail. Viable progress cannot be achieved without an understanding that change will always be resisted and will always be adversarial, coupled with an understanding of the reality and necessity to work from present day circumstances in order to move forward. An understanding that change is a process; it’s not an event.
With present day realities in mind, libertarianism or resource-based systems are equally utopian. In order to achieve either libertarianism or a moneyless society, an ongoing process occurring over time has to be incrementally implemented.
No one should be under the impression that circumstances can change on a dime, or that by 6:00 tomorrow morning any new system could be in place. President Obama nor any other President or Congress, nor any American can make that happen without infinitely planning long-term with infinite vision. It takes time; we have to work from the point of where we are now and not from where we would like to be. Our vision must represent where we would like to be at each step in the process. We have evolved economically as a result of the congressional initiatives of both conservatives and liberals, and from Keynesian economic management, wherein the economic system has been manipulated by the Federal Reserve and by government. We cannot change that in a flash.
For any journey to be successful, one must know the destination. In terms of Iraq, Afghanistan, monetary policy, and healthcare reform, we must start from where we are now and move forward to where we wish to be.
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