April 2014
FREE RIDERS
At the beginning and at the end of our lives we are definitely free riders. We get what we need without producing anything either for us alone or for us and for others. This should surprise no one: Babies and the youngest children can not work and the frail aged, the disabled, and the severely sick are unable to do so. Most of us - whatever our politics or our religion - find no fault in this. We each have observed others who require constant care and attention and we may remember times when we were in need and found ourselves to be the recipient of such kindness given by others.
Inevitably almost all of us find ourselves grown and healthy and among millions of other adults who may have only basic skills to offer or who may have very specialized skills to offer but who are able and willing to contribute personal effort toward overall productive economic activity - work that will benefit us and everyone else who lives in our society. Some enter such productive economic activity early in life, some later, and some never at all.
In order to have the most productive society possible everyone who is able to work and who wants to work should have a job that allows her or him to use their skills at the highest level of which he or she is capable. Failure to accomplish this gives us a society that is operating at less than its full capacity.
There are primarily two types of organization that engage people in productive activity. One is private enterprise. Another is government. A third type is a hybrid, sometimes called a non-profit, which is not taxed but may generate large surpluses from its operations for use in future years.
Private enterprise is supported, maintained, and grown through savings, profits, and loans.
Government is supported, maintained, and grown through user fees, taxes, and loans.
Private enterprises are always looking for ways to increase profits and to cut costs.
Governments are always looking for ways to increase both user fees and taxes.
Taxes reduce profits creating this economic conflict:
Governments need fees and taxes to provide services.
Private enterprises need ever increasing profits to grow bigger and to pay dividends to stockholders and owners.
Labor is common to both governments and private enterprises.
Look around: There is no lack of work that needs to be done.
So who runs the show and why are there millions of unemployed or under-employed in the United States whose economic production of goods and services is the largest on the face of the earth?
One reason is this:
There is a small but significant group of investors who demand an ever increasing return from the financial assets that they own and another small number of very well compensated executives whose income depends upon ever increasing stock prices, stock dividends, and other returns on the financial transactions associated with the companies they manage.
Other reasons include these:
A lot of work activity is not highly profitable unless it is carefully managed and completed by low paid workers.
A lot of work requiring highly skilled and well paid workers does not generate enough profit to be attractive to prospective owners of private enterprises.
So the owners and stockholders of private enterprises delegate the low profit jobs to government while doing all in their power to reduce the flexibility and bargaining power of either private or public labor for higher wages.
These owners and stockholders spend millions of dollars to convince the general public that government is incompetent, inefficient, and unable to do much but raise taxes and spend money unnecessarily.
At the same time they spend hundreds of millions of dollars more in an effort to have their hand-picked candidates elected to public office.
Makes one wonder:
Is the drive for stockholder value, high executive compensation, and more corporate influence upon elected officials really just a deliberate process designed to build a highway for free riders not only in youth and in old age but also during many of the years in between?
