Monday, October 26, 2009

Searching for Jeffersonian Economics in the 21st Century

In Jefferson's time, more than nine out of ten people were independent, largely self-sufficient farmers. They provided for almost all their own needs, and only relied on others for luxuries. The people who provided these luxuries, such as book sellers or makers of musical instruments, were tradesmen whom we might today call small business owners. If a person worked for someone else, it was often as an apprentice until he had accumulated enough knowledge to strike out on their own. People controlled their economic destinies to a vastly greater extent than they do today.

Times have certainly changed since then. Today, our economic destinies are almost entirely beyond our control, being determined instead in the high-rise offices of faraway corporations or in government agency buildings in Washington D.C. Since Jefferson's time, the simultaneous rise of the mega-corporation and of government economic intervention have so transformed the economy that it is effectively impossible for citizens to obtain any level of self-sufficiency.

In our time, economic conflict is often reduced to a competition between socialism and capitalism, with every position marked somewhere on a scale between complete government control of the economy on one side and absolutely no regulations on economic activities at all on the other side. Is there a place on this spectrum where should 21st Century Jeffersonians should stand?

First off, Jefferson not only would not only reject socialism, but would fight against it with every ounce of his strength. All his life, he struggled against those who sought centralized governmental power, whether it took the form of George III and the British or Alexander Hamilton and the Federalists. The idea of socialism would have terrified Jefferson, as it removes decisions from the hands of individuals and places it in the hands of others: the very antithesis of freedom.

From a rational perspective, Jefferson would also point out the obvious fact that socialism simply doesn't work. In every country where socialism has been tried on a large scale, it has not only failed but failed disastrously. The Soviet Union collapsed spectacularly between 1989 and 1991, while India and China dumped socialistic models in favor of capitalism and experienced massive economic growth as a result. Modern Venezuela, with its clownish President, is today on the brink of economic collapse, being propped up only by high oil prices.

No, Jefferson would never have been a socialist. Having said that, though, it is equally clear that unbridled capitalism would also have dismayed Jefferson. He was a man who lived in a time of broad economic equality, with a vast class of independent farmers and tradesmen making up the great bulk of the American population. There were very few super-rich people and and astonishingly small number of people living in poverty. Jefferson saw real poverty during his years in Europe, and often expressed how grateful he was that America had escaped such conditions.

In our time, of course, Jefferson's fears have been realized. Wealth is highly concentrated at the very top, with a shrinking middle class and an impoverished lower class, the very existence of which would have saddened Jefferson. The question Jefferson would ask, therefore, is how can America restore the self-sufficiency of the individual and economic equality, while avoiding the socialistic trap of government control?

Could it be the present European model, which attempts to mix elements of socialism and capitalism to reach some sort of synthesis? Jefferson would have followed the European experiment with interest, as he believed the world was entering "the age of experiments in government". But he wouldn't have held out much hope of success for the European model, in which the people rely to such a great extent on their government. Rationally speaking, the long-term fiscal and demographic situation of the European nations will spell an end to their welfare-state experiment, which even now is only maintained due to the willingness of the United States to finance the defense of Western Europe.

Jefferson would dismiss the contest between socialism and corporate capitalism as not particularly relevant, as both models eventually result in citizens losing their self-sufficiency and hence their liberty. Socialism deprives citizens of their liberty by denying them freedom of action, whereas the prevailing corporate model of capitalism deprives citizens of their liberty by permitting powerful corporations to exploit citizens and take away their freedom. Either way, the result is the same.

Jefferson would call upon us to devise a new economic model altogether, freeing ourselves from dependence upon corporations while avoiding the socialistic trap of state control. But what form could such a model take?

These days, there is a lot of talk about the globalization. The steady trend in increasing globalization is largely inevitable due to advances in transportation and communication technologies, and in many cases there is no particular reason to object to it. Obviously, there are no mom-and-pop semiconductor plants, car manufacturers, or big-screen TV factories. The economic activities of such corporations do not directly threaten the freedom of individual citizens, they provide good jobs for a great many citizens, and the corporate models are probably the best way to provide for the manufacture and distribution of such things.

But globalization has taken root among many other economic activities that are vastly more important to individual liberty and community cohesion, particularly the local establishments and businesses which are the heart and soul of individual communities. Corporate chain stores and restaurants are slowly squeezing the life out of both individual citizens and entire communities, whose cash reserves allow them to undercut competition and force independent businesses to close. By doing so, they represent as great a threat to American liberty as that posed by British bayonets in 1776.

Communities should protect their own independent businesses, ensuring that the greatest proportion of money being spent remains within the community and is not swept away into the coffers of some distant corporation. Jeffersonians avoid Starbucks in favor of locally-owned coffee houses, disdain Barnes and Noble in favor of independent bookstores, and stay away from Chili's and Olive Garden in favor of locally-owned restaurants. By supporting a vibrant local economy, Jeffersonians help themselves and their neighbors to disentangle themselves from the prevailing corporate economic structure, becoming that much more free.

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