Friday, June 15, 2012

Dependent on a Third Party

The fact that most Americans are dependent on a third party employer as their single source of income is a bigger problem for the nation than the fact that we don't have enough jobs to satisfy demands.

When people have multiple sources of income, they can move between different positions and activities as the market changes to optimize their resources.

When people are reduced to dependency on a single third party for their livelihood, they become alienated and develop a need for big political forces to enter the picture to regulate that dependency.

The solution to this problem is ownership. The key to the American Experiment in self-rule was distributed ownership. In a system of distributed ownership, people are able to invest in their individual business and gradually shake off dependency.

Sadly, our modern financial system was designed to the desires of big businesses seeking to dominate the entire market.  To dominate markets, big firms take on dangerously leveraged positions which create systemic faults in our economy. The big businesses start by using their huge position to swamp competitors. As their leveraged position tends to be large and unwiedly the big firms end up swamping the economy at large.

Sadly, when political leaders attempt to address the jobs issue, they invariably play into the hands of big business by flooding the market with cheap credit. This might create a temporary unstable boom. The credit bubble always bursts.

The better solution is to turn away from the jobs issue and concentrate on property rights issues. If the government were to concentrate on helping people rebuild their individual ownership, we could stabilize the economy and help restore widespread prosperity.

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