We have previously blogged about Albert Chavannes' writing on utopia called The Future Commonwealth, and how his ideas about the funding of government have been implemented by many societies today particularly in their establishment of Sovereign Wealth Funds. On the other hand, the US only funds itself by taxes and the issuance of debt. On this topic Chavannes, writing in the nineteenth century, was prescient.
Chavannes' other main idea was the widespread use of apprenticeships erstablished not by private enterprise but by the government. However, Chavannes was not a complete socialist maintaining that there is a proper balance between public and private enterprise:
"By making our Commonwealth a cooperative business concern, we have made it rich and placed its citizens above want. Yet we have retained sufficient fields of activity for private enterprises. By our system of public apprenticeship we are training our youths to useful occupations. It brings all classes together, and is the measure that will have the most far-reaching effects."
Now this idea of publicly sponsored apprenticeships is worth considering especially in light of the present day high unemployment rate and job downsizing and offshoring. The government reponse to high unemployment is extended unemployment insurance benefits. In other words, rather than requiring any actual work from the unemployed, the government basically pays them to search for non-existent jobs. It wasn't always so. In the Great Depression FDR established the Civilian Conservation Corps and the Works Progress Administration. These programs provided immediate work for numerous people and resulted in considerable improvements to US infrastructure including the environment.
Contrast this with today's response to high unemployment which results in no on the job training or useful public works being constructed. On the one hand you pay people to search for nonexistent jobs in the private sector. On the other you provide jobs with what amounts to apprenticeships (another name for on the job training), put the same amount of money into the economy which will have a multiplier effect, and get useful constructive results manifested in return. It is all well and good to encourage people to go to college, but there is a large segment of the population such as ex-felons and homeless people who are virtually unemployable, and government programs to employ these people are needed. The unemployment rate today among male African-Americans is about 20%. Unless a societal effort is made to employ these people directly and immediately with on the job training and without raising the bar by requiring a college education, many will either wind up homeless or in jail.
Chavannes is acutely aware of the criticism that public enterprise is less efficient than private enterprise. He compares the US to his version of utopia:
"Well, my dear Sir," Mr. Wilton replied, "probably there is a foundation for the opinion you express, although it may be fostered by those who have a direct interest in preventing the government from extending its operations.
"But there is a fundamental difference between your government and ours. Yours is a Republic, established to maintain civil and political rights. Ours is a Commonwealth, organized to secure those rights, and besides, to manage public business for public benefit. Our welfare is intimately connected with the pecuniary success of the Commonwealth, and we are all interested in its proper management. On that account the people never surrender the law-making power to their delegates, but exercise a constant supervision over all their actions. and if they fail to properly conduct the business committed to their case, they are quickly called to account for their mismanagement."
This contrast between a Republic and a Commonwealth is worth noting for its resemblance to the state of world affairs today. Conservatives in the US argue that the US is a Republic not a Commonwealth or a Democracy and as such should not be concerned with the welfare of its people except to maintain civil order and to fight wars. Progressives, on the other hand, maintain that social programs such as education and health care should be rights not privileges as they are in much of the rest of the developed world. Most other advanced societies such as Europe, Brazil, China and India are in fact Commonwealths not Republics because they not only provide for the economic welfare of their people but they act as state capitalists raising money by various means and depositing it in their Sovereign Wealth Funds. Monies are then used for various social welfare programs. The crucial points here are that in these modern day Commonwealths money is raised by means other than taxation and money is expended for the purposes of public welfare. This has been called state capitalism.
The problem with the US is that it lowers taxes, has no other means to raise money since it gives away its natural resources to private corporations, and, therefore, goes increasingly into debt. A recent piece on NBC described how billions of dollars of gold are mined from public lands by private corporations while not one penny goes into the public treasury.
This land is owned by the taxpayers of America, but the profit is totally in the hands of private interests. Contrast this with Norway where 50% of the monies realized from their natural resource of oil goes into the public Treasury while the other 50% goes to private interests. There is a 50-50 split between public and private.
Chavannes talks about government having a Business department similar to Japan's Ministry of International Trade and Industry (MITI). I have blogged about the need for the US to establish such a cabinet level Department, but the US seems committed to running huge trade deficits with the rest of the world only adding to its immense national debt, and it takes a hands off policy to the establishment of any enterprise which might in any way compete with private enterprise. As a result and particularly because the US will not enforce the Sherman Antitrust Act, corporations in the US, as is the case with the health insurance corporations, are virtual monopolies which can raise prices with impunity.
Chavanees goes on:
"We have added to out government a Business department, independent of the Political and the Judiciary, which has entire charge of the business of the commonwealth, and is responsible to the people alone for the result of their labor. Through this department we co-ordinate the productive power of the whole people, and constitute ourselves into a cooperative association.
"We, the people, thus become a business firm, and hire a certain number of men to manage the work for us. We recognize that there must be stability, and on that account the Managers and Advisers are elected for indefinite terms, and are retained in place so long as the people are satisfied with their services. [much like in China!] But should dissatisfaction arise, specific charges must be laid before the Advisers, and if they are sustained, a new election is ordered which is the final verdict pronounced by the people. [unlike in China!]"
Chavannes goes on to say that there are oversight and supervisory Boards whose duties are to provide checks and balances over the whole public business enterprise. He also states that these business functions can occur at the local government level as well as the national level.
Finally, Chavannes deals with some of the inevitable criticism that his utopia will evoke:
"'I am surprised,' I said to him, 'that some of your energetic men do not crowd to the wall their less ambitious neighbors.'
"'I believe,' he answered, 'that if you were to remain here some time, you would understand it better. It is naturaL that in your country [the US] you should strive for wealth, for wealth is not only comfort, it is power. Under your system everything is for sale. Suppose I should bestir myself to accumulate a fortune, what should I do with it? All our most valuable property is in the hands of the Commonwealth. We have little inducement to increase our wealth beyond what will secure us a comfortable existence.'"
This is as opposed to the US where immense wealth translates into control of the political process through lobbying, TV advertising and campaign contributions.
Chavannes continues:
"I expressed my fear that this stifling of private ambition might result unfavorably to the general prosperity.
"'We have found out here that there are other things worth living for besides the acquisition of money. Our men have as much brain, and are just as enterprising as yours, but, unable to concoct schemes by which they can exploit their weaker neighbors for their own benefit, they have to place their intelligence and their activity at the disposal of the Commonwealth to be used for the people's benefit. Yours is the freebooter system, ours is the organized army of labor.'
"Still it seemed to me that all this government control could not be maintained without a serious loss of personal freedom. I asked him whether he was not compelled to order his goods from certain stores, and give them a price arbitrarily fixed by the Government.
"'Not at all,' he answered. 'Our wholesale trade is perfectly free, and the prices are regulated by the law of supply and demand as in all countries. It is true that we have some regulations here that do not exist in other countries, but they are for the protection of the whole people. ...'"
Chavannes goes on to say that while profits have not been abolished, speculation has. But he says, "All that we ask is that [public laws] should tend to accomplish the desired end with the least infringement of individual freedom."
Chavannes is clearly proposing a mixed society, not purely socialistic or capitalistic. He is proposing that the Government or Commonwealth be concerned about regulating private enterprise as it does in many parts of the world today. Arguably deregulation and non-enforcement of existing laws has led to the Great Recession of 2008 in the US and the egregious excesses of some US corporations especially banks. While other countries regulate and seek to optimize trade and industry in their own self interest, the US continues to pursue its free trade policies which benefit transnational corporations to the detriment of the public Treasury and the accumulation of national debt. While other countries enrich their Sovereign Wealth Funds, the US continues to lower taxes, give away its natural resources to private corporations and not pursue other means to accumulate public wealth. This leads to increased national debt. Before Ronald Reagan entered office in 1980, the US was the world's largest creditor nation, imported raw materials and exported manufactured goods. Now after 30 years of Reagan initiated policies of lowered taxes and free trade, the US is the world's largest debtor nation with the bulk of its debt owed to foreign countries, exports raw materials and imports manufactured goods. Increasingly, it is becoming a Third World nation with its top 1% owning 95% of the wealth and the middle class fast becoming the redundant poor.
