Why We Need A Middle Class
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Do
people truly understand the power of the middle class? I think they're
starting to overseas. We may not have invented the concept of a middle
class, but we sure perfected it, and everyone wants to emulate it. Since
the fall of the Soviet Union, countries around the world have been
reconfiguring their economic policies in order to remain competitive in
a global economy. In case you haven't been paying attention, new middle
classes have slowly emerged in such places as China, Belarus, Brazil,
Russia, Vietnam, and amongst South African blacks. People in these
countries now have spending power thereby causing a demand for products
and services, not to mention a call for construction of new houses and
businesses.
The rise of middle classes around the world is
significant as it is a recognition that capitalism works as opposed to
socialism or communism. A sizable middle class represents an economic
engine for a country. Capitalism encourages people to work and to invest
and spend their money and allows a country to collectively compete. The
average person wants nothing more than to earn a respectable livelihood,
so they can enjoy life and raise a family unencumbered by overbearing
government regulations. As President Calvin Coolidge observed, "After
all, the chief business of the American people is business. They are
profoundly concerned with producing, buying, selling, investing and
prospering in the world. I am strongly of the opinion that the great
majority of people will always find these the moving impulses of our
life."
In order for capitalism to work, you need to be
allowed to have certain freedoms, such as the freedom of expression, the
freedom to innovate and invent, the freedom to choose your own path, the
freedom to conduct legitimate business, etc. This is why it is rather
ironic how some of our former communist foes are now embracing
capitalism.
In the absence of a middle class, you have just the
rich and the poor (the "have's" and the "have not's") which lends itself
to being a feudal state controlled by dictators or monarchies. Such a
state does not operate harmoniously, corruption is rampant, and unrest
is common. The "have not's", which is a sizable majority, have little to
earn and spend. Consequently, the economy sputters and stagnates which
our communist friends discovered the hard way.
As mentioned, in order for capitalism to work,
certain freedoms have to be permitted to allow a person to work, earn,
and save their money, not to have it redistributed to others by
government decree. This means there is an explicit relationship between
freedom and capitalism. Implicitly, it means capitalism requires a
certain amount of democracy to allow the citizens to participate in how
the government runs, which means capitalism cannot work under a
dictatorship (see Cuba, Iran, North Korea, et al). As an aside, it is
the middle class who elects government officials, not the upper or lower
classes. The upper class may support politicians economically. but it is
the middle class that casts the votes.
When someone asks me about my political leanings, I
tell them I am an unabashed capitalist. This of course means I believe
in liberty, and the right of the individual to lead a meaningful life,
and I abhor any attempt by government to alter this or forcibly
redistribute the wealth earned by the individual. I can understand
government monitoring the legality of someone's occupation, but aside
from this they should not hinder a person's right to earn a living.
Capitalism is our greatest export. It represents the
seeds of freedom and economic prosperity. If it spreads, it could lead
to world stability and peace which, of course, certain tyrants and
crackpots openly reject. For example, Iraq will be an interesting
experiment in capitalism. If Iraq succeeds, freedom and democracy will
succeed, which is why Middle Eastern terrorists desperately want to see
it fail as it represents a challenge to their authority. It's not so
much about religion as it is about control. Capitalism is a genuine
threat to feudalism, a system which has no regards for the rights of the
human-being and respect for the human spirit. Make no mistake, feudalism
is barbaric.
To summarize:
1. In order to effectively compete in a world
economy, you need capitalism.
2. In order for capitalism to flourish, you need
freedom and democracy.
3. A byproduct of capitalism is a sizable middle
class with spending power.
4. Therefore, any attempt to change capitalism is a
threat to freedom, democracy, and the middle class.
No, I am not a proponent of government sponsored
bailouts, stimulus packages or the creation of artificial jobs. Such
devices does capitalism a disservice and is unnatural. It is not
government's role to tamper with capitalism, only to establish the
environment for capitalism to flourish, namely assuring freedom and
democracy, serving its constituents, and providing incentives to
encourage new avenues of business.
Yes, the failing financial companies and automotive
manufacturers should have been closed. They were corrupt, made bad
decisions based on greed and stupidity, and do not deserve any sympathy
for their plight. If they had been allowed to fail, new institutions
would have surely been created to replace them which would have been
leaner, stronger and smarter. It's called "evolution." By bringing back
our right to fail, you assure our right to succeed.
Keep the Faith!
Note: All trademarks both marked and unmarked belong to
their respective companies.
Copyright © 2010 by Tim Bryce. All rights reserved.
About the Author
Tim Bryce is the Managing Director of
M. Bryce & Associates
(MBA) of Palm Harbor, Florida and has over 30 years of experience in the
management consulting field. He can be reached at timb001@phmainstreet.com
