WHICH THEORY IS BETTER? (Updated 1/22/15)
First and foremost, I would like to break the ice right away. It is not right on my part to comment on the first three just for the fact that these theories have transcended time, and we are still discussing about it. If not anything, we can learn from each one of those theories. I will leave the debate to the experts. Instead let me focus on my analysis. To my surprise while I was getting to put together my thoughts, I came across this interesting article aligning with my thinking process -
In this article, you would see a brief explanation of Dr. Schumpeter's work titled, "Capitalism, Socialism, and Democracy". It discusses how democracy and capitalism advances innovation and increases efficiency. Moreover, Thomas Piketty and many others have pointed out about the widening wealth gap across the globe. The data that I have assimilated also suggest the same combined with some structural issues build into the society across the globe.
Personally, I have not experienced Communism or Socialism, and I prefer not to discuss anything about those theories. When it comes to Democracy and Capitalism, again, I will leave it to the economic experts on how and what really defines democracy and capitalism. There are certainly concerns that appears to be there in US and around the globe, which needs to be addressed soon through right policies and actions. President has announced actions in this regard within US. It is also important to handle international relations with delicate care now, as data makes me wonder whether we will be heading towards a no-win game.
What factors should be considered while devising those policies and actions?
Three factors comes to place - 1. Trust 2. Stability 3. Clash of Egos
How can we enhance trust, stability and touch upon egos?
While talking about trust, stability, I would like to point out a recent video that I got to see in pbs about four countries making progress towards economic freedom. This documentary was titled, "Economic freedom in action".
May be along the lines of these four countries, similar actions can be implemented across the globe. At the same time, one-size fits all may not work. The best solution would depend on countries demographic profile. Just like the law enforcement data analysis that I had shared, every country should start analyzing the demographic profile, and identify your hotspots. Take actions to address those hotspots with right policies, and compromises with the local players. Right now, may not be the time to show who is big. The local players around the globe, whether like it or not, should be brought into the discussion table soon. UN should also play an important role across the globe.
CEOs around the globe:
Please support your employees, and avoid lay-offs as much as possible for the next one to three years. Instead, invest in training and hiring to spur domestic demand (in the short-term 1-5 years); Provide opportunities for creativity to come to the forefront. Shareholders support those companies by holding onto those stocks. You may not get the return that you want, but it will pay off in the longer run.
Educational and Infrastructure funding should increase to spur domestic demand -
Educational funding would employ the intellects, and infrastructure funding tends to be more labor-intensive, and would employ individuals without right education, and buy them time. Another area where jobs can be created would be through increasing satellite financial institutions such as, credit unions and community banks. This action would serve two purposes: help to reach out to smaller businesses without intermediary units and increase number of jobs while providing options in the banking system. There can be many other actions, and with more creativity, we can achieve it.
Individuals of the society - You also have a big role to play
1. For those without right education, go back to school
2. For those with education and looking for jobs, new opportunities should be opening up this year
3. For those with jobs, invest in further education
4. For those with jobs, and have decent savings, consider buying items that you have been postponing for a while to spur domestic demand. At the same time, make sure that you will have enough for rainy days.
Individuals should certainly seek experts in this regard, but I would also advice everyone to get some financial education to proactively manage your finances, and understand where you're spending.
I would like to again bring out the saying - "You have to forget to think"
That's what appears to be needed around the globe, and take it from me five years down the lane, all the major players can go back to playing your games. Also, method and process of implementation is more important than ideas.