Archive Project - College Essays #1

Archive Project - College Essays #1

This is the first of a series of essays I found on old floppy discs ... This is from an English 201 class I took while working on my second BA from 95-96 ...

The American Dream, the United States Economy, & the Central Planning Elite:
You’ll Only Get as Far as They Let You

Bill Gates is the luckiest man in America. Not only is Bill Gates the wealthiest individual in America, but he did so despite significant odds and a system that does not desire for Bill Gates’ to happen. The United States economy is supposedly based upon the free market system and the notion that anyone can make themselves wealthy with a lot of hard work and a little luck. In fact, that is not true. The United States economy is a closed system with hurdles that are designed to allow for limited movement and the constant dangling of the proverbial carrot in front of those who wish to pursue the American Dream. This paper will discuss the notion of the American Dream as it relates to a supposedly free market economic system and the central planning elite that keep things the way they are.
The American Dream is generally accepted to be true. With a lot of hard work and effort, a little luck, and perseverance anyone can build the personal economic base to lead the good life (Calian 23). To an extent this is true. There are numerous cases of individuals going from rags to riches in the American mythos (Stockman 69). The economic system of the United States allows for the occasional millionaire to sprout from seemingly out of nowhere. Literature is continually pouring off the presses attempting to sell this idea to the public.
In other areas of media this is also true. It is difficult these days to turn on television without an infomercial on how to make a personal fortune in only a matter of minutes in your home with no money down (Miller 800). Of course, you have to send $39.95 to get the whole story. Selling the American Dream to those eager enough to plunk down the money could be the best way to make a quick buck in this country legally. Perhaps the best way to get rich quick is to write a book on how to get rich quick and sell it to anyone else who wants to get rich quick.
Many people seem to believe that the economy is a living entity. However it is more likely that what is generally accepted as the economy is actually a collective set of statistics based upon a somewhat chaotic system of trade. The terminology somewhat chaotic is used here because it is impossible to predict with any real degree of certainty how things will pan out in the economic sphere. Since there are parameters in place for trade it is possible to argue that the somewhat chaotic system of trade is actually a controlled dynamic (Munkirs 122).
No economic system could be measured if there was not a definable and accepted set of parameters from which to measure and of which to measure. Economies are measurable in that they are defined by specific economic activities (Carlstrom 1-4). The flaw in this notion is that not all activities are economically measurable. It is possible to place a quantitative measure on time spent engaged in a productive activity. It is possible to place a price for trade on a tangible item. It is even possible to place a price on an intangible activity or concept like service. What all of these ideas share is that the measure is based on accepted societal values (Munkirs 140).
Central planning is the design for the economy on a large scale from a focal point. In the United States central planning on the day to day level is at best a loose concept (Munkirs 45). However, on a large scale the economy of the United States is defined and controlled by a select few which we can refer to as the central planning elite.
The parameters of the United States Economy begin with our currency, which is determined by the Federal Reserve. Federal Reserve Notes are printed and valued and placed in circulation in increments of dollars, a concept called fiscal policy (Dederick 2). The Federal Reserve has a significant impact on all aspects of the American economic system since “The Fed” sets interest rates and fiscal policy that the rest of the main players in the economic system follow.
The economy is an accepted set of parameters. It is interesting to think about what it would be like if people simply stopped using money and went back to barter. In the modern era where virtually all economic activity is taxed it seems impossible. Any economic activity, be it sales of physical items, interest accrued, time worked, insurance purchased, services provided, or anything else is taxed (Stockman 230). If a piece of land is owned it is taxed on the value on an annual basis, whether it is in actual use or not. The government of the United States at all levels sees to it that all economic activity is reported and defined for taxation purposes.
Large corporations and a handful of wealthy individuals control the wealth in the United States and the general direction of the economy. With wealth comes power. Since the economy is defined in the terms accepted by the elite few they also can determine who gets access to capital resources. It takes money to make money. In very few instances is wealth created out of thin air (Lutz 122-123).
Bill Gates found a niche in the world that had not been economically exploited and went from a $75,000.00 investment in a computer program called DOS to being the richest man in America. He saw beyond the plan of the corporations and the elite few and the floodgates opened for him. Getting back to the concept that it is impossible to predict with absolute certainty economic trends it is possible to see why Gates was able to step in and make his fortune. The computer software industry today is now part of the central planning elite.
Banks could not exist without a significant degree of central economic planning. The financial system requires that there be rules and regulations and a definable measure for economic activity. Here the fiscal policy of the Federal Reserve rears its head to show where its impact is the greatest. Without the specific rules and constant tinkering by the Federal Reserve the United States economy would be subject to the radical swings in other nations (Dederick 2). Even in a country where the free market economy is revered there are few who would be willing to completely deregulate the financial system and take the risk of another 1929.
The central planning elite are those who have. It seems safe to assume that those who have wealth want to keep it. The concept of a central planning elite does not include a massive conspiracy theory of a handful of bankers and others in a dimly lit room planning the future of every citizen. The notion that we have a central planning elite is not a paranoid reaction to the economic status of the majority. What the central planning elite concept says is that there are a few people and corporations that control the majority of the wealth and therefore have the ability and power to keep things moving the way they want to. It seems logical to accept that people become defensive about there status and power when there is a risk of losing it. The central planning elite potentially have a lot to lose. To argue that the wealthy and powerful do not do everything in their collective power to stay that way in both actual and relative wealth ignores aspects of human nature having to deal with power relationships (Lutz 3).
The free market system has historically lead to periods of massive economic growth where individuals could rapidly gain wealth and power. Unfortunately those periods of economic growth have been punctuated by periods of massive and swift economic decline. Those who have the most to lose in a period of economic decline are those who have the economic power in society. By planning out a system with fewer abrupt economic changes the risk involved in economic life is lessened. Unfortunately for the majority it is harder to break in to the central planning elite as a result of more restrictive economic growth (Stockman 189).
We do have a limited free market economic system. Our economic system has parameters for competition and allows for most to enter the market arena. Anti-trust regulations do not allow for complete monopolies of industry except in specific areas deemed necessary as a matter of public policy. United States laws allow for monopolies in areas of utilities and other essential public services, but those areas are not areas in which personal fortunes or creativity is often focused. A competitive environment is allowed for in the economic system of the United States, but there are boundaries. Most of the boundaries have to do with how far upward an individual can move in economic status without throwing the entire system out of whack.
Competition does not always bring out the best in people. Many proponents of totally open free markets point to competition as the be all and end all for economic activity and growth. To many, a competitive environment only allows for prosperity. This blind faith in competition does not seem to take into account that competition also brings out the worst in people. When faced with the prospect of economic ruin or wealth people will do what is necessary to protect themselves and gain the wealth. A survey of those in poverty is not likely to find many saying anything at all about the glorious wonders of economic competition. It would hardly be mentally reassuring to wake up in poverty and think about how it’s fine because in a competitive environment people sometimes lose. Competition seems therefore as likely to bring out the worst in people as it is to bring out the best.
Since competition brings out unpredictable human responses it is necessary to create parameters for that competition. The anti-trust laws are but a part of those parameters. The United States Government has other laws on the books that allow for individuals to benefit from the fruits of their labor should they find a new economic niche. Patent laws and other intellectual property laws allow for new inventions to remain the property of those who create them (Feltenstein 16). Individuals have access to the court system against major corporations. Even with these laws on the books there are limitations. The resources of those in economically powerful positions allows for them to buy their way out of many problems.
There is a difference between making a living and making a life. Even in a planned system there is room for some movement in economic status. This room for movement is where the true American Dream resides. Even though the central planning elite generally do not allow for massive gains in wealth for the average citizen it is still possible to build a better economic life. Playing by the rules and within the parameters set is essential for this to happen. It is therefore no surprise to find that people are constantly buying in to the notion of the American Dream. The phrase buying in is used here instead of selling out. Selling out is in fact giving up. When someone sells out they are symbolically throwing their hands up, giving up who they are, and going on. Those who buy in are playing the economic game by the rules established but do not give up who they are at heart. It is all a matter of perspective
Central economic planning is generally assumed to exist on micro levels in corporations and only on macro levels in autocratic states (Bennett 36). The generally accepted view of the centrally planned economy is that of the former Soviet Union (Dembinski 23). Critics of Soviet economic policy point to the eventual economic collapse of the Soviet Economy as a proof that the free market economy is necessary (Bogomolov 145-147). However, this is a false dichotomy. It assumes that since the Soviets failed and the United States has a different system that the presumed failure of one system validates the continued existence of the other (Ladd 7-8). Free market theorists conveniently forget about the depressions caused throughout American history by unregulated economic activity.
The centrally planned economy in the Soviet Union based itself on predicting every detail of economic life in the country. The massive planning apparatus of the Soviet Union did not take into account the inherent unpredictability of economic activities. In the later years of the Soviet Union attempts were made to reform the system into a semi-open economy with specific parameters. The parameters of the Soviet system that were attempted were still more restrictive in regards to fiscal policy and intellectual property laws than the United States (Gorbachev 190). Essentially, the Soviets forgot about the carrot (Voinovich 214).
The United States economy is not as restrictive as the traditional Soviet model or even of the modified Soviet model under Gorbachev. The parameters set by the central planning elite in the United States leave room for the occasional glitch (Blazyca 21). Even though it upsets the status quo the occasional Bill Gates is necessary to continue the notion of the American Dream and to be consistent with the laws on the books. The belief that if one works hard enough they can be like Gates is a powerful motivating tool for the American public.
Even though it can be argued that there is a central planning elite in this country that controls the basic direction and sets the parameters for the economy it is also possible to argue just the opposite. An economic system on the scale of the United States is a dynamic that is beyond accurate measure at any one time. Without there being an actual conspiracy group in coordination it can be argued that this entire concept is just a paranoid delusion on the part of those who are bitter over the size of the slice of the economic pie that they were given. A strong argument can be made that it is simply impossible to control as much wealth as the United States has. To a point this argument has merits but it forgets that since the Great Depression of the 1930’s the United States Economy has not had the massive economic highs and lows that have punctuated its history. Only since the legal changes in the 1930’s and continued growth of regulations and corporate power has their been a period of relative economic peace. This is simply no coincidence. Those in economic power will simply not allow the United States economy to sway to the winds of radical changes in economic conditions.
The central planning elite in America control the parameters of the United States Economy. In this way they control the movement within the economic system as well. In this paper we have looked at the basic philosophical aspects of our economic system and studied how that economic system currently operates. Our economy is only what we choose to place definable measures upon. Basically, Bill Gates found a way though the system to become the wealthiest individual in America. A good life can be made within our economic system, but don’t expect to be another Bill Gates.

Works Cited
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Blazyca, George. Planning is Good for You: The Case for Popular Control. London: Pluto Press, 1983.
Bogomolov, Oleg. Market Forces in Planned Economies. Hampshire, England: MacMillan, 1990.
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Dederick, Robert. “Understanding the Federal Reserve in 10 Easy Lessons”. Economic Times April 1995: 2.
Dembinski, Pawel. The Logic of the Planned Economy: The Seeds of Collapse. New York: Oxford University Press, 1991.
Feltenstein, Andrew. “The Role of Interest Rates During the Transition to a Market Economy”. Economics of Planning 27 (1994): 1-19.
Gorbachev, Mikhail. Perestroika: New Thinking for Our Country and the World. New York: Harper & Row, 1987.
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Lutz, Vera. Central Planning for the Market Economy. New York: Harlow, 1969.
Miller, Edythe. “Economic Regulation & the Social Contract: An Appraisal of Recent Developments in the Control of Telecommunications”. Journal of Economic Issues Sept. 1994: 799-818.
Munkirs, John. The Transformation of American Capitalism: From Competitive Market Structures to Centralized Private Sector Planning. Armonk, NY: M.E. Sharpe, 1985.
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Voinovich, Vladimir. Moscow 2042. New York: Harcourt Brace Jovanovich, 1987.