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Tuesday, 26 February 2019

A new Moscow on the Hudson (3)

In his recent State of the Union (a.k.a. SOTU) speech, the 45th President made an interesting comment: "America will never be a socialist country". The Washington Examiner called Trump's comment "a clear rebuke of a new generation of Democrats and socialists like Rep. Alexandria Ocasio-Cortez, D-N.Y.".

Chinese Emperors and Russian Czars may have once have uttered similar statements but history proved them wrong. In 1912 (China) and in 1917 (Russia), the masses denounced their (non-chosen) leaders. A similar event happened in Cuba in 1959.

Extreme inequality, such as in China (<1912), Russia (<1917) and in USA today, will always be countered by a push for (extreme) equality following Isaac Newton's Third Law of Motion: "For every action, there is an equal and opposite reaction".

These political waves have a remarkable similarity with an accounting framework called People, Planet & Profit or triple bottom line. In both cases, the order of events appears to be the same:
  1. Profit: basic necessity for continuity ==> Capitalism;
  2. People: additional requirement for growth and development ==> Socialism;
  3. Planet: additional requirement to preserve raw materials and retain customer base ==> Greens.

The transfers between those waves are (very) different: the first wave is often a revolution (eg, China, Russia, Cuba), while the second wave (from #2 to #3) is an evolution in human thinking. The 3rd wave is only quite recent (eg, climate change activists, greens).

Unfortunately, human misunderstanding often forces us a choice (ie, or/or) rather than applying a hybrid (and/and). Without (business) profits, there is no continuity and thus no stage 2 and 3. The alternative, of governments applying central allocation of economic inputs, has always failed.

The extreme American inequality provides fertile ground for a new movement, which has been dubbed millennial socialism by The Economist. This U.S. movement may be quite successful for decades but is doomed to fail, similar to European socialism (eg, Bloomberg).

The Economist (2019): "Yet, although the reborn left gets some things right, its pessimism about the modern world goes too far. Its policies suffer from naivety about budgets, bureaucracies and businesses."

Western European countries have tried both economic models (ie, capitalism and socialism) and have concluded that both are unsustainable. They adopted a hybrid version, which is commonly called social democracy. The Nordic hybrids are, however, quite different from the Saxon hybrids. Still, these countries are all adopting "green" political solutions.

[Don't wanna be an] American Idiot (2004) by Green Day


Note: all markings (bolditalicunderlining) by LO unless stated otherwise

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