George Shultz on Economic and Political Systems

Karl Marx viewed that the world would inevitably move towards communism (as the working class united and took over the bourgeois). However, Francis Fukuyama recently articulated in "The End of History" that the move towards global capitalism and democracy is inevitable. He stated that this was documented by recent history (the US winning the Cold War, Capitalism growing popular in the world and Marxism/Maoism/Communism's popularity declines). In today's WSJ, George Shultz, Reagan's Secretary of State, articulates this move in describing "neoconservatism."

"I don't know how you define 'neoconservatism,'" he replied, "but I think it's associated with trying to spread open political systems and democracy. I recall President Reagan's Westminster speech in 1982 -- that communism would be consigned to 'the ash heap of history' and that freedom was the path ahead. And what happened? Between 1980 and 1990, the number of countries that were classified as 'free' or 'mostly free' increased by about 50%. Open political and economic systems have been gaining ground and there's a good reason for it. They work better. I don't know whether that's neoconservative or what it is, but I think it's what has been happening. I'm for it."

Outrage misplaced

If a rise in nationalism (in all respects) wasn't enough. The United States is turning into 1938 Mexico. First, we have outrage over the high gas prices (nobody was complaining was big oil was giving us gas at 99 cents per gallon). Then, we have outrage over corporate executives getting rewarded for good performance.

I must stop here before I produce the third point that makes us 1938 Mexico. I love how there is no outrage over how much A-Rod makes in ten years ($252 million). It is called hypocricy.
Next, we have a great article in the Economist pointing out WHY Lee Raymond is making $400 million as a retired man...

Mr Raymond has enjoyed a remarkable record of using its capital to earn high profits—one reason why it has easily outperformed most other large oil companies in terms of total shareholder returns.

And it is the shareholders, after all, who pay Mr Raymond—and who have done well out of Exxon themselves. The real executive compensation scandals are those cases when bosses do well, while their shareholders do not.

And lastly, we now have senators calling for Big Oil to be broken up, be robbed of their profits (through a windfall profits tax), and now a senators want to investigate whether gas price gauging is occuring. Two words for these hysterics....demand and supply!

We should embrace high gas prices. The market is working by telling drivers, "Find alternative forms of energy." This is the best way to get hybrids on the road. Government only makes this move worse. For instance, ethanol is a great alternative by creating flex fuels. However, we 'protect' our ethanol farmers with a54-cent per gallon duty. (Note: The liberal Renewable Fuels Association says that the tarriffs are not a "barrier to entry". Thus confirming that liberals know nothing about economics.)

It's still winnable!

Six CEOs from six major multinationals try to convince the investing public that Doha needs to succeed and there is still hope for its success. In an eloquent but brief paragraph, these leaders articulate why the movement towards freer trade (overseen by a rules-based WTO) will make life better for old and young, rich and poor, white and black, male and female...

We have strongly supported the Doha Round since its launch four years ago, with its emphasis on helping the developing world through multilateral trade liberalization and on real new market access opportunities in goods and services for all. Our collective experience has taught us that multilateral trade liberalization and a rules-based global trading system will foster economic growth, create jobs, give consumers more choices and improve lives in both the developing and the developed world. For us, a stable and open trading system is a most important prerequisite for our decisions to invest in the future.

They also highlight some of the amazing benefits that Doha has to offer...

These include outlawing all agricultural export subsidies by 2013, introducing duty- and quota-free market access for almost all exports from 32 least-developed countries by 2008, and eliminating developed-country export subsidies to cotton by as early as the end of this year.