China & the New Silk Road - Lessons for Canada

I’m often away from the news these days and now and again I turn on the Radio. One day I turned on the radio and they were talking about the New Silk Road, a Chinese initiative to build “new” trade access to Europe and Africa. The initiative brings several Arab countries into the trade picture, looks to Russia and others. It is about infrastructure to connect trading regions, highways, railways etc.  It is a massive initiative, it is visionary, it is real leadership. In management we always look to find the BHAG – Big Hairy Audacious Goal, the New Silk Road is such a thing.

The details of the initiative are less important than fact that China has gotten started on something that is interregional, that reaches out to many “incompatible” national actors and so promises peace and prosperity in the amalgamation of interests under the banner of trade. China sceptics will say this is all in China’s interests, I agree, that is only a problem if you believe China’s interests are mutually exclusive to other actor’s interests – of course, this is in no way the case. Other actors will only participate if they see value in the exchange. It does signal, however, that the “hermit nation” China once was, has now graduated even more dramatically onto the world stage.

Do I see a threat in this, yes – less from the fact that China is doing it and more from the fact that the West is so complacent it has failed to offer such leadership. We use to “do” leadership, Suez Canal, Panama Canal, Breton Woods, British Empire … you’re getting the picture – the west has too many chubby and comfortable people avoiding making waves to lead anymore.  China, by contrast, is emerging, emerging with the most powerful combination of authoritarian government, national homogeneity and a vigorous corporatist culture – if that sounds familiar it should, it is the combination the built the British Empire. We, rightly, let China into our markets so that it could transition from a generally reduced state to be a player at par on the world stage – they and we have a responsibility to ensure measured progress; they in working toward liberating the masses and us in exercising ourselves robustly.

When the wall first fell, there was optimism in the world – we were talking about building a bridge over the Bearing Straight – a North America / Europe connector – I remember my heart leaping at the prospect. Have we wasted that opportunity by mismanagement – perhaps? I think that Russia could be convinced to contemplate such a project – imagine the impact if you will – of a Trans-world highway with a cloverleaf exit to the New Silk Road and inter-modal ground transport from Montreal to Johannesburg. It would have been nice to have initiated such a proposal and hence been able to more effectively define the project, now our only option is to augment and then compete to gain influence in what promises to be one of the most revolutionary “infrastructure” projects in world history.

China has in the main developed infrastructure that pays, that is, national high-tech infrastructure, transportation infrastructure, human capital infrastructure – there has been some overkill in some areas certainly, however, the focus is correct. There is an adroitness in an authoritarian government that can and has in Canada’s case, get lost in democracies. Further, there is longevity in policy, a course is plotted and taken to fruition. This can be a bad thing too, as was the case with the Great Leap Forward that resulted in some 30 million souls starving to death – there is a balance to be struck to be sure.  The embrace of market incentives and a free market stance generally and trade has made a dramatic difference in the progress of the country.

So what’s the takeaway from China’s success for us, Canada, the provinces and communities? First, sit down and clearly define a 25 year and 50-year infrastructure program founded on consensus from interest groups, commit to the program via legislation that isolates it from the rigours of the political process, and execute with vigour and integrity.

What would this infrastructure program look like?

1.       Education – no buildings – intellectual capital

a.       Intellectual Capital is infrastructure – I submit the most important infrastructure, the challenge we have is convincing people to donate time and energy toward valuing it and communicating that value in dollars and cents – the language universally understood by all.

2.       Big pipes for the internet and a world network of server stations

3.       Nationwide Communications

4.       Road, Rail, Sea and other transport – Transmission Lines, Pipe Lines etc.…

5.       Conservation, the general greening of infrastructure, infrastructure support for alternate energy sources.

China’s intellectual capital is growing exponentially, China generates 300,000 engineers annually, we do a tenth of that – engineers apply technology. The world’s knowledge is nearly doubling every 6 months – the fax machine was invented in WW2 and the technology only gained penetration into the population in the 1970s. We need people to convert a mountain of latent technology into usable products and services, it is the world’s weakest link – Canada needs to occupy this space. Disruptions like a transistor radio, the computer will become a weekly event – so knowledge acquisition can no longer have a massive institution attached to it with four, six and eight year time frames to action. In WW2, the time it took to train a pilot was measured in weeks, basic training was six weeks – they were farm boys who had just left the age of horse farming – surely we can get a doctor up and running faster than eight years or a carpenter faster than four years. We are warehousing our best, brightest and most vigorous population in universities for nearly a decade, think about what they could do if they learned on the run as I have and many others have. It is far more efficient to set about a task and collect the knowledge needed for that task than to try and educate yourself for every eventuality or contingency; properly structured knowledge transfer can do this – self-paced, independent and freely accessible are the order of the day.

While China’s infrastructure program is less than perfect, it is better than ours. The Chinese transformation has lessons for us, we would be wise to avail ourselves of them and act decisively. If we meander along as we have, or let the political pendulum send us to and fro, the Chinese assent will be both wasted on us and will likely consume us. 

Bring Back the Village, Yearning for a Connected Life

Introduction

In a recent Facebook posting my daughter used #bringbackthevillage, it was a concept that had resided in my mind absent a handle for some time. The village as perceived by me was an intimate place to live, a horizontal community where the whole family unit found a place of existence in, and with, an integrated entity. The village was never created, it was forged by necessity, the need to work together and respond more or less as a unit in response to environmental realities and threats largely. It existed bound by love in the face of often harsh realities – that was the foundation of the utopian element of the village, the people near were the people you loved, cared for and were most invested in.

Where the Village Went

In contemplating how to bring the village back, perhaps some contemplation on where it went is in order. It is clear that societal evolution since industrialization and the accompanying specialization has generated both the consolidation of the population and then, in an effort to manage massed populations institutions came into being and in consolidation to urban settings and with institutionalization came the stratification of the population. Combine this reality with the transient workforce, our built environment, and our urban infrastructure and you have millions of people within feet of one another alone, detached and then the most wrenching element of modern society, redundancy – a reality boar of oversupplied labour markets and technological advancement rendering people literally “useless”. 

The Misdirected Substitute

It is important to note; that the village was a construct of individual actors – the butcher, the baker, the candlestick maker – going about their daily life as artisans. This contrasts greatly with the “commune” where everyone is managed by a committee or an administrative body – the village found harmony through real demand for services and people provided a solution for those service requirements. 

Paradoxically the communitarian movement, or the socialists, tend to wax about community as a village substitute and yet their policies tend to eliminate, or at a minimum, compete with the imperatives that made the village in the past; that is to say, that in the provision of social services the need for cohesive community is reduced and so people tend to get pushed into isolation. Social services have a place; it is just the mechanics of their distribution that effects, or perhaps finances, fragmentation and isolation.

Marx gave capitalism a bad name, he viewed the consolidation of capital to a few as the source of societal inequality, what was at play in the massing of the population was the natural inclination of people to gain stature in society, and then a consolidation of the emerging social strata supported by institutionalization. It is true that capital does mass to capital, however, it is unclear which force created the ill Marx set out remedy – the natural state of mass attracting mass OR the capacity for those of influence to mass capital in a time of change.  Marx witnessed and was affected by, the disintegration of agrarian society, the vacating of the village and the massing of ill-prepared people to urban settings ill-prepared for their arrival – squalor ensued. The point here is that the “financial” system is an adjunct to the human endeavour; it merely brings resolution to the ills of humanity and at its most powerful an exuberant tool for those human inclinations. The reason for referencing Marx is that people often yearn for the village, and Marxist Communitarianism tends to fill the vacuum, the danger here is that Marxist ideals actuated have always provided the same outcomes as any other government structure because they have humanity as their only substrate. The village never lived in the European welfare state and the village never will, it will wither there as humans do – subordinated by a little more than enough. 

Defining the Village  

Village life was innately “communitarian” as opposed to “institutionalized community”.  In the time of the village, people knew one another, when their neighbour was ill they never said there should be more funding for medical, they did what they could to help – there, then and in an immediate way. This contrasts greatly with the circumstance we find ourselves in today, where the government extorts in excess of half our income and spends it – the money we put into social services tends to be consumed by the administration and the imperatives of professionalism.  

The point is that the village grew into being in large measure around agrarian capacity, it was the first point on the road to urbanization, it emerged out of tribes becoming stationary – extended family units coming to rest around a technology. It is important to note no one engineered the village, it came in existence, firstly, out of capacity to come to rest in an improved state of being relative to being nomadic and secondly, in response to the commerce that emerged and lastly, the culture that evolved from an excess of goods, relative needs. Villages need reasons to be, real reasons to be, other than a few people to pick a place on a map to congregate. 

The agrarian Canadian society that existed prior to Canada’s de-ruralization was a society of community with near village-like qualities, the “building bee” community if you will. It held as inherent in existence being known, everyone knew your name “who you were”. It held intergenerational continuity. It was stable, inherently non-transient. People congregated, largely around a church of some sort – even people who were unreligious attended church because it was a social venue, a means by which to connect. The desirable elements of these communities hold commonality with the desirable elements of the Village.

I think there are means to regain some of the elements of the village, the connectedness of that way of life. The structure of the “village physical” is very hard to recreate, but the human structure, a horizontal association of people connected in common interest is possible. It is possible in a large urban centre to begin your day as a lawyer – speaking to lawyers and finish your day socializing with lawyers never having had contact with any other “type” of person. This stands in contrast to the richness of a rural community or the village, where on any given day you would “socialize” with people from all walks of life on a personal basis, knowing who they are and perhaps even what their dreams are about.

The village was a place of knowing and being known – that is the essence of connectedness. The waitress has a name; as opposed to someone you abuse a little to get better service. You may even take the time to ask how she is, where her brother is … you get the picture – the village is where acceptance is the first order and class is addressed through the progress of an individual. There is merit in taking the time to encounter the full array of humanity, that is to say, the segregation that has emerged out of the “large urban center” is unhealthy for us all – all people can contribute to the richness of our experience, one only needs a forum by which to access the extraordinary among the ordinary.

“Equality” is in no way a prerequisite for the village, just free association between people is required. The communitarian concept grew from just two paragraphs in the Bible – I remember reading them and thinking – this is where it all started. On the banks of the Sea of Galilee, the concept of the “communitarian community” began, it was in no way a place of equality – it was a place of sharing. Inherent in the human condition is inequality, yet somehow, out of the communitarian ideal came equality. If we hold equality as a prerequisite for the modern village, then we are sure to fail as all other attempts at equality have done. The important thing is “sharing” each other, knowledge, and dreams – real attempts at accessing resources, the capacity of our neighbours and then mustering resources to ensure a full and rich life. 

Contemplation on Creating the New “Village”

It could be that most of the interest in the return of the village lies in connectedness, one wonders if some of the attraction might be as strongly anchored in cadence. The pace of life now is extreme compared to people’s contemporary perception of village life; a desire akin to the slow food movement – a chance to simplify life and have time to enjoy each other. One contrasts a mother in the “old” village wandering around the gardening, child in tow – with the mad rush to putting kids in daycare and to get to work. There is more than cadence at stake here, there is parenting, there is a challenge to the “phenotypes” that emerge when a specific family culture, or village culture, meets a given environment. The village provided an ever-generating source code for the reprogramming of humanity. Massing populations to urban settings, a single state school system and mass media have effected a degree of societal homogenization unprecedented in human history.

The sheer mass of society – from institutions to infrastructure – generates inertia that is antithetical to “village life”. Society fragments family, Mom goes one way, Dad the other and children the other – villages were constituted of family, innate humanity bore of intimate association facilitated care for those who were struck by miss fortune in a way the left them, absent family. While it is critical that we protect family or proxy structures and that we are compassionate and generous in our administration of society, we need to give a mechanism to the reconstitution of the village, where necessity forged the village before we only have a desire now. 

In business when there is a perception of a need or desire among a population segment, one contemplates the requirements to satisfy that need and then develops a business model that suits. As I contemplate the challenge of bringing back the village, of developing a model to achieve a modern village, the realities of modernity seem to present an overwhelming barrier. Clearly, the ability to co-inhabit a specific geophysical space is challenged for most people located in large centres.

When I think of village life, I think of living in a connected way – like Cheers (TV Show) where everyone knows your name –, in a socially vertically environment – all walks of life in conversations- and at a cadence that permits effective interface with family and other villagers. At the point of actuation one needs to think through how to motivate people to make the life changes requisite with moving from the masses to the village, how one might facilitate “congregation” and on what basis association would be initiated and maintained. The modern village then would take place with the association as the adhesive element rather than a place.

To some extent, “quasi-villages” are here now, in that, people have a collection of people they are in association with, they offer some degree of connectedness, but fail to provide for other elements of village life. The challenge is that modern society fractures human association in unhealthy ways, parent from children, grandparents from grandchildren, one occupational group from another – much of this reality is culturally driven – by way of example – people work hard to differentiate themselves in our society, there is very little cultural support for broadening association across occupation types, age types or “cultural” types.

For people with young families, constructing a village which has extended families, and broad occupational contribution, gives support for all aspects of life. Children, instead of being dropped off at government institutions while parents attend to occupation, can be part of joint childcare, either pooled resources to a centralized facility or actual multi-generational multi-family childcare at homes OR better integrated into the “working” life of parents. The objective is to develop an association that broadens social cohesiveness, effects a truly connected life and one that reduces the burden on individuals. The modern village would be an organized co-existence within society.

The creation of a village there requires an initiative to “start” the village; I had stated that one of the primary reasons for having a village was to “recreate” the vertical “social” construct (vertical social construct with a horizontal organization) that the early village had, the assertion being that more exposure to various walks of life makes a richer life. I began to ask the question, what would prompt people enjoying the fruits of our stratified society to verticalize their association, especially, in the face of a cultural inclination to elevate and exclude, rather than, to make horizontal and include.  The thought challenges my sensitivities, I have been conditioned to want exclusivity, so how does one overcome, harmonize or in some way effect a circumstance that would encourage the development of a village within the larger urban space by people one might describe as social innovators.

Absent the imperative of religion, association in the nature of the Church seems to offer a mechanism. Church as an association model pulls people from disparate social strata, occupations and circumstances to a single organization. It gives a point of the congregation, a “reason” for the various social strata to mingle, to network, to seek common interest and benefit. The church is a stronger association than a mere “network”, the church tends to develop stronger “concern” for its participants and in many cases generates a sense of connectedness. Church also provides a “common” place, and offers some physicality to an association. There may be promise in a secular version of the Church, whereby, a collection of people purchase a “place” in the urban setting, congregate, and forge a co-existence together.

The vagaries that forged the “old” village provided association that we all crave now, we are social beings that require, one hesitates to use the term, ”love” to nourish us – it is a question of building a forum to gain access to each other.      

No Minimum Wage - We Need Minimum Income

One can judge the quality of a society by the way it treats its poor, the government has a role in extending care to those who are unfortunate – “what you do to the least of my brethren you do to me” someone once said – I love the quote because it personalizes the issue. The challenge, of course, is striking a balance between extending help to the unfortunate and spending.

Whether you're poor because you're unemployed, underemployed, retired absent income or disabled – you're poor, you require resources. Presently we have several government departments dispensing funds to the people in need of help, CPP, Employment Insurance, Social Services … the list goes on. Every department has its own administration, set of criteria for helping and complex operations – all of which represent OVERHEAD or add to the transaction cost that is government.

Much of the thrust of the administration of the programs is to ensure that people are only getting what they are entitled to – in large measure these departments assess people against a set of criteria and dispense funds accordingly. This is, at its core, a policing function, the challenge that arises from this process is an administrative cost, dollars spent running a department instead of helping people. If we are going to spend money helping the poor, we need to ensure that the money we allocate for help – helps.

The simplest way to ensure a base living is to provide everyone with a base income. The government would simply distribute cheques to everyone, every two weeks, those who had income exceeding the base amount would have the “base income” “clawed back” (taken back) at tax time.  This is a very elegant solution, we can be more generous, the stigma associated with social service use is gone and a base living is established.

This also is a de facto floor on living generally; minimum wage, for example, would be rendered redundant, given that the marginal advantage of employment would force wages to a living wage. The other advantage here with respect to minimum wage, is that absent the need for a minimum wage for adults, the market could accommodate youth – as it is often the complaint with minimum wages that the youth are affected due to the axis of experience and cost working against them. By way of example, if a $1000 / month minimum income was provided, the marginal benefit of employment would exceed the minimum wage in British Columbia now – at $8.50 / hour the monthly income is $1360 – there would be no advantage of working given the cost of attending work – clothes, transportation etc. This illustrates the “floor” that is formed on human existence with a “minimum income”. 

A minimum income fulfils state obligations to Liberty in Section 7 of the Charter, Life, Liberty and Security of Person. The most coercive element that exists in society is a growling stomach; it is the absence of any secure income that drives people into exploitive circumstance. We can afford to do this, in fact, studies done by the CATO institute in the United States indicate that overall, the minimum income is the most efficient way to deliver resources due to a reduction in administrative costs.

The amount and the “Clawback” regime would need to account for marginal tax considerations, marginal employment benefit and the like. I like this solution – it is simple, efficient and generous – it seems a quintessentially Canadian way to go.

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Economics - Market Transcendence

The combination of our educational system's complete abrogation of teaching economics and the devaluation of enterprise in Canadian society at large has fostered a societal ignorance of the economy. It is as though the separation of us from human endeavours associated with an enterprise is possible. The very essence of humanity is the exchange of goods and services, economics is the medium of expression; a means by which we can observe the vast complexity of human exchange. The attempt by many in the world of academics to marginalize the market-based economy has put us in peril of leaving unexplored the most relevant of human studies. The financial representation of human reality and its influences on our behaviour is the most useful of lenses to view the world. Markets, when properly facilitated provide wealth and prosperity, the wealth and prosperity that facilitates all the rest of the social complex. The unprecedented wealth we enjoy in western society today can be squarely attributed to the unique dynamic that a market-based economy in concert with democracy produces.

  

The generalized state of unawareness regarding matters relating to the economy allows the propagation of policy that ignores the value of the market or worse seeks to curtail the market as the primary means by which we supply people with goods and services. The amount of distortion that takes place around economic policy in the political process is contorting the public’s view of economic policy in a manner that is detrimental to the country as a whole. So much of the political process’ address of economic issues is consumed by class warfare; a particularly pernicious political element, that being people promoting redistributionist policy. Redistributionists would do better to focus on a state of generalized prosperity rather than a state of generalized equality.  Rather than taking from productive people, provide equitable access to a growing pie. The proposition of paramount importance is, that in order to promote the well-being of people we need a vibrant economy, and a vibrant economy starts with businesses being able to respond to opportunity absent distorting policy.

The most common distortion is the linking of capitalism to negative outcomes related to displacement, dislocation and exploitation. Capitalism is a means of exchange ONLY, capitalism if un-distorted by an authority will distribute wealth broadly. Marx linked the painful events for the working people around the industrial revolution to capitalism, wrongly. The causes of dislocation and poverty as the industrial revolution unfolded, were a product of disequilibrium of labour supply in the context of new technology. This disequilibrium in concert with the government failing to respond to a changing circumstance, or perhaps in some cases exacerbating dislocation with policies that exploited the vulnerable, was the cause of the pain experienced by the working classes. 

Capital is a mere abstract representation of human action, if something bad happened or happens, it is the product of human thought as opposed to the capitalist process. Capital allows for the aggregation of energy (Capital) which is fungible, this aggregation of capital does afford power to the holder and raises the possibility of the power being misapplied. The misapplication of power happened throughout history absent capitalist processes, and in regimes that sought to function by eliminating the pooling and use of capital through central planning, evil happened; evil happened on a grander scale in these regimes because power was concentrated with one government, instead of a million capitalists. While capitalism can greatly enhance human progress by providing a fungible energy resource to apply to any human endeavour, it is value-neutral – it cares little whether it is directed to good or evil – remember if you don’t like what you see it is us your looking at. In the presence or absence of capital processes, evil can occur or the beauty that resides in humanity can shine. What this document is advocating is enlightened capitalism, where there is a culture and regulatory commitment to universal prosperity by giving access to an ever-growing human dynamic.      

Social issues around meeting humanitarian obligations are best met by providing a floor on human existence and then providing access to the education necessary for people existing at that floor to progress. The presence of universal healthcare is mute when universal prosperity is present. Social services are only relevant when the economy is so poorly managed that people are unable to pay for the services they need. I offer these statements only to demonstrate how abundance transforms lives, realizing there is a requirement at present for social services. The desire to promote a competitive and productive economy stems from the view that prosperity fosters more prosperity. The key recognition necessary for people holding redistributionist inclinations is that the economy is unlimited. The economy can grow large enough to provide abundance to all people all the time. The abstract element of this realization is that the economy is detached from the physical world as services represent a larger and larger portion of the overall economy. When services generate prosperity the wealth generated may be directed at physical requirements and so draw on raw resources, but a likely outcome is that wealth will be directed at services. Read these words, there is no limit to the size of the economy and the abundance it can provide. As the economy grows, equitable access brings people off the floor to various socioeconomic circumstances depending on their abilities, chosen life cadence and circumstance. All it really takes for this realization to take hold is to concede that abundance is at least as common as scarcity and that both scarcity and abundance are mental constructs.  

Human endeavour emerges out of the entire panoply of resources, circumstances and environmental variants. Human actions in the context of what earth offers reaches unfathomable complexity, just trying to contemplate the most basic of human endeavours soon becomes intensely complicated. The Dali Lama teaches a concept called Dependent Origination, of which one element relates to time, as the origination of the present is dependent on the past and the future, the present can only exist in the context of the past and the future. The second element relates to the physicality and thought of the origination of an item. The example of a clay pot is used, when one begins to contemplate a clay pots creation, one begins with the creators' thoughts of the design, the gathering of the clay, the composition of the clay, the temperature of the kiln, the make-up of the glaze, the construction of the kiln; as one embarks on this process with one of the humanities most basic and early furnishings, the level of complexity is staggering. Some elements occur in a state of tacit awareness, knowing what thought process the pot maker went through in the creation of design is almost unknowable absent perhaps years of exposure to her actions. Now imagine the process with a computer, and staggering complexity takes on a staggering complexity. Our marketplace does all this absent any central knowledge bank; the complexity of human action is managed and valued by each other’s perception of the value of one good relative to the other. There is absolutely no facility available to humanity to manage the mass of human action; it simply must emerge out of the natural inclination for people to engage each other in the context of their respective needs and desires – people left to their own interests and good intent will make a million flowers bloom.    

Knowledge is best applied at the point of action. Imagine a circumstance where the government with all its resources decided that by synchronizing people's food consumption with a view to bringing better knowledge to the process by accessing professionals and by standardizing everyone’s meals the government could buy food in bulk and get it cheaper. You might turn on your radio every morning and the government representative would provide the meal plan for the day, the ingredients for which you draw from a box of foodstuffs provided by the government. Begin the process of dependant originations on this process; it is impossible to know where to start. How would you manage leftovers, because it would be impossible for any government to predict the appetite of a given individual at any point in time? Extra food would have to be provided to ensure enough for big people even though most people are average, wasteful to say the least. As one begins to contemplate the government managing our meals for us, you realize what an absurd notion this is. Yet, in spite of thousands of instances where central planning has failed, there are people still advocating it as a solution. Clearly, everyone can see that their lay knowledge applied at the point of action will generate a more appropriate result than professional knowledge at a distance. The closer the management of resources is to the point those resources are actuated, the more appropriate the use of those resources.  

Money measures and facilitates complex human action. The attachment of value to a given item in the context of other items or services value can only take place efficiently with an abstract representation and money is what we use. The more valuable an item the more of that item gets supplied. All the complexity associated with the delivery of a good or service is managed by itself as the spontaneous response to demand occurs. This process is so finely nuanced the details of value and production and delivery are almost imperceivable. Our society has been well rewarded for allowing humanity to manage its own affairs and it's done nary a single central planner, it all happens out of the spontaneous association of actors. Please though, mine is only one word, take a look around, in every circumstance where there has been central planning, the government has reduced the population to impoverishment and subjected them to totalitarianism.

This position, of allowing humanity's spontaneous actions to determine the action of the collective still allows for collective action. The critical point in accessing the value of spontaneous human action as a thought process is to consider policy creation in the context of the individual as opposed to the aggregate. Inherent in all human action is the choice of one person to do something, so this is the logical spot to start designing policy for the collective, in contrast to planning for the aggregate. In this way, knowledge is best applied and resources are most effectively distributed and utilized. The policy is “planned” in response to human action as opposed to a policy that plans human action. As stated previously, the sum of human action is impossibly complex to plan from a central point, to direct the actions of every individual is a Herculean task even if it were possible, however, a policy can respond to trends that become apparent from the observation of human action. If provisions are made for the individual to accumulate wealth then society will be wealthy and for those who are unable to care for themselves, special programs can be developed. Policy needs to be directed toward excellence and the outliers mitigated for, central planning for the aggregate tends to take policy to manage for the lowest common denominator. 

The single most critical thing for a successful society is the provision for people to be able to capitalize on their efforts. Karl Marx spoke of this in great detail, where labour exercised action with the incremental valued-added of that labour was extracted away from the labour to the extent they remained in subsistence. In an enlightened capitalist society, we understand, that if we want people to be capitalists they need to have capital. To the extent generosity (capital) is bestowed at large is the extent to which prosperity will be accelerated. By provisioning the masses with capital a virtuous upward cycle moves us from a world view of scarcity to a world view of abundance. The industrial revolution occurred absent the ability to manage the displacement that took place leaving people in an exploitable circumstance, Marx and Engels observed an injustice and we got communism. The unscrupulous leveraging of capital, over the offer of an honest day's work, created communism; a scourge that has demonstrated its ineptitude at every attempt at execution and yet people are still promoting it in varying degrees. I wonder when people will realize the source of the Marxist view and address it with generosity.

To bring people firmly to a state of believing in an enlightened capitalist economy they must see the fruits of others' labour and see the path to access that abundance. The most effective way for people to progress, assuming they have skills to apply to occupation, is to allow them a means to accumulate a portion of the fruits of their contribution to capital. A generous credit policy to purchase a home is an excellent example of a policy that empowers the individual. A young couple caught in a circumstance where they are both working to pay rent and to feed their family is greatly supported by a 100% loan on a home; as it releases them from the rental trap and puts them on the path of capitalizing on their efforts. A free education, as demonstrated later, provides the state with greater revenues and builds human capital reserves and empowers people. Generosity in human development and empowerment works. As demonstrated so aptly by the homestead acts, the government gave land and on that foundation, people responded by accumulating 25% of modern US capital reserves. The key to all successful economic policy is to seed prosperity with the individual and watch the collective result.

When prosperity is seeded with the individual, people are free. When prosperity is doled out from a central source people are controlled. The damaging precept of much government policy is one of control. In all societies that focus on control of people, society entrenches in a state of fixed stratification and the number of impoverished people grows. In Peru, for example, where the process to gain property rights is so convoluted that average people are unable to secure property, impoverishment grows. The backdrop of Peru's policy development has been one of an elite exercising control; that is the purpose of complex and convoluted legislation, to facilitate access for the well capitalized and keep those who are without capital in a ready state of exploitation. This circumstance happens at the expense of the elite and the general population as well, as generalized prosperity provides more opportunity for capital use and returns, a charming paradox. Contrast this with counties like Canada and the US, which have extended more opportunities to allow access to capital by appropriate rule of law and effected a more generalized state of prosperity. Seeding the individual with a generous means to accumulate and access capital is the ticket to prosperity. The chatter for equality will become muted when a generalized state of abundance transpires because equality is the language of the have-nots, and talk of equality fades when the consideration is focused on the degree of prosperity.

The essence of any government's action must be prudence. Generosity with prudence requires engaging in generosity in the context of return on investment. In the case of homesteading, assets that were idle came into action, and people who received the land paid taxes to governments commensurate with the new assets' value and infrastructure grew up around them. Government spending must be rationalized to government benefit in clear terms. Present funding through government rarely is submitted to the rigours of cost and benefit. The value of a Doctor to the tax roles is greater than the average, a doctor then represents an incremental benefit in tax revenue, and the funds provided to the creation of a doctor need to be rationalized to that incremental benefit. The assertion of generosity here is in the creation of a value-adding, wealth-generating investment as opposed to grants without condition.