A Quick Analogy on Capitalism and Governments.
Capitalism is both revered and vilified. Where some see an eternal goose with the golden eggs, others see nothing but rats partaking in a race without an end in sight.
Trained as an economist, the role of governments always come to mind when I read the word capitalism. Soon thereafter, horses and horse jockeys come to mind as well. It is easy to explain.
If we recognize the horse as the symbol of a nation’s economy, then the horse jockey represents that nation’s government, controlling the horse — or not.
Some governments are setup in such a way that the government’s role in their economy is minimized (laissez-faire). Other nations have their governments set up in a way to have more control.
The size of the horse jockey is therefore important.
When partaking in a race, a light-weighted horse jockey can help a horse win a race. If the horse jockey is too heavy, it will make the horse perform not as well, and others end up winning.
Yet a light-weighted horse jockey may also not control a horse well, perhaps best visualized with a six-year old child on a mature horse. The horse can end up roaming where it isn’t supposed to roam, going where the benefits for society are all going toward the happier few.
- A perpetual race may not be the best state of mind for a healthy society.
At the same time, an overweight horse jockey will not deliver a happy outcome either, because that horse will likely not move all that fast and likely not all that far.
- Envision a sumo wrestler as horse jockey, and the horse will likely not move a single foot.
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There may not be a perfect combo of horse and horse jockey, yet for sure there are many imperfect combos. Let’s look around quickly at the various governments and how they control smaller and larger horses.
A nation with just a single party, or just two-parties in total, has control over the horse that may be good for some, but likely not good for all. The horse may end up being used for specific tasks that benefit fewer people than society as a whole. Think large industries, for instance, getting their way without much government control, polluting local areas and not needing to regulate themselves in an optimal way.
- Or… think war mongers able to direct their horses for rather devilish goals, taking their nation to the brink of war with a neighboring nation such as Ukraine.
Small nations may not perform well at all for their societies as a whole when there is just one party, or just two parties and most of the profits going to the happy few. The hierarchy of power is found with the horse controlling the horse jockey more so than the other way around.
A nation with twenty parties may also not establish much control over a horse because the horse may get weary about the many different demands given to it; it may end stubbornly stuck in place, not moving forward.
- Particularly large nations should not have twenty parties; it will surely tear the large nation apart. For small nations this large number of parties may be okay, and these small nations may sometimes do better than everyone else, like a small basketball player sometimes making many smart goals.
The right amount of parties appear to be four, like the number of hoofs. In reality, political systems trying to deliver that goal of four parties tend to deliver a number of parties between three and six. Still, with more than two parties, but not as many as twenty, the horse ends up receiving just enough different demands to perform real well and provide for the needs of many different people in society.
- The horse is strong, but the horse jockey knows how to control the horse in a good number of ways. Whether large or small, a nation with three to six parties often ends up having the perfect balance between speed and dressage.
Capitalism isn’t bad unless it occurs in a situation that isn’t guided well by governments. Capitalism most often finds the best paths forward, faster than any other method. Yet unbridled, a horse will end up listening to itself (the elite), and will no longer find the golden compass of benefiting all in our societies.