Holy Capitalism: Origins, Workings and Energy Catalyst
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The thesis here is that in United States (U.S.) capitalism, unemployment is 'sticky' at 9+% permanently regardless of U.S. government fiscal policy or even Federal Reserve Bank monetary policy.
Dr. Richard E. Itteilag
RICHARD L. ITTEILAG Retired Vice President of Marketing & Sales for three regulated and unregulated energy companies, Aquila (UtiliCorp Energy Services), Columbia Energy Services, PowerTrust.com, and a trade association, American Gas Association, spanning nearly 30 years. Principal responsibilities included unregulated electricity/natural gas sales to commercial accounts and managed a large national salesforce. Authored hundreds of energy economics articles, keynote speaker at multiple energy forums and conferences worldwide and published a book on natural gas/electricity marketing with Prentice-Hall. Taught a course for five years in conjunction with professional activities to energy professionals sponsored by the Association of Energy Engineers (AEE) on the economics of natural gas and electric air conditioning. Also taught a course on creating a successful energy services company through the AEE. Currently, writing an energy book on the load-leveling techniques to offset electricity capacity shortfalls in the U.S. Received a B.A. from Manhattan College in New York, an M.A. from New York University in New York and completed the course work for a Ph.D. from Georgetown University in Washington, D.C., all in economics. As an avocation, owns and rents real estate in New York, Florida and Virginia. Currently resides in Palm Beach County, Florida.
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Holy Capitalism - Dr. Richard E. Itteilag
HOLY
CAPITALISM
Origins, Workings and
Energy Catalyst
Dr. Richard E. Itteilag
US%26UKLogoB%26Wnew.aiAuthorHouse™
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Bloomington, IN 47403
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Phone: 1-800-839-8640
© 2012 by Dr. Richard E. Itteilag. All rights reserved.
No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.
Published by AuthorHouse 07/11/2012
ISBN: 978-1-4772-1738-2 (sc)
ISBN: 978-1-4772-1737-5 (e)
Library of Congress Control Number: 2012910353
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Contents
Preface
Chapter I: The Capitalist State as The Welfare State
Chapter II: Plato’s Ideal State
Chapter III: Origins of Capitalism
Chapter IV: Capitalism: Democracy v. Communism
Chapter V: Holy Capitalism as the Welfare State, i.e., the Common Ground
Chapter VI: Monetary Policy
Chapter VII: Conclusion: The Idealism Inherent in the Reality of Capitalism
Chapter VIII: Energy, the Robust Resource Base, as Catalyst
Preface
In a recent book, Civilization: The West and the Rest
by Niall Ferguson, he maintains that, beginning in the fifteenth century, the West, i.e., Western Europe, developed six powerful new concepts that the Rest of the world, primarily the East, did not have. In fact, the Far East, i.e., China, was considerably more advanced than the West prior to the fifteenth century. For example, in the thirteenth century, when Marco Polo visited the Orient as the first westerner, he was amazed by the volume of vessel traffic on the Yellow River, in both directions. Moreover, the Forbidden City, constructed by over a million workers in the heart of Beijing, using materials from all over China, had over a thousand buildings and was the greatest city in the known world. In addition, the Industrial Revolution was prefigured in China. The first blast furnace for smelting iron ore was not built in England in 1709, but in China before 200 B. C. The oldest iron suspension bridge in the world is not British, but Chinese.
This then begs the question: Why did the East, or more globally according to Ferguson called the Rest, stagnate?
There appear to be six main reasons missing in the development I y of the Rest:
1) competition,
2) science,
3) the rule of law,
4) modern medicine,
5) consumerism and
6) the work ethic.
These applications kept the West ahead of the Rest through:
1) charting global trade routes,
2) mastering scientific research,
3) instituting democratic governments,
4) doubling life expectancies,
5) developing the Industrial Revolution and
6) dramatically increasing human productivity.
At the time, essentially about a dozen Western countries, i.e., Austria, Belgium, France, Germany, Italy, the Netherlands, Portugal, Spain, Russia, the United Kingdom and the United States, controlled 60% of mankind’s lifestyle and 80% of mankind’s wealth. Of foremost importance, in effect, was global trade. Adam Smith, the famous English economist, noted that: China seems to have been long stationary, and had probably long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions. But this complement may be much inferior to what, with other laws and institutions, the nature of its soil, climate, and situation might admit of. A country which neglects or despises foreign commerce, and which admits the vessels of foreign nations into one or two of its ports only cannot transact the same quantity of business which it might do with different laws and institutions… By a more extensive navigation, the Chinese would naturally learn the art of using and constructing themselves all the different machines made use of in other countries, as well as the other improvements of art and industry which are practiced in all the different parts of the world.
Ultimately, the West outpaced the East over 500 years ago. However, the East has more than caught up currently with the West, and in some ways, I.e., through lower labor costs, computer technology, information technology (IT), etc., has actually surpassed the West, particularly in competitive trade. Retraining workers, computer automation of machinery, improved productivity and better cooperation between western governments and the business community can overcome this competitive trade disadvantage in the future.
From Ancient Philosophy (Plato) to Modern Economics (Joseph Schumpeter)
Chapter I
The Capitalist State as
The Welfare State
The Gates/Ellison Unemployment Trap,
or inverted innovations curve, shows that unemployment is sticky at high 9+% rates regardless of government policy, i.e., productivity rates from year 2000 at an index rate of 85% to year 2011 at an index rate of 115% v. unemployment rates from year 2000 of just under 6% to year 2011 at just over 9%. By observation, as productivity rises over time, unemployment rises in tandem showing a high correlation between the capitalist efforts to increase productivity to improve profits and the corresponding increases in unemployment to cut labor costs. Therefore, unemployment is sticky at 9+% rates. (2 graphs: productivity & unemployment here)
Most important, unemployment is ‘structural,’ i.e., skill-set gaps and limited work opportunities are actually endemic to modern-day capitalism, ergo a hidden and permanent characteristic of a capitalist economy.
Similarly, the share of working-age Americans who are in the labor force continues to decline to 63.6% in April, 2012, the lowest rate since December, 1981. Essentially, the rate has been declining since 2000, again while productivity has been