Chingo De Dinero

The basics of markets, and what you need to know to make a “Chingo de Dinero”

Does the Government counteract the Free-Market Economy? Is it good?

I was talking to a friend the other and somehow this came up. If you know anything about markets and how they work, you always have to have forces from different sides to make sure everything works smoothly (eg buyers and sellers). If one side gets very weak, things can get out of balance. Extending it, does this work to keep the poor and rich in check?

So, what I am wondering, is do we need a government, that is run on a basis where each person gets a vote, to counter act the free-market economy, which is run by the wealthy. Do we need a democratic government to keep us from having something like the French Revolution? Do we need a strong Free-Market Economy to keep us from turning into Cuba?

I think so, just based on how it seems to be working. The US is not too dominated by the government, resulting in free hand-outs and economic stagnation, but again, it is not too dominated by wealthy businessmen, and full of monopolistic trusts. At the extreme for both, the country is run by a very few people. So, to keep either from happening, you create these two forces that disburses the power, or at least keeps enough conflict to maintain competition. For the record, when I say monopolistic trusts, I am not talking about the Standard Oil, JP Morgans, etc. I don’t think they ever reached the serious stage.

Let me conclude with a little analogy. If you think of people as states, and people as money (a little weird). So you have 50 people, and 300 million for everyone’s wealth. Everyone gets 2 votes (Senate). But, they also get a certain number of votes based on the amount of money they have (house). So, everything takes two votes, one based on just being a person, and the other based on wealth. Mr. California gets the same power as Mr. Rhode Island for the first vote, but in the second vote Mr. California gets a ton more power. So, in the end, nether party can be hurt too bad. The rich cannot do things that hurt the poor, and the poor can not do things that hurt the rich. There you go, the balance in action. Man, the people who wrote the constitution were on their game.

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