Common Welfare Theory Issues - Essay Example

?The past several hundred years have d many different economic and social models/theories that have been presented, implemented, accepted, and/orultimately rejected. Due to the nature of the way in which human societies continue to grow and expand, exhibit different needs, and fulfill different destinies, seeking to create a social and economic system that most appropriately addresses these evolutionary changes is perennially of interest. One such theory that has come to a level of prominence within the past several decades is what can be defined as a “common welfare economy”. In seeking to understand and delineate what specifically a common welfare economy in detail, the following analysis will provide a summary overview of 20 points that help to define a common welfare economy; delineating whether or not each of these points are acceptable with regards to creating a new approach to economics and a new definition of the way in which society and business must interact with one another. One of the first elements that define common welfare is with regards to the fact that the very same values that are used to fulfilling interpersonal relationships are also used towards fulfilling the needs of broader society; namely cooperation, appreciation, democracy, confidence building, and solidarity. With respect to the way in which this would work within and implementation level, it must be understood that this particular aspect of the theory is inarguable and must be accepted due to the fact that it is been proven to work throughout society and to be true as a whole. A secondary core element of this economic and social theory is that a fundamental shift must be made away from seeking profit and dominance within a given market alone. Instead, individuals should seek to maximize the common good. With respect to this particular approach, it must be denoted that this is an idyllic vision of the way in which a business interactions should take place; and one that is unlikely to succeed in the real world. A third core element of the common welfare approach is the understanding that a regulatory framework is needed in order to encourage the shift away from a competition and profit based approach. This could foreseeable be engaged; however, the costs of implementing such a system, with respect to the lost efficiency that this would necessarily entail, could be massive. A fourth key factor of the theory is that the more effective/better the common welfare is, the more legal advantages will be passed along to the company in question; i.e. lower taxes, reduced customs/duties, loan rates etc. Although this may be true, the ultimate time that would take for the common welfare approach to signify a total and complete change to the entire economy could be far longer than might be expected; thereby leading to a breakdown in the system. A fifth cornerstone that is noted is that the financial balance sheet, the gold standard that has been used to measure success within previous models, must become a secondary balance sheet alongside the common welfare balance sheet. The difficulty in this is that elements of common welfare are extremely difficult to measure; as compared to their more numeric and quantitative economic counterparts. This calls into question the efficiency or effectiveness of that such an approach could engender. Items 6 points to the fact that once a company is free of the drive to continue to promote profitability, it can then focus upon growing to the optimal size; keeping in mind that this optimal size does not necessarily denote complete domination of the market. The shortcoming that is inherent within this particular approach is the fact that such an approach decreases the incentive that a firm has to continue to provide a high quality of goods/services and merely seeks to survive. Item 7 discusses the way that cooperation and solidarity can become evidenced within firms that espouse the common welfare approach. This may indeed be true; however, once again, the incentive to cooperate and work together to share knowledge is reduced due to the fact that profit no longer provides an incentive. Item 8 points the fact that inequalities in wealth will be limited through democratic discussion and decision-making. As with so many other points that have thus far been listed, this particular point is an idyllic interpretation of the way in which business practice takes place and the desire to provide a more ethical environment are evidenced within the business sphere. Item 9 focuses upon the fact that employers of different sizes will be treated differently; namely the fact that employs over 250 employees must necessarily pass on to a shared type of ownership. Although this may be good in theory, the actual implementation of such a plan would be inherently flawed and cause employers to limit their size as a means of continuing to accrue wealth for the owner. Item 11 focuses is not necessarily on the business process itself but rather the economic and fiscal policy that directs a given nation/group of individuals. The critic sovereignty is the first and foremost definition of how the national Bank/central bank would place control an exercise changes over fiscal and monetary policy. The obvious shortcoming in this is the fact that if the process is truly Democratic, there is no safety net or guarantee to ensure that individuals will not merely vote themselves benefits. Of all of the items that have thus far been discussed, item 12 is perhaps the most logically sound and realistic that has thus far been analyzed. Ultimately, item 12 focuses upon the need to invest in and promote a global level of fairness and standards in trade. Ultimately, no shortcomings from such an approach can be noted and implementing this can only benefit all stakeholders involved. Conversely, of all the points that is thus far been referenced, item 13 is perhaps the most harmful with respect to seeking to implement an actionable system of rethinking the way in which the economy works. As Adam Smith and a host of other philosophers and economists have long noted, the ability to have ownership is ultimately the route from whence profit and benefit can be derived. Accordingly, item 13 places in intrinsic value upon nature; such that it cannot be sold and bought two individuals; only rented or deeded for a particular period of time. This Marxist interpretation of the way in which property in land can and should be defined as failed on multiple attempted implementations throughout recent history is no expectation that it could somehow suddenly work is reasonable. Item 14 points to the fact that economic growth can no longer be considered determinate goal from which the political institution, government, or society should place as the ultimate end. Rather, economic sustainability, the reduction in carbon footprint, and a host of other environmental factors should be a categorical imperative which all businesses should engage. Naturally, this author agrees with such a standpoint; however, gambling such plan would require a fundamental shift with regards the way in which these actions would somehow be incentivized. Item 15 regards the reduction in the overall amount of time worked in an average week to around 30 to 33 hours. Information that was utilized to make this determination was based on responses by individuals with regards to what they would prefer. Naturally, as might be inferred, seeking to maximize efficiency and/or Chile based upon taking a cross-section of the way in which laborers would like to engage in their work is ultimately an unfair and inefficient means of measurement. As such, seeking to implement this 30 to 33 hour workweek would likely not only see a great loss in efficiency and utility, it would also see a future reduction in the workweek as individuals involved would feel entitled to even further reducing the workload in question. Item 16 regards incentivizing tenure at a specific business operation by allowing one of every 10 years to be utilized as a “Free Year”; during which the individual can pursue whatever means they would like all the while continuing to receive a salary. Naturally, implementing such a deviation from the standard business practice engage the economy and a deadweight loss with regards to the overall output achieved. Naturally, it would also engage further hours of the workforce; however, once these individuals were engaged, this engagement would be merely temporary. Item 17 involves a direct level of democracy and participatory democracy. Whereas this may at first appear as a net benefit to all societal stakeholders, not having a rigid constitution that cannot be altered and/or changed and allowing all laws to be based upon the women on the populace could create highly dangerous and volatile situation; one which business could not hope to thrive based upon the sudden whims of a fickle population. Item 18 involves the way in which these cornerstones should be developed with regards to a bottom up process. Despite the process is highly useful and it is this students understanding that this particular item does not leave much to be desired with regards to an effective and efficient implementation. Item 19 directly involves seeking to foster this particular approach well into the future by engaging the common welfare economy with the educational system. The drawback should most readily be noted here is with respect to the fact that the educational system does not lend itself to rapid change. Moreover, the stakeholders within the educational system will not be likely to reflect these changes anytime in the near future. Finally, item 20 involves the way in which different leadership style should be utilized as a means of engaging stakeholders with the efficacy and usefulness of the previously denoted cornerstones that have thus far been referenced. Naturally, utilizing further leadership theories is a useful means of engaging stakeholder support; however, the existing leadership there is a proven themselves to be effective and should not readily be dismissed. From the information that is thus far been presented, it can definitively be noted that the common welfare economy, although imaginative and useful in denoting many of the wrongs and ills of the current system, is ultimately an ideologically of idealism. With such a utopian view of the world, it is unlikely that the perfectionism of the common welfare economy can ever be implemented to effectively protect and engage in the way that it seeks. Read More