Rules for a great economy
1.) Have corporations that produce product that is needed and wanted.
2.) Have a government that protects the corporations and marketplace.
3.) Have corporations that are profitable.
4.) Have corporations that produce good jobs.
5.) Have investors that want to invest in those corporations.
6.) Provide an open market with exactly the right amount of competition.
A nation MUST have all six. If any of the six listed requirements is not met, the economy of that nation will fail.
The first one is obvious. In a free market the people must want the product or they will not buy the product.
The second requirement is not currently done with any optimality by the United States. As an example, if a jewelry story could not protect their products, the price would be zero and they would quickly go out of business. There are several other ways a product needs to be protected as well. Copyrights, trademarks and patents need protection. Tariffs offer protection as well. Tariffs of 45% protected the American market place during most of America’s history.
The third requirement that corporations be profitable is obvious. Without profitability, there wouldn’t be investors.
The fourth requirement that corporations produce good jobs is also obvious. Without good jobs, a nation would eventually have to be socialistic, allow their population to die, or cease to exist. A nation with a trade imbalance will be purchased property by property by the country with corporations that produce jobs.
The fifth requirement in a free society is that investors be able to own their own business. For investors to desire ownership, obviously the business must be profitable.
The sixth requirement is that the competition needs to exactly the right level for corporations to be both profitable AND produce good jobs. Too much competition and either the jobs or the corporation cease to exist. Economists and politicians have universally forgotten this, for some reason. In every endeavor competition has to be the right level to strengthen. Vaccinate a person with too strong a Polio virus and he will die. Vaccinate a person with too weak a Polio virus and he will die if he catches Polio. Give the person polio virus weakened properly and he will become stronger; just the right challenge to the immune system has made the person stronger. Just the right level of competition creates strength.
The moral of this story is that trade competition is only good when it makes a nation’s products, companies and jobs better. Government must create exactly the right conditions for corporations or that nation will cease to exist.