Hawaii’s World

By A.A. Smyser

Thursday, November 27, 1997


A strong economy
can help the needy

MOST of us have a lot to give thanks for today, particularly those lucky enough to live in Hawaii, land of natural beauty and balmy weather, and home of the most successful cosmopolitan population intermixing in the world.

Most of us also give thanks for being part of the United States of America, under whose flag democracy -- as well-rooted as anywhere in the world -- has brought strength, prosperity at levels never before seen in any major nation and opportunity for the overwhelming most of us to do our best, reap our rewards and even work to change the system.

"Most" is a key modifier in the above sentences. Can we move to a society where all will be considered lucky and all will be satisfied with the opportunities facing them? No -- human nature being what it is. But we can move closer.

Particularly in the years and decades ahead we must learn to better blend capitalism with welfare statism.

Tragic experiments with state-managed economies -- often executed at the cost of war and millions of lives -- have proved that tyranny and socialism don't work.

We are left with democracy and free enterprise as the two building blocks for a just society that have been thoroughly tested and proved strong. But capitalism has no heart. Its strength is that it builds on selfishness, a key quality of all of us, to give us incentives to succeed by producing products and services that we can sell to others at a profit.

It allocates labor and goods immensely more productively than government-managed economies ever have or can. Thus the widespread current support to "privatize," to take as many functions away from government as possible.

We see it succeeding in places like New Zealand, a test tube with many similarities to Hawaii, that in 13 years has moved from being close to the No. 1 government-managed free nation in the world to close to the No. 1 free-enterprise nation and yet kept the overwhelming number of its voters from wanting to turn back.

But the greed of capitalism has its downside, which we must control -- as we have by outlawing sweat shops, imposing health regulations on the work place, establishing strict environmental protection and many volumes of other rules.

New Zealand's rich have gotten richer and its poor -- mostly Maoris, who are the Polynesian kin of Hawaiians, and other Pacific Islanders -- may not have got much poorer but certainly aren't enjoying the progress of other New Zealanders. The government says it has figures to show the gap is closing. But it's still a big gap.

Recent U.S. Census Bureau figures have been read by some to say our poor are either getting poorer or at least more numerous and that our middle class is thinning.

Societies with great rich-poor gaps are not what we want.

We want, I believe, to merge a free-enterprise society that is politically free, with the social concerns that nag at a lot of us along with our free-market selfishness.

New Zealand is working at this. It is trying to help those really deserving at the same time it discourages free-loading on the taxpayers. It has changed a lot of rules in the process but still spends about as much of its gross product on social programs as it did when its big changes started in 1984.

NEW Zealand has, however, built a much richer economy -- and here is a key: A prosperous society is much better able to help its needy than one that is broke.

That is why I shudder when critics say Governor Cayetano's economic revitalization program "has no soul." The 26 movers and shakers who unanimously developed it spent a lot of time talking about the poor. They modified their tax proposals because of such concerns.

But they also recognized that a Hawaii that goes broke can help very few of its citizens. Let's unleash more free enterprise in Hawaii, as the task force proposes, then fund fair social welfare programs with the revenues thus raised. Finding the magic balance won't be easy but stifling the economy will leave little to give thanks for in future years.



A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.




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