Can you identify the essential difference between economic systems? I am just finishing up R. Paul Stevens' Doing God's Business. At the beginning of Chapter 3, he has a wonderful excerpt from Richard Higginson's Questions of Business Life (pages 25-26) on economic systems.
Feudalism
You have two cows. Your lord takes some of the milk.
Fascism
You have two cows. The government takes both, hires you to take care of them, and sells you the milk.
Communism
You have two cows. You must take care of them but the government takes all the milk.
Capitalism
You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.
Enron Capitalism
You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then create a debt equity swap with an associated general offer so that you can get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred through an intermediary to a Cayman Island company secretly owned by the majority shareholder, who sells the rights to all seven cows back to your listed company. The Enron annual report says the company owns eights cows, with and option on one more.
Economics and bovine humor. It doesn't get any better than this!
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