Government statistics paint an excessively grim picture of what is happening to real wages and the growth of real national income. They overtly downplay increases in quality of life and the ever increasing value offered in the marketplace.
In the USA, broad and deep government control is preferred to individual freedom of action; that control is continuously advancing and strengthening; and those who resist the control are met with coercive constraint. The productive class – everyone who doesn’t work for the government – becomes more and more repressed.
Let’s name some of the pathways down which government control keeps progressing (that’s their word for it: progressive) and then we’ll look at the barriers that are going to arise across those pathways.
1. Government spends more of your money each year and saddles you with more and more debt.
Economically speaking, government creates no value. It can only extract from value created by others. It does so via taxes and fees, and spend these on its own non-productive activities. Just to take the period of time this writer has been alive, from 1948 to 2016 (the last complete year of data), government’s officially reported spending progressed from approximately $55 billion to $6.67 trillion (or $6,675 billion). That’s 121 times, or 12,118%, or about 7% increase per year.
Not only does the government extract and spend your money, it racks up debt because it wants to spend more. We are all sadly familiar with the government debt total of about $20 trillion (which will probably inflate to over $23 trillion by the end of 2017).
2. Government adds new regulations every year.
Government control is implemented via the regulations it issues. These are not laws passed in Congress but rules formulated by bureaucrats in government departments, often referred to as the Administrative State. They are extra-constitutional but that doesn’t help us defend against them. Those who amuse themselves by counting the addition of administrative burdens on citizens in the Federal Register put the new load at about 24,000 new pages per year and about 3400 new final rules per year. You have no idea how many rules you are breaking, but you know these rules have a huge economic cost.
3. Government uses the central bank to monetize government debt and to control banks to create household and business debt.
The government will never repay the debt it has issued. That does not matter to the central bank that buys much of it. The central bank is the satanic issue of a joint venture between the government and the big US-based banks. The central bank prints money, and exchanges it with the government in return for government debt. It keeps interest rates low, so that the government can afford to make the coupon payments, but repatriates a lot of the coupon receipts to the US Treasury anyway. It’s all a shell game. In return, the member banks are authorized to issue household and business debt to the amount of 10 times the deposits they have on hand. It is this reckless credit creation that generates bubbles and then busts. No matter. The central bank bails out the member banks from their reckless behavior; only the working, taxpaying citizen suffers.
4. The government uses the central bank for inflation.
The central bank has an explicit 2% annual inflation target. That means they plan to make your income worth 2% each year. After 10 years of this, your paycheck will be worth about 80% of what it used to buy, and after 20 years, about 66%. Your wages don’t go up fast enough to compensate. It’s just another way of stealing from you.
5. The government has created the military-industrial-surveillance complex to exert further control.
The government spies on its own citizens. How evil is that? Do you want to live in a country where a small group of just over 2 million spy on the other 300+ million?
6. Government creates a massive welfare sector which it uses to buy votes.
The essence of the government scam is that the democratic process justifies their taxing and spending and debt accumulation. You voted for it, therefore it’s all done with your approval. Well, roughly 129 million votes were cast in the 2016 Presidential election, about 40% of the population. (Remember, all men are created equal, even those too young to be granted eligibility to vote.) So 60% of us didn’t vote for taxing and spending and debt accumulation. In fact, less than half of eligible voters turn out for House elections in many states.
More importantly, all the politicians, of whatever party, are willing, at whatever cost, to promise more and more expensive benefits to the voting population to try to get them to vote. This has resulted, over time, in the bloated, unaffordable, unsustainable welfare state. Half of US households receive benefits from one or more government programs. In fact, one way to look at government spending is that they bribe all of us. Tax subsidies, mortgage tax deductions, employer sponsored health insurance, tax-protected retirement plans, tax free municipal bonds – one way or another, we’re all taking the bribes. Which is, in effect, just the government allowing us to reclaim a small portion of the money they’ve already taken from us. Theft and bribery are their business.
7. Government employees get special compensation for sticking with them, rather than with us.
Total compensation for federal government workers has been estimated to be 17% higher than for comparable workers in the private sector. In the same study (published by the government itself) the cost of providing benefits for federal civilian workers was 47% higher than for comparable private sector employees. Cato Institute thinks the number is 78% more in total compensation for government employees compared to private sector employees.
Whichever is the most accurate number, you can be sure that, if you work in the private sector, you are heavily penalized.
8. There is no way out because the two political parties both support the taxing and spending and regulation, and merely trade power from time to time.
They tell us we can vote to change policies, but that’s hardly true. The Democratic and Republican parties stand for exactly the same things, and support exactly the same government policies. If spending and regulation and government debt grow every year, and central bank inflation compounds every year, how can the parties claim that swapping one for the other makes any difference at all?
Now for the optimistic countdown.
The happy news is that all of these pathways are approaching their terminal barriers. Peak government may be with us now, but the peak is followed by decline, which will mean a lesser load on citizens’ backs.
In quick countdown terms, here are the optimistic signals.
Government’s pension and healthcare promises are unsustainable.
They’ve promised more than they can deliver. They’ve miscalculated the costs. Their program will go bankrupt and fail. They’ll have to renegotiate them.
The government’s welfare promises are unsustainable.
When less than half the population is working to support more than half the population taking government benefits, you start to “run out of other people’s money”, as UK Prime Minister Margaret Thatcher famously said.
The population is beginning to find ways to evade the spying of the military-industrial-surveillance complex.
There is always a technology race between the good guys and the bad guys. The promising evidence is that the good guys – that would be us, the people who don’t work for the government – are finding some new tools. Blockchain technology offers secure, anonymous (or at least pseudonymous) exchange of assets, and may generate a successful private currency not issued by government fiat. It won’t be the case that government can’t regulate or intervene on the blockchain, but crypto can make spying, tracking and intervention very expensive, and it may at least force the government to narrow down their efforts to what is most important to them. Chances are our everyday business and personal trades will not fall into that category because it won’t generate significant revenue for an increasingly revenue-challenged regime.
Central banks are losing control.
Central banks have been printing money and creating credit at an unprecedented rate over the past several years. Their role has become one of monetizing government debt, debasing the currency (i.e. making the money in your pocket buy less each year), and inflating asset values – like houses and stocks. But there are signs that their ability to control outcomes in the way they want to is decreasing. Japan experienced a 10 year bust where the Central Bank could not generate asset value growth, GDP growth, employment growth, or inflation, despite their best efforts and best promises. The European Central Bank could not solve the political problem of one favored state (Germany) benefiting from the inflation, and others (France, Italy, Greece) suffering by comparison. The US Central Bank has created such as asset bubble in the stock market that it is bound to burst, which will cause financial system disruption and a loss of credibility for the bankers. Their years of hyper-experimentation might soon come to a disastrous end. When the financial system shows stress, the private sector creates new solutions.
Alternative financial arrangements will be decentralized and democratized.
Blockchain technology – better described as decentralized ledger technology – creates an alternative financial system that is not run on the central computers of big banks and financial institutions, but on hundreds of thousands of computers distributed all over the word. The software is used to create peer-to-peer exchanges of financial assets that are secure, fast and low cost – a much better experience for the customer, with which the big banks and institutions will not be able to compete. Fintech – new financial technologies – will create lots of alternative arrangements, some of which will succeed and some of which will fail, i.e. the market (you and me) will decide, not the government. Whatever the outcome, it will not be controlled by the centralized institutions, and they will not be able to keep up with the speed and creativity of decentralized innovation.
While we can’t evade government, we can secede.
It’s early days in regards to secession, but the movement is nascent and building. Sanctuary cities are declaring their determination to disobey federal laws. Institutions like the Tenth Amendment Center are bringing secession discussions to the fore. As Ronald Reagan said, we can vote with our feet. Secession discussions are a promising sign of vitality among the citizenry.
Prepare your individual response.
The individual acts as an entrepreneur in all aspect of his or her own life, bearing the uncertainty of the future by identifying opportunities and seizing them. It is unclear how peak government will descend into its post-peak phase. We all should think through our options, set our goals, identify our resources, choose our collaborators, and prepare to navigate a personal / family / neighborhood / community course. Navigation implies constant course correction as new data becomes available. Be flexible and thoughtful.
Politics is the most vile institution to emerge in our civilization. We don’t even pretend to ourselves that there is anything good in politics. It’s about interest groups fighting over pieces of some kind of communal pie, looking to steal from others, or disadvantage others, or punish others, or otherwise seize resources to which they have no right and which don’t belong to them.
The political way is not to work, not to innovate, not to serve others in the marketplace, but to wait until all that productive activity has taken place and then to grab a piece of it that was neither earned nor deserved. The people who do this – politicians – are rightfully despised. The choice of politics as a field of activity reveals a deep cynicism and a complete moral vacuum.
Politics is about factions in society fighting with each other, demeaning each other, unweaving the fabric of collaboration that is not only the nature of the human condition but the cause of societal progress. War is politics by other means. Politics is war every day.
The individualist has no interest in politics. Its very essence runs contrary to everything that drives the individualist. We individuals wish to pursue our own interests by serving other individuals in the marketplace and earning commensurate commercial, economic and psychic rewards. Politics only gets in the way, restricting us, taxing us and frustrating us.
Happily, the individualist has a solution to the problem of politics. It is a solution that requires us only to act self-interestedly, as we are wont to do.
1) Don’t vote
The politicians justify their scheme on the basis of the processes of democracy. They say we all participate – so we’re all complicit – as a result of voting. They also say that the decision of the majority in selecting so-called representatives provides the excuse for the politicians to pass all the laws, regulations and taxes which so confound individual freedom.
Obviously, the “winning” politicians do not represent a majority of people. Set aside the contradiction that there is no politician who can represent your or my individual views. We need only observe that it is never a majority of the population, and often not even a majority of those who actually cast votes, that is in their favor.
The justification thesis rests, at least, on the fact that quite a large number of those who are “qualified” to vote (what a condescending term that the politicians use!) do actually complete a ballot.
What if we didn’t? Let’s not vote. Let’s never vote again for any politician. Let’s not give them the grounds for the justification of their scheme.
Even if some vote, and most of us don’t, then the justification will become thinner and thinner and harder to sustain.
In Australia, the politicians have made it mandatory to vote. There is a fine if you don’t. That certainly betrays the fear of the politicians that the scheme is becoming threadbare and harder to sustain. Here in the U.S. too, politicians will undoubtedly seek ways to force you to participate, or to appear to be participating. Let’s resist. Let’s refuse. It’s a simple thing. But it could be profound in it implications.
2) Don’t talk about politics or politicians
The politicians have adopted the techniques of marketing and have become pretty good practitioners. They know how to get attention; and they think they can “sell” their laws and regulations and taxes and fines to their vested interests by using the language of benefits.
They have direct access to all the channels of marketing communications. They are interviewed in Congress and in their constituencies and in the offices of their bureaucracies and in TV stations and newspaper offices. They run advertisements during election periods, using the tools of the free market to undermine the free market.
They have also developed an army of talking heads who, in TV shows, podcasts, web videos and newspaper columns, make politics a subject of popular entertainment by talking, talking, talking.
We, in turn, talk about the talking. We talk about it in our Facebook conversation and on Snapchat and Instagram and Twitter. We talk about it over lunch and dinner and drinks with friends and around the water cooler in our offices. We give them credibility because the more they talk, the more we talk. They’ve politicized everything, and we let them do it.
Let’s stop. Let’s talk about the economy and sports and film stars and sportsmen and women and business and innovation and economic theory and fashion and gardening and vacations and cars and romance. Let’s give the politicians no echo chamber, and no popular dialogue. Let’s make them a monologue. Let them talk to themselves. We’ll talk about something else.
3) Be your own editor
One way to make progress towards the goal of excluding politicians from your life is to be your own editor. It used to be the case that you could let an intermediary sort through the news and commentary for you, organize it, and present it for your consumption. In the past, you may have given permission for network TV to do this for you, or a daily newspaper, or an aggregation website, or a magazine. No longer! They all have biases, and the information they present is filtered through those biases. Often, they are trying to get you to over-react, by placing more emphasis than is merited on some “hot” news item and inflating its supposed importance.
Pick your own sources of news and information. Sometimes, these may be publications or websites, and sometimes just individual writers and bloggers. Pick your subjects – maybe you can curate a set of news providers and commentators on economics or technology or business or sports who don’t stray into politics. Pick your writers. By all means pick them from multiple sides and perspectives, in the knowledge that all are biased.
Be firm in your own opinions and beliefs. Challenge yourself every day. But don’t let the politicians and their echo chamber mislead you.
4) Don’t be fooled into believing in collective goals
Politicians like to talk about “the national interest” or “social goals”, or lower order collective concepts such as “the labor market” or “the middle class”. Don’t be fooled. Only individuals enter into economic exchanges and so only the values and interests of individuals matter; in fact, these are the only values that exist. There are no social values, and no national interest. Individuals may share values in common, and may even agree on policy directions. But they do so only for furthering individual interests. These interests are not collective, and we can safely ignore politicians whose preaching suggests that there are superhuman interests that individuals should be enticed to follow.
Adam Smith established for us the principle that, if we each pursue pour own individual interests as we see them, guided by our own individual morality, great results will emerge for all individuals who participate in the community. Set your own goals and pursue them with confidence and energy and do not let politicians impose constraints. Assert your individual independence with pride.
5) Be an entrepreneur and help to fix other people’s problems.
One of the justifications politicians invoke for their laws and regulations and taxes and fines is that they are aimed at solving social problems. We know there is no such thing as a “social problem” because there is no such thing as society. There are just individuals. So they are claiming that they can solve the problems of individuals.
In fact, the only way to achieve such a goal is through entrepreneurship. The entrepreneur is an individual who identifies the problems that people want solved, and develops a solution that he or she can offer for sale. If people buy, they’re indicating that the offering does, indeed, solve their problem. If the entrepreneur makes a profit – the sale price is higher than the entrepreneur’s costs – it’s a signal that the solution is highly valued.
This is the way the market works to solve problems. Becoming an entrepreneur will give you the immense satisfaction of participating in this process, perhaps even leading it in your domain or your locality. By solving problems, you will make a genuine contribution to progress, innovation, and quality of life – something politicians will never do.
In a most depressing episode of EconTalk posted on May 29, 2017, host Russ Roberts brought together columnist George Will, author P.J. O’Rourke, and David Boaz of Cato Institute, to discuss the State of Liberty. The conclusion was that Liberty is not doing well. It’s losing the argument. People seem to prefer high taxes, the Federal Reserve, the big government that those institutions fund, and the handouts and entitlements that big government provides.
Many decades before EconTalk, Henry Hazlitt authored an article and a collection of essays under the title, Is Politics Insoluble? His conclusion – after much erudite discussion of history, philosophy, civics and political science – was, in a word, Yes.
Why are we losing the argument for Liberty?
Why is politics insoluble, and why is Liberty losing the argument? It’s because we have lost all sense of individualism. America was conceived in liberty. Thomas Jefferson’s words in the Declaration of Independence draw on John Locke and the theory of natural rights – that the individual owns his or her own body (life), and is free to act to achieve their own goals (liberty), in the belief that doing so will improve their circumstances (the pursuit of happiness). This is individualism – individualism true, as F.A. Hayek put it.
Individualism is the answer
The individualist is not selfish, not isolated, not disconnected. The individualist understands that his or her role in society is connection and collaboration. They know that society advances when each of us helps others to improve their lives and to feel better about their own circumstances. That’s true in commerce, where free market exchanges take place only when the buyer feels good about their purchase, and the seller feels good about having made the transaction. It’s true in being a good neighbor. It’s true in education. It’s even true in blogging and journalism (although perhaps it gets a bit confused when the news is “fake”).
The individual’s relationship with society is reciprocal. The goal for the individual is win-win exchanges with other individuals.
In collectivism, everything’s politicized.
The opposite is true in collectivism. It rears its ugly head in American society today
especially in the form of politics. Politics is never good for individuals. It’s always about
groups, mostly special interest groups fighting for an unfair share of the pie of
government largesse, and aiming to defeat competing groups aiming for the same
outcome. Politics is win-lose. When there’s talk about government picking winners, it
must be remembered that they are also picking losers.
It seems like everything is politicized today: race, gender, class, country of origin, religion, schools, work, television programs and website content, facebook posts and tweets. It’s amazing how this nation of individuals has become so collectivist in its recent history.
Individualism makes politics irrelevant.
If we could return to the philosophy of Individualism, we could cure a lot of ills. Individualism is anti-politics. Individualism has no special interest groups. Individualism does not classify into race, class or creed. Individualism listens to ideas, not ideologies.
Politics may well be insoluble. A widespread resurgence of Individualism would make it
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