“[T]he government has to take resources from someone before it can dole
them out to others. This act of taking destroys an economy. The more you take
from the productive members of society, the less productive they become.
That’s the primary lesson of the history of socialism.”
The above quote is from Porter Stansbury – from his book, America 2020.
It states a concept that I’ve described for years, but Porter states it more
succinctly than I ever have. In particular, it negates the argument by many
“progressives” that, even if they don’t recommend full-on socialism, they
believe in getting “just the right mix” of socialism and capitalism to create
the ideal system.
Unfortunately, as viable as this concept may sound, even moderate
socialistic national policies result in moderate deterioration of the system.
It’s not unlike being “just a little addicted” to heroin.
It may be argued that, “That’s different. With heroin, the addict will
always end up wanting more and he’ll become even more dependent.” Exactly so
– and that’s unquestionably true for socialism as well. Once the concept of
“free stuff” is part of a nation’s governing system, the desire for more
free stuff will inexorably rise.
And, of course, historically, we have seen that governments always
step up to the plate whenever the demand for more free stuff is suggested.
But why should this be so? Wouldn’t a more conservative government be less
likely to proffer entitlements than a more liberal government?
Actually, no. To believe this is to misunderstand the very nature of
governance. Those who are governed like to believe that their government
exists to serve them, and all political leaders are quick to encourage
this perception. However, amongst themselves, political leaders fully
understand that they exist primarily to feed off of and dominate the
electorate. Of course, they can’t actually admit this, but, regardless of
party affiliation, that is their very raison d'etre .
In a free-market society, a government is not especially necessary. It may
be needed to defend the country if it’s invaded, or, arguably, it may be
useful in creating a national currency, building national highways, etc. (But
even these needs may be argued.)
A free-market society is beneficial, as it creates prosperity. It enriches
the population with both money, goods and services. It also rewards those who
are the most productive. However, it does tend to leave behind those
that are less productive, and here’s where political leaders find their
opportunity to cash in.
Let’s say we have a country that’s made up of five voters, with their
respective net worths as follows:
Voter A: $1
Voter B: $10
Voter C: $100
Voter D: $1,000
Voter E: $10,000
If I were running for office and declared that no one should own more than
$10, I would not be elected, as most voters would quite rightfully regard me
as a threat. But if I were to declare that “the greedy rich” have too much
money and should be required to “give some back,” I might get all voters
except Voter E to vote for me.
Why should this be so? Because no one thinks of himself as being
amongst “the greedy rich”. For the man who is worth $1,000, the greedy rich
are those who are worth $10,000 or more. But, likewise, the man worth $100
thinks of the greedy rich as those worth $1000 or more. Human nature dictates
that we don’t see ourselves as greedy, so it’s not too difficult for
politicians to convince us that those who have more than us are greedy.
Further, once we’re convinced of this, it’s not too difficult to fool us into
believing that the greedy rich have, in some way achieved this wealth by
swindling us out of it. And, now that you mention it, yes, we would
like to have some of it back, thank you.
So, any population becomes an easy target for leaders who promise to take
from the rich and “give back” to the less rich, like a modern-day Robin Hood.
But what of that claim that “just the right mix” of socialism could take some
away from the rich, but leave prosperity intact? Well, here’s why that will
never happen in any country…
Political leaders, as stated above, do not exist to serve the
populace, they exist to feed off of and dominate them. They cannot do
this without the wealth of the electorate passing through their hands.
The more of the electorate’s wealth passes through their hands, the greater
the amount that can be skimmed off to both enrich themselves and increase
their power. (Only in Uruguay does the President leave office driving the
same Volkswagen he did when he took office.)
And so, it’s the nature of governments (whether they claim to be either
conservative or liberal) to seek to increase the size of government annually
(requiring ever-more revenue to pass through their hands) and to take an
ever-greater part in the hands-on distribution of the nation’s wealth. All
governments will do all they can to grow themselves, as it’s very much in
their interest to do so. All governments will, regardless of their
party rhetoric, continually pursue a greater level of socialistic policies.
In this regard, political parties are interchangeable.
So, where does that leave the individual voter? Well, the vast majority
will vote for the candidate whose rhetoric most closely follows his own
ideals, but he will surely be the loser as a result. (Campaign rhetoric almost
always proves to be a lie.)
The choice, really, is whether the individual is living in a jurisdiction
where he believes the government has already become so socialistic that he’s
a net loser, rather than a net recipient. Beyond this point, his future can
only be on a downward trajectory.
This is a most unpleasant conclusion to come to grips with, as it informs
the individual not only of his current situation, but the rest of his life.
In standing back and observing his entire future from a greater vantage
point, he realises that, increasingly, he will be beating his head
against the wall if he remains where he is.
Those who internationalise, do so with the understanding that, if they
choose one country because it’s the most ideal to do banking in and choose
another because it’s the most productive to invest in, they will prosper. At
some point, they additionally realise that it’s also beneficial to apply that
logic to their choice of country of residence.
Throughout the life of anyone who advances himself, there’s a tendency to
change neighbourhoods from time to time, to attain a better quality of life.
Yet, most people drop this logic as soon as they reach the borders of the
country they were born in. In truth, the decision to move beyond national
borders to choose a neighbourhood – one where the system has not deteriorated
to the point that it’s dramatically usurping the wealth of the individual –
is not such a great leap. In truth, it’s relatively easy to do.
In much of the former “free world”, socialism is here to stay, but the
individual citizen needn’t be. He may vote with his feet and move to a better
neighbourhood.
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Jeff Thomas is British and resides in the Caribbean. The son of an
economist and historian, he learned early to be distrustful of governments
as a general principle. Although he spent his career creating and
developing businesses, for eight years, he penned a weekly newspaper column
on the theme of limiting government. He began his study of economics around
1990, learning initially from Sir John Templeton, then Harry Schulz and
Doug Casey and later others of an Austrian persuasion. He is now a regular
feature writer for Casey Research’s International Man
(http://www.internationalman.com) and Strategic Wealth Preservation in the
Cayman Islands.
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