October 17, 2008

Economics, Part III: Revolution

Links to the first couple of posts:

Part I: Pros and Cons
Part II: Endgame

America began by a revolution, not of values, but of economics. Americans did not like being economically subject to the will of a superpower hundreds of miles away across a deep and very cold ocean. The freedom sought by the first Americans was not truly of personal freedoms of religion, morality, etc., but was of an economic and political nature - the two are deeply intertwined. The Boston Tea Party protested economic tarrifs and increasing prices; many initial skirmishes were fought over the way British soldiers were billetted without "choice" in American homes, the same soldiers who imposed the taxes and levies on American colonial businesses. America was not created to free the individual, but to free the economy from foreign domination. While individualist language may have been used to justify the revolution, economics played a disproportionately large role in the motivation behind it. The slaves did not rebel, nor did the Native Americans; it was the middle class and the gentry, those that had a stake, something to lose, that rebelled against British economic policy.

And so a new country was created, though one might claim that it's really an economic institution.

And institutions require support. To maintain the "freedoms" of a collective (we'll get to that), to keep others from violating their ability to maintain an open number of possible choices (and we Americans are obsessed with having a large number of choices), structure was needed, and a government was created. Nothing too intrusive, just enough to provide some discipline to those that didn't quite fall in line with the values of individual economic freedom; for example, if you tried to take from somebody else (stealing, a crime that requires the assumption of "personal" instead of "collective" property), you were violating their economic "rights" and thus forfeiting yours. You took something and so you went to "jail", assuming you were caught.

But as a country grows, it requires a larger infrastructure. Those "jails" I mentioned are part of that infrastructure; facilities become necessary to support business and commerce, such as government buildings, lavatories, fire and police services, and hospitals. Who is to pay for all of this? Ideally, the people who reap a benefit from its creation; thus, a system of taxes was created to allow everybody to contribute (never mind that taxes were one of the initial reasons for rebelling against the British in the first place). But again, the infrastructure needs governing so that everybody contributes their "fair" share; it is not voluntary because some might use the public facilities without having paid for them; we are, after all, inherently selfish, and so if we can get away with reaping a reward without having to make a sacrifice, we will. And so the government role was increased a bit more each time a new public system was created; a department of transportation, a department of the interior, etc. And this required funding, and so the department of the treasury was created to oversee taxes. The federal government was created with a modicum of internal accountability, "elected" by the people, to be replaced on a regular basis.

But over time, to be elected required a "campaign," which required money and time, both of which are commodities held by only the wealthy. A middle-class or low-class American has no money for campaigning, ours is a financial situation still intent on survival, if not a few luxuries. And so the wealthy, who are obviously not concerned about their own economic survival (that's a given), became concerned about their political survival, the increasing of their wealth and the maintenance of the power structure they had built for themselves. New laws were created to maintain the system, government was expanded, and a department of defense (homeland security) was created to preserve the growing economy from foreign and domestic enemies, those that might thwart our status quo.

The larger the institution, the harder and more expensive it is to maintain.

You see where this is going, of course. America as we know it is a far cry from where it began, yet it is the inevitable result of its origins. Far from the "ideal" capitalism of our country's youth, we are fast becoming a socialist state in which the wealthy form a ruling class to impose "equality" ("fairness") on everyone in the name of the maintenance of a standard of living. The historical end result of capitalism is inevitably a socialist state, specifically to maintain the notions of capitalism. It happens gradually, slowly, but as generations pass away, they accept the new status quo and then try to maintain it. Their maintenance, coupled with the entitlement we talked about before, only increases the drive towards socialism. Goods and services become standard, a "necessity" rather than a luxury. You can see this in the stereotype welfare citizen, watching tv from his satellite dish while avoiding looking for a job; take it away, and you've impinged upon his "rights." Likewise, try to tell the Wall Street venture capitalists that what they have is extravagant, and you'll get a lecture about how they have a "right" to what they have.

Where does it end? Ultimately, it will always end in revolution. The government will eventually become so large that no amount of money can maintain it and either it will be paired down or it will be torn down. Since no government ever voluntarily reduces itself (despite idealists like Sarah Palin), revolution - the tearing down of a government structure - results when the people can no longer legitimize the abuses. Alternatively, the government eventually gets so large it implodes upon itself in a fit of bureaucracy and a different sort of revolution breaks out in which somebody tries to pick up the pieces and fit them back together: the military, a foreign power, cartels, an internal faction, or perhaps the people. We saw this with Rome, with the Catholic Church, with many protestant churches, and ultimately, we will see this with America.

(to be continued ...)

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