Markets, Democracy and Socialism

The Telegraph had this to say about the debate over the welfare state:

The truly fundamental question that is at the heart of the disaster toward which we are racing is being debated only in America: is it possible for a free market economy to support a democratic socialist society? On this side of the Atlantic, the model of a national welfare system with comprehensive entitlements, which is paid for by the wealth created through capitalist endeavour, has been accepted (even by parties of the centre-Right) as the essence of post-war political enlightenment.

Oh that it were true that the US were having an honest discussion regarding the size, role and responsibilities of government. No such debate is occurring here. Nor is one possible. The entitlement culture of both the political class and the dependency class prevents meaningful discussions here just as they do in Greece or the rest of Europe. Yet, the wounds of the welfare state are as deep on our financial and economic system as they are in Europe. In many respects the US financial system is in worse condition than many of the European nations.

How far the US has strayed from its beginnings! John Locke, an inspiration for the writers of our Declaration of Independence and Constitution, defined the role of government quite simply:

Government has no other end, but the preservation of property.

Locke’s vision of government was the one adopted by the Founders and codified. Today, this vision is considered barbaric and cruel. The conception of property itself is under attack and has been for generations. The Rule of Law, meant to ensure that men were treated equally and knew in advance the legal boundaries is routinely overridden by the criminal class we accept as politicians. Increasingly, we ignore the Rule of Law, substituting for it the Rule of Man which has no precedent other than convenience and can we get away with it.

Our differences with than Europe have now narrowed. They are measured in degrees rather than meaningful magnitudes. Philosophically there are remnants where we still differ, but not practically. We are all Socialists now.

Capitalism and freedom, the drivers for the success of this nation, need space in which to operate. Big government also needs space. Unfortunately, they are competing for the same space. The bigger government becomes the less capitalism and free markets remain. Governments grow at the expense of the productive sector. Liberty and prosperity are diminished as government grows. That is why there is an inverse correlation between the size of government and the economic well-being of a society.

Government directed free markets is a contradiction in terms, an oxymoron. Democracy and free markets are also incompatible. The Founding Fathers abhorred democracy. Benjamin Franklin was adamant that what the US was was a Republic “if we could keep it.” The founders provided us with a Republic in an attempt to mitigate the destructiveness of democracy. John Adams was particularly blunt in his assessment of democracy:

Democracy… while it lasts is more bloody than either [aristocracy or monarchy]. Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There is never a democracy that did not commit suicide.

The Founders succeeded in preparing the greatest documents for freedom and prosperity the world has ever known. Over time, self-seeking politicians and businessmen worked together to gain advantage at the expense of the many. Eventually, the founding principles of the country were weakened. Democracy overtook the Republic. So long as something was favored by the majority, it was implemented regardless of what the Constitution allowed.

Democracy inevitably leads to Socialism. The majority abuses the minority until the welfare state destroys the productive sector of an economy. The welfare state is the cancer that now threatens the survival of all modernized Western economies.

That is the current state of the world with political rulers that will not or cannot roll matters back.