Three articles have appeared here recently on the situation in Cyprus. This tiny, almost negligible, country can have no impact on the financial crisis that is coming. At least in terms of its dollar impact, it cannot. Relative to the rest of the world, it is equivalent to a pimple on an elephant. Cyprus’ economic size, however, should not be confused with its significance. Cyprus has already provided a service to the world, whether history ultimately recognizes its importance or not.
A previous article likened Cyprus to a modern-day American patriot – Cyprus Could Be The New Paul Revere – who warned the populace that “the British are coming” during the American Revolution. I equated the two events because both alerted populations to imminent danger. Cyprus, unwillingly and unwittingly, has performed this service to the world. The EU, ECB and the IMF revealed themselves and the true nature of government with their gangster-like ultimatum.
Arnold Ahlert minces no words when he describes the situation:
And make no mistake: this is a shakedown, comparable to a Soprano-style protection racket. “Nice little country you have there, Cypriots. It would be shame to see it run into the ground.”
Here’s the truth about what’s going on: we’re all Cypriots now. We’re all beholden to an international cartel of governments and bankers who don’t’ give a damn about “quaint” concepts like democracy, or national sovereignty. The Cypriot parliament voted 36-0 against stealing money from peoples’ bank accounts, but as far as the troika is concerned, they got the vote “wrong.” And while there is talk about coming up with a “plan B,” what that really means is, as it was said in “Cool Hand Luke,” that the MPs in the Cypriot parliament “gotta get their minds right.”
The situation in Cyprus puts the nature and methods of big government front and center for the world to see, and it isn’t pretty. From a public relations standpoint, this incident has been a disaster for government but a wake-up call for the rest of us.
Government has behaved as George Washington warned almost 250 years ago. It is force not reason. As governments around the world get closer to financial collapse, their methods become more desperate and increasingly indistinguishable from those of a professional criminal class as was pointed out by Albert J. Nock almost a century ago.
Revealing the true nature of government is a service that Cypriots unwillingly provided for the world. As a result, people are questioning the sacrosanct, benign vision of government. The realization that they have no more say as to what their government does than the Cypriots is a terrifying one.
There is no bad, unless you believe in big, strong government partnered up with big strong banks. For the rest of us, the Cyprus situation should be a wake-up call.
Here are a few of the take-aways:
- Government’s image as a compassionate institution is under attack. Government markets itself as a champion of the little guy. It pretends to be a force that ensures that the small are protected from the big and powerful. This shakedown of private depositors in Cyprus to bail out wealthy banking interests is easily seen as reverse Robin Hood behavior. Government favors itself and its wealthy cronies.
- Private property and the rule of law have been shown to be dispensable when government chooses.
- Society cannot exist peacefully without private property and the rule of law. Government, extended as it now is, cannot continue with these two pillars. Governments everywhere face solvency issues. They have overextended and have no way to meet their obligations within the boundaries of the rule of law and private property.
- Increasing recognition of the lawlessness of government makes economic recovery impossible. Investors see what is happening in Cyprus and realize there is nothing that can be done to prevent it from occurring where they are. Behavior becomes more defensive. Less money goes into new ventures and banks. More money “disappears.” Capital leaves jurisdictions where risk is high and flees to regions where it is expected to be treated better. The capital flight eventually turns into emigration flight, where human talent follows the capital. Regions with respect for the rule of law and private property will prosper while others deteriorate.
No force, not even totalitarian government, is stronger than individual desire for freedom and a better life. Oppression is a natural abuse of power. It can gain ground, but it cannot hold it for long.
Unfortunately for humans, history’s conception of a short time is longer than biology’s allowed lifespan. Oppression can exist for several generations before the irrepressible forces of human nature overcome it. For those who happen to live through these periods, no amount of philosophical musing can make up for their lost opportunity. The Soviet Union was a prime example. How many lives went unfulfilled as a result of the seven or eight decades of State oppression?
For those alive today, the process ahead will be bad. Economic well-being and freedom are going to shrink. Civilization will become less civil. Outcomes will likely be worse for our children and grandchildren than for us.
Some of us deserve our fate. We were accomplices in the process. We made it possible by falling for the siren song of government. Our children do not!
Most of us will escape the pain that our offspring will experience as a result of our ignorance and cupidity. If there is a hell after life, those of us who doomed several generations to future unnecessary suffering deserve to experience its full fury.