As the long, slow death of economies and countries plays out there will be many twists and turns.
Cyprus was a shock to those who didn’t believe that the sanctity of private property and the rule of law could so easily and brutally be cast aside. It should not have been. History is replete with similar examples.
When history is written fifty or one hundred years from today, Cyprus will likely be, at best, a footnote. Archduke Ferdinand’s assassination preceded World War I just as Cyprus preceded the coming worldwide turmoil. Neither caused the events that followed (will follow). Both were effects rather than causes. Had neither happened, history would not have been altered.
Government has no conscience, but it does have a monopoly on violence and plunder. When its position is threatened, it protects itself. No incentives or barriers prevent it from unleashing violence when it is in its interest to do so. We are at just such a point in history. Government is increasingly seen as responsible for the mess we are in. Likewise, it is increasingly seen as inept, corrupt and self-serving.
Like a cornered, wounded animal, government will do anything to survive and retain its spoils. The brutality of this survival instinct is beginning to become obvious. Cyprus was a minor, first example.
Benevolent government is nice when things are going well. There are limits to how far the carrot of bread and circuses can go. When those limits are reached, the powerful stick is all that is left. Violence, death and destruction are all tools (or results) that government resorts to when it has no other way to survive. Recorded history is little more than governments cycling through carrot and stick periods.
The world is now going through a painful economic and financial crisis. Governmental cronyism and interventionism are largely at fault. Government is unable to solve this problem in a way satisfactory to itself. Nor is it able to fund the coverup of the problem much longer. It has about run out of the resources which enabled it to do so thus far.
As government continues to intervene, future decades of suffering and cruelty are only made worse. Law, private property and common sense, the DNA of civilization and social cooperation, are under attack. As seen in Cyprus, when these principles get in the way of government they are ignored and reduced to academic, philosophical concepts.
When government feels threatened, raw unmitigated power is unleashed. Oppression and tyranny result. Benevolence, even if the resources were there to continue it, is displaced with oppression. Rulers adopt the despicable but effective styles of Hitler, Stalin and other despots. The world is entering this phase of the governmental cycle. A new era of government savagery is just beginning.
The road to tyranny is complex. It is long and has many twists and turns. The civilized world traversed the least uncomfortable part of this journey over the past seventy years or so. Now, it enters the phase where the speed and pain are about to accelerate.
The developed world is heading toward a future that looked like the old Eastern Europe. The concept of freedom, often treated as an academic issue, is about to become a practical one. The potential horrors of government no longer will need to be described by quaint quotes from our Founding Fathers or warnings from individuals like Lord Acton. These horrors will eventually become a daily part of the routine. We will see a threatened beast attempt to protect itself by ignoring anything that hinders its ability to survive a bit longer. Concern for collateral damage to citizens or other countries will not matter.
The concept of freedom, now so dear to the Eastern Europeans who did not have it for so long, will be cherished as a result of its absence for future generations in the US and much of Europe. The pain of our current economic crisis will seem mild in light of what follows.
Simon Black outlined what is likely to occur in eight distinct steps. There is nothing original here as they are part of the rhythm of history. These depredations have been repeated for more than a thousand years. What may surprise is that they are coming to what we thought were civilized, developed nations. Even that is not new. Arguably, Germany in the 1930s was the most civilized and refined culture in the world. Civilization, culture and refinement were no defenses against the raw force, power and horror of Adolph Hitler.
Here is Mr. Black’s outline:
Expect these eight steps from the government’s playbook
by SIMON BLACK on MARCH 26, 2013
To anyone paying attention, reality is now painfully obvious. These bankrupt, insolvent governments have just about run out of fingers to plug the dikes. And history shows that, once this happens, governments fall back on a very limited playbook:
As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority.
Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.
Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax.
Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).
This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.
Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued.
We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureatePaul Krugman argue in favor of Capital Controls.
Wage and Price controls
When even the lowest common denominator in society realizes that prices are getting higher, governments step in and ‘fix’ things by imposing price controls.
Occasionally this also includes wage controls… though wage increases tend to be vastly outpaced by price increases.
Of course, as any basic economics textbook can illustrate, price controls never work and typically lead to shortages and massive misallocations.
Wage and Price controls– on STEROIDS
When the first round of price controls don’t work, the next step is to impose severe penalties for not abiding by the terms.
In the days of Diocletian’s Edict on Prices in the 4th century AD, any Roman caught violating the price controls was put to death.
In post-revolutionary France, shopkeepers who violated the “Law of Maximum” were fleeced of their private property… and a national spy system was put into place to enforce the measures.
Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size.
In the early 1920s, for example, the number of bureaucratic officials in the Weimar Republic increased 242%, even though the country was flat broke from its Great War reparation payments and hyperinflation episode.
The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.
War and National Emergency
When all else fails, just invade another country. Pick a fight. Keep people distracted by work them into a frenzy over men in caves… or some completely irrelevant island.