At Last, the Death of Politics

Image by scottchan

For over a year now the Eurocracy has tried to put Humpty-Dumpty together again, to somehow restore belief in the solvency of the European welfare state, which is ultimately the real issue at the core of the current malaise rather than just the  problems of the more recklessly extravagant periphery. The Greek state cannot live within its means but neither can any of the others. Meanwhile, over at the global superpower, the public is slowly waking up to the fact that this government, too, is going bust, thanks to out-of-control entitlement programs, expensive bailouts, and the suicidal policy of everlasting peace through everlasting war. For the past six months, all of the United States government’s issuance of new debt has been bought by its compliant central bank and paid for by the printing press. As the politicians of this empire in decline are fiddling on the aptly named Capitol about a few billion in savings here and a few billion there, trillions are getting burned by the unstoppable state machinery. And over in Albion, the hotly debated “savage” cuts in public spending still seem the figment of tabloid imagination as they have so far not prevented the country from accumulating another £145 billion in debt over the past 12 months.

No wonder the world’s leading state paper currencies are locked in a deadly race to the bottom, as is apparent to everyone who chooses not to measure one fiat money against another fiat money but more appropriately against anything of real value, anything that cannot be printed by the kleptocracy like confetti. The reason: state spending globally is out of control and the mirage of solvency can be maintained – for now at least – only with the help of super-low administrative interest rates and debt monetization from the central banks. Our politicians are running out of fingers to put into the growing number of holes in the sinking ship that is – the state.

Should we feel sorry? Worried? Desperate? – Well, with apologies to Oscar Wilde, but one has to have a heart of stone to read about the struggling political class without laughing.

The modern state is in terminal decline. Good riddance.

While I do not want to belittle the upcoming upheaval and the pain it will cause to many, all of us who love liberty should rejoice. The state is bust. Game over.

Hoorah, the state is dead!

Karl Hess; photo by mises.org

We libertarians have been treated as slightly eccentric for years, no, for decades. Our plans to convince our fellow men and women of the benefits of small or no government, of the power of voluntary cooperation on free markets, of the global division of labor and of personal liberty – they were greeted with the pitiful smile reserved for the hopelessly naive. No political party would ever win on such a platform, we were told. If given the choice, the public votes not for freedom with all its uncertainty but for the caring, paternalistic state with free health service at point of delivery – and while we are at it, why not all sorts of other freebies, too? And, let’s face it, our critics were right. The chances of Ron Paul becoming the next American president are – well, zero. The political process – in particular modern mass democracy in which every vote counts the same whether from a taxpayer or tax-consumer – is designed to increase state power, not to limit it. As Mark Steyn has observed so pointedly, government is like coffee at Starbucks: It only comes in three sizes: tall, grande and venti.

But as good libertarians we should not rely on politics like our enemies, the statists, do. That is their game. Let’s not play it. We should rely – as befits proper anarchists – on our fellow man’s self-interest. Not more, not less. Most people prefer more goods to fewer goods. For that they need markets, not politics. Politics just gets in the way. Just as the market is working and delivering the goodies every day even if most people don’t understand why and how, so the state is collapsing under the weight of its own inconsistencies whether the people still want to believe in it or not.

“Events, dear boy, events.” All we have to do is sit back and let the state collapse. We know that in the long run, the state is dead. And the long run may be sooner than we think.

The only thing slightly more ridiculous than the political class with their sweaty eagerness to run our lives and to stay relevant despite their empty pockets, is the earnestness and gravity with which the members of the international commentariat report about it. Like the politicians they are writing about, they too perceive every problem as a grave political challenge that can only be met with better, newer, and, in any case, more policies. All that tiresome drivel about how we need more cooperation between governments, more dialogue, more solidarity, more bipartisan agreements – as if combining two or three penniless fools would make one wealthy genius.

Of course, every problem is political – in this sense:

“Politics and politicians not only contribute to the problem. They are the problem”

as John Shuttleworth, co-founder of The Mother Earth News figured out already in the 1970s, back when most environmentalists were still soft-spoken countercultural types and not yet angry authoritarians.

What if they gave a G-8 summit and nobody showed up?

Take the discussion about the new head of the IMF. The common-sense response should be this: IMF? Why do we have an IMF? Do we need it?

IMF HQ: "no regulation-free zone"; Photo by IMF

The IMF was part of the Bretton Woods system of monetary management after the Second World War. Bretton Woods is dead since 1971 but the IMF still exists as it has managed – like any self-respecting, fully tax-funded bureaucracy– to outlive its original mission. Now that its elitist doyen has been caught with his pants down, his job goes, naturally, to another member of the class of card-carrying etatists that France seems to have an unlimited supply of.

The best thing the IMF could do for free trade and prosperity is to dismantle itself.

But who am I to say such nasty things? As the director of the preposterously named Earth Institute at Columbia University, Jeffrey Sachs, told us in yesterday’s FT:

“There would still be plenty to do at IMF headquarters. The world economy is rife with lawlessness and recklessness, with tax havens and regulation-free zones catering to the avarice of globally mobile capital.”

Woah! Regulation-free zones? We can’t have that, can we?

What kind of economist is Professor Sachs, I wonder, if he really believes that regulation and tougher tax enforcement are going to make people better off? Capital is the basis of our prosperity. Only by increasing the ratio of capital per capita have the Western economies become so wealthy over the past 100 years – and luckily for the developing world, that capital is now globally mobile. As long as Professor Sachs doesn’t get his way.

If given the choice between a global economy hyper-regulated and heavily taxed under the auspices of the likes of Professor Sachs and the IMF’s new Marie Antoinette, and “lawlessness”, the world’s poorer people would be well-advised to take “lawlessness” any day. Or, better yet, they should make their own laws. The ones that suit them – which are the ones that attract capital, not repel it.

In one way, I have to tame my optimism. As the Western states go bust, politicians and the worshippers of state-power will probably get desperate and aggressive. In the “developed” world, I could envision a period of more state intervention, not less. We will face higher taxes, more aggressive enforcement and soon also capital controls. But these futile exercises are but the painful death-throes of the state just before rigor mortis sets in. None of this will last. Looking into the immediate future, I am a pessimist but looking further ahead, I remain an optimist.

Ayn Rand famously said about Barry Goldwater’s presidential bid in 1964 that “it is earlier than you think”, meaning that the electorate was not ready yet to embrace Goldwater’s Old Right libertarian message. The public still believed in the big state and in politics. Of course, she was right. And Goldwater – maybe the most impressive character in 20^th century American politics – got annihilated at the polls. But as to the demise of the modern welfare state funded with ever more paper money and ever more debt – it may be much later than we think.

(Talking of Goldwater, I “borrowed” the title for this Schlichter File from the outstanding essay “The Death of Politics” by Karl Hess, the genial anarchist and former Goldwater speechwriter, which you can read here.)

In the meantime, the debasement of paper money continues.