A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.
We have often quoted the above, attributed to Scottish economist Alexander Tytler in 1787, commenting on the (then) new American experiment in creating a republic.
Readers of this publication will no doubt agree that Tytler has been proven correct in both his concept and even his timing. If there remains any debate as to his premise, it may lie in whether the US (and for that matter, many other First-World countries) will eventually collapse into dictatorship.
Many—particularly American libertarians—hold out hope for the US in believing that the deterioration, although now dramatic, can somehow be reversed. Their hope is partially based upon the emergence of a few libertarian Congressmen, such as Rand Paul, and grassroots groups such as the Tea Party.
To be sure, there is a slowly growing awareness amongst some Americans that the country is headed in the opposite direction of what the American forefathers intended; and these Americans are growing stronger in their desire to reverse this trend.
Will they be successful? To answer this question, let’s have a look at what they are up against.
To begin, we should examine other collectivist efforts. In the Caribbean and Central America, we have seen numerous attempts at collectivism in the last few generations. Some have ended, while some are ongoing. So, for those that have ended, did the populations decide that they no longer wanted to receive largess from the government? Did they choose to return to self-reliance? Well, actually, no. What caused the return to self-reliance was the collapse of the system—the movers and shakers who are actually responsible for creating wealth, jobs, and production left with the advent of collectivism to contribute their expertise to other jurisdictions. When the collectivist governments reached the point that the productive people were so few in number that they could no longer support the collectivist system, the system collapsed monetarily, and the country needed to start over.
It is important to note that, when these countries did start over, they did not abandon collectivism because they no longer wanted the benefits that collectivism promised—they abandoned collectivism because it could no longer be supported.
Whilst this may seem obvious to any libertarian, it is easy to overlook the fact that in the collective mind of the population, the desire to return to collectivism had not ended; only the possibility of collectivism had ended.
It is for this reason that in countries such as Argentina, the population has still not accepted that the impossible Perónist ideal of the 1940s should be abandoned. As soon as one economic collapse ends, the people of Argentina begin the slow slog uphill to rebuilding their economy. At the same time, those who had once been the recipients of governmental largess are already dreaming of a return to the largess as soon as it can again be placed on the backs of those who are productive.
As an Argentine acquaintance of mine commented to me recently in Uruguay, “Our people never learn. Those of us who want to prosper must do so in between the crashes every 10 years or so.”
To be sure, after a collapse, one politician will espouse hard work and self-reliance. His opponent will espouse a return to governmental largess. For one or two elections, the former philosophy may win electoral favour, but, as in all countries, memories are short. Before long, the latter philosophy wins out.
This tendency first came home to me in 1980, one year after Margaret Thatcher became Britain’s prime minister. Following the election, I naïvely assumed that my fellow Brits had “seen the light,” and realised that socialism was a failed concept. At that time, so many of my colleagues agreed that we needed a return to conservatism, self-reliance, and a measure of abstinence.
But I was dead wrong. Only one year later, those same colleagues were saying, “Yes, we needed to be a bit more responsible, but we’ve done that bit. It’s been a year now, and we need some relief.” No lesson had been learned.
In America today, this can be seen in the Occupy Wall Streeters (OWS) as they justifiably oppose the rampant abuse of Wall Street firms and banks. The OWS mistakenly request stronger government regulations to rein in Wall Street, not understanding that government and Wall Street sleep in the same bed.
It is a historical fact that, once a majority in a country is on the government teat, the minority that seeks a return to a free market cannot achieve it through the electoral process.
So how will the drama play out in the US? Will there be riots? Will there be revolution? Each of these is possible, and it appears that the US government is anticipating all of the above, based upon its level of preparedness.
However, history tells us that such efforts rarely succeed. When the free-marketers are in the minority, their efforts do not succeed. They tend to assume that the majority of people will follow them, but the majority instead merely demand ever-more vehemently that government maintain and expand upon the entitlements.
No junkie has ever gleefully given up his use of heroin.
Finally, we might do well to have a look at such countries as Cuba and the USSR, which carried on as collectivist countries for generations. They were not overthrown. The USSR collapsed under its own weight, as Cuba is now also doing. Still, it is instructive to note that Fidel Castro remained in power longer than any national leader of the 20th century. Whilst he had his detractors, the Cuban people to this day fear the loss of collectivism as the Castro brothers reach the end of their lives.
The lesson to be learned is that collectivism is a self-renewing disease for which there is no antidote. Typically, it ends not with the realisation that it is a lie, but with the expiration of the free-market system on which it feeds. As much as collectivists decry the free-market system, it is the host upon which the collectivist parasite lives.
As long as those who create wealth, jobs, and production remain in a country that has caught the collectivist disease, they provide the lifeblood to the collectivist system and ensure that it can continue.
The great fallacy amongst free-marketers is, “Maybe it will turn around. Maybe people will wake up.” Historically, this has not been the case.
However, there are success stories to be observed. The Jews who exited Nazi Germany prior to 1939, the Cubans who headed for Miami in 1959, the Jamaicans who exited Jamaica after independence in 1962—all these have left a record of their own success, whilst their home countries went south. They have done so not by remaining in the dying country, but by exiting and starting over elsewhere.
Editor’s Note: Unfortunately, there’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation.
It’s not all doom and gloom; the world is your oyster, and there are very attractive jurisdictions that are cause for optimism. That’s what International Man is all about—making the most of your personal freedom and financial opportunity around the world. The free IM Communiqué is a great place to start.