Whenever there has been a massive technological advancement, we, as a species, have enjoyed large gains in life expectancy, standard of living and general opportunities. When we learned how to grow food instead of chasing it through the forest with pointy sticks, we were able to settle down and build up capital.
These buildups of resources, also known as savings, were used to expand our capacities to produce various goods and services. When we learned to automate farming, one machine was able to do the work of five men. Over the course of the 20th century, the number of farms fell by 63 percent while food production increased.
The invention of the internet allowed us to communicate instantaneously, drastically increased productivity, created countless new industries and so on. However, if you look at the past 15 years, when the internet and related technologies have really matured and seen universal adoption, we see stagnation.
In utter defiance of the precedence set by similar advancements in the past, such as the industrial revolution, there has been virtually nothing to come from our shift to the digital age. Median wage has been stopped dead in its tracks while the cost of living continues to grow. Some force outside of the market has absorbed most of what should have been vast amounts of new wealth.
Why are economic conditions worsening? I believe that this painful situation was set in motion many years ago. There are many contributions to the national debt that eclipses our GDP including the irresponsible expansion of our military, rampant protectionist policies, increased regulation, the war on drugs, expansion of the welfare state combined with lax immigration laws, expansion of licensing laws, centralized fiat currencies, foreign policies which armed those who would later become powerful terrorist organizations, the rise of corporate welfare and the remarkable spending on the part of the federal government.
Interestingly enough, the national debt is now almost exclusively purchased by the Federal Reserve instead of private investors. This has led to a cumulative inflation of 10 percent since 2008, which wreaks havoc on savings and forecasts the decline of the dollar. In short, the growth of the government has finally outpaced the free market.
Some of you may blame capitalism, and I understand that. The rich are in fact getting richer and the poor are in fact getting poorer. However, if the reasons given above do carry any weight when determining why it is we find ourselves stuck in a 15-year-long stagnation, we must acknowledge that perhaps overreach by the government into the market may have something to do with it. It is generally accepted that money runs politics. As a result, many people rightfully condemn businesses which purchase political favors, although they ought to condemn the politicians in the same breath. Actively lobbying congress is extremely beneficial to those businesses and Congress. Why worry about competing in the market when you can simply purchase a law that makes it more difficult for your competitors to keep up?
The result has been a government-directed economy because it has been the role of economic legislation to funnel money to various industries. Most, if not all, protectionist policies, trade deals, tariffs or subsidies are funded and designed by corporate lobbyists to benefit their companies.
I feel it is very important to point out that this is not capitalism. It never has been capitalism and never will be. Our current economic system is one in which the state essentially partners with large businesses to facilitate mutually beneficial arrangements with law. It’s all heavily interventionist, but the fact that much of it is designed to benefit certain industries or businesses makes it clear that the economy is being deliberately directed with such laws.
We may call it interventionism, but when free trade capitalism is stifled to this extent, it leaves me questioning what economic system we actually have. It almost seems like the mutant offspring of fascism and socialism wearing a nametag which reads, “Hello, my name is Capitalism.” This is to say there is an abundance of intervention in our economy, but people still believe that we live in a capitalist system.
This falsehood then leads them to blame capitalism for our troubles, and that is the problem I am trying to address. This is something most people, both Republicans and Democrats, consistently get wrong.
When you think of capitalism, think free trade. If any law infringes on your ability to work, trade, speak, travel, or spend money, it’s no longer true capitalism.
