It matters how societies shape themselves. Despite this, few individuals debate or continuously review—let alone attempt to change—the form of governance under which they have been born.
They wait for their societies to evolve, mature, grow old, and collapse. Some societies collapse in their relative youth through mismanagement, undefeated threats, or other causes. Some linger into sclerotic old age.
Given that many societies worldwide are evolving to the ends of their natural cycles, there is now a great opportunity to review what we have and what we could achieve with consideration.
No one, it seems, can accurately attribute the origin of the concept that the best government is the least government. It is widely accepted as a concept, largely in the breach, because there have been few examples of successful and powerful societies that actually have had little or no government structure.
We see repeated examples of how societies experience a decline in economic growth or performance in almost direct response to the rising imposition of greater levels of government controls and state dominance of their economy and society. The United States was a clear exemplar of this. In 1865, emerging from a massively destructive civil war (the results of which have still not been fully resolved), and with at least 620,000 direct deaths from the war, the United States embarked on an economic rebirth with few regulations from government.
By the beginning of the 20th century, it became the world’s largest economy, largely because of the organic rise of robber barons and oligarchs.
U.S. economic growth then began to reduce to prosaic levels in direct proportion to the imposition of regulation and the rise of the taxpayer-funded sector. The same model has been repeated elsewhere around the world. Economic growth and individual liberties—indispensable partners—are most likely to occur in societies before the imposition of government regulation and, as if to underscore the point, occur again only with an occasional government withdrawal of regulations (including taxes).
In general, however, government does not retreat from the growth of its own size and place in the economy, and this dominance is only possible at the taxpayer’s expense.
Governments will never willingly return any degree of sovereignty to the individual nor reduce their burden on the taxpayer unless voters reject high-tax politicians at the ballot box.
It must now be considered a maxim that governments—to fund their growth in numbers, power, and the dispensation of “entitlements”—must at some point exhaust the taxpayer’s resources and resort to borrowing. And once the borrowing has begun, the diversion of funds from tax revenues to service the debt reduces the ability of the government to deliver entitlements: the bribes to voters. So more funds must be borrowed.
Government, then, becomes a Ponzi scheme—a fraud in which early investors are repaid by future investors rather than through actual wealth creation—sustained only by the ability of a government to print money to pay for its excesses. But increased money supply creates inflation and the loss of prestige and trust in the currency.
For smaller economies, this leads to death in the short term. For larger economies with more tradeable currencies, it merely leads to death at a more distant date. But the larger the economy, the more sudden and violent the death when it does come.
Countries such as Argentina, South Africa, and China are already teetering on the edge of such a cliff. Nigeria and Egypt may not be far behind, along with Turkey. The United States continues to be protected because it owns and prints the most pervasive trading currency in the world. Still, there will come a time when—already resuming—trade reverts to a more bilateral status and other mechanisms, including barter and counter-trade. The dollar and the euro will become vulnerable. Germany, the bastion of the euro, also has the cliff edge at its feet.
The geography and people remain, but the government is lost into history and, with it, the associated debt. Much is lost with a repudiation of national debt, through the collapse of a nation-state. For Rome, at the end of the Empire, it meant a retreat into the Dark Ages from which Italy, the successor state, has never recovered. The Chinese Communist Party (CCP) claims to be the legitimate successor to the imperial state of China, but it is not. It repudiated the debt of Imperial China. China attempted to service the Imperial debt until the communists took over mainland China in 1949—but the CCP’s currency and prestige are not backed by the Chinese people, thus giving the CCP an unstable framework.
