Even great nations can fail if seeds of destruction get planted and no one bothers to dig them up and toss them into the trash. A cardinal example is the Roman Empire, which printed money to pay for ‘bread and circuses’ to distract the masses and hired Visigoth barbarians who would only work for you if you paid them in gold.
Rome promised the barbarians not just gold, but pieces of land, if they were to enlist themselves in Roman protection forces. When promises could no longer be kept due to over-extending itself, Rome found itself sacked in 410 AD, by the very barbarians it had taken on as “hired guns.”
Here are the 4 main ways to bring even a strong nation down:
government regulation of private enterprise
unsound (fiat) money, as issued by a central bank
government (centralized) spending
government protectionism, mostly in international trade
It’s no mistake that 3 of the 4 ways to bring a nation down involve government, and even the central bank option is never completely independent of government, and most often acts just as if it were an arm of the government.
Regulation of Private Enterprise
In the middle 1800s, when cases first went to courts asking for it to be allowed for governments to intervene into private enterprise, those cases were shot down. The main group pushing for price controls were farmers of the Midwest who paid steep railroad shipping prices to ship grain out East, where millions lived.
Grain storage facilities were often also owned by the railroads, putting the farmers in a precarious position either way. But then news surfaced of a man in Europe who popularized the notion of interfering with private enterprise: Karl Marx.
The First Communist International was held in London in 1864, led by Marx, himself. This event inspired hope in those who seek to interfere in the private business affairs of others. Marxism wasn’t a good philosophy, but it told many people what they wanted to hear.
Here is Marx telling his readers how, if they just adopt Communism, they’ll get to do whatever they want:
In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic. --The German Ideology (1845–46)
The main Marxian idea is this:
Generating wealth isn't hard and doesn't have any complex requirements or emergent properties, such as is found in dynamic and rivalrous, agent-based systems. Therefore, because getting something from nothing is so easy, government intervention should occur whereby people are able to get their fair share while doing what they want to do -- regardless of whether or not it is economical, or even economically feasible.
This shows a lack of understanding of the basic economic concepts of division of labor and specialization. But nonetheless, it did turn the tide and price controls by state government were ultimately approved of by the US Supreme Court in Munn v. Illinois (1877).
Later, in 1890, the Sherman Antitrust Act would put the federal governent in charge of policing prices nationwide. You could get fined or jailed for one of these 3 pricing strategies
prices lower than your competition (undercutting)
prices the same as your competition (collusion)
prices higher than your competition (price gouging)
In other words, government gets to interfere in private enterprise (because the Act says so). It doesn’t have to be economically-feasible, but it’s the law.
Unsound (fiat) money
Before a central bank got created in 1913, the USA was doing well. Free enterprise can be volatile, but always tends towards improving the affordability of a standard of living for the greatest number of people. Besides that, it is morally correct. Here’s the record of improvements (green and purple markings added):
Notice how the USA successfully recovered from 12 recessions (shaded areas) from 1863 to 1913, without a central bank. People could afford to buy almost 2% more things each year. But some influential people, channeling Mayer Amschel Rothschild (quoted below), wanted to control the money:
Give me control of a nation's money and I care not who makes the laws. — in 'The Creature from Jekyll Island' (American Opinion Publishing), p. 218
They got their foot in the door in 1907, due to a rich magnate, F. Augustus Heinze, trying to corner the market in copper. Heinze, his two brothers, and a fourth accomplice — Charles “the Ice King” Morse — attempted to corner the copper market and they collectively 'lost their lunch money’, so to speak.
But Heinze ran a bank in New York, and was apparently associated with three other banks, and people didn’t want to bank with a crook who tries to screw people over. There was a run on the 4 banks associated with their “get-rich-quick” scheme:
Long story short, the bailout of this crooked behavior led to the setup of the National Monetary Commission (NMC), mostly by efforts of Senator Nelson Aldrich. Senator Aldrich was the Chairman of the NMC, and it ultimately recommended a central bank.
But when big spender and quasi-fascist President Woodrow Wilson signed the Federal Reserve Act in December of 1913, it was like a kid who created a candy store. Even nominally, more money was borrowed in a single month from Federal Reserve than would be the case for over 50 years (green markings added):
That’s almost $3 billion in a single month. That record would be broken, but only after Nixon took the USA off of the so called Gold-Exchange Standard (closed the gold window). The main reason for fiat money isn’t because it is necessary. The persistent economic growth from 1863-1913, including full recovery from a dozen recessions, proved that.
The main reason is so that hyper-acquisitive misers can get more rich, and the enablers are “officials” such as President Wilson, FDR, and LBJ who show themselves more than willing to spending other people’s money for their own personal initiatives.
The new plan is the Central Bank Digital Currency (CBDC). If put into effect, it will be much more of the same: the richer richer, and the poor poorer, but on a scale never seen before in human history.
Government (centralized) spending
Because a central bank was created, government can spend money on programs that the citizens would never, ever agree to pay for via taxation. An example would be a program of government censorship, only given a euphemistic name, such as The Ministry of Truth, or maybe even the Disinformation Governance Board.
But besides being undemocratic, centralized spending kills economies. Check out the long term outlook for the USA, for instance (orange markings added):
State and local governments already spend 14% of GDP, so if the federal government spends 29.1% as projected, then government is allocating 43.1% of the resources of society.
Besides the destruction of wealth creation which comes from such a high transfer of wealth from the private sector to the public sector, the government revenue cannot keep up with the spending, leading to double-digit annual budget shortfalls.
That’s like putting 10% of your grocery bill on a credit card, hoping you’ll never max out and you’ll never get your rates adjusted up. The history of federal revenue provides evidence that suggests that the federal government cannot afford to represent any more than about 17% of GDP (green markings added):
But just projecting 6 federal budget line-items forward in time reveals that, without reform, a sovereign debt crisis is coming to the USA (purple markings added):
There is no future in having just 6 things chew up 26 cents of each spent dollar, with interest on the debt alone approaching 8% of GDP (8 cents of each spent dollar). Because there is no future in it, the elites behind this “government racket” are attempting a Great Reset.
It’d be better to uproot the original seeds of destruction though.
Note: “Protectionism” will be put off to the next installment