In a free society, government is limited to defending its citizens from foreign threats and domestic criminals. There is very limited involvement in the economy, if any, since individuals are in charge of their own lives and their own businesses. Free markets prevail and property rights are protected. If there are disputes, they are settled by courts, juries, and judges. The government serves as a referee, not a Tsar.

 

Politics in a free economy is never an issue. It only becomes an issue to an economy when the government intervenes within that economy and imposes its will on others. There are basically three kinds of government systems that intervene into the economy and use force to change human action, and therefore change an economy.

 

There is communism, where a dictator imposes his will on the society and dictates the terms of trade, i.e. who gets what, and at whose expense. The Soviet Union was an example of this form of government and over time it collapsed of its own inefficiencies. It, in effect, went broke. Communism doesn't work as even the Chinese communist government will tell you -- in the economic sense. China is still a communist government politically but they turned to markets to help them survive.

 

There is also socialism, where a democratically elected leader, selectively redistributes the money of some for the benefit of others. Europe in general has adopted socialism in varying degrees within various countries. Economically it has struggled basically since the end of WWII. The unemployment rate has remained at over 10% for decades, upward mobility is virtually non-existent for most people, and the standard of living is stagnant. Socialism only works to the degree that it keeps an economy stagnant.

Then there is fascism - and I'm not talking about Nazism. Fascism is a system where property is owned by individuals on paper, but controlled and regulated by the government. Fascism can work for a time, but is the most insidious system of them all. It slowly enslaves people, then strangles the life out of an economy.

Cuba is an excellent example of communism. Castro took a vibrant economy and turned it into a command economy in the name of fairness. As dictator he made most things free, and took from the rich and gave to the poor to pay for his communist model. Soon Cuba went broke and stagnated. It has been frozen in time as a third world country with its citizens living in poverty and is barely surviving. It has been propped up and able to survive only due to the subsidies from other dictators such as Russia and Venezuela.

England is a good example of socialism. During WWI, England went to a command economy and virtually eliminated the free market economy they had lived under during the 19th century. England turned to institutionalizing socialism after WWI and went from the greatest political and economic power in the world to the poor man of Europe by the 1970s. Marx and Engels were taught prominently at the London School of Economics, and capitalism was a dirty word. Socialism is still praised and practiced in England although they have struggled from time to time to shed the bonds of socialism and return to capitalism. At best, England is a mixed economy, but has never returned to the kind of prosperity it enjoyed when it was free.

 

America is also a mixed economy, but we are flirting with a very different system. For example, we are witnessing governments raise the minimum wage in cities and states throughout America. California, New York, and the city of Seattle are the latest to implement 15 dollar minimum wages. And there's a call for a national minimum wage of 15 dollars an hour. This is an example of fascism at work. The owner of the business has nothing to say about how much he will be forced to pay a new employee. The government decides this. Again… fascism is a system where property is owned by individuals on paper, but controlled and regulated by government. (“You didn’t build that business” freely translated, means “You don’t own that business”.)

 

Referendums are a form of "democratic" fascism. Just as democratic socialism relies on the voting majority confiscating the money of the minority, (the 1% for example), democratic fascism relies on a vote of the majority of citizens to eliminate voluntary contracts between employer and employees, and takes over the function as “the boss" and sets wages. In the minimum wage laws just passed, no one asked the owner of the company what he thought the starting wage of an employee he just hired should be, or why.  The employer of a company has become irrelevant when it comes to wages.

 

Fascism has worked its way into every aspect of business. An employer must abide by government controls and regulations and run his business, not by what the free market dictates, but by what the government dictates. He will also be told who he can and cannot hire. He will be told who he must or must not serve. Remember the signs that used to hang in bars and restaurants, "We reserve the right to refuse service to anyone"? Today, that's a crime; it is the government that decides that. It happened very insidiously. And he even may be told whether he will be permitted to move his business out of the city, state, or country. In some cases if he tries, his business and/or his assets will be confiscated. The government punishes businesses that don't do what the government wants them to do under fascism.

If a businessman chooses to set up a branch of his business in another country, he may be coerced and his exports very well may be taxed through tariffs, or even prevented from being sold through the use of quotas. In most cases in this country, business people effectively do not own or operate their companies -- the government does.

Businessmen and women are simply employees of the State, serving a master that tells them what they can and can’t do, how and when to do it, and doles out the money they allow a business to keep through their tax laws. If a businessman can actually manage to succeed in this environment and make a profit, the federal government, state, county, and city will take a certain percentage of his profits and divide them up between themselves. Everyone calls this "private enterprise". It is not. It is fascism.

You see it in the case where a cake making company refused to bake a cake for a gay couple’s marriage. They lost their business when the government declared them criminals. You see it when the government can’t figure out how to break into a phone and decode it, and then decrees that Tim Cook, a man that has lifted the lifestyles of millions of people around the world and who is a modern day hero to many, will be a criminal and be sent to jail if he refuses to think and create for the government.

And you hear it in the promises of a presidential candidate that threatens 11 million Mexicans  - men, woman, children, grandmothers and grandfathers -  with being rounded up and deported for the crime of working. Now this is flirting with Gestapo style Nazism. (This proposed policy has recently been put on hold.)

 

And now many presidential candidates are threatening to prevent businesses from leaving the country to open up businesses abroad. This smacks of slavery. The blatant intent is for the most productive minds in this country - and their money - to be used in the service of society and the government. If they dare try to protect their money and their business they could be stopped by the IRS, the Treasury Department, or the Department of Justice. We see examples of this today as the rules of the game are being changed in mid-stream by whim and political edict.

Since businesses cannot survive for long under this system, they have been forced to pass on all the costs of higher wages, higher taxes, and greater government controls and regulations to their customers. A minimum wage will translate into a higher minimum price. This will hurt the poorest of society most since they will not be able to afford many of the products offered to them any longer. They are in effect being priced out of the market. (Imagine what a Big Mac will cost in California in 2022 when the 15 dollar an hour minimum wage is fully implemented.) Only the well-off will be able to afford many products that all can afford today. All the remaining consumers will pay most of the costs, allowing many businesses to stay in business but only at the expense of the consumer.

But don't blame businesses for raising prices and lowering the quality of their products -- blame government. Make no mistake, today's businessmen and women do not work for themselves. They work for the government.

These are just a few examples of fascism and how it destroys businesses and eventually the economy. It is occurring today as we witness our standard of living fall and stagnation prevail. It is a system that has been evolving for decades and has now finally taken its toll on the economy. Free enterprise has for the most part been replaced by democratic fascism.

People are angry. They have the sense that their destinies have been taken out of their hands. They do not understand what forces have led to this devastating stagnation. Wages have not risen. Standards of living have fallen, and the rich get richer and the poor get poorer. They blame it on capitalism, but capitalism in this country no longer exists as it did in the era of Reagan. The society has been "transformed".

Many tell us that it is the banks fault. But the banks are the government today. Interest rates are set by the Federal Reserve Board, Mortgages are extended by Fanny Mae and Freddie Mac which have been nationalized, and there are more regulators at your neighborhood bank today than bank employees.  

Some political leaders tell us that free trade is responsible for our downfall. We're told that the ideas of Adam Smith -- who wrote The Wealth Of Nations, which promoted free trade that led to the Industrial Revolution and a hundred years of the greatest burst of prosperity ever seen in human history -- is bunk.

Instead of free trade we are told we need fair trade. What is amazing is that with all the talk that we are losing jobs, that our economy is suffering and that we are being played for suckers by our trading partners, all the evidence is to the contrary.

We are not losing jobs. Our unemployment rate since the recession has fallen from over 10% to under 5%. We are creating jobs – not good jobs but jobs none the less. Protectionist Europe has an unemployment rate at over 10% and has for six years. Yet they have a trade surplus. A surplus is supposed to create jobs. Why is their unemployment rate not 5%?

 

The dollar is strong. Most other countries have been devaluing their currencies to spur on exports. Yet, they are in stagnation and recession, and many are trying to stave off deflation, while America has low but stable growth and prices. A weak currency is supposed to stimulate an economy and inflation, yet just the reverse has happened.

Protectionist Japan has had trade surpluses for decades and has been in recession and deflation on and off for thirty years. What good has their trade surplus done them? And China has the largest trade surplus with America by far, and we watch their economy falter, and their currency be devalued and their standard of living decline. China’s growth rate has been falling for 3 years now. The US has been importing cheap goods, has a strong and stable currency, and a stable economy with falling unemployment. And we are the suckers?

Many believe that China's accumulation of dollars through their trade surplus puts America in jeopardy if they should ever decide to dump their dollars. If China were ever to dump those dollars and push the value of the dollar down then our exports would soar. The devaluation of the dollar would be a good thing, according to present protectionist logic. This would make our exports much cheaper to the world and create employment as we experience a huge export boom. The US would be doing as well as Japan, or Europe, or China that have devalued their currencies, and we all know how well off they are. Do you detect a faulty line of reasoning here?

America has its problems but a trade deficit is not one of them. But a trade war would be the one thing that could push America and the world into a world-wide depression and the fact that so many of our world leaders and citizens can't understand the simple lessons that Adam Smith taught centuries ago, is to say the least, disturbing.

Protectionism doesn't work to protect jobs, or economies, or standards of living. It does exactly the opposite.

Once again I insert Click here: Who's Protected By Protectionism - PaulNathan.biz for those who would like to know why.

So here we are having come full circle. We have come to the point where freedom is being outlawed and innocent people are being declared criminals for disagreeing with the government.  Only government-controlled trade is considered "fair" trade in America. It's now fair to jail a person that won't serve you. It’s fair to jail a creative genius for not providing the government with the information it wants. Whether a cake maker who refuses to bake a cake for a gay marriage, or Tim Cook who refuses to take orders from the government, it is the cake maker and the employer who are now the criminal, and the government and politicians who will be our savior.

Take your choice: communism, socialism, or fascism. Or you can fight for freedom of the individual and against the tyranny of the government as well as the tyranny of majority rule. The choice is yours.

Paulnathan.biz