The trouble with democracy, is that there is always a section of any society which is really dumb. Suppose I was to stand for election with a proposal to repeal the Law of Gravity. The Law of Gravity is one of the leading causes of deaths each year both at home and on the work site. If I promised to repeal this law, I can guarantee there would be some people stupid enough to vote for me.
Problem number two in a democracy is that the results of a policy are often different, or even the opposite, of what you might expect. Let’s take the simple example of rental properties.
In a capitalist society, anyone with enough money (or credit, which is something rather different) can buy a house and rent it out. If rents are high, more and more people will invest in rental property instead of shares or fixed income investments. The increase in available rental properties depresses prices, bringing down the cost of rent for the great majority.
If prices drop too far the opposite happens. Investors get fed up with losing money and sell properties. This reduces the amount of rental properties and boosts rents to a more sustainable level.
Free markets can vary from the normal, but naturally correct and always eventually find equilibrium, just like in nature.
Now imagine that a politician called Billy Boofhead is elected on a promise to reduce the cost of rent by 50%. Of course, this will be popular with people renting houses, particularly if they have no idea of how capitalism works.
If the Government actually did pass laws to reduce rents by 50%, many property investors would sell up and move their money into shares or other investments. This would be painful for those investors, but devastating for the tenants.
The loss of rental properties would lead to a huge increase in homelessness. Meanwhile, many homes would end up empty and ultimately vandalised and uninhabitable. So, the policy intended to help renters is a policy which would eventually lead to devastating hardship for renters.
Of course, there will be some winners in this game. Some property owners are wealthy and will hold on to their properties regardless. Their fortunate tenants then find their rents cut in half. You can expect that they will be delighted with this new policy.
The other great winner is political opportunist Billy Boofhead. Come election time, he will find an adoring fan base of lucky renters. These people will be waving his placards and handing out how to vote cards for him. Some will even donate to his campaign.
Those poor miserable wretches who are now living in homeless hostels or are on the street will probably not bother to vote. Even if they do, they are unlikely to support a candidate who promises to allow the market to raise rents.
This simple example is just a microcosm of the relationship between Governments, voters and the economy. Politicians love to implement policies designed to benefit workers at the expense of businesses.
When they do so, large numbers of marginal businesses collapse or downsize due to the extra strain. Thousands upon thousands of workers will lose their jobs. Of course, workers in more secure businesses will be cheering. They will happily donate money through their union dues and turn out on polling day to support their champions in government.
The way we were
The biggest winners in the perversion of free markets are government employees. The largest groups of these employees are in health, education and indirectly through construction of government funded infrastructure.
Not surprisingly, left leaning politicians always want more money for………..yep, you guessed it, health, education and infrastructure.
Of these three, the cosiest relationship remains between government and the education system. Is there a single other profession outside teaching where an employee cannot be sacked? It is almost impossible to fire a teacher, no matter how incompetent he or she may be.
Not surprisingly then, hardly a school in the supposedly capitalist Western world will teach children what I have just explained to you. Teachers (even economics teachers) extoll the virtues of government intervention in the market place.
“Capitalism can’t survive without government intervention,” they tell our impressionable kids. Most of the media (particularly government owned media) now parrot this fiction.
The extent to which nations fall for this lie, determines how successful the nation will ultimately be.
Some countries went “full retard” and put the government in charge of everything, including food pricing. Not surprisingly, governments cut food prices to below cost of production. Food production stalled and horrendous mass starvation was the result.
Russia, China, Cambodia, Vietnam, North Korea, Ethiopia, the list is too long and depressing to recount in full. Whenever it is tried, the same catastrophe ensues. Venezuela is simply the latest in a very long and inglorious line.
The tipping point
The extent to which a nation falls for this fallacy is also the extent to which inequality increases between those who have government patronage (like teachers, bureaucrats and merchant bankers) and those who don’t (like service industry workers).
Not surprisingly, the more we reject free markets and embrace government intervention, the more the rich get richer and the poor get poorer.
Despite this, our kids are being indoctrinated with the fantasy that free markets are evil and government intervention benefits us all. Jeremy Corbyn just came close to victory thanks to a combination of migrant votes and freshly indoctrinated millennials who haven’t yet figured out the scam.
To some extent, this is a natural process. However, if a group or individual wants to attack or weaken a nation, they could (and likely do) use their influence to help the process along.
The key to resisting this evil is education. As Thomas Jefferson so astutely noted, “a nation which wants to remain ignorant and free, wants what never was and never will be.”
Today, we are no longer completely reliant on government, schools or the mainstream media for our education. Each of us has an opportunity and an obligation to help spread the truth. With the internet, this is now possible.
There are many good sources of information out there and it is important that we read and share them.
It can seem like a thankless task advocating for capitalism online. Each one of us who stands up however, inspires others to speak out. It is important then that each of us continues to try to break through the barriers of ignorance.
Our future survival as a nation surely depends on it.