State Capitalism

During the era of Ronald Reagan and Margaret Thatcher we were lulled into a false feeling of economic safety. As their policymakers prophesied of the great golden age that was soon to be upon us, we believed them. Deregulation and privatization of state-owned enterprises would bring us freedom. Freedom not only when talking economic and social mobility, but also political freedom, the fulfillment of the American Dream for all human beings that thrive on this Earth. The opportunity to climb the tree of success, from meager beginnings at its roots, pulling oneself upward on the branches of free enterprise to attain goals; the leaves of happiness. And was it not Fukuyama who saw the end of history looming on the horizon? Soon western liberalism would triumph as the empire of evil came tumbling down, just as Reagan had worked to achieve. The world was opening up and would soon become nothing more than a large hamlet, filled to the brim with opportunities and freedom for all, driven forth by economic prosperity where the invisible hand would from then on steer the ship of history.

Two Laws and A Paradox

As it turns out they were not right, but a man named Hilaire Belloc was. So accurate were his predictions that one almost gets downright scared reading them.Before touching on the subject of Belloc's predictions, allow me to elaborate on a certain “law” we must keep in mind when analyzing what went wrong with the promised golden era of freedom. While drawing out political or economic policy, great ideas are thrown out on the tables of political cabinets, all bent on reforging the world through the mould of freedom. Be it Keynes or be it Hayek, both set forth an idea which would eventually bring man more freedom through economic policy. Policymakers in the west believed that they would bring freedom to mankind by carrying out the ideas of Hayek, but they soon found themselves building the dystopian vision of Keynesian economy. No other example in modern times is so illustrative to demonstrate the meaning of the law of unintended consequences. Neither Keynes nor Hayek wanted the government and economy we have now, a government that was brought into life as western governments somehow managed to combine the flaws of both views into the current leading economic policy. Politicians soon found themselves caught in the paradox of freedom: political and economic freedom do not mix.The great problems in this (post)modern era that need to be faced when setting out true policy, and not the attempted containment which is what current governments are trying, are threefold. These problems are draining the west from the power needed to reform societies which are headed on a collision course with history. They are (1) a lack of leadership from the political elites, (2) a lack of popular trust in alternatives and (3) the feebleness of mind that we see in almost all. We have seen throughout history that a lack of leadership from ruling elites is not an uncommon occurrence. Different from our times however was that in the days of yore a lack of leadership quickly led to the complete stripping of leadership responsibility from those that lacked the personal skill to execute it and the handing over of that leadership to those who did have the skill to lead the nation, community, state,… through the stormy ocean of time. This was possible because the positions of leadership were open to all who would challenge and could lay claim to them. Today there still is opposition from those who wish to change and from those who can lead, but they are held back by the “democratic authorities” who only wish to “stop extremists from establishing an extremist state that the majority of people don't want.” The volonté générale, the popular will, as set out by the totalitarian philosopher Rousseau and as introduced in oppressive socialist states, is only one step. The political elite struggle to maintain their positions of power, both political and financial, and refuse to reform the state or open up leadership positions fearing that they are one step away from the pits of historical and political oblivion. Therefore we can only conclude that they have proven able to enact one law that truly defines society and political culture: the iron law of oligarchy, a law that applies to democracy, as written down by German sociologist Robert Michels in 1911 but still relevant, which states: “It is organization which gives birth to the dominion of the elected over the electors, of the mandataries over the mandators, of the delegates over the delegators. Who says organization, says oligarchy.” Clearly we can see how the current political elite is a corrupt and closed oligarchy, bend on using all means available to keep the opposition out of government. Not out of ideological reasons, but by mere fear of material loss and loss of power.To their surprise the people no longer wish to follow them. Many still do, to their great relief, but this is guided more out of fear of something new and something unknown. Or at least, that is what they are made to think. Our struggle is a truly traditional one, not one of radical adventures. A traditionalism which is not out to maintain stability for the purpose of stability. The difference between spineless conservatism and liberalism is only the speed by which the same goals are achieved: either by steam  train or by high-speed monorail. True conservatism manifests itself by setting out certain ideas and archetypes as a sturdy foundation on which we build political, social and economical culture. Traditionalism does not align itself with the extremist ideas of the radical Enlightenment, found both in marxist internationalism as in liberal capitalist globalism. For a historian, who understands historical context and can see the dialectic process of history, it almost painful to see that the Anglo-Saxon peoples, who once fought the ideas of the radical Enlightenment with such furious passion, now defend them with the same fury and defend them as conservative ideas. Thus, those who wish to make great strides towards a society based on traditional values first need to identify these ideas from conservative and progressive ones. People are only scared of ideas that are actually truly traditional because those in power make them afraid. For example: traditionalism does not equal the fundamentalist belief in a global-scale free market. On the contrary, traditionalists can only look at the current globalist economy and conclude that the economic base which once built western dominance over the world has been eroded. The community economies which developed great power through their strength on the national level, draw their power from the communities in which they were embedded. In these economies people were able to build up both their personal and communal wealth, while never cutting off the roots from which they had grown.An authentic free market is not a capitalist globalized market, but a Distributist one. The traditional alternative to globalism is not some strange alternative idea found among the yuppies who dominate the Occupy movement or Tea Party, nor is it the totalitarian socialist state (be it marxist socialism or national-socialism). Those who wish to see globalism collapse and an end to mass immigration (for in these times man is being reduced to a good which can be sent in large quantities all over the world), an end to outsourcing, an end to selling out our core industries and an end to monetarian slavery, have their solution: Distributism. Although I must stress the fact that, contrary to other "isms", Distributism is not a dogmatic ideology promising Utopia.

How Reaganomics Paved the Way for the Servile State

When talking about Capitalism and the traditional view on government we can distinguish two eras of economic policy. The first era stretches from 1900 until the Keynesian policies during World War II. During this era the economy was in a state of crisis for almost half the time. Following the introduction of Keynesian policy that number was brought down to around 15%. Is this a plea for a Keynesian policy? No, these policies have only postponed crises by burying them under a mountain of inflationary monetary politics, bequeathing the instability to future generations. A Keynesian policy can be summarized as a managed economy whereby the government lowers taxes and increases spending, amassing debt in the process to kickstart the economic engine. As soon as the economy picks itself up and starts running again in a durable way, the government should raise taxes again and decrease the amount of spending to pay off debt. In reality, this has proven to be a threshold governments do not wish to cross. The political elites have taken the first part of Keynesian economy, which introduced government deficit spending to boost the economy, and combined it with Hayek's view, that is, minimal to no government interference, stopping government from raising taxes during better times.The results are that western governments are piling up debts at an alarming rate. When Ronald Reagan came into office the American federal debt was about 700 billion dollars. Following the period known as Reaganomics, during the Reagan-Bush era (1981-1993, although the true end of Reaganomics lies more in the crisis of 2008), the federal debt piled up to a staggering 2.1 trillion dollars despite the four pillars of Reaganomics: reduced government spending, reduced income tax and capital gains tax, reduced government regulation and a control of the money supply to stop inflation. Indeed, decreased taxes have only increased taxes on future generations. The results of this policy have become clear as the era of Reaganomics fully crashed to a halt in 2008 when, to name one of the most well-known examples, Lehman Brothers was brought down to earth. A mountain of debt and a huge government encroaching further on the freedom of society is the result of more than a decade of conservative policy.The era of Reaganomics left central governments in huge debts and with much more centralized power over economic and political freedom. Hayek claimed Keynesian policy as a road to serfdom, but the irony is that under the pretext of carrying out Hayek's ideas we have boarded the plane to serfdom.Why has this happened? The answer is clear, although an inconvenient one for some. There can be no Capitalism without a powerful and big government. As I previously mentioned in this text, during 1900 and 1940 the economy was almost half the time in crisis, with large ups and downs in between. An economy either in the state of euphoria or in the state of depression cannot sustain durable growth on the level that we require now. These extremes in economic volatility are the price we pay for the capitalist market on a global scale during the industrial era; a price which the voters aren't prepared to pay and by extension the politicians aren't prepared to pay. May I remind my readers that the only capitalist experiment which truly followed the free market ideas of Milton Friedman were carried out, not in a democracy, but under the military junta of general Augusto Pinochet of Chile? Voters will always chose stability over uncertainty.Afraid of losing elections, politicians started building big government. In Europe it was the welfare state, which relied on large amounts of money, racked up inflation, as well as the strength to suppress the defiant. A campaign against this kind of government is a campaign to strip the political elites from their power. One must only look at the treatment Ron Paul receives for criticizing the current economic and political order. He is feared for the danger he provides for the positions of power on which the political elites thrive.

Hilaire Belloc: Predictions for Today From a Different Era

It certainly is not so that our current state was unpredictable. As mentioned in the beginning of this text, Hilaire Belloc foresaw many of the problems we face today. In his book The Servile State, Belloc argues that the advent of Capitalism was not a natural evolution that can be traced to the rise of industrialism, but more to the dissolution of monasteries in England. In other words, Belloc states that the roots of Capitalism lay in the abandonment of a religious tradition and the intruding of the state into private affairs and property by taking the property of the monasteries for itself, a forebode of big government which intrudes on an increasing number of affairs of its citizens. It is also the forebode of the redistribution of material wealth contrary to the traditional view on economics called Distributism. This intrusion on natural law which values private property, steered an economy no longer guided by justice but by political goals. From these roots we can also track the evolution of economics from a normative science (guided by morals, tradition and justice) towards a positive science whereby mathematical charts replaced ethical concerns. Economics became a matter of numbers and redistributing wealth. Both the capitalist way in which the rich accumulated wealth by taking it from the others through various means previously condemned by society and the Catholic Church, and the socialist way in which wealth was taken from all to try to make man equal, have their roots in the abandonment of natural law. The alternative to redistributionist policy is Distributism, the natural flow of wealth as a result of labour, not as a result of non-existent capital multiplication (as we see in the large money-creating machines called Wall Street and the Federal Reserve) which was once denounced in Europe by the Catholic Church as usury.

Conclusion

One question remains. What is stopping us from rallying the people towards true tradition, towards the road of freedom, and away from servitude? What stops us is the gigantic influence of an economy that needs consumption badly. A daily tsunami of commercials and luxury items we do not need separates us from our historical context. We live well, why worry about the past? Because we lack cultural and personal stability. As soon as the system comes crashing down, and the more government tries to spend itself a way out of it, the harder the crash will be. We shall be faced with uncertainties. No material certainty, no spiritual certainty. For in the name of freedom we have given up the most important lesson that our ancestors have tried to pass down: the knowledge that freedom comes at a price, a price named responsibility. No rights without duties and no right of collective aid when the individual refuses to make an effort himself.Some of you may find this text to be quite militant or assertive, maybe even bordering on aggressive. You can rest assured that I am not a barrel of anger, only waiting for a spark to explode. But we must be aware that a new era will soon be upon us. We can choose to continue patching up problems and continue down the path to dystopia. The alternative is not a utopian ideology, but catching up with history again. A chance to return value to human life, to see man not as just a client of a state or the producer of goods and value, but as a full human being, holistic in his definition. For we seek not stability for the sake of stability, nor tradition for the sake of tradition. We seek to make it able for every human to finds his or her place in the world and become a willing part of the community. And the community must prevail, for is it not written in 1 Corinthians, Chapter 14: “Those who speak in a tongue may build themselves up, but those who prophesy build up the community"?