Trends – Political and Social (Part 1)
Three men go for a walk into this forest. One man has $100. The other two don’t. The other two don’t like this very much. They hold a vote and with their majority elect to split the $100 between the three of them – this is Democracy.
Others join them and quickly realise how unfairly the first person was treated. In response they elect a single person to supposedly fix the Democratic mistakes – this is a Republic.
Through free markets and property rights the people of the forest prosper for a time. Most people are productive, however, some people are more productive than others. This is Capitalism.
Community pride is high as citizens foster and share in the culture, customs & traditions born out of their newly found prosperity. This is Nationalism.
Over time however it becomes obvious that the owners of capital and risk takers have become very wealthy and have left the working class behind. So these workers gather together to demand higher wages and better working conditions. This is Unionism.
Due to higher wages, businesses in the forest are now less profitable. Fortunately for the manufacturers, the people in the nearby river valley work for much less than those in the forest. So the owners move their factories to the valley and transport the goods to the forest. Everyone rejoices because the goods just became cheaper. This is Globalisation.
However, without a manufacturing industry many workers were left idle and without means of income production. They see this as unfair. They seek to increase taxes on the wealthy and have it redistributed to themselves. This is Socialism.
To appease this new Socialist movement a larger governing body is formed to facilitate the redistribution of wealth in a fairer manner for all. This new bureaucracy, with their newly found political influence, involve themselves directly in all manner of free-market activity. Quite often with just enough regulation to ensure the continued success of their preferred product and service providers; and, usually at the expense of the competitors. This is Crony Capitalism.
Realising that the expanding bureaucracy is taking advantage of its size, power and influence, the central government introduces additional levels of bureaucracy to police the old. This is Authoritarianism.
With resources quickly being depleted to fund the massive public workforce, emergency measures are briskly introduced to facilitate the only truly fair allocation of monies, property and resources. The government seizes all and cancels the next election. This is Communism.
Everyone is content for a short time, until finally all the resources have been distributed, the people are left unproductive and the land is barren. Violence, starvation and death follow. People flee. Including three men who go for a walk into a forest. One man has $100, the other two don’t.
History is littered with civilizations who strayed too far left of center and simply never returned. If there was a single political lesson for all parents to teach their children it would be – ‘Socialism – has always failed and will always fail.’ As Margaret Thatcher so eloquently stated – ‘The problem is with socialism, you eventually run out of other people’s money to spend.’
Need a modern example of a failing socialist system, look no further than Venezuela. Twenty years ago it was the crown jewel of South America. Rich in wealth, culture and oil. Socialism, accompanied by a sustained period of low oil prices, put a swift end to this.
However, as you can see from the prior anecdote, Democracy has its failings too. As soon as you have what over 50% of the population want, they will simply vote to take it from you. They will try to soften the pain for you of course. They will call it a tax, a duty, a levy or a surcharge. They will also praise you for doing your civic duty. But at the end of the day – they are simply taking something from you and giving it to someone else.
If you are left with only two options – the first being an authoritative socialism on the left, or democratic capitalism to the right – be pushing towards the right all the time. Not only will your standard of living will be higher, you will probably live longer.
Most importantly though – understand the political trends at any particular time. Is there a unionist movement gaining momentum? Are the conservative capitalists likely to win the next election? Accurately predicting where the political trends are leading will create financial opportunities for you. It will also save you a great deal of time and money, by preparing for likely eventualities only.