Politics is Still the Problem

Let's replace every politician with at least two honest entrepreneurs.

Source on Unsplash

It’s not easy to generate wealth and value through production and peaceful interaction, which we have called the economic means, following Franz Oppenheimer. That's why we should be leery of terms such as *late-stage capitalism.* Human history has involved too many political means, that is, the scaled-up threat of violence dressed in Brooks Brothers today. 

Think of it as a continuum between the cooperative means and the coercive means.

Remember the Lords and aristocrats who served Royalty while the serfs worked the land and created value. It wasn't until the dawn of the 19th century that entrepreneurs began to tinker and toil. Eventually, the riff-raff got out from the yoke of parasite classes claiming a 'Divine Right' or special status.

After millennia of mostly flat progress in standard of living, worldwide economic growth exploded around 1800 and never stopped, giving us what economic historian Dierdre McCloskey calls 'The Great Enrichment.' In other words, growth turned exponential, and so did living standards.

Humanity has made tremendous improvements to institutions compared to medieval baronies and feudal societies, particularly those that protect private property, entrepreneurial capital, and the resources of those who create value.

Along with the Great Enrichment, we have seen some means to protect the Makers, but we have also seen the political process become co-opted by Takers. The ebb and flow between the economic and political means is more pronounced when viewed on shorter time horizons.

Yet, it is possible to shift power from parasitism to prosocial behavior.

We should note that evolution doesn't weigh in except on the question of success or failure. Lampreys, eye-infesting worms, and feminizing barnacles are all "successful" species. However, we can imagine a shift in the selection function for organizations. In other words, through better rules, tools, and culture, we can make the economic means more accessible to the many and the political means more costly to the few.

We call this subversive innovation.

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The more the selection function shifts to favor those people and firms who generate value through voluntary cooperation, the greater the abundance for any given person.

But we have a long way to go.

COERCIVE———————>|<———————COOPERATIVE

Anywhere in the world, there are two kinds of wealthy people: those who get rich by making our lives better and those who get rich by using the political process to transfer wealth from others. You'll find Takers anywhere officials can pick winners and losers in the economy—whether through regulations, subsidies, or favors. Likewise, you'll discover Makers anywhere people are free enough to launch an honest enterprise.

The trouble is, the rules don't always favor the Makers.

"The organizations that come into existence will reflect the opportunities provided by the institutional matrix," said institutional economist Douglass North in his 1993 Nobel Prize lecture.

That is, if the institutional framework rewards piracy then piratical organizations will come into existence; and if the institutional framework rewards productive activities then organizations—firms—will come into existence to engage in productive activities.

Great civilizations emerge where Makers can flourish. Once-great civilizations declined as the Takers started to outnumber the Makers. Greece. Rome. Britain. Europe.

The firewall between business and the state had been dismantled in these formerly prosperous centers. They all lost ground because they succumbed to the parasitism and predation of Takers, that is, public and private special interests. While many believe authorities should wield government power for the greater good, most of what gets done in the public's name is politics without romance.

America will soon follow unless the people seize this moment. Or as

Rachel Haywire

writes:

We are the vanguard of a new American rising. We are possessed by the vitalist spirit that has raised civilizations through history and made our own the exception of history.

The disenchantment we have faced at the hands of lockdowns, inflation, activism, and its assorted institutions have left us with no choice but to build a counter-elite that resurrects the renegade spirit of America.

America is a launchpad, and our task is to fuel it with energy and risk. We are a nation of artists, pioneers, astronauts, and inventors. We are building the means to transcend the systems that hold us back.

To restore this dynamism, we have to make politics as we know it obsolete. And that prospect might make some readers feel uncomfortable.

But as long as we feel uncomfortable confronting the political means—the lobbyists, the backroom deals, the unholy alliance between power and money to create exclusionary cartels—the more we will continue to blame *capitalism* for all our woes when the problems lay with politics all along. The beneficiaries of the system’s status quo will fight tooth and nail to keep it.

One silver lining of a total economic collapse is that the Takers will no longer have access to any transfer regime. But what if the collapse is not severe enough to decouple the Takers from the institutions?

The decline will be protracted and painful.