Let’s assume everything collapses. The skyscraper of cards tumbles; parasitic, unsustainable governments fail; chaos reigns. For all its flaws, living today, especially for those of us in the more advanced economies, is a lot easier than during any prior time. As late as 1900 US life expectancy was less than fifty years. However, there are reasons to root for collapse; it would present a huge opportunity to keep the good parts of the present age and build upon them, while at the same time changing the things that will have been manifestly responsible for the collapse, i.e., the incompetence and corruption of governments. However, to avail ourselves of the opportunities, it is necessary to consider what will replace that which has failed. SLL will kick off the process with a few modest proposals.
Freedom: The lodestar of what emerges must be individual freedom. History’s greatest quandary has been how to secure the fruits of production—essential to the survival of the producer and the species—to those who produce it. Government started as a protection racket; some production was diverted to it in exchange for safety from theft and violence, both internal and external. The danger of this arrangement is obvious: governments become the most rapacious criminals. How does a society protect itself and its property not just from criminals and invaders, but from its own government?
The sad fate of the US Constitution demonstrates that any founding principle or document can be perverted and corrupted. However, a building is better with a blueprint than without. The foundational principle, stated clearly in a new and improved Constitution, must be that individual freedom and the protection of individual rights and liberties are paramount. The corollary: the government shall be subordinate, its duty to use its monopoly on initiatory force to secure and protect those paramount rights and liberties and nothing else. Obviously, many details will have to be worked out, but the standard libertarian formulation of government limited to police, judicial, and military functions captures the basic idea. Will power-seekers try, and eventually succeed, in subverting a new Constitution? Probably, but nobody has figured out how to cure human nature’s malignancies. Clean slates get dirty, but at least they start out as clean.
Voting: The founders envisioned a republic, not a democracy, which they abhorred as mob rule. History has proven them right. Democracy is two wolves and a sheep deciding what’s for dinner. An arrangement that might stop people from voting other people’s means for their own ends is to restrict the franchise to those who receive no money from the government, either directly or indirectly. Politicians, government employees, including the military, and contractors and their employees would not vote. What politician is going to pander to a bloc that cannot vote? The ban on voting would only be in effect while an individual receives money from the government, a sacrifice required for “public service.” The government under this set of proposals will be a shadow of its current behemoth self—the voting prohibition will apply to a very small percentage of the population. This is admittedly an extreme proposal. If you have something less extreme that will keep the productive citizenry from being turned into lamb chops, please submit it in the Comments section below.
Involuntary redistribution: There shall be none, no government-provided anything other than the military, police, and courts. Nothing the government provides through coercion cannot be provided better by free individuals, businesses, and markets. Much of what the government provides shouldn’t be provided at all. This seems fanciful now, but will seem much less so after the government goes broke. There will be no problem of fulfilling legacy promises to those counting on goodies from the government; those promises will have already been broken.
Defense: Defense will be limited to the defense of US territory: no allies, no “interests,” no Pax Americana. Military action will be limited to wars duly declared and specified (no more open-ended wars) by Congress within a short period after the first hostilities. The US enjoys the greatest geopolitical blessings of any nation in history. To the east and west lie the Atlantic and Pacific moats. To the north and south are friendly, militarily weaker nations. It has the world’s largest and most advanced economy, huge raw-material-extraction and industrial capabilities, a formidable arsenal of conventional and nuclear weapons, a well-armed populace that includes millions of potential guerrilla fighters, and a host of geographically inhospitable features—mountains, deserts, rivers, lakes, forests, swamps, and always tough urban environments. Even the contemplation of invasion amounts to insanity, which is why nobody has tried for two centuries. A US military limited to defense of the US could be funded for a fraction of what is spent now.
Money and debt: Historically, governmental mismanagement of money and debt has caused more misery than any other activity, save war, in which they engage. Logically, there is no reason why governments have to be involved with money issuance. They are almost always hostile to privately-developed money because they accrue economic advantages through money issuance: monopoly control of the medium of exchange; legal tender laws that mandate acceptance of their money and debt; the seignorage privilege of being the first user of money or debt, and inflation, the hidden tax of depreciating exchange value that non-first users bear (for a more extensive discussion, see “Real Money,” SLL, 9/9/15).
The estimated 96 percent depreciation of the dollar since the establishment of the Federal Reserve in 1913, and its deterioration from a unit freely convertible to gold to one freely convertible only to another paper dollar, cinches the case that the government should be barred from any monetary role at all. Such depreciation is the rule, not the exception, when governments and their allied central banks control monetary issuance. The alternative? Let the market decide on acceptable money or monies. Undoubtedly it will choose money that holds its value. Along the same lines, the enslavement of future generations engendered by issuing debt must be severely circumscribed, perhaps only permissible upon a declaration of war; limited to the duration of the war, with redemption within a few years after the war.
Funding: The funding requirements of the new regime will be minuscule compared to what the government takes in now, probably less than 10 percent of the GDP, compared to the present 40 percent (for local, state, and the federal government). Not only will the revenue numerator be much smaller, but the GDP denominator will be much larger as the newly unshackled economy makes a joke of today’s 2 percent (if that much) growth rates. The income tax, one of the most pernicious thefts ever invented, will be abolished. Government revenue will come from the imposition of non-income based fees, taxes, and assessments. You might be able to fund this government just by passing the hat to newly unshackled, grateful producers. A fee could be charged on all contracts that parties agree are to be enforced in government courts (although nobody will be required to use government courts for contractual dispute resolution). A per capita flat fee could be accessed for the national defense and police. Excise taxes could be levied on imported goods; they were the chief source of funds for the federal government prior to imposition of the income tax. Most public lands would be sold off, and the proceeds could be held in a trust that will throw off revenues to the government.
Trade and immigration: Freedom is freedom, and that means free trade and open borders. Free trade doesn’t mean the current managed trade snuck under cover of agreements labelled “Free Trade.” Real free trade can be instituted by any nation in a sentence or two that prohibit tariffs or trade barriers for the goods and services of any foreign entity exporting to the US market, except perhaps for excise taxes, applied at a uniform rate regardless of the country of origin. Free trade redounds to the benefit of any nation that practices it, regardless of whether or not any other nation does so.
Immigration is most problematic for welfare states with shrinking or barely growing economies. Welfare states attract immigrants looking for freebies, and even those looking for work are demonized for taking “scarce” jobs from citizens. There will be no government handouts or benefits in America 2.0, and the newly freed economy is more likely to suffer from labor shortages than surpluses. That was certainly the case during the booming Industrial Revolution, the heyday of American immigration. The new wave of immigrants will be looking for their piece of the American pie through hard work and eventual assimilation, just as previous waves—up until elements of the current one—have.
These proposals are meant not as immutable proposals, but to prompt those of us who anticipate a dramatic change from the current “way things are” to think and discuss beforehand the “way things ought to be.” We can’t let a once-in-many-generations opportunity slip away for lack of intellectual preparation for it.
A NOVEL SET WHEN AMERICA 1.0 WORKED