Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
The Result of Excessive Government Is Democratic Fascism
A country in which central government expenditures account for an excessive part of the GDP can hardly be called democratic. The role of government in a democracy should be limited to defense, treasury operations, inter-country relations, a judicial system, the construction and maintenance of public infrastructure, maintaining law and order, and a limited number of specialized agencies. To the extent that the central government intervenes in the operation of the private economic system it should be limited to the grant of patents and copyrights as a reward for innovation and invention and little else. The setting of prices and wages should be beyond its powers. Even the anti-trust laws smack of crony capitalism.
The reader will recall that the Nazis professed to be socialist; indeed the term Nazi stands for National Socialist German Workers Party, dedicated to government control of all industry. Aided and abetted by Communists and communist fellow travelers, the party has been mislabeled a right-wing party but its basic orientation is socialist. Bernie Sanders self-described himself as a democratic socialist but since he proposes unlimited government expenditures of a social nature his philosophy should be more appropriately described as democratic fascism.
Which brings us to the question, what is a democratic government? We are a republic and a republic is not necessarily democratic? A republic is a country whose head of state is not a monarch. The USSR described itself as a union of socialist republics, none of which was a democracy. The U.S. is a republic and the head of state, the president, is chosen by electors representing the various States, not by direct popular vote. We are considered a democracy because the electors of each State are chosen by the popular vote of the citizens of the States.
But questions are raised about the influence of the printed media on the results of an election. They are sometimes referred to as the fourth estate, meaning in U.S. parlance, the fourth branch of government. Do the media determine the results of an election? Obviously, they did not determine the results of the most recent national election. What happened to the media’s power? The simplest answer seems to be that Trump was able to get his message directly to the people by using electronic media, principally the internet, by-passing the need to send his message through the press. Of course, the media could not ignore what he was saying to the crowds of his supporters. And his message was that the government bureaucracy, the Congress, the president and his opposition have been pursuing policies not in the interest of the majority of workers and the middle class. And his views prevailed.
What is the role of political parties in a democracy? They compete with one another for the voter’s approval. But what tactics are they permitted to use in a democracy. Hitler had his Hitler youth invade public places like restaurants, places of entertainment and public events to demonstrate for him, not unlike Bernie Sanders’ supporters demonstrating at Trump rallies where, in some, they used force, and they succeeded in getting his rally in Chicago cancelled and they harassed the attendees while entering and leaving. And what of the student demonstrators who prevent invited persons whose views they dislike from speaking at scheduled events on campus, which reminds us of the behavior of the Nazi youth. It is the behavior of fascist youth, whatever they may call themselves. Perhaps they think of themselves as democratic socialists. But they really are democratic fascists. In a democracy, political parties and groups may not engage in violent behavior against opponents. They may demonstrate but not impede access to opposition events. When they do, let us call it by its true name, fascism.
Socialism and democracy are basically incompatible. Democracy requires a democratic economic system, a free enterprise system. One may point to the Scandinavian countries and the European Union as democracies. But their governments are too big and necessarily limit democratic expression. As it has been said, power corrupts and absolute power corrupts absolutely. The more power the government has the less it rules a democracy.
In a democracy, government should strive to live by rules, not authorities. Authority is the basis of all corruption. The ability to make someone rich by one’s power to make a decision invites corruption. Government choose crony capitalists. As few administrators as possible should have the power to make decisions that will empower and enrich those affected by their decisions. Unfortunately, Congress has expanded the authority of a large number of government administrators, giving hem great powers to regulate and therefore to choose crony capitalists. In the name of the environment, federal and state governments have given and lent vast resources to private firms and individuals. This has enabled such administrators to benefit cronies, some private capitalists and others groups like the Sierra Club. That is an example of corruption. Some of the beneficiaries are lobbyists and those they represent.
In some countries, corruption is endemic and to do business one has to give bribes. Many countries in Latin America and Africa have that reputation. A recent example is the corruption scandals in Brazil. The US has a law forbidding American companies from offering and giving bribes to do business in foreign countries. This means foregoing the opportunity to do business in those countries unless the firm hires a third party to do the influencing. Sometimes, these people masquerade as lobbyists.
Just as some businesses are alleged to be too big to fail, government agencies and departments can become too big to manage efficiently. Like tenured professors at universities, government workers are difficult to fire and discipline. Government departments do not operate under the important condition applicable to private enterprise -- unless benefits are greater than costs, they go out of business. Government departments can commit error after error and not be disciplined at all. How many apartment buildings have been built by the Department of Housing and Urban Development that had to be torn down long before their expected life expectancy with no one being chastised or disciplined.
At the end of the 19th century a German economist invented the “Law of Increasing Government.” The size of government seems to grow without end and hardly any government agency is ever eliminated. Perhaps we need a constitutional amendment forbidding the federal government to exceed a certain percentage, say 10%, of the preceding year’s GDP. The alternative is fascism, albeit a somewhat democratic fascism. It certainly is not democratic socialism since it regulates rather than owns industries.
Journal of Economic Literature:
Atlantic Economic Journal: