Greetings my fellow Americans!
As we continue our trek through the 28 Principles of Liberty (from The 5000-Year Leap), we encounter another which I think also deserves its own chapter in this series of AFNN articles (emphasis mine):
- The highest level of prosperity occurs when there is a free-market economy and a minimum of government regulations.
As a political conservative for as long as I can remember (and more so a classic liberal, but more on the war of language in a forthcoming article), I suspect that most anyone who just read that principle who identifies likewise is thinking “of course,” while others are believing that the “minimum” asserted above has actually resulted in the opposite, and that the chronic lack of big and strong government is how lack of prosperity and economic “unfairness” came to be that is beaten into us almost constantly by modern media and career politicians. That both could be considered true within any group of people who call themselves citizens of the United States should come as no surprise to anyone, though why both could be considered so boils down to the fundamentals of being American which we’ve been reviewing in this series of articles.
As the Principles we’ve covered so far have relied on the foundation of Natural and Divine Law to frame a political and social structure for America, so does this one for an economic. And like the social and political, the approach and scope to economic prosperity which the American Founders adopted was quite novel in the annals of human history.
Based largely on the work of Adam Smith entitled The Wealth of Nations, the free-market concept of early America was based on the natural notions of individual talent, supply and demand, and encouraging profits and competition. Maximum economic prosperity stems from freedom: the freedom to try, to buy, to sell, and to fail. By the early 20th Century, Americans were producing nearly half of the world’s supply of consumer goods and services, with only five percent of the land and six percent of the population. The role of government, while important, was limited to preventing (1) forcing people to purchase goods or services against their will, (2) fraud, (3) monopoly, and (4) commercial exploitation of human vice (i.e., pornography, obscenity, drugs, liquor, prostitution, gambling). Like in the social and political arenas, government was responsible for maintaining the space of economic freedom for all Americans, but was never to be an active participant in it.
Of course, because this approach meant minimal government and prohibited arbitrary meddling into the lives of others, it was anathema to many who were either accustomed to oppressive, micromanaging government or who enjoyed the power of being oppressors and micromanagers. The shift of the United States from the laissez-faire economics of Adam Smith to the socialist approach of Karl Marx (and later John Maynard Keynes) was in full swing by the 1920s, and pervaded the social and political domains by the 1930s during the height of the Great Depression. While there was a momentary resurgence in the Smith approach, culminating in the presidency of Ronald Reagan, the general drift over the past 100 years has been away from the original American premises of free-market economics and maximum prosperity.
An even earlier economic diversion from the original American concept came with the creation of the Bank of the United States (and later, the Bank of the Federal Reserve). Article I, Section 8 of the Constitution placed the sole and exclusive power of managing the basis and supply of all currency in the U.S. Congress. Intended to be based on a wealth economy, the U.S. has instead been largely operating on a debt basis, as the banks who assumed control of the money supply chose to separate the value of the paper from the precious metals and other assets it was intended to represent. The result has been a cyclic instability which continues to this day, despite the efforts of several Presidents to correct this mistake (yes, even the Founders were human).
Despite these early errors, our currency was at least based on some semblance of hard assets until 1971, when the Nixon administration completely decoupled the money supply from what was then the gold standard. (While I defer on a deep dive into why the Congress was not directly involved in this decision, this move illustrates how far we had strayed from our Constitutional charter by even that time.)
I opened this series with a quote from a fictional Star Trek character: “In fact, I am surprised how little improvement there has been in human evolution. Oh, there has been technical advancement, but, how little man himself has changed.” I’m reprising that quote here because it is a stark reminder of just how much we all really do have in common, not only with each other, but with those who came before us. And despite how much “liberals” and “progressives” would like you to believe that their ideas are the new and innovative ones, it is quite the opposite. America in the 18th Century was the byproduct of novel and revolutionary thinking and action, and resulted in the richest industrial nation in the world less than 150 years later. As with all earthly things, it has not been perfect, but has been the best and most civilized for the greatest number that Man has been able to devise.
A free-market economy respecting both human virtue and human vice was one of the pillars upon which that civilization has been based. Like its social and political siblings, it has reflected an apex of understanding of ourselves and the world around us, the dichotomous limits of that understanding, and how these domains of existence relate naturally and beautifully when respected and appreciated. WE must return to our Founders’ level of understanding of these principles and their historic novelty if we are to renew America. Of, By, and For the People.
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