Economics

7 Kinds of Government (An Alarming Analysis) – Oliver DeMille

May 5th, 2014 // 11:42 am @ Oliver DeMille

Power and Obedience

Every government seeks to increase its power. And “power” is control over obedience, according to the great writer Bertrand de Jouvenel.

“Force alone can establish power, habit alone can keep it in being…”

But one more thing is needed to have absolute power: credit. (This is Jouvenel’s word, meaning “recognition” or “validation” – not lending.)

This means that any government wanting great power must come up with some way to openly reward people who obey its commands.

In short, any entity trying to control obedience must find a way to use force, to maintain a habit of obedience among the people, and to give credit and recognition to the most obedient.

This makes obedience popular and lucrative, and disobedience dangerous and unpopular.

To gain the obedience of the masses, Jouvenel taught, a government must first convince the people that they should obey. Then it must show them that they will hurt if they don’t obey, and be rewarded if they do.

Part I: Six Bad Types and One Good Type of Government

There are seven main ways to persuade the people that they really should follow a government, and six of them have been used multiple times in history to increase the power and force of bad governments. Freedom is decreased any time the people believe any of these six:

1. The Divine Right of Kings (“God made me your ruler, and your eternal salvation depends on obeying me and my agents.”)
2. Majority Rules (“If most of the people vote for it, the rest should follow, even if the vote is evil or ridiculous, because we are all part of the whole and must follow the majority decision.”)
3. Benefits to the People (“If you vote for me, I’ll make sure you get more of x and less of y.”)
4. The Need for Order and Security (“If the government doesn’t have the power to protect you, bad people will hurt you; so give us more power—we promise, we’ll never, ever abuse it. Just trust us.”)
5. The Pure Force Doctrine (“If you don’t obey us, here is what we’ll do to your parents, spouse, children, reputation, body, and possessions…”)
6. The Invisible Government/or/A combined Pure Force and Order and Security system on Steroids (“A few of us will know the secrets and make the decisions so that the rest of you can relax and enjoy life. Trust us, because though historical governments have abused power, we never will.”)

Any government or politician arguing any of these six dangerous doctrines should immediately set off a warning bell to every citizen.

Exactly none have ever maintained their trust; all have been abusive of their power and their people.

Moreover, all six of these arguments are fallacies; none are a true reason for giving power or obedience to a government.

The Seventh Form: You

The solution to all of these is the 7^th form of government: The Informed Citizen. This is the doctrine of regular people 1) having the vote to determine who will lead them, and who will not lead them, and also 2) having the wisdom to keep a close eye on everything government does and keeping it in line if this is ever needed.

Without the second part of this—regular people closely watching government and keeping it checked—all governments end up as one of the six bad types. In all six, freedom is eventually lost. In fact, all six types eventually turn into The Pure Force style of government.

But don’t just take my word for it; do the math: There is no exception to this in history.

By the way, the worst type of government system is The Invisible Government. In this model, the government operates largely in secret, exerting Pure Force whenever and however it wants without effective media or citizen oversight.

In fact, many people living in an Invisible Government system don’t even realize that Pure Force is happening every day – until they’re the ones on the receiving end of power abuse. And under an Invisible Government, such “complainers” are often branded as paranoid or rebellious non-conformists who are rocking the boat for everyone else, who prefer to enjoy the “security” and “prosperity” the uber-powerful government provides. (The big party poopers. Why can’t they just get back in line and enjoy the gettin’ while the gettin’s good??)

The only way to stop the six bad kinds of government—including eventually becoming a Pure Force government—is The Informed Citizen society. Without this, no nation can last.

The American founding generation, and the American framers, established an Informed Citizen model. It wasn’t perfect, and because of slavery it never fully flourished until after the Civil War. Once slavery was abolished, the Informed Citizen system began to deepen and expand.

By 1945, the United States, with less than 6% of the world’s population, was producing over half of the globe’s goods and services.

Turns out that freedom works.

But freedom only lasts when The Informed Citizen stays strong and active.

Are you such a citizen?

Part II: How to Know Which System Your Government is Following

Today we live under an Invisible Government model (with Pure Force steadily increasing in power) where a few power elites are expected to know the secrets and make the big decisions so the rest of us can just live our lives.

If this trend continues, the entire freedom system of the United States will experience further decline. (Are those just words, words, words to you? I sincerely hope not. Ponder for a moment what that means for your children, and your children’s children.)

If this trend continues, the entire freedom system of the United States will experience further decline.

The way to determine which system your government uses is simple: How does your government and nation treat the weakest, most vulnerable, least powerful among you, les miserables; and, how does it treat your enemies?

As Jouvenel said, expansionism is part of the character of a nation seeking more power.

By these measures, Rome was powerful but it wasn’t great. Slaves, women and children were chattel, literally owned by their masters. Enemy cities were leveled, the inhabitants tortured and killed or sold into slavery.

The ground was salted so nothing could grow for generations to come.

Likewise, the British Empire was powerful but cruel. The lower classes were frequently treated like slaves (read Dickens, for example), the wealthy were often aloof and domineering, and the people in foreign colonies such as those in India and Africa were consistently exploited and mistreated.

Money and power were used to manipulate nearly every transaction and relationship.

In contrast, once slavery was abolished in the United States, America stood for the principle of freedom to millions around the world.

It raised a Statue of Liberty in the New York Harbor that invited all the poor and mistreated from around the world to immigrate to our shores and join us in freedom.

It fought for European and Asian freedom and asked for no colonies or tributes in return.

During this era, America genuinely aspired to live up to the ideals of an Informed Citizen system.

Two Paths…

This focus has changed in recent times. How do we now treat the poor or struggling immigrant yearning to be free? The unborn baby? The captured enemy? We exclude, we terminate, we torture.

Yet because the regular citizen does not hold the torturer’s knife we are able to (falsely) claim a semblance of morality. We comfort ourselves in plausible deniability.

This is precisely how Invisible Government works.

But when our government agents torture in the name of our protection and freedom, they act in our name.

This means we bear responsibility—unless we attempt to decry and end such behaviors.

When they came for the unborn babies, we turn a tearful eye. But it kept happening—to millions.

When they came for the captured enemy we turned a blind eye to torture. We played Javert, thinking the government knew best. But even if this were true, when we allow our government to torture it will eventually turn such measures on us.

This is a law of history.

When they come for the weary immigrant, who risks his life just to send a few dollars home to feed his child like a modern Jean Valjean, we frown in disgust and send him on his way. An Abraham, a Jesus, the Bishop in Les Miserables would have thrown open their arms and proffered (personal) resources of sustenance, hospitality and welcome.

Too few of us follow their example.

We stand at a crossroads in modern America. On the one hand, we are quickly headed toward overwhelming Invisible Government that spies on us, expands its controls over us, and every day increases its tentacles of force.

On the other, we can be Informed and Active Citizens.

These are the two choices.

“The face of power changes,
but not its nature.”
—Bertrand de Jouvenel

(See FreedomShift, by Oliver DeMille, for more commentary on and solutions to these trends.)

Category : Blog &Citizenship &Community &Current Events &Economics &Government &History &Leadership &Liberty &Politics

Corruption By Any Other Name – Oliver DeMille

April 25th, 2014 // 10:41 am @ Oliver DeMille

Another Domino Falling

JP Morgan recently settled a case brought by the government, agreeing to pay Washington $13 billion for its role in the mortgage bubble meltdown.

This creates a very dangerous standard. When something bad happens, Washington will naturally seek to find fault in a place that brings it a lot of extra cash—the most profitable businesses.

As Ken Kurson put it:

“This settlement sets a terrible precedent. Companies with strong balance sheets can expect to become targets of the government…”[i]

This is another domino in the decline of our freedoms, and it’s a big one. This new approach allows, even incentivizes, government corruption. Let’s review how this process works:

• The federal government passes laws that require or incentivize businesses to give loans or offer services/products to people who can’t actually afford them. Businesses that refuse are penalized.

• As a result of this kind of bad policy, many businesses fail. Businesses that comply, but only make middling profits, are left alone.

• Businesses that comply, and make big profits, are targeted by the federal government and end up paying huge sums of money to the government.

Godfather Over Again

This is a great racket. It’s akin to a mafia protection scheme: “You need protection from us. We’ll provide it, for a fee. The fee will be set by us, without appeal or negotiation. If you don’t pay it, we’ll hurt you and/or your business—thus proving that you really did need protection.”

An official term for this new precedent is “corruption.” Except that the Supreme Court gets to determine the actual definition of the word. And who gave the Court the power to do this?

The Supreme Court did, in a string of cases starting in 1803 through 1936.

Is this recurring pattern starting to make sense?

“Wait,” the critics say. “The crash was real! And JP Morgan and other companies that participated need to pay! Right?”

As Kurson wrote:

“Of course, most of JP Morgan’s wrongdoing—70 to 80 percent of the exposure—was committed by two companies, Bear Stearns and Washington Mutual, it acquired in 2008 at the request, to the point of command, of then-Treasury Secretary Henry Paulson. JPM acquired those companies as acts of mercy during a crisis.”[ii]

Let’s get this straight. The economy was tanking, so the government demanded that JP Morgan buy two flailing firms—to help save the economy. Then, when the fall came, the government targeted JP Morgan for the mistakes of these two firms and made it pay for them.

Godfather corruption indeed.

Who It Hurts

How are businesses responding to this emerging new economy? Many are closing. Others are going abroad, to China, India, Brazil, etc.  Those that make enough from the U.S. economy simply pay the fines, settlements, and fees—it’s the cost of doing business.

The real problem is for American workers and families. JP Morgan has increased its litigation reserve up to $23 billion (from $3 billion in 2010).[iii] Other companies are learning to do the same.

What happens when the extra billions are refocused this way? Money moves away from salaries and purchases, the economy is hurt, private sector jobs are cut or curtailed.

The government is currently seeking similar payoffs from a number of other big companies. As this precedent sends its ripples through the economy, it will harm a lot of families.

More firms will move operations and jobs abroad, and others will shift more money from jobs and put it to litigation and fees.

Old Pattern, New Cloth

Oh, and just re-read the government’s pattern outlined above for the mortgage bubble, but this time read it with Obamacare in mind:

• The federal government passes laws that require or incentivize businesses to offer services/products to people who can’t actually afford them. Businesses that refuse are penalized.

• As a result of these bad policies, many businesses fail. Businesses that comply, but only make middling profits, are left alone.

• Businesses that comply, but make big profits, are targeted by the federal government and end up paying huge sums of money to the government.

This really is as shocking as it sounds. Yes, this really is happening in the United States.

The worst news in all this is that most people will do nothing about it, because this kind of financial news is considered technical mumbo jumbo.

Citizens usually just ignore it. “What can I do, after all?” is the typical response.

This is how freedoms decline: slowly for a while–then all at once. The amazing part is that when the “all at once” crash comes, almost everyone acts surprised.

But what can a regular person do? Really? It’s not like you can stop government overspending, party bickering, or a growing culture of corruption with a call to your Congressman or a letter to the editor.

The answer to this major post-modern question (What can a regular person do?) is interesting: We can start with not being surprised.

Problems and Solutions

We can know what is coming. A government addicted to spending and borrowing, and constantly increasing its spending and borrowing, is going to cause problems for the economy and for its citizens.[iv]

A government addicted to increased regulations is going to cause problems.[v]

A government that demands official secrecy from its own people while increasing how it spies on its own citizens is going to cause problems.[vi]

A government that inflates its currency and borrows from its biggest enemies and competitors is going to cause problems.[vii]

A government whose top officials routinely make promises during elections or to pass big agendas and then break them once they win is going to cause problems.[viii]

A government that uses statistics it knows distort reality (just revising them a few months later once decisions have been made), in order to support its continued ideological course, is going to cause problems.[ix]

A citizenry that turns a collective blind eye to these realities is enabling the very problems it fears. Then the people claims surprise when the crash comes.

Anyone who is surprised by the next crash has been lying to themselves for a long time.

False Recovery

As Allan Greenspan wrote in November 2013:

“One can hope that in a future financial crisis—and there will surely be one…”[x]

Calomiris and Haber noted that banking crises should be expected:

“The banking system in the United States has been highly crisis-prone, suffering no fewer than 14 major crisis in the past 180 years.”[xi]

The question isn’t if, but when, the next one will come.

Or consider what J. Bradford DeLong wrote in a piece in Foreign Affairs titled “The Second Great Depression: Why the Economic Crisis is Worse Than You Think”:

“The U.S. economy has enjoyed a recovery [since 2009] only in the sense that conditions haven’t gotten worse…. But it is unlikely that the economic downturn will be over by 2017…”[xii]

Greenspan suggested the second thing people can do. He wrote:

“Financial firms could have protected themselves…if…they had prepared for a rainy day.”[xiii]

Though he addressed this belated counsel to companies, it certainly applies to regular people as well.

Time and Two Steps

To summarize, we have covered two things a regular person can do about our current problems. First, know about them. Pay attention. Keep a close eye on the government, the economy, and current events. Read the fine print and the technical mumbo jumbo put out by government.

The English word for this daily activity and focus is “citizenship.”

The second is to prepare. Look around, see what is really needed, and what is likely to be needed in the years ahead—and take action to help your community flourish.

Not just for you, but for others.

The word for this kind of initiative and foresight is “entrepreneurship.” It isn’t pessimistic, doomsayer, or extreme. In fact, effective entrepreneurialism is precisely the opposite.

It only works if it is optimistic, positive, and sustained.

Without such citizenship and entrepreneurialism, the decline of freedom is only going to accelerate. We’ve still got time for these two things to work, but time is running out.

Category : Blog &Business &Citizenship &Community &Current Events &Economics &Entrepreneurship &Leadership &Liberty &Mini-Factories &Mission &Politics &Uncategorized

Why Do We Keep Losing the Freedom Battle?

March 20th, 2014 // 3:00 pm @ Oliver DeMille

Two Avenues of Destruction

Why does government keep growing, no matter who we elect, no matter which party is in charge? Why do freedom lovers, those who truly want limited, Constitutional government, continue to lose the battle?

There are two answers. First, the freedom battle loses—year after year, election after election, decade after decade—because it is poorly funded. The political parties are well funded, mind you, but neither party truly stands for freedom. Freedom lovers lose because they are underfunded, pure and simple. More on this below.

Second, those who stand for freedom lose the battle to bigger government because the regular people can’t see what is happening. We don’t see armed troops in jackboots marching daily through our streets, entering our homes, and stealing our property and lives.

When the people can’t see this happening, it’s hard for them to get too excited about it. They don’t know what to fight against. They don’t know who the enemy is. They aren’t sure who to fight, or how to fight them.

The Paper Sword

We don’t realize that Soft Power attacks (certain licensing requirements, regulations, agency policies, commercial codes, revenue bills, statutory changes, executive orders, secret agency procedures, exemptions, ex post facto decisions, and court cases) are as dangerous to freedom as Hard Power attacks (invading armies, armed rebellions, political officials with their own armies, or government use of force against its own people).

In history, the regular people often respond to Hard Power attacks on freedom, but they seldom even notice Soft Power attacks until their freedoms are too far gone to recover.

Citizens of nations almost never realize it when Soft Power is attacking them. The biggest irony of this is that throughout human history Soft Power has taken away more freedom than Hard Power. In fact, Hard Power is seldom used until Soft Power has weakened a nation.

Today, we are witnessing a wholesale reduction of our freedoms—nearly all through Soft Power attacks that few people notice.

To See and Understand

As one insightful friend wrote to me in an email: “We don’t know who or what to fight against. I still believe the majority of Americans value freedom… We, as a culture, do not know how to defend freedom in this new age of information, nor do we know who or what to defend it from. All the average citizen sees—or is supposed to see—is things going a little darker, a little dirtier, a little more crowded, each day. There is, for most Westerners in any case, no force-of-state brutes-in-boots and uniforms…. We see only the results of class stratification and economic divergence…. The most dangerous enemy is the one you can’t see.”

Americans would stand up and vote to get their freedoms back, if only they understand how much they are under attack.

If they could see their freedoms being stolen by Hard Power attacks at the level that they are truly under siege from Soft Power, they’d change things—and fast.

But the regular people don’t see, because Soft Power is used behind-the-scenes, on paper.

How to Win It

This is why only a nation of voracious readers can maintain its freedoms. This brings us back to the first reason freedom is losing: underfunding.

Not only do we need a nation of voracious readers, we need a lot of successful businessmen, professionals, entrepreneurs, and others of means to fund freedom—to fund those things that help the regular people see and understand the impact of Soft Power.

This is the current battle for the future of freedom.
1. Will people of means fund effective responses to Soft Power attacks on our freedom?
2. Enough to win the battle?
3. ill enough regular people take entrepreneurial action and become people of means?

On these three questions turn our future.

Which of these three battles are you helping fight?

Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Aristocracy &Business &Citizenship &Community &Constitution &Current Events &Economics &Entrepreneurship &Government &Leadership &Liberty &Mini-Factories &Mission &Politics &Statesmanship

America’s Great Degeneration

March 5th, 2014 // 1:24 pm @ Oliver DeMille

Speaking of how the government runs its finances today, historian Niall Ferguson wrote:

“The present system is, to put it bluntly, fraudulent. There are no regular published and official balance sheets. Huge liabilities are simply hidden from view. Not even the current income and expenditure statements can be relied upon. No legitimate business could possibly carry on in this fashion. The last corporation to publish financial statements this misleading was Enron.”

This basically sums up the modern American problem. The government operates on one set of rules, hides it from the regular citizenry, and enforces a different set of rules on businesses and families.

No such system has ever remained free.

This is already extracting a terrible toll from our economy. As Ferguson put it:

“In a 2011 survey, [Michael] Porter and his colleagues asked [Harvard Business School] alumni about 607 instances of decisions on whether or not to offshore operations. The United States retained the business in just ninety-six cases (16 percent) and lost it in all the rest.

“Asked why they favored foreign locations, the respondents listed the areas where they saw the U.S. falling further behind the rest of the world. The top ten reasons included:

1. the effectiveness of the political system
2. the complexity of the tax code
3. regulation
4. the efficiency of the legal framework
5. flexibility in hiring and firing.”

In short, a number of other countries have more economic freedom than the U.S. We have more regulations, a more complex tax code, and other problems that make business abroad more attractive for about 84 percent of businesses deciding whether to stay in America or leave.

The average citizen isn’t aware of this reality, or the fact that corporation after corporation is moving to other countries because of Washington’s policies.

Our freedoms are being lost, as business leaders see every day. Yet it continues to happen, and most Americans simply don’t realize it. Nor do they realize how much this hurts our economy and the pocketbooks of U.S. families.

As regulations increase, making it harder and harder for businesses to make a profit, more jobs, capital, and corporations are leaving. The American Dream is declining day after day, right in front of our noses.

For most Americans, the only solution in mind is to elect better government officials. But this hasn’t fixed the problem yet — not by a long shot. The problem gets worse (government spending and regulations increase) whichever party inhabits the White House.

Some other solution is needed, and it will require a return to good, old-fashioned American initiative and innovation — from regular people, not government. Yes, the government makes this more difficult with nearly every passing regulation, but freedom is worth overcoming it anyway.

If we rekindle the American spirit of entrepreneurialism in the next few years, this is a battle we can win. Nothing else will fix the problem.

What are you doing to promote, spread, and teach entrepreneurialism?

Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Business &Citizenship &Economics &Entrepreneurship &Government

Obamacare is a Disaster

February 15th, 2014 // 10:00 am @ Oliver DeMille

Category : Blog &Economics &Education &Generations &Government &Politics