Government

We entered a new cycle of history during 2013.

Like any cycle, this one started small. But it is growing quickly, and it is already swaying the future.

To understand this, let’s briefly go back to the beginning — when this cycle was first described.

In 1836, even before Alexis de Tocqueville finished his famous classic, Democracy in America, a British official named Henry Taylor published a book entitled The Statesman.

Taylor’s main point was that the Anglo world had been focused on forms of government for too long, ever since 1787 when the Americans wrote their Constitution. Taylor noticed that that there are two main types of political leadership:

1. Setting up forms and systems of government (statesmanship)
2. The business of governing (politics)

The first, which consists mostly of writing and discussing what is the best constitution or model of government, is always led by statesmen.

The second, which consists of day-to-day politics that focus on the issues, is dominated by political parties, special interest groups, politicians, and bureaucratic agencies.

The first usually emphasizes freedom and liberty, while the second is all about increasing government spending and regulations.

Statesmanship vs. Politics

In 1836, Taylor’s message was that Europe and America had spent sixty years focused on the first kind of leadership, and he argued that it was time, in his words,

“to divert the attention of thoughtful men from forms of government to the business of governing.”

It was statesmanship versus politics, and Taylor believed that it was time to forget statesmanship for a while and emphasize politics. The era of the politician had come.

Specifically, the statesmanship era from 1776 to 1836 was followed by an era of politics from 1836 to 1913, which was followed by an era of statesmanship (changing constitutions and overarching societal systems) from 1913 to 1945. Then came another era of politics (increased government spending and regulations by politicians and bureaucrats) from 1945 to 2013.

We are on the verge of another major shift today, and the changes will be drastic.

Instead of the major national dialogue focusing on issues (e.g. immigration, abortion, energy policy, national security, health care, gun control, education policy, etc.), the increasing focus will be on how to change the Constitution.

It has already started, in fact. Less than a year ago, for example, Georgetown professor Louis Seidman wrote an article in the New York Times entitled “Let’s Give Up on the Constitution.” He argued that the Constitution is outdated, and that it is time to “scrap” it and write something better.

This brought a series of angry rebuttals from the Right, and a number of strong suggestions from the Left, but few seem to realize that this is the beginning of a new era of the American debate.

Several others have entered this growing discussion, like David Brooks, who wrote in the New York Times on December 12, 2013 that the U.S. should alter our system to “Strengthen the Presidency.”

And New York Times bestselling author Mark Levin wrote a series of new amendments that he feels should be added to the Constitution to fix our current system and get America back on track.

Just a couple weeks ago, almost 100 legislators from 32 states met in Mount Vernon, Virginia to discuss the possibility of adding amendments to the constitution through a convention of the states, as authorized by Article 5 of the constitution.

The Next Shift

When Orrin Woodward and I wrote the New York Times bestseller LeaderShift and released it earlier this year, neither of us knew that 2013 would be the year of this major shift — from politics to statesmanship, from issues to changing the whole system.

This is momentous, and our book outlines nine specific changes, in the form of proposed amendments to the U.S. Constitution, that would put American prosperity, freedom, strength and power quickly back on line.

I am convinced that LeaderShift is representative of the best of this new trend, this growing debate on how to change our system to get it headed in the right direction once again. And you can read all four of the new commentaries in this emerging debate (Seidman, Levin, Brooks, Woodward and DeMille) and decide for yourself.

Make no mistake: this is THE debate of the coming decade. As a nation, we have concluded that Washington is broken. The American people generally feel that the system is fractured and needs to be fixed, and those who are focused on daily governing will miss out on the real tide ahead: coming changes in our overall system.

Since such changes aren’t usually the focus in elections, many people won’t realize that this is happening. But as I already noted, the debate has already begun.

Issues and Politics

When Orrin and I were interviewed by many journalists about our book, it was a bit of a surprise to us that nearly every interviewer wanted to focus on issues, issues, issues and partisan politics, politics, politics.

That’s been the tone in America for over sixty years, so we probably should have expected it.

But now the tide is shifting. This isn’t something we can afford to get wrong. Change is upon us. President Obama was elected by promising such change. Yet if we make the wrong changes, it can only hurt this great nation.

Change is here, and it is the kind of change that focuses on our Constitution and the very fundamentals of our society and national system.

The debate will grow in the years ahead, the way such changes always do — slowly for a while, and then all at once.

Yet the ideas at the center of this debate, the ideas right now argued by Seidman, Brooks, Levin, Woodward and DeMille, and others who join the discussion, will sway the 21st Century.

I wrote in my book, 1913, that the year 1913 was a pivotal time of change. It looks more and more like its century year 2013 will be even more significant. This is the year we began the shift from politicians, bureaucrats and issues to and major changes to our Constitution and system.

Some will argue that we should change nothing, that the old Constitution is the best. But in reality we haven’t been following the original principles of the Constitution for many decades, and the primacy of the Constitution continues to erode due to the way Washington skirts, reinterprets and at times ignores it.

Whatever you think of our current system, change is imminent. The only question is: How will we change, what precisely will we change?

That is what this debate is all about. A LeaderShift is happening, right now, under our noses. America is changing while its citizens sleep.

What we need is a new generation of Madisons, Adams, and Jeffersons.

We need more men and women who understand how to write constitutions and amendments that create and protect real freedom. If you are one of these people, or should be, it is time to join the debate.

It is time to take action, so we go in the right direction.

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.

Do we have an answer yet? Not quite.

But we’re making progress.

A few months ago I suggested that many companies were going to lay off a lot of employees when Obamacare went into effect — starting in October 2013 and increasing for the next eighteen months.

Then I asked for input from readers: How can business owners overcome the negative effects of Obamacare and avoid laying off or shutting down?

A lot of people responded to this question, and many of the suggestions were excellent. Out of all the wise responses, one really struck me, because it showed true out-of-the box entrepreneurial thinking.

It went something like this: The entrepreneurs in our nation need to put their business innovation skills to figuring out a private business model that will provide effective, affordable health care that beats whatever the government is offering.

While this kind of innovation would require major creativity, initiative, and risk, not to mention capitalization, the rewards would be huge.

Actually, another response to my online question may provide part of the answer: Get people thinking health, not health care. This is much less expensive, easy, and effective. It doesn’t cover emergency care, and it won’t work for everyone, nor will it solve the short-term problem faced by small businesses, but it is certainly the right solution for a lot of people. Get a lot healthier.

A combination of these two might just be on to something.

The biggest problem isn’t Obamacare, it’s a generation that doesn’t naturally think of innovative, out-of-the box, entrepreneurial solutions for every major challenge. Humans are amazingly creative — there are real solutions to the Obamacare dilemma. Entrepreneurs need to find them, and make them profitable so they spread.

In fact, the whole reason Obamacare came about is that for a long time insurance companies could collect payments from a client for twenty or thirty years — and then raise the price beyond his ability to pay when a serious health problem came along. In short, health care was a major problem before Obamacare.

That said, there are solutions. Keep thinking like innovators. And keep sharing your creativity.

So, here is my new question: What is the real solution to health care? Write it, and share it…

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.

It happened on the same day.

Two people, who as far as I know don’t know each other, asked me the same question. Or, to be more precise, they asked two different questions that have the same answer.

In truth, this is a question that a lot of Americans have on their mind right now. Many of them don’t even realize it, but every time they watch the news, hear about current politics, or discuss Washington’s latest antics with friends or at work, they feel a growing sense that our government is becoming less and less likely to handle really big challenges.

The first question went something like this: “Oliver, I just don’t understand your logic in a recent article you wrote. I understand your concerns about big government, but why do you think business is any better?”

The second question was similar: “In your book, LeaderShift, you and Orrin Woodward have James Madison say that as business leaders go, so goes America. Why did you single out business leaders, instead of parents, academia, media or the government?”

This is an incredibly important question. Of course, I won’t presume to speak for Orrin — he can answer this question however he wants. His answers are always excellent. As for me, here’s my answer:

Where there is freedom, there is progress.
Where freedom is lacking, there is decline.

Yes, a little regulation can increase freedom — to the extent that it protects people and keeps contracts and agreements honest, and safe from crime. Beyond this, however, increased regulation means decreased freedom and therefore decline.

During the 1990s and 2000s, for example, the computing technology sector was probably the freest major industry in the world — and it brought us our greatest new fortunes, our major new technologies, and the biggest new advancements that drastically changed our world.

During that era, for example, most other sectors were highly regulated — and in decline as a result. Communications and media were highly regulated, banking became highly regulated after 9/11, transportation and manufacturing was highly regulated, and so was education, health care, farming, law, engineering, etc.

In fact, rewind a few decades, and note that the freedom in home construction and land development before the 1990s made real estate a major part of the economy. Huge fortunes, millions of jobs, and a lot of widespread prosperity came from this freedom. Not to mention widespread home ownership — the kind where people could actually afford their homes.

This kind of growth always happens where there is freedom.

And the increase in overbearing real estate regulation began before the housing bubble — it may well have caused it.

Remember: Where there is freedom, there is progress. Where freedom is lacking, there is decline.

Earlier in world history, America rose while Europe declined — precisely because America was free and most European nations were highly regulated. The same had happened when Greece and Rome chose high regulations while the European nations maintained relative freedom.

In the 19th century when Americans went west and found free lands to till, develop and improve, American prosperity soared. Later, when a Civil War gave a higher level of freedom to all Americans by ending slavery, prosperity skyrocketed. It took a while, but in less than eighty years the United States became the world’s leading power.

Freedom brings progress.

When industry, farming, education, and health care were only barely regulated (just enough to provide basic, obvious protections), all of these sectors made huge wealth, built a strong America, created millions of good jobs (where one working adult could support their whole family), and spurred increased innovations and technologies.

While big-government Europe watched its people live in apartments, small-government America watched its citizens build and own independent homes, often with large yards.

In big-government Europe well-to-do families owned a car; in small-government America even many lower-middle-class families owned several.

Freedom brings progress; decreasing freedom brings decline.

So many more examples from world history could be discussed. Sectors free from regulation lead a nation, at least until politicians figure this out and find ways to regulate them.

Today, there are at least five sectors that have higher-than-average levels of freedom:

1. Family
2. Home businesses
3. Network marketing businesses
4. Online businesses
5. Businesses that operate across borders in many nations

Note that politicians are already scheming ways to tax online businesses, force people to buy an electronic stamp for each email or Facebook update/relationship change, charge fees for various actions of international companies, and many others.

All such attempts to increase regulation actually reduce freedom and bring decline.

But for now, business is the sector of society with the most freedom. If progress is going to come, it will happen in the entrepreneurial sectors.

Bill Gates said that

“One sign of a healthy industry is lower prices. The statistics show that the cost of computing has decreased ten million fold since 1971. That’s the equivalent of getting a Boeing 747 for the price of a pizza.”

So why can’t all of us afford a jet today, just like we afford a computer? The answer is that during the past thirty years the aerospace industry was highly regulated while the computing sector was not. You can argue that airplanes should be highly regulated; after all, they can be weapons. But, in rebuttal, so can computers.

The principle remains: Where there is freedom, there is progress. Where freedom is lacking, there is decline.

If you want to promote freedom today, think entrepreneurially — and encourage your youth and others to do the same. The future belongs to entrepreneurship, because freedom leads to progress.

This is what’s really going on in our nation, and only those who understand this realize what’s coming — and what to do about it.

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.

The solution was suggested by Jagdish Bhagwati and Francisco Rivera-Batiz in their recent Foreign Affairs article, “A Kinder, Gentler Immigration Policy.”

This is exciting, and this can work.

The proposal boils down to this: Let the states try their own ways of handling immigration.

The results of such a policy would be interesting. At least one or two states will likely take a hardline policy against immigration, and a few will no doubt adopt a more lenient approach. Most will probably choose policies that are more in the middle.

As this happens, we’ll get to watch the results. Will the hardline states see negative social and economic consequences, or will the results be positive? What will happen in the states with lenient immigration policy?

States will have to decide whether to pay for the education and medical expenses of illegal immigrants, and how to deal with other issues that are truly, according to the Constitution, meant to be local and state issues anyway.

They will have to determine how to assess taxes from illegal workers, and how to respond to businesses that hire illegal immigrants in ways that bring the most benefit to the state, and they are much more likely than any federal agency to do these things effectively.

Over time, legislatures and courts will learn from these examples and trend toward the policies with the best results.

Not everything needs to be done from Washington. In fact, the founders specifically wanted most things to be done at the local, and if necessary, state levels.

A full 28 percent of Federalist Papers are dedicated to supporting this very point — what can be done by the states should not be done by Washington (see Federalist 17,23-30,33,41-51,53,59-60).

Critics will argue that illegal immigration poses a number of national security threats, and that national defense is clearly a federal issue. To address these important concerns, we can amend the proposal as follows:

1. Secure the border, to fully protect our national security.
2. Let the states try their own ways of handling immigration.

If history has shown us anything, it is that one of the fifty states is a lot more likely to adopt the right policy than Washington.

In fact, if the issue is left to Washington, it is doubtful whether we’ll ever get an effective policy — and many people feel that if Washington does pass something it may well be more bad policy.

America was founded as a federal republic, where the individual states were designed to laboratories that could teach each other — and Washington — what works and what doesn’t.

The wisdom of the framers can help us today in the debate on immigration.

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.

The Big Lie dominates Washington and much of our American culture. The lie, in a nutshell, argues that as government increases regulation, our society improves.

This lie has lasted a long time, mainly because our society is divided between two versions of The Big Lie. The Democratic version contends that as the government increases regulation on various sectors of society and the economy, our nation progresses. The Republican version maintains that as the United States expands it power around the globe, the whole world benefits.

Both lies are passed down to the rising generations, despite the fact that there is a preponderance of evidence that debunks them.

For example, the Republican Big Lie claims that after each major war (WWI, WWII, Korea, Vietnam, and the Cold War) U.S. leaders have reduced military budgets and hollowed our national defense — and that this has inevitably helped contribute to continued world conflict.

The evidence, however, tells a different story. In times of reduced military budgets, the Executive Branch has actually upped its strategic planning.

Indeed, as Melvyn P. Leffler put it in Foreign Affairs:

Decreased military budgets “forced U.S. policy makers to make tough but smart choices…to think hard about priorities and tradeoffs…And in this regard, history shows that austerity can help rather than hurt…”

The same is true of the Democratic Big Lie. For example, few things have been pursued by Democratic leaders as doggedly as the desire to increasingly regulate big banks, big business, and big health care.

But such policies have caused more harm than good. To date, we have little data about what Obamacare regulation will do to the economy, but there is ample information about banking regulation and its results.

As Charles W. Calomiris and Stephen H. Haber pointed out, nations that highly regulate their banks have experienced less stability and more banking crises than those with fewer regulations. For example, when Britain and Scotland adopted central banks in 1694 and 1695, respectively, both were ruled by King William III.

The King treated the two banking systems very differently, and the results were drastically different as well. Because William III saw the Bank of England as the source of his government’s borrowing, he wanted to regulate it to ensure access to easy capital. In contrast, he thought it “was easier to adopt a policy of laissez faire with respect to the Scots…”

The results are interesting, and instructive. Under the weight of extensive regulation, the English banking system was usually “fragmented,” “unstable” and “England suffered frequent major banking crises…In sharp contrast to England, Scotland [with it’s free, less regulated banking system], by the middle of the eighteenth century, had developed a highly efficient, competitive, and innovative banking system, which promoted rapid growth” in the economy.

In short, higher regulation hurt the economy, while less regulation helped it.

This same pattern was repeated by U.S. and Canadian banks, with the U.S. banks highly regulated and Canadian banks operating under less regulation.

Again, The Big Lie is that government regulation makes things better, but the evidence shows a different reality.

Calomiris and Haber noted:

“The banking system in the United States has been highly crisis prone, suffering no fewer than 14 major crises in the past 180 years. In contrast, Canada…experienced only two brief, mild bank…crises during that period…The Canadian banking system has been…so stable, in fact, that there has been little need for government intervention in support of banks since Canada’s independence, in 1867.”

What is the difference? The Canadian banks were set up, like in Scotland, as free and independent banks, while the U.S. banking system was established like the British model as a highly regulated source of ready capital for the federal government. As a result, Washington continues to increase banking regulation — which nearly always hurts the American economy.

The biggest problem in all this was pointed out by Murray Rothbard in his classic book, The Mystery of Banking, first published in 1983. Rothbard argued that few people understand banking, or how the government works with banks, and so they ignore what is really happening and just let it keep occurring. The connection of banks and the government in a highly-regulated system, Rothbard warned, decreases our freedoms and weakens our economy.

But since most people don’t even think about this, or consider it too complex, it just keeps happening. The truth is that banking really isn’t that much of a mystery, but most people find it too boring to study.

That’s how The Big Lie survives. It’s big, but it’s a bit boring. So the people don’t stand up against it. That’s how it starts.

But in our time, it’s reached another level. Now, in reality, most people actually seem to believe The Big Lie. They actually believe that government regulating something will make it better. They believe that more government regulations on banks will help the economy (truth: it does the opposite), that more government regulations on business will bring more jobs (truth: it does the opposite), and that more Obamacare regulations on health care will bring cheaper, better insurance and health (truth: it is doing the opposite).

The Big Lie is strong and growing in America. And the more it grows, the more it ensures the decline of our economy.

Those who point it out, from either the Right or the Left, or the middle, are simply ignored by most Americans. As a result, it is very difficult to fix the problem.

We are a nation in denial. We think more government will fix things, and so it grows. As it grows, it causes more problems.

And the cycle repeats.

At some point, we need to face The Big Lie. More government regulation from Washington won’t fix our nation. More government power from Washington won’t fix other nations.

We need to apply principles, not increase regulation. The principles of freedom work. We need them. Most of all, we need the average American to study them and understand them.

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.