(English summary from the foreword and introduction of the upcoming booklet “Mehr Kapitalismus wagen. Streitschrift für ein Gemeinwesen jenseits von Staat und Politik”)
The march on the path towards destruction is gaining speed. For decades now, the so-called “Western” world is moving in the wrong direction. Plagued by growing interventionism, the economy is weakening. Yet instead of taking the worsening of economic performance as a warning that the wrong path is taken, governments implement more of the same bad policies. Instead of opting for more capitalism, governments choose more socialism.
Politics has become an obstacle to wealth creation. Under the political system of the modern party-democracy, only a falsified kind of capitalism does exists. The rule of the party democracy undermines the free market economy. In order to arrive at unrestrained capitalism and to bring about an authentic market economy, there is a need to abolish politics. The less space there is for politics and the less there is government action, the faster free capitalism will emerge. Such a change has become a necessity because we need an economic system of the highest productivity.
Modern technology provides the tools that will make the political apparatus obsolete and allows the privatization of the functions of government, of the public administration, and of the judicial system. With the end of party politics and of the monopolistic state dominance, a colossal financial burden falls from the shoulders of the population. In a world without a state in the conventional sense, the cost of living would be only a fraction of that of today and obligatory contributions would take only a negligible part of income. Productivity would be so high that the purchasing power of the salaries would do away with the anxieties of today about job security and paying the bills.
The policy agenda of the modern democracy asserts that government could prevent and cure unemployment, economic crises, recessions, depressions, inflation, deflation, and inequality and that the state could provide education, healthcare, and social security for all. The promises of rising incomes and employment dominate the political campaigns. Yet politics has never attained these assertions. In the time to come, the system of party politics will even less so fulfill its claims.
These collectivist policies have not worked and will even less so function in the new millennium. The answer is not more of the old but to eliminate politics and the state. We must do away with the conventional economic and social policies. Not more welfare state and government intervention are the answer but less state and more free capitalism. Not more centralization but more decentralization. Not more international organizations such as the UN and UNESCO, the IMF along with the World Bank, and last but not least, the infamous WHO is the answer but to abolish them before they fully become the new masters of the world.
Guided by obsolete principles — such as social justice — the economy becomes fragile and less productive. Yet instead of changing the current economic system towards more capitalism, the reverse has been taking place. Capitalism is getting destroyed while more socialism deepens the problems. The endpoint is a stagnation first and the decline thereafter. Governments have become a burden on the economy. Contrary to the claims, economic policy does not promote stability and economic growth. Interventionism hampers productivity gains and weakens the fulcrum of prosperity.
The modern administrative state is active in all sectors of the economy and society. Money is in the hands of the state. As such, the state takes part in each monetary transaction. The public sector is present in the form of taxation, and the government plays a major role in the economy with its control over the spending for the military, health, pension, and education.
Interventionism has taken hold of the economy. Yet in truth, it is governmental activity that provokes many of the evils that the political leaders claim to heal. Instead of smoothing the economic cycle to stabilize the economy and to strengthen the factors that bring about economic growth, the impact of the monetary and fiscal policy weakens and destabilizes the economy.
Economic policymakers ignore that fluctuations of the economic activities are natural and indispensable since they show to the entrepreneurs that there are distortions of the capital structure and that business management must, therefore, alter faulty allocations. The policy of on economic stimulus one after the next, however, falsifies the crisis signals and by their monetary policy of ZIRP and NIRP, the central banks have virtually eliminated the signal function of the interest rate.
When the prices, wages, and interest rates do no longer serve as reliable economic indicators, the market mechanisms of adjustment become distorted, and the economic agents are being deceived into committing mistakes. Thereby weakened, the bad performance of the economy serves as the fake reason that more government intervention is needed. Distortions spread throughout the economy and the longer and more intensive the state intervention has worked, the more difficult it becomes to amend the production structure. The artificial boom, which government itself has instigated, becomes the next bust.
A hyperactive policy has prolonged and deepened the crisis during the Great Depression of the 1930s. Massive fiscal and monetary stimuli have not pulled out Japan from its stagnation, which has afflicted this country since the 1990s. After the outbreak of the 2008 crisis, governments and central banks in the United States and Europe have been working to boost their economies. Governments and central bankers claim that by expanding government expenditure and through hyper-low interest rates, they have averted a new depression. Yet the great economic recovery that was promised has not become a reality. With the “pandemic of 2020”, the next deep slump has arrived. Yet here, too, it was the economic policy, this time in the form of the lockdowns, and not the virus that has caused the economic crisis.
The state’s response to a supposed “pandemic” has taught us that existing institutions cannot be relied on to guarantee freedom and prosperity. The lockdown has driven many people into misery and robbed the citizens of their freedom. A new tyranny has emerged, tarnished as a technocracy of the good but inherently evil.
Even in the so-called “Western countries”, the executive branch has ignored parliaments. There was hardly any resistance from the judiciary, even though personal liberties were violated. Together with the deprivation of liberty, the impoverishment of large parts of the people by their own government happened shockingly smooth and swift.
Everyone should now be warned that the political and legal system as it currently exists is not a guarantee of freedom and prosperity. The so-called “democratic constitutional state” has demasked itself and the leading parties and politicians have exposed themselves as charlatans. The representatives of the people have given in to the government’s claim to power, as has the judiciary.
The fall into more centralization and new forms of dictatorship were possible because of a receptive mindset of large parts of the population — a brainwashing that has been in the making over many decades and soiled schools, universities, the legal system, and the public mass media.
Guided by the false ideas that these institutions now disseminate, the government has become a suppressor of wealth creation. The public discussion of economic growth is full of myths, which excite the public as ‘limits of growth’. Climate protection has become the new religion with nature as its new god.
It is time to abandon the myths about the state, politics, and the economy. The modern political party system is neither democratic nor beneficial to the people. Parliaments are not representative of the people. The current monetary system does not promote prosperity. To get out of these conundrums, more state and more politics will not help. We need a free society and a free economy. A decisive step to accomplish this goal is doing away with the political parties and elections.
Modern technology allows the choice of representatives by random selection. A legislative Assembly whose members come into office by lot, even if larger than present parliaments, would cost less than an electoral system, be more representative, and in this sense would be much more democratic. With the length of service limited, the representatives would return to their civil life and their law-making would be free of the evils that come with the present political party system and its politicians whose main aim is careerism.
The vision of an anarcho-capitalist order with a highly productive economy and a stateless, highly decentralized society stands in stark contrast to the contemporary social-democratic, ‘liberal’ system of governance which marches on to more government spending, more public debt, and more regulation, lower productivity, and less purchasing power of the salaries.
The inner workings of the present social-democratic system bring higher taxes and more contributions. Public debt will continue to rise. The endpoint of the existing system of party democracy, social welfare, and state capitalism is not stability, wealth, and liberty but state bankruptcy, misery, and suppression. Without a change to a libertarian order of a stateless society, the road leads to a system where the new technologies could become the deadly instruments of comprehensive state control in the hands of a totalitarian regime.
In order to block the new wave of totalitarianism, we must have more capitalism and fewer politics. Instead of the social democratism, a libertarian order is need that would do away with party politics through a system called ‘demarchy’ or ‘sortition’, which has the legislative body selected by a lottery. A political system free of party politics together with a market-based monetary order and the private provision of law and security would minimize and finally abolish the State as the monopolistic organization of the apparently “legitimized application of violence”.
An anarcho-capitalist order would open the way for the new technologies to do away with the avalanche of public policies and regulations and thus eliminate the present system, which is so inefficient, corrupt, unjust, and which is in its essence also undemocratic. Free capitalism together with the drastic reduction of the state and the abolishment of politics would do away with the financial burdens that afflict the modern citizen. Not state intervention in economic life leads to prosperity. The path to affluence is the withdrawal of the state and the end of politics.
Free capitalism embedded in a minimum state and a free social order is the appropriate economic system for the new millennium. Capitalism does not become better if it becomes more like socialism. In order to gain prosperity, capitalism must become more capitalistic. There is no rational alternative to free capitalism. Those nations that reject the libertarian order of a free capitalism will first stagnate, then decline and finally wither away into destitution and bondage, while those communities that welcome and foster free capitalism will enjoy prosperity in liberty.
A step on the way to a free society would be, first, to establish a truly representative democracy by randomly selecting the people’s delegates. Such an ‘aleatory democracy’, also called ‘sortition’, or “demarchy” would set the conditions for a new way of legislation beyond the special interests that dominate a democracy based on elections. A body of randomly selected non-political lawmakers would represent the people. Using public money to buy votes and to serve special interest groups to promote political careers would vanish. While the logic of the present system of political elections endorses government spending and more public debt and taxes, a randomly selected parliament would end the use of public money for buying votes. The role of the state would diminish along with the role of politics.
A further step toward free capitalism would be to end the central bank and to do away with the state monetary monopoly. A private monetary system would restrict the latitude of the state to spend. Doing away with the state money and establishing a free money system would curtail the public debt and all the evils that come with it. The system of governance by political parties allows the deception according to which each citizen could live by the generosity of the state if only the right party would gain the election. A free monetary system would unmask this fraud. Under free banking, the state loses its monopoly over the currency. The role of the national currency as the only ‘legal tender’ would disappear.
Such an anarcho-capitalist revolution does not consist in a violent upheaval but comes through insight. The victory of libertarianism does not require martyrs. Free capitalism will emerge as the economic system with the highest productivity when the shackles of the modern state do fall. Under the societal order of anarcho-capitalism the potential of the fourth industrial revolution would come to its full fruition.
The prime effect of the current industrial revolution is a gigantic leap in productivity. Yet to gain the full potential of the massive increase of productivity, we must do away with the state and politics. Over the past two hundred years, since the first industrial revolution, technology has transformed human existence more than in the thousands of years before. In the next couple of decades, innovations will change the world more than happened in the past one hundred years. What took place with manufacturing and basic services will encompass sophisticated workplaces. Job security is a thing of the past and a college degree serves no longer as an insurance policy against unemployment.
Yet the new technologies contain the solution of the problems they present. While technological progress destroys occupations, innovations make the economy more productive. Higher productivity is the solution to the problems. Yet to come to its full fruition as a source of liberty and prosperity, the immense productivity gains that are to result from the fourth industrial revolution must be embedded in a socio-political and economic order of liberty and free markets.
To some, the turning point to true capitalism may seem utopian. However, this objection has been valid for all political innovations. The ancient Greeks were talking about democracy, but they could not imagine a society without slavery. The Romans thought it impossible to rule without capital punishment. The monarchy was sacred to the people of the Middle Ages. Just as these beliefs of the past have vanished, today’s political creeds that a society needs political parties, state money, state administration, and a public monopoly over the application of force to guarantee justice and security will also disappear.
We are at a crossroads. Like in the decades before and after 1800, when the industrial revolution took off, those nations that did not recognize the signs of the time have fallen behind and remained in stagnation. Today, the world faces a similar challenge. Again, we must choose and take a decision. This time it is about more or less capitalism. Less capitalism will lead to socialism and thus to the misery associated with such a regime. The right way for the 21st century is the choice in favor of free capitalism. The future belongs to those countries that choose capitalism free from the state and from politics as their system of governance.
The new millennium will belong to those societies that discard the administrative state and move towards capitalism that is free of the state and of politics.