Our Retreat from Prosperity

The process that built the United States into the world's wealthiest country has reversed; it's tearing down what it once built.  Americans once sang proudly of "America the Beautiful"; now they avert their faces in guilty silence while demolishing everything that once defined them.  They welcome strangers to replace them.  This is an ending; it cannot end well.  Long downhill slides never have.

British colonists came to North America for opportunity denied by the rigidities of their home society.  The British had made the most of the Industrial Revolution up to that time and they brought that with them.  Some tried communal forms of organization; those quickly failed and were replaced by private property, which worked because people produced when they could own and enjoyed the result.  Private property was a foundation inducing colonists to produce; a result was their buying and taking land to develop from the Indians, a process that accomplished the replacement of the Indians by the colonists.

Spanish colonization awarded the land to elite settlers and absentee owners who enslaved the Indians to work it rather than driving them off, making a very different society compared to the farmers, traders, and manufacturers who appeared in most of North America.  The southern plantations were the closest parallel but for their use of imported Africans to replace Indian labor.

The American who developed out of this was optimistic, ambitious, hardworking, capable, and willing to sacrifice for future gain; what came to be called the Protestant Work Ethic was his sigil.  He viewed an enormous land rich in resources, there for the taking.  His government saw the lure for other governments and encouraged him to take as far and as fast as he could.  The government protected manufacturers, provided farmland to homesteaders, and used huge land grants to encourage universities and railroads; the railroads in turn sold land cheaply to encourage farming, ranching, and mining as sources of business.  Roads, canals, bridges, and other improvements were favored.  By 1850, the United States had laid the base for its development into world leadership in manufacturing and agriculture.  Immigrants from depressed countries flooded into the U.S. to share the opportunity unavailable on such a scale anywhere else, furnishing large amounts of both labor and knowledge.  This was a potent mix on a new scale.

American industrialization piled factories onto an agricultural society, accelerating urbanization.  As it had in Europe, it displaced people, which provided fertile ground for politicians selling socialism in various forms as a means for relieving the economic distress.  In Europe, the socialists were immediate beneficiaries of the Industrial Revolution.  In the United States, the Civil War displaced additional people, especially in the South, and fed political corruption.  Political reformers clustered around the idea that the solution to such large-scale problems had to be the federal government.  Approaching the end of the 19th century, the came to call themselves Progressives and eclipsed Americas' acknowledged socialists.  They accomplished their first national political successes with passage of the Interstate Commerce Act, the Sherman Antitrust Act, and the Forest Reserve Act, which began government control of commercial carriers, of corporations, and of natural resources, all before 1900.

The first Progressive president was Republican Theodore Roosevelt; the second, Woodrow Wilson, a Democrat.  Both effectively forwarded Federal government control of the U.S. economy.  Herbert Hoover, contrary to popular impression, was a Progressive and an activist in expanding government's role; Franklin Roosevelt ran against his spending but many of his Depression policies were rooted in Hoover's, resting in both cases in expansion of government in the economy.  Though the legend of Hoover's laissez-faire approach toward the Great Depression still lingers, the truth is much more interesting.  Neither president's policies succeeded in relieving the Depression; recovery was built on the growth following World War II.

Let's analyze: Resources, labor, and investment came together in America and government stayed out of the way but for encouragement.  That was capitalism, more free and unrestricted than it had been anywhere else, a result of an open land lacking the social and legal restrictions of Europe, magnified by the disparate backgrounds and interests of the new Americans that loosened social boundaries.  Such unrestricted capitalism is rare in history and the sheer scale was unique; that was the basis for America's unequaled wealth-production.

The lack of cultural uniformity and cohesion that freed economic forces to operate efficiently accelerated the relentless changes that also provided numbers of displaced people, the losers in the capitalist reward system.  Many were only temporary losers but some were stranded.  That portion of the "creative destruction" of a free market provided elected politicians with target voters.  The Civil War, fought to decide whether industrial or agrarian interests would control policy, added extensively to these displaced voters, strengthening the Progressive movement and opening to it the halls of power.  The very factors that provided capitalism its effectiveness also provided the wide range of outcomes, the winners and losers that rewarded politicians for attacking it.  They had only to offer government as the equalizer, promising to offset life's unfairness by taking from the rich to give to the poor, and that they found easy to do.

By producing still more losers, the Great Depression vastly accelerated Progressive policies and government growth.  World War II added to it.  So did such later programs as President Lyndon Johnson's "Great Society."  Today, it will require some thought to find an aspect of the economy without government presence.  Such omnipresence does not arrive free; it consumes or restricts an increasing share of resources, denying their free-market use.  A point where government overwhelms the economy's freedom arrives and it slips quietly into statism.

If free-market capitalism carries the seeds of its own destruction, so does the suffocating, stultifying statism that results from it.  Call it socialism, liberalism, Progressivism, Communism, or anything else you like; it ends of its own incompetence.  The politicians chasing power have to escalate their promises over time to hold off rivals.  The world's resources are finite and at some point, political promises outrun the available resources and the edifice collapses.  That's what brought down the Communists and it's what we see happening in Europe and in the U.S. now, with governments quite deliberately pushing things.  With green excuses, governments are depressing the living standards of the developed world, primarily by driving up the price of energy and secondarily via regulation, continually limiting industrial production and individual choices.  Change comes fast now; technology has changed nothing but it has accelerated response times.

It would be nice to know what will follow the present statist cycle after its financial collapse, but that isn't given us to know.  We can predict statism following free-market capitalism and we can predict statism's ultimate collapse, though not neatly wrapped with a date.  But it's not far off, by appearances.  Statism self-destructs by impoverishing itself; all you have to do is look around.

So free-market capitalism is the natural source of Progressivism and Progressivism is the destruction of free-market capitalism.  Free-market capitalism creates wealth; Progressivism destroys wealth, except for the political elite who acquire it via appropriation from others.

Capitalism is the political Ouroboros -- the snake with his tail in his mouth, arising from chaos and descending again into it as he swallows himself.  But it's great while it lasts...at least, for the winners.  By creating the world's first large-scale majority middle class, it created more winners than any predecessor.

Maybe Americans will revert to their roots, rise up, and restore that which provided their glorious past; no better time to consider that could be imagined.