Originally posted at Sprott Money June 8, 2016
In much of what was once called "the free world," governments and economies are in the throes of self-destruction. Before long, we shall witness revolution in several of these countries.
The revolutions may prove to be violent, or they may prove to be "soft" revolutions - major changes in the political structure. They may vary anywhere from mere changes in the rhetoric of political hopefuls, to changes in the actual structure of governments.
One incorrect assumption about revolution is that it took place because the entire population had become dissatisfied. Not so. Most every revolution occurs as a result of a fraction of the population (sometimes a tenth, sometimes a third or more) taking action significant enough to bring about the desired changes.
This is an important point, as it serves as a reminder that revolution frequently comes about as the result of a minority dissatisfaction. The revolution may then succeed if the minority can pull off a coup. And revolutions are not necessarily morally right or wrong, they're just successful bids for change. In many such cases, all that changes is the faces, not the fundamentals of governance.
But, assuming that the objectives are clearly-stated objectives (as opposed to vague proclamations such as, "We're not gonna take it anymore," we can examine, whether, in hindsight, the stated objectives of the revolution have been realised.
The Ghost of Revolution Past
Let's have a brief look at the American and French Revolutions, which occurred at roughly the same time. Each aimed at the overthrow of a monarchy that was regarded as oppressive in its rule. The American Revolution was highly successful in that, by championing the rights of the individual, it opened up America to a highly productive future that lasted for quite some time. However, the French Revolution, which had similar stated objectives (the motto was, "Liberty, Equality, Fraternity"), did not succeed in its stated objectives. It devolved fairly quickly into vengefulness, pillaging of the property of the Second Estate (the nobility) and demands for entitlements and political favours. Consequently, it failed to revitalise France; it did not result in an era of great freedom and productivity; it devolved into corruption and socialism.
A glimpse into why greater productivity (as a bi-product of greater individual freedom) did not occur is evident in France's "Declaration of the Rights of Man," a parallel document to the then-new American "Bill of Rights." The clauses were somewhat similar, but, on inspection, the eventual abuse of rights was baked in the cake right from the outset. Two examples:
XIII. A common contribution being necessary for the support of the public force, and for defraying the other expenses of government, it ought to be divided equally among the members of the community, according to their abilities.
Here we have a clause that was clearly written by a committee. The original author could have been a French "Jefferson" or "Madison," as it states that taxation should be divided equally, yet an amendment was added - "according to their abilities." Well, unfortunately, that tosses "equal" out the window, and allows for future legislators to add as many socialistic regulations as they see fit. "Equal" has a clear meaning, whilst "according to their abilities" is vague enough to allow any level of inequality future legislators might desire. Clearly, in putting this clause through committee, there were French "founding fathers" who had no intention of honouring liberty and equality, but had a more entitlement-centred France in mind.
XVIII. The right to property being inviolable and sacred, no one ought to be deprived of it, except in cases of evident public necessity.
Here we go, again. A firm statement as to the rights of the individual, watered down (again, presumably in committee) with the rider, "except in cases of evident public necessity," to allow the state the authority to violate that right as it sees fit.
A declaration of rights that negates itself is no declaration of rights at all. Noted English pamphleteer Thomas Paine (who had assisted in providing verbal focus to the American Revolution), said, in discussing the French declaration at the time,
"[G]overnment is governed by no principle whatever...it can make evil good and good evil, just as it pleases. In short,...government is arbitrary power.
Exactly so...and a memorable observation with regard to any government.
The Ghost of Revolution Present
Argentina was once a thriving country, but has been plagued, since the Perons in the 1940's, with socialistic regimes. They have just elected a new president - Mauricio Macri, who has promised to save the collapsing economy through conservative measures. To most people outside Argentina, this appears to be a soft revolution; a promise for a revitalised Argentina. However, for those closer to the situation, the "revolution" may be pre-ordained to failure. Across the river in Uruguay, prior to the recent election, my neighbour Marcelo shrugged his shoulders and said to me,
"Most Argentines receive entitlements, but as Cristina ruins the economy further, the entitlements get smaller and smaller. So, they're angry and, this time, they'll vote for a conservative for president this time. Argentina will become more fiscally responsible for two or three years, then the people will demand a return to the socialism that they had before. The majority don't care about a healthy economy. They only want conservatism long enough to stabilise the country, so that they can get their entitlements back. It's always the same."
He's correct that in Argentina, the cycle has repeated over and over. Until now, no lesson was learned by the majority of voters. So, this time around, have they figured out that entitlements are counter-productive to a vibrant economy and begin a period of prosperity for Argentina, or will they give the new president a few years to stabilize the economy, then once again begin demands for entitlements? Time will tell.
The Ghost of Revolution Future
Many in the US talk of revolution. Most hope for a soft revolution, in which their country would go back to the good old days of traditional values, hard work, the rights of the individual and a productive society.
Not likely to happen, I'm afraid. The first American revolution resulted in that very outcome, but that was (in my opinion) because the colonists had no entitlement society to begin with. They went to America as pioneers and each was his own champion. They therefore accepted hard work, self-reliance and treasured individual rights. After the revolution, the US went into a long, highly productive period, because the great majority of Americans shared this view.
Unfortunately, that's no longer true in America. "Freedom" is a concept that sounds good to all, but, with it come great responsibilities - responsibilities that a majority of citizens are unlikely to accept after the revolution. Just as in France, they will want to be assured that, although they want their own freedom, they want to limit the freedom of others; so that others be forced to contribute to "the greater good."
Once the concept that your neighbour is obligated to sacrifice his freedom to satisfy your needs or desires is ingrained in a people, it's virtually impossible to remove. If we seek true change, we're only likely to find it in locations that are truly starting over, without the baggage of an entitled population to mire the rebirth of the new regime.
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