“Long ago, the districts waged war on the Capitol and were defeated. As part of the surrender terms, each district agreed to send one boy and one girl to appear in an annual televised event called, ‘The Hunger Games.’ The terrain, rules, and level of audience participation may change but one thing is constant: kill or be killed.” – The Hunger Games
It can be risky comparing fiction with real life.
But there’s usually a lesson to be learned somewhere.
After all, many authors take real life experiences as the inspiration for their work. So it’s only natural to complete the circle by relating fiction back to real life.
The latest blockbuster movie – The Hunger Games – is based on a book of the same name.
It tells the story of an authoritarian central government that pits one group of oppressed citizens against another.
Of course, it’s not just authoritarian governments where that happens. Pitting one group against another is the very core of democracy and the Western Welfare State.
Communism Spreading West
The surprising take-away from Port Phillip Publishing’s first investment symposium – After America – was the number of times speakers used the phrase “welfare state”.
Your editor used it many times in our presentation. We pointed out it was baloney to suggest China was becoming more capitalist.
Our argument was (and still is) that China isn’t becoming more capitalist, it’s that the West is becoming more communist.
Sure, we’re not at The Hunger Games stage, where the State forces citizens to fight to the death. But we are at the stage where the State pits citizens against each other in a fight for government handouts.
That’s the thing. When the State goes down the path of welfare state bribery, it’s almost impossible to turn back.
At first it seems an easy way to buy votes… using someone else’s money. But because it is so easy, there’s always the temptation to keep doing it… until suddenly, the State has gone too far.
That no politician can ever get elected on a program of welfare cuts. Simply because those receiving the welfare cheques will always fear that their welfare cheque will be the next to get cut.
In The Theory of Money & Credit, Ludwig von Mises explains how it all works:
“Governments did not want to cause unrest among the masses of their wage-earning subjects. They did not dare to oppose the doctrine that regards high wages as the most important economic ideal and believes that trade-union policy and government intervention can maintain the level of wages during a period of falling prices.
And governments have therefore done everything to lessen or remove entirely the pressure exerted by circumstances upon the level of wages. In order to prevent the underbidding of trade-union wages, they have given unemployment benefits to the growing masses of those out of work and they have prevented the central banks from raising the rate of interest and restricting credit and so giving free play to the purging process of the crisis.”
Naturally the Progressive will say, “Hang on, Australian unemployment is only 5.2%, so the government isn’t paying unemployment benefits to bribe the masses.”
The Progressive may want to re-think that view. As AAP reported over the weekend:
“The official unemployment rate is 5.2 per cent but, according to data released this week, 14.4 per cent of Australian[s] who want a job don’t have one.”
That tells you many more people rely on government handouts than official unemployment figures show. They may not qualify for unemployment benefits, but you can be sure the government is handing out taxpayer dollars in some form.
The government imposes a minimum wage to keep the trade unions happy. But because minimum wage rates cause higher unemployment, the government has to placate the unemployed by paying them not to work.
It’s taxpayer versus tax-receiver.
Capitalists Like Us?
The bottom line is, you don’t need to live in an authoritarian state for the State to be authoritarian. Democracy combined with a Welfare State creates a similar form of government.
So similar in fact, that the lines become blurred.
It’s why we believe so many people have become confused about China. They see China meddling in markets, directing the economy, imposing tariffs and providing subsidies.
Then they look at Western economies… where governments have meddled in markets… where governments try to direct the economy… where tariffs are imposed… and where subsidies are handed out like candy.
“Say, those Chinese, they’re capitalists just like us!”
If you think democracy is the path to freedom and prosperity… that by turfing out one mob and electing another you’ll get a better brand of democracy and the new mob will take care of you – you’re wrong.
So, what is the path to freedom and prosperity? The After America investment symposium had the answer to that…
Your only option is for you to take care of yourself and your family.
How do you do that?
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Written by Kris Sayce
Kris Sayce is Editor in Chief of Australia’s biggest circulation daily financial email — Money Morning. (You can subscribe to Money Morning for free here).
Kris is also editor of Australian Small-Cap Investigator, his small-cap stock research service, where he provides detailed analysis on some the brightest, smallest listed companies on the ASX.
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