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Government and Economics Made Dead Simple: Either people control the government or government controls the people

There are only two types of governments.  Two.  That’s it.  There are those where the people control the government and those where the government controls the people.  Likewise, there are only two types of economic systems: economies where free markets control commerce and economies where bureaucrats control commerce.

It’s that simple.  Really.

The Two Types of Governments

\ Those fortunate nations believe that people are born with natural rights and inherently possess the liberty to direct their own lives.  The term democracy is bandied about, but nations based on sovereign individuals are never pure democracies.  Democracies can take whatever they want from groups outside the majority voting bloc.  Instead of sovereign, individuals outside the mainstream can be victims of the popular vote.  Countries that respect an individual right to “life, liberty, and the pursuit of happiness” are republics or parliamentary systems with safeguards for minority interests.

The United States of America was founded on the principle of sovereign individuals — an idea that flipped the concept of “divine right of kings” on its head.  Instead of rulers being ordained by God to rule, each and every person was “endowed by [his] Creator with certain unalienable Rights.”  Nothing’s absolute in this world, but the greater the power of the state, the less power held by the people.  Our Founders understood this and possessed a healthy fear of an overly powerful government.

Two Types of Economies

Commerce enables our lives.  Few can self-provide all of life’s necessities, so the human species has always relied on trade to get some of what its members need or want.  In centrally managed systems, bureaucrats decide what gets produced, in what quantity, and how these goods get distributed.  If you believed in the infallibility of man, you might think this is a nifty system.  You’d be wrong.  It’s been tried countless times and always failed to deliver the goods.  State-run economies generate shortages that never seem to go away.  You see a line; you get in line.  It doesn’t matter what they’re selling.  You either need it or can trade it on the black market for what you do need.  State-run economies always have black markets.  This aspersion really denotes the sector that functions because it remains market-driven.

On the other hand, market-driven economies produce abundance.  Why?  Because every time you buy something, you’re voting for what you want.  Independent producers, with no guidance from above, tally these votes and make more of what you bought.  They do this to make a profit.

Profit is the fee producers get for making desirable stuff available.  If you don’t like the stuff, they lose.  If you like it a lot, they get rich.  If that’s not clear, ask Steve Jobs, Taylor Swift, or LeBron James.  The dollar incentive to get the right stuff to market is what makes a market economy hum.  At times profits get exorbitant, but other producers see this and rush to get in on the action.  Unless…the current producers are in cahoots with the government.  You see, governments can create barriers that other producers can’t overcome, thus ensuring that their chosen suppliers continue to make a killing.  The chosen suppliers provide kickbacks to their political overlords.  This is called crony capitalism or, in its extreme variant, fascism.

This brings up a final point.  Nothing in this world is black and white.  It’s a gray scale.  Different governments wield different levels of power.  But once the centralization of power passes the tipping point, governments go totalitarian.  All of them.  No exceptions.  Human beings are flawed creatures.  Some have an inborn need to control everyone else.  These alpha types are never satisfied and constantly strive to increase their control over every aspect of society.  They claim they’ll take care of you, but it’s a bait-and-switch game.  They really want you under their thumb.

Socialism does more than deny you material things; it sucks the soul out of a society.  Socialist countries are sad, dreary places.

Excessive power in government is bad.  Socialism concentrates governmental and commercial power in the state.  No checks, no balances.  Raw power centralized in one place where the most ruthless can grab it to dominate other human beings.  For most of the eight billion people on Earth, this is their way of life.  Why would you want to join them?

Our freedom depends on We the People controlling our government and not the other way around.  Freedom is a precious commodity — so rare that few in history have experienced it.  As Ben Franklin put it so succinctly, the real question is whether we can keep it.

James D. Best is the author of Tempest at Dawn, a novel about the 1787 Constitutional Convention, and the Steve Dancy Tales, among other books.