Democracy and Debt

Global government debt in 2010. Please take note of which countries have the highest debts.

 

Assalaam alaykum,

A few years ago, this article was forwarded to me and I was asked for my thoughts. I replied with the email below and subsequently wanted to publish it as a blog post but never got around to it. Now, with a general election next month in the UK, I am again hearing discussions about the validity and legitimacy of voting and democracy and therefore I think the information below is very relevant. I haven't quoted any fatawa or even touched on the issue of man-made legislation. Rather, I've quoted Americans and other westerners who have grown up and still live in democracies. For the purposes of the blog, I've added links where appropriate.

______________

Assalaam alaykum,

Jazakum Allah khayran for the article.

It appears to me that the author has completely missed the point about what a democracy is, and why democracies are always in debt.  The author also has no idea what a bank is supposed to be and what free markets are. In conclusion, he favours social democracy even though he laments that it is now large social democractic projects, like the EU, that are working for the banks. So, as a typical leftist, he continues to sing the praises of statism, i.e. a big government regulating and controlling an economy, and when the obvious and inevitable consequences happen (i.e. debt, unemployment, corruption, a ruined economy etc.) he can sniffle and say "if only the right people were in charge". As Milton Friedman said, we don't want a system that depends on the right people running it. Rather, we want a system that forces the wrong people to do the right thing.



As explained by Jonah Goldberg in Liberal Fascism, Milton Friedman in Free to Choose, and several others, when governments expand they are always bought up and infiltrated by corporations and banks. The more power and influence a government has the easier it is to corrupt. Milton Friedman on incentives for immoral behaviour:



On corporatism:



As Goldberg explains brilliantly, it is government intervention, like FDR's New Deal, that leads to monopolies, because the corporations come in and sit down with governments and write the regulations, thereby making it impossible for smaller businesses to expand and eventually come to compete with the corporations. This is not capitalism; this is crony capitalism, or, as as Mussolini described it, corporatism. It can be called capitalism only in the sense that the means of production are technically in private hands, but it is certainly not free trade. In a truly free market, it is very hard for a monopoly to be created, let alone survive.

Goldberg also mentions that the Vatican accused Mussolini and his Fascists of statolatry, i.e. state worship, and this is exactly what is wrong today. The majority of humanity, especially in the west, whether consciously or not, worships the state, i.e. they believe that the state has supernatural  powers and can achieve the impossible. Thomas Sowell on The Art of the Impossible:



In short, the way democracies work is that politicians offer voters the impossible in order to be elected, and they avoid raising taxes because that would cost them votes. So what do they do? They borrow money, and thus the debt piles up. John Stossel did a good show on this a few weeks ago:



Before long you have a spoiled population who can't live without their government handouts (tax credits, subsidies, welfare, Medicaid etc.). The debts are spiraling out of control but politicians are too scared of losing votes to a) cut spending or b) raise taxes. Ibn Khaldun mentions this in his Muqaddimah, i.e. that people dependent on the state become like women and children dependent on the master of the house. The ancillary to borrowing is of course the printing of money, which inevitably leads to inflation. This is why Milton Friedman told Phil Donahue's audience back in the 1970s that if they wanted to stop inflation they needed to leave their politicians alone. [ML: The discussion starts at 26:23] Regardless, what we see from this set up is that central banking (and a fiat currency) is absolutely crucial for a democracy. Canadian commentator Stefan Molyneux (the first video is about gold becoming legal tender in Utah, and Molyneux explains how democracy can only work with fiat currency and debt):





[In the second video, the relevant discussion starts at 3:40]

Democracy is, in fact, bribocracy. It can also be called deathocracy because it relies on force and violence, and there are other videos by Molyneux in which he explains this.

...
[end of email]

Wassalaam,

Mahdi
______________

Other videos of interest:

Democratic Tyranny
Left vs Right

Related Posts:

Madness is Rare in Individuals
Allah is the Wali of Those who Believe (especially the third footnote)
The Democratic Fallacy
Britain's Trillion Pound Horror Story
Muslims and Infrastructure (Jurjis)