Monday, January 31, 2011

Crony Capitalism, A Return to British Mercantilism

By Douglas V. Gibbs

The American Revolution was fought to bring independence to the American Colonies. As a new nation, using Britain as their frame of reference of defining tyranny, the Founding Fathers wanted the United States of America to be as little like the British Empire as possible. One of the characteristics of Britain's centralized system at that time was the British mercantilist economic system, which was a system built on protectionism, government franchise monopolies, a state-run bank, and interventionism that benefited the state and its supporters at the expense of the general public. The British Mercantilist Economic System was an instrument of plunder against the people. Such a system of crony capitalism consists of governmental consolidation, the elimination of the true free market, a dominant executive power, and mercantilistic economic policies.

During the time of the Founding Fathers, as with today, the big government folks (progressives) pushed for an interventionist approach to our economy. Statism has progressed in America despite the limiting principles of the Constitution that were designed to guard against such centralized thinking. The liberal left progressives are trying, as did Teddy Roosevelt, Woodrow Wilson, Franklin Delano Roosevelt and Lyndon B. Johnson (to name a few American progressives), to use the powers of the federal government to achieve some kind of national greatness through a manner that holds disdain for the private sector, truly believing that the members of a free society are unable to prosper without the regulatory powers of the federal government in place to make sure they behave. This is why the liberal left supports protectionism, bail outs for a chosen number of businesses, tax subsidies for certain corporations, and general economic interventionism.

Unfortunately, big government interventionism has spread like a virus, and is a belief that inhabits both American political parties. One must not forget that in 1995, after the Gingrich Republicans swept into power, Speaker of the House Newt Gingrich told TIME Magazine that Alexander Hamilton (a huge believer in creating a system much like the British Mercantilist Economic System in America) was one of his personal heroes. Then, after about six months of abiding by conservative principles, the Republican majority reverted back to the lusts of the political establishment, and the federal government wound up becoming larger, and more powerful.

Claims that big-government policies benefit the "public interest" by benefiting small but powerful special interests at the expense of the rest of the society is nothing new. All democracies eventually, through a method of creeping incrementalism, evolve into a state where the net beneficiaries of government (entitlement program recipients) outnumber and dominate the net taxpayers (achievers, successful). It happened in Greece (ancient and modern), Rome, and every other system that devolves into a society ruled over by a political elite. This is one of the reasons why the Founding Fathers crafted our nation to be a republic, rather than a democracy; and why the progressive left has been working tirelessly to silence the voice of the people and the states throughout history (1824 taking away State legislature's ability to appoint electors for presidential election, 1913 17th Amendment taking away State legislature's ability to appoint the members of the U.S. Senate, and in recent decades the federal government seizing power rather than requesting authorities through the amendment process).

Despite the current administration's claims, through bail out programs, executive branch czars, and the unconstitutional regulatory actions by federal agencies, the American federal government has advocated special-interest policies designed to favor some businesses while allowing others to fail or be overtaken by government control or regulations. These policies primarily benefit politically connected merchants, manufacturers, speculators, and bankers at the expense of the rest of the public.

These policies are the policies of nationalists. Nationalism is a love of government, rather than the love of country as exhibited by patriots. This is why the progressive liberal left denounces the U.S. Constitution as a worthless document. The founding document serves as an obstacle to the progressives, because it was designed to limit the powers of the federal government so that the political elite could not do as they have been doing unchecked. Their expansive view of the Constitution is practiced in the hopes of combating the views of strict constructionism. Nothing is out of bounds, to these people. They use unconstitutional concepts of judicial review, implied powers, and "interpretation" to do whatever they want. Don't be fooled, however. They do not do this through ignorance. Their big government actions are by design.

In the end, these policies of protectionism and corporate welfare are damaging to the general welfare of the republic. The policies of economic statism cripples the American economy by depriving it of the advantages of the division of labor, and halting the ability of businesses to innovate and grow without restriction. The government, under such an agenda, literally picks and chooses who are to be the winners and losers, and then decreases the number of players so that true competition is eliminated, ultimately giving the government more fascist-style regulatory control over the few survivors.

Central economic planning schemes such as with the policies the Democrats are now putting forward creates conflict, often within the system, as political elitists compete for the right to use the coercive powers of the state to benefit themselves economically at the expense of others. The American economic system, under the tight regulatory controls of the federal government, has become a scheme of statism and mercantilism that is literally enabling the Democrats (and establishment Republicans) the political power to plunder the minority. The economic conflict, ultimately, will bring down our financial system, and force America into an era of being a failed state similar, if not worse, than to what Greece, and other European nations, are currently experiencing.

Ultimately, the liberal progressive's belief in mercantilism is proof positive of their arrogance and ineptness. The liberal left is literally trying to use and enforce a creaky and antiquated system of economics that the United States fought to eliminate during the Revolutionary War. Adam Smith's free-market concepts have been set aside. The entrepreneurial spirit that has made this nation prosper is being shunned by the Democrats. It is time for Americans to link economic rights and political rights, and realize that progressive government economic policies enslave the populace, assaulting our liberties, and forcing us into a state of dependence upon the potentially tyrannical federal government.

-- Political Pistachio Conservative News and Commentary

FDA protects Pharmaceutical Industry not the American Public: Prescription for Disaster - Drug PROFITEERING and Deceptions - GARY NULL - Natural News

British Mercantilism research:

John Taylor, Tyranny Unmasked (Indianapolis: Liberty Fund, 1992)

Larry Schweikart and Michael Allen, A Patriot's History of the United States (New York: Penguin Group, 2007)

Maurice, Baxter, Henry Clay and the American System (Lexington: University of Kentucky Press, 1995)

Maurice, Baxter, Henry Clay the Lawyer (Lexington: University of Kentucky Press, 2000)

Thomas J. DiLorenzo, Hamilton's Curse (New York: Three Rivers Press, 2008)

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