The Source for Freedom and Self-Reliant Information[1]

Thomas Jefferson defined rightful liberty as “unobstructed action according to our will within limits drawn around us by the equal rights of others—I do not add ‘within the limits of the law,’ because law is often but the tyrant’s will, and always so when it violates the right of an individual.”

America’s Real Problem Is Not Capitalism—It Is the Abandonment of It

Our problems would disappear if we restored limited government, economic freedom, and constitutional federalism

Free market capitalism is often blamed for inequality, inflation, debt, corporate favoritism, and the rising cost of living. Yet that accusation rests on a false premise: the United States has not operated as a truly free market for more than a century. A genuine free market is built on voluntary exchange, private property, sound money, limited government, and equal treatment under the law. What Americans live under today is something very different—a managed economy shaped by central banking, progressive taxation, federal regulation, entitlement spending, subsidies, mandates, and political favoritism. A more accurate description is Socialism!

The result is not capitalism in its pure form, and it is certainly not the liberty-centered system envisioned by those who believed government should protect rights rather than manage outcomes. Instead, America has drifted toward a mixed economy in which private businesses still exist, but government increasingly directs, taxes, regulates, and redistributes the fruits of our labor. Calling this system “capitalism” and then blaming capitalism for its failures is like blaming freedom for the consequences of bureaucracy.

The Turning Point of 1913

A major turning point came in 1913. That year brought the ratification of the Sixteenth Amendment, which authorized the federal income tax; the Seventeenth Amendment, which changed the election of senators from state legislatures to direct popular vote; and the Federal Reserve Act, which created the nation’s central banking system. Each reform was presented as progress. Together, however, they shifted power away from states, local communities, and individual citizens and toward Washington, D.C.

The federal income tax gave the national government a powerful and permanent revenue stream. Direct election of senators weakened the original design in which states had an institutional voice in Congress. The Federal Reserve centralized control over money and credit. Whether one defends or criticizes these reforms, their combined effect is undeniable: they made it easier for the federal government to grow beyond its earlier limits.

Government Intervention Has Distorted the Market

Supporters of socialism often argue that economic hardship proves the failure of capitalism. But many of the hardships they cite are intensified by government intervention. Heavy regulation raises the cost of doing business. High taxes reduce the reward for work, risk, and investment. Subsidies protect politically connected industries from competition. Welfare programs, though often created with compassionate intentions, can create dependence when they discourage work, savings, family stability, and local responsibility.

This does not mean society should ignore poverty or suffering. A free society has moral obligations. But there is a difference between private charity, local problem-solving, family responsibility, and voluntary cooperation on one hand, and an ever-expanding federal welfare state on the other. The first strengthens civil society. The second often replaces it.

Socialism Concentrates Power

The central danger of socialism is not merely economic inefficiency; it is the concentration of power. When government controls more of the economy, it controls more of daily life. It decides which industries receive favor, which behaviors are rewarded, which choices are punished, and which citizens must pay for promises made by politicians. Economic control becomes political control.

Libertarian economist Hans-Hermann Hoppe makes a related argument: when political leaders act only as temporary caretakers of public power, they have strong incentives to consume resources now, expand control while they hold office, and transfer costs to future citizens. In that view, a democratic state can encourage short-term promises, rising taxation, and expanding regulations because officials do not personally bear the long-term cost of the political machinery they control.

This criticism becomes especially relevant when America operates less like a limited constitutional republic and more like an unconstrained democracy, where momentary majorities and political factions pressure government to exceed its proper boundaries. The checks and balances designed to restrain power have been weakened, inverted, and weaponized by those who control the machinery of government, turning safeguards for liberty into instruments of political advantage.

Dr. Will Durant, the late historian and Nobel Laureate wrote, democracy is now taking “its turn in the misgovernment of mankind.” Dr. Hoppe believes that democracy has been a complete failure:

“After more than a century of compulsory democracy, the predictable results are before our eyes. The tax load imposed on property owners and producers makes the economic burden even of slaves and serfs seem moderate in comparison. Government debt has risen to breathtaking heights. Gold has been replaced by government manufactured paper as money, and its value has continually dwindled. Every detail of private life, property, trade, and contract is regulated by ever higher mountains of paper laws (legislation). In the name of social, public or national security, our caretakers “protect” us from global warming, and cooling, and the extinction of animals and plants, from husbands and wives, parents and employers, poverty, disease, disaster, ignorance, prejudice, racism, sexism, homophobia, and countless other public enemies and dangers.”

“However, the only task a government was ever supposed to assume—of protecting our life and property—our caretakers do not perform. To the contrary, the higher the expenditures on social, public, and national security have risen, the more our private property rights have been eroded, the more our property has been expropriated, confiscated, destroyed, and depreciated, and the more we have been deprived of the very foundation of all protection: of personal independence, economic strength, and private wealth. The more paper laws have been produced, the more legal uncertainty and moral hazard has been created, and lawlessness has displaced law and order. And while we have become ever more helpless, impoverished, threatened, and insecure, our rulers [the political class] have become increasingly more corrupt, dangerously armed, and arrogant.”

As Drs. Durant and Hoppe have explained, the American Republic has been turned into a Democracy, which has led to Socialism.

Free market capitalism, by contrast, disperses power. It allows buyers and sellers, workers and employers, entrepreneurs and consumers to make decisions without needing permission from a central authority. It rewards innovation, discipline, service, and risk-taking. Most importantly, it respects the dignity of citizens by treating them as responsible individuals rather than dependents of the state.

The problems we face in the United States of America today is because of Socialism NOT Capitalism.

As the late Dr. Walter E. Williams stated, “During earlier periods, Congress and the Supreme Court had far greater respect for the Constitution. . . Today, it’s an entirely different story. Congress . . . and the Supreme Court[2] have abiding contempt for the Constitution and . . . Americans are left with a constitutional carcass.”

Dr. Williams continued, “. . . the education establishment has played a greater role through the dumbing down of Americans. The resulting ignorance has allowed . . . charlatans and quacks in the legal profession [to] tell [Americans] what the Constitution means.” When the Constitution was written, it was easily understood by a nation of mostly farmers, not intellectual elites.

We must take back the government-controlled education, or rather, indoctrination system, if we have any hope of restoring individual freedom or free-market capitalism. As the late British Prime Minister Margaret Thatcher once stated, “the problem with socialism is that you eventually run out of other people’s money.”

As Dr. Durant discovered, “On one point all are agreed: civilizations begin, flourish, decline, and disappear—or linger on as stagnant pools left by once life-giving streams.”

According to John B. Glubb, “the rise and fall of great nations are due to internal reasons alone,” and that it takes ten generations (25-years per generation) or 250 years for “human beings to transform the hardy and enterprising pioneer into the captious citizen of the welfare state.” We have just celebrated our 250th anniversary and we have become a welfare state.

The great experiment in individual freedom, which began 250 years ago in 1776, “may yet be defeated by the high birth rate of unwilling or indoctrinated ignorance.” Durant

If we are to survive, the Democrats/Socialists must be voted out-of-office and, we must take back our government-controlled “education system,” by removing the progressives and those instructors, administrators, and professors that hate America.

Dum Spiro Spero—While I breathe, I hope.

Slàinte mhath,

Robert (Mike) G. Beard Jr., C.P.A., C.G.M.A., J.D., LL.M.

[1] Each Jeffersonian Group, LLC (www.jeffersoniangroup.com) publication is intended solely for information purposes and is not intended, nor does it purport to provide legal, tax, individual investment advice, estate planning advice, medical advice, insurance, or business advice. In addition, information and analysis is compiled from sources believed to be reliable but such accuracy cannot be guaranteed. Readers should do their own research and consult with expert medical, legal, tax, insurance, business, and financial counsel before taking any action.

[2] Recently, the Supreme Court has attempted to reverse some of the damage it has done since 1913. You may want to read Freedom vs. Democracy, The Supreme Court May Be Our Last Hope, by Robert G. Beard Jr., available from Amazon.com or through our website, www.JeffersonianGroup.com.