Without trying to sound cliché, Karl Marx once wrote: “History repeats itself, first as tragedy, second as farce.”
This seems to be the state Western liberal democracies find themselves in these days.
Big governments with bloated bureaucracies, high taxes and insatiable demands for more revenues, massive public debt, political polarization and constant social unrest are now the ‘new normal’ for North America and Western Europe.
The Biden Administration has announced an unprecedented ‘progressive’ spending program. Europe is not far behind. How Western governments intend to pay for it, fight covid-19 and re-start their economies whilst migrating to the new ‘green economy’ is anyone’s guess. One thing for certain is that such announcements usually end up being a pretext for sharp tax increases.
We have been here before.
Russia went through this paradigm shift in 1919, when the Tsar and a developed market economy was thrown out in favour of Mr. Marx, all in the name of equal distribution of income and results. There was social unrest, a heavy handed state trying to remain – followed by a new one bent on asserting control – with many new ‘progressive’ ideas. We know what happened. Russia is still trying to get past this part of its history.
Ancient Rome is another example. Starting with Nero in AD 64, the Romans continuously debased the dēnārius (the dollar of the day) until, by the end of the 3rd century AD, hardly any silver was left – the quantitative easing of the ancient world so to speak. The resulting crisis of the third century was about internal turmoil, disturbed trade flows, bloated and inefficient governments. Corruption was rife, and the Emperor and his minions sought ways to appease rising discontent.
In Rome, it was about gladiatorial games and food; today, it’s about free education, guaranteed annul income and the ‘great reset’. In both cases, it was about unwarranted entitlement.
The problem with all of this is that some point the system implodes. Rome and Tsarist Russia did; so did the Ottoman, Spanish, Portuguese and British empires as well (as each, in turn, over extended itself to such an extent that nothing could save it). In all of the voids these empires created in their collapse, new states and governmental systems arose.
Today, Western liberal democracies are crippled with debt. They have byzantine tax systems. Governments are arbitrary and contradictory. There is widespread discontent. Attempting to maintain control, they see the pandemic and the green economy as ideal excuses to keep overspending and increasing the role of the state and public administration. Dissention is not tolerated.
What will happen is anyone’s guess; but if history is any indication, it will not be pretty.