We are living in a time dominated by the growth of the state. The growth has already taken place in the twentieth century and can be tracked by the rhetoric of crisis and the growth required (supposedly) to respond, however poorly. WW1, the New Deal, WW2, The Great Society, The Cold War and Wars against Communism, and coming soon universal everything, the abolition of citizenship and the domination of healthcare.
Listen closely: Environmental crisis. Supply chain crisis. Pandemic crisis. Race crisis. Mental health crisis. And on and on. It is leviathan. It is mammoth, sluggish, addicted, obese, starving, consuming roughly 40% of GDP, debasing the coinage, and suppressing any independent strength through webs of regulation and welfare lures. How does one invest in such a time? First, know that this puritanical libertarian offers no investment advice. He only dares to think out loud. He takes full responsibility for his own choices and asks any reader to do the same. Remember, it is not prudent to speak around those who will not take responsibility for their listening. Second, before investing, one must have some sense of the context in which one is seeking to operate.
One good way to invest is to be on the inside of state machinations. Hence the great attraction of joining the state superstructure. Given that the state plays a greater and greater role in the distribution of capital saved from production (gained through taxation) knowing where it is going to send capital enhances the possibility, at least in the short term, of profit. This puritanical libertarian has no such access. He ponders much about what a sluggish, addicted, obese, starving man might do next. To work around such a man on the block is to first work in hiding, to try and not draw attention. And yet, one cannot work at any state legitimated business as an employee without having ones income tax, payroll tax, extracted before one even receives wages for labor. This makes hiding difficult!
Note as a sign of growth: income tax is not snuck into constitutional status until 1913. What loot for the soon to be entrance into WW1. It is not until 1943 and WW2 that the Current Tax Payment Act is introduced. I have the following on testimony: “Armed with tax withholding and other new authorities, the internal revenue service became more assertive. The number of tax returns filed went from 7.5 million in 1939 to 50 million in 1945.” Can you see the extension of power through coercion?
These are signs of growth. It is the growth of an entity that has the power of coercion legitimated through public opinion. Note that while roughly 40% of GDP is consumed by the federal state only roughly 60% pay federal taxes. One of the things that means is that the state is adept at playing the public opinion game. It attempts careful targeting of those it extracts from and those it distributes loot to. The loot is first to itself. Then it is to those it bribes in contract with stolen loot. It is finally to those for whom it has largely destroyed the possibility of productive labor by outcompeting those that would otherwise provide production and hire labor.
It is growth that anyone interested in surviving, set aside flourishing, should be measuring. The first point is that the size of the state has changed significantly over the twentieth century. Addicted to such growth one can predict that the dissatisfaction from greater difficulty in continuing to grow, the state should be expected to become grumpier. Like a dependent child, used to getting what it wants, one should expect tantrums. But oh the difference between tantrums from a four year old and tantrums from a tumor consisting of the military industrial complex and the power to tax and make law!
The second point is that there are natural limits to such growth. The twentieth century was one of both internal and external expansion of coercive control by the state. It is running up against other states that do not desire its reach extending so close. More interesting to me are the internal limits to extraction. Because of its threatening and extractive activities, the state will reduce the significance of internal production thereby reducing what it can extract. In addition, those to whom it looks to extract from have limits. One should expect an increase in crime, and now that opioids are well integrated, an increase in the number of citizens who choose reality avoidance over dealing with the state.
I have it on testimony that “the prescribing of benzodiazepines in the United States has increased , from 69 million prescriptions in 2002 to 83 million in 2007…”. Benzodiazepines are addictive dear reader. This has been well-established since the 1970s. Benzodiazepines are handed out for the masking of anxiety. In addition, “In 1955, there were 38,200 people in the nation’s metnal hospitals due to depression, a per capital disability rate of 1 in 4,345. Today, major depressive disorder is the leading cause of disability in the United States for people ages fifteen to forty-four. According to the NIMH, it affects 15 million American adults, and researchers at Johns Hopkins School of Public Health reported in 2008 that 58 percent of this group is ‘severely impaired.’ That means nearly 9 million adults are now disabled, to some extent, by this condition.” Antidepressants are offered for those wishing to hide from depression.
The number of those at the edge of impoverishment, exhausted from the effort to avoid impoverishment, and noting the rudimentary sustenance provided to any who default to accepting impoverishment, will increase. It is economically predictable. As poverty increases and all of its pathologies, those with the means to avoid it will flee at faster rates. Those who seek to avoid it, and can’t, will be faced with growing hopelessness and despair. Don’t worry. There are drugs for that.
Those who seek others who will not act extractively and who will respect private property rights will find each other. But they must cluster in hiding. To draw attention will only draw the attention of the extraction agency–in the name of poverty, of pandemic, of mental health, of national defense, of financial crisis, of environmental crisis, and I expect the list will only be lengthened.
How to act? Next. Preserving and investing near the state.