America is known around the World as a free and prosperous country, and has been since its founding. This image that the United States is given does not necessarily account for many of the political decisions made throughout its history. The notion that America is still the same libertarian country it was when it was founded is farcical, but has been relatively hidden beneath the complexity of the government. The United States of America was created as a Capitalist nation; however, the United States federal government has severely limited the private sector freedoms that are necessary for an economic system to be a capitalist one, placing its freedom and economic stability at great risk.
During America’s relatively short history it has been empirically proven that as the government gains power the free market necessary to sustain a healthy capitalist economy is weakened. Virtually all of the founders accepted the fact that certain areas of government required the expansion of federal power, particularly defense, the mail system, the customs network, and the bureaucracy that supervised the surveying and distribution of land (Schweikart 12). When the national income tax was first introduced to America it was expected to remain between one and seven percent; however, the tax rates under President Wilson reached seventy-three percent by 1921 (Laffer, Moore, Tanous 50). In situations similar to the one experienced by President Wilson during World War I, an increase in taxation levels can be arguably justified because of the circumstances. The United States Presidents who raised the tax rates in such circumstances have rarely lowered them when there is no longer any urgent need (Laffer, Moore, Tanous 60). Dr. Ron Paul created a list of ten principles of a free society based upon the founding fathers’ ideals. Since a free market is an essential component of a capitalist economy one would expect America’s economy to exhibit these principles. America is in violation of the majority of these requirements: rights belong to individuals, not groups; government may not redistribute private wealth or grant special privileges to a specific group, government cannot and should not protect us from ourselves, aggressive wars, even when called preventive, are forbidden; and all forms of involuntary servitude are prohibited, including forced distribution of wealth (Paul 327-328). Every principle of a free society that the United States is in violation of is the result of the expansion of governmental power.
Socialistic restrictions, under the right circumstances, can be an effective method of government; however, it can become extremely dangerous if those conditions cease to be met. Karl Marx, known for essentially starting the movement towards socialistic form of government, gave a list of 10 measures of the communist ideology, yet none of them could be implemented in America (Marx 27-28). The United States government has, however, taken steps toward socialism resulting in the tanking of the U.S. economy in the 1930’s and the 1970’s and demonstrating the dangers of the four great killers of capitalism. Those killers are: trade protectionism, tax increases and profligate government spending, new regulations and increased government intervention in the economy, and monetary policy mistakes (Laffer, Moore, Tanous 12). Another circumstance that must be met, according to Marx, is that a strong sense of national pride is necessary in order to attain prosperity in a socialist nation (Marx 19). This proves that America is incapable of transitioning into a Socialist country even under extreme circumstances. The separation of states in the United States allows for a strong sense of pride in their fiscal and social lifestyles, but a stronger national government restricts these to a dangerous point (Paul 267-272). If the national government given more control over the individual states, citizens will lose the pride they once had in their great nation, leaving the country without the ability to be prosper.
In order for a capitalist society to succeed it must be truly capitalist, which calls for a simple, fair, and libertarian government to be established. In 1994 Mart Laar became the prime minister of Estonia. Laar had studied and been inspired Milton Friedman’s libertarian economic ideology, and instituted a flat tax at 23 percent, despite being told by his advisors it would not be possible. The World was shocked when they witnessed Estonia have one of the most rapid growth spurts of any nation, and the simple, fair 23 percent flat tax is widely heralded as the cause for Estonia’s success (Laffer, Moore, Tanous 179-180). One of the greatest drawbacks to a complicated form of government is that it allows people to suffer for years without being able to identify the source of the problem. Enlightenment thinker Thomas Paine went so far as to say that absolute governments hold the advantage of being simple over the more humane, democratic form of government (Paine 68). Another area in which America has lacked a fair government is the office of the President. Although there is a system of checks and balances, one cannot expect a single person, who needs to be checked by other branches of government, to make decisions for the nation as a whole (Paine 70). This leads to a stronger national government over time, and weakens individual freedom. The patriotism felt in America has always come from the love of liberty, since socialism conflicts with natural liberties essential for a libertarian economy it dissolves the patriotism necessary for socialism to be successful.
The size of government has expanded with almost every presidency, taking the power that once belonged to the states’ governments. The expansion of the, once meager, “free” market restrictions by the United States Federal Government has caused economic depression, inflation of the dollar, and has managed to restrict personal liberties in the process. It is possible to instigate short-term national government policies, but only if there is an exit plan to return to the prosperous and free American society. America cannot flourish under long-term Marxism, yet leaders do not give up their power when it is no longer necessary. Those who do not learn their history are doomed to repeat it, the only way America can flourish again is by returning to its Capitalist foundation and rejecting any form of socialist policy.
Laffer, Arthur B., Stephen Moore, and Peter J. Tanous. The End of Prosperity: How Higher Taxes Will Doom the Economy–if We Let It Happen. New York: Threshold Editions, 2008. Print.
Marx, Karl, Friedrich Engels, and Martin Puchner. The Communist Manifesto and Other Writings. New York: Barnes & Noble, 2005. Print.
Paine, Thomas, and Isaac Kramnick. Common Sense. Harmondsworth Middlesex, England: Penguin, 1986. Print.
Paul, Ron. Liberty Defined: 50 Essential Issues That Affect Our Freedom. New York: Grand Central Pub., 2011. Print.
Schweikart, Larry. Seven Events That Made America America: And Proved That the Founding Fathers Were Right All along. New York: Sentinel, 2010. Print.