“The euro and stock markets fell,” reports BBC News, “and borrowing costs of indebted countries rose, as worries over debt crises in the eurozone and US mounted.” Ahead of a meeting of European leaders set to begin in Thursday (July 21), gold spiked to record highs and financial stocks plummeted.
As trust in the state wanes, interest rates on government debt rise starkly, accompanied by growing worries that governments around the world — including the U.S. — will default on their debt obligations. All the while politicians insist that, in the words of U.S. Treasury Secretary Timothy Geithner, government must act “forcefully” to prevent further crisis.
Whether or not any particular state is currently in default, the economic system of statism, built on theft and exploitation, is at all times unstable and on the verge of collapse. By rendering inefficient business models and pursuits profitable where they otherwise would not be, the state promotes the accumulation of wealth in losing commercial activities.
The state’s arbitrary rules and regulations, barriers to market entry erected under the pretext of “consumer protection,” create an environment wherein multinational corporate giants suck up all the oxygen. Where — in a market freed from the constraints of the ruling class — societal wealth and investments would flow into cost-effective and socially beneficial enterprises, today the outlets for all economic resources are systematically determined by the interests of elites.
To brace its crony capitalism against the constant pressure of economic reality, the state must spend ever more, both allaying the strains of widespread poverty and unemployment and — more significantly — subsidizing the operating costs of huge, powerful companies. “Too big to fail” became the familiar refrain in the incipiency of the present economic downturn, and it is indeed true that in the current, statist economy, many of the most important pivot points of the system are the most thoroughly intertwined with the state.
Consider, for example, what would happen to the U.S. economy if the gigantic war-mobilization sector were to suddenly disappear. Though we unmindfully label murder industry contractors “the private sector,” virtually all of their jobs and revenues are the result of astronomical levels of government spending. Further, its diseconomies and wastes are passed onto the American taxpayer, that seemingly endless reserve on which the ruling class can draw to nourish its sickly pyramid scheme.
Eventually, though, the underlying, ever-present infirmities of the system surface in the kinds of ruinous tragedies we’ve witnessed through the past few years, the kinds that never seem to touch the fat cats who actually benefit from all of the government intervention we’re taught to esteem. Within an economic paradigm in which the state has predetermined the pathways for both natural and human resources, it should come as no surprise that wealth gathers in those favored individuals, companies and industries chosen by legislators and bureaucrats.
The fluidity and variability of genuine free markets necessarily preclude the kinds of economic misjudgments and abuses that lead to speculative bubbles and surging government debt. Where commercial activities must take place within the rigid framework created by the state, however, crisis is unavoidable.
As anarchist theorist and historian Shawn P. Wilbur noted not long ago, “I think it’s pretty important to face the possibility that maybe what we have now is so big that it can’t do anything but fail.” And although it contradicts the conventional wisdom, “forceful” action by the state is what created these disasters in the first place, thwarting the kind of competition that could have undercut the criminal monopolies at the center of the financial plotline.
The state is an always has been in the service of a small elite. Genuine free markets, the voluntary exchanges we would all make absent coercion, are by definition the instrument of “the people” at large. It’s time we finally stop trusting monumental decisions about the world economy to a handful of corrupt politicians. It’s time we see what free people will do when left to make those decisions one at a time, on a human scale without aggressive interference.