In 1759, Scotsman Adam Smith, who is widely regarded as the world’s first true economist, published his first great work, The Theory of Moral Sentiments. In it, he postulated that all social evolution can be attributed to “individual human action,” as opposed to “individual human design.” By this, he meant that whatever understanding worked well between any two people was likely to lead to progress. The reason for this was that such agreements would, of necessity, be based upon “trust and empathy.” He believed that, if mankind were left alone to sort out all commerce and other interaction on their own, using truth and empathy, they’d succeed at moving the society forward.
I’m often asked how I see the warning signs that allow me to gauge the timing of the coming economic crisis. Although careful research into an economy can result in a relatively accurate prognostication, the timing is always the most difficult aspect to pinpoint.
However, a good indicator is to track how others within the economy are surviving the situation. This tells us much more than their questionable claims that they’re doing just fine.
In any country, during prosperous times, the great majority of people go to work each day with the understanding that productivity results in an improved life. Even for those of humble means, the existence of prosperity around them is a daily assurance that, if you work hard and/or work smart, your life will steadily improve.
Recently, many political hopefuls on the Left in the US have “come out” as socialists. Some may have been socialists all along, whilst others may merely be hoping to cash in on the popularity of avowed socialist Bernie Sanders in 2016. Whatever the answer, those on the Right have gone into attack mode, fervently stating that, “The US will never be a socialist country!” This will unquestionably become the primary emotionally-based issue until the 2020 election.
Governments are in the flim-flam business. Pared down to the bare essentials, governments can be very useful in passing and enforcing a small number of very basic laws. These laws should be limited to policing those who would seek to aggress against others, or their property. Governments may also have a value in providing protection from invasion – organizing an army of able-bodied people to address this collective problem, if and when it occurs. And that’s about it. Beyond that, the private sector can, and almost always does, do a better job at virtually everything else. Therefore, a government should be small, cost very little to run and do as little as possible.
As regular readers of my missives will know, I enthusiastically recommend the concept of internationalisation – the diversification into multiple jurisdictions to avoid being the possession of any one government. Recently, I was asked if this didn’t make an individual the possession of several governments, instead of just one, and the answer is no.
The Akkadian Empire is often regarded as the world’s first empire, reaching its peak between the 24th and 22nd centuries BC, some 4400 years ago. It was in the Middle East, home of quite a few empires over the millennia. It began with King Sargon, who, having succeeded at conquering his neighbours in Babylonia, decided to expand further into Syria and Canaan. King Sargon established a fad that has remained until the present day. In any era since his time, there have been those nations that, having had initial successes at conquest, couldn’t resist the temptation to “have it all.”
Years ago, Doug Casey mentioned in a correspondence to me, “Empires fall from grace with alarming speed.” Every now and then, you receive a comment that, although it may have been stated casually, has a lasting effect, as it offers uncommon insight. For me, this was one of those and it’s one that I’ve kept handy at my desk since that time, as a reminder.
We’d like to think that all people have a sense of compassion and fair play, but this isn’t so. Roughly ten percent of all people, in any population, are estimated to have traits associated with narcissism. Roughly four percent are estimated to be sociopathic and one percent are estimated to be psychopathic.