Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

The Result of Excessive Government Is Democratic Fascism  
Raymond Richman, 3/8/2017

A country in which central government expenditures account for an excessive part of the GDP can hardly be called democratic. The role of government in a democracy should be limited to defense, treasury operations, inter-country relations, a judicial system, the construction and maintenance of public infrastructure, maintaining law and order, and a limited number of specialized agencies. To the extent that the central government intervenes in the operation of the private economic system it should be limited to the grant of patents and copyrights as a reward for innovation and invention and little else. The setting of prices and wages should be beyond its powers. Even the anti-trust laws smack of crony capitalism.


The reader will recall that the Nazis professed to be socialist; indeed the term Nazi stands for National Socialist German Workers Party, dedicated to government control of all industry. Aided and abetted by Communists and communist fellow travelers, the party has been mislabeled a right-wing party but its basic orientation is socialist.  Bernie Sanders self-described himself as a democratic socialist but since he proposes unlimited government expenditures of a social nature his philosophy should be more appropriately described as democratic fascism.


Which brings us to the question, what is a democratic government? We are a republic and a republic is not necessarily democratic? A republic is a country whose head of state is not a monarch. The USSR described itself as a union of socialist republics, none of which was a democracy. The U.S. is a republic and the head of state, the president, is chosen by electors representing the various States, not by direct popular vote. We are considered a democracy because the electors of each State are chosen by the popular vote of the citizens of the States.


But questions are raised about the influence of the printed media on the results of an election. They are sometimes referred to as the fourth estate, meaning in U.S. parlance, the fourth branch of government. Do the media determine the results of an election? Obviously, they did not determine the results of the most recent national election. What happened to the media’s power? The simplest answer seems to be that Trump was able to get his message directly to the people by using electronic media, principally the internet, by-passing the need to send his message through the press. Of course, the media could not ignore what he was saying to the crowds of his supporters. And his message was that the government bureaucracy, the Congress, the president and his opposition have been pursuing policies not in the interest of the majority of workers and the middle class. And his views prevailed.


What is the role of political parties in a democracy? They compete with one another for the voter’s approval. But what tactics are they permitted to use in a democracy. Hitler had his Hitler youth invade public places like restaurants, places of entertainment and public events to demonstrate for him, not unlike Bernie Sanders’ supporters demonstrating at Trump rallies where, in some, they used force, and they succeeded in getting his rally in Chicago cancelled and they harassed the attendees while entering and leaving. And what of the student demonstrators who prevent invited persons whose views they dislike from speaking at scheduled events on campus, which reminds us of the behavior of  the Nazi youth. It is the behavior of fascist youth, whatever they may call themselves. Perhaps they think of themselves as democratic socialists. But they really are democratic fascists. In a democracy, political parties and groups may not engage in violent behavior against opponents. They may demonstrate but not impede access to opposition events. When they do, let us call it by its true name, fascism. 


Socialism and democracy are basically incompatible. Democracy requires a democratic economic system, a free enterprise system. One may point to the Scandinavian countries and the European Union as democracies. But their governments are too big and necessarily limit democratic expression. As it has been said, power corrupts and absolute power corrupts absolutely. The more power the government has the less it rules a democracy.


In a democracy, government should strive to live by rules, not authorities. Authority is the basis of all corruption. The ability to make someone rich by one’s power to make a decision invites corruption. Government choose crony capitalists. As few administrators as possible should have the power to make decisions that will empower and enrich those affected by their decisions. Unfortunately, Congress has expanded the authority of a large number of government administrators, giving hem great powers to regulate and therefore to choose crony capitalists.  In the name of the environment, federal and state governments have given and lent vast resources to private firms and individuals. This has enabled such administrators to benefit cronies, some private capitalists and others groups like the Sierra Club. That is an example of corruption. Some of the beneficiaries are lobbyists and those they represent.


In some countries, corruption is endemic and to do business one has to give bribes. Many countries in Latin America and Africa have that reputation. A recent example is the corruption scandals in Brazil. The US has a law forbidding American companies from offering and giving bribes to do business in foreign countries. This means foregoing the opportunity to do business in those countries unless the firm hires a third party to do the influencing. Sometimes, these people masquerade as lobbyists.


Just as some businesses are alleged to be too big to fail, government agencies and departments can become too big to manage efficiently. Like tenured professors at universities, government workers are difficult to fire and discipline. Government departments do not operate under the important condition applicable to private enterprise -- unless benefits are greater than costs, they go out of business. Government departments can commit error after error and not be disciplined at all. How many apartment buildings have been built by the Department of Housing and Urban Development that had to be torn down long before their expected life expectancy with no one being chastised or disciplined.


At the end of the 19th century a German economist invented the “Law of Increasing Government.” The size of government seems to grow without end and hardly any government agency is ever eliminated. Perhaps we need a constitutional amendment forbidding the federal government to exceed a certain percentage, say 10%, of the preceding year’s GDP. The alternative is fascism, albeit a somewhat democratic fascism. It certainly is not democratic socialism since it regulates rather than owns industries.

Your Name:

Post a Comment:

  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Sep 2021
    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019
    May 2019
    Apr 2019
    Mar 2019
    Feb 2019
    Jan 2019
    Dec 2018
    Nov 2018
    Aug 2018
    Jul 2018
    Jun 2018
    May 2018
    Apr 2018
    Mar 2018
    Feb 2018
    Dec 2017
    Nov 2017
    Oct 2017
    Sep 2017
    Aug 2017
    Jul 2017
    Jun 2017
    May 2017
    Apr 2017
    Mar 2017

    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation
    Last 100 Years

    Real Estate Taxation

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]