The State for Private Benefit

The most enduring tendency in every organized human society in which there is some form of state – for example, a ruler, a power hierarchy, rules for what is permissible and impermissible – is the aspiration of the people to use power and the state for their personal goals.

In 1850, the French philosopher and economist Frédéric Bastiat said: “I would like to establish a prize of one million francs, with a crown, a cross, and a ribbon in honor of the one who could give a good, simple, and intelligent definition of the word ‘State.’ Imagine what a great service he would do for society.” Bastiat added that the state is “a strange subject … the most desired, the most confusing, the most engaging, the most advised, the most reproached, the most mentioned, and the most provoked in the world.”

People, according to him, even when they are not looking for personal advantage or the satisfaction of other needs, are inclined to commission the state with the fulfillment of their social dreams. Those who “from the bottom of their souls want to cure all the evils of mankind” are not at all worried about entrusting the state with the responsibility for the realization of these dreams. At the same time, in order to realize different human ideas, the state – that is, the government – needs to create a specific organization, and the only way to do that is to procure resources.

Is the American State being used for Private Benefit?

It took ten years for tens of millions of American citizens to recover from the so-called “Great Recession.” In 2018, the Census Bureau announced that “for the first time in 11 years, the official poverty rate was significantly lower than 2007, the year before the most recent recession.” This state of reduced poverty, however, was a fact for only two years. In 2020, the economic crisis caused by covid-19 further reduced incomes and increased poverty. Poverty rates in the United States in the first two decades of the 21st century were higher than in the 1970s.

The trend in the development of American corporate profits is just the opposite. They are on an aggressively increasing curve. In contrast, the number of small businesses starting up and closing has been identical between 2000 and 2019. In 2019, 33% of small businesses indicated they had insufficient capital and revenue. To this we should add that 78% of their owners are over 40 years of age, and 53% are over 50. American small business is shrinking under conditions of a high average age, a shortage of income and capital, and an increasingly corporatizing economy. Its share of the US GDP has been steadily declining over the past 20 years. American capitalism is mutating. This is inevitably leading to changes in the social structure of society, in the political process, in representation, and in the constitution and exercise of power.

The concentration of economic resources in corporations and the weakening of small business is feudalizing American society. The degree of dependency is increasing. On the one hand, the freedom of the individual American citizen is limited by indebtedness. In 2019, the consumer debt of Americans, accumulated in credit cards, auto loans, mortgages, and other similar types of debt was higher even than in 2008, the year of the Great Recession. This indebtedness will not decrease in the next several years. For a number of reasons, one of which is the economic recession caused by the COVID-19 pandemic, American citizens will owe even more.

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