Economic Lessons from Roman History

The United States of America rose from nothing and has sustained itself as a great entity for over two centuries, because of its strong character.

When the U.S. allowed the temptations of the welfare state to erode her character, when we abandoned responsibility, self-discipline, self-reliance and respect for the property of others, and began to use government to rob Peter and pay Paul, we turned down a fateful and destructive path.

Now when U.S. politicians run for the office, they bribe the electorate with promises of free stuff—at taxpayer expense—and they win as a result. Now, growing numbers embrace the notion that voting for a living is more lucrative than working for one. Candidates for office spend huge sums to win public favor, then plunder the population afterwards to make good on their promises to the greedy mob that elected them. As our republic of states gives way to a centralized government, a succession of presidents and politicians build their power on the massive programs and budgets they control. Nearly a third of the U.S. population now receives public-relief payments.

It’s frightening to consider how easily an industrious people, when they let their guard down and compromise their character, can be bought and paid for by the welfare State. And once we sell ourselves for handouts and favors from politicians, it’s not impossible to turn back—but it’s not easy.

We got it right when we determined at our nation’s birth that concentrated power was the main problem of governance and the source of endless other problems. We once understood the wisdom of Lord Acton’s famous admonition: “Power corrupts and absolute power corrupts absolutely.” (And power attracts the already corrupted.)

Power concentrates, because that’s what power does if the people are not vigilant. Our states have lost their independence to the central government by increasingly relying on federal programs for financial assistance. Our personal freedom has been undermined, when the focus of our leaders changed from the security and good of all, to the satisfaction of particular individuals and interest groups. Legislation is now passed, not only for the nation as a whole (which is the limited realm of the federal government), but for individual classes of people and groups.

In 2008/2009, a financial panic gripped our economy. The government responded with massive bailouts and zero-interest credit. Businesses that happily took the bait found themselves later thoroughly ensnared. After all, he who pays the piper calls the tune.

Our leaders increasingly seek power; not only against their own people (us), but over others as well. Now, we have embarked upon one foreign adventure after another in the name of “homeland security.” Add the costs of empire to the costs of a welfare State and eventually bills come due that even the most powerful government cannot (collect and) and pay; without cheating the people of a sound currency.

Power is an exceedingly dangerous thing in the hands of any government. This popular quote is often attributed to George Washington and though that’s never been verified, it nonetheless sounds like something almost any of our Founders would have said or agreed with: “Government is not reason; it is not eloquence; it is FORCE and like fire, it can be either a dangerous servant or a fearful master.”

Early Americans built and planned and lived for the future. They sacrificed present gratification, so the future would be better. Then there came a time when living for the moment ruled the day. The feeling was, get what you can now, regardless of the cost or who pays for it or how untenable a situation it may cause for you or others tomorrow. If problems arise, some future generation will figure it out after we’re gone.

We’ve heard a lot of talk in recent years that certain companies are “too big to fail.” But in dealing with that imaginary, short-term problem, we’ve handed huge chunks of our lives and economy over to a government that is arguably too big to succeed.”

To give credit where credit is due, all of the above was written by Lawrence Reed on August 29th: How to Lose a Constitution—Lessons from Roman History. However, these paragraphs were written about the rise and fall of the Roman Empire—2000 years ago! I have taken the liberty of replacing “Roman” names, dates, terms, etc. with “U.S.” names, dates and terms; otherwise, the content is quoted virtually verbatim from Mr. Reed’s article.

It is shocking how we can insert ourselves into a story from twenty centuries ago. Perhaps we should pay heed to the lessons of the past. Like the U.S., Rome, as a response to tyrannical rule from outside, established a republic based on representative self-government. They set up protections of liberty, personal property, the rule of law and controls on government power. These institutions led to unprecedented economic progress. After several centuries, the Roman Republic began to morph from a representative system of self-government, into a corrupt and centralized empire. Not only did Roman society begin to decline (thus degrading the lives of the Roman Citizen), it eventually left a void in the world (resulting in economic decline for centuries – “The Dark Ages”).

It has been said that when you get the “politics” wrong, everyone suffers. More precisely, when you get the “economics” wrong, everyone suffers. When the incentives within a society promote dependency, growth and progress come to a halt. The future of your wealth depends—requires—you to embrace personal responsibility, self-discipline, self-reliance, an industrious work ethic and respect for the property of others. These American traits are what made our society truly successful and they will bring success to you as well.

If you would like to read Mr. Reed’s prescriptions for how we can avoid the same fate as the Roman Empire, you can read his original article at the following link.
http://www.fee.org/the_freeman/detail/how-to-lose-a-constitutionlessons-from-roman-history

Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James.