New Doc 66_4

Like the weather, everybody complains about politics, but nobody does anything
about it. What can and should be done? In my view, a gentle shift to the right or the
left has no hope of success. The Reagan administration had many ideological
conservatives in its ranks whose battle cry was “If not us, who? If not now, when?”
They had some limited success in rolling back the state in a few areas, like firing the
striking air traffic controllers and reducing the maximum income tax rates, but were
ineffectual overall. In fact, their main success was in expanding state activities
favored by conservatives, like the military, the DEA, customs, NSA, and CIA,
while leaving most of the liberal establishment intact.

The experience of Third World countries probably gives the best hint of what
will happen in the United States. Third World governments have tried every
conceivable variation on a socialist theme. Without exception, they ran their
societies into the ground. It’s rare that a downward trend can be turned around once
it is underway, for the same reason it is impossible to stop a boulder once it starts
rolling downhill. They only stop when they’ve hit bottom. There is no reason the
United States should be any different. It will just take longer, since the country has
so much capital and a more pronounced antiauthoritarian tradition than any other

A renaissance in liberty is more likely to occur in some country that’s already
been devastated by collectivism than in the United States. I’ve made it an avocation
to try putting theory into practice by meeting with Third World leaders and
presenting them with a plan to revitalize their bankrupt countries. What’s to be done
with basket cases?

In essence, I suggest that 100 percent of the government’s assets, which
typically means almost everything in these countries, be put in a public corporation,
with the shares distributed pro rata to every man, woman, and child in the country
although extra shares would necessarily be given to those in authority and a
percentage would be put in trust for the next generation. A small percentage of the
shares would be sold on major world markets to generate capital and establish a
market price.

Since the assets of the government theoretically belong to the people, it’s only
fair to give those assets directly to the owners. This is important, since most
“privatization” plans floated today feature auctioning off government assets, which
ensures that only the rich, who have the money to bid, and the government, which
gets the proceeds, benefit directly.

414                                                                  Crisis Investing for the Rest of the ’90s

Distributing shares directly to the people puts the power where it belongs, but
it’s not enough. It would also be necessary to:

  1. Spin off all state industrial and agricultural enterprises to shareholders,
    while reserving perhaps 30 percent for distribution to current employees, both to
    encourage loyalty and to act as a golden handshake for the many who will be
  2. Allow the formation of unregulated stock exchanges where the above shares
    can be traded, and capital raised for new enterprises. Permit the establishment,
    without regulation, of private and foreign banks.
  3. Take 100 percent of government gold and foreign currency reserves and use
    them to make the national currency completely convertible to all holders. It would
    soon become the world’s most desired currency. Citizens would save it, not look to
    dump it for any tangibles available.
  4. Totally abolish all duties, subsidies, exchange controls, taxes, ministries,
    bureaus, and regulations, with no exceptions. Ex-government employees could
    liquidate shares to sustain themselves while they found productive work.
  5. The government would serve no function except to protect residents from
    common-law crimes of force and fraud. But private police forces and courts would
    be allowed on an equal basis. Schools, and all other useful government functions
    would be “spun off” like all other assets.

In every case, it’s not a matter of “doing something,” but simply of getting rid
of laws, like a decades-old encrustation of barnacles, that make it impossible for the
market to give people what they need. One thing that wouldn’t be either needed or
wanted is aid from foreign governments. As it always has, such aid only serves to
entrench the old power structure. So counterproductive is aid that it’s amazing
people of good will even consider it. The answer lies in laissez-faire and freedom.

Should any country do something even approaching this proposal, its standard
of living would surpass America’s in only a few years, and the country would be
inundated with foreign capital, labor, and entrepreneurs. What are the chances of it
happening? Don’t plan your life around it. But stranger things have occurred, and
the leadership of several countries I’ve approached may try it, if only out of
desperation. It would make them legitimately rich, domestically loved, and figures
of world stature. That certainly beats waiting for the next revolution to put them up
against the wall.

A similar plan would work in the United States; I discussed it briefly in
Strategic Investing, but America has become one of the most conservative countries
in the world, with a power structure for whom “change” is no more than an
election-year buzzword.

———-New Doc 66_1

Excerpt from the book “Crisis Investing for the Rest Of The ‘90s”
By Douglas Casey – 1993 – Chapter 34: “The Real Problem” – page 412 –