Dear Reader,

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Do you know what the most pervasive myth of the modern era is?

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It’s the myth that capitalism and democracy go hand in hand – that one naturally reinforces the other.

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Democracy leads to capitalism, and capitalism leads to democracy.

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It’s a comforting fiction that politicians love to peddle to the masses.

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But as I’m about to show you, it’s just that – fiction.

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Because while it’s true that, for now at least, the freest markets today are found in the most democratic nations, that doesn’t mean democracy sustains capitalism.

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In fact, the exact opposite is true.

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Over time, democracy corrupts true capitalism, mutating it into a perverse imitation of its ideals.

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And this unholy marriage has given birth to many of the problems we see today – from obscene debt and spiraling inflation to severe income inequality and a culture of dependency.

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That’s because this corrupted version of capitalism is actually much closer to communism than most realize.

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And it’s about to change what things like “money” and “security” mean for you over the next few years.

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The road to Marxism is paved with democratic intentions

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If you open Karl Marx’s The Communist Manifesto, you’ll find something chilling.

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Marx listed 10 “measures” or “planks” that would transform society into communism.

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They are referred to as planks because most consider them the foundational steps needed for building a bridge from where society is now to the perfect communist utopia.

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Most don’t realize it…

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But many of these planks have already become the law right here in the United States.

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• Plank 1: Abolition of property in land and application of all rents of land to public purposes.

Sure, we still have property rights. But eminent domain means the government can just snatch your land if they deem fit. Zoning laws determine what you can or can’t do on your own land. Refuse to pay your property taxes? You’ll soon see who the true owner of the land is.

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• Plank 2: A heavy progressive or graduated income tax.

We’re already here. The bottom half of tax payers pay 3% of all federal individual income taxes. If you’re even a reasonable high earner, you’re probably paying over 30% of your income to the government. That means four months out of the year, you’re essentially working for Uncle Sam – whether you like it or not.

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• Plank 4: Confiscation of the property of all immigrants and rebels.

Did you know that if you’ve successfully accumulated a certain amount of wealth and decide to give up your US citizenship, the government imposes a hefty “exit tax”? And let’s not mention Federal Asset Forfeiture, where the government can just seize your assets if they just suspect (without even having to prove) that it’s connected to a crime.

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• Plank 5: Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.

That’s just the Federal Reserve. It wields a monopoly over the issuance of US dollars. And by controlling interest rates and liquidity in the banking system, it effectively controls the flow of credit across the entire economy as well.

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And that’s just to name a few.

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Democracy’s fatal flaw

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You see, democracy incentivizes politicians to dangle grandiose promises to the masses that they can’t keep.

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Free healthcare, free education, “forgiven” loans, bailouts when things go wrong.

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Over time, voters catch on. They realize they can simply vote themselves benefits from the public treasury.

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In fact, why in his book Democracy the God That Failed - political thinker Hans Herman Hoppe said:

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“If the right to vote were expanded to seven year olds … its policies would most definitely reflect the ‘legitimate concerns’ of children to have ‘adequate’ and ‘equal’ access to ‘free’ french fries, lemonade and videos.”

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-Hans Herman Hoppe 

  Democracy: The God That Failed

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It twists the democratic process into an endless bidding war of who can redistribute the most.

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Who is the most willing to rob the masses to “pay off” special interest groups.

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Basically, who is the most willing to promise “free” french fries to children. 

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And the law – essentially, the state’s monopoly on violence – is used to enforce this redistribution.

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The 19th-century French economist, Bastiat, in his seminal work The Law, called this “legal plunder”.

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“But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime…If such a law – which may be an isolated case – is not abolished immediately, it will spread, multiply, and develop into a system.

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-Frédéric Bastiat (The Law)

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In a pure democracy, it’s the tyranny of the majority. The 51% vote to raid the 49%, and the law backs them up.

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In a representative republic like ours, it mutates into the tyranny of the minority – lobbyists, donors, and entrenched elites buying politicians to impose their will on everyone else.

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It’s the complete antithesis to true capitalism…

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And it wrecks public finances.

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Just look at where we are today.

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A $37 trillion debt load – the equivalent of saddling six-figures of debt onto every man, woman, and child in the country.

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This is close to the peak that we saw right after World War II…

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Except unlike back then, politicians from both sides of the aisle only keep piling on more debt.

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In less than five years, we could be looking at nearly $50 trillion worth of debt, and even that is likely conservative.

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The money supply has also soared to new all-time highs as the Fed fires up the money printer once again.

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And instead of supporting open trade, the current administration is forcing through anti-free market tariffs instead…

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While brazenly grabbing stakes in public companies – paid for in “grant monies not yet disbursed” and at a discount to market price.

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And that could be just the start.

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And while I had high hopes this administration would be different, it looks like they are doing the same thing all politicians do.

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They are once again promising “free french fries” to children.

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This is democracy’s fatal flaw – and it’s inseparable from democracy itself.

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When politicians realize that control over the public treasury allows them to buy votes…

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And voters realize they can influence politicians by collecting into special interest groups…

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The “Unholy Marriage” is born.

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And once it sets in, there is no getting a divorce.

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There is no incentive to turn back the other way.

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But just how bad can things get?

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Let me show you a clear lesson from history…

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Venezuela was once the richest country in Latin America, riding decades of oil wealth. 

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By the 1970s, its living standards rivaled those of Europe. 

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This abundance created the illusion that prosperity would last forever.

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But instead of saving oil revenues (as Norway did), Chávez spent recklessly to buy political support.

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Gasoline was nearly free and there were vast electricity and food subsidies.

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Fiscal deficits exploded, and the central bank printed more and more money.

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The public became hooked on these “free” benefits…

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Turning a blind eye as the government distorted free market mechanisms by nationalizing businesses, imposing capital controls, and setting price ceilings.

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By the 2010s, millions of Venezuelans relied on subsidized food, electricity, fuel, and state jobs. 

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The economy was no longer functioning on savings and production, but on money-printing and redistribution.

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Then, in 2014, oil prices plummeted 60% – and the music stopped.

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Instead of letting the market correct itself, the government became a de-facto dictatorship…

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Continuing to maintain a failed policy of money printing, reckless spending, and capital controls.

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Citizens who once voted themselves subsidies now faced repression, scarcity, and mass emigration.

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Venezuela’s GDP has fallen by over 70% since its peak, with inflation once reaching close to 345,000% (right now, it’s moderated to “only” 172%).

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Their last truly free election? Nearly 10 years ago in December 2015.

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Obviously, there are big differences between Venezuela and the US.

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The dollar’s status as the world’s reserve currency has prevented us from spiralling into hyperinflation…

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And despite rising yields, US Treasuries are still viewed as a universally safe asset.

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But the warning signs are flashing. 

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Our deficits are exploding, our entitlements are on a collision course with insolvency, and our politics increasingly revolve around who can promise the most free benefits.

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And while no one can say exactly how or when the cycle will play out… 

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