Outwardly, everyone condemns the Chinese government, run by the Chinese Communist Party (CCP). Their society is authoritarian and “anti-democratic” while in America, as the song goes, “at least I know I’m free.”

Yet, no one seems to believe freedom leads to greater economic prosperity or human happiness. Inherent in every political discussion about China is the idea that authoritarianism produces better results and the United States is handicapped by its devotion to freedom. Americans enviously note that when China’s central government decides to do something, they are not encumbered by adversarial processes inherent in the U.S. Constitution.

This is also the assumption underlying the trade wars. China has “taken advantage of” the United States by being more economically mercantilist while the United States has foolishly allowed its industry to migrate to China and other countries because of relatively freer trade policies.

That is demonstrably false. Manufacturing still comprises about the same percentage of real GDP as it has throughout the post-WWII period. The problem with American manufacturing isn’t the amount produced but what is produced. American manufacturing is far too skewed towards producing weapons and other items without utility, misdirected by a monetary system that allows resources to be directed towards unproductive ends.

The emergence of China as an economic power certainly provides the United States new competition, but that emergence is not a result of China’s authoritarianism. On the contrary, China’s economy has grown exponentially in the past thirty years because it is significantly less authoritarian, especially in the economic sphere, than it was previously.

Americans never seem to ask themselves why a country with four times the population didn’t have a much larger economy than the United States during the twentieth century. The answer is simple: communism. China had as authoritarian an economic system as has ever existed in human history. While they are by no means laissez faire now, they are far more “capitalist” in relative terms. This is the key to their success, not the authoritarianism that remains from the communist years.

The United States, on the other hand, is relatively less free than it was at almost any time in its history, with the exception perhaps of the 1930s and 40s. And its trajectory is towards more and more government intervention into the economy and life in general.

The United States became the most powerful economy in the world for the same reason the United Kingdom, comprised of two tiny islands with relatively small populations, was the most powerful before the United States. It had the freest markets. It was the most “capitalist,” for lack of a better single word.

The United Kingdom squandered its wealth trying to maintain a vast global empire that gave its government prestige but drained its wealth and led it to debauch its currency. Sound familiar? Empire may be made possible by capitalism, but it is not an inherent part of capitalism. Empire is anti-capitalist. Capitalism is about property rights and voluntary exchange. Empire demands taxes and misdirection of capital into production of arms and other imperial necessities that do not add to the happiness of the taxpayers.

Weapons, soldiers, and military infrastructure beyond what is needed for defense have no utility. Sooner or later, the productive part of the imperial economy can no longer afford to subsidize the unproductive part.

This has been the end of every empire in history. It is also the reason the USSR had a much more painful transition from communism to capitalism than China – it had an empire of other communist republics draining its already misdirected resources.

While the global standing army the United States maintains is a significant reason for its economic decline, it is not the only reason. In all areas of economic and social life, America has become less free with each passing year.

Read the rest at Tom Mullen Talks Freedom... 

Of all the curtailments to our freedom, the Federal Reserve System is the most damaging. It robs our wealth and therefore our ability to determine our future silently, without anyone voting or even discussing. Sometimes it robs us in big chunks, as it did in 2008 and 2020. At other times, by a slow and relentless trickle.

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