1 Free people create wealth (capitalism).
2 Governments begin to tax and regulate
3 Taxes and regulations degrade freedom and begin to strangle the economy.
4 Legislative distortions divide society into winners and losers.
5 The economy begins to fail.
6 In the effort to keep the show on the road, central banks manipulate interest rates downward, which encourages consumption of capital.
7 Less capital causes the gap between ‘haves’ and ‘have-nots’ to widen even further, to the point of being intolerable.
8 The people demand that government enacts even more regulations and taxes in order to fix the problem.
9 Control of the economy becomes total (socialism), which destroys what capital (and freedom) is left.
10 Such capital as does remain is withdrawn from the system and hidden.
11 Government control of society collapses.
The cycle repeats ad infinitum.