The problem, which has now come to a head, is the growing belief in the Anglo Civilization that a country forms around its government. It does not; it forms around the economy. The success, or not, of a nation, its raison d’être, is not defined by its government, but by its economy. A successful country is one that has a thriving economy. A failed country is an impoverished one.
There is a connection, which is that the strength of the economy is derived from the freedoms allowed by governments. The greater the freedoms, the stronger the economy. Big economy equals prosperity; big government equals poverty. That is one of the major and clearest lessons from 3,500 years of history.
In 2020, governments around the world forced people to close their businesses, destroy their own investments and livelihoods and throw hundreds of millions out of work. It was, to put it kindly, a terrible mistake. Governments came to believe that is was their economy to turn on and off as they pleased. It was not. It was the most egregious and widespread trampling of property rights that the world has ever witnessed. Yes, they showed conclusively that they could utilize their monopoly of force to turn off the economy, but no amount of force can make business people turn it on again.
Note that there were a very few noble exceptions who recognised the limits of decent government.
For entrepreneurs and business people, the lesson is clear and simple –
no investment is safe. No matter how
sound the investment, their capital, expertise and time can be destroyed in an
instant by the ultimate force majeure – government abuse of power.
In Australia, if we escape this with less than 20% unemployment, then it will be a better than expected outcome. I expect far worse. Too much capital has been destroyed; too much trust has been squandered. When the finance industry has a problem, it is concentrated and the central bank can step in. When small business does, they cannot, the problem is too fragmented.
The situation of a shortage of capital, zero trust and major disruptions to supply and demand mean a depression is right in front of us.