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Authored by Patrick Barron via The Mises Institute,

The purpose of this essay is not to convince the reader of the necessity for change. It is to present some commonsense policy changes to attempt to mitigate the economic harm that has been done to Western economies, especially to the United States and the United Kingdom, since the end of World War II.

Please watch Godfrey Bloom and Alasdair Macleod’s recent interview with Sonia Poulton.

The video describes the current financial and reputational weaknesses of the West. For a more in-depth analysis of the financial threat to the West, please read any of Alasdair Macleod’s weekly essays from the past few months.

In the Poulton interview, Macleod ably describes the financial implications of the West’s deindustrialization policies and currency debasement. Bloom describes the reputational damage stemming from the West’s “sanctions” against Russia plus the consequences of deindustrialization due to the foolish pursuit of a Green New Deal.

This essay’s goal is not to convince the reader of the seriousness of the current situation, which Bloom and Macleod do so well, but rather to present policies that must be changed to stop the destruction of the West’s economies and reverse the harm to their reputations. Western nations need to build a reputation for honesty, fair dealing, and adherence to the rule of law in the international arena by embracing free trade and neutrality.

There is no need to point out that in the US and the UK, none of the policy changes listed below will be enacted by either of the two main political parties in their current state. Either one of the leading parties in each country must change leadership or a third party must emerge. There is precedence in both America and Britain for the emergence of a new party. In the mid-1850s, America’s Whig Party was thrown on the scrap heap of history when it was supplanted by the antislavery Republican Party. In the first half of the twentieth century, the Labour Party supplanted Britain’s Liberal Party. It has happened before, and it can happen again.

The following “policy imperatives” assume that such internal change has occurred and that the new ruling party must mitigate and eventually reverse the damage done by its predecessors over several years. The task will not be easy, nor will it be painless, but it must be done.

Policy Imperatives

  1. Drastically cut government spending. The purchasing power of the dollar and the pound is being steadily weakened by the Treasury’s need to borrow more money than taxes and the bond markets will offset. Currently the central banks “buy” the excess debt with money created out of thin air. This leads inevitably to more money chasing fewer goods, which results in higher prices and the boom/bust credit cycle, among other economic damages.

  2. Abolish the so-called Green New Deal, which is based upon the schlock science surrounding “climate change.” The Western economies not only must end the destruction of their industrial economies, but they must revive the entrepreneurial spirit in individuals by eliminating regulations on business activity that does not directly cause real harm to people. For example, the West must stop mandating costly and time-consuming environmental impact studies, which elevate nonhuman life above human life. The US should abolish the Occupational Safety and Health Administration (OSHA), and the UK should abolish the Health and Safety Executive (HSE). Both countries have well-established common-law precedents that protect and compensate workersfor on-the-job injuries.

  3. Reinstitute the gold standard. The dollar and the pound must be seen as proxies for real money; i.e., gold. This means that currency cannot be issued unless the central bank has gold with which to back it. There is a long list of economic benefits to be derived from a stable currency, but perhaps the most important benefit is spending discipline. The government’s myriad spending orgies will face real-time discipline from the taxpayers and the markets.

  4. House the nation’s gold, which is used to back its currency, in a neutral and internationally supervised place—for example, Switzerland—that will redeem the nation’s currency for gold upon demand. The government must not be allowed to suspend currency redemption. Remember, gold is money and all else is credit. If a nation’s credit is in question—i.e., the market fears that there is insufficient gold to redeem all the currency or that the government may suspend redemption—then demand to hold its currency for settlement purposes will drop or even evaporate completely.

  5. Return stolen property to its rightful owners. Theft is a violation of law at every level. The Western powers confiscated Russian property as part of the so-called sanctions following Russia’s invasion of Ukraine. This insult to justice must end. Neither country has declared war on Russia, yet the sanctions are well-known tools of war. Ending sanctions is both a moral and an economic issue. If the world believes that its property can be seized for some act for which a country’s government disapproves, international trade of all varieties will fall drastically for such a country and become difficult to recover. Who in the world can trust such a country again?

  6. Adopt a noninterventionist foreign policy. The world is full of controversies that often lead nations to war. Unless their interests are directly threatened, the US and the UK must not intervene in foreign disputes but remain neutral, even if these disputes lead friendly foreign nations to war. There is no way that the Western powers can honestly adjudicate these never-ending disputes. The West should encourage diplomacy rather than war making. Otherwise, keep out.

Conclusion

The Western world has violated international norms of fair dealing to the point that its reputation is nearing long-term destruction. The West’s currencies are poised to fall in value due to unprecedented money printing over several decades. Western governments foolishly believe that there is nothing that the rest of the world can do. They believe that the rest of the world must kowtow to whatever international norms the US and the UK dictate.

But they are horribly wrong. The rest of the world is moving beyond dollar hegemony and beyond the reach of US and UK sanctions. It is building a new reserve currency for settlement of international trade. The non-Western world is much larger than the West in terms of population and commodities. More importantly, the non-Western world is willing to exploit its commodities for the benefit of its citizens, whereas the West has placed its commodities off limits due to its belief in and commitment to schlock environmental science that posits impending environmental doom.

The process can be reversed, but such a reversal requires new leadership. Nothing can be done unless new leaders can change policy. The West does not need to “rule the world” in order to be peaceful and prosperous.

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