Proponents of capitalism often claim that their system is the only viable alternative to socialism. This doesn’t make any sense to me; it sounds like saying that we should go downstairs to avoid reaching the basement. I think that any nation which adopts a capitalist system and a dedication to capitalist ideals begins a process that leads inevitably to a large government role in the economy.
To begin with, we need to understand that “capitalism” means both the laws and the philosophy. In other words, a capitalistic economy must have a government that defends property rights, but it also requires having people who form businesses. Those businesses work towards the goal of maximizing their own profits.
The process works like this:
1.) In a capitalist system, variations in personal wealth must exist.
2.) The rich people will gain a disproportionate share of control over the government. This can’t be avoided. Money is only a form of power, power is the ability to make other people obey your will, and the government is made up of people.
3.) Rich people in a capitalist society are self-interested, meaning that they look for ways to maximize income with minimum effort. Arranging for a government handout will almost always bring a higher income/effort ration than honest labor. Consequently the rich will devote more and more attention to getting government handouts. Having control over the government, they will get their handouts.
4.) Once the process of handing out government pork begins, it can only grow. Increasing spending will always be easier than decreasing it, because the rich people are personally interested in maintaining their handouts, while no one’s very deeply interested in ending those handouts.
5.) Consequently, government spending continually rises.