“The Rise of Modern Socialism and Economic Freedom: A Discussion with Rainer Zitelmann and Steve Forbes”

Rainer Zitelmannauthor of the book In Defense of Capitalismmet Steve Forbes, editor of the magazine Forbes, twice in New York in April. He is a remarkable man who has a clear vision of the market economy. They talked about current economic and political developments in the United States and Europe.

Rainer Zitelmann: The Heritage Foundation has just awarded the United States the worst index of economic freedom since the index was first published in 1995. According to the latest index, no less than 16 European countries are now considered freer economically than the United States.

Forbes : Two major factors have caused the reduction of economic freedom in UNITED STATES. The first is the rise of modern socialism. Rather than the old idea of ​​public ownership of businesses and industries, modern socialists manage to control the economy by developing the regulatory state. More and more regulators are telling you what you can and cannot do.

The scope of the regulatory state has increased enormously during this century. The Trump administration reversed the trend, but it was only a respite. Mr. Biden not only undid what Mr. Trump had done, but he also increased the reach of the regulatory state to unprecedented levels.

Latest example: the proposed rules for electric vehicles. By coercion, they want to destroy the use of the internal combustion engine and make the auto industry a virtual ward of the state.

The second factor is absolutely ignored by policy makers and experts: the devaluation of the dollar. Money is a measure of value, just as the scale measures weight, the clock measures time, and the ruler measures length.

In the early 2000s, the Bush administration pursued a deliberate but undeclared policy of weakening the dollar. Commodity prices soared. The same was true for real estate prices. The result was the crisis of 2008-2009 which, of course, was blamed on free markets rather than state errors.

This disaster was followed by the Federal Reserve and other central banks cutting interest rates, and then printing an excessive amount of money during the covid crisis.

The antidotes are simple: cut tax rates, stabilize the dollar and deregulate. The Supreme Court has made – and will make – decisions that will contribute to the fight against the administrative state. To reverse the slide in economic freedom, Republicans must win in 2024.

Rainer Zitelmann: What should the United States do to reduce its mountain of debt?

Forbes : The only realistic ways to deal with the state’s growing financial crisis are to create the conditions for a booming economy – lower tax rates, spending restraint, deregulation and a stable dollar. This is largely what the US did after World War II, when US debt as a share of GDP fell from over 120% to around 35% before we exited the US.gold standard in the early 1970s.

Rainer Zitelmann: What do you expect from a candidate like Ron Desantis? Does it advocate a clearly market-oriented approach?

Forbes : So far, none of the candidates or potential candidates have presented a growth program as has Ronald Reagan when he ran in 1980. Key to Reagan’s program was a 30% across-the-board personal income tax cut.

These future Republican presidents must also specify what they intend to do with the Federal Reserve, which can do nothing. And of course, they must come up with a strategy to deal with an increasingly geopolitically dangerous world. Reagan also did.

Rainer Zitelmann: Inflation has spread all over the world lately. Some politicians and media claim that we are past the peak. What do you think is the cause of this recent inflationary surge and what will happen next?

Forbes : The recent rise in prices is the result of the severe disruption caused by these lockdowns and by states undermining the value of their currencies. Unfortunately, the Federal Reserve and other central banks believe in fighting inflation by depressing economies and making people poorer. It’s like what doctors did to patients over two centuries ago: they bled them!

Rainer Zitelmann: The European Union has banned the registration of new cars with combustion engines from 2035. For me, this is a sign that Europe is getting closer and closer to a planned economy, where this politicians, not businesses and consumers, decide what is produced. What do you think of this ban? Do you think the United States will introduce similar legislation?

Forbes : The proposed bans in Europe and now in the United States are an integral part of a modern planned and socialist economy. They use false scientific data and outright lies to justify this liberticidal takeover!

Rainer Zitelmann: As capitalism is threatened all over the world, anti-capitalism is growing. What can we do ?

Forbes : From a practical point of view, it is necessary to argue for a reduction in tax rates and to oppose obvious nonsense such as banning gas stoves, reducing the power of air conditioners and requiring to buy expensive electric vehicles. American voters feel that what is happening today is profoundly wrong, just as they felt in 1980. We must insist that our current woes are the result of gross errors and excesses of power by from the state!