Many would assume that the Agricultural Revolution back near 10,000 BC was the greatest innovation and breakthrough in human history.

Or the invention of the wheel back around 3500 BC.

Or the creation of writing 300 years after.

Those were all milestones in human history.

But from an economics standpoint, it was the start of both free market capitalism and democracy in the late 1700s that was truly the greatest innovation and breakthrough.

The steam engine was perfected in 1776.

That same year the Declaration of Independence was signed, and Adam Smith published his breakthrough book on capitalism, The Wealth of Nations.

In my most recent book, Zero Hour, Andy Pancholi and I show how a 250-year Political Revolution, a 84-year Populist Revolution, and a 28-year Financial Crisis Cycle all came together back then – just like what’s happening NOW!

And I’ll be speaking more on this at our 2018 Irrational Economic Summit.

In the book, I predict we’ll continue to see the greatest political polarization since the Civil War, and it will only intensify.

The Democrats are leaning far left. They claim that capitalism has failed, and that we need to push towards socialism with guaranteed income and health care for all if conditions are to improve.

It’s ridiculous!

That’s a guarantee of national bankruptcy when we’re already up to our necks in debt at public and private levels. It’s far more now than any other time in history.

Capitalism has not failed.

It has merely been corrupted by Wall Street.

The goons have rigged the system for the financial elite to prosper, and made it to work against businesses and everyday interests. Glass-Steagall was repealed in 1994 just in time to allow the greatest debt and financial bubbles since the Roaring ’20s. It was passed precisely to prevent such collusion in financial institutions.

Central banks have now totally taken over free markets by setting short- and long-term interest rates to zero (adjusted for inflation).

That takes away free market pricing and accountability. It only rewards speculation and stock buybacks, creating unprecedented and unsustainable bubbles in everything. It certainly doesn’t support productive investments and wage gains for everyday people. Dr. Lacy Hunt, who is speaking at our Irrational Economic Summit, shows how low money velocity measures and reflects that.

Tax cuts when corporate profits are at the highest – compared to GDP – in history only serve to add to this whole debt and financial bubble environment, while wages continue to stagnate.

This endless and extreme economic tinkering is NOT free market capitalism!

Bubbles are natural. They will always occur at some point in the economic cycle.

Left alone, capitalism would never have allowed such a bubble economy to get anywhere near this extreme and out of balance.

For the first time in history, we’ve had three major stock bubbles and two real estate bubbles in a row… that means an even more dramatic end to our “economy and markets on crack.”

The Republicans have not only allowed for such fiscal irresponsibility at all levels, but they have led the charge against democracy.

Wealthy corporations and billionaires – special interest groups made richer than ever by the bubble – have taken over.

Are you aware that the two Koch brothers single-handedly vetoed Mitt Romney to run for president in the 2016 primary? Two douchebag billionaires did this.

It’s not about whether that was a good thing or a bad thing…

That’s NOT democracy…

The Supreme Court voted to allow corporations to be treated like individuals and have unlimited ability to contribute to political campaigns…

That’s NOT democracy.

The Republicans now seem hell bent on stepping back every advance in social progress made over the past several decades, from civil rights to pollution. They are seemingly aiming against public interest or common good. They’re simply supporting anything that makes prioritizes profits.

That is NOT democracy!

Democracy and the chance to vote despite financial standing was designed to be a natural counterbalance to capitalism, which rewards the people who contribute and innovate the most.

It was designed to be more inclusive and to align the troops with the generals.

The secret is that democracy and capitalism are actually opposite principles that balance each other like men and women, boom and bust, inflation and deflation.

Clueless economists and politicians want an economy that grows at 3%-plus with no recessions or cycles of inflation and deflation.

They all went nuts when the S&P 500 reached all-time highs last week, which is a side effect of QE and continual artificial stimulus.  .

The problem is that it’s those very dynamics and play of opposites that actually drive innovation and a standard of living that has grown nine times since 1900!

Find a time in history when that has happened…

Lobbying by special interests should be outlawed or severely limited.

Political contributions should be capped at something like a $1,000 per household per candidate.

Corporations, at best, get the same $1,000 cap, if anything at all.

Central banks should not be able to artificially stimulate the economy with money printing or interest rate manipulation.

And if they do, it should only be allowed for brief periods during times of defined emergencies, like recessions with unemployment over 10%, or stock crashes over 50%, etc.

The Fed should simply grow the money supply in line with GDP growth and only provide injections of liquidity when needed to keep the banking system from getting overwhelmed and melting down unnecessarily…

NOT to prevent recessions and natural rebalancing that keeps the economy healthy and innovation moving forward. That is free market capitalism with consequences for failure.

We are on the verge of the greatest political, social, and economic revolution since the advent of democracy itself.

Our newfound information technologies make capitalism more innovative than ever through bottom-up network systems, rather than top down.

It’s more competitive than ever.

They make democracy more robust since everyday individuals can be much more informed and participate in many more ways.

It’s more inclusive than ever.

This revolution is about the revitalization of the two most important principles in history, not about the failure or destruction of them.

Our greed, our shortsightedness, and our political system is what has failed here.

I’m afraid that the system is going to have to break down further than any previous time in history for us to understand and restore these simple principles.

One of the things my father told me stuck with me: “People are not realistic. Hence, they are irresponsible.”

It’s not that people mean to be irresponsible, or in this case, want to kill democracy or capitalism.

The desire for an easy, risk-free life and economy kills these proven and successful principles without us even knowing or seeing it.

It’s time we listen to people that do understand capitalism and democracy. It’s time to start seeing the obvious here.

David Stockman is one of those people you should be listening to.

He’s the author of the bestselling book, The Deformation of Capitalism, and he’ll be speaking at our Irrational Economic Summit in Austin, Texas this October.

Seats are running out, and the Hilton Hotel is nearly booked full.

Be sure to reserve you seats now before there are none left.

If you’ve any faith in the system – the original untampered system – then you won’t want to miss out on the chance to hear some of the greatest minds come together and talk about the current state of our economy and markets.

Harry
Follow me on Twitter @harrydentjr

The Latest Bestseller from Harry Dent: Zero Hour

In Harry Dent's latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, he guides you through the revolution ahead to help you understand the… Read More>>
Harry Dent
Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.