Arguably the biggest news of the last few days is that the official regime-change operation of the US government, USAID, is getting its wings clipped, with a far-reaching cut in spending and the introduction of adult supervision. Up until very recently, this agency seemed to have operated without any accountability, using US taxpayer money to promote homosexuality, transgenderism, and Marxism abroad. USAID is just a symptom of a much bigger problem, which greatly impairs Western countries. The underlying problem is that large parts of the economy focus on resource extraction. The scale is enormous, and does not at all apply to supposed modern-day robber barons like Elon Musk. Instead, it is a death by a thousand paper cut or, more precisely, death by dozens of millions of economically unproductive people.

The extent of the self-serving economy is truly staggering. By a conservative measure, made by the centrist think tank Brooking Institution, is that about 10 million people directly work for the government. This number is an absurd underestimation. We can use well-known government agencies like the CIA or USAID to explain how large-scale grift works: you start with a huge pile of money which you want to spend on your supporters. There are several ways of getting this money. A very popular approach is setting up an NGO. These NGOs are effectively government-financed operations, and they are very helpful in astroturfing political campaigns. At the flick of a switch, these people spring into action, supporting whatever position the Democrats want to see supported. One day it is gay rights, the next it is BLM, and later it is climate change. Whenever there is a new psyops to run, countless NGOs are there to do their bidding. According to official government figures, there are 1.5 million (!) NGOs in the United States. This is directly from the website of the State Department:

Approximately 1.5 million NGOs operate in the United States. These NGOs undertake a wide array of activities, including political advocacy on issues such as foreign policy, elections, the environment, healthcare, women’s rights, economic development, and many other issues. They often develop and address new approaches to social and economic problems that governments cannot address alone.

Of course, because a tyrannical leftist government does not want to be seen pushing an issue like sex-change operations for children, they outsource this work to NGOs they directly support financially. In addition, there surely is a lot of outright fraud, i.e. NGOs receiving government money, which is partly donated to the Democrats.

Obviously, not all NGOs do the bidding of the Democrats, but it is probably not much of a stretch that many millions of people in the United States make their livelihood by working in an NGO, supporting whatever cause Democrats want them to support. The same is true of academia. Universities are extremely left-leaning. At Harvard, less than 1.5% of professors identify as conservative, and zero percent as very conservative. There are about 1.5 million faculty members at US universities. Probably at least 80% live off the taxpayer, getting lavish funding for research that conveniently shows that the Vikings were blacks, that IQ differences does not exist but racism does, or that CO2 causes global warming. Overall, dozens of millions of people do not produce anything of economic value and instead are part of an elaborate machine set up by the Democrat party to promote leftist causes. However, this rabbit hole goes a lot deeper.

You may be well aware that real-world inflation is out of control. Just look at the explosion of real-estate prices. Governments are obviously incentivized to downplay inflation, partly to openly deceive you and keep up the image of everything being under control and portraying an image of competency but also in order to limit expenses that are tied to inflation rates such as certain social benefit payments. The lower the publicly declared inflation rate is, the less the government has to pay to citizens on such programs. There is a very simple intuitive understanding for inflation: if the supply of money increases but the supply of goods and services remains stable, money loses its value. Thus, you need to pay more for whatever you want to pay. This is inflation. Amusingly, or shockingly, in academic economics, this is a fringe view. Tens of thousands of professors in this field instead dream up all kinds of bizarre nonsense, with a significant fraction even claiming that inflation is completely unrelated to the supply of money. To make it even simpler: Assume a toy economy in which there are 100 dollars available on one hand, and one fancy rock on the other. You can set “X” as the asking price for this rock. The actual number is not even relevant. However, if you suddenly print an extra 900 dollars while there is no concomitant increase in the supply of fancy rocks, the price for the latter will shoot up.

If you just extract money from the economy but you do not produce anything, then society has to pay for this via increased prices. Use a closed economy again for the purpose of illustration: Assume there is only one person who is able to retrieve fancy rocks, and he likes selling them. He adds value to the economy and others pay for this. However, if this person ends up reading Marx and decides to just live off welfare, then there is a productivity gap. Suddenly, there are fewer goods and services that are being produced, yet the number of consumers is constant. As a consequence, the value of money will go down. Not being engaged in productive labor adds to inflation, however minutely or imperceptibly. Effectively, a bunch of artists or writers whose work does not lead to an increase in productivity, for instance by improving the mental health of people who are exposed to their work, devalue your nation’s economy, as unpalatable as this may sound. On a side note, the government loves to pay for the goods and services of “minority-owned businesses” and there are also businesses that exclusively provide services to the government. However, every business that depends on the government and could not survive otherwise, also engages in resource extraction. The taxpayer collectively gets fewer goods and services, or worse ones. Thus, this also undermines the value of money.

I do not want to bash artists and writers, however, because there are much bigger problems in society, i.e. useless middlemen that impede progress. Labor unions are infamous for insisting on certain processes and jobs in order to “secure employment” for their members. If these jobs only exist to provide a sinecure, then these people are harmful to the economy. In an alternative reality, they could quite likely work productively. This is even true in tech. I should add that I am not completely against labor unions as they obviously help protect the rights of workers. Surely, you would not want to be exposed to a third-world working environment. However, labor unions seem to sometimes overshoot their goals. This is the case when they think they are protecting their members when they instead actively harm the economy.

A current hot-button issue in Western labor unions is the use of AI to displace workers. I think it is disingenuous to claim that people losing their job can simply retrain to do something else, e.g. factory workers becoming engineers. This is laughable pro-capital propaganda, and sadly this is the level of the discussion at times. However, if you engage in work that could be completely automated, you weaken your local economy because you effectively get subsidized by others. If the judicious use of AI could reduce the number of people in a call center by 30% due to the automation of some tasks, but the labor union opposes that then the equivalent of 30% of these people effectively dig holes all day, only to fill them up again in the evening, and they do this day after day. On a related note, I once came across the claim that trucking is such an important industry in the United States because the labor union block more effective approaches, such as sending goods per train. There is probably some truth to that, albeit I do not know enough about this topic to have an informed opinion. Nonetheless, it would be far better for society if people who have a job that does not need to exist did something else instead. So far, humanity has not run out of labor nor will we anytime soon, so there is no fundamental issue. Of course, some people will not be able to find a similar job but for this there is, at least in most of Europe, a social support system in place, and even the United States has a pretty generous welfare state.

A hyper-effective economy is a pipe dream, just as you will not be able to be 100% productive every day either. However, a certain level of effectiveness needs to be maintained. There can be some economic parasitism but there cannot be superparasitism in which 30 or 40% of the people in the labor force do not engage in productive work. Arguably, given the high amount of inflation in recent decades, the West is beyond that point, with far too few people being engaged in productive labor. Imagine you had two million more construction workers and, simultaneously, two million fewer people pushing Marxism on us via an NGO! Obviously, if there were more houses and apartments on the market, supply would go up and prices would go down. Instead, an ever-smaller number of productive workers, based on the labor-force participation rate of men going down, has to support more while more people are engaged in, effectively, unproductive labor. This includes everyone whose work does not have an economic benefit, including a significant number of office workers who enjoy a cushy bullshit job.