Whither Leviathan

This is part 2 of my economic lamentations of 21st century America, continuing from my May 18th article ‘Modern Industrialism Is Betraying Us’.

On the subject of a nation, I ask myself: what is the purpose of a nation? Is it security, economy, control, binding of a people, or some form of all these things? When so many elements of our nation need improvement it’s hard to decide where to start analyzing the problems. Let’s continue with the economy – but first a history lesson, as history is a long sequence of case studies. One cautionary tale for modern Americans is the Spanish Empire in the 1500-1600s. Paraphrasing the late Rodney Stark in How the West Won: The Neglected Story of the Triumph of Modernity, Spain lost her empire by focusing on her empire and not on Spain.

Spain didn’t focus on the actual people of Spain and their interests. Spain (the emperor, government, aristocracy, etc.) spent or consumed a disproportionate amount of the nation’s wealth derived from the Americas to fund global wars, expansion, and to administer over their great spread of acquired land. And Spain had ambitious goals:

bringing in new territory into their economic system, constant exploration, defense of what was claimed, and spreading Christianity – the latter of which they were very effective. But the Spanish people benefited little despite the influx of wealth from their empire’s activities.

The reader in 2026 can see some similarities in the US today. Spain ceased as an empire, its height lasting for about 200 years. The empire was too big for its administration to manage. Perhaps because its administration was also too big. The larger a government, the more taxes needed to keep said government afloat, and those taxes come from the people – another vicious cycle in an economic system reliant on big government. I need not explain our colonial ancestors’ opinion on taxation this 250^th season. We all know what our historic attitude toward the size of government and taxation used to be.

Unlike the Spanish Empire the US is very capable of producing wealth within our borders. However, a growing economic trend across the entire West emerged: the increase of government spending as a percentage of our GDP, notably when we’re not in a recession. In other words, what amount of our economy is simply the government (federal and state) spending our tax money. Here’s a table showing this percentage over the last 100 years across various Western countries.

Government Spending as a Percentage of GDP (in %)

Note the Soviet Union at the bottom, and that the US is at 38%. If these numbers are true, then we need to think about the modern West differently. France, Germany, Italy, and Sweden’s governments expenditure is the same percentage of GDP at the height of the Soviet Union. It means their economies are likely now dependent on the government spending tax money – another major leap to centralized planning, if that’s where we want to go.

With France’s case, for every $100 the country produces, $57 is spent by the government. This inherently requires more taxes to maintain the programs in place and to feed the industries now dependent on this government spending. This increases the risk of assuming greater debt while also risking private sector displacement by big government. Is this what a nation is for? To have our government be our biggest client?

Like the Spanish Empire in the 1600s, the US government today spends a lot its money on its empire – wars abroad, financial aid to foreign countries, collaboration on the interests of big business, and being less representative of the people within the US (see the programs USAID funded before DOGE).

People today across the political spectrum notice the oligarchical feeling of the government and big business connection, especially with the current tech darlings and always with the military-industrial sector. Allen Tate wrote in Notes on Liberty and Property, “The Marxists believe in the big corporation for two, to them, excellent reasons: (1) they like centralization as a good thing in itself; and (2) they like it as a means…so the Marxist hymn the big corporation as the result of ‘economic determinism (divine order) because they know that it has already accomplished the first stage of the journey toward the collectivist State…” And as G.K. Chesterton said, “Big Business and State Socialism are very much alike, especially Big Business.”

These two birds of a feather are similar in their mechanism. Both entities derive their revenue from the taxpayer ultimately. When selling to governments, businesses don’t have to convince millions of people to buy their products, they only have to convince one bureaucrat – who did not earn the funds he/she is spending. In fact, you, the taxpayer, paid for whatever the bureaucrat is buying for their agency’s use. Yet you had no say whether that agency should have bought whatever it is they’re buying.

While there are thousands of examples to choose from, nothing has highlighted the big business and big government relationship recently than the modern AI frenzy – see the hundreds of articles about which AI company is in good standing with the Pentagon or some other agency at the moment.

These AI promises also beg the question of whether we need global fungible labor with their promise of needing less labor. Maybe we can cease “temporary” working visas for both white and blue collar jobs. And if we’re cutting some of these jobs because of AI, hopefully we’re not banking on the government to back up all of these laid off employees’ mortgages that millions pay every month. Like 2008, we’ll have to see. In the meantime, these new AI companies are in the ‘cash grab’ phase of emerging technology, before significant competition creeps in and everyone must move to the ‘lean and mean’ phase to continue.

While we’re in the ‘cash grab’ phase the promises will be endless. See the Gartner Hype Cycle and determine where we are. Now, none of these world-solving or world-doom declarations could come to fruition in the end. Either way, note the behavior our government exhibits toward the AI companies making these ‘profound’ declarations. The government loves the opportunities, the glamor, and the forming relationship with these tech giants. And yet we continue importing global fungible labor while taking a blasé approach to the impacts of mass layoffs.

Here’s a table with the top 10 companies who request H1B visas, the number of approved visas, the number of layoffs in the US and percentage of which came due to AI, and how much money they receive in sales from the government:

To caveat, will we know for sure that the H1B job replaced the exact laid off role already in the US? No. Are these numbers large enough for us to make some assumptions? Absolutely. And these are the companies our government continues court every time there’s a tech need. However, big business in this case shows itself for who it is, which is no friend to the American worker. Some of these companies are receiving an H1B employee for every US based layoff. And based on reported numbers it’s safer to say AI is paving the way for more H1Bs (global fungible labor) rather than resource efficiency. The promises these AI companies are making don’t match their hiring/firing practices. Either AI reduces labor requirements, or these companies are trimming costs by hiring H1Bs. If these companies are using a form of both, namely replacing workers using the H1B system – is there no protective measure for the American worker?

We as citizens have less impact on big business than on the government, see Part 1 of Who Owns America? (Agar and Tate) for greater analysis on the subject, namely the 5^th and 14^th amendments where corporations were deemed as ‘persons’ and subject to applicable rights. Our government is too big, is too much of our economy, and its continued growth will eat at our liberties at an increasing rate. As John C Rawe states in Agriculture and the Property State, “There is but one solution for this nation and that is a new Declaration of Independence and return to the Jeffersonian concept of the Constitution…”. Although Rawe was referring to property ownership, an entirely other subject for another day, I see no reason why the sentiment cannot apply to our modern issue of the government effectively becoming the economy increasingly – as was the Soviet Union. Although I am being hyperbolic here, Rawe was definitely not when he wrote that. The US is doing better than Europe in this case though. Yet I dare assert that even Hamilton might have winced at our government’s expenditure being 38% of GDP (once explained what GPD is – as it wasn’t a concept until the 1930s when it was GNP).

As I said at the beginning, we must be cautious of what our government spends money on, how much is spent, and its role in the economy – as that will determine how much the government deems it needs from us, the taxpayer. If we focus on our empire and not on the interests of our people, then we follow the path of the Spanish Empire. While I do not concern myself over whether any empire should last for any period of time, I do not want any economic collapse in the US, and so I voice my concerns.

The views expressed at AbbevilleInstitute.org are not necessarily those of the Abbeville Institute. 

Matthew Conard

Matt Conard holds an MBA from the University of North Carolina - Chapel Hill and a master's from North Carolina State University. He is a husband and father working in technology and is a self published author of the book Knights of Lebanon. Among other things he was a US Army officer, and is now becoming drawn into the Southern agrarian ideology - as it is the furthest thing from his known world despite living in a rural county in North Carolina.

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