[The 51% Legal Dictatorship 9] The Fall of Truth: A 200-Year History of Capitalism as the Engineered 'Enemy of Democracy'

In this article, we will examine the origins of the myth that Capitalism (the Economic OS) leads to inequality and dictatorship, while Democracy (the Political OS) is the essential cure. We will look at the hard facts, and see how the Austrian and Chicago Schools—which tried to dismantle this myth—were eventually marginalized.

(1) Marx’s “Exploitation Theory” of the Industrial Revolution

Why does the formula “Capitalism is Evil, Democracy is Good” run so deeply in our collective OS? It is because Karl Marx’s narrative of Industrial Revolution exploitation was incredibly powerful. His narrative is simple:

Early capitalism and the Industrial Revolution pushed workers into a hell of exploitation.
The source of value is labor, not capital (Labor Theory of Value).
Therefore, once productivity is ripe, workers should communalize the means of production through democratic principles to ensure prosperity for all.

To be blunt: this is not just agitation; it is a total lie. What saved workers from poverty was not state paternalism. It was a combination of three things: the capitalist’s “selfish” desire to maximize profit, the worker’s “Right to Exit” to a better environment, and the geographical conditions that made this possible. I am here to fight this 200-year-old dichotomy.

[The Rural Village I Remember]

Economists have already finished this research: the Industrial Revolution was not the fall of civilization, but the greatest progress in history, saving the masses from starvation. I won’t waste time listing boring numbers like exploding income, plummeting infant mortality, or extended lifespans.

I want to talk about something else: the leftist “Romanticism of the Countryside.” The idea that a “warm rural society” was turned into a “cold city” by capitalist exploitation is a complete fraud. Intellectuals describe pre-capitalist rural life as a cozy, primitive commune where people shared potatoes. They write this while sipping lattes in their studies. They have never stepped foot in the mud. Marx, in particular, exaggerated the hellish life of early urban workers and packaged rural poverty as a Disney fairytale to incite revolution.

Let’s speak the truth. The Korean countryside I endured in the 1980s and 90s was a struggle for survival. Child labor was a given. 13-year-olds plowed muddy fields holding ox reins larger than themselves. Boys grew up with abnormally thick muscles because they were “ground down” before their bones could even grow. Three generations huddled together under asbestos slate roofs—a Class 1 carcinogen. When it rained, water dripped from the ceiling into urinals placed at our heads.

The “healthy life in nature” is another lie. Nature is cruel. It only ended when a child, coughing up blood from severe pneumonia because the family had no money for medicine, was finally rushed to a hospital. My strongest memory is the kitchen hearth. Behind it was the cattle shed. In summer, flies swarmed the smell of manure; in monsoon season, wastewater flowed back into the kitchen. In winter, we had to burn wood constantly just to keep the floor warm. The wind pierced through the paper windows like a blade. We survived only by piling 4 or 5 layers of moldy blankets. My older brothers had to gather wood and carry water every single day. We barely survived, praying to “holy spirits” to look after us.

What rescued us from that poverty was not “moral solidarity.” It was the Producers of Capitalism—those who built factories, created tools, and traded goods. Even my grandmother, who stayed in the village when everyone else left for Seoul, refused to go back to the countryside after visiting the city a few times. Do we need any more proof?

[The Visibility of Poverty]

The reason this historical distortion was so easily accepted is what Friedrich Hayek called the “Visibility of Poverty.” In rural areas, absolute starvation and abject poverty were scattered and hidden. Capitalism simply gathered the poor in cities to work in factories, making the poverty visible. These were people who would have died in the “state of nature,” but survived because of the new employment opportunities capitalism provided. Leftist intellectuals saw this visible concentration and claimed capitalism created poverty. The reality is the opposite: infant mortality dropped from 50% exponentially, the population grew, and production soared. Poverty and child labor always existed; capitalism just made them visible—and then started to solve them.

[Who Threatened You with a Knife to Go to the Factory?]

Leftist historians like Marx and Eric Hobsbawm claim the Enclosure Movement forced peasants out, and capitalists exploited these “helpless” urban poor. Textbooks parrot this fraud. But during Korea’s rapid industrialization, the youth who took the night train to the factories in Guro and Incheon did so by voluntary choice. No one pushed them. They flocked to the cities because they could no longer endure the poverty and low productivity of the countryside.

As Hayek noted, there was a gap of about 100 years between the Enclosure Movement and the urban population boom of the Industrial Revolution. The Enclosure Movement actually established private property rights, which increased agricultural productivity. This created surplus labor in rural areas, and urban factories offered an “Exit” through higher real wages. They migrated voluntarily to survive. Yes, factory conditions were harsh and hours were long—but compared to the rural environment of the time, it was a step forward. If the countryside was the “warm Eden” the left claims, why would anyone abandon it for a 12-hour factory shift in a slum?

Conclusion: Production is a human right, not labor. The production of added value saved us from poverty.

Yet, look at today’s double standard. To producers who scream in pain because the minimum wage is too high, people coldly say: “Who forced you to start a business? It’s your risk, you deal with it.” But if you say to a worker, “Who forced you to take this job? If you don’t like it, quit and go back to farming,” you are treated like a cold-blooded sociopath. Whose logic is truly contradictory?

(2) Why is Labor Welfare Considered a “Human Right”?

To prove that production is the true human right, let’s look at the contradictions in the claim that “labor welfare is a human right.” Leftist theorists divide the world into a childish dichotomy: the “kind, oppressed worker” vs. the “greedy, evil capitalist.” They then claim welfare = human rights based on “democratic principles.”

But labor welfare was never a natural human right. Marx himself hated the term “human rights,” calling it “bourgeois trash” because, at the time, human rights meant private property rights and the freedom to protect them.

The formula “Labor Rights = Human Rights” was born in 1948 with the UN, influenced by the Soviet camp’s worldview of “Worker = Citizen.” As the Cold War set in and Western workers joined the middle class, the left realized the era of communist revolution was over. To court conservative voters and seize political power, they shifted their frame from “Labor = Class Struggle” to the moral frame of “Labor = Human Rights Struggle.” Consequently, employers who lost the “human right to private property and freedom” were automatically rebranded as “oppressors of human rights.”

Korea and France have fallen into a unique brand of populist democracy because labor activists led the democratization movement. Because the military dictatorship led economic development, the labor unions on the opposing side were granted the “Holy Crusader” frame by default. Today, Korea and France are among the few countries where the right to strike is a constitutional guarantee, while the collective action of producers is punished under criminal law. As a result, the worker has become a God, and the small business owner has become a slave.

[The Reality of the Producer-Laborer OS]

Category	Wage Laborer (Proletariat)	Self-Employed / Small Biz (Employer)
Economic Crisis	Low wages, tight living.	Net profit lower than a part-timer; no accumulated profit; carrying the risk of bankruptcy.
Leftist Diagnosis	“This is structural contradiction! Cruel capitalist exploitation!” -> Becomes a narrative of “Human Rights Oppression.”	“Lack of competitiveness. If you can’t manage, you should be weeded out.” -> Becomes a narrative of “Meritocracy.”
Proposed Solution	“The State must intervene to guarantee human rights (Living Wage) and provide subsidies!”	“If you can’t pay the minimum wage, you’re a zombie company. Close down immediately!”
Response to “Who forced you?”	“You cold-blooded sociopath! You’re blaming structural inequality on individual effort!”	“Who told you to start a business? It’s a risk you ‘chose’ to make more money, so deal with it yourself.”
Essential Treatment	Treated as the “Absolute Good” and a “Victim” to be protected by the state.	Despite being a producer of added value, treated as a “Potential Oppressor” and a “Moral Offender.”

(3) The Fatal Error of Liberalism: Superior Logic, Inferior Storytelling

Let’s start with a blunt fact: At its core, a labor union is an interest group formed to raise wages and protect vested interests. However, the moment they seize the moral frame of “Democratization” and “Constitutional Human Rights,” they create a shield that no logical attack can pierce. At best, the opposition can only scratch the surface by calling them “hypocrites.” Why did this catastrophe happen?

It is because developing a moral narrative powerful enough to persuade the masses while defending liberalism and market economics is excruciatingly difficult. Market morality—which tolerates inequality of outcome and demands individuals shoulder their own risks—is fundamentally hard for human nature to digest. It places the burden of responsibility entirely on the self.

In contrast, the leftist narrative feels “natural.” It praises primitive communal societies and claims private property is the root of all misery. The image of the “Garden of Eden” where apples are shared peacefully blends seamlessly with the image of the “Roman Empire (Capitalist)” whipping “Jesus (Worker).” Exposed to this narrative in schools and cinemas, the masses come to believe leftist logic is synonymous with “Justice.” (Of course, some adopt “Leftism as Fashion” just to appear virtuous.) Despite the fact that history’s worst genocides occurred under regimes trying to realize leftist ideals—the USSR, Maoist China, the Khmer Rouge—the public remains numb to these truths. Why? Because the Left has a monopoly on the [Narrative OS].

[The Art of Incitement: How to Make the Masses’ Hearts Race]

Friedrich Hayek was deeply shocked by the fact that “Those who control the narrative control history, regardless of the truth.” Giants like Robert Nozick and Nassim Taleb also struggled to dismantle the leftist logic that portrays production as a crime and the looting of producers as “justice.”

They realized that a narrative that incites the masses requires three specific conditions:

A Promise of Utopia: There must be a promise that the “old capitalist world” will inevitably fall to technological shifts (like AI), and from its ashes, a paradise will emerge where workers share UBI. Mircea Eliade criticized this as a secularization of the Christian “End of History/Salvation” arc, turning political-economic goals into a “Manifest Destiny.”

A Clear Enemy to Strike: To incite the masses, the enemy must be defined as an “Absolute Other.” If the target is too complex, the masses won’t unite. Examples include Marx’s “Capitalist,” Piketty’s “Inherited Wealth,” or Hitler’s “Jew.” It is a bitter irony that while the “Absolute Other” held sacred authority in ancient times, they become symbols of “Inequality and Dictatorship” in a mass society.

Ideological Parasitism on Archetypes: This is the technique of injecting ideology into intuitive symbols so that they can be understood without thinking. By overlaying the archetype of “Jesus being persecuted by Rome” onto the “Worker vs. Capitalist” context, the narrative becomes so “natural” that people stop questioning it. Agitation succeeds when it is intuitive; it fails when it is logical.

Roland Barthes saw this clearly. He decoded how “Myths” are created by stealing symbols. For example, a photo of a Black soldier saluting the French flag is used to inject a new meaning: “France is a just nation that treats all races equally, therefore French Imperialism is justified.”

However, Barthes intentionally ignored how the Left turned “Democracy” into a “Political Myth for the Economically Oppressed.” By throwing a painting like Delacroix’s Liberty Leading the People into the mix, they lump the Monarchy, the Clergy, and the Capitalist together as the “Ancien Régime.” Naturally, the “Goddess” who smashes this oppression is projected as a “People’s Activist.” We see this in Korea, too: a politician goes to jail for taking bribes or commits suicide, and the narrative cleverly transforms them into a “Jesus fighting dictatorship” or a “Sacrifice for the people.” Whether Left or Right, both use manufactured myths to justify their ideology as “natural.”

La_Liberte_guidant_le_peuple_-_Eugene_Delacroix_-

[Wiki Source: La Liberté guidant le peuple – Eugène Delacroix, Christ carrying the cross – El Greco

I must point out: the narrative that capitalists control the media and support dictatorship while workers defend liberal democracy is a fabricated myth. History—specifically the British and American civil revolutions—shows that Liberal Democracy and Private Property Rights were protected most fiercely by Producers (The Bourgeoisie/Middle Class) who understood the Rule of Law, not by mobs swayed by emotional agitation.

I realize we cannot beat the Left with “Morality” based on logic. They employ the logic of religion and myth to appeal to emotion. How to launch a counter-offensive by appealing to morality and emotion is a topic I will explore in my upcoming work: [The Brain of a Democratic Citizen].

[Fact Check: Who Creates Value, and Who Owns the Rights to It?]

Let’s ground ourselves in the facts. Logically, if I buy oil for $10 to heat a room and make money from a guest, I don’t say, “Thank you, Oil!” and pay it $20 next time. Similarly, there is no “natural” reason to share the fruits of an investment with a worker just because you hired them.

The capitalist didn’t earn money by doing “nothing.” They earned it by investing their own capital and taking the risk of bankruptcy to turn a $10 item into a $100 item. What happens when this achievement is looted from the producer and given to the “proletariat masses” who do not create added value?

As I have argued: Mass Manufacturing grows the Proletarian Democracy, but that Democracy eventually eats the Manufacturing. France is the ultimate cautionary tale. Before the 1968 revolution, France was not the leftist-democratic state it is today. It was a powerful, elite-driven state that developed high-level mathematics, science, and philosophy through institutions like the École Normale Supérieure. These elites did not recognize the “right to economic distribution” for a proletariat that created no added value. Instead, they enacted policies favoring Producers who built national wealth.

This was the foundation of the “Glorious Thirty” (1945–1975), the golden age of French history. Airbus, Concorde, Rafale, Focal, Bugatti, Michelin, L’Oréal, TGV—these icons were all born of that era. French academic achievements were equally massive: not just Fermat and Descartes, but the thinkers I often quote—Baudrillard, Bourdieu, Lévi-Strauss, Merleau-Ponty, and Michel de Certeau. Even the term “Laissez-faire” is French, as the origins of modern liberal economics lie with French Physiocrats and Supply-Side economists.

Why did this academic and economic superpower become the “Sick Man of Europe,” surviving on tourism and luxury goods? The pressure for “Economic Democratization” had existed since 1789, but after 1968, leftist intellectuals and “People’s Theologians” shifted the discourse from “Economics” to “Existentialism,” elevating worker livelihoods to the level of “Human Rights.” This began the [Looting of the Producer]. They pushed for punitive inheritance taxes, corporate taxes, wealth taxes, and “University Equalization.” They introduced the 35-hour work week and “Piketty Taxes,” realizing the myth of “The Moral People Executing the Corrupt Elite.” The geniuses fled to America. The producers went extinct.

Today, the French economy is in shambles. Manufacturing, which was 30% of GDP in the 1980s, has plummeted to 9%—less than half of Germany’s and far below the OECD average of 15%. France carries world-leading levels of government debt relative to GDP, and its bonds have turned to junk. It survives on the printing press of the ECB, waiting for the day of national bankruptcy.

Production is purchasing power. Only production creates sustainable national wealth. When laborers who do not create added value hold the sovereignty, bureaucrats become stagnant, and politicians simply push debt to the next term. There are no “devils” in this world; there is only the cold reality that wealth can only be increased by investing capital and risking self-destruction to produce.

What can we call this structure—where the screams of small business owners and producers are ignored in the name of “Human Rights,” and the producers’ necks are strangled by the tyranny of the majority—other than the “Dictatorship of the 51%”?

[The Anatomy of Narrative vs. Logic]

Category	Leftist Narrative (Myth)	Liberal Logic (Fact)
Moral Frame	“We are Good and Persecuted” (The Saint)	“Take risks and be responsible” (Isolation)
Definition of Evil	Capitalists, Heirs, The Elite (Clear Target)	None (Only individual inefficiency)
Mythic Tools	Jesus’ Atonement, Garden of Eden (Archetypes)	Price Arbitrage, Marginal Productivity (Math)
Stance on Democracy	Redistribution by the 51% is a “Natural Right”	Liberal Dictatorship is better than Illiberal Democracy (Hayek)
French Example	“The Moral People execute the corrupt elite”	Manufacturing plummeted to 9%; near bankruptcy

2. What Truly Raised the Wages of Workers?

If workers want more to eat, they shouldn’t strike against capitalists; they should increase their own productivity or participate in the market directly as producers. This is common sense, so why doesn’t it stick?

It’s because people view the economy through a moral binary: “Capitalist Dictatorship vs. Worker Democratization.” This frame mashes politics, economics, and morality into a single, blurry mess. People start to hallucinate that the way to raise wages is through “moral and political struggle” rather than economic output.

But the actual method for raising wages is different. According to Albert Hirschman, when an organization’s quality declines or oppression increases, members have two options: Exit or Voice. His core insight? Competent people—those who can easily find alternatives—almost always choose Exit. Why stay and fight when you can leave whenever you want? Consequently, the performance of an organization left only with those who cannot leave converges to below average. Hirschman’s logic leads to a cold conclusion: you must hold onto those who “Exit” and push out those who stay behind just to raise their “Voice.” Let’s look at history.

(1) Workers Who Can “Exit” Have Higher Wages

[Workers Exiting to the Frontier in the 1800-1900s]

In the 19th century, the U.S. industrialized at a breakneck pace. Yet, the Marxist revolutions and radical proletarian riots seen in the UK and France never took root. European leftist scholars despaired: “Why is there no socialism in America?” The reason was simple: the working class had no reason to unite.

To understand this, we look at Frederick Jackson Turner’s Frontier Thesis. America had the West—a vast, wild frontier with no police and no taxes. If you didn’t like the factory in the East or the wages were too low, you packed your wagon and left. Thanks to the Homestead Act, free land was everywhere. If a capitalist asked, “Who forced you to be a worker?” the worker could simply reply, “Fine, I’m out,” and Exit. This ability to leave was the ultimate leverage. As Hirschman’s theory suggests, the young and capable had the highest probability of survival in the West. Capitalists had to choose: pay wages higher than the expected profit of a self-sufficient farmer, or close the factory.

There was no mass democracy and no “Labor Rights = Human Rights” narrative back then. Yet, wages rose because of the market principle of The Right to Exit. This was a win-win: capitalists kept reinvestment profits without “shadow taxes,” and workers won higher wages. The state bureaucrats and activists—who create zero added value—got nothing. The market balanced inequality without a revolution.

[Henry Ford’s $5 Day]

In 1914, Henry Ford announced a $5 wage for an 8-hour day—double the average at the time. Leftist economists paint this as capitalist charity or a symbol of labor-management harmony. The truth was different. When Ford introduced the assembly line, skilled workers couldn’t stand the boredom of repetitive labor and quit in droves. He had to hire 370 people just to maintain 100 jobs. To keep the line moving, he had to raise wages. Ford was not a benevolent man; he even created a “Sociological Department” to monitor workers’ private lives, drinking habits, and home cleanliness. Ultimately, it was the worker’s ability to Exit that acted as the most effective lever for a wage increase.

[The Fear of Small Business Owners]

This logic repeats in modern Korea. Talk to any small business owner, and they’ll tell you the same thing: the incompetent part-timers never quit. They cling on, and if you try to fire them, they turn into “vibe-killers,” filing complaints with the Labor Ministry and demanding settlements. The truly “scary” ones are the competent workers who sell well. You have to pay them more because everyone wants to poach them—but you don’t mind paying because they create value. From the 19th-century pioneer to the 21st-century alleyway shop, the core truth is the same: Leverage comes from the ability to Exit, not the ability to scream.

(2) People Who Cannot Leave Have Lower Wages

When I tell people on online communities, “If you don’t like it, quit,” just as they tell small business owners, “If you don’t like it, close up,” I get attacked. If Exit is the best way to raise wages, why do people choose the “Voice” of populist struggle? Because when there is no “space” to Exit to, bargaining power vanishes. No bargaining power means low wages, which leads to political noise.

[UK’s Island Geography and the Birth of Class Struggle]

The UK, the birthplace of the Industrial Revolution, is an island. During early industrialization, urban workers had no “Frontier” to Exit to. Their only choice was to stay and resist. It is no coincidence that the Luddites, the Chartists, militant Unionism, and Fabian Socialism were born in the UK. It was a reaction to the spatial limit of having nowhere to run.

[Korea’s Island Geography and Extreme “Voice”]

Korea has even fewer exits than the UK. North Korea is to the north, and the sea is on three sides. 70% of the land is mountainous, and 55% of the population is crammed into the Seoul metropolitan area. Our language isn’t global like English or Spanish. There is zero space to Exit. Thus, there is no structural reason to pay more. This is why Korean labor movements are among the most militant in the world: fasting, self-immolation, and driving trucks into workplaces. It is the inevitable reaction of people with nowhere to go.

[Where Can Small Business Owners Exit?]

Small business owners in Korea are in an even worse position. Because they cannot Exit, they earn far less profit relative to their labor. Since they are legally “employers,” the “Labor Rights = Human Rights” logic doesn’t apply to them. They are saddled with income and quasi-taxes that make expansion impossible. “Voice” mechanisms like price-fixing or restricting supply are strictly forbidden by law.

Consequently, producers are Exiting to the online space—YouTube, Crypto, DeFi—where they don’t need the state or workers. They are fleeing to countries with no income tax. But not everyone can leave. Before we discuss solutions, let’s look at how our predecessors—the economists who defended producers—were slaughtered by the Narrative OS.

3. The Fall of the Austrian School: Banished from the Mainstream

Mises, Hayek, Kirzner. Their careers show what happens to those who tell the truth in a world governed by myth.

(1) Ludwig von Mises: The Ghost of NYU Who Received No Salary

In a 1920 paper, Mises predicted the collapse of the USSR. At the time, this was a shocking claim, as the USSR was a rising superpower. Mises proved that rational resource allocation is impossible under socialism because it lacks a price mechanism. He was real genius. When Mises fled the Nazis to America, the mainstream was already occupied by Keynesianism. Keynesians, who argued that the government should spend money, became professors and ministers. Mises, however, never secured a salaried faculty position at NYU. He ended his life training a handful of disciples in unofficial seminars.

(2) Friedrich Hayek: Academic Isolation and Severe Depression

Hayek, Mises’s greatest pupil and a 1974 Nobel laureate, shows what happens when you win the logic but lose the crowd. Keynes had already lost the 1931 LSE debate to Hayek. However, Keynes’s prescription—that government spending creates demand—perfectly suited the appetites of bureaucrats and the masses. The academy shifted to Keynesianism. Hayek, who emphasized “distributed knowledge” and told the government to stay out of the market, was buried. In 1950, when he tried to move to the University of Chicago, the economics department rejected him, calling his theories “unscientific.” Hayek suffered from depression so severe he nearly stopped his research. He was “resurrected” by the Nobel Prize later in life, but his prime was already stolen.

(3) Israel Kirzner: The Entrepreneur Wandering the Jungle Alone

Kirzner, another student of Mises, didn’t even try to win in traditional economics, which had become a game of mathematical modeling for bureaucrats. He spent a long time in academic solitude. His core argument was that the entrepreneur creates profit by being alert to price imbalances that others miss. Therefore, the entrepreneur owns the right to the profit.

But this narrative never captured the public. Kirzner’s entrepreneur is a lonely hunter, braving uncertainty and bankruptcy alone. The masses don’t want to wander the jungle; they want a “warm community” that shares food.

[Personal Proof: The Pub]

Yet, if there are no barriers to entry, you don’t even need “alertness” or “imagination.” Finding a niche is easier than we think. We fail to find opportunities not because of incompetence, but because the state blocks the way.

Before I started my pub, I had never cooked. After being fired from my job, I noticed that my neighborhood only had franchise bars and chicken shops. I used my experience living abroad to open a German pub. I was lucky; the previous owner had set up all the permits but passed away suddenly, allowing me to take over the lease without a “premium” (key money). This was the price imbalance Kirzner talked about. By bypassing the usual strict regulations and investing only $15,000, I entered the market. Over six years, I made 10 times that in net profit. I paid off my COVID debts and reinvested that capital into my current knowledge-retail business.

If I had to deal with the state’s zoning laws, fire safety, and hygiene permits from scratch, I never would have started. The core of entrepreneurship is avoiding regulation. Without regulation, even someone as poor as I was can find a niche, become a producer, and reinvest that success into the next venture.

4. The Fall of the Chicago School

Observing the academic exile of their Austrian predecessors, the Chicago School realized they needed to secure faculty positions. The Chicago School diverged ideologically from the Austrian School—which rejects the very existence of a central bank—by recognizing the central bank’s role but advocating for rule-based monetary management. While they inherited the market-centered, laissez-faire philosophy, they abandoned the battlefield of morality, philosophy, and logic. Instead, they adopted a new methodology: Fighting with Mathematics.

(1) Economics Escapes into Positivism

In 1953, Milton Friedman published a seminal essay. His core argument was that economics should not be a discipline concerned with what is ethically right, but a “value-neutral science” concerned with what is factually true. It didn’t matter if the model’s assumptions were realistic or moral; all that mattered was its ability to accurately predict the future.

Why publish such an essay? Because by the 1950s, Keynesian leftist economists had already won. Not only had they elevated the narrative of “legalized looting” by the democratic welfare state to the level of myth, but they had also seized control of the mathematical tools of the trade. Friedman’s decision to fight with data rather than philosophy was, in reality, a declaration of surrender. It was an admission that they could no longer construct a moral narrative for why the producer should hold the rights to their wealth.

Policy-makers, however, do not look at facts. They look at the masses, and thus, they prioritize narratives. If you have a story that hits the ear perfectly, you can fit the data to it later. From this point on, the Chicago School became an insular club, priding itself on getting its disciples jobs at Central Banks while losing the heart of the public.

(2) The Pinochet Incident in Chile

Having abandoned narrative-building, the Chicago School ended up assisting the economic policies of General Augusto Pinochet, the military dictator of Chile. Salvador Allende’s democratic socialist government had collapsed the economy, with inflation exceeding 1,000% and foreign reserves depleted. Pinochet took power in a coup and appointed a group of economists trained at the University of Chicago—the “Chicago Boys.”

In 1975, Milton Friedman visited Chile, met with Pinochet, and provided the guidelines for economic policy. The result was the “Miracle of Chile.” Inflation was suppressed, government spending was slashed, and the foundation was laid for Chile to become the wealthiest nation in South America.

However, the military regime executed approximately 3,000 dissidents and tortured tens of thousands. While the regime had its reasons—noting that the democratic ideals of “compromise and persuasion” only work in power games of budget allocation, not in the battle for a system’s OS—the Leftist intellectuals pounced. In Barthesian terms, they injected the “Signified” of Neoliberalism = Devil into the “Signifier” of Pinochet’s torture. The real history of saving the Chilean people from starvation vanished, replaced by the Myth of the Bleeding Victim. Friedman won the Nobel Prize in 1976, but the ceremony was overshadowed by the “Dictator’s Advocate” frame. Neoliberalism was branded as an “Evil Criminal Economics” that only functions through state violence. Their facts were brilliant, but their disregard for morality and politics led to a tragic conclusion.

(3) A Defense for the Chicago School

In this article, I will not address the sharp criticisms leveled by the Austrian School against Friedman’s ideas, such as floating exchange rates or monetary rules. There will be an opportunity to discuss this in the future. Assuming we view Austrian school and Chicago school under the umbrella of broader liberal economics, it is utterly unjust for leftist economists to label them as fascism.

Leftist intellectuals always compare the worst dictatorship with the best democracy to create the formula “Liberalism = Fascism.” Let’s flip the frame. What happens when we compare the worst democracy with the best dictatorship?

Hitler was legally elected under the Weimar Constitution—the most democratic constitution in the world at the time. The masses cheered for a narrative of seizing the wealth of capitalists and Jews to save the Germanic race. The USSR was built on the moral pretext of representing 99% of workers, yet it massacred the minority of producers and starved tens of millions of its own citizens. Venezuela and Argentina are both democracies.

Conversely, consider nations that lack political democracy but adopted liberal economics. Singapore is a one-party state under the People’s Action Party. Freedom of the press is restricted. Yet, its GDP per capita is higher than that of the US. The state is run like a massive corporation. Bureaucracy is strictly controlled, and ministers are paid performance bonuses like CEOs when the GDP grows. Dubai is an absolute monarchy under the Al Maktoum family. Democratic participation is impossible. Yet, billionaires from around the world flock to this desert because there is no income tax, no corporate tax, and no regulation.

Singapore and Dubai share one more thing: extraordinary public safety. Nations that prioritize the protection of private property over mass democracy tend to maintain better order. The idea that non-democratic states must inherently loot their citizens and suppress human rights is a 144p-resolution prejudice.

5. Conclusion

The 200-year-old formula of “Capitalism = Evil, Democracy = Good” has been a history of massive [Narrative Gaslighting], looting the profits of producers to scatter them among consumers. The Austrian and Chicago Schools, despite being armed with facts and logic, lost because they failed to create a moral narrative that stimulated the masses’ dopamine.

As a result, even nations like France and Korea, which have decimated their producers through populism, justify themselves in the name of “Democratic Justice.” The liberals insisted on “leaving it to the market,” failing to scratch the itch of either the masses or the bureaucrats. The philosophy of “do nothing” and “failure is individual responsibility” cannot be adopted in a democratic society where everyone shares sovereignty.

This is a society that cheers for the Snowpiercer narrative—where the “righteous” worker uncovers the capitalist’s conspiracy—while proudly closing its eyes to the fact that it was the capitalist who built the train in the first place.

In the next article, I will explore why reinvestable profit for producers is essential, why current “conservatism” cannot be the alternative, and how producers—realizing there is no way to fight democracy—are choosing to respond.

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[The 51% Legal Dictatorship 9] The Fall of Truth: A 200-Year History of Capitalism as the Engineered ‘Enemy of Democracy’

1. Why Capitalism Became Evil and Democracy Became the Hero