Category: Economics
A Free Society
| 29 January 2022 | 16:46 | Economics, Politics | No comments

Freedom
Freedom means that we are free and responsible to direct our own lives and the use of our possessions while respecting the same freedom for others. Freedom is being respectful and considerate of others.

We have a Culture of Freedom
This is what our mothers taught us. If you want to get along with others, don’t hit, and don’t mess with their stuff.
Canada is known as a free country. For the most part, we do not live in fear of assault or theft. Assault and theft in various forms do happen, but not to the extent that most Canadians are afraid. The people that I come in contact with have no desire to hurt me nor I them. This is what most of us experience.
This culture of freedom comes from individuals, not government. Governments contravene this culture of freedom the most by taking our stuff in taxes and threatening harm if we don’t obey their dictates.
Support freedom so government will also respect individual rights to choose what we do with ourselves and our possessions.

Libertarians Promote Market Regulation
Market regulation uses competition and consumer choice to determine which products and services survive. Markets give businesses the incentive to meet a wide variety of customer needs and wants within normal cost efficiencies.
Government regulation is what a few people decide for everyone affected. Government bureaucracies are a high cost way to implement barriers to business and personal choices.
Support liberty to get the cost effective benefits of market regulation and avoid the costly problems of government regulation.

A Free Society Promotes Free Enterprise
Free enterprises face competition and must be profitable to stay in business with the incentive to provide innovative products and service, customer satisfaction, and to minimize waste and costs.
Government enterprises are monopolies with no market, no competition, and no profit motive. They tend to waste public funds, operate with high costs, lack innovation, and have no incentive for customer satisfaction.
Support freedom to get the benefits of cost efficient free enterprises and avoid the problems with costly government enterprises.

A Free Society Promotes Sound Money

A free society will have sound money which increases in value due to the productivity of the economy. An example of this is electronic devices where the cost has decreased despite the devaluation of our currency.

Sound money has a productive origin. When a person is paid for their work, that money represents their productivity which they can then exchange for other products and services.

Fractional banking allows banks to extend loans with money that comes out of thin air. The government also uses a process called monetizing debt where the Bank of Canada pays for government debt using money that comes out of thin air.

Billions of dollars coming out of thin air with no productive origin is being dumped into the economy where it dilutes the money originating from productive work. This is why our currency is continually losing value. This devaluation of our money is an insidious tax which particularly hurts those on the lower end of the economic scale and those on a fixed income.

Support freedom so the banking system cannot simply “print” money and we can have sound money to exchange productive work for real products and services.

A Free Society and Politics
Politics is about how to get along with others. And we get along with others by showing them respect; by respecting their person and possessions which is their property rights.
Private individuals have no authority to compel others to do anything and yet government compels people to obey their regulations and codes. As individuals we have no authority to force others to pay us money and yet government taxation compels people to pay them money.
Canadian governments take over 40% of the private sector income every year. This is a tremendous loss of resources that are not available for business opportunities and employment. Government regulation imposes costs and barriers to business expansion and innovation. These interventions cause economic difficulties for many individuals and businesses.
There is a disconnect between how we treat each other in the private sector and how government treats private individuals and businesses, particularly small businesses.
Do what you can to change government so that individual choices are respected and we are free from government intrusion in our lives and businesses.

The Virus and Freedom
| 28 April 2020 | 22:17 | Economics, Politics | No comments

I don’t think the restrictions on individual freedom due to the new corona virus are reasonable. The bureaucrats dictating these restrictions are taking the usual one-size-fits-all approach which invariably creates problems for many people. There is no credible evidence to justify the restrictions. There appears to be no understanding of how our capitalistic economy works.

People who do not want to risk infection with this virus can isolate themselves. Why should every individual or family isolate themselves from everyone else? Moving around freely as people normally do exposes them to all kinds of viruses and bacteria which builds the immune system.

There are no studies that show that social distancing is effective in preventing contagion. We do know from physics that molecules in the air move around at any thing from 300 to 500 meters per second. If someone is breathing out viruses, then a few meters is not going to make any difference especially in an enclosed space like a store.

A study was done in South Korea on the effectiveness of masks. Not even surgical masks could filter out viruses, they are too small.

Several non-governmental scientists and medical practitioners have run the numbers on testing for infection extrapolated to the given population compared to fatalities and get fatality rates on the order of 1%. This is no different than any other flu in any other recent year. If this is not correct, then why don’t the bureaucrats show us the numbers and the correct interpretation to justify their restrictions? Instead, all we get is people are being infected and people are dying which is typical of what happens all the time. The only difference now is all the hype and fear mongering.

Keeping everyone isolated creates many problems like abuse, suicide, and avoiding necessary medical services. Many of these problems besides having fatal consequences, will have long term effects for those who live through them.

Governments are saying that they are going to sustain the private sector during the lock down. Now there is an interesting concept. Governments in Canada are sustained by taking over 40% of the annual wealth produced in the private sector. That 40% pays government salaries; some is wasted; and the rest goes to their boondoggles. So the government will do an electronic fund transfer to your bank account and you will sign into your bank account online and print out food??? How about plants for my garden or dental work; can I print that out too???

Our capitalist economy is billions of people all over the world doing their part of some process that eventually ends up as a product or service that we can purchase. The complexity is mind boggling. That is why central planning does not work. There is no way for a single person or group of people to understand, let alone effectively control a capitalist economy. It works best in free markets. Any intervention by governments is detrimental; some visible, most not easily visible. We have just made the move to all out fascism and most people seem to be fine with it.

Goodby freedom.

The False Paradigm of Government
| 21 March 2019 | 20:48 | Economics, Politics | No comments

There is a false paradigm of government where people accept the propaganda that governments run countries (or provinces or cities). Countries run because individuals and businesses engage in peaceful exchanges to produce goods and services and otherwise treat each other with respect and consideration. Peace and prosperity are directly related to how people treat each other. When people have respect for the person and other property of others, then everyone is at liberty to lead a peaceful, productive life.

What governments do run are bureaucracies which are burdens and obstacles to the peace and prosperity of society. The proper role of government is to give collective backing to the natural right that everyone has to protect their person and other property. In direct contradiction to that proper role, most of what governments do is take people’s property in taxes and interfere with people’s choices with regulations. When an individual takes someone else’s property or interferes with their choices, we call it a crime. When government does these same things, they call it legal as if their legislation can turn a crime into some kind of moral good.

Most political parties support some version of the scam that they can run things to our benefit. They have their various proposals about how they are going to do it differently with their set of taxes and regulations.

I will continue to promote liberty, but I despair of our society coming to the realization that their paradigm of government is false. The sad part of all this is that while many survive the burden of legal plunder, there are many who suffer in misery and heartache because of the burden of bloated government.

On Trade
| 23 June 2018 | 20:25 | Economics | No comments

Trade is most beneficial when it is unencumbered by government interference. The only useful thing government can do regarding trade is to back people up against robbery, theft, fraud, or anything of that nature. Free trade is when there are no quotes, tariffs, or other trade barriers that impede transactions between individuals and businesses any where, be it local, regional, or global. Governments don’t trade with each other so there is no good reason for them to be involved in trade.

Trade is another of those simple economic principles that is blown up into an “issue” that doesn’t exist. The only situation where a balance of payments means anything is in individual transactions.  When someone offers something for sale, they will expect payment with something of equal value. Actually both parties to the transaction will get something they value more than what they gave up, but it is balanced.  If you buy all your groceries from a given store, the transactions are balanced.  You buy their products and they “buy” your money.  It does not matter that they don’t buy products or services from you. Neither does it matter for the combined transactions of individuals and businesses between cities, regions, or countries.  The transactions are balanced and the money will circulate around which is the reason for having a medium of exchange.

The freer the markets, the more prosperous the economy. Trade between countries is no exception.  The less that governments interfere with trade, the better off everyone will be.

Taxing Businesses is Taxing the Rich?
| 15 September 2017 | 10:59 | Economics, Politics | No comments

Businesses exist because people have invested in productive assets like land, buildings, machines, and employees. These businesses provide goods and services that are voluntarily purchased or in other words things that people need or want. Taxes decrease the productivity of businesses which means less product, less employment, less income to buy other products. Taxes decrease the standard of living for everyone which is especially onerous for those on the lower end of the economic scale. So increase tax on businesses? Not a good idea.

Defining Capitalism
| 9 August 2016 | 17:42 | Economics | No comments

Capitalism is an economic system that uses a high degree of capital (or productive) assets, has a high degree of division of labour, and requires a medium of exchange. Capitalism started with what is called the industrial revolution and got a big boost with American independence and the spread of a greater amount of freedom and property right. Capitalism produces a myriad of products and services that sustain higher populations and reduce poverty. (Unfortunately, the term capitalism is misused to refer to political systems that grant privileges to large companies in violation of free enterprise and property rights.)

Subsistence agricultural and cottage industry is another type of economy that uses some capital assets, has some division of labour, and uses a medium of exchange along with barter. A hunter and gatherer economy uses few capital assets, little division of labour, and has largely self sufficient groups which which may or may not barter or use some medium of exchange.

The three types of economies described above can all exist in the same region at the same time although if capitalism is present, it will dominant the economy.

A capitalist economy can function in any form of government, but will be most effective where there is freedom and protection of property right. Socialist, fascist, and dictatorship forms of government restrict free enterprise and property right.  There is nothing stopping these forms of government from investing in productive assets, but they are subject to bureaucratic management which is less effective than private enterprise. Democracies are a mesh mash of socialism, fascism, dictatorship, and some property right all of which is subject to ineffective bureaucratic management.

The best form of government is a constitution that has laws that do no more nor less than protect the right of individuals to decide what they do with themselves and their possessions (property right) with provision to be made whole if that right is violated. All operations would be provided in the private sector where private ownership would avoid waste, the profit motive would provide low cost, efficient operations, innovation, and a high level of customer satisfaction, all in contrast to bureaucratic management. Under such a government, capitalism would flourish with peace and prosperity for all.

Minimum Wage Laws
| 16 January 2016 | 16:21 | Economics, Politics | No comments

A wage is a price that employers are willing to pay for an employee. Prices are subject to the law of demand. We have all seen the effect of demand where a price goes up and people buy less or a price goes down and people buy more. Setting a minimum wage increases the price to employ a whole group of people which will eventually result in an increase in unemployment including those persons who will now give up on the job market and are not counted in government unemployment numbers. Employers will adjust the way they run their businesses by changing the duties of a fewer number of employees or perhaps by introducing capital assets so a fewer number of employees can be more productive. People work for low wages because their lack of skills and experience puts them at that level of productivity. The way to increase productivity and the associated wage level is to increase skills and experience. The first step to increased productivity is to gain skills and experience in a low paying job, a step that is not available for many due to minimum wage laws. Many politicians and their supporters think the minimum wage is compassionate while in fact it consigns many to despair of being able to work. One does wonder about the sincerity of politicians since they increase the minimum wage a few dollars rather than to something like thirty dollars. Minimum wage laws are a prime example of the untended consequences of government intervention in the economy where those it is supposed to help are actually hurt.

Government does NOT create jobs
| 12 November 2015 | 12:25 | Economics, Politics | No comments

I have noticed in the press that once again government is saying that they are creating jobs.  If government returning tax funds to the private sector creates jobs, then when the taxes are taken out of the private sector, jobs are destroyed. It would be more accurate to say that government is restoring previously destroyed jobs in the private sector while incurring administrative costs in taking the taxes out and then putting them back in. The next worst thing the government does is destroy productive jobs in the private sector and replace them with productive jobs in the public sector which are less effective due to bureaucratic management. The next worst thing the government does is destroy productive jobs in the private sector and replace them with unproductive jobs in the public sector. The next worst thing the government does is destroy productive jobs in the private sector and replace them with bureaucratic waste and inefficiency. Canadian governments take over 40% of the annual private sector income in taxes which is a tremendous loss in potential investment and the associated employment.  Governments ignore the negative effect they have on the economy.  When a government claims to be creating jobs either they are dishonest or they do not understand the impact of taxes on the economy. The truth is that the net effect of governments is to destroy jobs.

Money, Banking, and Government
| 24 July 2014 | 16:57 | Economics, Politics | No comments

Money is useful or more correctly, essential, as a medium of exchange in a free enterprise, capitalistic economy. This type of economy has a large number of products and services, and a high degree of specialization. Consequently, people are occupied with their specialized work and don’t have time or means to produce all the products and services that they need and want. People exchange their specialized work for money and then use this money to exchange for the results of other people’s work.

Money represents productive work and it is illegal and illegitimate to make money by non-productive means called counterfeiting. Counterfeit money does not represent productive work so that if it mixes in the money supply, the counterfeit money will dilute the value of the money representing productive work. This is a form of stealing and a violation of the property rights of everyone whose money has been devalued.

Fractional banking is legal and consists of lending more than the bank has on reserve. These loans do not represent productive work since they are simply numbers added to an account balance. These loans enter the money supply and dilute or devalue the money. The difference between devaluation due to fractional banking and counterfeiting by private individuals, is that fractional banking is legal, illegitemate, and the scale is so large as to render the devaluation due to private counterfeiting irrelevant.

Besides legalizing fractional banking, governments also engage in a manipulation of money to monetize debt. In this process, the government incurs an obligation and pays for it by printing money. Once again, this money does not represent productive work, will enter the money supply, and devalue the money. And again this is legal, illegitemate, and on a grand scale.

The devaluation of money by fractional banking and government money manipulation is easy to do with fiat money which has no commodity base. Fiat money is simply paper supported by legal tender laws. The value of fiat money is not tied to anything like a precious metal, so the amount of fiat money can be increased at will.

It is the people doing productive work that lose due to the devaluation of money. People tend to pay more for products and services over time, not because these things are worth more, but rather because the money is worth less. In a truly free enterprise economy, things get cheaper as the capital expands. Consider the difference between digging a hole with your bare hands or using a shovel or using a backhoe. Capital is productive resources and as people accumulate these resources they become more efficient and productive so that the cost of what they are producing decreases and things become cheaper. Computers have come down in price even in the midst of money devaluation. The computers are more dramatic because it is emerging technology. Gasoline priced in gold is cheaper in 2014 than it was in 1960.

We should have stable money that keeps its value and fairly represents the productive work for which people are paid. This is possible if the devaluation of money by fractional banking and government money manipulation is illegal just like counterfeiting by individuals.

Job “Creation”
| 5 August 2013 | 16:50 | Economics, Politics | No comments

In a recent letter to the editor, Leon Benoit, MP Vegreville-Wainwright, was disputing comments about the job situation. Mr. Benoit used the phrase “job creation” several times as in “We’re proud to announce the creation of 36,000 jobs for Canadian youth through the program”. I would like to invite Mr. Benoit to return to his Reform Party principles of small government. The truth and reality regarding jobs and government is that governments destroy jobs. Any money that a government puts into jobs came from the private sector along with more money to run through a wasteful, inefficient bureaucracy. Taxation destroys more jobs than governments can try to replace. Governments cannot compete with the private sector in job creation.