Category: Economics
Free Enterprise Versus Regulation and Privilege
| 13 March 2012 | 20:34 | Economics, Politics | No comments

Free Enterprise
Free enterprise means that people can conduct their affairs and enter into contracts with each other without interference from the government. Free enterprise means that people can decide how, when, and where they will use their possessions and to what purpose. People can decide what to exchange with others. Individuals are capable of making these decisions and if they need help, then free enterprise can provide standards associations and rating services.

Government Interference

Government interference in people’s affairs and business by imposing bureaucratic control is wasteful, inefficient, and slow moving. Government imposed codes become irrelevant, out dated, and hamper innovation. Large businesses lobby government to impose regulations in their sector which the large businesses can afford to implement and which stifle their smaller competition thus introducing waste, inefficiency, and slowing progress. Government licences to perform certain work grant a monopoly privilege by imposing hurdles in money, time, and quotas. Such licences will once again give us waste, inefficiency, and hampered innovation.

Bureaucratic Management
Our governments have taken on an ever increasing role as central planners using bureaucratic management. Bureaucratic management has no profit incentive as in free enterprise management. The consequence is that the bureaucracy has no incentive to control costs but rather to spend all or more of their budget and add to their personnel regardless of need. Bureaucracies have no price discovery in a market so they will push salaries and prices to the upper limit. Bureaucracies have no competition so there is no incentive to innovate and progress. People in bureaucracies are the same as people in free enterprises; the difference is in the systems, not the people. By its nature, bureaucracy is wasteful, inefficient, and slow.

Freedom and free enterprise is the way to prosperity. By its nature, free enterprise anticipates and fulfils the choices of consumers in an efficient manner while moving to the next innovation.

On Liberty
| 25 February 2012 | 21:00 | Economics, Politics | No comments

Libertarianism is based on individual responsibility and property rights. Each person has the inalienable right to life and their legitimately owned possessions and to use their body and other possessions as they choose while not violating that same right that everyone else has. In exercising these rights, a person takes responsibility for what they do, is accountable for what they do, and takes the consequences for what they do. In accordance with this principle of liberty, a person has the right to defend their property (their person and other possessions) from assault, vandalism, theft, or any other aggression.

Property Rights
Property right means that the legitimate owner can do whatever he chooses with his property as long as it does not damage the property of anyone else. Or to turn it around, no one can legitimately interfere with the property of anyone else, and this includes the government.

Government and Property Rights
Governments routinely violate property rights by taxation, expropriation, and regulation of private property. The Canadian constitution does not acknowledge property rights such that any use of property is subject to government approval. Property rights are not recognised in Canada and consequently, we do not have liberty in Canada. What we have in Canada is whatever freedom our governments allow us to have, and whatever restrictions on liberty that our governments choose to legislate.

Property Rights in Canada
To the extent that Canadian governments allow freedom, there is prosperity. To the extent that our governments interfere with property, there is waste, inefficiency, and hardship for many citizens. The objective of the libertarian movement is to restore the recognition of property rights and the liberty of our citizens to pursue happiness and prosperity according to their initiative.

The Proper Role of Government
The only possible legitimate role of government is to protect the property rights of its citizens including their person. For example, laws that prohibit assault, vandalism, and theft would be legitimate and should have provisions for restitution to the victims. It may not be unreasonable to have a law enforcement system in place to protect property rights.

The Improper Role of Government
There are three major ways that government violates property rights to the detriment of its citizens. This happens with money, taxation, and regulation.

Sound Money and Banking
| 25 February 2012 | 20:02 | Economics, Politics | No comments

Money serves as a medium of exchange. A person works for or sells something in exchange for money. They can then use that money to buy what they need. Money is another type of property such that any fraud associated with money is a violation of property rights.

One type of fraud associated with money is counterfeiting. We use a money which has no value in itself, but rather represents the value of the real services and products that we exchange for the money. As long as everyone is willing to go along with this, it works fine. So what would be wrong with printing or counterfeiting money? Counterfeit money does not represent any real service or product. If it is put into circulation, it will dilute the value of all the money. The logical end of counterfeiting is that everyone prints money so there is lots of money, and no one works so there are no services or products to buy with the money.

Government and Money
The government prints a certain amount of money and replaces worn out money. What if the government increases the supply of money? It will have the same affect as counterfeiting and dilute or devalue all the money. The government does do this routinely because it is an easier way for them to get more money without raising taxes. This is why we have inflation and prices tend to go up. At the time the increased money is issued, the government and early users of the money pay current prices. When the increased money filters down to ordinary citizens, they will pay higher prices. It is a subtle form of fraud and violation of property rights that a libertarian government would discontinue.

Banks and Money
We have fractional banking in Canada which means that banks can lend money that they don’t have. A bank can make a loan by an accounting entry to increase the balance in a chequing account. That increase to the account balance does not represent any real value and when a cheque is drawn on the account, the money spent will dilute all money in the same way as counterfeit money. A libertarian government would discontinue the fraud associated with fractional banking.

Property Rights
| 31 October 2011 | 17:02 | Economics, Politics | No comments

There was a meeting on Alberta provincial land use laws held in a nearby town in August 2011.  The speaker was a lawyer who works for land owners who object to government decisions on the use of their land.  The local newspapers reported on the meeting and the response of the local Member of the Legislative Assembly, Lloyd Snelgrove.  As I understood the report, Mr. Snelgrove indicated that one piece of legislation was to save the land owners the time and money for court cases that were futile.  The implication is that land owners really don’t have property rights which is absolutely correct.  You will look in vain for property rights in the Canadian Constitution.

What we call ownership is really a tenancy.  Our governments are the real owners who collect rent and decide how property can be used.  Some of the rent is collected as property tax and GST.  Some rent is prepaid as income tax before purchases.  And some rent is hidden in the purchase price as businesses pass on taxes that they have paid.  It is a modern version of the lord and serf relationship of medieval times.

Our relationship to government is also like that of a parent and child.  The parent is responsible for the child and allows the child to do more or less depending on capability.  Government regulations set our boundaries.

Freedom comes from individual responsibility.  A person who is free is responsible for themselves and their possessions and consequently decides what to do with themselves and their possessions.  In this country, our governments assume responsibility for what we can and cannot do, and the control of all resources.

I am grateful for what our governments allow me to do, especially compared to other parts of the world.  Still, I would rather be free.

Who Is To Blame For Taxes?
| 19 August 2011 | 18:48 | Economics | No comments

Previously I explained why taxation is wrong and immoral even though it is legal.  Who is to blame?  It is human nature to want to blame someone else like our politicians and/or bureaucrats, but you and I are to blame.  The people in government are citizens like the rest of us and it is we the citizens who give our assent to the tax and spend form of government whether we do so actively or passively.  If we agree that taxation is wrong and do nothing about it, then we sustain taxation by default.

Most political parties have a tax and spend platform.  Only libertarians take a different approach to government.  The libertarian platform is liberty meaning that a person has the right to live as they choose and use of their legitimately owned possessions as they choose.  The only proper role of government is to protect the liberty of its citizens.  More on that later.  Consider taking an active part in getting rid of taxes and supporting liberty by joining together in the libertarian movement.

Central Planning in Canada?
| 8 December 2010 | 18:37 | Economics, Politics | No comments

Central planning is alive and flourishing. In most countries today, governments practice central planning through taxation, inflation, and regulation. This is not so much government ownership of the means of production as in the former Soviet Union, but rather the centrally planned and inefficient use of resources that have been taken from the private sector. Even if those resources go back to private enterprise as government contracts, the government is deciding rather than the market on where those resources will be used. Government control of resources in any way is central planning.

Central banks are another way for government to take resources out of the economy and regulate the banking industry to our detriment. They create money out of thin air which goes first to the privileged recipients of the central planners. This causes the money supply to go up such that eventually prices go up and it is the average citizen on the street who loses out. Wage rates don’t catch up unless maybe you can legislate it. This creation of money is a subtle form of taxation and is also the source of the boom and bust cycles that we go through. The government causes the inflationary boom and takes credit for the apparent prosperity. When the inflationary bubble becomes known and bursts, the government now accuses the private sector and assumes the posture of rescuer. It turns out that the rescue is more inflation and regulation. Of course, they might borrow the money first and later print the money to pay for it, but it ends up being higher prices and more taxes for the average citizen. The whole system of creating money out of thin air is immoral since it is a legalized form of counterfeiting.

Why should government decide how to spend half of our income? Are politicians and bureaucrats smarter or of higher moral character than other citizens? (I am not trying to be sarcastic. I just don’t know how else to put it.) We as private citizens have no right to take other citizen’s property, so how can we authorize our government to do so? It is actually like any other thief; they do it because they can and expect to get away with it. And they do get away with it as long as we buy in to the miss-information and euphemisms that are used to cloud our minds.

Freedom and prosperity go together. So far we have enough freedom in the western democracies that the private sector can carry the tax burden. If we allow our governments to keep expanding, this will eventually turn around. I think the economy is one major factor contributing to more women having fewer children and working out of the home. I think health care line ups have the same origin as grocery line ups in the former Soviet Union.

I don’t fault the people working in the public sector. The resources taxed out of the private sector are also taking jobs out of the private sector. When the government uses some of those resources to ‘create’ jobs in the public sector we cannot blame people for taking those jobs rather than sitting idle. Most of the people that I know in the public sector are working as diligently as they would in the private sector. It is the system that is the problem, not the people. If we returned the resources and the people back to the private sector, we would have greater productivity and prosperity and the people who moved from the public to the private sector would be happier along with everyone else. Prosperity and happiness comes with the freedom of consumer sovereignty not through central planning.