Posts belonging to Category Economics



Libertarianism is not Utopian

The following link is to an article that gives a good explanation of why libertarianism is ethical, practical, realistic, logical, and reasonable. It is very worthwhile to read. I also think it explains why libertarianism is the political part of the Judea-Christian ethic.

https://mises.org/wire/libertarianism-utopian

A Strategy to attain a Government for a Free Society

Law establishes Freedom

A free society is based on law which establishes that a person can seek compensation for all types of assault and all types of theft. All tax and regulatory legislation contradicts law and decreases freedom.

An Anti-political Party Platform

An anti-political party (a libertarian party) would have as its platform the repeal of all tax and regulation legislation. The consequence of this would lead to Members of the Legislative Assembly (MLAs) being voluntary positions, privatization of all government services, and no government bureaucracy.

Politics

Despite what a dictionary definition of politics might be, politics as practiced means candidates for the legislative assembly “buying” votes by promising government services and special privileges for certain groups. Politics also means passing regulatory legislation which blocks competition for large businesses. All political parties have their customized variation of vote “buying” consisting of basic government services, private, labour, and corporate welfare, plus some combination of funding and regulations for special interest groups.

The Anti-political Vote

Convincing voters who are currently voting for a political party to switch to an anti-political party is unlikely. What about eligible voters who don’t vote? Why don’t they vote? My guess is that some are too lazy or don’t care. Is it possible that some are disgusted with politics or see no way that their vote can counter the corruption in politics? The proposal here is that half the non voting eligible voters could be persuaded to vote for an anti-political party.

The Numbers

How could an anti-political party get elected? Let’s look at the numbers. What follows is a look at the last five elections using percent of vote figures for each party. It is assumed that half of the non voting eligible voters were persuaded to vote for the anti-political party. Percent voter turnout is the actual figure. The percent of total eligible votes (everybody who could have voted) is shown for each party. Adjusted percent votes is what the voter turnout would have been with the added anti-political vote.

2015

2012

2008

2004

2001

% of Eligible Vote

% of Eligible Vote

% of Eligible Vote

% of Eligible Vote

% of Eligible Vote

% Voter Turnout

57

54

41

45

53

Conservative

16

24

22

21

33

Wildrose

14

18

3

NDP

23

5

3

5

4

Liberal

2

5

11

13

14

Other

2

2

2

6

2

Anti-political

22

23

30

28

24

Adjusted % Votes

79

77

71

73

77

Under these assumptions, the anti-political party does quite well. Usually a party with 25% of the total possible votes would form the government. These percentages would not translate directly into elected MLAs because that happens at each constituency level, but it is still a good indication of the outcome of the election.

Politics versus Anti-politics

Libertarians are unlikely to win the political game. Libertarians don’t believe in politics; they can’t stomach it; their heart is not in it. A libertarian party is not likely to beat politicians at their own game. The best strategy for libertarians is to appeal to people who have a similar view of politics. This would mean running under the anti-political party platform.

Summary

This anti-political strategy is practical, plausible and the only realistic possibility for a libertarian party. Could it be over optimistic? Maybe, but the game of politics is downright depressing.

New Party Name and Constitution

Our working group has established the name of the proposed party as “Alberta Libertarians”.  We have also agreed on a new version of the constitution which is on the page “Proposed Constitution”. Our next step is to draft a policy document.

Register the party forum

People want to move forward with getting an Albertan libertarian party registered.  To that end we have set up a forum to discuss and  plan the path forward.  If you want to be part of this effort, join us at: https://forum.albertalibertarian.ca

Defining Capitalism

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.

The Spirit of Liberty

Libertarians are often missing the “spirit of the law” of liberty which is showing respect and consideration for others. When a libertarian is disrespectful, there is not going to be a court case to determine damages.  What is going to happen is others are going to think of that person as a hypocrite and untrustworthy for upholding the principle of liberty. The libertarian may be thinking “who cares” or “suck it up”.  Such a dismissive attitude is not going to win friends and influence people.  The libertarian may think that they are going to live their life of liberty on their own, but that is not possible in our society with the current pervasive taxes and regulations.

The “letter of the law” of liberty (that everyone has property rights to choose what they do with themselves and their possessions (or the non-aggression principle)) is attractive to many people.  Those people will join the cause of liberty if they are not disgusted by libertarians who violate the “spirit of the law” of liberty by their disrespectful and inconsiderate conduct.

If you are a libertarian, please take this idea of the “spirit of the law” of liberty seriously.  Surely you want others to join you in the cause for liberty.

Money, Banking, and Government

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, 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, 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.

Minimum Wage Laws

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

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. Robert McFadzean

About “Libertarianism.com”

I have looked through the Libertarianism.com web site (note that it is not libertarian.com) and find it to be a good site for a basic understanding of the libertarian philosophy.  One part that I particularly like is the quotes of several libertarians on controversial issues.  Libertarians agree on the principle of having respect for others and their property, but there can be different applications of that principle on a given issue.  “Short answers to tough questions” is another part of the web site that gives a good idea of one libertarian’s views on various issues.