Articles from December 2010



Central Planning in Canada?

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 assets 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. Robert McFadzean