Thursday, 27 August 2015

The Insanity of Authoritarianism versus the Rationality of Libertarianism

It never ceases to amaze me at just how economically illiterate people really are. Of course, professional ‘economists’ are little better, as they are simply individuals who are paid to guess wrong about the economy. The answer to the question: ‘what is the cause of our economic woes?’ is easily answered by anybody who has spent any amount of time studying history and the relevant aspects of economic theory. The problem is excessive government meddling in market forces. We often hear the odious whines of Guardianistas who are only too quick to blame ‘unfettered free-market capitalism’ as they sip their overpriced Starbucks coffee, spewing forth bile from their MacBooks, iPads, and iPhones. Yet, if we had generally free-market capitalism, how then do we have a centrally planned complex regulatory economic system that includes things such as VAT, duty taxes, government licensing, etc.? A protectionist system is inherently the exact opposite of a genuinely free-market system. Indeed, not just in the UK, but in the US, and much of the world, we have an inherently protectionist, centrally planned economy. Not to the extent of the few remaining socialists states, such as Venezuela, but such a regulatory apparatus nevertheless exists and is a continuous economic drain. The most insidious form of government regulation exists in the form of central banking. The UK, the US, and the EU all have a central bank. The Bank of England, the Federal Reserve, and the European Central Bank.

A central bank is the bank that manages a state’s currency, money supply, and interest rates. The central bank issues the national currency to commercial banks. This is inherently problematic, since interest rates are meant to reflect the state of the market. Yet, this cannot be done if it is being artificially set by a central bank. Indeed, the government response to economic crisis is to set interest rates low, but this distorts market forces since the signals that could be used to tell investors the health of the economy have been altered, subverting the market process. Having a state-issued currency is also problematic, which might surprise some. Since only the central bank is allowed to create new money, people other than the central bank who try to make their own money are considered ‘counterfeiters.’ One of the functions of the central bank is to print money, a policy called ‘quantitative easing.’ However, the more bank notes there are, the less the currency is worth. This is because we have what is called a fiat currency, which means our currency is just paper not backed by any kind of physical commodity, such as gold or silver. If our money were backed by a physical commodity, then new bank notes could only be created through the acquisition of new physical commodity. Whereas, on a fiat currency, money can be printed endlessly, which causes the value of each bank note to decrease. This is called inflation, and one of the effects of this is to decrease the real value of wages and increase the real value of prices. You will still be being paid the same wage, but you will notice that, after a few years, you can’t afford as much as you used to be able to. This is price inflation, a direct result of monetary inflation.

If other banks were allowed to print their own money, then the central bank would go out business if it kept printing its own money ad infinitum, as its currency would become worthless. Moreover, if we had a currency or currencies backed by physical commodities, such as gold, silver, then price inflation would not take place. Prices would only go up and down in relation to supply and demand. Since we do not have these systems, prices do not necessarily reflect supply and demand, as they can be inflated via bubbles. For instance, the US housing market crash. The US government under the administration of Bill Clinton, told banks that they had to provide mortgages to low income families who previously would have been unable to afford a mortgage. The effect of this was to cause house prices to skyrocket (which government officials and ‘economists’ think is a good thing) and resulted in a crash as, surprise, surprise, the low income families who could not afford mortgages could not afford to pay the mortgages the government told the banks to provide them with. Free banking and sound money would also put an end to the practice of fractional reserve banking, which is where banks loan out roughly 90% of their reserves, rather than 10%. With free banking and sound money, such risky practices would either not be engaged in at all, or only engaged in very rarely.

Now, whilst the Guardianistas complain about the ‘evil’ and ‘greedy’ corporations, their proposed solution of more government intervention and regulation to stop corporations from being evil and greedy is particularly hair-brained and nonsensical when we consider the fact that the only reason corporations are allowed to exist and engage in anti-competition behaviour is because they are propped up and maintained due to government intervention. Wealthy backers of politicians lobby their pals in government to pass certain legislation that is beneficial for their company but not their competitors. These politicians then subsidies these corporations and give them lucrative government contracts, allowing them to engage in anti-competition practices without suffering the economic losses that would occur in a free market system. Because, in a genuinely free market, businesses must live and die on their own merits. Whereas in our economy, corrupt businesses and corporations can succeed despite their many palpable and egregious practices. In the US, Democrat senator Elizabeth Warren claims that ending regulation led to the financial crisis, yet people ith a memory span of more than five years will be able to point out that the reason that the commercial banks in the US got bigger is because they were combined by the regulators.

Regulation is the best friend of big business and crony corporations. Regulation and licensing make it more costly to do business, which causes prices to rise. High levels of taxation also make it more costly and difficult to do business, which, again, causes prices to rise. With the government in their pocket handing them contracts and subsidies and effectively handing them a monopoly, these big businesses and corporations don’t have to play by the rules they would be subject to in a free-market system. Some people think the solution is to raise the minimum wage, but anybody with more than half a brain can see that this would only raise nominal wages, and not real wages. On paper, it will say you have more, but raising wages artificially will, in turn, make it more costly to do business, and so prices will rise, unemployment will rise also, and the real value of wages will DECREASE. You do not fix low wages and unemployment in order to fix the economy. You fix the economy in order to fix wages and unemployment. All minimum wage laws accomplish is the outlawing of low paying jobs, which makes it harder for unskilled workers to get work, and eliminates entry level jobs. Lots of business nowadays are replacing workers with automated machines, such as self-service checkouts. As minimum wage laws make it more costly to do business, business will have no choice but to lay off workers and replace them with automated machines.

Labour unions are no better, as they engage in the same nefarious anti-competition behaviour that hurts workers. For example, the spread of services such as Uber and Lyft, whilst economically beneficial, are opposed by Taxi labour unions who are trying to get these services shut down rather than compete fairly. They also tend to negatively affect non-union members. Despite the common myth that ‘labour unions’ have made conditions better for workers, this is largely untrue. Technological innovation and competition have made conditions better for workers. Trade unions, like big business and crony corporatism, do nothing but hurt workers. They are opposite sides of exactly the same coin. They stifle competition, which, in turns, stifles innovation. Innovation is the source of technological advancement, and the betterment of working conditions. The only people who oppose technological advancement are backwards-thinking Neanderthals and Luddites. After all, when the motorcar was first invented, it was opposed by horse and carriage drivers. Yet the invention of the motorcar has vastly improved conditions for humanity. Some might gripe about pollution from fossils fuels, but the solution for this is, once again, competition and innovation, which only comes from free-market capitalism. It is no coincidence that high oil prices and high energy prices are due, not to the ‘greediness’ of the oil and energy companies, but because of the excessive amounts of regulations and taxation that they face.

Whilst the Guardianistas blame lack of regulation, the Daily Mailers, of course, blame it all on immigrants and those on benefits. Usually with the typical phrase: ‘they stole our jobs.’ Yet, immigration has ZERO effect on any of the economically suicidal policies mentioned. The only reason immigrants might be a drain on the economy is because the economy is already doing badly. The solution, then, is not to ban immigration, but to fix the economy. The UK and US in particular are nations built on immigration. First the Angles, the Saxons, the Jutes, and the Vikings. More recently, people from India, Jamaica, and various African nations. Now that it is people from the Middle East and Eastern Europe there is suddenly a problem? Of course, opposition to immigration is also justified by claiming terrorists are coming into our country, but, we have to remember, the whole reason there are a lot of terrorist groups operating in the Middle East is because they were either funded and set-up by the West, or arisen due to a power vacuum left in the wake of a foreign incursion by Western nations. The current Iranian regime was the result of a revolution in the 1970s that was a response to the US backing a corrupt Shah. The current conflict in Ukraine is a direct result of Western meddling. Western agents helped instigate and provoke the protests that ousted the pro-Russian president, and his replacements were backed by the US and EU. Incidentally, a number of the new Ukrainian leaders turned out to have neo-Nazi sympathies.

Constant meddling in the affairs of foreign regions causes instability and power imbalances, which allows radicals to gain power and influence. Today’s freedom fighters usually turn out to be tomorrow’s terrorists. The US, after all, funded Bin Laden, et al. during the 1980s to fight the Soviets. The Syrian rebels funded by the West became ISIS. Prior to the modern Iraq war, Saddam Hussein was funded in the 70s by the West, and, using that funding, was able to acquire and then use chemical and biological weapons not just on the Iranians during the Iran-Iraq war, but also on the Kurds living in Iraq. Saddam Hussein then went on to invade Kuwait using the funding and weapons supplied to him by the west. Former Libyan leader, Muammar Gadaffi, was also funded by the West. Moreover, constant military intervention overseas combined with constant foreign aid spending is a huge drain on the economy. Instead of punishing the poor by cutting benefits spending, we could cut military intervention overseas and foreign aid spending instead. Whereas today, a lot of immigrants are coming from nations WE have bombed. So, if we do not want immigrants coming from war-torn nations, we should probably stop bombing them.

When it comes to benefits, if we want people to come off of benefits, we need to first fix the economy. A lot of working people are reliant on benefits such as child tax credit and housing benefit just to survive. Whereas, benefit fraud is actually largely negligible, especially in comparison to fraudulent MP expense claims and tax evasion. As a side note, I don’t mind people dodging taxes, as taxes are too high. I do mind it, however, when the people doing the tax dodging are ones who are responsible for the high levels of taxation in the first place whilst insisting that we are all ‘in this together.’ Taxation is insanely high: VAT is 20%, our top income tax rate is 50%, corporation tax is 35%. This is insane and completely unjustifiable to anybody who isn’t an ideological stooge. Contrary to what those on the left say, the poor do indeed pay taxes, and pay into a system that robs them of their choices. We have to pay a TV license regardless of whether we watch the state funded BBC. We have to pay special duty taxes on cigarettes and alcohol. Yet, government spending continues to climb. How about, instead of punishing the populace through taxation, we cut government spending? Again, if we withdrew from foreign conflicts, and ended all foreign aid we would save a lot of money. Withdrawal from the authoritarian EU is a must, and we should cut ties with organisations such as the IMF, etc.

Aside from simple economics, most people are functionally illiterate when it comes to social issues also, as evidenced by the stance of certain individuals when it comes to immigration. Healthcare is another issue where common sense is nowhere to be found in the minds of the populace. We are told that the NHS is the ‘envy of the world,’ yet the quality of NHS hospitals is generally quite poor and the waiting lists are atrocious. However, people erroneously claim that the opposite of this is the American system. Yet, the American healthcare system is not one of free-markets at all, but is subject to a similar complex regulatory system. Healthcare is NOT a right, since we are not entitled to the goods, services, and/or labour of another. Since healthcare requires the goods, services, and/or labour of others, it cannot be a right by definition. The same applies to benefits, actually. If we want to help poor people, then we need to fix the economy. Benefits should only be a short-term solution. It is no coincidence that those on the left are some of the least charitable people on the planet. They assume everybody is as uncharitable as themselves, and so think it is up to the government to force people to give money to the poor. (Never mind, either, that this is a MASSIVE fundamental human rights violation, since we are not entitled to the property of others.)

People say we need the NHS because the price of healthcare is high, and not all can afford basic healthcare. Except the reason prices are high is because of government regulation and meddling in the healthcare system. Needless bureaucracy is one particular problem we face in the UK. If all Hospitals were privately run, and we ended the complex regulation that governs prices of healthcare, healthcare would be affordable. One reason healthcare is expensive in the US is not because Hospitals are privately run, but because of the hoops pharmaceutical companies have to jump through, the rise of ‘big pharma’ due to government favouritism. The regulation governing medical schools has made the number of healthcare providers in the US more scarce. Moreover, the health insurance system in the US is totally broken. It is not like car insurance where you pay premiums and, in the event you occur a cost you cannot immediately cover, the insurance company covers it. Health insurance in the US is not like this. It also does not help that Barrack Obama passed an act requiring US citizens to purchase health insurance by law or face fines and penalties. This is exactly like the sub-prime mortgage crisis/housing bubble under the Clinton administration.

In a genuine free-market healthcare system, we would simply not have the problems that the US system face. Since the US system is not a free-market system, but a hybrid of private ownership and government regulation. Another way we could save money is by ending bans on certain classes of voluntary interactions. For instance, drugs, guns, etc. The only reason such things are banned are due to the hysterical, irrational shrieking of the uninformed, vapid, supercilious, condescending, preening twits who think they know what is best for us better than we do. Human beings have a right to self-defence, self-determination, freedom of association, liberty, etc. Any mutual exchange and voluntary exchange should be legal. This would have a drastic effect on prison populations, as ending victimless crimes would mean a decrease in prisoners. Gun ownership by law abiding citizens would deter crime, lowering the number of criminals, and thus prisoners, which would save a lot of money. This is essence of the non-aggression principle. Acts of initiatory violence and aggression are always immoral, and the only legitimate use of violence is in self-defence against an aggressor (as long as it bears a reasonable relation to the level of threat presented.) Thus, if people want to take certain drugs, they are free to. I can warn them about the consequences, and, if I really care about them, I can do my best to dissuade them, but, ultimately, it is their choice. If someone wants to kill themselves, or wants to die via assisted suicide, then that is their choice. If someone wants to enter into a relationship with a member of the same gender as themselves, then that is their choice.

Of course, some try to smuggle in abortion under this rubric, but it is clear that this is not the case since abortion is an act that negatively affects the unborn child without their consent. Human rights apply to all human beings, apply even to unborn humans. Unless we are to imagine that a human is made only when a clump of cells infused with mother’s intent makes contact with delivery room air. It is also apparent that businesses are free to discriminate however they like, contrary to those baying for the blood of the Christian bakers who dared refuse bake a cake for a same-sex wedding. The thought police social justice warriors will claim that, in supporting such a right, we are somehow opposed to equality. This is once again evidence of a maxim once spoken by the esteemed intellectual Frederic Bastiat. Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.


Simply put, why can’t we give freedom and liberty a try? We have tried central planning, and complex government regulation. Whether it is in the form of pure socialism or the half-private/half-public mixed economy we have now, the result is always the same. Economic ruin and stagnation. Sure, policy makers can stave off such disaster temporary, but they can only ever postpone the inevitable. Government regulation feeds boom-bust cycles, which simply would not occur in a free-market system. The only people who say otherwise are dyed-in-the-wool faith heads who place their hope in the almighty government to save the day. For authoritarianism and statism is a religion, and government is like any idol or graven image to which men and women ascribe supernatural and divine powers. What can the government not do if only we have faith in it? Whereas, those with more than only half a brain; those who base their beliefs on evidence, logic, and reason; will know that the reverse is true. Opposition to government meddling is based on the level headed realisation that thousands of years of government intervention has only ever retarded economic growth and led to nothing but stagnation, death, and misery. The mayhem of free-market capitalism is wholly conjectural and without the slightest shred of corroborating evidence. The mayhem of government is wholly undeniable, wholly factual, and wholly horrendous.

Wednesday, 26 August 2015

Immigrants, Open Borders, and Free Trade, Oh My!

With the upcoming 2016 presidential election on the horizon and the various EU crises, we have, of course, seen a slew of anti and pro immigration propaganda being spewed forth by a variety of buffoons. We have also seen the same types of know-nothing ivory tower politicians decry, of all things, free trade. That's right, these people don't just support preventing the free movement of people, they also support protectionism and central economic planning. Not that this comes as a surprise to me. The mainstream politicians of the left and centre "right" are, of course, nothing but authoritarians who hate freedom. All they are interested in is the maintenance of power, and, for that, they need to keep in place the complex regulatory framework that keeps them at the top. Even though liberty and freedom, both economically and socially, is the cure for the economic stagnation centuries of statism have inflicted upon us, they eschew both things since to allow such things would be to rob themselves of power.

Immigration is not the driving factor behind economic instability, although it can add onto it if the conditions aren't right. For instance, allowing uncontrolled waves of migrants from incompatible cultures is a particularly bad idea, because it prevents migrants from settling to the new culture, and puts strain on the economy. Whereas controlled migration can greatly benefit a culture. Some have objected to controlled migration on the basis of libertarian philosophy, however, this is misguided. 

In a libertarian society, there is no commons or public space. There are property lines, not borders. When it comes to real property and physical movement across such real property, there are owners, guests, licensees, business invitees, and trespassers – not legal and illegal immigrants.” – Jeff Deist

Of course, some insist that the free movement of peoples is a good thing, however, uncontrolled migration is a provably disaster. Of course, one charge made against opponents of uncontrolled migration is that they are racists and xenophobes. Whilst some opponents of migration might oppose all forms of immigration, and might genuinely be racist and or xenophobic, this does nothing to undermine the case for controlled migration. Uncontrolled migration is a palpable disaster, and this is very easy to show.




Now, whilst racists and xenophobes have seized on this to push for their agenda, it does not undermine the case for controlled migration. To argue otherwise would to be to commit a guilt by association fallacy. Moreover, trying to silence people and labelling everybody who disagrees with you as racists does nothing to combat the views of actual racists, et al. It just breeds resentment and allows extremist views to take further hold amongst those who otherwise might not have considered such views. The reason Donald Trump is so popular is because of the sheer devastation the political elites have wrought and the sheer contempt they have for poor and working class people. People are pissed off about being spat on and treated with contempt. Political correctness, etc. made Donald Trump possible.

Free trade is also a bedrock of economic prosperity. Voluntary and exchange and interaction is simply what trade is. Whenever the government gets in the way, certain interactions are prohibited, others are forced, and money is lost on bureaucracy and waste. And since the government is inherently corrupt to its very core and only interested in maintaining power, it bends to the will of those who back them financially, and end up passing legislation favourable to said parties. This results in artificial monopolies, and mega-corporations who no longer to have to compete fairly. Prices go up, and smaller businesses have to close. Jobs are lost as a result. 

Now, what arguments are there against these positions? The most popular anti-immigration argument is that immigrants 'steal jobs.' This is, of course, false. Unless you have been fired and had your job replaced by an immigrant, then, no, nobody is 'stealing' your jobs. Immigrants come to a country and get hired. This is somehow considered problematic. Of course, unemployment is rising, and there aren't enough jobs to go around. Except the reason for low jobs and high unemployment is because of government intervention, not immigration. 

The obvious solution is to end the economically suicidal policies that lead to high unemployment, etc. and you don't fix the economy by "creating" jobs, you create jobs by fixing the economy. It really is that simple. Moreover, if there are no jobs, then there are no jobs for immigrants to steal. As a side note, some of the staunchest anti-immigration pundits in the US are sons of immigrants, some of whom entered the US in a not entirely legal way. It also worth noting that the biggest anti-immigration voices have never worked the kind of jobs that immigrants typically work. 

Opening the borders and doing away with all regulations immediately without making any changes to the disastrous and economically suicidal policies currently being employed might be irresponsible. Refusing to change those disastrous and economically suicidal policies and maintaining closed/regulated borders is far worse, however. Now, the correct approach to 'fixing the problems' is not clear, since it depends on how one views things. Either, we do away with everything in well fell swoop, which would cause a massive restructuring of society, or we implement fixes incrementally, to reduce the upheaval caused by fixing the hideously broken system we have. In other words, the difference between ripping off a plaster, or peeling it off slowly. Yet, it is certain, clear, and obvious what the correct stances and policies should be.

Essentially, focusing on immigration is a red herring, since the cause of economic stagnation has nothing to do with immigrants. Opposing free trade, on the other hand, is to oppose economic stability, recovery, and growth. It is no coincidence that some of the biggest anti-immigration voices are staunchly opposed to free trade, and support higher taxes. This is simply backwards thinking that will make our economic woes worse. For more, see: http://reason.com/archives/2015/08/24/the-trump-recession