Thoughts on Freedom

Whenever rent control laws have been enforced in Australia, there have been long queues for those seeking housing. As the government artificially creates low rents below market equilibrium, this induces increased demand. Yet supply does not expand to meet the rising demand because of the low government mandated rents. The result is a shortage of housing. As Thomas Sowell observes in his book Basic Economics, “Nine years after the end of World War II, not a single new building had been built in Melbourne…because of rent control laws there which made buildings unprofitable” (p. 26).

Given that most economists — whatever their ideological disposition — agree that price controls are a bad thing, I was surprised to learn that rent control still exists in Victoria under the Landlord and Tenant Act 1958. To find out how extensive the rent control program is, someone will need to go through the regulations passed under the Act, a time-consuming and tedious process. Research for someone else to do!

Congressman Ron Paul’s new book, The Revolution: A Manifesto, was released today (April 30 in American time). It will debut at #7 on the NY Times Bestseller list. This is impressive, as that list position is based on pre-release sales figures. The number of copies sold is likely to grow even higher now that the book has been officially released. The Revolution has also reached #1 on Amazon.com.

It has always been the case that political movements are fleeting. But books are a long-term investment: they make the case for liberty to future generations. This book continues the momentum achieved last year, when Dr Paul set an online-fund raising record by hauling in $6 million in one day. He has raised nearly $35 million in total, not a bad sum in comparison to some other “mainstream” (read populist) candidates.

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(Copied from Reason Magazine).

The US State Department has decided it knows how to deal with Iran better than India does. But India begs to differ:

USING uncharacteristically strong language, India last night told the US to butt out and mind its own business after Washington attempted to tell the country how to deal with Iranian President Mahmoud Ahmadinejad when he visits New Delhi next week.

Ahead of the visit, the first to India by the Iranian leader, a State Department official offered gratuitous advice to India on how to handle him, suggesting that it should take a tough line in pressuring Tehran on the nuclear issue to “become a more responsible actor on the world stage”.

We need more countries like India to speak out against America’s current isolationist policy (sanctions, threats of military confrontation) towards Iran. I think it would reduce the chances of the Iraq war spreading into Iran.

I have just finished reading John Lee’s book, Will China Fail?, released by the Centre for Independent Studies. Lee has performed a valuable service by documenting what moving towards freer markets has achieved – stunning growth rates and lifting hundreds of millions out of poverty. He also notes the fundamental contradictions that must eventually be resolved by the Chinese Communist Party.

These contradictions arise from the tension between free markets and political authoritarianism. Free markets cannot exist in a vacuum. Markets require the defence of private property, enforcement of contracts and government organs operating under the rule of law. Though no longer a totalitarian state, China is still very authoritarian. It does not have an independent legal system, and thus cannot provide businesses the certainty they need to prosper.

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During the forced collectivisation of China’s “Great Leap Forward”, food production dropped sharply. But Communist Party officials inflated food statistics so they could argue there was no food shortage. The authorities exported grain while ordinary Chinese starved. ”See, communism does work,” Mao Zedong would proclaim to the world.  

Unfortunately, communist rationing of food had some side-effects:

Deaths were kept secret as long as possible. What food there was was distributed by the collective kitchen and generally one family member would be sent to collect the rations on behalf of the whole household. As long as the death of a family member was kept secret, the rest of the household could benefit from an extra ration. So the corpse would be kept in the hut. In Guangshan county, one woman with three children was caught after she had hidden the corpse of one of them behind the door and then finally, in desperation, had begun to eat it.

From this, we can derive a basic test that we should apply to all ideologies. It goes like this. Is the ideology likely to lead to mothers eating their own children? If so, the ideology is flawed. Pretty simple, really.

In the case of libertarianism, to the best of my knowledge, I believe the answer is “no”.

In the Impact magazine of Winter 2007, Peter Davidson defines poverty in the following manner:

[The] poverty line… used by the OECD, is set at 50% of the median (middle) disposable income for all Australian households for a single adult.

Using this measure, Davidson (a researcher with ACOSS) concludes that in 2004, “1,935,000 or 9.9% of Australians, including 365,000 children, lived below the most austere poverty line widely used in international research.” Elsewhere in the article Davidson uses a “less austere” measure of 60% of median income, finding that “3,859,000 people, including 786,000 children, were found to be living in poverty in 2004. This represented 19.8% of all Australians.”

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Thanks for all the helpful feedback on my previous post. I will now be reforming my blogging style in order to make it more compatible with Australian libertarians.

From now on, I shall issue the “Aussie Libertarian Disclaimer” in all of my posts that criticise America. This will involve strategically placing a footnote with the words, “But China is worse, so that makes it OK”. It has to be an Aussie disclaimer because the pseudo-libertarians in America seem to think that all countries should be judged by the same standards.

So for example, if I was to comment on a news story involving an American soldier raping an Iraqi girl, I would at the end of the sentence place the appropriate footnote: “But China is worse, so that makes it OK”.

This should make my writing more compatible with common Australian libertarian practice.

Note, there is a disclaimer to the Aussie disclaimer: I can’t guarantee that China really is worse in every single case. It’s more the thought that counts. 

Apparently I’m anti-American.

I can’t say I’m particularly surprised. It so happens that whenever I bring up the topic of America’s record on civil liberties (warantless searches, removal of habeas corpus, secret prisons, torture, high imprisonment rates) or foreign policy (thousands of innocents dead from unjustifiable and illegal war in Iraq), the more intelligent readers of this blog have pointed out these are anti-American left-wing views.

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1. A recent study found that the US now imprisons more people than authoritarian China. Read the Washington Post report. But note that Jacob Sullum rightly asks us to be sceptical of China’s official incarceration figures.

2. Graphic video evidence of prisoner abuse in an American prison has emerged. Read Tim Lynch’s analysis. Remember this occurred in a domestic context where the rule of law is supposedly protected. It’s much harder to obtain such evidence from the secret prisons run by the CIA, or from Guantanamo Bay.

3. The latest edition of the Human Rights Record of the United States (prepared by the Chinese government to counter American preaching about human rights) is also worth reading.

Yep. The US truly is the most qualified nation to spread the values of freedom and democracy through the barrel of a gun.

Whatever you think about the policies of President George Bush Jr., it’s easy to see why he’s such a successful politician. He has a sense of humour (something not as obvious in Obama, McCain and Clinton). For the average voter unconcerned with the details of policy it’s probably hard not to find Bush at least somewhat likable.

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Read about what happened back in the days when the US had no statutory minimum wages:

“…one young man didn’t want to stay on the farm so he approached a dry-goods dealer in town and asked for a job. After the guy decided to hire him, the young man asked what he would be paid. “Pay? Your pay? You should pay me for working here, you don’t know anything about the business. After you learn enough to be useful I’ll start paying you.” The young man worked three months for absolutely no pay.

How would you like to be that young man? For three months you are paid nothing, then you get a pittance after that. What did he think of his employer? Well, later he not only thanked the man for valuable lessons, but made him a partner in his own business. Maybe you’ve heard of that young man. His name was F.W. Woolworth and he became one of the world’s wealthiest men. What would have happened had that employer been forced to pay Woolworth more than his meager skills were worth?”

Anyone interested in political activism may want to sign up to the Libertarian Leadership School run by the American Libertarian Party. They run 6-week online correspondence courses in the same manner as you’d expect from a professional educational institution. It costs $50 ($55 Australian) per course.

If you’re interested in being a politician this is a good way to learn something and support the broader libertarian movement at the same time.

As I haven’t done any of the subjects, I’m not sure how much is America-specific and how much could be applied in Australia. But it’d be easy enough to find out before enrolling.

A possible reform to keep down government spending is a constitutional amendment freezing all yearly spending at a certain amount. If the amount was an inflation adjusted $X per year, this would force the government to prioritise spending within a certain bound. The advantage of a constitutional spending limitation is that it places a cap on the expansion of government.

It might be achievable in those states where the constitution can be amended by simple legislative majority. At the federal level however, it would be more difficult to achieve.

For sure, arguing for a constitutional amendment is hopelessly idealistic. If every budget included no new spending, how would politicians ‘bring home the bacon’ to bribe their constituents? Politicians would be forced to shuffle the same amount between different public services each year.

On the other hand, pushing for this reform could lead to some interesting debate about what an appropriate capped amount is. Is it $100 billion? $200 billion? Maybe $300 billion? How much does a government really need to spend in order to perform its core functions?

Former New Hampshire Governor, Craig Benson, announced in March 2003 that he was setting up a special ‘Tax Me More’ account for those who feel they aren’t paying enough tax. The accounts provide an opportunity for advocates of big government to put their money where their mouth is, by donating to the government.

According to Americans for Tax Reform, five other states – Arkansas, Massachusetts, Montana, Oklahoma and Virginia – have introduced a similar voluntary tax. About a dozen American states have publicly debated the concept.

‘Tax Me More’ accounts would be a useful tool for fiscally conservative Australian politicians (there aren’t many of them) looking for a way to justify tax cuts. The importance of politicians being able to identify, through reference to the accounts in public debate, that increased spending usually equals a corresponding increase in the tax burden, should not be underestimated.

Environmentalists, most of whom prefer the government keep more of our money, could donate publicly so everyone can see the extent of their financial commitment to causes like combating climate change. Any environmental taxes could be voluntary.

Few people are as generous with their own money as they are with someone else’s money. If, as is likely, the accounts receive negligible contributions, we will know with a greater degree of certainty the disconnect between support of a greater role for government, and the actual willingness to sacrifice hard earned cash. This could provide evidence in support of the contention that the supply of government exceeds the demand.

Can we judge whether a law is good or bad based on:

• its impact on privacy?
• whether it shifts the burden of proof from the government to the accused? 

I was taught early on that a good law is one that’s easily enforceable. If a prosecutor can’t obtain evidence to establish a criminal case without having to invade individual privacy, and can’t successfully prosecute without relying on a reversal of the burden of proof, then the law in question is probably a bad law.

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The events of September 11 have inspired two wars aimed at disrupting possible terrorist activities. Civil libertarians have alleged numerous abuses arising out of the conduct of the fight against terrorism. Some have called for impeachment — or at least a thorough investigation — of President Bush.

In all this it has been the judiciary that has defended individual rights, from its declaration that the military commissions set up at Guantanamo Bay were illegal, to its reaffirmation of the writ of habeas corpus. A narrower interpretation of the Constitution would arguably assist in preventing further questionable practices. But Congress must take some responsibility. A more forceful Congress is crucial in preventing unwarranted growth in Executive power.

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Republican Ron Paul recently raised $4 million in a single day, thanks to a pledge that over 17,000 supporters signed. To test the waters and see how effective online fundraising could be for the libertarian cause in Australia, I’ve also decided to set up a pledge. I promise to donate $10 to the LDP if 100 other Australians will do the same. This will raise $1,000 for the party, but maybe someday we will raise millions like Ron Paul!

Please go here to sign the pledge. And do tell your friends. Freedom doesn’t defend itself — we need capable people and plenty of money to get the message out.

UPDATE: After half a day, several people have signed up to donate.

Imagine you are an entrepreneur. As a businessperson, would you start a venture where you were forced to pay workers $100 an hour, a rate which is well beyond what you could earn from them? No — you wouldn’t open a new enterprise if you were guaranteed a loss. Therefore, the only businesses that will thrive under such conditions are those which are sure to recover the cost of labour plus the cost of capital, and also compensate themselves for the enormous risk of opening a business in the first place. This argument, which is persuasive with a $100 per hour wage rate, can be repeated incrementally down the ladder.

Labour economists have devoted much effort to empirically estimating the effects of minimum wage legislation on the employment levels of various age, race and gender groups. It is now widely agreed that increases in minimum wages do reduce employment opportunities, especially among teenagers.

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I recently discovered the National Rifle Association publishes an Armed Citizen Database where they record news stories of law-abiding Americans using firearms to halt or prevent crime:

During the decades the American Rifleman has published “The Armed Citizen” column, thousands of incidents of law-abiding Americans using firearms to halt or prevent crime have appeared in the magazine. Editorial space allowing, the total could have been far greater of course, as award-winning survey research shows that each year in the U.S. gun owners use firearms for protection as frequently as 2.5 million times.

The right to own a firearm to protect yourself and your family is a fundamental civil liberty. One doesn’t actually have to fire the gun; even brandishing the weapon can often be enough to deter a criminal. It’s unfortunate neither mainstream party is supportive of this unfashionable aspect of civil liberties.