Paging All Pro-Liberty Students!

Last week I had the privilege of attending the amazing, brilliant, and wonderful annual conference of Students for Liberty, which attracted well over 1,000 libertarian students from not only the U.S., but around the world.

The success of Students for Liberty is an amazing story: in just five years they have grown from nothing to having 800 clubs on campus in the U.S., presence in many European cities, regional conferences both in Europe and the U.S., and of course, their main annual conference with – again – over 1,000 students in attendance! Clearly they are doing something right!

As readers where would know, options  for libertarian students in Australia at present remain rather limited: only a couple of universities have anything resembling libertarian clubs (and even these are rather new), so many students do not have the opportunity to develop their libertarian ideas or receive training in effective advocacy as part of a network and support-structure of like-minded individuals.

As such, I am incredibly excited about the fact that Students for Liberty has just launched a new program to train and provide resources to libertarian future leaders. Called their Global Charter Teams Program, this is an amazing opportunity for people to start up their own clubs, or, if they are already members, receive the skills necessary to become more effective. And, of course, make new friends around the world! Here’s more on the program:

The SFL Charter Teams program seeks to build the student movement for liberty around the world by identifying, training, and supporting the strongest student leaders of liberty in areas currently underserved by SFL (i.e. outside the United States, Canada, and Europe).  All students selected to the Charter Teams Program will undergo a rigorous 3 month online training program with biweekly readings and online seminars on the philosophy of liberty and management techniques.  This training will educate Charter Team members in the best practices SFL has developed over the years to effectively create a student movement for liberty in new areas.  Once the online training program is completed, Charter Teams will begin to start student groups at their own schools and schools nearby, run events that educate others on the meaning of liberty, and seek to identify other pro-liberty students in their areas.  The goal is for Charter Teams and the individual members achieve success in building the student movement for liberty in their area to create long-lasting, meaningful mechanisms of supporting pro-liberty students.

In addition to this, I know that Students for Liberty is very interested in helping provide support and resources to help build the movement up in Australia, so this is a great opportunity on all rounds!

So, if you are a libertarian student, I would strongly encourage you to check out the Charter Team project and apply(and also, feel free to email me on my gmail address (timintheus) if you have any questions, or want to be involved more!). Otherwise, if you’re not a student… I’m sure you know some who are pro-liberty, so pass the link along!

Does Australia need industrial relations deregulation?

Last Wednesday I attended a joint Friedman/HR Nicol Society dinner arranged by the infamous John Humphreys. The guest speakers were Professor Judith Sloan and the former Howard minister Peter Reith. Both made the case for deregulation of the labour market and condemned the current Fair Work system as imposing excessive costs on employers and stifling flexibility. This is clearly a controversial issues and Labor is quick to remind people of workchoices.

Flexibility is one of those hot words when it comes to industrial relations. For many it’s code for employers being flexible with pay and conditions, while workers work harder in less certain jobs. For those who are employed in industries where they have little bargaining power and are working in jobs where little skills is required this is a likely consequence of a more flexible industrial relations system. Trade unions use the fears of such people to defend the arbitration system that gives them significant power.

What is often not mentioned in arguments about industrial relations is the cost of a highly regulated system to those people who are excluded from employment. Setting minimum standards for wage rates sets wages above the market rate, meaning that there are people willing to supply their labour for less than the award rate. Industrial laws actually make it illegal for people to work for less than the award rate. The result of this restriction on individual liberty means for those people who due to a lack of experience, training or ability are not productive enough to justify the award rate are excluded from the labour market.

The Government itself has all about acknowledged this by providing wage subsidies for its employment services to use. The ultimate effect of a wage subsidy is to reduce the cost the employer incurs employing people who lack experience or education. This method of creating flexibility has significant transaction costs to the employer and financial costs to the government. Wage subsidies have to be agreed to and both employer and jobseeker are at the mercy of government policy to determine if they are eligible for the subsidy. Ultimately the employer is getting taxpayer money for employing someone and the worker is getting a wage above market rates.

Another deficiency of the current system is that imposes a set of penalty rates on both employers and employees. Of course these benefits are popular with workers who earn extra money for working weekends, what often doesn’t get reported is the employment opportunities that never occur because employers choice not to open their doors. Rules that impose penalty rates and minimum hours eliminate opportunities for unskilled jobseekers to enter the labour market. While doing dishes for two hours on Sunday afternoon may seems like a “shitty” job to many of us, for others it is an opportunity to enter a new industry, gain some experience and a credible reference for their resume. This can be an important first step for some to enter the labour market. Unfortunately, “fairness” for workers at the bottom of the labour market comes at the expense of those excluded from the labour market. These are the true forgotten people in the industrial relations debate.

Is the medicare rebate middle class welfare?

I should start by saying this piece is more of debate about ideology rather than economics. The medicare offset known commonly as the medicare rebate can be seen as a subsidy of 30% to the holders of private health insurance. These people are mostly middle class or in a high income bracket. However, many people, especially those with health issues choice to purchase a private health insurance policy despite not having a high income. Alternatively, the policy could be seen as a way of giving health consumers choice. In that if people decide to insure themselves privately they can at least claim a deduction on their tax for the cost of the policy allowing them to pay with their gross income rather than net.

How a tax offset differs from a deduction is that a deduction reduces a persons reportable income on their tax return and results in a reduction of tax of whatever the top marginal tax rate the consumer was paying. So assuming the person who bought the policy was earning 200k the deduction would be 45% plus a reduction in of the medicare levy making a total tax deduction of 46.5% of the policy cost. This would mean that the wealthy would get a bigger deduction for purchasing health insurance than people not paying the top marginal tax rate. An offset instead is a blanket 30% of the policy cost regardless of who buys it. It’s for this reason and to reduce the cost of the policy the Howard Government would have chosen to have an offset rather than a deduction.

This with the fact its commonly known as a rebate has seen this policy portrayed as middle class welfare. This with the private vs public school debate really comes down to the question should people be able to opt out of government provided services? Clearly in health people still continue to benefit partially by the public system and will still continue to receive benefits from it, but should people who choose to partially seek healthcare through the private market be made to pay the full cost of the public system that they now are far less likely to use. Many people have the view yes, if people choose to use private services than they should still contribute 100% to the public system and receive no assistant/deduction for their private expenditure.

Another argument that is often used is the claim that people should pay their fair share. Too often a person’s fair share is their share and about four other peoples share and then are to be told they can’t access the service they paid for becomes of a means test. It’s apparent that the expansion of middle class welfare in the late Howard years was a response to the fact the middle class felt they were paying taxes into a system that wasn’t interested in helping them or their family.

As a libertarian I believe in a perfect world much more of the health system would be left to the private market with competitive pressures rather than a system that helps line the pockets of the medical profession. (I believe we do need a public helathcare system, probably similar to what Queensland had pre Medicare) However, we do not have that system, we probably will never have that system as the average person does not under that government funding of many medical services in the long run raises the price of those services. So as a next best solution those people who do not want take a chance with government waiting lists is to allow them to choose to access services through the private market. By allowing a 30% rebate of private health insurance means the individual gets a small deduction of their tax as an incentive, while they still continue to pay the medicare levy and a significant proportion of their taxes still goes towards funding the system.

Should alternative medicines be regulated?

Earlier this week I was listening to radio national and a group of doctors and scientists were campaigning for universities to stop teaching alternative medicines. Their argument was that universities teaching it gives these unproven and unverifiable practices legitimacy they don’t deserve. (Like Keynesian economics. Jokes……..) Readers of this blog should know that I am an atheist skeptic who can be very hostile to ideas I consider stupid. Most alternative medicines and religion come under this category. I am also a pretty hard line libertarian.

From the mid twentieth century on government has created an alphabet of regulation and departments to protect us the consumer from poor quality goods and services. In some cases these departments have done good in many others they have imposed significant cost onto both the taxpayer and the consumer. They have also protected monopolies but creating artificial barriers to entry for new competitors. In fact some experts have argued that the creation of new miracle drugs stopped about the same time as the establishment of the Food and Drug Administration in the United States. It is quite likely that modern medicine ran out of a low hanging fruit to pick around this time, but there is no doubt that the FDA has made it enormously expensive to develop new drugs.

The creation of regulators for consumer protection is a rejection of the idea that both the marketplace and the court system will provide an incentive for producers to make products that work. Regulation is a vote of confidence in the expert. In the case of alternative treatments sometimes they can provide effective treatment in spite of supporting evidence that such a treatment should work. This is nothing new and not limited to the alternative lifestyle types. Sister Kenny promoted physical therapy as a treatment for polio, her understanding of what polio was complete quackery. However, her treatments were effective in a time before vaccination. The medical establishment then as they do now tried to prevent her from offering this treatment. This was an example of the marketplace being ahead of medical science.

Like many government policies regulation of medical services has unintended consequences. The victims of an unregulated shocky service are loud and politically powerful. However, the people who are priced out of medical services due the increased in price caused by complying with regulation has no voice. Nor are those who die because medication were never developed.

Chiropractors are an excellent example, many people who use these services would love nothing more to see a pain specialist and Osteopath. Chances are those people can’t afford those services. Osteopaths and the broader medical profession resist Chiropractors operating in their area of specialty, they regularly attempt to get the government to regulate against alternative treatments and publicly attack alternative treatments as quackery. No doubt the medical profession would deny this about their financial interest and says something like, the government should fund people to see an Osteopath. Aghhh yes our old friend rent seeking.

The broader point is in the examples of chiropractors is to regulate them assumes people are stupid. That people would continue to see people throw away money on services that fail to deliver results. I’m sure as medical science develops betters ways of treating backpain the chiropractic profession will be dramatically reduced, however until then these professionals are delivery a service people believe work and that people are willing to regularly use.

Ultimately, in an age where people can use the legal system to sue business that fail to deliver services and were information by other consumers are readily available on the internet. Do we really want the Government whom response to vested interests telling us as consumers what we can and cannot buy. I don’t.

Andrew Bolt, Race and Identity Politics

WARNING: VERY LONG POST

In a recent court decision, conservative commentator Andrew Bolt was found guilty of breaching the Racial Vilification Act (Eatock vs. Bolt, see http://www.austlii.edu.au/au/cases/cth/FCA/2011/1103.html ).

From the classical liberal perspective, the good intentions behind the Racial Vilification Act do not justify the existence of the Act; Free Speech is an absolute right which is only bounded by fraud (for example, in the case of actual defamation) and coercion (i.e. making threats of violence or similar forms of extortion).

I am not a viewer of Andrew Bolt, although in full disclosure I did once send him an email which corrected a philosophical mistake of his; he accused Postmodernism of being Metaphysically Subjectivist (i.e. people’s minds literally remake reality). I believe that to be mistaken since Postmodernism is Epistemologically Subjectivist, typically on philosophical grounds derived from German Idealist thought. This has been my only interaction with his work in the past, and I know little about him. Although I was pleasantly surprised when reading his Wikipedia page that he’s an Agnostic rather than a religionist.

But the reason for this post is that I found a specific comment about the Bolt case interesting from the perspective of political philosophy.

Commentator Brian F. McCoy argued that the ultimate issue in the Bolt case wasn’t freedom of speech. He identified the core issue as “freedom of identity” (see http://www.eurekastreet.com.au/article.aspx?aeid=28512).

What a fascinating concept.

“Identity” in the context of the case was referring to social identity or the groups with which one identifies.

The following article is not so much a deliberate argumentative essay per se. Rather, it is a set of commentary on a series of interconnected issues raised by the Bolt affair. In it, I will cover epistemological and philosophical considerations relating to the concept of “social identity” and I will also discuss the various analytical frameworks and assumptions that are used when dealing with the concept. Ultimately I will launch into a discussion of Brian McCoy’s “freedom of identity.”
Continue reading

The Mises Seminar

Today I attended the Mises Seminar in Sydney. It was organised by new kid on the block The Mises Institute of Australia. The event was very professionally organised, with a well planned agenda, a great venue, a terrific guest list, and brilliant libertarian speakers. As and when they have another such event I would encourage all libertarians to go along and have a look.

I met lots of terrific people. When I mentioned my involvement with the LDP I got an unfortuantely too typically libertarian response which is that people would like to join the LDP and vote for a candidate of the LDP if only the LDP was properly libertarian on policy X, policy Y or policy Z. Ironically many of these same people if in America would vote for Ron Paul who belongs to a political party far less libertarian than the LDP. Strange but unfortunately typical.

I would definitely hang out at one of these seminars again and I support the effort entirely. However if I was to complain about the lack of libertarian purity regarding the event it would be the obsession of most of the economic speakers with the very unlibertarian idea that fractional reserve banking should be illegal. It is the same idea that turned me off the Austrian school of economics when I first encountered it more than a decade ago. Thankfully they had one speaker, Steve Kates, who did not share this obsession. He kind of saved the day for me.

To be clear I do agree with Austrian economists when they say we should abolish central banks. This is a very libertarian proposal.

In summary libertarians can disagree on the details but should still work together where they have common cause and find agreement. So vote LDP and also support the Mises Institute of Australia.