When security trumps freedom

Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety ~ Benjamin Franklin

Many people find the idea of unfettered capitalism scary. Modern 'liberals', who support a high level of freedom in political, social and religious spheres, baulk at the idea of economic freedom on the basis that it fosters inequality. This is something that perplexes libertarians who believe that there is no such thing as freedom without economic freedom, and that if you are not free to choose how you make your living, what you consume and with whom you trade, you cannot be free in other areas of your life.

There are two reasons people do not want freedom in economic matters. The first is that they want others to take care of them. This is a natural tendency of human beings - after all, we spend the first decade or two of our lives being taken care by our parents and many find it a challenge crossing that threshold where they have to take responsibility for their own welfare. The modern welfare state makes it very easy for people to opt out of adulthood. We provide state-subsidised education to people well into their twenties and it is possible to live adequately on welfare benefits for the whole of one's life.

The second reason why people do not want freedom in economic matters is simple envy. People would rather not be free if it means someone will have more wealth than them. This is the malevolent and misanthropic motivation for socialism and the reason left-wingers tend to support higher taxes even when they are not necessary for fiscal reasons. They would rather everyone is worse off than allow a few to be better off than others. It is consistent with the Marxian worldview that sees human existence as a zero-sum game - that if I have more than you, I must have taken some of your share of the fixed pool of wealth.This is demonstrably a nonsense because if it were so, wealth per capita would never increase (as it has done exponentially for the last couple of centuries).

Whichever of these two motivations apply, the results are the same - a willingness to compromise freedom in the name of economic equality even if makes everyone worse off. This is what we are now seeing in Western societies - freedom is being abrogated in all spheres, including traditional touchstones such as freedom of speech and political association. Governments do not, and cannot, distinguish between the economic and social spheres when it comes to applying their authority, which is why socialism inexorably leads to dictatorship, the most recent example being Venezuela today. The left-wing ideal of political, social and religious freedom combined with high levels of economic control, is a case of wanting one's cake and eating it too.

Independence Day celebrates individual rights

Today is Independence Day, the day on which Americans celebrate the Declaration of Independence of the Thirteen Colonies in America from Great Britain. One thing that is often forgotten is that the American Revolution was a rebellion of Englishmen against their government. They were a remarkable group those revolutionaries, risking their lives by committing treason against the Crown. They were intellectuals like Thomas Jefferson, polymaths like Benjamin Franklin and pragmatists like James Madison. Some, like John Adams, came reluctantly to the cause, while others like George Washington were enthusiastic revolutionaries. What they had in common was a belief that

individuals that are sovereign and that moral governments can only rule with the consent of the governed.

Those brave founders signed a declaration that enunciated a philosophy that was radical for the times. It wasn't completely original - other Englishmen like John Locke and Thomas Paine (who went to America to join the revolution) had already expressed similar sentiments - but it went against the the predominant philosophy that had endured since Aristotle and Socrates - that individuals are sacrificial lambs to the greater good. They turned this prevailing wisdom on its head and said that human beings have inherent rights including the right to pursue their own interests (described in the Declaration as 'the pursuit of happiness') and that these rights cannot be subordinated to anyone's view of the collective good.

The Declaration also stated that governments exist only to protect the rights of individuals. This is, in my view, perhaps the most under-appreciated principle contained in that powerful document. It means there cannot be conflict between the actions of a moral government and the rights of the individual. How can that be true, you ask? Surely part of the role of government is to arbitrate between the conflicting rights of its citizens?

The answer to this dilemma is that there is no conflict between the objectively-determined rights of individuals. Conflict arises because of subjective claims that are not genuine rights (such as 'the right to a job'). The rights that the Declaration refers to are by definition universal and they impose no obligation on anyone other than to respect the same rights in everyone else. There is no conflict between a government that regards its role as solely to protect rights by this definition and the rights of the individual because they are one and the same thing*. This suggests that many, if not most, of the actions of the United States Government today are immoral and inconsistent with the Declaration (and the US is certainly not unique in this regard).

There are many who claim that the Declaration and the US Constitution are anachronistic. I think, on the contrary, both documents were incredibly farsighted. It is not these documents that are the problem today but successive governments abrogation of them.

* I have expanded on this subject before here.

Representation Through Taxation

I used to be a pure democrat, convinced that the concept of one man (or woman), one vote had a moral sanctity that could not be questioned by any right thinking person. But I am becoming increasingly convinced that it is our system of universal suffrage that has led to the current economic plight of most Western nations. Specifically, it is the separation of representation and taxation that is the problem in my mind.

The American Revolution was started with the catch-cry of "no taxation without representation," a protest about King George III's government levying taxes on the American colonists without granting those colonists representation in Westminster. In the West we have gone to the opposite extreme - every adult has an equal say in the election of the government irrespective of whether they pay any tax at all.

Benjamin Franklin said "democracy is two wolves and a lamb voting on what to have for lunch," and this is precisely the nature of Western democracy. In most Western countries the vast majority of the taxes are paid by a very few taxpayers (in New Zealand, the top 17% of taxpayers pay 97% of income tax and in most Western countries it is a similar ratio). This means the small minority of people who pick up the bill for almost all government spending are held to ransom by the majority who pay nothing and who continue to demand more and more.

The current prolonged economic downturn in the West is, in the opinion of an increasing number of commmentators, likely to be worse than the Great Depression. Almost all Western governments are living beyond their means, running up huge budget deficits and adding to their existing mountain of debt to fund them. The only response by governments is to spend more through so-called "quantitative easing" while calling for the productive few to pay even more taxes. The situation is unsustainable and few politicians have any alternative solutions.

I believe most leaders in the West know what is the real solution to the problem but lack the political courage to implement it. The solution, of course, is to significantly cut government spending and regulation, balance the budget and put money back into the hands of the productive few who will invest it to grow their businesses and create new jobs.

The issue with doing this is that politicians are not going to reduce expenditure and handouts to the unproductive majority while that majority determines whether they will continue to govern. Turkeys cannot be expected to vote for an early Christmas. That is why we must change the voting system if we are to change the economic behaviour of governments.

I believe the answer is a system that I call "Representation Through Taxation". I discussed this in an earlier blog and reiterate its key points below.

I would like to see a revision to our electoral system, call it a new form of proportional representation if you like, where you get to vote in proportion to the taxes you pay. Under this system, taxation could become voluntary but if you wanted to influence the political system you would have to pay taxes to, in effect, buy votes. Each $1000 you paid in taxes would buy you one electoral vote. The average of your tax contribution over the three years prior to the election would be taken to avoid stacking the votes in the last year of an electoral cycle. If you paid no taxes, you would get no votes. I see no reason why corporations shouldn't be given votes in proportion to the taxes they pay as well.

But what about those who contribute to society through unpaid voluntary work, I hear you ask? Well, it would be simple to ensure those people are recognised for their efforts too by giving them equivalent tax credits for the hours they worked in their voluntary jobs.

This is a radical change to the fundamental premise of "one man, one vote" that, I am sure, will have the left-wingers screaming from the rooftops. They will shout it down with claims that it is a return to the feudal age where the aristocracy got to determine who governed everyone - but it is not. It is system that gives everyone who contributes to society a vote proportionate to their contribution and it holds governments accountable to those who pay the bills. It is, therefore, a system that will promote economic rationalism and responsibility.

It is time those who paid the piper got to call the tune.

A New Form of Proportional Representation

New Zealand, like many countries, has been living beyond its means in recent years. Our government is borrowing $300m per week to make ends meet and we are headed for an economic oblivion similar to that currently being experienced by the "PIGS" countries - Portugal, Ireland, Greece and Spain (a very appropriate acronym).

The problem is our form of democracy and in particular our Mixed Member Proportional (MMP) electoral system that gives every minor political grievance party an inordinate influence in our House of Representatives.

Benjamin Franklin said democracy was "two wolves and a lamb voting on what to have for lunch" and this is perhaps truer of 21st Century Western democracy than it was of 18th Century America. In our democracy a diminishing minority of the populace are held to ransom through the tax system by an increasing, unproductive majority.

We need to introduce fiscal responsibility to our system of government and I believe the only way to do this is to give greater political power to those who pay the bills.

I would like to see a revision to our electoral system, call it a new form of proportional representation if you like, where you get to vote in proportion to the taxes you pay. Under this system, taxation could become voluntary but if you wanted to influence the political system you would have to pay taxes to, in effect, buy votes. Each $1000 you paid in taxes would buy you one electoral vote. The average of your tax contribution over the three years prior to the election would be taken to avoid stacking the votes in the last year of an electoral cycle. If you paid no taxes, you would get no votes. I see no reason why corporations shouldn't be given votes in proportion to the taxes they pay as well.

This system would solve our nation's fiscal problems in short order and would ensure policies that promoted the economic well-being of the country.