Let the beggars be

There has been a fair bit of publicity recently about people begging on the streets of our major cities. This may seem odd to overseas readers because beggars are a constant fact of life in most cities internationally but in New Zealand they are a fairly recent phenomenon. The fact that the growth of begging has been at a time when the New Zealand economy has been enjoying relatively strong growth and the Government has been increasing welfare benefits suggests the problem is not primarily an economic one.

Retailers have observed that the beggars who station themselves outside their shops appear to be highly organised, with prime spots allocated on a rotational basis and 'rent' charged by minders who manage the territory. Many of the beggars do not appear to be impoverished and most of them will be receiving state welfare benefits and not declaring the income they 'earn' from begging.

Wellington property investor Bob Jones has called for them to be banned. The libertarian in me says that would be an unnecessary state intrusion into what should be a free interaction between the panhandlers and those who are happy to give to them. I suppose my view is influenced by the fact that in my youth I found myself literally penniless on the streets of a foreign city and was faced with the prospect of having to beg to survive. It would be a heartless and oppressive society indeed that forbid people from asking others for help.

I draw the line at the point the beggars become a nuisance or adopt threatening tactics to obtain alms and I don't think taxpayers should be paying them welfare benefits when they are topping up their incomes (quite generously in my observation) from begging. But mostly they are harmless and we should let them be.

Prosecution of property co will make it worse for renters

New Zealand is frequently held up as a paragon of freedom and I guess it is in comparison with many other countries, but I think being top of a sinking pack is not something of which to be especially proud. Every Western nation is seeing an erosion of rights we take for granted - to free speech, privacy, due process - and New Zealand is no exception. The trend is particularly obvious in the commercial sphere where it seems we have moved to a situation where everything is illegal unless the government gives you permission to do it, a reversal of the principles on which our English system of law has been based since pre-Conquest times.

The latest signal case is the prosecution of Wellington commercial landlord, PrimeProperty, for letting a family live in one of its office buildings. It is not obvious from the news reports why this was a problem, particularly in view of the fact that many if not most Wellington office buildings now have some residential use. The reports say that the prosecution was for 'putting lives at risk' - a reference to the fact that the building was damaged in last November's Magnitude 7.8 earthquake and a decision has since been made to demolish it. However, no one was injured in the earthquake and the building in question stood up sufficiently well to enable the family in question to safely evacuate.

The structural requirements for residential properties are actually less onerous than for a commercial property, and there are buildings in Wellington that have been cleared of commercial tenants since the earthquake that are still being used for residential accomodation (presumably with the blessing of the bureaucrats), so no one can seriously claim that housing people in commercial buildings is placing them in any greater risk. The most heinous factor in this case seems to be that the landlord did not have the bureaucrats' permission.

My business is a tenant of PrimeProperty. I find them to be an excellent landlord. Their rents are reasonable, they provide excellent service, and the building I am in is very safe. The owner of PrimeProperty says he allowed the family to occupy the space in his building at a low rental as a favour, and I believe him. Presenting the family as victims of reckless endangerment is an inversion of the truth - they were 'victims' only of Aharoni's generosity and the crime was only of bureaucratic non-compliance. The prosecution, like so many these days, was to justify the unnecessary bureaucratic interference rather than to keep tenants safe.

A woman from an organisation named Wellington Renters United, of which I have never heard, claims that "if it weren't for the utter lack of affordable housing in the city, this situation is unlikely to have occurred in the first place." This comment demonstrates a typical ignorance of economics from many who advocate on behalf of those on low incomes. The truth is that if it weren't for the plethora of unnecessary regulations in the property market, and the high costs of of developers and landlords complying with them, there would be a lot more rental accomodation available in the city and the competition would drive rents down to more affordable levels. This prosecution will only make the situation worse.

Leave us alone, Gauleiter Brownlee

So Gerry Brownlee is not happy that the new mayor of Wellington, Justin Lester, did not declare a 'red zone' in the Wellington CBD after this week's earthquakes. In case anyone has any misconceptions about what Brownlee's red zone would mean, this article describes what life is still like in Christchurch's red zone five years after the 2011 earthquake. Brownlee's dictatorial management of the aftemath of the Christchurch earthquake has more effectively destroyed that city than any damage done by the earthquake.

Wellington property owners have been acting quickly and responsibly to assess the damage to their buildings in the days since the magnitude 7.8 earthquake that hit the top of the South Island. In my own offices on Lambton Quay, the owner asked that we stay out of the building until he had had engineers assess the damage. This work was completed on Tuesday afternoon and (as there was happily no damage) we were then given the all-clear to reoccupy the building. This has been the process throughout the city with no direction or help from central government and where necessary buildings have been kept closed for further inspection and remedial work. Justin Lester may not have satisfied Brownlee's authoritarian bent but four days after the earthquake there have been no reports of any injuries from earthquake damage in central Wellington so the risk appears to have been well managed and the mayor seems to have made exactly the right call in not closing down the entire central city.

The best thing that a government can do to facilitate the recovery from a natural disaster, as was proved in Joplin, Missouri*, is to get the hell out of the way and let individuals and businesses get on with the job of recovery. A few of Wellington's buildings are seriously damaged but the vast majority have superficial or no damage at all. We don't need red zones, and we certainly don't need the Brownlee's jackbooted approach to dealing with residents and property owners in Christchurch, to get on with the recovery work. Please, just leave us alone, Gauleiter Brownlee.

* H/T to Not PC for the link to the WSJ article on Joplin (which is subscription only - if you can't get past the paywall read about what it says in this blog post).

Rights, morality and the size of government

The city of Wellington, where I live, is the capital of New Zealand and it is full of well-off public servants who think that bigger is better when it comes to government, and being of a libertarian persuasion myself, I find I am often called upon to explain my political views to friends and colleagues. In fairness, my views usually engender curiosity rather than outrage - they wonder how someone who is apparently rational and thoughtful could hold beliefs that are so obviously at odds with their own. They are even more surprised when I argue for minimalist government not from the familiar position of practicality (i.e. that the private sector could fulfil many of the current functions of government more effectively and efficiently than the government itself) but from a position of morality. They find this surprising because left-wing, big government supporters always think they have the moral high ground and it is disconcerting for them to find an opponent who undermines the very basis of their own beliefs.

The elemental moral argument against big government is that it requires the threat, and ultimately the use, of force against its own citizens. You could argue that it is not the size of government per se that requires the use of force, but it is hard to see how government could have grown to the size and broad role that is has today without resort to violence. The collection of taxes, for example, requires the threat and use of force and without taxes there can be no big state. If you believe as I do that the use of violence in human relations other than in self-defence is never moral, then you can't believe in big government.

My friends respond that the government needs the threat and use of force to prevent and stop violence. That is the moral contract of government, they argue - we give up the right to use violence to settle disputes ourselves and give the government a legal monopoly on its use in order to protect our rights. But the government doesn't need the unprovoked threat and use of violence to fulfil that moral contract. The moral role of government is the defence against, and prevention of, violence - not the initiation it.

Ah, my opponents say, if the government has a role in protecting rights then what about when those rights are in conflict? Doesn't the right to life mean someone has a right to food - and therefore government has a responsibility for ensuring everyone is fed?

True rights are never in conflict - if they are, then they are not rights. Rights are inherent to our humanity and they are universal. My rights cannot detract from your rights. Your right to swing your fist ends where my nose begins.* The right to life simply means you have the right not to be killed by someone else - not that everyone has the responsibility to feed you. When the government takes on the responsibility of feeding those who can't feed themselves, it has to resort to violence to force others to pay for the feeding.

But, they cry, what about a baby? Yes, a parent who brings a baby into the world has a responsibility to care for that baby. The parent has made the choice to bring the baby into the world and the parental duty of care doesn't detract from the parent's rights any more so than a restaurant owner's right to run his business doesn't obviate his responsibility not to poison his customers. In other words, individual rights don't eliminate individual responsibilities.

Genuine rights sometimes appear to be in conflict and it is the role of the government, through the police, courts and armed forces, to mediate these conflicts by resorting to the objective facts and to moral rights. I have yet to find an example where it is demonstrable that genuine rights are in conflict when all the objective facts are revealed. Of course, sometimes the objective facts cannot be determined and the courts must decide between conflicting claims without full knowledge.

So, if the legitimate role of government is to mediate conflicts, how can it carry out even this limited role if it can't forcibly extract taxes? It has to convince sufficient numbers of people to contribute (through voluntary taxes or user charges) the money it needs to run government services. Such a system would almost certainly result in smaller, more efficient, more accountable and more moral government and that would be a very good thing.

* Variations of this saying have been attributed to different people but most commonly to Oliver Wendell Holmes.

Public Sector Millionaires

"Life is a long succession of vested interests, though we are inclined to see everyone’s but our own," says Theodore Dalrymple in this article in which he points out that senior public servants these days are often millionaires. The difference between public service millionaires and most others is that the public servants tend to deny that they are acting entirely in their own interests, preferring to delude themselves and others that they are pursuing their careers solely for the benefit of society.

Wellington, the capital city of New Zealand where I live, now has the highest household income (at nearly $100,000) and GDP per capita ($58,000) in New Zealand. It is no coincidence that it is where most of the public servants live. I have written before about how I have noticed the decline of Wellington's private sector economic base over the past couple of decades. Suburbs that used to be filled with factories and distribution companies are now empty of all commercial activities except for 'large box' retailers and recreational businesses that serve the prosperous bureaucrats that remain.

And prosperous they most certainly are. At the highest executive levels, public servants may still earn less than those in the private sector but across the board the relationship between salaries in the public and private sectors is significantly reversed. A divisional manager in a government department with a few dozen staff is likely to receive an annual salary of $150,000 to $200,000, whereas if you take an equivalent role in the private sector - say, a manager of a regional factory for a national manufacturing company with a similar number of staff - the role would be lucky to earn $100,000 and more likely about $70,000 to $80,000. And I know who would have the most risk and stress in their job - the factory manager, who undoubtedly is continually fighting for the factory's survival against international competition.

Many public servants appear to have no idea how the tax revenues that pay for their positions are generated. That is because many of them have never had a job where they have had to pay their own salary out of the margin from selling the products and services they produce. They have no idea about the economic value that must be created to generate the profits on which the taxes are levied that pay their salaries. They don't have to compete for customers - the people public servants love to call 'customers' are not customers at all, but rather members of the public who are forced to deal with them. They have no appreciation of the plight of the business owners who, if they have a bad month of sales, aren't able to draw any income out of their businesses at all, or who have to borrow to pay provisional and terminal taxes because their revenues have dropped after one good year.

It is no surprise that public servants almost universally have left-wing political views - after all, turkeys do not vote for an early Christmas. They regard the economy as just one big money-go-round, a zero-sum game in which they are entitled to grab what they think is their fair share. Public servants invariably regard themselves as empathetic types, bestowing their largesse with other people's money on those they regard as the deserving in society, and yet in their well-off Wellington suburbs they are often as isolated from the deprived in our society as anyone. And they have no empathy at all for those in the private sector struggling on much lower incomes than themselves.

When I was growing up, our rich neighbours were those with their own businesses. Today they are public servants, and I think that is an indictment on our our society and a sign of our ultimate economic decline.

Wellington voters choose economic decline

The New Zealand local body election results are in, and here in Wellington we now have a slew of Green Party councillors on the city and regional councils as well as our Green mayor re-elected.  This is not entirely surprising. Wellington is the capital and many of its workforce are public servants.  They tend to hold left-wing political views and unsurprising support more government in the lives of citizens, not less.  The Green Party is, like most similar political groups worldwide, hard-left on economic matters.

Wellington as an economic centre is dying.  Even our Prime Minister, John Key, a man you would think would be sensitive to making such criticism of his seat of government, recently said so.  Wellington's problems started in the 1980s with the decline of its manufacturing base due to the (much-needed) reforms of the Lange-Douglas Government including the removal of protectionist trade policies.  The trend was exacerbated with a significant migration of corporate head offices and supporting service businesses to Auckland.   

The economic decline of the capital was disguised throughout the term of the Clark Labour Government in the 2000s because of the vast expansion of the public service with core employees increasing by about 40%. The majority of the increase was in Wellington and the spending of these public sector employees in the region drove up economic activity (and most notably property prices) during the nine years Labour was in power.  The Key National Government has stopped the expansion by limiting departmental budget increases and has even required some retrenchment of numbers.  This has meant Wellington's non-public-sector decline cannot be disguised any longer.

The Greens' policies, which are about socialistic redistribution of wealth and increasing compliance costs for development in pursuit of their environment agenda, are not likely to help matters.  Wellington can't afford the profligate, anti-growth economic policies of the Greens.  The city needs new businesses to generate employment and wealth to stem the decline of the past three decades.  The Greens offer only offer more economic blood-letting at a time when the patient needs vitamins.

If you want an example of what can happen at a local level after years of ill-advised policies you only need look at Detroit - a city that, like Wellington, once had the highest per capita income of any in the country, which has now filed for bankruptcy.  If Wellington is to avoid becoming another Detroit, its voters are going to have to choose politicians who value economic growth over fanciful socialist and environmental aims. Unfortunately I hold out little prospect of the capital's large public employee electorate making such a choice.