Category Archives: role of government

Applauding Turkey and Brazil (and Russia and China too)

Recent sanctions leveled against Iran seem troublesome, and as some (like Ron Paul) have indicated, seem to be the last or next-to-last step before armed conflict in our relations.  In my case, trying to promote freedom and liberty by constricting it (to a country that would greatly benefit from it) seems counterproductive.  In the case of Iraq, crippling sanctions resulted in the deaths of half a million children and women in the 1990s.  Hardly justifiable.  Sanctions have also failed in North Korea, Cuba, and Venezuela.  No regime change is apparently imminent in either country.  Instead, some of the poorest and most repressed on the earth become even poorer as their trade with other countries is restricted.  A far better policy would be to follow the Golden Rule, treating other countries as we would want to be treated.  This method would lead to greater peace and prosperity, and would make America the “city on the hill” it aspires to be, rather than the “king of the hill” it sometimes appears to be.

However, there is some good news to be found.  For one, Turkey and Brazil tried to go the third-party enrichment route (Iran’s refusal was reportedly the US’s rationale for issuing the sanctions in the first place), and though they succeeded in getting Iran to agree to having its uranium enriched elsewhere, both countries were informed it was too late, and that the sanctions were going forward.  Both boldly opposed the sanctions.

Russia and China were both interested in softening the sanctions; and soften them they did.  What the UN passed was far from the “crippling sanctions” US Secretary of State Hillary Clinton promised to impose.  One of the biggest reasons was that China and Russia insisted on softening the sanctions, or they would not be passed.  I applaud such efforts to reduce the costliness of sanctions on a country that definitely could benefit from trade, especially at this juncture.

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Filed under Austrian Economics, foreign policy, politics, role of government, Ron Paul

Taiwan and Chinese Relations

Taiwanese and Chinese relations are growing closer.  This is an exciting international piece of news!

Since 2008, and the election of Taiwanese President Ma Ying-jeou, there have been increasing closeness with regards to transport and trade.  For years, there were tensions, even high tensions, between the China (sometimes called the “mainland”) and Taiwan.  I recall a cruise missile incident about fifteen years ago which seemed scary.  Taiwanese presidents would provoke mainland Chinese anger by intimating that they were independent of mainland China, or that they would like to be so.  The People’s Republic of China has long been bristling at such notions.  President Ma has more of a “building on common beliefs” philosophy with respect to China-Taiwan relations, and it seems to be working well.  He works with the mainland on issues of mutual interest in a way that is innocuous or at least inoffensive to mainland China.

How have the countries grown closer?  Consider trade, for one.

Since 2000, direct trade between the countries was $31 billion.  In 2008, it was $100 billion.  Even with this increase, Taiwanese businesses and entrepreneurs would like even more trade barriers removed.  At this juncture, Taiwan and China are working on a trade agreement (called Economic Cooperation Framework Agreement) which would enable even closer ties with fewer trade restrictions and tariffs.

Another difference would be travel.  In 2000, individuals desiring to travel from Taiwan to mainland China had to go through Hong Kong (and vice versa).  This restriction was recently lifted, and direct flights to the mainland are now commonplace.

In a world where the West (Europe and North America) seems increasingly statist and bent on cluelessly spending itself into oblivion, those in the East, especially China and India, seem to be moving in the other direction, at least in some aspects.  These are to be applauded.

I look forward to the day when the doors of the Gospel will be opened in mainland China.  Increasing closeness with Taiwan can only help in this regard.

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Filed under Christianity, fiscal policy, foreign policy, Libertarian, role of government, War

William Ewart Gladstone

William Ewart Gladstone was a British politician and true classical liberal.  He was an ardent supporter of free markets, fiscal discipline, low taxes, and peaceful relations between nations.

His political career spanned many decades, starting in Parliament, serving as Chancellor of the Exchequer (roughly equivalent to Secretary of the Treasury) twice for a total of roughly ten years, and serving as Prime Minister four times for a total of roughly thirteen years.  (Having a career public servant serve as Secretary of the Treasury is certainly not the pattern the United States has followed for the last few decades, as these are in general picked from the financial world, rather than the public sector.)

One of his early aims as Prime Minister was to abolish the income tax.  An early strategy to this end was to expand the income tax to lower income brackets, thinking that this would provoke such a popular uproar that the income tax would no doubt be abolished.  Unfortunately, in this naive perspective he was disappointed, as though it was an unpopular move, it never lead to a complete abolishment of the income tax.  In fact, during times of crisis or military conflict, he temporarily raised the income tax in the name of fiscal discipline and balancing the budget.  One of his great statements, uttered during the Crimean conflict in the 1850s is this: “The expenses of a war are the moral check which it has pleased the Almighty to impose on the ambition and the lust of conquest that are inherent in so many nations.”  Note, for one, the direct and shameless reference to God.  Also note the emphasis on fiscal discipline; at approximately the same time, the United States of America inflated and borrowed to finance the Civil War.

He was a powerful orator, an impressive communicator, even when discussing tame subjects such as the budget.  His career had many small accomplishments such as outlawing a centuries-long practice of flogging citizens during times of peace, as well as large and significant moves which aimed at improving relations between the British Empire and other countries such as Ireland and France.

Late in life, while serving as Prime Minister, he stood in opposition to the members of the Cabinet, all of whom favored an increase in Navy expenses.  He believed that this ran counter to his entire career, and more importantly, the principles of freedom.  In January 1894 Gladstone wrote that he would not “break to pieces the continuous action of my political life, nor trample on the tradition received from every colleague who has ever been my teacher” by supporting naval rearmament.

Like John Lilburne and many others, William Ewart Gladstone is a titanic historical liberal figure that modern-day liberals (and conservatives and libertarians and those of all stripes) would do well to look to.

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John Lilburne, Libertarian Hero

One of my heroes who fought unceasingly for liberty and freedom his entire life is John Lilburne.  As we study individuals like him, we gain a better appreciation for what we have and gain a better understanding of what we should do to spread principles and ideas of freedom.

One of his greatest legacies is the notion of rights that all individuals are born with.  At his time in England, there was a class structure (there still is, to some extent).  Royalty was at the top, followed by lords and gentlemen.  Commoners or peasants were at the bottom.  John was part of the middle-class.  Of course, those born into royalty or lordships were treated differently because of their perceived social status.  On the other end of the spectrum, peasants were looked down upon by nearly everyone.  There was this idea that rights were correlated with social or class status.  Royalty had more rights than lords and gentlemen, for instance, who had more rights than the middle-classes, who had more rights than peasants and commoners.

The idea of freeborn rights was revolutionary: all people are born with certain rights, regardless, (so the implication went) of social status.  Similarly, John fought for equality before the law, regardless of social status, increased voting rights, and religious tolerance.

John fought for his individual rights in remarkable ways.  For instance, early in his life, he smuggled in literature which went against licensing laws, a prime example of civil disobedience.  He was brought before the Star Chamber, a high court in England.  He demanded to know the charges brought against him in English, as the court spoke French in those days.  Thus began a series of trials and imprisonments which lasted nearly his whole life.

He was also revolutionary in writing proposed Constitutions for England.  Prior to this time, the idea of a constitution was much different than our conception; the English constitution was what constituted the body of English judicial, executive, and legislative tradition and legal history.  There was no such thing as a written Constitution; the concept was not even in the minds of Englishmen.  John Lilburne’s two attempts to write Constitutions for England were again revolutionary and paved the way for the founding of our nation, founded, as it were, by a written Constitution, which, in the minds of the Framers, bound the government by chains and fetters to enable a system based on individual liberty.

As we study the lives of people like John Lilburne, we better understand what we can do to further the cause of freedom; we are enlightened, enriched, and encouraged by his example.  In examining history, we see so much of growth of government, tyranny, and the shrinking of liberty.  But there are also shining lights which give us hope in greater liberty and freedom.  John Lilburne is one of those lights.

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On President Obama, Moral Source of America’s Authority, and Sacred Trust

I start my long public absence from cyberspace with with two quotes from President Obama:

We must draw on the strength of our values — for the challenges that we face may have changed, but the things that we believe in must not.  That’s why we must promote our values by living them at home — which is why I have prohibited torture and will close the prison at Guantanamo Bay.  And we must make it clear to every man, woman and child around the world who lives under the dark cloud of tyranny that America will speak out on behalf of their human rights, and tend to the light of freedom and justice and opportunity and respect for the dignity of all peoples.  That is who we are.  That is the source, the moral source, of America’s authority.
http://www.whitehouse.gov/the-press-office/remarks-president-address-nation-way-forward-afghanistan-and-pakistan

The U.S. “is ready and eager to assume that sacred trust…I urge you to choose Chicago. And if you do — if we walk this path together — then I promise you this: The city of Chicago and the United States of America will make the world proud.”

http://www.shallownation.com/2009/10/02/obama-olympics-2016-video-photos-10-2-09-chicago-2016-bid-in-copenhagen/

Interesting, these two quotes, from President Barack Obama.

First, let’s discuss the first of these two.  (Remember that this first speech is to drum up support, of which there was and is plenty on both sides of the aisle before this speech, for an increased military presence in Afghanistan.)  What is the moral source of America’s authority?  Some sort of Lockean social contract?  Some sort of transcendent goodness or truth?  God-given inalienable rights?  It’s not really clear to me what exactly he’s referring to, but in context, it seems at its root, to be a more flowery yet similar argument to what President Bush said, that you are either with us or with the terrorists (see here) in that to oppose this plan is to oppose morality itself, or perhaps the moral source of America’s authority, as if America is necessarily propelled to its current and currently increasing levels of hyperinterventionism because of its moral authority.  (One would wonder, then, was the Founder’s noninterventionism somehow less moral?)

It is also clear that God is not mentioned, even obliquely, as a moral source of America’s authority (lest there be any confusion, let me be clear: this is not limited to Democrats; Republicans are guilty of the same omission; others hypocritically invoke His name while their actions betray Him).

Actions and ideology indicate that this kind of opportunity and justice is more closely related to a notion of positive rights.  In addition, volumes could be spoken of how hypocritical this statement seems on its face, in that to hundreds of millions, if not billions, the very policies America is pursuing domestically and internationally promote the opposition of freedom, justice, opportunity, and respect for the dignity of all peoples.

Now, for quote number two.

Notice the use of “sacred.”  For me, as an active Mormon, and along with many other religionists of all creeds, I reserve this word for my relationship with Deity.  That, alone, is sacred.  Yes, as a Latter-day Saint, since I believe associations may continue into the next world, those also are sacred, but mostly in a theological contrast.  If God is removed from these, the sacred goes away, too.

So what does the use of this word tell us about President Obama, and the ideology which he (and many other Americans) subscribes to?  What, for him, holds the highest importance?  What is sacred to him?

No question that it is important to certainly respect one another, and to value one another’s trust.  But the use of that word “sacred” seems a little over-the-top, at minimum.  Perhaps, you might say, it is just trivial political pandering, begging to get a global economic stimulus into his beloved Chi-town.  But maybe it means something else….

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GDP and a Culture of Consumption

Many have the misconception that a true advocate of the free market (a condition where individuals are free to exchange, invest, and economize without coercion) is necessarily an advocate of our consumer culture.  Nothing could be further from the truth.

Gross Domestic Product, or GDP, as it is commonly known, measures three indicators: consumption, investment, and government spending.  GDP is the most commonly used indicator of economic strength among the mainstream.  As consumption is a presumed sign of economic strength, governments around the world perpetually create schemes and concoct incentives to try and boost consumption, for according to this measurement system (which I strongly disagree with), as consumption increases, so does the overall economic health of the nation.

Our culture of consumption is not a product of the unfettered free market, but is largely a result of state interventionism, including unholy alliances between governments and businesses of all stripes.  This is nothing new: the Austrian School of Economics has been preaching this for decades.  Economists of various flavors have been preaching this for centuries, if not millenia.

I clearly do not support increased government spending as a measure of economic strength.  Quite the opposite.  Investment alone (this would include what we call “saving”) is the prime indicator of economic health, in my mind.  As the government can do nothing constructive to assist this (except to protect individuals from acts of aggression), there is really no constructive purpose to measuring GDP.

One argument against measuring investment alone is that investment is bad for the economy in the short-term.  In a sense, this is true.  A consumption-oriented culture and economic system has a capital structure centered around perpetual consumption.  When that ceases, it is true that jobs are lost and companies go under as the capital structure is modified.

As opposed to consumption, investment is a long-term, rather than a short-term objective.  In the long-term, investment leads to stable growth.

Money saved now (and not consumed) will one day be invested in some capital expenditure of value and benefit to society: a car, a house, an education, etc.  Unfortunately, our consumption-oriented corporatist culture diverts resources from where they are most useful (i.e. investment) and puts them in an area where they have short-term gains at the cost of long-term rewards.  That money is diverted from its proper use to purchase some expendable and often non-essential good.  (When such purchases are made on credit, the consequences are even worse.)

Would consumption exist in a country with a small government and no measurement of GDP?  Of course: people still need to eat, shower, brush their teeth, and enjoy recreation.  But there would be less frequent frivolous purchases and more long-term planning and saving.

In short, capitalism gets a bad rap for our government-encouraged corporatist, consumer-driven culture.  My advice: stop measuring GDP, get government out of the business of business, and let the market go to work. In other words, stop interfering with every transaction between individuals: and let them economize and exchange freely, rather than being bound and fettered by onerous regulation, heavy taxation, and myopic incentives.

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Filed under Austrian Economics, fiscal policy, Libertarian, Personal, politics, recession, role of government, Social Commentary

Bold Automotive Predictions

With President Obama’s proposed upgrade of car fuel efficiency standards (government-mandated standards, of course), I have a few bold predictions to make:

1. The administration’s estimate of an average increase of $1,400 per vehicle is far too low.  A more accurate estimate would be an extra $4,000 or $5,000, what one would pay extra (at least) for a hybrid car.

2. Materials in cars would move increasingly towards polymers (plastics) and aluminum and away from steel and cast iron.  Conventional illumination systems will be increasingly replaced by high-end, expensive LED systems.  This could be good news for some small companies in the South, West, and Northeast, but will probably hurt even more the rust belt, which still has a fair share of iron and steel plants which primarily serve the auto industry by producing low-cost, high-quality, ultra-reliable parts.  They will be driven out in a hurry.  Too swift a movement towards these lighter materials will likely mean a safety problem and almost certainly a quality compromise.

3. The value of some used cars will increase as their demand will as well.  A reliable gas guzzling vehicle purchased in 2014 may depreciate lower than one purchased in 2002.

Let it always be remembered that, as Henry Hazlitt would say, a good economist looks for all effects of a certain policy, and a poor economist looks at a narrow window of scope, ignoring the complete picture.  Sadly we have neglected wisdom and we continually look to our tunnel-vision minded political machine to set our course for us.

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Filed under Austrian Economics, fiscal policy, Paleoconservatism, politics, recession, role of government