Who can?

A good question indeed:

Who can seriously doubt that the power which a millionaire, who may be my employer, has over me is very much less than that which the smallest bureaucrat possesses who wields the coercive power of the state and on whose discretion it depends how I am allowed to live and work? (#)

Unfortunately, the answer is not no-one, but many, and they have many names, for example: Statists, socialists, social democrats, national socialists, fascists, Leftists, anti-capitalists, Greenies, etc.

Poor and happy, or just poor?

In a relatively recent article in the New York Times (subscribers only, but subscribtion is free) a few rather little-known facts are listed about Norway and other socialized European countries. An example:

After adjusting the figures for the different purchasing powers of the dollar and euro, the only European country whose economic output per person was greater than the United States average was the tiny tax haven of Luxembourg, which ranked third, just behind Delaware and slightly ahead of Connecticut.

Also:

Alternatively, the study found, if the E.U. was treated as a single American state, it would rank fifth from the bottom, topping only Arkansas, Montana, West Virginia and Mississippi. In short, while Scandinavians are constantly told how much better they have it than Americans, [...] statistics suggest otherwise.

And..:

While the private-consumption figure for the United States was $32,900 per person, the countries of Western Europe (again excepting Luxembourg, at $29,450) ranged between $13,850 and $23,500, with Norway at $18,350.

The numbers give a clear message: Europeans would be the poor ones if Europe and America were one country.

But maybe this isn't so bad. We "all" know that Norwegians, for example, take very good care of their money. They own big sums in the bank, owe next to no money, take lunch-packs to work and do with very little consumption (or?). Some say that Norwegians are very satisfied with this and have no use for a more materialistic way of life, like for example the hyper-consuming average American. (Of course seeing a Norwegian coming to Denmark gives another picture. The Norwegian usually drinks himself silly in his Denmark-visits because the beer-prices are about half of what the Norwegians are used too at home. But lets keep the reality to the side this time.)

Yes, true, many a person can do with little and feel good about. Aren't other things important, like "free" this and that, a big generous State and a nice mountain-view? Sure. The African does with desert-sands, filthy clothes and surely, lunch-packs to work, and despite all this he will still go out at night and dance and sing and rejoice life with his family and friends after a day of work. But is this something to brag about? Can it be said that the Norwegian is tight-held on his money by choice rather than by need?

How is the story about the people of the old Soviet Union again? During the Soviet-era everyone got their food-stamps, "free" housing and a job. People could save their money and keep it safe under their pillows. When the Soviet Union collapsed, everyone had a nice stack of money under their pillows, but unfortuanelly at that time, it was worthless.

Some believe in the Norwegian policy of living poorly, have a big, fat bank-account and aim on living it out "later". The Norwegian State has billions in oil-money saved up, runs an unsustainable welfare-policy and plans on using up the billions on sustaining that system when the oil runs out. To this author this sounds like holding ones breath as long as possible and wait until the air starts to smell like roses, and then breathe. It leads to sufferings, is no guarentee for anything better coming along later and will most likely lead to more (brain) damage than pleasure.

The Left says: Tax those most who earn the least!

In principle the State needs money to fund its operation. The less the State does, the less money it needs, naturally. The more it does, the more it needs, naturally. When a State has expanded enough it starts to feel the need to tax more. Nothing new here. However, at some point it seems the State has to override the unwritten laws of fairness and justice and tax beyond the lines of common decency.

According to hard logic the State should collect a fixed amount from every person. Everyone is getting the same police-protection, the same access to a legal-structure of courts and procedures and everyone has to obey the same laws. When the State expands, this kind of taxation wont cover the expenses of it. The need for a proportional tax arises - everyone pays the same fixed percentage of their income, of the prices of products bought, etc. But again the State expands and the point of unjustifiable discrimination starts. Some people are made to pay higher percentages than others. Some products are taxed more than others. Some behaviour is rewarded and some other is punished. The balance of paying everyone's expenses versus keeping those expenses down forces the State into the road of discrimination.

When this point is reached the taxation starts to hurt those who have the least. Prices on everything rise due to taxation. Low-income people loose their incentive to work harder because margin-taxes from rising tax-percentages eat up all the benefits of higher wages. Owning a car becomes an almost impossible burden. Smoking becomes a trap because high cigarette-prices hit the poor hardest, creating an even more stressful life, making it less and less likely that a relaxing stop-smoking-course is put on the agenda. The society truly becomes a society of the rich at the expense of the poor. And the strangest thing of all is that the Left, above all, is the main force behind that development. By expanding the State the poor are made to bleed.

The alternative is to go back to flat, low taxes with a small, restricted and a well-defined State that focuses on keeping the law. Those who truly need help are a very small group, easily helped by compassionate humans (or at the very most a very small governmental institution). By taxing everything in order to help someone only makes the total need for help bigger and thereby increases the need for more funds to help those who need help, which again increases taxation, which again increases the need for help.

I believe the so-called "welfare state" will be a historical memory before 30 years have gone by. The sooner that better and for the sake of the poor.

Does the State create jobs or problems?

Many, including the followers of the economics of John Maynard Keynes, think the State can "create jobs" and "get the wheels of the economy started". The principle is simple: The State borrows (or prints) money in huge quantities and spends it. As a result som individuals will get jobs doing something, get paid for it, spend the salary on something and thus create jobs for someone else, who in return spends the money, and so the ball rolls on creating lots of jobs and happiness.

We now know this is not the case. Keynesian economics are simply outdated by logic and experience, and haven't had a positive effect on any economic recession at any time.

The government "pump-priming" myth and other Keynesian myths became widespread through Paul A. Samuelson's introductory economics textbook Economics, which was introduced to college students in 1948. While the economics profession has long since abandoned much of Keynesianism, Samuelson's textbook has not been replaced with a more suitable one, leaving two generations of college freshmen (including today's lawmakers and reporters) exposed to outdated 1940s economics. (#)

What the State spends, you don't. What the State "invests" in, you don't. What the State borrows or buys, you pay. You can't choose tax away unless you break laws or don't work. You can protest public spending with one vote every four years. You can protest private spending (for example, your supermarket's lates price-increase) every single day.

...and since all this "money-talk" is problaby uninteresting to the Leftist-reader who is probably on welfare himself, I think it's in order to remind the reader that a persons property is a persons extension of the persons self-ownership. In other words, a persons property is his because a persons body - and the fruits of its labour - is his.

Alternative to capitalism?

Is there an alternative to capitalism? Lets ask Google and see what comes up. I try to pick the most organized articles and the most concrete sentences. The reader can check the context himself to see if I have manipulated any message to fit my "cause":

Workers World Party: What's the alternative to capitalism? "Just asking the question leads to a discussion of socialism--a society where production can be planned to meet human needs because it has been broken out of the stranglehold of private ownership." ... "What gives [the rulers] nightmares is the fear that the workers who built the means of production will become organized, politically conscious, and powerful enough to pull this small class down from its pinnacles of power--as happened with socialist revolutions in Russia, then in China, and more recently in Cuba." ... "By the end of the capitalist war, 40 million people had died. But in Russia, the enraged masses had toppled two governments and set up a new state unlike any in existence--based on councils, or soviets, of workers and peasants. Marxism, which had become so watered down in Western Europe, had been rescued by Lenin and the Bolsheviks as the doctrine of revolutionary struggle."

Conclusion: The "alternative to capitalism" is simply the old Soviet-union. We all know how that went. Yes, the same path as any other country that took up communism during the 20th century - down the drain.

Paul Burrows: Is There An Alternative to Capitalism? "I favour a "participatory economic" vision influenced by the libertarian Marxist, anarchist, and syndicalist traditions. But I think it would be redundant, a waste of everyone's time to stand up here and regurgitate yet another stand-alone variant of socialism." ... "Solidarity has to be put into practice, it has to be lived." ... "In my opinion, the first of these forms of socialism (which existed in the old Soviet Union and exists today in Cuba) should be off the revolutionary agenda--not because it doesn't work (it does, even by comparison to capitalism), but because it's not compatible with the greatest fulfillment and development of the majority, of the workers and consumers themselves." ... "But if we're going to develop a true alternative to capitalism, we need to be very clear about what values and principles we want to uphold."

Conclusion: No real conclusion except perhaps that since communism worked in the old Soviet Union and works present Cuba (!) there is no reason to think it couldn't work else were.

Sean Hannity: Alternative to capitalism "We advocate public/social property relations in place of privatized capitalist property relations. In the new system, each workplace is owned in equal part by all citizens. This ownership conveys no special right or income. [...] Instead, we all do--or symmetrically, if you prefer, no one does. At any rate, ownership of productive property becomes moot regarding distribution of income, wealth, or power. In this way the ills of private ownership such as personal accrual of profits yielding huge wealth, disappear. But that's it. We haven't accomplished anything more than that, only a removal." ... "This entitles us to a share of the product of work. But how much? This new vision says that we ought to receive for our labors an amount in tune with how hard we have worked, how long we have worked, and with what sacrifices we have worked. We shouldn't get more by virtue of being more productive due to having better tools, more skills, or greater inborn talent, much less by virtue of having more power or owning more property. We should be entitled to more consumption from society's product only by virtue of expending more of our effort or otherwise enduring more sacrifice in its creation."

Conclusion: Remove private property rights and hope for the best. Remove the incentive to work and hope people still would. This and a complex system of all sorts of mandatory councils and decision-making bodies.

It seems that the "alternative" to capitalism is still the good-old socialism - the biggest killer of the 20th century. Or does anyone have another suggestion?

No debts, but then what?

Everyone knows about the huge debt-relieves recently promised by the G8-countries for the poorest developing countries. Won't they help a lot? Wont they benefit the poorest of the poor? No, and here's why:

According to the [2005 Index of Economic Freedom], of the 18 countries (Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda, and Zambia) that would immediately qualify for debt relief, 13 have "mostly unfree" economies (right next to plain "unfree") and only 5 have "mostly free" economies. Most of these countries have little protection of property rights, high corruption, and little domestic security. Some of these countries, such as Bolivia, are currently a political mess, and others, such as Niger, Rwanda, and Tanzania are virtual dictatorships. What are the odds that these countries will use the economic flexibility afforded by debt relief to help the people and not to line the pockets of the ruling elite? Sustained growth will be difficult for these countries to achieve as more foreign aid follows debt relief, leaving them without any incentives for economic reform - just as before. (#)

These debtrelieves will have nothing to say even though they could be a great opportunity for a country to get a fresh start in reforms and economic policy. What would help these countries, with or without debt-relief, is increased economic freedom.

The Germans shook of a huge war-penalty and a ruined economy in record time by putting the forces of the free market to work after World War 2, becoming the strongest economy in Europe within few years. Any aid given to them did neither do harm or any particular good. The same goes for everyone else, debts or no debts.

A good advice

Read and learn:

African nations can become prosperous, but we are fooling ourselves if we pretend that rich countries can achieve that result through government-to-government wealth transfers. Modesty is missing in the debate. The hard work of economic development has always rested squarely in Africa. It is time for African governments to embrace economic freedom and for rich countries to stop discouraging them from doing so.

Facts, experience and logic all point to the same conclusion: Encourage Africans to embrace capitalism, dump socialism and build up a free market of protected private property rights and economic freedom. Aid, debt-relief and other such tools have never worked (except reversely compared to the intentions). We need no further proof. We really don't.

The key to success

Some news are better than others. While freedom gains ground in some places it looses grounds elsewhere. Every year we learn a little more about what creates healthy and wealthy societies and what does the opposite. All in all the lesson is clear: Economic freedom, most often mixed with democracy, social freedom and respect for human rights, lifts societies from poverty to riches. Economic freedom paves the way for political freedom. Political freedom paves the way for social freedom. Social freedom paves the way for increased respect for human rights and care for the environment.

This is not surprising for the reader of classic political liberalism. Even before all the experience of today had been accumulated it had been predicted by liberal philosophers that economic freedom was a necessary ingredient to create a wealthy and healthy - and free - society, and perhaps the most important of all ingredients. Modern socialists try to tell us that regulation and social justice must come before economic freedom. This has not turned out to true. Experience and liberal logic tells us otherwise.

A private choice for the public or a private choice for the private?

Supporters of a tax-funded school-system argue that the State must pay all elementary and most higher education, and some say the State must pay for all education for everyone in order to prevent some rich from receiving a "better" education than most poor. This argument has the flaw of eliminating the price for the individual student, thereby hiding the needs for his education from him. If an education is popular many are willing to seek for it. Most likely, because many seek for something in limited supply, the price for the education increases. However, due to increased numbers of students graduating with a certain degree, the need for that certain education decreases. Salaries for those who graduate drop as a consequence and fewer see the rewards in paying for the education as a result. Fewer take the education, supply of graduates stabilizes according to demand on the market and salaries recover. This is the tuning-system of the price-system seen in everything but health-care and education in Europe. That's why the world is filled with unemployed French-literature graduates and that's why many die needlessly on long waiting-lists.

However, this kind of argumentation has no effect on the socialist. "The society," he says "must make sure the poor have a chance to seek education too, and research show that education is beneficial for everyone in the society!" Ok, lets say that is so and for the reasons the socialist gives (of course education is just an investment like everything else - houses, cars, televisions, clothes - and the poor have the best chance of affording those investments when the market is free, but lets keep these facts out for now). On what grounds, then, does the socialist choose his own personal education? Does he study unemployment-numbers to see what education is the most likely one to lead to a job-offer later? Does he look at the hospital's waiting-list to see if there is more need for a nurse or a doctor? Does he count the number of old people who need support or streets that need police protection and choose an education accordingly?

In most cases the answer is no. Having no need to bear the cost of the education the student will in most cases simply base the choice of his education on his own personal interests without regards to possible future earnings or need on the market. Despite all the fair descriptions about "benefits for the society" or "national need" he will choose according to his own personal will. Luckily most people realize that there is more need for this than that and make some realistic estimates about the future possibilities for a good job after finishing a certain degree, but that is simply a sign of resistance against a system that tries to force people into school for the "society". It is simply a fortunate coincidence that people choose something which is missing instead of crowding into differently useful lectures about the bees and the birds. The human's survival instinct simply doesn't allow us to think that the "society" will welcome any education even though its noble and nice and lead to beautiful poetry and writings.

When it all comes down to it we don't think to much about the society as such. We are individuals and we make choices that benefit our own future and present needs. A nationalized school-system needs other logic than the "benefits the society" to argue for its existence. Here's a suggestion: Because the State must control what we learn!"

Two for the reading-list

US donations to Africa outstrip Europe by 15 to 1: American citizens donated almost 15 times more to the developing world than their European counterparts, research reveals this weekend ahead of the G8 summit. (#)

President Bush Discusses Global Climate Change: "Our approach must be flexible to adjust to new information and take advantage of new technology. We must always act to ensure continued economic growth and prosperity for our citizens and for citizens throughout the world. We should pursue market-based incentives and spur technological innovation." (#)

A short explanation

George W. Bush is in Copenhagen now for a short visit. A group of Danish people have organized a protest in Copenhagen during the course of the visit called Stop Bush. The group behind the protest writes (roughly translated, and bold text is my doing):

Bush and his world order stands for war, threat of war and torture, for making education a market product, for privatizing of common welfare. It stands for speculators and environmental-pigs getting free hands. It attacks democratic rights in "the fight against terror" and promotes Christian fundamentalism - all of this is only for the benefit of a small, privileged minority.

Every sane person can, of course, see through the most basic errors: Bush hasn't gone to any war because it was his and only his idea to do so but gone with a number of democratic states into one country ruled by a man who had threatened the Western world for a decade or so. Education is a market product (sometimes financed with taxes and heavily regulated). Bush hasn't privatized anything in the USA that counts although he has suggested that young workers in USA are allowed to set a little aside in private pension funds instead of pumping every pension-market dollar into the soon-bankrupt social security system. Bush has not given free hands to anyone doing harm to the environment, or has he? (Tips on the issue welcomed.) However, he refuses to buy the useless, expensive Kyoto-nonsense and maybe that's enough to call him bad names. Bush has, and that's true, like many other State-leaders, wanted increased "security" in order to "fight terror", but it's nothing he alone stands for. Also true is his passion for his own Christian values and those who share them with him (a few tens of millions of Americans for example). But so was his opponent's in the presidential race, John Kerry, and this is something most big-name politicians in America share with Bush.

What is left is that "Stop Bush" has very little to do with Bush himself, and more to do with a group of socialists who have plenty of time and social support to organize protests against everything coming from America. An un-named friend of mine and a supporter of the protests (per say) thought that maybe the protests are in principle about how "ugly" Bush is, and that stands out as the best explanation yet.