The necessaries of political sainthood

This past week was the first anniversary of the death of Jack Layton. He died in office as Leader of the Opposition, less than four months after taking his party to a once unimaginable second place finish in a Canadian Federal election. That is an accomplishment worthy of praise if your political bent is toward socialism. So, Mr. Layton and I have very little in common as I suggested here just days after his death.

Certainly I respected him as a politician, but I thought the funeral then, and the memorial just days ago, were a bit over-the-top. I know its inappropriate to speak ill of the dead, but Jack Layton did not plan the funeral or the recent memorial, these were planned by his living family and his political party. Most commentators in the Canadian media avoided any criticism of the recent memorial, I found a couple I could agreed with. Chris Selley in the National Post, said this about Layton and the memorial:

"He wasn’t a hero, wasn’t a saint. He was an uncommonly skilled retail politician who gained respect for practicing a brand of politics that was less greasy and vulgar and off putting than his opponents’. That’s not nothing. It’s quite a lot, really. I don’t begrudge anyone a good vigil. But ringing bells in towers for a nice guy and a very good politician just seems a bit … much."

Some of the media went to great lengths to pay tribute to Layton, in particular the government funded broadcaster CBC. It went a bit overboard in its coverage in my opinion. That did not help dissuade my belief that CBC has an overt leftish bias, for which I continue to resent paying for in any amount. 

Also annoying was the frequently heard "Jack would have wanted it this way" from a variety of interviewees and commentators. Of course he would! This was blatant political opportunism, by a political family with a message to deliver no matter how inappropriate it was on the back of a memorial.  It was nothing less than a political beatification, not unlike was done with Tommy Douglas or Pierre Trudeau or FDR in the States. The difference being those men had made some accomplishments (for good or ill), what exactly did Jack Layton do outside of his tiny political world?

Some at the memorial promised to "finish the work that he started," and some suggested Layton was a beacon of hope. Well, hope is a subjective thing, and the hopes of Layton and the NDP are most emphatically not shared by me. Yes, I'm sure he wanted to make Canada better. So do I. But my vision of the future of this country is diametrically opposed to his.
Here is a excerpt from the Preamble of the  2011 NDP Constitution to show you what I mean:

Did you read that? Let me highlight these lines again:

"That the production and distribution of goods and services shall be directed to meeting the social and individual needs of people within a sustainable environment and economy and not for making profit;

To modify and control the operations of the monopolistic productive and distributive organizations through economic and social planning. Toward these ends and where necessary the extension of the principle of social ownership;"

Is this the work 'they' want to finish? Is this the beacon of hope and optimism that we are to look toward? Is that what it takes to become a political saint in this country? Do those words represent Canada? Not my Canada!

I occasionally agree with Ezra Levant, often not. But here is one place I think he said it best for me: 

Eco-pigheadedness and costly paranoia - DDT

National Post editors will never be accused of being shrinking-violets. The fiftieth anniversary of Rachel Carson's Silent Spring is upon us and the Post pulled no punches marking the occasion in an editorial this week. Wikipedia calls it the book that helped launch the environmental movement.

The Post points out that Carson was correct in that the indiscriminate use of synthetic chemical pesticides is not wise: "spraying large quantities of pesticides can have serious, and sometimes fatal, consequences. Ms. Carson helped sow a degree of caution about synthetic chemicals by showing the ill effects they can have on plant life, animals (Silent Spring focuses on the effects of DDT on birds — the Spring season will be “silent” once they have all been killed off) and, potentially, humans."

But, and it's a big BUT, the editorial continues: "DDT is not nearly as harmful to humans (or birds), in moderate doses, as Ms. Carson suggested. But it is harmful to the mosquitos that transmit deadly malaria and typhus that kill millions every year across the developing world." That's the issue of course, the uses of pesticides and other methods to increase crop yield or protect humans are rarely black or white situations, there are levels of appropriate use.

Its thought that the total ban or at least diminished use of DDT, particularly in areas where serious diseases (malaria) are carried by insects has led to untold millions of human deaths. How many deaths can be shown to be caused by DDT spraying? Certainly not anywhere near the deaths attributed to malaria. What I'm suggesting is that there is a level of DDT use that allows it to be used effectively without undue risk to human health, and therefore it should be used in that context.  

The ban and abandonment of DDT is for me a perfect example of the "lets be safe attitude" that many environmentalists have with regard to global warming and similar situations. You know the attitude, where they come out and say lets curtail energy output, lets cut back on industrial production, lets stop using fossil fuels to drive our economy, just in case it may cause catastrophic global warming, melting of the ice caps, raising sea levels - in fact the whole Al Gore "inconvenient truth" scenario that only the most fanatical still believe. That attitude has the effect of destroying or diminishing our economy on the chance that global warming or whatever will lead to catastrophe.

The Post's editorial mentions the use of chemical spraying in Dallas Texas to curtail the spread of West Nile virus. The irony there is that West Nile's North American invasion is likely an effect of global warming, but the spraying went ahead without much fuss.

My point being, that environmental issues are best examined where they actually affect people, and that is in local situations where those involved can make use of all the tools that are available to them and make rational and objective choices.

The elephant in the room: Rollover risk

chart from PFS Group....

Interest rates are at historic lows, still. Most people take for granted that government Central Banks dictate interest rates, and most of the time they seem to. And yet there are stories from the financial crisis in Europe that you may be aware of, where local country rates in Greece or Spain have spiked far higher than anywhere in the Western world. What's going on? If rates are in fact controlled, why are they seemingly out of control in some countries?

The answer is related to the confidence of the lenders, markets and money supply.

As an investor or lender you may not want to consume some of your money over a defined period of time. You could choose to put the money in the stock market, but the risk is high and the return is unknown. You may want to make certain you will be repaid for your investment and also paid interest for the time the money has been lent out of your control. The rate of return, interest, is a function of the time the lender is willing to forgo consumption and control of the money invested. However, you expect to be repaid.

High rates of return (high cost of money) should indicate that investment money is scarce, this might entice investors to take advantage of good returns, and it also tells business people that it might not be the best time to expand their particular business. As money is saved in banks and becomes more plentiful, rates of interest would fall indicating more money is available to be borrowed.

On the other hand, with low rates of interest (when borrowing is cheaper), it should be a signal to the business community that there is more money available now for borrowing and that means it's a good time to expand business.
   

According to the Austrian business cycle theory (ABCT), originated by Fredrick Hayek and part of the reason he received a Nobel Prize in 1974, interest rates serve the purpose of signalling to the competitive business community whether they should be expanding or contracting their business. Interest rates have an important function that way in regulating the movement of capital, and allowing the market to operate most efficiently.

When Central Banks took on the role of issuing currencies and regulating market conditions by manipulating interest rates, they created distortions and inefficiencies in the operation of the free market. For example, the ABCP crisis of 2008-09, had its roots in years earlier, when interest rates were set artificially low (ignoring the lack of savings at the time) by the US Federal Reserve Bank which sent a false signal to builders that expansion was a good idea. The housing bubble thus created, popped as soon as variable interest rates "rolled over" and moved slightly higher exposing the extent of overall consumer and business debt. Banks stopped lending because they feared they would not be repaid. Financial transactions froze in the US.

But that crisis was primarily in one country, the US, and of course it had huge ramifications around the world. But what if there were a similar borrowing bubble with the same root causes, only bigger?  

Central banks around the world have set their interest rates very low through a variety of complex manipulations since the US housing bubble. The "interest signal" to the market is, money is cheap to borrow, it must be abundant (according to ABCT). Governments are borrowing, individuals are borrowing, all because rates are low. Cumulative debt is increasing, rollover risk is also increasing. What is rollover risk? The following is from a newsletter I received recently from Agcapita.

"Rollover risk can be defined broadly as the possibility that a borrower cannot refinance maturing debt. If combined with insufficient funds/liquid assets on hand to fund the shortfall, the borrower will experience a liquidity problem and technically may be considered insolvent.

Here is a concrete example of rollover risk that may be unfolding right in front of us: Bloomberg estimates that the developed economies have $7.6 trillion of debt maturing in 2012 led by Japan ($3 trillion) and the U.S. ($2.8 trillion) and more than $8 trillion must be financed when interest payments are included. By 2015 it is estimated that half of the debt of the top 10 global debtors ($15 trillion) will mature and must be rolled.

Debt Maturing in 2012 ($)

Japan - 3,000 billion

US - 2,783 billion

Italy - 428 billion

France - 367 billion

Germany - 285 billion

Canada - 221 billion

Brazil - 169 billion

U.K. - 165 billion

China - 121 billion

India - 57 billion

Russia - 13 billion

Considering that global GDP is estimated at $70 trillion the magnitude of these numbers beg the questions of 1) how this will be financed and perhaps more importantly 2) at what rates?"

So, you see, there is an elephant in the room, the question is how will it be dealt with? The answer could come sooner than we might like. 

Ready for more on Austrian Economics and interest rates? Robert Murphy:

Watch while you can, Robert Higgs on Warfare, Welfare and the State

The other day I was speaking with a colleague about his fear that governments will become less and less comfortable with the freedom of the internet. I'm not talking about China or Iran, I'm talking about Canada, and the United States.

The US tried SOPA and PIPA in recent months and while most people think they are gone, defeated, the fact is, the danger is still present, just delayed.

Those US laws are supposed to stop piracy and protect intellectual property, don't believe it. If they are passed they will be the thin edge that signals the end of internet freedoms. Who knows what will follow, what interests need to be "protected" by government fiat?

One thing that may disappear is the kind of thing displayed in Robert Higgs' speech last month at the Mises Institute. Higgs pulls no punches, and tells it like he sees it. It's almost an hour long, but well worth your time.

When Collectivists clash with the State

The Quebec student strike, that I have already written about here, raises some interesting issues.

The students have formed a "union," wherein every member (like it or not) is subject to the will of the group, just like a labour union. The protest, of course, should make anyone with any sense morality, cringe. The students want full funding for their post secondary education, the right to free schools. Already 90% of their tuition is borne on the backs of taxpayers, but they want it all.

To get it all they have taken to the streets.But a new law passed, called Bill 78, restricts student access to free speech and assembly.

I don't know where to start critiquing this. Does a good citizen support the students right to speak on behalf of their desire to confiscate money from the general population and pay to send them through university? Or should the State be criticized for such a draconian law? Probably both. Watch what ReasonTV makes of this.    

Liberty with a side of sauerkraut - Part 3 - Equality vs. Freedom

Jan Narveson at LSS 2012...

In my previous post, John Tomasi raised the idea of social justice through the fostering of the "democratic citizen," both concepts not common to libertarian discussions. The Sunday session at the Liberty Summer Seminar (LSS) began with a response to John Tomasi's presentation from Prof. Jan Narveson. Jan is the Chairman (among other things) of the Institute for Liberal Studies which runs the LSS.

Jan started his response with some comments on democracy, or more accurately some swipes at democracy. Our society, indeed much of the planet, views democracy as the ultimate form of government, and very often confuses it with freedom. It is after all, rule by the majority, the "will" of the people, so it must be correct.

Jan's first comment sounded like this: it was decided in a democratic vote (51 to 49) that you should be boiled in oil (ouch), then he went on to Churchill's famous quote about democracy. He then asked "if your rights were protected, would you still want democracy, maybe not?"

The great lie of democracy is that laws are passed by the majority, its never true. And even if it were true, is it right, is it moral? In a representative democracy such as we have, laws are never passed by the majority, always a plurality, and as for the laws themselves, some, we would all want, but many are designed to benefit certain groups at the expense of others. "Democracy," Jan continues, "proves only who would win in a fair fight." It's not the most rational approach, it's rarely the best idea, and is simply based on the size of the mob and its clout. "Is this a good system of government, he asked?"

The democratic citizen that John Tomasi wants, must submerge his "self-ownership," his right to his property, to people he doesn't know, and for a purpose he does not necessarily support, mediated by a government he may not have chosen. That is essentially what we have now, but John Tomasi thinks that if we allow people to accumulate as much wealth as possible, this satisfies libertarians.

Prof. Narveson points to a principle that is popular among some left liberals called the Difference Principle, based on the faulty premise that: "Each member of society has an equal claim on their society’s goods." Jan referred to it as the "maximin" principle, or maximize the minimum, favouring the bottom but allowing the wealthy no restrictions. Note that word "allowing." The reason this inequality might be acceptable to some left liberals, that typically have problems with property rights and wealth accumulation, is that it could be to the advantage of those who are worst-off, because the really wealthy have more to "share" with them.

I doubt that satisfies many libertarians, not me anyway. Many people think that the wealthy have a duty to share. That is a moral position that I don't support, it's typically a religious dictate. I prefer the word responsibility, it's not as strong as duty which is obligatory. A responsible human being, that has the where-with-all to share, probably should, but they should be able to choose.

Prof. Narveson finished by stating that this issue highlights the difference between "equality and freedom." The former is forced, the latter is not. "Free markets," he said provide equality," because no one has coercive powers.

The next speaker Jacob Levy, a political science professor from McGill, and a more frequent writer for Bleeding Heart Libertarians, argued from a more practical position in support of John Tomasi. His point was that the state already exists, its been around since the 1600's, and has evolved along with modern financial institutions in most jurisdictions. "The state will not be legislated away," he said, an aspiration of some libertarians. The state has armies, taxation and spending authority and in many ways national defence is already redistributionist, both rich and poor are defended equally. That argument is a bit of a cop out I think. I kept thinking of the argument from the American Revolution, when the slaves are freed who will pick the cotton?

The final speaker was Pierre Desrochers, who introduced his book (The Locavore's Dilemma) co-authored by his wife Hiroko Shimizu - that I have already talked about here.

LSS 2012 was a memorable experience, you should come next year.  



   

Liberty with a side of sauerkraut - Part 2 - Social Justice

The Flag that flew over LSS #12......

I've separated this post of my experience at the Liberty Summer Seminar 2012 (LSS) from the previous post because this one may prove to be a bit more contentious.

In the previous post I implied that libertarians come in various flavours. Our final speaker on Saturday, the keynote speaker, John Tomasi is a case in point, a different flavour. John was there with his new book Free Market Fairness. John is also an occasional contributor to the blog Bleeding Heart Libertarians (BHL).

Sometimes I try to read BHL and generally I find it difficult to understand. It's typically written for academics by academics, with lots of philosophical jargon and references sprinkled everywhere. But, I have a sliver of sympathy for some of the concepts espoused.

This paragraph was copied from the "About" section of BHL, and gives you an idea of the blog's purpose:

"Bleeding Heart Libertarians is a blog about free markets and social justice. All of us who blog at this site are, broadly speaking, libertarians. In particular, we are libertarians who believe that addressing the needs of the economically vulnerable by remedying injustice, engaging in benevolence, fostering mutual aid, and encouraging the flourishing of free markets is both practically and morally important."

You can see from the first line of the "BHL About" their mention of the term "social justice," not a common phrase among libertarians. In his keynote presentation at LSS, John Tomasi outlined the various forms of Liberalism that applied to his argument. There are Classical Liberals and Libertarians, both seeking Economic Liberty, the former for utilitarian reasons, and the latter because of the concept of self-ownership. Then there are High Liberals that seek social justice through what Tomasi called the Democratic Citizen. What Tomasi wants to do is to somehow meld Economic Liberty with the Democratic Citizen idea to create the Neo-Classical Liberal, a hybrid of libertarianism and high liberalism who favour social justice.

Really, this all boils down to: what is social justice? That was not entirely clear to me except that it somehow allows a strictly limited government to redistribute the wealth of its well off citizens, such that, the not so well off are better off. Tomasi never got down to the mechanics of how this was to be done, he is a political philosopher after all. I kept thinking that there needs to be an element of coercion here, this is not a voluntary situation, so how is it different from what we have now except by degree? Most governments in the Western democracies already do a considerable amount of redistribution, and then some. So is it the same? Tomasi says no, he believes in Economic Liberty. But is that true?     

Early on in his presentation Prof. Tomasi, confided to us that he was uncomfortable with the Libertarian idea of "self-ownership," a comment I thought was rather strange coming from a libertarian. Self-ownership is foundational to the right to property, your most fundamental property is your self. From self-ownership it follows that you have the right to those things produced by your self, through your labour, be it money or whatever. Its all your property, to dispose of as you wish, that is true Economic Liberty. So fudging on "self-ownership" is like fudging on property rights, and if that is free market fairness, then I'm really missing something.

I'll have more to say in Part 3. 

Liberty with a side of sauerkraut - Part 1

The Libertarian "big tent..."

It didn't rain! For the first time in its 12 year history, the rain held off, in fact the weather was spectacular during the Liberty Summer Seminar (LSS) at the Jaworski Estate in Orono Ontario last weekend.

This annual two day seminar is one of the largest gatherings of libertarians of all stripes in Canada. Stripes of libertarians? Absolutely, if you thought libertarians came in only one flavour, this seminar would have been an eyeopener. I'll say more about that later in Part 2.

I'm always impressed with the selection of speakers at LSS, this year was no different. For me each speaker was a highlight, so let me select for you what it was I learned from them.

Fred McMahon of the Fraser Institute was first up on Saturday talking about economic freedom and how it relates to other freedoms. Fred pointed out that economic freedom is the fundamental freedom on which all the others are built. Historically the first European nations that were free, were market oriented. Freedom, he said, is often confused with democracy, and has little to do with it. In fact, to be economically free means being liberated from dependence on government, something that most democracies today, do their best to thwart.

The Fraser Institute produces much of its research based on econometrics, which most Austro-libertarians dismiss because human action, they say, is impossible to model through laboratory experiments as other sciences are. That didn't stop Fred from displaying slide after slide demonstrating the positive relationship based on econometrics, of economic freedom to wealth and happiness.

Next up was Cindy Cerquitella of the Atlas Economic Research Foundation. Cindy's topic was Freedom Champions: Stories from the field. For those who are unaware of Atlas (not named after Atlas Shrugged) its mission: "is to discover, develop and support Intellectual Entrepreneurs worldwide who advance the Atlas vision of a society of free and responsible individuals. Achieving Atlas’s vision of a “peaceful and prosperous society of free and responsible individuals” requires respect for the foundations of a free society: individual liberty, property rights, limited government under the rule of law, and the market order. To move public policy debates toward these classical liberal ideas...." In other words, an organization after my own heart.

Cindy spoke about think tanks around the world, and demonstrated a positively encyclopedic knowledge about them. After speaking of a few interesting groups that Atlas supports in some countries, the audience was invited to shout out a country, to which she named the think tank and some of its members, for country after country, no notes, very impressive. And I was buoyed by how many countries there were that had liberty oriented think tanks.

Our next speaker was Victoria Henderson speaking about Advancing Liberty in the Americas (Latin America). Victoria was part of a panel on drug policy that I attended last January, though drugs are not her field of study. Her field is Latin American Studies and Geography, and she is the Managing Director at the Institute for Social and Economic Analysis (ISEA).

Victoria used two terms with which I was not familiar: Epistemic Communities - voluntary groups held together by ideas, and Epistemic Landscapes for which she gave an interesting example: in her class of 174 at Queen's University, students were shown pictures of Che Guevara, Fidel Castro, Karl Marx and then, Ronald Reagan, Margaret Thatcher and Milton Friedman. Ninety percent of the class knew the first trio, only one person knew all of the second. That is the "landscape" we are up against, an educational apparatus in Canada that is geared to teaching about collectivist thinkers and thinking.

One fact that Victoria mentioned, a surprise to me, was that the Austrian School had a precursor in 16th Century Spain. Further investigation suggests there was no direct influence, but the School of Salamanca was in many ways so similar to the Austrian School that Murray Rothbard referred to them as proto-Austrians.

Another surprise to me, was Victoria's mention of the Universidad Francisco Marroquín (UFM) - The Free Market University in Guatemala! Who knew? A university that teaches about Mises, Hayek, Friedman etc. In fact there is a library named after Mises: La Biblioteca Ludwig von Mises. UFM is 41 years old, and on its a 40th anniversary last year it wrote "if Guatemala were to enjoy prosperity, it would be necessary for a group of influential people to understand, very clearly, the ethical, legal and economic aspects of a society of free and responsible persons," that is a worthy and wonderful mission.

Stay tuned for Part 2, BTW, I love sauerkraut.

    

After Ron Paul what?

So what happens after the GOP convention in Tampa Bay? Who will carry Ron Paul's message into the future. Here are some thoughts from ReasonTV.

A libertarian diet: How the government makes you fat.

About 2 years ago, I discovered that I required hernia surgery, it's not uncommon at my age. I chose to go to one of the few private hospitals remaining in Canada (near my home). This hospital was a hold over from the time before socialized medicine, a centre of excellence for hernia surgery worldwide. Unfortunately (for me) they refused to do the surgery unless I lost some weight. According to the doctors in the private hospital, weight loss would make the surgery easier and the recovery quicker.

So, I had a dilemma, lose weight, endure the discomfort of the hernia, or go to a government run hospital and get the surgery done. Maybe the queue in the government hospital would be shorter than the time it would take to lose the weight, I needed to lose over 20 pounds.

I chose to lose the weight and go to the private hospital, and they were good enough to give me a diet they recommended to lose weight quickly and safely. I've posted a part of this diet here, and you can see from the "forbidden list" that this is a low carb diet. What you can't see on the other side, is that meats, fats, cheese, eggs, nuts and mostly vegetables, make up the greater portion of what I was allowed to eat.

This was definitely not a "fat free" diet, but it was virtually a "no carb diet".

The diet worked marvellously well, I was able to eat more often in some cases, but of smaller amounts of food. I learned to eat less and as I reached the goal set by the doctors, and had my surgery scheduled I was put on a "maintenance diet" that was very similar to the original, I was just allowed to eat a bit more. My weight levelled off as if by magic, I had the surgery and was out in two days. Recovery was pretty quick as predicted.

The best part of the story is most of the weight is still off, and I have good evidence that this diet really works. Emulating it, on a daily basis works to keep my weight down, and it's so simple.

The diet that I was on, is similar to diets advocated by Gary Taubes. The TIME cover (top) and the story that went with it, was one of the major impetuses that led to the "fat-free" craze that still grips our society. Listen to Gary Taubes as he was interviewed by ReasonTV and look at the notes I have appended below for more information, he thinks fat free diets are crazy:

From the YouTube video:

Reason.tv's Zach Weissmueller talked with Taubes about his controversial work in the world of nutrition and epidemiology, including Taubes' hypothesis that carbohydrates, not dietary fat, overeating, or lack of physcial activity, are the primary factor causing obesity. Other topics include the inability of governments and large informational institutions such as the American Heart Association to adapt to new information, the mess of bad legislation and bad science that Taubes believes led to America's obesity problem, and why many libertarians seem to love the Paleo Diet . 
Taubes' work has unsurprisingly invited criticism from scientists, government officials and journalists, even in the pages of Reason Magazine, where he went back and forth with Reason contributor Michael Fumento. Read below and decide for yourself who, if anyone, is right:
Fumento on Taubes - http://reason.com/archives/2003/03/01/big-fat-fake
Taubes' response - http://reason.com/archives/2003/03/01/an-exercise-in-vitriol-rather
Fumento's rebuttal - http://reason.com/archives/2003/03/01/gary-taubes-tries-to-overwhelm