The future? "Better in some ways, worse in others."

"The story that was widely accepted in the 1960's.....strong central government and central planning.....is much less believable now, than it was then." David Friedman 

Good news: "the use of force is going down"

"Libertarianism is based on a single ideal, the non-aggression principle, so libertarian rhetoric tends to be remarkably consistent." Mary Ruwart

A new understanding of why money and democracy don’t mix well.

Of the many events that happened in November 2012, one of them was the first Toronto Austrian Scholars Conference. The conference was held by the Mises Institute of Canada, whose mission is to educate the public to the importance of placing human choice at the centre of economic theory.

One of the featured speakers at this conference was Assistant Vice-Provost of the University of Guelph-Humber and Program Head of Business, Dr. George Bragues. My daughter interviewed Dr. Bragues, and here is what she wrote. This originally appeared here.

If democracy needed only to be viewed through a moral lens, Dr. George Bragues, would have many good things to say. “Equality is the moral pivot of the whole democratic regime. And in many ways, a very noble aspect of it,” he says.

But enter a financial lens, and the picture becomes clouded with contradictions.

Money in a democracy is an affair of the State; the State prints the money, and oversees its supply. But in a democracy, the State is also voted in by the many. This naturally brings political incentives into the picture – and more than that, the necessity to please the many in order to win their votes.

“Given the moral climate democracies tend to foster, and given the incentives that politicians face to get votes – politicians tend to be inclined toward deficit spending,” says Dr. Bragues. He explains: “Democratic politics becomes a bit of a bidding war, where politicians tend to outbid one another in an ‘I can offer you that’ manner in order to win a majority. But never is there talk about how it will be paid for. In a democracy, the cost of public goods always appears cheaper than they really are to the voter,” he says.

Once politicians are faced with deficits, Dr. Bragues explains the three options from which they have to choose: “One – you can cut spending, which is not very popular. Two – you can increase taxes, which is difficult from a political standpoint. Three – you can just print more money.”

Dr. Bragues says it is this third option that is often the chosen route, given the innate realities of a democracy. But to take this one step further, Dr. Bragues adds that printing more money leads to its devaluation. Soft money, as it is otherwise known.

Here comes the part where Dr. Bragues prefaces his thoughts with “I hope I don’t sound pessimistic.”

“Soft money raises serious moral questions.”

He argues that certain virtues become undermined with soft money, ultimately and inevitably leading to a moral decline. “What ends up happening is one part of society uses another part. The people who profit more from a soft money regime gain at the expense of those who get hurt by it.”

“So – are you really treating everybody equally? Or is the political regime just helping one part of society to gain at the expense of another?”

Here is Prof. Bragues in his own words at the conference:

Middle East Morass

Troubling, is what I would call some of the commentary from libertarians on Facebook and other social media with regard to the Palestinian - Israeli conflict recently.

Steve Horwitz, a professor of economics and an advocate of the Austrian School, wrote a blog post on the conflict that sums up my thoughts very well, in an argument that might satisfy many libertarians. Have a look at his blog post, it's worth your time.

The issue of course is extremely complex, made worse by missteps on both sides and by the 24 hour news cycle that needs to be fed. On top of that there are issues of political correctness when one or the other side is criticized.

A great many younger libertarians and modern day liberals have approached this conflict with the same view promulgated by politicians, commentators, and reinforced by the modern liberal mainstream media who believe they are being objective in their position which sounds something like this: 

Poor tiny Gaza is being blockaded by the tyrannical Israeli's, whose apartheid policies have caused the Palestinian people untold hardship. It's an unfair fight, the Israeli's with their modern military might against the Palestinian's homemade rockets and plucky attitude of resistance. 

That represents the superficial argument if you, like many, are unaware of the history of this conflict or you have been fed the revisionist story widely available on the CBC et al. 

The purpose of my blog is to advance the cause of liberty and secularism. It is difficult to ignore that this conflict seems to be a clash of religions. Lets put aside the conflict for the moment, one has to consider which side in this conflict has the greatest possibility of advancing the cause of liberty in the future. So lets look at that.

Over the past two years a number Arab states in the region have undergone what is called the Arab Spring. This has been touted as a freedom movement by the liberal media, a move towards democracy and away from dictatorial rule. In several of the countries dictators have been overthrown or killed and replaced by new government. Lets look at Egypt, one of the more "peaceful" revolutions. The dictator Mubarak was overthrown, the new President, Mr. Morsi, after 100 days in power has adopted temporary sweeping new powers, effectively making him a dictator now backed by the Muslim Brotherhood. A Mubarak military dictatorship has been replaced by a Morsi theocratic dictatorship. 

Is that a move forward or backward? I'm not sure. 

Its happened in other places and in Syria, it is still happening. The dictator is slaughtering his own people, cutting them off from the rest of the world (Internet was turned off for two days) with no peace in sight yet. The Arab Spring has morphed into the Islamist Winter. I'm going to take a guess and say that it is unlikely that any of these revolutions will result in classical liberal democracies with the type of liberties common in other countries like Canada.

On the other hand Prof. Horwitz has this to say: "Let me be blunt: there is one and only one state in the region that rests on broadly classical liberal values and that is Israel. It has the rule of law, an independent judiciary, a more or less market economy that protects private property, not to mention a higher degree of ethnic/religious inclusiveness in its political institutions. It is far from perfect, but it is the most classical liberal game in town."

Their have been several wars since the state of Israel was founded 65 years ago, Israel has been victorious in all of them. Do you seriously believe that if Israel had lost one of those wars the country would still exist? I don't. Yet each of Israel's neighbours still exist, they have even (foolishly IMHO) had land returned by the Israeli's in an attempt to have peace, but those wars have morphed into an ongoing war of attrition. I'm predicting this war is going to get much, much bigger, in many different ways. I hope not, but history is not on the side of peace. 

The video below is a bit of history, and if you haven't seen it you should.