The Man versus The State

Another book that is on my must read list is Herbert Spencer's The Man versus The State. The Mises institute has a great commentary on this work, written back in 1884 but still full of relevant wisdom and accurate insight. Many of the gloomy predictions made by Spencer have come true due to his understanding of the role of government and its expansionary instincts. An interesting aspect to this classical liberal text was that it was written in 1884, and describes how British society was already heavily regulated, with many supporters of socialised rail, health, medicine and infrastructure.

A common misconception is that the 20th century saw the emergence (and fail) of socialism, but it seems that socialism is a slowly creeping phenomena and the 19th century had its share of supporters who insisted on an ever greater role for the state in providing welfare. The 20th century gave us more than a handful of examples of the blanket poverty that emerged from a socialist command economy. But once again, the classical liberal writers are spot on with their predictions.

Mises foresaw the inevitable doom and failure of communism, and Spencer clearly saw the endless expansion of the state at the expense of individual freedom and liberty.

But any open-minded person who takes the trouble today to read or reread The Man Versus The State will probably be startled by two things. The first is the uncanny clairvoyance with which Spencer foresaw what the future encroachments of the State were likely to be on individual liberty, above all in the economic realm. The second is the extent to which these encroachments had already occurred in 1884, the year in which he was writing.

The present generation has been brought up to believe that government concern for "social justice" and for the plight of the needy was something that did not even exist until the New Deal came along in 1933. The ages prior to that have been pictured as periods when no one "cared," when laissez faire was rampant, when everybody who did not succeed in the cutthroat competition that was euphemistically called free enterprise — but was simply a system of dog-eat-dog and the-devil-take-the-hindmost — was allowed to starve. And if the present generation thinks this is true even of the 1920s, it is absolutely convinced that this was so in the 1880s, which it would probably regard as the very peak of the prevalence of laissez faire.

Yet the new reader's initial astonishment when he starts Spencer's book may begin to wear off before he is halfway through, because one cause for surprise explains the other. All that Spencer was doing was to project or extrapolate the legislative tendencies existing in the 1880s into the future. It was because he was so clearsightedly appalled by these tendencies that he recognized them so much more sharply than his contemporaries, and saw so much more clearly where they would lead if left unchecked.

Spencer has some words that are astonishingly relevant to modern society, with western governments claiming credit for our advances and developments when they deserve no credit at all:

It is not to the State that we owe the multitudinous useful inventions from the spade to the telephone; it is not the State which made possible extended navigation by a developed astronomy; it was not the State which made the discoveries in physics, chemistry, and the rest, which guide modern manufacturers; it was not the State which devised the machinery for producing fabrics of every kind, for transferring men and things from place to place, and for ministering in a thousand ways to our comforts. The worldwide transactions conducted in merchants' offices, the rush of traffic filling our streets, the retail distributing system which brings everything within easy reach and delivers the necessaries of life daily at our doors, are not of governmental origin. All these are results of the spontaneous activities of citizens, separate or grouped.

And Spencer viewed income tax as nothing more than slavery:

No man has any claim to his property, not even to that which he has earned by the sweat of his brow, save by the permission of the community; and that the community may cancel the claim to any extent it thinks fit. No defense can be made for this appropriation of A's possessions for the benefit of B, save one which sets out with the postulate that society as a whole has an absolute right over the possessions of each member.

Government flushes more cash down the toilet

Why control your spending habits ? Why prioritise ? Why cut back ? Why even look at what you get for your money ?

Why indeed, when its not your money ! The mantra of government is spend, and spend so you get noticed in the media. And the Liberal Party are following that philosophy, with the name "Liberal" simply being a recognised business name or corporate logo, rather than a set of ideas and principles which are followed.

The mantra of the ALP, our opposition party, is "if you can't spend, then promise to spend" so that you get more favorable attention in the run-up to the next election. The ALP have all sorts of zany expensive ideas, like wind energy, solar power, $4.7billion to broadband and billions more into failing hospitals.

The Liberals are keeping pace, with their promises to "help out the farmers". Well, not directly you see. Peter Costello isn't heading down to the farm to grab a shovel or drive a tractor. No sir. He's got a much better idea. Mail out cheques to farmers. Cheques paid for by every Australian taxpayer. This announcement comes after the government has put together a $714m assistance package for farmers.

THE Federal Government today announced a $714 million package to help farmers hit by the worst drought in living memory.

The package comes on top of $430 million in exceptional circumstances funding announced by Prime Minister John Howard on September 17.

Assistant Water Minister John Cobb told a drought summit in Parkes in central western NSW the package would include direct grants to irrigators and more exceptional circumstances funding.

And the treasurer gives his own wisdom on the subject:

GOVERNMENTS may need to consider "exit packages" for farmers seeking to leave the land, Peter Costello says.

Going into a Cabinet meeting to discuss the increase of drought relief, the Treasurer said there was a danger the bush was heading back towards the worst drought in 100 years, with winter rains failing to bring an end to the dry spell.

Cabinet is discussing more generous income and assets tests, reducing the red tape for providing drought relief for those farmers in the horticulture industry who are in danger of losing their permanent plantings.

Mr Costello said the first priority had to be income support to keep food on the table. But he also acknowledged that long term decisions may need to be made.

“Some of course may be thinking about moving on from the farm and you have to look at exit packages for those that want to do that voluntarily,” Mr Costello said this morning.

Exit grants of up to $150,000 will be available to farmers to leave their properties and there will be an increase in the number of mental health counsellors from the package.

Here's a novel idea Mr Costello. Bugger off and let the farmers decide for themselves. If they can't survive as farmers, then let them be plumbers, accountants, doctors, cleaners or wherever else their labour earns the highest return. Its called the free market. And you help speed up the adjustment and allocation process by *NOT* subsidising or interfering with bail-out packages.

Aussie Police Commissioner is on the lookout for global warmenising

Thanks Mick Keelty for being the biggest moron ever appointed to be our top cop:

And as Australian Federal Police commissioner Mick Keelty warned that climate change - not terrorism - would be the security issue of the century because of its potential to cause death and destruction on an unprecedented scale, Foreign Minister Alexander Downer urged the UN to use the climate change outcomes of the Sydney APEC summit as the template for a proposed new international agreement on combating greenhouse gas emissions.

Well there you go, you can just imagine a whole range of new and "modern" roles for the police to fulfil. Shutting down plants. Stopping carbon polluters. Arresting people for watching TV. Issuing fines if people turn on their air conditioners.

Wow.. there are so many things police can keep themselves busy with, who needs to bother with pesky murder, rape and theft crimes ?!

Great Youtube for the election

The LDP are finally starting to produce some videos. This one is about taxes. The truth is pretty devastating, and if more ads like this could get out there, people would pause before sticking to the 2 major parties at election time.

The Spencer Street Asylum

Few things are more amusing to me than the comments placed in The Age "your say" section. Sanity and rational thought are the exception, rather than the rule. And today's topic deals with the governments tough new laws against graffiti, banning the sale of spray cans to people under 18 unless they can prove its work related.

Any young people doing crafts or carpentry as a hobby are going to be screwed by these laws. But getting back to the issue of graffiti, it seems plain as day that it is a crime against a person's property.

What do the inmates at The Age have to say about this?

Well, I don't know. Will they also ban the printed, billed, postered, signed, glowing advertising that is presently raping our souls?

• Posted by: James Wall on September 21, 2007 10:42 AM

So now a billboard = rape of your soul ?

How come global corporations are daily allowed to pollute my visual environment?.

What gives them the right to shove ads in my face every single waking moment?

Looks like the money men want to be the ONLY ONES ABLE TO GET ANY MESSAGE ACROSS?

Ban public advertising by corporations first, they have no right to constantly pollute the visual environment.

Leave the Graffiti artists alone but you can have taggers fingers cut off if you like, they are completley devoid of any imagination, sad little people who like to see their little squiggles, Sad.

• Posted by: We Love Ha Ha on September 21, 2007 10:44 AM

You know they need their medication once they started using CAPS LOCK ! This guy is equating the voluntary and consenting placement of advertising on someone's property to the random defacing and vandalism of someone's property. Its those damn global corporations !!

There should be some laws concerning "street art" in the cbd as it is a great asset for our city. I think banning tagging is reasonable as it's just visual pollution, but all graffiti? I think the government (or even the Melbourne city council) should set up some kind of responsible graffiti program.

• Posted by: Ez on September 21, 2007 10:58 AM

Ahh, what would an Age comments section be without calls for more government programs ! I tell you we have a shortage of government programs in Australia.

Meanwhile, it seems every other comment supports graffiti as a form of art, but not tagging or stencilling. Other readers celebrate Melbourne's graffiti as unique , internationally renowned, and even a tourist attraction.

Only one reader had the common sense to dismiss this fallacy:

If Graffiti is an art then why not paint on a piece of canvas, and sell it like other artists.

I'm sure you have a huge following of art followers that would actually pay, instead of upsetting people that don't appreciate your sytle of art.

Be enterprising and take a chance, you may actually become famous!

• Posted by: Kaz on September 21, 2007 11:26 AM

The greatest photo on the planet

Courtesy of Tim Blair, comes a picture that is just so .. awesome. The world's #1 environmentalist, setting a fine example of how to leave a small carbon footprint.

Al Gore is coming to Melbourne tomorrow where he is giving a public talk at the Docklands together with super alarmist bore, Tim Flannery. I think I'll go along with a giant banner saying "how many $'s worth of solar panels will it take to make the polar bears happy?"

Vote for nobody

Where is our democratic right to abstain and not cast a vote ?

All political parties receive an amount of funding proportional to the number of votes they receive. So its definitely in their interest to maintain the status quo and force everybody to vote. But what if we don't care, or we don't approve of any of the parties running in the next election ? We have to vote for the least bad option then.

The Australian ALP, the champions of committees, bureaucracy, technocrats and regulation will not be getting my vote:

Mr Howard told Parliament Labor promises included 96 inquiries, such as a committee on federal-state relations and a climate change review.

He said there also were pledges for 67 new bureaucracies such as the Office of Strategic Interventions and the creation of a non-profit housing organisation.

The US Federal Reserve - more powerful than ever

The Mises blog has a scary and shocking article about the US Federal Reserve, the precarious state of the US economy and what could be a looming disaster. Most people I encounter give very little thought towards monetary policy and the role and powers of central banks around the world. But it seems everybody is out there complaining and feeling the effect of rising prices. Most people go on to blame phantom boogeymen, like the government or global warming, without looking at the role of the money supply and the central bank in all of this.

The scenario painted by the article is not a rosy one at all. Since 1999, the Federal Reserve has been allowed to accept all kinds of securities as collateral for loans, without matching the loans with a corresponding sale of US treasury securities. This has led to easy easy easy money and booming credit and lending by banks.

If sub-AAA MBS [mortgage backed securities] collateral pledged to the Fed were to fall in value while the Fed was holding them, the bank that deposited the MBS and took the loan would be required to deposit additional collateral or reduce its loan balance to an appropriate amount. In the case of securities with no market price, the need for additional topping up could be difficult to determine. In theory though, most of the risk associated with falling collateral values lies with the bank accepting the loan, not the Fed.

The main risk to the Fed would be if the borrowing bank were to go bankrupt during the course of the loan. Under such a scenario the Fed would take possession of the collateral and sell it in the open market to recuperate the funds it had lent the failed bank. If the market price for the collateral was significantly below the amount the Fed had originally lent out, the sale would not withdraw the total amount of dollars originally created by the loan. This is problematic because it would put the Fed in contravention of Section 16 of the act, specifying that all dollars must be properly collateralized. In other words, the Fed would have lent a certain quantity of new dollars into the economy, but with the sale of the collateral it would have withdrawn only a portion of this amount, leaving a large chunk circulating with no backing. In order to comply with Section 16, the Fed would be required to withdraw this amount of money from the financial system by selling a corresponding amount of treasuries from its surplus.

In a situation in which the Fed exposed itself to significant quantities of iffy collateral and multiple institutions refused to honor their obligations, the Fed would be required to sell massive amounts of treasures in order to withdraw unbacked cash from the financial system, in the process drastically reducing the money supply and making an already precarious situation worse.

Our government is a modern dinosaur

Man has evolved and progressed over centuries. The last few have been especially productive and never before have so many millions of individuals lived so well.

Government is not to thank for this. Don't let our politicians claim any credit for our wealth, our economy, our prosperity, science, medicine, education, space exploration, air travel, fertility, population growth, culture, arts, sports or entertainment.

ALS has a post that makes me yearn for the good old days of 1901. Not in terms of all of the items mentioned above. But in terms of the size of government. People were free to own property, to earn income, to enjoy liberty, and to keep what was rightfully theirs.

Back in 1901…

Back in 1901 there was only one Commonwealth public servant - Sir Robert Garran.

Back in 1901 the bulk of revenue was spent on schools and hospitals, but there were few, if any, government welfare/social security programs.

Back in 1901 the States had responsibility for income tax.

Back in 1901 not all States actually implemented an income tax, even though they had this power.

Back in 1901 the size of the public service (Federal & State) was a fraction of its size today.

When I get the time I intend to do more research on Australia in 1901…