The Wild West ... the outback ... The new world of the 1800s was a time of true liberty. People stood on their own merits. They won or they lost and they reaped the rewards or swallowed the consequences. There were no cubicle dwelling civil servants hell bent on saving you from yourself. No planning permits no licenses no permissions no heritage overlay no bylaw no regulators no inspectors. And guess what ... it worked

This site is set up to provide a forum for a number of like minded professional economists to post and comment on contemporary issues. There are a number of regular contributors whose bios are made available on the site. Most if not all of these contributors use a pseudonym for the simple reason that they are practicing economists who must take into consideration the commercial implications of posting their opinions.

While some may feel that this is a bit of a gutless approach it is the only way we can ensure free and open discussion without jeopardising our paycheques.

Saturday, December 26, 2009

Santa Hates Me (Roy Rodgers)

Santa hates me ...

I've never done anything to Santa. I've always had a good word for the bloke. Despite a general distrust of altruistic institutions, the cult of personality and total aversion of the welfare state I have always made an exception for Santa.

I know he wears a big red suit and rules his own little fiefdom of socialist oppression where little elves (obviously deprived of their full nutritional requirements) are made to wear bizarre little uniforms and toil endlessly in factories producing purely consumptive goods that bear no reference to any sane economic output.

I've never been to the north pole but sure as hell there is a statue right in the middle of town. A nice big one of Santa toiling away. Just like the statues Mao was so fond of. Just like the statutes Stalin loved to build, just like the ones Saddam Hussein commissioned.

Despite all this I have stood by Santa... but no more ... this year Santa crossed a line that should never be crossed ...this year the bastard stuck a copy of "the capitalism delusion" by Bob Ellis in my Santa sack.

To be fair it wasn't actually Santa but my father who did the deed, and to be fair he did offer the critique that the only improvement the publishers could have made was to print it on extra soft double ply. However, at the end of the day he is still responsible. And while he is currently revelling in the hilarity of watching me foam at the mouth every time I read a passage from Bob's masterpiece, my father will rue the day he decided to take the micky on this one.

Bob's masterpiece

After reading a couple of pages I was beginning to come to the obvious conclusion that Bob, god bless his soul, was just another in a long line of delusional nut jobs who spend their lives rallying against the progression afforded the human race by the somewhat radical idea that people should be free ... free to choose what they want to do, when they want to do it and how they want to do it ... somehow, through some sort of twisted illogical process, people like Bob equate freedom with the extension of monopoly powers of coercion to a centralised state that then by definition has to direct people on what to do, when to do it and how to do it.

Here's a hint Bob ... the thing about free markets is that they are free. The thing about socially democratic economies or socialist economies is that they are not free.

But rather than rant and rave I thought there may be some value in having a look at exactly what Bob is saying and providing some rational evidence based discussion on Bob's little gems.

Before we start there are a couple of things that should be mentioned, so that the conversation will make more sense.
  • Bob appears to define capitalism as free markets, he also appears to take that definition to the extreme of free markets = no government (anarchy by any other name).

  • Bob's grasp of economics is fairly loose, the manner in which he fails to grasp some very basic economic principles and theories make the discussion particularly unsophisticated.

  • Bob does not appear to have provided any evidence anywhere for any of his musings, I suspect the research conducted for the book consisted of reading some Naomi Kline and watching Mike Moore's 'Sicko' (both acknowledged in the prelims) ... so don't expect any well informed or defendable arguments.
Before we start, its worth noting that most of these types of books are based on a core fallacy that is the fallacy of the false dichotomy. The arguments put forward will be framed in the following manner ... capitalism is crap ... it did this, it did that, it lead to this outcome, it lead to that outcome. It then follows that because capitalism is crap.... socialism must be good.

Well not really ... obviously no country has ever existed free of government and as anyone with any interest in politics knows, the difference between social democracy and liberal democracy is not one of absolutes but rather is one of degrees of government intervention. Liberal democracies have an explicit faith in their own people to make choices that benefit themselves and everyone else if they are by and large free to do so. Socialist economies think people are stupid and must live at the behest of vastly more intelligent cubicle dwelling planning bureaucrats. Liberal economies focus on market-based outcomes and will tolerate government intervention where markets cannot be established. Socialist economies favour planned outcomes and will tolerate markets where plans don't seem to be working (i.e. most of the time).

So it is worth mentioning that for all his bluster on the evils of capitalism, Bob never once outlines how his beloved socialist system would do it better. And that is the point most libertarians make ... we realise the world isn't perfect and allowing people the freedom to do as they wish when they wish to, may sometimes lead to outcomes that appear to go against the grain of what experts view as our collective aspirations. However, no matter what the outcome, you can reasonably assume (based on past experience) that it is better than the alternative that some pimply 30 year old wearing a polar fleece vest in a government cubicle somewhere in the wasteland of the civil service could provide (the socialist alternative, Bob's alternative).

Bob's little gem for the day

The best place to start is the very beginning, page 1.

If i were to say to you don't worry about the tsunami the free market will sort it out, you might think me a little mad.

Bob's problems start here with the very first sentence of the very first chapter. No the free market can not undo the tsunami but I personally would not think Bob mad at all to suggest allowing people the freedom to allocate their resources as they see fit in response to the tsunami as opposed to a centralised response, would provide for an effective response. Centralised disaster management has come under alot of scrutiny and criticism in recent times, especially given the what can only be labelled government failure in response to Katrina and the destruction of new Orleans. One of the primary criticism of centralised disaster responses is that it is often slow and ineffectual, primarily due to information problems.

Or if I were to say the Chinese earthquake, it isn't a problem. The issues arising from a schoolhouse falling in and the one child of a one child family being killed and his father having had a vasectomy and his mother wanting another child to replace him are issues that markets will easily fix, you wait and see

This is the second sentence and again Bob has a few problems. All of the schools that collapsed during the earthquake were government owned and run. They were designed and built to government specs, and as any architect who has worked in China will tell you, those specs are quite considerable. Further to this the fact the father has been neutered is a requirement of his socialist government's one child policy. So Bob's problem is that he seems to have put forward an example of the ineffectiveness of free markets that has absolutely nothing to do with free markets but is totally down to the absurdity of a socialist government. Of course that's not to say that the earthquake would not have had such horrible consequences for a market based economy, but one thing we can say with certainty is that the notion of compulsory neutering is not consistent with notions of a free market, and the prospect of thousands of childless families would not be as big an issue in a liberal free market economy.

Or if I were to say to you the killing of three hundred children by Israeli bombardment? And the destruction of fifty thousand buildings? Don't worry. The deregulated free market unguided by government interference will quickly fix all that.

Bob ... what in the name of sweet Jesus are you trying to say? The decision by a socialist leaning government to bombard it's neighbour over an apparent dispute centred on contested land and the demarcation of national boundaries, tied into an ongoing conflict between two sets of religious fundamentalists ..... has absolutely nothing to do with the free market. And the contention that the adoption of open boarders, open markets and free trade has no role to play in any future peace is idiotic.

The next little gem isn't the fourth sentence, but it's close. It's the central point of Bob's fourth paragraph.

.... or the killing by machete of eight hundred thousand harmless Rwandans, are well within the power of the free market to sort out ...

Well Bob ... given the blatant ineptitude of the centralised response provided at the time by the United Nations who sat idly by watching the slaughter ... one would have thought that, contrary to your dribble, this is a perfect example of an instance where free markets would not have hurt, if a defendable system of adequately defined property rights had been in place then maybe just maybe the world could have avoided the macabre result of tribal feuding and nepotistic governance that Africa so often produces.

What can we say about Bob and his book?

Well, based on the first four paragraphs .... I think he's an idiot. Let's hope as we get further into the book that he is a least an amusing one!


Anonymous said...

KFC gives 'racist' ad the chop

Roy we need your perspective on this

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