Lessons in Socialism

There is a phrase that I use at work from time to time to illustrate and explain the apparent laziness of those people who seem to have the easiest of jobs but who fail, again and again to do them efficiently or correctly. Unfortunately the phrase has proven correct more often than I care to remember.

The truism? “The less people do the less they want to do.”

I’ve used it time and again but I’ve never thought of it as being applicable to an entire society or an entire social system. It is.

This is a lesson in socialism and Theodore Dalrymple has it learned well.

Right, For all the Wrong Reasons

Irvin Studin’s idea to increase immigration into Canada is a good one, but although he momentarily catches sight of why it is a good idea when he says, “The Canada of 100 million has a far larger national market and the attendant economies of scale and scope…” this is a mere afterthought for him.

To Mr. Studin, hailed as something of a public policy wonder-kid, the prime reason to open immigration and increase Canada’s population is to “build strong national institutions and structures across the vast territory of Canada -- institutions that, while today are often absent or weak, would eventually serve as a bulwark for international strategic influence. Second, a far larger talent pool to populate the strategic arms of the state -- the military, diplomatic, civil service and political branches of government, as well as business, cultural, educational and scientific sectors.”

If you read the entire article it becomes quite clear that Mr. Studin’s intent is solely focused on increasing the power of the state both within and outside of Canada.

He envisions some sort of superpower which will simultaneously see the Canadian people held from cradle to grave by the “strategic arms of the state” and witness the rise of Canada as an international military and diplomatic force, with emphasis on the force part.

This is exactly the wrong reason to increase immigration and Studin's plan which counts on immigration as a force in and of itself is exactly the wrong way to go about it.

I agree that Canada ought to open up immigration and have it limited only for national security reasons, to prevent the spread of infectious diseases or to keep criminals out. But there is something else that must be done first.

First we should begin to dismantle the so called social safety net. The reason why we should do this ought to be self-evident. We want people to come to Canada to work. We want them to come here for the opportunity to succeed and thrive in a country that offers them more freedom to achieve than the one they just left.

Consider the United States in its early history. Immigrants didn’t flock to America for social services or “strong national institutions”, they came for the opportunity to be free and to make their own way in the world. As a result of that “pioneer spirit” the USA went from upstart colony to world superpower in less time than Mr. Studin could imagine in his wildest public policy wet dream.

Once we have ensured that immigrants won’t be coming to Canada to turn the “social safety net” into a hammock there is another step we must take before we can open the flood gates, and be reasonably assured that those that come will be those that want the freedom that we can offer, the freedom to prosper.

Now with immigration comes the economic benefit of all those added people. Mr. Studin continues to apply all this human power to “applied research institutions; to aid the generation of policy ideas; to create bona fide national institutions of higher culture in the musical, visual and theatrical arts; to justify national sports leagues” but he seemingly ignores the very thing that makes all of that possible… Individual economic activity.

To make this immigration plan work you can not just dump a bunch of people onto the land and expect great cities to rise, or… well you could if no one was going to get in their way… but sadly Canada is an over-regulated, politically restrictive pseudo-capitalist, bureaucratic welfare state.

So step two, before immigration can be opened up with any realistic hope of creating the wealth and its serendipitous cousin the power - that Mr. Studin so fervently desires - is to begin dismantling the bureaucracy. We would need to get the government at all levels out of the way of the people who actually make that wealth and power a possibility.

The best way to accomplish this would be to have, as Ayn Rand put it in her brilliant collection of essays The Virtue of Selfishness, “a separation of state and economics, in the same way and for the same reasons as the separation of state and church..” . Initially, however, I think we could go a long way by eliminating superfluous regulations, business taxes and the sort of nickel and dime, money wasting red tape nightmares that make it so hard to open and run a business today.

Sure it will mean that consumers will have to be more aware of the services and goods they contract and consume, (with lessened regulation I am not so naive to think that some unscrupulous men won’t try to cheat and defraud) but that is part and parcel of being free. Besides we are not talking about eliminating the courts or police services and such frauds should be held to account by the law.

So now with the social safety net severely curtailed if not gone completely, and our bureaucracy restricted to the absolute bare minimum, Irvin Studin’s proposal for increased immigration could be implemented with reasonable chance of success.

Although this would no doubt lead to more economic, political and international clout for Canada I doubt that with the reduced scope of “strong national institutions” and the reduction or elimination of “strategic arms of the state” that Mr. Studin would recognize or appreciate the change.

Abbott and Costello Meet the Economy...

Time to Pay Up

UPDATE: Second Firm Pulls out of Greece , and the Greeks continue to evade reality...

This is the end of the road for socialized medicine.

Medicine just like bread, automobiles and bowling balls cost a certain amount to produce. That is a fact. It is not a construct of a company or a secret cabal of evil capitalists perpetrating a "brutal blackmail".

It is also not "a violation of corporate social responsibility" the company would not exist, there would be no insulin to buy, and no one to produce it if they (the company) were to ignore the realities of what it takes to produce this or any other product.

It is simply a matter of reality, things cost money, and nothing can be produced for free. Nothing can be supplied indefinitely at a loss. Yes, you might be able to supply it for a time at a loss but as less money comes in less product is produced and soon there is nothing and no company to produce it.

The decree by the Greek government that all medicine prices shall be cut by 25% (so that the government can continue to supply those medicines through the health care system) is a command divorced of reality.

There is a simple solution. Return the portion of taxes that each Greek pays into the health care scheme and allow then to pay for their own medicine at the market rate.

The Greek Government is not the only one to blame for this though. The Greeks have themselves as individuals to blame. Every time they demanded that their government give them more for less, every time they allowed another government program to supply for them something that they should have bought themselves. Every time they asked for more pay and less work, every demand to feather their social safety net led to this.

Reality can not be ignored forever, you may survive for a time while evading it but sooner or later its time to pay up.

Greece's bill is due.

The End of The Beginning of the End

"This really is Act V of the fiscal welfare state, in which monetary policy becomes the shameless handmaiden of fiscal policy in order to sustain an unsustainable kind of riskless society with massive benefits for everyone paid for by a few."

Read the whole thing.

So close...

And yet so far.

This article in the National post begins with a precise and correct statement of principle.

"If you have a language, heritage or sexual orientation you would like to celebrate, good for you. This is Canada: Feel free to stage a march, parade or festival in honour of whatever makes you proud. But, please, do it on your own dime."

but then they go and ruin it by adding...

"As Toronto's Pride Parade and several recent Sikh events have demonstrated, public funds should not be used to underwrite controversial gatherings for niche communities."

Do you see the problem?

It's not that these parades "underwrite controversial gatherings for niche communities." it's the theft of public funds to support any such event. Whether it be the Molson Indy or a boy scouts parade, if there isn't enough voluntary or corporate support in the community then there is no damn way that a government, any government ought to be able to use taxes to put on a show.

This is a fine example of the waste in our public finances. We have millions of dollars of debt at the municipal level, tens of billions of debt at the provincial level and hundreds of billions at the federal level and we are throwing parties?

I don't know about you but when I find myself a little short at the end of a month I don't decide to pay for a friend's kegger.

Running out of other People's Money

Margaret Thatcher once famously quipped that the problem with socialism is that eventually you run out of other people's money to spend.

Greece is in the middle of proving that the people who support the socialist ideal will turn on the government they created as soon as that eventuality comes to fruition.

And We Call it Aid...

*

"Unfortunately, the Europeans' devastating urge to do good can no longer be countered with reason."

The concept is simple, allow the people of Africa to solve their own problems and they will be better off, and will be able to stay better off.

Imagine if you will that suddenly the average Canadian couldn't afford to buy a house so another country decided that they were going to donate as many fully constructed homes to Canada as possible. Think about the repercussions that would have. The Canadian builders couldn't hope to compete with free houses so they would go out of business, which would push construction workers out of work, which would mean less building supplies were needed, which would lead to layoffs in those industries. Markets are all interconnected and all these layoffs would lead to people having less money to build and buy houses which would exacerbate the original problem, not solve it.

Notice in this map that South Africa entirely surrounds the tiny country of Lesotho. Aid is supposed to go to countries suffering from drought or other such serious disasters right? Well, how is it that the entire area surrounding Lesotho requires less than 1% Aid and that country needs between 5 and 10%?

A true plan to revive the economy

Stockwell Day is now Canada's Treasury Minister, and will have to make cuts to government spending amounting to about 8% to reduce spending by $19 billion over the next five years. To make this palatable to voters and the opposition parties, transfer payments are to be considered "untouchable". There is a lot of fat in terms of programs which are either not delivering what is promised, have outlived their usefulness or are mismanaged and can be reorganized to run more efficiently. Consider that large corporations like Canadian Tire or Wal-Mart typically only have five layers of management, while government departments have convoluted structures with multiple layers of management (reputedly as many as 30, but I'll leave that as anecdotal until I see proof)

I think the emphasis on protecting transfers is wrong headed, but that is because I don't see the idea of the State seizing wealth and property from the productive to give to political rent seekers and the non productive as being a proper role for the State.

However, given political reality, cutting transfers to individuals would be electoral suicide, so about $61 billion is untouchable.

We can still look at other areas like transfers to governments (especially governments with their own sources of revenue like offshore oil or hydro), which gives us another $46 billion to work with.

Subsidies should be cut for another @ $30 billion

Crown corporations should be cut as well, since that provides another $8 billion

Adding that up, we can get $84 billion in cuts. Sustained for six years this would allow the entire national debt to be paid off, and if the program is sustained for 12 years then all unfunded liabilities (CPP, pensions, etc.) are also covered.

Not included in this virtuous circle is the possibility of reductions in operating expenses due to the ending of so many programs, and of course the reduction of the $30 billion/year in debt payments. Real tax cuts can be made from the savings here, energizing the economy and in all likelyhood speeding up the entire process through increased tax revenues.

Here is a real program to get behind: don't leave the debt to our grandchildren but pay it off before our children leave school!

Canada's transformation into a Republic

An American Republic at that.

Canada will probably become a Republic sometime in the mid century through a combination of demographic and economic forces.

Short version of the argument: while Canada erodes with a very sub replacement birthrate (aprox 1.4 children per couple), the United States is continuing to expand, with the population expected to be between 500 and 550 million. At the same time, Canada will be suffering acute labour shortages due to the demographic "bust" of the 2020's.

Large numbers of Americans can be expected to immigrate to Canada seeking the higher pay employers will be forced to offer to get workers, and they will also import their values. As they become more numerous and politically active, they will become the driving force behind many social and institutional changes in Canada.

Remember too that it is the "Red State" Americans who have large families, not "Blue State" Americans, and the generations leading up to 2040 will have seen Social Security and Medicare/Medicaid go bankrupt (along with many US municipalities and even some States like California, Michigan and New York). Come to think of it, most Canadians will be around to see American entitlement programs go bust (some estimates put the entitlement programs into net deficit as soon as 2016), so there will be at least two generations of Americans who will not be disposed towards unsustainable entitlements, and certainly will work hard to see these things do not happen in their new home.

Canadians will also have witnessed their own social programs like "Public Health Care", CPP and OAS go bust as well in the late 2020's as Boomers drawing on taxpayer funded benefits begin to outnumber and overwhelm the actual number of taxpayers. A large segment of Canadian voters will also have become adverse to socialist ideology, given they were put through severe hardship to pay for these Ponzi schemes, combined with a generation of young, politically active American immigrants with similar life experience should provide a large voter base to carry out political change.

This should be a topic that everyone should consider regardless of political orientation; how will you prepare yourself and your family and loved ones for the coming demographic changes, and what will you do to ensure the change is positive and peaceful for most Canadians?

Doomed to Repeat it...

*

"With interest rates at zero, monetary engines humming as never before, and a self-proclaimed Keynesian government, we are back again embracing the brave new era of government-sponsored prosperity and debt. And, more than ever, the system is piling uncertainties on top of uncertainties, turning an otherwise resilient economy into a brittle one."

No Tax for Pan-Am

1.4 billion

Bread and Circuses, that's what it was called back during the fall of the Roman Empire. The idea at the time was that the political leadership of the Empire could distract the citizenry, and make them to forget the realities of their day-to-day lives by staging elaborate games and spectacles in the colleseum.

Fast forward 2000 years... Now, in the middle of a recession, when people in the manufacturing heartland of Ontario (of which Hamilton is a part) are suffering from lay offs and plant closures all three arms of the government, municipal, provincial and federal, led by Dalton "Nero" McGinty think it's a good time to take more money from taxpaers to fund a sporting event?

Ridiculous!

No Tax For PanAm...

Your Money

Stolen from you. Given to Them.

Circling the drain.

Questions?

The on line world, cont.

As readers know, my interests have been along the lines of how Objectivism and Libertarianism have become social rather than political movements, and how to migrate to a virtual "Galt's Gulch" in order to live, work and dream in privacy without the busybodies of the State interfering with our lives. (Far better the agents of the State were to concentrate on their real jobs of protecting our lives and property from theft and fraud...).

Next Big Future has an interesting post here on the idea of transhumanism as applied to libertarian thought. For those of you who havn't come across this idea before, many futurists, science fiction writers and others maintain that advances in technology and biology will allow the human race to trancend current limits and achieve a physical utopia free of current problems and wants.

Ideas such as nanotechnology, highly advanced computers and artificial intelligence and genetic engineering do have the potential to eliminate scarcity and poverty in the world, and allow ordinary people access to the sorts of tools that are currently only in the reach of governments today. This is a two edged sword, of course. Being able to fabricate a spaceship and go to the asteroid belt is a positive, but the same technologies also allow you to build an ICBM and take personal action against a foreign regime you may not like.

It occurs to me that much of what we see in politics is a reaction to this sort of thinking (however diffused and unorganized). Politics is defined in organizational theory as a means of allocating limited resources. In the transhumanist libertarian universe, there are no limited resources (besides natural limits set by physics), hence there is no need for politics as usually defined. Why do we need a CRTC to allocate limited bandwidth, when there is effectively unlimited bandwidth through the Internet? The world produces more than enough agricultural produce to feed everyone, famines are caused by government actions that distort markets or actively embargo food distribution for military or ideological purposes. Other examples can be thought of by the preceptive reader.

What we are seeing is a process of limiting access to resources by political entities in order to maintain control. Bureaucratic entities like the CRTC float trial balloons to limit the sorts of information available on the Internet in a very public way. Other groups act like "Brownshirts" and attempt to drive competing ideas from the public square, as this example shows. "Cap and Trade" and associated "Climate Change" hysteria is designed to frighten people and make inexpensive access to energy, manufactured goods and services too expensive to afford for the masses.

So how do we respond?

Transhumanism is a very high tech idea and would require the resources of innovative corporations and the mass market to develop quickly and effectively. However, lots of low to mid tech resources exist in the here and now that allow the determined person to partake of relative abundance in the comfort of their own households. Everything from hydroponic gardening to using rain barrels to catch unmetered water, investing in high efficiency appliances to schooling yourself to turn off and unplug "instant on" devices reduces you dependance on outside resources and agencies without necessarily depriving you of a lifestyle of relative abundance.

Busybodies of the State will still attempt to harass you, for example citing zoning laws or launching complaints to take up your valuable time.  This is where you can become involved in the political process, and at a level that you, the reader have much influence. I am suggesting that applying anti-politics to your lives and engaging in the political process at the municipal level will provide the means to break down the overwhelming control of the State.

Anti politics (removing or reducing your dependance on the municipal grid and services) reduces the tax revenues of the State, provides an example for your friends and neighbours to follow and even co-ops some of the memes that the Statists use to attempt to control your lives.

Being active in municipal politics is doable for the majority of people, and the results can be imediate and very gratifying (rolling back intrusive bylaws and ordinances, for example).

Perhaps this is not as much fun as prospecting in the rings of Saturn or sea steading in the Earth's oceans, but it is doable, and it is possible for all of us, today.

Freedom is a self help project!

Still seeking "Galt's gulch"

Right now, I am still thinking about how a "virtual" Galt's Gulch would work, since we are living in an era that does resemble the collapse of American free enterprise in Atlas Shrugged. While it is very nice to stand and declare your beliefs, most readers can see there is an ever increasing trend towards State intervention in everything, and State oppression is pretty close at hand (if not there already, see the CHRC or the American Congress openly considering a bill of attender against AIG executives...).

Being able to disappear from the view of State censors or other Brownshirt thugs will be a real survival mechanism for anyone who wants to keep liberty alive in these conditions. I am also not so confident that civilization can be rebuilt on Classical Liberal principles as easily as making the sign of the dollar in the air; I am thinking in the worst case we actually need to consider a sort of Irish Monastery project  (although this could also just be natural paranoia peeking through).

Sadly, a physical Galt's Gulch is probably not practical or feasible in the here and now (at least not if we like hot and cold running water), and attempts to stake out a physical space in the oceans or deserts is probably doomed to failure in the face of State competition (and the reason we have "States" is because they were the best form of organization for creating and controlling military power ever devised). Unless someone comes up with inexpensive access to space so communities can be established on the Moon, asteroids and moons of the gas giant planets far away from current State competition, then we are stuck with the virtual world.

I am still heartened by ideas that the Libertarian Revolution is actually a social rather than political movement, and Objectivism is certainly part of this movement. The T.E.A. party movement shows there is a groundswell of opinion against the current political and social situation, but no one has managed to capture it just yet, and of course there is always the danger that the T.E.A. party could either devolve into irrelevance or be captured by "the man on the white horse".

Of course, hunkering down in a real or virtual bunker against the impending Apocalypse is pretty defeatist. As Jerry Pournelle reminds readers of his blog "Chaos Manor"; Despair is a Sin. We need to move outwards in all kinds of unexpected directions, small furry mammals in the Jurassic political park. 

-Using virtual tools to create and operate in an underground economy

-Going Ragnar Danneskjöld and applying for government grants equal to the taxes you have paid

- Boycotting companies and media that actively promote or support statist views and policy (GM anyone?)

- Supporting political candidates of the Freedom Party or Libertarian Party (a small "c" conservative party if there are no representatives of the first two parties available).

- Working at the municipal level against statist policies

- Becoming energy self sufficient and getting off the grid. Minimizing the use of other centralized services as much as possible or practical is also encouraged.

As you can see, there are lots of possible options, and not every one is possible for every person. You will have to decide which ones work for you, and then execute the plan. The individual actions of thousands or millions of people will have a huge impact, and you can vote with your dollars and your actions every single day.

Freedom is a self help project!

Tax And Gouge Liberal

In this time of economic uncertainty the McGinty government wants to impose another set of taxes on the people of Ontario. First it was the announcement in the 2009 Ontario Budget that his government would harmonize the PST adding 8% tax onto every single good and service that is currently PST exempt.

This is a cash grab of unprecedented proportions from the guy that said he wouldn't increase taxes!

Then McTaxation decides he wants to go ahead with a Cap and Trade system for Carbon emissions. The speculation that increased costs for industry "could be passed on to taxpayers" is laughable. What on earth is speculative about it!!! Do the mental midgets in Queens Park believe for one second that a businessman is not going to pass this increased costs onto the consumer?!?!?

"A cap-and-trade system places a ceiling on greenhouse gases and lets participants buy and sell emissions permits within that cap. Those who don't meet the emissions targets can buy credits from others with a surplus instead of lowering their emissions."

This is nothing more than a wealth distribution scheme. Which is to say distributing your wealth into the government's coffers. I am willing to bet that every single one of these transactions will be subject to the new HST... How much money will this net the Tax-drunk Liberal Government of Ontario.

I'm going to don my soothsayer hat for a moment...

When... WHEN (not if) Ontario business' pass this new carbon/production penalty onto consumers I expect the McTaxation Government to lambaste them for "taking advantage of the consumer" or/and for "forcing the innocent consumer to pay for their waste and polution"... Crank up the spin machine... It's going to be a doozy!

Now for an examination of the Win, WIN, WIN, WIN situation these new taxes represent.

• Company A (a logging firm) is assessed as being in violation of its Carbon cap. So that business buys Carbon credits from CompanyB (some "carbon nutral" business)... Cha-Ching! McTaxation gathers his carbon cap loot... Win
  

• Company A having been forced to pay for Carbon raises the price of his lumber which he sells to Comapny C (the building supply company)... Cha-Ching! McTaxation gathers HST loot... WIN
  

• Company C having been forced to pay more for the lumber passes that cost on to Company D (the home builder)... Cha-Ching! McTaxation continues his taxation-extraviganza gathering in more HST... WIN *note that this would happen with almost every product that goes into a house or other product.
  

• Company D having been forced to pay more for the materials used to build the house passes that increased cost onto the consumer... CHA-CHING!!! McTaxation gathers the biggest payoff yet because not only does he get more taxes because the house costs more but this is actually a brand new taxation stream for his Tax-adicted government... New construction used to be PST exempt!!! WIN

NB* Even with the market in a downturn the median price of a home in Ontario is $275,000. That represents a tax-gouge of $22,000 for every new home sold in Ontario. Last month in the GTA alone 1880 new homes were sold.* That would mean a grand total of $41,360,000 dollars from ONE city, ripped out of this provinces economy (your pocket) and stuffed into the McTaxation government's greedy cake-hole.

McGinty is about to castrate this province's economy worse than Bob Rae's NDP did.

The magic of compound interest

The dark side of compound interest actually....

The Mouse Roars.

Tell me again how the strong Canadian Dollar is killing Canadian business'...

"Canada recorded its first ever surplus in bilateral direct investment with the United States last year, overtaking an economy 10 times its size."

LINK

Summing up the Obama Administration

And in only two months: http://www.youtube.com/watch?v=DsrFa9jrpv8

Share this with everyone you know for the next four years........

Inquisition 2009

Punishing producers reminds me of the dark ages practice of torturing, excommunicating and killing the guy that dared to use his mind.

As Thucydides said so well... Atlas Shrugged was supposed to be a warning, not a blueprint.

"Study after study over the past several decades has shown how countries that spend more produce less, while nations that tax less produce more. Obama is doing it wrong on both counts."

h/t to PUBLIUS @ Gods of The Copybook Headings