"The men who are not interested in philosophy need it most urgently: they are most helplessly in its power. [They] absorb its principles from the cultural atmosphere around them--from schools, colleges, books, magazines, newspapers, movies, television, etc." #QotD

"The men who are not interested in philosophy need it most urgently: they are most helplessly in its power. [They] absorb its principles from the cultural atmosphere around them--from schools, colleges, books, magazines, newspapers, movies, television, etc."
          ~ Ayn Rand, from her address 'Philosophy: Who Needs It?'
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"Increasingly, it feels like the Christchurch atrocity is what happens when the politics of identity, the reduction of everyone to cultural or racial creatures comes to be the only game in public life... The identitarian impulse has catastrophically divided society." Bonus #QotD

"[W]hat feels terrifyingly mainstream about the ideas that appear to have energised and inspired this racist mass murderer [are] the politics of identity. To read the killer’s alleged manifesto ... is to gain a horrible glimpse into the cultural fragmentation and racial paranoia unleashed by the relentless rise of identitarianism. Increasingly, it feels like the Christchurch atrocity is what happens when the politics of identity, the reduction of everyone to cultural or racial creatures whose relationship with other cultural and racial cultures must be monitored and managed, comes to be the only game in public life.
    "The killer seems to see himself as little more than a cultural being. In his seeming manifesto he professes commitment to the warped ethos of ethno-nationalism and continually refers to himself as white. He can see no identity for himself beyond the one he inherited by birth. Strikingly, the killer appears to say that his attack was done in the name of diversity – he says he wants ‘diverse peoples to remain diverse’, meaning identity groups must remain ‘separate, unique, undiluted, unrestrained in… cultural expression’. This sounds chillingly similar to the separatist ethos of the identitarian outlook, in which ‘cultural appropriation’ is a sin and anyone who seeks to speak up for other races or cultures risks being reprimanded with the words, ‘Stay in your lane’. The killer’s belief in cultural purity is of a piece with the identitarian worldview...
    "The identitarian impulse has catastrophically divided society. It has nurtured cultural and racial conflict. It has given rise to a grotesque game of competitive grievance. It has had an inexorably fragmentary impact, ripping the social fabric. We are now actively invited to think racially, behave racially, conceive of ourselves as little more than white men or black women or whatever, and to engage with people through a racially and culturally heightened perspective: check your white privilege, watch your microaggressions, 'stay in your cultural lane,' etc. It would be remarkable if such a depraved culture did not help to nurture new forms of violence. Christchurch confirms that identitarianism is now a scourge of the violent right as well as the woke left...
    "[I]if we want to limit the attraction of such violent identitarian thinking, such vicious cultural paranoia, we must urgently make the case for a new humanist politics in which your character and humanity count for more than your skin colour and your heritage. The war of identities must end, whether it’s in public life or bloodstained places of worship."
          ~ John Ray, from his post 'The barbarism of identity politics'
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"The [Christchurch murderer] is ideologically on the same side as the Jihadists: he's moved by the idea that people are essentially parts of tribes, defined by ancestry & tradition, that are vying to 'replace' or repress one another. This idea must be opposed in all its forms." #QotD

"The [Christchurch murderer] is ideologically on the same side as the Jihadists: he's moved by the idea that people are essentially parts of tribes, defined by ancestry & tradition, that are vying to 'replace' or repress one another. This idea must be opposed in all its forms." 

          ~ Greg Salmieri
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"People are playing politics with evil while human lives are lost to hate. The 1930s never looked so close, from so far. It didn’t have to be like this. Islamists and far-right extremists, a plague on both your houses." #QotD

"People are playing politics with evil while human lives are lost to hate. We must take stock, and recognise that by raising our political pompoms every time an event appears to confirm our narrative, and by playing up our own victimhood, we are only feeding into the recruitment narratives of all terrorist groups...
    "We have reentered an era of competing extremes. The 1930s never looked so close, from so far. It didn’t have to be like this. Islamists and far-right extremists, a plague on both your houses."
          ~ Maajid Nawaz, from his article 'Here's How Islamists and the Far Right Feed Off Each Other'.

The Killer Had An Ideology

Guest post by Jeffrey Tucker

“Sir Oswald Mosley is the person from history closest to my own beliefs.” These are the words of the bloody murderer in Christchurch who has shocked the world with gore and reminded us all of the presence of profound evil in our world. It should also remind us of the murderous power of malevolent ideology. Ideology is a force in our world that can and does overcome every theory of decency and morality.

To deconstruct the killer’s ideology, it is best to begin with his own recommendation. Sir Oswald Mosley (1896-1980) was in some ways a clownish figure in interwar English politics, a former Tory MP and Labour Party minister, a displaced member of a once-powerful aristocratic class who warmed to fascist ideology and Hitlerian politics. Speaking in parks and rallying his followers in dingy basements, he never tired of whipping up demographic panic, calling for dictatorship, and raging against the race-mixing enabled by modern commercial life.

As events unfolded and Nazism was revealed to be a murderous racial cult bent on the construction of an industrialised killing machine, Mosley was run out of the country and his organisation banned. He died in disgraced obscurity in Paris.

The ideology Mosley represented, however, lives on, and remains as exterminationist and deadly now as it was in the interwar years. In the sweep of fascist history, Mosley was a spectacle. He continues life as a folk hero among a certain set of deranged but dedicated opponents of liberalism, along with other popularisers of Hitlerian theory like George Lincoln Rockwell in the United States.

I’ve read the killer’s 87-page manifesto, posted just before the mass murder began. Yes, it celebrates Mosley. It also invokes every trope of what is called alt-right politics, or what is more precisely identified as right-wing Hegelian collectivism, complete with its tribalism, longing for control, exterminationist aspirations, anti-capitalism, and panic about birth rates (the anarchy of human reproduction terrifies them). Even his supposed love of nature and the environment has precedent in certain brands of fascist politics (right Hegelians believe that the commercial use of natural resources is dysgenic).

It’s a long tradition of thought, one born in reaction against the progress of liberalism in the early 19th century. The ideology built a bit at a time over the decades (in parallel to the other anti-liberal tradition of Marxism), rolling out objections to core beliefs of the modern world that were breaking down tribal barriers, blurring class distinctions, increasing contacts between peoples, and diminishing government power and the influence of leaders.

In the mid-19th century, the reigning king of proto-fascist thought was Thomas Carlyle, who decried the end of slavery, the rise of free trade, and the dethronement of great leaders. He despised capitalism but didn’t consider himself a socialist or communist; he was instead a nationalist and reactionary. He set the stage for the rise and persistence of a new ideology of control that was reactionary and revanchist at its core. It demanded back (what it imagined to be) the old world of hierarchy, separation, and elite control of resources.

The forces of reaction built over time. It was, as I’ve written, contributed to by the protectionist Friedrich List, the romantic Luddite John Ruskin, the reactionary Houston Stewart Chamberlain, the fashionable race theorist Frederick Hoffman, the Darwinian preservationist Madison Grant, the eugenicist Charles Davenport, the IQ theorist Henry Goddard, the communist turned Nazi philosopher Werner Sombart, the officious puritan misogynist Edward A. Ross, the brooding historicist Oswald Spengler, the anti-Semitic poet Ezra Pound, the Nazi jurist Carl Schmitt, the radio populist priest Charles Edward Coughlin, the pretend-baron and violence worshiping Julius Caesar Evola, the jailed millenarian Francis Parker Yockey, and so many more.

What unites all their views is a worship of power, the sacralising of violence, the dismissal of individual choice, the loathing of the cooperative commercial society, and the adoration of the state. Of course one name stands out in the 20th century as their martyr and hero.

Despite the vanquishing of the architect of the Holocaust, this ideology continues to have a massive presence in our world. It has virtually no life at all in any academic setting, of course, but it has a huge presence in the darkest corners of opinion in many parts of the world. But precisely because of this chasm between respectable academia and trash-talking racist culture, we can sometimes be deceived about the violent threat this alternative form of collectivism represents to civilisation.

As we see from the killer’s manifesto, he was disgusted by commercial life and wanted conflict more than anything. Only a war of tribes would save the world from demographic and environmental disaster, in his view. He was impatient to see it begin. He believed that it was his personal responsibility to give the historical narrative a kick in the right direction, human rights and morality be damned.

It’s possible to commit heinous crimes without carrying around a wicked ideology to inspire and grant cover. But ideology can help embolden the mind with delusions that your evil acts are actually blessed by the forces of history, and that the blood you spill is not senseless killing but rather part of some needed corrective to the unfolding narrative of which you and your people have lost control.

How to combat this wickedness? The post-killing narrative will be is already filled with calls for gun control, controls on the Internet, controls on social media, more power for states to crack down on association and speech. This is precisely what the killer hoped to bring about, in his own words: “To incite violence, retaliation, and further divide… To create an atmosphere of fear and change in which drastic, powerful and revolutionary action can occur.”

The right response is to rededicate ourselves to the worldview that he hated the most, the view that rights are embedded in individuals, that people should have equal freedom to live their lives unencumbered by states and violence, that society contains within itself to capacity to manage itself without the intervention of fanatical ideologues who imagine themselves to be masters of our fate, that every single human life is worthy of dignity and deserving of respect.

The ideology of hate that spilled so much blood in Christchurch is best avenged through a new dedication to a social philosophy of love, harmony, cooperation, and freedom for all.

* * * * * 

Jeffrey Tucker is Editorial Director for the American Institute for Economic Research. He is the author of many thousands of articles in the scholarly and popular press and eight books in 5 languages. He speaks widely on topics of economics, technology, social philosophy, and culture.
This post first appeared at the AIER blog.

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"It is absurd that a man should be ashamed of an inability to defend himself with his limbs, but not ashamed of an inability to defend himself with speech and reason." #QotD

"It is absurd that a man should be ashamed of an inability to defend himself with his limbs, but not ashamed of an inability to defend himself with speech and reason." 

          ~ Aristotle, On Rhetoric 

[Hat tip Bernard Darnton (whose graphic that is above) from his superb presentation 'From Informative to Persuasive']
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"The descent of [UK] politics into a dinner theatre of dissemblers is complete. If the last year doesn't entirely discredit the notion of a professional ruling class, nothing will." #BrexitBetrayal #QotD

"It is almost three years since Britain voted to leave the European Union, and less than three weeks till it's supposed to happen. As of now, no one knows what, if anything, will actually occur on that day. However, one consequence of the last three years is clear: David Cameron, an open Remainer, was succeeded by Theresa May, a sotto voce Remainer reborn representing herself as a can-do Brexiteer. Instead, she has remade almost the entire UK political class in her own malign image. Almost every utterance from anybody in the Palace of Westminster now rings bogus: former Remainers silkily purport to be "delivering Brexit" by supporting a May deal that subverts it; hardcore Brexiteers of the Gove school turn out to be squishier-than-thou types; Jeremy Corbyn, a visceral Europhobe, pretends to be in favour of a second referendum to keep the sophisticates of the metropolitan media on side; and any number of run-of-the-mill MPs are hoping their colleagues will pass May's deal while they themselves vote against it to preserve deniability on charges of a sellout...    "Nothing is what it seems, although even that may not be what it seems. The descent of politics into a dinner theatre of dissemblers is complete. If the last year doesn't entirely discredit the notion of a professional ruling class, nothing will." 

          ~ Mark Steyn, from his latest Monday Notebook
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"To suppress free speech is a double wrong. It violates the rights of the hearer as well as those of the speaker." # QotD

"To suppress free speech is a double wrong. It violates the rights of the hearer as well as those of the speaker." 

          ~ Frederick Douglass

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"In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual.” #QotD

"In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual.” 

           ~ Galileo Galilei (1564 - 1642)
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"The environmental movement lives in a state of denial regarding the relationship between economic growth and environmental quality" # QotD

"The environmental movement lives in a state of denial regarding the relationship between economic growth and environmental quality, e.g. per @MaxCRoser,'the OECD's Better Life Index correlates with GDP": 

~ based on Jim Rose's post 'Richer is greener: environmentalists are Environmental Kuznets Curve deniers'
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"There is good and bad and there is right and wrong. That doesn't change depending on the geographical location that someone is born in. We can't turn a blind eye to atrocities just because it’s part of somebody’s culture." #QotD

"There is good and bad and there is right and wrong. That doesn't change depending on the geographical location that someone is born in. We can't turn a blind eye to atrocities just because it’s part of somebody’s culture."
          ~ Yasmine Mohammed on why she set up #NoHijabDay.

"The mainstream Catholic Church regarded all of this as blasphemy. Children were to be understood as dangerous bundles of instincts needing to be tamed by discipline, authority and the threat (often the daily reality) of violence." #QotD

"On the one hand, some Catholic religious orders like the Ursulines and the Dominicans, as well as some non-Catholic groups like the Quakers, were highly receptive to [Maria] Montessori’s ideas that children are independent creatures with imaginations of their own that can be developed in a structured but nurturing environment.
    "On the other, the mainstream Catholic Church, speaking through Fr Timothy Corcoran, (the historian Brian Titley calls him the church’s 'watchdog' on educational matters and thus 'the most influential figure in shaping the education system which emerged in the new Irish State'), regarded all of this as blasphemy. Children were to be understood as dangerous bundles of instincts needing to be tamed by discipline, authority and the threat (often the daily reality) of violence."
          ~ Fintan O'Toole, from his article 'Ireland’s education system was rigid and violent'

[Hat tip Maria Montessori Education Foundation]
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"I am proud of the fact that my secondary education was not paid for by the taxpayers of New Zealand but by the farmers of Canterbury and Hawke’s Bay. I ripped them off for 5 years then, and I shall get stuck into them again in the next few years..." #QotD

"I am proud of the fact that my secondary education was not paid for by the taxpayers of New Zealand but by the farmers of Canterbury and Hawke’s Bay. I ripped them off for 5 years then, and I shall get stuck into them again in the next few years..." 

~ former finance minister Michael Cullen (just confirmed as being paid $1062 per day to continue defending the Tax Working Group's envy taxes, despite the Group's disbanding) quoted from his maiden speech in Parliament, 23 April, 1982

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"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." #QotD

"There is no difference between communism and socialism, except in the means of achieving the same ultimate end: communism proposes to enslave men by force, socialism—by vote. It is merely the difference between murder and suicide." 

          ~ Ayn Rand, taken from the Ayn Rand Lexicon entry on Socialism

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"Wealth Itself Is a Process, Not a Hoard of Stuff" #QotD

"To speak of ‘having’ wealth creates a dangerous misimpression. We are wealthy not because we have somewhere in a holding pen a gargantuan stock of stuff called 'wealth' that we, either individually or collectively, can access and then somehow distribute. No such massive store of real wealth exists.
    "Instead, we are wealthy because we live our daily lives as part of a global process of wealth creation and distribution. This process consist of every activity from bakers awakening early each morning to prepare the muffins that we buy at Au Bon Pain to Wall Street wizards assuming personal risks as they direct financing to where it will be most productive. Because state intervention too often slows and distorts this process much as sand slows and distorts the operation of gears, state intervention obstructs the daily process of creating and distributing the real goods and services of which our wealth actually consists.
    "In short, if this process of wealth creation is slowed, we become less wealthy because, again, our wealth is not accumulated stuff; it is the smooth and successful 24/7/365 operation of a process of producing goods, services, and capital goods."
          ~ Don Boudreaux, from his post 'Wealth Itself Is a Process, Not a Hoard of Stuff'
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"A government that considers the scale of its spending to be proof of its virtue is an easy mark for hucksters and worse." #QotD

"A government that considers the scale of its spending to be proof of its virtue is an easy mark for hucksters and worse."
          ~ Paul Wells, quoted in Eric Crampton's post 'Oh Canada'

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"Sensing their slip to under 5%, the Greens seem to have decided that gerrymandering MMP for their benefit in time for the 2020 Election is preferable to dumping the Middle Class Woke Identity Politics that is making them so alienating and unelectable in the first place..." Bonus #QotD

"Sensing their slip to under 5%, the Greens seem to have decided that gerrymandering MMP for their benefit in time for the 2020 Election is preferable to dumping the Middle Class Woke Identity Politics that is making them so alienating and unelectable in the first place...    "I expect this kind of ruthless corruption of the electoral system from National, ACT and MANA on a good day, but [not] from the Greens ... 

    "Note that it’s not 1%, 2% or 3% ... oh no, it’s 4%, [which just so happens to be] the threshold that would most benefit the Greens while killing off any other proto-political movement." 

          ~ Martyn Bradbury

RELATED:

• Danyl Mclaughlan on "the terrible, terrible optics of a political party that is part of the government, and hovering just above the 5% threshold in the recent round of polls – and which routinely under-performs the polls on election day – attempting to alter the electoral system to its own advantage and consider the 5% threshold itself."

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"The free market is blind to politics, religion, sexual behaviour, and, yes, race. Do you ask about the politics or the religion of the farmer who grew the potatoes you buy at the store? Do you ask about the colour of the hands that helped produce the steel you use in your office building?" #QotD

"The free market protects the integrity of the individual by providing him with a host of decentralised alternatives rather than with one centralised opportunity. Even the known communist can readily find employment in capitalist America. The free market is blind to politics, religion, sexual behaviour, and, yes, race. Do you ask about the politics or the religion of the farmer who grew the potatoes you buy at the store? Do you ask about the colour of the hands that helped produce the steel you use in your office building?"
          ~ Benjamin Rogge, quoted in a post at Cafe Hayek.

'The Tax Collector's Office,' by Pieter Brueghel the Younger

'The Tax Collector's Office,' by Pieter Brueghel the Younger: People's lives, livings and the full extent of their possessions are weighed in the balance and disposed of by smug, well-fed, self-serving scum -- owners and owned like tossed aside just like so much refuse. 

Story of the painting itself from the South Australian Gallery, where the painting now resides:

The Tax-Collector's Office is one of approximately forty copies by the artist of a lost painting by his much more famous father, Pieter Brueghel the elder. It shows a group of poor Flemish villagers waiting patiently to submit their taxes not in cash but in baskets of eggs, poultry, game and other produce. A prosperously-dressed tax-collector, assisted by a staff of half-witted clerks, is shown peering at a parchment behind a counter laden with piles of documents and money-bags. The artist mocks the wastefulness of this hive of bumbling officials by showing mountainous bundles of cancelled bills and receipts spilling carelessly across the office floor.

Death and taxes? How about death, desolation, wastefulness and tax collectors. Funny how the four seem to fit together.

[Image from Wikipedia Commons]
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"The taxation review has been trumpeted as being all about 'fairness.' But how fair is it to tax the residual value of a business which has had to survive in an unsympathetic, highly regressive & often ideologically-hostile environment ... only to find that at the end of a difficult journey, a rapacious government will requisition 33% of their realisation, in the name of 'fairness'?" Bonus #QotD

"Our Prime Minister assures farmers and small business owners that they have 'nothing to fear’ from a proposed capital gains tax.
    "But they have much to fear.
    "Why? Because small businesses already have to deal with an overwhelmingly onerous, highly regressive, taxation compliance regime, to which they must conform, at considerable cost ,with significant financial and personal penalties if they do not.
    "These include: company tax; income tax on salaries and drawings; fringe benefit tax; goods and services tax(GST); ACC levies; resident withholding tax on investments or dividends such as a shareholding in a partnering business; imputation tax issues; employer subsidy contributions; the cost of filing annual returns; franchise fees. The list goes on and on.
    "The cost of complying with these government requirements is already astronomical for small businesses. The Cullen-led Tax Working Group appears to be both ignorant of and unsympathetic to the fact that these compliance costs are hugely regressive. The cost of compliance as a proportion of turnover is far higher for small businesses than for larger businesses.
    "Small businesses account for 50-60%of all employees. They provide us with personal services, shops, restaurants, and trades, to name just a few.
    "Imagine your community without these facilities? ...
    "The taxation review has been trumpeted as being all about 'fairness.'
"But how fair is it to tax the residual value of a business which has had to survive in an unsympathetic, highly regressive and often ideologically-hostile environment requiring owners to expend huge personal effort, time and money over many years, only to find that at the end of a difficult journey, a rapacious government will requisition 33% of their realisation, in the name of 'fairness'?" 

~ Professor Martin Devlin, emeritus professor of management from Massey University, from his post 'Small Businesses Beware'.

"The musician pays a price in order to play music. The only reward the musician receives is music: the privilege of standing in the presence of music when it leans over and takes us into its confidence. For those in music, this is the moment when life becomes real." #QotD

"The musician [pays a price] in order to play music... The only reward the musician receives is music: the privilege of standing in the presence of music when it leans over and takes us into its confidence. As it is for the audience. In this moment everything else is irrelevant and without power. For those in music, this is the moment when life becomes real... 

    "May we trust the inexpressible benevolence of the creative impulse. When all is impossible and without hope, may we trust this inexpressible benevolence ... and listen to its silent voice with a quiet ear." 

          ~ guitarist Robert Fripp, from the liner notes to King Crimson's Great Deceiver, Vol. I. 

"A border is a geographic limit on the power of government. A border is not a limit on the rights of people." # QotD

"A border is a geographic limit on the power of government. A border is not a limit on the rights of people. 

     "This confusion as to whether it is government or people who have unlimited rights is at the heart of the liberty movement, from its inceptions at least back to the Magna Carta and certainly 18th century England." 

          ~ Keith Weiner, commenting on a misconception of the nature of borders, rights and government

RELATED LINKS:

• The 14 Most Common Arguments against Immigration and Why They’re Wrong
  Alex Nowrasteh, CATO INSTITUTE
• The Case for Unbounded Immigration
  Vinay Kolhatkar, THE SAVVY STREET
• Amnesty For Illegal Immigrants Is Not Enough, They Deserve An Apology
  Harry Binswanger, FORBES
• A Defence of a Policy of Absolutely Open Immigration
  Harry Binswanger, BINSWANGER LIST

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"Here’s a radical idea: no child should get a high-school certificate if they can’t answer the question 'which political ideology caused the most deaths in the last 100 years'? The answer starts with a 'C', and if you say Capitalism you have to repeat a year, and so do your teachers." #QotD

"Here’s a radical idea: no child should get a high-school certificate if they can’t answer the question 'which political ideology caused the most deaths in the last 100 years'? The answer starts with a  'C', and if you say Capitalism you have to repeat a year, and so do your teachers."
          ~ Jo Nova from her post 'Millennials haven’t forgotten Mao, Stalin or Lenin. They never knew them.'
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"If a man proposes to redistribute wealth, he means explicitly and necessarily that the wealth is his to distribute. If he proposes it in the name of the government, then the wealth belongs to the government; if in the name of society, then it belongs to society." #QotD

"If a man proposes to redistribute wealth, he means explicitly and necessarily that the wealth is his to distribute. If he proposes it in the name of the government, then the wealth belongs to the government; if in the name of society, then it belongs to society."
          ~ Robert Alonzo 

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"Capital has value only to the extent it is used to serve consumers. So who owns the means of production doesn't matter, since its value is zero (!) unless used to satisfy other people's wants. Really, capital isn't power." #QotD

"Capital has value only to the extent it is used to serve consumers. So who owns the means of production doesn't matter, since its value is zero (!) unless used to satisfy other people's wants. Really, capital isn't power."
          ~ Per Bylund 

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An important notice to all readers: If you want to get your hands on a ready-made pre-loved home by Organon Architecture (yes folks, that's by me, your humble correspondent) then here is your chance -- a home in Hamilton very much loved by its owners, who are moving to a new opportunity and new home in another city so need to find the right owner for this one.

Says the blurb:

The design is timeless, the combination of raked ceilings and lowered 'ceiling decks' cleverly defines spaces within the open-plan living areas.
When featured in House 'n' Lifestyle magazine, this property was described as '... a meld of dwelling and garden that's innovative, subtle and clever.'

So if you or anyone you know is in the market for a place set in landscaped native bush and just a stroll away from downtown Hamilton, give this some serious thought.

[Photos by Lodge Real Estate]

In a division-of-labour society, the beneficiaries of capital gains are all of us. #capitalgainstax

It's only early days in the reaction to the proposals by Michael Cullen's Tax on Working Group (well, only just a day, and hyperbole on all sides is off the hook) but it seems to me that focussing only on houses, as so much of the commentariat and many of the critics have been doing, is taking your eye dangerously off the ball.

After all, as Amy Adams boasted this morning, the Nats in their last term already imposed a capital gains tax on any house sold if owned for less than five years -- which is just one reason her Blue Team have zero credibility when it comes to protesting about this tax (or, indeed, any tax). But also a serious reason why this will neither encourage capital into more productive uses (but instead, as I argue below, the opposite), nor do anything at all to make housing more affordable.

For those who do think a Capital Gains Tax on houses would solve the housing crisis, let them reflect that it did no such thing in any western city in the world that did have a capital gains tax on housing (London, Sydney, Vancouver, Los Angeles) and still experienced massive house-price inflation. And nor could it not being the real reason for the house-price inflation in any of these places.

I would suggest those folk who are truly concerned with curbing house-price inflation look instead to cure the monetary pumping that has underpinned the explosion in monetary demand, and to remove the shackles on land and building that have constrained supply. These are the real cures for the housing affordability disaster for which both the Red Team and the Blue Team share responsibility, and for which neither seem willing to cure.

So why is focussing only on housing so potentially destructive? For one reason, that's not where the true destruction caused by such a tax really lies (a tax, let us not forget, that it is recommended be set at an eye-watering and world-record rate of 33 per cent for everyone earning over $70,000 a year in their day job). And also because, for the most part, the folk supporting such a tax don't understand the destruction it would cause -- and seem so wound up simply by envy that they don't care -- even if, as it will, it affects them.

It will affect them because real use of capital is not what's tied up in houses, it is productive capital put to work -- advancing the wages that income-earners spend; starting up the businesses that produce the goods and services on which we all depend; being continually reinvested in those businesses to create the increasing prosperity on which we have all come to depend.

Productive capital is the seed corn of all future prosperity. If a tax on smoking is intended to discourage smoking, a tax on alcohol is intended to discourage drinking, and a tax on carbon is intended to discourage producing CO2, what do you think a tax on capital gains will do to the incentive to use and reinvest capital productively? 

Because there are many other things the owners of capital could do with it. Put simply, the choices are always two: to consume it, or to reinvest it. (And if they save or buy shares or other industrial assets, the money capital is reinvested on their behalf.) Contrary to popular and envy-ridden opinion, the owners of capital are not "petty spoilt children sitting on a pile of toys they refuse to share" (as one envy-ridden twitterer tweeted this morning). The vast majority is neither hoarded nor consumed: it is reinvested -- and as  economist George Reisman explains in this timely guest post, if that reinvestment were positively discouraged, those who depend on that continual reinvestment (i.e, all of us) will be very much worse off. Sadly however,

the overwhelming majority of our contemporaries, ranging from the illiterate to the highly educated, are utterly ignorant of the role of privately owned means of production—capital—in the economic system. As they see matters, wealth in the form of means of production and wealth in the form of consumers’ goods are essentially indistinguishable. For all practical purposes, they have no awareness of the existence of capital and of its importance. Thus, capitalists are generally depicted as fat men, whose girth allegedly signifies an excessive consumption of food and of wealth in general, while their alleged victims, the wage earners, are typically depicted as substantially underweight, allegedly signifying their inability to consume, thanks to the allegedly starvation wages paid by the capitalists. 

    The truth is that in a capitalist economic system, the wealth of the capitalists is not only overwhelmingly in the form of means of production, such as factory buildings, machinery, farms, mines, stores, warehouses, and means of transportation and communication, but all of this wealth is employed in producing for the market, where its benefit is made available to everyone in the economic system who is able to afford to buy its products...

    However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well-being, including their own. 

In other words, as he explains in this post from 2011 (when anti-Wall Street protest was rife), in a division-of-labour society the beneficiaries of capital gains are all of us.

In Praise of the Capitalist 1 Percent

Guest post by George Reisman

"The wealth of the 1 percent provides the standard of living of the 99 percent."

The protesters in the Occupy Wall Street movement and its numerous clones elsewhere in the country and around the world chant that 1 percent of the population owns all the wealth and lives at the expense of the remaining 99 percent. The obvious solution that they imply is for the 99 percent to seize the wealth of the 1 percent and use it for their benefit rather than allowing it to continue to be used for the benefit of the 1 percent, who are allegedly undeserving greedy capitalist exploiters. In other words, the implicit programme of the protesters is that of socialism and the redistribution of wealth.

Putting aside the hyperbole in the movement's claim, it is true that a relatively small minority of people does own the far greater part of the wealth of the country. The figures "1 percent" and "99 percent," however exaggerated, serve to place that fact in the strongest possible light.

What the protesters do not realise is that the wealth of the 1 percent provides the standard of living of the 99 percent.

The protesters have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.

In such a world, if one sees a farmer's field, or his barn, or plow, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people's means of production except by inheriting them or by seizing them.

In the world of the protesters, means of production have the same essential status as consumers' goods, which as a rule are of benefit only to their owners. It is because of this that those who share the mentality of the protesters typically depict capitalists as fat men, whose plates are heaped high with food, while the masses of wage earners must live near starvation. According to this mentality, the redistribution of wealth is a matter merely of taking from the overflowing plates of the capitalists and giving to the starving workers.

Contrary to such beliefs, in the modern world in which we actually live, the wealth of the capitalists is simply not in the form of consumers' goods to any great extent. Not only is it overwhelmingly in the form of means of production, but those means of production are employed in the production of goods and services that are sold in the market. Totally unlike the conditions of self-sufficient farm families, the physical beneficiaries of the capitalists' means of production are all the members of the general consuming public who buy the capitalists' products.

For example, without owning so much as a single share of stock in General Motors or Exxon Mobil, everyone in a capitalist economy who buys the products of these firms benefits from their means of production: the buyer of a GM automobile benefits from the GM factory that produced that automobile; the buyer of Exxon's gasoline benefits from its oil wells, pipelines, and tanker trucks. Furthermore, everyone benefits from their means of production who buys the products of the customers of GM or Exxon, insofar as their means of production indirectly contribute to the products of their customers. For example, the patrons of grocery stores whose goods are delivered in trucks made by GM or fuelled by diesel oil produced in Exxon's refineries are beneficiaries of the existence of GM's truck factories and Exxon's refineries. Even everyone who buys the products of the competitors of GM and Exxon, or of the customers of those competitors, benefits from the existence of GM's and Exxon's means of production. This is because GM's and Exxon's means of production result in a more abundant and thus lower-priced supply of the kind of goods the competitors sell.

"The physical beneficiaries of the capitalists' means of production are all the members of the general consuming public who buy the capitalists' products."

In other words, all of us, 100 percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate. As just indicated, the oil fields and pipelines of the hated Exxon corporation provide the fuel that powers the tractors and trucks that are essential to the production and delivery of the food the protesters eat. The protesters and all other haters of capitalists hate the foundations of their own existence.

The benefit of the capitalists' means of production to non-owners of means of production extends not only to the buyers of the products of those means of production but also to the sellers of the labor that is employed to work with those means of production. The wealth of the capitalists, in other words, is the source both of the supply of products that non-owners of the means of production buy and of the demand for the labor that non-owners of the means of production sell. It follows that the larger the number and greater the wealth of the capitalists, the greater is both the supply of products and the demand for labor, and thus the lower are prices and the higher are wages, i.e., the higher is the standard of living of everyone. Nothing is more to the self-interest of the average person than to live in a society that is filled with multibillionaire capitalists and their corporations, all busy using their vast wealth to produce the products he buys and to compete for the labor he sells.

Nevertheless, the world the protesters yearn for is a world from which the billionaire capitalists and their corporations have been banished, replaced by small, poor producers, who would not be significantly richer than they themselves are, which is to say, impoverished. They expect that in a world of such producers, producers who lack the capital required to produce very much of anything, let alone carry on the mass production of the technologically advanced products of modern capitalism, they will somehow be economically better off than they are now. Obviously, the protesters could not be more deluded.

In addition to not realising that the wealth of the so-called 1 percent is the foundation of the standard of living of the so-called 99 percent, what the protesters also do not realise is that the "greed" of those who seek to become part of the 1 percent, or to enlarge their position within it, is what serves progressively to improve the standard of living of the 99 percent.

Of course, this does not apply to wealth that has been acquired by such means as obtaining government subsidies or preventing competition through protective tariffs and other forms of government intervention. These are methods that are made possible to the extent that the government is permitted to depart from a policy of strict laissez-faire and thereby arbitrarily reward or punish firms.

Apart from such aberrations, the way that business fortunes are accumulated is by means of the high profits generated by the introduction of new and improved products and more efficient, lower-cost methods of production, followed by the heavy saving and reinvestment of those high profits.

"All of us, 100 percent of us, benefit from the wealth of the hated capitalists."

For example, the $6 billion fortune of the late Steve Jobs was built on a foundation of Mr. Jobs having made it possible for Apple Computer to introduce such new and improved products as the iPod, the iPhone, and the iPad, and then heavily saving and reinvesting the share of the profits that came to him.

Two closely related points need to be stressed. First, the fortunes that are accumulated in this way generally serve in the larger-scale production of the very sort of products that provided the profits out of which their accumulation took place. Thus, for example, Jobs's billions serve largely in the production of Apple's products. Similarly, old Henry Ford's great personal fortune, earned on the foundation of introducing major improvements in the efficiency of automobile production, which brought down the price of a new automobile from about $10,000 at the beginning of the 20th Century to $300 in the mid 1920s, was used to make possible the production of millions of Ford automobiles.

Second, the high rates of profit earned on new and improved products and methods of production are temporary. As soon as the production of the new product or use of the new method of production becomes the norm in an industry, it no longer provides any exceptional profitability. Indeed, further improvements again and again render earlier improvements downright unprofitable. For example, the first generation of the iPhone, which was highly profitable just a few years ago, is or soon will be unprofitable, because further advances have rendered it obsolete.

As a result, the accumulation of great business fortunes generally requires the introduction of a series of improvements in products or methods of production. This is what is required to maintain a high rate of profit in the face of competition. For example, Intel's ability to maintain its high rate of profit over the years has depended on its ability to introduce one substantial improvement in its computer chips after another. The net effect has been that computer users have gotten the benefit of improvement after improvement not only at no rise but a drastic decline in the prices of computer chips. Insofar as high profits rest on low costs of production, competition drives prices down to correspond to the lower level of costs, which necessitates the achievement of still further cost reductions to maintain high profits.

The same outcome, of course, applies not only to Intel and microprocessors but also to the rest of the computer industry, where gigabytes of memory and terabytes of hard-drive data storage now sell at prices below the prices of megabytes of memory and hard-drive data storage just a couple of decades ago. Indeed, if one knows how to look, the principle of ever more and better products for less and less applies throughout the economic system. It is present in the production of food, clothing, and shelter as well as in the high-tech industries, and in virtually all industries in between.

"The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate."

It is present in these industries even though the government's inflation of the money supply has caused the prices of their products to rise sharply over the years. Despite this, when calculated in terms of the amount of labour the average person must expend in order to earn the wages needed to enable him to buy these products, their prices have sharply fallen.

This can be seen in the fact that today, the average worker works 40 hours per week, while a worker of a century or so ago worked 60 hours a week. For the 40 hours he works, the average worker of today receives the goods and services comprising the average standard of living of 2011, which includes such things as an automobile, refrigerator, air conditioner, central heating, more and better living space, more and better food and clothing, modern medicine and dentistry, motion pictures, a computer, cell phone, television set, washer-dryer, microwave oven, and so on. The average worker of 1911 either did not have these things at all or had much less of them and of poorer quality.

If we describe the goods and services received by the average worker of today for his 40 hours of labor as being 10 times as great as those received by the average worker of 1911 for his 60 hours of labor, then it follows that, expressed in terms of the amount of labor that needs to be performed today in order to be able to buy goods and services equivalent to the standard of living of 1911, prices have fallen to two-thirds of one-tenth of their level in 1911, i.e., to one-fifteenth of their level in 1911, which is to say, by 93 1/3 percent.

Capitalism — laissez-faire capitalism — is the ideal economic system. It is the embodiment of individual freedom and the pursuit of material self-interest. Its result is the progressive rise in the material well-being of all, manifested in lengthening life spans and ever-improving standards of living.

The economic stagnation and decline, the problems of mass unemployment and growing poverty experienced in the United States in recent years, are the result of violations of individual freedom and the pursuit of material self-interest. The government has enmeshed the economic system in a growing web of paralyzing rules and regulations that prohibit the production of goods and services that people want, while compelling the production of goods and services they don't want, and making the production of virtually everything more and more expensive than it needs to be. For example, prohibitions on the production of atomic power, oil, coal, and natural gas, make the cost of energy higher and in the face of less energy available for use in production, require the performance of more human labor to produce any given quantity of goods. This results in fewer goods being available to remunerate the performance of any given quantity of labor.

Uncontrolled government spending and its accompanying budget deficits and borrowing, along with the income, estate, and capital gains taxes, all levied on funds that otherwise would have been heavily saved and invested, drain capital from the economic system. They thus serve to prevent the increase in both the supply of goods and the demand for labor that more capital in the hands of business would have made possible. They have now gone far enough to have begun actually to reduce the supply of capital in the economic system in comparison with the past.

"It turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe."

Capital accumulation is also impaired, and can ultimately be turned into capital decumulation, through the effects of additional government regulation in raising the costs of production and thus reducing its efficiency. This applies to practically all of the regulations imposed by the Environmental Protection Agency, the Occupational Safety and Health Administration, the Consumer Product Safety Commission, the National Labor Relations Board, the Food and Drug Administration, and the various other government agencies. The effect of their regulations is that for any given amount of labor performed in the economic system, there is less product than would otherwise be produced.

Now anything that serves to reduce the ability to produce in general serves also to reduce the ability to produce capital goods in particular. Because of such government interference, any given amount of labor and capital goods devoted to the production of capital goods results in a smaller output of capital goods, just as any given quantity of labor and capital goods devoted to the production of consumers' goods results in a smaller output of consumers' goods. At a minimum, the reduced supply of capital goods produced serves to reduce the rate of economic progress. A reduction in the supply of capital goods produced great enough to prevent the addition of any increment to the previously existing supply of capital goods, and thus to put an end to capital accumulation, brings economic progress to a complete halt. A still greater reduction, one that renders the supply of capital goods produced less than the supply being used up in production, constitutes capital decumulation and thus a decline in the economic system's ability to produce. As indicated, the United States already appears to be at this point.

The problem of capital decumulation has been greatly compounded as the result of massive credit expansion induced by the Federal Reserve System and its policy of easy money and artificially low interest rates. This policy led first to a great stock-market bubble and then a vast housing bubble, as large quantities of newly created money poured into the stock market and later the housing market. Between these two bubbles, trillions of dollars of capital were lost. In both instances, vast overconsumption occurred as people raced to buy such things as new automobiles, major appliances, vacations, and all kinds of luxury goods that they would not have believed they could afford in the absence of the effects of credit expansion, often incurring substantial debt in the process.

In the one case, it was the artificial rise in stock prices that misled people into believing that they could afford these things. In the other, it was the artificial rise in home prices that produced this result. The seeming wealth vanished with the fall in stock prices and then again, later, with the fall in housing prices. In the housing bubble, moreover, millions of homes were constructed for people who could not afford to pay for them. All of this represented a huge loss of capital and thus of the ability of business to produce and to employ labor. It is this loss of capital that is responsible for our present problem of mass unemployment.

Despite this loss of capital, unemployment could be eliminated. But given the loss of capital, what would be required to accomplish this is a fall in wage rates. This fall, however, is made virtually illegal as the result of the existence of minimum-wage laws and pro-union legislation. These laws prevent employers from offering the lower wage rates at which the unemployed would be reemployed.

Thus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe. It is their mentality, the Marxism that permeates it, and the government policies that are the result, that are responsible for what they complain about. The protesters are, in effect, in the position of being unwitting flagellants. They are beating themselves left and right and as balm for their wounds they demand more whips and chains. They do not see this, because they have not learned to make the connection that in violating the freedom of businessmen and capitalists and seizing and consuming their wealth, i.e., using weapons of pain and suffering against this small hated group, they are destroying the basis of their own well-being.

However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well-being, including their own.

_______________________________________________________________________________________________

George Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics and the author of Capitalism: A Treatise on Economics(Ottawa, Illinois: Jameson Books, 1996; Kindle Edition, 2012). See his Amazon.com author's page for additional titles by him. His website is Capitalism.net and his blog is GeorgeReismansBlog.blogspot.com.

    This post was originally posted at the Mises Blog in 2011, and is used by permission. It is now available in expanded form as a Kindle download at Amazon.

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“Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?” #QotD

“Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?”
          ~ Thomas Sowell
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A word from Winston Churchill ...

"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." 

          ~ Winston Churchill.

And since the ill-named Tax Working Group will soon vomit forth, here are some more words from a few others on the self-same theme...

"To steal from one person is theft. To steal from many is taxation." 
- Jeff Daiell 

"I think coercive taxation is theft, and government has a moral duty to keep it to a minimum." 
- former Massachusetts Governor William Weld 

"See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs." 
- Dave Barry 

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” 
- Jean Baptiste Colbert 

"The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money." – Alexis De Tocqueville 

“We shall tax and tax, spend and spend, elect and elect.” 
- 'New Deal' luminary Harry Hopkins 

"Most of the presidential candidates' economic packages involve 'tax breaks,' which is when the government, amid great fanfare, generously decides not to take quite so much of your income. In other words, these candidates are trying to buy your votes with your own money." 
- Dave Barry 

“Taxation is just a sophisticated way of demanding money with menaces.” 
- Terry Pratchett 

“For every benefit you receive a tax is levied.” 
- Ralph Waldo Emerson 

"It's sad to realise that most citizens do not even notice the irony of being bribed with their own money." 
- Anon. 

"[There are dangers in] the disposition to hunt down rich men as if they were noxious beasts." 
- Winston Churchill 

"When Barbary Pirates demand a fee for allowing you to do business, it's called 'tribute money.' When the Mafia demands a fee for allowing you to do business, it's called 'the protection racket.' When the state demands a fee for allowing you to do business, it's called ‘sales tax’."
- Jeff Daiell 

"Taxation is far greater an evil than theft. It is a form of slavery. If you cannot choose the disposition of your property, you are a slave. If you must ask permission to work, and/or pay involuntary tribute to anyone from your wages, you are a slave. If you are not allowed to dispose of your life (another way of defining money, since it represents portions of your time and effort, which is what your life is composed of) in the time, manner and amount of your choosing, you are a slave." 
- Rick Tompkins 

"The man who produces while others dispose of his product is a slave."
- Ayn Rand

"Taxation without representation is tyranny." 
- James Otis 

"Taxation WITH representation ain't so hot either." 
- Gerald Barzan 

"Our forefathers made one mistake. What they should have fought for was representation without taxation." 
- Fletcher Knebel 

"When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before."
- HL Mencken 

"What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin." 
- Mark Twain 

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." 
- Ronald Reagan 

"When more of the people's sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of free government."
- former US President Grover Cleveland 

"Rulers do not reduce taxes to be kind. Expediency and greed create high taxation, and normally it takes an impending catastrophe to bring it down." 
- Charles Adams 

"The mounting burden of taxation not only undermines individual incentives to increased work and earnings, but in a score of ways discourages capital accumulation and distorts, unbalances, and shrinks production. Total real wealth and income is made smaller than it would otherwise be. On net balance there is more poverty rather than less."
- Henry Hazlitt 

"The poor of the world cannot be made rich by redistribution of wealth. Poverty can't be eliminated by punishing people who've escaped poverty, taking their money and giving it as a reward to people who have failed to escape."
- PJ O'Rourke 

"A government with the policy to rob Peter to pay Paul can be assured of the support of Paul." - George Bernard Shaw 

"Freedom is the quality of being free from the control of regulators and tax collectors. If I want to be free their control, I must not impose controls on others." 
- Hans F. Sennholz 

"There's only one way to kill capitalism--by taxes, taxes, and more taxes." 
- Karl Marx 

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
- Vladimir Lenin

"The power to tax involves the power to destroy."
- former US Supreme Court Justice John Marshall 

"Taxes are not levied for the benefit of the taxed." - Robert Heinlein 

"Taxes are the sinews of the state." 
- Cicero 

"Death and taxes are inevitable; at least death doesn't get worse every year." - Unknown  

"Be wary of strong drink. It can make you shoot at tax collectors, and miss."
- Robert Heinlein

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"I don't want to save the planet from human being; I want to improve the planet for human beings." #QotD

"I don't want to save the planet from human being; I want to improve the planet for human beings."
          ~ Alex Epstein, founder of the Center for Industrial Progress and author of The Moral Case for Fossil Fuels .