Tuesday, 26 February 2013

SUMMER SNIPPETS: ‘The Mystery of Capital’

More snippets from some of my summer reading, this time from Peruvian economist Hernando de Soto’s 2003 classic The Mystery of Capital, the work that brought home to all those who read it that what the have-nots have not is at root property rights, without which they will forever remain without.

The major stumbling block that keeps the rest of the world from benefiting from capitalism is its inability to produce capital. Capital is the force that raises the productivity of labour and creates the wealth of nations. It is the lifeblood of the capitalist system, the foundation of progress, and the one thing that the poor countries of the world cannot seem to produce for themselves, no matter how eagerly their peoples engage in all the other activities that characterize a capitalist economy.”

Even in the poorest countries the poor save. The value of savings among the poor is, in fact, immense: forty times all the foreign aid received throughout the world since 1945. In Egypt, for instance, the wealth that the poor have accumulated is worth fifty-five times as much as the sum of all direct foreign investment ever recorded there, including the Suez Canal and the Aswan Dam.
    “In Haiti, the poorest nation in Latin America, the total assets of the poor are more than 150 times greater than all the foreign investment received since the country’s independence from France in 1804. If the United States were to hike its foreign-aid budget to the level recommended by the United Nations – 0.7 per cent of national income – it would take the richest country on earth more than 150 years to transfer to the world’s poor resources equal to those that they already possess.
    “But they hold these resources in defective forms: houses built on land whose ownership rights are not adequately recorded, unincorporated businesses with undefined liability, industries located where financiers and investors cannot see them. Because the rights to these possessions are not adequately documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles where people know and trust each other, cannot be used as collateral for a loan and cannot be used as a share against an investment. In the West, by contrast, every parcel of land, every building, every piece of equipment or store of inventories is represented in a property document that is the visible sign of a vast hidden process that connects all these assets to the rest of the economy.”

One of the greatest challenges to the human mind is to comprehend and gain access to those things we know exist but cannot see. Not everything that is real and useful is tangible and visible. Time, for example, is real, but it can only be efficiently managed when it is represented by a clock or a calendar. Throughout history, human beings have invented representational systems – writing, musical notation, double-entry bookkeeping – to grasp with the mind what human hands could never touch. In the same way the great practitioners of capitalism, from the creators of integrated title systems and corporate stock to Michael Milken, were able to reveal and extract capital where others saw just junk by devising new ways to represent the invisible potential that is locked into the assets we accumulate.”

imageThe proof that property is pure concept comes when a house changes hands; nothing physically changes. Looking at a house will not tell you who owns it. A house that is yours today looks exactly as it did yesterday when it was mine. It looks the same whether I own it, rent it or sell it to you. Property is not the house itself but an economic concept about the house, embodied in a legal representation. This means that a formal property representation is something separate from the asset itself.”

For [Adam] Smith, economic specialization – the division of labour and the subsequent exchange of products in the market – was the source of increasing productivity and therefore ‘the wealth of nations’. What made this specialization and exchange possible was capital, which Smith defined as the stock of assets accumulated for productive purposes. Entrepreneurs could use their accumulated resources to support specialized enterprises until they could exchange their products for the other things they needed. The more capital was accumulated, the more specialization became possible, and the higher society’s productivity would be. Marx agreed; for him, the wealth capitalism produces presents itself as an immense pile of commodities…
     “It is, as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion.’
    … “What I take from [Smith] is that capital is not the accumulated stock of assets but the potential it holds to deploy new production. This potential is, of course, abstract. It must be processed and fixed into a tangible form before we can release it – just like the potential nuclear energy in Einstein’s brick. Without a conversion process – one that draws out and fixes the potential energy contained in the brick – there is no explosion; a brick is just a brick. Creating capital also requires a conversion process.
    “This notion – that capital is first an abstract concept and must be given a fixed, tangible form to be useful – was familiar to other classical economists. Simonde de Sismondi, the nineteenth-century Swiss economist, wrote that capital was ‘a permanent value, that multiplies and does not perish . . . Now this value detaches itself from the product that creates it, it becomes a metaphysical and insubstantial quantity always in the possession of whoever produced it, for whom this value could [be fixed in] different forms.’ The great French economist Jean Baptiste Say believed that ‘capital is always immaterial by nature since it is not matter which makes capital but the value of that matter, value has nothing corporeal about it’.
    “This essential meaning of capital has been lost to history. Capital is now confused with money, which is only one of the many forms in which it travels…”

As Aristotle discovered 2,300 years ago, what you can do with things increases infinitely when you focus your thinking on their potential. By learning to fix the economic potential of their assets through property records, Westerners created a fast track to explore the most productive aspects of their possessions. Formal property became the staircase to the conceptual realm where the economic meaning of things can be discovered and where capital is born.”

The genius of the West was to have created a system that allowed people to grasp with the mind values that human eyes could never see and to manipulate things that hands could never touch.”

Formal property is more than a system for titling, recording and mapping assets – it is an instrument of thought, representing assets in such a way that people’s minds can work on them to generate surplus value. That is why formal property must be universally accessible: to bring everyone into one social contract where they can cooperate to raise society’s productivity.”

imageA good legal property system is a medium that allows us to understand each other, make connections and synthesize knowledge about our assets to enhance our productivity. It is a way to represent reality that lets us transcend the limitations of our senses. Well-crafted property representations enable us to pinpoint the economic potential of resources so as to enhance what we can do with them. They are not ‘mere paper’: they are mediating devices that give us useful knowledge about things that are not manifestly present.”

The capacity of property to reveal the capital that is latent in the assets we accumulate is borne out of the best intellectual tradition of controlling our environment in order to prosper.”

The philosopher John Searle has noted that by human agreement we can assign ‘a new status to some phenomenon, where that status has an accompanying function that cannot be performed solely in virtue of the intrinsic physical features of the phenomenon in question’. This seems to me very close to what legal property does: it assigns to assets, by social contract, in a conceptual universe, a status that allows them to perform functions that generate capital.”

Throughout history people have confused the efficiency of the representational tools they have inherited to create surplus value with the inherent values of their culture. They forget that often what gives an edge to a particular group of people is the innovative use they make of a representational system developed by another culture. For example, Northerners had to copy the legal institutions of ancient Rome to organize themselves, and learn the Greek alphabet and Arabic number symbols and systems to convey information and calculate. And so, today, few are aware of the tremendous edge that formal property systems have given Western societies. As a result, many Westerners have been led to believe that what underpins their successful capitalism is the work ethic they have inherited, or the existential anguish created by their religions – in spite of the fact that people all over the world all work hard when they can, and that existential angst or overbearing mothers are not Calvinist or Jewish monopolies… Therefore, a great part of the research agenda needed to explain why capitalism fails outside the West remains mired in a mass of unexamined and largely untestable assumptions labelled ‘culture’, whose main effect is to allow too many of those who live in the privileged enclaves of this world to enjoy feeling superior… 
    “This is not to say that culture does not count. All people in the world have specific preferences, skills and patterns of behaviour that can be regarded as cultural. The challenge is fathoming which of these traits are really the ingrained, unchangeable identity of a people and which are determined by economic and legal constraints. Is illegal squatting on real estate in Egypt and Peru the result of ancient, ineradicable nomadic traditions among the Arabs and the Quechuas’ back-and-forth custom of cultivating crops at different vertical levels of the Andes? Or does it happen because in both Egypt and Peru it takes more than fifteen years to obtain legal property rights to desert land? In my experience squatting is mainly due to the latter. When people have access to an orderly mechanism to settle land that reflects the social contract, they will take the legal route and only a minority, like anywhere else, will insist on extra-legal appropriation. Much behaviour that is today attributed to cultural heritage is not the inevitable result of people’s ethnic or idiosyncratic traits but of their rational evaluation of the relative costs and benefits of entering the legal property system.
    “Legal property empowers individuals in any culture, and I doubt that property per se directly contradicts any major culture. Vietnamese, Cuban and Indian migrants have clearly had few problems adapting to US property law. If correctly conceived, property law can reach beyond cultures to increase trust between them and, at the same time, reduce the costs of bringing things and thoughts together. Legal property sets the exchange rates between different cultures and thus gives them a bedrock of economic commonalities from which to do business with each other.”

And so formal property is this extraordinary thing, much bigger than simple ownership. Unlike tigers and wolves, who bare their teeth to protect their territory, man, physically a much weaker animal, has used his mind to create a legal environment – property – to protect his territory. Without anyone fully realizing it, the representational systems the West created to settle territorial claims took on lives of their own, providing the knowledge base and rules necessary to fix and realize capital.”

Monday, 25 February 2013

Responding to the Census demand.

Guest post by Sam Pierson

Census demanders will shortly be knocking on your door demanding you respond. Here's one idea for a principled, gentlemanly and appropriate response.

1.  Write a letter to the Government Statistician in the next few days that goes something like this:-

        Geoff Bascand, Government Statistician
        PO Box 2922
        Wellington 6140

        Dear Sir,
        I wish to let you know in advance that I will not be filling out the census forms I have received.  I
        understand that this is against the law.

        I will expect to be prosecuted as per the law.

        Yours sincerely,
        [Name, Address, Sex, Age]

2.  When the collector comes, return the blank forms explaining that you have not filled them out, that you have let Mr Bascand know. and that you expect to be prosecuted.  Be polite.  Be courteous. Be brief.

3.  Within a month or so following the census, write to Mr Bascand referring to your original letter, and asking when you can expect prosecution proceedings to commence.

4.  If you get a fine in the mail, seek to go to court.

5.  In court, make a clear and concise statement explaining why you disagree with the law in principle. Do not try to get out of it. Openly accept that under the law you should be prosecuted for your offence and agree you have broken the law.

6.  If you hear nothing at all, go to the Statistics Department office in person & turn yourself in to Mr Bascand.

In all dealings be the model of polite & cheerful.  This is important.  Don't try to convert or convince anybody over the rightness of your cause.  Don't grandstand or seek attention.  Other than in court, and even then, be of few words.  The line is: 'I did not fill out my census form and I expect the Department to do its job, under law, and prosecute me.'

Within government & popular opinion, the census is seen as a minor imposition for the greater good of gathering the data to make 'better' public policy decisions in a 'modern' nation-state.  The aim of this response is to register dignified, civilised disagreement to all that: disagreement to the imposition & disagreement to the idea that the data collected for the state planners is good for us & our fellow countryfolk.  (See Doc McGrath's post here for more, and for his alternative response.)

As we also believe in the rule of law, we believe laws that are made should be followed.  Hence the request that the department do its lawful job & prosecute.

You'll probably need be prepared to spend $500, maybe some more—hard to tell.  We'll have a pub meetup a little while after the census to exchange stories & progress for those interested.  This is an individual by individual response, but no one will get left behind.

Do it with low to no expectations, in a breezy spirit. 

Good luck.  

UPDATE: And in Northland,

Party rebels over 'intrusive' Census
Libertarianz Northland coordinator Helen Hughes will be holding a party on Census day - March 5 - to "responsibly" destroy her form with others opposed to the information gathering exercise.
Ms Hughes admits it's exhorting people to take part in a mass form of civil disobedience, but said many didn't like the intrusive nature of the Census and don't trust the Government.
"Nobody should destroy their [census] forms unless they know what they are protesting against. Yes, it's urging people to break the law, but when the law is wrong then protest is absolutely necessary."

The Biggest Crisis to Hit the Stock Market Since the Last One

Guest post by Kris Sayce from Money Morning Australia 

The Biggest Crisis to Hit the Stock Market Since the Last One

What did we tell you a few weeks ago?  It’s impossible for the stock market to move up or down until the Wall Street whiz kids and mainstream media create a new catchphrase.

‘Debt ceiling’, ‘fiscal cliff’, ‘credit crunch’, and ‘Grexit’.  You’ve heard them all.  Each time one of those terms rears its head, the market falls. Then soon enough someone finds a ‘solution’ and stocks roar again.

Well, it looks as though we’ve got a new excuse for stocks to fall. And this one is the scariest of all.

It’s ‘The Sequester‘.

What does it mean and should you worry about it?  For an explanation of The Sequester, here’s the Washington Post:

The sequester is a group of cuts to federal spending set to take effect March 1, barring further congressional action.
    The sequester was originally passed as part of the Budget Control Act of 2011 (BCA), better known as the debt ceiling compromise.
    It was intended to serve as incentive for the Joint Select Committee on Deficit Reduction to come to a deal to cut $1.5 trillion over 10 years. If the committee had done so, and Congress had passed it by Dec. 23, 2011, then the sequester would have been averted.

In short, the US Congress and Obama Administration need to agree to cut a bunch of government spending, raise taxes, or both. If they don’t then it means a total of USD$85.4 billion in mandatory cuts spread across defence, discretionary spending and Medicare.

So, they’ve got just about a week to figure things out. Will they? Or will you see history repeat itself? Here, let us explain…

Stocks Fall Again, Will They Rise Again?

Last Thursday the Australian share market dropped 118.6 points…or 2.3%.  Investors are worried. They’re worried the US Federal Reserve may turn off the money tap. If that happens the stock market will have to fend for itself.

Add that to The Sequester and you’ve got a recipe for a stock sell-off.

As we said at the start, the market and mainstream investors are so insecure that they can’t buy or sell anything without an excuse. They need a big macro-economic disaster…and they need to give it a name.

They’ve done that before. So many times we’re bored of it. Here’s a chart of the US S&P 500 going back to 2007. We’ve overlaid data from Google Trends. The marks on the chart indicate the point at which each phrase reaches the peak in news headlines:

Click here to enlarge
Source: Google Finance, Google Trends

You remember the ‘Credit Crunch’. Headlines containing that phrase peaked in October 2008. The fear of a Greek exit (‘Grexit’) from the European Union peaked in May 2012.

And the Fiscal Cliff hit a crescendo in December…just before US stocks bagged a 9% gain in four weeks!

Each of these phrases has something in common – a short shelf life. The media reaches a frenzy,stocks sell-off and then…that’s right, politicians reach a bogus deal and the crisis is over…until the next crisis arrives.

That’s where we are with ‘The Sequester’…

That’s where we are with ‘The Sequester’. Use of the term has gone sky-high since the start of the year. Check it out for yourself on Google Trends (and sign up for Google+ while you’re there so you can follow our commentary throughout the day).

But we’re prepared to bet that you’ll see another eleventh-hour squib of a deal and they’ll avert the crisis…until the next time anyway. And you can guess what will happen then: stocks will take off, as we dare say part of the deal will involve more spending and/or more money printing.  And if we’re wrong? That’s why we hold dividend-paying stocks for income, cash for safety and gold for insurance. This volatility and fake crisis solving is why we’ve gone on so much about spreading your money around into various asset classes.  If you’ve followed this advice, then yesterday you should have just sat back and enjoyed the view.

Just because politicians and everyone else is irrational, doesn’t mean you have to be.

Kris Sayce is an Investment Director for Port Phillip Publishing and an editor for Money Morning Australia.

Friday, 22 February 2013

State-owned companies in the REAL world

Via Dim Post:

Solid Energy is at a crisis point, with a Government bailout almost inevitable, mine closures possible and further job cuts likely in another restructure to try to salvage the debt-ridden coal mining company.
The state-owned enterprise yesterday revealed it was in talks with its banks and the Government over its future after its debt rose to $389 million and a further “significant loss” would be in its half-year result.
The company posted a $40 million loss last year
     Solid Energy’s financial condition has deteriorated over the past two years, a slump it attributed to a 40 per cent fall in coal prices and low returns on investment attempts in areas such as biofuels.

So state-owned Solid Energy geared itself for debt which it used to pay massive salaries to its executives and boost dividends to the state. Now it’s collapsed and the taxpayer will bail it out.

Good old long-suffering taxpayer.

I guess that’s the advantage of having your companies state-owned: they bring the benefit of government monopolies and freedom from commercial imperatives to bear on steadily and progressively diminishing the value of the assets they oversee—transforming their capital over time from assets into dead losses.  And all the losses they make every year are socialised.

Good old long-suffering taxpayer, who loses twice over—once in the blundering mismanagement of assets ever-dwindling in value; twice in the losses for which he is always and every time on the hook.

Meanwhile, dullards scream for more companies like this, the lietmotif of all such entities being that they produce fewer resources than they consume.

And this is supposed to be an era that values “sustainability.”

[Hat tip, sort of, to Dim Post’s post]

The Rebuild(TM): Tell us your story [updated]


It’s now exactly two years since the big earthquake that tore Christchurch apart, two-and-a-half years since the first large shake, and despite lots of talk about The RebuildTM, there’s been precious little rebuilding and lots and lots of hindrances and prohibitions on any building at all.

Perhaps because all the talk has been about The Rebuild—a phrase revealing the top-down thinking of central planners, who move with glacial pace their wonders to under-achieve--rather than about rebuilding—a word describing a process in which people just get on with it.

Which is why when I hear the grey ones talking ad nauseum about The Rebuild I want to scream.

So on this inauspicious anniversary, when we commemorate how government both central and local has managed to do to the city what the earthquake couldn’t quite manage, rather than me saying again what I’ve said umpteen times before about The Nonbuild (see below), why not take this chance, Cantabrian readers, to tell us what’s been happening to you.

Tell us your story.


UPDATE: I can’t resist fisking John Key’s media release to mark the second anniversary (Key’s coments are in italics):

Rebuilding Christchurch is one of the four priorities my Government has for this term in office…
…and it looks like a disaster. Still, with two of the other three “priorities” (stronger economy and responsible finances) looking worse by the month, and the fourth (asset sales) all blown out of the water, at least they’re all of a piece.  And at least he said “rebuilding.”

The destruction in greater Christchurch means we're facing unprecedented circumstances, but each time I visit the city I am staggered by the progress that has been made.
Progress? What progress?  Let’s see what he can spin to find something to boast about….

The land zoning process is pretty much complete.…
My god, is this really achievement number one?!   The planners, who have been active (for two frickin years!) drawing lines on paper prohibiting folk doing what they wish with their own property, are almost finished! Two years of folk knowing not what they might or might not be allowed to do!!  But cheer up, this process is now “pretty much complete.”

…and by the end of the year more than 50,000 house repairs are expected to be completed under the EQC managed repair programme. 
I really don’t think “managed” is the word to use for anything related to EQC. And this 50,000 figure is not “progress that has been made.”  It’s progress promised “by the end of the year,” promised with a smile and wave, with no care and every little responsibility because a meagre 13,000 houses is all that the “the EQC managed repair programme” has actually managed to repair in two fricken years! Not exactly progress. And not much to boast about.

The CBD red zone is decreasing and we expect the cordon to be gone by the middle of the year. 
Translation: The cordon around the city for the last two years keeping land and business owners from their property in the CBD might be taken down in a few months. It might. But only if, by then, we’ve turned the entire CBD into a carpark, with or without the permission of property owners.

Economic activity is improving, with latest figures showing 7.5 per cent growth in the region year on year, and
over 16,000 more people were employed in Christchurch last year.
”Last year”: i.e., a year in which economic activity was only just beginning to recover from being blasted to hell and back.   And while 16,000 more is better than 16,000 fewer, overall employment levels are still well below pre-earthquake employment levels.

In other words, don’t believe a frickin’ thing these bastards say.

Thursday, 21 February 2013

Calling all beer lovers

I have need of your assistance.


My local tennis club is changing its beer supplier to DB, who are putting money into the bar in return for an exclusive supply agreement. Result being that the only beer the bar can stock is a DB beer—which is to say either a DB or a Tui or a Monteith’s. And after a decent run around the tennis court (my standard of tennis meaning I’m the one usually doing the running), a man is desperately in need of a decent drop.

I do have the opportunity to recommend something drinkable out their range to come out of the club’s taps or beer fridge, but I fear there’s nothing there to recommend.  Unless one of you can?

D.I.Y. complaining

The Herald this morning has a special supplement on building and renovating, with a cover story wringing its hands about NZers love for Do-It-Yourself—the basic tone being, “how dare they!”

Former Labour Prime Minister Norman Kirk famously built his own home back in the fifties, “Big Norm” even casting his own bricks. Nowadays, Big Norm would be arrested, fined, and his house probably demolished, being doing it yourself is mostly illegal. DIYers these days are restricted by law (both National’s and Labour’s) to doing bugger all around their own house. Anything more than a bit of painting, or knocking up a few shelves inside your own home—or something a little more aggressive outside it—is almost immediately going to have some nosey parker poking his nose over your fence going “I hope you’re allowed to do that.” 

Most of the nosey types have been interviewed for the Herald article, discussing in calamitous tones how frightful it is that home owners are actually allowed to build their own retaining walls, or knock up a pergola.

Far and away the most egregious of these low-lifes is lawyer Paul Grimshaw (famous for making more out of leaky home cases than home owner themselves). Grimshaw is a 'Vholes,' the kind of lawyer Dickens describes as "always looking at the client as if he were making a lingering meal of him with his eyes as well as his professional appetite."

imageThis particular Vholes emphatically declares that allowing you and I and any other prospective home builder or re-modeller to do anything at all is a big mistake, least of all be allowed to do any building or remodelling without asking permission first from the grey ones. “We should be making it as difficult as possible to obtain a building consent,” says the maggot.


This Oscar Pistorius story is all a bit strange, isn't it?  There must definitely be more to it.  He seemed so happy just the other day, he had such a spring in his step…

Yes, it was only minutes after Oscar Pistorius’s arrest that the jokes began … all taking the Pistorius.

His lawyer's got a hard job ahead of him. Realistically, it looks like Pistorius hasn't got a leg to stand on.

Oscar clearly misunderstood when his girlfriend told him that on Valentine's Day he had to take her out.

Oscar Pistorius is pleading not guilty due to temporary diminished responsibility.  He claims he was legless at the time of the incident.


Whatever happens in court, he still has a career. The IOC say he’s a front runner  at the next Olympics for pistol shooting.

Police reconstruction indicates that Pistorius lost it when, for his Valentine's Day gift, his girlfriend gave him a pair of socks.

New Valentine’s Day card: “Roses are red, violets are glorious.  Never creep up On Oscar Pistorius.”

Too many Oscar Pistorius jokes already. Trying to come up with a new one is like taking a shot in the dark.

Looks like he has an expensive lawyer. I hope he can foot the bill.

Otherwise, the Oscar goes to........................Jail !!

New evidence has been found outside the Pistorius home that completely acquits him of his girlfriend's murder................ Footprints!

She didn't notice Oscar sneaking up behind her. It was the silence of the limbs.

I see what Pistorius is doing. He is going to jail for 25 years and when he gets released... Bam! President of South Africa. That's how it works over there, right?

When Oscar Pistorius said he wanted to be just like able-bodied athletes, who knew he meant OJ Simpson?

Surely Oscar Pistorius isn't the first man to wake up legless during Valentine's night, then shoot all over his partner whilst imagining she's somebody else?

First Tiger Woods, then Lance Armstrong, and now Oscar Pistorius. I think Nike should start telling their athletes " Just  Don't Do It."

Hollywood are doing his life story; it's now going to be called Blade Gunner.

If found guilty he's gonna have to take it on the shin.

And finally,

Anyone making jokes about Oscar Pistorius is just prosthetic!

This means you.

PS: So what’s wrong with cheap, dirty jokes. I never said I was tasteful.  And on some stories, you have to go out on a limb….

Wednesday, 20 February 2013

“You should be forced to buy this book”

The title of this post comes from Stephen Hicks, who blogs on a new book by aspiring philosopher-queen Sarah Conly defending paternalistic laws;

conly-aathat is, laws that make you do things, or prevent you from doing things, for your own good. I argue [says the bossy bitch] that autonomy, or the freedom to act in accordance with your own decisions, is overrated … we need the help of others—and in particular, of government regulation—to keep us from going wrong.”

To which busybody-babble Hicks drily responds:

Rumour has it that contrarian paternalists disagree violently, arguing that Conly should have been prevented by force from writing the book.

What does she miss? Many things, including this: “To be fully human is to make one’s own decisions and initiate one’s own actions in life.”

Sarah Conly is not fully human.

Or wishes not to be.

SUMMER SNIPPETS: ‘Wolf Hall’ by Hilary Mantel

More snippets below from my summer reading…

While we’re talking about figures  undeservedly maligned by history – possibly --  allow me to introduce to you (if you haven’t already been introduced) a new view of Thomas Cromwell—a man for the modern age.


An apprentice to Cardinal Wolsey, the sometimes benevolent sometimes bullying Thomas Cromwell (right, in a classic painting by Holbein) was the advisor to King Henry VII through one Reformation, three marriages and many royal successes (and successors).  He is a villain however in Robert Bolt’s Man For All Seasons, and hence—for the generation that venerated that play—a villain in real life.

Hilary Mantel sought to overturn that notion in her novel, Wolf Hall, the first of a first-person trilogy portraying a worldly-wise master technocrat-–the crafty, capable power behind Henry’s middle-period throne. Our Cromwell has read his Machiavelli, Mantel tells us…

He has got Niccolò Machiavelli's book, Principalities; it is a Latin edition, shoddily printed in Naples, which seems to have passed through many hands.

…and the layers of meaning in that sentence tell us much about both men—and about Mantel’s multi-layered writing.  But Mantel’s Thomas would have much to teach Machiavelli …

Mantel’s Cromwell is himself a self-made success, rising from his poor beginnings as an oft-beaten blacksmith’s son in the quickest way possible in Tudor England: through business success and marriage, in Cromwell’s case both combined .

When he got back to London he knew he could turn the business around. Still, he needed to think of the day-to-day. ‘I've seen your stock,’ he said to [his future father-in-law] Wykys. ‘I've seen your accounts. Now show me your clerks.’ That was the key, of course, the key that would unlock profit. People are always the key, and if you can look them in the face you can be pretty sure if they're honest and up to the job. He tossed out the dubious chief clerk – saying, you go, or we go to law – and replaced him with a stammering junior, a boy he'd been told was stupid. Timid, was all he was; he looked over his work each night, mildly and wordlessly indicating each error and omission, and in four weeks the boy was both competent and keen, and had taken to following him about like a puppy. Four weeks invested, and a few days down at the docks, checking who was on the take: by the year end, Wykys was back in profit.
    “Wykys stumped away after he showed him the figures. ‘Lizzie?’ he yelled. ‘Lizzie? Come downstairs.’ She came down. ‘You want a new husband. Will he do?’ She stood and looked him up and down. ‘Well, Father. You didn't pick him for his looks.’ To him, her eyebrows raised, she said, ‘Do you want a wife?’ ‘Should I leave you to talk it over?’ old Wykys said. He seemed baffled: seemed to think they should sit down and write a contract there and then. Almost, they did. Lizzie wanted children; he wanted a wife with city contacts and some money behind her. They were married in weeks. Gregory arrived within the year. Bawling, strong, one hour old, plucked from the cradle: he kissed the infant's fluffy skull and said, I shall be as tender to you as my father was not to me. For what's the point of breeding children, if each generation does not improve on what went before?”

Mantel always likes to include a moral, or a quip.

“How simple it would be, if he were allowed to reach down and shake some straight answers out of Norris [, a king’s man come to threaten harm to Cromwell’s cardinal]. But it's not simple; this is what the world and the cardinal conspire to teach him.
    “Christ, he thinks, by my age I ought to know. You don't get on by being original. You don't get on by being bright. You don't get on by being strong. You get on by being a subtle crook; somehow he thinks that's what Norris is, and he feels an irrational dislike taking root, and he tries to dismiss it, because he prefers his dislikes rational, but after all, these circumstances are extreme…”

“He looks down  from a window [at the small groups of Londoners beginning to gather outside his gate], and feels he recognises them; they are sons of the men who every autumn stood around gossiping and warming themselves by the door of his father's forge. They are boys like the boy he used to be: restless, waiting for something to happen.
    “He looks down at them and arranges his face. Erasmus says that you must do this each morning before you leave your house: ‘put on a mask, as it were.’ ”

The hero of Man For All Seasons was Thomas More [right, in Holbein’s famous portrait, now curiously housed]—executed by Henry VIII (with the edge of an old axe) for refusing to countenance his (Henry’s) divorce. Mantel’s More is altogether less heroic, and more the sort of man to whose family he was dictator, and who as Chancellor would happily get hold of you and shut you in his cellar. “And all we will hear is the sound of screaming.”

“It is Christmas Eve when Alice More [Thomas’s widow] comes to see him. There is a thin sharp light, like the edge of an old knife, and in this light Alice looks old. He greets her like a princess, and leads her into one of the chambers he has had repanelled and painted, where a great fire leaps up a rebuilt chimney. The air smells of pine boughs. ‘You keep the feast here?’ Alice has made an effort for him; pinned her hair back fiercely, under a bonnet sewn with seed pearls. ‘Well! When I came here before it was a musty old place. My husband used to say,’ and he notes the past tense, ‘my husband used to say, lock Cromwell in a deep dungeon in the morning, and when you come back that night he'll be sitting on a plush cushion eating larks' tongues, and all the gaolers will owe him money.’ ‘Did he talk a lot about locking me in dungeons?’
    “ ‘It was only talk.’ ”

The asides can be wonderfully wise.

The English will never be forgiven for the talent for destruction they have always displayed when they get off their own island.”

There cannot be new things in England. There can be old things freshly presented, or new things that pretend to be old. To be trusted, new men must forge themselves an ancient pedigree, like Walter's, or enter into the service of ancient families. Don't try to go it alone, or they'll think you're pirates.”

Sometimes … he feels almost impelled to speak in defence of his [child-beating] father, his childhood.  But it is no use to justify yourself. It is no good to explain. It is weak to be anecdotal. It is wise to conceal the past even if there is nothing to conceal. A man's power is in the half-light, in the half-seen movements of his hand and the unguessed-at expression of his face. It is the absence of facts that frightens people: the gap you open, into which they pour their fears, fantasies, desires.”

“[Cardinal] ‘Wolsey always said that the making of a treaty is the treaty. It doesn't matter what the terms are, just that there are terms. It's the goodwill that matters. When that runs out, the treaty is broken, whatever the terms say.’ ”

It's all very well planning what you will do in six months, what you will do in a year, but it's no good at all if you don't have a plan for tomorrow.’

When you are writing laws you are testing words to find their utmost power. Like spells, they have to make things happen in the real world, and like spells, they only work if people believe in them.”

The blacksmith’s son threatens lords by pointing out where power lies in the modern age.

“‘My lord,’ he says. ‘You have said what you have to say. Now listen to me. You are a man whose money is almost spent. I am a man who knows how you have spent it. You are a man who has borrowed all over Europe. I am a man who knows your creditors. One word from me, and your debts will be called in.’
    “‘Oh, and what can they do?’ Percy says. ‘Bankers have no armies.’
    “‘Neither have you armies, my lord, if your coffers are empty… Let's say I will rip your life apart. Me and my banker friends.
    “How can he explain to him? The world is not run from where he thinks. Not from his border fortresses, not even from Whitehall. The world is run from Antwerp, from Florence, from places he has never imagined; from Lisbon, from where the ships with sails of silk drift west and are burned up in the sun. Not from castle walls, but from counting houses, not by the call of the bugle but by the click of the abacus, not by the grate and click of the mechanism of the gun but by the scrape of the pen on the page of the promissory note that pays for the gun and the gunsmith and the powder and shot. ‘I picture you without money and title,’ he says. ‘I picture you in a hovel, wearing homespun, and bringing home a rabbit for the pot. I picture your lawful wife Anne Boleyn [whom the king now covets] skinning and jointing this rabbit. I wish you every happiness.’ ”

The gentlemen of England apply for places in his household now, for their sons and nephews and wards, thinking they will learn statecraft with him, how to write a secretary's hand and deal with translation from abroad, and what books one ought to read to be a courtier. He takes it seriously, the trust placed in him; he takes gently from the hands of these noisy young persons their daggers, their pens, and he talks to them, finding out behind the passion and pride of young men of fifteen or twenty what they are really worth, what they value and would value under duress. You learn nothing about men by snubbing them and crushing their pride. You must ask them what it is they can do in this world, that they alone can do.”

PS: The double-Booker prize winning Mantel is currently making headlines, or having them made for her, for attacking the odious over-attraction to royalty, saying in a recent speech:

When [Princess Kate’s] pregnancy became public she had been visiting her old school, and had picked up a hockey stick and run a few paces for the camera. BBC News devoted a discussion to whether a pregnant woman could safely put on a turn of speed while wearing high heels. It is sad to think that intelligent people could devote themselves to this topic with earnest furrowings of the brow, but that’s what discourse about royals comes to: a compulsion to comment, a discourse empty of content, mouthed rather than spoken. And in the same way one is compelled to look at them: to ask what they are made of, and is their substance the same as ours.
    I used to think that the interesting issue was whether we should have a monarchy or not. But now I think that question is rather like, should we have pandas or not? Our current royal family doesn’t have the difficulties in breeding that pandas do, but pandas and royal persons alike are expensive to conserve and ill-adapted to any modern environment. But aren’t they interesting? Aren’t they nice to look at? Some people find them endearing; some pity them for their precarious situation; everybody stares at them, and however airy the enclosure they inhabit, it’s still a cage.

Poor Richard

What we know about King Richard III we mostly know about from Shakespeare. It is from him we get the vicious deformed hunchback we all “know”: the scheming blackguard “cheated of feature by dissembling nature, deformed, unfinished, sent before his time into this breathing world scarce half-made up”—so lame and unfashionable dogs bark at him as he limps by—so deformed he is unable to prove a lover, hence is determined to be a villain.

Yet the body of the last Plantagenet king, the man defeated by Henry Tudor at Bosworth Field—who Shakespeare has despairing at his end, “a horse, a horse, my kingdom for a horse!”—has now been found by that field, under the Leicestershire carpark under which it had been inadvertently interred.  And the figure of the man it reveals differs markedly from the caricature.

No viper, toad or hedgehog; no unformed bear-whelp, or lump of foul deformity. Instead, the man dug up from the car park of Leicester Social Services in September had, for the most part, an ordinary shape. His height was a little above average for the time when he had lived. His limbs were regular and delicate—almost feminine, the scientists said. Pace Shakespeare, there was no withered arm. There was, however, a severely sideways-twisted spine, the result of scoliosis that had probably emerged in adolescence. It would have put one shoulder higher than the other, making him stand shorter than he was. He might have needed extra cushions in his chairs...

So not the deceiving beast of legend then. Though the corpse offers but little to reveal his true soul, it seems history here had very definitely been written by the winners.

But written damnably well.

[HT Quote Unquote]

PS: Little known fact:  John Lydon once claimed that he based his stage persona Johnny Rotten on Laurence Olivier’s classic film portrayal of the royal hunchback. So you can also blame the Sex Pistols on the historically flawed figure of His Royal Hunchbackness…

Tuesday, 19 February 2013

Twisting the Treaty: A Tribal Grab for Wealth and Power [updated]

Ahem, allow me to recommend a new book—just published!


As you’ll have seen, there are one or two names there that might be familiar.

The book appears at an important time in the country’s constitutional history.  If the Treaty itself arrived just in time to cement in place and reward pre-Treaty genocidal land grabs by the likes of Hongo Hika, Te Rauparaha and others, then the Maori-National party’s “constitutional review” of today arrives at a time when Maori corporations, having been gifted billions by taxpayers for things we haven’t done, seek to have their “special” status as a permanent drain on taxpayers constitutionally protected.

If enough people read this book, it could lead to some much needed changes in the way we are governed.

I suggest that you pass on the book’s information it to all your contacts, along with the appropriate purchase information:

  • A5 paperback, 414 pages plus 16 pages of photos.
  • Price: $40.
  • Available from Paper Plus stores and independent book shops. or direct from the publisher, Tross Publishing, P.O. Box 22 143, Khandallah, Wellington 6441
  • Payment to the publisher can be by cheque, or by Direct Credit to Tross Publishing, Westpac, Wellington 030584-0210107-00. 

Recessions: The Don't Do List

Back in 2008, when even politicians started to notice the economic fertiliser had begun hitting the blade-rotating ventilation device, I suggested there were seven things governments could to to ensure the economic recession was a long one—and predicted they would do them all.
And so they did.
And here we still are.
Those seven things were taken from Murray Rothbard’s excellent book
America’s Great Depression. In this Guest Post, John Cochran updates the story.

Listening to a new report on the just-released American GDP numbers while reading Rothbard’s America’s Great Depression made me realize how relevant and important this work is relative to today’s poorly performing economy. The book briefly summarizes Austrian Business Cycle Theory and applies the theory to the period of the Great Depression from 1929–1933. The book is especially relevant in that it provides policy guidance for dealing with an economic crisis, based on both historical evidence and Austrian Business Cycle Theory. The policy recommendations include actions to avoid, as well as positive actions government could undertake to speed recovery. Unfortunately, the official reaction to the present crisis has been a virtual match to Rothbard’s “don’t do” list, while the few positive actions have been conspicuous by their absence in most mainstream policy discussions. Even more important for  future prosperity is the need for monetary reform, the key to preventing future boom-bust cycles and thus avoiding depressions altogether.

Preliminary US GDP numbers for 4th quarter 2012 were just released and, in the words of the Wall Street Journal, indicated that the “[r]ecovery shows a soft spot” with GDP declining 0.1%. As Jeffrey Tucker reports in “The GDP Shock”:Rothbard, Murray N.

Hardly anyone anticipated this. USA Today and other purportedly reliable venues immediately assured the world that this does not mean recession. Somehow after hanging onto to GDP numbers for three years—recovery is here despite your internal sense that the economy is still in a ditch—now we are told that the GDP figures are really just misleading. Recovery is still here, says the mainstream press.

Jon Hilsenrath in “Unusual Quarter of Contraction Doesn’t Mean Recession” provides a toned-down example of what Tucker is talking about:

A one-quarter contraction of economic output doesn’t mean the economy is formally in recession, but it is unusual for such contractions to happen in the middle of economic expansions.

Austrian economists are keenly aware that “GDP figures are really just misleading.” Inclusion of government spending in any measure of economic production or growth is inherently misleading.  Business cycles are characterized by greater fluctuations in the capital goods industries relative to consumer goods. Malinvestment during the boom is followed by capital restructuring during the depression/recovery. Maintaining a coordinated structure of production is essential for maintaining a given level of prosperity, and lengthening the structure is a necessary condition for an improvement in the material standard of living. When one fully incorporates capital theory into macroeconomic analysis, it becomes clear that consumption is not the “engine of the economy” (see John Papola’s “Think Consumption Is The ‘Engine’ Of Our Economy? Think Again”in Forbes online, or Mark Skousen’s “Gross Domestic Expenditures (GDE): the Need for a New National Aggregate Statistic”). Per Rothbard (Americas Great Depression, pp. 58–59):

Savings, which go into investment, are therefore just as necessary to sustain the structure of production as consumption. Here we tend to be misled because national income accounting deals solely in net terms. Even “gross national product” is not really gross by any means; only gross durable investment is included, while gross inventory purchases are excluded. It is not true, as the underconsumptionists tend to assume, that capital is invested and then pours forth onto the market in the form of production, its work over and done. On the contrary, to sustain a higher standard of living, the production structure—the capital structure—must be permanently “lengthened.” As more and more capital is added and maintained in civilized economies, more and more funds must be used just to maintain and replace the larger structure. This means higher gross savings, savings that must be sustained and invested in each higher stage of production.

Even though GDP is a highly inaccurate measure of economic activity, and regardless of whether or not one quarter of negative growth in real GDP indicates an economy on the verge of a double-dip recession, the number does provide further evidence of an economy struggling to recover from the depression which followed back-to-back Fed induced boom-bust cycles. This is an economy essentially stagnating since the reported end of the “Great Recession” in June 2009, nearly four years ago.

Mainstream economists have given competing explanations of why this is the worst recovery since the Great Depression. Many Keynesians, including Paul Krugman, have argued the recovery is slow, not because the policy response was wrong, but because it was not big enough. The policy response was strong enough to save the economy from a bigger disaster, but despite an $800 billion fiscal stimulus, deficits of over one trillion dollars leading to a public debt of over $16 trillion, and a tripling of the Fed’s balance sheet, the policy response was still too small. Carmen M. Reinhart and Kenneth Rogoff, also defend the policy response, but in This Time is Different, they argue that recoveries from recessions accompanied by a financial crisis have, based on historical evidence, always been slow compared to recessions not accompanied by financial crisis. While fiscal and monetary stimuli have not generated a speedy recovery, these policies did prevent the crisis from being even worse. According to Rana Foroohar in Time, “The Risks of Reviving a Revived Economy”:

Ironically, the stimulus is also a reason the recovery has been so slow and will continue to be for the next three to five years. Harvard economist Ken Rogoff, who, along with his colleague Carmen Reinhart, has been the best rune reader of the past few years, says that historically during financial crises “to the extent that you act to slow the deep, sharp economic pain, you also slow the recovery.”

Contra Rogoff and Reinhart, Michael Bordo has done some excellent work showing that throughout US economic history, recovery has actually been quicker following financial crises. His work has been used by John B. Taylor to bolster his argument that policy activism and the accompanying policy uncertainty, both monetary and fiscal, have impeded business planning and recovery. Much of the debate can be accessed here. Austrian economists like Robert Higgs and myself, and fellow travelers such as Mary L. G. Theroux, have pushed the uncertainty argument even further to include regime uncertainty as the key element retarding recovery.

However, readers of Rothbard’s America’s Great Depression should not have been surprised that the recent bust was not a sharp depression followed quickly by a return to prosperity and sustainable growth, albeit not necessarily to the levels expected by those fooled by the false expectations created by monetary mismanagement due to malinvestments and wealth destruction during the previous two booms (see Salerno’s “A Reformulation of Austrian Business Cycle Theory in Light of the Financial Crisis,” Ravier’s “Rethinking Capital-Based Macroeconomics,” and most recently Shostak’s “Fed’s policies expose mainstream fallacies”). While the first part of Rothbard’s great book is devoted to explaining the Austrian boom-bust theory of the business cycle, defending the theory from critics, and illustrating its applicability to the events leading up to the 1929 crisis/bust, the second part of the book is devoted to examining governmental interventions and policy errors that retarded recovery and turned a “garden variety recession” into a Great Depression.

Rothbard, Murray N.

Rothbard notes two things of significance for both then and now:

1. “[T]he longer the boom goes on the more wasteful the errors committed, and the longer and more severe will be the necessary depression readjustment” (p. 13). The current boom-bust had its roots in the boom during the late 1990s, which resulted in a bust/recession, recovery from which was aborted by aggressive Fed action beginning in 2003, which added new malinvestments and misdirections of production to the unresolved malinvestments left over from the previous boom (see my article “Hayek and the 21st Century Boom-Bust and Recession-Recovery”).

2. Unemployment, if recovery is not impeded by interventions, will be temporary. Per Rothbard (p. 14):

Since factors must shift from the higher to the lower orders of production, there is inevitable “frictional” unemployment in a depression, but it need not be greater than unemployment attending any other large shift in production. In practice, unemployment will be aggravated by the numerous bankruptcies, and the large errors revealed, but it still need only be temporary. The speedier the adjustment, the more fleeting will the unemployment be. Unemployment will progress beyond the “frictional” stage and become really severe and lasting only if wage rates are kept artificially high and are prevented from falling. If wage rates are kept above the free-market level that clears the demand for and supply of labor, laborers will remain permanently unemployed. The greater the degree of discrepancy, the more severe will the unemployment be.

When the crisis hit in 2007 and 2008, the correct policy would have been the response Rothbard recommended in 1982 in the introduction to the fourth edition (p. xxi) of America’s Great Depression:

The only way out of the current mess is to “slam on the brakes,” to stop the monetary inflation in its tracks. Then, the inevitable recession will be sharp but short and swift[emphasis added], and the free market, allowed its head, will return to a sound recovery in a remarkably brief time.

While, as mentioned above, Rothbard only briefly discusses Austrian Business Cycle Theory (p. xxxviii), “a full elaboration being available in other works,” America’s Great Depression, elaborates on the theory’s implication on government policy: “implications which run flatly counter to prevailing views [both then, 1963, and now].”

What are these implications? First and foremost (p. 19), “don’t interfere with the market’s adjustment process” [emphasis original]. The more government blocks market adjustments, the “longer and more grueling the depression will be, and the more difficult will be the road to complete recovery.” Rothbard argues it is possible to logically list the ways market adjustment could be aborted by government action and such a list would coincide well with the “favorite ‘anti-depression’ arsenal of government policy.” The list almost perfectly matches with policy responses to the crisis during both the Bush (see Thornton’s “Hoover, Bush, and Great Depressions”) and Obama administrations.

Here is Rothbard’s “Don't Do” list (pp. 19–20), with my comments in brackets:

1. Prevent or delay liquidation
“Lend money to shaky businesses, call on banks to lend further, etc.” [Done. Tarp, auto bailouts, and the Fed’s mondustrial policy. See recently John B. Taylor in the Wall Street Journal: “The low rates also make it possible for banks to roll over rather than write off bad loans, locking up unproductive assets.”]
2. Inflate further
“Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government ‘easy money’ policy prevents the market's return to the necessary higher interest rates.” [Done in spades.]
3. Keep wage rates up
“Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.”
4. Keep prices up
“Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.” [3 and 4 are both direct results of current Fed actions, including price inflation targets near 2%.]
5 & 6. Stimulate consumption and discourage saving
“We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved-capital even further. Government can encourage consumption by ‘food stamp plans’ and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed. Any increase in the relative size of government in the economy, therefore, shifts the societal consumption-investment ratio in favor of consumption, and prolongs the depression.” [The federal government has expanded from a bloated 18–20% of the economy to 23–25% of the economy under the current administration. The Bush fiscal stimulus in 2008 and the majority of the 2009 Obama stimulus supported consumption relative to investment as did the ineffective recently repealed temporary payroll tax cut.]
7. Subsidize unemployment
“Any subsidization of unemployment (via unemployment ‘insurance,’ relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.” [Does anything need added here?]

Rothbard (p. 21) argued these were “time-honored favorites of government policy” and the last part of America’s Great Depression was devoted to showing how these were the policies adopted in 1929–1933. Current policy has followed the same path. We should not be surprised that the result has been similar, if not as yet quite as tragic. It is still not too late to change paths, but unfortunately such action, while possible is not likely to happen. Neither will the positive actions recommended by Rothbard (p. 22) to speed recovery be undertaken. Reducing the relative role of the government in the economy while reducing taxes, especially those that bear most heavily on saving and investment, are also, as I have argued previously in “Thoughts on Capital-Based Macroeconomics” (Part III),the correct actions to address the debt and size-of-government crisis.

We are again undone by the “Crisis of Authority,” the urge to action, the incorrect, but too often, as explained by Pierre Lemieux, unchallenged belief that Somebody in Charge[1] is a solution to recessions. The correct government depression policy is “Nobody in Charge.” Laissez-faire is thus the untried alternative and the preventative of depression. Sound, free market money is the untried alternative to government money. Laissez-faire and sound money would replace the recurring boom-bust, and its attendant needless depression and unemployment, with sustainable growth and relative prosperity.

* * * * *

John P. Cochran is emeritus dean of the Business School and emeritus professor of economics at Metropolitan State University of Denver and coauthor with Fred R. Glahe of The Hayek-Keynes Debate: Lessons for Current Business Cycle Research. He is also a senior scholar for the Mises Institute and serves on the editorial board of theQuarterly Journal of Austrian Economics.
This post first appeared at the Mises Daily.

He sells real estate AND …

In between selling real estate, Martyn Bradbury will be changing the NZ blogosphere. Or so he says.

His plan to “change the blogosphere” is (wait for it, wait for it!) a new blog.  One that “will bring together 30 of the best left-wing bloggers and progressive opinion shapers in NZ all onto one site to critique the news, the media, and politics to provide the other side of the story.”

I can already hear you ask how this will differ from existing blogs like, for example, The Double Standard? Well, for one thing, at least they’re all using their own names…

Launching March 1st TheDailyBlog.co.nz will feature: Chris Trotter, Selwyn Manning, Professor Jane Kelsey, Keith Locke, Sue Bradford, John Minto, David Slack, Morgan Godfery, Gareth Renowden, Coley Tangerina, Phoebe Fletcher, Wayne Hope, Queen of Thorns, Burnt Out Teacher, Steve Grey, Aaron Hawkins, Marama Davidson, Tim Selwyn, James Ritchie, Efeso Collins, Robert Winter, Lynn Prentice, Frank MacsKasy, Matt McCarten, Wayne Butson, Chris Flatt, Allan Alach, TheDailyBlog Reposts, and The Liberal Agenda.

My own invitation must have been lost in the post.

Spot the contradiction

The item all over your news last night was Education Minister Hekia Parata’s announcement of school closures, mergers and rationalisations around Christchurch.

Virtually to a man (and woman) the parents, principals and teachers the reporters spoke to were agin it.  Their response is best summed up by that of the Educational Institute (NZEI), who says  the Government “needs to listen to schools and their communities.”

These are the same people, and the very same NZEI, that wholeheartedly supports top-down centralised control of state schools—which takes all important decision making away from schools and their communities; that stands against bulk funding of those schools—which would support schools and their communities to make their own decisions; and that is violently opposed to Charter Schools—which gives almost complete autonomy to schools and their communities.

Can you spot the contradiction?

Because they can’t.

" Keep The Home Fires Burning - With Your Census Form"

DOWN TO THE DOCTOR'S: This week, Dr Richard McGrath is getting his matches ready...

Yes, it's that time again: when freedom lovers across the land express their antipathy to that recurrent symbol of bureaucracy and the Nanny State -- the five yearly census form --by turning it into a carbon footprint.

Libertarians object to being told to fill in a census form for two reasons: first, being ordered to fill in a questionnaire (they never just ask nicely, do they) is a violation of a peaceful person's right to be left alone; second, the information obtained via the census is utilised for all manner of central planning by the State.

This central planning prolongs the existence of many government agencies that libertarians believe lie outside the scope of limited government --departments and ministries such as education, welfare, tourism, ethnic affairs, health, finance, agriculture, trade, transport, employment, fundraising, the voluntary sector and environmental protection, to mention just a few.

By refusing to hand over details of your private life to bureaucrats, even if it doesn't make someone in government sit up and reflect on the violation of civil liberty that the census represents, at least you will annoy a few of them by creating more work.

Should you choose not to warm your dwelling by oxidising your census forms, at least drag your feet on completing them by the due date. Let the lapdogs of the State come running to you and, when they do, refer them to the Privacy Commissioner, whose office "seeks to develop and promote a culture in which personal information is protected and respected". Ultimately, ask them to meet you in a public place where they can kneel down with hands clasped and beg you to fill their forms in. Surely they will if the information is that important.

And when or if you do hand it over, be aware that the only information their own law compels you to supply is your name and address.  Which they already have.

Click here to read the Libertarianz Party's response to news of the coming head-count-at-the-point-of-a-gun.

See ya next week!

Richard McGrath
Libertarianz Party leader

Monday, 18 February 2013

Europe by night

By crikey, the human environment is beautiful!

SUZUKI SAMURAI: Doing what NGOs do

Guest post by our roving Asian correspondent Suzuki Samurai, who woke up this morning in Cambodia realising he worked for an NGO.

NGO is not a term I like. To call an organisation "non-government" suggests that government is the natural first point of call for those in dire need. I could look at it positively I suppose and say that NGO Non Governmental Organisation actually shows that people outside of government know the government will do a shit job – so we best do it ourselves. NGOs, such as the one I work for, face a number of difficulties that I’d not cared to think about before. The securing of funds through donation is pretty straight forward, as it turns out; it’s how to effectively make that money work that makes things much less so.

Take for example my NGO: one way they help is by giving $12 per child, per month directly to families considered the poorest, on the condition that the child attends their local government school (and can demonstrate that with an appropriately completed attendance record). Unfortunately, many parents like the money, but they keep their kids working in the fields instead of going to school. They play the system to keep getting the money.

Another factor is the cultural influence of continuing to breed. The NGO's German country manager and I were visiting a family the other day--the mother and her four children are living in what could only be described as a tree-house; she was all of 24 years old. Upon being asked if she intended having further children she said, “I hope not." Now in Cambodia there is a pretty good education program about contraceptives, including booklets about the pill, injections, condoms, and some other thingy-me-jig. Turns out her husband doesn't like condoms, especially when he’s pissed, and she keeps forgetting to get the other ‘free’ alternatives. I suspect she will be pregnant again in no time - a fifth mouth to feed.

The NGO is duty bound not to put ‘less breeding please’ as a condition of receiving payment, though in our culturally sensitive times I don’t think they’d say so even if they could.

Another example is that of the NGO funding a family of a working mum and her four kids (dad’s dead) to the tune of $48 per month + a bag of rice – next thing, mum quits work as that was near-on the money she was bringing in when she was working. (I remember Jake Heke making the same observation)

Then there are examples of other NGOs funding and managing sewing shops, craft manufactories etc to enable locals to make products for tourists. Once these things are up and running & successful the NGOs hand them over to local managers to continue the good work--only to find that six months later the factory has been embezzled, run into the ground and left to rot.

There are many more examples like this I’m sure among the other 1000 NGOs operating in Cambodia, just as I’m sure there many success stories. But it demonstrates to me what welfare does to people.

It is one thing to build a water treatment plant or a well, or a school house, or provide some teachers – but to simply dole out money is often a dead end, except for the opportunity to learn anew the Law of Unintended Consequences.

What’s required is for good people to demand an end to corruption, to bring about the rule of law, to institute property rights; by doing so it will encourage much needed foreign investment to bring about the work that will enable the locals to fix their own problems themselves.

Until such time as these things happen, not much in the lives of the ordinary folk will really change at all.