In its raw form [as a steel billet], it’s worth around $1.
If it’s turned into horseshoes, its value rises to about $100.
If it’s made into sewing needles, its value jumps to roughly $500.
If it’s crafted into watch springs and gears, it can be worth around $100,000.
And if it’s transformed into precision laser components, like those used in lithography, its value can reach $10-50 million.
What gives escalating value to the simple raw material is the mind. It is the mind that transforms the value of a metal bar into the value of those horseshoes, needles, watch springs, and precision labour components.
Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions—and you'll learn that man's mind is the root of all the goods produced and of all the wealth that has ever existed on earth.
That was Ayn Rand, writing in answer to the question: "What is Capitalism?"
Rand was almost unique in writing about the role of the mind in man's existence; about its role in invention and production and valuing. "It is the mind," her novel Atlas Shrugged illustrates, "that is the root of all human knowledge and values -- and its absence is the root of all evil."
"Too often ‘multiculturalism’ is mistaken for ‘multiracialism,’ when the two could not be more different. A multiracial society is one in which people of all races are able to coexist together in peace and cooperation as equal citizens under the law. A multicultural society is one in which people are encouraged to ghettoise themselves according to national or cultural identity."
Environmentalist Paul Erlich alarmed the world back in 1968 predicting a "population explosion" which forecast “the greatest cataclysm in the history of man” -- food shortages escalating hunger and starvation “into famines of unbelievable proportions.”
In the obituary for the 93-year-old doom-monger, who died this week, the New York Times called his predictions "premature." But they weren't even wrong. They didn't happen, and they never will. (See above for how cataclysmically wrong the catastrophiser really was.)
Some of his other failed and frankly nasty predictions:
"In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate."
"In ten years [this was 1970] all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish."
"By the year 2000 the United Kingdom will be simply a small group of impoverished islands, inhabited by some 70 million hungry people.If I were a gambler, I would take even money that England will not exist in the year 2000."
“Sometime in the next 15 years the end will come, and by ‘the end’ I mean an utter breakdown of the capacity of the planet to support humanity.”
“Giving society cheap, abundant energy at this point would be the moral equivalent of giving an idiot child a machine gun."
“By 1985 enough millions will have died to reduce the earth’s population to some acceptable level, like 1.5 billion people.”
"We must have population control at home, hopefully through a system of incentives and penalties, but by compulsion if voluntary methods fail."
Yet despite being wrong about everything, the failed forecaster made a million and was showered with awards.
Several decades ago, gloom-monger Paul Erlich and techno-optimist Julian Simon had a bet.
Erlich was certain resources were running out and humanity was doomed. Simon asserted they weren't and wouldn't be. The bet was that, by the end of that decade, a basket of resources chosen by Erlich would cost more to buy — more, said Erlich, because by then those resources would be running out. Less, said Simon in reponse. (Simon, you see, was confident that the ultimate resource, from which all others derive, is the human mind — a machine for turning shit into useful stuff.)
Simon won.
Resources weren't running out.
They still aren't.
The "Simon Abundance Index" (SAI, below),which measures the relative abundance of resources since that bet, now stands at 609.4. Meaning that in 2023, the Earth was 509.4 percent more abundant in 2023 than it was in 1980!
How astonishing is that! World population since 1980 has almost doubled; while resources produced by human beings have multiplied by more than five times!!
Turns out that as global population increases, that "virtually all resources became more abundant. How on earth (literally) is that possible?"
Unlike Erlich and the sundry other doom-sayers who litter the planet today, Simon recognised that without the knowledge of how to use them, raw materials have no economic value whatsoever. They are just so much stuff. What transforms a raw material into a resource is knowledge — knowledge of how that stuff might satisfy a human need, and how to place it in a causal connection to satisfy that need. (The great Carl Menger explained this process way back in 1870!) And since new knowledge is potentially limitless, so too are resources.
Infinite, because the ultimate resource is the human mind.
1. Malthus published his book on English overpopulation and overconsumption in 1798. Thereafter, the population of England rose, and the prices of wheat fell relative to wages. 2. Marx published 'Das Kapital' in 1867, arguing that workers' wages would be squeezed to zero by capitalist competition (based on a much-debated and probably incorrect "Engels' Pause"). Thereafter, English wages skyrocketed. 3. Ehrlich published his book about coming global famines in 1968. Thereafter, global famines collapsed, and standards of living across much of the world rose.
Forget these failed forecasters. Sign up to Tupy's Human Progress agenda instead.
"I can’t tell you exactly how I would respond to someone who defended Hitler, but I know what I would not do: stalk him on social media, contact his employer to try to get him fired, or ask my government representative to help criminalise such talk. Does this make me a free speech absolutist? Not quite. ... [More of a] free speech maximalist....
"[T]he maximalist position grants special status to free speech and puts the burden of proof on those who wish to curtail it. While accepting some restrictions in time, place, and manner, free speech maximalism defaults to freedom of content. It aligns with the litmus test developed by U.S. Supreme Court Justices Hugo Black and William O. Douglas, which holds that government should limit its regulation of speech to speech that dovetails with lawless action:
'Let’s go kill a few Germans?' Not kosher. 'The only good German is a dead one?' Fair game. ...
"But but … critics sputter … what about hate speech? Free speech maximalism posits that you can’t regulate an inherently subjective concept. ...
"To those concerned about the dangers of loosening our tongues, I offer Greg Lukianoff’s bracing maxim: 'You are not safer for knowing less about what people really think'.”
"[W]hen the pandemic hit Ardern and Robertson had a decision to make. Respond in a fiscally prudent manner or borrow seventy billion, at least thirty of this was spent on non-pandemic frippery, and wrap themselves in a cloak of virtue while leaving an economic calamity to a future set of politicians. ...
"Ardern and Robertson used the pandemic to advance their own agenda ... [John] Key saw a crisis and, lacking an economic agenda or political philosophy, ran to the international money men to maintain the status quo rather than attempt meaningful reform.
"Given the content of the Covid Report the current government is right to highlight Robertson’s fiscal incontinence; pointing to the 70.4 billion total spend as a contrast with their own rectitude.
"Except. Well. ... [Nicola] Willis, who has managed to add over twenty billion new debt in her first two years in office, is projected to increase sovereign debt by more than Robertson achieved over the next five years.
"And this is without a pandemic, major earthquake or outbreak of foot and mouth. ...
"Imagine a company director who has seen revenue fall but maintains payroll by borrowing. Eventually the line of credit ends, staff lose their employment and the director is forced to sell the family home.
"It's 2029 [the Iranian regime] was bloodied and enraged, but not defeated, in a 3-week aerial campaign in 2026. They've had 3 years to rebuild. Not their civilian infrastructure -- their arsenal of drones and hypersononic missiles. Plus their capacity to manufacture them.
"Now the hardened underground facilities where they make, store, and launch them are now safely below the penetration depth of US bunker-busting bombs.
"In technology development, three years is an eternity.
"The new drones are faster, have a smaller radar signature, and are much smarter. Their hypersononic missiles have much longer range. They can hit anywhere in Europe. From a ship, they can hit anywhere in the US.
"Three years was also enough for [the regime] to enrich uranium to weapons grade. And to perfect their warhead design. And to manufacture dozens of them
"One fine morning -- Sep 11, by purest coincidence -- the US Fifth Fleet is hit by a swarm of drones. In the chaos, distracting the US military, three salvos of hypersonic missiles are launched. Tel Aviv goes up in radioactive smoke six minutes later. 15 to 20 minutes later, countries friendly to the US -- Germany and the UK -- get hit.
"And ships disguised as tankers launch at the US from both oceans.
"The survivors wonder what happened. They had confused two different things:
the 2026 war had an unconstitutional start;
Iran was not a serious threat.
"And nuclear. ...
"This is what the next Iran war would look like if the US abandons this one (i.e. loses) now. ...
"There is an elephant in the room. Let's acknowledge it. If we lose now, [the Iranian regime] will be emboldened. It may take them a year to rebuild their arsenal and make longer range missiles, and nuclear warheads. But they will do it, and unleash terror on a global scale. ...
"I did not say that I think the US will do this. I say if the US does this, then the result is predictable. ...
Not immediately. [The regime's] capability has been degraded. They will rebuild capability, and add much more (including nukes). And start the next war, at the moment they choose.
"I have made no secret of the fact that I think Trump is a terrible president, a dishonest narcissist who operates on whim and whose whims change ten times a minute.
"The major risk of a war like this with a terrible Commander in Chief like this is that his whim will change. ...
"The risk is TACO: the risk of Trump leading this attack is that he will chicken out, and give up.
"[Now it's begun] we shouldn't work to push him to do that. ...
"This is an argument for not going to war in the first place. But once the war is going, it is not an argument for abandoning it!
"'When you're going through hell--keep going!' (Winston Churchill)."
"The rebbe rightly rejects the false alternatives from
Machiavelli: 'be feared or be loved.' But he does not mention
a key attribute of the good man: INDEPENDENCE."
"One of Machiavelli’s most famous ideas is that it is 'better to be feared than loved.' He observed that, in power struggles, being feared can prevent betrayal or confrontation and can command a certain kind of respect. "My goal in life is not to pursue power at any cost. I also reject the false choice between being feared or being loved by others.
"What I seek instead is happiness—achieved through my own independent effort. I do not wish to live as either a master or a slave to anyone.
"Whether others fear me or love me cannot be the foundation of my happiness, because that would make my well-being dependent on them. True happiness, for me, comes from independence: from using my own thinking and actions to create the things I want to see existing."
In January Javier Milei explained to a room of Davos delegates to the WEF forum how the world works, and how economic progress and prosperity happens. This is an excerpt. [Milei's speech was originally in Spanish, and the English version at the WEF website has been transcribed by AI. I have edited slightly it for smoothness and clarity. Emphases mine]
Xenophon ... [first] highlight[ed] the benefit of private property by stating that the owner's eye fattens his cattle. [Or as the English saying has it: "It's the master's eye that makes the mill go"]... Xenophon then delves into the dynamic realm, noting that efficiency also entails increasing wealth: that is, increasing the available quantity of goods through entrepreneurial creativity, namely through trade, innovation, and recognising opportunity. ...
"[T]he institution of private property deserves a separate chapter. By focussing on it, the Austrian School of Economics from Mises, Hayek, Rothbard, Kirzner and Hoppe to Huerta de Soto has demonstrated the impossibility of socialism, thereby dismantling the illusory idea of John Stuart Mill that postulated independence between production and distribution; a form of academic deafness that led to socialism, and cost the world the lives of 150 million human beings -- while those who managed to survive the terror, did so in absurd poverty.
In line with [those writers'] previous remarks, and consistent with Xenophon's second [point], economic theory has identified four sources of economic progress.
First, there's the division of labour, which was illustrated by Adam Smith through the pin factory example. At its core, this is a mechanism that generates productivity gains, manifested as increasing returns. Although its limit is determined by market size, the size of the market is positively affected by this process. However, it is also worth noting that this virtuous process is not infinite and that its ultimate limit lies in the endowment of initial resources.
Second, there is the accumulation of capital, both physical and human. With regard to physical capital, the interaction between saving and investment is crucial, highlighting the fundamental role of capital markets and of the financial system in carrying out such intermediation. On the human capital side, the focus should not be limited to education alone, but should also include the development of cognitive capacities from birth, as well as nutrition and health, basic elements for gaining access to education and the labour market.
Third, there is technological progress, which consists in being able to produce a greater quantity of goods with the same amount of resources, or to produce the same output using a smaller quantity of inputs.
Finally, there is entrepreneurial spirit, or rather the entrepreneurial function, which, according to Professor Huerta De Soto constitutes the main driver of the economic growth process. Because, although the three factors mentioned are important, without entrepreneurs, there can be no production, and living standards would be extremely precarious.
In fact, the entrepreneurial function is not so much focused on short-term efficiency, but rather on increasing the quality of goods and services, which, in turn, leads to higher standards of living. On this basis, what truly matters is to expand the frontier of production possibilities to the maximum extent possible.
Thus, dynamic efficiency can be understood as an economy's capacity to foster entrepreneurial creativity and coordination.
In turn, the criterion of dynamic efficiency is inseparably linked to the concept of the entrepreneurial function, which is that typically human capacity to perceive profit opportunities that arise in the environment and to act accordingly to take advantage of them. This makes the task of discovering and creating new ends and means fundamental, driving spontaneous coordination to resolve market imbalances.
Moreover, this definition of dynamic efficiency proposed by Huerta de Soto coherently and appropriately combines Schumpeter’s idea of creative destruction with North's concept of adaptive efficiency.
Naturally, given the role of the entrepreneurial function, the institutions under which it develops are of vital importance. In this regard, both Douglass North and Jesús Huerta de Soto consider one of the key functions of institutions to be that of reducing uncertainty.
So, while North presents them as a set of humanly devised constraints that structure social interaction in a repetitive manner, Huerta de Soto considers that these institutions, conceived by human beings, emerge spontaneously from a process of social interaction without being designed by any single individual, and that they reduce uncertainty in the market process.
As Roy Cordato points out, the appropriate institutional framework is one that favours entrepreneurial discovery and coordination. Accordingly, within this framework, economic policy should aim to identify and remove all artificial barriers that hinder the entrepreneurial process and voluntary exchanges.
Given the decisive influence of institutions on economic progress, this directs our attention to the importance of ethics, as societies that adhere to stronger moral values and ethical principles in support of institutions will be dynamically more efficient and will therefore enjoy greater prosperity.
Accordingly, the fundamental ethical problem is a search for the best way to foster entrepreneurial coordination and creation.
Therefore, in the field of social ethics, we conclude that conceiving human beings as creative and coordinating actors entails accepting axiomatically the principle that every human being has the right to appropriate the results of their entrepreneurial creativity.
So the private appropriation of the fruits of what entrepreneurs create and discover is a principle of natural law because if an author were unable to appropriate what they create or discover, their capacity to detect profit opportunities would be blocked, and the incentive to carry out their actions would disappear. Ultimately, the ethical principle just stated is the fundamental ethical foundation of the entire market economy.
So, what we've just demonstrated is that free enterprise capitalism is not only just but also efficient and also that it is the one that maximises growth.
RELATED: Here's Per Bylund at the latest Ludwig Von Mises conference explaining that it's entrepreneurs, not politicians, who change the world for the better.
This is an amusing account below of an important public meeting. Important in the context of making Auckland an affordable city.
Here's some quick context: Auckland's town planners have strangled the city in red tape for years. In recent times however, many planners and councillors (and mayor Wayne Brown) have come around to the realisation that the fewer houses built, the higher the prices for those houses: that, just maybe, people might be allowed to do a bit more on their land, to maybe build a little more densely.
Opposing this, of course, are the councillors and politicians of the leafier suburbs like Christine Fletcher -- and of course David Seymour, who's dropped his party's alleged principles about property rights to wring his hands instead about there being 'no density without infrastructure.'
There's no greater hand wringer than Christopher Luxon however, who decided over summer that Auckland Council must 'downzone' their proposed plan change that would allow greater density.
So this meeting Wednesday night was to confirm where the push for greater density would be maintained in the upcoming Plan (where would be upzoned), and where that push would be relaxed a little (where would be downzoned).
When the government’s efforts to intensify Auckland were debated at council back in August last year, critics took turns wringing their hands about the strain it would place on infrastructure. Plan Change 120 [which will allow greater density] could end up putting apartments in places that weren’t set up to handle them, they fretted. “Ultimately you can’t do all this upzoning without making the commitment to provide the infrastructure that will support it,” warned Albert-Eden-Puketāpapa ward councillor Christine Fletcher ...
Yesterday the worriers got their wish. Thanks to a government backdown wrangled over chardonnays and summer barbecues, councillors are allowed to reduce the capacity in the new plan from two million to 1.6 million houses. Council’s policy and planning committee was meeting to decide where to make those cuts, and its chair Richard Hills started out explaining the staff recommendations to prioritise places 10km or more from the city centre. Asked why those areas should get first dibs on downzoning, council planner John Duguid was clear: it was because the land within 10km of the city centre had the best access to public transport, employment opportunities, regional amenities like parks and pools and three waters capacity, as measured by Watercare:
Three waters capacity in the central areas is set to improve even more when the Central Interceptor comes online soon. (Image: Watercare)
It should have been a celebration. But what would you know, most of the people who were once so concerned about ensuring housing is near infrastructure weren’t happy. Instead they were stewing over the revelation that the places with the best infrastructure were in their well-to-do wards. North Shore councillor John Gillon had looked at the maps and found that a 10km radius from the city centre would include the entire area he represents. He moved an amendment, seconded by Fletcher, to delete the 10km clause, saying he was “concerned” about the figure.
Waitākere councillor Shane Henderson was having none of it. He pointed out that west and south Auckland had accepted the vast bulk of the new houses in Auckland since the Unitary Plan passed in 2016. As for strain on infrastructure, those areas have limited pipe capacity and less access to public transport, and we see the effects of that outside-in planning in rush-hour congestion, parking shortages and sewage overflows, he said. Henderson argued Fletcher and Gillon were engaged in “a poorly dressed up move to take away intensification from the best-equipped parts of the city”. “The intention is simple: to downzone wealthy suburbs. There is no sensible reason for excluding central isthmus communities – again – from doing their part.”
The mayor was, if anything, more blunt. He said Gillon’s motion was aimed at putting housing in Pukekohe rather than areas close to “all the infrastructure”. “I don’t want to see endless sprawl just so nimbys in Parnell and politicians can get re-elected,” he said, in what appeared to be a shot at his political nemesis, Act leader David Seymour. “That’s disgraceful, I can’t vote for it.” ...
As Brown saw it, his colleagues’ first purpose was elitism. But if they had a second priority, it was delay. Gillon and Fletcher also put forward an amendment proposing to ask the government for more time to enact Plan Change 120. ...
The demand was familiar. Fletcher has asked for more consultation in just about every planning meeting for years, and the mayor was incensed. “I want to get out of this without further delay and dithering,” he said. “God almighty, it would be great to do something this three-year period.” ...
“For fuck’s sake, get on with it,” he said, as Fletcher spoke for the final time. ...
Afterward, Brown expanded on his frustration with Fletcher, saying the meeting was “one long filibuster to stop poor people living in her area.”
Read the whole thing here. It's an entertaining lunchtime read.
The media is slowly waking up to the reaction inside Iran to US-Israeli bombing, beginning to report on the perspective of Iranians living inside there who look forward to a regime change.
It's an unusual moment. People being bombed who are welcoming the bombing.
The New York Timesspoke to an engineer in Tehran who said many in the city were comfortable with U.S. bombings and that “they are upset if there is a night without bombing, and fear the war might end while the regime remains. You can see this clearly":
The experience of being bombed is even more terrifying because the government is sharing little information and sending few alerts, said Ali, an engineer in Tehran. Ordinary Iranians are cut off from the internet, and Ali said people had resorted to calling friends and relatives in areas where they saw fighter jets headed.
The ferocity of the attacks has divided sentiment among opponents of the government after a brutal crackdown on nationwide protests by security forces last January. Thousands were killed.
"Some people are comfortable with the bombings - I know that may sound strange," said Ali. "They are upset if there is a night without bombing, and fear the war might end while the regime remains. You can see this clearly. People say we have already paid enough of a price and the Islamic republic must go."
Ali said he was sympathetic to that view. "Our lives have no value for the Islamic republic," he said. "We are the government's human shields."
"Whether in politics or in the media, words are increasingly used, not to convey facts or even allegations of facts, but simply to arouse emotions. "Undefined words are a big handicap in logic, but they are a big plus in politics, where the goal is not clarity but victory -- and the votes of gullible people count just as much as the votes of people who have common sense."
"People have it all wrong" about AI and robots, says philosopher Harry Binswanger.
Robots are going to take your job? No doubt.
What if robots take all the jobs? Hint: They can't.
You may not keep this job. But your next one will pay so much more. How can we know that? Because, he argues, "We’re all going to get richer. The more that AI and robots can do for us, the richer we will get."
How so? Because AI and robots makes everyone’s labour far more productive -- and the result will be more goods produced, and hence "more wealth in the whole economy."
More wealth means more savings. More savings means more investment. And "more investment means more goods produced, which means a drop in the cost of living, which means a rise in the standard of living."
But how can he be so sure that if your job is replaced you'll be able to find a new one and "take part in this bonanza?"
The temptation is to answer by finding things robots won’t ever be able to do. “Robots will never be great chefs.” “Robots will never be venture capitalists.” “Robots will never write a first-rate symphony.”
That’s irrelevant. The point is that even if AI and robots could do everything better than any human being, that would enhance, not undermine, the value of human labour.
Why? The explanation comes from applying here an important truth discovered two centuries ago. In 1817, the great English economist David Ricardo identified “The Law of Comparative Advantage.”
Ricardo's Law of Comparative Advantage explains that no matter how poor you country may be at producing stuff, if both you and others specialise in what they each do best then, at the end of the day, we are all better off. It's best, for example, if Scotland trades whisky with France for claret and burgundy, rather than the other way around. ("It is the maxim of every prudent master of a family,"explained Adam Smith, "never to attempt to make at home what it will cost him more to make than to buy.")
Equally, the best way for New Zealanders to get cars and electronics is not to try making cars and electronics ourselves, but to process grass into milk powder, meat and wool so that New Zealanders can trade for those fancy devices. And when we do, we're all better off. ( If you're struggling with the concept, because it is remarkably subtle, PJ O 'Rourke's short explanation is one of the funniest on record, and undoubtedly the only one using Courtney Love to help explain things.)
Recognising that self-same principle of Comparative Advantage applies between people as it does to countries, economist Ludwig Von Mises expanded Ricardo's Law to make it "one of the most beautiful laws of the universe." Calling it the Law of Association he showed that specialisation allows even the less productive to benefit from working with the more productive -- or what his student George Reisman characterises as 'what the productive cleaner gains from the genius inventor.'
Even if the inventor can clean faster than a given cleaner, it still pays him to hire that cleaner because off-loading the cleaning work saves him time. He can then use that saved time in the area of his comparative advantage: inventing and selling more stuff.
Likewise, even if there comes a time when the robots can do everything better and faster than human beings, [even] more wealth will be produced if robots and humans each specialise in what they do best. Super-robots would produce more for us if we save them from having to do things that are less productive [for them].
(Of course we won’t be trading with robots: robots own nothing. Robots are owned by people, and those people will be paid for selling robots or for renting them out, just as you can rent power tools from Home Depot today.)
The Law of Comparative Advantage means humans will never run out of productive work to do. There will always be tasks that you don’t want to waste your rented or owned robots’ time in doing.
If you’ve got a robot building you a swimming pool, you don’t want him to stop to cook you dinner.
A chainsaw is a lot more efficient than a knife at cutting. But you don’t use a chainsaw to slice a loaf of bread. Particularly not if that chainsaw is being used by a robot to clear a place for a tennis court in your backyard.
So, rather than panic over “the rise of the machines,” let’s bear in mind the Law of Comparative Advantage ....
And let's recognise that "even with science-fictional super-robots, there will still be money changing hands and a price-system, just as now. You will still be paid for working in the field of your own comparative advantage.
New kinds of jobs will appear, as they always have when technology advances. Ironically, most of the jobs people are afraid of losing -- such as programming jobs or truck-driving jobs -- were themselves created by technological advances. There used to be an American saying: “Adapt or die.” Having the same kind of job as your father and grandfather did is not the American dream.
What new types of job will be created? I can no more project that than a man in 1956 could have projected that today there would be jobs in something called “social media”; or that money can be made by driving for Uber and by renting out living space through AirBnB.
The robots will make work much easier, more interesting, and much better paid.
It's a busy week. This week also marks the 250th anniversary of Adam Smith's Wealth of Nations, the first in-depth exploration and explanation of (in PJ O'Rourke's words) why some nations are prosperous and wealthy and other places just suck.In honour of the anniversary, here are several of Adam Smith’s most insightful observations:
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages. [The Wealth Of Nations, Book I, Chapter II]
It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. [The Wealth Of Nations, Book I, Chapter I]
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things. [Lecture in 1755, quoted in Dugald Stewart, Account Of The Life And Writings Of Adam Smith LLD, Section IV, 25]
It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. [The Wealth Of Nations, Book IV Chapter I]
By means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland? [The Wealth Of Nations, Book IV, Chapter II]
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. [The Wealth Of Nations, Book IV Chapter VIII]
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices…. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary. [The Wealth Of Nations, Book IV Chapter VIII]
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution... It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it. [The Wealth Of Nations, Book I, Chapter XI]
It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. [The Wealth Of Nations, Book II, Chapter III]
There is no art which one government sooner learns of another than that of draining money from the pockets of the people. [The Wealth Of Nations, Book V Chapter II Part II]
Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. [The Wealth Of Nations, Book IV, Chapter II]
What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. [The Wealth Of Nations, Book I Chapter VIII]
The man of system…is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it… He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. [The Theory Of Moral Sentiments, Part VI, Section II, Chapter II]
This is a substantial change – and as a GP with nearly 40 years’ experience in medicine – let me tell you, Peter, it sends shivers down my spine.
Doctors are being told they must now accept that colonisation - present tense, ongoing - is why Māori can't access healthcare, and that it is their professional duty to challenge the "systemic bias within the system”.
If they don't? Their practising certificate could be on the line.
I'm Dr Roderick Mulgan - GP, barrister, and International Director of the Free Speech Union.
I've read these draft standards with both hats on.
As a doctor, I know what good patient care looks like.
As a barrister, I know what the law requires.
These standards go beyond both.
The consultation closes 24 March. The Medical Council needs to hear from you.
It takes minutes. We've made it easy. More on that below.
What doctors must now believe
The draft standards on "cultural competence, cultural safety, and hauora Māori" read less like a regulatory document and more like a postgraduate ideology course.
Doctors must accept that:
the health system is built on oppressive "settler traditions";
colonisation is the reason Māori can't access health resources;
patients are entitled to equitable outcomes across identity groups (somehow);
doctors must use their professional influence to actively "dismantle unfair systems;"
that doctors should challenge colleagues who do not embrace this approach.
Which are all funny things to put in a medical standards document.
You might agree with some of this. You might agree with all of it. That's beside the point.
The question is whether a medical regulator can turn highly contested political opinions into compulsory professional doctrine - backed by the threat of deregistration.
What the law actually says - and what happens in a consultation room
As a barrister: the Health Practitioners Competence Assurance Act requires doctors to demonstrate cultural competence, including respectful interaction with Māori.
That's it. No ideological extremism. No activist roles. No dismantling.
This is yet another clear-cut case of a regulator trying to impose powers beyond what the legislation allows them.
The New Zealand Bill of Rights Act protects not only the right to speak freely, but the right not to be compelled to say things you don't believe. What the Council is proposing is compelled belief, dressed up as professional development.
As a doctor what matters when a patient walks through my door is whether:
Whether I hold the Council's approved position on colonisation has precisely nothing to do with any of that.
On Friday, I was on The Platform talking about the MCNZ.
The chilling effect nobody's talking about
Free Speech Union Council Member Ani O'Brien made a sharp observation earlier in the week: once disagreement with a framework is treated as evidence of the very problem it describes, recertification stops being about clinical skill. It becomes a test of whether you've learned to say the right things.
The real danger isn't dramatic purges. It's quieter.
Doctors will learn the language. They'll stop saying what they actually think - not because they've been persuaded, but because they have mortgages and families. A culture of inquiry becomes a culture of compliance.
Good medicine depends on doctors who think critically, question assumptions, and follow the evidence. These standards would replace that with ideological conformity.
What you can do
The Free Speech Union is conducting a full legal analysis and will submit before the deadline.
But this consultation is open to everyone - and the Council needs to hear from more than just the institutions already nodding along.
If you think doctors should be judged on the quality of their care - not the orthodoxy of their politics - make a submission.
