repudiate the national debt

Leaving aside the question for the moment of unfunded liabilities direct debt in Canada is around 1.2 trillion dollars for all levels of government. Should this money be repaid and if so how should the funds for it be obtained? Who is it owed to? Government debt is often wrongly equated with private debt. While money borrowed by an individual or organization, lent from a high time preference individual to someone with a lower time preference, is productive and constitutes a contract which morally must be fulfilled (indeed, to not repay debt one incurs is tantamount to theft) when the state pays for wasteful spending with a deficit this money can only be repaid by extorting the taxpayer. This represents then not so much a morally and legally binding contract but rather a plan to commit an act of aggression and both the government official and loan profiteer in question are culpable. Since we can hardly sanction the manifest evil that is taxation (and who can deny that it is wrong to obtain revenue by threatening to lock someone in a cage if they do not give up their cash?) we are left with two options for handling this sum. The first is repudiation; the second auctioning off assets held by the government such as crown land or government buildings.

While it is immoral to tax, this is not the only problem with repayment. Raising a trillion dollars through taxation would also be a powerful blow to our future economic prosperity. Such a large amount of wealth taken from the hands of the individuals who created it would leave our nation significantly poorer. It would mean factories not built, jobs not created and it would also mean a much lower standard of living for many people. People or businesses might simply flea in favour of a nation where they can keep more of their income.

Now it's true that repudiation would make it difficult, if not impossible for the Canadian government to borrow in the future but is this a curse or more of a blessing? Take the example of stimulus spending during a recession. We are told that this is necessary for the government to borrow money during a recession to rescue us from the economic downturn but this Keynesian explanation of the business cycle has been dis-proven by history. Far from depressions occurring as a result of a failure of aggregate demand the real culprit is bank credit expansion and artificial tinkering with interest rates. The trough is actually the healthy stage of the business cycle, in which malinvestments in capital goods industries are liquidated and reallocated on the basis of consumer demand. Efforts by the state to rescue the economy will actually make the problem worse in the long run when taxes are collected to repay the funds borrowed to pay for stimulus or malinvestments are again liquidated. Government planners would be better served to study the example of Harding rather than FDR or Hoover. Saye's law, that supply of x constitutes demand for y, illustrates that there is no such thing as a failure of aggregate demand or a general glut of overproduction.

But what about war? Here we have a bit of a mixed bag. In the eventuality that say the Russians invaded it would indeed make sense to borrow significant funds to raise a larger army and fight them off. But this is a truly remote possibility indeed. Canada is not only in possession of significant natural defenses, to whit our oceans, we are also geo-politically connected with regards to our alliance with the Hegemony and the E.U. The boogieman of invading Reds is simply a convenient prop for our elites and the imperialist class. Still it does make sense to prepare for the possibility of a defensive war at some point in the future, by liberalizing gun laws, by allowing for greater acceptance of immigrants and refugees and by adopting the principles of laissez-faire in our economy, the latter two points being critical to national security since we will need a much larger population and industrial base if we are to fend off the rampaging Chinese or Indian hordes of the hypothetical wars of the late 21st or early 22nd century. At any rate the massive nuclear arsenal of our close American allies renders the prospect of foreign invasion of North America an extremely unlikely event. But debt can be financed to use an entirely different set of wars as well, not only those fought defensively here at home but also those which occur in other nations, such as Afghanistan or Iraq. And while it would be good to be able to borrow money to keep our country safe it is terrible to finance wars of aggression in the middle which actually make us less safe by inciting hatred for us both domestically and around the world. Not only do these wars hurt our popularity they also contribute to the murder of countless souls and bankrupt our nation, and while a defensive war is a remote possibility an offensive war or police keeping action is an almost certain reality.

Another problem with repudiation is that a significant chunk of the debt is held by Canadian banks. Could this not send a shock through the banking system? What if the banks shut down and people lost their savings? While it would be possible to settle these debts through the sale of crown lands, it is also important to recognize that money is not exactly wealth. Even if this did cause the banks to collapse and a massive reorganization of the economy to occur the wealth of the nation would still be intact. Farms would still produce foods, factories would still churn out goods and the tar sands would still extract fuel. Indeed there is a strong argument that the banks should collapse since they are fundamentally unsound and the fractional reserve system is both fraudulent and dangerous. Were it not for constant government intervention to protect bankers, that is to say if we had a system of free banking and sound money, they would be forced to engage in full reserve banking and our society and economy would be far better off. It would be far more difficult to fund wars of aggression or any manner of ill advised government spending and we would see rates of economic growth which are scarcely imagined possible in the developed world.

Repudiation is a radical step. It is not discussed by anyone in the political mainstream except to be dismissed but it is the only moral approach to handling government debt and our society would be far better off if it is adopted.

corporate welfare in Ontario

Decades of intervention in markets in Ontario has created unfavourable economic conditions. Unemployment is high and businesses are reluctant to invest in a locality where all of their profits will be expropriated by the state. Instead of taking the logical step of repealing the confiscatory tax rates and onerous regulation that makes Ontario such an inhospitable place for industry, the Wynne government has hit upon a brilliant plan : tax giveaways! And why not? Truly, what problem cannot be solved by spending more of the taxpayers hard earned lucre?

There's $220 million for Cisco, $110 million for Open Text Corp, some $27.7 billion in corporate subsidies in total were given away during the 90's and 00's and around $3 billion a year every year for the latest years. Keep adding up the billions and pretty soon you are talking real money. But what about the competitors of the firms who receive this gift? Why must they be taxed so that the companies the are competing against on the market may receive the subsidy? How is that fair? It seems as if the Liberals would have us revert to the mercantilism of 16th and 17th century Europe. Instead of free competition in the market they would have carefully staked out economic fiefdoms, where a few prosper at the expense of everyone else. Instead of economists being bold champions of freedom they are today toadies of those in power, rationalizing and explaining away idiotic state policy. Now, instead of business fighting to see who can provide the public with the best product at the lower price, the real battle is to see who can lobby Queen's Park for the best subsidy. Why compete on the market place when you can compete in the political arena instead? Why subject your firm to the vagaries of the open market when the proper grant from the state can ensure you of profits for decades to come?

Instead of the government picking winners and losers it would be far better for Ontario to revert to the free market. Direct these subsidies into a general reduction of taxes for all and attract business not by unfair favouritism but by a more hospitable business climate in general. Lower taxes dramatically and deregulate radically! Eliminate labour laws and special privileges for unions. Enshrine property rights in law and ensure the court system makes this it's priority in settling disputes. Then capital would flow from around the world to this province and the economy would boom. Unfortunately this corrupt gang of menshevik crooks will never make these changes. It's up to the people of Ontario to rise up, to denounce these etatist policies and shout down the voices of those who apologize for idiot economic policies. Then, and only then, we can again know prosperity.

the city's still breathing but barely it's true, through buildings gone missing like teeth

Ah Winnipeg, birth place of The Weakerthans, murder capital of Canada, consistently voted #1 place you don't want to get caught outdoors in after midnight. A new report from Statistics Canada shows that over 1 in 4 Manitobans are employed by the state (the remainder of the population, presumably, are unemployed natives) and that the wages of these bureaucrats are neatly outstripping inflation. With the NDP in charge the bureaucracy expands, verily. The Selinger government with a lowly 17% approval rating seems destined to fall in the next election, which may coincide with the federal voting day (October 2015 although both dates are tenuous) and already a palace coup has been launched with both Steve Ashton and Theresa Oswald vying for the dubious honour of head of the Manitoba NDP. Both Ashton and Oswald are now emphatically against the extremely unpopular sales tax hike which they previously trumpeted.

But what's wrong with all this government hiring anyway? Doesn't government spending stimulate the economy, doesn't the wealth paid to bureaucrats trickle down to the rest of the economy? The problem is first of all, every dollar which is paid out in salary must be raised in taxes, or borrowed or inflated. Let's deal with taxation first. First there is the issue of justice. If someone creates wealth, how can it be just for anyone else to take that wealth from him and spend it? And what is the means by which the state raises taxes? The money is not requested voluntarily; it is taken through force! The punishment for declining to pay taxes is incarceration, and if you have never had the misfortune of being locked away in one of our dungeons I can assure you the experience is savage indeed. Surely we can all concede that it is wrong to use force to get what you want? But putting aside justice for a moment, how about social efficiency? When people have money they will necessarily spend it on the things they value most. They will satisfy their most urgent ends, then move on to their second most urgent, and so on and so on until they or their wife have spent all the cash. Or they could save some of it, although how anyone saves anything with the confiscatory tax rates and high inflation of our economy is beyond me. So by choosing for themselves they necessarily obtain the highest utility. But what happens when that wealth is taken by the state and then spent on their behalf? Necessarily the spending decisions of the government reflect not the values of the person who's behalf the spending is being done, the taxpayer, but rather the consumptive decisions of the bureaucrat in charge of spending. So there will be a great loss in utility.

But doesn't government spending stimulate the economy, especially in times of recession? This is nothing more than Bastiat's broken window fallacy. And like Bastiat we must consider ce qu'on voit et ce qu'on ne voit pas. We must consider not only the hiring of the bureaucrat and the spending that bureaucrat makes in the private sector, buying clothes, housing, an auto perhaps but also the taxes which finance his salary, and the spending which the taxpayer can no longer do, the clothes, television sets and automobiles they can no longer buy. When you consider not only the immediate effect of a government policy but also the secondary and tertiary ripples of state action then you realize that it is not necessarily the rosy picture depicted by would be planners.

We must finally consider another aspect of this spending. If the government spent money only on roads, police and courts, for example, it wouldn't really be all that bad. We must drive on roads and surely someone must tackle the murders and evil doers out there. These are the most productive areas of government spending. These things are vital to the future of our society. But what of all the other things that government does? Take the regulatory state for example. A lot of their work is actually counterproductive. Forcing business owners to jump through pointless hoops and retarding our economy with layer after layer of red tape and bureaucrats to ensure it is all observed scrupulously. From the pointless dictates of the competition bureau (like the latest crackdown on price gouging), to needless war in the middle east, to the pointless war on drugs here at home, there are no shortages of foolish government policy. Here there is a double loss, first in the money which is taken out of the public sector through taxes, but then secondly in the harm that is inflicted through these types of harmful government spending.

But then, the etatist might argue, what if we don't tax the money, but instead inflate or borrow? These methods of financing government spending come with their own attendant costs. Inflation is a tax on those who save and it's also a disincentive towards saving money. But without savings how will our economy grow? Where will the supply of funds for much needed capital come from? And the new money does not enter the economy evenly, instead those who get it first benefit by spending it at old pre-inflation levels whereas those who get it last suffer the the bulk of the effects. It is also no coincidence that war coincides with inflation. War is extremely expensive and requires both the ability to collect taxes coercively and to debase the money supply in order to afford it. So by enabling the state to inflate we also enable it to finance it's monstrous wars of aggression.

As for borrowing? Government borrowing crowds out the private sector demand for funds. There is only so much money which can be lent out. Further, the money will eventually be repaid, at which point taxes must be raised to do so and you have simply delayed the problem for a few years but it has grown worse in the meantime.

So perhaps when Pallister gets in next year things will be different. Perhaps taxes will be reduced, the bureaucracy cut, the system reformed... but I won't be holding my breath. Hope lies outside the political spectrum, beyond the decisions of the governments of the day, in the minds and beliefs of Canadians across the country. It is the power of ideas that shape history; instead of waiting for the good king to arrive at last we should focus on what we can improve, in our own lives and our interactions with others.

prentice has avarice on the mind

While the rest of North America is celebrating the fact that they can finally afford to till up their car falling oil prices have left everyone here in Alberta a little unhappy. No one is less impressed with this state of affairs than Jim Prentice, Premier of Alberta, who has been pontificating on how his government can make up for lost oil royalties. This is actually a wonderful opportunity for the province of Ontario to reduce the burden of government in this region. While Prentice et. al are sure to look at higher taxes as the way forward this would be the wrong approach. It is a truism that the greater the level of economic freedom in a locality, the greater the prosperity. Lower taxes and less regulation, ceteris paribus, mean people are financially better off. Instead of borrowing the money to make up this short fall or taxing it the government of Alberta should simply reduce how much of our money they are spending every year. Far from putting Alberta into a recession, as Prentice claims, this would usher in a new golden era of prosperity, if the cuts were drastic enough.

But where to cut? To the libertarian the answer is easy. Anywhere and everywhere, the more severe, the better. Why not reduce the number and salaries of the bureaucracy? Pensions could be clawed back, services privatized, land and buildings auctioned off. Why should MLA's make 200k+ a year when they could easily get by on 50? Auction off all the schools. Get rid of the ministry of aboriginal relations, the ministry of seniors, of jobs and skills training. Wield an axe mercilessly and let it land where it may. Shut these ministries down, fire all the bureaucrats that work with them, don't give them a dime in severance pay, take back their pensions and auction off all the buildings in which they pretended to work. Let these resources be reallocated back to the private sector (including the labour, such as it may be), where they can go to work creating wealth instead of mindlessly consuming it.

shut down health canada

Where would we be without our omniscient state to watch over us like a guardian angle, ever ready to swoop in at the last moment and save us from ourselves? Far better off no doubt. What an infantile view of themselves most Canadians must have to welcome the ever present oversight of the regulatory state. Here's an idea : if you think a drug is too dangerous, how about you just don't take it? When did we all become so incompetent that we require the guidance of bureaucrats to control our treatment options? And what of those who languish needlessly while some blithering bureaucrat decides whether or not medicine can go to market?

It takes an especially shallow view of other people (or an excessively generous perspective on one's own wisdom) to assume that you know better than a stranger how they should live their life.  That anyone could know better than anyone else how that person should conduct their affairs and manage their health. The truth is we are all profoundly different people with disparate ends and varied means. It is nothing short of hubris to imagine that without the benefit of having lived a person's life in it's totality that you are better informed on their decisions than they themselves are. Instead of dictating to others, or having the state do so by proxy, why don't we just all live our own lives, mind our own business and let others go about theirs?

To be sure drugs can be extremely dangerous. They can also be rather benign, like caffeine. Either way the decision on whether or not to take a drug should be up to an individual, ideally with the aid of a physician or some other expert. What we don't need is to insert an officious and narrow minded bureaucracy into the process. There is a dangerous incentive in the regulatory process, whereby if a drug is released and people die then heads will roll and the bureaucrat who rejected the drug is liable to lose their job. On the other hand, if a drug is not released, which would have saved people, then nobody is really any the wiser. The people best suited to weigh the risks and benefits of a particular drug are the individual at risk and the physician who is treating them not some far removed central planner. What we need to do is scrap the regulatory process altogether. It's unfortunate that when considering this problem people seem to only consider the risk of a dangerous drug being brought to market but not the equally appreciable risk of life saving medicine being delayed or denied entirely.

LOTR : the return of the king

One message of Return of the King with which surely libertarians can relate is the importance of courage in the face of overwhelming opposition.  Even when it seems as if Aragorn, the true king of Gondor, has abandoned the fight and defeat is certain Theodin, King of Rohan, rides in to battle.  Even when forbidding mountains and an army of ten thousand orcs stands between Frodo and the fires of mount doom he and Samwise proceed valiantly into what appears to be certain doom. And why not? If the cause is noble enough, as surely our struggle for the free society is, then what  choice do you have but to take up arms? So even when every media outlet, political candidate and etatist intellectual espouses the belief that central planning is the only path forward for our society we must not succumb to the temptation of defeatism and withdraw from the struggle.
There is also a certain agreeable strand of feminism in the movie. Instead of asserting that men and women are equal, or if not or should be made to be so, it is precisely Lady Éowyn's femininity that allows her to slay the Witch King of Angmar. The differences between men and women should not be denied but celebrated.
In the siege of Gondor we have at last the good war, the just war, entirely defensive in nature. This is quite different from Western military adventures, which occur not at home but in other nations and are motivated not so much by the necessity of self preservation but by base economic interests and the machinations of the imperialist classes. There are no merchants of death lobbying for wars of aggression in Rohan or Gondor, only brave knights taking up the heroic struggle for the freedom of their people.
While it is tempting to look at the roles of Aragorn and the Stewart of Gondor as a reiteration of the myth of the benevolent despot perhaps there is a more sophisticated interpretation than simply the modern idea that we are always one election away from choosing the right technocrats to command the state apparatus. The kings of middle earth, and indeed the kings of old on actual earth, were not exactly analogous with modern governments. They had nowhere near the powers of coercive taxation, debasement of money or arbitrary regulation which exist today. The omnipotent state is still a relatively recent invention. Libertarians are not anarchists (without rulers) per se, not necessarily opposed to the notion of rulers entirely. Instead we demand that all relationships be voluntary and uncoerced. Why not view the illegitimate rule of Wormtongue in Rohan and the Stewart in Gondor as an involuntary, deceitful relationship between ruler and ruled and contrast with the good, healthy and voluntary rule of the true kings. What is wrong with a king who serves his peoples interests, who does not rule through plunder but instead through voluntary means, fighting personally for their freedom in battle and leading the charge against the forces of evil?
All in all it was an incredible film, with several recurring libertarian themes and aside from that a cinematic masterpiece.

Two Towers

Probably one of the best things about Two Towers is that virtually everyone is armed and all very quick to use their weapons in self defense. Defensive violence is glorious and the movie rightly trumpets it.  One of the central ideas of this movie is the importance of actively resisting evil.  It's not enough to simply withdraw, as the elves did to Valinor or the Rohan did to Helms deep, but instead you must do battle and confront malicious forces wherever they exist. In short tu ne cede malis sed contra audentior ito. Another common theme is as Acton said that "power corrupts". A craven love for the ring turns Smeagol into a deceitful, murderous beast; he becomes obsessed with weilding power and this in turn destroys him.  The movie isn't perfectly anti-authoritarian. The myth of the 'good king' is pervasive. Theodan, King of the Rohan, has his rule subverted by Wormtongue acting at the behest of Sauroman acting at the behest of Sauron but once the spell is broken all is well again in the Kingdom  (well, except for the ever present threat of ramapaging orcs of course). Throughout the movie kings, at least true kings, are seen as a great force battling on the behalf of their people, instead of the exploiters they truly are. Another troubling pro authority message is  Gollum's slave-master relationship with Frodo, which seems to be a positive influence on him. Over all it was a great movie, which stresses the importance of friendship and the ability of small people to effect great change in the world.