- Stockholm Syndrome and our Love-Hate Relationship with Government — Neville Kennard on the prison of Australia and how we treat the wardens.
- Kitching on Hogan as Political Prisoner and more — Ronald Kitching saves us from reading the newspapers.
- Why There Was No Unemployment in Hong Kong — Mark Tier on the evil minimum wage.
- Our Global Island and Its Wannabe Dictators — Peter Hume does the calculations for Treasury and government.
- WORLD EXCLUSIVE: Political Corruption Exposed! — the editor gives the position of Economics.org.au on the policy area of “scandals”.
by Mark Tier, reprinted from his website with permission
[This article was originally titled Why There Is No Unemployment in Hong Kong. Today, a more appropriate title is Why There WAS No Unemployment in Hong Kong. When I wrote this in 1991 unemployment in Hong Kong was 1.5%; now it’s around 7.7%, almost as high as in France and Germany. What’s changed? Lots. So I’ve added updates at the end of the article.]
Recently, on a ferry crossing Hong Kong’s harbor, I struck up a conversation with a black musician from Seattle. He told me how much he preferred living in Hong Kong to the States. What impressed him most about Hong Kong was that “everybody has a job!” Each time he repeated this comment his eyes would almost caress the Hong Kong skyline; and he spoke as if a place where everyone has a job was so alien to his experience, that he thought of Hong Kong as a fantasy land, a place that simply could not exist on earth.
Back home, he told me, unemployment, especially for blacks, is high [remember: this was 1991]. He was also puzzled at the wide-spread influence of the United States here, and the evident esteem in which his country was held when his personal experiences were quite at variance to this image. Something he definitely did not miss, he said, was his treatment by the police. From his perspective he told me, blacks were either poor and therefore badly treated by the police; or if they appeared to have money, the police assumed they were drug dealers — and acted accordingly.
I don’t wish to add to the barrage of words that’s been written about the drug problem, except to remind you that whenever and wherever prohibition has been tried it has failed. And it’s failing again. This man’s sense of despair when talking about his life in Seattle made me think one reason people turn to drugs is from an attitude of hopelessness engendered by the impossibility of finding a job. And that impossibility happens whenever minimum wage laws bar the unskilled from ever being employed.
A minimum wage is simply another form of price control: it prevents anyone from offering employment below a certain price. Like any other price control, the result is a shortage or a surplus: in the case of a minimum wage, the surplus is called “unemployment.” See how it ends »
by Ronald Kitching, dissenting editor
Stimulations, Booms and Busts
History shows that freedom of the individual, and the open, competitive spontaneous organizations, customs, and procedures in a free market, secure private-property system, is much more efficient than centralised consciously rational-directed systems of organising the human economic activity.
The mystery for any economy, is how people’s actions are impersonally coordinated by the market. All classical liberal monetary theorists noticed, that the price system — free markets — does a remarkable job of co-ordinating people’s actions, even though that coordination is not part of anyone’s intent.
The market, wrote F. A. Hayek, is a spontaneous order. By spontaneous Hayek meant unplanned — the market was not designed by anyone, but evolved slowly as the result of human actions. But the market does not always work perfectly.
The main cause of market distortions is increases in the money supply by the central bank. Such increases make credit artificially cheap.
Entrepreneurs then make capital investments that they would not have made had they understood that they were getting a distorted price signal from the credit market.
Artificially low interest rates cause investment to be artificially high, and cause mal-investment and the boom turns into a bust. As readjustment to reality occurs many people are thrown into temporary unemployment.
Monetary theorists see the bust as a healthy and necessary readjustment. The way to avoid the busts, they argue, is to avoid the artificial booms that cause them.
The “stimulation” commended by many was and remains an artificial boom. Bernanke is getting ready for another one. See how it ends »
- Kitching for PM and other news
- Kitching on the Canberra Kremlin
- No Arbiter Superior to the Always Democratic Market
- Kitching at Large
- Kitching's Sensible Advice to Canberra
- Kitching on Hogan as Political Prisoner and more
by Neville Kennard, contributing editor
“Stockholm Syndrome” refers to an event in Stockholm, Sweden in 1973, when some bank robbers took captive a group of hostages and held them for six days while the robbers negotiated with the police. What happened was that the hostages developed an attachment to their captors, despite the fact they were held prisoner by them and their captors were criminals. The name Stockholm Syndrome was given to this paradoxical psychological phenomenon by criminologist and psychiatrist Nils Bejerot who investigated the crime.
Could the same phenomenon explain the strange attachment people have for their politicians?
Politicians are often held in rather low regard by the citizens of a country. They rank down there with car salesmen when surveyed on trust and respect. And yet there is also a strange attachment the electorate holds for these politicians, these guards and jailors who take the citizens’ money (in the form of taxes), spend it foolishly and wastefully, impose liberty-restricting regulations on their “captors” and they behave like lords and masters of the people who elect and pay for them.
What is this about?
Why do the citizens identify with and protect those “guards and keepers” who hold them hostage with promises and threats? If one has been born in a kind of prison, and then been told that it is one of the best prisons around, that it is a bit better than this other prison across the water, much better than some prisons, especially those Communist prisons we hear of. And there are even people lining up to get into our prison and out of a much worse prison. Our prison has a nice flag, a national song and a pretty good football team. See how it ends »
- Welcome from Neville Kennard
- Think Tanks Don't Work
- "Market Failure": Just what the government ordered!
- The Tragedy of the Tax Pool Commons
- Corporate Welfare
- Citizenship for Sale?
- I Don't Vote
- Voting: Right or Privilege?
- Stockholm Syndrome and our Love-Hate Relationship with Government
by Benjamin Marks, editor
Newspapers are always going on about SCANDAL! in politics. But they only ever focus on ridiculously minor schoolmarmish issues, comparable to typographical errors that do not alter the meaning of anything. Shallow journalists think they discredit politicians when they show them doing things that are the proper concern of a jealous wife (or significant other). And yet readers seem to think that newspapers are preserving the morals of society, as if the disgraced politician is irreplaceable and their job description will disappear when the person who happens to fill it does.
Looked at objectively, the question of whether a married man should be associating with young women, homosexual partners or convenient websites, is analogous with whether a cricketer, representing his nation, should be playing Test cricket one week and One-Day cricket the next — not to mention, heaven forfend, Twenty20. Recall the trouble Shane Warne had.
To return from our analogy, there are two common justifications given for making public politician’s private perversions:
- “They are doing it when they should be serving the public.” This is equivalent to asking for a bit of the action yourself.
- “If a politician’s morality is questionable here, then extrapolate that elsewhere.” Stupid argument. We already know what they are doing elsewhere. They are not hiding it. Only journalists, academics and so-called think tanks are.
Mencken went a long way toward where everyone else should when he said, “Adultery is the application of democracy to love.”1 But even this doesn’t go far enough, because it ignores that little issue of consent for the participating parties.
Wanting to avoid controversy, naming names or implicating anyone, imagine a purely hypothetical situation where a politician, inexcusably ignorant of economics, supported, say, the minimum wage; which, if effective, results in compulsory unemployment. Would not this bring their character into disrepute? Should we hold them accountable for this blatant violation of liberty, productivity and justice or only for less consequential issues? Why don’t journalists focus on this? Is it too disgraceful to print? See how it ends »
- H.L. Mencken, A Mencken Chrestomathy (New York: Vintage, 1982). p. 621. ↩
- Why Sports Fans Should Be Libertarians
- Ron Manners’ Heroic Misadventures
- Government Schools Teach Fascism Perfectly
- Deport Government to Solve Immigration Problem
- The Drugs Problem Problem
- Capitalism Harmonises Population
- Self-Defeating Campaigning
- Gittinomics: Economics for Gits
- Exclusive Ross Gittins Interview on The Happy Economist
- Population Puzzle Solved
- An Open Letter to the CIS
- Principled Foreign Policy Options: Reinvade or Shut Up and Get Out
- WORLD EXCLUSIVE: Political Corruption Exposed!
by Peter Hume, columnist
Imagine an island with seven people on it producing a total of seven goods, with no contact with the outside world.
The economy consists of all the things these people produce and exchange with each other. So Fred catches a fish. Pete cuts down a coconut. And so on.
Remember factorials in maths? 4 factorial equals 4 x 3 x 2 x 1. To find the total possible number of permutations of exchanges on our island, you have to multiply numbers of combinations of persons, and numbers of combinations of goods *factorial*.
If you do the maths, the total possible permutations of one person exchanging one good, is 2,365. If you include all possible permutations of combinations of people and combinations of goods, the total is 700,776,097.
Now think of an economy the size of Australia: imagine the total number of possible permutations of exchanges for 22 million people and thousands of goods. See how it ends »
- Thoughts on Hung Parliament
- Our Global Island and Its Wannabe Dictators
- Voting: Right or Privilege? — Neville Kennard explores voting dynamics.
- Kitching’s Sensible Advice to Canberra — Ronald Kitching successfully replaces the nation’s newspapers.
- Thoughts on Hung Parliament — Peter Hume with some biting analysis.
- Spooner on the Secret Ballot — the great Lysander Spooner on the legal consequences of the secret ballot.
- Best Election Day Commentary
- On Destroying the Prestige of Government — a short note by Albert Jay Nock.
- Principled Foreign Policy Options: Reinvade or Shut Up and Get Out — the position of Economics.org.au on foreign policy.
by Neville Kennard, contributing editor
Voting, in western democracies, is a Right that all citizens, over a certain age, gain typically when they turn eighteen. It was once at age twenty-one.
The evolution of Democracy and the Right-to-Vote has evolved over the last hundred and more years. Once it was just Property Owners, and Men. Then the franchise was extended and extended. The thing about voting is that if the government does do much, doesn’t tax much, doesn’t interfere much, then voting is not considered very important. The Swiss, with one of the world’s most stable democracies, only granted women the right to vote in 1971. It was not then considered very important, unjust and “sexist” to the Swiss, thought it may now seem that way to us.
In nearly all democracies, voting is Voluntary. Only Australia, Belgium and Argentina make voting Compulsory. Why it is compulsory is a very good question. I would say that Compulsory Voting is Undemocratic! Isn’t part of a “Democratic Society” to do with Freedom? Doesn’t making voting Compulsory make us a bit less free? Of course with Secret Ballots, voting is not really Compulsory — showing up at the polling place and having your name crossed off the list is what is compulsory. Not casting a ballot, or casting a blank ballot paper, or writing some obscenity on the paper is OK. Just go to the inconvenience of making the trip to the polling place so you save yourself the threat of a fine. Dumb??? See how it ends »
- Welcome from Neville Kennard
- Think Tanks Don't Work
- "Market Failure": Just what the government ordered!
- The Tragedy of the Tax Pool Commons
- Corporate Welfare
- Citizenship for Sale?
- I Don't Vote
- Voting: Right or Privilege?
- Stockholm Syndrome and our Love-Hate Relationship with Government
Lysander Spooner, No Treason: II:
As all the different votes are given secretly (by secret ballot), there is no legal means of knowing, from the votes themselves, who votes for, and who against, the Constitution. Therefore, voting affords no legal evidence that any particular individual supports the Constitution. And where there can be no legal evidence that any particular individual supports the Constitution, it cannot legally be said that anybody supports it. It is clearly impossible to have any legal proof of the intentions of large numbers of men, where there can be no legal proof of the intentions of any particular one of them. See how it ends »
by Ronald Kitching, dissenting editor
Unlimited Democracy and Law Legislation and Liberty
Both excessive taxation and inflation have been an international problem since the gold standard was abolished by the combatants in 1914 to fight WW1.
In fact income taxation was illegal until 1914. By war’s end and since then, it has become acceptable. This of course is a capital destructive policy See how it ends »
- Kitching for PM and other news
- Kitching on the Canberra Kremlin
- No Arbiter Superior to the Always Democratic Market
- Kitching at Large
- Kitching's Sensible Advice to Canberra
- Kitching on Hogan as Political Prisoner and more