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by Ronald Kitching, dissenting editor

Impartial Governors May Be the Answer

No matter who it is, the Canberra Kremlin occupants do not have the necessary economic knowledge or expertise to make decisions affecting the fate of the multitude.

It is only the free market and a regime of honest money which can decide upon the outcome of the population’s fate, by impartially and automatically assessing every person’s utility.

The impartial result is distorted by the “elite” to the extent that it depends upon the level of taxation they impose.

The reason Federal taxation was originally advocated by Federal enthusiasts, was to pay for and co-ordinate the defence of the Nation.

But taxation has now become so onerous, especially targeting efficient producers, its cost now threatens industries and hence jobs in every profession and trade there is.

George Bernard Shaw once suggested that Nationals were incapable of rationally governing themselves. He suggested for instance, an Englishman ought to govern say China, and a principled Chinaman govern England.

That system worked exceptionally well in Hong Kong where English Governors made that freeport the world’s freest and most prosperous trading city. It so happened that Hong Kong’s governors were all Classical Liberal scholars.

Singapore is another well run City/Nation. Lee Kuan Yew had an English Education before he was elected to lead Singapore.

Shaw’s ideas would certainly bear fruit if we had Mr. Lee govern Australia for a few decades. It may be the answer to anarchist concern about competent administration of the law here.

Money Printing and Inflation

The U.S. Federal reserve is frantically printing $600 Billion of new fiat money. Bank Chairman Ben Bernanke says that this initiative will stimulate the economy.

But it is inflation and what it really does is that it waters down existing hard capital.

English historian, Alan Bullock, wrote in his book titled Hitler: A Study in Tyranny:

The collapse of the currency not only meant the end of trade, bankrupt businesses, food shortage in the big cities and unemployment: it had the effect, which is the unique quality of economic catastrophe, of reaching down to and touching every single member of the community in a way which no political event can. The savings of the middle classes and the working classes were wiped out at a single blow with a ruthlessness which no revolution could ever equal; at the same time the purchasing power of wages was reduced to nothing.

Even if a man worked till he dropped it was impossible to buy enough clothes for his family – and work, in any case was not to be found. The result of the inflation was to undermine the foundations of German society in a way which neither the war nor the revolution of November 1918, nor the Treaty of Versailles had ever done. The real revolution in Germany was the inflation, for it destroyed not only property and money, but faith in property and the meaning of money.

The U. S. Federal Reserve has a lot to learn from 1923’s Germany.

About Honest Money and Devious Taxation

Productive people earn money by producing goods and or services.

Government, which includes their bureaucrats, “earn” their money by taxing the productive population.

As taxation rates rise, the population resists. This makes elected politicians unpopular. With the abolition of the gold standard, acquiring the monopoly of producing money was a great bureaucratic advance, as the State can print fiat money, as the U.S. is now doing, on an enormous scale. ($600 Billion).

Inflation provides its practitioners with a relatively simple, costless, and secure “political” avenue to amassing money assets, one which circumvents the unpopularity connected with the imposition of higher taxes.
Inflation is a process little understood by the population at large. This fact serves well to obscure the true cause of inflation and permits the government to shift the blame for the shrinking purchasing power of the monetary unit and the other undesirable consequences of inflation from itself to other groups. Big business, greedy bankers, people or companies making “windfall” profits are easy targets.

In his The Theory of Money and Credit, Ludwig von Mises wrote:

What all of the enemies of the gold standard spurn as its main disadvantage, is precisely the same thing that in the eyes of the advocates of the gold standard is its main virtue, namely its incompatibility with a policy of credit expansion.

Thoughtful people are becoming much better informed today, and are pressing for a return to the sanity of the gold standard.

See: http://mises.org/resources/5827/Money-Sound-and-Unsound.