by Neville Kennard, veteran preaching and practising capitalist
The essence of prosperity is property rights. Without strong and secure property rights people can not become prosperous. Without good property rights people can not be free. Property rights are part of human rights. If people have self-ownership — if they have the right to be themselves and own themselves and their lives and the legitimately-acquired products of their lives — then property rights are inalienable; or at least they should be.
In his book The Mystery of Capital Hernando de Soto researched the question of why capitalism worked in the west and not in other places. He came to the clear conclusion that it was the security and predictability of property rights that made the difference. The western nations and advanced societies generally had more secure property rights than other more fragile or authoritarian regimes.
Many western societies are “democracies” and it has been taken for granted that it is the presence of “democracy” that encourages prosperity. But is this so? Is it “democracy” that encourages prosperity, or is it some under-recognised elements that have encouraged prosperity? Is it capitalism and the predictability of property rights that in fact have brought about prosperity? Has “Democracy” been given the credit when really it is individualism, capitalism and self-ownership that has been the catalyst for prosperity?
And are these elements now under threat in the western democracies? Is democracy compatible with property rights? Is democracy compatible with capitalism?
“Can capitalism survive in a democracy?” is a question thinking economists ask. Does democracy by its very nature threaten the essential elements that have made it successful — property rights and capitalism?
Democracy is rather ill-defined but is generally regarded as a form of government having representative government, free and fair elections, a constitution, freedom of speech, and an independent judiciary.
Mostly in the better democracies these conditions are met, but does the quest for popular support and election to office induce politicians to promise people things that require some erosion of their property rights? Of course, this erosion of property rights is not spoken of, but it is buried in the promises and legislation that accompanies it. A good example is populist environmental promises, where endorsement of “green” policies takes away farmers’ and home owners’ and other property owners’ rights to use their property as they choose. Farmers are prohibited by ever-increasing legislation: for example, from clearing their land. Home owners need a permit to cut down a tree. Property developers are required to do “environmental impact statements” that have little to do with any real environmental impact. Green populism under the guise of “democracy” can threaten property rights and our prosperity.
“Heritage Listing” is another example of property rights erosion. Zoning laws reduce property rights. Property owners are forced to bear the burdens of all this populist regulation. Bureaucrats build their fiefdoms on it.
Changes to tax rules can threaten property rights; the recently touted Australian Mining Resource Taxes erode the property rights of the mining companies (and their shareholders) and thus affects what is known as sovereign risk. Thus Australia, once known for secure property rights and good sovereign risk status, gets reduced to a higher sovereign risk category, more in keeping with a Banana Republic.
Democracy and the quest for popular votes and more taxes thus leads to property rights being threatened. Special-interest groups (like the Greens) offer their electoral support in exchange for policies that can threaten property rights.
It is in fact capitalism and property rights that have done the heavy lifting in the western democracies to produce high standards of prosperity and well-being while “democracy” gets the credit. And the very nature of popular democracy can bring about the demise of prosperity and eventually of democracy itself. Taxes rise, capital flees, talented people expatriate and the down spiral gets under way. Democracy can be the enemy of capitalism and property rights. And the love affair with “Democracy” that people have can mask its inherent threats.
The best authority today on this is Professor Hans-Hermann Hoppe, founder of the Property and Freedom Society and author of Democracy, the God that Failed. Before Hoppe it was Murray Rothbard and Ludwig von Mises who explained tirelessly that property is freedom.
- 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
- Civil Disobedience: The Rules of Engagement
- Should Respect for Law Extend to Bad Laws?
- Jaywalking as a Demonstration of Individuality
- Government Likes War
- Collusion is Our Right
- Why Not the Drug Olympics?
- Unconventional Wisdom
- Tiger Farming: An Alternative to Extinction
- Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
- Tax Avoidance is a Patriotic Duty
- Kennard Writes to IPA Review Editor
- Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
- Separating Sport and State
- Your Home is Not an Investment
- Dick Smith, Celebrity Philanthropist
- A Libertarian's New Year's Resolution
- Extend Politicians' Holidays to Create Prosperity
- Entrepreneurs are Disruptive, and Bureaucrats Hate It
- What is a good Australian?
- Governments Like Employment But Hate Employers
- The Market Failure Industry
- Neville Kennard: The Tax Avoidance Imperative
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- The Tribal Chief and the Witch Doctor
- The Tannehills
- Democracy versus Property Rights and Prosperity
- Government Doesn't Work, and That's the Way They Like It
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- The Tyranny of the Majority
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- The Immorality of Trade Unions
- "America" vs "The United States"
- Sweet Anarchy
- The Illusion of "Job Creation"
- Gold Is Money
- Guilty Capitalists
- Prosperity vs Growth
- Capitalism vs Democracy
- More people = More fun
- Self-Ownership - the very idea!
- Government will murder Neville Kennard if he doesn't back away
- The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
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- My Journey to Anarchy:
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- Government Needs Bad Guys –
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- Wayne Swan stands on the shoulders of other intellectual pygmies
- Neville Kennard Obituary