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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.

(in order of appearance on
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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