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Economics and Politics

Economics & Politics

Some men see things as they are, and ask why? I dream of things that never were and ask why not?  Robert F. Kennedy

With money comes power over the world. Men are freed from drudgery, women from exploitation. Businesses can be started, homes built, communities formed, religions practiced, educations pursued.  P.J. O'Rourke

Cutting edge science and medicine are fantastically expensive.  Creating the wealth necessary to finance the pursuit of physical immortality is the topic of this chapter.  The ultimate resource is the human mind. Julian Simon

We believe the best strategy for increasing wealth is liberating billions of human minds trapped in socialist, statist, despotic and corrupt regimes.  All that is required to tap this immense resource is the rule of law, economic freedom, property rights and limited government.

Peter Singer believes it is not charity to relieve suffering and death for lack of food, shelter or medical care.  It is our moral duty.  That moral duty transcends property rights and is limited only by negative moral consequences that outweigh further intervention.  Singer suggests giving 25 - 40% GNP to the destitute and suffering of this world.  Pete would fail Econ 101, nevertheless, his moral position seems unassailable.  We do have an obligation to intervene.  

Men and women blessed with economic freedom, property rights, limited government and the rule of law, prosper.  Prosperous men and women are less prone to war and can afford provisions against natural disasters.  Paraphrasing Singer, our moral duty to relieve destitution and suffering transcends sovereignty rights of those regimes that cannot or will not provide their countrymen the critical  elements for prosperity.

Today, the ascendant nations and corporations are masters not of land and material resources but of ideas and technologies . . . The global network of telecommunications can carry more valuable goods than all the world's supertankers.  Wealth comes not to the rulers of slave labor but to the liberators of human creativity, not to the conquerors of land but to the emancipators of mind. George Gilder

There is historical precedent for using military and economic power to advance a worthy cause on a global scale.  The British Empire of the 19th century employed its economic and military power to eliminate slavery worldwide.

Organized opposition to slavery arose in the eighteenth-century England among the Quakers, who began to require their members to free their own slaves.  Evangelical members of the Anglican church transformed anti-slavery sentiment into a political movement, with William Wilberforce and Henry Thornton leading the parliamentary battle for the end of the slave trade.  Beaten badly in Parliament at the outset, the anti-slavery forces continued the fight until Parliament finally voted overwhelmingly to ban the international slave trade in 1808.  By then, ever-widening opposition to slavery led to petitions from all parts of the country arriving in London with hundreds of thousands of signatures form people of the humblest ranks to those of titled nobility.  This was unprecedented in an era before mass communications or mass transportation.  
Banning slavery throughout the British Empire was more than simply a matter of enacting laws.  Since slaves were legally property, their owners had to be compensated for their emancipation, and that cost the British government £20 million – a huge sum in the nineteenth century, when the pound sterling was of far greater value than today. Even this was not the full cost of the anti-slavery crusade, however, for the British attack on slavery was not limited to banning it for Britons, but sought to stop other nations from engaging in the slave trade as well. Through political influence, economic bribes, and military threats, Britain was able to gain the acquiescence of many – though not all – nations  to its boarding of their vessels on the high seas to search for slaves. Where slaves were found, they were freed and the vessels confiscated.  Thomas Sowell

Indians are successful everywhere but India. What if, as Winston Churchill preferred, India was not granted its independence August 15, 1947?  Instead, imagine that India had submitted to the same government of benign neglect as Hong Kong the last fifty years? The odds are that India would rival the United States in economic prowess today.   For graphic evidence see the ABC News Special Is America Number One? B which compares the United States, India and Hong Kong.  Would Africa be worse off today if the colonial powers remained?  It is difficult to imagine otherwise. Engaging the United States Marines to re-colonize India in order to govern them properly is fantasy. American’s will not risk their lives to make poor Indians rich in spite of themselves.  Nevertheless, there maybe measures short of that within our power.

Until philosophers are kings, or the kings and princes of this world have the spirit and power of philosophy, and political greatness and wisdom meet in one, and those commoner natures who pursue either to the exclusion of the other are compelled to stand aside, cities will never have rest from their evils – no, nor the human race, as I believe -- and then only will this our State have a possibility of life and behold the light of day. Plato

This philosophy of government worked magnificently in Hong Kong over the last fifty years. Unfortunately, for ambitious men driven to create history on the world stage, Hong Kong is an unattractive example. The philosopher-king in Hong Kong's case was a nation (Great Britain) not a man. The policy of Great Britain was benign neglect, the rule of law, and low taxes. Hardly a great opportunity to make history for would-be Alexanders. This is exactly the model of governance that would advance our cause most rapidly. Its practicality is another thing in the year 2001.  Plato's notion that wise men  would govern best has an intuitively logical appeal – but has not worked well in practice as Plato learned in Syracuse. Aristotle adds this observation:  

Now in all states there are three elements: one class is very rich, another very poor, and a third in the mean. It is admitted that moderation and the mean are the best, and therefore it will clearly be best to possess the gifts of fortune in moderation; for in that condition of life men are most ready to follow rational principle. But he who greatly excels in beauty, strength, birth, or wealth, or on the other hand who is very poor, or very weak, or very much disgraced, finds it difficult to follow rational principle. . . . Again the middle class is the least likely to shrink from rule, or to be over-ambitious for it. Aristotle

Almost by definition, wealthy nations have a large middle class. Ethical considerations compel successful states to intervene on behalf of the humanity trapped in desperate, unnecessary poverty. Our self interests are served as well: their inevitable rags to riches tale under an enlightened regime, can mean only that we are richer as a result. Their goods and services will necessarily provide us with a higher standard of living, their wealth will be used purchasing goods and services from us.  In that general expansion of global prosperity will be the additional wealth needed to finance our pursuit of immortality. One of the history lessons of 20th Century is that free market economies outperform centrally planned economies.  The keys to general prosperity are economic freedom, property rights, limited government and the rule of law.  While West Germany outperformed East Germany, The United States outperformed West Germany.  If you compared growth rates of per capita income, Hong Kong outperformed the U.S. It does not appear that a ‘middle ground’ between central planning and benign neglect is, in anyway advantageous. Axiomatic of limited government is a system of checks and balances afforded by competing powers, i.e., executive vs. legislative vs. judicial, federal vs. state vs. local, party vs. party, and interest group vs. interest group.  Out of this mêlée the public interest is served. In the United States (and elsewhere) there is no substantive group representing taxpayers to offset the powerful interests that drive the growth of government. Consequently the government’s share of the economy slowly but surely ratchets upward year after year.  

The Western legal tradition was rooted in legal pluralism. Medieval Europe had a complex network of political authorities, legal systems and overlapping jurisdictions. There existed customary law, the king's law, feudal law, municipal law, canon law, and so forth.  The Western World owes its liberty to the conflict among these competing authorities. Neither the spiritual nor the temporal authorities had libertarian intentions, but the ongoing competition between these institutions gradually led to the development of intermediate institutions (such as municipalities), as Pope and Prince conceded various liberties and immunities in an effort to win allies. And it was these intermediate institutions, not governments, which were largely responsible for the freedom that is unique to the Western World. A remarkable system of competing governments also existed in America for many decades prior to the War for Independence. The colonials came to regard their provincial governments as independent and autonomous institutions that were necessary to check British power. And the British government, in its turn, restrained the power of the colonial assemblies. This situation resulted in a paralysis of power (since neither government could do much) and in a great deal of personal liberty. Adapted from: 

One remarkable idea for addressing the issues of limited government, poverty and personal freedom is outlined below. It replaces income and payroll taxes with a variable sales tax. Billionaires pay a smaller percentage of their ‘increase in net wealth’ for a given year than the rest of us. A sales tax – a product-specific sales tax – would force anyone who lives like a billionaire to pay taxes accordingly. The scheme outlined herein addresses financial privacy issues concerns by eliminating the need for government knowledge of our wealth and incomes. Last but not least, a sales tax creates a new powerful interest group opposed to taxes: business. It becomes an industry’s financial interest to reduce taxes on their goods and services. That kind of interest will finance political coffers accordingly.

George Will:

Sixty years ago, on July 10, 1941, half the polish town of Jedwabne murdered the other half. Of 1,600 Jews, about a dozen survived. Why did the murderers do it? . . . Political philosophies that celebrate atomistic individualism need to be re-read in the light cast by the crematoria of Auschwitz. The Holocaust, writes Gross, is "a foundational event of modern sensibility, forever afterward to be an essential consideration in reflections about the human condition." George Will

 

Over the Judiciary department, the Constitution [has] deprived [the people] of their control. ... The original error [was in] establishing a judiciary independent of the nation, and which, from the citadel of the law, can turn its guns on those they were meant to defend, and control and fashion their proceedings to its own will. ... The opinion which gives to the judges the right to decide what laws are constitutional and what not, not only for themselves in their own sphere of action but for the Legislature and Executive also in their spheres, would make the Judiciary a despotic branch. ... It is a misnomer to call a government republican in which a branch of the supreme power [the judiciary] is independent of the nation. ... It has long, however, been my opinion, and I have never shrunk from its expression...that the germ of dissolution of our federal government is in the constitution of the federal Judiciary; working like gravity by night and by day, gaining a little today and a little tomorrow, and advancing its noiseless step like a thief, over the field of jurisdiction, until all shall be usurped. - Thomas Jefferson

Sales Tax replacing payroll and income taxes

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