Policy Spotlight

Home Policy Spotlight Page 10

Take The White Pill

Did Certain Events Really Take Place The Way They Have Been Presented?

Many readers will be aware of the term ‘red pill’. But for those who are not, it refers to a scene in the 1999 blockbuster The Matrix where the main protagonist, Neo, is presented with the option of continuing to live in his computer-simulated reality by taking the blue pill, or to be exposed to the unsettling truth of his existence by taking the red pill. In the decades since, being ‘red pilled’ has come to refer to waking up to the unsettling realities of our controlled existence.

To take the white pill is to abandon despair and surrender to the optimism of hope.

DOWN THE RABBIT HOLE
In the last few years, use of the pill metaphor to represent different ideologies and worldviews has continued to expand. Yet while many are now aware of red and blue pills, far fewer are aware of black and white pills.

The commonly understood pathway is that we begin in a blue-pilled existence: we accept the world around us as the truth and do not question what is presented before us. Most people spend their entire lives perceiving the world this way – never delving below the surface level. Some of us begin to question the world we see around us: we become red pilled. Is the government really acting in our best interests? Are we truly free? Did certain events really take place the way they have been presented?

The awakening that comes from taking the red pill can often spur someone to action. The realisation that all is not as it seems must be shouted from the rooftops; people need to be woken from their living slumber and see what is really going on. But the reality is that most people want to continue living in the simulation. Challenging your worldview and potentially shattering everything you believe to be true is hard, and that is a journey most people are not willing to take.

THE BLACK PILL
Those who are red pilled can become disillusioned by their failed efforts. Ultimately they believe that nothing matters and any efforts to change are futile: they take the ‘black pill’. They become extreme nihilists. For many, their journey ends here: bitter at the world for failing to see what they see. They withdraw, believing that the living zombies around them deserve this world they have created.

Unfortunately many libertarians, and those who are politically active, fall into this trap. Stuck in a sad, black-pilled existence; determined that they will be further alienated by an increasingly authoritarian world. Looking around, particularly during recent Covid tyranny, it is hard not to agree. News of new, “deadly” Covid strains, incoming global warming lockdowns, 20-minute cities, a growing surveillance state and unending censorship is incredibly depressing to those of us who believe in freedom, prosperity and human enterprise.

ANOTHER WAY
There is one final step on this journey: the ‘white pill’. To take the white pill is to abandon despair and surrender to the optimism of hope. Unlike the blue pilled, who are hopeful due to ignorant optimism, being white pilled requires you to challenge nihilism with reason and inquiry. In other words, it is to become cynical of cynicism and sceptical of scepticism.

we accept the world around us as the truth and do not question what is presented before us.

There is nothing dishonest or unprincipled about taking the white pill. While the blue pill represents optimism due to ignorance, the white pill represents optimism in spite of ignorance. And not only is it ideologically authentic, it is also much more likely to convince others of the merits of freedom and liberty. When you live your life as a beacon of hope and reasoned optimism, others will be naturally drawn to you. When you live a sad and bitter existence, others cannot wait to get away from you.

WALK YOUR OWN WAY
Libertarians might not enjoy much political success, but I don’t particularly care what a bunch of bloated public servants in a fancy room hundreds of miles away from me say – and neither should you. These are people who I have never met and do not relate to in any way. Despite what they may call themselves, they are not my representatives.

Winning seats in parliaments should not be our metric for success; rather living a free and prosperous life. Freedom comes from within, and I know I will always be a free man unless I let them take it from me!

Have a Merry Christmas and enjoy the festive season, free and white pilled.

3 Wacky Crazy Ideas Creeping into International Politics

This is Part 3 of my 3-Part series on geopolitics.

You really need to read Part 1 and Part 2 before ploughing into this article.

5 Ways To Maximise Peace In The World is Part 1. There, I gave you a menu of options for handling international politics. If you haven’t read it yet, go back and read it now.

Then in Beware! This Article Channels The Ghosts of Locke, JSM, Friedman and Other Pugnacious Thinkers, we’ve double-checked the leading thinkers of our classical liberal-libertarian movement. I even chipped in with my opinion and asked for yours. Again, read it if you haven’t yet.

Now, in this third and final part of the series on geopolitics, 3 Wacky Crazy Ideas Creeping Into International Politics, I’m going to eviscerate some of the more stupid ideas coming out of the commentariat. Then I’m going to tell you what positions any sensible thinking classical liberal or libertarian should have when it comes to international relations. Then a call to action.

Australian libertarians need to be outwardly-focused, alliance-building policy advocates, and dedicated to early warning defence systems and a deterrent with punch.

Ready? Let’s do it!

Just to prove how centrist classical liberals and libertarians are, and how off-the-charts the Guardian is when it calls us ‘far right’, here are 3 Wacky Crazy Ideas Creeping Into International Politics, all which fall outside the Overton Window as far as I’m concerned:

WACKY, CRAZY IDEA #1: NAÏVE, PEACEKEEPER, WHITE FLAG DEFENCE
There are at least 11 senators in the Australian Parliament who, for whatever reason, believe non-aggression means we wait until a foreign-invader’s amphibious craft land on our beaches before we protect ourselves. They are called the Australian Greens. If they had their way, the Australian Defence Force would be relegated to fractional peacekeeper capacity. I have heard some in the freedom-movement, usually young and unschooled in the realities of a harsh world, a tiny group, who share this view. They don’t understand statecraft and chokepoint strategy.

The threat to Australia isn’t from a landing on Bondi Beach. It’s the South China Sea shipping lanes through which passes critical fuel from South Korea on the way to our last two government-subsidised refineries in Brisbane and Geelong. A blockade for 53 days would deplete fuel reserves, preventing trucks from replenishing supermarket shelves. Imagine 25 million starving people in 53 days!

And Australia has other chokepoints which could be squeezed from afar by a foreign actor.

And in this regard, we depart from our US libertarian friends with isolationist tendencies, the ‘no foreign entanglements’ brigade. This might be arguable from the bosom of a 330 million populated, 5422 nuclear warheaded nation. For nuclear-free Australia with a 25 million population strewn across the same continental land mass, it just doesn’t fly. Australian libertarians need to be outwardly-focused, alliance-building policy advocates, and dedicated to early warning defence systems and a deterrent with punch. 

WACKY, CRAZY IDEA #2: ANTI UN RHETORIC
Can we just stop with the Ricardo Bosi conspiracy theories? Enough. The United Nations is absolutely worth keeping. In fact, it’s a great innovation of the liberal movement of which libertarians are front and centre. We just need to update its software. Classical liberals and libertarians are supporters of cooperative arrangements between nations whether free trade or to prevent of war. Stop with the nutjob UN bashing and start talking UN reform It is a voluntary organisation, not an Orwellian world government.

WACKY, CRAZY IDEA #3: AN ACTUAL WORLD GOVERNMENT
This is the biggest of the wacky crazy ideas. Can you imagine the horror of a ‘world president’, world laws, world surveillance, no reprieve from the totality of it all? We have enough of a problem with nation states. As I’ve said, the Structural Realist Theory sacrifices freedom for the security of a global Big Brother. Mad!

A blockade for 53 days would deplete fuel reserves, preventing trucks from replenishing supermarket shelves. Imagine 25 million starving people in 53 days!

A FOREIGN POLICY ON WHICH LIBERTARIANS SHOULD AGREE
Australian libertarians ought to advocate the following positions on international relations:

  • A strong, technologically-advanced Australian Defence Force. Defence is a legitimate role of government. Let’s do it properly, building a domestically-located defence manufacturing capacity delivered by the private sector, space industry included;
  • Formally-negotiated and robust multi-lateral defence alliances including with Indonesia, Singapore, Philippines, Japan, South Korea, India, New Zealand, PNG, the Pacific Islands and of course the United States, the United Kingdom and the Anglosphere countries. Make clear that alliances will not be granted with countries which permit strategic advantage to apparent foes;
  • Instant free-trade agreements with those who become our formal allies;
  • The creation of a Preferential Alliance Citizenship. If a citizen of any of our formal allies wishes to migrate to Australia and has the skills we value, he is given preference. Let’s create a more cohesive cultural and economic region of strategic importance; 
  • Zero foreign aid to any country apart from our formal allies, if that be strategically advantageous;
  • Trade with our apparent foes, but no Preferential Alliance Citizenship;
  • A fresh look at the UN Security Council admission criteria.

THE UNLIKELHOOD AND PRECIOUSNESS OF FREEDOM
There are 195 countries in the world. Freedom House says 17 of these are true democracies, Australia being one of them. Corruption, tyranny and authoritarianism are the norm, not freedom. We need every possible strategy at our disposal to maintain our precious legacy and to hand it to our children.

Classical liberals and libertarians must continue to operate in the context of the world as it is. We must have our wits about us. We must cooperate and engage and project ourselves as a free people. We must negotiate and trade around the world for mutual benefit, lifting people out of poverty as we do it. We must find the common ground of our humanity. We must continue to show the greater part of ourselves and inspire those with whom we come into contact. We built this modern world. We continue to unlock human potential and flourishing. We must be open to those who value our freedom. We must also deter and resist those who don’t. We must neither aggress nor harm, but we also must not withdraw into the timid shadows of fear at yet another foe, for we have seen so many of them off. 

If not entrepreneurial, nation-building classical liberals, if not liberty-loving, deep-thinking libertarians alert to coercion wherever it may lurk, who?

Beware! This Article Channels the Ghosts of Locke, JSM, Friedman and Other Pugnacious Thinkers

This is Part 2 of my 3-Part series on geopolitics.

5 Ways To Maximise Peace In The World is Part 1. There, I gave you a menu of options for handling international politics. If you haven’t read it yet, you’re missing an important point. Read that first.

WHERE WE’RE UP TO

I’ve taken you inside the minds of the world’s leading geopolitical advisors, where I cover the five approaches to foreign affairs that policymakers use to make sense of the world. If you’re a true libertarian and classical liberal, you’ll love three but find one alarming.

As explained in Part 1, they are:

  • The Democratic Peace Theory
  • The Economic Interdependence Theory 
  • The Liberal Institutional Theory
  • The Human Nature Realist Theory
  • The Structural Realist Theory.

THE GHOSTS OF PHILOSOPHERS PAST
Let’s check in with the ghosts of classical liberal and libertarian philosophers past:

Locke says man has natural rights of life, liberty and property, and that these can be better protected by forming a government under a social contract. This idea of free people cooperating for mutual benefit is consistent with the Economic Interdependence Theory and the Democratic Peace Theory

John Locke

In “A Few Words on Non-Intervention”, John Stuart Mill advocated for international cooperation and diplomacy as a means to prevent conflicts. He stressed the importance of peaceful resolution to disputes between nations and the establishment of international norms to govern relations between states. This sounds like the Liberal Institutional Theory.

You could almost say that Adam Smith was the founding philosopher of the Economic Interdependence Theory. In “Wealth of Nations”, he suggested each nation state has a certain comparative economic advantage and that, not only would they become more prosperous by specialising in that advantage, but interdependence between nations would proliferate. The idea was that nations with economic ties have a vested interest in each other’s well-being, making peace more likely.

Britain had extensive economic interdependence with India, Canada, Australia, the United States and, yes, Germany. Yet, conflict between Germany and Britain occurred. 

In “Economic Harmonies”, Frederic Bastiat suggested free markets and voluntary exchange create a natural harmony of interests among individuals and nations, creating the conditions under which they are less likely to enter into conflict. Again, this is support for the Economic Interdependence Theory, one purpose of which is to maximise peace and prosperity.

If you look closely at the later philosophers, Hayek was against central planning and authority so would have been horrified by the Structural Realist Theory. Like John Stuart Mill, Rothbard was anti-imperialist and would have been very cautious about the Human Nature Realist Theory because it relies on coercive foreign intervention.

Friedman too famously supported free-trade and the ideas behind the Economic Interdependence Theory.

Milton Friedman

MY OPINION
For my part, I think no single approach is foolproof. I’ll take each in turn.

There are case studies which show the Democratic Peace Theory doesn’t always work. For instance, the United Kingdom and Argentina were at war over the Falkland Islands in 1982. Both India and Pakistan are democratic but have clashed repeatedly, with open conflict in 1999. In 1974, Greece and Turkey were fighting over Cyprus. Both those countries were liberal democracies. 

But wars between liberal democracies are rare. It’s therefore a worthwhile pro-peace strategy that more liberal democracies exist.

When it comes to the Economic Interdependence Theory, again it doesn’t always work. Just prior to World War I, Germany had deep trading ties with France, Belgium, Austria-Hungary and, yes, the Great Britain. Britain had extensive economic interdependence with India, Canada, Australia, the United States and, yes, Germany. Yet, conflict between Germany and Britain occurred. 

But wars between economically interdependent nations are less likely. So, this too is a worthwhile strategy to adopt for maximising peace.

When it comes to the Liberal Institutional Theory, I’m unashamedly in the camp of international cooperation. If you sense a “but” coming, I can’t help you.

nations with economic ties have a vested interest in each other’s well-being, making peace more likely.

However, a friend of mine was a general counsel of the United Nations. Among his duties was the writing of official minutes at UN Security Council meetings. He has a lot of insight into the effectiveness of the United Nations and is pessimistic. 

A relative of mine helped found the United Nations in 1945. It was a noble endeavour, has served us well on occasion, but it is time it was overhauled. This idea that the United States, Russia, China, the United Kingdom and France are forever permanent members of the Security Council was a built-in flaw. 

What we need is a United Nations 2.0 and I’ll share some ideas with you in a future article. As for the Human Nature Realist Theory, I am cautious on this. I believe libertarians should have no problem with a balance of power approach, but the moment foreign interference occurs we must be on alert. I concede many will regard this as naïve. My response is that much damage has been caused by intervening in the affairs of others.

Finally, what do I think about the Structural Realist Theory. As a diehard classical liberal, I’m having an allergic reaction. The phrase ‘binding world government’ is a huge red flag for me. Nothing could sound more tyrannical or authoritarian. I therefore cannot agree with John Mearsheimer’s position. Inevitably, he discards freedom for security. Not for me.

YOUR COMMENTS
As a classical liberal or libertarian, do you share my instinct that we need multiple approaches?

Do you agree that philosopher after philosopher reinforces the validity of the Economic Interdependence Theory, and do you agree with Adam Smith here?

And do you agree that the Human Nature Realist Theory is a slippery-slope and that the Structural Realist Theory is no-go territory?

Share your responses in the comments section below.

So, we’ve covered all the mainstream political strategies for handling international relations in 5 Ways To Maximise Peace In The World.

And in Beware! This Article Channels The Ghosts of Locke, JSM, Friedman and Other Pugnacious Thinkers, this article, we’ve double-checked the leading thinkers of our classical liberal-libertarian movement.

In the third and final part in this series on geopolitics, 3 Wacky Crazy Ideas Creeping Into International Politics, I’m going to bang on the head some of the most unsupportable thoughts coming out of the commentariat. 


5 Ways to Maximise Peace in the World

Welcome to Part 1 of my 3-Part series on geopolitics.

If you haven’t listened to the Lex Fridman podcast, do.

Its long-form interviews with notable guests are fantastic, covering topics ranging from the nature of God to developments in bioengineering, from the essence of motivation to world politics.

In Episode #401, Lex interviews University of Chicago international relations scholar, John Mearsheimer. 

Mutually beneficial trade between nations creates a reciprocal reliance which neither would wish to disrupt. Thus, peace is maximised.

Mearsheimer is a controversial figure in the world of international strategy. He is viewed with suspicion among the Washington power elite for his position that the United States itself caused the Russia-Ukraine war by pushing for Ukraine’s admission into NATO, thus creating an aggressive, common border with Russia.

The hawks hate this interpretation!

But I’d never heard John Mearsheimer speak himself, so I listened to the podcast and was transfixed.

John Mearsheimer

International politics is really about keeping the peace; he described five main strategies for achieving that.

Three are liberal approaches.

LIBERAL APPROACH #1: DEMOCRATIC PEACE THEORY
This is the idea that democracies are relatively transparent and that competing democracies can see the geopolitical intentions of the other. This instils trust and is reinforced by pro-liberty values. Thus, peace is maximised.

LIBERAL APPROACH #2: ECONOMIC INTERDEPENDENCE THEORY
This approach says that mutually beneficial trade between nations creates a reciprocal reliance which neither would wish to disrupt. Thus, peace is maximised.

LIBERAL APPROACH #3: LIBERAL INSTITUTIONAL THEORY
Here, the theory says that if we create voluntary, cooperative international bodies, nation states can participate in decisions affecting them and build practical relationships with their counterparts for mutual benefit. Bodies like the United Nations and UNICEF, so peace is maximised. 

Running like a thread through these approaches to keeping the peace is that the nation state retains its autonomy, while prosperity is the goal to which to strive.

Competing democracies can see the geopolitical intentions of the other. This instils trust and is reinforced by pro-liberty values. Thus, peace is maximised.

After the liberal approaches, there are two realist schools of thought:

 REALIST APPROACH #1: HUMAN NATURE REALIST THEORY
This school of thought is sometimes also called Defensive Realism. The idea is that, in order for peace to be maximised, a geopolitical balance of power must be maintained. It could mean some countries will maintain their strength and play the role of world policeman. Think America. And other countries could be denied advancing their geopolitical strength because it would tip the balance. Think Iran securing nuclear weapons. Also think of the example of America and the Soviet Union and their mutually assured destructive nuclear arsenal. If the balance between superpowers is maintained, so the argument goes, peace is maximised.

REALIST APPROACH #2: STRUCTURAL REALIST THEORY
This approach is also called the Offensive Realist Theory. It looks at the world as a competition for security. It starts with Hobbes who said that, in the state of nature, man has to confront anarchy. Here, don’t think of anarchy as a free-for-all riot. Anarchy here is the opposite of hierarchy. Hobbes’ solution in the Leviathan is the nation state. Man gains his security over nature by forming a government. The Structural Realist Theory then suggests this simply moves the competition from individuals to the nation state. To eliminate war, which is the ultimate competition for security, the Theory says we need a world government with binding rules, to which all nation states are forced to comply. This removes competition for security, and thus war.

This is John Mearsheimer’s position, and you can see now hints at why he is controversial.

The two Realist schools are pragmatic and have a strong emphasis on multinational enforcement and have a built-in tendency to authority.

As a classical liberal or libertarian, which of these appeals? Which ones don’t you like?

Let me know in the comments section below.

Next up, let’s find out what the great classical liberal and libertarian leading minds said about this subject. You’ll be able to compare your responses to theirs. 

It’s all in Part 2 of this 3-part series on geopolitics: Beware! This Article Channels The Ghosts of Locke, JSM, Friedman and Other Pugnacious Thinkers.

Wind Power Industry is a Scam

Is the business concept viable? 

To comprehend the vast folly of the wind power industry, we can ask one logical question: Is the business concept viable? 

Assessing business viability necessitates a comprehensive review of financial projections, operational feasibility, profitability and return on investment (ROI). 

Financial analysis demands meticulous examination of startup costs and operational expenses, versus revenue. 

Operational feasibility assesses practical aspects, evaluating the availability of resources and skilled personnel. 

And profitability and ROI requires the business to generate revenue in a manner that justifies investment. 

Successful businesses meticulously align these factors to achieve sustained success in the free market.

Keep this information in mind as we look at business cases from the wind power industry over the past year.

Financial Trouble 

Markbygden Ett:
The owners of the Markbygden Ett sub-project, part of Europe’s largest onshore wind complex, are undergoing financial restructuring in the Umeå district court, northern Sweden. Facing bankruptcy, the company’s financial struggles stem from an unprofitable 19-year Power Purchase Agreement (PPA) signed with Hydro in 2017. The fixed-volume PPA obliges the company to buy power on the spot market during insufficient wind production, incurring costs due to intermittency. Spot prices rise when wind power is low, contributing to substantial losses. 

This exit cost the Danish company $2.2-2.6 billion in penalties.

Siemens Energy AG: 
Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June. This is mainly attributed to issues within its wind turbine subsidiary, Siemens Gamesa. The company projects a €4.5bn loss for the year due to quality problems and offshore ramp-up challenges. Additionally, technical faults in onshore turbine models are expected to cost around €1.6bn to rectify. Siemens Gamesa’s CEO highlighted concerns including rotor blade wrinkles and bearing particles, posing risks to critical components. Siemens Energy aimed to address these issues, but struggled to secure guarantees for its order book. This contributed to a €2bn loss in Q3. Germany’s government approved a €15 billion financial package, including €7.5 billion in loan guarantees, to support Siemens Energy in delivering Germany’s renewable projects. However, the company’s challenges persist.

Cancelled Projects 

Ørsted:
The world’s biggest wind power developer received approval to develop wind power off the New Jersey coast in June this year. It terminated both developments five months later due to soaring costs. This exit cost the Danish company $2.2-2.6 billion in penalties. 

Avangrid:
Avangrid, a member of the Iberdrola Group, is terminating power purchase agreements (PPAs) for the Park City Wind offshore project in Connecticut, citing industry challenges like inflation and supply chain disruptions. This follows their similar move with the Commonwealth Wind project in Massachusetts, resulting in a $48 million penalty. Avangrid plans to rebid both projects. These decisions align with a broader trend of wind project cancellations and challenges nationwide, including requests to government for rate increases above those previously agreed.

Siemens Energy AG is facing a substantial downturn, its share price having dropped nearly 70% since June. 

Fortescue:
Fortescue Metals Group has abandoned its Uaroo Renewable Energy Hub project in Western Australia, once a key part of its green energy strategy. The multi-billion-dollar initiative aimed to build 340 wind turbines and a solar farm, generating up to 5.4 gigawatts. The project’s termination, marked by last month’s approval application withdrawal, signifies a shift in Fortescue’s commitment to achieve carbon neutrality by 2030.

Vattenfall:
Swedish energy giant Vattenfall has halted plans for the Norfolk Boreas wind development, a crucial part of the UK’s green energy goals. The project, intended to power 1.5 million homes, faced a 40% cost increase due to global gas price surges and supply chain challenges. After winning a government contract with a record-low bid, Vattenfall deemed the project unprofitable amid changing market conditions. The decision incurred a £415 million penalty. This is still seen as prudent, considering lack of future profitability. Vattenfall urged the UK government to adapt the financial framework, and the government capitulated, agreeing to increase payments for offshore electricity generation. This intervention raised hopes for the Norfolk Boreas project’s resumption.

Verdict

These examples highlight the vulnerability of wind power development projects. This is particularly evident in offshore projects. 

Wind power does not meet the criteria for a viable business concept.

It Takes Two To Tango

Australia’s centrally planned economy is failing – intergenerational wealth gaps are widening, economic prospects are waning, and the side effects from the Reserve Bank’s (RBA) medicine are becoming worse than the disease. 

Inflation is a scourge, insidiously stealing wealth from those least able to protect themselves, and it benefits the least needy. 

We hear all sorts of explanations as to why inflation is not the government’s fault: the RBA was too loose with monetary policy, AHPRA failed to regulate bank lending standards effectively; hell, even consumers themselves were blamed by former Governor Phillip Lowe.  

But Lowe is gone now and the RBA board under Chalmer’s new darling, Michele Bullock, has continued to hike rates with a 25 basis point increase last week. It’s high time the government understood that fighting inflation is going to require some sacrifice of its own. As Dimitri Burshtein explained, more tax doesn’t make for better government; likewise, more government spending doesn’t curb inflation.   

Dumb and Dumber

The RBA effectively only has one instrument to fight inflation – and that is to increase the cash rate, the thinking being that if borrowing becomes more expensive then demand will be sapped from the wider economy. Australia is a land of high household debt, and it’s largely mortgage holders who feel the pinch when rates rise.

Australia desperately needs synergy between the government and RBA on inflation

What is truly disappointing about the current economic climate is the complete lack of synergy among our central planners – and their approach to the drivers of inflation. The Government seeks to relieve cost of living pressures with subsidies, welfare and spending, while the RBA is slamming the brakes on. We also cannot hope to tame inflation if infrastructure spending remains at record highs and the bureaucracy continues to grow (Georgia shows what must be done).      

Where credit is due

The ‘lender class’ are older Australians who have paid off their homes and are now seeking better returns on their investments – a higher cash rate delivers them higher returns (albeit reduced in real terms by inflation). Meanwhile, mortgage holders only see their costs rise as rates climb, squeezing their already tightening budgets. Downstream from this, renters are slugged as their landlords pass on higher mortgage repayments amidst low rental stock.  

The ‘lendee class’ is getting smashed on two fronts – inflation on the cost of goods and services, while the RBA’s rate hikes squeeze them even more. 

There has to be a better way.

Government to the rescue

The Federal Government needs to take three key steps to reduce the impact of inflation on the ‘lendee class’.  

  • Reduce or remove excise tax on fuel, alcohol and tobacco   

Measures that decrease the cost of items are needed, not inflationary welfare that only continues to drive demand. Fuel excise is particularly important due to its impact on the transportation costs of goods. Meanwhile alcohol and tobacco excise disproportionately affect lower income earners. 

  • Reduce GST, or expand the criteria for exempt items

The Goods and Services Tax disproportionately affects lower income workers as the tax applies as a flat rate on all eligible items, many of which are essential. This will impact state government revenue but with many household budgets at breaking point, they too will have to learn to live within their means.

Inflation is a scourge, insidiously stealing wealth from those least able to protect themselves

  • Sensible energy policy

A thriving economy needs cheap and abundant energy, with energy being a key input across the supply chain, not to mention household budgets. Australia must abandon its 2050 net-zero and 2030 emissions reduction targets. We should welcome investment in coal fired power and natural gas, which we have in abundance. Longer term we must embrace nuclear power. 

Not only would these policies provide genuine relief for those suffering the most from inflation, but they would actually reduce the costs of production and business, helping the RBA rein in inflation. 

Australia desperately needs synergy between the government and RBA on inflation, and the attempts of Chalmers and co to direct public scorn onto the central bank in order to save face are a great shame. If Australian households are expected to do it tough for a while, it’s high time our government accepted the same responsibility. After all, it takes two to tango.  

Other People’s Money

Philosophy #1: Living On Other People’s Money Is Unwise

When reading the news and opinion, I am frequently mindful of the idea of other people’s money and the perceptive words of French economist Frederic Bastiat, who wrote that “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

I thought of Bastiat when reading a recent opinion column by Ross Gittins, the Economics Editor of the Sydney Morning Herald.  There really needs to be a better lexigraphy to reflect the differences between the economic writings of Bastiat and Gittins.  After all, we don’t call plumbers aquatic surgeons.


Philosophy #2: Exploiting Other People’s Money Is Good

In Gittins’ latest, he again advocates for higher taxes, because “… paying tax is good and, for better government, we should pay more”.  Evidence be damned, that ever more expensive government has delivered ever worse outcomes – from education, to health, to defence.  But for some, it is axiomatic that we must tax other people’s money more. 

Messrs Gittins and Keating: you are welcome to voluntarily pay higher tax.  But until you do, please don’t demand that others are forcibly required to do so.

As long as it is other people’s taxes. The funny thing is that those who advocate higher taxes never seem to volunteer to pay higher taxes themselves.  No doubt, the ATO would accept voluntary contributions, but that is not the game.  Higher tax advocates don’t want to pay higher taxes themselves.  They just want other people’s money so that they can “live at the expense of everyone else” as Bastiat predicted.


Call To Authority

Gittins starts his case with a call to authority saying that “former top econocrat did something no serving econocrat is allowed to do, and no politician is game to do: he set out the case for us to pay higher, not lower, taxes.”  That former econocrat is Michael Keating (unrelated to Paul Keating) and he delivered his remarks at the Australia Institute’s revenue summit at Parliament House in Canberra.  That’s the Australia Institute that has never found a tax or regulation they did not like.

Keating and Gittins are reflecting what is known as bureaucrat logic: that increasing input delivers better outcomes.

Frederic Bastiat. Frugal with other people's money
Classical liberal economist, Frederic Bastiat. He cautioned frugality with other people’s money.

Permit some definitions:

  • Inputs are resources going in – such as dollars.
  • Outputs are things that are produced with the inputs – such as patients treated or students graduated.
  • Outcomes are the results – such as healthy citizens and kids who can read.

But for some, it is axiomatic that taxes must be increased. 


No Linear Relationship Between Inputs and Outcomes

Bureaucrats, econocrats and many politicians seem to believe that, despite evidence upon evidence to the contrary, there is a linear relationship between inputs and outcomes.  Increase education spending and you get more literate kids.  Huge increases in Gonski funding delivering worse education outcomes is just a bump in the road.  Even more is required.

Messrs Gittins and Keating: you are welcome to voluntarily pay higher tax.  But until you do, please don’t demand that others are forcibly required to do so.

As American writer Harlan Ellison said: “The two most common elements in the universe are hydrogen and stupidity.”  There seems to be a high concentration of both in Canberra.

What Housing Crisis?

There is no housing crisis.

Most of the recent increases in rents simply reflect that the prices of all things are going up. General prices have gone up by 5.4 per cent over the past year and rents have gone up by 7.6 per cent.  If monetary policy had been implemented properly, general prices would have risen by around 2.5 per cent and rents would have risen by around 4.6 per cent.

Over the past decade the average annual rise in rents has been a measly 1.5 per cent.

Housing in Australia is becoming less crowded, not more.  Over recent years the average number of people per residence has fallen slightly, and there has been little change in the average number of square metres per residence.

It may well be that we are in a homelessness crisis, given reports of increased demand for homelessness services throughout 2023.  But this does not mean there is a housing crisis more broadly, or that we should be attempting to lower rents for everyone.  Homelessness warrants policy tailored to those at risk.

Government should do nothing about housing.  

Stamp duties, land taxes and local government rates should be abolished.
Current negative gearing rules and CGT exemptions should remain.

Doing nothing means not adopting a pro-development policy stance.

Government’s slow release of residential land, and its restraint on urban infill, may be optimal.

Land holders do not currently own the right to build as high as they wish, or to build residential properties on land not zoned as residential.  Effectively, these rights are owned by the general citizenry. It could be that the general citizenry wants agricultural land on the outskirts of cities to remain agricultural, and low-rise suburbs to remain low-rise.  We could find out if development restrictions reflect the wishes of the general citizenry by introducing trading into our planning systems.

It is reasonable for local government to charge developers the full cost of infrastructure for a new suburb.  After all, the alternative is for local government to go into debt and recoup these costs through taxation of future residents.

Federation House

Governments should not provide public housing, as government has no inherent advantages in constructing housing or being a landlord.

Government should not subsidise housing, either through public housing or subsidies to private operators providing ‘affordable’ housing.  Such subsidy arrangements inevitably deliver different degrees of assistance to people who are equally deserving, depending on the vagaries of waiting lists and where the public or affordable housing is offered.

Government welfare should not be delivered as rent assistance. Under current arrangements, if an individual moves from one rental property to a cheaper rental property, or to a property where no rent is charged, the individual receives less from government. Government should not discourage such economising.

When determining its policy on migration, government should not account for the impact of migrants on rents and house prices.  These are impacts on private, voluntary transactions.  We should remember that, when a migrant bids up a rent or a house price, more often than not this involves a benefit to an Australian landlord or home-owner.  What migration policy should take into account is its impacts in the public realm, like the congestion on public assets like roads.

Housing in Australia is becoming less crowded, not more.

Finally, tax policy should be blind as to whether an asset is a housing asset or not.

Stamp duties on housing should be abolished, as should all stamp duties, because any taxation of transactions discourages the mutual benefits of voluntary trade.

Land taxes and local government rates should be abolished. Such taxes discourage improvements to the land itself, such as efforts to improve soil quality. These taxes also discourage housing improvements, as they inevitably stray into taxing what lies on the land.  And like all wealth and income taxes, these taxes discourage working and saving more than broad-based consumption taxation.

Deductions should continue to be available when losses are made, whether these losses are from investing in rental property or from other investments. In other words, current negative gearing rules should be maintained.

Capital gains tax is a bad tax, so anything that reduces its application, including the capital gains tax exemption for owner-occupied housing and the 50 per cent capital gains tax discount for individuals, should remain.

The rise and fall of prices goes hand in hand with the allocation of scarce resources to those most willing to pay for them.  This phenomenon is something to be appreciated rather than lamented.  

In essence, the rents we see are the right rents. If governments were to adopt a ‘do nothing’ attitude to housing, we would be better off.

Closing The Gap One Child At A Time

So Stan Grant wants to prance around like a prize git and pretend he is an oppressed man. Give me a break. Grant is healthy, wealthy, and (un)wise. I suggest he get over himself and let the wise think about the plight of the unhealthy and poor.

This is some of the bile he poured out at a recent ANU ‘oration’. ‘Not the big truths: how land is stolen without repatriation (I assume he meant reparation); how countries are invaded with no accountability; how people are killed without conscience; how the poor stay poor; how money buys speech…these truths that democracies hide so well.’

Let’s workshop this, Stan. Land stolen without reparation? Those who might conceivably require reparation are dead, Stan. The descendants are no more deserving than you or me. As for invasion, I presume you are aware that Aboriginal clans regularly invaded others’ territory. Were they held accountable, or indeed, did they pay reparation?

Killing without conscience, do you have any proof that either side did so? But be aware that murder was a capital offence under white man’s law from the earliest days of settlement and was enforced. The courts were, however, reluctant to intervene in inter-tribal disputes. As for staying poor, you seem to have worked out how to avoid that, Stan. Maybe you should pass on your secret to poor Aborigines; that would involve escaping a non-adaptive culture, but I guess if you admitted that, your whole Aboriginal identity thing would fall down around your ears. As for money buying speech, that is rich! Your top-end-of-town mates spent more than $50 million on the Yes case in the referendum. On the No side, we scraped around for pennies.

Close the Gap Research will concentrate on needy Aborigines. We will also call out the privileges and ideologies of upper and middle-class Aboriginal identifiers – like Professor Grant.

To cap it off, your distaste for democracy puts you in elite company. Translated, your disdain reads, ‘We of the elite were defeated by ordinary Australians, including many Aborigines, who could smell a grab for power a mile off. We were foiled when we tried to defile the Australian constitution and undermine universal citizenship in favour of group rights. Now I want to get back at you, you common bastards.’

Grant will get back at us in his new job. He was recently appointed a professor and inaugural Director of the Constructive Institute Asia Pacific at Monash University. If you have never heard of ‘constructive’ journalism, think of a ‘public interest’ NGO, ‘activist’ journalist, or ‘ABC’ journalist.

The constructive journalist is no mere cipher. Instead, they will facilitate ‘conversation with experts and those in power.’ That is precisely what the ABC and 9 News did in the referendum when they berated anyone who opposed the ‘experts’ from the Yes camp. The predominant side, woke academics and craven CEOs, readily captures journalists who take on this facilitative role.

If Professor Grant and the entire Aboriginal industry and their activist ciphers want to bat on after their drubbing at the referendum, we will be there to greet them. Our winning team, Recognise a Better Way, one of the teams on the No side, is flipping to the next phase in the war against Aboriginal separatism.

Close the Gap Research (closethegapresearch.org.au) will concentrate on needy Aborigines. We will also call out the privileges and ideologies of upper and middle-class Aboriginal identifiers – like Professor Grant.

We want to carry the fight to the industry that created the mess in the first place. We will assess existing programs for relieving the benevolent needs of Aboriginal people in three fields: school scholarships, employment programs, and prisoner rehabilitation.

These are critical points of intervention in a person’s life. Our method is to team with providers who are prepared to publish proof of success. Organisations prepared to publish their measure of impact and methodology would be added to a list of preferred providers.

Those who might conceivably require reparation are dead. The descendants are no more deserving than you or me.

The Productivity Commission, for example, reports on Aboriginal welfare relative to the non-Aboriginal population but does not assess whether the funds invested in raising Aboriginal Australians’ living standards are effective.

There is also the more significant question of what to do for those stuck on land with no economic base. It’s why we suspect the children of Aboriginal landholders are losing interest in the land rights game: there is little in it for them. They need the key to the broader world that lies beyond the title.

Several billion dollars are spent on programs for Aboriginal people each year. A small percentage improvement in the effectiveness of these programs would represent millions of dollars of new investment in programs. Now that is constructive, Stan.

A Serving of Humble Pie, Minister?

Arrogant and egotistical are the two words most equated with politicians.

Australians who voted NO to enshrine race into our Constitution will no doubt confirm the veracity of these two terms now that some states have declared they intend to legislate it anyway.

Despite the overwhelming NO vote, state politicians, through their arrogance and egos, are ignoring that majority by either pushing on, in the case of South Australia and Western Australia, or begrudgingly backing down for now while continuing to make excuses as to why it is needed.

The question must be asked by every citizen who values their democratic rights and the rights of their fellows: how is this democracy at work?

The focus here is not on pros and cons of the issue, nor the referendum result. Rather, it is to highlight the blatant disrespect of the citizenry by those who are elected to represent them – the “pollies,” to use Australian vernacular.

It would be helpful, to say the least, if aspiring politicians would read his story in the hope that our societies would benefit from more humility and less hubris.

Is it power they cannot resist? Or do they truly believe they know best?

Undoubtedly, it is a combination of both. And it is as old as time. Most of them are caught up eventually in the net of hubris. As Plato wrote over two millennium ago, that “under tyranny of the master passion, a man becomes in his waking life what he was once only occasionally in his dreams.”

Plato learned from his teacher, Socrates, considered to be the wisest man in history despite him declaring he knew nothing.

Socrates was condemned to death on the charge of leading the youth astray by encouraging them to continually ask questions of everything. Here we are, 2400 years later, and the modern West is on the verge of censoring their citizens from forming their own opinions via strict misinformation laws. Not much has changed really. But I digress.

The Death of Socrates

Plato presents Socrates’ account leading up to his death in Apology. The God of Delphi declared that there was no man wiser than Socrates. In his defence to his accusers, he urged them to listen carefully to his account, as I likewise urge you to read it closely:

‘After long consideration, I thought of a method of trying the question. I reflected that if I could only find a man wiser than myself, then I might go to the god with a refutation in my hand. I should say to him, “Here is a man who is wiser than I am; but you said that I was the wisest.” Accordingly, I went to one who had the reputation of wisdom, and observed him—his name I need not mention; he was a politician whom I selected for examination—and the result was as follows: When I began to talk with him, I could not help thinking that he was not really wise, although he was thought wise by many, and still wiser by himself; and thereupon I tried to explain to him that he thought himself wise, but was not really wise; and the consequence was that he hated me, and his enmity was shared by several who were present and heard me. So, I left him, saying to myself as I went away: Well, although I do not suppose that either of us knows anything really beautiful and good, I am better off than he is—for he knows nothing, and thinks that he knows; I neither know nor think that I know.’

It would be helpful, to say the least, if aspiring politicians would read his story in the hope that our societies would benefit from more humility and less hubris. Then perhaps they, with the wisdom of Socrates, would look with eyes wide open at the upcoming Misinformation Bill that is slated to rob Australians of their right to think and speak as free people.

Sure, we won’t be put to death by hemlock poisoning; but to censor what we as free people have to say and be threatened with jail terms should we resist the edict by what James Hol describes as the “Cult of Authority” is not acceptable in a modern democracy.

It is very concerning when a Minister of the Crown fronts the media to say that “there are no lessons to be learned from the Voice referendum.” The Queensland Minister for Housing, Meaghan Scanlon, made this statement on 16 October. A few days later, the Queensland government announced it would not proceed with the legislation due to the Opposition withdrawing support. But the political indifference by politicians of people’s views is indisputable.

It is past time for politicians of all persuasions to sit down to a very big serving of Humble Pie.

Perhaps the Minister considers that in her very young life she has learned all there is to learn in this world. Socrates died 2400 years ago, yet his words still resonate for those who have ears to hear and the will to listen.

Two millennium must count for something – wisdom via endurance.

The most infamous of prideful kings of ancient Rome was Lucius Tarquinius Superbus – Tarquin the Proud. Superbus is the Latin term for a proud man. So, in ancient Roman terms, Ms Scanlon would be referred to as Superba, the “ba” representing the feminine, compared to “bus” representing the masculine.

It is past time for politicians of all persuasions to sit down to a very big serving of Humble Pie.

Popular Posts

My Favorites

BRICS+ of Gold

1
Jim Rickards, an esteemed American investment banker and author with expertise in finance and precious metals, recently brought to light an intriguing prediction regarding...

Taxation Dysfunction

On The Word ‘Liberal’