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The Adventures Of JONATHAN GULLIBLE A Free Market Odyssey Story by Ken Schoolland Commentaries by Ken Schoolland and Jan
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The Adventures Of
JONATHAN GULLIBLE A Free Market Odyssey Story by
Ken Schoolland Commentaries by Ken Schoolland and Janette Eldridge Commentary Edition © 2004 Ken Schoolland and Janette Eldridge
Published by Leap Publishing Cape Town
ii
Dedication
About the Book
iii
About This Book
Dedicated to my daughter, Kenli
Available in more than thirty languages: Albanian, Bulgarian, Chinese, Croatian, Czech, Dutch, German, Greek, Hungarian, Italian, Japanese, Kiswahili, Korean, Kyrgyz, Latvian, Lithuanian, Macedonian, Mongolian, Nigerian Pidgin, Norwegian, Palauan, Polish, Portuguese, Romanian, Romany, Russian, Serbian, Slovenian, Somali, Spanish, Urdu. Text copyright © 1981, 1987, 1995, 2001, 2004 by Ken Schoolland, [email protected]. Original edition published in 1988. Second revised edition in 1995, third revised edition 2001. All rights reserved. This book or parts thereof may not be reproduced in any form or mechanically stored in any retrieval system without written permission of the author.
http://www.jonathangullible.com [email protected] This edition published by Leap Publishing PO Box 36021, Glosderry, 7702, Cape Town, South Africa Cover design by Barry Kayton [email protected] Cover photograph by Noray Babcock [email protected] An educational project of Small Business Hawaii, Hawaii Kai Corporate Plaza, 6600 Kalanianaole Hwy., Suite 212, Honolulu, Hawaii, 96825, USA, telephone: (808) 396 1724, fax: (808) 396-1726, email: [email protected], website: http://www.smallbusinesshawaii.org. ISBN: 0-9584573-2-8 Printed by RSA Litho Cape Town, South Africa
This book is fun. It challenges readers to think about why some countries are rich, while others are poor. It explores alternative thinking about important economic, practical and philosophical matters. The variety of ideas will challenge readers to ponder, question, and engage in meaningful discussions. Underlying all this is the respect for, and tolerance of, the individual. Since 1980, Ken has been writing economic commentaries for radio. Straight commentary from an academic economist was dry and uninteresting. He thought he would spice up these radio spots with fantasy dialogues. Friends were willing to perform with him, and so Jonathan Gullible was born. Immediately, interest among listeners soared! The ideas were provocative and outlandish, yet they drove home hard-core free market ideas in a humorous way. Later, he enlisted a dozen friends as actors to produce the episodes as a dramatic series. Again it was a hit! Since then The Adventures of Jonathan Gullible: A Free Market Odyssey has been used for radio broadcasts, discussion groups, essay contests, skits and theatrical productions around the globe. Each chapter, except the first, starts with a short “parable” about Jonathan Gullible and his encounters with the strange laws of an island and its inhabitants. The story highlights the absurdities of the laws, the controls imposed on people’s lives, and the economic drawbacks of these laws. The laws are recognisable as common to countries throughout the world. As the story unfolds, the part we play in political decision-making and personal responsibility is introduced for discussion. There are many subtle nuances. Sometimes people miss the meaning of a story, so each “parable” is followed by commentaries and relevant background information. These commentaries are meant to provide only the gist of each issue. Books and websites are recommended for further research. They will be particularly useful for projects and debates. Questions following each chapter are guidelines for group discussions about self-responsibility and life skills that will arouse an interest in the areas of sociology, macro-economics, philosophy, political science, and ethics.
iv
About the Book
About the Author
Teachers are warned that the book contains chapters that are critical of contemporary education systems. We feel that students should not be shielded from hard questions about schooling. Rather, we should trust students to take a hard look at the circumstances that are most familiar to them. Indeed, these chapters are typically the most popular with students. Website: http://www.jonathangullible.com
Awards and Reviews Available in more than 30 languages: Albanian, Bulgarian, Chinese, Croatian, Czech, Dutch, German, Greek, Hungarian, Italian, Japanese, Kiswahili, Korean, Kyrgyz, Latvian, Lithuanian, Macedonian, Mongolian, Nigerian Pidgin, Norwegian, Palauan, Polish, Portuguese, Romanian, Romany, Russian, Serbian, Slovenian, Somali, Spanish, Urdu. A number of further translations are in the process and due for publication in 2004. • Awarded the first annual Leonard E. Read Book Award by the Foundation for Economic Education in 2002. • Thomas Leavey Award for Excellence in Private Enterprise Education from the Freedoms Foundation at Valley Forge 2001. • Twice awarded the George Washington Honor Medals for Economics Education & Public Communication, The Freedoms Foundation at Valley Forge, Pennsylvania. • Freedom Book of the Month, Henry Hazlitt Foundation, Chicago, September 2001. • Book of the Month, Instituto Liberal, RS, Porto Alegre, Brazil, November 2001.
v
About the Author Ken Schoolland is presently an associate professor of economics and political science at Hawaii Pacific University. Prior to this he was the Director of the Master of Science in Japanese Business Studies programme at Chaminade University of Honolulu and head of the Business and Economics Programme at Hawaii Loa College. Following his graduate studies at Georgetown University, he served as an international economist in the U.S. International Trade Commission, the U.S. Department of Commerce and on assignment to the White House, Office of the Special Representative for Trade Negotiations. Ken left government for the field of education, teaching business and economics at Sheldon Jackson College in Alaska. He also taught at Hakodate University in Japan and wrote Shogun’s Ghost: The Dark Side of Japanese Education, which has been published in English and in Japanese. Ken is a member of the Board of Directors for the International Society for Individual Liberty and is a Sam Walton Fellow for Students in Free Enterprise. He has travelled extensively observing cultures, traditions and economies in many countries around the world. Stephen Browne, Director of the Liberty English Camp in Lithuania, once summed up Prof. Schoolland’s character by saying, “As soon as Ken sits down in any given place long enough, a child is going to come up to him from somewhere and want to sit on his lap, or a teenager is going to come by and want him for a game of basketball.” Such is the author of The Adventures of Jonathan Gullible: A Free Market Odyssey.
• Students in Free Enterprise, top 15 national finalists, Free Market Economics Month Special Competition, Kansas City 2003. • Adopted by more than a dozen economics and public policy institutes for translation and publication.
Ken Schoolland with his students who were the top 15 national finalists in the Free Market Economics Month Special Competition, 2003.
vi
Contents
Contents
vii
Contents Chapter
Page
About the Book. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii The Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi Jonathan’s Guiding Principles . . . . . . . . . . . . . . . . . . . . . . .x Prologue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii 1
A Great Storm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Jonathan is shipwrecked on a strange island.
2
Troublemakers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Jonathan answers a woman’s cry for help.
3
A Commons Tragedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 A fisherman shares a story and his meagre catch.
4
The Food Police . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 A woman and her child are driven from their farm.
5
Candles and Coats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Jonathan learns how to protect industry.
6
The Tall Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 The tall are brought low by a new code.
7
Best Laid Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Jonathan watches the destruction of a good home.
8
Two Zoos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Twin fenced habitats make Jonathan uneasy about the law.
9
Making Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Jonathan is taught to distinguish between two types of printers.
10 The Dream Machine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 A mysterious machine causes the closing of a factory.
11 Power Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Lady Bess Tweed encourages Jonathan to enter politics.
12 Opportunity Lost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 A hobo tells the old story of seen and unseen benefits.
Chapter
Page
13 Helter Shelter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 A young woman explains her worries about housing.
14 Escalating Crimes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Jonathan learns a horrible truth about law.
15 Book Battles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 A man and a woman fight over the price of free books.
16 Nothing to It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 A lottery solves an artistic dilemma.
17 The Special Interest Carnival . . . . . . . . . . . . . . . . . . . . . . .91 Jonathan witnesses a game that pleases all players.
18 Uncle Samta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Jonathan discovers the replacement for an old tradition.
19 The Tortoise and the Hare Revisited . . . . . . . . . . . . . . . .103 A grandmother’s tale has an unfamiliar twist.
20 Bored of Digestion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Jonathan is warned about the Nutrient Officers.
21 “Give Me Your Past or Your Future!” . . . . . . . . . . . . . . 117 A thief takes Jonathan’s money and offers advice.
22 The Bazaar of Governments . . . . . . . . . . . . . . . . . . . . . . 123 A dairy farmer relates options in selecting governments.
23 The World’s Oldest Profession . . . . . . . . . . . . . . . . . . . . .129 A stranger offers to read Jonathan’s future.
24 Booting Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135 An official press conference unveils a new programme.
25 The Applausometer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139 A show host interviews an election officer and a party leader.
26 True Believer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147 A devout voter explains her loyalty.
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Chapter
Contents
Page
27 According to Need . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153 Jonathan watches a school graduation and contest.
28 Wages of Sin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 A chain gang recounts the deeds that brought them woe.
29 New Newcomers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167 Foreign workers are exposed and deported.
Chapter
ix
Page
Epilogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 Acknowledgements and Notes . . . . . . . . . . . . . . . . . . . . .253 Credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .255 Recommended Reading . . . . . . . . . . . . . . . . . . . . . . . . . .256 Recommended Organisations and Websites . . . . . . . . . . .257 Index of Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .258
30 Treat or Trick? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175 The elderly lament the trickery that haunts their retirement.
31 Whose Brilliant Idea . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181 Lawyers explain the path to riches by controlling the use of ideas.
32 The Suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189 Jonathan takes a lesson in liability.
33 Doctrinaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .195 A doctor explains the ownership of life.
34 Vice Versa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203 A policeman lectures Jonathan on immorality.
35 Merryberries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .209 Jonathan narrowly avoids a trap.
36 The Grand Inquirer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217 A revered leader explains the trauma of freedom and virtue.
37 Loser Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .223 Jonathan stumbles across a fight and a gamble.
38 The Democracy Gang . . . . . . . . . . . . . . . . . . . . . . . . . . . .229 A fearful stampede in town causes Jonathan and Alisa to flee.
39 Vultures, Beggars, Con Men, and Kings . . . . . . . . . . . . .237 A despondent Jonathan receives a lesson on virtue.
40 Terra Libertas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245 Jonathan returns home and begins his life’s work.
When elephants fight, it is the grass that suffers. Kikuyu proverb
x
Jonathan’s Guiding Principles
Jonathan’s Guiding Principles
Jonathan’s Guiding Principles
The Individual is Sovereign Each individual is the sole owner of his or her life, and of the fruits of his or her efforts. An individual may not initiate the use of force or fraud against another, but may strongly resist the use of force. Every man has freedom to do all that he wills, provided he infringes not on the equal freedom of others. Herbert Spencer 1851
Implications • • • • • • •
Freedom of speech, association, contract, and movement. Recognition of the supreme rights of the individual. Respect for property rights (life/possession/space). Love for life, freedom, and the pursuit of happiness. Limits on the powers of groups, governments, and gangsters. Rights to resist force, theft, and enslavement of any kind. Individual responsibility.
The only freedom which deserves the name, is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it. John Stuart Mill, 1859
For Jonathan Gullible’s philosophy in flash animation by Kerry Pearson see: http://www.jonathangullible.com/media.htm It may be downloaded and sent to those whom you feel would be interested.
xi
M
y philosophy is based on the principle of self-ownership. You own your life. No other person, or group of persons, owns your life nor do you own the lives of others. The harvest of your life is your property. It is the fruit of your labour, the product of your time, energy, and talents. Two people who exchange possessions voluntarily are both better off or they wouldn’t do it. Only they may rightfully make that decision for themselves. You have the right to protect your life, freedom, and justly acquired possessions. You may rightfully ask others to help protect you. You do not have a right to initiate force against the life, freedom, or possessions of others. Thus, you have no right to designate some person to initiate force against others on your behalf. You have a right to seek leaders for yourself, but have no right to impose rulers on others. No matter how officials are selected, they have no rights or claims that are higher than those of any other person. You cannot give them any rights that you do not have yourself. Regardless of the imaginative titles, officials have no right to murder, to enslave, or to steal. Since you own your life, you are responsible for your life. You choose your own goals based on your own values. Success and failure are both the necessary incentives to learn and to grow. Your actions on behalf of others, or their actions on behalf of you, are only virtuous when they come from voluntary, mutual consent. For virtue can only exist when there is free choice. This is the basis of a truly free society. It is not only the most practical and caring foundation for human action, but it is the most ethical.
Jonathan Gullible
xii
Prologue
Chapter 1
A Great Storm
I
Prologue
I
n accordance with Mr Gullible’s wishes, I take up the task of recounting a bizarre tale that he related to me in his last years. I have made every effort to remain true to his account, despite some literary licence. This is a firsthand testimony about the people and incidents of his journey.
n a sunny seaside town, long before it filled up with movie stars driving convertibles, there lived a young man named Jonathan Gullible. He was unremarkable to anyone except his parents, who thought him clever, sincere, and remarkably athletic – from the top of his head to the bottom of his oversized feet. They worked hard in a small chandler’s shop on the main street of a town that was home to a busy fishing fleet. It had a fair number of hard-working folk, some good, some bad, and mostly just plain average. When he wasn’t doing chores or errands for his family’s store, Jonathan would steer his rough sailboat out the narrow channel of a small boat harbour in search of adventure. Like many youths spending their early years in the same place, Jonathan found life a little dull and thought the people around him unimaginative. He longed to see a strange ship or sea serpent on his brief voyages beyond the channel. Maybe he would run into a pirate ship and be forced to sail the seven seas as part of the crew. Or perhaps, a whaler on the prowl for oily prey would let him on board for the hunt. Most sailing trips, however, ended when his stomach pinched with hunger or his throat parched with thirst and the thought of supper was the only thing on his mind. On one of those fine spring days, when the air was as crisp as a sun-dried sheet, the sea looked so good that Jonathan thought nothing of packing his lunch and fishing gear into his little boat for a cruise. As he tacked beyond the rocky point of the lighthouse, he felt as free-spirited as the great condor that he watched soaring above the coastal mountains. With his back to the breeze, Jonathan didn’t notice the dark storm clouds gathering on the horizon. Jonathan had only recently begun to sail beyond the mouth of the harbour, but he was getting more confident. When the wind began to pick up strength he didn’t worry until it was too late. Soon he was struggling frantically at the rigging as the storm broke over him with violent force. His boat tossed dizzily among the waves
2
Chapter 1 • A Great Storm
like a cork in a tub. Every effort he made to control his vessel failed, useless against the tremendous winds. At last, he dropped to the bottom of the boat, clutching the sides and hoping that he would not capsize. Night and day blended together in a terrifying swirl. When the storm finally died down, his boat was a shambles, its mast broken, sails torn and it tipped in a definite list to starboard. The sea calmed but a thick fog lingered, shrouding his craft and cutting off any view. After drifting for days his water ran out and he could only moisten his lips on the condensation that dripped off the shreds of canvas. Then the fog lifted and Jonathan spotted the faint outline of an island. As he drifted closer, he made out unfamiliar headlands jutting from sandy beaches and steep hillsides covered by lush vegetation. The waves carried him onto a shallow reef. Abandoning his craft, Jonathan swam eagerly to shore. He quickly found and devoured the pink guavas, ripe bananas and other delicious fruit that flourished beyond the narrow sandy beach in the humid jungle climate. As soon as he regained some strength, Jonathan felt desolate but relieved to be alive. He actually grew excited at his unintended plunge into adventure. He immediately set off along the white sandy beach to discover more about this strange new land.
Chapter 1 • A Great Storm
Background
You own your life. To deny this is to imply that another person has a higher claim on your life than you do. Extract from Jonathan Gullible’s Guiding Principles
Jonathan was first envisioned after browsing through Gulliver’s Travels and The Little Prince. Also, by coincidence, or subconsciously, “J.G.” are also the initials of John Galt, a character in Ayn Rand’s Atlas Shrugged – a book that is also famous for challenging many of society’s assumptions about ethics, force, economics, and the proper role of government. The Little Prince by Antoine de St. Exupery is a mystical tale about a prince living alone on a planet, showing independence of mind, imagination and sensitivity. The film Saint Ex deals with Antoine de St. Exupery’s life as a rather “adventurous” pilot during World War II. Jonathan Swift’s Gulliver’s Travels is often thought of as stories for children. But his story, like this book, was written “to vex the world” and to show the unpleasant aspects of the politics of the day. The condor is North America’s largest flying bird.
3
Chapter 2
Troublemakers
J
onathan walked for several hours without a glimpse of any sign of life. Suddenly, something moved in the thicket and a small animal with a yellow-striped tail flashed down a barely visible track. “A cat,” thought Jonathan. “Maybe it will lead me to some people?” He dived through the thick foliage. Just as he lost sight of the beach and was deep in the jungle, he heard a sharp scream. He stopped, cocked his head, and tried to locate the source of the sound. Directly ahead, he heard another shrill cry for help. Pushing up an incline and through a mass of branches and vines, he clawed his way forward and stumbled onto a wider path. As he rounded a sharp bend in the trail, Jonathan ran full tilt into the side of a burly man. “Out of my way, chump!” bellowed the man, brushing him aside like a gnat. Dazed, Jonathan looked up and saw two men dragging a young woman, kicking and yelling, down the trail. By the time he caught his breath, the trio had disappeared. Certain that he couldn’t free the woman alone, Jonathan ran back up the trail looking for help. A clearing opened and he saw a group of people gathered around a big tree – beating it with sticks. Jonathan ran up and grabbed the arm of a man who was obviously the supervisor. “Please sir, help!” gasped Jonathan. “Two men have captured a woman and she needs help!” “Don’t be alarmed,” the man said gruffly. “She’s under arrest. Forget her and move along, we’ve got work to do.” “Arrest?” said Jonathan, still huffing. “She didn’t look like, uh, like a criminal.” Jonathan wondered, if she was guilty, why did she cry so desperately for help? “Pardon me, sir, but what was her crime?” “Huh?” snorted the man with irritation. “Well, if you must know, she threatened the jobs of everyone working here.”
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Chapter 2 • Troublemakers
“She threatened people’s jobs? How did she do that?” asked Jonathan. Glaring down at his ignorant questioner, the supervisor motioned for Jonathan to come over to a tree where workers busily pounded away at the trunk. Proudly, he said, “We are tree workers. We knock down trees for wood by beating them with these sticks. Sometimes a hundred people, working round-the-clock, can knock down a good-sized tree in less than a month.” The man pursed his lips and carefully brushed a speck of dirt from the sleeve of his handsomely cut coat. He continued, “That Drawbaugh woman came to work this morning with a sharp piece of metal attached to the end of her stick. She cut down a tree in less than an hour – all by herself! Think of it! Such an outrageous threat to our traditional employment had to be stopped.” Jonathan’s eyes widened, aghast to hear that this woman was punished for her creativity. Back home, everyone used axes and saws for cutting trees. That’s how he got the wood for his own boat. “But her invention,” exclaimed Jonathan, “allows people of all sizes and strengths to cut down trees. Won’t that make it faster and cheaper to get wood and make things?” “What do you mean?” the man said angrily. “How could anyone encourage an idea like that? This noble work can’t be done by any weakling who comes along with some new idea.” “But sir,” said Jonathan, trying not to offend, “these good tree workers have talented hands and brains. They could use the time saved from knocking down trees to do other things. They could make tables, cabinets, boats, or even houses!” “Listen, you,” the man said with a menacing look, “the purpose of work is to have full and secure employment – not new products.” The tone of his voice turned ugly. “You sound like some kind of troublemaker. Anyone who supports that infernal woman is trouble. Where are you from?”
Chapter 2 • Troublemakers
7
Jonathan replied anxiously, “I don’t even know Miss Drawbaugh and I don’t mean any trouble, sir. I’m sure you’re right. Well, I must be going.” With that, Jonathan turned back the way he came, hurrying down the path. His first encounter with the people of the island left him feeling very nervous.
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Chapter 2 • Troublemakers
Chapter 2 • Troublemakers
Brainstorming • • • • • • •
What is the purpose of work? Are labour-saving innovations good or bad? Why? Who is affected? How can such innovations be stopped? What are some examples of this behaviour? Is it bad for people to change the kind of work they do? • What ethical issues are involved with the use of force?
Commentary Among the most visible of all economic delusions is the belief that machines on net balance create unemployment. Henry Hazlitt
One of the myths about productivity is that labour saving machinery, computers, and robots, cause unemployment and poverty. This theory appears plausible only because the jobs that are lost are seen, but those that are created by the new inventions are not yet seen. Without the freedom to innovate and earn a profit, there would have been no progress. Imagine how we would be living without the innovation of the wheel, or, as in this chapter, the axe. The reason for this confusion about laboursaving automation is that fewer workers are required when new machinery produces product X. People forget that the money saved on the wages of redundant workers is used by consumers to purchase more of product X, Y, and Z at lower prices. Workers who are taught to use these new machines, and the manufacturers of the new machines, all have greater incomes to purchase more products at lower prices. To begin with, there may be temporary unemployment in certain sectors as consumers, producers, and workers adjust to the new demand. Many more workers are eventually employed in
How did we make the transition from using wood to using coal, from using coal to using oil, from oil to natural gas? How in God’s name did we make that transition without a Federal Energy Agency? Milton Friedman, 1978
Success and failure are both the necessary incentives to learn and to grow. Extract from Jonathan’s Guiding Principles
a wider range of employment opportunities that use a greater diversity of talents. Although some people will be upset by change, change is the price of progress for everyone’s higher standard of living. The only way this process can be slowed to a near standstill, for it can never be stopped, is for people to go to government and request laws to prevent the use of new innovative tools.
Background The subject of patents is an interesting debate. Daniel Drawbaugh, the developer of many intriguing devices from a coin sorter to a clock with a magnetically controlled pendulum, claimed to be the inventor of the first telephone ten years before Alexander Graham Bell. Some say the patent fees were too expensive for his meagre income. Bell, however, patented a telephone device and was thereby able to block Drawbaugh and 600 others from using similar devices because of patent infringement lawsuits. Whether or not Bell was the sole and original inventor of the telephone, he was an authentic scientist, unlike George Selden who appears in a later chapter of this book.
References Richard B. McKenzie, in The American Job Machine, says, “Creating jobs is easy – just outlaw farm machinery. If the health of an economy is measured by the number of jobs its citizens have, then China should have the strongest economy on earth.” Further articles on this, and related issues, may be found on the Cato Institute research site: http://www.cato.org/research.
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Chapter 3
A Commons Tragedy
T
he trail widened a bit as it cut through the dense jungle. The midday sun burned hot overhead when Jonathan found a small lake. As he scooped up some water to refresh himself, Jonathan heard someone’s voice warning, “I wouldn’t drink the water if I were you.” Jonathan looked around and saw an old man kneeling at the shore, cleaning a few tiny fish on a plank. Beside him was a basket, a reel, and three poles propped up in the mud, each dangling a line in the water. “Is the fishing good?” inquired Jonathan politely. Without bothering to look up, the man replied, somewhat crossly, “Nope. These little critters were all I got today.” He proceeded to fillet the fish and to drop them into a hot skillet that was set over a smouldering fire. The fish sizzling in the pan smelled delicious. Jonathan spotted the rough yellow-striped cat that he had followed, already picking at scraps of fish. His mouth watered. Jonathan, who considered himself an accomplished fisherman, asked, “What did you use for bait?” The man looked up at Jonathan thoughtfully. “There’s nothing wrong with my bait, sonny. I’ve caught the best of what’s left in this lake.” Sensing a solitary mood in this fisherman, Jonathan thought he might learn more by just remaining silent awhile. Eventually, the old fisherman beckoned him to sit beside the fire to share some fish and a little bread. Jonathan devoured his meal hungrily, though he felt guilty about taking a portion of this man’s meagre lunch. After they finished, Jonathan kept quiet and, sure enough, the old man began to talk. “Years ago there were some really big fish to catch here,” the man said wistfully. “But they’ve all been caught. Now the little ones are all that’s left.”
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Chapter 3 • A Commons Tragedy
“But the little ones will grow, won’t they?” asked Jonathan. He stared at the lush grasses growing in the shallow waters along the shore where many fish might lurk. “No. People take all the fish, even the little ones. Not only that, people dump rubbish into the far end of the lake. See that thick scum along the far side?” Jonathan looked perplexed. “Why do others take your fish and dump rubbish in your lake?” “Oh, no,” said the fisherman. “this isn’t my lake. It belongs to everyone – just like the forests and the streams.” “These fish belong to everyone ...” Jonathan paused, “including me?” He began to feel a little less guilty about sharing a meal that he had no part in making. “Not exactly,” the man replied. “What belongs to everyone really belongs to no one – that is, until a fish bites my hook. Then it’s mine.” “I don’t get it,” said Jonathan, frowning in confusion. Half speaking to himself, he repeated, “The fish belong to everyone, which means that they really belong to no one, until one bites your hook. Then, the fish is yours? But do you do anything to take care of the fish or to help them grow?” “Of course not!” the man said with a snort of derision. “Why should I care for the fish just so someone else can come over here at any time and catch them? If someone else gets the fish or pollutes the lake with rubbish, then there goes all my effort!” With a mournful glance at the water, the old fisherman added sadly, “I wish I really did own the lake. Then I’d make sure that the fish were well tended. I’d care for the lake just like the cattleman who manages the ranch over in the next valley. I’d breed the strongest, fattest fish and you can bet that no fish rustlers or garbage dumpers would get past me. I’d make sure of that.” “Who manages the lake now?” interrupted Jonathan. The weathered face of the fisherman grew hard. “The lake is run by the Council of Lords. Every four years, the Lords are elected to the Council. Then the Council appoints a manager and pays him from my taxes. The fish manager is supposed to watch out for too
Chapter 3 • A Commons Tragedy
13
much fishing and dumping. The funny thing is, friends of the Lords get to fish and dump as they please.” The two sat and watched the wind stir a pattern of ripples across the silver lake. Jonathan noticed the yellow cat sitting erect, sniffing and staring at a fish head on his plate. He tossed the head and the cat caught it neatly with one hooked paw. This feline looked tough, with one ear torn from some old battle. Mulling over the old fisherman’s tale, Jonathan asked, “Is the lake well-managed?” “See for yourself,” the old fisherman grumbled. “Look at the size of my puny catch. It seems that the fish get smaller as the manager’s salary gets bigger.”
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Chapter 3 • A Commons Tragedy
Chapter 3 • A Commons Tragedy
Brainstorming
The tragedy of the commons is like children with their straws in a communal fizzy-drink bowl – each sucking “fit to bust”! Unknown
• How do people take care of things that belong to everyone? • Who really owns the lake and the fish? • Would the fisherman dump rubbish in the lake if he owned it? • How would people’s behaviour change if the fisherman owned the lake? • Who benefits by common ownership? • Examples? • What ethical issues are involved?
What is common to many is taken least care of, for all men have greater regard for what is their own than for what they possess in common with others. Aristotle
Commentary
One had better be a poor fisherman than meddle with the art of governing men. Danton
This chapter is in reference to the concept of the “tragedy of the commons”. Common ownership refers to anything owned by authorities or the state for the supposed purpose of the common “benefit” for everyone. The first part of the tragedy is that everyone is supposed to benefit from, and feel responsible for, this common ownership. Frequently, however, no one benefits because each person has the desire to grab as much as he or she can before others do. This means that resources are taken before they have matured. The second part of the tragedy is that no one feels responsible for the consequences. Governments the world over have contributed to environmental damage by owning and controlling vast stretches of land, immense bodies of water, and extensive coastal areas. State ownership really means ownership by no one, so no one has the personal motivation to protect the resources. Instead, those with special interests who gain the favour of politicians, exploit the supposedly common resources for personal gain.
Problems that arise from the initiation of force by government have a solution. The solution is for people of the world to stop asking officials to initiate force on their behalf. Extract from Jonathan’s Guiding Principles
Land: The tragedy of the commons is the reason why people are more inclined to dump rubbish on public grounds rather than on their own lawns. It explains why fruit in public areas is picked before it ripens. When travelling by plane, one can observe the contrast of high productivity on privately owned lands with the overgrazing and waste of “commonly owned” lands. Flora and Fauna: The tragedy of the commons illustrates why the existence of privately owned cows and garden plants remain safeguarded from extinction. Yet publicly “owned” buffaloes and indigenous plant species are in danger of extinction. Environment and Pollution: Horrible examples of pollution and destruction of the environment have been allowed to happen by governments on government-owned property, including the air and waters. It is revealing that pollution is usually greatest near areas that are inhabited by people with low income and the least political power. Courts and regulatory agencies frequently rationalize and justify this behaviour.
Background Countries under communist rule, where governments controlled everything, had the worst pollution in the world with almost complete disregard for their citizens’ health. Even in “democratic” countries government pollution control is a failure. In America there is far more water pollution from sewage plants owned by local government authorities than from water pollution from industry. Making pollution and environmental protection a matter of state regulation has meant imposing huge unnecessary costs on the taxpayer. This could be avoided through greater respect for private ownership and personal
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Chapter 3 • A Commons Tragedy
No man ever ruled other men for their own good. George D. Herron
responsibility. Some avenues to this end could be achieved by: • recognising genuine indigenous peoples’ rights to property and the homesteading or privatisation of other government properties; • holding people personally accountable for injuring the lives and property of others through all forms of trespass, including pollution; • removing subsidies and governmental privileges to favoured companies or groups; allowing people to negotiate mutually agreed upon compensation for potential injury.
References In the “Destroying the Environment” chapter of her book, Healing Our World, Mary Ruwart shows how, in practical terms, we are more likely to protect the environment when we own a piece of it or profit by nurturing it. You may browse this entire book online at: http://www.ruwart.com/Pages/Healing.
? What do you do
when you see an endangered animal eating an endangered plant?
Alan Burris in A Liberty Primer is another good source. The Market for Liberty by Linda and Morris Tannehill is a source in very practical alternative thinking. The Cato Institute has more on environmental regulation: http://www.cato.org/research. A good website that shows how the free market and property rights are harmonious with the environment can be found at http://www.newenvironmentalism.org. This is run by the Reason Foundation. An intriguing book on the overall state of the world environment is The Sceptical Environmentalist by Bjørn Lomborg.
Chapter 4
The Food Police
P
aths converged with the dirt trail as it broadened into a gravel country road. Instead of jungle, Jonathan passed rolling pastures and fields of ripening crops and rich orchards. The sight of all that food growing reminded Jonathan of how little he had eaten for lunch. He detoured toward a neat white farmhouse, hoping to find his bearings and maybe another meal. On the front porch, he found a young woman and a small boy huddled together crying. “Excuse me,” said Jonathan awkwardly. “Is there any trouble?” The woman looked up, eyes wet with tears. “It’s my husband. Oh, my husband!” she wailed. “I knew one day it would come to this. He’s been arrested,” she sobbed, “by the Food Police!” “I’m very sorry to hear about that, ma’am. Did you say ‘Food Police’?” asked Jonathan. He patted the dark head of the boy sympathetically. “Why did they arrest him?” The woman gritted her teeth, fighting to hold back tears. Scornfully, she said, “His crime was that of growing too much food!” Jonathan was shocked. This island was truly a strange place! “It’s a crime to grow too much food?” The woman continued, “Last year the Food Police issued orders telling him how much food he could produce and sell to the country folk. They told us that too much food would lower prices and so hurt the other farmers.” She bit her lip slightly then blurted out, “My husband was a better farmer than all the rest of them put together!” Instantly Jonathan heard a sharp roar of laughter behind him. A heavyset man strutted up the path from the road to the farmhouse. “Ha!” he sneered, “I say that the best farmer is the one who gets the farm. Right?” With a grand sweep of his hand, the man glared at the woman and her son and commanded, “Now get your things
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Chapter 4 • The Food Police
packed and out of here! The Council of Lords has awarded this land to me.” The man grabbed up a toy dog that was lying on the steps and thrust it into Jonathan’s hands. “I’m sure she can use the help, boy. Get moving, this is my place now.” The woman stood up, her eyes glaring in anger, “My husband was a better farmer than you’ll ever be.” “That’s a matter of debate,” the man chuckled rudely. “Oh sure, he had green fingers. And he was a genius at figuring what to plant and how to please his customers. Quite a man! But he forgot one thing – the Council of Lords sets the prices and crops. And the Food Police enforce the Council rules.” “You parasite!” yelled the woman. “Your farming methods are incompetent! You waste good manure and seed on everything you plant, and no one wants to buy what you grow. You plant in a flood plain or on parched clay, and it never matters if you lose everything. You just get the Council of Lords to pay for the rot. They’ve even paid you to destroy entire crops.” Jonathan frowned, “There’s no advantage in being a good farmer?” “Being a good farmer is a handicap,” answered the woman as her face reddened. “My husband, unlike this toad, refused to flatter the Lords and tried to produce honest crops and real sales.” Shoving the woman and her boy off the porch, the man growled, “Enough! He refused to follow the annual quotas. No one bucks the Food Police and gets away with it. Now get off my land!” Jonathan helped the woman carry her belongings. The woman and her son walked slowly away from their former home. At a bend in the road, all turned to take one last look at the neat house and barn. “What will happen to you now?” asked Jonathan. The woman sighed, “I can’t afford to pay the high food prices. Luckily, we’ve got relatives and friends to rely on for help. Otherwise, I could beg the Council of Lords to take care of Davy and me. They’d like that,” she muttered bitterly. She took the young boy’s hand and picked up a large bundle saying, “Come along, Davy.” Jonathan gripped his stomach – now feeling a little more sick than hungry.
Chapter 4 • The Food Police
Brainstorming
Products and production belong to the producers. What is unjust is to enslave producers by robbing them of what they produce with their labour (work). Alan Burris, A Liberty Primer
• Why are some farmers paid not to grow crops? • What would that do to the price and availability of food for consumers? • How does that affect poor people? • What kinds of dependency arise? • How does the government benefit? • Are there real examples of this behaviour? • Why do we have import duties on food? • What ethical issues are involved in the use of force?
Commentary
… And to lose the product of your life and freedom is to lose the portion of your past that produced it. Extract from Jonathan’s Guiding Principles
In many countries efficient farmers who grow an abundance of food, or sell food at too low a price, can be fined and imprisoned. This government meddling in the economy is a violation of individual rights and, as a practical and humane matter, is detrimental to consumers. The reason people are poor is not because some farmers produce too much. High production lowers prices and benefits everyone including the poor. Instead, people are made poorer because efficient farmers are prevented from producing. Such intervention is accomplished by government control boards, tariffs and subsidies. Even efficient farmers lose the incentive to produce. Once subsidies are introduced, they tend to remain in place forever. It would take unusual courage on the part of a politician to remove them. If there is no government interference, consumer demand will control what and how much is produced by the prices they are willing to pay.
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Chapter 4 • The Food Police
Chapter 5
Background
In 1982 the American taxpayers spent $2.3 billion ($2,300,000,000) to buy up almost all of the powdered milk, all of the cheese, and all of the butter produced by American dairymen. Johanna Neuman 1983
The Economist magazine once reported that farmers in the U.S. were paid to take as much as a third of the arable land out of production. This was about 65 million acres, about the size of Great Britain. Currently US farmers are still being paid to destroy crops such as sugar beets, prunes, and cranberries. Oddly enough, this information is not hidden. Newspapers will print front-page headlines about hurricane or hail damage, but they report on their back sections about the far larger destruction of crops by government officials. Most people accept this, as they assume their government must be acting with good intentions for the citizens’ benefit. Japan and Europe have worse policies, ensuring that their own farm products won’t be undersold by cheap foreign imports. All this to the detriment of the consumers.
References ? “What do you think is the trouble with farming?” “Well, in my day,” said the farmer, “when we talked about what we could raise on 60 acres, we meant crops – not government loans.”
The Machinery of Freedom – David (“Davy”) Friedman, Economics in One Lesson – Henry Hazlitt, and Liberty Primer – Alan Burris, are all useful references. There are several books and articles that tell of awful agricultural policies; notable is James Bovard’s The Farm Fiasco, a devastating analysis of the waste, fraud, and corruption in agricultural policy. In Healing Our World, the chapter “Destroying the Environment,” Mary Ruwart deals with the effect of subsidies on wildlife, water, and farming habits.
Candles and Coats
J
onathan accompanied the despairing woman and her boy a couple of miles down the road to the home of her relatives. They thanked him warmly and invited him to stay. One look told him that the house could barely contain the whole family, so he excused himself and continued on his way. The road took him to a river where he found a bridge to a walled town on the other side. The narrow bridge held an imposing divider. On one side of the bridge, a sign pointed to the town reading, “ENTER STULTA CITY, ISLE OF CORRUMPO.” On the other side of the divider, another sign simply read, “EXIT ONLY, DO NOT ENTER.” That was not the oddest feature of the bridge. To cross into town, one had to climb over jagged obstacles. Piles of sharp rocks and massive boulders blocked the entire entry side of the bridge. Several travellers had dropped their parcels by the way or into the river rather than haul them over the craggy barrier. Others, especially the elderly, simply turned back. Behind one feeble traveller, Jonathan spied the familiar yellow-striped cat with a ragged right ear, sniffing and pawing at a bundle that had been discarded. As he watched, the cat extracted a piece of dried meat from the torn bundle. In contrast, the exit side of the bridge was smooth and clear. Merchants carrying goods out of town departed with ease. Jonathan wondered, “Why do they make it so tough to get into this place while it is so easy to get out?” Jonathan clambered over the entrance side of the bridge, slipping on the uneven footing and hauling himself up on the boulders. He finally arrived at a pair of thick wooden gates that were thrown wide open to allow him to pass through the great town wall. People riding horses, people carrying boxes and bundles and people driving all manner of wagons and carts traversed the roads inside. Jonathan straightened his shoulders, dusted off his tattered shirt and pants and marched through the gateway. The cat slipped in behind him.
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Chapter 5 • Candles and Coats
Just inside, a woman, holding a rolled parchment, sat behind a table that was covered with bright little medallions. “Please,” asked the woman, giving a wide smile and reaching out to pin one of the medallions onto Jonathan’s shirt pocket, “won’t you sign my petition?” “Well, I don’t know,” stammered Jonathan. “But I wonder if you could direct me toward the centre of town?” The woman eyed him suspiciously. “You don’t know the town?” Jonathan hesitated, noting the chilly tone that had crept into her voice. Quickly, he said, “And where do I sign your petition?” The woman smiled again. “Sign just below the last name, right here. You’re helping so many people with this.” Jonathan shrugged his shoulders and took up her pen. He felt sorry for her, sitting all bundled in heavy clothing, sweating profusely on such a pleasant, sunny day. “What’s this petition for?” asked Jonathan. She clasped her hands in front of her as if preparing to sing a solo. “This is a petition to protect jobs and industry. You are in favour of jobs and industry, are you not?” she pleaded. “Of course I am,” said Jonathan, remembering the enterprising young woman who was arrested for threatening the jobs of tree workers. The last thing he wanted was to sound uninterested in people’s work. “How will this help?” asked Jonathan as he scribbled his name badly enough so that no one could possibly read it. “The Council of Lords protects our local industries from products that come from outside of town. As you can see, we’ve made progress with our bridge, but there’s so much more to be done. If enough people sign my petition, the Lords have promised to ban foreign items that hurt my industry.” “What is your industry?” asked Jonathan. The woman declared proudly, “I represent the makers of candles and coats. This petition calls for a ban on the sun.” “The sun?” gasped Jonathan. “How, ..uh,.. why ban the sun?”
Chapter 5 • Candles and Coats
23
She eyed Jonathan defensively. “I know it sounds a bit drastic, but don’t you see – the sun hurts candle makers and coat makers. People don’t buy candles and coats when they’re warm and have light. Surely you realise that the sun is a very cheap source of foreign light and heat. Well, this just cannot be tolerated!” “But light and heat from the sun are free,” protested Jonathan. The woman looked hurt and whined, “That’s the problem, don’t you see?” Taking out a little pad and pencil, she tried to draw a few notations for him. “According to my calculations, the low-cost availability of these foreign elements reduces potential employment and wages by at least fifty percent – that is, in the industries which I represent. A heavy tax on windows, or maybe an outright ban, should improve this situation nicely.” Jonathan put down her petition. “But if people pay for light and heat, then they will have less money to spend on other things – things like meat, or drink, or bread.” “I don’t represent the butchers, or the brewers, or the bakers.” the woman said brusquely. Sensing a change in Jonathan’s attitude she snatched away the petition. “Obviously you are more interested in some selfish consumer whim than in protecting the security of jobs and sound business investment. Good day to you,” she said, ending the conversation abruptly. Jonathan backed away from the table. “Ban the sun?” he thought. “What crazy ideas! First axes and food, then the sun. What will they think of next?”
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Chapter 5 • Candles and Coats
Chapter 5 • Candles and Coats
Brainstorming
When goods don’t cross borders, soldiers will. Frederic Bastiat, 1850
• Is it good for people to get free light and heat from the sun? • Who objects? • Are the objections to imports similar? • What groups object to people buying cheap products from other countries? • Why? • Do consumers suffer when imports are banned? • How do groups stop imports of low-cost goods? • Examples? • What ethical issues are there?
When our economies are entwined we will not fight. Unknown
Commentary Sanctions prevent the peasants from creating wealth. Anonymous
Whatever cause you champion, the cure does not lie in protesting against globalization itself. I believe the poor are poor not because of too much globalization but because of too little. Kofi Annan, Secretary General of the United Nations
The title of this chapter is in reference to one of Frederic Bastiat’s famous essays on candle makers. The candle makers wanted to ban the light and heat from the sun, and so create an artificial need in order to “protect” their country’s industry. Imports: Governments’ import restrictions are not aimed at foreigners. These restrictions penalise consumers by forcing them to buy higher-priced or lower-quality products than they would prefer. By raising prices, trade barriers also deprive us of the savings that we could use to buy other products that would be generated by employment in new industries. Thus, if one has five coins and can pay one coin for the imported product, then one has four coins to buy other things. But if the import is not allowed, then one may have to pay five coins for the domestic product and there will be nothing left to buy other goods. The excuse offered for import restrictions is that governments are “patriotically” protecting domestic jobs and companies. However, as
Two people who exchange property voluntarily are both better off or they wouldn’t do it. Extract from Jonathan’s Guiding Principles
long as these jobs are protected, they will never outgrow their need for protection. What makes companies competitive is competition. If they can’t compete, it would be better if they shifted capital and labour into product lines where they have an advantage over other markets. Trade barriers in retaliation against another country only injure the innocent. The home country gains nothing by inflicting “reciprocal” injury on their own citizens. Exports: Why are a nation’s exports uncompetitive? This is frequently because of high taxes and burdensome regulations in the exporting country, not because of strong competition from abroad. Protecting local industry slows competitive innovations. It also leads to dependency on politicians who hand out the protection. Protecting “job and industry” by banning “unfair competition” is very similar to the argument that the tree-workers made against “unfair competition” from labour-saving inventions. When laws are passed to protect the candle makers, coat makers, and tree workers from competition, then consumers have to pay more than what they otherwise would. This hurts even those who gain from the protection. In the long-run we all have more to gain from free trade than from a policy of protectionism.
Background There was a time, in the history of Europe, when there was a tax on windows. To avoid this tax people boarded up their windows or walled them up completely. Quote from Bastiat’s famous Candle Makers’ Petition: “We candle makers are suffering from the unfair competition of a low-priced foreign rival. Our Customers desert us and related industries are also injured.
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Chapter 5 • Candles and Coats
What generates war is the economic philosophy of nationalism; embargos, trade and foreign exchange controls, monetary devaluation, etc. The philosophy of protectionism is a philosophy of war. Ludwig von Mises
“This rival is the sun! Please pass a law requiring the covering of all windows, skylights, holes and cracks. Domestic manufacturers will be stimulated. Agriculture will thrive on the need for tallow. Whale oil demand will improve shipping and thus defence. Jobs will be created and everyone will benefit. We have always served our country well and gratitude demands that we be protected.” Frederic Bastiat, 1846. In Sophisms, Chapter 10, Bastiat writes: “Once upon a time there were, no matter where, two cities, Stulta and Puera.” See: http://ww.econlib.org. He goes on to tell the tale of the two cities building a highway between them, at great expense. Then employing salaried “Obstructers”, at great expense, whose function was to set up obstacles, at great expense, to “prevent the flooding” of trade.
References In July 2001 The International Society for Individual Liberty – http://www.isil.com – celebrated the centenary of the birth of Frederic Bastiat – the French economist, statesman, and author. Notable is his little (75 pages) thoughtprovoking book The Law. The Incredible Bread Machine by R.W. Grant discusses the history and power of politics. The Fair Trade, by James Bovard. To see a 12-year old girl’s opinions on imports/ export see: http://www.JonathanGullible.com/ FreeMarketSuger.
Chapter 6
The Tall Tax
A
s Jonathan strode through the town he immediately noticed a dignified well-dressed man kneeling in the street, trying painfully to walk. Yet, the man didn’t appear to be crippled – just short. Jonathan offered a helping hand, but the man brushed him aside. “No, thank you!” said the man, wincing in pain. “I can walk okay. Using knees takes some getting used to.” “You’re okay? But why don’t you get off your knees and walk on your feet?” “Ooooh!” moaned the man, squirming in discomfort. “It’s a minor adjustment to the tax code.” “The tax code?” repeated Jonathan. “What’s the tax code have to do with walking?” “Everything! Ow!” By now the man settled back on his heels, resting from his torturous ordeal. He pulled a handkerchief from his shirt pocket and mopped his brow. He shifted his balance to massage one knee, then the other. Many layers of worn-out patches had been sewn on at the knees. “The tax code,” he said, “has recently been amended to level the field for people of different heights.” “Level the field?” asked Jonathan. “Please stoop over so I don’t have to shout,” pleaded the man. “That’s better. The Council of Lords decided that tall people have too many advantages.” “Advantages of tallness?” “Oh, yes! Tall people are always favoured in hiring, promotion, sports, entertainment, politics, and even marriage! Ooooh!” He wrapped the handkerchief around the newest of many rips in his grey pants. “So the Lords decided to level us with a stiff tallness tax.”
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Chapter 6 • The Tall Tax
“Tall people get taxed?” Jonathan glanced sideways and felt his posture begin to droop. “We’re taxed in direct proportion to our height.” “Did anyone object?” asked Jonathan. “Only those who refused to get on their knees,” the man said. “Of course, we’ve allowed an exemption for politicians. We usually vote tall! We like to look up to our leaders.” Jonathan was dumbfounded. By now, he found himself slouching, self-consciously trying to shrink. With both hands pointing down at the man’s knees he questioned incredulously, “You’ll walk on your knees just for a tax break?” “Sure!” replied the man in a pained voice. “Our whole lives are shaped to fit the tax code. There are some who have even started to crawl.” “Wow! That must hurt!” Jonathan exclaimed. “Yeah, but it hurts more not to. Ow! Only fools stand erect and pay the higher taxes. So, if you want to act smart, get on your knees. It’ll cost you plenty to stand tall.” Jonathan looked around to see a handful of people walking on their knees. One woman across the street was slowly crawling. Many people scurried about half-crouching, their shoulders hunched over. Only a few walked proudly erect, ignoring the sanctions completely. Then Jonathan caught sight of three gentlemen across the street sitting on a park bench. “Those three men,” indicated Jonathan. “Why are they covering their eyes, ears, and mouths?” “Oh, them? They’re practising,” replied the man as he leaned forward on his knees to shuffle along. “Getting ready for a new series of tax proposals.”
Chapter 6 • The Tall Tax
Brainstorming • Is it proper to use taxes to manipulate behaviour? • Do people shape their lives to reduce taxes? • Are officials more wise and moral than their subjects? • Is it unfair for people to be tall? • Examples? • What ethical issues are there in this story?
Commentary We, and all others who believe in freedom as deeply as we do, would rather die on our feet than live on our knees. And those who defy the government’s manipulations stand proud. Quote by Franklin Roosevelt (though he probably didn’t want people to reject some of his government actions!)
Through taxes governments have the means to manipulate the behaviour of citizens. This is in violation of individual rights. When taxes become severely burdensome, people alter their lives to guard against the costs, inconvenience, and indignity of those taxes. When governments want less of undesirable behaviour, they tax it. By promoting some taxes as “sin taxes” the state is saying “these are sins – things you should not be doing, so we are going to tax them”. The state tries to discourage smoking and drinking in this manner. Ironically, taxes have the same effect on other kinds of behaviour such as working and saving. Thus working, saving, and becoming self-sufficient, are also treated as sinful behaviour. The more people work – “sin” – the more they will be taxed. In this way the government also treats business success as a sin. This happens even though profitable firms provide goods and services, jobs and incomes – all of which provide for more tax revenues. In other words, the state is discouraging work and self-responsibility – behaviour that is surely not sinful and that most people would like to encourage. Governments tend to tax efficiency and subsidise inefficiency.
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Chapter 6 • The Tall Tax
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“Silent” or hidden taxes heavily penalise low-income people who have less influence over government officials. These types of taxes, in many disguises, affect our lives as politicians’ wishes seldom coincide with our own. Control of people through taxes, licences, and regulations upsets the economy, increases costs and reduces the demand for labour. This often leads to hostility and violence between groups that are on different sides of government favour.
Background
?
A fine is a tax for doing wrong. A tax is a fine for doing well.
This chapter is about the idea that equality of everything should be forced upon people. In this chapter, politicians try to force everyone to be the same equal height. As we saw in the previous chapter, people in Europe were prepared to alter their lives by shutting out the sunshine in order to save on taxes. It is no different today. Governments try to control our behaviour with taxes. It is amazing how many people’s lives and conversations are shaped by the tax code.
References A very comprehensive book that deals with this issue is A Liberty Primer by Alan Burris. In Welcome to the Monkey House by Kurt Vonnegut, strong people are made to carry weights to bring them down to the level of the rest. An active and successful international institute for promoting free trade, free markets, and personal responsibility is the Atlas Foundation, http://www.atlasusa.org.
Chapter 7
Best Laid Plans
D
ull two- and three-storey wooden row houses lined the streets of the town. Then Jonathan noticed one grand, elegant home, standing apart from everything, isolated on an expansive green lawn. It looked solidly built, adorned with attractive latticework and freshly painted white walls. Curious, Jonathan approached the house and found a crew wielding heavy sticks, attacking the back of the home and trying to tear it down. They weren’t very enthusiastic and moved very slowly at the job. Nearby, a dignified, grey-haired woman stood with her hands clenched, visibly unhappy at the proceedings. She groaned audibly when a piece of the wall came down. Jonathan walked over to her and asked “That house looks well built. Who’s the owner?” “That’s a good question!” the woman shot back vehemently. “I thought I owned this house.” “You thought you owned it? Surely you know if you own a house,” said Jonathan. The ground shook as the entire back wall collapsed inside. The woman stared miserably at the cloud of dust billowing up from the rubble. “It’s not that simple,” yelled the woman over the noise. “Ownership is control, right? But who controls this house? The Lords control everything – so they’re the real owners of this house, even though I built it and paid for every board and nail.” Growing more agitated, she walked over and ripped a paper off a single post left where a whole wall had stood moments before. “See this notice?” She crumpled it, threw it down and stamped on it. “The officials tell me what I may build, how I may build, when I may build, and what I can use it for. Now they tell me they’re tearing it down. Does that sound like I own the property?” “Well,” ventured Jonathan sheepishly, “didn’t you live in it?”
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Chapter 7 • Best Laid Plans
“Only so long as I could keep paying the property taxes. If I didn’t pay, the officials would have booted me out faster than you can say ‘next case’ !” The woman grew red with fury and continued breathlessly, “No one really owns anything. We merely rent from the Council so long as we pay their taxes.” “You didn’t pay the tax?” asked Jonathan. “Of course I paid the cursed tax!” the woman practically shouted. “But that wasn’t enough for them. This time, the Lords said that my plan for the house didn’t fit their plan – the master plan of ‘superior owners,’ they told me. They condemned my house – gave me some money for what they said it was worth. And now they’re going to clear it away to make a park. The park will have a nice big monument in the centre – a monument to one of their own.” “Well, at least they paid you for the house,” said Jonathan. He thought a moment and asked, “Weren’t you satisfied?” She gave him a sideways look. “If I was satisfied, they wouldn’t have needed a policeman to push the deal, now would they? And the money they paid me? That was taken from my neighbours. Who’ll compensate them? The Lords won’t pay them!” Jonathan shook his head in bewilderment. “You said that it was all part of a master plan?” “Ha! A master plan!” the woman said sarcastically. “That’s a plan that belongs to whoever has political power. If I spent my life in politics, then I’d be able to impose my plans on everyone else. Then I could steal houses instead of building them. It’s so much easier!” “But surely you need a plan in order to have a wisely built town?” said Jonathan hopefully. He tried to find a logical explanation for her plight. “Shouldn’t you trust the Council to come up with such a plan?” She waved her hand at the row houses. “Go see for yourself. The worst plans are the few that they actually complete – shoddy, costly, and ugly.” Turning to face Jonathan, she looked him straight in the eye. “Think of this. They built a sports stadium where nine of every ten spectators can’t see the field of play. Because of their shoddy work, it cost twice as much to repair as it cost to build in the first place!
Chapter 7 • Best Laid Plans
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And their great meeting hall is only available to visitors, not for the taxpayers who paid for it. Who did the planning? The Lords. They get their names emblazoned in stone and their friends get fat contracts.” Jabbing a finger into Jonathan’s chest, she declared, “Only foolish plans have to be forced on people. Force never earned my trust!” Fuming, she glared back at her house. “They haven’t heard the last from me!”
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Chapter 7 • Best Laid Plans
Chapter 7 • Best Laid Plans
Brainstorming
The harvest of your life is your property. It is the fruit of your labour, the product of your time, energy, and talents. Jonathan’s Guiding Principles
• When is it OK for the government to take a house away from someone? • What is the problem with superior ownership, or eminent domain? • If an official can use, control, take, or destroy a house that another person builds, then who really owns the house? • Can private initiative provide better and cheaper buildings? • Is a property tax like rent? • Examples? • Ethical issues?
Commentary
Under the pretence of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few. Frederic Bastiat 1849
Vast stretches of land in all countries are owned by the state. Yet, the state has the power to take anyone’s property if it is claimed to be “for the common good”. State officials set the price unilaterally. If you resist, the state has the power to forcefully remove you. So, who really owns the land? In theory, your property is any possession owned by you. This can be your house, your farm, your toy, your book, or your car. To own something is to have control over what you do with it. In fact, you may do what you like with it as long as you do not harm others. You may use your property any way you wish. This includes your right to decide not to sell or to sell voluntarily at a profit. If you do not have control over your property, then it cannot really be yours even though you built it or paid for it. You are but a “renter” or a “borrower” from the real master – the higher authority.
Many visitors wonder why Geneva, one of the world’s richest cities, headquarters of a host of banks and international organisations, has no great architecture in which to take pride. But when one needs to get authorisation from pen-pushers and approval by a referendum of philistines to build on one’s own land with one’s own hands, the result is architecture to please philistine pen-pushers. Christian Michael
A look at the queues at your local licensing office will tell you how much your community is being controlled and forced to conform to regulations. A further disadvantage of licenses is that they are left to the whim of officials. If an official feels so inclined, he or she has the power to delay an application until a more “convenient” time. This power puts him in a good position to consider a bribe. In Costa Rica there is a saying, which translates as “where there is a license there is a sausage (a bribe).” Licences and regulations stifle progress. It is no accident that countries with the most restrictions experience the least economic growth. The situation is different if a group of people voluntarily reaches an agreement to mutually coordinate their property or housing plans. The difference is that it is voluntary – unlike government plans where one group imposes its will upon all others.
Background Eminent domain, Latin for “superior owner”, the authority of the state to take private property for public use. The 5th Amendment of the US Constitution requires that just compensation be given, but is it? How can it be just if it can only be accomplished by force?
? In some cities
they tear down buildings to save taxes. They might try tearing down some taxes to save buildings.
References Bastiat’s The Law is the best reference on authorised plunder. For a New Liberty by Murray Rothbard gives some great alternatives in tough areas. Eminent domain is an act of aggression. An illustration of how this power is abused can be found at the website, Institute for Justice: http://www.ij.org.
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