Monday, 8 August 2011

ECONOMICS FOR REAL PEOPLE: Reserve Bank, cause or cure … ?


Here’s the note from our friends at the UoA Economics Group for their talk tomorrow evening:

Hello Everyone
This week we have Rodney Dickens coming to speak to us further about the role the Central Bank plays in the Business Cycle.  Rodney Dickens is the former head of Research at ASB Bank and has been a member of the RBNZs Monetary Policy Committee.  He is now the Managing Director of Strategic Research Analysis and brings a unique perspective on how the market operates from his 25 years experience working as as an Economist. 
In a recent media release he showed how lowering the OCR during the early 2000's created the boom bust property cycle.  [Some reaction to his media release here.] While this created short-term employment for those in the building industry, it ultimately left many people out of pocket, as over 50 different finance companies collapsed and billions of dollars in investments were lost.  As markets around the world continue to struggle, come and hear an interesting perspective on how this story began.

    Date: Tuesday 9th August
    Time: 7pm
    Location: Case Room One, Level 0, UOA Business School

Please note the change of time for this week to 7pm.  Look forward to seeing you there

DOWN TO THE DOCTOR’S: Why Labour should support tax cuts for the rich

_richardmcgrathLibertarianz leader Dr Richard McGrath invites you down to his surgery for an inoculation against this week’s stories and headlines on issues affecting our freedom.
This week: Why Labour should support tax cuts for the rich

DOMPOST: “Inequality report ignores tax cuts for the rich: Goff” - John Key appears to think income inequality is a bad thing. Phil Goff slaps him with a wet bus ticket for not taking into account the cuts to income tax enacted by National since their election in 2008…

This is much ado about nothing, a phony war over a non-issue. Apparently the gap between top and bottom incomes hasn't widened recently. That's probably not a good sign, as it means industrialists and entrepreneurs possibly aren't making bigger profits, and therefore are less likely to employ more people.

It's no secret that Labour and Bill English like the idea of a capital gains tax. Labour also wants to reinstate the Cullen Envy Tax (i.e. raise the top tax rate back to 39%). But why would on earth would Goff want to decrease government revenue? Doesn't he realise that hiking income tax rates leads to less, not more, tax taken by govt?

Daniel Hannan, member of the European Parliament, points out in his blog that in order to make the rich pay more, governments should tax them less. He links to an interesting article by the Adam Smith Institute (whose publications I strongly recommend) that quotes example after example of how tax reductions for the wealthy encourages them to stick around, keep making profits and thus fall prey to tax collectors.

Even that darling of statists everywhere, John Maynard Keynes, stated: "[T]axation may be so high as to defeat its object, [and] a reduction of taxation will run a better chance than an increase of balancing the budget."

Don’t believe me? Here’s some examples:

  • UK, 1979: Chancellor Geoffrey Howe cuts marginal tax rate from 83% (!) to 60%. Before the cuts, the top 1% of taxpayers were paying 11% of total income tax received. Nine years later, despite the hefty cuts, they were paying 14% of total income tax.
  • UK, 1980s: Chancellor Nigel Lawson cuts marginal rate further, to 40%. By 1997, the top 1% of taxpayers are paying 21% of income tax received. Thus halving the marginal tax rate doubled the income tax receipts from the wealthiest 1%.
  • US, 1920s: Presidents Coolidge and Harding reduced the top tax rate from 73% to 25%. The share of tax paid by earners making over $100,000 nearly doubled between 1921 and 1925, from 28% to 51%.
  • US, 1961: The top tax rate under Eisenhower had crept up to a staggering 91%. The Democrats supported by Kennedy dropped this to 70%. He stated, a few months before a sniper removed the occipital lobes of his cerebral hemispheres: "[T]ax rates are too high today and tax revenues are too low, and the soundest way to riase revenues in the long run is to cut the tax rates..." As a result of the Kennedy tax cuts, those earning over $50,000 increased the amount of tax paid by 40%, and paid 15% of income tax received in 1966, as opposed to 12% in 1963. Total income tax received went up from $69b in 1964 to $96b in 1968.
  • US, 1981: Under President Reagan, Congress reduced the top tax rate from 70% to 50%. Between 1981 and 1988 the top 1% of tax earners increased their share of tax received from 18 to 28%, while the bottom 50% of taxpayers decreased their contribution to income tax received from 7.5% to 5.7% over this same period.
  • US, 1991: George H W Bush, elected on a platform of "no new taxes", supported the introduction of new taxes including raising the top tax rate from 21 to 31%. The net result was that the wealthiest Americans paid $6.5b less in 1991 than they had the previous year before the tax was introduced. Federal tax results as a proportion of GDP dropped too.  
  • US, 2003: George W Bush reduced the top tax rate from nearly 40% to 35%. Between 2004 and 2007 federal tax receipts increased by $785b, mainly from the wealthy.
  • In 2000, the top 60% of US taxpayers paid all the income tax. The bottom 40% paid no net tax.
  • Canada, 1990: Top federal tax rate cut from 45% to 29%; share of tax paid by top 10% of taxpayers increases from 29% to 45%.
  • France, 1996: Gradual decrease in top income tax rate from 48% to 40%; result: higher tax receipts.
  • Hong Kong: Low flat income tax rate of 16% (or choice of graduated rates up to 17% maximum). Result: purchasing power parity 7th highest in the world and closing in on the US.
  • India, 1985: Top tax rate reduced from 65% to 50%; tax revenue the following year rises by 20%.
  • India, 1997: Tax rates reduced across the board; result: no drop in revenues but increase in number of taxpayers over following year, with rise in tax revenue over following 6 years and 50% increase in compliance.
  • Russia, 2001: Flat tax of 13% introduced. Result: 25% increase in personal income tax receipts the following year.

So, Mr Goff:

There is ample evidence that decreasing the top tax rates increases government revenue. So why are you advocating a rise in the marginal tax rate?

Are you so consumed by hatred of the successful for being successful that you would incur a drop in government revenues in order to drive these people offshore, which, of course, is what the wealthy do when grasping parasites like you try to steal larger amounts of their income than they are willing to hand over for redistribution?

Pray tell, Mr Goff.

See y'all next week!
Doc McGrath

Garden of Eden

I don’t know about you, but we had a ball at Eden Park on Saturday night. It wasn’t the MCG—we sat on scaffolding five miles in the air whose shaking quelled the staunchest stamping—and instead of built-in facilities we had portaloos and hot-dog caravans down several miles of stairs—but once installed up in the nosebleed section the atmosphere was fantastic. 

And if you had parking close (as some of us were lucky enough to enjoy) transport there and back was easy, and partying afterwards painless.

And there was a lot to celebrate, wasn’t there. Unless you are Australian. Or Robbie Deans.


This was pretty much our possie (above), which you might think would feel a little out of the atmosphere. But it wasn’t. Despite being behind the scoreboard at this end, the one at the other end was huge—and “spidercam” showed us anything we’d missed. And there was no chance of feeling out of it: with a crowd of 52,000, it was easy to feel part of it. I’d happily sit there again.  And might, in coming weeks.

Q: So how was your Eden Park experience?

Reality strikes back [update 2]

Malinvestment is always the result of the inability of human beings to foresee
future conditions correctly. However, such human errors and the resulting
malinvestments are most frequently compounded by the illusions
created by undetected inflation or credit expansion.”
- Ludwig Von Mises, Human Action

The cause of the ‘bust’ is the same as the cause of the previous ‘boom’ – the
willy-nilly creation of credit out of thin air…  To understand the root cause of
this crisis you need to understand the root cause of ‘boom and bust.’”
– David McGregor, ‘The global financial/economic crisis: causes & solutions

For decades, economies have been built.on a formula of fractional reserve banking and counterfeit capital—money created by banks out of thin air—debt, organised into currency.

This was the "new economy" proclaimed the fakers, an economic model in which production of real things was replaced with production of bank-created credit. Credit created out of thin air propping up prosperity created by illusion.

That unstable gallimaufry collapsed in the malinvestments of 2007 and 2008. And ever since, the fakers have tried to prop up their collapsing model of bank-created credit with trillions of dollars of government paper.

Such fakery can only last so long. Reality will out. All that "stimulus" flooded into the markets served only to resuscitate bad positions that should have been extinguished, and to inflate a (paper-based) "recovery" which allowed the gullible to think that reality had been faked once again.

But it hasn't been.

It looks like this morning, with markets ready to open again, that reality will reassert itself again.

The economic chickens are coming home to roost. Watch out for the fallout therefrom.

UPDATES  from around the traps:

UPDATE 2:  More reaction":

  • Don’t worry about US Government debt says the man who blew up the US housing bubble. “This is not an issue of credit rating,” says Alan Greenspan, “the United States can pay any debt it has because we can always print money to do that. So, there is zero probability of default."
    Yes, folks, this man was Chairman of the US Government’s money-printing wing for nearly twenty years. And you wonder why we’re all now in the mess we’re in!
  • Meanwhile, there are alleged economists out there saying that even though the US Government’s debt situation was “abysmal,” even though they’re now struggling to pay for all the government paper they wasted,  they should have gone for way more than the multi-trillion-dollar stimulus they did.
    “What I want is more now," Christine Romer said about a bigger and better stimulus.
    Yes folks, this woman was Chairman of the Council of Economic Advisers under President Obama and chief architect of his stimulus bill. And you wonder, etc…

Sunday, 7 August 2011

Happy Birthday, E-Type

Since it’s Sunday, here’s Jeremy Clarkson with the closest thing to a religious experience you’re likely to see here: a tribute to the best car ever made, on the occasion of its fiftieth birthday!

Top Gear Jaguar E-Type Tribute from Eric Huntington on Vimeo.

Friday, 5 August 2011


My apologies for such a poor effort on the blogging front this week. Unfortunately (or fortunately, depending on your viewpoint) an old back injury flared up again, putting me out of action for most of it.

But fortunately (or unfortunately, depending on your viewpoint) a crash-hot physio has me almost back to normal--and just in time to head to the test match tomorrow night.

How's that for timing!

So hopefully you will enjoy your weekend as much as I will, and I will see both of you back here on Monday, if not before.


Location:Jervois Rd,Herne Bay,New Zealand

Monday, 1 August 2011

So the (over) spending can now continue…

It has just been announced that Republicans, Democrats and and President Obama have reached a deal to raise the US government's debt ceiling.


Because as Peter Schiff said last week, “The real crisis will occur not if we fail to raise the debt ceiling, but if we succeed.”  The door is now open to new borrowing, new spending, more stimulus of the kind that has already signally failed … and many more crises to come down the road—and in very short order.

And don’t think that raising the government’s debt ceiling will comfort America’s producers, or avert a downgrade of US Govt Debt.

As former Chairman and CEO of BB&T Corporation John Allison notes

    It is important to recognize that the down grade [will not be] fundamentally based on the debt ceiling issue.  The credit rating agencies are focused on the long term deficits faced by the U. S. government.  Raising the debt limit may (or may not) help in the short term.  However, if federal government spending and deficits are not reduced U. S. government debt will be downgraded and rightly so.  The government will ultimately default on some of its obligations unless spending is brought under control…
    Corporate America is fundamentally concerned about the financial instability of the U. S. government and the very destructive regulatory environment, which is why businesses are holding so much excess cash.  It is impossible for a business to be fully prepared for a downgrade, but CEO’s see the government deficit problem, and out of control spending  as far deeper than the debt limit fight.

That’s what virtually every party to this argument, and every report from the MSM, has wilfully ignored. The fight over the debt limit has been a fight over consequences—when the real battle should have been over causes.

Even now, they fail to recognise that.

What would 'Party X' do about the environment? - CONCLUSION: A Kyoto plan with a difference

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Over the last week, I’ve been throwing out the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

I conclude today with an idea and an invitation.  The idea: a Kyoto Plan that makes the whole thing plain. The invitation: you’ll find that at the end of the post.

7. The Kyoto Plan for Tax and Regulation

Here’s one last suggestion that sums up the aim of all seven environmental policy planks presented so far. A plan explicitly designed to clean up the human environment, using the language of those who seek to shackle humans in the name of trees, rocks and mud puddles.

If you recall, to save earth’s environment from man’s allegedly climate-changing pollution the Kyoto Protocol to which Simon Upton signed us up required carbon emissions to be cut to 1990 levels by 2010. Which was never going to happen.

Whether or not you accept either the science or the politics behind that notion, however, it certainly concentrated minds on the proposition and elicited great pressure to achieve the goal, or something like it.

So what I propose—what a Party X could proposes—is to do something similar, but in the name of human freedom instead of human bondage.

What I propose quite seriously is a similar protocol to limit a far more serious and provably destructive pollution: the legislative pollution emanating from parliament that punishes achievement, destroys freedom, and requires the productive to go cap in hand to the unproductive just to ask permission to produce.

And along the lines of the Kyoto Protocol, I’d make it one that restricts the levying of taxes and the emission of regulations to 1990 levels, by about the time of the next parliament.

That shouldn’t be a big step to take, but it would at least concentrate minds on the enormous stack of new rules and regulations pouring out of parliament every year. While the jury is still out on the possible destructive consequences of emissions of carbon dioxide, there is no doubt at all of the destructive consequences of the emission of new taxes and ever more intrusive regulations.

Time to put a stop to the explosive growth in these emissions. 2014 works for me. Now would be better.

* * * * *

That concludes the series as written.

But now you’ve seen how easy it is to devise reforms that advance freedom one step at a time without implementing any new coercion, why not have a go yourself? I invite you to post in the comments your own ideas on reform in any policy area. And I invite members of political parties who claim to stand for freedom and small government to give serious thought to making their’s a property Party X, instead of just lapdogs to power.

INTRO: 'What Would 'Party X' Do About the Environment?'
PART TWO: 'A Nuisance and a BOR.'
Making Life Easier for Small Consents
PART FOUR: “Iwi then Kiwi” - A Unique  Privatisation
PART FIVE: A Very Special Carbon Tax
PART SIX: A Fishy Story

THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

DOWN TO THE DOCTOR'S: Dentists and dickheads

_richardmcgrathLibertarianz leader Dr Richard McGrath invites you down to his surgery for an inoculation against this week’s stories and headlines on issues affecting our freedom.
This week: Dentists and dickheads…

THE DOCTOR SAYS: No, dental fees are not out of control. They have settled according to the economic law of supply and demand. High demand + low supply + over-regulation by government = high prices. If you restrict the number of people graduating from the Otago University dental school (as they do), and then you block qualified dentists from setting up shop in New Zealand (as is done), then of course prices will be high.
        Look at some of the comments made online at the Herald website however:

        "These people who are responsible for our health should not be doing it for personal profit, which
    they do."

    Written by a person who has clearly abdicated responsibility for his own health. Well, I have news for him. Each person is responsible for their own health. Why should anyone else be responsible for my health? It's my body, and I make the decisions that affect my health. The profit motive is what incentivises people to work hard. What dentist is not going to try to make a profit after paying for five years of training and then sitting vulnerable throughout his working career to anyone who cares to make a complaint to the Health & Disability Commissioner? 
    There were lots of other bleeding hearts evident in the online comments, positing the argument that dental care should be paid for with other people's money, but one comment resonated with me: a woman who had dental work done in Thailand at a fraction of the cost in NZ and recommended that others do the same. From my own personal experience, I can recommend travelling to Bangkok where there are top-notch dentists who can even arrange discounted accommodation at four or five star hotels within walking distance of their office.
     I have been over twice and my experience was good.
    For any dental work costing more than $4k, I would think a trip to the dentist in Bangkok would be more economical in dollar terms. Needless to say, let the buyer beware: do your homework first!

3 NEWS: “Family mourn loss of 'big-hearted girl' in Norway” - A 14 year old New Zealand born girl was among those apparently killed in Norway….
THE DOCTOR SAYS: This mass murder was tragic, and the murderer should spend the rest of his life compensating the families of his victims in every way possible—if indeed there is any way possible.
    There were a couple of other interesting angles to this outrage, though.  First, this young lass joined the Labour Party a year ago, aged 13. Thirteen! Isn't it a little unusual to join up children into political parties at such a tender age and take them out on 'camps'? Plenty of potential for brainwashing/indoctrination/child abuse—not sure I'd go as far as Glenn Beck and compare the murdered teenagers to the Hitler Youth movement, but it all seems a little strange to me. 
     Not that it excuses the actions of her killer.
    Like many countries, Norway has strict gun laws. As is the case in many other jurisdictions, a Norwegian's desire to be capable of acting in self defence is not considered a valid reason for him to own an instrument by which he could defend himself. To own a firearm over there, one must be a certified hunter or sports shooter.   
    But if one—just one—of the people who had the misfortune to encounter the killer had had recourse to a firearm, how very different the outcome might have been. How ironic that the inspiration for many little socialists such as those killed eight days ago, Chairman Mao, once opined that political power grows out of the barrel of a gun.
    And it didn't take long before someone from the misanthropic greenie left, a soulmate of Ted Kaczynski, expressed the opinion that the killings in Norway were trivial compared to the slaughter of animals to provide protein for human nutrition.
    What a dickhead.

That’s all for me this week.
See you next Monday.
Doc McGrath

Sunday, 31 July 2011

“Evolution made us all”

Here’s a nice hymn for a Sunday:

by Ben Hillman

Here’s another: 

‘by Monty Python’s Flying Circus

[HT Linda K.]

Saturday, 30 July 2011

INVITATION: “Capitalism, the Cure for Racism”

A few of the more enthusiastic students from the Auckland Uni Econ Group and beyond have been hooking up on Sundays to work through George Reisman’s Program of Self-Education in the Economic Theory and Political Philosophy of Capitalism.

It offers, as the sub –heading of Prof Reisman’s book describes it, “a complete and integrated understanding of the nature and value of human economic life.”

This Sunday, tomorrow, we’ll be listening to Prof. Reisman’s classic lecture on “Capitalism: The Cure for Racism”—an extension of the Uniformity-of-Wages Principle, i.e.,

that the profit motive of employers [where it is free to operate] operates to eradicate all differences ni pay based not on differences in performance. Where such differences persist, they are [argues Reisman] the result of government intervention or private coercion that is sanctioned by the government.

This is an ideal time to come along and hear Prof Reisman’s mind at work on a subject no less topical today than when his lecture was first delivered. So why not come along and enjoy the discussion!

When: Sunday 31 July (tomorrow), 10:30am
Where: The Organon Architecture offices, Level 1, 236 Dominion Rd (next door to the Valley Rd supermarket carpark)

See you there!

Friday, 29 July 2011

Peter Schiff: “The real crisis will occur not if we *fail* to raise the debt ceiling, but if we **succeed**”

Peter Schiff on the U.S. debt ceiling. There’s a more important ceiling staring the U.S. govt in the face than the one they’re trying to fake right now, he reckons: a lending ceiling…

What would 'Party X' do about the environment? - PART 6: A fishy story

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

Yesterday we started depoliticising the commons. Today, we finish the job: here’s how to de-politicise the fisheries

New Zealand’s fisheries are at present what’s known as a “managed commons,” a system in which the tragedy of the commons is limited only by bureaucratic management of the fisheries—which is effectively held in common by all those who own fisheries quotas, and managed by bureaucratic fiat.

While it’s been applauded by some who should know better as a system bringing property rights to the fisheries,  the Quota Management System is in fact nothing  more than system of rationing by bureaucrat, with no incentive for the bureaucrats who set the level of rationing to get it right, nor for quota holders to maintain the resource.

The result has been politicisation of the fisheries, short term thinking from fishermen (rational in the circumstances), and pressure for even more government control of local fisheries to fix the very real problems created by so-called “deregulation.”

I suggest we need a rethink.

The best way to protect fish stocks and to protect the legitimate interests of fishermen is not through rationing but through property rights. We know that when property is secure that property owners tend to look to their longer term interests: no reasonable property owner wants to destroy the goose that lays his golden eggs.

When property rights are insecure however (as they are with Individual Transferable Quotas, whose value can be wiped out at the stroke of a Minister’s pen) the situation is reversed: the greatest incentive with the short-term horizons created by insecure property rights is to grab what you can while the going is good. So it’s no surprise then to see increasing reports of bottom trawling and bucketfuls of bycatch, and scary reports of decreasing fish stocks and decimated fish stocks. Such is the inevitable result when incentives favour short-term thinking.

The answer is not more politicisation, but less.

THINK ABOUT IT FOR a moment. Native birds face extinction, and fish stocks are reported to be running down. Meanwhile, there is no immediate likelihood of dairy or beef cows becoming extinct. The difference? In the former cases, there is no long-term incentive for private individuals to harbour the resource; whereas in the latter case, where farmers’ property in their cattle is protected, they have an enormous incentive to protect the value of their property—in the case of breeding programmes, right down through several generations.

That’s the whole difference in a nutshell. Protect property rights properly, and you set up “mirrors” reflecting back owners’ behaviour—and incentives to nurture and protect rather than smash and grab.

Farmers have historically protected the property in their stock and crops with methods such as barbed wire, brands and enclosed paddocks—and their development created a revolution in food production that saw the world’s population explode.

Obviously, none of these methods of protecting farmer’s property in their stock works very well with fish. (Certainly, shellfish can be tied to a stake, for which water rights and seabed rights are necessary, but few fish show much concern about swimming past a few barbs on a strand of wire.) But the difference is only technological:  and giving fishermen an incentive to develop the necessary aquatic equivalents is key.

What a responsible Party X would do is not to say how and why a property right in fish would be recognised in law, but invite fishermen themselves to develop the technology to do that—and incentivise the development by promising firm protection in law for whatever method is proven to work.

In other words, give fishermen the opportunity to show reason WHY their ownership in a particular fishery should be recognised in law, and HOW the ownership may be recognised and protected.

A Party X offering this would be using the power of good law to promote the technological means by which good law could be brought to bear on the problem.

THINK ABOUT THE DEVELOPMENT OF property rights in cattle, and how technology helped: The use of cattle brands was the first simple method enabling cattlemen to define ownership of their stock, which it was the law’s job to protect, allowing them to plan and to grow their herds ‘sustainably’ in the full knowledge that their investment in the herd was protected. The better the legal protection, the longer term the investment and the planning that could be done—hence the reason that cattle rustling was treated so severely in the days before barbed wire.

The invention of barbed wire revolutionised farming, allowing farmers to protect and define both their stock and their land across huge areas, allowing them to plan ahead and to protect both their herd and their land ‘sustainably’ in the full knowledge that their investment in herd and land was protected.

Both inventions enabled the legal technology of property rights to be brought to bear to protect first the resource (by means of identifiable brands) and then the environment (by means of barbed wire). What’s needed now is the same thing to happen with the fisheries.

If every fishermen’s interests in his own fishery and fish stocks are safeguarded, then every incentive exists for them to take the long term view. Why would you bottom trawl or in any other way damage your own highly valuable property?

What’s needed with the fisheries is the maritime equivalent of brands and barbed wire so that fish stocks and fisheries are protected by those who have the most interest in protecting them: the fishermen themselves. What’s needed is technology. Political parties don’t invent technology. They can’t. But what they can do is offer the protection of property rights to those who do.

I suggest the best way to obtain what we want here is to invite the fishermen themselves over, say, a three year period to present methods either technological or otherwise by which their own interests in fish and fisheries may be objectively recognised and protected in law, and then commit to enact that protection. I predict an explosion in fish stocks, the depoliticisation of the fisheries … and a big export market in the technology produced.

[Tomorrow, Part 7: A Kyoto Plan with a difference]

* * * * *

INTRO: 'What Would 'Party X' Do About the Environment?'
PART TWO: 'A Nuisance and a BOR.'
Making Life Easier for Small Consents
PART FOUR: “Iwi then Kiwi” - A Unique  Privatisation
PART FIVE: A Very Special Carbon Tax
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

Thursday, 28 July 2011

What would 'Party X' do about the environment? - PART 5: A very special carbon tax

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

Today, Today, what I like to ironically my 'Carbon Tax Plan':  A Carbon Tax—but not as you know it!

We've all heard the litany: We’re all gonna die. Runaway global warming is gonna get us.  Man-made global warming is killing the planet. We "need" a carbon tax, urgently …  Agree or disagree, like it or not, but those sentiments and those statements are political reality, both here and across the Tasman.

So I’m proposing something to bring honesty to warmist science and warmist politics. Yes campers, it is a carbon tax. But look closely, because it’s a very special carbon tax.

First off, it’s a carbon tax that is a substitute for other taxes (yes, a condition of Party X’s support for any new tax would would be the removal of another tax.)

And second of all, it’s a carbon tax that’s reality based, i.e., it’s a tax whose rate is linked to actual global temperatures instead of to the sound of hot air.

What I’m actually suggesting is not new. It was first put forward by Canadian Ross McKitrick, who was the co-debunker with Steve McIntyre of the IPCC’s infamous ‘Hockey Stick.  What he put forward was a carbon tax linked to actual global temperatures – specifically, to the temperature of the tropical troposphere, which is precisely where the IPCC's science says the primary CO2 "fingerprint" is to be found.

It is, if you like, a way to call warmists’ bluff. But it is a new tax, of sorts, albeit a tax with a number of very attractive advantages for everyone on both sides of the debate.

Because if you really believe that temperatures are going to rise precipitately, then how could you reasonably oppose such a tax -- from the warmist point of view, this is a one-way bet with cross-party support! And if you don’t believe, it’s the same.

So if warmists were to oppose the tax, it would call into question everything they say they hold to be true—and vice versa.

But there’s more:

  • The Special Carbon Tax offers a real fiscal bonus. If the globe warms we pony up, true, (but remember this is offset by the removal of another tax). But if the globe cools as many solar researchers expect?Then if the globe cools, we all get a real refund. “If models are right, then the tax would go up a lot,” [points out economistGeoffrey Plauche], “but on the other hand, if the tropical troposphere temperatures continue to decline as they have since 2002, then the tax would go negative and turn into a subsidy on carbon emissions. Of course, the alarmists are convinced this won't happen so it shouldn't be an obstacle to them endorsing the tax...” Like I say, a Party X could use this to call warmists’ bluff.
  • But that’s not all. With carbon taxes linked to global temperature, people would begin to really focus on the actual means by which global temperatures are measured – how the measurements are produced, what the actual surface temperatures are, and how closely (if at all) they correspond with predicted temperatures. They might notice too that the methods by which the surface temperatures are presently produced are seriously shonky but considered “good enough for government work.” And they might even notice that there has been no real warming since 1998.
  • There will be serious attention paid to this ongoing temperature figure, so much so that we might even see warmists forced to admit there has been no real warming since 1998. We might expect to see the measurement recorded at the Stock Exchange, and shown on the news each night right after the Dow Jones and the Nikkei and the US govt debt figures, and for the same reason those figures are reported and with the same pressures regarding accuracy and accountability (except of course for the US govt debt figures).
  • In a further wrinkle suggested by economist Arnold Kling and others, we would expect there to develop a futures market in the temperature indicator, with taxes, profits and predictions tied to the futures price in a way that rewards accurate forecasting instead of the sort of political horse-trading rewarded by the IPCC.
  • Furthermore, all those computer models that predict warming (and since 1998 that’s the only place we actually see any real warming) – all those models would be under much closer scrutiny. And as Climate Science Coalition convenor Owen McShane points out, we’d expect to see the rise of real, non-government, climate experts to make real non-government sponsored predictions about where troposphere temperature is going, Those whose "predetermination and bias" always encourages them to predict "warmer" would soon lose their clients and their track record would be there for all to see. No doubt too these experts would be listed in the same pages as the share market and similar "real" information. As Owen says, “The late Augie Auer would be thrilled.”
  • Finally, as I said before, this idea was originally proposed by Ross McKitrick (the chap who helped debunk the bogus IPCC hockey stick) so it already has serious credibility, and has received significant international attention. No harm at all in using that spotlight to help promote more freedom here.

So in short we have here a “tax” designed to call warmists’ bluff while keep industry free of their shackles, and doing it in the name of the warmists' name—a “tax” that promises to be a tax refund.

You can see why I call it a special carbon tax.

[Tomorrow, Part 6: A fishy story]

* * * * *

INTRO: 'What Would 'Party X' Do About the Environment?'
PART TWO: 'A Nuisance and a BOR.'
Making Life Easier for Small Consents
PART FOUR: “Iwi then Kiwi” - A Unique  Privatisation
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

Wednesday, 27 July 2011

Gratitude, by Daniel Anjou

Gratitude - Danielle Anjou

A passion for life and a spirit inspired by that full-blooded reality focus I talked about the other day...

Tax, tax, and more tax

You have to laugh.

I’ve been posting in recent days about an imaginary ‘Party X’ committed to more freedom and less government. Indeed, if you scour the National Party constitution, under all the dust you’d even find such a commitment written there.

Just as you’d find a firm commitment from that that same team before the last election for “an ongoing series of personal tax cuts” delivering “about $50 a week to workers on average wage”—a “tax cut programme [that] will not require any additional borrowing.” And no increases in GST, to boot.

They lied to you then like they always do.

Instead of more freedom and less government we’ve seen the opposite. And instead of delivering tax cuts of about $50 a week with no new borrowing, we’ve seen lots of the latter and very little of the former—much borrowing, derisory tax snips, and and a whole raft of tax increases and new taxes, from rises in Roger Douglas’s GST on everything, to increases on ACC levies, to increases in excise tax on everything enjoyable, to the introduction of Nick Smith’s ETS taxes on fuel and power.

And to top it off, we now have Steven Joyce wanting to whack motorists with a new tax to pay for his favourite form of stimulunacy: oodles more taxes to spend $36 billion building more roads.

Because the govt isn’t already taking enough out of your pocket to do the things he wants it to do.

Sod off Steven.

Q: What would 'Party X' do about the environment?– A: They’d use it to push privatisation.

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

Today, “Iwi then Kiwi” - a unique kind of privatisation. A politically viable method of ending the tragedy of the commons by beginning to get rid of the commons.

The leitmotif of this series so far is using existing pressures in the political environment to advance the de-politicisation of the natural environment.

There is arguably no more virulent and on-going political pressure in the wild than those that formed the Maori and Mana Parties. And there’s no more important environmental repair than fixing the Tragedy of the Commons. The water needs it. The land needs it. Even “protected” species need it.(And while the reasons the Commons need fixing are as simple to understand as cocktail party etiquette, the methods by which the Tragedy is overcome are enough to earn people a Nobel Prize.)

Now, I’ve maintained in many posts here that property rights under a common law regime provides superior environmental protection to what we presently endure. Property rights are the key to genuine environmental protection. Property rights in defence of nature. But there’s a problem there too, isn’t there.  There’s no property rights without property…

To work effectively, property rights-based environmental protection needs an owner to stand up for it. And more than half of this beautiful country (and, despite the best efforts of Hone, Pita and Tariana, most of the seabed, foreshore and waterways) have no-one to stand up for them but a bureaucrat.  [Cue the joke told by Department of Conservation (DoC) bureaucrats: Q: What’s the best way to exterminate possums? A: Give them to DoC to protect. ]

No, most of this beautiful country still has no property rights attached. Most of it is essentially un-owned, i.e., nearly half of the country is still nominally Crown Land, with no owner in the least interested in standing up for their patch. (With about thirty percent of the country being so called “conservation estate,” i.e., “protected” by Kate Wilkinson and her Department of Conservation (DoC).) 

SO WHAT DO WE do? Using our ‘judo’ principle of using our opponents’ strengths to gain our goals, what do you think the easiest way would be to establish property rights in all that land that needs property rights protection. Anyone?

I’ll give you that clue again, shall I? What about giving the Maori and Mana Parties something to vote for? Think about that for a moment.

It makes a lot of sense. Who’s going to advocate loudest and longest for title in all Crown land, seabed, foreshore and waterways to be privatised?  Just imagine getting the full weight of brown roundtable behind privatisation. That’s a fair old weight!

So am I really advocating giving all this un-owned land away to a bunch of tribalists!? Well, yes I am.

What have they done to deserve it? Well, nothing. Nothing, that is, except develop rights in land and water over long historic use, and agitate loudly enough today so that they’re on point as the easiest way to effect this sort of privatisation.

If we can have titles created in land where there are presently no titles at all, if we can extract land and water from the hands of the state and turn it into private property with covenants and easements attached that protect all existing rights, then that’s as good a thing as any peaceful freedom fighter can hope to achieve—and it’s perfectly in line with our goal of more freedom, with no new coercion.

THERE”S JUST FOUR THINGS that should be done to ensure that both freedom and prosperity are secured.

  • The first thing is to ensure that only Crown Land is involved; that no existing private property will be in the mix.  Don’t put it past a bureaucrat to take the chance to effect another confiscation, even while all around are being privatised.
  • The second is that tribalism must taken out of the mix: title must be transferred NOT to tribal leaders so they can increase their control or create new tribal fiefdoms, but to individuals. The only opposition to this condition will come from tribal leaders themselves, of course, who realise they’re being made redundant, and not before time—and that opposition in itself will reveal that the interests of the tribal leaders and the people on whose behalf they claim to speak are not the same, and are actually at odds with each other.
  • The third thing is to ensure that all existing interests, such as logging rights, fishing rights, harvesting rights—all existing easements or covenants, whether presently registered or not—are registered and protected on all new titles.
  • And the fourth thing to do is to to ensure that all titles created are both fully individualised and transferable. As Ronald Coase points out, as long as titles are made transferable and transaction costs are kept low, then land titles so created will tend to end up in the hands of those who most value them. The first holders of these new titles can do anything they wish with them (and making land individually owned and transferable is between them a necessary condition to allow the holders of these titles to borrow against them to advance their wealth), but as we’re all aware the deadbeats and the astute will both quickly sell to those who value them more than they do, and the productive who wish to will keep theirs and use it to produce something more. The choice will be entirely up to these new first-time owners.

So there you have it. A simple and politically possible way to begin effecting property rights all over the country. In short, this is a privatisation even talkback callers can support.

And over time we would expect to see this land and water which was initially un-owned and unprotected (the main reason for problems like ‘dirty dairying’) used first to raise people out of poverty who are in urgent need of that boon and thence to reduce the importance of tribalism--and then once land and water end up in the hands of those who value the land and waterways the most, owners who have most to gain from its protection, we’ll have the sort of strong environmental protection across the country that common law was so successful at delivering.

[Tomorrow, a very special carbon tax plan ...]

* * * * *

INTRO: 'What Would 'Party X' Do About the Environment?'
PART TWO: 'A Nuisance and a BOR.'
Making Life Easier for Small Consents
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

Godwin’s Law again [updated]

Here’s something to ponder.

Why is it that it is apparently okay for folk to yell “Godwin’s Law!” at people who compare them to Nazis, or who call people Little Hitlers, but those same folk have no problem leaping into print loudly and nastily comparing other people to the Norwegian mass murderer.

See what I mean? They’re all doing it.

Is it just me, or has a rather nasty line been crossed?

UPDATE: According to Danyl it’s okay to call someone a Nazi if they do things Nazis did. Fine. But bizarrely enough, he seems to think the Nazis’ only evil was the Holocaust. As if, absent that, the Nazis were simply a minor nuisance.  You know, book burning, tobacco banning, property thieving, invading Europe, treating human beings like cattle … all just “inconveniences,” apparently, with no relation at all to the ideology that created the Holocaust; so if anyone advocates something along those lines it would be wrong to call them Nazis.

Hear that George?

Meanwhile, emulate anything said by a Norwegian mass murder, anything at all, and you’re clearly an incipient murderer yourself.

A strange double standard indeed. One commented on rather well by Edward Cline in this post.

The Yanks & the PIIGS [updated]

You have to give it to American and European governments: their bumbling incompetence at paying their own way makes Bill English look like a competent manager of government finances.

Making Bill English appear competent while his government runs record deficits, living beyond its means to the tune of one-third of a billion dollars a week, is not an easy thing. Indeed, this is a measure of just how far Europeans and Americans have been living beyond their means.

The Greek debt crisis; the Portuguese/Irish/Italian/Spanish debt crisis; the American debt crisis … the sums involved are so enormous, the unpayable figures measured with so many zeroes, that our own serious problem seem dwarfed by comparison.

But only by comparison. A government needing to borrow a third-0f-a-billion dollars a week because it’s spending so much more than it brings in is the same problem in essence facing the Yanks and the PIIGS, and the cause is precisely the same: because for sixty years western economies have been built on a foundation of deficit spending, welfare/warfare payments and money printing. Which is to say, a policy foundation based on faking reality.

But, Keynes to the contrary, economic reality can only be faked for so long.

The responses to the reality check of economic crisis have instructive. When the world economy collapsed under the weight of too much counterfeit capital (the very essence of the phoney Keynesian expansionism followed by the mainstream for the past sixty years), the world’s governments thought they could fake things for a little longer by propping up all the bad positions with trillions of dollars borrowed from the world’s bond-buyers, and spat out straight from central banks’ printing press.

The result can be seen in the world’s headlines: rising unemployment; fears of both deflation and rampant inflation; and (not despite the efforts of governments to fix things, but because of them) never-ending, soul-destroying stagnation.

And the bill for the borrowing and printing (which is what the so-called Sovereign Debt Crisis represents) is now due. And it can’t be paid.

So we see that instead of fixing the problem, the world’s economic “managers” have instead made the problem worse. The World Economic Crisis has continued to eat out our substance, and to that crisis has been added the Sovereign Debt Crisis. One failure of mainstream political economy leading to another.

But reality can only be faked for so long. The economic bill must be paid by someone. And for the Yanks and the PIIGS, and for us, the bill is now coming due.

Frightening. And it should be.

That none of the above realise that, that they all still seem to think it’s business as usual, is a signal that things over the next few years are not going to be pretty.

Batten down the hatches.

UPDATE: Slightly revised for smoothness.

Coal Mine Owner Shrugs

Guest post by Jeff Perren

A coal mine owner in Alabama has decided to go Galt. He's had enough.

“Nearly every day without fail…men stream to these [mining] operations looking for work in Walker County. They can’t pay their mortgage. They can’t pay their car note. They can’t feed their families. They don’t have health insurance.

And as I stand here today, I just…you know…what’s the use? I got a permit to open up an underground coal mine that would employ probably 125 people.

They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home.

What’s the use? I see these guys—I see them with tears in their eyes—looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them.

So…basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.”

I applaud his decision. After thinking it over for two years, I've reluctantly concluded that it's time for the entire country to do that. I honestly can not see any other way, short of actual civil war, to get the state and Federal governments to back off.

The latest round of ridiculous 'negotiations' in D.C. was one of the last tumblers to fall into place. I applaud the Republicans for trying, but even the most 'extreme' plans represent at best 1/10th of what needs to happen, economically.

The regulatory burden, many times greater, isn't even being discussed. While I fully expect things to get a whole lot better for a while after January 2013 - if Obama. Reid, and crew haven't completely destroyed any chance of recovery by then - it won't be nearly enough.

No one hopes more than I that I'm wrong, that this is just (temporary) and unfounded pessimism. But I genuinely can not see how you pay down several trillion dollars of debt without serious changes to entitlement programs and even the Republicans are only nibbling at the edges. I can't see how you prevent a continued economic slide without removing vast swaths of irrational regulations. I can't fathom how any of this will even begin without a moral and cultural revolution, which doesn't appear to be in the offing. Even the Tea Party is a very weak brew.

Still, I've been wrong before. Maybe I will be again.

Tuesday, 26 July 2011

ECONOMICS FOR REAL PEOPLE: Capital and Interest in the Business Cycle

Here’s the note from our friends at the Auckland Uni Econ Group about this week’s meet-up :

Hello Everyone.

This week we will be looking at the way in which capital and interest are interrelated and the role they play in the Business Cycle.  We are going to use some of the themes that have been running through previous weeks and begin to tie them together.  These include questions over why, in a division of labour economy are there periods of time when unemployment is higher than others.  In what way do interest rates effect capital formation and create co-ordination in the economy and why do Business Cycles occur?  This is a very important subject, not just student of economics, but for everyone. The Business Cycles affect us all. 

    Date: Tonight, Tuesday 26th July
    Time: 6pm
    Room: University of Auckland Business School, Owen G Glenn Building,Case Room 1, Level 0.

Look forward to seeing you soon

What would 'Party X' do about the environment? - PART 3: Small Consents

IMAGINE A ‘PARTY X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.
    Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.

No serious environmental policy can avoid the elephant in the room that is the Resource Management Act (RMA).
Today, I present for your consideration a simple solution for removing RMA pain from the little guy, and a step towards making more affordable housing.

“When the productive have to ask permission from the unproductive in order to produce,” said Ayn Rand, “then you may know that your culture is doomed.”

That’s true.

Just ask anyone who has waited in line for a resource consent.

But although it’s practical to remove the RMA overnight, it’s not yet politically possible.  So here’s one way to get that particular ball rolling using political pressures that presently exist.

For all the high-profile RMA horror stories that hit the news, as former Federated Farmers president Charlie Pederson observed, "it's little, not large, that suffers most RMA pain." So let’s start there. Let’s start by freeing up the little guy so he doesn’t have to stand around cap in hand waiting for a pimply-faced graduate of some planning school to decide if your carport extension is “a sustainable use of the earth’s resources”—which is exactly what happens now.  And let’s start in the place that will have the most impact on making new New Zealand houses affordable: by removing the delays and uncertainties involved in smaller more affordable projects.

Here’s how it could be done.

FIRST, ENACT A CODIFICATION of basic common law principles such as the Coming to the Nuisance Doctrine and rights to light and air and the like.

Second, register on all land titles (as voluntary restrictive covenants) the basic “no bullshit” provisions of District Plans (stuff like height-to-boundary rules, density requirements and the like).

Next, and this will take a little more time, insist that councils set up a ‘Small Consents Tribunals’ for projects of a value less than $300,000 to consider issues presently covered by the RMA and by their District Plans. These Consents Tribunal should function in a similarly informal fashion as Small Claims Tribunals do now, with the power to make instant decisions.

This would mean that instead of talking to a planner about your carport, about which he couldn’t give a rat’s fat backside, you decide for yourself.  And, if your carport would violate one of the covenants, you then talk about it to your neighbour—with whom you and he would have plenty of negotiating room.  And once you (and your neighbour if necessary) have made your mind up, The Consents Tribunals would consider your small project on the basis of the codified common law principles, the voluntary restrictive covenants on your title, and the agreements (if necessary) you’ve negotiated with your neighbour(s). Simple really.

You should be able to reach agreement in an afternoon, and have your title amended the next day.

So instead of cluttering up the Environment Court with minor projects that only add to the already lengthy delays there, a ‘Party X’ keen to roll back the state could start by freeing up the huge number of small projects that are either in long delay, or are stillborn due to the expense and delay of the presently unpermissive environment.

Setting up such tribunals should be sensible, relatively simple, and politically achievable. And at a stroke you’ve made lower-cost housing easier and more attractive to build.

And at some point it should become clear to most land owners that these restrictive covenants on their titles are not vague prescriptions coercively mandated by statute, but instead are ‘voluntary’ in the sense that (as with basic common law principles) they are covenants in favour of neighbouring landowners–i.e., covenants that protect your neighbours’ legitimate rights.

Furthermore, these are things over which you don’t need to go cap in hand to a planner to change. Instead you may negotiate with your neighbours to add to them, amend them, or remove all or any of them--making any reciprocal deals you may imagine. (And you’re negotiating with people whose business it really is.)

Here’s how these examples could work out in practice.  If for example you like my tree, and I like my view over a particular corner of your section, then we can negotiate at our leisure and have these interests registered on our titles as a covenant and an easement respectively. That’s how the whole process starts. With simple voluntary agreements like this.

Over time we should slowly see emerging a network of reciprocal covenants built up between neighbouring properties reflecting the voluntary agreements over land that neighbours have freely negotiated—a network reflecting not a planners’ commands, but a network of legitimate rights, interests and values.  And in time, as more of these agreements are negotiated between neighbours, the former District Plan provisions(stuff like height-to-boundary rules, density requirements and the like) would become increasingly unimportant, and it will be these voluntary agreements on which the Small Consents Tribunals will be adjudicating.

NOW AT A STROKE these Small Consents Tribunals will make affordable housing more affordable, and encourage more interest in projects at this end of the market.

At a stroke too it should free up the Environment Court and council offices for more important projects than these small ones, and depoliticise many neighbourhood disputes. Everyone kicks a goal.

Who could possibly object?

As the success of these Small Consents Tribunals becomes more evident, as I'm confident they would be, and as their own sophistication in common law increases, then public pressure should build up to raise the financial value of projects accepted by the Tribunal first to $400k, then to $500k and beyond, and eventually there should be sufficient public pressure and political will built up to abolish the RMA altogether in favour of common law protections.

That’s the secret of good judo: using simple means to rid yourself of a large opponent.

[Tune in tomorrow for policy proposal number four: “Iwi then Kiwi - a unique kind of privatisation.”]

* * * * *

INTRO: 'What Would 'Party X' Do About the Environment?'
PART TWO: 'A Nuisance and a BOR.'
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'

Monday, 25 July 2011

Vermeer: The Geographer

ACT reject coalition

Don Brash announced yesterday that the ACT Party, if it still exists after November, may not go into formal coalition with any government.

And nor should they

A principled party would not need to.

And a party with John Banks holding the anchor seat would not want to.

What would Party X do about the environment? Part 2: A Nuisance and a BOR

    Imagine a ‘Party X’ that was actually committed to opposing statism ,and to advocating for free enterprise. Imagine such a party had a cabinet committing to rolling back the state, and an environment minister brimming over with ideas to do that.     Here, in several parts, are the sort of environmental policies such a party (and such a minister) could advocate. Seven simple policies using present-day political realities to roll back the state without introducing any new coercion along the way.
This morning, two proposals to propel property rights towards the heart of New Zealand life:

diving for pennies2The newspapers this morning carry the news that  the world-famous famous penny-divers at Rotorua’s Whakarewarewa are being told by the authorities not to swim in the Puarenga River if they value their health. It seems the stream is being seriously polluted.
    Tests over the years have shown poor results for water quality and [authorities] says companies like the Red Stag Timber Mill could be doing much better.
    But Tim Charleson, the mill's environmental manager, says the company carries out regular chemical tests on its effluent and it's meeting the conditions of its resource consents.
I have no doubt Red Stag et al are indeed “meeting the conditions of [their] resource consents.” But as this story and others clearly demonstrate, resource consents are not a form of environmental protection. If you think they are, think again.

In cases like this one and all over the country, from the Tarawera River (into which the paper mill has a license to dump chlorine and worse) to Akaroa Harbour (where the council has given itself a license to dump nearly raw sewage), a resource consent is nothing more than a license to pollute.

The RMA, under which resource consents like this are issued, is hopeless at protecting the environment because it’s hopeless at protecting property rights. Contrast this common law, which has seven-hundred years of sophistication at protecting both, and you realise how far from ideal NZ’s so-called “environmental legislation” really is.

With strong property rights under common law, for example, the tourism operators along the Puarenga River—and the former fishermen at the head of the Tarawera River; and the aquaculture operators in Akaroa Harbour—would all have had legal standing to take action against polluters damaging their property right.

Historically and in principle that’s the best protection the environment ever had – both for the natural environment and for the human environment. Property rights in streams and rivers for example coupled with common law systems of protection would at a stroke solve the ‘dirty dairying’ problem about which so much is said, but so little achieved. Property rights in flora and fauna and land is the best means of ensuring a genuinely sustainable nation.

So how do we do that? Here’s two ways:

1. Putting Property Rights in the Bill of Rights Act

We know that common law protection of property rights has been buried by statute and regulation and the Foreshore and Seabed Act and its replacement--but it’s not too late to resurrect it. Placing property rights in the Bill of Rights Act would be a start—a politically possible start—repairing an omission that Bill of Rights architect Geoffrey Palmer has publicly conceded was a mistake, and that National's disgraceful about-turn three years ago overturned.

It should be simple enough to insert a new clause in the Bill of Rights adding property rights to the rights protected.  (But a responsible ‘Party X’  would know they would need to add pressure to make the Bill of Rights  superior to all other law, as it always should have been.)

After all, the principle of property rights simply promises the protection of the right to peacefully enjoy that in which one has property. What reasonable objection can be brought to a law that protects an individual’s right to peaceful enjoyment? (Let me stress the word "reasonable.")

Let’s place on the back foot those who object to that right by challenging them to say for what reasons the right to peaceful enjoyment should not be made superior to all other law. Why should that right not  be put beyond the vote? That is, beyond the power of politicians to tamper with.

Our putative ‘Party X’  may not be immediately successful in this goal, but it could at least flush out the bastards who oppose such peaceful rights, and expose the reasons they do.

In the meantime, you might like to consider what would happen if property rights ever actually were placed at the heart of the likes of the Resource Management Act . . . would it be something like the meeting of matter and anti-matter ?

2. Coming to the Nuisance

Planners like nothing more than than telling you where and how you may live.  The RMA gives them that power in spades, and the country is infested with the well-fed bastards writing and administering District Plans empowered by the RMA to boss you and your family around.

It wasn’t always that way. Back when common law was being invented, the English king was becoming increasingly frustrated at having to fix issues about the damage that someone’s chickens did to someone else’s crops.  Keen to stop his castles being overrun by defendants’ chickens, the king quickly realised the three important questions that could quickly solve these issues:
  1. Whose chickens (and whose crops) are they?
  2. What damage did they do? (And how to remedy it?)
  3. Who was there first?
Such was the birth of common law—and right there in those three questions the English king had hit on the three ingredients that have been at the heart of common law ever since:
  1. Property rights.
  2. Damage.
  3. Nuisance (and who came to it?).
Once these principles were established, the English king was able to solve these problems rapidly, to cleanse his castles of chickens, and to head north to invade Scotland—which is what the king known as “The Hammer of the Scots”  he’d been trying to do when he got bogged down in these disputes.

What I’m going to propose here is another simple modification to law that would allow New Zealanders to once again repair to the common law protections that “The Hammer” had made possible. In particular, the codification of the common law principle of Coming to the Nuisance (seen in palimpsest in point three above), which on its own would a powerful antidote to the zoning that the RMA has entrenched -- perhaps the strongest possible antidote to zoning there is. Supplementary to putting property rights in the Bill of Rights, then, ‘Party X’ could promote the reintroduction of the Coming to the Nuisance doctrine for use as an absolute in neighbourhood disputes.

The Coming to the Nuisance Doctrine is an enormously powerful principle protecting pre-existing rights, and quickly establishing rights in situations of apparent neighbourhood conflict. Move next door to a clean and well-run chicken farm or pig or mushroom farm for example (even if the place has been re-zoned since the farm opened), and under this doctrine you have no right to have them thrown out.

Move next door to a speedway track, for another well-known example, and you have no right to complain about excessive noise.

I assume you see the difference with how things presently work. If the farm or the speedway or whatever it is was there before you chose to buy next door, then that’s probably why you got your land so cheap.

And if the track (or farm) is well and properly run, then those pre-existing rights should and can be protected in law; and if they were you then have a strong incentive to either make a more careful choice in future (whereas now the incentive is there to move in and force them out), or to buy out the speedway or the farm, or buy easements or covenants over the neighbouring land.

Either way, when the coercion is removed from all parties and bargaining is all that’s allowed, the tendency is for property to end up in its highest value use. This is not something planners can ever claim to have achieved.

Furthermore, what this principle will demonstrate over long use is that zoning is not only coercive, but unnecessary. It will on its own provide a daily demonstration that sound property rights work for everybody except the grey ones and the looters.

Coming To The Nuisance then is THE pre-eminent antidote to zoning.

Not only that, at the same time as undercutting the zoning law established under the RMA, if  introduced it would ensure that if neighbours of Western Springs speedway aren’t prepared to stump up enough for the bikes and midget cars to go elsewhere, then the noise of fast cars and motorbikes will continue to annoy wankers like Peter Williams QC for some years to come. You can’t do better than that.

[Tune in tomorrow for policy proposal number three: Small Consents Tribunals.]
* * * * *
INTRO: 'What Would 'Party X' Do About the Environment?' PART ONE: Un-taxes
THE SERIES IS BASED ON THE PRINCIPLE DEVELOPED HERE: 'Transitions to Freedom: Shall We Kill Them in Their Beds?'