Monday, 5 December 2011

Perhaps the Black Caps were watching Chris Martin videos?

Perhaps the Black Caps were watching Chris Martin batting videos?

That can surely be the only explanation for what happened in their second innings against Australia?

[Hat tip Tim Blair]

History of war in pictures: 1000 years of conflict in five minutes

It’s not entirely accurate , but this graphic presentation of the wars and battles of the last thousand years—with explosions (not always) showing the number of casualties—is sobering viewing.

Since the birth of history, men have been finding reasons to kill other men en masse and to gain values by conquest.

They never have.  They have succeeded only in destroying values, and lives.

“If men want to oppose war,” argued Ayn Rand, “it is statism that they must oppose. So long as they hold the tribal notion that the individual is sacrificial fodder for the collective, that some men have the right to rule others by force, and that some (any) alleged ‘good’ can justify it -- there can be no peace within a nation and no peace among nations.”

Herewith, Exhibit A:

Herald: “a new liberal party seems the only viable solution”

The Herald editorial writers weigh in the future for ACT and its members under John Banks, concluding “a new liberal party seems the only viable solution”:

Act's lone MP, John Banks, has been making all the right noises about the party's negotiations for a confidence and supply deal with National. There would be gains for Act in the areas of "choice, responsibility and private enterprise", he said after a second round of talks with John Key. The wording was designed to emphasise Mr Banks' affinity with Act's founding principles, and to draw attention away from his previous existence as a Cabinet minister in two National governments. He was, in effect, trying to persuade Act's dwindling number of supporters that he was one of them. It would be understandable if few were convinced…
    His true colours were revealed when Dr Brash backed the decriminalisation of the personal use of cannabis. This advocacy tallied with Act's promotion of individual freedom and personal responsibility. It was to be expected from a party that embraced classic liberalism. Yet Dr Brash's initiative was rejected out of hand by Mr Banks, confirming that he was very much a social conservative.

A social conservative who only joined the party to get National across the line. Now that it has …

 Act exists in name only…. 
     The party's brand has been badly tarnished by a succession of scandals.. Now its only MP does not fit the Act mould. There appears every reason for the supporters of its principles to call it quits and establish a new liberal party. They could do so in the knowledge that there will always be a niche constituency for their core philosophy…
    It has been suggested that Mr Banks, for his part, would fit far more snugly with the Conservative Party… If Mr Banks were to leave Act and join the Conservative Party, it would, in many ways, serve the interests of both parties…
    [In any case, as Stephen] Whittington has intimated, Act appears beyond repair. A new liberal party seems the only viable solution.

I agree. And I’m prepared to be part of it.


Because the ideas and principles that powered both Libertarianz and the ACT Party* are too important to die—as they will do under Banks. Members of both parties, me included, now need to accept that we’ve done a poor job in our respective parties of promoting those principles.

But this is the low point. We can learn from what went wrong with both parties, and from their ashes commit to doing a better job this time.

Who’s with me?

* * * *

* That powered both parties? Well, yes. The ACT Party’s principles were written by Ian Fraser, who left the ACT Party before its first election to found Libertarianz (where he expanded on them). Those principles are as important now as when he first wrote them:

  • that individuals are the rightful owners of their own lives and therefore have inherent rights and responsibilities; and
  • that the proper purpose of government is to protect such rights and not to assume such responsibilities.

If a new party can’t coalesce around those principles wHile learning the lessons of the past, there’s something wrong.

Sunday, 4 December 2011

Project ACT is over, bar the shouting [updated]

Former ACT candidate Stephen Whittington has now said what was obvious as soon as the good ship ACT crossed the finish line last Saturday with only party hopper John Banks inside the boat: that Project ACT is over.

On his Facebook page Mr Whittington called Mr Banks "economically ignorant and interventionist", in response to the Epsom MP's comments opening the door to Conservative Party leader Colin Craig…
    "Banks' post-election comments [on Mr Craig] certainly clarify that there is no liberal future in the Act Party.”

And nor is there, as Whittington himself made clear enough in his election night speech to his own supporters:

The media will report that the ACT Party has hung on.  In reality, John Banks, with the resources of the ACT Party thrown behind him in Epsom, has hung on.  ACT, a liberal party now represented by an MP who has such questionable views on homosexuals and ethnic minorities, and sees it as his personal mission to suck up to National as much as possible, exists in name only…

This is hardly just Whittington’s opinion, it is the opinion of many others as well.

And it’s not just opinion: it’s a simple statement of fact. 

Sure, now it can hold its caucus meetings on the back of John Banks’s Harley the ACT caucus is going to be free of all its traditional infighting. But a party-of-one represented only by a bigot and a spendthrift (an overspending mayor, he left the Auckland council nearly one billion dollars in debt) is not a natural  repository for social and economic liberalism.

The ACT Party is now the Banks Party. Having failed to get a second MP into Parliament, the brand of ACT will be the brand of Banks.

Which leaves long-term ACT supporters having to ask themselves what they were in politics for, and what they are loyal to:

  • are they loyal to liberty and the ideas of social and economic liberalism, and they voice they thought promoted them?; or
  • are they simply loyal to the ACT flag, regardless of who is carrying it and what that flag flies over?

Whittington’s own answer seems to be that those loyal to liberty and the ideas of social and economic liberalism need to recognise reality and find (or make for themselves) a new home.

Which leaves feral ACT flag-flyers like Cactus Kate incensed. On her blog yesterday, she threw a tantrum. She attacked former hero Whittington (who only weeks ago she was talking up) and told former colleagues “if you don't like where ACT is headed, stay around and be constructive and work with John Banks.”

But why would you?

With the captaincy of Banks, ACT is already dead and buried. It has no unique voice, and no more fundamental reason to exist than the Peter Dunne Party.

And with Banks at the helm, ACT  is already on the the rocks as a vehicle for social and economic liberalism. So the only reason to stay around and work with Banks is to support Banks. Which means to help bury both ideas.

That might be okay for ACT tribalists like Cactus who just like waving a yellow flag. But for those who got into ACT because they value freedom and responsibility and who saw ACT as the repository for those values, then the time has come to confront reality. Time to move on.

Time to find (or build) a new vehicle.

UPDATE:  No surprises about Cactus’s tantrum. As a one-time deputy leader of ACT once observed,

Act sees [politics] as primitive combat, with a need to destroy a colleague's reputation to justify an otherwise inexplicable decision.

Or as I’ve often said about those in politics who eschew ideas:

…For them, politics isn’t  a battle of ideas, it is a battle of warring political tribes.

Time for intelligent people to put the toxicity, tantrums and tribalism aside, and focus on the bigger goal.

Saturday, 3 December 2011


“The likelihood of Banks transforming himself into a standard-bearer for [ACT’s] values and principles is as great as that of Ahmadinejad converting to Judaism.”
                 - Lindsay Perigo, from his post “The Mortification of ACT: Malpractice by Cactus

Thursday, 1 December 2011

A new political alliance?

Guest post by Mark Tammett

As the recent Christchurch earthquakes amply demonstrated, an emergency often brings out the best in people . In these situations individuals tend to put aside their differences and spontaneously co-operate to address the common threat to life and property – whether that be pulling co-workers out of the rubble, delivering food to strangers, or helping to shovel out liquefied muck from their neighbours' driveways. Folk exhibit a focus and determination that’s often not seen in their daily lives.

These situations provide an object lesson in what can be achieved by individuals identifying a common goal and putting aside their differences. The co-operation may be only limited, or even temporary, but tangible gains can thus be made.

In a way, all large and successful companies have to achieve a similar outcome. In a small business you might be lucky enough that every person you work alongside has compatible ethics and personality type. In a big corporation this is never going to happen; statistically it’s not going to happen – and certain people just aren’t going to get on. So it comes down to how senior management can channel those differences towards a common goal – in a way that allows both the goals of the company and those of disparate individuals to be achieved. Two individuals may not like each other, and outside of work want nothing at all to do with each other, but they will co-operate and function with each other effectively if they have a common goal within the business.

In a political context, we face a similar threat to our life and property that’s almost as serious as the earthquake. That threat is runaway government expenditure, and the seeming inability of the large political parties to address the train wreck that is surely coming. Our current welfare state is unsustainable, and is an historical anomaly that cannot continue for much longer. Either it goes, or our relative prosperity has to go.

A large number of individuals in New Zealand are aware of this threat, and to varying degrees want to do something about it. In voting behaviour or political affiliation they are spread across a range of parties – Libertarianz, ACT, Conservatives, and perhaps even a reasonable proportion of (very quiet) Nationals. I would estimate that individuals in this category comprise perhaps 10-15% of the voting public.

However they also disagree on a lot as well. Which means at election time, votes get dispersed and made ineffectual. They are either spread amongst the smaller parties so their vote is less than the 5% thresh-hold - or in the case of the Nationals, buried under the pragmatism of the party machine, which places priority on getting elected ahead of anything else.

The political party that aligns most with my beliefs is Libertarianz. However with their radical agenda I struggle to see getting elected in my lifetime. I hope I’m wrong, but I don’t think I am. They present consistent policy on a wide range of issues, but for most voters it’s too big a chunk to digest. Even if people agree with the gist of it, they struggle to see how we can practically go from what we have now to what Libz proposes. So they cast their vote elsewhere.

imageBy the same token, I don’t believe toning down the message is the right solution either. The average voter may know nothing at all about explicit political philosophy, and have no inkling at all of the unsustainability of our welfare state – but they can  sense insincerity a mile off. If you don’t say what you mean and mean what you say, people will know. You cannot ‘trick’ people into freedom. If you try, voters will sense you’re hiding something, and run a mile – and that I think largely explains the current unpopularity of ACT.

So what do we do then? We want to encourage co-operation in a political context, so we can make some real and tangible gains in rolling back the state. But we can’t afford to to ‘tone-down’ or moderate our true beliefs either.

Well here’s one scenario that I can see which is realistic, and starts to roll back the stage from the 2014 election onwards:

  1. We form a new political alliance. Not a new party, but a new alliance. For instance, and purely for the sake of this discussion let’s call it GERA – the Government Expenditure Reduction Alliance.
  2. This new alliance is focused on achieving a limited and tangible objective: confronting the biggest ‘emergency’ of our current era by drastically reducing government expenditure. We invite a variety of parties to put aside the things we don’t agree on, and be part of this alliance for the 2014 election. It might include Libertarianz, ACT, and even the Conservatives.
  3. Outside of the election campaign, each party, or even individuals within each party continues to focus on whatever issues are important to them. These may be consistent, or they may be inconsistent (depending on your viewpoint). In the case of certain Libz members it may be marijuana legalisation and abolition of the RMA; for ACT the removal of business red tape; for Conservatives the dangers of the ‘demon drink.’ Whatever – to each their own. Unlike the big parties we don’t try to pretend we agree on everything.
  4. However when it comes to the election campaign, we put aside those differences, and campaign on the earthquake-sized economic disaster and the one objective we all do agree on – runaway government expenditure.
  5. GERA’s specific policy for the 2014 election campaign would need to clear and consistent, and also very concrete and specific. Something the average person can clearly understand. For instance it might be a reduction in government expenditure by 10%, or 20 or 25%, via the elimination of specified government departments, all of which are listed and costed out in detail – combined with a reduction in all tax brackets by 2% (or ten) percent across the board. It’s a modest goal, but something that’s politically realistic in the short term – and attacks the government departments or services that most people can do without.
  6. GERA makes it known that if they achieve MP’s, they will not compromise on any level on this policy. Not one iota. If any of the major parties needs their support to form a government, they will have to implement GERA’s policies in total. The GERA platform is modest in terms of our ultimate goal, but it’s a pill that the bigger parties will be able to swallow it if they have to.
  7. I can easily imagine GERA getting 5-10% of the party vote, perhaps 10-15% - and I can easily imagine them holding the balance of power.
  8. One of the major parties agrees to form a government with GERA, on the basis that GERA will not compromise on their limited bottom line. GERA’s policy is implemented, and we start the process of rolling back the state.
  9. Next election GERA comes up, and we redraft another specific policy platform that continues with further changes in the right direction. We continue to roll back the state incrementally because we can command enough vote to hold the balance of the power.

imageSounds easy doesn’t it? And it is.

There is at least one challenge I can see with this, however, something that requires a bit more thought. How would we deal with voting on other matters put before parliament - issues that all members wouldn’t agree on? For instance if a law proposing some form of alcohol prohibition was proposed by the major governing party - Conservatives might be in favour, but Libz would be against. Or the converse would apply if a law providing for liberalization of marijuana were before parliament. If we’re to keep the alliance together, how do we handle this?

One option I can see is that we have the following simple rule: all GERA MP’s will abstain from voting on any issue that is not part of the core GERA platform for that election. This ensures that all members of GERA, and all voters who gave their vote to GERA cannot end up assisting a law they don’t agree with. The result will be same as if the GERA MP’S weren’t there – which is what would happen anyway if GERA was never formed.

Some might protest that this approach is only tinkering. That it doesn’t achieve the radical overhaul needed. Well of course it doesn’t, but it’s at tangible first step. How do you eat an elephant? One mouthful at a time. More importantly, it sets the scene for further and more significant change in latter years. If the average voter doesn’t miss the government departments we abolish in 2014, and can see the tangible benefit of the tax cut in their pay cheque every week, they’ll be motivated to vote for more of the same next election. Along the way, they might start to learn about individual freedom, and why it’s consistent to apply that principle across the board.

It’s often said that political change can only happen once the required philosophical change has happened within people’s heads. I largely agree with this sentiment, but I would add an important qualification: this is not a linear process. Most people do not change their philosophy as a result of reading or listening to speeches, and then go out and implement that in practice. They learn from both hearing the philosophic theory and seeing the results of that theory in concrete practice. A good philosophy encourages good politics, but good politics also encourages good philosophy. People need to see with the tangible benefits of freedom in their own lives.

The scenario I’ve outlined would set up a virtuous circle - whereby people would see the concrete results of greater individual freedom, even if it was only in a limited context. This would encourage philosophic change that was sympathetic to more freedom, which encourages more political change, and so it would go on.

Mark Tammett is a Christchurch engineer and long-time liberty advocate.

Burlingham house, El Paso Texas, by Frank Lloyd Wright


Very much not a Frank Lloyd Wright house, yet it is exactly that. Well, sort of.

His only house designed using south-west USA’s indigenous adobe construction, Wright designed the house in 1941 as a modest 2400 square foot house to complement the rolling sands that

piled [the site] with sweeping sands, continually drifting in swirling lines that suggest waves of the sea.

It was finally built in 1985, 26 years after Wright’s death, as “a 4,900-square-foot sprawler .. [with] a swimming pool and underground garage” in a park-like setting that wouldn’t disgrace Pakuranga.


Not exactly what the great man had in mind.

Nonetheless, it is officially the world’s only Wright-designed adobe house.  And you can own it for just US$4.75 million.


Wednesday, 30 November 2011

Steve Jobs on “living a life that's fully your own”

While governments loot and destroy, creators still hold up the world.

So now the election’s over, let’s draw inspiration from the productive and good rather than just focussing on the venal and disgusting. In that vein then, here’s Steve Jobs in a 1995 interview “speaking about about the importance of living a life that's fully your own, rather than accepting limits imposed by others…”

and “…on the importance of being willing to act in pursuit of what you want.”  Says Diana Hsieh, at whose Noodle Food blog I first saw these (and whose descriptions above I pinched), “I love the benevolence in the initial discussion of asking for and giving help!”

Roll out the barrel…

From today’s Parliament Watch:

Election | Rookie MPs Take Grand Tour |
Goodie bags containing iPads and smartphones and instructions on how to maximise your free air travel and accommodation perks – it must be induction day for Parliament's new MPs…

See what happens when there’s no real perk-busters around?

Morning myth busting: “the government can always pay”

The myth behind all modern economics, which is to say Keynesian economics, is that “the government can always pay.”

It was one of the myths that allowed governments to think they could get away with bailouts,  backstops and efforts to “stimulate” their country’s economies with truckloads of borrowed money (a failure of economic theory now exploded by the failure of all economies to be so “stimulated”).

But the debt is now due for all that senseless borrowing. And they can’t pay. They just can’t. There isn’t enough money in the world to pay all the debts they all racked up in a vain attempt to turn bad times into good.

That is the root of the problem in the US, in Japan, in Greece, in Italy, in Spain … and now in Germany.

Because last week saw the beginning of the collapse of even German government bonds (the market for which hit the jitters last week) which suggests the myth that “the government can always pay” is being exploded. 

If even the German government can’t attract buyers of its debt, then what’s the future for every other government? Including ours?

Fact is, the worldwide bubble for government debt is finally bursting.  And when it finally does, we will witness a momentous change in market behaviour.

“None of the above”

While we in EnZed were having an election to which only two-thirds of voters showed up, Egypt was having its first election since, well, ever—and everyone showed  up.

imagePeople queued for hours just for the chance to vote--a hard-fought right in this “fledgling democracy,”* and a great sight in a country riven for centuries by dictatorship and worse.

Which led many folk here at home to complain about the million adult New Zealanders who stayed home on election day (many of the complaints amounting to “if you don’t vote, you can’t complain about what you get), and to denounce them for taking their right to vote “for granted”—as if not voting was an insult to those who fought and died for the freedom to vote. 

But is it really an insult?

If you have the freedom to vote, then you also have the freedom not to vote. And if nothing on offer is worth getting out of bed for, then a vote for “none of the above” is actually a very rational choice.

So quit complaining about the non-voters. A freely chosen non-vote is still a vote.

* * * * *

* Yes, it is a great sight seeing people able to vote in a country normally suffering under brutal dictatorship. But the prospects for long-term democracy, or for real freedom, look awfully dim when you realise the party still most favoured to win the final vote is the Muslim Brotherhood—the organisation which gave birth to Al Qaeda, and from which so many Al Qaeda operatives are still drawn.

Tuesday, 29 November 2011

Support for Banks is support for the Conservatives

It looks like ACT’s Minister of Rhyming Slang knows on which side his bread is buttered, and is intent on keeping the butter flowing no matter who and what he sells out.

Because just three days after being elected on the ACT ticket, John Banks is already talking up his prospects as a Minister, talking publicly about  rebranding and redirecting “his” ACT  party, and talking noisily about merging it with Colin Craig’s Moral Majority –“a class New Zealander” according to Banks.

Colin Craig at least is happy to muse publicly that this will require the departure of the libertarian wing of ACT—i.e., the folk who got Banks over the line in Epsom this year.

Banks, I’m sure, is equally aware.  And just as happy at the prospect. It’s just that he’s not talking about it. Not publicly. Not yet. Except to say:

He [Mr Craig] is interventionist when it comes to social policies but the ACT party has people who are not. And that's where we would have to talk.

He does not say who he would have to talk with. Or how he would reconcile that problem.

But it’s clear enough already what he intends. And clear enough now that support for Banks from this point forth is support for the Conservatives in 2014—whether with a small ‘c’ or a large one.

Might I suggest then that those being taken so shamefully for granted decide now where their futures, and their principles, really lie. Because it’s just possible that in 2014, in Epsom and elsewhere, the folk they will be fighting are those they so recently supported.

And vice versa.

Monday, 28 November 2011

DOWN TO THE DOCTOR’S: The real election result

_McGrath001Libz leader Dr Richard McGrath looks at who really won on Saturday night.

Let's check out the real result of Saturday night.

Total number of eligible voters by 5 p.m. Friday 25 November         3.054 million
Number of unregistered potential voters                                                     0.27 million
Total number of possible voters                                                                       3.261 million
Number of people who actually voted                                                           2.014 million
Number of people who did not vote but could have                1.247 million 
Turnout (number of voters/number of possible voters) =     61.8%

So, revised totals for the parties:

National                 29.7%
Labour                   16.7%
Greens                  6.6%
Winston                 4.2%
Cons                     1.7%
Others                    2.9%
And the winner, with 38.2% of possible votes is: NONE OF THE ABOVE

Together, a National-Labour 'Grand Coalition' would only have incorporated 46.4% of possible votes.

Which means no party has a “mandate” to govern as a result of this election.  The people have spoken: All the political parties on offer are dogshit.

And 45 seats in the new parliament should be left empty to reflect the real views of all New Zealanders.

Sunday, 27 November 2011

Thoughts on a sunny morning

It's beautiful this morning. But that's everything to do with the weather, and nothing to do with politics. Or the election.

Yesterday' election finished up as a ringing endorsement of no-one.

Labour got 150000 votes fewer than last time.

National got 100000 fewer, with the votes of around one-third of the country's eligible voters.

Don Brash won no more votes as leader than Rodney Hide had been on track to make

Hone won his seat, with his dream-team of celebrity whingers in tow, but only 7000 voters in total rated him in his own electorate, and the rest of the country told the whingers to go to hell.

So the winners were really those folk who stayed home yesterday and didn't vote. Around one million of you.

And Winston.

And the Greens.

And MMP, without which neither of these entities would have a political future.

And John Banks. National's 63rd MP. 

Banks's survival as Act's single solitary MP might at least relieve AT's congential caucus infighting, but it will kill the ACT project stone dead--kill it far more effectively than if the Party had missed out altogeher on an MP, because with Banks as their lone voice no-one in the party, least of all the keen, energetic knowledgable youngsters who are its core , will be able  to preyend any longer they are  a "classical liberal."

Banks is not a classical liberal, or any kind of liberal. If the future for ACT is Banks and only Banks, then ACT has no future. 

Time perhaps for freedom  lovers of all persuasions to combine together to form a real freedom party ready for 2014--a Party of All Talents that combines the talents and abilities of freedom lovers from acros the board.

Because  in three years time, after Global Ginancial Collapse II, this country is going to be desperate for the answers only a real freedom coalition can offer.

Let's start talking now.

And what about the future for National under MMP? 

Well, that future was so clear it makes you wonder about the supposed political acumen of Mr Key and his strategists. This election sees his party at a historic high water mark of support, yet under MMP it is still struggling to pull together a government. And when National's high tide goes out, as it inevitably will, under MMP  it might struggle to form a government ever again.

Yet John Key did not bother to spend even a cent of his enormous political capital to campaign against MMP.

So this election's winners are few indeed.

And they don't include Phil Goff. Or the people of Christchurch, who in a sign they might have developed Stockholm Syndrome, voted to keep and even add to their National  MPs. 

So perhaps they, and and the rest of the country, deserve what they're going to continue to get:  More of the same, with knobs on.

Saturday, 26 November 2011

Quote of the Day: Mamet on Inequality

We cannot live without trade. A society can neither advance nor improve without excess of disposable income. This excess can only be amassed through the production of goods and services necessary or attractive to the mass. A financial system which allows this leads to inequality; one that does not leads to mass starvation.
David Mamet, from his new book
'The Secret Knowledge: On the Dismantling of American Culture'

Friday, 25 November 2011

NOT PC’s patented, principled voting guide

So Liberty Scott has posted his own voting guide for tomorrow—who to vote for in which electorate, and why—and I promised I’d do something similar.

So here goes.

First of all, remember that in ninety-nine percent of electorates the sitting MP and one of other buggers is already going to parliament whatever you and every other voter does to throw them out, which means the only vote that really matters as fare as the make-up of parliament is concerned is the party vote.

Which means your electorate vote is your “protest vote.” The vote that tells your MPs what you’re really thinking.

I’ve based my choices unswervingly on two rock-solid principles: either that a candidate advances or is at least sympathetic to freedom, OR that I know them, and they’re not a complete arsehole.

And since the marginal value of votes for smaller parties are higher than votes for larger, I’ve tended to favour those.

There is one basic difference between my choices and Scott’s. He wants to offer you a vote in every electorate. I don’t. My basic default position is that, unless there’s a good reason to do otherwise, you should stay home.

If however you insist on voting, then I suggest your default position should be voting Libertarianz in your party vote (since a vote for any other party is a vote for more government, not less), and leaving your electorate vote blank—unless, that is, you are in one of the electorates mentioned below:

Auckland CentralDavid Seymour – ACT
The ‘Battle of the Babes’ is as vacuous as they are. One’s a powerluster, and the other is dimwitted. Seymour is a good bloke in a party with too few of them. Give him your vote.

Botanyleave your ballot blank
Scott reckons National’s Jami-Lee Ross deserves your tick because he quoted Thatcher and Reagan in his maiden speech. He quote Maggie saying “the problem with socialism is that eventually you run out of other people’s money to spend.”  The problem with Mr Ross however is that he’d done nothing all his own life but spend other people’s money, and then vote for more of the same. Fuck him.

Christchurch/Ilam/Port Hills/Waimakariri/Selwyn etc – vote against the Czars
A vote for any National candidate in Christchurch is unconscionable. What the earthquake didn’t destroy, they have. And will do. Do not under any circumstances give them your vote. Punish them for punishing the city’s businessmen and women, and for ensuring home-owners are left without options. Vote for anyone, anyone at all, just as long as it’s not one of the Blue pricks. Even Lianne Dalziel.

Clutha SouthlandDon Nicolson – ACT
If you vote for Sir Double Dipton, Lord English of Karori, then you need your head read. Don is a good bloke who wants the ETS abandoned. Give him your vote.

CoromandelHugh Kininmonth– Labour
National’s replacement for stroppy local Sandra Goudie is carpet-bagger Scott Simpson. Scott’s a family friend, but frankly he’s too wet for Coromandel—a seat that Goudie turned from marginal into a safe blue seat. Friends tell me Kininmonth is a good bloke in the wrong party—and enough votes for decent Labour electorate candidates like him might displace some of their worse ones who hope to get in on the list. So vote Kininmonth.

Epsom …
If there’s one electorate that tells you how pathetic MMP is it’s Epsom—where a vote for the National candidate will help Labour, and a vote for the “Liberal Party” candidate will get you a conservative.
I can tell you right now what I will not be doing in Epsom. I will not be lifting a finger to help the Minister of Rhyming Slang back into parliament. Not even a pencil. This is a man I wouldn’t piss on if he was on fire.
So for the first time in my life I’ll be giving my vote to a National candidate. To Paul Goldsmith. If, that is, I can bring myself to do that. And if you can. (If you can’t, then abstain.)
Because a man who talks fiscal responsibility when he was the biggest spending mayor in the country doesn’t deserve your support. He deserves a kick in the arse. Because a man who talks reform yet as MP opposed everything Ruth Richardson did deserves not a tick but a kick. Because a man who tells his own leader to go to hell when his leader, Don Brash, advocated applying their party’s principle to marijuana doesn’t deserve your vote. He deserves a belt in the face. Give it to him. Metaphorically, anyway. (And those who say you have to vote for this slime in order to get other ACT MPs into parliament, I say “fuck ‘em".” I say they should have thought of that when they picked this piece of shit to run in their anchor seat.  A vote for Banks is a vote for Banks—a vote to give him control of any caucus ACT might possibly be able to muster. If that’s not enough to make your skin crawl, then you’re not alive. And you and I have nothing to talk about.)

Hamilton EastGarry Mallett – ACT
Unlike Banks, Gary is for smaller government and (somewhat) more freedom. And he’s a good bloke. So by all means pin your picture of Labour’s Sehai Orgad up on your bedroom wall, but give your vote to Gary.

Hamilton West - Tim Wikiriwhi – Independent
The Blue Team’s candidate is an unremarkable “Blue Green”; the Reds have the unenlightened Sue Moron. And why would you vote for them anyway when you can vote Wikiriwhi—a man who eats, sleeps, breathes and writes about freedom and liberty. If only he could spell. But vote for him nonetheless.

Invercargill - Shane Pleasance – Libertarianz
Shane is Libertarianz’ president, Director of the Southland Chamber of Commerce and he believes in Invercargill, freedom and personal responsibility.  He definitely deserves it. (And yes, I did pinch that write-up from his blog. But it’s still true.)

KaikouraIan Hayes - Libertarianz
Ian Hayes has them rolling in the aisles at public meetings. In a good way. So give him your vote in this safe National seat.

Mana - Richard Goode – Aotearoa Legalise Cannabis Party
Richard has swapped membership in a party promoting freedom in all things to one promoting freedom in one only. Nonetheless he’s not the Forrest Gump of Mana, Kris Faafoi. Nor is he professional Maori and token woman Hekia Parata. And he was responsible for setting up this blog for me, way back in 2005. So in return, give him your vote.

MangereClaudette Hauiti – National
Claudette is a lovely woman without a chance in a wall-to-wall Red seat. So help out a woman who does talk about less government and more personal responsibility by giving her your tick.

ManurewaDavid Peterson – ACT
David is a libertarian and an advocate of Austrian economics—and he still needs to return one of my books.  So help me get it back, if you please, by giving him your vote, then asking him to return it. If you’d be so kind. Because he is a decent fellow, which can’t be said about his opponents—a career bureaucrat, and another Wet Blue Green. Vote Peterson.

Maungakiekie - Peseta Sam Lotu-Iiga – National
Vote Sam just to piss off Carol Beaumont, the Marxist who believes the seat is hers by right.

Nelson - Maryan Street – Labour
Maryan Street is hardly the worst Labour candidate to stand on a husting. And she has one unique qualification: she is not Nick Smith. There is neither time nor space here to recount the reasons this mad moron, this Minister of the RMA and the ETS, of the Kyoto Treaty and of forced training for ECE teachers, deserves to be given the white pill. And I don’t mean aspirin. Vote Street. And if you see Smith out and about, punch him for me. In the face. Hard.

New Lynn - Tim Groser – National
Speaking of a punch in the face, there is one other character in the current parliament who competes with Smith for the title of most deserving. Do anything you have to, anything you can, to punish the wrecker of Telecom.  Even voting Groser.

North ShoreMichael Murphy – Libertarianz
No, don’t vote Brash. As the man who hand-picked Banks, and who is therefore single-handedly responsible for the demise of his own bid to keep National honest (which bid he has now conceded is over by agreeing to be John Key’s compliant lapdog should ACT get over the line), Brash sadly doesn’t deserve a tick. He deserves a lesson in principle.
So vote for Libz stalwart Michael Murphy, someone who could give it to him.

Northcote - Peter Linton – Libertarianz
Peter is an untiring advocate for your right to self-defence. Give him the biggest and loudest tick you can muster. And then leave the polling booth happy.

NorthlandLynette Stewart – Labour
National’s Mike Sabin is obsessed with prohibition, with ramping up the War on Drugs, with criminalising victimless crimes, and is unconcerned with what this will demonstrably do to gang profits (raise them) and to peaceful people (criminalise them).
So vote for anyone instead of this egregious busybody because at 60 on National’s list he needs your vote to get in. Vote for anyone to stop Sabin, even Lynette Stewart. Tell National the time for prohibition is over.

OhariuSean Fitzpatrick – Libertarianz
Ohariu, parliament and the country’s hairdressers need to see the back of Peter Dunne.  But that doesn’t mean we need to see the front of Charles Chauvel. Tell them both to go to hell and vote for the bloke who runs the most successful martial arts academy in Wellington.  And then invite him to take a trip to Nelson…

Otaki - Peter McCaffrey – ACT
Nathan Guy is like fog, wet and thick. Labour’s Peter Foster is like dross, useless and nondescript. But McCaffrey is another good young man in the wrong party, a chap who led a principled and eventually successful campaign against compulsory student unionism. Give him a big tick.

PakurangaChris Simmons – ACT
National’s Maurice Williamson took the leaky home issue and as minister proceeded to make it worse by using it as an excuse to corral builders, designers, Tom Cobley and all into what amounts to compulsory state unions. Tell him to go to hell. If voting Simmons can do that (and there’s precious few other choices on offer) then do it, I say.

TamakiStephen Berry -  Independent
Berry is funny, energetic, a principled advocate for freedom,  and he’s really stepped up in his campaign for this electorate. None of which you can say for National’s Simon O’Connor. Give Berry the big tick. He deserves it.

Tamaki-Makaurau - Pita Sharples - Maori Party
Even the Labour Party don’t deserve Shane Jones—and if voting Sharples keeps out the Minister for Self Abuse, then it’s worth keeping the racist seats for another term, until the Maori Part fold in the next one. So vote against Jones by voting Sharples. If you must.

Te AtatuPhil Twyford – Labour
Tau Henare is a bloke who discovered at middle age that life in parliament is a comfortable berth. Phil Twyford is the bloke who ran a principled campaign against Rodney’s super—shitty Super City. On balance then, there’s no contest. Tell tau to get a real job, and make Twitter safe for decent people again.

Te Tai TokerauKelvin Davis – Labour
Davis is sane. Hone is the opposite. ‘Nuff said, really.

Waiariki Te Ururoa Flavell – Maori Party
Flavell has surprised me often by saying good things on property rights and the economy. Yes, it’s true. Reward him with your favour.

Wairarapa - Richard McGrath – Libertarianz
Let me just quote Liberty Scott on this one:  “Vote for NZ’s most freedom loving GP – Dr Richard McGrath for Libertarianz. He’s a fine man, and has a good profile in the electorate.  You don’t need to think twice about this.   National’s John Hayes will probably win given his comfortable majority of around 6,700, but I strongly endorse McGrath politically and personally as the one candidate of all I most would like to see elected, across the country.  He would shake up healthcare, the war on drugs and would always take a balanced and measured approach, that adds up to whether any government measure reduces freedom and individual rights or increases it.  Vote McGrath with pride.”
And vote secure in the knowledge that he trounced all the other candidates in the district quiz.

WaitakerePeter Osborne – Libertarianz
Minister for Expanding the Welfare Rolls Paula Bennett is battling the Repulsion Camel, Carmel Sepuloni out west. Declare a plague on both their houses by voting for a bloke who knows that welfare doesn’t help those it pays for. It destroys them. Both Bennett and the Camel will be in regardless anyway, so vote for the good bloke. Vote Osborne.

Wellington Central Reagan Cutting – Libertarianz
In this electorate you can vote for state-worshipper (Grant Robertson), state-worshipper lite (Foster-Bell), libertarian lite (Whittington) or the real thing. Accept no imitations. Vote Cutting. Do it for the Gipper.

Whangarei - Helen Hughes – Libertarianz 
As Helen told her local newspaper, “A man cannot be freed till he knows he is in bondage.'' If you do, then a vorte for Helen Hughes is your only option.
And  as  the newspaper profile demonstrates, not only is Helen Hughes more colourful, more principled and more effervescent than the wet, limp, virtually lame Phil (I’ve Done Nothing in 3 Years But Buy A Bottle Of Wine) Heatley, she is a better sculptor too. So reward her and punish him. Tell the man who’s helped make affordable housing even more of a pipe dream to go to hell. Vote Hughes.

So there you have it. A few different recommendations than Scott’s, but only a few. I make it a recommendation for

6 ACT candidates, 9 Libz, at least half-a-dozen Labour, 2 from the Racist Party, 2 Independents and 1 ALCP type. But then I can’t count for custard.

Enjoy your voting tomorrow. At least it means this turgid campaign is finally over.

And that at least is something to celebrate.

And who knows, if we’re lucky we might get a few weeks without a government.

Wouldn’t that be nice.

Quote of the day: Reasons to be Grateful, Part Three

In a world of pepper-spraying cops, genital-groping TSA agents, and a debt-to-
GDP ratio that's topped 100 percent, it's sometimes hard to find the good, but
despite the ankle weights the state keeps attaching to us, humanity keeps
running, moving ever upward…
Even as freedom retreats in some quarters, the freedoms we have left continue
to improve the lot of humanity in ways our ancestors could only dream of.  The
sad part is that we continue to weight and shackle ourselves in ways that are
slowing that progress from what it could have been...
As we pause to recognize all we are grateful for today, let's also re-commit
ourselves to the task at hand, which is to understand the degree to which free
people under the right institutions can maximize the degree of social cooperation,
peace, and prosperity made possible by the progressive extension of the division
of labor and exchange.  And let's further re-commit ourselves to taking what
we've learned and spreading it to the four corners of the Earth so that the
cornucopia so many enjoy in the West can be the reality … for all of humanity.
                           - Steve Horvitz, "On Pausing to Note the Continued Upward Climb of Humanity

Partial privatisation

One of the very few differences between the Blue Team and the Red Team is the Blue Team’s plan to partially privatise, i.e., sell down a few shares in, a few state-owned enterprises. A very few.  Just four power companies and an airline.

But is that really any real difference at all? Remember, it’s not even a full privatisation: the Blue Team plans the government to keep a majority shareholding. And rather than pay down debt, it plans to buy more state stuff with the proceeds.

Which means the sale gets all the costs of government management, with none of the benefits of private ownership, as Tim Hazledine, Eric Crampton and Seamus Hogan point out:

  • You get little of the potential efficiency benefits of full privatisation, but add downside risk.
  • You get few incentives for private managers to innovate.
  • There's no potential for an external shareholder to force changes in management if things are run inefficiently.
  • With continued political management political incentives will continue to trump production incentives,and to minimise technological innovation.
  • Partial government ownership makes bailouts or other government support (and coerced cartelisation) much, much more likely. (Think KiwiRail, not Telecom.)

So what’s the point? Because rather than persuade people about the benefits of privatisation, the results of this half-arsed, half-done privatisation will demonstrate none and persuade no-one.

Perhaps that’s why the National Party is running with it.

How the Economy Works

imageGuest post by M. Northrup Buechner, Associate Professor of Economics, St. John’s University, New York

Here is the fundamental problem of economics: Every consumer good that you buy reaches you through the cooperation of literally millions of people. The six-pack of beer that a man purchases at the corner deli was delivered to the deli by a wholesaler, who gets the beers he delivers from several different beer producers. To produce the beer, the manufacturers need hops and barley which they buy from grain elevators or farmers. To grow the hops, the farmers need pesticide and fertilizer which are produced by other businesses. To manufacture beer, the producer needs cans which he buys from, let us say, American Can. To manufacture cans, American Can needs aluminium which it buys from Reynolds or Kaiser or Alcoa. To produce aluminium, the aluminium companies need bauxite and electricity, the two raw materials of aluminium. Bauxite has to be mined for which heavy equipment is required, like steam shovels, bulldozers, and trucks, which are purchased from still other companies.

If we were able to trace back through the economy all the businesses and all the workers who directly and indirectly participated in the provision of that beer (or Coke or milk or hamburger or golf clubs), we would find that it involved at least half of the economy and probably much more: that is, half the labor force, half the businesses, half the capital value of the economy.

imageWhat makes this almost miraculous is that of all the millions of men and women whose work jointly puts beer in the deli, the only one of them who gives a thought to putting beer in the deli is the wholesale. All of them (including the wholesaler) are concerned with nothing but their own personal financial interest. In their work, they are focused exclusively on earning the money necessary to support themselves and those they love, and to achieve other goals of their own to which money is a means. Yet somehow, the actions of all these millions of human beings are integrated into what is normally a smoothly functioning unit that puts beer where the man wants it, when he wants it, and as much as he wants. If one steps back for a minute and thinks about it, that is an amazing, unbelievable phenomenon—a phenomenon which we live with and take for granted every day and on which our lives depend. How is it possible?

The answer is prices. It is prices that integrate the economy into a unit. It is prices that reconcile the apparently opposing interests of the members of an economy. It is prices that make everyone’s desires consistent with one another so, for example, a furrier wants to give a woman the exact fur coat she wants to possess.

I. The Origin of Prices

Every price is set by someone. That is our starting point. Some human being must name the price. This is actually not a self-evident truth, but it is close. Because what would be the alternative? The wind blows the sand to form the price or the clouds write the price in the sky? If prices were determined that way, there would be nothing to talk about.

Every price originates in the mind of an individual human being. In a modern industrial economy, that basic fact is reflected in five different methods for creating prices. In this paper, I will deal only with the one that is most familiar (almost all consumer goods and services are created by this method) and probably the most widespread. That one is: someone sets the price.

The prices in the economy that are directly involved in the production and sale of goods and services can be divided into three classes:
        (a) the prices businessmen charge other businessmen for producer good and services. These are the
              goods and services that are used in production (of other goods and/or services).
        (b) the prices businessmen charge consumers for consumer goods and services. 
        (c) the wages businessmen pay their employees for their work. (Wages are prices; the price of human work.)

imageLet us begin with the prices of producer goods and services.

When a businessman sets the price, how does he decide what price to charge? If he wants his business to survive, we can be sure that he looks at and weighs the relevant facts, and sets a price that reflects those facts so he can sell his product and continue in business.

This principle, that prices are based on facts, is a crucial point. It removes economics from the realm of hopes and daydreams. It immediately nullifies the popular saying, “Businessmen can set any price they want.” Prices reflect facts. Prices originate in facts. In a free economy, businessmen set prices to reflect the facts of their markets.

2. The Facts Prices Reflect

Many different facts may be relevant, depending on the specific product, industry, or market, but the price-setter will almost always consider these three:

  1. the demand for his product;
  2. his competition; and
  3. his cost of production.

(1) Businesses face the alternative of life and death just as living entities do. If a business fails to secure its means of survival, it dies, it goes bankrupt, and in the end, nothing at all may be left. The fundamental requirement for business survival is profit, and the means to profit is sales. The expectation of sales is a prerequisite for production in a market economy. Some businesses, like realtors, can survive on occasional, irregular sales. But most businesses require regular, continuing, repeated sales over time, often numbering in the millions. (Just think of Ford cars, Cheerios, and Dell computers.) The price-setter choses a price that he expects to yield those sales. This is his estimate of the demand for his product—the quantity he expects to sell at the price he selects.

image(2) Competition affects this result. His sales will be higher if competitors charge higher prices or sell inferior products. His sales will be lower if competitors charge lower prices or sell superior products. The price-setter chooses a price that is consistent with the price others are charging and with the quality of their products. The better the quality of his product relative to his competitors’ products, the higher the price he can charge, while usually it is economic suicide to try to charge a higher price for an inferior product.

The price based on (1) and (2) together constitutes the price-setter’s estimate of his customers’ “willingness to pay.” How urgently do buyers want his product?—therein lies the meaning of economic value, as opposed to political value or aesthetic value. This is what prices measure: the price-setter’s estimate of the price his customers will pay and in what numbers.

(3) The third element the price-setter considers is the cost of production. Over the long run, total revenue must exceed total cost. This is the business world’s absolute from which there is no escape. Income receipts must exceed total outlays. The businessman must make a profit--and not just any profit, but a profit sufficient to allow him to replace his plant and equipment as they wear out. But this is a long run, average requirement; that is, his accounts must show a profit on average over time. In the short run, a businessman may chose to set a price at which he knows he will take a loss (to meet the competition, to establish a new product, or to enter a new market). Usually this is not a disaster or even a hiccup, because he can easily make it up in the future.

3. What the Buyer Knows: Producer Good Prices

Now let us look at the price of the producer good or service from the buyers’ side. What does the price tell the buyer? It tells him the seller’s estimate of other customers’ willingness to pay, that is, the value placed on the good by the seller. It also tells him that the seller thinks enough people are willing to pay this price that he will be able to continue to produce it at a profit. But at first glance, there does not seem to be any reason the buyer should care about these things. Let us see.

imageCertainly, the potential customer cares primarily about what the product will do for his business. Maybe he expects the product to reduce his costs of production or improve the quality of his product or improve the efficiency of his secretarial staff or increase the reliability of communication within his business. In deciding whether or not to buy in the light of what the product will do for his business, he decides whether the product is worth the value placed on it by the seller as given by the price. Given the origin of the price, this means that in effect he is thinking, “Am I willing to pay what this seller thinks others are willing to pay?” If he is, he buys the product. But there is more to the role of price than this.

Imagine all the producer goods of the economy divided into three broad categories according to their cost:

  1. Very expensive, that is, selling for a million dollars or more. This category includes things like turbine engines to produce electricity, machine tools, and heavy construction equipment such as steam shovels, bulldozers, and cranes.
  2. Moderately expensive (thousands of dollars): things such as copy machines, office furniture, and central air conditioning.
  3. Inexpensive: things such as copy paper, pens, and paper clips.

Remember that the price reflects the seller’s estimate of his customers’ willingness to pay. A high price reflects a high estimated willingness to pay; the seller thinks buyers are willing to pay a high price in sufficient numbers to cover his cost and yield a profit. A low price, on other hand, reflects a low estimated willingness to pay: customers are willing to pay only a low price, but still in sufficient numbers to cover cost and yield a profit.

The thought and consideration given by businessmen to the purchase of a producer good varies directly with the price. Inexpensive products such as copy paper and paper clips are purchased routinely. In effect, they are sufficiently inexpensive that little or no thought is given to them. Moderately expensive products do get some serious thought and the businessman may decide that something in this category, such as a copy machine, is too expensive to justify its purchase.

imageProducer-customers give by far the greatest thought and consideration to the most expensive producer goods. These are the goods with the greatest value in production to other businessmen as proved by the high price that buyers are willing to pay; the goods most highly valued by other producers for their own productive ends. Thus, in thinking carefully about expensive purchases, it is as if producers were thinking, “The high price of this machine means that it is important to other producers, so I am not going to pay that price, and remove it from another man’s use, unless I am going to get a greater benefit than he would get.” If he buys the factor, he does get a greater benefit because the man thereby excluded from the factor excludes himself by refusing to pay the price.

The value in production that businessmen receive from the factors they buy exceeds the value that would have been received by the businessmen who do not buy, both in the judgment of the individuals involved. This is the principle by which capitalism distributes the nonhuman factors of production among all the businesses of an economy. The highest valued factors go to the highest valued uses, both in the judgment of the businessmen involved. As a result, economic output and growth are maximized.

4. What the Buyer Knows: Consumer Good Prices

The same principle applies to consumer goods and services. Expensive consumer goods are given more thought than inexpensive consumer goods. Again, it is as if the buyer were thinking, “The high price means that this good has high value to other buyers, so I am not going to buy it and remove it from their use unless it has more value to me than to them.” If he buys, it does have more value to him, because the other party excludes himself by refusing to pay the price. Thus the consumer goods and services of the economy are distributed to the consumers who value them most.

imageSocialists object to this argument on the grounds that the rich have more money. If everyone’s income were equal, they say, then distribution of the economy’s goods according to who was willing to pay the most would be fair. But in reality, those willing to pay the most are those with the most money. The economy distributes its economic output according to the dollar votes of the consumers, but the rich have more votes. The result is that the rich man buys steak to feed his dog while the poor man eats rice and beans. The system, they say, is unjust.

The answer to this objection is found in the origin of wages in a free market. What causes differences in wages? Why do some people make much more money than others?

5. The Creation of Wages

imageTo grasp the cause of differences in wages, let us think of the labor market as consisting of hundreds of worker pools. Each worker pool consists of all the workers of a particular kind or type who are looking for work in their field. These are the workers who have been fired or who quit or who are entering the work force for the first time or who are re-entering the work force. There is a different pool for each type of worker: mechanics, teachers, secretaries, accountants, nurses, chemical engineers, civil engineers, mechanical engineers, and so forth. Each type of engineer has his own pool because they cannot do each other’s job. The same is true of other specializations, of which there are hundreds.

When the economy is functioning normally, that is, neither booming nor crashing, new people enter a worker pool looking for work at approximately the same rate that businesses hire people out of the worker pool. The pool neither shrinks nor grows, and wages for each type of worker stay about the same.

6. How Wages Rise

In order to understand how wages rise, we need to understand the thinking of the businessman who raises his wage offer first. That is the difficult subject. Once one competitor raises his wage offer, it is easy to see why others choose to follow.

Let us take the pool of unemployed accountants. The economy is growing, and there is an increasing demand for accountants. Consequently, the rate at which accountants are hired out of the pool exceeds the rate at which unemployed accountants enter the pool. As time goes by, the pool of unemployed accountants shrinks and it becomes harder and harder to hire an accountant. Eventually some businessman, one who perhaps has been looking unsuccessfully a long time for an accountant, decides that if he is going to hire an accountant, he has to offer a higher wage. This news will soon be known throughout the accountants’ labor market, and other firms looking for accountants find that they also must offer a higher wage in order to compete.

imageIf the higher wage for accountants lasts, it will redound throughout the accounting profession. First the wages of new hires will rise, then the wages of junior accountants will rise to keep ahead of the new hires, and then the wages of senior accountants will rise to keep ahead of the junior accountants.

Businessmen raise wages because they must in order to hire and keep the workers they need. Thus, wages rise with increasing scarcity, as the demand for a particular type of labor increases relative to the supply. This is true not only of accountants, but of every kind and type of worker.

7. How Wages Fall

The wages of workers fall when there is decreasing scarcity (or rising abundance) of workers of a particular type. This occurs when the supply of workers increases while the demand does not change, or the demand for workers decreases while the supply does not change, or the demand decreases and the supply increases at the same time. This last case is one of the chief signposts of a recession.

In a recession, demand decreases for practically every type and kind of worker. At the same time, the supply of unemployed workers in the worker pools increases dramatically as workers are fired or laid off and businesses stop hiring out of the worker pools.

The result is that there are abundant workers for businessmen to hire at the current wage. In response to an advertisement, potential employees besiege a business or word of mouth about a job vacancy brings a surfeit of applicants. Under these circumstances, employers may offer to pay lower wages and workers may offer to work for less. In 1982 and 1983, the average union wage rate fell as unions negotiated lower wages to avoid layoffs. From 2007 to 2009, both skilled and unskilled workers negotiated lower wages.

8. Relative Wages and Relative Scarcity

An increase in demand for workers of a particular type relative to the supply represents an increase in relative scarcity, and wages rise. This is the typical result of an economy coming out of a recession.

imageA decrease in the supply of workers relative to the demand also represents an increase in relative scarcity. Historians estimate that the Black Plague killed between one third and two thirds of the European peasants. This created an enormous increase in the relative scarcity of labor, and wages rose, creating [ironically] what may be called the golden age of the European peasantry.

A decrease in demand relative to the supply represents a decrease in relative scarcity, and wages fall. This typically happens at the beginning of a recession.

An increase in supply relative to demand also represents a decrease in relative scarcity. The wage increases following the Black Death reduced mortality so more people lived to adulthood and had more children. Within a hundred years, the population increased to the point that wages fell back to the level preceding the Black Death.

Now let us consider the wages of different occupations in terms of the relative scarcity of their members. The most widely known minimum wage employees are fast-food workers. Why are they paid a minimum wage? Because, although the work is hard, almost anyone can do it, so if the wage rises above the minimum wage level, more workers enter the field. Sometimes this happens.

imageA good divorce attorney in New York may earn $400 an hour. Why does he get so much more than fast-food workers? Because few people can do what he does and many people in New York need divorce attorneys. Divorce attorneys are much more scarce than fast-food workers. On the other hand, an attorney with political connections in Washington may get $1000 an hour, because such attorneys are even more scarce than divorce attorneys.

The scarcest employees in the business world are CEOs. Out of the world’s population of approximately 7 billion, there may be 50,000 who might be able to run a major corporation. I estimate that a CEO making $10 million a year earns about $3000 an hour.

But CEOs are not the scarcest workers in the economy. Much more scarce are NFL quarterbacks, of which there are probably less than ten who excel at their work. I estimate that their pay comes to about $10,000 an hour.

Great opera singers are certainly as skilled and dedicated and rare as NFL quarterbacks, but they make much less. Why is that? Because the demand for football is huge while the demand for opera by comparison is small.
Finally, there are the scarcest of all the workers in the economy, the true superstars, the highest paid members of the free market: movie stars. Casual observation suggests they may make as much as $100,000 to $1,000,000 an hour.

9. Justice

Now we can answer the socialist argument at the end of ‘Part 4’ above. To call the capitalist economy “unjust” is a gross act of injustice. Capitalism is the epitome of justice.

imageObserve the principle of justice governing the operation of the worker markets of a free economy. The wage rate of every worker reflects his relative scarcity as measured by the worker pools described above. Workers whose skills and abilities are more scarce receive higher wages than workers whose abilities are less scarce. This is just because an employer chooses to pay the wage required by the worker’s relative scarcity only if the employer thinks the worker is worth it. In other words, every employee receives a wage that measures the value of his work to the business as judged by the businessman who pays the wage. From this perspective, the hierarchy of wages in a free economy is a hierarchy of productive contribution.

Taken altogether, the array of annual wages and salaries of all the employees in the economy is a hierarchy reflecting the relative scarcity of every kind and type of employee. Workers with higher salaries are relatively more scarce than workers with lower salaries. The same hierarchy ranks all the different kinds and types of workers according to their value to their employers. Employees with higher wages and salaries have higher value. The businessman chooses to pay the wage required by a worker’s relative scarcity only when he thinks the worker is worth it.

Consider, for example, a scientist working in the research and development department of a large corporation. The scientist contributes nothing to current output; he has no role in reducing current cost, or in selling the corporation’s products, or in improving communications, or in facilitating management control, or in any of the other crucial day-to-day operations of the business. His contribution is entirely prospective and uncertain. Yet management chooses to pay him a very high salary, perhaps on the level of a vice president. Why? First, because his scarcity value is such that they must pay him that salary to retain his services. But second, and equally important, his work is judged to be essential to the survival of the company—because while his contribution is prospective and uncertain, it is a certainty that the corporation will fail without him (that is, without research and development).

10. Conclusion

This then is how the economy works. Every price reflects exactly the judgment of the price-setter as to what his customers are willing to pay. That in turn reflects the value placed on the product by those customers, which depends to a large extent on the prices and products of competing businesses. In addition, over the long run, every price often measures (roughly) the cost of production, which in turn depends on the prices and quantities of all the resources (including human beings) required to produce the product. [Contrary to the claims of socialists monopoly theorists, therefore, prices are not set arbitrarily by business owners; nothing could be further from the truth.]

Whenever anyone, producer or consumer, chooses to buy a product or engage an employee, he does so in consideration of the price. If the price is so low that he needs to pay no attention to it, that is still a kind of consideration, because there is always some price that would demand his attention.

imageWhen he considers the price, he considers all the other potential buyers of the product and the value of all the goods and services required to produce the product. If he buys, it is because the product is more valuable to him, as a producer or as a consumer, than to everyone who chooses not to buy. Thus all the economy’s productive resources end up in the hands of those producers who value them most highly in production, and all the economy’s consumer goods and services end up in the hands of those consumers who value them most highly in consumption. This is the integration a free economy performs. This is why each individual’s choice is consistent with every other individual’s choice—because everyone is making their choices on the basis of the same prices—each of which conveys the relevant information about the buyers’ willingness to pay and the resources required for production.

Thus, in pursuing his rational self-interest, each producer and each consumer, each buyer and each seller—each of them focuses on the prices he must pay or wants to receive and chooses actions that are consistent with those prices in conjunction with all the other values of his life. He focuses on prices in the same way and for the same reason that he focuses on all the other facts he must take into account in order to act successfully.

imageThe difference between prices and the other facts he considers is that every price reflects, directly or indirectly, all the economic facts, so that in adjusting his actions to the prices he faces, he integrates himself into the economy.

This essay is based on M. Northrup Buechner’s book Objective Economics: How Ayn Rand’s Philosophy Changes Everything About Economics. For excerpts from the book, videos and additional essays visit For a full exposition of Dr. Buechner’s ideas on economics please read the book which is available at

This essay is copyrighted 2011 by M. Northrup Buechner. Permission is granted to republish it on websites as long as it is reproduced in its entirety including links in the paragraph above and this notice.

Los Hongos House, by Rolando Barahona Sotela


Who says concrete has to be boring? 

Not Frank Lloyd Wright, who called it the material ideally suited “to bear the imprint of human imagination.”

And not architect Rolando Barahona Sotela who designed this 1983 Costa Rica house.


The house is dominated by two solid concrete structures which are designed to generate shadows and wind—both highly desirable in Costa Rica’s climate—collect water, and organise the house.


Says the architect, “It is a comfortable indoor- outdoor home, indoors it has 4 private suite bedrooms with private terrace and bath, indoor living dining area, studio, jacuzzi area, bar, kitchen breakfast area and multiple decks and terraces under the concrete umbrellas surrounded by jungle. 5 river water pools with sun decks and reservoirs- a side river and a lake! Do you need more?”

[Hat tip Ryan Thewes’ Organic Architecture blog]