Friday, January 7, 2011

Prices, Fares, Toll Fees and Statism

The Central Lesson Here: Government is Bad

Food prices – Government prevents the supply of food from abroad by its imposition of tariffs on commodities such as rice, wheat and sugar. The logic of the state is that without the high prices created by the imposition of tariffs, local producers would go unemployed. Yet Noynoy Aquino is going to sign an executive order removing the tariff on wheat in order to reduce flour prices by P20.00 per bag. It seems that the government is very arbitrary as to its trade policies, not wanting to put too much of a shock on the consuming public.

The uncertainty created by land reform affect the prices of food as landowners become hesitant to invest funds to make their operations more efficient. Land reform thrusts the peasant farmer into an entrepreneurial position where he may not be suited for. There are many reports of the distributed land being sold back to the landowner because of bad debt-management and necessary technical know-how. The point is that land reform lowers output and contributes to high food prices.

Lastly, there is the nefarious National Food Authority, which, under the same logic of protectionism, buys commodities from the agricultural sector only to be brought to waste because of corruption and incompetence.

Transportation (tolls, fares) – Higher fuel prices are the cause. What’s the cause of higher fuel prices? Yes, government. Military interventionism in the Middle East and a global oil cartel OPEC results in the underproduction of oil, or manipulates oil supply making it nearly impossible for entrepreneurs to anticipate.

Abolish Regulations on Public Vehicles – there should be no regulations, coerced standardization, and licensing of public vehicles. Without regulations, price competition will ensue and different services catering to different needs will emerge in the market. Some individuals may choose lower quality or older vehicles because of the lower fare charged. Some may want the safest ride they can get no matter how high the fare. Under a free market, both the consumer and the servicemen choose the ‘right’ fare with proper consideration to the scarcity of the factors of production. If the problem is that fares are too high, then servicemen will be encouraged to innovate in cost-cutting in order to satisfy the need for lower fares. Government can only be detrimental to this entrepreneurial process. Legalize free choice in transport.

Privatize the Roads and Mass Transit – No more Build-Operate-Transfer Projects. No more public-private partnerships. Separate all transportation infrastructure development from government. The majority of the population does not make use of the road system as much as large statist corporations. Government roads shift the cost of transport from corporations to the taxpayer. Government mass transit had to be created in order to allay the dissatisfied majority. Privatization and denationalization of all transportation infrastructures would radically change it into something more suitable to the average consumer, with much less sprawl and congestion. This would require abolishing agencies such as the Metropolitan Manila Development Authority (MMDA), Land Transportation Franchising and Regulatory Board (LTFRB), and Department of Public Works and Highways (DPWH).

Money Supply – The main cause of rising prices for almost everything is the central bank which preposterously makes the claim of controlling inflation. The central bank, which holds a legal monopoly in money printing, is the root of the problem.

Thursday, January 6, 2011

Changing the Mainstream Concept of the Political

The word politics comes off to the anti-statist as a dirty word. The word connotes power, matters of state, control, running peoples’ lives, property expropriation. Rothbard equated politics with economic violence. Hence, consistent libertarians, adhering to the principle of peaceful relations among men, are fundamentally opposed to anything political. Radical libertarians are predisposed to despise the political and attack the views of those who follow it.

The Left and mainstream political thought, on the other hand, views politics in a very different way. Politics is human affairs, it is consensus building, it is communication. In other words, the Left ascribes to the word politics qualities that are the very opposite to what anti-statists ascribe to it. This semantic divide creates needless antagonism between the two camps. Libertarians can be more successful in airing their views if they borrow the word ‘politics’ and use it in a positive way.

Now to be sure, there is a good reason the libertarian does not have a positive view of politics. Politics is associated with the state to the point where the two concepts are interchangeable. The libertarian, recognizing that the state is really a form of organized crime, rejects this association. It is therefore the leftist, in his failure to grasp the criminal nature of the state, who is at fault.

It would certainly be wise to borrow the word politics and use it against the state. That way, libertarians can utilize the many positive connotations that come with a word which is familiar and dear to mainstream political thinkers. If it could be proven that politics, in the true, classical sense, is to be found in the market, then accusations of the market as being an anti-social force would lose teeth.

The Ancient Greeks were the first to define politics as social interaction, matters of human relations and consensus building. Plato talks of the polis, or the just city. The furtherance of justice is the goal of politics. In defining the just city, Plato speaks of the division of labor.

The Polis, Society, and Division of Labor in Book II of Plato’s Republic

Here I quote passages from Book II of The Republic where the ideal polis is presented. Plato recognizes the fact that humans cooperate not out of loving feelings for one another but because of the selfish need.

Socrates: Well, then, a city, as I believe comes into being because each of us isn’t self-sufficient but is in need of much. Do you believe there’s another beginning to the founding of a city?

Adeimantus: None at all

Plato emphasizes the value of specialization in one job. This conclusion comes from accepting the natural diversity and inequality of man.

Socrates: Now, what about this? Must each one of them put his work at the disposition of all in common --- for example, must the farmer, one man, provide food for four and spend four times as much time and labor in the provision of food and then give it in common to the others; or must he neglect them and produce a fourth part of the food in a fourth part of the time and use the other three parts for the provision of a house, clothing, and shoes, not taking the trouble to share with others, but minding his own business for himself?

Adeimantus: Perhaps, Socrates, the latter is easier than the former.

Socrates: It wouldn’t be strange, by Zeus! I myself also had the thought when you spoke that, in the first place, each of us is naturally not quite like anyone else, but rather differs in his nature; different men are apt for the accomplishment of different jobs. Isn’t that your opinion?

Adeimantus: It is.

Socrates: And, what about this? Who would do a finer job, one man practicing many arts, or one man one art?

Adeimantus: One man, one art

Plato blasts protectionism.

Socrates: And further, just to be found the city itself in the sort of place where there will be no need of imports is pretty nearly impossible.

Adeimantus: Yes, it is impossible.

Plato even realizes the radical idea that people undertake risks to fill other people’s needs. In explaining the emergence of tradesmen, he is presenting the idea of entrepreneurship and the beauty of spontaneous market order.

Socrates: Now, if the agent comes empty-handed, bringing nothing needed by those from whom they take what they themselves need, he’ll go away empty handed, won’t he?

Adeimantus: It seems to me.

Socrates: Then they must produce at home not only enough for themselves but also the sort of thing and in the quantity needed by these others of whom they have in need.

Adeimantus: Yes, they must.

Socrates: If the farmer or any other craftsman brings what he has produced to the market, and he doesn’t arrive at the same time as those who need what he has to exchange, will he sit in the market idle, his craft unattended?

Adeimantus: Not at all, there are men who see this situation and set themselves to this service... They must stay there in the market and exchange things for money with all those who need to sell something and exchange, for money again, with all those who need to buy something.

Socrates: This need, then, produces tradesmen in our city....

Socrates: Then has our city grown to completeness, Adeimantus?

Adeimantus: Perhaps.

Politics during the time of the Ancient Greeks was about human interaction and as we have seen from the text of The Republic itself, the division of labor and trade---- otherwise known as the market ---- is the central element in the polis.

A New Perspective of Politics

In order to revive and refine the classical definition of the polis as the market, we must understand a fact that collectivists try to suppress --- society is composed of individuals. The individual must be once again thrust to the center of political discourse, for the workings of society can only be understood in terms of the actions of individual men. The collectivist must work on the assumption that the individual is irrelevant. He must assume that all individuals are the same --- in other words ---- there is no individual, only an individual unit. Society, for the collectivist, has pronounced its collective will and wishes its leaders to act. By making such assumptions, they become the spokespersons of the masses and are justified in grandiose schemes to improve humanity. Politics is thus transformed into statism. Everybody is forced to participate. This arrangement makes no room for individual action, preferences and ultimately, freedom.

Take for example education. Why are so many people complaining about education? It is because everybody’s interests are pitted against one another by the state. People want different methods and content for education. Yet, there can only be one type of education. If I want to change the educational system, I have to convince 51% of the electorate of my idea before it can get implemented. This is not the same with goods in the private sector. If I want to have a mango, I go to the market and buy one. The only politics that exists in that arrangement is between me and the seller of the mango. We both benefit from this arrangement, no third person loses. Now imagine if I know of a cure for cancer but need funding and help in order to develop it. I then go and try to convince investors to risk their money for my project. I also call up medical professionals to ask if they are interested in becoming partners in my undertaking. Politics now exists between more than two persons. Realize that both investors and medical partners are involved for their own profit (or possible loss), yet the benefactors are the whole of humanity.

This is the beauty when we drop our leftist assumptions about human equality. How, again, is human inequality present here? The arrangement of the investors, inventor and partners are only among themselves, others are excluded because they do not have the desire nor the ability to undertake such a task. This is what we mean by inequality. And it is from social acceptance of this reality, and its ethical-economic implication of private property rights, that all of human achievement, creativity, and progress has come about.

With that said, our new understanding of politics must be that it is dynamic and spontaneous. We must stand aback, suspend our value judgments, and learn to appreciate the individual as he interacts with other individuals. Society is composed of individuals. There are tasks which require politics between only two individuals, and there are tasks which require politics among thousands. The important thing is that we understand that human relations are always changing. There is in the course of human affairs no certainty, no fixed arrangement. Politics is only possible if individuals have the freedom not to engage in it.

Remarks on Philosopher-Kings and Political Framework in Plato’s Republic

Plato conceived of the philosopher-kings as having to live a communal lifestyle in order for them to rule the city well. He outlined what might be considered a rather totalitarian program for the polis, advocating such things as eugenics to control the genetic quality of the citizenship and propaganda to control the mass culture. The philsopher-kings must not have any ties to family for the citizenship is their family. Their happiness must be the welfare of the constituents.

Such details do not refute our new conception of politics. Book II of The Republic clearly established that the city was complete when individuals cooperate under the division of labor. It is only because Glaucon thought it not enough and demanded a more sophisticated city. He was not satisfied with a system of political self-determination. It is from this demand that the dialogue continues and the philosopher-kings are invented to impose personal preference on how society should be organized.

Source: The Republic of Plato. Translated by Allan Bloom