John Humphreys

We hope that Joe Hockey is a liar. We can understand why a politician would want to bash banks, and we can understand why a politician would want to promise more regulation to control the “naughty market”. Both of these are populist positions which hit the political funny bone, and score cheap points.

It is no surprise that Wayne Swan regularly complains about evil bank profits, and we’re sure the Greens (and other assorted reds) would eagerly agree to more regulation. But while we can understand the political desire for populism, when it actually comes to managing the rules for our economy, we can only hope that Hockey is not serious about his stated desire to have the RBA act as referee on interest rates.

We already know that Joe Hockey wanted to introduce a psuedo-national bank, and he wanted more regulation to ensure that banks gave more risky loans, and also gave fewer risky loans.

Now the issue is whether banks should be able to set their own prices for loans. To be fair, Hockey has only suggested that the Reserve Bank of Australia (RBA) should nudge banks, but given his track record on not understanding finance it’s a dangerous start. It hints very much towards government regulation of interest rates, which is price fixing of some of the most important prices in the economy.

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The race for the Republican Presidential nominee in the USA is getting interesting. Last Tuesday the good people of Iowa voted for their favourite Republican, with no clear outcome. Willard “Mitt” Romney won the popular vote by eight over Rick “please don’t google my surname” Santorum, but the actual allocation of delegates is unknown since Iowa uses a complex caucus system that no normal person understands. The only certain consequence from the Iowa vote is that Michele Bachmann has dropped out, leaving six serious contenders.

While all of the remaining candidates have an interesting story to tell, it is the rise of Ron Paul and a growing libertarian voting block that has the biggest long-term consequences. When I wrote about Ron Paul for “the drum” a month ago he was still being largely ignored by the mainstream media (MSM) despite consistent good polling and fund-raising. That is slowly changing. Given that Paul came 3rd in Iowa (with 21% of the vote), is currently polling 2nd in the next voting state of New Hampshire (~20%), and is the only candidate other than Romney with money and campaign infrastructure around the country, some people have started paying attention.

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I believe in free speech. I mean — I really believe in free speech.

That doesn’t just mean that I support Andrew Bolt’s right to say whatever he likes about aboriginals, irrespective of who gets offended. And it doesn’t just mean that I oppose all censorship, such as the banning of Mein Kampf in some European countries. It also means I oppose defamation laws, and I believe you should be allowed to say anything about anybody, whether true or false, for whatever reason. It even means I believe that tobacco companies should be free to advertise.

I believe attempts to limit speech “for the public good” will mostly do more harm than good, and that messy and imperfect freedom is better than neat and tidy (but even more imperfect) government control.

Today I was discussing another of the controversial areas of free speech. Yesterday, that crazy old kook of the blogosphere grumpy-Graeme Bird wrote an eloquent rant aimed at me, where he said:

“He must die. John Humphreys must die so that this country can live.  He has betrayed this country too many times and he must no longer live … This is too important a subject to let John Humphreys live. Where does the lying end. I’m convinced that it only ends when John Humphreys is cold and stiff … HE MUST DIE, FOR THE LYING TO END. AND THIS IS A LIFE OR DEATH MATTER … I am accusing Humphreys of being a knowing traitor … SO MY NEW CLAIM IS THAT HUMPHREYS WILL NEVER STOP LYING. THAT HE WILL NEVER BE A SAFE PAIR OF HANDS. THAT HE WILL ALWAYS BE A TRAITOR. WHILE HE YET LIVES.”

My first death threat. Now I know that I’m important. A few friends have suggested I take it seriously, and one kindly offered to call his federal police friend who would call Graeme… but I nixed that idea. For his part, Graeme says that it is not a death threat because he doesn’t plan on doing any killing himself. That’s good to hear. But another friend pointed out that the above sentiments might still be considered incitement to violence… which got me thinking about free speech.

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Over 60 years ago Hayek wrote “The Road to Serfdom“, which attempted to glimpse into the future of the western world. He predicted that if a country gave over significant control of it’s economy to central planners, then eventually the country would start to drift away from democracy. In the decades that followed, the UK and the rest of the west steadily gave more economic power to government but remained democratic, and so some concluded that Hayek’s predictions of doom were wrong.

Perhaps they were just premature.

Hayek argued that democracy can be slow and messy, but that economic decisions often need to be made quickly and decisively. If the government controls the economy, then the people have a choice between slow and messy economic decisions, or making the government less democratic so that leaders could “get things done”. As we look at the economic problems in Europe and America today, the lessons of Hayek seem very appropriate.

From American towns to the European countries of Greece and Italy, elected leaders are being replaced by technocrats. With growing debt problems, the idea that some Europeans may start to look for a “strong leader” to make “tough decisions” without having to deal with those “meddling and bumbling politicians” doesn’t sound too outlandish. Even in Australia, we have seen one commentator hint at the idea of suspending democracy so that leaders can take strong action.

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At the recent Mises Seminar in Sydney there was a speech by Chris Leithner that explicitly called for the banning of fractional reserve (FR) banking. Leithner and other Australian libertarians (including Michael Conaghan & Benjamin Marks from Liberty Australia) follow the lead of some American libertarians (Walter Block, HH Hoppe, JG Hulsmann — BHH) and argue that FR-banking is fraud and should be banned, and further that it is economically damaging and causes inflation.

These two issues need to be addressed separately. The first is a deontological issue about whether FR-banking is consistent with a free world. The second is a consequentialist issue about whether FR-banking leads to bad outcomes. It is possible that FR-banking is consistent with freedom and yet leads to bad outcomes, and then those libertarians who accept the “non-aggression principle” would have to tolerate FR-banking even if they don’t like those outcomes. But before delving into that debate, it is worthwhile quickly explaining what we are actually talking about with FR-banking.

Vaults, loans & banks

Anything can be money. In jail (and POW camps) cigarettes have been used as money. In the early years of Australian settlement, rum was used as money. In some small island nations, shells have been used as money. Through much of history, precious metals (especially gold and silver) have been used as money. And today, the most common sort of money is “fiat” paper money that is created by government but is intrinsically worthless (ie it has no value except as money). This is not the place to go into a debate about what should be money or who should decide, but the important point is simply that there is some original supply of money that then becomes the standard “unit of account” and “store of value” and “medium of exchange” in an economy. For the sake of this discussion, this original supply will be called “base money” and in Australia it is created by the Reserve Bank of Australia (RBA).

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In November next year, Barack Obama will go up against a Republican candidate for the Presidency of the United States, and defacto leader of planet earth. But before then, the Grand Old Party (GOP) of the Republicans will need to pick their candidate, which involves an eight month marathon of rolling mini-elections in 55 States and territories (including Guam and American Samoa) starting in Iowa on 3 January 2012.

While sane people have been ignoring the political circus, election junkies have been closely watching the long campaign as various candidates have come and gone. At the beginning of the year the pundits pontificated as a string of potential candidates — Donald Trump, Sarah Palin, Chris Christie, Rudy Giuliani, Jeb Bush, Paul Ryan, Mitch Daniels, Haley Barbour, and Mike Huckabee — all opted out of the race. Tim Pawlenty said “yes” then “no”. Tease.

And so when debate season rolled around, the field had been narrowed to a rag-tag bunch of about a dozen, with the most prominent being the millionaire Mormon ex-Governor of Massachusetts — Mitt Romney. From the start, Romney has consistently been 1st or 2nd in national polls among GOP voters with about 20-30% support, and he has been seen as the frontrunner due to his decent polling, wealthy friends, establishment support, and high media profile. The race has then been seen as a contest between Romney and “anti-Romney”, a mythical creature who has so far taken four human forms — Michele Bachmann, Rick Perry, Herman Cain and now Newt Gingrich. Cain has since dropped out of the race.

(Sadly, the self-described vampire Jonathon Sharkey has also dropped out… and the “rent-is-too-damn-high” candidate Jimmy McMillan has failed to get into the early primaries.)

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The Queensland Treasurer Andrew Fraser has recently introduced a private members bill on civil unions for same-sex couples. The debate is ongoing, but submissions to the relevant committee considering the bill closed today. Below is my submission, on behalf of the Australian Libertarian Society.

Submission to the Legal Affairs, Police, Corrective Services and Emergency Services Committee

RE: CIVIL PARTNERSHIP BILL 2011

On behalf of the Australian Libertarian Society (ALS), I would like to suggest that the government does not belong in marriage at all. The debate about how the government should regulate our love lives and our personal relationships rests on the idea that the government should be involved in the first place. That starting assumption is flawed. Love and relationships do not become better or worse because you inform a politician. Few married people conclude that their love is real only because it has been approved by Anna Bligh or Julia Gillard.

A marriage or civil union is an agreement between two people, and the only people who should be able to make that decision are the people involved. So long as the people involved are consenting adults, there is no reason for the government to restrict their right to form a contract with each other. The idea that the government should restrict the basic economic freedom to contract, on the basis that the parties to the contract are the same sex, is a perplexing attack on liberalism and the rule of law.

Ideally, the government should fully deregulate “marriage”. But if the government insists on continuing its weird fixation with documenting our love lives, then at the very least they should conduct their kinky hobby without discrimination. Personal discrimination is necessary and normal in everyday life, but government discrimination should never be tolerated because the government has the privileged position of being able to impose their views on others through force, and without direct consent.

In case this isn’t clear, let me state it simply — marriage should be fully deregulated, but if that is considered “too radical” then the government should at least allow for same-sex civil unions.

Defenders of marriage will rightly say that marriage is traditionally a religious concept. If only it had stayed that way. I suggest that religious groups should be free to discriminate according to their beliefs, just as we all discriminate every day regarding who we date, meet, support, visit, like, etc. However, that discrimination must not be done with the backing of government. Churches should always be free to *not* conduct a same-sex marriage or a same-sex union, but that decision should be left to each church, and not imposed by the government.

Freedom is now considered a quaint concept in most of the western world, including Australia. While political talking heads will argue passionately about how the government should run our lives, most people are genuinely perplexed when they hear the idea that perhaps the government should not run our lives at all. Many people now feel comfortable in their gilded cage, debating about the rules that our “leaders” should impose on us. This letter is in support of civil unions, and to let you know that some of us still believe in human self-ownership and reject the idea of government control of our lives.

You may set restrictive laws if you like. I will consider obeying them. Who is Ron Paul?

Kind Regards,

John Humphreys
Australian Libertarian Society
libertarian.org.au

There is a country in Europe with a federal income tax rate of 1.2% and free trade, recognition of same-sex unions and yet no anti-discrimination legislation, people can own handguns for self-defence, welfare is done at a local level, their leader believes the State should just concentrate on the rule of law and foreign affairs, citizens can veto any piece of legislation with a referendum, local autonomy is so extensive that a local community (about 3000 people) have the freedom to vote themselves independent at any time, there is no standing army, they refuse to join the EU, and have a GDP/person of $134,392. Welcome to the Principality of Liechtenstein — libertarian wonderland.

The debate about mining on agricultural land has long frustrated me. While one side argues to help the “farmers” and the other side wants to help the “miners” it seems everybody has abandoned the most obvious solution — clear allocation of private property rights. As nobel prize winner Ronald Coase explained, conflicts over resources can be solved by allocating private property rights and then allowing trade so that the resources end up going where they are most valuable.

So my suggested approach to the mining/farming debate has been to strengthen the private property rights of farmers so that they have the “right to say no” regarding access to their land. Miners can then deal directly with farm-owners to come to mutually beneficial deals regarding access. Unfortunately, this approach has been ignored by both sides of politics. Until now.

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My carbon tax article in “the drum” in June sparked a lot of debate, with many people angry at my article and a few people saying some nice things. Most of the negative responses were quite dumb and don’t deserve a response, and it seemed that many didn’t read (or at least, didn’t understand) the article before they declared it wrong. But there was a response by “James512″ (20 June 2011, 12:39pm) which deserve a response. I’m going to go back to an old-style blogging technique and “fisk” his comment:

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