Sunday, July 24, 2011

Athletes Shrugged

The state-run broadcaster reported today some incredible news.  In a protest against government interference in their right to freely train and compete, the best winter sports athletes in the world discreetly gathered in British Columbia to hold a competition based on the principles of individual rights.   Athletes called the event the first free competition in over a hundred years.

Downhill ski racer Francisco d’Anconia was interviewed just after he completed the fastest run of the day to take the gold medal.  “I grew tired of participating in events where the prime directive was ‘from each according to his ability to each according to his needs’ and I was forced to give up my spot on the podium to athletes of much lesser ability, poor conditioning and no dedication” said d’Anconia.  “This is the first event in living memory where I was allowed to compete without state officials handicapping my performance so others could have a turn winning.  Today, the outcome was decided objectively by individual ability alone.” 

“It’s not fair!”complained would-be downhill skier James Taggart, who did not participate in the event, to the competition board.  “Just because Francisco has such enormous talent does not give him the right to take first place.  I’m going to take this case to the equalization of athletic rights tribunal and make them take away his medal.  Just imagine if success was only based on individual ability, training and hard work- why it would leave no chance for the rest of us who want to win too” he sneered.

Over in the hockey arena the captain of the team seemingly destined for gold, John Galt, was heard to say “the great athletes of the world are tired of living under the punishing rules set by state bureaucrats who are themselves incapable achieving what these athletes can do.  We realized that principles we had followed all our lives were contrary to man’s nature and have shrugged off the burden of carrying our fellow men on our backs.  We will no longer train with such intensity and dedication for the purpose of placing the less competent on the podium.  We will allow success and failure to be determined by a free market for athletic skill.”

Multiple medal-winner in long track speed skating, former American Dagny Taggart, supported Galt’s position.  “Under a socialized athletic education and health care program I was unable to work with the instructors I wished to hire or find the best trainers and therapists.  I was paying such high taxes for the state-run monopolies I could not afford to also pay for a school of my choice or obtain the fast, affordable and flexible access to health care available in free countries, so my training suffered.  Since I moved to a country where teachers can work as they choose, competing for the best students, and medical professionals are able to choose their own business models, my performance has improved quickly.  Before, I was forced into public training programs where equal opportunity was the rule and when I was injured I had to wait in line to see doctors and therapists who were forced to provide ‘equal’ treatment for people who simply did not take care of themselves.

The outspoken cross-country skier Hank Reardon, who was once taken to court for daring to claim he had a right to earn and keep any medals he won in open competition, declared he wanted to see an end to the massive subsidy programs for sports teams.  “The notion that any particular team is too big to fail is ludicrous!” said Reardon.  If a hockey team has signed contracts giving away the future of the business to its players and the fans are unwilling to buy enough tickets at the prices required to keep the team solvent, then the team must be allowed to close.  If willing new owners can revive the business and operate it without losing money they are free to do so, but this idea of taking money by force from the remaining successful teams that made rational choices and paying those running an irrational business model is sheer lunacy and will only lead to greater problems down the road” said Reardon.  “I trust individuals to choose the ticket prices they are willing to pay and support the team of their own liking.  They have the right to choose their path in life.  Government interference only distorts the entire sports industry!”

Sports Directorate Minister Wesley Mouch criticized d’Anconia, Taggart, Galt, Reardon and the rest of the competitors at this ‘unsanctioned’ event.  “These people have no right to hold their own events and allow a free market for sports ability to determine their winners” he complained.  “They are ignoring the collective principles that hold our society together.  This disproven theory that individual freedom is a good thing will surely fail soon.  People can’t be just allowed to succeed or fail based on arbitrary measures such as ability or intelligence – it’s not sustainable.  Why, these so-called athletes operate as if everyone else did not have the same right to win if they want to.  Everyone knows that NEED is the highest moral standard and that if someone needs to win a gold medal and others must be held back to enable this, then that is the right thing.”

When asked about the comments by Mr. Mouch, John Galt declared “the greatest athletes in the world gathered here have taken a vow.  They have each said ‘I swear by my life and my love of it, never again to sacrifice my training and competitive spirit for the sake of another, and never to allow another to sacrifice his abilities for me.’  In order to live, man must be free to think, act on his ideas and hold onto the product of his efforts.  These are the principles of this event, which we are calling the Reality Games.

Friday, July 22, 2011

Politicized science in Orleans

In an attempt to create fear of the future among adult citizens, Ottawa-Orleans MPP Phil McNeely continues to spread his grossly mistaken version of climate change.  McNeely was quoted in the Star, saying “I have a couple of grandkids and don’t see much of a future for them.” He sponsored a climate change forum for Orleans high school students where he has been trying to create fear in our children and was quoted “The kids are going to suffer in 2030, 2040 and 2050.”  Meanwhile, the Ontario government under the control of his party has implemented a plan to take hard-earned money from innocent citizens, harming the weakest the most, and give it to people willing to implement the politically distorted version of electricity generation, people who will be generally well-off already.  This short paragraph illustrates the damage done by political interference in science, education and the economy.

To gain a basic understanding of the science of climate change McNeely has only to attend a class or two at Ottawa University.  There, students learn of recent research from the scientific disciplines of geology, physics, climatology and mathematics that Earth’s temperature changes with several natural cycles (examples: ocean currents, planetary rotation, solar, galactic) over all time scales.  They will learn how there is no correlation between CO2 and temperature in the last 100 years and how temperature changes precede CO2 changes by an average of 800 years over the last few hundred thousand years.  The world’s top satellite data expert, Roy Spencer’s research shows that cause and effect have been reversed in the minds of most people and that satellite data proves man-made CO2 does not have any dramatic effect on global temperature.  Students may also learn about very recent work using satellite data by researcher Ferenc Miskolczi who identified the equilibrium equation for Earth's gain and loss of heat.  Miskolczi's work shows that when the carbon dioxide level rises then water vapour concentration falls exactly enough so the Earth maintains its energy balance. Thus, even large changes in carbon dioxide will have no effect on the global temperature.

Climate science has been thoroughly taken over by people who feed off money taken from citizens by government.  Some of these people desire to control the lives of others, and often try to create large-scale fear in the public to get people to give in to the control.  Fear of planetary disaster through man-made warming is the clearest example. Socialists who think they know better than you implement thousands of policies that gradually erode your freedoms.  The second group is scientists and their staff who want to work and support their families but rely on government funding instead of a free market to do their research.  Once the power-seekers have taken control of taxpayer funded science, they direct funding to those who will reinforce their point of view and block contrary finding and a dogmatic bureaucracy becomes entrenched.

When power-seekers can’t get adults to react enough to suit their liking, they go after the children.  Since government has gradually assumed control over most of the nation’s education, it is quite easy to change the curriculum to introduce a particular political agenda.  By assembling students and placing a politician (himself) who knows almost nothing of the science in a position of authority, MPP McNeely takes the final step in replacing science with political dogma – a fear-induced frenzy in our children about a non-existent threat.

Meanwhile, out in the real world, government force is implemented in the economy.  Just look in your newspaper for ads about a new Ontario government program that will give money to people who install solar electric panels at ten to twenty times the going rate for electricity while making everyone else pay for it.  Obviously, if solar power was economic then people would use it of their own free will with no government force needed.  Since it is non-economic, the price difference is pure economic waste – electricity that could be produced at far lower cost but is not.  Those most harmed are the poor, for whom electricity is an essential and significant part of their budget.  Of course, since power is used to produce everything, the price of everything will rise.  This is most clear in developing countries, where environmentalists using political force have blocked the construction of hydro and coal powered electrical generation, leading to the continuation of hunger, sickness and death for millions of human beings.  People who have freely chosen against solar power are being forced to use and pay for it by the very people they once to elect to protect their freedom to choose – a clear perversion of the purpose of government.

What is needed to eliminate the problem of the politicization of science, education and the economy is not simply a replacement government with slightly different ideas about how to control your life, but a government willing to return to its moral and proper role: the protector of individual rights through objective law, the police, the courts and the military.  What we need is a change from various collectivist philosophies to one based on individual freedom.

Wednesday, July 20, 2011

Fatally conceited

When the Ontario government delivered its budget it plans deficits for the foreseeable future (at least eight years) and thus offers not even a glimmer of hope.  Eight years is two full election cycles and is about the same length as the average economic cycle.  We will likely have another recession by the time Ontario proposes to balance its budget, and then the government will say they need to run deficits again to “stimulate” whatever parts of the economy they have left standing.  What exactly is wrong with our governments?

The problem is one of philosophy, two branches of which are politics and economics.  Philosophy asks the biggest questions about topics like the nature of existence and what is right for man’s life.  Politics narrows this down to ask “what is the right way to govern a society?”  Economics asks “what is the right way to exchange values between people?”  The massive problems we face in these areas are because all our politicians have the wrong answers to these questions and thus demonstrate an improper philosophy.

I have only heard a few elected politicians who do not espouse the fatally conceited view that things can be made better in society if only government can force “correct” political and economic views on enough citizens.  They don’t recognize their ideology as such, but their words and actions prove it is so.  These power-hungry people honestly believe they know better than you do how you should run your life and so proceed to invent hundreds of thousands of rules to control your behavior.  The idea that people left to make their own decisions are capable of cooperation to achieve their goals in life is inconceivable to them. They see the complex interactions of millions of free people as chaotic and lacking structure, so they proceed to force their own vision of structure on the people.  Thus we have extreme examples such as near-monopolies in much of the health care and education sectors that eliminate many of the rights of patients, doctors, students and teachers alike.  Even a very traditional business such as dairy farming is cornered by myriad rules and regulations.

Running a country and an economy from the top down requires omniscience.  How can a politician know how to instruct a bureaucrat to direct a manufacturer to make a certain number of a particular type of widgets or to make them more efficiently or change their features?  And when the number of widgets change and the population adapts their preferences slightly, how does the central planner know how to change the production of all other goods and services?  Since there is no way to do this, all centrally planned economies fail and their countries go bankrupt to the degree they engage in such ridiculous schemes.  The largest examples of central planning failures are Russia and China, with North Korea being the prime example these days.  Starvation, deprivation, degradation and misery are the norm, except of course for those few at the top who plunder the country and its people.

What is the right way to govern a society and exchange values among people?  Man’s mind it his means of survival and to properly use it he must be free to think, free to act and free to keep the product of his actions.  Therefore, in a free country the rights and freedoms of each individual are protected by objective laws enforced by government.  No one sacrifices his interests to others and neither does he ask others to sacrifice their interests for his sake.  Agreements such as employment, exchange of goods and services and all other sorts are all formed only through voluntary cooperation.  All wealth is obtained, retained and exchanged through freely chosen agreements.  This system of government based on the primacy of individual rights is known as capitalism.

Examples of the failures of central planning abound in our lives.  The Ontario government feeds growing legions of more dissatisfied and disabled civil servants high wages on the back of the part of the economy that remains free.  Central plan after central plan to “save health care” (as if more government is the answer) swallows up ever-growing dollars yet the state-run industry remains in a condition of constant pain and strain; this with the baby boom not yet exerting more than a minor push on demand.  Centers of excellence exist despite government interference and not because of it.  The City of Ottawa is pathologically incapable of deciding if a fiberglass cow should be allowed on the roof of a cheese store, never mind running a massive bus transit business.  The current federal government purports to be in favor of individual rights and a free economy yet has expanded the maw of government more than anyone else.  All of them - elected parties, MP’s, MPP’s and city councilors - are philosophical collectivists who advocate passionately to preserve and grow their right to control your life.

There is no elected party whose platform is based on the philosophy of individual rights and consequent freedoms.  All of them are socialists because they believe in and act upon the principle of state control of the means of production and the removal of individual rights needed to implement such a regime.  It is very difficult to change such an entrenched philosophy since our teachers are unionized, work for the government and the principles of a free society are not taught in our schools.

By the end of 2011 we will have seen another civic and provincial election and federal election in one year.  Once again we have a chance to vote for representatives who can promise either to continue and increase government interference in our lives or to start the process of dismantling the apparatus of central controls.  What is needed is to introduce the principle of a free society into the political debate.  While it is but a distant hope, imagine if we saw even one city councilor elected on such a platform - perhaps the word could spread from there.

Monday, July 18, 2011

Force and power in our schools

The Ottawa Carleton District School Board (OCDSB) entered into agreements under the Ontario Power Authority’s (OPA) renewable energy feed-in tariff program.  The program pays participants for electricity they provide to the power grid through means such as roof-mounted photovoltaic (PV) panels.  My cottage is on an island off the electrical grid and I have been a PV system owner and user since 1992, so I have a fair understanding of the benefits and drawbacks of solar electric panels.  I believe that as technology advances such panels will one day generate a significant percentage of the electricity used in Ontario.  However, that day is likely twenty years away and the OCDSB and OPA schemes are wrong in science, economics and principle.

The science of photovoltaics is advancing like most technologies do, in the shape of an S-curve (see the curve for broadband penetration below).  In the innovation phase the product is very expensive and few people use it.  If it achieves mass market viability and passes 10% adoption, there is a rapid growth phase where the costs decline rapidly and adoption by users rises rapidly.  In the maturity phase, most of those who will adopt have already done so and incremental improvements are the hallmark.  Photovoltaics are way below the 10% market penetration level because the technology is still primitive.  There is a great deal of research being done and some researchers hope to double the efficiency of panels in the next several years.  A true breakthrough would be a method of producing much more efficient panels from common, inexpensive materials.  Some envision a flexible roll of material as cheap as roof shingles that could cover the roof of every home.  Alas, we are still a long way from that, and according to the S-curve the cost of power from solar panels will reach par with conventional sources in about 2030.  From a scientific angle we have a long way to go and installing panels on schools teaches students that the current state of scientific fact is secondary to the wishes of social engineers.

Science leads me to economics: since the technology is still so primitive, conventional methods of producing electricity are far more economical than using PV panels.  Solar panels suffer from the major weaknesses of inefficiency (commercial panels have 10% to 20% energy conversion efficiency) and inconsistency (only produce when exposed to sunlight).  Under the OPA micro-fit program people who produce electricity from PV panels will be paid about 2,000% more than the normal electricity price.  If your usual electrical bill is about $150/mo and you had to pay the rate that PV users will be paid, your bill would be $3,000 per month!  To the government’s surprise, offering to pay people twenty times the going rate has motivated thousands to install panels on their roof.  The money used to pay the solar producers must first be taken from the general population, so the people who can see that solar power is economically irrational and have chosen not to use it are being forced to pay the people who see a way to take advantage of their fellow citizens using the power of the state.  This teaches students that government is a tool to be used against citizens for the benefit of those who can manipulate political power.

Both science and economics are a part of philosophy, our method of identifying reality and determining good from bad.  The decisions of the OPA and OCDSB are not only based on flawed science and irrational economics but depend on actions that violate the individual rights of citizens and so are wrong in principle.  The OPA itself was created because government dictated so, not because the market asked for it through the freely chosen demand of customers.  Of course, the same applies to the OCDSB monopoly.  The program to pay people irrational amounts of money for primitive technology could only be created by the use of government force against citizens.  With the freedom to choose, you would never start up such a business with your own money; or if you did it would quickly die from massive financial bleeding.  When the OCDSB states that their use of the OPA program will eventually generate over $1 million of revenue per year they are technically correct, but conveniently ignoring the fact that this money is taken from Ontarians helpless to choose if they wish to support the plan.  In other words, it is a fully-baked tax increase.  For a price 20 times lower the OCDSB can be supplied with the same energy.

Thus, our students see by example that it is right for one government monopoly (Ministry of Education) to adopt the non-scientific program of another government monopoly (OPA) to implement the irrational whims of those who hold political power (MPP’s) over the lives of citizens.  When children are taught that scientific principles are to be ignored when reality is inconvenient; taught that economic facts are to be overridden by political pressure groups; and taught that the rights of citizens to pursue their own goals and make their own decisions in life free of state interference are subjugated to any transient political wish, it is no wonder they often grow up with little knowledge of science, economics or philosophy.

Saturday, July 16, 2011

I am not my brother's health care keeper

The sustainability of socialized health care in Ontario was in the news when the TD Bank released a study.  Every year government spending on health care increases more than revenues and this single social program now consumes 46% of Ontario’s budget.  Ontario is already planning to run a deficit for the next eight years – even as the health care crunch is just starting.  Imagine when the crunch is in full force!

Ontario has a baby boom generation that is much bigger than the older and younger generations.  The front edge of the baby boom has not even begun its period of heavy demand for health care.  The lead edge of the baby boom was born at the end of World War II and is now just over 60 years old.  Health care spending increases from only about $3,000 per year at age 60 to $15,000 per year (and growing) over the age of 80.  In the next 20 years the number of seniors over the age of 75 will double.  Do the math – the existing system cannot survive the coming demand and very large changes will have to come.  Without a change of philosophy either costs will skyrocket and cannibalize other programs or service quality will greatly deteriorate.

In the existing system of central control doctors and hospitals are paid a fixed amount per service provided.  Because patients are granted a “right to health care”, they can go to a doctor as frequently as they want and can consume unlimited amounts of money in the process.  If health care is a right, then who is to decide how much money should be spent saving a life – is $100,000 or $500,000 or $1,000,000 or more the right amount?  There is actually no limit.  In this system the last months of life consume vast amounts of money prolonging life by only short amounts of time.  The very old consume a large part of the limited funding that could otherwise be used to improve the lives of many more people, but because the system is socialized and their condition is life-threatening they can demand that such sums be spent.  This system creates a war between the sick and the healthy.  The sick people demand money for health care as a right that must be paid by others – the non-sick.  What a perverse morality is socialism! 
The TD authors point out that “paying for each service provided by the physician leaves little incentive to appropriately weigh the costs of procedures against their potential benefits. More­over, the physician has no incentive to consider how his or her actions in providing care for this patient will affect the care other patients receive and there are few mechanisms in place in order to effectively enable physicians to consider the cost-effectiveness of treatment decisions.”  They continue by recommending a
diagnosis-related group-based payment system” wherein “hospitals are reimbursed for the episode of care with which the patient is admitted and with the rate based on the type of service performed and the estimated cost of treatment per diagnosis fixed in advance. Payment is tied to an evaluation of the appropriate cost of the service and payments are for full episodes of care and not individual services performed.

Consider the implications of such a policy for the hospital. You arrive in the emergency with symptoms of a dangerous condition.  The hospital knows that if the condition is formally diagnosed then they will receive a fixed dollar payment based on average costs.  Initial tests are done but the doctor believes you would benefit from further testing, which is expensive.  He also knows that if he runs the test then the hospital will lose money on your treatment.  He requests permission of an administrator who decides the test may not be medically necessary and asserts that the doctor cannot be certain it will be helpful.  After all, lots of patients don’t have the test.  Besides, the supply of test equipment a lab time is limited and the administrator has a budget to keep.  If the hospital can spend less than average on you it makes a profit and looks good to the government regulators.

What about the implications for the doctor?  He knows there is more he can do to help you but he is restrained by the system from providing further help.  It is against the law for him to provide further services to you even if you wish to pay for his help.  The procedures he must follow are dictated by the policies of government regulators and hospital bureaucrats.  He is forced into a position that makes him choose between the evil of denying you further treatment or facing penalties by the administration.  His right to choose patients and treat them as he and the patient see fit has been removed.

What about you, the patient?  You are given the treatment based on partial information, never knowing that further tests could have helped, or even if you did know and want the tests you are not permitted to pay for them since your treatment is based on the principle of “universal access” and you have no right to choose your own tests or treatments unless the hospital administrator allows them.  In the name of universal access most of your rights have been forcefully removed.

If the current system of paying doctors by the treatment is severely broken and a system of payment by diagnosis will create perverse effects, then what are we left with?  The rarely discussed alternative is to implement truly free health care.  No, not the kind you don’t have to pay for, but one where all use of government force against patients, doctors and hospitals is removed.  Call it a liberated health care, just like prisoners of socialism become liberated when their country is freed or they escape to a more free country.  In a free country each individual is responsible for his own life and all the decisions he makes.  Every doctor is free to study as he wishes, build whatever practice he wishes, see the patients he wishes and charge any price he wishes.  Every hospital is free to stay small or become as large as its owners wish, build any facilities they wish, specialize in any area they wish, accept all the patients they wish and charge any price they wish.  And they all compete with each other to do the best job at the lowest price – that is the only way any business can survive more than a short time.

A free market is how things work in areas like dental medicine, chiropractic medicine, physical therapy, laser eye surgery and the few other parts of health care that remain relatively free from government control.  What has happened in these areas of health care?  Innovation is the rule not the exception.  Technology improves at a rapid pace and is quickly implemented or the practitioner loses patients or money.  Treatments become more effective and usually at a lower cost.  A shortage of professionals is almost unheard of and gaps are quickly filled by professionals who identify the opportunity.  New offices spring up wherever neighborhoods are built.  Patients are allowed to choose any professional they want and negotiate a mutually satisfactory deal.  No one has the right to force patients to accept only the government approved treatments or to force doctors to accept patients they do not wish to work with.  Professionals who are highly productive are rewarded financially to the exact degree their patients are satisfied. 

Individuals could choose to save for their future health care costs or more likely buy insurance, which would be available from any company wanting to be in the business and able to sustain its business model for the long term through satisfying its customers’ needs and wants.  If they choose not to do so, individuals must face the consequences of their choice: they cannot afford care or they must depend on the charity of others.  That is a system of true justice because it corresponds with the facts of reality and not the imagined “rights/whims” of people who would take health care from others by force.

Thursday, July 14, 2011

Politics and Potash

There was been a hue and cry over a recent bid by Australian-based company, BHP Billiton, for the Potash Corporation of Saskatchewan.  Saskatchewan Premier Brad Wall, Ottawa investment guru and CFRA radio personality John Budden and National Post columnist Diane Francis have typified this and said the Government of Canada should step in and prevent foreign companies from buying a majority share in certain Canadian companies they refer to as assets of “strategic national interest”.  While this is all too typical thinking, it is in fact a violation of the rights of all Canadians – those who own Potash shares and those who do not – and of non-Canadians who would like to invest in Potash shares.

People who push for interference in the sale of Potash shares are asking for government to use force against its citizens who own Potash shares by forbidding them to sell to the buyer of their choice.  In a free market, transactions only take place with the mutually beneficial agreement of both the buyer and seller.  Unless the price is high enough for you as a seller to judge you are getting full value, you do not sell.  Unless it is low enough for you as a buyer to judge you are getting a bargain you do not buy.  When governments protect individual rights neither buyers nor sellers are unhappy with their transactions.  By forbidding the sale/purchase of certain shares the state is forcing some people to own them and forcing others not to own them.  The rights of both sellers and buyers are violated by such initiation of force.

Exactly what companies represent a “strategic national interest”?  Typically, companies that are resource-based such as the former cases of Inco and Stelco and the current Potash Corp. are identified.  The argument is that resources must be controlled only by Canadians so “we” can decide on employment policies, extraction methods, etc. because “we” care more about Canada than “they” do.  The belief is that “we” protect our access to these resources by having a controlling interest in the company.  Such arguments are invalidated by at least three important reasons.

First, we must identify who is meant by “we” and “national”.  The unstated assumption is that these words refer to Canadians, but then that should mean all Canadians, not just those in Saskatchewan, Ontario or anywhere else.  It should certainly not divide Canadians according to who does or does not own shares of Potash Corp.  Is it possible for any business decision to be agreed upon by all Canadians and would it matter?  Those advocating government interference in a transaction want the wishes of those who DO NOT own shares to override the free choices of those who DO own them, a perverse perspective.  If the share owners believe it is in their best interest to hold, they can certainly do so.  Regardless of whether they judge it is in their best interest to sell, they are the most affected “we” part of the “national” population.  If they sell shares no one else’s rights are violated.

If someone from Vermont or Illinois buys your shares, he can only do so if you agree with his price.  As a willing seller, by definition you have a better, more strategic interest in selling than holding. You may wish to buy a different company, spend it, donate it, deposit it in a bank or anything else with YOUR money. It is immoral for a government or anyone else to prevent you from selling YOUR shares. If I wish to buy your shares, I only need to put my money on the table and outbid others. Second, we must identify what is meant by the “interest” portion of “strategic national interest”.  The potential list is all Canadian-based companies.  Of course, there are many foreign companies more important to Canadians than many Canadian companies.  Microsoft has an important role in the functioning of most businesses and all governments in Canada.  Canadians certainly have a tremendous interest in seeing that Microsoft continues and improves its business, yet Canadians don’t control the company unless they own voting shares.  If you have an interest in selling your Potash shares because you have another use for your money, nothing prevents you from buying them back at a later date after you have made more money.  The unstated fact is that people who advocate for the “national interest” advocate for the violation of the rights of those actually involved in the decision, the buyers and sellers.  The market is a place where people like you use their own rational judgement for their own purposes. It should not be a place where interest groups tell you what you have to do or not do. Third, who is to decide which companies are “strategic” and will see the rights of shareholders violated and which companies will be free to determine their own path?  The government decided two bankrupt auto companies (GM and Chrysler) were of strategic interest in 2008 and took possession of the entire companies. What about companies that are not so poorly run as to go bankrupt but instead are highly successful such as Potash Corp. or Research in Motion in Canada or General Electric, Wal-Mart or Microsoft in the United States?  If such rules can be made about share ownership of terrible businesses can they also be made for excellent ones?  Since we have such rules already, the question is rhetorical.  What about companies that are privately owned instead of traded on a stock exchange?  Can they be controlled by government too?  Since there can be no objective definition of a thrice-flawed term like “strategic national interest”, it has whatever definition the party in political power gives it - and it changes all the time.  It is a meaningless anti-concept designed to camouflage the violation of rights using a nice-sounding term.

Who is to decide which individual shareholder rights will be violated by blocking a sale? Who decides which companies are strategic and overrides the opinions of others.  Who decides what is of national interest?  The people best suited and the only people morally correct to decide these questions are the ones who have put their decision-making ability on the line and risked their own capital by investing in the company, the people who own or wish to own the shares.  Who can say with certainty that you will not make more money elsewhere and bring better "strategic value" to Canada by selling instead of holding, although the question itself shows the absence of a proper morality based on individual rights.  Even if someone else is proven correct with time, it is your life, your money and your right to choose how you use it.  Those who would stop you are anti-rights, anti-freedom and anti-life.

A thought for your pennies

The Senate finance committee recommended that the federal government remove the penny from circulation.  It now costs more to produce the penny - about 1.5 cents each - than the coin's actual face value.  Since they have so little value, Canadians hoard pennies instead of spending them - an average of 600 coins per person across the country are floating around.  At first glance, this seems to be a sensible move, but have you ever thought about how our penny came to be worthless in the first place?

In a free economy, productivity increases steadily as people invent better ways of producing everything.  The philosophy of individual freedom born in the enlightenment led to discoveries in science and these were converted into practical applications by the businessmen of the industrial revolution. For decades, energy became more accessible, the cost of food became more affordable, housing quality improved, transportation expanded, health care became more obtainable and the ability of humans to shape their environment in better ways improved the quality of life more than in all preceding history combined.  A penny was made of copper and held an objective value that bought more and more goods and services for citizens of the freest countries.  “See a penny, pick it up, and all day long you’ll have good luck” made sense to people.

Why is a penny no longer considered worth keeping?  Look back to the 1930’s when disastrous government policies led to a rapidly rising government debt.  The government wanted to devalue the currency to pay back its foreign debts - effectively cheating the investors who had loaned the money.  The Bank of Canada was created by an act of parliament in 1934 and in 1938 was made a crown corporation, wholly owned by the government.  Since then, successive governments have borrowed and spent money in a vain effort to implement socialism to create their desired economic outcomes. 

Look at the graph of the value of a dollar from 1914 (as far back as the records of Statistics Canada show it) until 2009.  The start of this period begins with the currency debasement (inflation) of World War 1 but was followed by a period when the purchasing power of money rose over a 15-year period.  Since the creation of the Bank of Canada, the Canadian dollar has lost purchasing power every single calendar year except 1953.  The total effect is that an item with a price of 4.5 cents in 1934 now costs one dollar.  The converse of this is that a dollar has lost 95.5% of its value.

These days, as evident notably in the 1930’s and 1970’s, governments of all levels have borrowed money to bail out failing companies, pay for make-work projects and expand social programs.  Now, as then, these efforts are destined to fail as they pour resources into inefficient and even wasteful central planning that has never worked and cannot compete with the free market.  To make central planning work requires omniscience, and it should be clear to the casual observer that our politicians and bureaucrats are a far cry from that level of capability.  Year after year, decade after decade, government interference in the economy has proven to be needlessly wasteful and slows the rate of progress.  Just try placing the words “government” and “productivity” or “innovation” in the same sentence and see how many great results spring to mind.

Observe the current shining example of Premier McGuinty’s effort to implement his version of “green” power that is causing skyrocketing prices for energy (and consequently everything else) while lowering the standard of living for millions of Ontarians.  What incredible conceit it takes to think his ideas can produce power better than the combined cooperative efforts of all citizens of Ontario and Canada. To save us from our apparent ignorance, he is borrowing tens of billions in our name and torturing the energy market towards the shape he wishes it to take.  Vast and enduring inefficiencies are being entrenched in our electrical infrastructure – pain that will be felt for decades.  The fearful alternative is apparently the end of the world as we know it: death by plant fertilizer, also known as carbon dioxide.  It is destructive actions such as this that debase our currency and have led to the almost complete loss of value of the Canadian dollar, never mind the poor penny.

In tin-pot dictatorships the currency is regularly destroyed by political interference in the economy.  We may not be in as bad a condition as Zimbabwe with its recent issue of $100 Trillion dollar bills (that’s a number one followed by fourteen zeros), but we are afflicted by the same problem – people believing they know best how to run your life and using the weapon of state power to do just that.