…of bank$ter$, government$, fine$ and the mulberry bush.


Here we go round the mulberry bush, the mulberry bush, the mulberry bush…

The bank$ loan money to governments so that the governments can govern.

If the governments default they’d be bankrupt.

The bank$ play dirty game$ and get caught with their finger$ in the jar.

The mother bank$, or the governments will punish and fine the naughty bank$

When the bank$ got into trouble the governments bail them out with the money the bank$ loaned them so that the bank$ could remain giving them loan$.

Can somebody tell me who created the mulberry bush??


ST

US Fed fines Deutsche Bank US$156.6m for forex violations

Deutsche Bank US


CNBC

7 years on from crisis, $150 billion in bank fines and penalties

cnbc

…and the list goes on round the mulberry bush.

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The most destructive and murderous actions in history were carried out by governments.


FEE

It Takes a Government to Do an Auschwitz

The title of this post is a sentence from Matt Ridley’s recent speech at the Association for Private Enterprise Education in Maui, Hawaii. His speech was excellent, by the way.

The statement is a good reminder that the most destructive and murderous actions in history were carried out by governments.

I wrote something along the same lines in my book The Joy of Freedom: An Economist’s Odyssey. In Chapter 7, “Free Markets versus Discrimination,” I wrote:

Government use of force against ethnic groups is far more effective than private use of force against these same groups. I remember that when I first heard about Hitler at about age eight, and asked my mother who he was, I was told that 15 years earlier he had used tanks and other weapons to try to take over the world. I pictured a nut with some tanks he had bought coming down our highway and invading our small town in rural Canada. I didn’t understand at the time why Hitler was such a threat; I had been raised to believe that the police would protect us. Imagine the shock and sudden surge of overwhelming fear I had when, years later, I learned that Hitler employed the police and, indeed, ran a whole government. That was scary. Even as a child I knew that the government, any government, had more power than anyone who was not in the government, and that when the government passed and enforced a law, you couldn’t legally fight back. That’s when the true terror of Hitler dawned on me.

Addendum: here’s a review of Ridley’s The Rational Optimist that I wrote in 2010.

Republished from the Library of Economics and Liberty.

 

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The Income Tax Implies that Government Owns You


“…what more is necessary to make us a happy and a prosperous people? Still one more thing, fellow citizens a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned.” – Thomas Jefferson (1801)


FEE

Jeffrey A. Tucker

The income tax is enshrined into law but it is an idea that stands in total contradiction to the driving force behind the American Revolution and the idea of freedom itself. We desperately need a serious national movement to get rid of it – not reform it, not replace it, not flatten it or refocus its sting from this group to that. It just needs to go.

The great essayist Frank Chodorov once described the income tax as the root of all evil. His target was not the tax itself, but the principle behind it. Since its implementation in 1913, he wrote, “The government says to the citizen: ‘Your earnings are not exclusively your own; we have a claim on them, and our claim precedes yours; we will allow you to keep some of it, because we recognize your need, not your right; but whatever we grant you for yourself is for us to decide.”

He really does have a point. That’s evil. When Congress ratified the 16th Amendment on Feb. 3, 1913, there was a sense in which all private income in the U.S. was nationalized. What was not taxed from then on was a favor granted unto us, and continues to be so.

This is implied in the text of the amendment itself: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

No Limits

Where are the limits? There weren’t any. There was some discussion about putting a limit on the tax, but it seemed unnecessary. Only 1% of the income earners would end up paying about 1% to the government. Everyone else was initially untouched. Who really cares that the rich have to pay a bit more, right? They can afford it.

This perspective totally misunderstands the true nature of government, which always wants more money and more power and will stop at nothing to get both. The 16th Amendment was more than a modern additive to an antique document. It was a new philosophy of the fiscal life of the entire country.

Today, the ruling elite no longer bothers with things like amendments. But back in the day, it was different. The amendment was made necessary because of previous court decisions that stated what was once considered a bottom-line presumption of the free society: Government cannot tax personal property. What you make is your own. You get to keep the product of your labors. Government can tax sales, perhaps, or raise money through tariffs on goods coming in and out of the country. But your bank account is off-limits.

The amendment changed that idea. In the beginning, it applied to very few people. This was one reason it passed. It was pitched as a replacement tax, not a new money raiser. After all the havoc caused by the divisive tariffs of the 19th century, this sounded like a great deal to many people, particularly Southerners and Westerners fed up with paying such high prices for manufactured goods while seeing their trading relations with foreign consumers disrupted.

People who supported it – and they were not so much the left but the right-wing populists of the time – imagined that the tax would hit the robber baron class of industrialists in the North. And that it did. Their fortunes began to dwindle, and their confidence in their ability to amass and retain intergenerational fortunes began to wane.

Limit to Accumulation

We all know the stories of how the grandchildren of the Gilded Age tycoons squandered their family heritage in the 1920s and failed to carry on the tradition. Well, it is hardly surprising. The government put a timetable and limit on accumulation. Private families and individuals would no longer be permitted to exist except in subjugation to the taxing state. The kids left their private estates to live in the cities, put off marriage, stopped bothering with all that hearth and home stuff. Time horizons shortened, and the Jazz Age began.

Class warfare was part of the deal from the beginning. The income tax turned the social fabric of the country into a giant lifetime boat, with everyone arguing about who had to be thrown overboard so that others might live.

The demon in the beginning was the rich. That remained true until the 1930s, when FDR changed the deal. Suddenly, the income would be collected, but taxed in a different way. It would be taken from everyone, but a portion would be given back late in life as a permanent income stream. Thus was the payroll tax born. This tax today is far more significant than the income tax.

The class warfare unleashed all those years ago continues today. One side wants to tax the rich. The other side finds it appalling that the percentage of people who pay no income tax has risen from 30% to nearly 50%. Now we see the appalling spectacle of Republicans regarding this as a disgrace that must change. They have joined the political classes that seek advancement by hurting people.

The Payroll Tax

It’s extremely strange that the payroll tax is rarely considered in this debate. The poor, the middle class and the rich are all being hammered by payroll taxes that fund failed programs that provide no security and few benefits at all.

It’s impossible to take seriously the claims that the income tax doesn’t harm wealth creation. When Congress wants to discourage something – smoking, imports, selling stocks or whatever – they know what to do: Tax it. Tax income, and on the margin, you discourage people from earning it.

Tax debates are always about “reform” – which always means a slight shift in who pays what, with an eye to raising ever more money for the government. A far better solution would be to forget the whole thing and return to the original idea of a free society: You get to keep what you earn or inherit. That means nothing short of abolishing the great mistake of 1913.

Forget the flat tax. The only just solution is no tax on incomes ever.

But let’s say that one day we actually become safe from the income tax collectors and something like blessed peace arrives. There is still another problem that emerged in 1913. Congress created the Federal Reserve, which eventually developed the power to create all the money that government would ever need, even without taxing.

For the practical running of the affairs of the state, the Fed is far worse than the income tax. It creates the more-insidious tax because it is so sneaky. In a strange way, it has made all the debates about taxation superfluous. Denying the government revenue does nothing to curb its appetites for our liberties and property. The Fed has managed to make it impossible to starve the beast.

Chodorov was correct about the evil of the income tax. Its passage signaled the beginning of a century of despotism. Our property is no longer safe. Our income is not our own. We are legally obligated to turn over whatever our masters say we owe them. You can fudge this point: None of this is compatible with the old liberal idea of freedom.

You doubt it? Listen to Thomas Jefferson from his inaugural address of 1801. What he said then remains true today:”…what more is necessary to make us a happy and a prosperous people? Still one more thing, fellow citizens a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned.”

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A robbery by any other name


How Governments Justify Theft is a Fallacy: Wealth Was Created before Taxation

TheDailyBell

Do we owe society taxes?

Tax day is tomorrow. Some people get excited because they will get money back which the government withheld–a clever trick that makes people feel less oppressed and plundered by filing taxes.

Something the regressive left likes to say is that taxes are justified because of the infrastructure of society, provided by the government, makes all earning possible. It is, therefore, only fair to share some of that wealth to continue funding the common property. They say the rich would never have gotten rich without government provided services, and that is why they owe the government.

An up and comer on the left who we will unfortunately not stop hearing from anytime soon has weighed in on why we owe taxes to society. This is an old but relevant quote since progressive champion Elizabeth Warren will probably be a White House contender soon enough. While running for Senate she said:

There is nobody in this country who got rich on his own. Nobody! You built a factory out there, good for you, but I want to be clear, you moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces the rest of us paid for. You didn’t have to worry that mauraduing bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did… But part of the underlying social contract is that you take a hunk of that, and pay forward for the next kid that comes along.

I think she slipped up there. Do you see it? Warren says that if the government didn’t provide security for the factory, the business owners would have to “hire someone to protect against” marauding bands. And she is correct in that.

What she leaves out is that their money is already stolen to pay for the police. So why on earth would they say no thanks to a service for which they were forced to pay? (Well, I guess because the police do a terrible job. Most factories do in fact hire their own security in addition to the police that “the rest of us” paid for.)

And this is the whole issue: Which came first, the government or wealth?

Clearly, a business first has to have money in order to be taxed. And it makes sense to think that since the infrastructure already exists, it helps people to earn money. And it does, but it was all paid for first by privately produced wealth.

Think about it, the very first tax payers were farmers that were conquered by herders and forced to pay a share of their yield to the nomadic invaders. The herders realized they could make this a regular thing if they didn’t murder all the farmers, and thus government was born.

Not murdering the people was the first service which government ever provided. Boy, are we lucky to have them!

Ironic that Warren says taxes are paid to basically prevent from happening the very thing which began the existence of government. It was extortion from the very beginning. The farmers paid protection money to their government.

Who was the main threat? The government. The mafia does the same thing.

But looking at the first taxpayers shows that they necessarily had to have earned something and created wealth before they were taxed on it.

And this means we are building on a stolen foundation. It means we didn’t need the government to make wealth creation possible in the very first place. Based on the very function of government, which only came into existence after the first farmers had created wealth, this proves that it is possible to create wealth without that magnificent infrastructure for which “the rest of us” paid.

Warren said it herself when she admitted the factories could simply purchase their own protection. But what they are really paying for, is protection from the people they are paying, the government.

So is taxation the price we pay for the society government has built around us? Without a doubt, certain things taxes pay for are used by everyone living in society and thus contribute to business, like roads for shipping.

And even though the government is used to providing these things, the question remains are taxes what we owe to society for the opportunity to do business? Or did wealth have to be created first before taxes could be paid?

Justifying the Upward Redistribution of Wealth

Everything government does is done with tax dollars, therefore first something of value had to be created before they could tax anything.

So then why do people argue that we owe the government taxes because they have made everything we earn possible?

We wanted to add a Bernie Sanders quote since he was vocally against the wealthy. He is one of the most powerful U.S. Senators at this point, with his unspent war chest of individual campaign donations, and an army of useful idiots.

But it turns out the man said remarkably little for how much he talked. It was all catch phrases and the same repeated lines about how immoral it is to be wealthy. The rich need to pay their “fair share” he says, but that doesn’t actually answer the question of why anybody should have to pay taxes. We all need to be robbed equally?

There are certain ways to become wealthy which are immoral, such as securing government contracts, government bailouts, government grants, government loans, and government subsidies. But Bernie’s support for higher taxes would only exacerbate that upward transfer of wealth.

Sanders actually never tried to justify why the rich owe taxes, his only criticism seemed to be that they were wealthy. He repeated over and over that they basically stole this wealth from the middle class, but offered no real examples other than the Wall Street bailouts (which yes, were theft on their part, but again that was a government transfer of wealth, which giving the government more power would only increase).

Turns out what Bernie was doing has been done since the beginning of government. Jared Diamond explains the origins of Chiefdoms in his book Guns, Germs, and Steel:

These noble and selfish functions are inextricably linked, although some governments emphasize much more of one function than of the other. The difference between a kleptocrat and a wise statesman, between a robber baron and public benefactor, is merely one of degree: a matter of just how large a percentage of the tribute extracted from producers is retained by the elite, and how much the commoners like the public uses to which the redistributed tribute is put…

Make the masses happy by redistributing much of the tribute received, in popular ways. This principle was as valid for Hawaiian chiefs as it is for American politicians today.

Clearly, Bernie is a big fan of the redistribution method; his free college proposals sound pretty good to his young target demographic.

So basically, these “progressive” stars are actually regressing to the oldest forms of government which always looted and tricked the masses into supporting their power grabs and wealth confiscation.

The government didn’t create the wealth in society, and they didn’t even make that wealth creation possible. They simply stole the wealth that others created and redistributed it in obvious and popular ways. They monopolized mechanisms like roads and security in order to make it seem like the government is the only method of laying the infrastructure to create wealth.

But clearly wealth came before taxation, otherwise, there would have been nothing to tax! The premise of their justification for theft is a fallacy.

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23 Ways Big Government Is Hurting the Poor


-ditto- Malaysia❗️

FEE

Advocates for big government often equate expanding government with concern for the poor. But reality speaks to the contrary: Expanding government often has very harmful effects on the poor.

This reality is precisely what is addressed in a forthcoming special report from The Heritage Foundation, “Big Government Policies That Hurt the Poor and How to Address Them.”

Rather than looking at welfare policy—a usual focus of analysts when discussing policies that impact the poor—the report focuses on economic policy, including regulation.

The authors identify 23 policies and provide concrete solutions that would allow those struggling financially to have more opportunities and a higher standard of living. As indicated in the report, these policies are just the tip of the iceberg.

The authors found three recurring themes that marked the policies they identified:

1. Cronyism

A significant number of the policies are classic examples of cronyism. It’s quite illuminating how government policies supposedly designed to protect allegedly vulnerable workers or consumers wind up, in reality, helping dominant producers or politically favored special interests.

2. Disproportionate Impact on the Poor Through Artificially High Prices

Many of the policies identified drive up consumer prices, such as for food and energy. This disproportionately hurts the poor because a greater share of their incomes go to meeting basic needs, as compared to households at higher income levels (see the chart below).

3. Obstacles to Opportunity

There are numerous policies that create artificial and unnecessary obstacles for the poor when it comes to obtaining jobs or starting businesses that could lift them out of poverty.

Here are four of the harmful policies detailed in the report:

1. Occupational Licensing

Laws that require official occupational licensing cost millions of jobs nationwide and raise consumer expenses by as much as $203 billion per year. These policies are often just a barrier to entry to help existing individuals in the specific field by limiting competition.

2. Federal Sugar Program

The federal government tries to limit the supply of sugar that is sold in the United States. As a result, the price of American sugar is consistently higher than world prices, sometimes even doubling world prices.

This big government policy may benefit the small number of sugar growers and harvesters in America, but it does so at the expense of sugar-using industries and consumers.

Recent studies have found that the program costs consumers as much as $3.7 billion a year. The program has a disproportionate impact on the poor because a greater share of their income goes to food purchases compared to than for individuals at higher income levels.

3. Energy Efficiency Regulations for Appliances

The Department of Energy regulates a long list of consumer and commercial appliances, including products like refrigerators, air conditioners, furnaces, televisions, shower heads, ovens, toilets, and light bulbs.

These regulations prioritize efficiency over other preferences that customers and businesses might have—such as safety, size, durability, and cost. Customers and businesses might have such preferences even at the loss of some reduced efficiency.

While there are a number of problems with the government mandating energy conservation (such as cronyism and dubious environmental benefits), appliance efficiency regulations are likely to have a bigger negative impact on middle-income and low-income families, and likely to provide more benefits to upper-income families.

4. Ride-Sharing Regulations

For years, states and municipalities have attempted to heavily regulate, and at times ban, ride-sharing companies like Uber and Lyft in an effort to prop up their principal competitors—the traditional taxicab companies.

Government policies that attempt to preserve this system against competition from ride-sharing firms, or which impose costly and burdensome regulations on said firms, do so at the expense of both consumers and drivers, with a particular impact on the poor.

As the report illustrates, government regulation and unwarranted intervention are often the primary barriers to progress for those who are poor. Just getting government out of the way could make a huge difference.

The Big 23

Here is the report’s full list of 23 big government policies currently harming poor Americans:

  1. Climate Change Regulations
  2. Energy Efficiency Regulations for Appliances
  3. Fuel Efficiency Mandates and Tier 3 Gas Regulations
  4. Ozone
  5. Renewable Fuel Standard
  6. Tennessee Valley Authority
  7. Federal Sugar Program
  8. Fruit and Vegetable Marketing Orders
  9. S. Department of Agriculture’s Catfish Inspection Program
  10. Soda Taxes
  11. International Monetary Fund Bailouts
  12. Import Restraints on Food and Clothing
  13. Jones Act
  14. High Minimum Wages
  15. Occupational Licensure
  16. Economic Development Takings
  17. Home-Sharing Regulations
  18. Rent Control
  19. Smart Growth
  20. Payday Lender Rules From the Consumer Financial Protection Bureau
  21. Daycare Regulations
  22. Ride-Sharing Regulations
  23. State-Sanctioned Lottery Monopolies

The Bottom Line

All levels of government—local, state, and federal—need to look honestly at how they are contributing to the poverty problem. Then, they can become part of the solution.

Reprinted from the Daily Signal.

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Francesco Ferrara’s 19th Century War on Taxation


FEE

Alberto Mingardi

With a public debt to GDP ratio at 132% and general government spending at 51% of GDP, Italy can’t be mistaken for a beacon of classical liberalism. Things may have gone differently, had the country listened to its classical liberal economists. They had diagnosed some of the country’s most resilient problems with clarity and courage. Though often forgotten, they are still a source of inspiration. This is certainly the case of Francesco Ferrara.

Francesco Ferrara (1810–1900) was the most prominent Italian economist of the 19th century. A Sicilian, born in Palermo in 1810 of a family of modest origins, he entered the world of studies and politics as a statistician. In 1848, he took part in the Sicilian uprising. He was jailed briefly and later elected to the newly established Sicilian parliament. He was subsequently dispatched to Turin as part of a mission to offer the crown of Sicily to the Duke of Genoa, the brother of the Piedmontese king. When the House of Bourbon re-established its hold on Sicily, the envoys remained in Turin, to persist in their efforts to free Sicily. In 1852, the Bourbons condemned Ferrara to “perpetual exile” (Faucci). Later, in the unified Italy, Ferrara was briefly a cabinet minister and a member of the Italian tax court. In his forceful and prolific writings, the principles of individualism and economic liberalism were “glorified always and everywhere” (Weinberger). Commenting on Ferrara’s prose, Einaudi called him a “wizard” who “enthused thousands of mature men and ardent youths, making them fall in love with economic science”.

Ferrara was appointed to the chair in Political Economy at the University of Turin. He was widely engaged in policy debates and in 1858 was suspended from active teaching, as he frequently used his lectures to denounce the government and its policies—including the government’s monopoly in education. This prohibition to enter classrooms did not hamper Ferrara’s creativity and scholarship. He later taught in Pisa and eventually in Venice, after having served in a number of public offices.

Ferrara is best remembered for the remarkable publication series Biblioteca dell’economista, a far-reaching program of translations aimed at making the latest economic literature available to Italians. … In all, 26 books were published (two series of thirteen books each), most prefaced by a long introduction by Ferrara himself. These introductions were both biobibliographical and critical, full of insights. James M. Buchanan wrote of Ferrara’s introductions:

On the whole his criticisms are excellent by modern criteria, and he anticipated many of the neo-classical contributions. … He was forceful in his emphasis that value theory must be based on individual behavior, his whole construction departing from what he called “the economic action,” the author of such action being the individual who feels, thinks, and wants. … Ferrara was perhaps the first economist completely to shed all of the mercantilistic trappings in his rejection of economics as the science of wealth.

Not unlike the ‘Austrian’ economists, Ferrara trumpeted subjective value and was skeptical of the efforts to mathematize economics. He was critical of Ricardian economics and was heavily indebted to the French: Bastiat, who he considered a “hero and martyr in his battles for economic freedom” (Faucci), Antoine Destutt de Tracy, and especially Jean-Baptiste Say. Like Say, he based his view of the entrepreneurial function on a “knowledge-based approach” (Bini). He opposed intellectual property rights as a form of government-granted monopoly (for Ferrara, “a patent is the lottery win of industrious men”), endorsed free banking, and favored Italian unification but opposed the development of a strong, centralized Italian state. Ferrara maintained that centralization was not a price worth paying for unification: “I place my hopes in the unity of the Italian nation, but I cannot conceal that I am frightened by the centralization urges that manifest themselves everywhere whenever the Italian unification is mentioned, nor would I hesitate to proclaim that, in my opinion, a divided Italy is preferable to a centralized one.”

Besides the Biblioteca dell’economista, Ferrara engineered efforts to spread liberal ideas in Italy, including the publication of different journals in the Kingdom of Sardinia (one was called L’economista echoing the British Economist) and the establishment of the Società Adamo Smith in 1874, to bring together the intellectual devotees of free trade.

In the realm of politics, Italy moved increasingly in the opposite direction. In 1878 Italy abandoned Cavour’s free trade policies by introducing a modest tariff. In 1881, it embarked on a large program of naval construction, and in 1884 an Italian ‘industrial policy’ debuted with the creation of the Terni steel mills. In 1887, Italy got a new protectionist tariff, the second highest in Europe, for the sake of protecting not only infant industries but also agriculture. The rapid undoing of Cavour’s free trade policies is emblematic of a cause of a longstanding feature of Italian classical liberalism, namely its disenchantment with politics. It is hard to take politics seriously when the talk and conduct of political actors appear so capricious.

Ferrara was already well aware that “At the end of the day, all governments are a minority”. The downside of the representative system was that it enabled governing elites to manufacture an illusion of participation in collective choices, an illusion that greatly facilitated government spending:

The representative system is characterized by this serious flaw, that it can effortlessly become an instrument of delusion. The people is less loath to pay, when it deludes itself into believing that its taxes—as they are assented to by its representatives, whose interests are purportedly the same as its own—are for this only reason warranted by inescapable necessities. A large number of instances presented by modern history teach us how easily the good faith of peoples can be abused and reveal the covert motive that made not a few governments to reckon that, ultimately, it was in their own interest to suffer the establishment of deliberative assemblies, as a means to get rid of the odious appearance of oppressors of their own people and to enjoy the pleasure of spending large sums… When the administration has made an outlay unavoidable, majorities tend to feel obliged to allow it.

Buchanan highlights Ferrara as an important figure in starting the scienza delle finanze, the Italian tradition of public finance theory. “The ‘economic’ conception of fiscal activity was, to Ferrara, an ideal. In the actual state of the world, Ferrara considered that the levy of taxes tended to be oppressive and constituted the ‘great secret through which tyranny is organized.’ … Ferrara was intensely critical of the view, which had been expressed by German writers, that merely because tax revenues are transformed into public spending and are returned to the economy, society does not undergo a net loss” (Buchanan).

Scholars in the Italian tradition tried to develop a scientific definition of taxation, distinguishing two sorts: taxation necessary for financing for a limited government, and taxation that was essentially predatory. In its “purest meaning,” the imposta (tax) would be “the price—and a slim one—of the great benefits that the social state, the organized state offers to each of us”. Given the immense utility provided by the social state (that is: by the organization of law and order in society), such a price could be understood as something that would be paid voluntarily by each taxpayer. Since “Any tax is ultimately equivalent to a prevented consumption and a prescribed one in its stead,” and so it all boils down to the question whether “the substituted consumption is more or less productive than the prevented one”. For Ferrara, the cornerstone of the problems of taxation is the economic use of taxes, the fact that government should operate in a parsimonious way.

But if taxation can be theoretically understood as a fee, Ferrara was fully aware that historical evidence pointed in another direction:

In its philosophical concept, the organized state is the great reason that exalts the notion of taxation; in its historical understanding, however, taxation is the great secret that organizes tyranny… And if in its philosophical understanding the term “contribution” does appears to be truer and worthier, in its historical understanding I invite you to change it, but only to call it “scourge.”

Looking realistically at the dry facts of history, one sees taxation as the propellant of arbitrary government:

Would you like to fathom how a swarm of parasites and harlots can exist in the royal courts? Why ignorance and intrigue are exalted and knowledge and virtue are rejected and derided? How comes it that in a temperate government a bad minister can make the houses of parliament to be in thrall of his will? And representatives and newspapers can be found to conceal his faults and incompetence? Taxation contains and explains the whole riddle. Taxation is the great source of everything a corrupt government can devise to the detriment of the peoples. Taxation supports the spy, encourages the faction, dictates the content of newspapers.


This piece was excerpted and adapted from Alberto Mingardi, Classical Liberalism in Italian Economic Thought, from the Time of Unification, Econ Journal Watch 14(1), January 2017

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Government Experts Can’t Give You A Happy Life


FEE


Only you are expert on what is best for you and your family.


Ideological and political disagreements are healthy. They reflect different perspectives, experiences and priorities. And although masked by the farcical circuses that are political campaigns, discussions and debates do change minds and move public opinion.

Of course, some talk deserves less attention. Outright lies deserve no attention. So, too, with uninformed analyses that are passed off as informed analyses. If I, an economist, advise you on how to wire your home for electricity, ignore me. I’m no electrician. If you take my advice — say, because you’re impressed with the “Ph.D.” that I can gaudily parade behind my signature — your house will soon be in flames.

The same is true if I advise you on how to spend your money. You might think that because I’m an economist I have some expertise on this. But I don’t. Only you are expert on what is best for you and your family. I’m in no position to judge, say, whether it’s best for you to spend $1,000 on a family vacation or to save those funds for retirement. You’re the expert here, not me or anyone else.

Pretend Experts

Unfortunately, today’s world crawls with pretend experts whose titles and positions create the false impression that they have knowledge they can’t possibly possess.

Consider bureaucrats at the Food and Drug Administration. They don’t know you. None has any earthly idea of your preference for risk — say, how willing you are to risk possible death today to take a drug that might cure you of cancer that will otherwise surely kill you tomorrow. And yet these bureaucrats are commonly called “experts” on drug safety. What they have is expert knowledge of the various possible consequences, good and ill, of different drugs. But none of them has expert knowledge of the preferences and circumstances of each of the millions of individuals whose lives are governed by bureaucrats’ decisions on whether to approve a drug for public use.

Only you are expert on you and your family. Only you know if it’s “right” for you to deal with the risks and benefits of a certain drug. Of course, you’d be wise to seek input from a physician. But ultimately, even that physician shouldn’t have the final word over your medical treatment, for that physician is no expert on your preferences.

Similarly, only you are expert on what sort of employment arrangement is best for you. Despite the hordes of Ph.D.-boasting economists at the Department of Labor — and despite the countless reams of paper on which those scholars print the results of their econometric tests that reveal this or that variable to be “statistically significant” — those officials have zero knowledge of, say, whether it’s best for you to arrange for your employer to pay you overtime whenever you work more than 40 hours weekly. Of course more pay is nice, but you might prefer the greater job flexibility that your employer offers in lieu of overtime pay. But today, you, —the real expert — are overridden by the pretend experts in government who increasingly dictate your and other individuals’ terms of employment.

Government by pretend “experts” destroys government by true experts.

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