Mini-treatise on Good Government

Since I’ve ended up running for the Libertarian Party of Canada in the October 2015 Federal Election I’ve decided to add a “Governance” category here where I will post / repost my articles about this topic.

I recall a moment when I was on the Board to the Canadian Internet Registration Authority (CIRA) during a meeting another director quipped (I believe it was Conservative stumper Rick Anderson) when making some joke about the difference between the American and Canadian governance models “That’s why in the US it’s Life, Liberty and the Pursuit of Happiness but here in Canada it’s Peace, Order and Good Government” which earned cackles of laughter from around the table. Myself included. Both slogans do advertise laudable aims, sadly both nations have strayed widely from the path of their purported goals as to become grotesque caricatures of themselves.

For a long time I have been compiling a list of short, concise rules that I always thought , were a society to embrace them, could underpin a sound, thin layer of order and constrain Big Government.

Those maxims are as follows:

#1) If it’s illegal for the citizenry, then it’s illegal for the Government

Pretty straight forward. If something is illegal because it’s immoral (murder, theft, or any kind of infringement) then abstracting it behind “the collective We” doesn’t magically convey legitimacy.

If a given activity is not necessarily a moral one (i.e. operating a lottery), allowing the government to do it while forbidding private citizens from doing so is a racket.

Some people like to make all the rules
And tell others what to do
They make it their way so they always win
And the others always lose
Street gangs and madmen
How they wage their private wars
In bankers clothes their hearts are froze and
Their wives hold hands with whores

— Airbourne, Too Much, Too Young, Too Fast

#2) The Government can’t launch “pre-emptive” wars

“Pre-emptive” war is basically a euphemism for “attacking” or “invading” another country. Anybody who engages in “pre-emptive” strikes is by definition The Aggressor and as such, they are in violation of The Non-Aggression Principle.

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.
– Major General Smedley Butler, the most decorated marine in U.S. history and author of “War is  Racket”.

#3) The Government should not pick winners and losers

Creating public policies which favour some sectors of the populace over others posits a type of infallible omniscience normally ascribed to God-like entities. While a type of crowdsourced wisdom does emerge from the aggregated actions and pricing signals of all citizens and businesses transacting among themselves, it is impossible for a bureaucracy to end-run that by constructing market-rigging policies. The former will bounce around equilibrium, experience some volatility and even cyclic downturns, but typically never really get grossly mis-aligned. Contrast with the latter, which arbitrarily distorts the market signaling mechanisms resulting oligarchies, cronyism and bubbles (which are always followed by panics, depressions and wholesale wealth transfers).

The Government arbitrarily chooses who wins and who loses any time they:

• Set interest rates
• Control the money supply
• Enact a policy to incite one kind of activity over others (i.e.deciding that it’s better for people own their home owns than rent them)
• Forcefully redistribute citizens’ wealth
• Regulate doornobs.

#4) The Government shall not monetize its debt

Originally this point was “The government shouldn’t spend money it doesn’t have”, in other words – run a balanced budget. Yes, ideally they would do that. However, if a Government is running a sound monetary system (see below) and if they have a good reason (despite above) to embark on a project that will take a certain amount of leverage – say, entering into a private/public partnership to build out infrastructure, like a thorium reactor (more efficient than nuclear, no long term radioactive waste, and thorium cannot be weaponized) then it could be feasible to issue bonds that would be bought by the private market. Again, in an uncoerced market using unrigged money, the debt markets would add a natural stabilizer (in the form of reality based interest rates) against unsustainable debt levels.

I suppose instead of saying “the Government shouldn’t spend money it doesn’t have” you could say “The Government shouldn’t spend money that doesn’t exist“.

#5) The government cannot incur debts or make claims upon future generations

This one is clumsily worded, more accurately I would say that the Government shouldn’t incur debts onto future generations unless the benefits of that debt (as in our thorium reactor example above) would also be enjoyed by those generations.

Otherwise, there needs to be a plan to liquidate any debts incurred within the generation that incurred them. Contrast with popular belief, things like pension plans fall into this category – and I don’t mean that they are an example of something that is allowable, they are an example of something that should be eliminated – because all pension plans are ponzis.

#6) The government should employ sound money and allow currency competition

Most people don’t understand the monetary system and most governments want it that way. This is because anybody who does understand the current monetary system is either a crony capitalist stooge who enjoys the benefit of a rigged game, or else they have to endure a daily existence of cognitive dissonance because they understand that this Onion article is actually the truth.

In less sardonic terms I wrote about this extensively in my rebuttal of Pikkety’s “Capital In the 21st Century” entitled Cronyism in the 21st Century – (TL,TR – the monetary system is deliberately rigged to benefit the few who make the rules at the expense of the majority who have to follow them)

Sound money forces government to live within it’s means. This is a similar vein to #1, since all of us out here in the real world must live within our means, collectively amalgamating into something called “the state” doesn’t magically make Unicorn Economics a reality.

Unfortunately, it somewhat appears that way, because there is a conventional economic “wisdom” called “Keynesism” which is widely interpreted today to mean “the government can borrow money and inflate credit forever”, even though that isn’t what Keynes actually said.

What Keynes actually said was that it would probably be ok if the government did deficit spending during recessions to to stimulate the economy as long as it saved up money during the booms to amass surpluses. But in today’s parlance it means All Deficit Spending, All The Time, and the right time to cut back government spending, pay down debt and save money is “not on my shift”.

The following chart of Canadian debt since confederation is instructive:

The restraints that sound money would impose on a government would make this kind of runaway debt impossible. However, this doesn’t help us now that we have an unsustainable debt that will some day, somehow, through default or other means, be liquidated. Thus a move to sound money combined with allowing competing currencies can help us transition out of this flawed monetary regime. Local Exchange Currencies, bitcoin crypto currency & derivatives would enable commerce to continue even after sovereigns destroy their currencies.

#7) The government should not conduct wholesale surveillance of its citizenry

As Ben Franklin said, “those who would trade their freedom for security deserve neither.” Those who feel “if you aren’t doing anything wrong you have nothing to worry about” are sociopaths.

To put it bluntly, “the war on terror” is a farce and does not justify wholesale surveillance of the citizenry. You have a greater statistical probability of being killed by your own furniture than by a terrorist.

Wholesale indiscriminate surveillance against it’s own citizens only erodes the Government’s legitimacy, creates a bona fide Police State and finally, doesn’t actually accomplish its stated goals of reducing terrorism.

(On the flipside, all political leaders should be subjected to relentless scrutiny in all their private affairs.)

#8) Flat taxes and Goods and Services taxes vs Income tax

The official Libertarian Party platform calls for a flat 15% income tax. If there must be an income tax, then I personally find it impossible to argue with a flat tax. Although many do. They justify it as “why give successful people more money?” but what they fail to understand is that reducing the income tax rate for the top earners in society (currently a little under 50% when you combine federal and provincial rates) doesn’t give them more money. It confiscates less of their own money. Given that rich people make more money and would still pay more taxes, while poor people earn less money and again, would pay less taxes, under a flat tax system, the logic seems irrefutable. The big loser in all this is the Government, who would maybe not have the money to participate in pre-emptive wars or doornob regulation. This is a good thing.

My ideal flat income tax rate is 0%. Let everybody keep every penny they earn and let’s see what they do with it. Spending would go up, investment would go up and capital formation would go up.

Government could generate revenues on a universal goods and services tax which basically has “means testing” baked into the cake, removes the disincentive to make money (yes, it exists) and brings all kinds of subterranean revenues (cronyists, oligarchs, drug dealers, all of whom avoid income taxes but still spend money) back online into the tax base.

#9) The onus is on the government to prove it’s actions are legal

This is a big one, because there are no ends of examples from recent history where the Government is actually breaking the law, or violating their own constitutions. This seems to be too easily forgiven. It’s as if The Law only applies to the citizenry whilst the Government is exempt.

It should be the other way around: the onus should be on the Government to prove that whatever it is doing is legal. Conversely, the onus should be on the Government, when bringing action against citizens to prove their case.

In other words, the Government should operate under a presumption of guilt, while citizens operate under presumption of innocence. This would go a long way toward rectifying the gross imbalance in power between the Government and the Citizenry.

And finally,

#10) Politics as a profession should be abolished

In Frank Herbert’s “Dosadi Experiment” a minor plot detail around a super-humanly advanced extraterrestrial civilization was that they had abolished the profession of lawyer on penalty of death. Yes, they still had law, they still had courts and trials. But they did not have professional lawyers – all counsel were citizens, or otherwise productively employed entities who would assist in the trials for whatever reasons. If somebody was determined to be practicing law for money, or being a lawyer by profession, they could be summarily killed on the floor of the court on the spot. The court even kept a millennia old ritual knife in a box for the purpose of killing lawyers, and whoever lost the trial. Serious stakes, but then their civilization made it into the stars and it’s iffy if ours will make it back to our own moon.

I’ve always thought that politics as a profession was absolutely toxic to society. It attracts the very worst elements of society into it’s ranks:

Too little attention has been paid to the fact that electoral politics lures disordered, messianic personalities into positions of power.”

— Davidson & Rees-Mogg, The Sovereign Individual

It leads to otherwise mostly professional failures taking up roles that enable them to live off public largesse. It cultivates modern day royal dynasties (“The Clintons”, “The Bushes”, ….”The Trudeaus”) and creates a class of elitist parasites who live in an echo chamber of their own ideologies completely disassociated from real world exigencies.

At the very least, or as a good first step we would be well served by a simple rule:

No Re-election.

The “no re-election” rule mitigates the observed tendencies of politicians that has them clawing each other’s faces off to acquire power (first term) and then resort to any dirty trick or whoring to retain it (subsequent terms). What is conspicuously absent from their tenure in office is a good solid stretch of time where they are actually doing their jobs.

Ancient Greece, the birthplace of democracy had this aspect correct when they created a revolving pool of senators who would rule for a single term before returning to their private roles within the society.