Haters of Mankind

The Grubby Basement

Why has capitalism "triumphed" in the West, but languished in most other nations around the world?  Doubtless the reasons are many, but one in particular stands out.  Western nations have developed and deployed systems of universal recognition of property, and sanctioned them with property law and rights of ownership.

One reason this has occurred in the West, but not elsewhere, is a consequence of  the Christian faith.  Property, according to the Christian world-and-life view, is not just sanctioned by the eternal omnipotent God: it is protected by His holy law.  To the extent that a society does not comply with the rights of ownership, of private property, and attendant due penalties against theft and covetousness, property ownership will be undermined and under attack.

One consequence of such beliefs is the necessity of registering title to property, which in turn requires accurate and widely recognised definitions and descriptions of the property in question.  Think motor-vehicle registers, along with number or registration plates for example.  Or reliance upon serial numbers, for another.  It is hard--impossible--for private enterprise and capitalism to develop in nations which have no way of representing, defining, and describing what is owned by whom.

As De Soto puts it:

Recognizing Who Owns What Essential to Economic Growth

What's Yours is Yours; What's Mine is Mine

The sanctity of property and property ownership is established and protected by two commandments: the eighth and the tenth--

Thou shalt not steal
Thou shalt not covet.

Since these fundamental commandments are inscribed into the heart of every human being, it is not surprising to find that in most human societies that exist for more than a few generations there is a respect for, and recognition of, the sanctity of private (that is, not-government owned) property.  This respect can take many forms but they all fundamentally boil down to a recognition by a community that "John Doe owns that field there, and Anne Smith owns this dwelling here."

When property ownership becomes formally codified within a country or jurisdiction the potential for economic development and the creation of wealth increases exponentially.

A Cautionary Tale

Doing Business in China

Most of us make the mistake of thinking that other nations and their respective regimes are pretty much like our own.  Some times this is substantially that case--but only when two nations share a common cultural, intellectual, and religious heritage.

We were struck once again about how nations can be so fundamentally different and unalike.  In this case, we were reading a piece about China, and how business "works" there.

The contemporary practice of business in China is less confusing than the theory.  The essence of that practice is the proliferation of ways in which individuals manage to exercise some of what we call property rights.  All these ways, however, have one thing in common: they all involve either direct ownership by a part of the government or Communist Party--a unit of the police or the army; a local government (township or village enterprises accounted for 30 percent of industrial production) or a branch thereof.

Specifically, property rights can be exercised by officials and by those somehow connected to officials.  In sum the regime acknowledges its own great and growing pluralism and permits is various members to enrich themselves subject only to respect for the regime itself and the hierarchy within it.  [Angelo Codevilla, The Character of Nations: How Politics Makes and Breaks Prosperity, Family, and Civility (New York: Basic Books, 1997), p.114.] 

What this means is that "property rights" in China are not what we in the West know or understand.  As the crew of the Enterprise would have put it, "It is property, Jim, but not as we know it".  Nobody really owns anything in principle.

Western Riches

Who Owns What?

If We Don't Know And Can't Tell, Poverty Beckons

One of the more challenging aspects for the Western reader of Hernando De Soto's book, The Mystery of Capital is to be confronted with how much we all take for granted.   We are privileged to have inherited a system of title to property, the end result of which is to set us free from serfdom.

There are few serfs left in Western countries.  In New Zealand, those that are serfs are kept in that position by oppressors, acting criminally.  We have had instances of migrant labourers being kept in a state of slavery as their "owners" seize their passports, pay them a pittance in cash under the counter, and work them to exhaustion.  We have foreign fishing vessels working in our national waters being crewed by slaves.  So serfdom continues, in a few extreme cases, but it requires criminal intent and action to exist.

How did we escape the life of a serf?

Citizens Are Not to Be Trusted

We Are the Government.  We Know Best

The (radical) Left tell us that all property is theft.  So, the most perfect and just regime is one which owns all property, so that none may be guilty of theft.

It's true that left leaning political parties aren't prepared to go that far.  However, they will insist that when the state strips property from citizens it always leads to better, more just social outcomes.  Expropriating property from citizens via taxation and using or distributing it as the regime sees fit leads to far better results--or so we are told.  The State is neutral and disinterested; the individual or private property owner looks only to his own interests.

Take education and schooling, for example.  It is an almost universal maxim in the West these days that the regime will develop and run education systems superior to citizen efforts.  The Left gets all misty eyed and fervid over education being so important that it cannot be left to private citizens to invest in and produce a superior education service.  Education, we are told, is so important that self-interested citizens ought not to be allowed anywhere near it.

This grand idea starts to break down as soon as one remembers that the regime is not a machine.

The Potency of Title

Civilisation is Skin Deep

Sometimes the most profound realities stare us in the face every day and we fail to see them for what they are.  Property and property rights are one of these profundities.  In the West, we take them for granted.

When ordinary people have few or no property rights, they are stripped, vulnerable, and naked--subject to the slings and arrows of outrageous fortune--and to the depredations of tyrants.  A recent movie which illustrates this most powerfully is Leviathan,  Set in Russia, it is one of those masterpieces which haunt you for weeks afterwards.  Central to its plot is the issue of property rights, or the lack of them in Putin's Russia.

Westerners live in societies so grounded in fundamental and derived property rights that we scarcely think of them.  It takes an outsider to point out what we all take for granted.

The Mystery of Capital

Of Course!

We have just completed reading Hernando De Soto's The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Perseus/Basic Books, 2000.)  It is a seminal piece of work and deserves wide readership.

De Soto's thesis can be summarised in a series of seven propositions (which he sets about establishing in the book).

1.  The existence of capital is inextricably related to establishing a system of legal title for property.

2. Once legal title is established, property can be transformed into other forms of wealth.  Land to which one has legal title, for example, can be used as collateral for a bank loan.

3. Long before a system of legal title is established in a country or state, an informal system of ownership usually exists which recognises (amongst the participants) a person's title to property.

NZ Labour Party Goes Retrogressive

TPP or Die -- Why We Need It

Duncan Garner
Newshub

The political consensus on free trade is over.  Stand by for thousands of protesters to target the signing of the Trans-Pacific Partnership (TPP) free trade agreement on Thursday.

After decades of supporting free trade, Labour has chosen to veer left into the bosom of New Zealand First and the Greens and oppose the TPP. It's short-sighted and totally hypocritical, in my view. It looks like the party has had its strings pulled by anti-TPP academic Jane Kelsey.

This is a serious and controversial departure for Labour, and it may yet hurt the party among middle New Zealand voters.  Do these politicians know that our bottled wine can be sold tariff-free in Canada, Japan and the US on day one of the TPP being implemented? Why would you oppose that after we as a country have fought for this for so long? Most fruit and other produce can be exported tariff-free too, as a result of the TPP.

I travelled the world with Labour and National Party ministers for years, watching them fight bloody hard for market access for our exporters. I have seen a block of New Zealand butter selling for $25 in Japan; the same with cheese. Some of these tariffs are so high our exporters are locked out.

Some Qualifications to Margaret Thatcher's Bon Mot

Bounds, Limitations, Rights and Fundamental Truths

The NZ Taxpayers' Union has a "Quote of the Week" usually reproduced in Kiwiblog. This week's is a doozy which cuts through smoke and mirrors, the lies and deceit, and rams home a fundamental truth:

“Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more is can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay – that ‘someone else’ is you. There is no such thing as public money; there is only taxpayers’ money.” 

– Margaret Thatcher

However, a qualification is required.  A Christian qualification.  Well, actually two qualifications.  Upon these two qualifications hang the Christian doctrine of the State--and, therefore, by extenuation, the doctrines of justice and freedom.

First, the original and absolute owner of all money, wealth, property, goods, and kind is the Almighty God, "infinite, eternal, unchangeable in His being, wisdom, power, holiness, justice, goodness and truth."  The earth is His, and all that it contains.  That's the first fundamental qualification to Thatcher's dictum.

NZ: Increasingly A Closed, Controlled Economy

The Objection Industry

The benighted Resource Management Act ("RMA") was sold to the electorate as a way to achieve economic growth in a manner consistent with responsible resource management.  It has proved to be nothing of the kind.  As so many legislative overreaches demonstrate, the RMA does the exact opposite to its stated intent.  It has been used to stop development in its tracks while a very expensive, litigious court process inches forward, adding costs by the day.

At root, the RMA undermines property rights.  What is mine is no longer mine; it is owned substantially not by the legal owner, but the "community".  Others now have a property right that warrants them (via the courts) deciding when and how one's property may be deployed, exploited, and used. 

Duncan Garner, writing in Stuff, excoriates the RMA, writing up just one case.  It involves an RMA-meddling local council.  The council is unnamed.  That's deliberately done (see below).  One presumes the reporting is accurate.

Douglas Wilson's Letter From Moscow

Property and Love for the Poor

Douglas Wilson

Blog and Mablog

September 23, 2014

I have written a great deal on how the framework provided by biblical ethics honors and preserves the institution of private property. The argument is not complex. Just as “thou shalt not commit adultery” presupposes and honors the institution of marriage, so also “thou shalt not steal” presupposes and honors the institution of private property.

The private property that is honored is that which comes to a man through the ordinary processes. “Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope” (1 Cor. 9:10). God is the one who gives us the power to get wealth (Dt. 8:18), and it comes up to us from the ground. It does not float down upon us from the state.

Douglas Wilson's Letter From Moscow

Stuff Inviolate

Douglas Wilson

Blog and Mablog

Sept 13, 2014

I have been arguing that property rights are human rights. I have been insisting that it is not possible to love your neighbor without respecting his stuff. I have been saying that the commandment thou shalt not steal presupposes the institution of private property in just the same way that the prohibition of adultery presupposes marriage. And in the same way, I cannot honor the command not to covet my neighbor’s wife if I cannot come up with a definition of “wife.”

But there has been some surprising pushback on this simple idea, so let us dig a little deeper.

Douglas Wilson's Letter From Moscow

What Became of the Witty Pirate Then

Douglas Wilson

Blog and Mablog

September 6, 2014

Because taxes can be a form of theft, and because taxes need not be theft at all, a reasonable question to ask is how we can tell the difference.

The baseline, the starting point, is that property belongs to the individual. He is the one that Thou shalt not steal applies to. He is the one with the house, the vineyard, the lawn mower, the wallet, the smart phone, and so on. Whenever the Bible talks about property, it always talks about it two categories. The first is God’s absolute ownership of all things (Dt. 10:14), and the second is the relative ownership that you and your neighbor enjoy (Dt. 8:18). When we talk about the state possessing things, this possession is derivative. The state extracts value from the taxpayer, the appointed steward of God’s wealth, and this extraction can also be divided into two categories. This value can be extracted lawfully, or the state can play the role of the thief. So how are we to tell the difference?

Douglas Wilson's Letter From Moscow

On Pirate Ship Governance

Douglas Wilson

Blog and Mablog

September 1, 2014

I have been arguing that Christians need to learn how to stand for liberty, but in order for this to happen they must first learn what it is. And when this happens, they will find themselves saying some outrageous things, like I am about to do.

Human rights — which everyone is automatically in favor of — are nonsensical and absurd unless we have a robust understanding of property rights. Property rights are human rights. In our age, we understand that human rights are a grand and glorious thing, but we are bewildered when it comes to the crucial matter of property. We are entirely in favor a birthday cakes, but are dubious and confused about the concept of cake batter.

First, some history. In 1772, the first statement by the colonial Committees of Correspondence was released. Samuel Adams is credited with being the primary force behind that statement, and it begins by itemizing the rights of the colonists as men. The first right was the right to life, the second was liberty, and the third was property. The echo we hear in the Declaration four years later is obvious. We are endowed by our Creator with certain inalienable rights, and among them are life, liberty, and the pursuit of happiness. The pursuit of happiness is therefore grounded in our ability to own property.

European Progress

Breathing the Free Air

At this blog, we are all free-traders.  If Johnny Appleseed wants to sell his apples to customers in the Orange Free State, the respective states have no warrant to interfere with the property rights of Johnny nor his customers.  Secondly, free trade has a long history of demonstrating that, whilst economic dislocation might initially occur, in the longer term the population of poorer countries benefit from the opportunity to export to wealthier nations.  Free trade is one of the most effective modes of "foreign aid" ever seen--much more effective than dumping lashings of money upon less developed countries in some top-down, bureaucratic, government driven "we know best" model. Thirdly, free mutual trade is one of the most effective inoculations against the deadly virus of nationalism. 

To this end, we are heartened that finally the European Common Agricultural Policy ("CAP") is having its last rites read.  This from the NZ Herald: