Tuesday, January 10, 2012

An inquiry into the state of present day politicians as the cause of the decline of liberty and prosperity

Without a healthy democracy, there can be no liberty; nonetheless, democracy by itself does not produce a state of liberty. Liberty needs to be gained and maintained daily by human action in the form of civic diligence. Many have come to lament and bemoan the current state of affairs in Western politics; many blame the influence of big business and lobby groups for the problems faced by democratic societies and call for the abolishment of these ties. While interest groups are a part of the problem, they are not the cause of it; rather, they are an effect of the growing power given to politicians. Unfortunate as it is, citizens are no longer the conductors of democracy; politicians are. Since politicians are the masters of democracy—and those who lend their ears to lobbying groups—it is wise to examine their role in society.

Each new election year brings with itself the hope of an ensuing change toward a better reality than the one presently enjoyed; this feeling becoming ever more prevalent in more recent times as a result of the decay of the economic system which has continually bread prosperity for over three centuries. At the same time, both the United States and Canada see dwindling voter turnouts, which suggest resignation on behalf of the body politic. Mainstream pundits tell us that the public has grown tired of the cynicism and bickering tone of politicians. I contend this not to be the case, instead I believe that people have resigned themselves from participating in democratic processes as a result of a protracted move toward an abandonment of the liberal ideals upon which our society was founded and a turn toward socialistic practices. There is an expectation of great change toward unseen prosperity and equity that a great new leader—an Enlightened Despot—would bring about; the only challenge being finding this Enlightened Despot. Keynesian economists of Paul Krugman’s mold write paper upon paper convincing the public that governments can solve any problem, just as long as the voting public allows them to frivolously spend enough fiat money. This civic attitude of serfdom comes as a result of decades of indoctrination of the public by politicians and unionized educators alike that liberal, pro-free market individualism is the cause of every single societal problem; therefore, they claim, people ought to forfeit their liberty to their representatives, who, with the tools of central planning can provide all that the citizens’ hearts may ever desire.

A hint as to where the seed of our current troubles indeed lay may be drawn from that seminal piece penned some two hundred and fifty ago—the aptly titled “Common Sense”: “I draw my idea of government from a principle in nature, which no art can overturn, that the more simple any thing is, the less liable it is to be disordered, and the easier repaired when disordered (emphasis added).”[i] Centuries after Mr. Paine’s call to simple government, the world finds itself plagued by one big and complicated government regime after another. The American republic that Alexis De Tocqueville wrote about has been forfeited in exchange for something that the French aristocrat may have found closer to his home:

There are countries in Europe, where the natives consider themselves as a kind of settlers, indifferent to the fate of the spot which they inhabit. The greatest changes are effected there without their concurrence, and (unless chance may have apprised them of the event) without their knowledge; nay, more, the condition of his village, the police of his street, the repairs of the church or the parsonage, do not concern him; for he looks upon all these things as unconnected with himself, and as the property of a powerful stranger whom he calls the government. He only has a life-interest in these possessions, without the spirit of ownership or any ideas of improvement. This want of interest in his own affairs goes so far, that if his own safety or that of his children is at last endangered, instead of trying to avert the peril, he will fold his arms, and wait till the whole nation comes to his aid. This man, who has so completely sacrificed his own free will, does not, more than any other person, love obedience; he cowers, it is true, before the pettiest officer; but he braves the law with the spirit of a conquered foe, as soon as its superior force is withdrawn; he perpetually oscillates between servitude and license.[ii]

It is no wonder then, that our world is riddled with the various problems of ailing economies, lost youth, discontented masses and the destruction of lives and the environment with no end in sight.

As a result of growing influence of socialistic ideologies, governments have grown morbidly obese over the past century; our so called free and democratic societies bear witness to citizens’ lives greatly more influenced by the authority of the state today than was the case in the feudal societies of the Middle Ages. The cause of this gross infringement on personal liberties has been the rise of the cult of the omnipotent statesman-politician with his infinite wisdom and do-no-wrong capacities: despite the deliveries of blunder upon blunder, politicians have become the be-all-end-all deities of our times; believing that any sphere of private and public life can be positively shaped by political decisions. This is not to say that political figures have substituted pop-stars as the idols of the populace; rather, it is to say that people—though, so uninvolved in the political processes of their societies that they can probably name only the head of their government and no one else—have come to see all problems as solvable by political action.

It seems that few care to notice that this move toward the centralization of power in the hands of a minority elite contradicts the original liberal ideas upon which modern Western societies were founded, whereby the universality of human fallibility was in fact realized and thereby the glorification of some over others abandoned. Alexis De Tocqueville explains why this was so:

However enlightened and skillful a central power may be, it cannot of itself embrace all the details of the life of a great nation. Such vigilance exceeds the powers of man. And when it attempts unaided to create and set in motion so many complicated springs, it must submit to a very imperfect result, or exhaust itself in bootless efforts.

Centralization easily succeeds, indeed, in subjecting the external actions of men to a certain uniformity, which we come at last to love for its own sake, independently of the objects to which it is applied, like those devotees who worship the statue and forget the deity it represents. Centralization imparts without difficulty an admirable regularity to the routine of business, provides skillfully for the details of the social police; represses small disorders and petty misdemeanors; maintains society in a status quo alike secure from improvement and decline; which the heads of the administration are wont to call good order and public tranquility; in short it excels in prevention, but not in action.[iii]

At best centralization brings about stagnation, and at worst societal decline; while human nature desires perpetual improvement.

The state funeral given to Canadian socialist, leader of the New Democratic Party, Jack Layton, or a glance at ceremonies thrown during G20 meetings tell stories of our elected leaders assuming the roles of newfound royalty. Indeed, one cannot blame a person, in this case the politician, for attempting to make the most of his life; however, since by doing so the statesman-politician negatively influences the lives of the common citizenry, the impetuous is on the citizenry itself to take a close look at the institution which is claimed to be the embodiment of leadership on the path to a brighter future. That is, the onus on the citizen is to make an objective judgment of the institution of politician, as it stands today, in order to make a decision of self-interest: whether or not to continue to give up as much of its sovereignty to this institution. The statesman-politician in essence risks nothing while reigning over the state, constitutes an extreme case of unproductive labor and serves the interests of his party, rather than those of his constituency, therefore it can be drawn the professional politician represents an adverse entity for any society.

To be sure, every decision carries within itself an underlying risk. All citizens risk something whenever making a decision: to pay to attend university without the guarantee of graduating or materializing that education into an adequate compensation; to invest their monies into real estate or the stock exchange markets; or to choose one career path over another, to list a few. If any or all of these decisions result in failure or bad fortune, the common citizen is left with a rather brief list of options, all of which ultimately see him reduce his discretionary spending, while increasing the amount and intensity of work he commits himself to, in order to make up the loss; sometimes he even sees reductions in his spending on essentials such as food, clothing and shelter. On the other hand, what does the statesman-politician risk, or rather: what does he stand to lose from a poor policy decision or even a catastrophic tenure in office? While history shows some statesmen ending their careers in front of the firing squad, they are the few and far between—at the same time, while the firing squad momentarily relieves public anger, it does not reverse the policies undertaken by the deposed statesman. Further, in modern Western societies, the most a statesman-politician stands to lose is an election. We are told that ousting a politician from office causes injury to his dignity, public standing and self respect. However, it can be observed that the rules that apply to these feelings within the state of mind of the politician vastly differ to those of the common citizen: once the statesman-politician exposes himself to the public in such profane fashion as he does, he becomes bound not by the social mores that govern the common voter, but by those that command prostitutes.

In terms of poor fiscal decisions, it is not the statesman’s discretionary spending that gets diminished: while his policies may cost his constituents their homes, their life savings or their children's education funds, the statesman’s personal wealth does not suffer at all—in fact, it often happens that because of their involvement in the decision making processes, that the personal wealth of politicians grows. More so, whenever the politician runs the state into deficit or debt, he simply asks the citizens to work longer, harder hours and to cut down on their spending in order to make up for the politicians mistakes, all the while he keeps vote purchasing welfare programs intact. Worst of all, however, is the fact that no matter how well intentioned, the consequences of a statesman’s poor decision can be felt for generations after his ultimate departure from the political scene, as history bears witness to so many of the entitlement programs introduced by the FD Roosevelt administrations. Then, it can be said that granting the responsibility and power to run the lives of present and future generations to people who in return put nothing at stake but their disputable reputations is surely utter recklessness.

Equally important is to accordingly allocate the statesman-politician’s place in society by virtue of his utility. To achieve this, it is constructive to begin by locating the politician with respect to Adam Smith’s basic discernment of contribution to society. “There is one sort of labor which adds to the value of the subject upon which it is bestowed : there is another which has no such effect. The former, as it produces value, may be called productive; the latter, unproductive labor”[iv] While some unproductive labor inarguably has its merits by which society benefits, nonetheless, it is the overall productivity of productive labor that feeds society as a whole.

Many a noble professions are classified as unproductive labor: doctors and educators among which; the least noble of this class of labor is surely that of politicians. Much like the bureaucrat who is constantly aware of his lower relative worth to the undertaking which he is a part of, so too is the politician perpetually aware of society’s absence of real use for him. In response, the statesman-politician embarks on missions ad infinitum by which he creates an artificial need of himself. Thus, problems are never solved with solutions, but rather with further problems: that is, problems never get solved. Entitlements do not get discontinued; rather the government's debt grows larger. In lieu of producing an environment which would generate the conditions for outsourced jobs to start returning to the country, by voting in new regulations the statesman-politician pushes those jobs farther away. Economist Philip Bagus gives a concise example of how politicians caused the current economic crisis dubbed by some as “The Great Recession”:

When fractional-reserve banks expand credit, malinvestments result. Entrepreneurs induced by artificially low interest rates engage in new investment projects that the lower interest rates suddenly make look profitable. Many of these investments are not financed by real savings but just by money created out of thin air by the banking system. The new investments absorb important resources from other sectors that are not affected so much by the inflow of the new money. There results a real distortion in the productive structure of the economy. In the last cycle, malinvestments in the booming housing markets contrasted with important bottlenecks such as in the commodity sector.[v]

He goes on to explain how politicians have gone on to perpetuate the crisis that they caused:

All three aforementioned adjustments (relative prices changes, increase in private savings, and factor-market flexibility) were inhibited. Many bankruptcies that should have happened were not allowed to occur. Both in the real economy and the financial sector, governments intervened. They support struggling companies via subsidized loans, programs such as cash for clunkers, or via public works.

Governments also supported and rescued banks by buying problematic assets or injecting capital into them. As bankruptcies are not allowed to happen, the liquidation of malinvestments was slowed down.

Governments also inhibited factor markets from being flexible and subsidized unemployment by paying unemployment benefits. Bubble prices were not allowed to adjust quickly but were to some extent propped up by government interventions. Government sucked up private savings by taxes and squandered them maintaining an obsolete structure of production. Banks financed the government spending by buying government bonds. By putting money into the public sector, banks had fewer funds available to lend to the private sector.

Factors of production were not shifted quickly into new projects because the old ones were not liquidated. They remained stuck in what essentially were malinvestments, especially in an overblown financial sector. Factor mobility was slowed down by unemployment benefits, union privileges, and other labor market regulations.[vi]

Three simple solutions lend themselves to the ongoing problem of job loss in North America: cessation of unemployment benefits, eradication of minimum wage legislation and the lowering of taxes. High cost of doing business is the reason why so many companies have been moving their production away from North America over the past twenty years. With the termination of the distribution of further unemployment benefits and the elimination of the artificial minimum wage standards, more people are likely to start accepting jobs at wage levels they otherwise would not. Similarly, by reducing business and employment related taxes–which amount to nothing more than the penalizing of contributing to the real wellbeing of society–the overall cost of entrepreneurship is bound to recede from the inflated levels at which it currently resides. Lower taxes and fewer entitlements would cause the ratio of productive to unproductive labor to normalize. The combined effect of these steps would be that North American economies become competitive once again with respect to our sweatshop fueled rivals in the Far East, and thus be back on the path of prosperity.

Of course, as far as the politician is concerned, such policy would constitute career suicide. By it, he is bound not only to lose “special interest” votes, such as those of the labor unions; more so, the statesman-politician is bound to be exposed for what he really is: the unproductive labor of the worst kind. He therefore personifies a largely useless sham of an institution which we are told was at some distant point in time served only by the wisest and most experienced of the citizenry. In a situation of a self regulating, free-market driven societal life the statesman-politician’s own job is bound to become obsolete and resultantly outsourced into to the annals of history.

In addition, one ought to remember the cry of the American Revolution of “no taxation without representation”, specifically, as we are living under a system of delegate-democracy whereby the common citizen relinquishes a growing amount of his own sovereignty to that of his elected representative. Jean-Jacques Rousseau likens the political system which we enjoy today more with that of feudalism than with the Roman republic[vii]. To his credit, the parliamentary democracy scheme is drawn by the template of British constitutional monarchy rather than the ancient republics. In fact, Monsieur Rousseau refers to anyone who forfeits his sovereignty to a delegate a “slave”. While this idea may at first seem extreme, it deserves some consideration: the citizen himself grows more and more distant to his representation, as each new law and regulation take away his right to act accordingly to his own free will, and as each new government sponsored institution adds more administration by which the voter is kept farther from, not closer to, his representative. At the same time his delegate, the member of the various assemblies, once elected, does not steward the platform of the citizen who voted for him, nor of the one who did not: the elected representative finds himself subservient to the platform, or rather the interests of the political party to whose caucus he belongs; the political party’s sole interest being gaining power.  

Since the early days of the American republic, political parties have over time morphed into enterprises, no different from profit oriented organizations with a view only on the short term. Rather than serving the purpose of maintaining the republic, present-day politics gives its practitioners a more expedient purpose: that of winning power and holding on to it, simply as a means of gainful employment. Alexis De Tocqueville tells us that as recently as the 1830’s a career in politics in America meant something drastically different to what is the case today:

Even the State is only a second-rate community whose tranquil and obscure administration offers no inducement sufficient to draw men away from the home of their interests into the turmoil of public affairs. The Federal Government confers power and honor on the men who conduct it; but these individuals can never be very numerous. The high station of the Presidency can only be reached at an advanced period in life; and the other Federal functionaries of high class are generally men who have been favored by good luck, or have been distinguished in some other career.[viii]

The politician of our day is not some wise old head who keeps watch over the state of his posterity; rather, he enters politics a beardless young buck and dies a politician—politics is his chosen career. The professional politician goes from the classroom straight into an office in the Capitol, failing in the meanwhile to observe and practice the mechanics of society for a single day. Yet, in a gesture of pure madness, he is given the ultimate decision making authority over that same society. It is of little wonder then, to see the ascent of the idea of the welfare state: the idea that the statesman-politician is a parent, a demigod, an irreplaceable hand that gives life to life everlasting. By means of socialistic programs, entitlements, healthcare and innumerable other get-something-for-“nothing” arrangements, politicians of the various indistinguishable parties lure the masses to keep propping them up to the current status of nobility they have come accustomed to luxuriate in. The statesman-politician cares not how he comes to maintain himself in power: he defers the solution of a problem further down the road; he pits the “working class” against “big business”; he blames and penalizes job generating enterprises for pollution, while maintaining legislature that prevents financially viable means to the discovery and use of pollution solutions; he pits neighbors of different ethnicity, race or religion against each other, all for the sake of keeping himself relevant.

Reason must take precedence: how is the statesman-politician to be trusted to make useful policies for his constituency when his preeminent goal is to further his own employment. This he cannot accomplish by means of peace, prosperity and harmony; for, the statesman-politician’s interest is his own welfare, rather than ensuring that he creates the conditions for a fair and free competition among his constituents and thus leaving it to them to produce the best arrangements for themselves as they see them fit. After all, when each citizen is given an opportunity to seek out his own best interest, it is foolish to expect some opinion-poll driven, career politician who never in his life held a real job, living in a bubble with his comrades, to know what is really best for every single member of body politic.

On the other hand it can be argued that laws are needed for a society to function justly and therefore the statesman-politician is a necessary evil. The institution of the state itself is a product of the desire for justice among men; that is, the state is present for the purpose of protecting men from the harm of other men—however, it is missed that the state does not have the purpose of preventing people from harming themselves. This necessity, however, does not stipulate a mandate for the state to do harm onto one in order to establish what it arbitrarily considers just; or to impose the wishes of some on to others: cautious treading is called for, as in the pursuit of his own best interest–that of winning votes–the statesman-politician does harm to the state itself, as well as his fellow citizens. Furthermore the phrase “necessary evil” brings to the fore the reality of what the politician truly is. Therefore, much like a vaccine ought to be administered in tolerable dosages only, so must be the case with the statesman-politician’s role in the life of the state; for if left to rummage unchecked, history and presence show how harmful his consequences to society indeed are.

At the same time, some will bring forth the issue of, as it is euphemistically termed, social justice. If the mandate of the state and henceforth the mandate of the statesman-politician is to ensure that no one does harm onto another’s liberty, consequently then, the notion of social justice through the redistribution of wealth for the purpose of bringing financial equality to the citizenry, not only does not fit this mandate, rather it constitutes a blatant foul against it: for the redistribution of wealth deals only with a finite amount of wealth and therefore stunts the creation of more of it, and by taking away from those who have more in order to those who have less, violates the liberties of those who are plundered. Subsequently, as actions with the aim of creating equity in wealth curtail the citizenry’s ability to reach its greatest happiness, these dubious policies do more harm to those whom its propagators claim that they are instituted to benefit. Then, since the statesman-politician is an evil, the less of this evil is present in the life of society; the better off society would seem to be.

Common sense would suggest that it is most unwise for the citizenry to go on forfeiting its destiny to a class–the politicians–that stands to lose nothing by its poor work and only to gain by keeping the living conditions of said citizenry below what they potentially can be. Unfortunately, the present “Occupy” movement testifies for a complete abandonment of reason. Democracy can lead to tyranny, just as soon as it can lead to liberty. The fact that in the early days of America, democracy flourished into liberty was no accident: it was a result of civic diligence, as every individual wisely looked out for himself, instead of depending on some enlightened despot to do it for him, as De Tocqueville documented:

The native of New England is attached to his township because it is independent and free: this co-operation in its affairs insures his attachment to its interest; the well-being it affords him secures his affection; and its welfare is the aim of his ambition and of his future exertions. He takes part in every occurrence in the place; he practices the art of government in the small sphere within his reach; he accustoms himself to those forms without which liberty can only advance by revolutions; he imbibes their spirit; he acquires a taste for order; comprehends the balance of powers, and collects clear practical notions on the nature of his duties and the extent of his rights.[ix]