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Sunday, February 08, 2009

What is to be done at this crossroads for Canada and the world?

It's not difficult to perceive that the world is at somewhat of a political turning point as a result of the global financial crisis. 

The most obvious effect is the move in all countries towards lower interest rates and much larger government spending by which our rulers plan to "stimulate" their way out of the problems they created with policies of easy money and too much spending. The plan amounts to a government program to "pour gasoline on a fire that they themselves set."

Another effect is the beginnings of a global power realignment as the US finds it increasingly difficult to pay for it's global empire with a weakening economy. At the same time, the dollar's position as the world reserve currency won't hold for long as the bubble in the treasury market pops and the Federal Reserve continues prints money like never before. Even as the euro zone is straining to hold together, opinion seems to be shifting to favour something like what Putin proposed at Davos: regional currency blocs each with some reserve role. The US benefits from the current arrangement and will resist any adjustment away from it, but when it becomes clear that it cannot last, it will jockey for the highest position in the system that follows.

We are also seeing a move towards increasing global governance, as the idea of a New World Order becomes once again fashionable among the elites. Global crises like climate change, the "global war on terror," and the worldwide economic slowdown, the thinking goes, require global top-down solutions. The G20 leaders have already agreed to the necessity of global financial regulation and we are hearing calls for a global central bank. If strengthened international financial institutions are not the camel's nose, it may be some sort of carbon-emissions regime. With a US president committed to "science, international cooperation and progressive policies" now in place, the major obstacle to an international emissions cap and carbon-trading system is out of the way.

These three developments are predictable and intimately related. In his 1990 article "Banking, Nation States, and International Politics: A Sociological Reconstruction of the Present Economic Order" [pdf] economist Hans-Hermann Hoppe explains in detail the relationship between money and power relations between states, the instability and dysfunction of a "system ... characterized by a dominant paper currency and a multitude of national paper monies pyramiding on top of it" and also the factors that motivate states to desire centralization, first into regional governments and currencies, and then to push for global government and a world central bank.

Reading Robert Jago's post about the opposition of Australia's Liberals and the UK Conservatives to "stimulus" spending in their own countries brought a bit of focus to some other thoughts which have been floating around my head.

It's strange to watch, but in the US, the GOP and the mainstream conservative movement are returning to their Clinton-era budget-busting and fiscal conservatism, while in Canada the disease of big-government conservatism has now been given a huge boost thanks to Stephen Harper's giant "stimulus" package. Looking at the behaviour of the major conservative parties in Canada, the US, the UK and Australia in recent history a clear pattern emerges -- I think we can conclude that the only time Anglosphere conservative movements and parties are fiscally conservative is when they're not in power.

I don't find this conclusion remotely surprising, and its worth remembering that conservatives like Harper and Reagan who profess a belief in shrinking government seem always to achieve the opposite. Because they sometimes talk in language that pushes my buttons ("freedom good, taxes bad, guns good!"), I have some residual preference for the Republicans over the Democrats, the UK Tories over Labour, and our Conservatives over the Liberals, but I don't put much stock in any of them and haven't yet been convinced to put in a vote for the Conservative Party of Canada. At this point, the longer the Stephen Harper Conservatives remain in government (which may not be long), the more that the ideas of prudent economic policy, restraints on government, and respect for the decisions of individuals operating in the market will be perceived as discredited and archaic.

The party as currently constituted cannot work to serve small-government ends. Harper has proven to be a failure and though neither scenario seems to be in the cards anytime soon, I would welcome a new, more principled party leadership of the sort that could be provided by Scott Reid, Maxime Bernier or someone else I might be overlooking -- or failing that, a fracture of the Conservative Party along Blue Tory/Red Tory lines. I'm not invested enough in party politics to get flustered if these unlikely developments don't occur. I do believe that there are in fact real small-government conservatives and small-government liberals out there (we've even seen some of them rear their heads in reaction to Harper's budget), but I don't think that an electoral approach, simple faith in democracy, and a lesser-of-two-evils mentality is an effective means to reign in the power of the state.

So what then can we do if we wish to decrease the amount of power that politicians, bureaucrats and their connected industries have over our money and our lives? Since there are more of us then there are of them, people only get the government that they tolerate. Economist Murray Rothbard expressed this insight in summarizing a key thesis from the sixteen-century French political philosopher Étienne de La Boétie's Discourse on Voluntary Servitude:

Every tyranny must necessarily be grounded upon general popular acceptance. In short, the bulk of the people themselves, for whatever reason, acquiesce in their own subjection. If this were not the case, no tyranny, indeed no governmental rule, could long endure. Hence, a government does not have to be popularly elected to enjoy general public support; for general public support is in the very nature of all governments that endure, including the most oppressive of tyrannies. The tyrant is but one person, and could scarcely command the obedience of another person, much less of an entire country, if most of the subjects did not grant their obedience by their own consent.

This suggests that any efforts at electoral change are only likely to be successful if accompanied by a corresponding change in the attitudes of the electorate. Structural changes like devolution of powers may have potential to result in better, less-intrusive government but what is most critical is to spread to our neighbours the belief that individuals should not be subservient to their government.

If we are to have a government that works to protect individual rights, we must demand that government be our servant, not our master. To tolerate any less is to guarantee that we shall receive it.

Posted by Kalim Kassam on February 8, 2009 | Permalink


>>So what then can we do if we wish to decrease the amount of power that politicians, bureaucrats and their connected industries have over our money and our lives?

stop electing liars, alcoholics, and pretenders mostly

The increasing Jobless really do need more help, and the federal Stimulus is still unlikely to stem the job losses, help the unemployed. Reality, Canada is in the starts of of a deep recession and the proposed existing fiscal stimuli, is very much inadequate and what is needed is real, viable, tangible job creation programs.

The effective job creation programs should rather be done through the established firms in the private sector and done by mainly increasing their existing sales, marketing, developing additional markets, products in these existing profitable small, medium or larger firms. Most private firms still are hesitant to expand, they need incentives, encouragement to take on the extra problems, new work, to expand for they all tend to reach a comfort operating level and they tend not to want to next even increase their size, profitability in fact. Hoping to develop new jobs, profitability by the creation, establishment of the new firms is very unlikely, for it takes years before these firms show some degree to stability and profitability.

So you have to establish reasons for a new firm to create the new jobs, such as a cash grant, rewards for each of their new employee who lasts longer than 2 years with the firm. And provide for 2 months on the job retraining.

In order to do this you have to now help them to develop more effectively especially firstly their own sales, marketing department as well. A role the pretentious, incompetent FBDB is not capable of doing now even as well.. The government thus also should offer free services from a private sales, marketing consulting firm to help any firm that requests it a free review, recommendations towards increasing effectively, immediately their firm’s profitability, sales and size.


Posted by: thenonconformer | 2009-02-08 10:33:07 AM

Excellent article, Kalim. The key, as you state, is that none of this can exist without the people's acceptance. By acceptance I do not mean that the majority is in favour but by their apathy and complacence it is the same thing.

Personally I think that a time will come when people will revolt, and in fact people are already revolting in many ways: black market, tax evasion, and less and less respect for politicians, government and the "law". We know that freedom is never lost all at once and that once lost it usually requires a massive rebellion or revolution to restore it.

Posted by: Alain | 2009-02-08 12:09:56 PM

Inaction is a form of acceptance.

Posted by: Chris S. | 2009-02-08 4:02:17 PM

Great article.

I think the Western Standard is doing important work in seeing these ideas spread. I don't know how you guys do it, in such a tough business as new media publishing, but I'm glad you do.


Posted by: Mike Vine | 2009-02-08 10:51:09 PM

p.s. 'thenonconformer' is obviously part of the problem.

Don't you get it, man, that government is the problem, not the solution? If a new government program would solve everything, then why is Hong Kong rich and Zimbabwe poor? Why did people leave Europe to come to America?

Some people will never learn.


Posted by: Mike Vine | 2009-02-08 10:54:38 PM


1) The United States of America exports war.
2) All nations bow down to fear of death.
3) The planet is at risk of America's God.
4) America has room for all Jewish refugees.
5) We have nothing to fear but fear itself.
6) Humans are god-like when not animal-like.
7) Policy change can end war and ignorance.

Posted by: Karen Yung | 2009-02-09 1:07:28 AM

To reduce their power we need to reduce the size of government. What many don't realize is that corruption is not new. In the new American Republic corruption was rampant BUT the key point was that the US government was 1/50th size of their British counterparts. So the consquence of graft and corruption made great newspaper stories but had neglible effect on the average American.

Reagan at least had a few excuses. He is not all powerful in his role as Executive like a Prime Minister is. Reagan had to fight a high spending Congress and for those that remember the government actually shut down over this. He was also fighting the Cold War the rest of NATO paid lip service to. The crushing military expenditures of the US brought Sovietism to its knees. Harper couldn't even manage one penny for the military in his 64 billion boondoggle.

Posted by: Faramir | 2009-02-09 3:18:21 PM

"So the consquence of graft and corruption made great newspaper stories but had neglible effect on the average American." Sounds like a quick first step on the slippery slope towards, "sure Adscam was bad, but on a per capita basis it really had a negligible effect on the average Canada."

Posted by: anonymous | 2009-02-10 1:51:58 PM

The saddest thing with all those continual lies and spins of thus a mostly crooked past leaders in in Alberta the last 50 years is that Alberta still is and always will be a one horse town.. mainly centered on oil.. and the very same incompetents have never ever been able to effectively diversify to other industries, products even cause the population base is still too small, and the cost of electricity is too high.. that all makes Alberta just a nice place to visit.

I REMEMBER WHEN MANY ARROGANT ALBERTANS, POLITICIANS USED TO FALSELY BOAST ON THE NET ABOUT THEIR PROSPERITY.. and I would reply they need to be really now more considerate of the poor people and the rest of Canada for they too will ONE DAY be on social aid, EVEN asking other Canadians to help them.. it is funny how reality comes to pass with time even in Alberta.

Posted by: thenonconformer | 2009-02-22 5:19:13 PM

Ontario didn't diversify much either. Its auto industry seems to be the entire basis of its economy. Look at them now, cowering in fear and demanding - not asking - for assistance. I say let them starve but that's me.

Look at who isn't asking for help - why, it's Alberta. Nuff said.

Posted by: Zebulon Pike | 2009-02-22 5:33:57 PM

Look at who isn't asking for help - why, it's Alberta. Nuff said.
Posted by: Zebulon Punk | 2009-02-22 5:33:57 PM

Except when it affects Alberta, like BSE, and the feds gave them millions / billions. Or the NOI which cost Ontario billions to fund the Alberta oil industry. Are prairie oysters still a delicacy in Alberta?

Posted by: The Stig | 2009-02-22 6:55:03 PM

Offering help because it is required under law is one thing, as what occurred with BSE. Alberta received help because the feds had to give it, and together the crisis passed.

Requesting special help on top of existing obligations is another, as Ontario frequently needs because of its perpetual incompetence as a society - like needing the army to shovel snow or to bail out the uncompetitive sector of its auto industry. We'll see if Ontario will survive. I pray that it does not.

Posted by: Zebulon Pike | 2009-02-22 7:12:57 PM

Offering help because it is required under law is one thing,
Posted by: Zebulon Punk | 2009-02-22 7:12:57 PM

What law is that?

Posted by: The Stig | 2009-02-22 7:35:13 PM

Import Export laws, food quality enforcement. Foreign affairs.

Posted by: Zebulon Pike | 2009-02-22 7:49:56 PM

Import Export laws, food quality enforcement. Foreign affairs.
Posted by: Zebulon Punk | 2009-02-22 7:49:56 PM

Would you be more specific and cite the law that required the feds to compensate Alberta farmers.

Posted by: The Stig | 2009-02-22 9:00:41 PM

I see that I've won this debate.

Posted by: Zebulon Pike | 2009-02-22 9:18:51 PM

I see that I've won this debate.
Posted by: Zebulon Punk | 2009-02-22 9:18:51 PM

Bwahahahahaha. The only debate you'll ever win Punk is when you are talking to yourself and looking in a mirror.

Posted by: The Stig | 2009-02-22 9:35:52 PM

Show me which laws require bailing out the auto industry or to shovel snow because Toronto people were too lazy to do it.

Posted by: Zebulon Pike | 2009-02-22 9:46:33 PM

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