It is an interesting fact that Oscar Wilde, who was successfully prosecuted for moral crimes in the United Kingdom in 1895, would have been equally successfully prosecuted for his moral indiscretions in Norway in 2010, but would have gone free had he managed to find his way to Norway in 1895.
The new and carefully crafted law against moral indiscretions that has recently been unanimously passed by the Norwegian parliament is extraordinarily well suited for silencing outspoken social commentators, like Oscar Wilde, and is worth a closer look, both in its form and in its effect.
The "Oscar Wilde Law", which is a copy of the "Sex Purchase Law" in Sweden was used as recently as July 2010 to silence the outspoken Swedish parliamentarian Sven Otto Littorin, who resigned completely from Swedish politics on the mere suspicion that he might have broken the law.
Being fed up of Littorin's pointed political comments and biting ironies, Littorin's opponents decided to silence him once and for all by finding a prostitute who would testify that she had sold sex to Littorin, and although this was never proven to be true, the mere prospect of a lengthy court hearing on this indiscretion on Littorin's part in the middle of an election campaign was enough to make Littorin agree to an immediate resignation from politics.
The silencing of Littorin was a great victory for his political opponents, and was only possible due to the ingenious lopsided nature of the law, which makes buying sex illegal, while selling sex remains legal. The prostitute could denounce Littorin freely without any fear of being herself prosecuted, while Littorin would have to defend himself in a court of law.
Controversial politicians and social commentators, such as Sven Otto Littorin and Oscar Wilde, are often quite unconventional people with a tendency to live unconventional lives, and the architects of the "Oscar Wilde Law" must have known this perfectly well. Since they also knew that the "Sex Purchase Law" in Sweden had failed to have the desired effect of reducing prostitution, but that it had been a convenient tool for blackmail and coercion, the impression one is left with is that its true purpose is to silence and control inconvenient people.
The law was pushed through parliament on the false promise that it would reduce prostitution, and the only sure thing to have come from it is that being an unconventional person with political views contrary to that of the establishment has become, as it has been in Sweden for many years, a dangerous position. Prostitutes can at any time be called upon to denounce the social commentator and have him tried and punished for his moral sins, effectively silencing voices critical of the establishment.
Oscar Wilde would no doubt have been an early victim of this law if he had lived in Norway today. And with Oscar Wilde's sincerity and strong belief that his relationship with prostitutes was of no business of the public, he would no doubt have received the maximum sentence, just as he did in England in 1895.
onsdag 4. august 2010
søndag 11. april 2010
Deteriorating Infrastructure
There is something strange about Norway. It is one of the richest countries in the world, it is a democracy, and its people are peaceful, well educated and prosperous. It has all the qualities of a highly successful country, yet its infrastructure is in very bad shape. It has the worst roads in Europe, its trains are extremely unreliable and prone to accidents, many of its schools and other public buildings are in need of urgent repair, and the sewage and water system are also in a very bad shape.
Looking at its infrastructure, one would think that Norway was a relatively poor country and not one of the richest in the world, and since this can hardly be due to a lack of money, the policies implemented by successive governments over the years must take the blame for this sorry state of affairs.
Norwegian politicians have neglected vital infrastructure for decades and things are now starting to fall apart, but instead of dealing with the problem, the politicians are blaming each other for the mess. Almost every political party in Norway must take some part of the blame, it is argued, because almost all the political parties have been in power off and on over the period of neglect that stretches back for at least a generation. But spreading the blame does nothing to fix the problem, and apart from this blame game nothing much seems to be happening. Improvements are made every day, we are told, but no policies have been changed, and funding remain largely unchanged, so it is hardly likely that things will become better any time soon.
An interesting feature in Norwegian politics is that politicians seldom refer to experiences from other countries, or lessons from history, but argue within a narrow ideological range of ideas. The large and generous welfare state is never criticized in principle. Only very limited tinkering is discussed. All the parties talk about community and the common good. Only a few parties on the political right talk about individual rights and private initiative. Wealth redistribution is viewed as a political virtue by all the parties, and only the scale of this is a matter of debate. And the large and expanding role of the state in key businesses is largely viewed as uncontroversial.
The infrastructure that is currently falling apart is all state owned, while private infrastructure such as the telecom network is in good shape, yet the state has recently expanded into publishing of school books. It has also increased its stake in key businesses, with the conviction that centralized and large scale companies are more efficient than the free market place. Many politicians are openly skeptical to private ownership, despite the fact that history has pretty much proven once and for all that the free market is superior to centralized planning.
Norwegian politicians do not generally listen to other people than their own advisors, their civil servants and Norwegian university professors when they introduce new laws and reforms. However, the civil servants and professors have often been installed into their offices exclusively out of political considerations, and the advice they are giving is anything but objective and scientific, but simply a confirmation of accepted political dogma. The result is that the civil servants and professors do not function as the neutral advisors that they ought to be. Policies are seldom being scrutinized for adverse effects and flaws, but are more often judged to be desirable or undesirable out of political considerations, with little or no reference to actual results.
A resent school reform made it mandatory for all Norwegian schools to give all its students a PC, and declared that PCs should be used as much as possible. This is of course a very costly reform and illustrates that Norway has no shortage of money. However, independent research has shown that students who pay attention to the teacher and write their notes on paper do better at school than those who have their PC on during regular lessons, and the net result of the costly reform has indeed resulted in a further slide down on the international ranking of Norwegian school children, but the government has not responded to this adverse effect by issuing any form of advice or change in policy when it comes to the prescribed use of PCs in all aspects of school learning.
Norwegian students do not score very well on international tests despite the fact that Norway spends more money per pupil than virtually any other country in the world. Countries that score very well internationally, notably Finland, do not spend nearly as much as Norway, and the successful policies in Finland are well known and presumably easy to replicate. However, Norwegian politicians do not spend their time arguing that we should replicate systems that are shown to be superior by independent research, but discuss loftily whether our students may in fact be better off and happier than students in other countries based on other and less easily defined standards, and get their hopes confirmed by Norwegian university professors, who tell them exactly what they want to hear.
The latest attempt to improve the quality of teaching and cut costs has been the introduction of a state run publishing company that will serve as a monopoly, replacing the private publishing companies that until now have competed in a free market to provide school books. No country has ever done this with success, and history is clear on the likely and dismal consequence of this, yet this is the legislation that was recently passed in order to improve the educational system in Norway, while no effort has been made to replicate the Finns who have a proven record of success.
This aloof attitude towards hard facts presented by independent international research, and refusal to accept unintended effects of implemented policies as problems that should demand objective inquiry, can be seen in all aspects of Norwegian governments.
Norway has the worst roads in Europe, yet does not spend less money on roads than most other countries, so here again, one would naturally expect the government to look into how things are done in other countries, like Switzerland, that have much the same type of technical challenges that Norway has when it comes to building roads in its mountainous terrain, and the conclusion should be self evident and clear, because Norway finances its road projects in a very different manner than what is normal in the rest of Europe.
Almost every country in Europe let independent entrepreneurs build roads with minimal interference from the government, and a predictable budget for the whole stretch under construction. In Norway, however, politicians interfere constantly with road building and give only annual budgets, so that the entrepreneurs never know if they will be allowed to continue building the road the following year. The business of building the roads are also mostly given to companies under state control, and private initiative is generally avoided.
Confronted with simple facts regarding the superior efficiency of alternative policies when it comes to matters of schools, roads and other national infrastructures, the politicians brush it off as irrelevant, not applicable to the special nature of Norwegian circumstances, or simply unfair and undesirable in a larger context. The fact that Sweden recently completed a stretch of road building in their country three times as fast and at a third of the cost to that of a similar Norwegian road project has so far failed to make an impression on the Norwegian government. The cost of building roads in Norway is much higher than in Sweden, it is argued, partly because unemployment is very low in Norway compared to Sweden.
The idea that Swedish or other foreign contractors could be hired to build roads seems not to have occurred to most Norwegian politicians.
The consistently low unemployment rate in Norway is often used by politicians to explain why it is so expensive to build things in Norway, and is also a source of much pride by successive Norwegian governments. Very few people are unemployed. We are all out building stuff, we are told, and there are simply no free hands to do additional work however urgent this may be. Norway is as it were a victim of its own success.
However, 25% of working age Norwegians are on some sort of welfare at any given time. These Norwegians are not unemployed, but they are not working either. They are at home watching TV, despite the fact that Norway has one of the healthiest populations in the world, judged by objective standards such as life expectancy.
The UN has voted Norway the best place to live for several years in a row, and Norwegian politicians have been quick to use this to argue for the virtues of the welfare state, and also to tell people that we have little or nothing to learn from other countries. When the OECD warns that the size of the welfare state is likely to seriously disturb the economy by making it virtually impossible to hire people to do small but vital maintenance jobs, it is brushed off as merely an opinion.
When politicians refuse to look objectively at facts, and stubbornly implement policies that have been proven to have adverse effects, and refuse to copy successful policies of other countries, the result is inevitably inefficiency and failure, and the sorry state of public infrastructure in Norway is ample proof of this.
No amount of money can make up for the shortcomings of bad policies. And policies made independently of hard facts and in the face of evidence that they will not work are inevitably bad. However, future Norwegian governments are not likely to change their policies much, and the downward slide of its public infrastructure is likely to continue for many years to come.
Looking at its infrastructure, one would think that Norway was a relatively poor country and not one of the richest in the world, and since this can hardly be due to a lack of money, the policies implemented by successive governments over the years must take the blame for this sorry state of affairs.
Norwegian politicians have neglected vital infrastructure for decades and things are now starting to fall apart, but instead of dealing with the problem, the politicians are blaming each other for the mess. Almost every political party in Norway must take some part of the blame, it is argued, because almost all the political parties have been in power off and on over the period of neglect that stretches back for at least a generation. But spreading the blame does nothing to fix the problem, and apart from this blame game nothing much seems to be happening. Improvements are made every day, we are told, but no policies have been changed, and funding remain largely unchanged, so it is hardly likely that things will become better any time soon.
An interesting feature in Norwegian politics is that politicians seldom refer to experiences from other countries, or lessons from history, but argue within a narrow ideological range of ideas. The large and generous welfare state is never criticized in principle. Only very limited tinkering is discussed. All the parties talk about community and the common good. Only a few parties on the political right talk about individual rights and private initiative. Wealth redistribution is viewed as a political virtue by all the parties, and only the scale of this is a matter of debate. And the large and expanding role of the state in key businesses is largely viewed as uncontroversial.
The infrastructure that is currently falling apart is all state owned, while private infrastructure such as the telecom network is in good shape, yet the state has recently expanded into publishing of school books. It has also increased its stake in key businesses, with the conviction that centralized and large scale companies are more efficient than the free market place. Many politicians are openly skeptical to private ownership, despite the fact that history has pretty much proven once and for all that the free market is superior to centralized planning.
Norwegian politicians do not generally listen to other people than their own advisors, their civil servants and Norwegian university professors when they introduce new laws and reforms. However, the civil servants and professors have often been installed into their offices exclusively out of political considerations, and the advice they are giving is anything but objective and scientific, but simply a confirmation of accepted political dogma. The result is that the civil servants and professors do not function as the neutral advisors that they ought to be. Policies are seldom being scrutinized for adverse effects and flaws, but are more often judged to be desirable or undesirable out of political considerations, with little or no reference to actual results.
A resent school reform made it mandatory for all Norwegian schools to give all its students a PC, and declared that PCs should be used as much as possible. This is of course a very costly reform and illustrates that Norway has no shortage of money. However, independent research has shown that students who pay attention to the teacher and write their notes on paper do better at school than those who have their PC on during regular lessons, and the net result of the costly reform has indeed resulted in a further slide down on the international ranking of Norwegian school children, but the government has not responded to this adverse effect by issuing any form of advice or change in policy when it comes to the prescribed use of PCs in all aspects of school learning.
Norwegian students do not score very well on international tests despite the fact that Norway spends more money per pupil than virtually any other country in the world. Countries that score very well internationally, notably Finland, do not spend nearly as much as Norway, and the successful policies in Finland are well known and presumably easy to replicate. However, Norwegian politicians do not spend their time arguing that we should replicate systems that are shown to be superior by independent research, but discuss loftily whether our students may in fact be better off and happier than students in other countries based on other and less easily defined standards, and get their hopes confirmed by Norwegian university professors, who tell them exactly what they want to hear.
The latest attempt to improve the quality of teaching and cut costs has been the introduction of a state run publishing company that will serve as a monopoly, replacing the private publishing companies that until now have competed in a free market to provide school books. No country has ever done this with success, and history is clear on the likely and dismal consequence of this, yet this is the legislation that was recently passed in order to improve the educational system in Norway, while no effort has been made to replicate the Finns who have a proven record of success.
This aloof attitude towards hard facts presented by independent international research, and refusal to accept unintended effects of implemented policies as problems that should demand objective inquiry, can be seen in all aspects of Norwegian governments.
Norway has the worst roads in Europe, yet does not spend less money on roads than most other countries, so here again, one would naturally expect the government to look into how things are done in other countries, like Switzerland, that have much the same type of technical challenges that Norway has when it comes to building roads in its mountainous terrain, and the conclusion should be self evident and clear, because Norway finances its road projects in a very different manner than what is normal in the rest of Europe.
Almost every country in Europe let independent entrepreneurs build roads with minimal interference from the government, and a predictable budget for the whole stretch under construction. In Norway, however, politicians interfere constantly with road building and give only annual budgets, so that the entrepreneurs never know if they will be allowed to continue building the road the following year. The business of building the roads are also mostly given to companies under state control, and private initiative is generally avoided.
Confronted with simple facts regarding the superior efficiency of alternative policies when it comes to matters of schools, roads and other national infrastructures, the politicians brush it off as irrelevant, not applicable to the special nature of Norwegian circumstances, or simply unfair and undesirable in a larger context. The fact that Sweden recently completed a stretch of road building in their country three times as fast and at a third of the cost to that of a similar Norwegian road project has so far failed to make an impression on the Norwegian government. The cost of building roads in Norway is much higher than in Sweden, it is argued, partly because unemployment is very low in Norway compared to Sweden.
The idea that Swedish or other foreign contractors could be hired to build roads seems not to have occurred to most Norwegian politicians.
The consistently low unemployment rate in Norway is often used by politicians to explain why it is so expensive to build things in Norway, and is also a source of much pride by successive Norwegian governments. Very few people are unemployed. We are all out building stuff, we are told, and there are simply no free hands to do additional work however urgent this may be. Norway is as it were a victim of its own success.
However, 25% of working age Norwegians are on some sort of welfare at any given time. These Norwegians are not unemployed, but they are not working either. They are at home watching TV, despite the fact that Norway has one of the healthiest populations in the world, judged by objective standards such as life expectancy.
The UN has voted Norway the best place to live for several years in a row, and Norwegian politicians have been quick to use this to argue for the virtues of the welfare state, and also to tell people that we have little or nothing to learn from other countries. When the OECD warns that the size of the welfare state is likely to seriously disturb the economy by making it virtually impossible to hire people to do small but vital maintenance jobs, it is brushed off as merely an opinion.
When politicians refuse to look objectively at facts, and stubbornly implement policies that have been proven to have adverse effects, and refuse to copy successful policies of other countries, the result is inevitably inefficiency and failure, and the sorry state of public infrastructure in Norway is ample proof of this.
No amount of money can make up for the shortcomings of bad policies. And policies made independently of hard facts and in the face of evidence that they will not work are inevitably bad. However, future Norwegian governments are not likely to change their policies much, and the downward slide of its public infrastructure is likely to continue for many years to come.
mandag 5. april 2010
Property
The most controversial of the three natural rights to defend life, liberty and property, is the defense of property. It is therefore often assumed that this is the weakest and least significant of these rights. Life and liberty, it is argued, is clearly more important than mere property, and some go on to argue that only life and liberty are true rights.
However, people arguing that defense of property is not a natural right while still accepting life and liberty to be natural rights, are failing to see the relationship between these three rights. They never ask the simple question why anyone would bother to take away somebody’s life or liberty.
Only deeply irrational people would ever kill or enslave someone for the sole purpose of doing just that. If there is to be any rationale behind an act of murder or enslavement it must be to either defend oneself, or to get at the property, or property/service generating ability of the person being violated.
People who have no desirable qualities, skills or intellect, posess no incriminating evidence against other people, and posses no property have simply no reason to fear that any rational being will violate their freedom or take their life. There is simply nothing to be gained from killing or enslaving such a person. Only people with desirable qualities, skills, knowledge or property have reason to be fearful of others in a rational society. Those who possess no such qualities or knowledge may still have good reasons to be fearful, because they have nothing to sell and must rely entirely on charity for survival. However, they do not need to fear that rational others will take their lives or put them in chains.
The only rational reason for murder is either self defense or theft of property. If there is no reason to fear a person, killing that person is in fact theft. And the same argument holds for enslavement.
However, fear may be a fear of being exposed as a criminal as well as fear of being exposed to crime. If a person is in a position to expose someone as a criminal, that person may indeed be in danger of loosing her life or liberty, but the root of the conflict is always property, because the crime being exposed is either a cover up for another crime, or a crime against property. Crimes committed by rational people are always ultimately theft of property or enslavement for the purpose of gaining a service or property.
The interesting conclusion from this is that property, far from being the least important natural right, is in fact the most important, and the right to life and liberty simply follow as natural consequences.
Using recent history to test this conclusion we can look to the fate of the Soviet Union and that of China. Both countries were seriously dysfunctional towards the end of the 20th century and in great need of reform. The leaders of the Soviet Union chose to give people freedom but virtually no property rights, while China gave people property rights but held back on the other two liberties. The result of these deviating policies turned out to produce widely different outcomes.
While the Soviet economy collapsed after a few years following its reform, China prospered to the extent of becoming a world economic power. A weak democracy emerged out of the ruble of the Soviet Union. Powerful people grabbed hold of all the property they could lay their hands on, power got concentrated in an oligarchy which in turn became suppressed and controlled by central political figures. The tendency in Russia today seems to be towards central control and dictatorship, and oppression of the general public.
China on the other hand avoided economic collapse and social unrest, and managed to preserve its centralized government. However, strong property rights have lead to an increasing need for free communication and public debate. The government tries to hold this back, but is in fact forced to gradually loosen their iron grip on the population. Trade and commerce demand public debate and freedom of speech in order to function well and an ultimate consequence of this is that politics too becomes a matter of pubic debate. China is gradually becoming freer and this can not be stopped without seriously damaging the Chinese economy.
While Russia seems to be on its way towards dictatorship, China is moving towards democracy.
Weak property rights lead a country towards less freedom, while strong property rights leads towards greater freedom. With history also showing that weak property rights result in more poverty while strong property rights lead to more wealth, we can predict that Russians will become increasingly poor and enslaved while the Chinese will become increasingly rich and free if no radical change of policies are implemented in these two countries.
However, people arguing that defense of property is not a natural right while still accepting life and liberty to be natural rights, are failing to see the relationship between these three rights. They never ask the simple question why anyone would bother to take away somebody’s life or liberty.
Only deeply irrational people would ever kill or enslave someone for the sole purpose of doing just that. If there is to be any rationale behind an act of murder or enslavement it must be to either defend oneself, or to get at the property, or property/service generating ability of the person being violated.
People who have no desirable qualities, skills or intellect, posess no incriminating evidence against other people, and posses no property have simply no reason to fear that any rational being will violate their freedom or take their life. There is simply nothing to be gained from killing or enslaving such a person. Only people with desirable qualities, skills, knowledge or property have reason to be fearful of others in a rational society. Those who possess no such qualities or knowledge may still have good reasons to be fearful, because they have nothing to sell and must rely entirely on charity for survival. However, they do not need to fear that rational others will take their lives or put them in chains.
The only rational reason for murder is either self defense or theft of property. If there is no reason to fear a person, killing that person is in fact theft. And the same argument holds for enslavement.
However, fear may be a fear of being exposed as a criminal as well as fear of being exposed to crime. If a person is in a position to expose someone as a criminal, that person may indeed be in danger of loosing her life or liberty, but the root of the conflict is always property, because the crime being exposed is either a cover up for another crime, or a crime against property. Crimes committed by rational people are always ultimately theft of property or enslavement for the purpose of gaining a service or property.
The interesting conclusion from this is that property, far from being the least important natural right, is in fact the most important, and the right to life and liberty simply follow as natural consequences.
Using recent history to test this conclusion we can look to the fate of the Soviet Union and that of China. Both countries were seriously dysfunctional towards the end of the 20th century and in great need of reform. The leaders of the Soviet Union chose to give people freedom but virtually no property rights, while China gave people property rights but held back on the other two liberties. The result of these deviating policies turned out to produce widely different outcomes.
While the Soviet economy collapsed after a few years following its reform, China prospered to the extent of becoming a world economic power. A weak democracy emerged out of the ruble of the Soviet Union. Powerful people grabbed hold of all the property they could lay their hands on, power got concentrated in an oligarchy which in turn became suppressed and controlled by central political figures. The tendency in Russia today seems to be towards central control and dictatorship, and oppression of the general public.
China on the other hand avoided economic collapse and social unrest, and managed to preserve its centralized government. However, strong property rights have lead to an increasing need for free communication and public debate. The government tries to hold this back, but is in fact forced to gradually loosen their iron grip on the population. Trade and commerce demand public debate and freedom of speech in order to function well and an ultimate consequence of this is that politics too becomes a matter of pubic debate. China is gradually becoming freer and this can not be stopped without seriously damaging the Chinese economy.
While Russia seems to be on its way towards dictatorship, China is moving towards democracy.
Weak property rights lead a country towards less freedom, while strong property rights leads towards greater freedom. With history also showing that weak property rights result in more poverty while strong property rights lead to more wealth, we can predict that Russians will become increasingly poor and enslaved while the Chinese will become increasingly rich and free if no radical change of policies are implemented in these two countries.
søndag 4. april 2010
Charity
The most popular argument for the development of a welfare state is that health care and social security is so important that it cannot be left to individuals for the simple reason that some individuals are unable to take properly care of themselves, and that a society with no welfare state will inevitably foster poverty, hunger and social despair, while a well developed welfare state will eliminate such suffering.
The argument against a welfare state is that it is inefficient, open to abuse, expensive and ultimately not able to provide for those most in need of help, and that charity will in fact serve just as well, if not better to fight poverty and social deprivation.
Charity, although considered a good human quality, is generally viewed upon as something of the past, and associated with Dickensian images of condescendence and deprivation, while the welfare state is considered a modern invention that all developed countries will inevitably embrace, and the conclusion is in most cases drawn even before any serious analysis of the two alternatives have been made.
This is unfortunate, because the welfare state seems to be notoriously prone to produce undesired side effects and never quite able to take care of those most in need. Charity seems to be required in order to take care of the most abject of a state’s citizens, regardless of the size and importance of the welfare state.
There is also a good deal of historical evidence that charity becomes less generous as the welfare state increases in size, which is a very bad sign indeed. The Soviet Union had a huge welfare state, and produced people who were shockingly selfish, while the US has a long tradition of generous charity.
Anyone bothering to take a walk in Oslo will easily find examples of human misery of the most heartbreaking kind, which is proof in itself that a very well developed welfare state does not help the most socially deprived. The misery encountered in Oslo is no less than what you can find in New York, Rio or Singapore.
The welfare state seems to take care of only those who are in a pretty good position to take care of themselves anyway, and this leads to the question of cost. If charity in the United States is able to provide for the abject poor, and family, social networks and voluntary help is sufficient to take care of those with temporary needs, while the larger part of the population takes care of itself by paying for private insurance, what is the added value or cost associated with a well developed welfare state?
What we see in Norway is that 25% of the working population is on welfare at any given time, compared to about 10% in the US and less than 4% in Singapore, so a well developed welfare state clearly comes with a high cost. Not only are many people in Norway not working, a lot of important but low paid maintenance work on Norwegian infrastructure is not being done, because the welfare state guarantees a minimum wage, and the required work becomes too costly for the state.
People can simply not be paid to do nothing and be expected to maintain vital infrastructure at one and the same time, and the result of 40 years of welfare in Norway is now starting to show in the form of Norwegian infrastructure falling apart.
Norway is one of the richest countries in the world, yet it has the worst roads in Europe, its trains are falling apart and derailing, and notoriously unreliable. School buildings are in such a state that they are being closed due to health hazards. The same is true for other public buildings. Having paid people to stay home rather than do small jobs to keep the infrastructure at an acceptable level has made Norway dangerously deprived in the way of infrastructure, with people loosing their lives as a direct consequence of faulty railroads and bad roads.
The cost associated with a large welfare state is enormous, yet the truly abject and socially deprived are no better off than in other countries, and those down on their luck or off sick are at best only marginally better off than people in the US, Brazil or Singapore.
Charity, it seems, has received a lot of undeserved bad press, and the virtues of the welfare state have been greatly exaggerated.
The argument against a welfare state is that it is inefficient, open to abuse, expensive and ultimately not able to provide for those most in need of help, and that charity will in fact serve just as well, if not better to fight poverty and social deprivation.
Charity, although considered a good human quality, is generally viewed upon as something of the past, and associated with Dickensian images of condescendence and deprivation, while the welfare state is considered a modern invention that all developed countries will inevitably embrace, and the conclusion is in most cases drawn even before any serious analysis of the two alternatives have been made.
This is unfortunate, because the welfare state seems to be notoriously prone to produce undesired side effects and never quite able to take care of those most in need. Charity seems to be required in order to take care of the most abject of a state’s citizens, regardless of the size and importance of the welfare state.
There is also a good deal of historical evidence that charity becomes less generous as the welfare state increases in size, which is a very bad sign indeed. The Soviet Union had a huge welfare state, and produced people who were shockingly selfish, while the US has a long tradition of generous charity.
Anyone bothering to take a walk in Oslo will easily find examples of human misery of the most heartbreaking kind, which is proof in itself that a very well developed welfare state does not help the most socially deprived. The misery encountered in Oslo is no less than what you can find in New York, Rio or Singapore.
The welfare state seems to take care of only those who are in a pretty good position to take care of themselves anyway, and this leads to the question of cost. If charity in the United States is able to provide for the abject poor, and family, social networks and voluntary help is sufficient to take care of those with temporary needs, while the larger part of the population takes care of itself by paying for private insurance, what is the added value or cost associated with a well developed welfare state?
What we see in Norway is that 25% of the working population is on welfare at any given time, compared to about 10% in the US and less than 4% in Singapore, so a well developed welfare state clearly comes with a high cost. Not only are many people in Norway not working, a lot of important but low paid maintenance work on Norwegian infrastructure is not being done, because the welfare state guarantees a minimum wage, and the required work becomes too costly for the state.
People can simply not be paid to do nothing and be expected to maintain vital infrastructure at one and the same time, and the result of 40 years of welfare in Norway is now starting to show in the form of Norwegian infrastructure falling apart.
Norway is one of the richest countries in the world, yet it has the worst roads in Europe, its trains are falling apart and derailing, and notoriously unreliable. School buildings are in such a state that they are being closed due to health hazards. The same is true for other public buildings. Having paid people to stay home rather than do small jobs to keep the infrastructure at an acceptable level has made Norway dangerously deprived in the way of infrastructure, with people loosing their lives as a direct consequence of faulty railroads and bad roads.
The cost associated with a large welfare state is enormous, yet the truly abject and socially deprived are no better off than in other countries, and those down on their luck or off sick are at best only marginally better off than people in the US, Brazil or Singapore.
Charity, it seems, has received a lot of undeserved bad press, and the virtues of the welfare state have been greatly exaggerated.
University Dogma
A resent series of TV programs has caused quite a stir in Norway by exposing a number of university professors as ignorant of research relating to their field of study, and extremely prejudice against views that do not agree with their personal opinion.
The interviewer started each program by asking basic questions about culture vs. biology, for which the university professors gave short and definite answers in defense of culture. The interviewer went on to ask for supporting evidence for the answers, and got some examples from everyday life and personal experiences as an answer, but no numbers or reference to research despite being repeatedly pressed for facts.
Not having gotten anything specific to go by from the Norwegian professors, the interviewer travels abroad to interview international experts on the sciences related to the culture vs. biology problem. These experts are surprised to hear what the interviewer just learned from the Norwegian professors, and show him experiments and research that indicate that biology is an important, but by no means only, factor in determining the behavior of humans.
There was in fact, and contrary to what the Norwegian professors had said, plenty of evidence that biology is an important factor in determining such things as intelligence, gender preferences for certain professions, mother child bonding, etc.
Returning to Norway, the interviewer confront the professors with the facts collected abroad, and unable to say anything sensible about the facts in front of them, the professors proceed to dismiss the facts as irrelevant, flawed and poor, despite the rather obvious weight of the evidence, much of it regarded as the very best science currently available in this field.
How is it possible, one wonders that these professors were ignorant of such research, produced in the very field that they operate? These professors have been very active in public debate and rebuffed biology quite frequently, and must have had first time access to the research that they so categorically dismissed, or else it could not possibly pass as well founded science. And yet, they were ignorant of all the evidence against them, or deliberately lying about their knowledge. Either way it is reason for concern.
The professors that were exposed as frauds in the TV series were all very high profiled personalities, frequently quoted by politicians when proposing reforms in education, health care, equal opportunities legislation and so on. They are also some of the best paid and best funded researchers at the universities, receiving generous grants from the government.
The Norwegian government wields great power over the universities by determining what fields are to be investigated, and what fields are not, granting funding to research deemed valuable, and denying funding to research considered worthless.
Having opinions that are in accordance to official government dogma is in other words of great importance when asking for funding, and the high profiled professors are all supporting the current government view that human nature is dynamic and malleable, which in turn is an important assumption when promoting policies for the common good, rather than laws based on human nature.
The level of power and influence on a detailed level that the current government wields over research at Norwegian universities is currently greater than ever, greater even than it was during the days of the Nazi occupation of Norway. What looks like an exposure of a few professors, is in fact turning out to be an exposure of a political system, in which the universities are being made loyal to government dogma, and opposition is systematically oppressed.
Bearing in mind the enormous influence universities wield over matters of science, and hence government policies, it is interesting to note that not a single political party in Norwegian politics regard the welfare state as anything but a common good, and an essential part of future policies. Not even the progress party which considers itself a classical liberal party suggests that the welfare state needs more than a bit of tinkering in order to give more desirable results.
The introduction of a state run publishing company to provide free schoolbooks to high school students, met only token opposition. Having won control of the universities, the high schools seem to be next on the list of institutions that are to preach the official dogma of the common good, and denounce the notion of natural rights.
The interviewer started each program by asking basic questions about culture vs. biology, for which the university professors gave short and definite answers in defense of culture. The interviewer went on to ask for supporting evidence for the answers, and got some examples from everyday life and personal experiences as an answer, but no numbers or reference to research despite being repeatedly pressed for facts.
Not having gotten anything specific to go by from the Norwegian professors, the interviewer travels abroad to interview international experts on the sciences related to the culture vs. biology problem. These experts are surprised to hear what the interviewer just learned from the Norwegian professors, and show him experiments and research that indicate that biology is an important, but by no means only, factor in determining the behavior of humans.
There was in fact, and contrary to what the Norwegian professors had said, plenty of evidence that biology is an important factor in determining such things as intelligence, gender preferences for certain professions, mother child bonding, etc.
Returning to Norway, the interviewer confront the professors with the facts collected abroad, and unable to say anything sensible about the facts in front of them, the professors proceed to dismiss the facts as irrelevant, flawed and poor, despite the rather obvious weight of the evidence, much of it regarded as the very best science currently available in this field.
How is it possible, one wonders that these professors were ignorant of such research, produced in the very field that they operate? These professors have been very active in public debate and rebuffed biology quite frequently, and must have had first time access to the research that they so categorically dismissed, or else it could not possibly pass as well founded science. And yet, they were ignorant of all the evidence against them, or deliberately lying about their knowledge. Either way it is reason for concern.
The professors that were exposed as frauds in the TV series were all very high profiled personalities, frequently quoted by politicians when proposing reforms in education, health care, equal opportunities legislation and so on. They are also some of the best paid and best funded researchers at the universities, receiving generous grants from the government.
The Norwegian government wields great power over the universities by determining what fields are to be investigated, and what fields are not, granting funding to research deemed valuable, and denying funding to research considered worthless.
Having opinions that are in accordance to official government dogma is in other words of great importance when asking for funding, and the high profiled professors are all supporting the current government view that human nature is dynamic and malleable, which in turn is an important assumption when promoting policies for the common good, rather than laws based on human nature.
The level of power and influence on a detailed level that the current government wields over research at Norwegian universities is currently greater than ever, greater even than it was during the days of the Nazi occupation of Norway. What looks like an exposure of a few professors, is in fact turning out to be an exposure of a political system, in which the universities are being made loyal to government dogma, and opposition is systematically oppressed.
Bearing in mind the enormous influence universities wield over matters of science, and hence government policies, it is interesting to note that not a single political party in Norwegian politics regard the welfare state as anything but a common good, and an essential part of future policies. Not even the progress party which considers itself a classical liberal party suggests that the welfare state needs more than a bit of tinkering in order to give more desirable results.
The introduction of a state run publishing company to provide free schoolbooks to high school students, met only token opposition. Having won control of the universities, the high schools seem to be next on the list of institutions that are to preach the official dogma of the common good, and denounce the notion of natural rights.
Free Schoolbooks and Resources
The Norwegian government has recently passed a law requiring the state to produce free school books and resources for teachers and students at Norwegian high schools. Having seen that Norwegian publishers have been making a healthy profit from schoolbooks, they have concluded that it will be more efficient to develop school books and resources centrally and thereby save themselves the profit margin pocketed by the publishing companies.
This is a good example of how the Norwegian government acts to implement laws based on the idea of the common good. The introduction of a publishing company that has no profit motive, but only serves to fulfill the need for reliable school resources bypasses the profit of a few to the common good of thousands of students every year.
The theory put forward by the Norwegian government with the introduction of this law seems rather clear and straight forward. The central production of schoolbooks and resources will save the Norwegian society as a whole a net amount equal to the profit made by the publishing companies. It assumes that a profit motive is unimportant for the quality of schoolbooks, and it further assumes that the central publishing company will be at least as efficient as the privately owned publishing companies. The net benefit to society is simply identical to the profit made by the private publishing companies today.
If we analyze this law using the natural rights theory we will see that it is seriously flawed and will in fact lead to poor quality on schoolbooks, and will turn out to be far more expensive than predicted by the common good theory.
The first thing we can expect to happen is that the introduction of this law in itself will make all private publishing companies stop investing in schoolbooks and resources for high schools, and will increase the price on existing schoolbooks in an effort to get as much out of their intellectual properties before it becomes worthless.
The second thing we can predict is that the state monopoly that follows in the wake of private publishing companies laying down their school book departments, will mean that there will be no competition on price or quality on the books, and there will be no incentive for the editors to do their work properly apart from personal pride in what they are doing. In the absence of competition, the price will increase, and quality will suffer.
Finally we can expect schoolbooks to be shaped by the views of politicians, rather than the need of the market, since the market for school books no longer exists, and political dogma becomes the ultimate criteria for editing. There will be much interference from politicians when it comes to subjects like social sciences and history, and objective and balanced teaching will be increasingly difficult to do.
The net result will be lower quality on the students graduating from high school, and schoolbooks becoming increasingly expensive, despite the fact that they are officially free. Nothing is free, of course, and free schoolbooks only mean that taxes must increase. The increased taxes will most likely turn out to be more than the cost of schoolbooks in the free market that has now been dismantled.
We now have two theories with conflicting conclusions and we need to find ways to test them in order to make a reasonable assessment of what will actually happen. With the law only recently being enacted, we can only test this against very recent events in Norway, but we should be able to find comparable examples in world history to make up for the little we so far can see in Norway.
The latest developments in Norway show that no new schoolbook project has been started for high school students by the private publishing houses, and investments in schoolbooks for other students have also been reduced drastically out of fear that the state run publishing house will expand its activities. In the face of uncertainty, short time profit is already becoming more important.
The government has reacted with some surprise to this initial development. They had assumed that the private publishing houses would dismantle their activities more slowly and orderly than what is in fact happening. Everyone rushing for the exit was clearly not a scenario that they foresaw.
At the present, there is something of a vacuum in the high school book market, with the state publishing house still being developed, while the privately produced schoolbooks are frozen, and some damage to the quality of teaching can be expected, but no numbers are currently available.
Looking for other examples of state publishing, we are limited to old communist countries and some fascist countries which had seriously flawed laws in many other respects than just their publishing philosophies, but history does in fact show that political interference in schoolbook editing was rampant, and the schoolbooks were seriously biased on topics of social sciences and history. The books were dull and of poor physical quality compared to free markets, and they were in fact no less expensive than the superior quality books of the free world.
We can in other words assume that the new publishing law introduced in Norway will further deteriorate the already fragile Norwegian infrastructure by pushing school quality further downwards.
Already scoring alarmingly poorly on international school test, despite record expenditures on education, Norway can expect to slide further down the international scale of school results and at the same time further up the scale when it comes to cost per pupil.
This is a good example of how the Norwegian government acts to implement laws based on the idea of the common good. The introduction of a publishing company that has no profit motive, but only serves to fulfill the need for reliable school resources bypasses the profit of a few to the common good of thousands of students every year.
The theory put forward by the Norwegian government with the introduction of this law seems rather clear and straight forward. The central production of schoolbooks and resources will save the Norwegian society as a whole a net amount equal to the profit made by the publishing companies. It assumes that a profit motive is unimportant for the quality of schoolbooks, and it further assumes that the central publishing company will be at least as efficient as the privately owned publishing companies. The net benefit to society is simply identical to the profit made by the private publishing companies today.
If we analyze this law using the natural rights theory we will see that it is seriously flawed and will in fact lead to poor quality on schoolbooks, and will turn out to be far more expensive than predicted by the common good theory.
The first thing we can expect to happen is that the introduction of this law in itself will make all private publishing companies stop investing in schoolbooks and resources for high schools, and will increase the price on existing schoolbooks in an effort to get as much out of their intellectual properties before it becomes worthless.
The second thing we can predict is that the state monopoly that follows in the wake of private publishing companies laying down their school book departments, will mean that there will be no competition on price or quality on the books, and there will be no incentive for the editors to do their work properly apart from personal pride in what they are doing. In the absence of competition, the price will increase, and quality will suffer.
Finally we can expect schoolbooks to be shaped by the views of politicians, rather than the need of the market, since the market for school books no longer exists, and political dogma becomes the ultimate criteria for editing. There will be much interference from politicians when it comes to subjects like social sciences and history, and objective and balanced teaching will be increasingly difficult to do.
The net result will be lower quality on the students graduating from high school, and schoolbooks becoming increasingly expensive, despite the fact that they are officially free. Nothing is free, of course, and free schoolbooks only mean that taxes must increase. The increased taxes will most likely turn out to be more than the cost of schoolbooks in the free market that has now been dismantled.
We now have two theories with conflicting conclusions and we need to find ways to test them in order to make a reasonable assessment of what will actually happen. With the law only recently being enacted, we can only test this against very recent events in Norway, but we should be able to find comparable examples in world history to make up for the little we so far can see in Norway.
The latest developments in Norway show that no new schoolbook project has been started for high school students by the private publishing houses, and investments in schoolbooks for other students have also been reduced drastically out of fear that the state run publishing house will expand its activities. In the face of uncertainty, short time profit is already becoming more important.
The government has reacted with some surprise to this initial development. They had assumed that the private publishing houses would dismantle their activities more slowly and orderly than what is in fact happening. Everyone rushing for the exit was clearly not a scenario that they foresaw.
At the present, there is something of a vacuum in the high school book market, with the state publishing house still being developed, while the privately produced schoolbooks are frozen, and some damage to the quality of teaching can be expected, but no numbers are currently available.
Looking for other examples of state publishing, we are limited to old communist countries and some fascist countries which had seriously flawed laws in many other respects than just their publishing philosophies, but history does in fact show that political interference in schoolbook editing was rampant, and the schoolbooks were seriously biased on topics of social sciences and history. The books were dull and of poor physical quality compared to free markets, and they were in fact no less expensive than the superior quality books of the free world.
We can in other words assume that the new publishing law introduced in Norway will further deteriorate the already fragile Norwegian infrastructure by pushing school quality further downwards.
Already scoring alarmingly poorly on international school test, despite record expenditures on education, Norway can expect to slide further down the international scale of school results and at the same time further up the scale when it comes to cost per pupil.
The Common Good
The most popular alternative theory to natural rights as the foundation on which to build society is the theory of common good, where society is seen as a large organism with an overall aim rather than the interaction of individuals with no other aim than to profit for themselves.
The natural rights theory makes the assumption that humans are makers of things and traders that interact with others in order to profit from their interaction. This is the nature of humans and cannot be altered, so it follows that society needs to make laws that take this natural behavior into account. Humans have a natural right to defend their life, freedom and property, and all laws have to recognize this.
Proponents of the common good theory tend to criticize the natural rights theory, as simply a cruel and selfish human invention. They argue that laws should not protect such selfish rights, but aim to maximize good and minimize bad. Property should be distributed to those who need it, and work should be performed by those that can do it. Individual freedom, property and even life are secondary to the common good.
The proponents of the common good theory are particularly opposed to the right of individuals to protect their property, and profit making is often viewed as theft, or at least deeply immoral. The market place where free individuals exchange goods and services is suboptimal, since it does not necessarily bring the goods and services to those who really need it, like the sick and elderly. Individual wealth is therefore a sign of an unfair society, and redistribution of such wealth is desirable.
Being faced with two different theories, we should test these and make an evaluation of how well they work. I suggest we start with a hypothetical example, so that we can make some predictions, and then look to history to see if this confirms or refutes our predictions.
Let us assume that you are a skilled potter and have recently arrived in a town where there is a market and several craftsmen and traders and you want to find your way in this new society. Before making any choices, you observe the behavior of the various individuals, and you use the natural rights theory to guide your judgment.
What you see is that there are some people making things, bringing them to the market, and exchanging these things, and you conclude that these are people you can trust and work and trade with. You also see that there are thieves that try to steal the products, but they are kept away by force, being beaten and sometimes even killed. But never do you see a trader beat another trader, and you conclude that you have no reason to fear the traders unless you try to steal from them, so you remain confident that you have more to fear from the thieves than the traders.
You set up shop, you arm yourself against the thieves, and you prosper due to your skills and hard work.
Now let say you reject the theory of natural rights and use the common good theory instead. You refuse to make judgments based on the idea that people have a right to defend their property, but look solely for maximum good and minimum evil. What you now see, is that the thieves are not thieves at all, but people with needs. They are not stealing, but simply redistributing the wealth. Taking goods from those who have the skills to make them and distributing them among their friends and family who have a need for these products. The traders who are beating these people and sometimes even killing them are clearly very selfish and in opposition to the common good, and you decide to join the cause of justice and join the redistributors.
You take part in the revolution, shut down the market place, remove the traders’ ability to defend themselves and redistribute their products for the maximum good. The traders are still rather selfish, so the redistributors make sure they stay producing their products and lock them up to make sure they do not escape. You set up schools to teach them how wrong natural rights are and how just and good redistribution is.
Being a skilled potter you show off your skills one day, and you are promptly set in chains and forced to produce the wares for the common good, and you end your days poor and enslaved.
The common good theory results in a society of slaves, force and poverty, while a society based on natural rights will result in poverty only among those who do not produce goods or services, but wealth among those who produce and trade freely. So much wealth, in fact, that charity is enough to cover the needs of the truly unfortunate and deprived.
And if we look to history as the ultimate testing ground, we see that our conclusions hold true. States that base their laws on natural rights have consistently outperformed those that base their laws on common good. States that have been run solely according to natural rights have always prospered, while those that have been run solely according to the common good have failed.
States with mixed laws tend to do better with stronger natural rights, and worse with more emphasis on the common good. Europe is doing less well than the US, but much better than North Korea. China is doing much better with strong property rights than it did with weak property rights.
The US has introduced a health reform to the common good, and we can expect the US to do less well after this introduction than it did before. Norway has steadily moved towards more emphasis on the common good, and its infrastructure is now falling apart.
The common good theory is clearly lacking, yet it is still a very popular one. It sounds noble and good, but is in fact a recipe for inefficiency and failure. Not because it is inherently evil, but because it fails to recognize human nature and the importance of natural rights.
Nature is the ultimate test of any theory, and the common good theory should logically have been dismissed a long time ago, but such is human nature too, that we like to think ourselves above nature itself, and so we go on arguing for the virtues of the common good despite all the evidence that it does not work.
The natural rights theory makes the assumption that humans are makers of things and traders that interact with others in order to profit from their interaction. This is the nature of humans and cannot be altered, so it follows that society needs to make laws that take this natural behavior into account. Humans have a natural right to defend their life, freedom and property, and all laws have to recognize this.
Proponents of the common good theory tend to criticize the natural rights theory, as simply a cruel and selfish human invention. They argue that laws should not protect such selfish rights, but aim to maximize good and minimize bad. Property should be distributed to those who need it, and work should be performed by those that can do it. Individual freedom, property and even life are secondary to the common good.
The proponents of the common good theory are particularly opposed to the right of individuals to protect their property, and profit making is often viewed as theft, or at least deeply immoral. The market place where free individuals exchange goods and services is suboptimal, since it does not necessarily bring the goods and services to those who really need it, like the sick and elderly. Individual wealth is therefore a sign of an unfair society, and redistribution of such wealth is desirable.
Being faced with two different theories, we should test these and make an evaluation of how well they work. I suggest we start with a hypothetical example, so that we can make some predictions, and then look to history to see if this confirms or refutes our predictions.
Let us assume that you are a skilled potter and have recently arrived in a town where there is a market and several craftsmen and traders and you want to find your way in this new society. Before making any choices, you observe the behavior of the various individuals, and you use the natural rights theory to guide your judgment.
What you see is that there are some people making things, bringing them to the market, and exchanging these things, and you conclude that these are people you can trust and work and trade with. You also see that there are thieves that try to steal the products, but they are kept away by force, being beaten and sometimes even killed. But never do you see a trader beat another trader, and you conclude that you have no reason to fear the traders unless you try to steal from them, so you remain confident that you have more to fear from the thieves than the traders.
You set up shop, you arm yourself against the thieves, and you prosper due to your skills and hard work.
Now let say you reject the theory of natural rights and use the common good theory instead. You refuse to make judgments based on the idea that people have a right to defend their property, but look solely for maximum good and minimum evil. What you now see, is that the thieves are not thieves at all, but people with needs. They are not stealing, but simply redistributing the wealth. Taking goods from those who have the skills to make them and distributing them among their friends and family who have a need for these products. The traders who are beating these people and sometimes even killing them are clearly very selfish and in opposition to the common good, and you decide to join the cause of justice and join the redistributors.
You take part in the revolution, shut down the market place, remove the traders’ ability to defend themselves and redistribute their products for the maximum good. The traders are still rather selfish, so the redistributors make sure they stay producing their products and lock them up to make sure they do not escape. You set up schools to teach them how wrong natural rights are and how just and good redistribution is.
Being a skilled potter you show off your skills one day, and you are promptly set in chains and forced to produce the wares for the common good, and you end your days poor and enslaved.
The common good theory results in a society of slaves, force and poverty, while a society based on natural rights will result in poverty only among those who do not produce goods or services, but wealth among those who produce and trade freely. So much wealth, in fact, that charity is enough to cover the needs of the truly unfortunate and deprived.
And if we look to history as the ultimate testing ground, we see that our conclusions hold true. States that base their laws on natural rights have consistently outperformed those that base their laws on common good. States that have been run solely according to natural rights have always prospered, while those that have been run solely according to the common good have failed.
States with mixed laws tend to do better with stronger natural rights, and worse with more emphasis on the common good. Europe is doing less well than the US, but much better than North Korea. China is doing much better with strong property rights than it did with weak property rights.
The US has introduced a health reform to the common good, and we can expect the US to do less well after this introduction than it did before. Norway has steadily moved towards more emphasis on the common good, and its infrastructure is now falling apart.
The common good theory is clearly lacking, yet it is still a very popular one. It sounds noble and good, but is in fact a recipe for inefficiency and failure. Not because it is inherently evil, but because it fails to recognize human nature and the importance of natural rights.
Nature is the ultimate test of any theory, and the common good theory should logically have been dismissed a long time ago, but such is human nature too, that we like to think ourselves above nature itself, and so we go on arguing for the virtues of the common good despite all the evidence that it does not work.
lørdag 3. april 2010
Human Nature
The oldest and most successful theory on human nature is the one that forms the basis of the theory of natural rights. It assumes that people are naturally inclined to make things, collect things and trade things, and that we fear those who try to take things away from us by force, and are drawn towards those who are willing to cooperate in a mutually profitable manner. We are inclined to cheat if we think we can get away with it, and we are naturally lazy, seldom preferring work to horsing around or doing nothing.
The theory of natural rights says that in the absence of any government or state, people will still recognize justice, and fear those who violate it. An example of this is the merchant who brings his wares to a market and sees that some people are stealing and others are trading fairly. The merchant will, in the absence of laws seek to defend his wares from the thieves, and seek to cooperate with those that trade fairly. And he will do this even if he sees that the fair traders punish thieves harshly.
It is human nature to view any threat to ones life, property or freedom as evil, and to defend oneself from this. It is also human nature to recognize this in the interactions of other people, and see it as everyone’s natural right to protect themselves from thieves, murderers and kidnappers. Failing to recognize the dangers of evil people is likely to result in loss of liberty, property and life, so it is of vital importance for people to recognize this. It is so important, in fact, that it is human nature to identify and fear the threat of evil.
An immediate and natural conclusion from this theory about human nature is that laws and politics should be made such that they protect people from what is seen as evil.
A testable consequence of this theory is that societies that value life, property and freedom highly will prosper and be peaceful, while societies that value these rights less highly, or even view these rights as somehow corrupt and mistake will do less well.
What we know from history is in fact that the 17th century Dutch Republic and the United States of the 18th and 19th century, which were governed almost solely by natural rights did in fact prosper rather than turn into anarchy, which some people would have expected. The most successful countries today have all strong property rights, have much freedom for their citizens and protect people well against threats to their lives.
Notable failures have all been lacking in property rights, had very little freedom, and did not protect people well from threats to their lives. The Soviet Union, Nazi Germany and Cambodia are good examples from the 20th century. North Korea and Zimbabwe are similarly dysfunctional today.
And it is not only at the extremes that the correlation between adherence to natural rights and success is strong. Pick almost any country at random, and check their ranking when it comes to wealth and social stability against their standing when it comes to natural rights, and the correlation is profound. Only countries with enormous natural resources can deviate from this correlation, which further illustrate the enormous cost associated with laws and policies that do not take natural rights seriously.
The correlation is so strong on this point that it seems likely that sensible predictions can be made when it comes to the consequences of new laws and policies being introduced in a country, as well as the consequence of leaving existing laws unchanged if they are in fact in conflict with natural rights.
Human nature is such that people will always try to get as much as possible for as little as possible. If laws are enacted that allow people to do this by violating other peoples’ property, liberty or life, serious consequences can be expected. This is true both if individuals are allowed to violate these rights and if the state is allowed to do so.
A state that collects taxes for the sole purpose of protecting its citizens, and make infrastructure that enhances everyone’s life is not deviating much from natural rights since the taxes that are forcibly collected return an easy to recognize benefit. However, if a state collects taxes for the purpose of redistributing wealth, taking property from one for the purpose of giving it to another, the state acts in violation of natural rights and serious consequences can be expected.
The western world is experimenting with wealth redistribution, and the consequences are about to be visible. Economic growth is slowing in Europe and infrastructure is decaying at an alarming rate in Norway. The US has just passed a health reform, and slower economic growth will most likely be the consequence of this over there too.
The welfare state, being so popular in the western world, is likely to cause serious trouble, for the simple reason that it violates property, by forcibly taking money from one for the sole purpose of giving it to another.
The theory of natural rights says that in the absence of any government or state, people will still recognize justice, and fear those who violate it. An example of this is the merchant who brings his wares to a market and sees that some people are stealing and others are trading fairly. The merchant will, in the absence of laws seek to defend his wares from the thieves, and seek to cooperate with those that trade fairly. And he will do this even if he sees that the fair traders punish thieves harshly.
It is human nature to view any threat to ones life, property or freedom as evil, and to defend oneself from this. It is also human nature to recognize this in the interactions of other people, and see it as everyone’s natural right to protect themselves from thieves, murderers and kidnappers. Failing to recognize the dangers of evil people is likely to result in loss of liberty, property and life, so it is of vital importance for people to recognize this. It is so important, in fact, that it is human nature to identify and fear the threat of evil.
An immediate and natural conclusion from this theory about human nature is that laws and politics should be made such that they protect people from what is seen as evil.
A testable consequence of this theory is that societies that value life, property and freedom highly will prosper and be peaceful, while societies that value these rights less highly, or even view these rights as somehow corrupt and mistake will do less well.
What we know from history is in fact that the 17th century Dutch Republic and the United States of the 18th and 19th century, which were governed almost solely by natural rights did in fact prosper rather than turn into anarchy, which some people would have expected. The most successful countries today have all strong property rights, have much freedom for their citizens and protect people well against threats to their lives.
Notable failures have all been lacking in property rights, had very little freedom, and did not protect people well from threats to their lives. The Soviet Union, Nazi Germany and Cambodia are good examples from the 20th century. North Korea and Zimbabwe are similarly dysfunctional today.
And it is not only at the extremes that the correlation between adherence to natural rights and success is strong. Pick almost any country at random, and check their ranking when it comes to wealth and social stability against their standing when it comes to natural rights, and the correlation is profound. Only countries with enormous natural resources can deviate from this correlation, which further illustrate the enormous cost associated with laws and policies that do not take natural rights seriously.
The correlation is so strong on this point that it seems likely that sensible predictions can be made when it comes to the consequences of new laws and policies being introduced in a country, as well as the consequence of leaving existing laws unchanged if they are in fact in conflict with natural rights.
Human nature is such that people will always try to get as much as possible for as little as possible. If laws are enacted that allow people to do this by violating other peoples’ property, liberty or life, serious consequences can be expected. This is true both if individuals are allowed to violate these rights and if the state is allowed to do so.
A state that collects taxes for the sole purpose of protecting its citizens, and make infrastructure that enhances everyone’s life is not deviating much from natural rights since the taxes that are forcibly collected return an easy to recognize benefit. However, if a state collects taxes for the purpose of redistributing wealth, taking property from one for the purpose of giving it to another, the state acts in violation of natural rights and serious consequences can be expected.
The western world is experimenting with wealth redistribution, and the consequences are about to be visible. Economic growth is slowing in Europe and infrastructure is decaying at an alarming rate in Norway. The US has just passed a health reform, and slower economic growth will most likely be the consequence of this over there too.
The welfare state, being so popular in the western world, is likely to cause serious trouble, for the simple reason that it violates property, by forcibly taking money from one for the sole purpose of giving it to another.
Nature
There is only one way to measure the success of a theory, and that is to test it against nature. And with nature, I mean all things external to us, including things that we have invented and built ourselves, such as buildings and institutions, and laws. By theory I mean any hypothesis about the way things, institutions and laws should be constructed, so as to give a desired effect.
Tested against nature, those theories that deviate most from the actual order of things will do worse than those theories that match the external order more correctly. The best theory will always deliver the best result over time. Not necessarily immediately, but over time, things that have been built on assumptions deviating from nature will do worse than those that are built on assumptions that fit well with nature.
Nature is by definition impossible to know exactly, since it is external to us. We know that Newton was pretty right about physics, but Einstein was closer to the truth. However, even his theory will one day be replaced by another one that includes more, and explains more still. Tested against nature, we know that Newton was lacking in certain parts of his theories, and that Einstein could explain more things better. However, we also know that there are things that neither Newton nor Einstein can explain in their theories, so there is still room for improvement.
Nature is not just the world of external objects, but includes human nature. No one person is in a position to describe human nature exactly, so in this way, even human nature is an external quantity, open for theories and scientific investigation. And human nature is in fact under continuous testing in the world of trade, politics and everyday human interaction.
Every law that is enacted and every policy that is carried out is in fact an experiment, and the policies that are in accordance with nature will give good results and a prosperous people and society, while those policies that deviate from nature will result in poverty, violence, apathy or some other undesired effect.
Let us therefore agree on this. That nature, and not man, is the measure of all things. And let us proceed to investigate past and present political problems, propose solutions, make predictions and test these against historical facts so that we can find a set of principles that we can use as guidelines for building society.
What is the nature of mankind, and which politics will bring out the best in us?
Let us look at history and learn.
Tested against nature, those theories that deviate most from the actual order of things will do worse than those theories that match the external order more correctly. The best theory will always deliver the best result over time. Not necessarily immediately, but over time, things that have been built on assumptions deviating from nature will do worse than those that are built on assumptions that fit well with nature.
Nature is by definition impossible to know exactly, since it is external to us. We know that Newton was pretty right about physics, but Einstein was closer to the truth. However, even his theory will one day be replaced by another one that includes more, and explains more still. Tested against nature, we know that Newton was lacking in certain parts of his theories, and that Einstein could explain more things better. However, we also know that there are things that neither Newton nor Einstein can explain in their theories, so there is still room for improvement.
Nature is not just the world of external objects, but includes human nature. No one person is in a position to describe human nature exactly, so in this way, even human nature is an external quantity, open for theories and scientific investigation. And human nature is in fact under continuous testing in the world of trade, politics and everyday human interaction.
Every law that is enacted and every policy that is carried out is in fact an experiment, and the policies that are in accordance with nature will give good results and a prosperous people and society, while those policies that deviate from nature will result in poverty, violence, apathy or some other undesired effect.
Let us therefore agree on this. That nature, and not man, is the measure of all things. And let us proceed to investigate past and present political problems, propose solutions, make predictions and test these against historical facts so that we can find a set of principles that we can use as guidelines for building society.
What is the nature of mankind, and which politics will bring out the best in us?
Let us look at history and learn.
torsdag 25. mars 2010
A liberal manifesto
In a world where new laws and regulations are invented every day, a return to a simple and fundamental set of laws may seem exotic and strange, but there is no reason to believe that an ever more complex set of laws does anything to enhance the rule of law. Rather the opposite seems to be happening, with politicians interfering evermore directly into the world of law and order, and a return to a set of simple and fundamental rules may already be long overdue.
I propose, therefore, the following liberal manifesto to serve as a guide to the dismantling of the over regulated state:
In the liberal state, the individual is supreme in the right to life, property and freedom, and the only obligation of the individual to the state is the taxes that are needed to safeguard these rights, through an efficient and swift justice system. All other functions of society can only be made through the voluntary cooperation of each individual.
Government in a liberal state concerns itself solely with the protection of the three fundamental liberties of the individual, and is therefore very small. Society is organized through contracts between individuals, companies and organizations, and the court of law has as the swift processing of disputes concerning these contracts, as its only task in addition to upholding the constitution itself. As a consequence, the courts in a liberal state can be expected to be large.
The apprehension of criminals and the defense of the state is not a matter for the courts or government, and are left to private organizations and individuals, who have to fund their activities with voluntary contributions. However, any restrictions on the fundamental liberties of an individual require permission by a court of law.
Justice must be reversible, so death sentence and corporal punishment is not permitted.
A flat tax on consumption, rather than income or property is likely to be the least intrusive on the fundamental liberties of an individual, and most likely to apply equally to every one.
The government and the courts of law exist solely for the purpose of the people and supreme representatives are as a consequence installed by the people in free and fair elections. Since every individual are equal to the law, all elections are carried out with one vote per individual.
I propose, therefore, the following liberal manifesto to serve as a guide to the dismantling of the over regulated state:
- We are all equal to the law, and laws exist for the sole purpose of protecting the life, property and freedom of individuals.
- No law or regulation can be in violation of any one of the fundamental liberties of life, property and freedom, and no law can be made that does not serve to safeguard at least one of these liberties.
- No law can apply to events that occurred before its introduction.
- An individual’s fundamental liberties can only be restricted by a court of law, and only when there is reasonable evidence that the suspect has been violating at least one of these liberties of another person.
- All individuals apprehended as suspects of a crime have the right to a swift and fair trial, and the help of an attorney.
- Apprehension of suspects can only be carried out by individuals, or organizations that have permission to do so from a court of law.
- Justice must be measured against the loss suffered by the victim, but cannot irreversibly remove any of the criminal’s fundamental rights.
- Taxes are paid by the people for the sole purpose of supporting the court of law and the legislative branch of government.
- Taxes must be fair and equally applied to every individual, and must intrude as little as possible on any of the individual’s fundamental liberties.
- The legislative body of government and the supreme judicial court are elected by the people every 4 years.
In the liberal state, the individual is supreme in the right to life, property and freedom, and the only obligation of the individual to the state is the taxes that are needed to safeguard these rights, through an efficient and swift justice system. All other functions of society can only be made through the voluntary cooperation of each individual.
Government in a liberal state concerns itself solely with the protection of the three fundamental liberties of the individual, and is therefore very small. Society is organized through contracts between individuals, companies and organizations, and the court of law has as the swift processing of disputes concerning these contracts, as its only task in addition to upholding the constitution itself. As a consequence, the courts in a liberal state can be expected to be large.
The apprehension of criminals and the defense of the state is not a matter for the courts or government, and are left to private organizations and individuals, who have to fund their activities with voluntary contributions. However, any restrictions on the fundamental liberties of an individual require permission by a court of law.
Justice must be reversible, so death sentence and corporal punishment is not permitted.
A flat tax on consumption, rather than income or property is likely to be the least intrusive on the fundamental liberties of an individual, and most likely to apply equally to every one.
The government and the courts of law exist solely for the purpose of the people and supreme representatives are as a consequence installed by the people in free and fair elections. Since every individual are equal to the law, all elections are carried out with one vote per individual.
The welfare state and the collapse of money
The welfare state is hailed by many as one of the great advances of modern society, and is often seen as the victory of good and order over evil and chaos despite the fact that the welfare state has a fundamental flaw that inevitably leads to moral decay and financial ruin, both for individuals and society as a whole. But so strong is the moral appeal of the welfare state that most people are unaware of or unwilling to accept the plain facts of history that shows how destructive and futile the system is. The idea of the common good, and the state taking care of the weak is so appealing that the sinister consequences of the welfare state is brushed off as technicalities that can be solved by legislative tweaking. However, no amount of legislative tweaking will ever make the welfare system work according to intention because the system itself is flawed, and will never work.
This may seem like a rather silly clam, since the western world are full of countries with welfare systems, and they all seem to be doing rather well. Not brilliantly well, but well enough. And the benefits of the welfare state seem at first glance to be a great advantage to everyone. No one needs to worry about health care, sick leave, old age, or unemployment. What could possibly be wrong with that?
Well, first of all, if something does not work, it cannot be right. Saying that a system is right despite the fact that it does not work, is like saying that a machine is right even though it does not work. The welfare state is a socio-economic machine, and can only be judged by what it produces. To judge it by its moral qualities is a silly, but surprising common mistake.
Secondly, in economy things can seem to work for a very long time before they suddenly stop working, and the welfare state is an example of this. Many countries in Western Europe have had a welfare state for close to a century, and there are few signs of anything being seriously wrong. However, there are two interesting features common to virtually all countries with a large welfare state that indicate something is not quite as it should. That is the relatively low rate of economic growth, and large national deficits.
The connection between national dept, and the welfare state, is quite straight forward to understand. Welfare costs money, and so the state has to either tax its citizens to pay for this, or borrow money to cover the cost. In countries with low tolerance towards taxes, such as the USA, England and South Europe, building up a deficit is the only way for politicians to get the money and still win the next election.
In Germany, Holland and Scandinavia, where people are more tolerant of taxes, the problem of national dept is smaller, or nonexistent. So coercing people into paying more taxes solves the problem of national dept, and this lends weight to the idea that legislative tweaking is sufficient to keep the welfare state working.
However, increasing the tax burden lowers productivity, since the incentive to work is eroded when the economic difference between being on welfare and being at work is reduced. Norway, which through objective measures such as infant mortality and life expectancy, has one of the healthiest populations on the planet, has close to 8% of the working population on short time sick leave at any given time, and an additional 17% of its working population is permanently on welfare. The tax burden is such that every penny paid into the state as income tax is spent on welfare. Hardly a penny is spent on infrastructure, and Norway, although one of the richest countries in the world has as a consequence the worst roads in Europe, has trains that are notoriously unreliable and increasingly dangerous, and sewage and water systems in great need of repair. The productivity in the Norwegian economy is clearly not at all what one would expect from such a wealthy country.
The above example may again be brushed off as insignificant, and no proof of any fundamental problem with the welfare state. Norway is after all a rich and prosperous country, with a very healthy population, and a proof in itself that the system works. Clearly, the decaying infrastructure in Norway, is no proof that the welfare system does not work?
True enough, however, what is happening in Norway today is suspiciously similar to what happened in the Soviet Union during its final decades before its collapse, and contrary to popular belief, it was not Communism that brought the Soviet Union to its end, but the welfare system that lay at the heart of Soviet society.
Communism exists today in China, and China has a thriving economy. Communist China runs a healthy surplus, while the USA is running up an enormous deficit. China’s infrastructure is improving day by day, while the infrastructure in Norway is slowly decaying. The Soviet Union collapsed because its economic engine grew to a halt, while China has grown into a major economic power. Lack of democracy and personal freedom does not explain why two Communist countries should fare so differently. Being equally oppressive, the difference lies in their fundamentally different economic model. China has virtually no welfare state, while the welfare state of the Soviet Union was highly developed.
The collapse of the Soviet Union was an economic and social disaster of enormous proportions, and was entirely due to the welfare state. The arms race with the US speeded up the process of collapse, but it did not cause the collapse. It was caused by a catastrophic collapse of productivity. People in the Soviet Union virtually stopped producing products and services of any value, for the simple reason that it did not pay to work.
At the heart of the welfare state, lies the idea of wealth and income re-distribution. Wealth and income is taken from productive individuals and given to individuals with special needs. The healthy take care of the sick and old. The strong take care of the weak. It seems fair enough. However, the system relies entirely on an assumption that we all want to work and contribute, and this is its fundamental flaw. People do not in general want to work. Very few jobs are truly inspiring. Who wouldn’t rather spend the day at the beach on a summer day, than fixing the sewage drains in downtown Oslo?
With less economic incentive to go to work, the sense of moral obligation becomes more important for the system to function, and welfare states often do rather well for at least a generation or so merely by appealing to the moral conviction of their people. However, the system’s reliance on moral obligation erodes this quality in people when they see that others take advantage of their hard work. This leads to a more cynical attitude towards work, where the benefits of the welfare state are taken into account as part of the pay for work. Staying at home every now and then becomes a part of the salary calculation when considering a job. The bigger the welfare system is, the more important will be the perks, and less important will be the pay. In a system where there is no economic difference between work and unemployment, no one will work unless forced to.
The moral decay that follows from reduced economic incentive to work, leads a welfare state two choices in order to preserve itself. It must either force people to work, or run a deficit to pay for all the people who do not work. The Soviet Union chose to enslave a large part of its population. When this slavery was abandoned, the inevitable consequence was decay and collapse of the economy.
In democratic countries, slavery and coercion is less accepted, although more common than many people may think. Some individuals in democratic welfare states pay more than 100% of their income in taxes, which means that they are in fact slaves to the state. These people are forced to work under the threat of having their estate confiscated by the state in the form of wealth tax. In Norway, there are numerous individuals who pay more in taxes than they earn, and the only way for them to escape this slavery is to sell everything, and permanently move out of the country. And Norway is far from the only democratic country that has or has had such a system in order to support its welfare state. England, France and Holland have all had periods with taxes on income reaching more than 100% for wealthy individuals.
Slavery is commonly accepted by a majority of the people in a democracy for the simple reason that it benefits this majority. Having wealthy individuals pay for the welfare of others through coercion and force is regularly promoted as virtuous and good. Taking money from the rich and giving it to the poor has a romantic ring to it that gives it its legitimacy. Wealth tax and other taxes on property are therefore quite acceptable and often promoted as a fair and just. However, welfare states are too large to rely on slavery alone, and running a deficit is inevitably the only way to support the demands of its clients.
Characteristic of welfare states is that consumption increases while investments decrease. People stop building and maintaining the infrastructure of the country, and are paid by the state to do nothing in the way of productive work, and simply consume the products produced by others. Welfare states eventually end up with large trade imbalances to cover up for the imbalance between consumption and production in the country. This is not true for Germany or Norway at the moment, but with a decreasing incentive to work, and erosion of work ethics, these countries too, will eventually be forced to run a deficit.
There is, as everyone knows, no limit to the potential demand for a free service. The welfare state provides a generous array of free services, and the demand for these will never diminish. Technology and scientific advances provide the potential for ever better health service. Social progress increase the level of welfare that is considered acceptable, and the definition of poverty becomes more relative to what others have, and less a definition in absolute terms. With free welfare, there’s no limit to the demand, and strict regulation is required to avoid abuse.
The bureaucracy required to run such a welfare state, produces in itself nothing, but simply serves to redirect money, either borrowed from or taxed from others. The bureaucracy in turn drains an already depleted workforce from the job market, speeding up the decay of infrastructure, and growing imbalance in the foreign trade.
The bureaucracy of the welfare state has the perverse effect of demanding energy and ingenuity from its clients in order to draw full advantage of the services that it provides. People who are truly down and out, and in desperate need of help, are not reached. Oslo has a disturbingly high rate of drug related deaths, and the number of beggars and homeless people is much higher than one would expect in a country with an extremely generous welfare state. The truly poor and homeless are left to charity, but charity finds it hard to find volunteers and donations, because the assumption is that a large welfare state takes care of everyone, and no further help is needed.
The welfare state does not only damage the work ethics of its people, but also the people’s compassion for others. High taxes going into the welfare state, makes people both assume that all are taken care of, and reluctant to spend what money they have left after taxes on additional welfare to others through voluntary contributions to charity. A notable change in Norwegian society over the past decades is a rise in violent crimes. Compassion, it seems, is a diminishing resource under the welfare state. The cynicism and extreme selfishness often seen in the Soviet Union before, and after its collapse is further evidence that the welfare state is morally destructive, and that the effect of this destruction can take generations to mend.
When a welfare state reaches a certain critical mass, the implosion of the system becomes inevitable because the people moving from the productive part of the economy into the welfare system, either as client or as redistributors, increases the burden on the remaining producers, which in turn sucks more people into welfare, drawing even more heavily on the producers, until the whole system collapses when production grinds to a complete halt, and the deficit balloons into unsupportable proportions.
When productivity is depleted from the economy the inevitable result is inflation. Money is, as we all know, only valuable when tied to products and services, but with virtually all services being free and, few if any domestic products to buy, the money/product balance becomes skewed, and the price of products and services increase. Importing more products may stem the price rise in the short run, but this must be financed with a growing deficit, and by now, potential creditors start to realize what is going on and demand higher interest, and better security on the national bonds, which in turn forces the welfare state to either print more money, or sell assets, often on behalf of their citizens; public buildings, infrastructure, hospitals, national parks, national resources, and so on.
Printing money will not work for very long, because the creditors will refuse to buy bonds in the domestic currency, and the demand for security to back up the bonds will increase. Printing money will make people switch to other currencies, but this will not necessarily stop the inflation, because the welfare state has removed so much productivity from the economy, that even foreign money looses its value in competition for the limited number of products and services for sale.
Inflation runs rampant until the final collapse of the welfare state, when the national dept defaults, the national currency becomes worthless, and every one who is part of the welfare state come back into the productive economy because the money they receive from the welfare state has ceased to have any value.
With a huge number of people suddenly desperate to provide products and services in order to earn enough to stay alive, hard currency becomes extremely valuable. Inflation turns to deflation and prices drop sharply. Such a situation would normally have been counteracted by printing more money, but with the national currency gone, the bankrupt welfare state is powerless as it sees it citizens desperately accepting almost any condition demanded by those possessing the hard and attractive currency.
However, few welfare states come to the point where they collapse completely. Constraint is normally imposed on the welfare state before it reaches its critical mass from which it cannot return. England pulled away from disaster in the past, and so did Holland. And both supports a welfare state today, so it seems that legislative tinkering does work and welfare states do not necessarily come at the cost of social disorder.
That may be so, but they do come with a high risk of becoming unstable, and they always reduce the productivity of a country by reducing the incentive to work. With national dept growing in the western world, and productivity being dampened by the welfare state, things may well already be getting out of control for several countries.
The alternative to a welfare state is a system without a central organizing body to provide welfare services, and no income and wealth redistribution. Social security and health care in such a system is a matter left to each individual. This comes with the risk of some people not being able to afford basic welfare services, but in practice this risk is much smaller than it first appears. Very few people have no social or economic resources to help them in times of need, and those that do are usually taken care of by charity, which can be expected to be quite generous when people are left with more money on their hands.
In a liberal and decentralized society, incentive to work remains high, and productivity which lies at the heart of all wealth, including welfare, is generally high. With less waste, there is more wealth to share, and very few run the risk of falling completely outside the system. Fewer, certainly than is the case of welfare states where finding your way through the maze of bureaucracy is vital in order to draw the full benefit of the system, and the truly destitute are left with no support at all.
Economy will sooner or later catch up with the welfare state. Competing with countries that take care of their welfare without the economic cost of a welfare state, old fashioned welfare states will have to reform, or face the consequence of being outcompeted by other nations. Central bureaucracies will have to be reduced, prompting the dismantling of the welfare state, and we are likely to see this happening over the next decade or two. Those welfare states that resist change will collapse, while those that dismantle will shed their welfare obligations more gracefully. Either way, the welfare state will be left to history as a curious and failed experiment of the 20th century that completely vanished during the first half of the 21st century.
This may seem like a rather silly clam, since the western world are full of countries with welfare systems, and they all seem to be doing rather well. Not brilliantly well, but well enough. And the benefits of the welfare state seem at first glance to be a great advantage to everyone. No one needs to worry about health care, sick leave, old age, or unemployment. What could possibly be wrong with that?
Well, first of all, if something does not work, it cannot be right. Saying that a system is right despite the fact that it does not work, is like saying that a machine is right even though it does not work. The welfare state is a socio-economic machine, and can only be judged by what it produces. To judge it by its moral qualities is a silly, but surprising common mistake.
Secondly, in economy things can seem to work for a very long time before they suddenly stop working, and the welfare state is an example of this. Many countries in Western Europe have had a welfare state for close to a century, and there are few signs of anything being seriously wrong. However, there are two interesting features common to virtually all countries with a large welfare state that indicate something is not quite as it should. That is the relatively low rate of economic growth, and large national deficits.
The connection between national dept, and the welfare state, is quite straight forward to understand. Welfare costs money, and so the state has to either tax its citizens to pay for this, or borrow money to cover the cost. In countries with low tolerance towards taxes, such as the USA, England and South Europe, building up a deficit is the only way for politicians to get the money and still win the next election.
In Germany, Holland and Scandinavia, where people are more tolerant of taxes, the problem of national dept is smaller, or nonexistent. So coercing people into paying more taxes solves the problem of national dept, and this lends weight to the idea that legislative tweaking is sufficient to keep the welfare state working.
However, increasing the tax burden lowers productivity, since the incentive to work is eroded when the economic difference between being on welfare and being at work is reduced. Norway, which through objective measures such as infant mortality and life expectancy, has one of the healthiest populations on the planet, has close to 8% of the working population on short time sick leave at any given time, and an additional 17% of its working population is permanently on welfare. The tax burden is such that every penny paid into the state as income tax is spent on welfare. Hardly a penny is spent on infrastructure, and Norway, although one of the richest countries in the world has as a consequence the worst roads in Europe, has trains that are notoriously unreliable and increasingly dangerous, and sewage and water systems in great need of repair. The productivity in the Norwegian economy is clearly not at all what one would expect from such a wealthy country.
The above example may again be brushed off as insignificant, and no proof of any fundamental problem with the welfare state. Norway is after all a rich and prosperous country, with a very healthy population, and a proof in itself that the system works. Clearly, the decaying infrastructure in Norway, is no proof that the welfare system does not work?
True enough, however, what is happening in Norway today is suspiciously similar to what happened in the Soviet Union during its final decades before its collapse, and contrary to popular belief, it was not Communism that brought the Soviet Union to its end, but the welfare system that lay at the heart of Soviet society.
Communism exists today in China, and China has a thriving economy. Communist China runs a healthy surplus, while the USA is running up an enormous deficit. China’s infrastructure is improving day by day, while the infrastructure in Norway is slowly decaying. The Soviet Union collapsed because its economic engine grew to a halt, while China has grown into a major economic power. Lack of democracy and personal freedom does not explain why two Communist countries should fare so differently. Being equally oppressive, the difference lies in their fundamentally different economic model. China has virtually no welfare state, while the welfare state of the Soviet Union was highly developed.
The collapse of the Soviet Union was an economic and social disaster of enormous proportions, and was entirely due to the welfare state. The arms race with the US speeded up the process of collapse, but it did not cause the collapse. It was caused by a catastrophic collapse of productivity. People in the Soviet Union virtually stopped producing products and services of any value, for the simple reason that it did not pay to work.
At the heart of the welfare state, lies the idea of wealth and income re-distribution. Wealth and income is taken from productive individuals and given to individuals with special needs. The healthy take care of the sick and old. The strong take care of the weak. It seems fair enough. However, the system relies entirely on an assumption that we all want to work and contribute, and this is its fundamental flaw. People do not in general want to work. Very few jobs are truly inspiring. Who wouldn’t rather spend the day at the beach on a summer day, than fixing the sewage drains in downtown Oslo?
With less economic incentive to go to work, the sense of moral obligation becomes more important for the system to function, and welfare states often do rather well for at least a generation or so merely by appealing to the moral conviction of their people. However, the system’s reliance on moral obligation erodes this quality in people when they see that others take advantage of their hard work. This leads to a more cynical attitude towards work, where the benefits of the welfare state are taken into account as part of the pay for work. Staying at home every now and then becomes a part of the salary calculation when considering a job. The bigger the welfare system is, the more important will be the perks, and less important will be the pay. In a system where there is no economic difference between work and unemployment, no one will work unless forced to.
The moral decay that follows from reduced economic incentive to work, leads a welfare state two choices in order to preserve itself. It must either force people to work, or run a deficit to pay for all the people who do not work. The Soviet Union chose to enslave a large part of its population. When this slavery was abandoned, the inevitable consequence was decay and collapse of the economy.
In democratic countries, slavery and coercion is less accepted, although more common than many people may think. Some individuals in democratic welfare states pay more than 100% of their income in taxes, which means that they are in fact slaves to the state. These people are forced to work under the threat of having their estate confiscated by the state in the form of wealth tax. In Norway, there are numerous individuals who pay more in taxes than they earn, and the only way for them to escape this slavery is to sell everything, and permanently move out of the country. And Norway is far from the only democratic country that has or has had such a system in order to support its welfare state. England, France and Holland have all had periods with taxes on income reaching more than 100% for wealthy individuals.
Slavery is commonly accepted by a majority of the people in a democracy for the simple reason that it benefits this majority. Having wealthy individuals pay for the welfare of others through coercion and force is regularly promoted as virtuous and good. Taking money from the rich and giving it to the poor has a romantic ring to it that gives it its legitimacy. Wealth tax and other taxes on property are therefore quite acceptable and often promoted as a fair and just. However, welfare states are too large to rely on slavery alone, and running a deficit is inevitably the only way to support the demands of its clients.
Characteristic of welfare states is that consumption increases while investments decrease. People stop building and maintaining the infrastructure of the country, and are paid by the state to do nothing in the way of productive work, and simply consume the products produced by others. Welfare states eventually end up with large trade imbalances to cover up for the imbalance between consumption and production in the country. This is not true for Germany or Norway at the moment, but with a decreasing incentive to work, and erosion of work ethics, these countries too, will eventually be forced to run a deficit.
There is, as everyone knows, no limit to the potential demand for a free service. The welfare state provides a generous array of free services, and the demand for these will never diminish. Technology and scientific advances provide the potential for ever better health service. Social progress increase the level of welfare that is considered acceptable, and the definition of poverty becomes more relative to what others have, and less a definition in absolute terms. With free welfare, there’s no limit to the demand, and strict regulation is required to avoid abuse.
The bureaucracy required to run such a welfare state, produces in itself nothing, but simply serves to redirect money, either borrowed from or taxed from others. The bureaucracy in turn drains an already depleted workforce from the job market, speeding up the decay of infrastructure, and growing imbalance in the foreign trade.
The bureaucracy of the welfare state has the perverse effect of demanding energy and ingenuity from its clients in order to draw full advantage of the services that it provides. People who are truly down and out, and in desperate need of help, are not reached. Oslo has a disturbingly high rate of drug related deaths, and the number of beggars and homeless people is much higher than one would expect in a country with an extremely generous welfare state. The truly poor and homeless are left to charity, but charity finds it hard to find volunteers and donations, because the assumption is that a large welfare state takes care of everyone, and no further help is needed.
The welfare state does not only damage the work ethics of its people, but also the people’s compassion for others. High taxes going into the welfare state, makes people both assume that all are taken care of, and reluctant to spend what money they have left after taxes on additional welfare to others through voluntary contributions to charity. A notable change in Norwegian society over the past decades is a rise in violent crimes. Compassion, it seems, is a diminishing resource under the welfare state. The cynicism and extreme selfishness often seen in the Soviet Union before, and after its collapse is further evidence that the welfare state is morally destructive, and that the effect of this destruction can take generations to mend.
When a welfare state reaches a certain critical mass, the implosion of the system becomes inevitable because the people moving from the productive part of the economy into the welfare system, either as client or as redistributors, increases the burden on the remaining producers, which in turn sucks more people into welfare, drawing even more heavily on the producers, until the whole system collapses when production grinds to a complete halt, and the deficit balloons into unsupportable proportions.
When productivity is depleted from the economy the inevitable result is inflation. Money is, as we all know, only valuable when tied to products and services, but with virtually all services being free and, few if any domestic products to buy, the money/product balance becomes skewed, and the price of products and services increase. Importing more products may stem the price rise in the short run, but this must be financed with a growing deficit, and by now, potential creditors start to realize what is going on and demand higher interest, and better security on the national bonds, which in turn forces the welfare state to either print more money, or sell assets, often on behalf of their citizens; public buildings, infrastructure, hospitals, national parks, national resources, and so on.
Printing money will not work for very long, because the creditors will refuse to buy bonds in the domestic currency, and the demand for security to back up the bonds will increase. Printing money will make people switch to other currencies, but this will not necessarily stop the inflation, because the welfare state has removed so much productivity from the economy, that even foreign money looses its value in competition for the limited number of products and services for sale.
Inflation runs rampant until the final collapse of the welfare state, when the national dept defaults, the national currency becomes worthless, and every one who is part of the welfare state come back into the productive economy because the money they receive from the welfare state has ceased to have any value.
With a huge number of people suddenly desperate to provide products and services in order to earn enough to stay alive, hard currency becomes extremely valuable. Inflation turns to deflation and prices drop sharply. Such a situation would normally have been counteracted by printing more money, but with the national currency gone, the bankrupt welfare state is powerless as it sees it citizens desperately accepting almost any condition demanded by those possessing the hard and attractive currency.
However, few welfare states come to the point where they collapse completely. Constraint is normally imposed on the welfare state before it reaches its critical mass from which it cannot return. England pulled away from disaster in the past, and so did Holland. And both supports a welfare state today, so it seems that legislative tinkering does work and welfare states do not necessarily come at the cost of social disorder.
That may be so, but they do come with a high risk of becoming unstable, and they always reduce the productivity of a country by reducing the incentive to work. With national dept growing in the western world, and productivity being dampened by the welfare state, things may well already be getting out of control for several countries.
The alternative to a welfare state is a system without a central organizing body to provide welfare services, and no income and wealth redistribution. Social security and health care in such a system is a matter left to each individual. This comes with the risk of some people not being able to afford basic welfare services, but in practice this risk is much smaller than it first appears. Very few people have no social or economic resources to help them in times of need, and those that do are usually taken care of by charity, which can be expected to be quite generous when people are left with more money on their hands.
In a liberal and decentralized society, incentive to work remains high, and productivity which lies at the heart of all wealth, including welfare, is generally high. With less waste, there is more wealth to share, and very few run the risk of falling completely outside the system. Fewer, certainly than is the case of welfare states where finding your way through the maze of bureaucracy is vital in order to draw the full benefit of the system, and the truly destitute are left with no support at all.
Economy will sooner or later catch up with the welfare state. Competing with countries that take care of their welfare without the economic cost of a welfare state, old fashioned welfare states will have to reform, or face the consequence of being outcompeted by other nations. Central bureaucracies will have to be reduced, prompting the dismantling of the welfare state, and we are likely to see this happening over the next decade or two. Those welfare states that resist change will collapse, while those that dismantle will shed their welfare obligations more gracefully. Either way, the welfare state will be left to history as a curious and failed experiment of the 20th century that completely vanished during the first half of the 21st century.
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