In the great Australian, libertarian movie The Castle, the Kerrigan family (and their neighbours) receive a notice of "compulsory acquisition" from the government. A new airport is to be built and their homes just happen to be in the way of this development. Ultimately, though, justice prevails and the court rules in favour of the Kerrigans.

Strike one for liberty against government theft and crony capitalism. 

But what if the movie had ended with the Kerrigans losing? Rather than the final scenes being family, friends and neighbours celebrating their victory, what if the final scenes were of them all behind a wire fence, watching hopelessly as their homes are bulldozed to the ground? 

No doubt the movie wouldn't have been as popular, that's for sure! Movies have to have a happy ending.

But in real life things tend to play out a bit differently.

For starters, in The Castle, the Kerrigans and their neighbours actually receive a notice of compulsory acquisition. The same can't be said for all those people living in Footscray whose homes are going to be knocked down to make way for a new rail development. They had to find out from the media.

Shocked residents of Buckley Street were informed by journalists yesterday of the state government's plans to forcibly take and bulldoze 26 of their homes.

Resident Rhiannon Modica was informally told by a Transport Department official yesterday that her house would be destroyed after the media came knocking on her door about 2pm.

But by 9am today, Ms Modica said she still hadn't received official notification - almost 24 hours after the announcement of the Regional Rail Link route.

"I made a phone call ... to seek some clarification and they said they were planning on delivering letters today stating something along the lines of we 'may' be compulsorily acquired," she told Radio 3AW.

"We still don't know what's happening."

 

She eventually received official confirmation and yesterday Premier John Brumby apologised:

"It's apparent that all of the people weren't contacted. I think that's a matter of regret. I'm sorry that these people were not contacted, they should have been."

 

When you have the power to forcibly evict people from their homes and to then use other people's money to pay them off, all those niceties that typically go along with buying and selling can go out the window. 

There's no need for the government to persuade or convince these people to sell because there's nothing they can do anyway.

Who can they appeal to for help to protect their homes? The police? That would be pointless because the government is in charge of the police. The police enforce the government's edicts. The same problem, of course, applies to the courts. As lawyer Ben Hardwick commented:

"Ultimately, there's no legal avenue to stop a compulsory acquisition for a rail project."

 

So that's basically it, then, that's the end of the story. Hardwick said their best hope is to just try and get more money out of the government than the amount originally offered.

But for some people, like the fictional Darryl Kerrigan, there's more to life than money. As he says in the film, "I don't wanna be compensated. You can't buy what I've got." Frances Muscat, who has grown up and spent 48 years in the house that will soon be demolished no doubt has similar feelings.

The saying that "a man's home is his castle" seems lost, though, on Premier Brumby. He said that

"In a sense your home is your castle, and so for anybody who's affected, of course, you feel for those. But we have gone to huge lengths to try and make sure that everybody in those communities was given advice and warning."

 

That's a slightly different interpretation from the one at least exemplified by The Castle.

In total, the plan is for "up to 193 properties, including 52 homes...to be acquired in Footscray, Yarraville and the Melbourne port precinct...as part of the government's $38 billion transport plan."

To begin with, to clear away misunderstandings:

  • My arguments are over how the Centre for Independent Studies can improve in its free market advocacy, not whether they have been successful in the past. I am willing to believe that the CIS has been very influential and that without the CIS the political situation would be worse. I am not wishing to denigrate any achievements or rewrite any histories. Everyone will agree that the CIS does not have a unanimous following, that their job is incomplete and that they want to be more influential. Surely, it will be agreed that the rate of reform that the CIS has brought about is not enough to make them beyond reproach or their strategy immune from debate.
  • My arguments are over how the CIS can improve in its free market advocacy, not whether they or a different group deserve money. Unlike Neville Kennard, I am not trying to advise philanthropists where they should put their money. I do not look at things from the perspective of a philanthropist, because I am not now nor have I ever been one.
  • My arguments are over how the CIS can improve in its free market advocacy, not whether they should have their continued existence compromised. Indeed, if the CIS cannot deal with criticism sufficiently and defend its point of view and reputation for radicalism, then, well, why blame the critics rather than the object of their criticism? (For the record, Neville Kennard’s suggestion for a radical group within the CIS was rejected.)

My three main objections to the CIS are:

  1. The CIS does not support a free-market in every area, and often endorse positive government programs. One obvious example is education (if you want more examples, just ask). My question to the CIS is: if you do not support a free-market in every area, where is your criticism of Gustave de Molinari, Lysander Spooner, Murray Rothbard and of the arguments in the middle and right columns of economics.org.au?
     
  2. The CIS focusses on utilitarian arguments, rather than clear statements of economic and legal theory and pointing out contradictions in beliefs for reasons other than utility indices. Debates revolving around interpreting graphs, surveys and happiness/wealth measures are not conducive to a final 'show-down' type situation, but always leave the door open for counter-examples, counter-case-studies, etc. For example, a debate about the minimum wage would be better if it did not include any statistics or real-life case-studies, but focussed solely on economic theory and hypotheticals. To argue that “arm-chair” theorising is bad strategy, is to have too short a time-frame in mind and to ignore the huge consequences of bad ideas. My question to the CIS is: why so much focus on utilitarian arguments, on sinking to the level of the mainstream debate at the expense of pointing out the incorrect theories underlying socialistic ideas?
     
  3. The CIS does not appear to have a well-thought-out strategy, for seven reasons:
  1. They quote Hayek saying they advocate discussion of the philosophical foundations of a free society, but they do not leave leave practical compromises to politicians, like the previous Hayek paragraph to the one they quote advises.
  2. They may argue that it is unrealistic to advocate without compromise, but as the former MPS Treasurer Clarence Philbrook explained, this line of reasoning shows its ridiculousness when you realise that the most likely to be accepted and realistically proposed view is one which will be accepted anyway.
  3. The CIS treats government as though it is not a criminal organisation that through unjustified use of force discourages productive work and investment. I do not deny that government deserves a fair trial, but as the prosecutor there is no reason to hold back, as there is no line of reasoning where the evidence is insufficient, compromised or invalid, and so no reason to go for little victories, since there is no lack of the usable evidence that is required to get the big conviction.
  4. My question to the CIS is: where do you think the place is for uncompromising free market advocacy, if not in independent think tanks aimed at long-term reforms?
  5. There may well be arguments for a softly softly approach, and the CIS may well be successful in getting a following through this approach, but there are also strong arguments for a radical approach, and getting media attention from that.
  6. A radical principled approach also has the benefit that what you espouse is also, as Philbrook said, what you believe when you put it in plain language.
  7. But, in any case, have the CIS ever tried the radical straightforward approach, and have they ever actually written about pros and cons of strategy?

See also 'Why is the CIS supporting a Carbon Tax?'.

Ask a trade unionist or fellow traveller if he has the “right” to dictate to his 20-year-old daughter whom she will marry, and he’s likely to say (firmly but perhaps regretfully) “no.”

Ask him if he can dictate to his daughter which career (if any) she will pursue, and again he’ll say “no.” It’s a democracy, after all, they’ve often alleged to me.

With a bit of prodding, the unionist’s likely to agree that his daughter has an innate right of freedom of association in matrimonial and professional matters: that is, she can choose with whom to associate. More generally, unionists champion the notion that women and employees have the right of freedom of association.

Then ask him if, once his daughter marries, she must forever remain married; and if, once she’s employed in a certain job, she must forever remain in that job. “No!” the trade unionist will almost invariably thunder in reply.

More generally, and although it’ll take a bit of prodding, he’ll agree that freedom of association implies freedom of disassociation – this is, his daughter "has the right" to quit the marriage and job whenever she pleases, either to seek a better marriage/job, or simply because she doesn’t like her present circumstances – or, indeed, for no reason at all.

So freedom of association implies freedom of disassociation – unless, of course, you’re an employer. That is, the employee is free to pick whatever job she wants, but the employer is not free to pick any employee he wants.

In other words, budding employees can and do discriminate among potential employers, but employers most certainly cannot discriminate among employees. An employee can quit anytime she pleases, and for whatever reason; but the employer cannot terminate an employee anytime and for just any old reason.

In marital matters, unionists typically applaud “no fault” divorce; but in commercial matters, they vitriolically denounce “no fault” dismissal of employees.

But if marriage is a contract, and the relation between employer and employee is contractual, then why are employers denied rights routinely granted to all non-employers?

By this stage, some unionists can see that they’ve been hoisted upon their own petard – but simply couldn’t care less. It’s at this point in the conversation when the iron fist emerges from the velvet glove, and the coercion that underlies employer-employee relations comes clearly into view. The implication is clear: employers are simply not free, and unionists ultimately use brute force to get their way.

Astonishingly, a few elements of this logic were broadcast on – of all places – ABC Radio National. Will wonders never cease?

David Koch (or "Kochie") is a household name. Respected and beloved for his cheerful character and financial advice, most people - including me - like Kochie. But Kochie's latest article makes him an enemy of the Australian working class.

The Article

Kochie makes the case in his article that times are tough for the Aussie homeowner and for small businesses. He argues that the Reserve Bank of Australia, by giving no indication that it will cut interest rates, is causing a "crisis in confidence" that is destabilizing the Australian economy:

The problem is that businesses large and small need to be able to plan ahead, and Stevens’ appearance on Friday gave little reassurance. All Stevens said is that it is a good thing to “sit still and do nothing” in such rocky times, but that is of little comfort to our struggling business owners. It has arguably got to the point that the RBA’s secrecy is causing a serious crisis of confidence in the broader economy, and this can lead to a destructive cycle in which fear feeds on itself, causing employers to shed jobs and cut back on investment. Indeed, the 9,000 jobs that have been lost in the past month suggest this is already happening.

Kochie, as indicated by the title of his article 'Why the RBA needs to cut interest rates', wants to run the printing presses to save the Australian economy. He disregards the real economists naysayers crying 'inflation' in the night with a quite amazing statement:

A cut in interest rates now would have no effect on the factors which are causing inflationary pressures, such as utility bills, food and fuel. Most of the inflation in our system is beyond the control of both the RBA and consumer spending.

This statement indicates that Kochie doesn't really understand what inflation is and how it works. Because of this, he does not understand the consequences of printing money and its role in causing the business cycle.

He continues:

Mervyn King, the former head of the Bank of England, once famously said that 'good central banking is boring.' What he meant is that it is better for everybody if the central bank is predictable, and does not have surprises hidden up its sleeve.

Predictability apparently means that the RBA should print money and create malinvestments throughout the Australian economy:

Governor Stevens should pay attention. While the RBA has done a pretty good job over the past couple of years, it went too far in the run up the the GFC in 2008 when raising the cash rate to 7.25%, pushing typical mortgage rates to 9.6%. It resulted in a glut of repossessions and unnecessary job losses. That took the market by surprise. We don’t need another surprise like that. Give us some transparency and let our small businesses get planning with some peace of mind.

The conclusions that Kochie makes in this paragraph again represent a lack of understanding as to the causes of the financial crisis. Moreover, transparency doesn't mean printing money and keeping the inflation party going forever.

Why Kochie is wrong: Inflation

Inflation is typically understood as a rise in the price of goods and commodities. However, it's more accurate to call this phenomenon "price inflation". So why is there a general rise in the prices of commodities, goods and services in the economy, especially when there is a strong tendency within the free market to lower prices?

The answer is: monetary inflation (or an increase in the money supply), which leads to price inflation.

Let's imagine that there is a shortage of coconuts. In technical jargon, the "marginal utility" of coconuts has increased - or in other words, the number of coconuts available for individuals to satisfy their wants has decreased. This means that individuals will value coconuts more highly than before as there are fewer coconuts available to satisfy "lower order" wants.

For example, imagine that Robinson Crusoe is living on a deserted island where the only food available is coconuts. His uses for coconuts may look something like this (in order of priority):

1. Eat for survival and health
2. Use the shells to make shelter
3. Use the shells to make shoes
4. Throw them into the ocean for fun

If the island is abundant in fresh coconuts, then Crusoe can collect 2000 coconuts a year. Crusoe only eats about 1000 coconuts a year. Because of his productivity and the availability of coconuts, Crusoe doesn't have to ever worry about starving or being malnourished. This leaves him with 1000 extra coconuts to satisfy less important uses. Crusoe can use 500 coconuts to make himself some himself a nice hut. This still leaves with 500 extra coconuts to the 2 remaining uses. To make shoes for walking around the island, he needs 300 coconuts a year to make a new pair every 2 weeks (the approximate durability of coconut shoes). Crusoe is left with 200 coconuts to throw into the ocean for fun.

Suppose a cyclone hits and causes significant damage on the island, so that Crusoe can only collect 1700 coconuts in a particular year. If he wants to survive, this will force Crusoe to give up some of the uses for coconuts mentioned above. He can't throw 200 coconuts into the ocean for fun because otherwise he won't have shoes to walk around the island with. Coconuts now are more valuable to Crusoe; he can't just waste a few here and there as he did before.

This simple thought experiment is used to explain the concept of 'marginal utility". Now imagine that Crusoe wasn't alone on this island, that he had a neighbor called Ug the Ogre on the other side of the island. Crusoe trades 100 coconuts for chickens with Ug. This means that Crusoe’s uses for coconuts are (in order of priority):

1. Eat for survival and health
2. Use the shells to make shelter
3. Use the shells to make shoes
4. Trade for chickens (5 coconuts per chicken)
5. Throw them into the ocean for fun

Now Crusoe only has 100 coconuts left to throw into the ocean for fun. One day, a storm comes and wipes out 200 coconuts from his stock. This means that Crusoe doesn’t have any coconuts to trade with Ug or use for leisure. Ug is upset; he really wants coconuts from Crusoe. Ug tries to trade with Crusoe in vain.

At the current exchange ratio, 5 coconuts will get Crusoe 1 chicken. Ug realises that he needs to reorder Crusoe’s priority list for using coconuts. Ug changes the price of chickens to 1 coconut/chicken.

This makes all the difference in the world for Crusoe. The value, from his perspective, of having 300 chickens a year is greater than the value of using coconuts to make shoes. Crusoe’s use of coconuts now changes (in order of priority):

1. Eat for survival and health
2. Use the shells to make shelter
3. Trade for chickens (1 coconut per chicken)
4. Use the shells to make shoes
5. Throw them into the ocean for fun

Let’s imagine now that the opposite happened. Crusoe finds a long rod of bamboo that increases the number of coconuts he can harvest to 4000 per year. Now Crusoe has more coconuts than he knows what to do with. Crusoe decides that since he has more coconuts to trade, he wants more chickens. Ug still has the same number of chickens and is only willing to part with 300 in a year. Crusoe tries to get the chickens at a price of 1 coconut per chicken, but Ug is no fool. He knows that Crusoe has many coconuts. He refuses and only accepts a price above 5 coconuts per chicken. Crusoe accepts, knowing that he can afford to pay a premium on coconuts without any consequence to the other more important uses he has for coconuts. Or maybe Ug doesn’t know about Crusoe’s ‘coconut inflation’ and is just plain unhappy with parting with 300 chickens for 300 coconuts because he has a higher value for chickens in that place and time. The price of chickens must go higher (i.e. inflate) in order for him to trade. In either case, Crusoe can afford the trade because of the inflation in the number of coconuts. The coconut inflation led to chicken price inflation.

So in this example we have seen that changes in the abundance of goods alters their marginal utility and value in the eyes of individuals. What these individuals are willing to trade for other goods (i.e. prices) will also change. Replace chickens for everyday items that you purchase like food, petrol, cars and homes. Now replace coconuts with money, or dollars in your wallet. If you have a greater supply of dollars in your wallet, you can afford to pay more for goods and services. In other words, monetary inflation leads to price inflation.

Monetary inflation is an increase in the supply of dollars in your wallet, or credit on your card. Monetary inflation is significantly controlled by the actions of the RBA through interest rate policy and open-market activities. When the RBA lowers interest rates, it lowers the price at which banks can borrow money from them. The RBA creates the money out of thin air (i.e. synonymous with printing money) by crediting the bank’s account. It’s like logging onto the computer records of your bank and changing the balance from $1,000 to $10,000; this would be $9,000 worth of monetary inflation. The bank does the same thing to you when lending money for a home, car or credit card loan; it's in effect an accounting entry. This happens routinely and lawfully.

So if the interest rate is lowered, banks can borrow more money from the RBA to cover more loans to entrepreneurs and other individuals within the economy. This artificial increase in the money supply inevitably causes widespread malinvestment within the economy, the same way a travelling circus can do to a local town it stops in. The circus brings fresh new money into the town, which may cause a restaurant owner to mistakenly believe that there is a permanent increase in business. The restaurant owner buys the property next door and builds an extension to accommodate the growth in customers. He can afford these additional costs so long as these new additional customers keep coming. Eventually the circus leaves town and the restaurant owner faces the harsh reality that the monetary inflation brought by the clowns is now over, and all he is left with is debt he can no longer afford.

The clowns at the RBA have indeed been shopping at every business, printing and lending money to more and more people through the fractional reserve banking system. This has tricked entrepreneurs and individuals around Australia to invest in various bubbles, namely the housing and building sector, thinking that the party will never be over. Well it will soon be over, and not because the circus has left town, but because the debt-servicing burden has exceeded the consumption and savings capacity of the economy. The solution to this problem is not to increase the levels of debt in the economy to stimulate more debt-fuelled consumption. This can only make the problem far worse than it is, threatening the stability of our currency and increasing the cost of living for Aussie battlers. An increase in the money supply without real growth within the economy only raises the prices of goods and services faster than wages can adjust. The RBA is trying as hard as they can to hide this in their official inflation numbers, through the voodoo of hedonics etc. But the average Australian family already knows that their heads are just below the water of rising prices.

So Kochie, the trusted financial advisor of Australia, thinks that this is all a good thing. More money printing, more debt, higher prices and further economic ruin… for predictability’s sake at least. But as long as Kochie advocates the policies of economic suicide, he will remain an enemy of the Aussie battler.

Every day we encounter a series of crises, either legitimate or fabricated, which somehow justifies the erosion of our natural rights through a new and fancy big government policy. Whether it's Washington's 'Cash for Clunkers' or government-installed CCTV cameras in our homes, the sheer audacity of modern-day legislation is disheartening.

I can't help but glance at my neighbors to see a hint of outrage in their eyes. Instead what I find are eyes glazed over with TV entertainment like 'Dancing with the Stars' or 'Master Chef'.

People just don't seem to question our political overlords. It is an Orwellian nightmare. What is going on? Are they stupid? Do they even care?

After watching an outstanding lecture on Predictable Irrationality by Dan Ariely, I think I may have figured it out.

One of the case studies Dr Ariely presents in his lecture is the difference in organ donation rates across different countries in Europe. Intriguingly, countries with similar cultural behavior and values had profoundly different rates of organ donation.

The reason for this divergence was finally found to be due to the check-box wording at the local DMV (Department of Motor Vehicles). Countries with a high organ donation rate had DMV forms that asked the individual to check the box if they want to opt-out of organ donation in the event of a fatal accident. In contrast, countries with low organ donation rates possessed DMV forms that asked individuals to check the box if they wish to opt-in to donate their organs.

In both cases, individuals didn't check the box and ended up with two divergent results. Ariely concludes that this result was not due to a lack of compassion on the part of the individual filling out the form. Rather, an issue such as organ donation is quite complex and people were inclined to settle with the pre-decided default choice on the form. Ariely proceeds to cite many other striking examples of similar behavior.

In a political context, this finding would suggest that people who apparently don't appear to care about the erosion of civil liberties, actually do care. However, the issues appear too complex and difficult for one person to make a difference. Thus, these concerns are thrown into the "too hard" basket... the default road is taken.

Unfortunately, the default choice is a road to tyranny and total government intervention, where individual freedom is trampled upon.

So where does that leave those of us who disagree with this 'express elevator to hell'? The battle must be fought on several fronts, but I believe the most important one is in the intellectual arena. Apologetics for tyranny must be countered with the ideas of liberty. The all-encompassing power of the State must not be celebrated, but challenged with the reality of oligarchical rule.

In short, liberty and freedom needs to be the new black.

On February 7, 2009, and in the week that followed, bushfires ignited across Victoria, in Australia.[1] The fires raged through many towns, destroying at least 1,834 homes,[2] and killing at least 209 people,[3] more fatalities than any bushfire in Australian history.[4]

Let's compare: in the 1983 "Ash Wednesday" bushfires, seventy-five people died; in the 1939 "Black Friday" bushfires, seventy-one died; in all previous bushfires in Australia, back to data on bushfires in the 17th century, there were a total of 642 fatalities.[5] In short, Australia has just experienced what is far and away the most devastating bushfire in its history.

While the immediate causes of the various bushfires are thought to include arson, discarded cigarette butts, faulty power lines, or lightning strikes, these initial fires transformed into huge infernos and spread uncontrollably across Victoria only because of extremely high fuel loads throughout the state's bushland. The reason? For years, local governments have neglected to manage fire hazards on their land in order to be faithful to the principles of environmentalism — a philosophy that contends that nature has intrinsic value that must be preserved, regardless of any use it has to man.[6] The result has been that people have sacrificed their prosperity and even survival in an attempt to preserve the unspoiled sanctity of nature.

In the case of land management, environmentalists have invoked the alleged intrinsic value of nature to oppose the controlled burning of bushland, the clearing of vegetation and the prevention of excessive fire hazards in government-controlled land and adjacent private property. They have lobbied governments to prohibit the clearing of trees and shrubs and have been eternally hostile to all attempts to reduce the "bounty of nature" that has stoked the deadly fires that have spread across Victoria.

How Environmentalism Contributed to the Bushfires

Under the influence of the philosophy of environmentalism, as well as political pressure from environmentalist groups and an "environmentally conscious" electorate, local councils have refused for years to clear the vegetation that has now served as fuel for lethal infernos. The modus operandi of these bureaucrats and their ecosupporters has been to insist on "rigorous" environmental assessments, which in envirospeak means, assessments that continue until reasons have been found to prevent any interference with the natural state of public land. In addition to perpetually stalling any clearing of trees or vegetation, government councils have also prohibited people from clearing trees and vegetation from their own property, aggressively pursuing those who break environmental-protection laws that place the "welfare" of trees above the property rights and safety of people.

In 2002, Liam Sheahan, a resident of Reedy Creek in Victoria, was prosecuted for disregarding local laws and bulldozing approximately 250 trees on his own property to make a fire break next to his home.[7] Council laws prohibited Mr. Sheahan from clearing trees further than six meters away from his house, but he went ahead with his decision to create a 100 meter fire break. During the resulting prosecution, bushfire expert Dr. Kevin Tolhurst testified on Mr. Sheahan's behalf, telling the court that the clearing had reduced the fire risk to Mr. Sheahan's home from extreme to moderate. According to Mr. Sheahan, "The council stood up in court and made us to look like the worst, wanton environmental vandals on the earth. We've got thousands of trees on our property. We cleared about 247." Mr. Sheahan's prosecution cost him $100,000 in fines and legal fees, but when the bushfires swept through his town in February 2009, his actions were vindicated — his home was the only property left standing in a two-kilometer area, while neighboring properties were destroyed. His disregard for environmental laws saved his home and the lives of his family.

Warwick Spooner was not so lucky. His mother and brother were killed as the bushfires consumed their home in Strathewen in Victoria.[8] He was in no doubt as to why the tragedy had occurred, telling the Nillumbik council, "We've lost two people in my family because you [epithet] won't cut trees down.… We wanted trees cut down on the side of the road, … and you can't even cut the grass for God's sake."[9] He was not the only one to express such frustrations, with another resident complaining to the council that her repeated requests to reduce vegetation growth on public land had been ignored.

In 2003, bushfire experts Rod Incoll and David Packham argued against planning regulations proposed to the council by environmentalist groups. These regulations, which were passed by the council, included restrictions against the removal of vegetation "and worse still, the requirement for planting vegetation around and almost over houses, as part of any planning permit to build a house in the shire of Nillumbik, so it gave the appearance from the outside of being a forest."[10]

Two weeks before the bushfires, Mr. Packham alerted Victorian residents to the critical fire conditions in the Victorian bush, warning them that bushfires could destroy between 1,000 and 2,000 homes and kill 100 people.[11] This frightening prediction may have sounded alarmist until hundreds were burned to death weeks later. During the fires, Mr. Packham followed up his predictions with an explanation of the carnage. He explained that fuel levels in public land had been allowed to reach dangerous levels due to environmentalist hostility to vegetation removal and controlled burning.

It has been a difficult lesson for me to accept that despite the severe damage to our forests and even a fatal fire in our nation's capital [the Canberra bushfires in 2003], the political decision has been to do nothing that will change the extreme threat to which our forests and rural lands are exposed.… It is hard for me to see this perversion of public policy and to accept that the folk of the bush have lost their battle to live a safe life in a cared-for rural and forest environment, all because of the environmental fantasies of outraged extremists and latte conservationists.[12]

 

Mr. Packham later branded environmentalists as "eco-terrorists waging a jihad" against prescribed burning, explaining that "[t]he green movement is directly responsible for the severity of these fires through their opposition to prescribed burning."[13]

As these incidents make clear, the negligent and authoritarian actions of local councils have contributed substantially to the severity of the Victorian bushfires. But they are the predictable consequence of a political atmosphere saturated with environmentalist philosophy, environmentalist lobby groups, and an electorate that views the Greens party (Australia's third-largest political party) as a benign protest vote, ideal for showing their disaffection with the major political parties. Under such pressure, local councils are faithfully implementing the philosophy of environmentalism, which requires them to reduce humanity's "footprint" on nature, and tells them that the inherent value of nonconscious entities like trees and shrubs is more important than the desires of those rapacious human beings who plunder nature for their own selfish gain.

Response to The Bushfires by Government and Environmentalist Groups

Having failed to achieve damage control in the bushfires through proper land management, the response from government officials has been a predictable game of public-relations damage control. Councils have responded to fierce criticism of their aversion to land clearance and controlled burning with promises that they will reassess their planning and environmental policies. Such promises would sound more genuine if not for the fact that problems of insufficient fuel reduction and controlled burning on public land have been well known for decades. These problems having been highlighted extensively in previous bushfire inquiries, which are a recurring event in a country as prone to bushfires as Australia.[14] For Warwick Spooner, this latest promise of review was little comfort. He told Nillumbik Mayor Bo Bendtsen, "It's too late now mate. We've lost families, we've lost people."[15]

Any attempts to increase land clearing and controlled burning to prevent bushfire damage may also face greater constraints from federal environmental laws in the near future. The Department of Environment confirmed that they have received a public submission calling for controlled burning to be listed under federal law as a "key threatening process,"[16]defined as a process that "threatens, or may threaten, the survival, abundance or evolutionary development of a native species or ecological community."[17] Listing would require the minister to consider a threat-abatement plan for controlled burning, to find the most "feasible, effective and efficient way to abate the process."[18] Already listed as a key threatening process is land clearance, including "clearance of native vegetation for crops, improved, [sic] pasture, plantations, gardens, houses, mines, buildings and roads."[19]

Meanwhile, there is no sign of any self-examination by environmentalist groups. Rather than reconsider their cherished environmental-preservation laws, which have helped fuel the fires, environmentalists have taken the bushfires as an opportunity to selectively find evidence of human-induced global warming.[20]

Proponents of this theory have been eagerly pointing out that the bushfires occurred during a heat wave across southeast Australia that has caused record-high temperatures during the summer.

Referring to Australia's especially hot weather in the last twelve years, Climate Change Minister Penny Wong assured the public that "[a]ll of this is consistent with climate change, and all of this is consistent with what scientists told us would happen."[21] For obvious reasons, she did not comment on whether the simultaneous record low temperatures in other parts of the world — such as the United States,[22],[23] Canada,[24] England,[25] France, Italy, Germany,[26] and India[27] — are also "what scientists told us would happen."

Rather than simply removing coercive restrictions that have prevented private landowners from clearing trees on their own property, the government is set to respond to the bushfires by imposing new coercive restrictions. This time, private landowners will be prevented from having trees too close to their property.[28] Thus, having already seized sole power to remove trees and vegetation on private property (on the assumption that property owners are too evil or stupid to be trusted with these decisions) and having thereby forced Victorian residents into a disastrous inferno through their previous regulations, the government is convinced that it is the proper decision-making body to decide when property owners can plant trees.

While this kind of thinking demonstrates the government's boundless arrogance and insatiable desire for control, the danger posed to human life from public-land mismanagement runs much deeper than the specific environmental laws and policies currently in place, or even the laws to come. The root of the problem is the philosophy of environmentalism, which permeates all land-management decisions, guaranteeing hostility to any attempts to interfere with "the balance of nature." Despite having the legal power to undertake controlled burning on its land, the Yarra Ranges Shire in Victoria refused to do this for years before it was hit by the bushfires, instead calling for "rigorous" environmental assessments to determine the breeding seasons of local flora and fauna and the effect on endangered Leadbeater's possums.[29] So long as such considerations remain above concern for human life and liberty, there is little prospect of reducing the impact of natural disasters.

How Private Land Ownership Would Reduce Bushfire Risk

Because private ownership entails the right to control one's own property, and because some people may not wish to sacrifice their lives to prevent interference with local possums, environmentalists seek to achieve their goals through government ownership of land — land socialism. In this endeavor, they have been very successful. State forests, national parks, and other Crown land in Victoria make up approximately one third of the state but contributed four-fifths of the February 2009 bushfires.[30] And as with all examples of land socialism, the situation in Victoria has created an incentive structure that has destroyed accountability, thereby exacerbating the disaster.

As mere caretakers of public land, bureaucrats and local politicians are not liable for any loss caused by their mismanagement. Nor do they have any personal stake in its capital value. When property is destroyed due to their ineptitude and their enslavement to the philosophy of environmentalism, their savings are not in danger. If anyone is required to pay for compensation, it is taxpayers who have had nothing to do with the whole mess. For the local councilor or the state or federal politician, what matters is getting the green vote, showing how "environmentally conscious" they are, and placating all those green lobby groups and media darlings that might say nasty things about them if they don't toe the line.

Had the bushland areas in Victoria been private property, the owner of the land would be subject to a duty of care to his neighbors under tort laws and would be liable for any damage caused to his neighbors' properties by his own negligence. He certainly would not be able to claim as a defense the fact that his own environmental policies make it difficult for him clear vegetation or conduct controlled burning. And as a result, he would have a strong incentive to ensure that the land is properly managed, neither plundered of vegetation to the point that it loses its capital value, nor allowed to overgrow into a dangerous fire hazard.

Had these bushland areas been regarded as unowned land, ripe for homesteading, then adjacent property owners would have been able to clear fire breaks to their hearts' content, homesteading as much land as necessary for a safe buffer between themselves and the bushlands beyond.

Had the areas of private property adjacent to these bushlands been treated as genuineprivate property — unconstrained by coercive regulation — then adjacent property owners would have been able to clear trees and vegetation on their own land, and build facilities to cope with bushfires, without groveling for permission from their political masters. They would not have been inhibited by mountains of regulations and armies of bureaucrats who frustrated their attempts at safety. They certainly would not have been prohibited from clearing vegetation before the fire has burned them out and then prohibited from planting trees after the damage had already been done.

The danger of bushfires and other natural disasters is ever present, but it is not a danger that we must accept passively as an immutable act of nature. It is a danger that can be managed or exacerbated. And it is a danger that is currently exacerbated by the philosophy of environmentalism and the land socialism that is used to implement this philosophy. In describing the California bushfires in 2003, Lew Rockwell diagnoses the problem:

What went wrong? The problem is in the theory of environmentalism. Under it, ownership is the enemy. Nature is an end in itself. So it must be owned publicly, that is, by the state. The state, in its management of this land, must not do anything to it. There must not be controlled burning, brush clearing, clear cutting, or even tourism. We can admire it from afar, but the work of human hands must never intervene.

Then the brush begins to gather. It piles higher and higher. Old growth rots. Uncontrolled growing leads to crowding. When the weather gets hot the stuff combusts. Then the winds blow and the fires spread. It's been the same story for several decades now, ever since the loony theory that nature should be left alone took hold.[31]

 

So long as governments remain under the sway of environmentalist philosophy and arrogate massive tracts of land to their own inept control, no amount of legal tinkering will prevent the next bushfire. How many more will die then?

 

Notes

1. The temperature in Melbourne reached 46.4°C (115.5°F), the highest temperature since records began 150 years ago. Other cities across Victoria also reached record temperatures. See Townsend, H. "City swelters, records tumble in heat," The Age, February 7, 2009.

2. "Fair trial for accused arsonist," SBS World News Australia, February 14, 2009.

3. "Victoria bushfire toll rises to 209," The Australian, February 20, 2009.

4. Huxley, J. "Horrific, but not the worst we've suffered," Sydney Morning Herald, February 11, 2009.

5. Ibid, Huxley (2009)

6. See Berliner, M.S. (2007) "Against Environmentalism," Ayn Rand Institute.

7. Baker, R. and McKensie, M. "Fined for illegal clearing, family now feel vindicated," The Age, February 12, 2009.

8. Petrie, A. "Angry survivors blame council 'green' policy," The Age, February 11, 2009.

9. Ibid, Petrie (2009). [Editor's note: deleting the expletive is Mises.org policy, not the author's.]

10. "Council ignored warning over trees before Victoria bushfires," The Australian, February 11, 2009

11. Packham, D. "Victoria bushfires stoked by green vote," The Australian, February 10, 2009.

12. Ibid, Packham (2009).

13. Ibid, Ryan (2009).

14. Less than six years prior to the Victoria bushfires, the McLeod Inquiry, which investigated the 2003 bushfires in Canberra, Australia, found that management of fuel loads in public forests was lacking. This finding was echoed in the subsequent coroner's report on the fires in 2006, which found that the ACT government had failed to follow recommendations for a rigorous back-burning process, and this resulted in heavy fuel loads, which fueled the fires. See Doogan, M. The Canberra Firestorm. ACT Coroner's Report, December 19, 2006, pp. 65–70.

15. Ibid, Petrie (2009).

16. Ryan, S. "Burnoffs following Victoria bushfires a 'threat to biodiversity'," The Australian, February 12, 2009.

17. Environment Protection and Biodiversity Conservation Act 1999 (Cth), s 188(3).

18. Department of Environment, Water, Heritage and the Arts.

19. Department of Environment, Water, Heritage and the Arts.

20. This is a familiar pattern. For discussion of global-warming claims during the 2007 California fires, see Anderson, W. "Fires of the Feds: How the Government has Destroyed Forests," Mises Daily, October 25, 2007.

21. "Heatwave a sign of climate change: Wong," ABC News, January 29, 2009.

22. Gunter, L. "Forget global warming: Welcome to the new Ice Age," National Post, February 25, 2008.

23. Evans, C. "Baby, it's cold outside," Daily Camera, January 6, 2009.

24. Cold weather records shattered in 6 Manitoba towns. CBC News, January 13, 2009.

25. Record cold weather payouts triggered as temperature hits -11C. Times Online, January 6, 2009.

26. Donahue, P. and Viscusi, G. "Central Europe, France, U.K., Italy Hit by Cold Air,"Bloomberg, January 6, 2009.

27. "Poor burn books to stay warm in chilly India, 55 dead," Reuters India, January 5, 2009.

28. Rolfe, P. "Building standards to be lifted," The Herald Sun, February 15, 2009.

29. Ibid, Ryan (2009).

30. Ibid, Ryan (2009).

31. Rockwell Jr, L.H. "Land Socialism: Playing with Fire," Mises Daily, October 24, 2007.

In the hands of the detractors of liberty and capitalism, ‘decadence’ is little more than a smear term, used to deride the human ideal of effortless consumption and enjoyment. Chief among these attackers is the arch nemesis of civilisation, Jean-Jacques Rousseau, whose Discourse on the Arts and Sciences exalts ignorance, primitivism and privation while scorning civilisation and luxury as antithetical to morality and goodness.1

Following Rousseau, many contemporary postmodernist philosophers also applaud primitivism and privation as a noble and dignified lifestyle, one that builds moral character.2Indeed, many are prone to express their admiration for primitive cultures and their alleged longing for simpler times, even as they bask in the luxuries unleashed by the economic liberty of capitalism, and abstain from any opportunity to live as their professed philosophy dictates.3 In short, privation, ignorance and toil are seen as requirements for moral virtue and good character in others, never in oneself.

Such attacks on luxury are implicitly attacks on the ideal of human enjoyment and the economic system of capitalism which makes wealth and prosperity possible. This is because social liberty, coupled with the wealth and prosperity that is the fruit of economic liberty, naturally leads to greater human consumption, enjoyment and luxury. Attacks on luxury are also implicit attacks on reason and knowledge, since these are the epistemological roots of capitalism, innovation and prosperity. It is therefore no accident that Rousseau expresses his enmity not only of luxury, but also of the arts and sciences themselves, which he regards as destructive of human virtue.4

It is true that in a world of scarcity and limitation, moral virtue is a requirement for an enjoyable and prosperous life. Indeed, contrary to Rousseau’s straw man argument, no serious philosopher would ‘dare to deny that good customs are essential to the duration of empires.’5 It is clear that production is necessary for consumption, thrift is necessary for future provision, and honesty and integrity are necessary to deal with others successfully on a regular basis. All of these virtues are the basis for a lasting and successful civilisation, especially one marked by the liberty of free market capitalism. But this does not mean that human prosperity should be spurned for fear of moral degeneration. Rousseau has things backwards—morality is not the end to which human life is only the means. Rather, morality is the means of sustaining human life, which is an end in itself. Moral virtues are the means for humans to attain luxury, prosperity and happiness. If these virtues dwindle in the presence of luxury, then this is cause for concern, not because these virtues are inherently valuable, but because they are the means of sustaining a good life in the future.

Consumption and decadence
If one accepts the goal of human prosperity, and accepts that moral virtues are required to sustain this goal, is there reason to fear that liberty will lead to moral decline and destruction? We know that the economic liberty of capitalism is conducive to the generation of wealth, and that luxury is the natural consequence of this wealth. With so much wealth and opportunity, must we constrain our liberties to avoid decadence? And what is the nature of this alleged decadence that we are supposed to fear?

Decadence is not an easy concept to nail down. After all, any human action involving the consumption of scarce resources entails the selection of immediate satisfaction at the expense of anticipated future satisfaction.6 The difference between the chronic alcoholic and the man who enjoys alcohol only occasionally or in moderation is one of degree. And yet, it is clear that the latter cannot properly be described as decadent. This is because decadence refers only to degeneration or destruction of some sort, one brought on by luxurious self-indulgence. The mere pursuit of vices such as alcohol, recreational drugs or gambling,7though certainly present-oriented and generally unproductive, is not necessarily degenerative or destructive to a person’s future. It is only sustained indulgence in short-range behaviour without regard for the long-term consequences (or the exaltation of such behaviour) that is genuinely destructive and therefore decadent. Obviously we should eschew such decadence, but this is not because moral virtue is inherently valuable—it is because such decadence is inimical to future luxury, prosperity and happiness.

Decadence and time preference
Whatever the particular form, decadence is always a manifestation of extremely high time preference—of the desire for immediate gratification and euphoria at the expense of important longer-term aspirations. As such, decadence is antithetic to moral values, which are rooted in orientation towards long-term prosperity and happiness. Such values are the conceptual embodiment of low time preference, which is manifested in characteristics of thrift, diligence and long-term self improvement, all of which involve forgoing immediate satisfaction in anticipation of gains in the future.

People with high time preference are naturally hostile to moral and intellectual ideas that are designed for long-term planning and welfare. Their focus on the immediate moment means that moral virtues such as rationality, independence, productivity, honesty, and integrity are anathema to them—rather than assisting their endeavour for immediate gratification, these virtues only inhibit them, and are therefore discarded. Similarly, ideas such as objectivity, reason and volition are implicitly hostile to their destructive conduct, and these too are discarded. Not surprisingly, liberty and capitalism, which are rooted in these ideas and which allow individuals to face the natural consequences of their actions, also receive little sympathy from those who focus only on the immediate moment.

If enough people have high time preference then the result is widespread moral and intellectual stagnation or degeneration. Ideas that support long-term planning and welfare become supplanted by ideas that support the desire for immediate gratification and ideas that underplay any destructive consequences of this practice. Determinism, relativism, non-discrimination, and statism become cultural norms, supplanting ideas of volition, objectivity, rational judgment, and liberty.

Time preference is more than a piece of esoteric economic theory. It is the root cause of the multitude of behaviours that are subsumed in the general notion of decadence. Political scientist Edward Banfield finds such behaviours to be particularly prevalent among the ‘lower classes,’ leading to a sense of determinism and behaviours that are reckless and improvident.8 Philosopher and economist Hans-Hermann Hoppe explains that the ‘root cause’ of destructive behaviours is not unemployment or low income; rather, lasting unemployment and low income are the consequences of high time preference, which is a contributing cause of phenomena such as family breakdown, promiscuity, venereal disease, alcoholism, drug addiction, violence, crime, high infant mortality, and low life expectancy.9

Why liberty and wealth lower time preference
In addition to biological and environmental factors and personal desires,10 time preference is also affected by social or institutional factors. The economic liberty of capitalism leads to increasing wealth and prosperity and this affects time preference. Contrary to the view that wealth and prosperity lead to moral degeneration, they actually lead to lower time preference, which fosters moral virtues based on long-term prosperity. Because growth in capital and knowledge increases the productivity of future labour and savings and also increases life expectancy, time preference in a free society will tend to diminish over time. As wealth increases, the diminishing marginal returns on exchangeable goods also means that people will shift more time and effort towards the acquisition of non-exchangeable goods such as knowledge, health and friendship.11 In describing this process of civilisation and capital accumulation, Hoppe explains that:

[N]o matter what a person’s original time preference rate or what the original distribution of such rates within a given population, once it is low enough to allow for any savings and capital or durable consumer goods formation at all, a tendency toward a fall in the rate of time preference is set in motion, accompanied by a ‘process of civilisation.’12

 

This argument is contrary to Rousseau’s view that luxury is destructive of moral values.
As time preference is lowered, this will lead to a drift towards attributes of long-term self improvement (i.e. human capital accumulation) among the population. Indeed, the pursuit of art and science, which is derided by Rousseau as concomitant to luxury, is itself an accumulation of human capital—in fact, the long-term contemplation and study required of these disciplines is evidence of lowering time preference and a move away from decadence.

The lowering time preference brought about by the wealth generation of free market capitalism means that indulgence in destructive behaviours will subside, and destruction and decadence will be reduced, although the rational pursuit of vices will remain.13 While the pursuit of vices may in fact increase due to greater wealth and opportunity, people will pursue vices only so long as these do not detrimentally affect their future prosperity too much—too much that is, in light of the now higher value that they place on their future prosperity. In short, vice may increase, but genuine decadence, in the destructive and derogatory sense, will wane. In a free society, the incurably decadent, who continue to engage in the pursuit of immediate gratification to the point of destructiveness and despite other opportunities, will bear the natural consequences of these choices—hangovers, loss of material resources, destruction of relationships, social ostracism, and so on.

Notwithstanding the benefits of economic liberty and wealth in reducing time preference, some may argue that the social liberty afforded by free market capitalism fosters decadent behaviour. While such behaviour is certainly not prohibited outright in the free market (so long as it is non-violent), it is important to note that the liberty of free market capitalism is grounded in the right to set rules of conduct on one’s own property and to exclude others from this property if desired. Thus, genuine liberty includes not only the freedom to drink alcohol, take drugs, watch pornography, and so on (assuming this is done either on one’s own property or with the permission of the property owner), but also the freedom to refuse to associate with people who engage in these behaviours, to exclude such people from one’s property, and even to form entire communities that exclude them.

How the welfare state fosters decadence
Unlike the liberty of the free market, the modern welfare state—built on Rousseau’s principle of the social contract, and directed towards egalitarianism—does not leave people free to enjoy their liberty and endure the natural consequences of their own actions. Rather, the welfare state obstructs this natural liberty and systematically fosters high time preference and decadence. Philosopher Irving Kristol observes that:

Fifty years ago, no advocate of the welfare state could imagine that it might be destructive of that most fundamental social institution, the family. But it has been, with a poisonous flowering of those very social pathologies—crime, illegitimacy, drugs, divorce, sexual promiscuity—that it was assumed the welfare state would curb if not eliminate. This has come as such a shock to welfare statists that they have been busy explaining it all away.14

 

The flowering of destructive pathologies under the welfare state is the result of its most fundamental policies. By ‘redistributing’ wealth from owners to non-owners the welfare state penalises productivity, diligence and thrift, and rewards ineptitude, sloth and recklessness.15 Production and thrift are penalised by taxation and regulation, so that (other things being equal) time preference will increase; people will put less effort into production and will consume more of their income. Conversely, unproductive and reckless behaviour is subsidised through welfare payments, government bailouts, and the provision of publicly funded services, so that (all other things being equal) time preference will again increase; people will be more likely to engage in reckless behaviour while relying on others to alleviate the destructive consequences of their own actions. On both ends of the ‘redistribution’ the result is higher time preference and increased decadence. Regardless of whether the recipients of redistributive policies are wealthy bankers or poor single mothers, brilliant intellectuals or stupid jackasses, careful planners or reckless party-animals, wealth ‘redistributed’ by government is always acquired through political influence rather than through production and voluntary exchange—so that increased time preference is the necessary result.16

In addition to redistributing property, welfare states also engage in other practices that increase time preference. Welfare states control extensive areas of public property and heavily regulate areas of private property, making it difficult for groups of private property owners to exclude decadent behaviours or people from their neighbourhoods.17 Finally, the welfare state fosters an atmosphere of moral and cultural relativism that makes the adverse judgment of decadent behaviour taboo, rather than the behaviour itself. All these policies increase the time preference of those affected, leading to greater decadence.

Those who lament the rise of decadent behaviours would do well to examine the source. For these behaviours are not the products of liberty, but rather, the products of systematic interferences with liberty in the pursuit of egalitarianism.


Endnotes

1. Rousseau is of the view that luxury corrupts the moral values of society. He states: "To misuse one’s time is a great evil. But other even worse evils come with arts and letters. Luxury is such an evil, born, like them, from the idleness and vanity of men. Luxury rarely comes along without the arts and sciences, and they never develop without it. I know that our philosophy, always fertile in remarkable maxims, maintains, contrary to the experience of all the ages, that luxury creates the splendour of states, but … will philosophy still dare to deny that good customs are essential to the duration of empires and that luxury is diametrically opposed to good customs?" See Jean-Jacques Rousseau, Discourse on the Arts and Sciences (1750) First Discourse, Second Part, paragraph 6.
2. Such views are often implicit in the postmodernist celebration of ethnic ‘minorities’ and its hostility to Western culture. In particular, Edward Slingerland discusses the Noble Savage myth that permeates the writings of postmodernist philosophers such as Paul Feyerabend and Bruno Latour; see Edward G. Slingerland, What Science Offers the Humanities: Integrating Body and Culture (The Cambridge University Press, 2008), 108–109.
3. This is true mainly of Western philosophers and intellectuals who are almost invariably affluent and urbane. Notable exceptions to this trend are Buddhist monks and other less publicised philosophers who actually practise the privation they preach.
4. See Rousseau (1750), First Discourse, Second Part.
5. See footnote 1.
6. This is true for any good capable of being employed for future satisfaction, which is the case for even perishable goods. For discussion of this issue and time preference generally, see Ludwig von Mises, Human Action: A Treatise on Economics (The Scholar’s Edition) (Ludwig von Mises Institute: Alabama, 1998), 480–487.
7. When I speak of ‘vices’ in this paper, I am speaking in the ordinary sense of things such as alcohol, drugs, gambling, etc. These things may or may not be damaging to one’s life, depending upon the extent of their use and the context. In moral philosophy, the term ‘vice’ refers to an act or practice that is destructive to values and therefore necessarily bad—the opposite of a virtue. Clearly there can be no rational or non-destructive pursuit of vices in this latter sense.
8. See Edward C. Banfield, The Unheavenly City Revisited (Boston: Little, Brown Book Group, 1974), 61–62.
9. Hans-Hermann Hoppe, Democracy: The God that Failed (New Jersey: Transaction Publishers, 2001), 6.
10. For detailed discussion on these factors affecting time preference, see Hoppe, as above, 3–15.
11. See Murray N. Rothbard, Man, Economy, and State with Power and Market: Scholar's Edition, (Alabama: Ludwig von Mises Institute, 2004), 241 and 1324. For further discussion on this issue, see Ben O’Neill, ‘Does Capitalism Make Us More Materialistic?’ (Alabama: Ludwig von Mises Institute, 2007), http://mises.org/story/2697 (Accessed 13 February 2009).
12. Hoppe, as above, 6.
13. See footnote 7.
14. Irving Kristol, The Lost Soul of the Welfare State (Washington, DC: American Enterprise Institute, 1997) www.aei.org/publications/pubID.7392/pub_detail.asp (Accessed 16 February 2009).
15. On the moral hazard associated with assisting the poor, see James Buchanan, ‘The Samaritan’s Dilemma,’ in Edmund S. Phelps (ed.), Altruism, Morality and Economic Theory (New York: Russel Sage Foundation, 1975). For discussion applied to government redistribution, see Stephen Coate, ‘Altruism, the Samaritan’s Dilemma, and Government Transfer Policy,’ American Economic Review 85 (1995), 46–57; see also Robert A. Moffitt, ‘Incentive effects of the U.S. welfare system: a review,’ Journal of Economic Literature 30 (1992), 1–61.
16. See Hoppe, as above, 9–15.
17. See Hoppe, as above, 137–149.