Left and right is dead

The old distinction between left and right has lost its meaning. In politics, there is only one main axis of difference, that between statism and individualism. Statists believe that decisions are best made by an authority and that individuals should be required to abide by the authority’s decisions. Individualists believe that every person has a natural human right to make their own decisions. There are extremists at each end of this axis, but wherever you are between the two extremes, the key political question is whether you favour more statism or more individualism. Whether you want to pass more decisions to higher authorities or bring decisions closer to the individual.

Statism is a continuation of the child’s belief in parental authority. As babies, we have to accept our parents’ authority. We may scream and throw tantrums when what we want is overridden by a parent, but in the end the parent makes the decision. As we grow up, we become better at making decisions for ourselves and we gain confidence in our ability to make decisions. In other words, we realise that parents don’t always make the best decisions for us and that they don’t have a right to dictate what we do. Typically, this is a gradual process, as we get more and more individual freedom, until the day we are legally free adults. We can then interact with our parents as equals in decision-making. Each of us makes our own decisions and we cooperate as far as we want to and can do so. We have become full members of society.

Picture a family on holiday. One parent and two children, 6 and 8 years old. It’s morning and the question is: what shall we do now? One child wants to stay in and play computer, the other wants to go to the beach. The parent has to make a decision because neither child can be left alone. The parent may want to go to the beach or stay in. They may think beach is better than computer or vice versa. They may try to persuade one child to change their mind with treats or threats or arguments about fairness. In the end, the decision is made and enforced by the parent, and the children like it or lump it.

Now imagine that the children are 16 and 18 years old, another family holiday. What shall we do today? The answer is more likely to be that each does what they want and perhaps meet up for lunch.

Under statism, the first question is how to choose the authority – who gets to make the decisions? The choice has typically been made by “god”, usually through war or hereditary right, or by committee members, such as the Soviet politburo, or by elected representatives, as in modern democracies.

How the authority is chosen does not define how good or bad it will be for the people. This depends on the wisdom, motivation and methods of the chosen leader(s). Do they know what is good for the people, do they make the good of the people their sole objective, how deeply do they intervene against individual freedom and what level of violence they use.

The Soviet Union was led by an appointed committee, it intervened heavily against individual freedom and used high levels of violence to enforce decisions. It is widely thought to be one of the worst political systems in human history. The European Union is led by an appointed committee, it intervenes heavily against individual freedom but uses low levels of violence to enforce decisions. It is loved or hated by about half of its people. Monaco is led by a hereditary monarch but intervenes lightly against individual freedom and uses low levels of violence to enforce decisions. This seems to be one of the best loved systems tried so far.

The main areas where states intervene against individual freedom are economics and morals. Communism and fascism are examples of extreme levels of intervention in both areas, enforced by high levels of violence. Most modern democracies intervene heavily in the economy and in some areas of morals, such as drug use, but have turned away from intervention in religion and sexuality, whilst using low levels of violence in enforcement.

Our political conversation is confused by the use of terms like socialism, social democracy, conservatism, collectivism, capitalism, radical, progressive and the like. None of these terms has a clear meaning. Your idea of socialism may be more or less economically interventionist than mine. Your idea of conservatism may be more or less morally interventionist than mine. And so on. The level of violence that any person or party wants to see used changes with circumstances and is not determined by the name of the party or the colour of the flag.

We can only get agreement on political questions if we use words with clear meanings. In every question, we should ask whether we want more or less state intervention, and we should realise that this is the same as whether we want less or more individual freedom.

Saving is good

We can double the wealth of ordinary people within 20 years. How? There is only one way: Save and use those savings to make more and better tools.

Why tools? Imagine starting a business washing cars. On day one, you have a sponge and a bucket. You can wash 10 cars in a day. Later you buy a power washer. Now you can wash 20 cars in a day. The power washer is a tool that makes you more productive and therefore increases your wealth.

Of course, tools are far more than just machines. Detergent is a tool. When you add it to the bucket, you can clean faster or better or both. If you have the idea of cleaning cars in one street instead of travelling between streets, that idea improves your productivity. Ideas are tools. Roads, water pipes and a host of other things are tools.

Why do we need savings to get tools? If you spend today baking bread, you can eat. If you spend the day making an oven, you can’t eat. So today you need someone else who makes more bread than they eat and gives you bread. A person saves when they eat (consume) less than they make (produce). The other person is saving bread to support your oven making.

In short: rising prosperity only flows from rising productivity, which only flows from making more or better tools. Tools can only be made or improved by using savings.

If you see the crucial role of saving, you realise how destructive is the idea of spending to get rich. The more you spend, the less you save. Government today acts as if saving were evil. It continually undermines savings by printing fake money. It manipulates interest rates to discourage saving. It is the biggest anti-saver in the country, spending billions more than it “earns”.

Some say that government can help society by gathering savings and channelling those savings into infrastructure and other tools. There are two problems. First, individuals are always better at deciding which tools to make than government. That’s because individuals are closest to the facts and stake their own wealth on getting it right. Government is cut off from the facts and has the carefree mind of someone spending someone else’s money. The second problem is that government cannot gather savings without reducing savings available in the hands of individuals. This is obvious in the case of tax. What the government takes from you in tax, you cannot use to support someone else’s oven making. Borrowing is the same. Whether government takes it from you in tax or borrows it from you, you don’t have it anymore. What about just printing money? Printing money has the same effect as counterfeiting. It makes the counterfeiters and their friends richer at the expense of ordinary people. It has no effect on the amount of bread we can eat.

If seeing ordinary people better off is your dream, vote for politicians who believe in saving. Make them stop the war on savers.

Things that don’t exist

It’s fun to read stories about make believe. Imagination is a wonderful thing. But when we want to talk about serious stuff, it’s best to avoid using words if the thing they’re meant to stand for just doesn’t exist.

How about “The Economy”? It sounds like an organisation. We like to think we can measure it and understand it, as if it were a business or a household. We even think we can forecast what it will do tomorrow. We can’t. It’s like a flock of starlings in flight, amazing patterns, ever changing, unpredictable. We can’t tell what is happening in the brains of the starlings to guide their flight. The economy is like all the flocks of starlings in the land. We can hardly measure what is happening, let alone predict the next movement. “Economy” really means the total of the actions of every person in the country. Actions follow from thoughts, so just because you do X today doesn’t mean you will do X tomorrow. We can’t know people’s thoughts and we can’t predict them. There’s no time here to expose the fiction of GDP, but it’s a great story for another time.

Group Identity is up next. Can we divide the country into groups by race or skin colour? We can imagine it, but we can’t do it. The first problem is that skin is not black or white or brown or red or yellow. Primary colours exist in science but there are no dividing lines in human skin colour. Even if there were, it would still be a world-spanning leap of logic to say that people’s loves, wants and beliefs are linked to their skin colour. Your skin colour doesn’t tell me where you started from and where you are going. Every person deserves to be treated as an individual. Pretending that we have group identity is just a way of dividing us to conquer us. It’s nonsense and it damages society.

Heard people talk about “Exploitation” of workers? Britain and then the US led the way in abolishing slavery, for the first time in human history. I feel enormously proud of the people who did so. Up till then, you could own me. That is exploitation. But you can’t exploit me by offering me a job at a low wage. If you don’t pay me what I am worth, someone else will. I am free to go. How can you build a successful business if you pay your staff less than they can earn elsewhere? They will desert you as soon as a better offer comes along. If I am worth only a low wage today, am I trapped and never able to improve? No, our society provides support to help me better myself. We should all aspire to see the lowest paid become better off. But talking about exploitation means we’re lost before we start.

And just one more before you go. Non-state Monopoly. If a business gets very big by offering us something better, is that bad? If they get lazy or stop improving, won’t others catch them? There are hordes of entrepreneurs and piles of money trying to find gaps in every market. No business leader can sit comfortably, because consumers are such hard taskmasters. Businesses have to adapt every day, learn again, throw away their painstakingly built ideas and assets and try again. Unless …. their lobbyists can trick politicians into building protected spaces for them by creating regulations. Regulations make it hard for competitors to rise. That protects the strong and leads to crony capitalism, the killer of consumer satisfaction.

Next time someone tells you about something, ask yourself whether it really exists. Don’t be fooled.

Why do we have so much debt?

People, companies and governments are loaded with ever increasing piles of debt. Why? The answer is that in the age of inflation, borrowing is the only sensible thing to do.

Inflation is good for people who owe money. It eats away at the spending power of money, so the repayments are worth less than the amount borrowed. Since our government is committed to inflation, not borrowing money means missing out on the greatest giveaway of all time.

The government says that gradual inflation is good for us. It is not. In a good society, prices would gradually fall. Why? Because humans are always thinking of better ways to do things, and better usually means lower cost (or the same cost for a better result). Being able to afford a little more of the world’s good things today than we could yesterday is the natural order. Gradually falling prices are good for ordinary people.

So why does government promote the lie that inflation is good? The answer is simple. Because it likes spending more than it can afford and that means it has to borrow. Rising prices are good for borrowers. Government is the biggest borrower, so government loves rising prices.

How does the government make prices rise? By printing money, creating it out of paper, or nowadays virtual paper. Of course, we need to replace worn-out bank notes. But that is only a tiny fraction of money printing. The country’s central bank prints money, but most of the money printing is done by banks, operating under rules designed by government to promote inflation.

Inflation redistributes wealth on a huge scale. The winners are bankers, government employees and vested interests. Why? Because they stand close to the source of the newly printed money. The losers are ordinary people. Savers are punished and borrowers get free stuff.

Ordinary people would be better off without inflation. Society would be better balanced without inflation. And there is a simple way to avoid inflation: stop printing money (apart from replacement bank notes). Government controls money printing, either directly or through the rules it sets for banks. So ordinary people must use their votes to force government to change course.

Robots won’t cause unemployment

There are practically limitless opportunities to make things that people want. When we invent a machine to do work, the people freed from that work are available to do other work. So humanity can now make more of the things we want.

Imagine a list of tasks, each of which involves making something that humans want (now or in the future). The list is arranged in descending order of necessity, so things at the top of the list are the ones most necessary to human life. The list starts perhaps with collecting water, growing corn, etc and heads off past providing space travel at giveaway and away into the barely imaginable. Making flat screen TVs for most houses was once a task way off in the unimaginable. I don’t think we will ever get to the end of the list.

Imagine the human population as a team at a row of workstations arranged in the order of the task list. At the start of human history, the whole team was working on the first few tasks at the top of the list. Most of the workstations were empty, corresponding to the tasks not yet of high enough priority to earn a human. As technology developed, some human time became  available to put into next thing on the list. In other words, as a machine became available that could replace the labour of one or more people, the human “team” shuffled up the row of workstations, so the next empty workstation became a manned workstation. The people displaced by the machine may be shuffled in to the team lower or higher along the row of workstations, but there is definitely a workstation available for them, so long as there are tasks stretching beyond the line of workstations. Humanity as a whole has more goods by everyone working than if any single person has no workstation.

If you accept the proposition, you also realise that the only reason we have unemployment is that guards are standing around stopping people getting to workstations. The guards are rules and other measures deployed by the government.

No more group identity

Commentators love to put us in neat boxes. They draw a line in the sand and claim that they can divide all of us into two groups. It might be by skin colour or gender or how much money we have. In fact there’s hardly any limit to the number of lines they can draw.

Do these lines mean anything? I think not. Humans are much too complex to be pigeon-holed. If you know someone’s skin colour, does that tell you what they think about anything? Where they have come from in life and where they are going? What hurdles they have to cross and what help they get?

If you can answer yes to all these questions and more with utter confidence, perhaps you believe in group identities. But if you know that every human is a unique person, then join me in rejecting these lines in the sand.

People who draw these lines are trying to divide us. Perhaps just because it makes for easy soundbites. Perhaps because their human need to belong sends them in search of a group to belong to. Perhaps they see human life as conflict.

For me, human society is all about cooperation. Cooperation between friends, family and fellow citizens, whether driven by love or economic needs, is the key to most human satisfaction. Cooperation has saved billions of lives and raised billions of us to amazing prosperity.

So I choose cooperation over conflict. I know that these lines in the sand don’t help us understand the world. They don’t make for a better world. We all belong to the human race. There is no other true group identity.