Friday, June 15, 2012

Gary Judd: Intrusive Governments Undermine Democracy

The intrusion of government into areas where it should not be ― does it herald or risk the disintegration of democracy?

We hear endless discussion concerning what should be the political and economic responses to the problems in Europe. But suggested solutions are simply palliatives which at best will have short term effects.

We also hear discussion about the causes of the problems: governments living beyond their means and debt funding their voracious demands ― but the underlying cause, which is not heard, is the state intruding into areas where it should not be. The only solution which is not just palliative and short term is for the state’s functions to be limited so governments are confined to their proper role.

In 1850, French economist and legal philosopher, Frederic Bastiat, wrote in The Law under the heading Property and Plunder: "Man can live and satisfy his wants only by ceaseless labour; by the ceaseless application of his faculties to natural resources. This process is the origin of property. But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labour of others. This process is the origin of plunder."

And a little later, under the heading The Fatal Idea of Legal Plunder: "But on the other hand, imagine that this fatal principle has been introduced: Under the pretence of organisation, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few — whether farmers, manufacturers, shipowners, artists, or comedians. Under these circumstances, then certainly every class will aspire to grasp the law, and logically so. The excluded classes will furiously demand their right to vote — and will overthrow society rather than not obtain it."

And a little later, under the heading Perverted Law Causes Conflict: “As long as it is admitted that the law may be diverted from its true purpose – that it may violate property instead of protecting it – then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder. Political questions will always be prejudicial, dominant, and all-absorbing. There will be fighting at the door of the Legislative Palace, and the struggle within will be no less furious."

What we are seeing today in Europe is a culmination of legal plunder, with potentially fatal consequences for democracy itself. The role of the state having been expanded beyond its proper sphere, democracy has become a system of bribery and corruption, with politicians bribing the electorate for votes and voters bribing the politicians with their votes. Producers have votes too. Lest too many producers are alienated by the insatiable demands of the state to enable it to effect redistribution from the productive to the non or less productive, governments have run deficits funded by ever-increasing debt.

As democracy disintegrates in Greece we see near anarchy with the potential for it to become full blown and to spread elsewhere in Europe, with conflict not just within countries when those who have become used to state largesse are threatened by its removal, but between countries where the more profligate are seeking to plunder the more frugal.

Other democracies where the state has been allowed to intrude beyond its proper place are not immune from similar fates.

Gary Judd QC is a Queen's Counsel, former Chairman of ASB and Ports of Auckland and former member APEC Business Advisory Council.

1 comment:

Jens said...

Quite true.
The question is, how to change that in a democratic way, by persuading the plunderers to become more provident and sel-reliant?

Arguably, to stop all wealth transfers abruptly is not achievable by persuasion and majority support.

Therefore - a little bit of legislated "austerity"- (universal retirement wealth accumulation on Personal Accounts) - introduced with our taxation system - is arguably the most effective way to move in the direction of diminishing plunder.

With that new wealth creating jobs immediately when invested in financing infrastructure as a priority at least until excessive unemployment is overcome - and plundering diminishing at the rate of the savings starting to finance universal superannuation -who would not be pleased by that?

As a result, a "less plunder, higher savings rate" culture will emerge.