Free Your Minds and Free Our Beer!

[This article originally appeared on the mises.ca blog on August 3, 2012]

Ask a person on any street in most countries of the world—including those Westerners consider unfree and undemocratic—whether theirs is a free society, and chances are the answer will be in the affirmative. It is a curious phenomenon, yet a very real one. This is probably so due to a combination of people’s limited idea of freedom (seeing it only as a state contrary to tangible bondage), and denial (people prefer to see themselves as they’d like to be, rather than as they are).

Simply put, people love the idea of freedom, and they like to believe that they are free. For people to see themselves as unfree is to admit personal failure with respect to an idea held so close to one’s heart. Canadians are no exception. Our attachment to the idea is proudly displayed in our national anthem, by paying homage to the “true North strong and free,” and our constitution:

            Guarantee of Rights and Freedoms

1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

Fundamental Freedoms

2. Everyone has the following fundamental freedoms:
(a) freedom of conscience and religion
(b) freedom of thought, belief, opinion and expression, including freedom of the press and other means of communication.
(c) freedom of peaceful assembly; and
(d) freedom of association.

As the above excerpt shows, despite a nominal pledge to freedoms, the government reserves the right to “reasonably” limit them when it deems it “necessary.” What is “reasonable” and when “necessity” arises are two questions whose answers must be aligned with the arbitrary tastes of a select minority given the authority to answer them at a given time. Such broad language is unfailingly dangerous to the governed and is rarely left unused. The temptations for social engineering and cronyism that such powers present, more often than not prove themselves all too inviting to be delivered from. So, the freedom of conscience is one that often suffers. And while in relative terms Canadians are among the freest nations in the world, we have not been safe from the tinkering with our liberties by the righteous and delusional. As a result, Canadians in general, and Ontarians in particular, despite their proud love of beer, are among the least free people in the world with respect to its production, consumption and distribution. Thus, when Ontarians wish to satisfy their desire for alcoholic beverages in general and beer in particular, they are triply struck: through excessive excise taxation, through a limited selection, and through the inconvenient distribution system where they must purchase their beloved beer through the government owned Liquor Control Board of Ontario (LCBO) stores or the privately held cartel that is The Beer Store chain.

The Temperance movement that had been working on abolishing alcohol from North America for the better part of the 19^th Century finally got its wish in the early parts of the 20^th. While explicitly the movement’s goals were higher morals, in fact it simply wanted to keep “the wrong kinds” of Whites (Catholics in particular) out. In other words, the move to ban or restrict alcohol was steeped in racial, ethnic and religious intolerance—quite contrary to the Constitution Act’s 2^nd Article. Alas the reader need not worry, since most pundits and intellectuals—be they “conservative” or “liberal” leaning—will tell him that Ontarians are not troubled by such hypocrisy, since “responsible” distribution of alcohol is something that represents “our” values and that these restrictions are for “‘our’ own good.” It should come as no surprise that Ontario’s restrictive alcohol retailing system was established during the heyday of the Progressive era. This was a time of great social engineering. Leading the push to Prohibition in the US was one of the worst economists of all time, Irving Fisher, whose idea of stabile prices seemed to have been only a subdivision of a greater vision of a completely sterile and immobile society. Canada actually spearheaded the Prohibition of alcohol as early as 1916, only to ease the policy by the tightly regulated retail system still in place today.

Apparently the Ontario Convenience Store Association (OSCA) as well as another 112,500 and counting other Ontarians didn’t get them memo on what their values are. Through the “Free Our Beer” campaign these confused (with respect to their values) Ontarians are making an attempt to petition the present Provincial legislature to further abandon the relic of bigotry that is the alcohol retail system in Ontario by allowing their stores to sell beer and wine. Even if this effort is successful—and at present there seems to be no indication that it is—it would represent but a baby step toward full beer freedom in Ontario. While supportive of the attempt, this author is not optimistic concerning its success, as there are forces too powerful to defeat.

First, and foremost among these is Ontario’s healthcare system which is funded largely by the aforementioned excessive excise taxes on alcoholic beverages in this Province. While the convenience stores association is not simultaneously calling for a repeal of these taxes, a shift to sales away from the tightly held system is sure to drain tax revenues away from the provincial government. One only need look at tobacco product sales to anticipate what is likely to happen with booze: the artificially set high prices are sure to encourage the development of smuggling operations. And while I have no qualms with bankrupting OHIP, those in government are sure to have a differing sentiment. Therefore, OCSA’s claim that “[l]ast May the OCSA unveiled an independent, third-party mystery shopping study that showed convenience stores were the best at age checks—better at denying sales of age-restricted products to minors than the foreign-owned Beer Store and the government-run LCBO,” is likely to have little impact on the decision-makers at Queen’s Park.

Likewise, the results of the mystery shopping study are unlikely to persuade that second powerful opponent of liberty—the omniscient paternalists—to get behind, or at least not work to block the initiative. As far as they are concerned, all people—except themselves, of course—are evil, rotten, ignorant idiots, who need constant supervision. On top of being a strong voting bloc—which represents further discouragement to those at Queen’s Park to side with the OCSA—they tend to be vocal, and beloved by the media. Thus, not only do they take the time from their busy schedules of petitioning for STOP signs, lowering speed limits, increasing industrial safety standards, keeping various weeds illegal—while prohibiting the destruction of dandelions, “supporting our men and women in uniform” etc., to write their local newspapers, TV and radio stations—but, the local media outlets love publishing their unsupported claptrap.

Thus, they tell the public that allowing convenience stores to sell beer and wine will definitely increase the rate of convenience store robberies. Likewise, they say that the addition of booze in stores will push out necessary products that consumers value more highly. Here are examples of the misuse of the principle of ceteris paribus if there ever was one, for, who is to say that the convenience stores will not install better security in their stores, or will not add more square footage. Nor do the proponents of such fallacious ideas consider that those products that are more highly valued by the consumer are also the products that are dearer to the seller, for they earn his bread. There’s no room for reason in paternalistic thinking, no time to ask “Why would convenience store owners drive business away if it is to their own detriment?” Lastly they say that making beer more easily accessible to the public will drive instances of alcoholism. They are of course, the Holier-than-thou spiritual heirs to the intolerant Temperance movement, and as such, they have a hotline with God. There is no point in reasoning with them that repressing alcohol sales has been proven to increase its potency; or explaining to them that prior to the Prohibition the most common alcoholic beverage in North America was 2% beer, while during Prohibition it was 40-50% hard liquor.

The third powerful force against alcohol freedom in Ontario is represented by the alcohol distributors. Over the years they have built relationships so cozy with the LCBO, that it is virtually impossible for new entrants to join the market. Unlike cigarettes, where four large companies dominate the world market, alcohol production is far more diverse, and those who have a piece of the lucrative Ontario market are less than willing to take a chance on the free(er) market. On the other hand, The Beer Store chain is owned by four large breweries which unsurprisingly favour their own products. Allowing convenience stores to retail beer and wine is sure to break the alcohol sales cartel in place in this Province. Again, while this author wholeheartedly approves of cartel-busting, he does not see it likely to happen.

In conclusion, the “Free Our Beer” campaign’s demands are quite weak compared to all that is wrong with the sales of alcoholic products in Ontario. At the same time any progress toward more freedom is better than none; and ridding ourselves of relics of ethnic and religious intolerance as public policy is always welcome. Yet, while the “Free Our Beer” campaign is rather tepid in its declared goals, too much is at stake for the provincial government and the beer distributors to allow for any chinks in its armor.

It’s the System, Stupid!

[This article originally appeared on the mises.ca blog on July 24, 2012]

Canada’s living journalistic icon Rex Murphy recently penned a characteristically blunt castigation of the present crop of political figures in this country. Yet, Mr. Murphy’s enduring career at Canada’s public broadcaster suggests that he has failed to stay completely true to the morals he seems to expound when wagging his righteous finger. Indeed, this veteran of political punditry, like the politicians he pours scorn on, is equally guilty of that all too prevalent abusive argument by the use of the fallacy of omission.

After listing just a sample of reasons why the Canadian public has rightly grown weary of its political class, Murphy offers a solution.

For a ploy of this magnitude, Dalton McGuinty and his energy minister should resign. But such gestures — resignation in the wake of incompetence, trickery, waste or deep mismanagement — belong to a time when politics had a noble status, public life retained a vestige of honour and politicians actually had an organ of conscience that occasionally allowed them to register real emotions of honest shame.

A reader’s comment quickly catches Murphy’s fallacy. A reader signed “bob klinck” rightly points out that

[t]he phrase “a time when politics had a noble status” needs more precise definition.  Just when was that Golden Age?  While occasionally the electorate’s hopes have been re-animated by a fresh face, the ultimate result for decades, centuries even, has been “throw the bums out”.

To be sure, we are taught in public schools of the noble politician-statesmen of old, the white headed father-figures who looked out for the state of their posterity, the Bismarcks, the John A. MacDonalds, the Honest Abes, the Charles de Gaulles[1]. Yet, an independent inquiry into the historical facts of any given political regime boils down to nearly the same flaws of corruption, cronyism and forceful coercion of the unwilling masses to partake in actions more or less detrimental to them. Democracy manifested by the rule of a minority elected by a supposed majority vote has not changed this fact.

A patient examination of society, the sort that has become verboten for fear of being labeled a “fringe element,” will show that the concept of rule by the people (democracy) has been bastardized and completely turned on its head. The important omission made by Murphy when he speaks of the “time when politics had a noble status” lies in the fact that he fails to acknowledge that victors write the official history, and official history is what is taught in schools and propagated through the public media. Likewise Murphy omits to point out that by its nature all government is incompetence, trickery, waste or deep mismanagement. Another important omission by Murphy and his ilk is in that when they talk about “us,” they bundle the entire population of a country in this all encompassing language without giving regard to the dissenters. For if we talk about government by the people, we must ask: Are those who disagree with the opinion of the omnipotent politician, bureaucrat or the members of the “majority” who put them there, not to be considered people? Are they a lower class whose wants, needs, desires and opinions are to be equated to some sub-human form? It is an unfortunate development that democracy has come to be a tyranny by majority vote, especially in light of the fact that throughout history majorities have displayed a tragic lack of wisdom. Here we ought to remind ourselves that majorities believed that the Earth was flat and persecuted those who refuted that belief, majorities organized witch hunts, majorities elected Hitler and supported his atrocities. So why are we forced to accept the majority as the ultimate arbiter? If we are to speak of democracy as a government by the people in any proper sense, then it must be a system of governance by each person. In other words, we are to speak of self-governance and an absolute respect for personal property as an extension of the person. Government elected by majority is government of some people for some (not necessarily same) people.

It is a logical contradiction to speak of politics as a noble occupation. This I say not because of the personal disdain I hold for politicians, rather because of the nature of the political system. Politicians seek the votes of diverse populations, which force them to shift their ideals as necessitated by the small group being addressed at the time. The “Etch-a-sketch” example given by a Romney campaign officer proves this point. In the search for a common denominator, politicians exploit that which is present in practically every person: profit seeking. Thus they promise impossible gains like “free” healthcare, “free” education, “government” guaranteed loans, more welfare, etc. What sort of nobility is to be expected out of contestants in popularity contests where the prize is unlimited power and the ability to enrich oneself beyond belief at the expense of others?

What is to hold these power seekers to resist the temptation of power and to hold themselves accountable? Why should an office holder not exercise his lawfully given immunity? No reasonable answer lends itself to these questions. There can scarcely be an idea more naïve than that of the responsible politician, for there is nothing to force office holders to be responsible guardians of the state. While history shows some statesmen ending their careers in front of the firing squad, they are the few and far between. At the same time, while the firing squad momentarily relieves public anger, it does not reverse the policies undertaken by the deposed statesman. Further, in modern Western societies, the most a statesman-politician stands to lose is an election. We are told that ousting a politician from office causes injury to his dignity, public standing and self respect. However, it can be observed that the rules that apply to these feelings within the state of mind of the politician vastly differ to those of the common citizen: once the statesman-politician exposes himself to the public in such profane fashion as he does, he becomes bound not by the social mores that govern the common voter, but by those that command the common whore (which is to be distinguished from the honest and honourable profession of prostitution).

In what can be seen as an anticipation of FA Hayek’s chapter on why the worst get on top in a democratic society from his legendary The Road to Serfdom, Arthur Schopenhauer gives an honest depiction of the character of the man whose “object is success in political life, where favour, friends and connections are all-important, in order to mount by their aid step by step on the ladder of promotion, and perhaps gain the topmost rung.” Unsurprisingly, the sharp intellect of Schopenhauer cuts much clearer than Murphy’s apologia. Schopenhauer evades any omissions when considering the nature of politics when he says:

In this kind of life, it is much better to be cast upon the world without a penny; and if the aspirant is not of noble family, but is a man of some talent, it will redound to his advantage to be an absolute pauper. For what every one [sic.] most aims at in ordinary contact with his fellows is to prove them inferior to himself; and how much more is this the case in politics. Now, it is only an absolute pauper who has such a thorough conviction of his own complete, profound and positive inferiority from every point of view, of his own utter insignificance and worthlessness, that he can take his place quietly in the political machine. He is the only one who can keep on bowing low enough, and even go right down upon his face if necessary; he alone can submit to everything and laugh at it; he alone knows the entire worthlessness of merit; he alone uses his loudest voice and his boldest type whenever he has to speak or write of those who are placed over his head, or occupy any position of influence; and if they do a little scribbling, he is ready to applaud it as a masterwork. He alone understands how to beg, and so betimes, when he is hardly out of his boyhood, he becomes a high priest of that hidden mystery which Goethe brings to light. (On the Wisdom of Life; Chapter III. PROPERTY, OR WHAT A MAN HAS.)

Hayek understood that the system is to blame for the proliferation of the lowest of the low. What both these great men failed to see, however, is that the system makes tyrants even out of noble persons. A tyrant is a tyrant, whether it’s Harper over a country like Canada, McGuinty over a former “have” province like Ontario, Ford over a metropolis like Toronto, McMillan over a backwater town like St. Catharines, or the local councilor over his ward. It is the fact that once elected these persons are de facto granted unlimited power. A point missed is that a politician of the “Right” will inevitably be a tyrant to a person of the “Left,” and vice versa, simply because the one has one vision, while the other a different one, and a compromise that cuts down the middle is no solution. It represents only a smaller tyranny to the one person, but greater tyranny to the other. The comparison of political with commercial compromise where two parties spilt the difference in valuation of a good in order to make a deal is improper. In commercial dealings the parties negotiate over specific goods which they own and specific amounts of them. The fact that they agree to a common valuation means that both parties are satisfied with it or they would not have come to the agreement. Political dealings treat aggregates of goods that the politicians do not own. The people whose lives are affected by the compromise have no say in the ultimate decision, thus their satisfaction with the outcome cannot be, and is not measured.

Furthermore, unlike commerce, where the maxim “The customer is always right” rules—and therefore each merchant’s mission is satisfying his potential buyer, politics is ruled by words. Politicians sell broad visions of “cities on a hill,” “sustainable ecosystems,” “better tomorrows,” and other catchphrases that ignite the voter’s imagination and let him define them his own way. Our own James E. Miller recently wrote quite ably about this issue.

The most influential men of history were important precisely because they used words to effectively communicate their ideals.  The masses won’t adopt an idea if they are unable to comprehend its full meaning.  Governments are never toppled by force but by the ideas that spark the flames of liberty.

Comprehending the concept of human action as purposeful behavior takes reading a number of volumes of history and logical reasoning. Understanding the concept and origin of money or the history of money and banking, likewise, require long hours of study and research. The concept of liberty is often broadly defined. Worse still, bondage is depicted only with a ball and chain—not as it is: the banning of non-aggressive actions and interactions. The concepts of a “living wage” and a “better future” leave it to each person to make of it what his mind can conjure up. No effort, no study is necessary to achieve that, as most people are hopelessly ignorant of their ignorance. Indeed, it takes knowledge to get a glimpse of one’s own lack of it. Thus, the Rex Murphys of the world can speak of a time that never was to an audience ignorant of the fact. In doing so, they perpetuate the chimera of the good politician—usually a man of the official Left—who is out there somewhere, but is either not seen by his peers, or if elected is blocked in his noble efforts by those irreparably bad politicians—usually men of what is called the Right. (The fallacy of this dichotomy was dealt with by Herbert Spencer in “The New Torries.”) For these reasons the candidate propagating prudence and realism has no place in politics.

Mr. Murphy speaks of noble politicians with a straight face because the vast majorities of the population never bother to consider the question “Whose interests do politicians serve?” It is widely understood that politicians serve that poorly defined body referred to as “the public;” yet in earnest, the delegates, the members of the various assemblies, once elected, do not steward the platform of the citizen who voted for them, nor of the one who did not: the elected representatives find themselves subservient to the interests of the political party to whose caucuses they belongs; the political party’s sole interest being gaining power. In order to achieve their goals politicians must create wedges in the population in order to pull on irrational emotional strings of the voters. Reason must take precedence: how are statesmen-politicians to be trusted to make useful policies for their constituencies when their preeminent goals are to further their own employment. This they cannot accomplish by means of peace, prosperity and harmony; for, the statesmen-politicians’ interests are their own welfare, rather than ensuring that they create the conditions for a fair and free competition among their constituents and thus leaving it to them to produce the best arrangements for themselves as they see them fit. After all, when each citizen is given an opportunity to seek out his own best interest, it is foolish to expect some opinion-poll driven, career politician who never in his life held a real job, living in a bubble with his comrades, to know what is really best for every single member of body politic.

When taking the above into consideration, only one logically consistent solution that presents itself. It is nothing more than the filling of the gap that Mr. Murphy leaves when he demands the resignations of some public office holders and bureaucrats. The solution is the demanding and actuation of the resignations of all public office holders and bureaucrats and the abolition of the collectivistic system. For no matter their personal qualities, the system makes them all lousy servants to society.

***
Now, our problem is that this article will be read by a dozen or so people, who already have come to most of the conclusions of it prior to reading it. These few understand that the political system as is, is curtailing their potentials; they ask themselves “Who drinks my milkshake?!” The masses, they drink the statist cool-aid and ask for more. They dare not pose any uncomfortable questions for fear of rocking the boat and losing what they have.


[1]I often get asked by Westerners how it is that I have no respect for the murderous dictator of Yugoslavia, Marshal Tito, when the “noble man” built roads and bridges for people.

With a Little Help From the President

[This article originally appeared on the mises.ca blog on July 18, 2012]

I’ve yet to read either of US President Obama’s books; however I’ve read in passing criticisms of use his excessive of circular arguments in them. Judging by his Roanoke, Virginia campaign speech, it would appear that the President has committed the same logical fallacy yet again. Being a politician by vocation, logical reasoning and truth-seeking deliberations are to be presumed entities outside of Obama’s scope of use. Far more expedient to the politician is the appeal to emotion and the clouding of any reasonable thought in the mind of the voter.

Thus, the president of “capitalist” America and “leader of the free world”—a trained lawyer—had the audacity to spew out something as illogical as follows:

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business—you didn’t build that.  Somebody else made that happen. … The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  (Emphasis added.)

The president’s main conclusion is correct; however his preliminary conclusions are not. To say that if one is successful it must be because of help received along the line is an unwarranted broadening of the definition of “help.” Likewise, to say that every success is the result not of the undertaker of the action, but of a mystical “help” from “somebody along the line” fails to acknowledge that somebody took specific action which resulted in the success (or failure). Thus the origin of the action is never reached, and the argument goes ad infinitum. It is true that no man is a universe in himself. Indeed, the state of the world at any given time is the inheritance of the present generation that is result of countless prior interactions among everything that comprises the Universe. Yet, this is only a general conclusion that cannot be applied for specific cases. Even when considering the history of the Cosmos we acknowledge specific parts of it that interact in specific ways to give specific results. As Mises wrote in Human Action:

The content of human action, i.e., the ends aimed at and the means chosen and applied for the attainment of these ends, is determined by the personal qualities of every acting man. Individual man is the product of a long line of zoological evolution which has shaped his physiological inheritance. He is born the offspring and the heir of his ancestors, and the precipitate and sediment of all that his forefathers experienced are his biological patrimony. When he is born, he does not enter the world in general as such, but a definite environment. The innate and inherited biological qualities and all that life has worked upon him make a man what he is at any instant of his pilgrimage. They are his fate and destiny. His will is not “free” in the metaphysical sense of this term. It is determined by his background and all the influences to which he himself and his ancestors were exposed. (p. 46)

The President speaks of roads and bridges. “Somebody” invested in them, he says. Very well, somebody did. And so every member of society has the same access to those roads and bridges. Yet, very few individuals become entrepreneurs in the transport industry, and only a portion of them become successful. Thus, it follows that success of the successful ones is theirs and theirs only. It is true that those who failed pushed the successful entrepreneur to become more innovative, more economical and more hardworking. But it does not follow from this that they deserve any part of his earnings. The successful businessman “paid them back” when he was answering their challenges. It is also true that by patronizing his business, the successful entrepreneur’s customers have assisted him. But, again it does not follow that he owes them anything, for he has paid them back by providing the goods or services that they found of use at the time.

If we took Mr. Obama’s statement about roads and bridges one step back, we must ask what made roads and bridges necessary. The answer to that is the motorized vehicle: a creation of private enterprise. The President cites the Internet as the product of government research. The story of creation of the Internet has become so muddled; its lack of clarity is rivaled only by the story of the creation of the Universe. I’m sure a certain Al Gore might have different version. In any case, even if the Internet was a government project, the President asks us to forget about every other useful product and service—all of which were the results of individual initiative. Of course, it should not be omitted that roads and bridges are presently built under government auspices because private concerns are forbidden (with a few exceptions) from owning and operating their own roadways.

Mr. Obama’s remarks betray his hopeless misunderstanding of the nature of exchange. People exchange products for products (money originated as a product) in order to satisfy an uneasiness. In market conditions they exchange freely, and purchase only the goods and services they deem will make them better off. On the free market no one entity can force another to purchase its offerings. This sort of binary exchange can only take place where one of the entities has the legal right to force the other to buy its goods or services. Being a politician, the US President has no use with clarity and verstehen. That does not mean he is to be let off the hook whenever he commits such intellectual crimes.

Despite Obama’s help in providing me with the material for this article, it was me who wrote it, not him or anyone else. While many saw the President’s fallacy, not all of them sat down and exerted effort in refuting it, despite the fact that they have the same levels of literacy as me, they have computers and word processors, connections to the Internet, etc. Of those that have, plenty have made cases quite different from the one I am making. I made this specific article and no one else. That is what Mr. Obama is missing.