Let’s open up the books at the Reserve Bank

Henry Ford, the American automobile manufacturer, once said that “It is well enough that the people of the nation do not understand our banking and monetary system for, if they did, I believe there would be a revolution before tomorrow morning”.

Indeed, if there’s one thing central bankers have been successful at, it’s using obfuscation and jargon so the public finds it difficult to understand what exactly it is they do.

Even when experts try and figure out what central bankers do, a range of legal barriers prevent a complete accounting of their activities. When former Congressman Ron Paul tried to audit the US Federal Reserve System a few years ago, for example, he faced opposition from a range of economists and politicians intent on preserving the Fed’s secrecy.

In Australia, the opaqueness of the Reserve Bank’s discretion doesn’t seem to trouble many people. But it should, because the RBA wields a significant power that influences the level of prices in the economy and consequently affects our hip pocket. The inflation it creates hurts the poor – and if more people knew the RBA was the culprit behind rising prices, and that much of the erosion in purchasing power we have seen over the past 100 years was unnecessary, there is little doubt that there would be protests on the streets.

The RBA’s aversion to scrutiny can be seen in the way that it shies away from the media spotlight, preferring instead to stage-manage the appearances of its officials in carefully scripted testimonies before parliamentary committees. The agency also enjoys significant exemptions from freedom of information legislation, and furthermore, doesn’t provide reasons for its decisions in a way that allows the public hold individual board members accountable for their views (one can contrast this to the Bank of Japan where individual board members’ votes are recorded). Continue reading

The unforgivable stupidity of the anti-banking “libertarians”

At the recent Mises Seminar in Sydney there was a speech by Chris Leithner that explicitly called for the banning of fractional reserve (FR) banking. Leithner and other Australian libertarians (including Michael Conaghan & Benjamin Marks from Liberty Australia) follow the lead of some American libertarians (Walter Block, HH Hoppe, JG Hulsmann — BHH) and argue that FR-banking is fraud and should be banned, and further that it is economically damaging and causes inflation.

These two issues need to be addressed separately. The first is a deontological issue about whether FR-banking is consistent with a free world. The second is a consequentialist issue about whether FR-banking leads to bad outcomes. It is possible that FR-banking is consistent with freedom and yet leads to bad outcomes, and then those libertarians who accept the “non-aggression principle” would have to tolerate FR-banking even if they don’t like those outcomes. But before delving into that debate, it is worthwhile quickly explaining what we are actually talking about with FR-banking.

Vaults, loans & banks

Anything can be money. In jail (and POW camps) cigarettes have been used as money. In the early years of Australian settlement, rum was used as money. In some small island nations, shells have been used as money. Through much of history, precious metals (especially gold and silver) have been used as money. And today, the most common sort of money is “fiat” paper money that is created by government but is intrinsically worthless (ie it has no value except as money). This is not the place to go into a debate about what should be money or who should decide, but the important point is simply that there is some original supply of money that then becomes the standard “unit of account” and “store of value” and “medium of exchange” in an economy. For the sake of this discussion, this original supply will be called “base money” and in Australia it is created by the Reserve Bank of Australia (RBA).

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Andrew Bolt, Race and Identity Politics

WARNING: VERY LONG POST

In a recent court decision, conservative commentator Andrew Bolt was found guilty of breaching the Racial Vilification Act (Eatock vs. Bolt, see http://www.austlii.edu.au/au/cases/cth/FCA/2011/1103.html ).

From the classical liberal perspective, the good intentions behind the Racial Vilification Act do not justify the existence of the Act; Free Speech is an absolute right which is only bounded by fraud (for example, in the case of actual defamation) and coercion (i.e. making threats of violence or similar forms of extortion).

I am not a viewer of Andrew Bolt, although in full disclosure I did once send him an email which corrected a philosophical mistake of his; he accused Postmodernism of being Metaphysically Subjectivist (i.e. people’s minds literally remake reality). I believe that to be mistaken since Postmodernism is Epistemologically Subjectivist, typically on philosophical grounds derived from German Idealist thought. This has been my only interaction with his work in the past, and I know little about him. Although I was pleasantly surprised when reading his Wikipedia page that he’s an Agnostic rather than a religionist.

But the reason for this post is that I found a specific comment about the Bolt case interesting from the perspective of political philosophy.

Commentator Brian F. McCoy argued that the ultimate issue in the Bolt case wasn’t freedom of speech. He identified the core issue as “freedom of identity” (see http://www.eurekastreet.com.au/article.aspx?aeid=28512).

What a fascinating concept.

“Identity” in the context of the case was referring to social identity or the groups with which one identifies.

The following article is not so much a deliberate argumentative essay per se. Rather, it is a set of commentary on a series of interconnected issues raised by the Bolt affair. In it, I will cover epistemological and philosophical considerations relating to the concept of “social identity” and I will also discuss the various analytical frameworks and assumptions that are used when dealing with the concept. Ultimately I will launch into a discussion of Brian McCoy’s “freedom of identity.”
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Trampling farmer’s rights to protect farmland from CSG.

“The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’- 
Ronald Reagan

Several days ago here in a post, “Protecting cropping land from mining, and farmers” I mentioned some of the nasties that were included in a Draft State Planning Policy for Strategic Cropping Land.  A number of normal farming activities would be removed from local control and be subject to central government decisions.

Dale Stiler from ‘Just Grounds’ has sent in a link, which makes it clear that this is a whole lot more serious than the issues raised before. Now it appears that an incredible number of activities that farmers could be expected to carry out in the pursuit of diversification, will be illegal on land that is designated “Strategic cropping land.”

The National Farmers Federation is skeptical as to the degree of protection afforded, and Carbon Sense Coalition chairman Viv Forbes, has found serious problems in the draught: 

Carbon Sense Coalition chairman Viv Forbes said the policy would stop farmers subdividing their land.

“Any other developments on their blighted land will be banned or difficult,” Mr Forbes said.  “Imagine the obstacles should they want to develop a racehorse stud, a feedlot, a new house or a private forest?” he said.

“Farmers will be condemned to be pastoral peasants on cropping land controlled forever, paddock by paddock, by an anti-farming, anti-mining bureaucracy.  Continue reading

High Court: Bikies 2, Governments Nil.

News has just come through that the High Court ruled that Hells Angels have succeeded in their attempt to have NSW’s Crimes (Criminal Organisations Control) Act declared invalid.

For two years now governments across Australia have been moving to outlaw bikie gangs. Legislation in all cases tends to follow the pattern of allowing Supreme Court judges to outlaw motorcycle gangs, after a request by the police commissioner, and ban bikie gang members from associating with one another, with stiff penalties for those who disobeyed the ban.

While few Australians have much sympathy for bikies, a point the various states count on while doing this, some of us understand the wider implications of allowing this to happen. Once laws that allow certain groups to be singled out as outlaws, it is a relatively easy matter to extend that to any other group that the state disagrees with. Usually this can be done by executive order.

The law should be there to deal with real crimes, which involve actual coercive acts, not to deny certain groups the right to associate. There are plenty of laws on the books already to deal with any criminals within any group.

From SMH:

The High Court ruled on Thursday that Hells Angels have succeeded in their attempt to have NSW’s Crimes (Criminal Organisations Control) Act declared invalid.

The law was enacted in April 2009 by former premier Nathan Rees following the death of bikie associate Anthony Zervas during a brawl at Sydney Airport several weeks earlier.

Effectively the law allowed Supreme Court judges to outlaw motorcycle gangs, after a request by the police commissioner, and also to ban bikie gang members from associating with one another, with stiff penalties for those who disobeyed the ban. Continue reading

War on Drugs turns 40.

Today, Nixon’s War on Drugs is celebrating its 40th birthday. Nanny staters everywhere are joining with sadists, wowsers, police state groupies, and dog haters in raising the odd glass, while thinking up new ideas to get tougher on the population at large. After all, ‘if it saves one life….”

Some of the images here are sickening to the point where most of our current crop of authoritarians will probably get off on it:

Australians remember Rudd’s War on drugs, but compared to these guys, he was not really taking it seriously. Of course, his was just one of the campaigns in his wider “war on everything.”

FEE has a fitting tribute to the occasion here including Nixon’s ‘mission accomplished’ statement.

Meanwhile, Arlo Guthrie credits the Narcs for his rise to success in his own inimitable way.