
Source: Scottish deficit is twice that of the UK and higher than Greece – The TaxPayers’ Alliance.
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
13 Oct 2016 Leave a comment
in constitutional political economy, fiscal policy
07 Oct 2016 Leave a comment
in comparative institutional analysis, constitutional political economy, development economics, economic history, economics, labour economics, law and economics Tags: affirmative action, racial discrimination, Robert Bork, Thomas Sowell
24 Sep 2016 Leave a comment
in constitutional political economy, Public Choice Tags: British politics
24 Sep 2016 Leave a comment
in constitutional political economy, international economics, International law, Public Choice
Sanctions only work at all if there is trade and investment to sanction – think of North Korea. This means the autocrat has already liberalised first for there to be trade and investment to sanction. But if the dictator, be it a tin-pot dictator or a totalitarian, has liberalised, it must build loyalty around that liberalisation quickly or risk a coup. All revolutions are palace coups.

Source: Ronald Wintrobe (2002) Dictatorship.
A dictator who agrees to liberalise puts himself in danger of being deposed, and it is no surprise that dictators like Castro, Hussein and Milosevic were all reluctant to do so. The Austro-Hungarian emperor opposed the introduction of railways because he thought they would bring revolution with them.
Neither trade sanctions nor airstrikes worked against Afghanistan under the Taliban. There is nothing to destroy or degrade.
22 Sep 2016 1 Comment
in constitutional political economy, politics - Australia, Public Choice Tags: 2016 Australian federal election, antiforeign bias, antimarket bias, expressive voting, free trade, globalisation, left-wing popularism, makework bias, rational irrationality, right-wing popularism
How can Pauline Hanson be an extreme right-winger if half of her votes come from people who 2nd preference the Australian Labour Party? This strong support for her populism has been well-known since she won the safest Labour Party seed in Queensland in the 1996 Australian Federal Election but is hardly ever mentioned by the media or her critics.
Source: Antony Green’s Election Blog: Preference Flows at the 2016 Federal Election.
It should be therefore no surprise that a lot of her views have popular support because she has support across the political spectrum. Not knowing that will means you will be not very good at combating her views which you simply do not understand where they come from.
Few of her supporters see themselves as extremists and will be insulted when you suggest they are. Listen here dummy is no way to win back votes of people who just voted for you recently.
Hanson’s support among Labour voters is increasing. Only 42% of her voters gave their 2nd preference to Labour in previous federal elections for the House of Representatives.
08 Sep 2016 Leave a comment
in constitutional political economy, F.A. Hayek, history of economic thought, Public Choice
08 Sep 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economics, labour economics, minimum wage, Public Choice Tags: expressive voting, rational irrationality
06 Sep 2016 Leave a comment
in constitutional political economy, politics - New Zealand, Public Choice
The hard left Daily Blog is so detached from power that it has forgotten that an effective opposition can slow governments down, sometimes to a dead stop. Stealing the opposition’s policies is a basic political skill. 
Watching a third term government fight like a cornered animal against an effective opposition in with a good chance of winning the next election is an ugly sight for those who do not like the sight of blood. The current third term government in New Zealand is not particularly tired and certainly is not facing an effective opposition smelling victory at the next election.
This far left blog has little appreciation of the median voter theorem and the propensity of political parties that actually win power to position themselves closely to each other. For that reason, governments are hesitant to adopt policies that take them too far away from what the opposition might do in response and thereby win votes in the next election.
The hard left has little knowledge of this because it really participates in putting up an effective opposition to government policies. Little of what the hard left says appeals to the median voter so a National party government does not have to worry much about what are the hard left says in opposition to its policies. The high left opposing a policy changes few votes.
Housing affordability New Zealand is an obvious example of the power of an effective opposition party. The National party-led government is unwilling to take risks for fear of losing votes to the opposition Labour Party at the next election. New Zealand election is always close because of MMP. Winning margins are one or two seats.
One of the great complaints against the British Labour Party now by ordinary voters including those are never vote for them is that the Tory government faces no effective opposition to their plans and because there is no effective opposition, there is no break on what they could do. They are not challenged; their ideas are not being tested in Parliament and elsewhere and perhaps found wanting.
A leading reason for the mass resignations from the shadow cabinet recently was the lack of an effective opposition to government policies was letting the Tories have a free reign. The first step in slowing the Tories down is having a leader in the opposition who is not widely regarded as a clown.

04 Sep 2016 Leave a comment
in constitutional political economy, politics - New Zealand Tags: Leftover Left, Old Left, progressive left
The far left has decided to establish its own think tank to carry on the fight against neoliberalism. Obviously, the university sociology and history departments are not carrying their weight anymore in research and idea dissemination.
The new far left think tank convened by Sue Bradford has several enquiry groups. The one that intrigued me was into political and organisation. Its mission statement is
We are interested in the different ways in which people organise politically, including novel forms of organisation operating outside of the traditional parliamentary sphere. We situate ourselves within a period of international political experimentation and innovation, and are committed to conducting research from a strongly anti-capitalist position.
By working with activists, academics, unionists, workers, beneficiaries, and others, we aim to facilitate rigorous and useful research that can further political thinking and organisational practices.
This is a welcome development. Maybe the far left has finally noticed how dismally it has performed in the last two New Zealand elections under the banner of the Mana party.
In 2011, it was assured of a seat in parliament, but Mana struggled to win more than 1% of the vote. I was deeply surprised at how small the far left boat was in New Zealand. The massively funded hard left campaign in the 2014 election won 1.2% of the party vote. The sitting Mana party MP lost his seat.
In the 2011 election, the same hard left party, when woefully underfunded, won 1.1% of the party vote. Getting the message out appears to have absolutely no effect on the party vote of the hard left. The median voter theory rules.
The British Labour Party under the leadership of Tony Blair also had a metamorphosis similar to this new far left think tank when it came to political organisation. In the House of Commons, those crazies to the right or left of you are tempered by a general election only every 5 years.
Little wonder UK Labor reconsidered devolution, an assembly for London, and regional government after 15 years of Maggie Thatcher, good and hard, with her unfettered right to ask the house of commons to make or unmake any law whatsoever.
Developing positive alternatives on the Left includes what to do about the rotation of power and fettered versus unfettered parliamentary and executive power. The failure of the Left to develop its own constitutional political economy is a major strategic shortcoming. Frequenting wine bars, cafes and blogs muttering to each other ‘our day will come, our day will come’ is not enough.
Too many on the left, in Richard Posner’s view, want to remake democracy with the faculty workshop as their model but followed up by a street march wherever possible. Such deliberation has demanding requirements for popular participation in the democratic process, including a high level of knowledge and analytical sophistication and a severe curtailment of self-interested motives.
The biggest challenge this new far left think tank must consider is democratic socialism is pointless because electoral power is fleeting: sooner or later, the left wing parties representing the socialist alternative lose power, and capitalism is resorted. How can democratic socialism work without entertaining the certain prospects of the right-wing winning office in 6, 9, 12 years time and undoing everything?
Under pension fund socialism, with the majority of the share market owned by superannuation funds, any call for wide-spread nationalisations is political suicide for the far left. The same for re-nationalisation later when the left-parties get another turn in office.

The rotation of power is common in democracies, and the worst rise to the top. So it is wise to design constitutional safeguards to minimise the damage done when those crazies to the right or left of you get their chance in office, as they will. New Zealand Parliamentary elections are always close because of proportional representation. This makes reality of ending up in the minority again very quickl at the next election if not the one after very real.
It is unfortunate that this far left think tank is starting to think of extra-parliamentary means of social change. The great strength of democracy is a small group of concerned and thoughtful citizens can band together and change things by mounting single issue campaigns or joining a political party and running for office and winning elections or influencing who wins.
That is how new Australian parties in the 20th century such as the Australian Labour Party, the Country Party, Democratic Labour Party, Australian Democrats and Greens changed Australia. Most of these parties started in someone’s living room, full of concerned citizens aggrieved with the status quo. In the 21st century, Australian democracy could not be more democratic, with a wide range of totally obscure new political parties winning seats in the state upper houses and the Senate.
The recent Senate election in Australia vindicates the view that the wrong sort of people get into parliament all the time. By wrong I mean people that the establishment parties would prefer not to be there including the establishment of the Australian Greens.
Indeed, it is that very strength of democracy – small groups of concerned citizens banding together – is what is holding up legislating on an end of life choice. It is not that minorities are powerless and individuals are voiceless. Exactly the opposite.
It is wise to design constitutional safeguards to minimise the damage done when those crazies to the right or left of you get their chance in office, as they will sooner or later rather than focus on the powers you and those that currently agree with you should have in your few days in which you fleetingly have a majority.
Too many policies and ideas of the one political party or another assume that they are the face of the future, rather than just another political party that will hold power as often as not and always for an uncertain time. Too many policies and ideas of the Left assume that they are the face of the future, rather than just another political party that will hold power as often as not.
State power was something that the classical liberals feared, and the problem of constitutional design is insuring that such power would be effectively limited. Sovereignty must be split among several levels of collective authority; federalism was designed to allow for a decentralization of coercive state power. At each level of authority, separate branches of government were deliberately placed in continued tension, one with the other. The legislative branch is further restricted by the establishment of two strong houses, each of which organised on a separate principle of representation.
Unfettered power loses its shine when it must be shared with your political opponents at least once a decade. The far left should look favourably upon federalism as a brake on neoliberalism.
Privatisation and deregulation is a lot slower in a federal system with an effective upper house elected by proportional representation. Regulatory powers and public asset ownership is spread over different levels of federations, with different parties always in power at various levels at the same time, all worried about losing office by going to far away from what the majority wants.
The will of the people is constantly tested and measured in a federal system with elections at one level or another every year or so contested on a mix of local and national issues. Any failings of privatisation or deregulation in pioneering jurisdictions would quickly become apparent and would not be copied by the rest of the country. These errors could be undone where they originated by incoming progressive governments.
As James Buchanan pointed out in 1954, the great strength of democracies is majorities are temporary so the exploitation by the majority of the minority is never permanent. If electoral majorities are other than temporary, the minority would have no choice but to fight.
Because of political ignorance and apathy, Richard Posner championed Schumpeter’s view of democracy. Schumpeter disputed the widely held view that democracy was a process by which the electorate identified the common good, and that politicians carried this out:
Schumpeter’s theory of democratic participation is that voters have the ability to replace political leaders through periodic elections. Citizens do have sufficient knowledge and sophistication to vote out leaders who are performing poorly or contrary to their wishes.
The power of the electorate to turn elected officials out of office at the next election gives elected officials an incentive to adopt policies that do not outrage public opinion and administer the policies with some minimum honesty and competence. That is the best that the hard left can do. Help throw the rascals out in the hope that the replacements might be a bit better.
The preference for this new far left think tank for extra-parliamentary action is a confession. In Australia, it is possible for just about anyone except a Trot to win a seat at the next election on issues that are important to them because they don’t need that many others to share their concerns and aspirations to win that last upper house seat on preferences.
The hard left in general failed abysmally in taking advantage of the unrest after the global financial crisis. Bernie Sanders can be explained by Clinton being a terrible candidate for president despite her practice run in 2008. Gary Johnson is attracting attention simply because Clinton and Trump are such appalling candidates. Corbyn got were he got because the 35 heroes of #Tories4Corbyn did understand the role of MPs in filtering out fringe candidates.
Europe elected centre-right governments in the aftermath of the global financial crisis. The parties that are on the rise are anti-immigration, anti-foreigner populist parties that support the welfare state. They currently play identity politics better than the left.
04 Sep 2016 Leave a comment
in constitutional political economy, Public Choice
02 Sep 2016 Leave a comment
in constitutional political economy, law and economics, liberalism, libertarianism Tags: free speech, political correctness
Celebrating humanity's flourishing through the spread of capitalism and the rule of law
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