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Yuma County Town Hall - 2003 - Parker, Arizona - May 1- 3 PUBLIC SPENDING: A PRIVATE AFFAIR Research Document Prepared for Yuma County Town Hall Prepared by Howard J. Blitz TABLE OF CONTENTS
ACKNOWLEDGEMENTS Yuma County Town Hall is to be commended for sponsoring this timely forum in order for the Yuma community to discuss and debate the proper role of government in our economic affairs. In addition, thank you to the Yuma County Town Hall Steering Committee for giving me the opportunity to complete this research document. Many thanks go to Mr. Jacob G. Hornberger, Dr. Mary J. Ruwart, Mr. Ken Schoolland, Dr. Tibor Machan, Dr. Mark Skousen, Dr. W. Cleon Skousen, Dr. Don Boudreaux, Dr. Walter Williams, Mr. Michael Cloud, Mr. Harry Browne, Frederic Bastiat, Henry Hazlitt, Leonard Read, The Foundation for Economic Education, The Future of Freedom Foundation, Advocates for Self-Government, and the many other individuals and organizations whose ideas found in their various publications served as the foundation for this document. An immense "thank you" goes to Dr. Frank Grosbayne, Mr. Dale Marler, and Mr. Kevin Swearingin for their time and forthright critique in the preparation of this report. A tremendous "thank you" to Julianne P. Calvet, my office manager, whose extraordinary management capabilities in the operations of my State Farm Insurance agency and moral support allowed me the necessary time to devote towards the writing of this paper. Finally, a sincere thanks to my wife, Nancy. Thanks for being there. INTRODUCTION The role of government in the individual's economic life has grown immensely over the two hundred twenty-seven year history of the United States, especially in the last one hundred years. Because of this enormous growth in government, this year's topic for Yuma County Town Hall, "Public Spending: A Private Affair", is most significant and timely. The more individuals avail themselves of the opportunity to discuss the appropriate role of government in our individual lives, the better chance all of us have of being able to differentiate between the free society and a socialist society, thus becoming better able to determine which society provides the most opportunity for the most individuals. The topic, "Public Spending: A Private Affair", elicits the idea of government spending for the benefit of individual gain ignoring the resulting government control over the individual's actions. The goal of this research document is to expose the dichotomy inherent in the concepts of government spending and private affairs. The objective is to expound upon the mutual exclusivity and even contradictory nature of these two concepts illustrating how one reduces, while the other expands individual liberty allowing for more opportunity for individual success for more people. First, the reader will be presented with the freedom philosophy, related ideas on the subject of liberty, and the contention that government spending is not a private affair. The remaining sections will focus upon the application of these principles of individual liberty and freedom to specific areas of particular interest in Yuma County. The final segment will summarize the key points presented in this research document. A Glossary of Terms is provided to enable the reader to share a common understanding of the ideas presented herein. A List of Organizations is also presented to assist in furthering the reader's knowledge of the topic. As a result of this year's Yuma County Town Hall presentation, "Public Spending: A Private Affair", the proper role of government in an individual's life will be discussed among a multitude of Yuma County residents. THE FREEDOM PHILOSOPHY "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness. That, to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed." "Government is instituted to protect property of every sort, as well as the various rights of individuals. This being the end of government, that alone is a just government, which impartially secures to every individual, whatever is his own." --James Madison, Father of the United States Constitution and Fourth President of the United States "One of the most important aspects of the freedom philosophy concerns its application in the market place. The matching of scarce resources against the infinite variety of human wants, the voluntary exchange of goods and services, the private ownership and control of property-all these and more are part of the economic aspect of freedom." The Declaration of Independence is one of the most radical documents ever written by mankind. By 1776 the idea that people must first receive permission from their government in order to do anything in their lives was prevalent all over the world. In many countries today, including the United States, that idea of government still prevails. However, in 1776, Thomas Jefferson and the other Founding Fathers of the United States turned this notion on its head by stating that individuals are born with natural rights among which are life, liberty, and the pursuit of happiness, and that the sole purpose of the government is to secure and protect these rights. Thus, individual rights preexisted government. Eleven years later the founders wrote the Constitution defining and enumerating the powers the government was to possess. Individuals were to elect representatives to make all law and that the referendum and initiative were not to be allowed to change the law. The president was to be elected by specific representatives elected by the people. Our founders gave us a republic, not a democracy. In other words, individuals were not to vote largess from a public treasury for their own use and our representatives were to make sure that government restricted all of us from interfering with the inalienable rights of another. If an individual did utilize force on another individual, it was the job of the government to make sure the perpetrator made restitution to the offended party. Our federal government is a product of the States' membership in an exclusive club. Each state is to be a sovereign entity and its purpose is to protect the rights of its citizens residing within its borders from the state itself as well as the federal government. As such, the state legislature supplies the counties and municipalities with sufficient legislative authority to resist abridgement of the individual's rights. Federalism is the form of government bestowed upon us by our founders, wherein government power is dispersed vertically from the state upward to the federal government and downward to the county, municipal, and town governments, thereby setting forth the relationship and distribution of power between these various governmental levels. The most powerful political subdivision in the federalism model of government is county government. Even our own newly elected governor Janet Napolitano stated, "Laws are passed to protect people from government, not one level of government from another".(1) United States Supreme Court Justice Sandra Day O'Connor stated, "The Constitution does not protect the sovereignty of states for the benefit of the States or State governments, but instead for the protection of individuals".(2) In order for an individual to pursue happiness, he has to be able to do with his property as he pleases, so long as the property was obtained without the use of force and is used without infringing upon another person's right to pursue his happiness. As a result, the right to the highest and best use of one's property is promulgated. When government is asked to take action it must use force to accomplish the task, and government control by its very nature cannot be incremental. If authority is ceded to government, then freedom of choice, individual liberty and freedom, regarding that issue is forfeited. The term, "Private", refers to the individual. A private affair is thus an individual affair, undertaking, or activity. The term means that the individual is free to do as he wishes with his own property so long as force is not being used upon another individual. Private affair elicits the idea of private property rights, i.e. rights assigned to assets of any sort owned and controlled by an individual, partnership, or corporation (See Glossary of Terms). Thus, "Public Spending: A Private Affair" deals inherently with the question of whether or not government spending is or should be a private undertaking. Government spending, i.e. money spent by government from the total tax revenues it receives from all citizens residing in its jurisdiction, cannot be a private affair (See Glossary of Terms). By definition government spending means government ownership or control and therefore eliminates any association with the concept of "private". A private affair has already been defined and by definition cannot be incorporated as government spending. In other words government spending is a government affair, private spending is a private affair. If government becomes involved in a private affair, the private affair ceases to be private. As stated previously, government must always use force to accomplish any goal. President Washington once declared, "Government is not reason, it is not eloquence - It is force! Like fire, it is a dangerous servant and a fearful master."(3) If government wants to protect certain lands, provide housing, save businesses from going into bankruptcy, or any other myriad of goals it wants to accomplish, government must use force on individuals to get the job done because government spending (public spending) means government taxation, i.e. forced payment. There is no such thing as a voluntary tax. However, when the private individual, corporation, or partnership (private affair) wants to accomplish a goal, the individual must use peaceful, persuasive means or else he/she would be guilty of committing a crime. If one does not pay his taxes, his property will be confiscated. He could eventually find himself incarcerated or even killed if he decides to prevent government agents from confiscating his property. This is the essence of government police power. Thus any time government spends money (public spending) it is spending money, which has been forcefully taken from individuals. Private affairs must be accomplished through the use of persuasion, sales, and any other non-violent means. When private individuals spend money they are either spending money, which they forcefully have taken from other individuals (referred to as theft and therefore a crime) or they are spending money voluntarily given to them from other individuals who have freely chosen to give up their property either in a voluntary trade or exchange or by outright gift. Based on this analysis, taxation becomes legalized theft. When private affairs are paid for through government spending (public spending), then the private affair no longer is a private affair; it is instead a public or government affair. These are two very distinct, different, and contradictory terms. Their core differences are predicated upon the manner in which the money is raised in order for the spending to occur, voluntarily or coercively. The difference between public spending (government spending) and private affairs (private spending) is the difference between socialism and individual liberty. It is the age-old question of who is to decide how one's life is to be lived, the government or the individual? This topic has been debated for all of mankind's history and is now discussed in this year's Yuma County Town Hall. WHOSE BUSINESS IS THIS, ANYWAY? "Business has only two functions - marketing and innovation." "A business that makes nothing but money is a poor kind of business." The United States of America was founded on the principle that each individual has the right to pursue his own happiness under his own power. In order for an individual to achieve his own definition of happiness it was considered imperative that the individual have the freedom to be able to voluntarily trade with his neighbor. We are a society in which none of us can do everything for himself. Very few of us know how to produce a pencil, a pen, or even the paper this document is printed on. We must trade in order to succeed. We must trade in order to live the life style we want, or otherwise revert to the very difficult days of the cave dwellers. Economic growth takes place because individuals, by their own machinations, attempt to achieve their lifetime goals by pursuing their happiness. As the quotes above by economist Peter Drucker and businessman Henry Ford suggest, individuals must create something that someone else desires in order to achieve what they want. Adam Smith called it "the invisible hand". The baker does not bake our bread because we want bread. The baker bakes our bread for us, Ford makes our vehicles for us, and Microsoft makes our computers for us because the baker, Ford, and Microsoft wish to achieve their success. In a free enterprise system, private affairs (i.e. actions undertaken by an individual, partnership, or an individual corporation) are truly private. Voluntary trade only takes place when all parties feel they will gain by the transaction. For example, if one goes into the "Burgers and Beer" restaurant to eat, one goes voluntarily thinking he will be better off as a result. In other words, the customer feels he will be achieving his happiness and be better off by going to Burgers and Beer. Likewise, the owners of Burgers and Beer will feel better off by serving the customer. Now, however, if a customer comes in who does not appear to be someone Burgers and Beer management feels they want to serve, the restaurant has the right (private property rights) not to serve that particular customer. The actual rationale for providing non-service does not matter, for in a truly free enterprise system, no one is forced to do business with anyone and therefore the reasons are immaterial. Likewise if the customer does not like the way the restaurant is treating him, he is free to go elsewhere. He can even start up his own restaurant basing decisions on how he feels a customer should be treated. Remember, we are talking about a truly free enterprise system, in which individuals have the freedom to go into business or not, or to do or not to do business with anyone, at any time, for any reason, so long as force is not utilized. This is not the type of system we have currently. In our current system the individual must pay the government a fee to go into business, beg the government to zone the land to allow the business to operate on the land, pay the government another fee to keep the land, pay the government still another fee to stay in business, and then fork over to the government part of his earnings. All of these fees severely restrict the capacity of an individual to achieve his or her goals in life. These fees particularly restrict an individual possessing limited resources to compete with a wealthy individual. In a truly free society all that the individual would need to do would be to find someone with whom to trade in order to succeed. He could then be in a position to obtain land and build a building or purchase an existing one and make it into a restaurant he feels would better serve the customer. He could do this with the sole intention of making a better life for himself. Now, this concept may be perceived by some as simple selfish greed to pursue what our new restaurateur has defined as his personal happiness. However, he can only legitimately accomplish his goals through the process of voluntary trade. By involving government spending (i.e. public spending) to oversee business and regulate treatment of the trading parties, antagonism develops because individuals are forced into actions not chosen by them. By allowing government to interfere in voluntary trade activity, government must tax, or in other words, force payment from its citizens. This act of taxation leaves its citizens with less of their money to spend on goods and services, which they would have otherwise preferred. Public or government spending takes on many forms. The expense of operating a planning and zoning commission, a corporation commission, and many other government bureaus and departments constitute but a few examples by which government regulates individual lives through the use of force. Consider also the public spending used directly to fund businesses through government loans or loan guarantees. When businesses go bankrupt in a free enterprise system, generally, it is because they have not been creative enough to provide the customer with what he wants at an effective cost. Remember, no voluntary trade takes place unless both parties feel they will gain. Voluntary trade is always a win-win situation; otherwise the trade does not take place. When government steps in to try to "protect" the poor, prevent a business from going bankrupt, or to "protect" the consumer, government laws and ordinances can actually make matters worse on three counts. First, it uses force to obtain the money to do whatever it is trying to accomplish. The government must increase tax revenues to fund the bureau being created. Second, government thus reduces the amount of wealth that would have otherwise been created because now individuals have less of their assets available to spend as they choose since they had to pay the tax to enable the government to do what it needed to do. Third, antagonism is now created, where there was none before, because now individuals cannot pursue their happiness as they define it. For example, by providing funds for Monarch's Rest, government resolves Monarch's Rest quest for happiness, but at the expense of taxing others, thereby restricting the taxpayers from their quest to achieve their happiness. All government actually does by "saving" any business is transfer funds from one person or business to another through using the force of taxation and causing animosity among the rest who must pay the tax for the public spending. As Henry Hazlitt so succinctly puts it, "It is the activity which is not seen, which would have taken place, had it not been for the government spending we do see."(4) Free enterprise, by definition, provides the individual the freedom to enter into business, or not enter into business (with anyone, at anytime, for any reason), so long as force is not utilized. This system allows the poor person the ability to compete against the wealthy because the poor person will not have to expend that portion of money necessary to obey the rules set forth by government. The rich, although inherently less affected by the act of having to pay government, will, under the auspices of free enterprise, now be capable of lowering prices to the benefit of the consumer and yes, possibly eliminating the small entrepreneur. However, that is actually to the betterment of the consumer. It is lower prices that the consumer wants. If the wealthy individual raises his price again, the small businessman will see an opportunity to make money, thereby increasing the supply of the product and thereby keeping the price at its lower level. The laws of economics work, and they work to the benefit of everyone. In a true free enterprise system, if someone is going broke it is generally because he is not producing efficiently and giving the consumer what he wants or desires. Government rules permitting government spending to control private affairs allows some businesses and/or individuals to influence government officials to assist them in achieving their happiness by restricting competition through government force. Had these same businesses and/or individuals tried to accomplish this goal privately, they would be considered criminals. It is, by nature, hard to compete and to be responsible. After all, that is what individual liberty and free enterprise is all about - freedom and responsibility. There cannot be one without the other. Consequently, any opportunity we humans have to pass off that responsibility, we are likely to do so. It constitutes an avoidance of the difficulties inherent in being responsible. However, when we permit government to take responsibility on our behalf, we choose to relinquish our individual freedom. Now, we are faced with obeying the government or being fined, incarcerated, or killed. By allowing government to use its police power to relieve us of our responsibility for our own protection, then we allow government to legitimize the use of that force to accomplish certain goals. TAXATION(5) "Taxation is the price we pay for civilization" "Liberty is incompatible with taxation." Public spending cannot take place without taxation. As a result, force is always used anytime government spends money. For example, when an individual goes to work for an employer he or she receives a certain wage for the work they do. However, the employee only receives a fraction of what he was actually offered because a substantial portion of the wage is given to other people. If the employer does not send that portion to the other individuals, these other people (i.e. government) will declare the employer a criminal. The employer is coerced into taking part of the employee's earnings and diverting it to those who have the power to make them do so. This is how the income tax works in our country. The sales tax is another way by which taxation works to coerce private businesses into individual private affairs so as to collect tax revenues for the city, county, state, and federal governments. Private businesses therefore become the tax collector for the government. Yes, some of the funds extorted are used for beneficial purposes to help those in need. However, the problem with extortion is not what the money is used for, but how the money is obtained, namely through coercion. All taxation is extortion. As such, all taxation is legalized theft. In a free society we do not define activities based on their end results. We define them on the basis of the means by which they are achieved. Karl Marx advocated, "From each according to his ability, to each according to his need" and that the ends justified the means. If this were true then all of us should be able to use any means to get what we desire. That type of a system, though, ends up in complete anarchy. Any time we use taxation to get what we desire, even when it might appear to be for the most humane of objectives (e.g. assisting individuals to find housing, obtain food, or health care), we use force to obtain the funds. If we did this privately we would be committing a crime. It is wrong to use force on others to extract assets from them to give to other individuals who do not own those assets. If it is wrong for any individual to do so, it also must be wrong for government to do so because government is an extension of the individual use of force. In order to first solve the situations of hunger, housing, medical care, education, transportation, and every other human need on the face of the planet, we must first acknowledge that taxation is a violation of human liberty. Taxation remained a feature of our constitutional republic because individuals needed to have their rights protected by some means involving costs. There was not to be a great amount of taxation since the founders understood that taxation was extortion. However, our founders did not see any other legitimate and morally acceptable method of collecting funds needed to pay government for its services of securing our rights. Government, however, could be paid for the services of securing our rights by charging for contracts, which could not exist without legal protection. Contract fees and not taxation could solve the problem of raising funds for such activities as roads, education, health care, etc. However, this method of raising funds was not contemplated, so we were saddled with taxation. Nevertheless, taxation is more than just theft or extortion. Taxation is intolerance for the preferences and even the moral viewpoints of our neighbors. Through taxation we forcibly impose our will upon others in an attempt to control their choices.(6) Aggression such as this creates impropriety and strife, locally and nation-wide. Taxation is thought to be indispensable to civilization today, just as slavery once was. Many individuals claim that since most people pay assigned taxes before someone with a gun shows up, they have implicitly agreed to it as the price of living in society. However, most slaves obeyed their master before he got out the whip, yet we would hardly argue that this constituted agreement to their servitude. PRIVATE AFFAIR "The most successful private programs accept little or no tax support. Indeed, their existence is often threatened by regulations imposed by bureaucrats. Even Mother Teresa's helpers were put out of business in New York." "The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of the misery." Voluntary organizations (a private affair), profit and non-profit alike, help everyone including the poor and unfortunate. More importantly, however, the work of these voluntary organizations is done with considerably less antagonism and animosity being generated because The Salvation Army, Crossroads Mission, Fry's, Papa-San, and the numerous other similar organizations in Yuma are pursuing their goals of their own choosing without force being applied. The for-profit and non-profit organizations help by delivering our food to us at grocery stores and "Meals-on-Wheels", building homes through private contractors and "Habitat for Humanity", and all of the other goods and services for our quality of life. To the extent any of these organizations receive government funding, it dilutes the quality and true nature of the service being provided because the funds providing those services are obtained through the use of force (taxation), as opposed to being obtained through voluntary payments. Capitalism increases wealth in society because the non-profit organizations are created from the profits of the for-profit organizations. In addition, those profits create jobs assisting others in their quality of life, while at the same time create goods and services desired by individuals. Capitalism allows the individual the freedom to pursue his own happiness, while serving others in order for others to pursue their happiness. PUBLIC SPENDING "Power tends to corrupt, and absolute power corrupts, absolutely." "He who owns the gold makes the rules" "In general, the art of government consists in taking as much money as possible from one party of the citizens to give to another." The more public spending there is, the less private affairs exist. This in turn results in more hostility and antagonism between groups. Just witness the parade of individuals before the city council expressing concerns about a recent subdivision development. Watching individuals beg government to allow them to do something with their own property is extremely demeaning and runs counter to the philosophy of government stated in the Declaration of Independence. The only function of any government is to make rules and regulations restricting the use of force. By allowing trade to take place freely between individuals, more wealth will be created with less hostility and antagonism. Whenever Yuma County or the City of Yuma receive federal grants, force is expended upon individuals nationwide, which increases the hostility nationwide so that individuals from across the country are antagonized. The saying goes, "If we do not accept the money here, then the people of Boston, New York, Dubuque, or any of the other cities or towns across America will accept the money. Therefore, we must accept these funds." Whatever grants Yuma County or the City of Yuma receives, those monies have been forcefully taken from others around the country. Again, government spending cannot take place without government taking. Public spending infers the power to acquire more power. By allowing government spending to occur, we allow the government to dictate the means and the ends, as opposed to allowing the individual to make those decisions. Note, once again, that this is the individual's own money which was earned producing real wealth in society. Last year there was a headline that AWC received a grant for nearly $400,000 from the U.S. Department of Agriculture to improve its ability to deliver its educational services to our community. Few will doubt the sincerity and/or the correctness of this goal. Most individuals want education to be delivered in the best method possible. The object is not in question. Accepting grants from the federal government, however, endorses the idea of using force to obtain the necessary funds to achieve this most worthy goal. Public spending no longer is a private affair. Voluntary contributions, voluntary trade, and voluntary payments (private affairs) provide a more civil and practical method to achieve our happiness. Food is raised through the voluntary cooperation of individuals. Yes, we do have government subsidy programs for farmers and to that extent the subsidies restrict and throw a "wrench" into the proper quantity of foodstuff produced and how the foodstuff is to be produced. Government subsidies interfere with the free market price of food creating either surpluses or shortages of foodstuff at any given point in time. In terms of actual wealth, we really do not know what type of a society we would really have if government spending were relegated to its solely legitimate function, (i.e. the protection of individual rights). The true cost of a new educational program or activity will never be known since we will never see how the tax money would have been spent had the individuals not been forced to pay for the new program. Most people turn to government to provide education, housing, roads and the like, because the governmental process is not inclusive of having to persuade anyone to rearrange their life to make society better. A law must be passed, often resulting in a demand for new public spending; and upon having accomplished this legal passage; everyone must do what government says. Everyone obeys because government is force. It has the power to impose coercion in circumstances where an individual can only accomplish the same through persuasion. Because government is force what government achieves is never as natural, as lasting, or as beneficial as what is achieved through persuasion. Because government is force, it becomes the tool of those with the most political influence, subsequently leaving poor, uneducated individuals left to the mercy of their so-called betters. In other words, the very people that public spending is supposed to help makes them worse off. Minimum wage laws restrict the very people who need employment from being employed because the legal minimum wage is higher than what the value of the prospective employee would be. Because government is force, the people whose lives are forcibly rearranged begin immediately to try to undo what government is trying to accomplish. So now you have people standing before a planning and zoning commission, a board of supervisors, or a city council to beg them not to approve or approve a particular plan. Economics and its natural laws are derived from the concept of scarcity. Thus, one of the basic laws of economics states that there is a cost to everything. All individuals attempt to satisfy their unlimited wants with their limited resources. Allowing individuals to evaluate their own costs in their attempt to satisfy their goals in life may not reduce disappointments, but can reduce animosity. Private affairs eventually satisfy individual needs, for if private affairs fail to do so immediately, private affairs will change to utilize resources more efficiently to serve customer needs. Public spending satisfies those individual needs that reflect the majority of a city council or county board of supervisors. The individual needs of everyone else may or may not get satisfied and this generates anger and hostility in those who are not content with the decision. This anger and hostility, when taken to a worldwide scale, is what starts wars. A library, a school, roads, and the like are all built with public spending and are very obviously seen. We give government the power to spend money on the arts, but we have terrible disagreements on what "art" is. We give government money to spend on education, but we have terrible disagreements on how education is to be delivered. We give government money to spend on charities, but we disagree on which charities. The reason for the disagreement is because there is no real ownership of the expenditure of the money and the money being spent was forcefully taken from individuals. Arguments arise over which programs are constitutional and which are not, as well as who is best qualified to run the programs and administer the public spending. What is ignored is the plain and simple truth. If there were private ownership of the spending, there would be less arguing and more individual responsibility for the success or failure of the spending. Mutually exclusive of whether or not it is constitutional or whoever administers it, government spending always winds up in disputes hindering the success of the spending. Government spending only succeeds in utilizing force upon individuals creating animosity. Order prevails when public spending is used only to deliver force for defensive purposes, and not used to remove the property of one person for the purposes of giving it to another. Order is disrupted when the law becomes perverted. Injurious results ensue when the law is applied in order to achieve goals believed to be truly vital, although in actuality creating circumstances in which the fabric of society begins to unravel. For example, we take money forcefully from individuals, through taxation to build libraries, schools, roads, and housing, while also attempting to provide health care, preserve the environment, and accomplish a myriad of other so-called honorable social objectives. This all constitutes a form of legal plunder, i.e. the use of force permitted by law to rob the populace of goods and valuables. Herein the law takes from one individual that which rightfully belongs to him and gives it to another to whom it does not rightfully belong. The result is that one-citizen benefits at the expense of another by doing what the citizen himself cannot do without committing a crime. These types of laws are a fertile source for begetting subsequent laws motivated by reprisal. Civil society disintegrates as laws further establishing legal plunder proliferate. In summary, it is not that we debate education, roads, medical care and other such needs be met; rather it is the means of funding those needs which we debate. We in fact debate whether the ends do justify the means. LICENSING LAWS(7) "Take care of your customers and take care of your people and the market will take care of you." "Wealth comes from successful individual efforts to please one's fellow man...that's what competition is all about: "outpleasing" your competitors to win over the consumers." "Firms receive their income, in the final analysis, from serving consumers. The more efficiently and ably the firms anticipate and serve consumer demand, the greater their profits, the less ably, the less their profits which will put them out of business eliminating the public's exposure to such a bad influence." "He that would govern others first should be the master of himself." Licensing laws (public spending) restrict economic growth and inhibit individual liberty because they prohibit the disadvantage from creating wealth. For instance, licensing laws lower the number of electricians in Yuma County by imposing extra requirements, making the cost to become an electrician prohibitive for those with very limited resources. Fewer electricians mean higher prices for electrical work. People, especially the disadvantaged, either do without a needed repair or attempt to do the work themselves, resulting in possible injury or even death. By limiting availability, licensing laws (public spending) lower the overall amount of quality service delivered. As a result, two classes of electricians develop, the legal ones and the underground gypsy. Usually electrical work permits have to be signed by licensed electricians. Because the licensed electricians get so busy and are usually more expensive, many people actually employ unlicensed workers to do most of their wiring. The licensed electrician might help to insure the quality of service and sign off on the job, however, the regulations and public spending necessary to oversee the private affair of the electrician industry, creates a class system of well-paid licensed workers and lower paid underground ones, and because the unlicensed electricians operate illegally, licensed electricians cannot work with them directly; thereby increasing the chance of a mistake being made. Licensing laws might prevent some people from cheating others, and they may protect some consumers, however, that protection comes at the expense of many others in pursuit of their happiness. Licensing laws make the rich "richer" and the poor "poorer" because those who have the funds have the ability to pay the tax or pay the expense required to receive the license, while those who cannot afford the taxes and fees are restricted from earning a living.
The above taken from Ruwart, Healing Our World, (2003), p. 181. PRIVATE PROPERTY RIGHTS "The right to life is the source of all rights-and the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain life by his own effort, the man who has no right to the product of his own effort has no means to sustain life. The man who produces while others dispose of his product is a slave." "Ultimately, property rights and personal rights are the same thing. The one cannot be preserved if the other is violated." The basis of virtually all freedom is the right to private property. If an individual is free to serve people food, the individual must be free to own his own restaurant. If an individual is free to sell jewelry to others, he must be free to own his own jewelry store. If an individual is free to publish, he must be free to own his own printing presses. If an individual is not free to own any property to do with as he pleases, then individual freedom has no meaning. If the government owns or controls through ordinances and regulations the presses, the restaurants, the jewelry stores, the grocery stores, or any other business, then it has the power to revoke an individual's liberty by simply denying permission to use them. This is indeed how business is done in this country. Any business desiring to conduct its affairs in Yuma County or the City of Yuma must first get permission from the designated appropriate governmental bodies. This is not the definition of free enterprise. In a free society, as long as individuals do not first obtain property through the use of force or coercion, then they have the explicit right to do with it as they please so long as they do not use force or coercion to further their goals. This is the true essence of freedom. Disputes today no longer focus upon whether someone has a right to their property, but how well an ordinance was designed. This type of scenario reflects how far we have drifted from the concept of a free society upon which this country was founded. In any society, people will, of course, have feelings and desires concerning the composition of their neighborhoods, about who will be served in restaurants, and who will buy at a particular grocery store. In a free society, private individuals buying and not buying from other private individuals or businesses decide these matters. In Yuma County, the City of Yuma, and throughout the rest of the nation, these matters are currently decided by imposing the will of a majority vote of a county board of supervisors or a city council, which is nothing more than a tyranny of the majority of that group of individuals, which is hardly an improvement over the tyranny of some dictator or single political party. In a free society, decisions of this sort are decided by gaining the support of others voluntarily. This means that if an individual does not like what some one is doing with his property, such as putting up a sign, building a wall, serving or not serving certain types of people, then individuals must use persuasion to get the property owner to change his activity. Another means of change would be to buy the property from the owner in order to preserve or use the property in another manner, or even better to open up a new business based upon principles he feels will better serve the community. Individuals, however, must be free without having to obtain permission from a governmental authority to use their property as they wish. In a free society an individual can start his own business (private affair) to compete with another person whom he does not like or because he dislikes what the other is doing with his property. This is how real change takes place in society. It might be a slow process, but it beats authoritarian rule. One cannot forcibly remove things from another's property, nor can he employ the use of force to have a property owner change his ways without being a criminal. Since individuals cannot do this themselves, it also wrong for city councils, county board of supervisors, state legislatures, and the national congress to do the same. This is another definition of what it means to be free. Such principled thinking is not fashionable today with all of the government rules and regulations that exist. Too many of us today believe that simply being in the majority renders whatever one decides to be perfectly acceptable. This type of thinking would have justified slavery at one time in this country. The bulwark against tyranny of the majority, no less so than against one party or dictatorial rule, is the institution of a vigently-protected system of private property rights. Free markets mean greater freedom for individuals and firms to employ their resources as they see fit. Many people, distrustful of the motives of others, consider free markets to be a danger to the environment. An individual could plunder the land and pollute the air and water in such a society. The institution of private property and free markets does provide freedom to be sure, but it also imposes a remarkable degree of accountability on the owners of the private property. On closer examination of environmental problems such as pollution and the destruction of the natural habitat, the greatest concern arises when property rights are not clearly established. Witness the current situation with the Sand Dunes. Since the government owns the land in question, the incentive for environmental goals cannot be appropriately and cooperatively balanced against other important goals in society. Hence we pit two groups of individuals against one another creating animosity and antagonism. People, untrained in the economic way of thinking, argue that the freedom associated with private ownership of environmental amenities is a danger to the environment. Profit seeking could only mean exploitation of the land for short-term commercial gain. Inadequate protection of the environment generally arises because even though mostly everyone understands its value, few have a personal stake in protecting it. The personal stake in protecting the environment and the commitment that comes from possessing it, are only created by establishing clear, defensible property rights enabling the protection and production of a healthy environment to be rewarded in the same manner that producers of other valued goods and services are rewarded. Private property rights align the incentives of owners with the values of consumers and nature-lovers. Change may mean some cumbersome maneuvers in deciding various issues in our community. By allowing councils and other legislative bodies to decide how property is to be used, antagonism and animosity develop, and we end up with the types of disagreements we have today. In a free society individuals would decide for themselves, through free trade, how and for what purposes their property would be used. Individuals would only become antagonistic with one another if they felt a party was using force against them. Then they could turn to the government's civil court system, to decide whether or not force was used in a transaction. Government's purpose is to protect all of our rights including the use of our property. Most people would not patronize a restaurant, which served spoiled food. Under most circumstances the person owning the restaurant is not interested in making his customers sick. The restaurant owner is interested in making a living so he can feed his family and live a decent life. In order to do so, he needs an income and in order to have a relatively constant income, he must have customers willing to voluntarily pay him for the food he serves. Those customers will not pay him if he serves them poor quality food. The selfish motive of trying to provide for oneself and one's own family keeps the major negatives to a minimum. There will be times when one gets sick or maybe even dies. The restaurant owner will have to pay the individual or the individual's survivors compensation, if it is agreed the customer did not receive proper and reasonable value for what was purchased. If the owner does not compensate the customer, then the customer can turn to the government's legal systems and file suit. Also, as word gets out about the poor quality food being served, that restaurant owner will be out of business faster than any government agency could put him out of business if the business does not change its ways. Government slows the process of change tremendously by requiring permits and taxes and deliberations by legislative bodies where the market takes care of the negatives and enhances the positives more quickly. When we advocate government control of the market in any form or fashion, we shift the focus of the business owner from the private affair to the public spending sphere.
In the absence of all aggression, in other words, the truly free society, the base of the Pyramid of Power outlined on the previous page is as broad and wide as our choice of goods and services. Our cost is low when aggression or force (public spending) is absent. Also, when we honor our neighbor's choice, it is more difficult for any one person or group to dictate our choices.(8) When we add a layer of aggression or force (public spending) in the form of licensing laws and regulations, some goods and services are outlawed by the licensing agency. As a result, First Layer goods and services are not as broad and wide as the Base. Prices go up as availability goes down. Consumers' choices are limited to the licensed items only or those they can provide themselves. Licensing is exclusive when all but a single monopoly provider is stopped at gunpoint if necessary from serving the customer. When the second layer of aggression is added to the first, costs go up even further, as the choice of goods and services become narrower. Consumers must buy the monopoly service created by the government agency doing the controlling. Subsidies and government spending create even further restrictions on choice and increases the cost of goods and services even further. Public services usually cost twice as much as those provided by a private concern. They may not seem like it, but the taxes, which must be raised, is usually more than the total amount needed by the individual to get what he wants. The third layer of power in the form of subsidies forces individuals to apply for the subsidized private firm because competition is limited by public spending through taxation. The fourth layer, of course, is the situation where consumers are literally forced to use the subsidized monopoly service. Doing without or providing his or her own is no longer an option. SUMMARY "Never doubt that a small group of committed, thoughtful citizens can change the world. Indeed, it's the only thing that ever has." "All truth passes through three stages. First, it is ridiculed. Secondly, it is violently opposed. Third, it is accepted as being self-evident." "None are more hopelessly enslaved than those who think they are free." By now the reader understands that a society predicated upon the ideas of freedom (private affair), as opposed to a government regulated socialistic system (public spending), provides for a more humane society with less animosity and more opportunity for every individual to succeed. There is no perfect society since all humans are imperfect and all have a different set of values upon which they live. However, every individual has the right to protect himself against the use of force being thrust upon him. Therefore, it follows that the individual can delegate the use of that force to a government, which is to use such force for only defensive purposes. Corporate and business power over government exists because our society, Yuma City and Yuma County included, is designed so that business must buy government power in order for the business to survive. Business still has to persuade the public to buy from them. However, it costs more to both the general public, who consume, as well as businesses, which supply goods and services because of the need to receive government's blessing from a planning and zoning commission, city council, county board of supervisors, state legislature, or the federal congress. To end this corporate and business power over government, government's power to regulate business would need to be eliminated. The power to regulate business would then be put back into the hands of each individual by allowing each individual the inalienable right to keep all of his income and to expend that income in any manner he chooses, as long as it is through peaceful means. By so doing, the individual then will have power over the types of housing, schools, libraries, medical care, and other institutions available in a free society. A free society does not guarantee that no one will be harmed, die or be killed. A free society does not guarantee bad things will not happen to individuals. No type of a society can guarantee this. What a free society does guarantee is that all individuals will have the freedom to choose their own kind of life. However, along with this freedom comes the responsibility of those individual decisions. One cannot have individual liberty and freedom without also bearing the responsibility of those decisions. Therein lies our quandary and our challenge. We individuals often eschew the idea of "responsibility" because it is hard to shoulder. We all want freedom, but we cannot have it without bearing the responsibility. The only alternative is to have someone else bear the responsibility for our lives, but that brings upon us the onus of the loss of our individual liberty. The ultimate life decision we now face is the acceptance or rejection of the use of force upon us, in lieu of individual freedom in decision-making. How important is it to us to retain our individual liberties? How willing are we to permit life's decision to be made for us by government? What really and truly is the function of government? GLOSSARY OF TERMS "Definitions are the guardians of rationality, the first line of defense against the chaos of mental disintegration." - Ayn Rand "With knowledge of the name comes a distinct recognition and knowledge of the thing. "
BIBLIOGRAPHY Bastiat, Frederic (1850). The Law. (Dean Russell, Trans.) (1998 ed.). Boudreaux, Donald J. (2000). Two Indispensable Lessons. Ideas on Boudreaux, Donald J. (September, 2002). Equality and Capitalism. Ideas Browne, Harry (1995). Why Government Doesn't Work. New York: St. Cloud, Michael (2000). Liberty or License (audiotape). Cartersville, GA: Cloud, Michael (2000). Personal Responsibility is the Price of Liberty Foundation for Economic Education (1988). The Freedom Philosophy. Gwartney, James D. & Stroup, Richard L. (1993). What Everyone Should Hazlitt, Henry (1996). Economics In One Lesson (50th Ann. Ed.). San Hornberger, Jacob G. (2002). Economic Liberty and the Constitution. Hornberger, Jacob G. (2003). Economic Liberty and the Constitution. Machan, Tibor (1995). Private Rights and Public Illusions. Oakland, CA: Machan, Tibor (2003, December 21). Forced taxation not compatible with Mixon, Jr., J. Wilson (Ed) (1996). Private Means, Public Ends: Voluntarism Reese, Randy (2002, November 13). Grant to help AWC reach distant Ruwart, Dr. Mary J. (1993). Healing Our World, The Other Piece of the Ruwart, Dr. Mary J. (2003). Healing Our World, In an Age of Aggression. Schoolland, Ken (1981). The Adventures of Jonathan Gullible, A Free Skousen, Mark (2000). Economic Logic. Washington, D.C.: Capital Press Skousen, W. Cleon (1986). The Making of America, The Substance and Smith, Adam (1776). The Wealth of Nations, Books I-III. (1986 ed.). Williams, Dr. Walter E. (1995). Do the Right Thing, The People's Williams, Dr. Walter E. (1999). More Liberty Means Less Government, LIST OF ORGANIZATIONS Advocates for Self-Government CATO Institute Foundation for Economic Education (FEE) Future of Freedom Foundation (FFF) George Wythe College Hillsdale College Institute for Humane Studies International Society for Individual Liberty (ISIL) Laissez Faire Books Ludwig von Mises Institute National Center for Constitutional Studies (NCCS) Paragon, Foundation, Inc. Ron Paul's Weekly Legislative Update Separation of School and State Alliance The Freedom Library, Inc. ABOUT THE AUTHOR Born and raised in Oak Park, Illinois, Howard J. Blitz attended high school in California, and graduated from the University of Arizona with a Bachelor of Science degree in Business Administration and a Masters in Business Administration with an emphasis in Economics. He has been a research specialist in Economics for two organizations and has taught Economics at Arizona Western College. He founded The Freedom Library in 1996 in order to provide scholarships to anyone interested in learning the principles of liberty. Besides being a self-employed State Farm Insurance agent for 27 years, he is also an adjunct professor of Government and Economics for Arizona Western College and the University of Phoenix, respectively. Howard lives with his wife Nancy and they have three children. 1 Janet Napolitano: 1998 Arizona State Attorney General |
