Thursday, January 17, 2013

“The biggest shake-up since the end of six ‘o’clock closing…”

Bars, restaurants and alcohol shops fear new licensing restrictions will send them out of business in a shake-up billed as the biggest since the end of six o'clock closing. [AUDIO, RADIO NZ]

But advocates for the new licensing restrictions are cock-a-hoop at the new powers it gives them that the new licensing gives locals a say in when and where liquor outlets can open.

What the report linked to above doesn’t say—and neither do the advocates for restriction recognise this—but locals already have a say in when and where liquor outlets can open. In fact, they have virtually complete control. 

Let us suppose, for example, that there are parts of South Auckland in which there were a bottle store on every corner (and I use South Auckland since, as these restrictions are another elitist measures to control the working man’s simple pleasures, South Auckland is the place where they will be most controlled. If there really were a bottle store on every corner (there are 350 bottle stores in Manukau, but many more corners) then that would in fact be a sign that this is precisely what “the community” does want—because the customers of those bottle stores, who come from “the community,” are the very people who are keeping all these bottle stores open, demonstrating as clearly as you can that this is precisely what “the community” does want.

They already have a say in where and when outlets are open—having a say by voting with their wallet every time they make a purchase.  Buy readily, shops stay open. Don’t frequent the shops, the shops close.  This is the power of the consumer to direct the activity of retailers.

So what the control freaks should admit, and what you others who’ve given the control freaks the power should understand, is that the control freaks don’t want communities to have a say; they simply want power to say “this is not what I want.” “The community, c’est moi.”

Because these new restrictions do not at all give a say to communities. Because everyone in the community is having their say every day—every time they choose to visit, or not, their friendly local bottle store. Who it gives “a say” to is council planners and bureaucrats. To the self-anointed guardians of other people’s morals. To those opposed to the working man’s simple pleasures. To the wowsers. The teetotilatarians. People without a life who want to make your life less colourful and less enjoyable, and with less access to the ingredients that make your private life more enjoyable. And in giving a say to the busybodies, they are taking it away from the communities themselves.

Fuck ‘em.

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A holiday in Cambodia

Guest post by our roving Asian correspondent Suzuki Samurai
As some of you may know, I’ve now moved in from China to Cambodia—to a place about 2 hours north of Phnom Penh though only 40km away, which tells you something about infrastructure here. It’s a very dusty and poor little village straddling a highway that’s been still-in-progress since progress first began. I’m here for two months.
I’m working for a German NGO that contributes funds to a school for the poor; the only subject being ‘taught’ is English. The students, all 400 of them, come from desperately poor households; their parents are mainly subsistence farmers who eke out barely enough to eat—mainly rice. If they produce any meagre surplus they exchange it for meat, flour, or veges with their neighbour or local stall holder. The kids are grubby, but somehow their parents still manage to keep them in crisp white school shirts. These kids are the most charming little buggers that I’ve ever had the pleasure of being around.
My job is to show the local state teachers—who teach at this school in the afternoon—how to teach English as a Second Language (ESL) more effectively. Normally this would be simple enough. Given however that English is a second language to the teachers themselves, and the classes contain anywhere from 25 to 45 students, it makes the task of training them to any degree at all nigh on impossible, though I shall endeavour regardless.
The Germans arrived today.  That is, some of the honchos and a number of donors of the NGO arrived today. They took about 18 kids from the poorest families to the local market and bought them all clothes & shoes. They also bought $1000 dollars worth of rice, which will feed the same poor families for about a month. Oh, and there is to be a graduation ceremony at the school on the 27th of January.  To support that, the good Germans bought (as lucky-dip giveaways for said graduates) school bags, badminton sets, dictionaries, and 3 brand spanking new bikes.
Typical Village Scene with a UWS School Ratanakiri CambodiaTomorrow, I present a report on how to improve our teaching. The report will also include expenditures they’ll need to make on such things as making the place safer—and, no, I’m not talking about cotton-wool safe as is the norm in our own over-the-top, padding-on-everything kids’ environments, but simple things that Cambodians don't seem to see, such as: live, exposed electrical wiring; hot cooking fat on a wonky table in a space where kids play; reinforcing steel and other  sharp pointy building materials smack dap in the places kids use to run laps; and toilets that, while completely unsanitary, are still not quite as bad as Chinese school toilets.  And as there will be Cambodians in the meeting as well, I’ll have to be at my sensitive best.  So it will be interesting to see how that goes.
Anyway, that’s me at the moment.
Suzuki
[Picture shows a UWS school in rural Cambodia, not necessarily that in which Suzuki is working]

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Tuesday, January 15, 2013

SUMMER SNIPPETS: ‘Migrations & Cultures,’ by Thomas Sowell

Migrations And Cultures: A World ViewMore interesting snippets I highlighted during my summer reading, this time from Thomas Sowell’s Migration & Cultures, part of his Race & Culture trilogy.  (Send a copy to Tariana Turia.)

Cultures are not merely customs which people have a sentimental attachment, or badges of “identity” which permit them to engage in breast-beating. Cultures are particular ways of accomplishing the things that make life possible—the perpetuation of the species, the transmission of knowledge, and the absorption of the shocks of change and death, among other things.  Cultures differ in the relative significance they attach to time, noise, safety, cleanliness, violence, thrift, intellect, sex and art.  These differences in turn imply differences in social choices, economic efficiency. and political stability.  Though cutures transcend race, particular cultures are obviously often associated particular racial or ethnic groups. Australians are Europeans, regardless of what geography may say…”

There is no reason to doubt that individual mental capacity was as great as ever, or that as many potential geniuses were born during the Dark Ages in Europe as during its eras of the most shining achievements. What was lacking was an ability to “avail themselves of the great bank and capital of nations and ages,” as Burke phrased it in a different context.  The institutions of such cultural transmission were simply gone with the collapse of Roman society.”

It may sound noble to say that cultures are merely different, not better or worse in any way, and that it is all a matter of perceptions and preferences.  But this argument contradicts itself by saying that one way of looking at cultural difference is better—the way of cultural relativism preferred by a fringe of of contemporary intellectuals, rather than the way preferred by the vast majority of other human beings around the world and down through the centuries.
    “These cultural differences do not matter only if cause and effect do not matter…”

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SUMMER REPRISE: Cue Card Libertarianism -- Constitution

jeffersonIn case you hadn’t noticed, the government has a committee working quietly under the aegis of Pita Sharples and Bill English towards entrenching the Treaty of Waitangi in a constitution a “constitutional review.” The committee, comprising a number of government and tangata whanua toadies, has been examining “the role of the Treaty of Waitangi within constitutional arrangements,” “how New Zealand's legal and political systems could better incorporate Maori,” and “whether New Zealand needs a written constitution.”

I doubt, if one emerges, it will be one that Thomas Jefferson would recognise.

An appropriate time then to re-post (with new links!)my Cue Card on what a constitution is for.

Cue Card Libertarianism -- Constitution

Why do we need a government at all? James Madison puts the argument in a nutshell:

If men were angels no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

Here’s the essential argument against anarchy, and for a constitutional republic: Because men are not angels, and government does need to be controlled.

But how?  That’s the question.

Let’s start with the purpose of government.  Government in essence is like a guard dog*: to protect us from being done over by others. However, if that dog is badly trained and it gets off the chain, we can be badly savaged -- more than we would have been without the dog.

A constitution is our means of chaining up the government and training it to act only in our protection.

As I’ve said already in these Cue Cards, the task of government is to protect us against physical coercion and its derivative, fraud. Good government is the means by which retaliatory force is brought under objective control. A good constitution, properly written, brings the government itself under objective control.

Such a constitution was the intent of America’s Founding Fathers, a clear and understandable document delineating a government that protects individuals’ rights, but after nearly two-hundred years the success has been only partial. Building on the success of the US Constitution and seeking to close the loopholes exploited since its introduction, New Zealand libertarians have written what we call A Constitution for New Freeland summing up what a good constitution should look like, and why:

  • The job of government is to protect our rights—a ‘Bill of Rights’ clearly outlines the rights to be protected.
  • The job of government is not to infringe the liberties of its own citizens without due process of law—a ‘Bill of Due Process’ clearly outlines under what circumstances and in what manner those liberties may be breached, and for what purpose.
  • The US Constitution has suffered from interpretations that have often been at odds with the declared intentions of the Constitution’s authors—the Constitution for New Freeland puts the intentions of its authors on the record in the ‘Notes on the Bills of Rights and Due Process.’
  • To prevent monopolisation of political power, a good government should have its powers separated—a formal statement is included as to how the rigorous separation is to be ensured, and each of government’s three branches – legislature, judiciary and executive – is given some specified veto power over all the others. The imperfect separation of powers in our present NZ constitutional arrangements shows the dangers of being without these essential checks and balances on political power.

Every good constitution relies on one further, crucial, restraint on the growth of Omnipotent Government: significant public understanding and support for the constitution and its protections, without which politicians and advocates of a ‘living constitution’ can pervert the constitutional protections as easily as the simple agreements given in the Treaty of Waitangi have been perverted.

Further, the task of constitutional law is to delineate the legal structure of a country’s law; it must therefore be superior to all other laws, and law stepping outside the bounds of what is declared unconstitutional must be able to be struck down – an accessible Constitutional Court makes this possible.

The superiority of a constitution to all other law is both a good thing and a bad thing. What’s good is that once a watertight constitution properly protecting individual rights is in place, it acts to chain up the guard dog and to keep it on its leash for good. What’s bad is that once in place, a poor or anti-freedom constitution is very difficult to get rid of.

imageAs history demonstrates -- and the constitutional conference of 2000 and a previous Select Committee review of NZ’s constitutional arrangements foreshadows – a bad constitution poorly written can give the erstwhile guard dog control of the back yard and the house, and before you know it it’s chewing off your leg and attacking the baby. Rather than protecting us, it has no impediment at all to doing us over.

Liberty, as Thomas Jefferson suggested, requires eternal vigilance.

This is part of a continuing series explaining the concepts and terms used by libertarians, originally published in The Free Radical in 1993. The 'Introduction' to the series is here.

* Yes, you really do have to watch your spelling!

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Monday, January 14, 2013

The Fiscal Cliff: An Opportunity Avoided

Guest post by Bud Conrad of Casey Research on the so-called “fiscal cliff” - perhaps it was a bullet dodged in the short run, he concludes, but in the real long-run an opportunity was missed to hit the real target: runaway spending, which is now clearly out of political control.

The Fiscal Cliff: An Opportunity Avoided
By Bud Conrad

The label "the fiscal cliff" evoked the fear that something terrible was about to happen if the US Govt’s previously legislated spending cuts and tax increases came into effect. From my point of view, America’s deficits and debt are growing at an alarming rate and need to be cut back. The reason these laws were enacted was to offer markets some hope that the US Govt would eventually work toward eliminating our serious deficits. But the prevailing and wholly mistaken opinion that such drastic decreases in the deficit would slow the economy and bring recession created the impression that this "cliff" must be avoided.

The chart below indicates the size of the federal government's budget deficit. The blue bars reflect what would have happened if there were no legislative changes, and the harsh measures of tax increases and spending cuts occurred. The red bars reflects potential tax increases, the green spending cuts, and the purple is additional interest paid on the expanded debt as a result of bigger deficits. The cliff is seen in the rapid drop of the deficit in the first few years of the blue bars.

(Click on image to enlarge)

The result so far of government (in)action on this front is that tax cuts have been extended for families making less than $450,000 per year (for individuals, it's $400,000). Spending cuts have been delayed for two months, and the debt ceiling will have to be raised at that time. Compared to last year's structure, the main result is a relatively modest increase of $650 billion in taxes on the rich. Spreading this over 10 years means that the budget is roughly $65 billion less per year because of the higher taxes. In essence, after all the political discussion and finger-pointing, the politicians did what I expected: they kicked the can down the road and made very little change compared to last year.

The next chart shows the same baseline blue bars with the rather large extension of Bush-era tax cuts to the lower-income households, plus some small additional spending items. Since the blue baseline includes the expectation of sequestering of spending, it is my expectation that the actual deficits could be higher when no cuts are made with some future exercise of government can-kicking. While this chart appears to have lower deficits than shown in the previous range of possible outcomes, the more accurate conclusion is that we are still facing huge deficits, and the politicians really achieved very little in managing our long-term deficit problem. When they get back to meddling, the final deficits could be a lot worse than this analysis.

After the markets closed on Friday, January 3 (when we were less likely to be watching), the Congressional Budget Office released an updated calculation on the size of the cost of the new legislation: it is now $600 billion worse than discussed. They left out the accounting for paying interest on the increased debt for the period of the calculation. I've included the interest-rate cost in the chart below where I estimated it as being larger in the later years of the chart. $600 billion turns out to be only a modest addition. It will turn out to be higher when rates rise.


(Click on image to enlarge)

Here are a few more details on what was decided:

  • Employees will have up to $2,000 more taken out of their paychecks annually due to the expiration of the temporary payroll tax cut
  • The estate tax will increase from 35% to 40%, with the first $5 million worth of property exempt from being taxed
  • Capital gains and dividend tax rates will increase from 15% to 20% for higher-income earners
  • Alternative Minimum Tax will be raised to affect only higher-income households
  • Doctors will not see big cuts for treating Medicare patients
  • Unemployed workers will receive extended benefits

It is also sad to report that Washington has been operating as business as usual, including extending many strange programs like support for NASCAR racetracks, rum import duties, and even special support for buildings in New York City near the World Trade Center. While deplorable, these items are small in the macro picture. One new emergency-spending measure that was not included is $60 billion for hurricane Sandy relief, which will surely be added to the deficit soon. The beat goes on, with the inevitable result that the deficit continues. Fiat currency systems have no built-in limit.

World markets applauded this relatively modest package, because it confirms the short-term positive results of government deficit spending. The Dow Jones Industrial Average was up 300 points the day after the crisis was "eliminated." That means that the Federal Reserve will back up the federal government with more QE to keep the government rolling for the time being. Another result should be further downgrading of the US government debt by the rating agencies. Can you see a progression over another cliff? Downgrading raises the interest rate required by investors on US Treasuries; that increases the cost and the deficit. See the purple in the above chart? When rates rise it will get worse, much worse, than the Congressional Budget Office is letting on.

I had been trying to ignore the massive, blanketed coverage by our media of this political circus. I knew ahead of time what the result would be from this deficit-cliff exercise. When it comes to holding the line against more government deficits, spending, and taxing, our government is dysfunctional. This event is more seminal than the results indicate: we can expect the politicians to repeat this process in a couple of months, and another couple of months, and so on and so on until there is finally and inevitably a major loss of confidence in the dollar. There will be no return to fiscal responsibility. My point is simply this: we are already beyond the point of ever returning to a sensible, balanced-budget system. We may be distracted by wars, some crazy or false-flag terrorist event, or by even a natural disaster, but the conclusion is already inevitable: The US dollar will be toast; Treasuries are a dangerous investment; interest rates will start rising; and even the massive Federal Reserve manipulation supported by the banking cartels will be unable to overcome that. We will likely start in a slow fashion his year and will escalate out of control in the decade ahead.

We need to understand the implications of this recent event, and - as this small step confirms - that promises of future fixes will be complete shams. Remember when President Johnson said that there would be no repercussions from removing silver coins from our currency? A silver quarter alone is now worth around $5.50. And that's not because silver is different; it's because dollars are heading into the toilet. Protect yourself!

In the long run, the fiscal-cliff deal should not be celebrated as if it were a positive event. It is far from balanced, considering the much bigger government-debt problems that we face as a nation. In essence, this action was an opportunity to take real measures to curb our deficits, but the action taken has drifted us further along the path of fiscal irresponsibility.

Author of the new book Profiting from the World's Economic Crisis, Bud Conrad holds a Bachelor of Engineering degree from Yale and an MBA from Harvard. He has held positions with IBM, CDC, Amdahl, and Tandem. Currently, he serves as a local board member of the National Association of Business Economics and teaches graduate courses in investing at Golden Gate University. Bud, a futures investor for 25 years and a full-time investor for a decade, is also a regular lecturer for American Association of Individual Investors. In addition, as chief economist at Casey Research, he produces original analysis for Casey Research, including unique charts and research on the economy and investment markets.

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DOWN TO THE DOCTOR'S: The land of the sinking sun

_McGrath001Libertarianz leader Richard McGrath takes the new Japanese Prime Minister into his clinic for a once-over.

Japan Pumps More Money Into Economy - The Japanese government has a bold new blueprint for the economy that will create over half a million jobs. At least, that’s what the headlines tell us.

What a cunning plan! It's never been tried anywhere before. You see, they've come up with this great idea where if you fire up the printing presses and make lots of money tokens, everyone will be richer. There will be a vicious cycle of spending and an upwardly spiralling standard of living, an unstoppable chain reaction of wealth creation until the whole Japanese population are living like the Sultan of Brunei.

I hate to break it to the Japanese government but this won't be the first time governments have tried to "stimulate" their country's economy by producing money tokens. President Obama tried it with QE1 and QE2 - and is trying it on an ongoing and indefinite basis with QE3. Any recovery the United States makes will come at the expense of a collapsing U.S. dollar, and eventually the nightmarish prospect (for some) of the greenback being supplanted as the default world currency.

In fact, it’s not even the first time the Japanese government has tried to “stimulate” their economy with phoney money and phoney “stimulus.” They’ve been doing it for two decades since their economy first fell into a hole, and the result of their “stimulus” has only been to make matters worse. In fact, it’s not even the first time this Prime Minister has tried it: in his previous (short) term as PM he kept the printing presses going, as it was held by his economic advisers a good PM should.

Much of these new Japanese money tokens however will be used on rebuilding after the tsunami and earthquakes-- which wouldn't be an issue if all property was privately owned and responsibility for insurance lay with owners; on 'support for regional economies' (read pork-barrelling and cronyism); and on 'investment’ in education (why not let the private sector, and the pupils and their parents, provide their own solutions to educational demand in the affected areas?) and on social security (if you can possibly call that “investment”--probably needed for those who have paid taxes all their lives and are thus reliant on a government pension, especially once the govt chews through their savings, but what about making a start to liberalising Japan’s tumescent welfare system by stopping payments for people who don't work?).

The Japanese government, by the way, has already foisted upon its people the world's highest debt relative to GDP (at 236% in 2012) and the second highest absolute debt in dollar terms. Interest payments alone, even at the historically-low current rates, take up around half of the government’s current tax receipts.  The IMF can see no option other than raising the consumption tax to relieve Japan of some of its debt, but even this is much to little and far too late. And from a Keynesian point of view, won't that tend to depress so-called “aggregate demand”? Oh dear!

The classical liberal approach to the mess in Japan would be to stop government from intervening in the economy altogether—let  the market sort out its delinquent traders, allow them to be liquidated and their assets redeployed into more profitable ventures. Let prices fall to a sustainable level so folk can make use of the little real money they have left, and businesses can get going again properly on sustainable and more profitable footing.

Instead of which, the government’s  'support for regional economies' will prop up failed enterprises and allow them to continue to operate with an unfair advantage over their competitors (about which, when it happens in NZ, the Anti-Commerce Commission does nothing). And prices will continue to be propped up, putting them above what they need to be to make businesses pay.

In any case, the state should not need to print money—private banks are quite capable of doing this, as they do in Hong Kong and other jurisdictions where they produce real (asset-backed) money. Printing money tokens however that debase the currency and destroy the livelihoods of those on fixed incomes should be an offence worthy of imprisonment for any politician that tried it, not the basis for knighthoods and other rewards.

See ya next week!  
Doc McGrath

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I’m a sexist.

According to this Listener survey, I’m a “hostile sexist.”

The survey’s “reasoning” seems to be if you distrust feminists, then you must necessarily be a misogynist.

SUMMER REPRISE: Cue Card Libertarianism -- Common law

Another post from the archives, made topical again by my summer reading.

Common law arose in England almost by accident, but much of the English-speaking world has benefited from its property-rights based solutions to otherwise complex problems.

What began in the late twelfth-century as a formalisation of existing customary law, was to become by the end of next century later (mostly because of King Edward I, known as Edward Longshanks) a way of dealing in an ordered, uncomplicated way with the legitimate concerns of his subjects.

What Longshanks was trying to solve was what we might call ‘The Problem of the Chickens.’ Traditionally, subjects would petition the king in person over their grievances, which were mostly about their neighbours. Edward, also known to his friends as The Hammer of the Scots, preferred to be up north hammering Scots rather than sitting at home surrounded by his subject’s chickens, about which an inordinate number of complaints were commonly raised.  (“My neighbours chickens ate my crops.” “Go ‘way with you, of course they didn’t! Just look at their innocent faces…”)

Edward reasoned that a system of courts common throughout the land could easily sort such complaints using principles of customary law common to them all. For instance, the easiest way to resolve disputes about neighbours’ chickens damaging a plaintiff’s vegetable garden was to determine 1) whose chickens; 3) whose garden; and 3) what damage.

Thus was born the simplicity and beauty of the common law system. Common law became property-based, and was focussed on specific harm or damages – it focussed on determining the rights in a property, and on finding remedies to damage caused by specific nuisance or trespass. Common law held that those who had rights in property were entitled to the quiet enjoyment of that property; that a man’s land and his house were his castle, and that protecting it from harm was his right.

Common law was also case-based rather than statute-based, and was tied by precedent: decisions made in cases using these guiding principles (which were held to be the ancient and customary law of the land) were made common to all similar cases by the principle of stare decisis (Anglo-Latin pronunciation “starry disSISus; literally “Let the decision stand”), so that decisions were consistent across the country, and over time.

Common law was simple enough that the principles determined in these cases were quickly codified by writs that allowed property-owners easy access to the protection of law for common causes of action. By the eighteenth-century the laws of nuisance and trespass were already highly sophisticated, and were to become more so as the Industrial Revolution and the railway age took shape.

Rights to light, to air, and to support were widely recognised as being a part of the peaceful enjoyment of land; rights associated with water and protections against noise, smell and other pollution were clear and in place; remedies for trespass and nuisance were well-known and based on the principle that a defendant should acquire no value thereby.

The valuable principle of ‘coming to the nuisance’ was established (and then sadly in some jurisdictions dis-established); as was the principle of a ‘bundle of rights’ being associated with land, and some of those rights being acquired over time by ‘prescription.’

Easements over land and voluntary restrictive covenants that attach to land in favour of particular neighbours were also recognised, offering (as did the ‘‘coming to the nuisance’ doctrine) a peaceful way to negotiate neighbourly relations without the ruler needing to do anything other than file papers. Easements are registered with titles, and can be traded and removed: You might for instance agree to protect a neighbours’ view over your land (a ‘view easement’) in return for the neighbour keeping a large tree on his that you like (by either a restrictive covenant or ‘conservation easement’). In this way a ‘net’ of rights is voluntarily built up reflecting the values of the right-holders rather than that of the legislators.

Much of the apparent confusion in the common law was made simple by eighteenth-century legal scholar William Blackstone, who with a few simple principles explained “the mass of medieval law” in England. Blackstone’s Commentaries on the Law of England were to become the bible of English-speaking law for more than a century. In the late nineteenth century for example a young circuit lawyer in rural Illinois wrote the only law books he needed to carry in his saddlebag were a copy of the Constitution, and his volumes of Blackstone. That lawyer’s name was Abraham Lincoln .

The objection is sometimes raised that as common law is ‘judge-made’ law it is consequently somewhat arbitrary, and open to judicial abuse.  Blackstone for one would disagree.  He held that judges’ responsibility was not to make law but to find the law; that is to say that with the facts laid out before them, it is the job of judges to determine the relevant principles in the matter, and apply them. Thereafter, when the context of subsequent cases was the same or similar, the principles applied would (by the principle of stare decisis) be the same. And when the context was a new one (as was with so many cases as the Industrial Revolution took off) the job was to see how the leading principles applied in this new context

Many aspects of common law are now regularised as a part of Tort law (and the best way to see them is to pick up an early twentieth-century book on the Law of Torts), but the explosion of statute law in the last fifty years has meant that duties imposed by statute now encumber and complicate what was once the simple but remarkably sophisticated realm of common law.

Common law is not just simpler than statute law, it is also relatively immune to political hijack – one particular reason for its  unpopularity with big government advocates. Rights are protected in practice rather than just proclaimed on parchment, and ignored thereafter.

Further, unlike statute law, common law always has a plaintiff or victim – there are no ‘victimless crimes’ under common law. Finally, it is the pre-eminent law to protect both environment and property, and unlike zoning laws, anti-pollution statutes and the Resource Management Act it has over seven-hundred years of sophistication in actually doing so.

English common law brought real property rights into the world and made all Englishmen equal before the law – in doing both it helped make England and her colonies wealthy and free. Noted Adam Smith in his Wealth of Nations: “The security of the tenant is equal to that of the proprietor.” He concluded that

Those laws and customs [of the common law], so favourable to the yeomanry, have perhaps contributed more to the present grandeur of England than all their boasted regulations of commerce taken together.

Unfortunately the “boasted regulations” of today have turned Smith’s insight on its head, and removed many of the rights that common law once protected. Not least among those rights are property rights.

This is part of a continuing series explaining the concepts and terms used by libertarians, originally published in The Free Radical magazine in 1993. The 'Introduction' to the series is here.

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Class warfare is real [updated]

People are right. There is a class structure in New Zealand—and in every democracy on which we model ourselves. But it’s a very different one to the class structure of Marxists’s fantasies. The real–life class structure looks like this: those nearest the top of the tree are closest to the dispensers of political favours, while those at the bottom are paying for them all.

It is ever thus, and will be as long as power and favour come out of the barrel of a legislator’s pen.

[Diagram by David M. Hart, from a lecture on ‘The State and the Ruling Class.’ Hat tip Sandrine L.]

UPDATE: What Frederic Bastiat observed of his age still holds true today:

“The prevailing illusion of our age is that it is possible to enrich all classes at the expense of one another—to make plunder universal under the pretext of organizing it. Now, legal plunder can be committed in an infinite number of ways; hence, there are an infinite number of plans for organizing it: tariffs, protection, bonuses, subsidies, incentives, the progressive income tax, free education, the right to employment, the right to profit, the right to wages, the right to relief, the right to the tools of production, interest-free credit, [the rebuild], etc., etc. And it is the aggregate of all these plans, in respect to what they have in common, legal plunder, that goes under the name of [modern government].”
         - Frederic Bastiat, “Legal & Illegal Plunder” (The Law) and “The Laws of its Operation” (Economic Sophisms)

Sunday, January 13, 2013

SUMMER SNIPPETS: ‘The Origins of the Common Law’

Origins of the Common LawMore interesting snippets from another of the books on my summer reading list—this time from The Origins of the Common Law by Arthur Hogue, one of the few books on what, to me, is a fascinating story on the origins of our modern civiilisation.

“[Common law in the Middle Ages was] simply the body of rules prescribing social conduct and justiciable in the royal courts of England … in competition with concurrent rules enforced in other courts. Save when a matter of freehold was at issue, Englishmen were not compelled to present their causes before the king’s courts … [however] by the end of the thirteenth century the common law had absorbed the business of its competitors [being primarily the local courts of the counties or boroughs, church courts, and baronial overlords’ courts] and may have borrowed heavily from them in the process of aggrandizement.”

In the time before there was much parliamentary legislation, where would royal judges find the common law? An answer to this question leads directly to the writ system and the Register of Writs… George Spence has defined the original or originating, writ as ‘an order from the king under the Great Seal … commanding [the defendant] to appear in the king’s court at a certain day to answer the complaint. Every writ was founded no some principle of law … which gave the right on which the action was founded and the facts were stated with so much detail only as to bring the case within such principle of law. Each order, or writ, acquired a name…”

The  entire formula of the writ Praecip quod reddat [the principal writ for the recovery of land in the King's court] can serve as an  illustration of an original royal writ…  Elements essential for any trial are either plainly stated or clearly implied… [The aggrieved man] actively seeks the aid of eth royal courts in the recovery of his property … he states the facts of the case … the defendant is ordered to obey the king’s command. If he refuses, a trial is set…  By implication, this writ reveals concern on the part of the king that men throughout the realm shall enjoy undisturbed possession of property to which they have a right and that to accomplish this purpose the royal authority will act, when called upon, through the royal Chancery, the sheriff, a royal agent, and the courts of justice.”

During the twelfth and thirteenth centuries, the tendency was in England to create an appropriate write for the protection of every private right or interest recognized by the royal courts… [T]he writ system hardened and set in the fourteenth century. Thereafter a plaintiff might brood on the maxim, ‘No writ, no remedy.’”

“[There was] an extremely rapid increase in the number of writs during the thirteenth century—from thirty-nine writs in the treatise called Glanvill to four hundred and seventy-one about a hundred years later…”

In England, the old forms of action have largely been abolished as the result of nineteenth-century legislation. And in most of the United States, there is usually but one action, called an action at law and equity. A knowledge of the old writs is still useful, however, for understanding common law principles… ‘The forms of action we have buried,’ write Maitland, ‘but they still rule us from their graves.’”

Litigants were not compelled to seek the king’s justice [but defendants were compelled to meet it]; only in matters touching freehold did the Crown enjoy a monopoly over judicial business. But because English subjects gave then their business, gradually the medieval royal courts starved out, rather than crushed out, their competitors [so] by the end of the thirteenth century the royal courts were rapidly becoming courts of first instance for free men of the realm.”

They provided the best justice available, for several reasons. First, the medieval jury … was preferable to older modes of trial such as ordeal … Second … royal jurists were superior to feudal lords and manorial bailiffs… Third, the incontestable validity of royal records was preferable to the records and fallible memories of suitors of local courts. Finally, decisions of the royal courts were enforced by an authority with wealth and power not to be challenged by any English subject…”

Legal concepts now lusted about the phrases ‘rule of law’ and ‘due process’ trace back to [the Magna Carta and] the quarrel of King John with his baronage.”

From the beginning the Great Charter [i.e., the Magna Carta] was an expression of the law which the king and his judges and other officials were not permitted to ignore.”

imageThe opinion expressed in the slogan, ‘No taxation without representation,’ has been read into Chapter 12 [of the Charter], which says, ‘No scutage or aid shall be imposed in our kingdom except by the common council of the kingdom…”

If one had to choose a chapter from al the Magna Carta to express the spirit and the principal idea embodied in all the Charter, it would be Chapter 39 of the 1215 version: ‘No free man shall be taken or imprisoned or dispossessed, or outlawed, or banished, or in any way destroyed, now will we go upon him, nor send upon him, except by the legal judgement of his peers or by the law of the land.’ …

In effect, each confirmation of the Charter became a solemn assurance to the realm that the king would act with a regard for eth welfare of all subjects.  It was an assurance, moreover, that the king would act according to established procedure: in short, the king, like all his subjects, was under the law.”

In 1258 the barons … went much further in their demands than the baronial faction that forced Magna Carta from King John … [insisting] upon an elective council of fifteen men, a standing council who would meet three times a year with another group of twelve elected barons. In these three annual “parliaments” [the word 'Parliament' came from the 'parley' or talks which the King had with larger groups of advisers] the twelve elected representatives of the commonality and the fifteen elected councillors were ‘to treat the wants of the king and his kingdom.’”

“[T]he principle of Magna Carta was [further] confirmed in 1298, 1299, 1300 and 1301.  And every confirmation  reinforced the view that the Great Charter of Liberties was part of the common law of England.”

The growth of the common law in the thirteenth century represents in large part the definition of established customs.  In the form of writs, judicial decisions, treatises, royal ordinances, and parliamentary statutes, the common law emerged into explicit written form and formal procedure… Controversies occasionally forced a definition of the law and frequently resulted in written statement on well-kept records…”

The basic elements in any civil action [in the courts of Angevin England to 1307 were these.] First, the aggrieved person must take the initiative… [he] must do more than grumble… Second, the court must act through appropriate officers to bring  [the accused] before the court to answer the charges of … the plaintiff. Next … the plaintiff and the defendant must be encouraged to formulate precisely the issues between them…  Then follows the trial … [in which] the  judge or judges apply the appropriate rules of law to the facts and reach a judgement… Finally, there must be the execution, or enforcement …
“The purpose of the verbal, combative procedure outlined here is the settlement of a dispute which might explode into violence if it were not channelled through a court [c.f. the continuing grievances and utu that plagued Maori inter-tribal life in later centuries].
“The law of medieval England was not much influenced by Christian doctrines of the duty of forgiveness and turning the other cheek. It assumed that a deliberate wrong would be resented … it assumed the desire for vengeance was natural and proper… [and from Anglo-Saxon times on, the system] was expected to quench vengeance and prevent a long chain of killing, woundings and injuries.”

In his coronation oath the medieval king assumed a three-fold responsibility: 1) the protection of the Church, 20 the preservation of the peace, and 3) the administration of justice.  Preservation of the peace was both a duty and a right of the king.”

The king in medieval England accepted a general responsibility to maintain the laws of the realm and to render the justice impartially to rich a poor alike… The sovereignty, or supremacy, of law was recognised not only in England but throughout the Latin Christendom during the Middle Ages.  The German scholar Fritz Kern has observed, ‘Not only the law of the realm but laws of property were considered laws which the king could not curtail on his own initiative alone.’ A political theory supporting absolute monarchy did not emerge in the Middle Ages…”

Blackstone in the eighteenth century makes the royal judges of the common-law courts the depositaries of the laws.  Presumably their long experience and studies enable them to determine the validity of general customs known throughout the realm, and their decisions consequently are the most authoritative evidence about customs included in the common law.  These decisions, having been recorded and preserved, are available for consultation in difficult cases… 
    “On all matters of general custom the royal judges assumed the power to recognise what was good custom … Blackstone provided in his Commentaries on the laws of England a clear account of tests which customs should meet before they were admitted to have the force of law… Above all, he makes clear that not all customs are good customs and that the courts will permit litigants to rely on customs only when those customs meet certain criteria such as antiquity and continuity.
    “Professor Theodore Plucknet reminds us [in 1949] that for Azo, the civilian jurist, ten or twenty years was ‘a long custom,’ thirty years a ‘very long’ custom, and forty years an ‘age-old’ custom.  But in any period good custom is spoken of as ancient.’”

“[In conclusion], it is important to note the persistence and force in the modern world of some ideas which men of the Middle Ages incorporated in the common law of England.
    “Foremost among these if the idea of the supremacy of law … This idea implies that there are limits to the power of ruling.  The rule of law was difficult to apply against medieval kings with absolutist policies … The rule of law is difficult to apply now in the face of modern ideas of sovereignty which admit no limitation on the power of ruling… What is required in the twentieth [and twenty-first] century is a much wider understanding of legal rights, how they have been gained, how they may be lost.
    “A second idea … touches … the doctrine of judicial precedents…  [Common law] demanded  justices learned in the law of the realm[[and decisions of prior courts]. In the Middle Ages common-law court decisions were recorded, and on special occasions the record was consulted, but for several centuries the common law lived more in the minds of its judges and practitioners than in plea rolls and reports.  The law of the Middle Ages was largely judge-made, and whenever it was changed by deliberate action of the king’s council or by Parliament, judges participated in the change.  It is an essential part of the common-law system that its principles are derived from decisions in actual cases in which, of course, judges play the principal part.
    “A third important legacy of the medieval law to the modern law is the writ system… English lawyers could afford the luxury of throwing away the old forms of action only after the principles within those forms had become embedded in the law [only to be thrown away all too often by subsequent Attorneys General].  After men have learned what constitutes a debt recoverable in the court [for example], a writ of Debt is unnecessary … Modern courts [too] now recognise a leaseholder is entitled to enjoy the full term of the lease and to recover the both the lease and damages if he is ejected from the leased property.  But the leaseholder’s remedies were not taken for granted in the Middle Ages. They were acquired slowly in the form of actions associated with writs.  The full catalogue of writs known as the Register of Writs was the framework of common law.  When in the present, a lawyer decides that his client has a good cause of action which the courts will recognise, he is drawing, more often that he may realise, on the medieval definition of that cause of action in one of the many form writs.”

The rule of law, the development of law by means of judicial precedents, the use of the jury to determine the material facts of the case, and the definition of numerous causes of action [based on right]—these form the principal and valuable legacy of the medieval law to the modern law.”

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