These are Ron’s presentation notes and slides from the 2017 Free Market Roadshow in Gran Canaria and Madrid, where he had considerable interest in the comparative numbers featured.
Spain and Australia – two interesting countries.
As an Australian businessman what do I know about Spain?
- I know that around the world, engineering companies from Australia, compete for heavy engineering contacts but they always come up against strong competition from Spanish engineers. So, both countries have very strong engineering skills. I know why this is, in the case of Australia and during my visit here I will try and find out how Spain developed its strong engineering skills too.
- Both our countries are blessed with good weather, fine wine, beautiful girls and beaches. In short, a great lifestyle. I suspect this lulls us into a sense of thinking that all is well, rather than working to build on these lucky circumstances.
- I see a desperate need for both Spain and Australia to introduce some economic policies that can be firmly embedded into our systems to reverse the downward slope showing the bleak future outlook for both countries as predicted by the PWC study below. Debt is a serious problem. Both government debt and household debt.
- When I look at the history of government involvement in both our countries I see similar results of how governments usually achieve the opposite to their original intention. As a matter of fact I have extensive research files and the thickest file is titled: ‘Government Intent Versus Results’ (the comedy of contradictions). Incidentally, the thinnest file is ‘Sensible Comments from Politicians’.
In our limited time today I suggest we focus on the last two points as without immediate action the future of our two countries (projected out to 2050, by the PWC study) looks desperate. What a legacy to leave to our children and grandchildren?
We have become lazy if we imagine that our governments will fix these problems. If we are honest we must admit that ‘politics is broken’. Be fearful of government solutions.
- In 1913 the US Government established the Federal Reserve to control and protect the US dollar. Today, just over 100 years later, the US dollar is worth about three cents. That sort of protection is about as effective as putting Robert Mugabe in charge of your Reserve Bank.
- In Australia, about ten years ago, the Australian Government became alarmed that the Aboriginal (indigenous) population of Australia, only 3 per cent, was responsible for 20 per cent of the prison population, so they doubled the taxpayer funding as a solution and now ten years later it has gone from 20 per cent to 27 per cent. A 32 per cent increase.
Rather than being honest and admitting that they have failed there is pressure for expenditure budgets to double again. Examples of government failures are so common that western politicians are the most despised categories of professions. Western Governments have been over-run by ‘machine politicians’ who have ‘never had a proper job’ and haven’t the faintest idea of how the real productive world works. In fact governments have such a consistent record in producing the opposite result that I’m tempted to make a prediction.
I noted in an article this month that the Spanish Government has appointed a Minister for Sex, to encourage people to have more babies. I’m predicting that your population will seriously reduce! All this bad economic news that surrounds us was predicted by many wise observers, over the years, way back to Confucius:
“If a state is governed by the principles of reason, poverty and misery are subject of shame; if a state is not governed by the principles of reason, riches and honors are the subject of shame.”
That latter situation describes today where we are driven by the cult of victimization and entitlement. This was also predicted by President Ronald Reagan in his inaugural address, January 20, 1981 where he said;
“Idle industries have cast workers into unemployment, human misery, and personal indignity. Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity.
“But great as our tax burden is, it has not kept pace with public spending. For decades we have piled deficit upon deficit, mortgaging our future and our children’s future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political and economic upheaval. You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we’re not bound by that same limitation? We must act today in order to preserve tomorrow.”
In his comments, President Reagan predicted dysfunctional events such as Brexit and the recent US Presidential elections.
Excess taxation is a burden on the productive sector. It is an obstacle to employment creation and lifting the standards of the vast middle-class and as Walt Whitman, over 100 years ago, stressed the importance of explaining our free-market wealth creating process as “a way of producing wealth in which the good fortune of others multiplied their own.” Only by explaining and understanding the benefits to mankind, of reducing the burden on the productive few, will we shake off the illusion that all good things come from government.
Confronting the Problem
I hope you agree with me in the need for some revolutionary changes if we are to avoid being despised by future generations. My parents left to me a world that was in relatively good shape. Will we do the same for our children?
There have been some significant reforms in your part of the world that can teach us much, with outcomes that remind me of a Ronald Reagan quotation:
“There have been revolutions before and since ours, but those revolutions simply exchanged one set of rulers for another. Ours was a revolution that changed the very concept of government.”
Reforms often change the concept of government by limiting government to the very few tasks that we can’t do best for ourselves as individuals. Then the secret is making those policy changes stick and I’m gathering information on who has been successful there.
Australia, too, benefited from some economic reforms in the decade-or-so from 1986. However, that push for reform has stalled and there is now insufficient political courage to continue the process — for example, by simplifying our incredibly complex tax structure. The idea of a simple flat rate tax is not even discussed.
The Good News
A few years ago there were very few ‘weapons’ for us to use in the war against over-reaching governments but today we are fortunate in having great examples to follow and I’ll list only a few with whom I’m quite familiar.
Former President, Mart Laar — Estonia
Former Deputy Prime Minister, Leszek Balcerowicz — Poland
Kakha Bendukidze — Georgia
Former President, Vaclav Klaus — Czech Republic
Today we have the ever-expanding network of economic think tanks such as the Austrian Economics Center who is responsible for this annual Free Market Roadshow, now generating an annual audience of over 10,000 people.
There is the Atlas Network in Washington who give guidance and wisdom to over 500 think tanks around the world. There is the Foundation for Economic Education who this year will be launching another of the world’s biggest libertarian events in Atlanta — FEEcon, June 15-18, 2017 where they expect to host thousands of attendees.
There are some great resource documents on economic reforms:
- Mannkal’s Project Western Australia
- New Zealand’s Far-Reaching Reforms by Bill Frezza
- Dry: In Defence of Economic Freedom. A Saga of How the “Dries” Changed the Australian Economy for the Better by John Hyde
- Making Australia Right (Where to from here?) – edited by James Allan
- Dr Richard Rahn’s video mini series
All very exciting at a time when change is desperately needed, we now have the tools and the intellectual fire-power to complete the job.
The Importance of Change
Nothing will change with most of the current politicians in power. They are generally without character and courage. The importance of character must be raised again and again and you must encourage people of character to enter politics. This slide, below, from an Australian Mining Conference, shows how character is far more important than strategy and tactics. Character is the unseen but essential ingredient for success as it forces you to do the right thing.
I hope you agree with me that change is needed and I’ve detailed elsewhere that I see four effective ways of facilitating change. There are many ways, even the inclusion of some humor can be very effective in bringing about change through peaceful civil disobedience.
Some years ago the Australian gold industry was confronted with yet another tax and we mounted a campaign where this was our electoral slogan. We produced bumper stickers and all manner of advertisements which embarrassed the politicians so much that the tax at that time was not proceeded with.
What am I personally doing to help in the upcoming ‘revolution’? So far our Mannkal Economic Education Foundation, based in Perth, Western Australia, has sent over 1,000 bright young Australians to free market economic think tanks around the world so that they can return to Australia fully appreciative of the benefits of bringing about long-lasting free market reforms.
Now to conclude I’ll read a quotation from my very ‘thin’ file of sensible things that Australian politicians have said and here are the words of Sir Charles Court, the Premier of Western Australia during those vital years between the 1970s and 1980s:
“The miner, the industrialist, the trader, the financier and the banker, if they play their role correctly, will do more to achieve world understanding and peace in a generation than the politicians and diplomats could do in a hundred years. Why? Because they are closer to reality, closer to their opposite numbers, closer to the community in the countries where they operate. In other words they have more to do with real people than with institutions.”
What he is saying is that the success of our future is not in the hands of the politicians, it’s in the hands of real people, just like you and me. The challenge is ours. So what must we do?
- Expose and vote out the high taxing, high spending politicians.
- Take back from them the responsibility of doing those things we should be doing for ourselves.
- Restrict governments to do the few legitimate tasks like defence, law and order, running the courts and protecting our property rights.
Reduce the size and reach of governments and do it quickly for the sake of your children and grandchildren. As the big sign at my local gymnasium (Subiaco Football Club) says: “Do what is right for no other reason than it is right!”