Monday, 4 June 2012

The question: how to limit government in the Enriched World

The Telegraph here, looking over the recent economic decline of Japan, argues that Britain faces the same problems in the future as it faces a shortage of labour from its demographic decline and growing pension problems.

The Telegraph also argues that Britain has to be careful with the solutions Japan has offered, because of Japan’s relatively small pension systems that yet face severe debts.

The key issue for author Michael Fitzpatrick is how under zero nominal interest rates and even with claims of deflation negative real interest rates young savers get almost no return on their savings, and become dependent on struggling state pension systems. Fitzpatrick says that there is a danger that Britain and other European nations will, especially outside a small number of megacities, suffer the same fate affecting rural Japan today: a very high suicide rate, almost no formation of new families and an increasing trend towards migration to nations that do not have severe demographic problems – as show by one Satsuki Okumura moving to Bali in 2011.

The PIGs and related organisations have consistently argued that if Britain and Japan simply privatised all their public services and demolished the public welfare state, the free market would provide ample jobs and return traditional values and high fertility that would dispose of the present “inverted population pyramid”. In theory, this cannot be remotely denied: before the creation of the present welfare states the Enriched World enjoyed high fertility and solid – though not exceptionally rapid – economic growth, as Hans Hoppe documented in his Democracy: The God That Failed.

The trouble is that underneath the stable, prosperous, and very socially conservative economic order between 1788 and 1914 lurked the following facts that Hoppe himself discusses only tangentially:
  1. that working class males never supported the existing political order of essentially absolute monarchy with a limited-suffrage parliament
  2. that academics (whose funding source neither Hoppe nor Benjamin Wiker nor Thomas Woods or anyone else spends time discussing) already in 1900 had fertility rates as low as 0.5 children per “woman-equivalent”.
    • That fertility rate would be, if correct, a tenth that of the nonacademic population, creating an enormous gulf quite beyond what we see today
    • The academic community of pre-World War I Europe generally preached the same values that form the majority in the Enriched World today
  3. higher education was essential (or becoming so) to the growth of economies in the Enriched World because as its agriculture became uncompetitive, it because more and more dependent upon technology which required a lot of scientific investment – whether private or public – to develop
  4. people on the other side of politics such as Mike Davis have argued that the growth in the Enriched World between 1788 and 1914 was heavily dependent on the exploitation of the Tropical World
    • examples are seen in the demographic decline brought about by Indian famines in the nineteenth century and in “currency wars” against nations on silver standards in Asia and Latin America
In pre-World War I Europe women and the ruling and landowning classes whose wealth depended on private property constituted the chief supporters of the old order of traditional religious moral standards and limited government. Women quite possibly did not lack influence to moderate the radicalism of men and maintain a limited government system, although except in forestry-dominated New Zealand and Norway women had not acquired suffrage by World War I.

There is no doubt that the Enriched World needs to do something to reduce the size of government; the trouble is that apart from a small number of politicians, it is hard to see where a political base for such policies exists?

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