Blog description.

Accentuating the Liberal in Classical Liberal: Advocating Ascendency of the Individual & a Politick & Literature to Fight the Rise & Rise of the Tax Surveillance State.

The Soviets thought they had equality, and welfare from cradle to grave, until the illusory free lunch of redistribution took its inevitable course, and cost them everything they had. First to go was their privacy, after that their freedom, then on being ground down to an equality of poverty only, for many of them their lives as they tried to escape a life behind the Iron Curtain. In the state-enforced common good, was found only slavery to the prison of each other's mind; instead of the caring state, they had imposed the surveillance state to keep them in line. So why are we accumulating a national debt to build the slave state again in the West? Where is the contrarian, uncomfortable literature to put the state experiment finally to rest?

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Wednesday, June 20, 2012

Asset Sales and Foreign Ownership: I Don’t Care - Here's Why.


This post is a challenge to Selwyn Pellett  who posted the following Tweet last night:

So difficult 2 understand how intelligent folk can justify selling our energy assets that return a net $100m. Guess they're not intelligent

I responded by saying that such assets would simply sell for the net present value of future cashflows, so the government was simply taking those future cashflows now. Sensible, what was the problem?  I then pointed him to this blog, and stated that the asset sales were not, firstly, for me, an economic issue, they were a philosophical and moral issue, namely: governments owning such assets are part of a planned economy which is reliant, always, on a government planning my life for me, starting with the extortion of taxes. That is, the issue concerns my freedom from the big state and my desire to move to a free, classical liberal society.

Selwyn didn’t get this: sadly, as with most businessmen, these guys don’t understand the link between philosophy, economics and politics, and the combination of these that has allowed their success (and conversely, those factors still holding them back, while keeping us all in the prison of state). His last post, and I’d gone to bed so haven’t responded yet, was:

I believe when I'm overcharged under current model it's just a tax, not a foreign dividend flow! Huge difference to NZ

You’ve missed the point on all levels, Selwyn. Okay, let’s ignore philosophy, I’ll answer you by a setting out the problem with this last statement, from the point of view of erroneous thinking, and my challenge to you is tell me how I’m wrong (remembering my challenge to Bernard Hickey still remains unanswered). This reply is indebted to the multitude of economic blogs and sites I read, which have become intermingled in my mind, but I suspect the below answer is particularly indebted to Paul Walker at Anti-Dismal – my apology if that attribution is wrong.

Selwyn, say that I’m a Mexican, and I buy a shareholding in one of the energy companies here when it is floated. After the first year I’m going to be distributed a dividend of NZ$100k. You call this a ‘foreign dividend flow’, and seem to think it bad for New Zealand. However, think about it, I can’t spend NZ dollars in Mexico, the drug lords just don’t want them, so the only way I can spend this dividend is to first exchange my NZ dollars with pesos, that is, I have to find someone to sell my NZ dollars to. The only person who is going to buy those dollars from me will be doing so to spend back in New Zealand, that’s the only place they can be spent, ultimately. So, where’s the outflow of physical dollars from New Zealand? Explain it to me.

That’s my question to Selwyn, as one of the - per his first tweet - ‘intelligent folk’, but it is also the precursor to another blog soon regarding all this nationalistic BS. In late 1930’s Europe, a very evil man used the emoting nonsense of nationalism to get himself voted in after a banking collapse. With Golden Dawn, Fascists, just voted into the Greek Parliament, is anyone feeling nervous in 2012?

To a freedom freak like me, national borders mean nothing. My freedom is indeed dependent on global laissez faire, which is also the best recipe for global peace. Yet businessmen like Selwyn are happy to whip this emoting foolishness up all over again over issues like this. And unbelievably, the Left in New Zealand seem to have done away with the Internationale, and nationalism has become one of their guiding polices. Chris Trotter’s social democratic credo drips with the blood of nationalism in his final stanzas. How do they square that? How do they square a union protecting a cushy job in New Zealand, thereby taking the food away from a subsistence family in the Third World reliant on an increasing standard of living by working in a sweatshop? Surely their lives are not worth less than ours'?

More coming soon … Over to you in the meantime Selwyn.

Related: Asset Sales II.

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