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    Why We Should Oppose Government Efforts to Age Restrict Social Media

    By
    Jess Colby
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    0

    There are increasing efforts to mandate age restrictions for social media. These efforts have occurred at federal level with a proposed minimum age of 16, and in Victoria with a proposed minimum age of 14 with parental consent for 14- and 15-year-olds. My home state of South Australia is also considering something similar.

    This legislation is motivated by concerns about some of the negative effects of social media use on teenage mental health. I do not believe this type of legislation is the right solution to the problem and that it constitutes government overreach.  I am concerned about its effects on civil liberties and internet privacy along with how it may be implemented. 

    My first major concern is the effect on internet privacy. In the event that such legislation is strictly enforced, social media companies will require ID verification for all participants to join their networks in Australia. This will severely compromise internet anonymity, which is important as it allows people to more openly discuss uncomfortable but important issues and protects the identities of people who are at risk of political persecution. 

    Ironically it seems there is a segment of parents asking for the legislation in an effort to outsource parental responsibility

    This is of particular concern given the increasing trend in Commonwealth countries of people being arrested for saying things online related to hot button political topics or that for some reason have been deemed offensive.

    There is also the issue of data privacy. Forcing people to hand over their ID involves the disclosure of sensitive personal data which could then be exposed in a data leak, stolen by hackers, or sold to third parties by the social media company itself.

    My second major concern is that such a law takes choice out of the hands of parents and increases government interference in the lives of families. All teenagers are different, and some are more mature than others. The decision to engage on social media should be made by parents, not the government.

    Ironically it seems there is a segment of parents asking for the legislation in an effort to outsource parental responsibility.  When some parents are asked why they don’t restrict social media for their children despite complaining about it, the conversation seems to go like this:

    Parent: I’m concerned that social media is harming my child’s mental health.

    Me: Why don’t you stop them from using social media or restrict its use?

    Parent: No. I can’t do that. I want my child to fit in and be popular!!!

    Me in my head: WTF?

    My third major concern is that the policy may have unintended consequences. Like many things, social media has both good and bad aspects, with the bad aspects more pronounced when used excessively. However, social media also allows people to interact with others regardless of how far away they are and to connect with like-minded people.

    This can be particularly beneficial to teenagers who live in remote communities, have family that lives far away, seek a family group chat, want to let the world know what is happening in their communities, or for some reason have limited opportunities to socialise in person.  

    For example, I recently had a friend who was committed to a psych ward. Social media allowed us to talk to each other when I couldn’t visit and outside of visiting hours. A policy of restricting social media would create a government-imposed one-size-fits -all approach affecting all teenagers that will not work for all. Such a policy simply doesn’t distinguish between excessive and moderate social media use.

    Social media companies will require ID verification for all participants to join their networks in Australia.

    My fourth major concern is what the government defines as social media. Not all social media is the same. I personally have Facebook, Discord and Signal. All these apps function differently despite falling under the umbrella of social media.

    Facebook mandates that people use their real name to create a profile. On Facebook you can create both public and private events, comment on things publicly, message people privately, and a range of other things. On Discord, you create a username and then can message people and join private and semi-public groups. 

    Signal works like text messaging, but you can create group chats and relies on the internet rather than phone data. Signal does not have public pages like Facebook. As someone who intends to become a parent in the future, I would approach all these apps differently and allow them each at different ages.

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    I would also like to point out that many social media sites already have age restrictions.  Facebook, for example, requires a minimum age to join of 13. There are also apps that you can get on phones and computers that limit social media use or block certain sites. 

    Given this, I believe the best alternative solution to this legislation would be increased parental responsibility surrounding social media, and social and societal support for parents who choose to limit excessive teen social media use.

    Whose Ethics make it Ethical

    By
    David Leyonhjelm
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    0

    When I started my business 35 years ago, very few investment funds were describing themselves as ethical investors. 

    Some years later I joined an organisation of CEOs, business owners and senior executives that meets to share and discuss their challenges. I enjoyed our meetings right up until my group was required to listen to a speaker on ethics. When I asked for a definition of ethics and who decides what is ethical, I was told I was out of order.  Not long after that I was asked to leave the group. 

    Some funds then began describing themselves as sustainable investors. I wrote a column about it, asking who defines sustainable, and has anyone ever knowingly invested in a company that was unsustainable? There were letters to the editor criticising me. 

    It then became ESG, or Environmental, Social, and Governance. Still seeking definitions, I found it supposedly incorporates sustainable investing, responsible investing, impact investing and socially responsible investing. 

    Australian agriculture often generates meagre returns on investment, but larger operations utilising modern technology do better.

    I also found a claim that ESG criteria can “help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.” That sounded like the focus was on financial performance, which is good, but in fact it was not the case. The more I looked, the more I found it was all just virtue signalling. 

    Then came DEI, or Diversity, Equity and Inclusion, which is all about how many women, black or disabled people are on the payroll. Not just virtue signalling, but bragging about it.  

    Funds that differentiate themselves like this are motivated by the desire to attract more investors and generate more fees for their managers. Furthermore, very few of those choosing to invest in these funds are using their own money; both the fund managers and their investors are deciding what is ethical or sustainable using other people’s money. 

    The problem is, most ESG funds deliver lower returns to investors. And, as I discovered, they don’t agree with each other about what it all means, and also don’t much like being questioned. 

    As it happens, I am an investor of my own money and regard myself as both ethical and sustainable. Moreover, I have no difficulty offering coherent definitions. 

    My favourite definition comes from former Norwegian Prime Minister Gro Harlem Brundtland, who said, “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.  In my view that’s also ethical. 

    As to what it means in practice, here are a few thoughts. 

    I will never reject an investment in coal unless there are better nuclear or hydro options, delivering cheaper and more reliable power. It is not sustainable to subject the community to the vagaries of expensive and intermittent wind and solar power, and it is grossly unethical to compel families in India to continue burning cow manure for fuel or force children to do their homework in the dark. 

    I will absolutely invest in forestry. Not only is it renewable, in Australia it is also totally sustainable. When the alternatives are importing timber from other countries or building in steel and concrete, it’s no contest. 

    Australian agriculture often generates meagre returns on investment, but larger operations utilising modern technology do better. Genetically modified crops, modern herbicides, precision farming and minimum or zero tillage are not only sustainable but also boost yields, leaving more land for conservation. There is absolutely nothing ethical about staying rooted in the past, using out-dated technology to produce food that some people cannot afford to buy. 

    Help investors avoid companies that might pose a greater financial risk due to their environmental or other practices.

    Some ethical funds say they refuse to invest in companies that harm animals, by which they mean those that use animals to determine whether pharmaceuticals or cosmetics adversely affect humans. By what ethical standard is it preferable to expose our loved ones to the risk of life-threatening or disfiguring harm? 

    As for things like tobacco, alcohol and cannabis, these are matters of personal choice. Whatever we might think of them, the ethical approach is to not interfere in the choices of others. I’d happily invest in them if the returns were adequate. And if it means protecting liberal democracy from authoritarianism, I’d certainly consider it ethical to invest in armament companies. 

    That leaves a fairly small unethical and unsustainable list.  Anything that funds or apologises for terrorism, racism, anti-Semitism, Islamism or corruption is on it.  I’m also wary of companies that foster a woke culture; not only are they hypocrites but ‘go woke, go broke’ is more than a slogan. 

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    But that’s just me – I don’t expect others to necessarily share my views, although it’s clear that an increasing number of people seem to be doing just that. For those with control over their own money, my suggestion is to simply invest in businesses that offer the best returns, and ignore those that virtue signal. You can then use the dividends or capital gains to help make a difference based on your own values.

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet. Its stable of writers has promoted the cause of liberty and freedom across the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    Resisting centralist power – Part 3

    By
    Bob Day
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    0

    In a speech entitled, Rebuilding the Federation, Richard Court, then Premier of Western Australia, described the tide of centralism as follows:

    “All the things that the States do best are under attack from the empire builders in Canberra. The bureaucracy running the Federal education system, as you know, is large but it doesn’t teach any students. There is an equally large health bureaucracy which doesn’t treat any patients.”

    Court went on to make the point that the Constitution recognised that State governments were better placed to respond to local priorities. 

    Many of the most stable, productive and influential nations on earth are federations.

    The States are left with constitutional responsibility for education, health, housing, law and order, commerce and industry, transport, and natural resources including land and essential services. But Court noted that, with the help of the High Court, the Commonwealth now has almost complete control in some of these areas.

    Benefits of Federalism

    Those who live in the major population centres on Australia’s eastern seaboard may not understand the importance of local decision making in the same way that those who live in the regions and smaller States do. In a country as large and diverse as Australia it is very difficult for a political administration and bureaucracy based in a distant national capital to take full account of, and understand, the interests and needs of local communities.

    As a principle not only of government, but also of life, the best decisions are taken when all the parties to the decision know and understand the issues intimately. A federalist approach that seeks to allow States to exercise power in making decisions on local matters is infinitely better than centralised decisions at a distance. Those who framed the Constitution understood this and sought to embed it in both the spirit and letter of the document.

    Economic Benefits

    The Productivity Commission has outlined the competitive benefits of federalism in improving performance in the Australian economy, saying:

    “The competitive dimension of federalism, which provides in-built incentives for governments to perform better across a variety of areas, is operating well.” 

    There is an inherent competitiveness between the States that should be encouraged. State governments have a vital role to play in creating the right environment to attract and retain capital. We live in a global market environment in which competition between States will only serve to make each of them more efficient.

    Those who framed the Constitution understood this and sought to embed it in both the spirit and letter of the document.

    By competitiveness, however, I mean real low cost, light regulation efficiency competitiveness, not taxpayer funded inducements to lure business from one State to another.

    Perhaps the most valuable attribute of successful federations is the way in which they lead to a disbursement of power that fosters democracy and restrains corruption and abuse. While the division of powers among the stakeholders may cause frustration for those who desire an unfettered capacity to determine the course of events, it does introduce important checks and balances to the political process.

    There is a creative tension that comes from the consensus building required to make a federation work, in the longer term serving both the individual and common interest.

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    Many of the most stable, productive and influential nations on earth are federations. The reason I am such a committed federalist is because it is by far the best way to govern a large and diverse country like Australia; far better than its alternative, centralism – power and law making centralised in one place. 

    Whilst it may seem counter-intuitive that six (or even eight), separate State service providers could be more efficient and cost effective than one big, centralized service provider, it is true nonetheless.

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet. Its stable of writers has promoted the cause of liberty and freedom across the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    Windfall?

    By
    Max Payne
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    0

    The Guardian recently said the quiet part out loud – the Coalition’s pivot towards nuclear energy is scaring away the big money that is backing renewables. 

    That’s right, the mere fact that the Federal Opposition (who aren’t fancied to win the next election mind you) has proposed nuclear energy for Australia is enough to put investors off backing renewable projects. And yes, we are at the point in the energy debate where The Guardian is now simping for big investors. 

    While the battle of energy technologies will continue to rage, we can say one thing about the big money behind renewables.

    We are constantly told that Australia is ripe for renewable energy – be it solar, wind or hydro. But the truth of the matter is that without unequivocal bi-partisan legislative support, private capital is unwilling to back projects even against the prospect of competition. That should tell you everything you need to know about the reality of the economics of renewables.  

    The Investor Group on Climate Change reported that ‘more than one’ major investor had decided to hold off on future investment decisions in Australia. General sentiment was that investors would prefer to back projects in jurisdictions with bi-partisan political support for a renewables-led transition to net-zero. 

    What is clear from these developments is that investing in renewable technology is not a vote of confidence in how the projects stack up. Rather, it’s simply an attempt to bet on government-backed guarantees, and once that guarantee is potentially threatened the investors flee. 

    We are at the point in the energy debate where The Guardian is now simping for big investors.

    To play devil’s advocate, nuclear technology may potentially suffer from similar issues. Due to the high upfront costs and long lead times of nuclear energy projects, even strong advocates of the technology freely admit that significant public funding would be needed to get projects off the ground and to induce private investment. It is unclear how competitive nuclear energy might be in the new energy market as well – would investors expect legislative guarantees to ensure returns? 

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    What is clear though, is that the threat of (or lack of) government intervention in the energy marketplace is destroying investor confidence. Be it renewables, potentially nuclear, or the ridiculous net-zero targets that are annihilating investment confidence in coal and gas, the sources that actually do the heavy lifting in the energy market.   

    While the battle of energy technologies will continue to rage, we can say one thing about the big money behind renewables. They aren’t betting on the tech, or on a technologically robust transition to net-zero. They are betting on a government guarantee to ensure their returns. 

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet.

    Its stable of writers has promoted the cause of liberty and freedom across

    the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    A Nation of Takers

    By
    David Leyonhjelm
    -
    1

    One of the many inequities of Australia’s welfare system is the exclusion of family homes from the means test. Recipients of age or disability pensions can own houses worth millions of dollars while remaining eligible for pensions funded by the taxes of people who cannot afford to buy a house at all. 

    In private, many politicians agree that excluding the family home leads to unfair consequences. However, neither side of politics is willing to change it. There are simply too many Australians who insist they are entitled to a pension. 

    It is much the same with the National Disability Insurance Scheme (NDIS). It is widely known to be extensively rorted, with scheme providers charging participants several times what they charge non-participants for the same service. It is also well known that many people on the scheme are only mildly disabled, if at all. And yet, even as the cost threatens to bankrupt the country, even minor reforms prompt screams of protest. 

    Australia relies more heavily on individual income taxes than other developed countries

    Also threatening the national budget is the cost of childcare. It is no longer sufficient to keep small children happy while their parents are at work; it is now early education. Advocates have created a narrative that children who remain home with their mothers are somehow deprived. Childcare is rapidly becoming yet another entitlement to be funded by the government.  

    There was a time when Australians liked to think of themselves as self-reliant and quick to help each other, while receiving welfare was an embarrassment and an indication of failure. 

    This has been replaced by a culture of entitlement in which there is absolutely no compunction about receiving money from the government. Many people insist they have a right to a pension simply because they have paid taxes, despite that never having been the situation in Australia. Even those who have never paid tax (apart from GST), or who frittered their savings away on gambling and ‘substance abuse’, demand it. 

    Some of this thinking is attributable to the fact that a proportion of immigrants originate from countries which have contributory pension schemes. They assume it is no different in Australia. But a far bigger factor is the entitlement mentality. If someone else can get a pension, I should also get it. If someone else is receiving benefits via the NDIS, it’s only fair that I obtain them too. In fact, if there is money being handed out for anything, I’m entitled to it. 

    There is no longer any disgrace in receiving government benefits. Indeed, a thriving industry of accountants and Financial Planners specialises in rearranging their client’s affairs to meet eligibility requirements for government benefits, especially pensions and the Commonwealth Seniors Health Card. 

    There is even intergenerational welfare, with extended families living on welfare their entire lives. This is particularly the case with certain indigenous communities, while “Lebanese back” is apparently sufficient to qualify for a disability support pension.

    Some admit that ‘government money’ originates with taxpayers, but it makes little difference. The sense of entitlement defies guilt, facts and reason, hence the reluctance of politicians to make changes for fear of losing votes. Even worse, many politicians use taxpayers’ money to buy votes. 

    The sense of entitlement owes it origins to the growth of the welfare state over the last half century, together with the rise in taxation that accompanied it. Although Australia has had an age pension for more than a century, disability assistance, childcare subsidies, unemployment benefits, medical benefits and many other handouts and subsidies are far more recent. 

    It has led to the perception of an all-pervasive government with unlimited resources. Moreover, if you go about it the right way, money can be extracted from it. 

    Also a factor is the level of income tax. Getting something back from the government to compensate for the amount of tax paid makes sense. Australia relies more heavily on individual income taxes than other developed countries, on average taking 25% of earnings. Plenty of people see little benefit for themselves. 

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    Obviously, this situation is unsustainable in the long term. As Margaret Thatcher once said, “The problem with socialism is that you eventually run out of other people’s money.” 

    Australia is already living beyond its means, with budget deficits year after year. It is also actively discouraging industries that support the economy – think coal exports, gas exports, sheep exports – while increasing energy costs. It obviously cannot last. 

    What the country needs is a government that encourages self-reliance rather than dependence on the state. Unfortunately, there is no sign of that.

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet.

    Its stable of writers has promoted the cause of liberty and freedom across

    the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    The Arguments and Rebuttals for Government Maintenance of Competition

    By
    Kenelm Tonkin
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    0

    This week the US Federal Court handed-down its decision in the United States of America et al v Google LLC, in which the US Government challenged Google for using exclusionary monopolistic behaviour to deny its rivals access to distribution channels provided by Apple and Samsung. Google lost but may appeal.

    Formidable, straight-shooting American libertarian, Hannah Cox, raised some interesting points in her Newsweek opinion piece Google Is No Monopoly. It’s Widely Used Because It’s The Best about competition law – what Americans call anti-trust law. 

    This is the area of law which deals with maintaining competition by determining whether companies wield monopolistic-like behaviour to inhibit competition, as well as protecting consumers.

    Knowing whether a policy is inside or outside the world of libertarianism can be a close fought thing at the best of times. As Justin Amash, a prominent American libertarian who just lost his bid for the US Senate in Michigan, said “Libertarians spend so much time arguing over who is the purest libertarian that they forget to work together to advance liberty.” 

    But define the very edges of libertarianism we must, and competition law seemed ready for a battle.

    Hannah took the corporation’s side of the debate, as the purist, to argue ‘market forces should maintain competition not government.’ Sounds libertarian, right? 

    But nagging doubt afflicted me. So, this article is me nailing my colours to the mast in countering “sometimes, rarely, market forces create monopolies which bring competition to a halt. When this happens, government must act as referee and deal with the monopoly to reinstate the free market.”

    So here are her arguments and my rebuttals.

    ARGUMENT #1 “MONOPOLY MEANS ONE”

    Hannah challenges any assertion that Google is a monopoly. She says, “In fact, there are over 30 other search engines in the world that are dedicated solely to search functionality, including Yahoo!, Bing and Duck, Duck, Go.” If there are many search engines, even just two, Google can’t be a monopoly. The ‘mono’ in monopoly means one.

    The mistake some libertarians make is to argue big government is the only potential agent for coercion in society. 

    REBUTTAL #1 “MONOPOLY IS CONTEXTUAL”

    My understanding of the US Sherman Act is that it focuses on “monopoly-like behaviour”, not whether a company is strictly speaking a monopoly. So, whether Google is a monopoly is irrelevant.

    Second, “monopoly” is defined in OxfordReference.com as “The situation where one company controls all or a substantial majority of a market.” 

    That is, substantial majority, not 100%.

    In the US search engine market, Google has 88.14% of annual searches. In the court case, they said 90%. Bing is #2 with 6.79%. Yahoo! And DuckDuckGo come in at #3 and #4 with 2.63% and 2.55% respectively. 

    All other players have less than 1% including Baidu, a Chinese search engine, and Yandex, a Russian rival. 

    88.14% is clearly a “substantial majority of the market. 

    So my rebuttal is that a monopoly doesn’t have to be present, just monopoly-like behaviour.

    If Google had 99.99999% of the market and there was one other player at 0.00001%, Cox would continue to argue Google is not a monopoly. That makes no sense. 

    ARGUMENT #2 “EXCLUSIVE ACCESS IS NOT MONOPOLISTIC”

    Hannah then argues that Google has just provided more convenience than its rivals, or better access, implying distribution channels aren’t a seismic advantage. She’s essentially saying securing exclusive access is not monopolistic.

    REBUTTAL #2 “EXCLUSIVE ACCESS IS MONOPOLISTIC”

    When you break down what she’s saying, it’s that Google is just more convenient to access. But the converse must also be true: that Google’s competitors Yahoo!, Bing and DuckDuckGo are more inconvenient to access. In commerce, convenience matters. There are thousands of markets where convenience is the deciding factor in commercial success. 

    Imagine two identical retailers, one with parking and one without. The one with parking will outcompete the other because customers have more access to it. Or think of marketing channel access like a waterpipe: if there are two pipes into town, one owned by Apple and the other Samsung, and Google pumps its water through those two pipes, Hannah would have you believe that it is no big deal for DuckDuckGo water to be accessed by walking 10 km and carrying it in a bucket on your head.

    Convenience matters. Access matters. Securing exclusive access at the expense of your rivals is monopolistic. 

    ARGUMENT #3 “DISTRIBUTION DEAL IS EVIDENCE OF SUPERIOR NEGOTIATION AND INTELLIGENCE”

    Then Cox continues with the following: “Being smart enough to negotiate such deals simply makes Google better at its job.”

    REBUTTAL #3 “DISTRIBUTION DEAL IS EVIDENCE OF MORE MONEY”

    Maybe.

    Is this Hannah inadvertently arguing that Google has a monopoly of high IQ negotiators?

    Putting that aside, what Hannah omits from her article is that Google had to pay Apple and Samsung billions for the rights to those distribution channels. So, Google spent billions to deny their competitors access. These billions are war-chests their rivals don’t have due to exclusive dealing.

    There’s a timeline of cause and effect to consider in the industry. Here’s a list of search engines and the year they were founded:

    1994 WebCrawler

    1994 Lycos

    1994 Infoseek

    1995 Yahoo! with AltaVista

    1998 Google

    2008 DuckDuckGo

    2009 Bing

    So Google joined the market after Yahoo!. 

    By 2002, it overtook Yahoo! for searches per annum and has been in the #1 position since.

    Perhaps its search algorithms were superior. No problems there; that’s competition.

    But since then Google has locked in agreements with Apple that Google be the default search engine on its devices. 

    When Samsung took up Android, Google repeated the process.

    Here are the real figures. Google pays Apple between $8 billion and $12 billion annually to remain the default search engine on Apple devices, including the iPhone, iPad, and Mac.

    Google reportedly is paying Samsung $8 billion over 4 years for similar access.

    Let’s call that $20 billion in total, and recurring over various intervals.

    Can Yahoo!, Bing and DuckDuckGo afford this?

    Yahoo! is owned by Verizon which, as at Q2 FY2024, had $17.2 billion in cash or cash equivalents.

    Bing is owned by Microsoft which, as at Q3 FY2024, had $130 billion in cash or cash equivalents.

    DuckDuckGo is a private company with speculated cash of $100 million in 2021.

    Therefore, Google has effectively shut-out Yahoo! and DuckDuckGo, the #2 and #4 in the market. Exclusionary actions like this emphasise the monopolistic nature of Google’s claim in search.

    ARGUMENT #4 “NO HARM CAUSED BY DOMINANT POSITION”

    Cox further argues that “The company has in no way harmed consumers, defrauded anyone, or even acted in an unfair way toward their competition.” 

    REBUTTAL #4 “HARM CAUSED BY DOMINANT POSITION”

    I’m surprised any libertarian would argue Big Tech has harmed no-one.

    I’ve just been through how Google uses exclusionary channel agreements to shut-out Yahoo! and DuckDuckGo. This seems unfair at first instance.

    Does Google defraud or misinform? Yes. 

    Douglas Murray famously challenged John Anderson to type “white couple” into Google and see the results. Google have since changed the bias in their algorithm so it’s not so obvious, but the following results demonstrate the bias still lingers.

    As at 7 August 2024, when you query Google images for “black heterosexual couple” and review the first 20 results, here’s what you get:

    • Black heterosexual couple: 17
    • Black homosexual couple: 2
    • Mixed heterosexual couple: 1

    And when you query Google images for “white heterosexual couple” and review the first 20 results, here’s what you get:

    • White heterosexual couple: 13
    • Why Google Images searches aren’t racist: 2
    • Mixed heterosexual couple: 5

    Santa Clara University reported that typing “Asian girls” resulted in Google’s algorithm yielding pornographic and highly sexualised results.

    In 2018, NBC reported that typing “black girls” would yield similar results.

    Much has been reported about political bias as well.

    US Government challenged Google for using exclusionary monopolistic behaviour to deny its rivals access

    Is that harm, or misinformation or fraud?

    ARGUMENT #5 “BIG ONLY MEANS POPULARITY”

    Hannah then backgrounds us about the ‘consumer welfare standard’, Robert Bork and political factional differences between Republicans and Democrats. 

    She goes on to criticise those who think ‘big is bad’ and that “Becoming big merely means it is popular and offers a product or service consumers quite like.” 

    REBUTTAL #5 “BIG CAN MEAN POPULARITY WITH COERCION TO FOLLOW”

    The mistake some libertarians make is to argue big government is the only potential agent for coercion in society. I’d argue, unlike Hannah, to start with any big organisation. Big brings power and economic clout, and it doesn’t necessarily have to be from government. 

    Hannah is partially right when she asserts becoming big merely means it offers good products. That’s how their ascendency begins. But what happen thereafter? They become smug in their economic security, their innovation ossifies and they tend to monopolistic behaviour designed to protect their fortress. This is a process from birth to death, from innovation to stagnation, that applies to individuals, businesses, churches, political parties, charities and even nation states.

    Libertarians must think clearly about what they want government to provide and not provide. We are clear that we want government in defence, police and the courts. I would add it has a role to ensure monopolistically behaving companies, in the rare times that occurs, are checked. There is a role for government to ensure competition is maintained. 

    But I’ll leave the last say to a couple of libertarian greats:

    On the issue of capitalism leading to monopoly, classical liberal Milton Friedman wrote: “There is a widespread belief that free markets tend to lead to excessive concentration of economic power. This belief is not without justification. There are important cases where free markets themselves tend to produce a monopoly.”

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    And the great Thomas Sowell went straight to activity which impedes competition, saying “There is a legitimate concern about businesses using their market power to stifle competition. Antitrust laws should be enforced to ensure that competition remains vigorous.”

    Caution is required applying competition law. But if rivals are being denied valuable consumer access by the #1 player sitting on 88% of the market share, I think the government referee can blow the whistle.

    Got something to say?

    Liberty Itch is Australia’s leading libertarian media outlet.

    Its stable of writers has promoted the cause of liberty and freedom across

    the economic and social spectrum through the publication of more than 300 quality articles.

    Do you have something you’d like to say? If so, please send your contribution to editor@libertyitch.com

    How Sunk Cost Fallacy Drives Authoritarian Policies

    By
    Jess Colby
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    0

    Sunk cost fallacy is the tendency of people to stick with a decision or course of action that isn’t having a positive result because the person has invested time, money and/or resources that cannot be recovered and do not want to feel that they have wasted them. In many cases, sunk cost fallacy can even drive people to double down on a bad decision or course of action. 

    Here are two real life examples of how people can be affected by sunk cost fallacy.

    Example 1: 

    Amy buys a ticket to see a movie and goes into the cinema to watch it. After about 30 minutes she concludes the movie is not very good but watches it to the end because she doesn’t want to feel she has wasted her money on the ticket nor her time watching it.

    Example 2: 

    Kiara has gambled away thousands of dollars hoping one day to win big. Kiara does not want to stop gambling because she thinks she will win big one day and doesn’t want to think her ‘investment’ was a waste. She continues to double down and gamble away even more money in the hope it will one day pay off.

    What is authoritarian policy and what drives it?

    Authoritarian public policy restricts the choices of individuals or violates recognised civil rights and liberties. It is typically driven either by a desire to control others or to solve a problem or perceived problem within society. 

    Governments convince themselves that the War on Drugs is necessary, and to end the war would turn the investment into a sunk cost.

    It can be driven by malevolent forces, such as a group or individual wanting to increase their power or cause harm to a person or group they don’t like, or by benevolent forces wanting to solve a problem or make society a better place in the belief that the end justifies the means.

    How is sunk cost fallacy relevant to authoritarian policies?

    The imposition of any policy requires time, money and resources. Authoritarian policies also involve sacrificing rights and liberties, often even including those of the people supporting and perpetuating the policy.

    Most people like to think they are decent and not causing harm to others and society. We each want to be the hero of our own story. Those who support and perpetuate authoritarian policies often have good intentions. But good intentions do not alter the harm they cause to individuals and society. To these people, any so called ‘sacrifices’ are a means to an end, and the erosion of civil liberties and human suffering are an investment. Any attempt to reverse such investment is considered an attempt to turn an investment into waste. 

    Some real-life examples of sunk cost fallacy driving authoritarian policies

    I will use two real life authoritarian policies as examples of sunk cost fallacy: the War on Drugs, and the Authoritarian Covid Response. Both came with significant social and economic costs, leading to major restrictions on individual freedom and causing significant suffering within society.

    The War on Drugs:

    The war on drugs has been waged for over half a century. Although there were laws that restricted and criminalised drugs in various countries, in the early 70s US President Richard Nixon found a way to criminalise groups that he did not like such as hippies and black people. 

    He knew that he couldn’t directly criminalise people for being hippies or black, but he also knew that drug use, in particular marijuana, was popular in both communities. From this, he enacted a policy in 1971 called the War on Drugs and created a government agency called the Drug Enforcement Administration (DEA) using the excuse of public safety. 

    And in a fashion typical of the US government, the policy began to be promoted to other countries, with many falling into line.

    The War on Drugs has proven to be incredibly destructive, with billions spent on enforcement around the world. Arresting people and putting them in jail uses a lot of resources and costs taxpayers a lot of money.

    The criminalisation of drug use has also had many negative social effects such as making criminals of those who were otherwise causing no harm to others, and being used an excuse to introduce policies such as civil asset forfeiture. 

    On top of this, the War on Drugs has been a failure:  drugs have won the war. People still use drugs. Yet governments around the world remain determined to make the policy work. New excuses are offered to justify the policy, such as public health and the cost to taxpayers in countries with socialised healthcare. Governments convince themselves that the War on Drugs is necessary, and to end the war would turn the investment into a sunk cost.

    Sunk cost fallacy can even drive people to double down on a bad decision or course of action. 

    Authoritarian Covid Response:

    The authoritarian Covid response (ACR) is a set of government responses to the Covid-19 virus which originated in China in late 2019 and proceeded to spread throughout the world. Although some people such the elderly and those with underlying medical conditions can get very sick, most people have mild symptoms and many don’t even know they have it.

    In reaction to the virus, governments threw out their prepared pandemic plans and implemented extreme restrictions on everyday life that severely curtailed civil liberties and derailed the lives of millions of people all over the world. 

    People were subjected to rules that were overly restrictive, made no scientific sense and were counterproductive. The rules were constantly changing, often confusing and practically impossible to follow even for those who wanted to follow them.

    The first two weeks and maybe even the first two months could have been forgiven but once it become obvious the rules were excessive and needless, they continued with significant societal support. The perpetuation of the policy had significant social and economic costs, has permanently eroded civil liberties, and has permanently and negatively altered the trajectory of the lives of many people including myself.

    Whenever the excessive nature of the ACR was mentioned, those who support it wouldn’t just disagree but would respond in a manner that can be best described as emotional and angry. I noticed many Gen Z peers to be very supportive of the ACR policy despite our age group disproportionately experiencing many of its negative effects.

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    The longer a person supported the ACR, the less likely they were to stop supporting it, with their support becoming more aggressive over time, even to the point of cutting off close friends and family. Given the extensive personal and societal ‘sacrifices’ created by ACR policies, many who supported the ACR came to view the ‘sacrifices’ caused by the policy to be an investment. 

    Ending the ACR policy would mean that the ‘sacrifices’ were a pointless sunk cost and a loss of their investment, and that they had needlessly harmed society. This desire to avoid losing out on their investment helped perpetuate the ACR policy and continue its existence.

    The implications of sunk cost fallacy driving authoritarian policies

    Knowing that sunk cost fallacy drives authoritarian policy emphasises the importance of working to stop authoritarian policies before they even take hold. Once they do take hold, people become invested in their continuation which makes it more difficult to eliminate them. 

    Childcare – Why should you pay for it?

    By
    David Leyonhjelm
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    Starting before they are born, our governments spend a lot of money on children. 

    The Commonwealth budget for education alone is $67 billion, and in NSW $24 billion. Add the other states and territories, plus health care, and as the saying goes, pretty soon you’re talking real money. 

    While our society obviously values children highly, it is rare that anyone questions why so much of their cost is socialised. Having children is, after all, a choice. Other lifestyle choices do not attract such taxpayer generosity.

    Among the taxpayers who provide the funds are many who do not have children themselves. Some are yet to start a family, while others have chosen not to have them. But there are also those who, for various reasons, would very much like to become parents but cannot. 

    A strong case is always necessary to justify spending other people’s money, but a particularly convincing case is required to justify compelling those who cannot have children to pay for other people’s children. It’s like obliging paraplegics to pay for the running shoes of the able bodied. 

    The government thinks there is a strong case for childcare. It wants women to return to the workforce as soon as possible, so they resume paying tax and contributing to government revenue. With state and federal governments all addicted to spending more than they collect, they have a strong incentive to increase taxpayer numbers. 

    The government also argues that the less time women are out of the workforce, the more they retain their work skills. This is presented as a benefit to the women, as women who return to work more quickly typically earn higher incomes. However, they also pay more tax. 

    For the mothers of the children, the case is not so clear. Some women are obviously career oriented and anxious to return to the workforce as soon as possible. However, there are many who would prefer to care for their children themselves, especially while they are small, rather than entrust them to strangers in childcare facilities. Motherhood is a powerful instinct, and most jobs are rarely more engaging than raising a child. 

    The government also argues that the less time women are out of the workforce.

    The key reason most do not remain at home is economic: single income families with children typically struggle to pay a mortgage or rent plus general living expenses, vehicle expenses and the rest. 

    The underlying cause of this is government policies, particularly high income taxes, excise on essentials such as fuel, and the regulation and taxes that lead to expensive housing. Remove these and it would be a lot easier to live on one income. 

    From the point of view of the children, the case for childcare is even less compelling. Mothers have been caring for their children for thousands of years and have not recently become incompetent. 

    But we are told that it is no longer sufficient to simply keep children safe, happy and entertained while their parents are at work; the children must now be educated by qualified early childhood educators. It is now known as early childhood education and care (ECEC).

    Moreover, whereas childcare workers were once just sensible, caring people, most with children or grandchildren of their own, they must now hold post-school – and sometimes even university-level – qualifications. Mothers who have successfully raised four children of their own cannot become childcare workers unless they have obtained the appropriate qualification, while those who have a qualification but no prior childminding experience are fine.

    There has also been a ratcheting up of regulation of the physical environment, the programs and routines offered, plus the ratio of staff to children in childcare centres. 

    For the most part this has been driven by middle-class parental guilt. That is, parents seeking to justify the decision to place their children in childcare are demanding standards that allow them to believe their offspring are receiving a better start in life than if they stayed at home. It makes them feel better about leaving the kids with someone else. 

    Unfortunately, there is no evidence to show that these standards are enhancing children’s outcomes. This was conceded in the Productivity Commission Inquiry Report into Childcare and Early Childhood Learning. The evidence indicates that the only children who benefit from ECEC are from dysfunctional households, such as those where substance abuse is an issue. 

    Furthermore, the ramped-up regulation and credentialism have made childcare seriously expensive. Even moderately well-paid parents baulk when the cost is almost as much as they can earn by going to work. For the poorest parents, especially single mothers who have a strong need to return to work, it is simply out of reach.  

    A strong case is always necessary to justify spending other people’s money,

    Childcare advocates, especially those with a pecuniary interest, are seeking to convince the government to implement a universal ECEC system, based on recognising early childhood education as a fundamental need. Naturally they claim this should be provided at minimal cost to parents, arguing it would give children the support they need to thrive into adulthood, while parents, particularly women, would be better able to balance work and care responsibilities.

    This is a profoundly elitist view, based on the assumption that virtually all women prefer to return to work, and that virtually all children benefit from early childcare education. As previously discussed, neither is true. Moreover, the cost of such a system, tens of billions of dollars, would be borne by taxpayers.

    What is never considered is changing the incentives so mothers do not feel so pressured to return to work. If income taxes were significantly reduced by, for example, allowing single income households to split their income between working and non-working parents, the pressure would ease. If the cost of childcare was tax deductible, it would help. If fuel excise plus GST did not take over half the cost of fuel, households would have more money for other purposes. If housing was not so heavily taxed and regulated by local, state and federal governments, there would be more houses at affordable prices. 

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    And if childcare was less regulated, with only those opting for early childhood education paying for it, the cost of ordinary childcare to mothers who genuinely need it would be more affordable. 

    As it stands, ECEC is a taxpayer-funded elite middle-class racket. Rather than hit taxpayers for ever increasing subsidies, the sector needs to be substantially deregulated.  Middle and upper-middle class families who expect gold-plated, diamond-encrusted childcare – with its university educated workers and low staff ratios – should pay for it themselves.

    Slaying the dragon of censorship.

    By
    Gerardine Hoogland
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    Is there no wild beast more savage than man when his passions are armed with power?

    This is the question the ancient Greek historian, Plutarch, asked in relation to the actions of the newly formed triumvirate of Octavian (soon to be Rome’s first emperor, Augustus), Antony, and Lepidus as they turned on their Roman countrymen in their quest for power in the final stages of the fall of the Roman Republic in 43 BC.

    It is a reasonable question to be asked of anyone aiming to assume leadership over their fellow citizens, no matter the period in history. That we have enough warnings of the traps which men fall into, should be uppermost in our minds when it comes to seeing our democracies as fair and reasonable.

    At least we are only de-platformed, never to be seen in cyberspace again!

    The most prescient warning, articulated in what I consider the best advice when setting up government, was penned by the Roman historian, Livy.

    “The study of history is the best medicine for a sick mind; for in history you have a record of the infinite variety of human experience plainly set out for all to see; and in that record you can find for yourself and your country both examples and warnings; fine things to take as models, base things, rotten through and through, to avoid.”

    To the question of power, I argue that it is even more pertinent today in our modern liberal democracy, because we were led to believe that modernity has ushered in a more humane, decent, and enlightened way to conduct our lives. 

    Recent events, however, prove otherwise. 

    Much has been written about the powers sought by Australia’s e-Safety Commissioner, Julie Inman-Grant, to silence Australians as if we were kindergarten children who cry out for guidance at every turn in the playground. 

    By now we ought to be used to unfettered power being sought and wielded by senior bureaucrats; the recent four years of mandates and scare tactics being a prime example. But we should never get used to our political representatives further bolstering those powers without consulting the people first. 

    It is frightening to consider what might lay before us here in Australia, with the recent announcement by opposition leader, Peter Dutton, that the Liberal Party in government would introduce a ban on social media for children under 16 years of age. 

    This is the mainstream party that apparently espouses the values of individual liberty.

    Dutton says that facial recognition to determine somebody’s age is “appropriate.” That, therefore, would leave anyone over 16 needing to comply with this ultimatum if they want to have a social media presence.

    No doubt the government will call it “choice.” We will be told it is all in the name of safety; in this case, keeping children safe online. Nobody disputes the gold standard of being able to keep children safe from harm, but to punish law-abiding citizens by extinguishing their individual right to express themselves and associate with others in a peaceful way, is wrong. 

    Is there no wild beast more savage than man when his passions are armed with power?

    I guess we should consider ourselves fortunate compared to the punishment dished out in the ancient world. 

    As the Roman Republic lay dying in the late first century BC, Cicero offended Marc Antony in several of his speeches, declaring Antony an enemy of the state. 

    For his efforts of expressing views to save his beloved Republic from a would-be tyrant in Antony, Cicero had his head and hands cut off, the latter pinned to the rostra in the forum. It was said to be a reminder of what happens to those who disagree with the ruling elite of the day but it was, for Antony, a statement of revenge upon the man who consistently delivered powerful invectives against his character.

    At least we are only de-platformed, never to be seen in cyberspace again!

    But the words of Cicero are still as meaningful today as they were when he warned his fellow senators that “servitude is the worst of all evils.” 

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    It is with a degree of risk that we stand up publicly and declare his warnings today, but to do so with the eloquence of a man who is considered by many to have been Rome’s greatest politician, would be sweet indeed:

    “To be slaves to libertines, bullies, foul profligates, gamblers, and drunkards, that is the ultimate in misery joined with the ultimate in dishonour.”

    GST is Better than Income Tax

    By
    Duncan Spender
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    In my last article I argued that a flat and broad-based income tax is much the same as a broad-based GST, so we have little reason to hate the concept of income tax more than the concept of GST. I argued this by setting out an imaginary scenario with five citizens, one business, and no government.

    But there is an inherent difference between income tax and GST that makes GST better. I will argue this by adding an additional year to the imaginary scenario, and by honing in on three of the citizens – the three employees.

    Year 1

    In year 1 each employee earns a salary of $100,000, enough to buy 100,000 products at $1 each. 

    One employee is short-sighted and borrows $100,000 from another employee, who we will call the long-sighted employee. So in year 1 the short-sighted employee buys 200,000 products while the long-sighted employee buys nothing.

    Year 1 with no government

    Citizen…receives…and pays…
    The short-sighted employee$100,000 of salary, plus $100,000 borrowed from the long-sighted employee$200,000 for 200,000 products
    The long-sighted employee$100,000 of salary, less $100,000 lent to the short-sighted employeeNothing for no products
    The take-it-as-it-comes employee$100,000 of salary$100,000 for 100,000 products

    To extract the money it demands, the government imposes an income tax rate of 19.8 per cent.

    Year 2

    In year 2 each salary is $104,030, but this amount now buys only 101,000 products because the product price has risen from $1 to $1.03.

    The salary of the short-sighted employee is transferred to the long-sighted employee to pay off the previous year’s debt. As such, the long-sighted employee buys 202,000 products in year 2, while the short-sighted employee buys nothing.

    Year 2 with no government

    Citizen…receives…and pays…
    The short-sighted employee$104,030 of salary, less $104,030 paid to the long-sighted employeeNothing for no products
    The long-sighted employee$104,030 of salary, plus $104,030 paid by the short-sighted employee$208,060 for 202,000 products
    The take-it-as-it-comes employee$104,030 of salary$104,030 for 101,000 products

    Bring Out The Government

    Now imagine instead a scenario where there is a government, and let us assume the government’s taxation does not discourage the citizens from producing as much as in the absence of government.

    In year 1 the government demands enough money from the three employees to buy 60,000 products. The government could get the money via a 20 per cent income tax on the salaries of the employees.

    Year 1 with income tax

    Citizen…receives…and pays…
    The short-sighted employee$80,000 of after-tax salary, and $80,000 borrowed from the long-sighted employee$160,000 for 160,000 products
    The long-sighted employee$80,000 of after-tax salary, less $80,000 lent to the short-sighted employeeNothing for no products
    The take-it-as-it-comes employee$80,000 of after-tax salary$80,000 for 80,000 products
    Government$60,000 in tax$60,000 for 60,000 products

    In year 2, the government ups its demand, and now seeks enough money from the three employees to buy 60,600 products.

    If the government gets the money via income tax, it ends up taking more from savers compared to the amount taken from borrowers, and compared to the amount taken from those who neither save nor borrow.

    Consider the long-sighted employee, who lent $80,000 to the short-sighted employee in year 1, and who receives $83,452 from the short-sighted employee in year 2. 

    Year 2 with income tax

    Citizen…receives…and pays…
    The short-sighted employee$83,452 of after-tax salary, less $83,452 paid to the long-sighted employeeNothing for no products
    The long-sighted employee$83,452 of after-tax salary, plus $83,452 paid by the short-sighted employee, less $683 of tax on interest $166,221 for 161,379 products
    The take-it-as-it-comes employee$83,452 of after-tax salary$83,452 for 81,021 products
    Government$62,418 in tax$62,418 for 60,600 products

    The pre-tax income of the long-sighted employee in year 2 is $104,030 of salary plus $3,452 of interest, summing to $107,482. So the long-sighted employee has higher pre-tax income than the other employees, simply because of a deal struck between peers.

    There is an inherent difference between income tax and GST that makes GST better.

    To extract the money it demands, the government imposes an income tax rate of 19.8 per cent. The rate is lower than in year 1 because the government has dreamt up more income to tax than just salary income.

    The long-sighted employee pays more tax in year 2 than any other citizen ($21,261 compared to $20,578). The long-sighted employee ends up purchasing less than double what the take-it-as-it comes employee purchases, despite the long-sighted employee having gone without all purchases in year 1.

    This intrusion into the deal struck between the long-sighted employee and the short-sighted employee is how income tax punishes saving.

    Even if the long-sighted and short-sighted employees respond to the imposition of income tax by negotiating a change in the interest payment involved in their arrangement, this would just mean they share the punishment of deal-making meted out by income tax, a punishment that the take-it-as-it-comes employee avoids.

    As income tax penalises deal-making between savers and borrowers, while GST does not, income is inherently inferior to GST.

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