FT124: “Liberals use the courts to give them what the people won’t.” -Old Pithy

Posted by PITHOCRATES - June 29th, 2012

Fundamental Truth

Magna Carta led to Constitutional Monarchy and Representative Government

Medieval kings liked doing as they pleased.  From living well.  To expanding their kingdoms by force.  Or trying to.  As kingdoms got larger, though, this was more difficult to do.  Because the larger the kingdom got the more food they had to produce.  And kings didn’t feed their kingdoms from their castle vegetable gardens.  They needed the wealthy and powerful landowners.  Who owned the land.  Grew the food.  And provided the kingdom’s wealth.

These landowners made land valuable.  By growing food on it.  As famine was no stranger during the Middle Ages there was nothing more important than growing food.  Those who did became wealthy.  And their estates became mini kingdoms.  With lots of peasants working the fields.  And lots of soldiers to defend their land.  And to fight for their king in times of war.  Kings needed to maintain good relationships with these wealthy landowners.  To keep them supporting their kingdoms.  And to prevent any one of them from rising up and challenging the king for his throne.

King John of England was hurting his relationships with the wealthy landowners.  He fought a lot of expensive wars across the English Channel in France.  Which required high taxes on the English landowners.  The barons.  Worse, King John lost a lot of his battles in France.  Losing the barons some of their Normandy lands.  So the barons were becoming a little disgruntled with their king.  And they rebelled.  Eventually forcing the king to place his Great Seal on Magna Carta.  Limiting his powers.  It didn’t change things much at the time.  But it would lead to constitutional monarchy.  And representative government.

The Patriots of 1776 were none too keen on Creating a New Central Power

Kings don’t like limits on their power.  King John would go on to renounce Magna Carta.  And got the Pope’s approval to not honor the promises he made with the barons.  But these barons sowed the seeds of representative government in England.  And the Western World.  Greatly influencing the Founding Fathers in America.  Whose Constitution placed great limits on the government’s power.

The Americans were having some problems with their Articles of Confederation.  The sovereign states were taking care of themselves.  Sometimes at the expense of the other states.  Or the new nation.  And the new nation wasn’t making much progress in the international community.  A bit of a laughing stock to other nations.  Who were all sure it was only a matter of time before the American colonies would be British again.  For once the war was over there was little united about the states anymore.  So James Madison urged a meeting of the several states to revise the Articles of Confederation.  To help make a more perfect union.  And to move the new nation forward.  They met in Philadelphia in 1787.  And caused a firestorm.  For they didn’t revise the Articles.  They threw them away.  And wrote a brand new Constitution.

This inflamed a lot of the Patriots of 1776.  Who had voted to sever the bonds from a distant central power about a decade earlier.  And they were none too keen on creating a new central power to replace the one they just banished.  It took awhile but with the presence of George Washington and some words from Benjamin Franklin, two of the most trusted and experienced Americans who sacrificed a lot in securing their independence, they completed their task.  It wasn’t a perfect document.  But it was the best they were ever going to produce considering the sectional differences in the country.  And they sent it to the states for ratification.  James Madison, Alexander Hamilton and John Jay helped to secure ratification by writing a series of articles that we know today as the Federalist Papers.  Some of the finest Constitutional scholarship ever written.

As Few as Five People in Black Robes can Fundamentally Change the Nation

Key to the Constitution was the separation of powers that restricted the power of the new federal government that no one trusted.  There was a legislature to write law.  An executive branch to enforce law.  And a judicial branch to interpret law.  To make sure that the other two branches did not violate the Constitution.  Such a system would have really crimped King John’s style.  For the law was above all the people.  Including the executive.  He could only do the things the laws allowed him to do.  And the things the laws allowed him to do he could only do if the legislature agreed to pay for them.  It was a system of checks and balances that helped the nation to grow while maintaining personal liberty.

King John would have been particularly irked by the legislature.  Made up by representatives of the people.  Who enacted legislation that was in the best interest of the people.  Not him.  Fast forward to modern times and you find history littered with people who wanted to expand their power only to have that representative body of the people foil them.  Ruling elites.  Modern aristocrats.  Those who feel an entitlement due to a superior education.  A superior bloodline.  Or simply like-minded people who would rather have the days of unlimited power like they had in Medieval Europe.  Before the barons had to muck up the works with Magna Carta.

Over time they learned how to bring back some of the old ways.  The easiest way was just to get people to vote for them.  And they did this by giving them a lot of free stuff.  But there were some things that they just couldn’t bribe out of the people.  So they turned to the courts.  And did a little legislating with activist judges.  Sometimes bringing a suit all the way to the Supreme Court to create a law where there was no law.  Abortion is now legal even though there was never any federal legislation addressing it.  While there was plenty of state legislation forbidding it.  Until seven men in black robes overruled the will of the people in those states.

The Supreme Court is powerful.  For as few as five people in black robes can fundamentally change the nation.  Which is why presidential elections are so important.  Because presidents nominate judges to the Supreme Court.  And those on the Left depend on the timely deaths and/or retirements of Supreme Court judges so they can nominate activist judges.  To get a majority on the high court to rule in their favor on bad law.  Such as Obamacare.  An unpopular law.  A law the majority of the people want repealed.  A law that became law only with subterfuge (the mandate is not a tax).  A law that clearly violated the Constitution (forcing people to buy something).  Yet five people in black robes just fundamentally changed the nation by voting that Obamacare was Constitutional (the mandate is a tax).  Which just goes to show you that where there is a will there is a way.  A way to rule like a king.  Against the will of the people.



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Mercantilism, Royal Navy, Napoleon, Pax Britannica, Corn Laws, David Ricardo, Comparative Advantage, European Union and NAFTA

Posted by PITHOCRATES - May 22nd, 2012

History 101

Mercantilism gave Britain the Royal Navy which Ushered in the Pax Britannica

Great Britain had a rough go of it at the end of the 18th century.  They lost their American colonies in the American Revolutionary War.  A war that started over the issue of taxation to pay for the previous Seven Years’ War.  So instead of securing new revenue to pay down old debt they incurred new debt.  The French Revolution closed out the century.  Causing concern for some in Britain that their monarchy may be the next to fall.  It didn’t.  For the constitutional monarchy and representative government in Britain was a long cry from the absolute monarchy that they had in France.  So revolution did not come to Britain.  But war did.  As the French expanded their revolution into a European war.  Pulling the British back into war with their old enemy.

With a large conscripted French Army and the concept of total war France made total war.  Napoleon Bonaparte won a lot of battles.  Conquered much of Europe.  Even marched back and conquered Paris.  Proclaimed himself emperor of France.  And continued waging war.  Including an ill-conceived invasion of Russia.  Which marked the beginning of the end for Napoleon.  And the French Empire.  Weakened from war France saw her old nemesis, Great Britain, rise as the first superpower since the Roman Empire.  And like the Romans’ Pax Romana Britain entered a century of peace.  Pax Britannica.

The reason the British could do this was because of their mercantile past.  They set up colonies and international trade networks.  And they used the proceeds from that lucrative trade to finance the greatest naval power then in the world.  The Royal Navy.  And the Royal Navy would help keep the peace in the Pax Britannica.  She became the world’s policeman.  Making the world safe for trade.  Especially on the high seas.  But then something interesting happened.  She broke from her mercantile past.  Because they saw the shortcomings of mercantilism.  One of which produced wealthy landowners at the expense of a hungry population.

When the British repealed the Corn Laws in 1846 Food Prices fell and the Standard of Living Rose 

The British Corn Laws were a series of laws protecting those who grew cereal crops.  The stuff we grow that has edible grains.  Corn, rice, wheat, barley, etc.  What we call staple crops as they form the basic sustenance of humans everywhere.  We grow these in greater abundance than all other foods.  And when you look at the grain size you come to one realization.  It takes a lot of land to grow these crops.  And who owns large tracts of land?  The landowning aristocracy.  A small group of people with a lot of wealth.  And a lot of political influence.  Hence the Corn Laws. 

The Corn Laws were legislation with one goal.  To prevent the British people from buying less expensive food.  By either forbidding any importation of cheaper grains until the domestic price had reached a certain price level.  Or adding tariffs to the less expensive imports so the landowners could still sell their grains at higher prices.  Thus preserving their wealth.  And they made specious arguments about how lower-priced food was actually bad for the people.  For it was just a way for manufacturers to maximize their profits.  For if food was cheaper they could pay their workers less.  Being the greedy bastards that they were.  So the only fair thing to do was to keep food prices high.  To keep the living wage high.  To force manufacturers to pay their workers more.  You see, the only way to help the poor and middle class was to let the wealthy landowners become even wealthier.  By keeping the price of the food they sold high.

Opposition grew to the Corn Laws.  People studied the works of their fellow countrymen.  Adam Smith and David Hume (both Scottish).  And the Englishman David Ricardo.  All great economists and thinkers.  Who were all proponents of free trade.  Ricardo’s Comparative Advantage basically proved the case of free trade over the protectionism of mercantilism.  Eventually the political power of the landowners could not overcome the economic arguments.  Or a famine in Ireland.  And, in 1846, they repealed the Corn Laws and adopted free trade.  Food prices fell.  Leaving people with more disposable income.  To purchase the goods the Industrial Revolution was making.  Increasing their standard of living.  While small famers had to leave their farms being unable to farm efficiently enough to pay their bills at the prevailing prices.

The Success of NAFTA proves David Ricardo’s Comparative Advantage

Mercantilists and other opponents to free trade like to point at the human costs.  Small farmers losing their farm.  Just so they can preserve some semblance of privilege to protect the high prices in their industry.  But it was becoming more and more difficult to make the argument that the masses were better off paying higher prices.  Because they’re not.  Lower consumer prices increase the standard of living for everyone.  Higher living standards create healthier living conditions.  And reduces child mortality.   For the greatest killer of children in the world is poverty.

The British were both a military and an economic superpower during the 19th century.  But someone was chasing her.  The Untied States.  Who was feeling her economic oats.  Her economy would catch up and surpass the British.  Making it the mightiest economic power of all time.  How did this happen?  Two words.  Free trade.  The United States was the largest free trade zone in the world.  The economic advantages of all those states trading with each other freely across their state borders made Europe stand up and take notice.  And in response created treaties that ultimately led to the European Union and the Eurozone.  To replicate the large free trade zone of the United States.

Back across the Atlantic the Americans, Canadians and the Mexicans took it up a notch.  And created the North American Free Trade Agreement.  NAFTA.  Extending the free trade that existed in each of their countries across their international borders.  The mercantilist fought against this.  Because protectionism, restrictions and tariffs helped the privileged few protect the high prices in their industry.  In America they talked about a great sucking sound as all American jobs went to low-wage Mexico.  Some manufacturers did move to Mexico.  Primarily because like the small farmers in Britain after the repeal of the Corn Laws they could no longer sell at prices to meet all of their costs.  But it was not as the mercantilists predicted.  Yes, imports increased.  In 2010 they were up 235% from pre-NAFTA 1993.  But exports were up, too.  Some 190% for the same period.  Proving Ricardo’s Comparative Advantage.  By focusing on what we do best and trading for everything else all countries do better.



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LESSONS LEARNED #36: “Politicians oppose across the board tax cuts because they are not politically expedient.” -Old Pithy

Posted by PITHOCRATES - October 21st, 2010

No King Ever Ruled Without the Consent of Money

There were kings.  And there were wealthy landowners.  Kings may have been sovereign.  But the wealth lies with, as you may guess, the wealthy landowners.  Kings needed money.  Because doing king ‘things’ got expensive.  War, armies, navies, festivals, feasts, castles, palaces, churches, etc., were very expensive.  So kings taxed their subjects to raise the money they needed to be king.  And when it came to money, the vast majority (i.e., the peasants) had little.  It was the peasants’ landlords who had the money.  And it was they who paid the bulk of the taxes.

But it was a two-way street.  Because it was their money, they, the wealthy landowners, had a say in how the king spent that money.  This was a restraint on the king’s power.  There were laws to protect the property rights of these landlords.  Now.  And in the future.  Property owners could pass their property on to their heirs.  As well as their political standing with the king.  Thus the rich and landed aristocracy passed on both their property and their nobility through inheritance.  Thus kings and Nobility lived by the consent of the other.  And they each lived by the consent of money.

The Roman emperors spent so much money near the end of the Roman Empire that they brought their advanced civilization to an end.  The landed aristocracy survived, though.  They just served a different sovereign.  The masses (i.e., the poor peasants) still worked the land.  The landlords still held the wealth.  Kings would come and go but this way of life (feudalism) remained.  Kings ruled as long as the landed aristocracy didn’t object too much.  Which they did in England in 1215.  The landed aristocracy met King John on the field of Runnymede.  Seeing his power was not absolute, the king reluctantly set his seal to the Magna Charter.  Constitutional monarchy would reign in England.  And England would reign supreme in the Old World.  And in the New World.

No Taxation Without Representation

The constitutional monarchy that developed consisted of the Crown and a bicameral Parliament.  The two houses of Parliament represented the needs of the few (the House of Lords) and the many (the House of Commons).  Thus the needs of the one (the sovereign), the few (the rich) and the many (the not rich) were balanced against each other.  It was a pretty good system.  The best in its time.  An English citizen had a better and more comfortable life with greater liberty than citizens of most other countries.

This liberalism unleashed a flurry of economic activity.  It created an empire.  International trade exploded.  England became a leader in farming and agriculture.  This knowhow spread throughout her empire.  As did her representative government.  Which they established in their North American colonies.  Perhaps a bit too firmly.  With the costs of world war came the need for higher taxes.  The British had just defeated the French and took possession of all their possessions in North America.  Her English subjects there were now free from French aggression.  And Parliament wanted these subjects to pick up a large part of that war tab.

Well, this didn’t go over well in the colonies.  For they had no representation in Parliament.  They had their own representative governing bodies in the colonies.  But they were subject to royal governors appointed by Parliament.  Without a vote in Parliament, they had no say in matters of taxation.  This was very un-English.  For the English nobility consented to taxation in exchange for having a say in how the king would spend those taxes.  As the landed aristocracy protested in 1215, the Americans protested this taxation without representation.  Eight war years later and America left the mother country.  Another few years later they ratified the Constitution and created the United States of America.  Which came to be because a governing body violated the sacred covenant between a king and his subjects.  A king may only rule as those who pay the kingdom’s taxes approve.

Universal Suffrage Increases Our Suffering

Because the new American government taxed property owners, property ownership was a requirement to vote.  In other words, those with the most to lose (those paying the taxes) had a say in how the government spent their taxes.  It kept the government honest.   By limiting the vote to those who had ‘skin in the game’ it made it hard for government to build palaces for themselves.  Because there was a direct connection between the source of funding and what that funding was used for.  The government may persuade the tax-paying voter for the need for a national postal system.  But a palatial palace was a much harder sell to the one footing the bill.  Especially when that person would never enjoy its benefit.

Such a system led to responsible government.  It minimized political corruption.  And if there is anything a politician doesn’t like it’s this.  They like corruption.  They thrive on it.  It’s their raison d’être.  And this responsibility thing just didn’t cut it.  They need people to vote who have no skin in the game.  People they can buy.  So they can live the good life.  Like in days of old.  Enter universal suffrage.  Where a politician can promise people other people’s money.

Wait a minute, you mean I can have a say in how other people spend their money?  Sweet.  Gimme gimme gimme.  I me mine.  Tax the rich.  Health care is an entitlement.  I mean, as long as someone else is paying, I’m for sale.  Promise me whatever I want and I will vote for you.  And forget what Benjamin Franklin warned us about: 

When the people find they can vote themselves money, that will herald the end of the republic.

Money Talks; Egalitarianism Walks

It probably started with Martin Van Buren.  Creator of the Democrat Party.  He created the party machine.  Patronage.  Payoffs.  And buying votes.  Dirty, filthy politics began with him.  And the Democrat Party.  Beginning with the campaign for Andrew Jackson, politics have gotten worse ever since.

It’s about the money now more than ever.  With the power to tax, government has a near unlimited source of money.  And with it they can get power.  By promising money to people that don’t have money.  Lots of it.  Thanks to universal suffrage, they can bus as many poor, indigent and government-depended people to the polls as possible.  And the more of them the better.  For they will vote for whoever promises to give them the most free stuff.  And why not?  They have no skin in the game.

And by voting themselves a permanent entitlement, they will make themselves a permanent underclass.  Where they will remain poor, indigent and government-depended.  As government spending continues to grow unchecked, it will push people down the economic ladder until the middle class disappears.  There will be only the rich (the government and the government-connected).  And the poor.  Just like in days of old.  Which is the goal of our tax policy.  You see, across the board tax cuts do not enhance the dependency-power relationship.  But targeted tax cuts do.  That’s why Big Government favors a complicated tax code.  It enhances the dependency-power relationship.  That empowers Big Government.  Throws egalitarianism out the window.  And makes life good for the ruling elite.



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