Don’t Restrictions on Freedom Affect the Quality of Life?

It is hard to believe that the Commission on the Measurement of Economic Performance and Social Progress would consider that freedom and personal responsibility have little relevance to the quality of life, but I haven’t been able to find any discussion of freedom or personal responsibility in their recently published report. The Commission, whose members include Amartya Sen and Joseph Stiglitz along with a list of other prominent academics, was established by the President of France, Nicolas Sarkozy.

The Commission’s report seems to have plenty to say about the limitations of GDP, and various issues concerning measurement of quality of life and sustainability, but the closest it comes to recognition that freedom might have some relevance to the quality of life seems to be in a sentence discussing freedom to exercise political voice. While it is good for people to be permitted to complain about restrictions on their liberty, it seems to me might be better if they had less restrictions on liberty to complain about. The authors give the impression that they consider that only the latter two words in the call for “liberty, egality and fraternity” are relevant to the measurement of social progress.

I would have been pleasantly surprised if the Commission’s report had endorsed the theme running through this blog that human flourishing must be a self-directed activity and that liberty is necessary for self-direction. (Some posts discussing these concepts are here, here and here.)

However that would have been too much to hope for. Although the relevance of rights is widely recognized in discussions about political institutions, the importance of the right to self-direction is often overlooked when it comes to discussions of the merits and demerits of alternative policies. Rights are routinely overridden when democratically elected governments consider that more important matters are at stake such as “social justice” or even the well-being of the people whose rights are infringed.

I had hoped, nevertheless, that the report would give some recognition to research findings that people value freedom. For example, it could have mentioned John Helliwell’s finding that people tend to have higher life satisfaction in countries in which a high proportion of the population are satisfied with their freedom to choose what to do with their lives (see NBER Working Paper 14720). The Gallup World Poll shows that satisfaction with freedom in France (82%) is somewhat higher than the U.K., but lower than in the U.S. (88%), Australia (91%) and Denmark (96%).

The fact that the vast majority of people in democracies tend to be satisfied with their freedom is related to economic freedom and civil liberties (as shown here). In addition, people would not be expected to feel that their freedom is being unduly restricted unless they are not permitted to do things that they actually want to do. But their sense of personal competence and self-respect must be weakened when responsibility for important aspects of their lives – such as family health care, education and saving for retirement – are taken out of their hands by paternalistic governments.

There is some survey information available to compare the extent that people in different countries feel that they have personal responsibility for what happens in their lives. Data from the World Values Survey shows that French people tend to feel that they have less control over their lives than people in the U.K., U.S. or Australia. The French also scored lower than people in the U.K, U.S. and Australia on the Gallup World Poll question asking whether respondents were proud of something they did yesterday. The Commission seems to overlook such matters.

I am sympathetic to the Commission’s view that more research should be done to assess the links between various dimensions of the quality of life. It is disappointing, however, that the Commission does not recognize freedom as an important dimension of the quality of life.

A Guide to the London Bullion Market

I have mentioned the LBMA’s “A Guide to the London Bullion Market” as few times on this blog. It is now available on their website.

I would strongly recommend it to anyone who wants to increase their understanding of how the gold industry operates, particularly at the wholesale level. The sections on gold forwards, lease rates would also be of value to those interested in Professor Fekete’s work on the basis.

The Government-Based Economy

I really got a laugh out of the report from Bloomberg that the Democratic Party of Japan (known in the parlance as DP) won an historic victory in the recent elections, coming to power for the first time in decades with “a pledge to support households battered by two decades of economic stagnation”, whatever that is supposed to mean, but which is, upon even casual inspection, Standard Political Crapola (SPC).

The interesting part is that the new prime minister, a guy named Hatoyama, said “he’ll avoid more bond sales, so new spending will depend on his success in shrinking the bureaucracy and public works programs”, which is so laughably, ludicrously impossible, especially in such a corrupt, lopsided economy that it makes me, a stupid American who really doesn’t know what in the hell he is talking about, who lives thousands of miles away, in another country and hemisphere, turn up his nose at the sheer stink coming from that idea! Phew!

Of course, this valuable piece of Righteous Mogambo Scorn (RMS) is because it is obviously, obviously too, too late for that.

It is too late, just like it is too late here in the USA, and just like it is too late almost everywhere else, too, where years and years of increasing government spending and control means that government IS the economy, and shrinking the size of government obviously shrinks the economy! Hahahaha! Oops!

So, to the Japanese, I say, “Hahaha! Too late for that, you dumb Japanese chumps! Now you are going to pay a huge penalty for being such morons with your fiat money, and then especially involving the idiot Americans and their fiat money!”

Anyway, crude and rude xenophobic insults and senseless bigotry aside, an example of this is that, here in America, the birthplace of sheer stupidity in central banking (by which I mean the disastrous Federal Reserve), our economic performance as a result of the same kind of constant stimulus is that non-farm payrolls have been falling and are now about back to where they were in 2000, meaning absolutely zero (non-farm payroll) growth for 9 years!

A lot more people seeking the same number of jobs is pretty bad, especially when the number of people is still rising while the number of jobs is actually still falling! Yikes!

Meanwhile, however, the government has spent its time growing bigger and bigger, like a huge, cancerous, oozing lump that is growing on your neck and already people are being repulsed by both the sight and the smell of it, and now there are 6% more people on “government payrolls” than there were in 2001, which is only the tip of the iceberg.

And, as if to add insult to injury, they all make more money than you! Hahaha! For the first time in history, the average pay of a government employee is higher than the average wage of non-government employees! And when you add in their generous benefit packages, they make a lot more, and they are not going to take it kindly that you want them to suffer losses in pay and employment like us average morons out here.

So that is One More Big Reason (OMBR) why the government will keep borrowing more and more and spending more and more, which is why the Federal Reserve must create more and more money and credit, which expands the money supply more and more, which makes prices go up more and more, sometimes in bubbles, which must, and always do, bust back to their intrinsic value.

And such government and banking insanity as we are seeing today is the One Big Reason (OBR) – perhaps THE One Big Reason (TOBR) – why you must buy gold, silver and oil, apart from it being, you know, so easy that you squeal with girlish delight, “Whee! This investing stuff is easy!”