Showing posts with label property rights. Show all posts
Showing posts with label property rights. Show all posts

Monday, September 24, 2012

Property Rights Equals Prosperity Equals Freedom


Folks rarely think about what makes human societies prosperous. Some folks are sufficiently delusional to believe that prosperity comes from the government, considered by many to be the cornucopia of plenty. The truth is that government is a prosperity destroying machine and the more power government has the greater its ability to enforce perpetual property.

 Prosperity is derived from only one source: secure property rights. Failed and impoverished nations suffer a severe deficit of secure property rights. The International Property Rights Index tracks the security of property on a nation by nation basis. The criteria includes:

1. Overall Score

2. Legal and Political Environment (Judicial Independence, Rule of Law, Control of Corruption, Political Stability)

3. Personal Property Rights (Protection of Physical Property Rights, Registering Property, Access to loans)

4. Intellectual Property Rights (Protection of Intellectual Property Rights, Patent Protection, Copyright Piracy)

Nations with the most secure property rights are:

1. Finland         8.6
2. Sweden        8.5
3. Norway        8.3
4. Singapore     8.3
5. Switzerland   8.3
6. Denmark       8.2
7. Luxembourg  8.2
8. New Zealand 8.2
9. Netherlands   8.1
10.Canada        8.0
11.UK              6.9
12.Hong Kong  7.8
13.Austria        7.8
14.Australia     7.8
15.Germany     7.7
16.Japan          7.7
17.Ireland        7.6
18.Belgium      7.5
19.US             7.5
20.France       7.4

The US continues to decline in secure property rights, largely because the growth of government power has directly slashed the security of property rights in a nation that once was the most prosperous nation on the planet because of the security of its property rights. As America nosedives into the collectivist cesspool of statism, the middle class is vanishing, the poor are getting poorer and prosperity is nothing but a distant memory.

Even more interesting is the Prosperity Index.  The most prosperous nations are:

1.  Norway
2.  Denmark
3. Australia
4. New Zealand
5. Sweden
6. Canada
7. Finland
8. Switzerland
9. Netherlands

It's no coincidence that nations with the most secure property rights also happen to be the most prosperous.  If we look at the poorest countries it's clear that they are poor precisely because they lack secure property rights.

The entire Middle East and the Muslim world is deficient in secure property rights. Hence, it's got some of the poorest nations on the planet.  However, the Muslim world just isn't deficient in secure property rights, it's massively deficient in political freedom and social issue tolerance.

The flow of capital, the lifeblood of economic prosperity, absolutely does flow to nations with political stability, liberty, tolerance and secure property right because these are all significant components in the equation to achieve prosperity.

Friday, September 7, 2012

US Foreign Policy and Freedom: Let's Talk Haiti


Naïve Americans are quick to applaud our military interventions in the false belief that we are doing good things, spreading Jeffersonian democracy and actually helping people who are suffering. But the truth is far different, very ugly and so horrifyingly repugnant that it should constitute an assault on our moral instincts.

Haiti and its suffering is a profound example of a nation destroyed and ruthlessly plundered for 200 years by Spanish, French and US corporate imperialists. First the island (discovered by Columbus and named Hispaniola) was invaded and exploited by Spain who enslaved the native population and introduced slavery. After the Spanish were lured to Mexico in search of gold and better exploitation opportunities, Spain lost interest in Hispaniola and the French arrived and started importing over 500,000 West African slaves. Huge sugar and coffee slave plantations were established. If Americans think US slavery was a horror, and it was, the slavery in Central and South Americas was far worse because slaves were literally worked to death and starved because it was far cheaper to keep importing fresh new slaves from Africa than to feed them and keep them healthy.  Life is cheap and expendable.  The native Indian Haitians were pretty much wiped out. Nevertheless, the French continually plundered Haiti, cut down its forests for timber and French imperialist slavers amassed great fortunes.

Then one of the most remarkable and successful slave revolts in all of human history commenced in Haiti in 1791 under the leadership of Toussaint Louverture, a situation that ultimately achieved independence for Haiti in 1804. But the French also demanded outrageously exorbitant reparations for monetary losses resulting from their slave plantations, a situation that would be the equivalent of the US reimbursing former US slave owners for their monetary losses after the Civil War. Haiti continued to pay France reparations until 1947 and most of its budget went to paying off slave debt to France for the French crime of human slavery. Haiti was mired in financial problems and freedom never really flourished under the weight of such massive financial depredations. Adding significantly to Haiti’s problems was the fact that a series of corrupt governments continued to administer Haiti along the lines of the model of colonialism. Moreover, Haiti was constantly forced to borrow to service its debt to France.

The national bank in Haiti that was initially established by the French ended up being owned by National City Bank (NY) who also had deep connections with the U.S. State Department and the Woodrow Wilson administration. The Banksters always enjoyed wielding their vast power and so the National City Bank convinced Woodrow Wilson, a Democrat, to invade, occupy and effectively control all of Haiti as a wholly owned subsidiary. In 1915, the US invaded Haiti to commence its corporatist and Bankster plunder; US corporations seized the best lands for plantations that were worked by impoverished serfs; we booted the Haitians to the hills and typical colonial resource exploitation continued unabated. After a brutal and ruthless US occupation from 1915-1934, the US installed a series of US approved dictators to guarantee into perpetuity our ability to plunder and exploit the Haitian people. It’s how Haiti got the horrors known as Papa Doc and Baby Doc and an economic death sentence.

Studies have proven that the only real cure for poverty is secure property rights. Norman Van Cott, an economics professor at Ball State University, wrote a piece on the sad state of Haitian property rights.

Trashing private property rights sowed and reaped Haiti devastation 
My point is that Haitian land stripped of trees and Haitian land covered with earthquake debris have a common cause — a dysfunctional system of property rights. The dysfunction promotes an economic myopia where any future benefits — from preserving trees to constructing longer-lived buildings — become less important in economic calculations when recipients are uncertain of receiving those benefits…… The economist, Hernando de Soto, in his celebrated book “The Mystery of Capital,” included specifics about the pathetic state of private-property rights in Haiti. He estimated that 68 percent of Haitian city dwellers and 97 percent of their rural counterparts live in housing for which no one has clear legal title — no one. Lack of property title in Haiti is not surprising, says De Soto. For Haitians to settle legally on government land, they must first lease it for five years. Finalizing a lease requires 65 bureaucratic steps, taking two years on the average.

Then things get worse: Subsequent purchase requires another 111 bureaucratic steps, taking 12 more years. That adds up to a total of 19 years of red tape and paperwork in a country where, to compound the problem, illiteracy is pervasive.
The earthquake that hit Haiti killed at least 200,000, yet many nations have suffered similar and even higher Richter scale earthquakes but experienced extremely low death tolls. Because of the lack of secure property rights, Haitians lived in deathtrap shacks that were cheaply constructed. The US never cared one iota that the Haitian people effectively had no property rights and hence no incentives to build stronger homes. It’s a story that is reverberated over and over wherever America intervenes. The US has a sophisticated system of secure property rights but we were too busy exploiting places like Haiti for the financial benefit of Banksters and multinational corporations to even consider implementing a system of secure property ownership and self governance for the Haitians.

The importance of secure property rights cannot be overemphasized and the Global Property Guide (www.globalpropertyguide.com ) compiles indexes of the security of property rights of nations.

Haiti’s Property Rights Index was 10 (as was Cuba) but other Caribbean nations fared much better – Barbados 80, Bahamas 70, Dominica 65, Trinidad 50, Jamaica 45, Belize 40, Dominican Republic (who share the Island of Hispaniola with Haiti) with 30.

The website also compiles an index of economic freedom with rankings ranging from Free (80-100), Mostly Free (70-70.0), Moderately Free (60-69.9), Mostly Unfree (50-59.9) and Repressed (0-49.0). It’s no surprise that on the economic freedom scale Haiti was rated “Mostly Unfree” at 50.82 while nations with more secure property rights in the region fared much better with the Barbados, Bahamas, Trinidad, Jamaica, Belize and the Dominican Republic all being Moderately Free in the economic liberty category.

Interestingly, in the US the Property Rights Index is 85, Canada is 90 and Mexico is 50; Economic Freedom Indexes are 77.97, 80.43 and 68.28 respectively. The US has been declining in economic freedom as well as secure property rights and is no longer leads the world in these categories that most affect prosperity.

The deeds of our government directly reflect on the American people and our national and personal conscious because we effectively endorse the activities of our government and military with our votes. By willfully failing to acknowledge the truth about what America does, why we do what we do and who benefits, Americans continue to perpetuate the legacy of denial.

Saturday, August 4, 2012

What's Really Wrong With Greece? It Lacks Secure Property Rights, and US Property Rights Keep Declining



The Washington Post had a most interesting piece on property rights in Greece.

Greece faces difficult odds with privatization
The gods lived at Mount Olympus, but the gamblers live at a casino on Mount Parnitha, and, lately, Greek leaders have been praying to strike it big here.

The Greek government owns an unusual half-stake in this mountaintop casino, the second-largest in the country, and Prime Minister Antonis Samaras has vowed that selling it — along with dozens of other properties, buildings and companies across the country — will be a top priority in last-ditch efforts to save the Greek economy.

But with time ticking on Greece’s bailout, and the country’s future on the shared euro currency ever more in question, the odds are stacked against him.

Greece owns large swaths of sectors like gambling that in other countries are in private hands. The arrangement helped derail Greece’s finances in the first place, with powerful unions bidding up workers’ salaries to unsustainable levels and money leaking to politically connected contractors. Now, few investors want to bet their money on these properties in the middle of what Samaras has called “our version of the Great Depression.” And it is not politically attractive to sell off Greece’s crown jewels at fire-sale prices.
Greece is the collectivist dream of every socialist Marxist big government statist. Socialists have been ruling Greece for decades and its corrupt government and powerful public sector labor unions have literally plundered and bankrupted the nation, in addition to stripping Greeks of their property rights and liberty. Nobody summarized the state of Greece better than Michael Lewis in his awesome book Boomerang.
As it turns out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past twelve years the wage bill of the Greek public sector has doubled, in real terms – and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a years. Twenty years ago a successful businessman turned minister of finance….pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension…..and there isn’t a single private company in Greece with that kind of average pay.”
Back to the Washington Post article, a Greek government official opines on the very problematic issue of privatizing Greek state owned property and business with the statement “There’s just no market”.

He's probably right but why? Greece does not have secure property right and in fact has some of the least secure property rights protections in the western world. Of course, insecure or state restricted property rights are also a chronic socialist statist dream. There are organizations that track and rate nations on the security of their property rights. International Property Rights Index uses several benchmarks to assess the security of property rights to arrive at an overall rating and index.  These benchmarks include legal and political environment, personal property rights and intellectual property rights.

The top 10 nations with the most secure property rights, here.:

1. Finland           8.6
2. Sweden          8.5
3. Norway           8.3
4. Singapore       8.3
5. Switzerland     8.3
6. Denmark         8.2
7. Luxembourg    8.2
8. New Zealand   8.2
9. Netherland      8.1
10. Canada         8.0

The United States (7.5 Index Ranking) is ranked 19, behind the top 10 and also behind United Kingdom, Austria, Hong Kong, Australia, Germany, Japan, Ireland and Belgium.  America is a nation that is experiencing a decline in the security of property rights, largely because of the growth of government power that hacks away at property rights.

Greece ranks 57th on the list with a pitiful 5.6 and is lower than Rwanda and many other nations deemed 2nd or 3rd world.

Secure property rights are the absolute and only foundation for liberty and prosperity, and the stronger they are the greater the prosperity and liberty of the people.  Without economic liberty, there can be no liberty and without secure property rights, there can be no economic liberty.

Greece is such a totalitarian collectivist mess that it can't even sell off its massive state owned real estate and business holdings because without secure property rights, there will be no buyers.  Simply put, nobody with money will invest in any property and asset when it can be seized or plundered at will by government, its goons and the corrupt rent seekers perennially attached to the state (oligarchs, plutocrats, corporatists, fascists, public sector unions etc.).