A commentary on the Sandy Hill election debate, May 2018

In response to "Do we call that a debate?" in the June-July print edition of Image, and as the Ottawa-Vanier riding candidate for the Freedom Party of Ontario I have several comments.

The article starts off by applauding the technical organization of the debate but incorrectly says that only three candidates showed up. In fact, only four candidates were invited - the Freedom Party was not. I registered as a candidate about a week after the election campaign started and then immediately contacted the debate organizers. They had already determined who would be invited and did not wish to have other participants. While I expressed my reasons why I thought my participation would provide positions very different from all the others, they politely declined and since I totally respect their rights to hold a peaceful event, invite whoever they wish and their freedom to exclude any people or opinions from their event, I attended the event as a spectator only. I found the discussion uniform and a sad comment on the state of our culture.

I was invited and did participate in a debate in Beacon Hill and at Samuel Genest High School (in French and for students only). In these I consciously avoided attacking the individual representatives of the other parties (who I believe to be mostly good but misguided) and the often awful platforms they held and instead made statements demonstrating the correct principles of a civil society, pointed out the moral and economic flaws of several existing widely adopted and even popular policies and explained why all my answers to questions were unified and consistent with those correct principles. 

The PC, Liberal, NDP and Green parties do not share my respect for individual rights, as demonstrated clearly by their long standing actions in government and their election platforms that restrict many freedoms and infringe many rights of Ontario citizens. Ontario has been sliding into greater government power, more central command of our economic activity and a progressive violation of our human rights for many decades, accelerating in recent years. This is a predictable pattern as the errors and damages caused by central planning and the elimination of millions of minds from decisions compounds on itself. When a government makes a rule, one relating to wage controls for example, it deliberately prevents people from rational consideration of all options, blocks freedom to negotiate and find agreement and replaces it by the opinions, wishes and whims of whatever group holds the reins of political power. It says "obey me or face the wrath of the people with guns I have in my control."  It is precisely this type of power that inevitably must corrupt those who hold it, even relatively benignly.

The article refers to the three speakers as inhabiting the same part of the political spectrum. In fact, even the absent PC party (which sometimes makes statements sounding like it values true freedom) has more ideas in common with the other three than it does with the Freedom Party. Whereas all four of them agree on fundamental socialist principles and differ only in degree or style of implementation, the Freedom Party holds completely to the principles required for a sustainable, peaceful and stable society of rational and free people - one where the purpose of government is to clearly define and strongly protect your rights to life, liberty and property and takes no action except for these purposes. We believe government is essential for a civil society but in contrast to the four parties mentioned we believe it violates its most sacred trust when it uses force to override the will of a citizen acting in the peaceful pursuit of his or her goals in life. In start contrast to the others, we believe that all economic and other exchange of values is properly done only by the consent of both parties.

I see the big three as the parties of Kathleen Horvath, Doug Wynne and Andrea Ford. I dare you to find an area where they differ on a matter of fundamental principle. I particularly note that the explicit policy of the other parties is to use physical force and the threat of it to sacrifice the rights, reasoning, choice and thus important parts of the lives of some citizens in order to supposedly benefit others. Of the three speakers present, the NDP candidate was the most strident and explicit about this - speaking eloquently with the passion of a consistent follower of Marx and Kant. The world is already full of examples of the human and  societal terminus of these ideas and it has always been destruction. Unfortunately, these are the dominant ideas in our culture today and unless radical changes are made, we will see a continuation of cultural decline.

David McGruer

Sandy Hill

Ottawa-Vanier Freedom Party of Ontario Candidate

Ontario Liberals are in love with the ideas of Karl Marx

Below is my quick response to the current Ontario Liberal campaign. They sent me an email asking me to support them in their efforts.  I declined and opted instead to send them a brief response.

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Unfortunately you have chosen to launch initiatives that are straight out of the ideology of Karl Marx. Each of the initiatives listed below requires a massive violation of the rights of Canadian citizens the government is elected to protect. I believe Sir Wilfred Laurier would recoil in horror at what the meaning of being a Liberal has become. In his lifetime he lived just long enough to see the ideas of Karl Marx start bloody revolutions that in the end resulted in the deaths of tens of millions of people across the world. More die daily as a result of these same ideas in countries like Venezuela, while countries that are throwing away these ideas like China and India are advancing more rapidly that any country in history.  The Liberal party ideology needs to return to its roots and re-discover the ideas that made Canada a great country – individual rights and a government that protects them, not one that violates them.

While volumes have been written about all that is morally and economically wrong with these ideas, I will simply state here how they violate the rights of citizens, with government forcibly sacrificing a part of innocent lives to the whims, wishes and wants of other people. These actions are the exact opposite of fair.

The five initiatives are:

1. A $15 minimum wage - violates the right of employees and employers to negotiate terms of employment contract free of interference from parties who are not involved in the contract.

2. A basic income pilot - violates the rights of those who are working to create value and exchange it for wages by seizing some of their money and giving to others who are not or who have chosen not to work in support of their own lives.

3. Free pharmacare for youth and children - violates the rights of all those who work to support their own lives and those of their family, forcibly taking part of their hard work and giving it to those who did not earn it.

4. Free post-secondary education - violates the rights of all those people who work to pay for the education of themselves or their loved ones and all the rest of society's producers too, forcing them to pay for the education of strangers at the expense of their priorities in life. Such an action raises the expenses of education, stifles innovation and competition, and punishes those who work the hardest and whose work is the most productive.

5. Rent control - violates the rights of the people who have saved and invested their capital to provide rental accommodations for willing tenants. Such an action can only cause less rental properties to exist and to reduce the quality of such properties.

A guaranteed income sacrifices producers

In an Ottawa Citizen column August 16, 2014, writer Toni Pickard proposes a guaranteed minimum income. She taught law at Queens University but apparently absorbed only marxist ideology instead of the correct principles of freedom, rights, prosperity, economics and capitalism.

Pickard claims that welfare demeans recipients and runs them ragged. Welfare is an immoral and counterproductive program that victimizes both its recipients and those whose rights are violated to pay for it. She claims a guaranteed income frees energy for work, when work naturally requires energy since it is a basic requirement of human survival. She claims technology eliminates jobs when in fact it creates new and better ones, raising the standard of living for all.  She claims there is no longer enough work for everyone, ignoring that the work to be done is infinite and only government interference through laws such as the minimum wage prevents full employment. She asks how we can enable people to live decently without sufficient work income, ignoring that reality requires individuals to earn their own living or perish and that her goal requires the sacrifice of the productive and rational to those who are not.

A state-enforced minimum income would be a horrific legacy, as has been discovered by the tens of millions of victims of marxism in Russia, China, North Korea, Cuba, etc. It is a monstrous idea that should be denounced at every opportunity.

Response to ACORN 2014 Ontario election questions

Remittance Justice - Legislation that will cap the fees of money transfer companies (like Western Union and MoneyGram) at 5% of money transferred. This would be inclusive of all fees. The legislation would also include enforcement and disclosure.

David McGruer, Freedom Party candidate response: No.
The Freedom Party believes that the only proper role of government is the protection of the individual rights of life, liberty and property and logical extensions of these.  As such, government should not interfere in the free decisions of citizens who choose to engage in economic trade. Thus, legislation to force companies to adhere to an arbitrary price determined by someone else's wishes is not a proper function of government. The Freedom Party would gradually withdraw interference in the trade between citizens so they may return to un-coerced exchange of goods and services without a sudden shock to the economy.

Healthy Homes/Landlord Licensing - Call for a policy review of the Residential Tenancy Act for the first time since 2006 in order to re-balance the act between landlords and tenants. To be included in legislation:

•  Vacancy Decontrol for full rent control.
• Successor landlords need to comply with Landlord Tenant Board orders placed on predecessor landlords. 
• Protect tenants from above the guideline rent increases that circumvent rent control laws in Ontario. 
• Implement a province-wide system of inspections and enforcement for rental housing standards.

David McGruer, Freedom Party candidate response: No.

Since government does not have a moral and proper role in controlling innocent people's lives, landlords and tenants must be left free to negotiate the terms of contracts they choose to enter. In a free society there should be no price controls of any kind and no government dictates about how citizens conduct their peaceful business affairs. The Freedom Party would gradually de-control the housing market so as to allow citizens and their businesses time to adapt to the changes, knowing what change is coming well in advance.

Minimum wage - Raise the Minimum Wage to $14/now (if no, then to what wage level?)
Index the minimum wage to the cost of living

David McGruer, Freedom Party candidate response: No.
Under a political system of freedom, where the individual rights of all citizens are protected equally, there are no rules that coerce citizens into or out of any specific economic contracts. There is no interference in the right of workers and employers to negotiate their wages.  Basic economics demonstrates that one effect of using force against innocent citizens through a minimum wage law is to create a class of unemployed people who are prevented by government from working. This causes damaging ripple effects through the economy and the lives of citizens. In a free society there is full employment for anyone who wishes to work. The Freedom Party would eliminate artificial barriers to employment that contribute to poverty.

Disability Rights - Greater allowance instituted before the claw back is administered for both Disability and OW.  Restore the Community Start Up and Maintenance Benefit.

David McGruer, Freedom Party candidate response: No.
In a free society the government is responsible for protecting the rights of citizens and disabled citizens have identical rights to all others. The act of taking money through force in order to give it to other people, whether they are disabled or not, is contrary to all the principles of fundamental rights and freedoms.  In a free society such functions are all done voluntarily through benevolent charities. The Freedom Party would work to gradually withdraw government from wealth confiscation and distribution but would work to make sure the most disabled in society are provided for. After decades of crowding charity out of this area, it will take a long time to restore a normal situation and so some existing programs would have to continue for a long time.

Payday Lending - Lower cap on interest to fixed fee of $10 plus interest charged at an annual rate no higher than 60%, plus a fee that is a fixed percentage of the dollar amount of the loan no larger than 5%.
Create a two tiered where people on assistance have access to a lower rate. Enforce the Ban on Roll-Over Loans by creating a real time user database to monitor and avoid roll overs company to company.

David McGruer, Freedom Party candidate response: No.
In a society of rights protection, no business that is making voluntary exchange with customers can be forced to adopt any arbitrary policies. Those who do not like a particular business method are free to shop from competitors or do without the service.  A free society allows all alternative business methods to be tried out and the market of customers determines the business success through their free choices.

Inclusive zoning enabling legislation - Inclusionary housing programs are a way for municipalities to use their development regulation and approval process to have private developers provide some affordable in all (or nearly all) market projects. It increases the amount of housing stock. While inclusionary housing policies are set by local governments it is very much up to the Province to ensure that these municipal approaches can be enforced and are not subject to endless challenges at the Ontario Municipal Board. The Province should ensure that municipalities have the authority to establish inclusionary zoning practices.

David McGruer, Freedom Party candidate response: No.

Housing has been made far more expensive than necessary through massive interference in the marketplace. Through zoning regulation, building regulation, labour regulation and other ways, the provision of low cost housing has been made uneconomic and undesirable by government policy.  In a free economy home builders will build homes at a wide range of qualities and prices to meet the wide range of demand and ability to pay.  In a free economy, adequate housing could be provided for a fraction of today's cost and charities would fill in the gap for the tiny fraction of citizens who are truly unable to afford basic aspects of life such as housing. The Freedom Party would gradually de-control the housing market so as to allow citizens and their businesses time to adapt to the changes, knowing what change is coming well in advance.

Discussion arising from "To curse machines is to curse the mind"

In April 2014 I posted a link to an article on Facebook. This prompted a response by a friend as follows:

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Machines are good because they decrease the amount of human labor necessary to perform certain tasks, sometimes by a factor of 100 or more. However, they do tend to exacerbate the problems already inherent in Capitalism, namely that anyone born without capital is dependent on others for their employment, and thus, their living. It is very difficult to get out of this position since within a Capitalist economy, a person with no capital has no leverage with which to raise themselves up. They must take what is offered or starve. 

The most faulty premise of Capitalism is the idea that a person is paid what they are worth. No, they are paid as little as the employer can get away with paying them. When a person has nothing to fall back on and must eat, that can be precious little. When a worker is paid so little that they can only afford the most basic necessities, then they cannot save, and if they cannot save money, then they will remain in a situation where they must take the low wages they are offered or starve.

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Naturally, I could not let such an attack on freedom go unanswered, so I composed the following:

Capitalism does not have inherent problems. The problems come from deviations from capitalism and to the degree of the deviations. This is not to say a free country under capitalism is a utopia since our survival and thriving require us to overcome the thousands of obstacles nature places in our way. 

Under capitalism every individual is responsible for his own life and cannot use force against others. Further, no group, no matter how large or how many votes they can obtain, can initiate force against individuals who have not violated the rights of others. Nature is metaphysically difficult to overcome - that is the challenge of survival we all face. To do it more effectively we think, create, innovate, build and produce, most often in cooperation with others via the division of labour. 

In a state of pure nature, man is a simple beast who fights for his life every minute of every day, killing and dying like other animals. Using his unique faculty of reason, man has learned to re-shape nature to make it more hospitable to his life. The re-shaping of his environment is man's most basic means of survival. A man in a capitalist society has an infinite advantage over one in a pre-capitalist society, since all the wonderful benefits of capitalism are already surrounding him and ready for him to leverage. All he requires is the use of his mind and he will be successful to the degree he applies reason to the challenges he faces. Capitalism abounds with stories of self-made men who started from nothing and reached the top of their field. 

The financial success of a man under capitalism is a pure function of how many of his fellow men are willing to trade values with him, and how much they value his product. It is not the man who produces a product who sets the price and value, it is his customers, who will use their own reasoning to decide what they are willing to pay, whose product offers them the highest value, and who they prefer to buy from. Under capitalism a producer has absolutely no power to compel anyone to buy from him at any price.

It is both logical and moral for an employer to pay the lowest wages the market will bear, since there is no other objective means of determining a price but by the market system. In a free market every consumer weighs all the alternative ways he could spend his money and prioritizes according to his individual preferences. The price system integrates all the preferences of all participants into a price hierarchy that is constantly adapting to men's shifting preferences. Producers who fail to offer buyers what they prefer are quickly run out of business while those who serve customer preferences are more likely to succeed. No one is guaranteed anything except the right to produce as rationally as possible and to spend as he sees fit for his own life.

If a worker is only paid subsistence wages, in a capitalist economy he is still infinitely better off than a subsistence worker in a pre-capitalist economy, where he would likely do physical labour from sunup to sundown yet still starve, suffer from horrible diseases, have little shelter or clothing, be disposed of by any random criminal who has no fear of justice, and die by the age of 25, having never had any of the rights protection enjoyed under capitalism.

The only solution offered by nature for a man who earns a low wage is to improve his value through the application of reason applied to the challenges of production - the same as we all must do. A capitalist society offers this man the very best opportunity to advance his goals since he benefits from the enormous knowledge capitalism has accumulated, benefits from the progress of all those who have come before, and gets to keep the product of his mind and labour. Until the discovery of capitalism, no society in history had accomplished even a fraction of what we have seen in just a couple of hundred years. A man who starts with nothing is not entitled to the product of others, not entitled to force others to pay him more than they wish and not entitled to steal from others (this is three ways of saying the same thing). Freedom and its corollaries are his only rights and capitalism is the system that fully recognizes this.

Response to Rick Gibbons on CFRA regarding minimum wage and other interventions in the economy

Rick, I was the caller who seemed "way out there" on this subject. I realize my statements seemed radical - and they are - because they represent a thoroughly principled stand in favour of individual rights. Unfortunately, Canada and most of the western world has been moving toward increasing controls, regulations and interventions in the economy for many decades now. This is because few people understand the nature and source of individual rights and have little or no economic education. Probably the greatest economist of all time, Ludwig Von Mises, thoroughly described socialism and capitalism about a century ago and has been proven correct a million times over ever since.

The value of any product or service can only be properly determined through free exchange. When one or both parties is subject to coercion, the price system cannot work properly and a ripple of distortions runs through the market. It is important to note that no one has a right to force another person into an agreement - it is thus not an agreement at all. If my work is only worth $7 on the market (determined by the amount a freely acting employer is willing to pay for a task) because I have little skill and experience, then making it illegal to hire anyone for less than $11 will not make my work more valuable, it simply encourages employers to seek productivity gains through means OTHER than hiring more people. Making it illegal for a low-skilled worker to find employment cannot help low skilled workers get experience and earn their way up the value chain. In fact, the most vulnerable people whose work has low value are the most harmed by using government force in the market for wages.

In a free society no one can ever be forced to accept a job for any price, such as $7. The existence of competition between both similar employers and all other potential employers drives market prices for all labour and all inputs into production. If I believe my work is worth $11 I am free to seek an employer who agrees and to sign a contract. If no one agrees, then that is a fact of reality I must deal with and it is morally wrong of me to recruit politicians to force an employer to pay me more than they are freely willing to. You see, employers must always pay a high enough wage to attract the employees they wish to keep, to keep their business operating efficiently. If other employers pay more for the same work, people recognize this market signal and change employers. It is the economic power of a free and uncoerced marketplace that keep an economy operating to maximize production, value, employment and wealth creation.

The side effects of government intervention in the economy are too numerous to cover here, but consider a few. Government has arrogated the control of the money supply, and since the 1930's has been inflating money, thus destroying the value of existing money. This harms the weakest in society most and causes consumer price inflation. It also serves as a wealth transfer from the general public to the beneficiaries of government spending, including corporations and selected politically powerful pressure groups. These receive newly printed money and the inflationary effect spreads through the whole economy, benefiting the first recipients the most. Often, at the end of the chain reaction are the most vulnerable, who do not understand economics and wealth creation - those on a fixed income, those who who not own equity, those who are unable to mount their own pressure group to feed at the government trough. The inflationary effect causes the entire price system to be distorted and less predictable, leading to abnormal production of some goods, hiring of some people, and lower overall economic output. The wealth of society is reduced and progress is slowed.

Some people then lobby government for a favour by asking for a minimum wage law - they ask for force to be applied against workers and employers who would otherwise agree on a wage as some level below the arbitrarily set "minimum". The minimum wage then raises the cost of production, leading to a further inflation of all prices in the economy, so everyone is paying more than before, including the minimum wage recipients. When the cost of living rises, the pressure groups go back to government and say the last minimum wage intervention is not working and it needs to be higher still. And so the cycle of disruption continues, while the pressure groups and the government ignore the fact they are causing inflation and harming those most vulnerable - again and again they persist, failing to make a permanent impact every time. They are ignoring the key economic facts of reality in pursuit of their belief that wishing to improve the financial status of an individual can make it so and ignoring the truth - that only by making my work more valuable and finding an employer who agrees can true value be created and actual improvement be accomplished.

There is another very different aspect of the poverty question that is almost always ignored - the study of what actually happens to the people who have a low income.

A November 2012 study titled “Measuring Income Mobility in Canada” by Charles Lammam, Amela Karabegovi, and Niels Veldhuis confirms what has been known for many years and what a reasoning  person should quickly realize: the portion of people who spend a long time in poverty is far smaller than many groups would have us believe.

Most studies of income differences are cross-sectional, that is they take a sample at a moment in time and analyze the data, dividing the population into income quintiles (five equal groups).  Such studies always show a certain fraction of the population is at the lower end (someone has to be) and a certain population living below what is called “the poverty line”. The data does not change much over the years, so people who view society in collectivist terms call for higher taxes on the productive members of society, more income and asset redistribution by the government powers and lifestyle support programs to help these supposedly poor people.

What these studies fail to do is track information longitudinally over time to see what actually happens to the individuals who are initially at varying levels of income.  Viewed this way, the problem of poverty is far lower than imagined since the large majority of those who are “poor” at a particular time do not stay poor. The table below is extracted from the study and demonstrates that in a short five years half of the lowest income people had moved to a higher income group.

As the time horizon was lengthened the results were even better, with 83% of the lowest earners moving up in a ten year period.  The greatest income gains were made by those who started out at the lowest levels.  This should not be surprising since many of those people are at the start of their earnings life and have less training, experience and value to employers than those with more experience.  It is entirely natural that their incomes would rise over time and that most of them would succeed.

Finally, the study looked more closely at how far the different groups moved.  Most notably, the lowest initial income quintile saw 26% move up by one group, 25% moved up two groups, 20% moved up to the top 40% and 12% moved up to the top 20% of all income earners.  This is certainly not a story of long term poverty and certainly is not a justification for the massive income redistribution called for and which often make it harder for the poor to rise while certainly punishing the more productive for being productive. That is a path to slower economic progress.

After just 10 years, only 17% of those who were in the bottom quintile were still in that group.  That’s about one sixth of the size of the problem often quoted.  We should celebrate the fact that despite the many government controls and redistribution plans  created over the decades, that we still have a free enough society to see 83% of the poorest people rise from poverty in a relatively short time. The study also looked at 19-year mobility and of course found it was even better than for 10 years, but by ten years there were only a few people left in the lowest income level so naturally there was little room for improvement.

This data is very similar to that published in a 1999 book by W. Michael Cox and Richard Alm titled “Myths of Rich and Poor”.  They used U.S. data from 1975-1991 and published tables much like the ones in the current research paper. I am glad and not surprised to see that Canadian data is very similar to the U.S.

It turns out that much of the effort directed at poverty reduction is not productive.  The truth is that individuals are properly responsible for their own lives and most of them work their way to a better standard of living through their own efforts.  Unfortunately there is always a small number people who are unable to help themselves.  In a free society there is a good chance there will be many benevolent groups willing to help them without any government intervention.

You asked the broader question "would society be better off if government did not regulate the economy?"  The answer, in the area of wages, and the same principles apply across all aspects of the economy, is an unequivocal yes, but it is very difficult for people to see unless they have a good grounding in economic science and reasoning.

I'd be happy to continue this discussion with you in any way you choose - email, on-air or in person.  There is great good that can come from applying the principles on which our country was founded - principles derived from Magna Carta, later the Bill of Rights (Great Britain), to the Canadian Constitution to the Canadian Bill of Rights. These principles prove that the best form of society is one where individual rights are paramount (a free, capitalist society) and government's role is to protect them, not violate them by dictating economic outcomes in defiance of reality.

David McGruer
2013 Candidate, Ottawa South
Freedom Party of Ontario