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October 1, 2007 | by  | in Features |
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How I see the world

Right wing politicians have a curious habit of writing books about their ideas. Take for example Richard Prebble’s I’ve Been Thinking or Rodney Hide’s My Year of Living Dangerously. In this tradition Salient asked A-Team leader Lukas Schroeter to articulate his personal worldviews, beliefs and values. Turn with us to page one of How I See the World by Lucas Schroeter.

Disclaimer

I have written this article in a personal capacity. The views set out below do not reflect those of the A-Team, especially given that the A-Team ran on an apolitical platform. As I am writing this opinion piece, I do not yet know the outcome of the VUWSA elections.

Introduction

My father has often told me stories of how, as a toddler, my favourite pastime was to ask questions; those “what, when, why, who, how” questions we are taught in primary school were my way of annoying my parents. Since then, I have always loved learning; especially by interacting with people, by discussing and debating with them. Via this interactive process I have slowly changed from being annoyingly conservative to staunchly libertarian. Over the next few paragraphs I will set out how I see the world. I hope you enjoy the ride.

Libertarianism

I am a libertarian. Consequently, I believe in freedom, responsibility and minimal government. So long as you do not directly harm me, you should be free to do as you please, and of course you should keep what you earn. I hold these beliefs because I genuinely believe them to be the fastest path to prosperity and a reduction in poverty. Nonetheless, my scepticism of the welfare state and desire for low taxes are (apparently) easily construed for heartlessness and greed. To prove that this is not the case, and to spell out the basis for my beliefs, I have set out three basic truths below.

The concepts are that:
Wealth can be created out of nothing – you don’t have to steal candy from children to become rich;
Wealth can only be created by creating things people want, and; Governments cannot create wealth.

Wealth can be created out of nothing

There is no finite amount of wealth in the world. Wealth does not have to be stolen, it can actually be created. Consequently the mere fact that you have $100 in your bank account, or some Wellington lawyer has a $1 million, does not actually mean that someone else is necessarily worse off – you could simply have created the wealth represented by that money. As set out below, there are three basic ways you can enrich yourself.

Imagine two farmers, A and B, each with equal plots of land, and each growing just enough food to survive. They work their land by hand from dawn till dusk. For A to become wealthier than B:
She could steal from B. This works in the short term, however creates the risk that B may do the same. No new wealth is being created. This approach is ultimately counterproductive and unsustainable.
She may just get lucky. Environmental co-incidence may enable A to produce a bumper crop one year, allowing her to be temporarily better off than B. However, luck is the antithesis of sustainability; A is unlikely to be enjoying the good times for long.
Finally she may discover some new way of farming. By inventing a spade or using an ox to plough her field, she may be able to complete a day’s work in half the time. If so, then she would be much wealthier than B, without having taken anything from him. By simple ingenuity A has gained an extra half year to help fulfil her desires.

Category three is the way most wealth in the world is created. My grandfather recently inadvertently provided me with an example. He told me of how he used to make ‘improvement suggestions’ while working as an electrician at power station building sites around Europe after World War Two. Where his suggestions contributed to operational efficiency, he was fiscally rewarded. By helping save time and other resources he created wealth. On a grander scale people such as Henry Ford have become exceptionally wealthy by revolutionising the way we live our lives. The motor car freed huge amounts of time, for people to focus on activities other than transport, thus creating wealth for both consumers and for Mr Ford.

For me, this simple logic allows me to respect entrepreneurs and business people – especially those who are particularly commercially successful. Even though there is still poverty in the world, these people’s actions have not contributed to it. They have created wealth, not stolen or destroyed it – if anything, their genius helps reduce poverty, as their ideas and wealth slowly trickle down.

Wealth can only be accumulated by creating things people want Wealth creation is desirable, because it necessarily implies a reduction in ‘want’. Logically, a person will only do something if they expect it to make them better off. I ran for VUWSA President because I yearn to be able to contribute to revitalising the association so that you, its members once again can be proud of your membership. Achieving this next year will give me a great sense of achievement, thus leaving me better off. My grandfather worked overseas for much of his life so that he could build a comfortable life for his family from within the rumble of post-war Europe. Similarly, business people will invest their energies in creating some product, only if they expect to be able to exchange that product (or service) for money to offset the effort they invest in its product. Implied in this statement, is that the concept of ‘wealth’ either directly or indirectly alleviates one’s wants. Therefore, developing new ways to create boggy flavoured chewing gum is unlikely to create wealth because no reasonable person would want such a thing.

If, therefore, wealth can only be accumulated by fulfilling needs, then surely those who become amazingly rich through their business pursuits should be given our utmost respect, not scorn – after all, their wealth represents the fulfilment of peoples’ needs, meaning that all involved are better off.

(A corollary to this point is of course that, so long as trades are voluntary, no person will trade unless they expect this to be beneficial to themselves, thus reinforcing the notion set out above).

Government can not create wealth

Government can only redistribute wealth, it cannot create it. It is a necessary evil, nothing more. If a government wants to engage in fulfilling people’s needs, then it necessarily needs to first tax its citizens, in order to fund its activities. This is where the problem lies. By interrupting voluntary trades between people by taking a slice of the wealth generated (cue income tax, business tax and GST), the government distorts the trade relationship. The individual parties gain when trading is reduced in the government’s favour. This in turn, as the mantra goes, reduces the incentive to trade and pushes out marginal trades – those trades that were ‘just’ worth it, but now are not because the extra the effort required to trade is not worth the net benefit gained. Obviously, on a small scale, this of limited concern, but when one remembers that the government taxes us to the tune of $10s of billions a year, the problem becomes more severe.

If the incentive to create new wealth is reduced then necessarily the world will be worse off. New ideas will be developed less quickly and will be dispersed less quickly thus slowing down the entire wealth development process.

How I became a libertarian

It was the slow discovery of these ideas (by reading the occasional book and many, many discussions) that triggered my attraction to libertarianism. The appeal of the ideas set out above is that they enable me to reason a response to any problem I face. In contrast, my conservative days were not accompanied by such a safety net. I found my responses to be ad-hoc and reactionary – unreasonable, if you will.

I sincerely hope that my musings will provoke you to look at libertarianism more closely.

That is how I see the world.

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Comments (40)

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  1. Damn Libertarians! says:

    Like a free market would ever work, ever heard of externalities? You know all those assumptions you learn in economics? Well they don’t apply in the real world! No perfect information, no absense of transaction costs, no perfect information etc etc. Learn what the real world is like, assumptions do not apply.

  2. Iris says:

    You misspelled his name.

  3. mike says:

    “The motor car freed huge amounts of time, for people to focus on activities other than transport, thus creating wealth for both consumers and for Mr Ford.”

    It also burnt fossil fuel, creating greenhouse gases, contributing to anthropogenic climate change.

    “That is how I see the world.”

    Dude, you need to get your eyes checked, your glasses don’t work.

  4. mr tears says:

    Yeah, lets just abolish the government. All it does is get in the way of WEALTH CREATION

    Those airwaves will just sort of regulate themselves.

    “Flight 3105 you are cleared to land on flight vect BZZZT COME ON DOWN TO MAD MAN DANS HOWLING MAD HOUSE OF DISCOUNTS!”

    “Shit, lost another flight to great deals.”

  5. kate says:

    FYI: You did not run on an apolitical platform.
    wealth creation is not the most important thing in the world.
    All you talk about is money and the accumulation of wealth.
    Do you not have a soul?
    Maybe you just need to get laid.

  6. Michael Oliver says:

    This really needed a picture of Lukas with his hands under his chin and staring starry-eyed at a thought bubble of planet earth.

  7. bloggete says:

    kate i hear he is a good shag, maybe you can “lay” him for the rest of us

    what the fuck else is more important than welath

    whales?

  8. bloggetedaidiot says:

    bloggete is lukas…..

  9. james says:

    OMG Lukas, you proved to us that you are a loser, by running for VUWSA, and now you have proved that you are a clueless fool, by writing this.

    “I pity the fool” that is Lukass

  10. Damn Libertarians! says:

    Dear Bloggete,
    Your right, we need more money, who cares about life, or human rights, or a world for our children to live in, those are pointless, all we really need is more money.

  11. blogette says:

    how the fuck do you think you create a world for everyone to live in without money
    how do you protect life without money
    how do you have human rights and liberty without money

    fuckwits

  12. blogettedaidiot says:

    blogette, you are an idiot. Fuck Lukass, you just don’t get it do you. Why don’t you fuck off and die, the world doesn’t need people like you.

  13. Tim says:

    Wealth creates better social outcomes. If you don’t believe me, go to Bangladesh…it will blow your mind.

  14. Tristan Egarr says:

    “The only wealth is life” – John Ruskin

    When the first Labour government planted pine forests, they created wealth
    Yes, private business could have done this – but they didn’t
    There were thousands of people who needed jobs,
    no-one was taking the initiative to create them
    so the guvmint did it.

    Libertarian economics presumes that people are rational agents
    Not only are we not primarily rational – I don’t even think it would be good if we were.
    Love and life are amazing things, and (to paraphrase Hume),
    reason is the slave of the passions.

    So while we could make some rational argument for libertarian economic policy,
    that would be a bit like Marxism –
    a theory that doesn’t take into account what humans are.
    Of course, to jump from saying that the only wealth is life to justifying big business is a leap I simply will not make, but the point is, to discuss wealth in material terms and say that, for some technical reason, goverments are not the proper channel for creating material wealth – it just seems to be a thought experiment,
    so it isn’t really worth much, like a Borges story without the imaginative wonder.

  15. Tristan Egarr says:

    eeps, i meant to say “justifying big government” not “justifying big business”

  16. Jimmy Southgate says:

    I just had a few things…

    1st:
    “Wealth can only be accumulated by creating things people want…”
    “If, therefore, wealth can only be accumulated by fulfilling needs…”

    Which is it? wants, or needs? They are very different.

    2nd:
    “Logically, a person will only do something if they expect it to make them better off.”

    I am not sure that this is logical – what about people who do things that make other people better off?

    3rd:
    “By inventing a spade or using an ox to plough her field, she may be able to complete a day’s work in half the time. If so, then she would be much wealthier than B, without having taken anything from him. By simple ingenuity A has gained an extra half year to help fulfil her desires.”

    Have you been talking about monetary wealth, or a wealth of time? Im confused. If its monetary wealth, then in this example both farmers would still have the same (assuming they sell what they produce, and there is no imperative to sell it before midday), one has just produced stuff quicker, without increasing production.

  17. Damn Libertarians! says:

    Blogette,
    It is possible to not value money above life and still have it. Money can exist without being the most important thing in the world.

  18. Peter says:

    “For me, this simple logic”……. no shit…. simple logic, I guess Lukas hasn’t moved past this

  19. Alice says:

    Its good to see people with strong convictions and ideas. As long as you dont become too blind-sighted. As for me, i would never as a 19 year old publicly announce my views (especially if they were so concentrated like this) because for one thing, who’s going to listen to a young’n anyway? Experience and understanding is key.

    Lukas if you have this view in 15-30 years time i would be quite happy to sit down and discuss it with you. In the meantime – read, read, read. Then eventually write and publish. Or become a farmer and invent a new type of farming devise. Up to you…

  20. Craig D says:

    Good on you Lukas.

    There are still too many idiots who dream of a utopian communist world, where everyone is so much better off without that evil thing called profit. Well profit is one thing that makes the world a better place – it is literally creating value where there was none before. It’s making the pie bigger, not taking a bigger slice.

    The more disincentives that you put in the way of free exchange (of money and ideas) the fewer opportunities are taken up, meaning fewer jobs and fewer new technologies. In this ideal communist world, why would you bother to come up with a great new idea? It’s far less effort to just work your day in the mines and you get the same benefit. All socialism has this effect, to a greater or lesser degree.

    Put simply, a communist world is one where everyone has the right to be equally miserable.

    I love this photo: http://www.globalsecurity.org/military/world/dprk/dprk-dark.htm
    Would you pick North or South Korea to live? Which side of the berlin wall were people getting killed trying to escape from? Why are Cubans risking their lives to reach the “exploitative” capitalist society of the USA?

    Think this is all about money? A stronger than the economic argument is the moral one.

    History is full of examples of what happens when a society subjects individuals to the whims of a majority. When you assert that individuals aren’t important, but collectives are, gross human rights violations are the logical outcome.

    Your right to associate freely, to barter and trade, to sustain mutually agreed relationships and to avoid coersion are essential to enjoy a life with the people you love. You can’t take away property rights and leave other rights intact – they go hand in hand. If you decide that it is morally ok to force an individual to submit to the will of an arbitrary collective with regards to property, don’t be surprised when other rights start slipping away.

  21. Craig D says:

    Alice,

    An idea isn’t a wine – it’s quality is not dependant on its age.

    A 15 year old wearing a Che T-shirt and going on about workers ownership is the same amount of wrong as a 60 year old academic who thinks communism “is a good idea on paper” but just had the wrong people in charge :-D

  22. Alice says:

    Everything looks better on paper – christ, even Joel Cosgrove.

    You misunderstood me – i was merely indicating that i wasnt convinced because i thought the paper lacked depth. Im 19, and i would be ashamed to put anything forward publicly like that with only a limited amount of reasearch. Its not a matter of it simply being a good idea, its the reasoning behind the idea that gives it status.

    This is just my opinion, its not fact. Im not claiming that i know better then anybody, including lukas. Im just saying that i would spend more time researching something before I publicly announce that it is what is best for society :) …And i am more likely to take something like the idea of a ‘free market’ on board if i know the reasoning is sound – not just adequate.

  23. Mike says:

    Really Craig, “utopian communist world” WTF?

    This is the worst ideology I have read in Salient, since, well, Perigo began to write for it.

    “For me, this simple logic allows me to respect entrepreneurs and business people – especially those who are particularly commercially successful. Even though there is still poverty in the world, these people’s actions have not contributed to it. They have created wealth, not stolen or destroyed it – if anything, their genius helps reduce poverty, as their ideas and wealth slowly trickle down.”
    Rich powerful countries such as the US, and Japan have built up their economies using protectionism, while forcing developing countries to open their economies up (with the argument of free trade). Developing countries cannot compete like this.

    Lukas writes about the trickle down effect. This shows that Lukas knows nothing about the real world. Even Joseph Stiglitz, winner of the Nobel Prize for Economics (2001), and former chief economist of the World Bank (so he knows a lot more about economics than Lukas or you Craig) says the the trickle down effect does not happen.

    Both you and Lukas have no idea about the real world, instead of just read libertarian
    book of nonsense, how about educating yourself on real world issues.

  24. Craig D says:

    Mike,

    When Nick Kelly spouts nonsense that Wellington would be far better off driving business away, avoiding making “evil profit” and having everything collectively run, then yes I call that a utopian communist world. The idea that people will achieve highly and work hard if there is no personal incentive, just a warm fuzzy feeling. His mate from the same party is now VUWSA president – yippee.

    My point is that all anti-business nonsense is built on the same incorrect basis, just watered down.

    Say I leave university and have two choices – to be a policy analyst for the ministry of social development or to start my own business with a good idea.

    Starting the business could well lead to job creation, and as long as I produce a product that is worth more than it costs (that evil profit thing) then benefit will go to me, my employees and my customers.

    The harder you make it for businesses to operate, the more people will opt to stay out of business ownership. The result won’t be a paradise where all the workers vote on management decisions – it will be foregone opportunities – ideas that were never tried, jobs that never existed.

    Call it what you want: If someone takes an idea and turns it into reality, the jobs that are created as a result haven’t been stolen from elsewhere, the profit generated isn’t money that is taken from others.

    Real world issues? I discussed human rights violations and the logical result of seeing people as part of a collective rather than individuals. You can’t get much more real than the millions of graves around the world courtesy of collectivism- or is a real world issue one that is against capitalism?

  25. Mike says:

    Where does Nick Kelly fit into this, why do you drag him into this. Nick, Joel, and Lukas are relevant in the scheme of things.

    New Zealand is the most business friendly country in the world. You use arguments based of other peoples opinions i.e. Nick, but really, you make no ground.

    Have you ever stopped to think whether the CIA sponsered countless so called human rights violations, or whether the ‘evil’ Muslims that attacked the twin towers, did so, because of Israel.,or that capitalism creates these human violations you speak of?

    Before you label me an anti-capitalist, stop your ideological brain for one second. I have never said that. Capitalism does have its bonuses, but it also has many, if not more down sides.

    Why don’t you do ask a poor Indian community what they think, when their water supply has be removed, so Coke can make more of its product.There are so many examples like this Craig, real world example. I think your problem, is that you don’t get how the world is interconnected.

  26. Jimmy Southgate says:

    “The idea that people will achieve highly and work hard if there is no personal incentive, just a warm fuzzy feeling.”

    Im obviously not producing any evidence that you’re wrong, but I find it hard to believe you are completely right.

  27. Craig D says:

    “Where does Nick Kelly fit into this, why do you drag him into this.”
    A real world example of people who believe in a utopian communist ideal, which you questioned earlier.

    “New Zealand is the most business friendly country in the world.” – Based on a World Bank survey. Different measures come up with different results. The government’s own small business advisory group gave it 5.3/10 in its last annual report for issues affecting small business (which is a huge part of NZs economy). Spose that’s a C pass!

    Anyway, I have things to do (such as study!)

    I don’t think capitalism is perfect. And I certainly don’t believe the US is the model which we should imitate (they are far from libertarian). I commented on this article in response to such brainless comments as “You just love money, you need to get laid” and “you just want money and don’t care about human rights.” Capitalism is certainly not perfect – but again, ask why people aren’t swimming US-Cuba and weren’t getting shot trying to escape into communist east Germany.

    I wanted to challenge the assertion that capitalism = love of money only = abusing people because it is pretty clear to me that the less individual freedom a government allows, the greater the propensity to commit atrocities. When a system stems from the premise that there is something more important than individual rights (fasicm= the nation, communism = the “people”) you get human rights violations on a massive scale.

    Jimmy – I volunteer upwards of 14 hours a week to charity in a very significant capacity. I certainly believe in charity and helping others. A hell of a lot is achieved in this country (and elsewhere) by volunteers, and more still could be if the government stopped putting its inefficient and incompetent finger into every pie it can.

  28. Jesus says:

    Lukus may be right. He is not saying wealth should be above everything else. With wealth, you can promote all those other things like human rights and abuses and all that other shit “lukus haters” care about. Lots of money can buy good military ships to blow the Japanese whalers off our shores, or it can peacefully “buy-out” their company. Wealth can also pay out for the homeless, widows, elderies, students, and the list just simply goes on and on. If it wasnt for liberatirian minds, we would be living in places similar to North Korea, old Russia or old China.

  29. ron "i don't even support free market solutions to genocide" paul says:

    If it wasnt for liberatirian minds, we would be living in places similar to North Korea, old Russia or old China.

    And if libertarians had their way, we’d be living during the Great Depression.

  30. Craig D says:

    Nice example, given the last great depression was in large part due to government interference.

  31. Dr Ron "i will kill 120,000 people" Paul says:

    the only difference between libertarianism and communism is that at least communism sounds _good_ in theory

  32. Craig D says:

    I love Lukas and capitalism. I want to make warm Man-Love with Lukas in a bed full of money while I scream, “Fuck me Harry Potter! Stick your wand in my back passage!”

  33. Mike says:

    Craig D, you cannot claim that. There is no one cause of the Great Depression. Some people believe that the free market was to blame. Some people believe that people were consuming way too much, some people believe it has to do with the gold standard.

    Wealth does not necessarily create happiness or well being. This is were your argument fails. I would rather be happy than rich. A society that is in a state of well being as opposed to rich (in the sense of monetary terms) is a better society. It doesn’t matter if it takes government or no government. I doubt anarhco-capitalism will create a state of well-being. This silly notion that economic growth is a good thing is wrong. There are several studies to prove this.

    Lukas is sad, and has made several assertions in this article, and it shows that he is stuck in ideology.

  34. Felicia Jollygoodfellow says:

    Well profit is one thing that makes the world a better place – it is literally creating value where there was none before.
    – Value created from the exploitation of working people.

    The more disincentives that you put in the way of free exchange (of money and ideas) the fewer opportunities are taken up, meaning fewer jobs and fewer new technologies.
    – If this was true than explain why most ‘new technologies’ are things which people don’t need, that are a waste of resources, marketed by media propaganda.

    Put simply, a communist world is one where everyone has the right to be equally miserable.
    – In your utopian free market (read: ‘cloud cuckoo land’), the right to be miserable is based on how much money you have.

    History is full of examples of what happens when a society subjects individuals to the whims of a majority. When you assert that individuals aren’t important, but collectives are, gross human rights violations are the logical outcome.
    -Give some examples then.

    Your right to associate freely,
    – To live in gated communities?

    to sustain mutually agreed relationships
    – wtf?

    and to avoid coersion are essential to enjoy a life with the people you love.
    – Funny how in order to ‘avoid coersion’ you extremist nuts want to double spending on the military and the police. It’s ok if the coersion is against someone else.

    You can’t take away property rights and leave other rights intact – they go hand in hand.
    – True. ‘Property rights’ have been used to deny people their human rights for centuries.

    If you decide that it is morally ok to force an individual to submit to the will of an arbitrary collective with regards to property, don’t be surprised when other rights start slipping away.
    – Most private property is the result of theft, eg land confiscation from Maori, the Highland Clearances, etc. I expect that the land of the mansion that your rich daddy lives on was taken from the Tangata Whenua through some dodgy or illegal NZ Company purchase. Whose rights are respected when the descendents of the original owners of the land are beaten up and arrested for demanding the land back? Whose rights are respected when your rich daddy builds a fence to stop access to public rivers and beaches?

  35. Tristan Egarr says:

    “With wealth, you can promote all those other things like human rights and abuses and all that other shit “lukus haters” care about.”

    While this is, to a certain extent, true, the total resource base of the world is limited – even renewable resources are only renewable up to the extent of the finite resources (area of soil, area of the fall of sunlight, amount of water produced by the atmosphere each day). Thus the amount of possible Material Wealth is limited.

    To attain levels of wealth large enough for substantial philanthropy in the hands of one entity/group (say, enough wealth for Bill Gates to go about doing lots of humanitarian good) will, to some extent, require reducing the level of wealth available to others. So many of the problems wealth solves are there because of wealth. This does not mean that material wealth is bad, just that we should remember its apparent greatness is to a large extent superficial.

  36. Felicia Jollygoodfellow says:

    i wanna suck your cock

  37. ? says:

    Why does it have to be libertarian or communist? Both of them seem to suck from where I stand, in one there is no incentive to do anything, in the other there is incentive to violate human rights and be a complete jackarse by polluting a river or dumping effulent on your neighbours property becaue there are no government controls limiting the negative externality of production.

    Surely some incentive to advance technology is good, but safe guards so that these advances don’t come at the expense of human rights or the environment.

    Thinking from a benefit to humanity as a whole thing, I mean one person making profit isn’t worth a river full of shit is it? The public cost greatly exceeds the private cost, the effect to society as a whole is bad. Free market places no incentives to stop the pollution, reduces lives/health further down stream. However internalise that externality, no pollution or bearable pollution, slightly less profit for that one person (profit for those who live off river, person who sells pollution treatment system, profit from future generations who will now not have twenty eyes and no lips etc).

    Best for society on a whole, what is wrong with that?

  38. Jimmy Southgate says:

    “ask why people aren’t swimming US-Cuba and weren’t getting shot trying to escape into communist east Germany.”

    Im not sure that the assumption that the economic system was entirely to blame is correct. There are are many other factors at play – such as the ongoing trade embargo the US has in place.

    “Why does it have to be libertarian or communist? Both of them seem to suck from where I stand, in one there is no incentive to do anything”

    Argh!, why is fiscal reward the only possible incentive anyone could have?!?!!?

  39. Felicia Jollygoodfellow says:

    It’s so funny you’ll laugh so hard your lashes will curl all by themselves.

  40. ? says:

    Jimmy Southgate
    There are other ways to get people to do things but you would be deluding yourself if your thought humans were, on majority, selfless enough to go without fiscal reward.
    Sometimes they will, but sometimes aint all the time, and therein lies the problem.

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