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Source link: http://archive.mises.org/21332/stealing-assets-ensuring-poverty/

Stealing Assets, Ensuring Poverty

March 3, 2012 by

Here in South Africa there is plenty of talk of nationalizing the nation’s mines, especially the country’s platinum mines. After all, SA is no longer the world leader in gold production, while the country still produces 80% of the world’s platinum. In fact platinum group metals (PGM) account for the bulk of SA’s mineral value.

However, as Nazmeera Moola points out in her “economic viewpoint” column in the February 24th Financial Mail, PGM production has been falling since 2007 at the same time profit margins fell, despite elevated prices. Ms. Moola writes that margins dropped 5-10 percent last year from the previous year, with rising wage and electricity costs to blame.

For the first time in years, the platinum price is lagging the gold price, despite the fall in production. And production will likely be further challenged going forward. Strike violence has not only led to 59 hospitalizations but three deaths, with the latest being a contract worker who was beaten to death. The body was found in Freedom Park near Impala Platinum’s Rustenburg mine.

Impala dismissed 17,000 workers over the labor unrest and 3,000 oz. of production is being lost each day. Through February 14th 60,000 oz. had been lost and the company announced that it would fall 40 percent short of fulfilling its contracted deliveries for April.

After six weeks, about half the the dismissed workers had been replaced, but workers are being prevented from entering the mine by striking workers. Some two dozen workers not wanting to take part in the illegal strike remain in the hospital after being assaulted by strikers.

Platinum mining is dangerous business and the South African government’s Department of Mineral Resources, while aiming for zero mining fatalities on the job, have stepped up the number of safety, or Section 54, stoppages. These DMR stoppages can lead to complete mine shutdowns.

According Ms. Moola, Section 54 stoppages accounted for half the 14% year-over-year drop in production at Aquarius Platinum, while causing Anglo Platinum to lose 101,000 ozs. of production in 2011. Impala’s production at Rustenburg was down in 12% in 2011 due to Section 54 stoppages.

“The combination of deeper mines and the increased focus on safety means mining techniques will need to adjust,” writes Moola. “This means less ore will be extracted and costs will rise.”

Platinum expert Steve Forrest makes the point that in addition to rising safety standards, there has been a lack of capital investment in platinum mining, and he believes PGM production peaked in 2008.

Impala has announced that once the strike is settled at Rustenburg, it will reassess the viability of each mine shaft at the project. At the same time Anglo American CEO Cynthia Carroll is considering either curtailing production at Anglo Platinum or getting rid of the company entirely.

South African’s ANC considers platinum a “sovereign resource.” So talk of nationalization could easily turn into heavy-handed government action. In neighboring Zimbabwe, the ham-handedness has already begun.

Just a week ago Implat’s David Brown received a demand letter from Robert Mugabe’s Zimbabwe government giving him two weeks to hand over the ownership of 29.5 percent of his company’s Zimplats operation to the state-run empowerment fund, threatening unspecified sanctions if it did not comply.

Perhaps Brown knew this was coming, as he had tendered his resignation weeks earlier, effective June 30th, with no replacement named. Brown was hoping to meet with government, attempting to negotiate a smaller taking, pointing out that handing over nearly a third (and eventually 51 percent) of the Zimbabwe operation will stop the company’s growth prospects.

Zimbabwe’s Empowerment Minister Saviour Kasukuwere says he is “sick and tired” of Brown’s delaying tactics regarding the ceding of shares under Zimbabwe’s controversial indigenisation legislation.

“We can only engage him if he comes here to implement the law,” Kasukuwere told Reuters, after stating that: “The problem with Brown is that he talks too much. We are sick and tired of his delaying tactics.”

Kasukuwere was quoted by Associated Press as saying that a proposed visit by Brown would not change the government’s decision. He also said he has no plans to meet Brown.

“I don’t need to meet them over anything. Why are they coming to see me? I’m not a zoo,” Kasukuwere told The AP. “I have nothing to discuss. They must respect the laws of this country.”

Just a day after the Empowerment Minister’s threatening comments, Zimbabwe Prime Minister Morgan Tsvangirai spoke to a trade and investment conference crowd in Johannesburg trying to drum up investment in his country. Using his best salesman spin, Tsvangirai called the indigenisation policy “rhetoric rather than reality.”

Business leaders in South Africa are talking about the opportunity for a “platinum valley,” emulating America’s Silicon Valley.

“Both big business and government are singing from the same hymn sheet of diversifying potential demand for platinum within the huge global energy arena,” writes Martin Creamer for Mining Weekly. “Platinum, clean energy and jobs can go hand in hand with the development of hydrogen fuel cells – zero-emission devices that are able to shrink the world’s carbon footprint.”

All this feel-good, job creating, clean energy rhetoric sounds great for spurring platinum demand and putting people to work. However, the government’s thievery (or threats to) of platinum assets only serve to stifle capital investment, leading to continued lower mine output.

Sadly, in a region with unemployment well over 20 percent and rampant poverty, the abundant precious minerals will stay in the ground, while millions living above ground starve.

{ 62 comments }

Bob March 3, 2012 at 5:43 am

Africa without the whites is destined to revert to the Dark Continent. No surprises except for die-hard cultural Marxists. South Africa is on the Zimbabwean route, just lagged.

victor March 3, 2012 at 6:49 am

Sorry Bob! I need to correct you. Africa without freer marketplaces is destined to revert to the economic Dark Ages. There are plenty of Africans of different skin pigmentation that understand the benefits of the marketplace. Marxists and thieves come in many different hues, and ethnic backgrounds. Ethic(al)– and not ethnic backgrounds define these Marxist thieves.

Bob March 3, 2012 at 5:57 pm

Oh, I agree with your point on thieves and brigands, but that’s not my assertion, which is that there is a difference in social time preference between sub-Saharan Africans and Europeans, as well as IQ (The Bell Curve, blah, blah, blah), with a material impact on the capacity to maintain first-world infrastructure and markets (which, in turn, hang off a sophisticated legal system, not replicable everywhere).

No, The Dark Continent I’m speaking of is a reversion to the primitive conditions that prevailed before colonialism, which, kindly note, I do not condone.

Here are some graphic representations of what I mean:
http://deathofjohannesburg.blogspot.com.au/

HL March 3, 2012 at 11:41 pm

Wow, the blog makes me think of SA as Detroit writ large. A nice reminder that democracy and demographics, combined with mindless statism (“roast penguins will fly into the mouths of those who vote for me!”), can bring down even the most civilized country. Poof, just like that.

Mr. French is privileged to get a peak into the future of the USA. Not a pleasant sight, I am sure.

Bob March 4, 2012 at 2:39 am

Note that the blog-owner will not tolerate racial epithets, so I don’t think the point is to gratuitously stigmatize, merely to document what has happened. Indeed, I imagine those who decry my shocking political incorrectness will probably never visit Detroit to enjoy its particular charm, or certainly not after dark.

White-flight is looking a safe bet for the American future. But who cares?

victor March 3, 2012 at 8:10 am

No Bob! I disagree with your statement, “Africa without the whites is destined to revert to the Dark Continent.”

Africa without freer marketplaces is destined to revert to the economic Dark Ages. There are thieves and Marxists of all hues of skin pigmentation. It is ethics– not ethnics, that determines ones’ affinity for the marketplace.

Despite what the people said in Westminster and D.C., Rhodesia wasn’t so much, blacks vs. white, and “White Rule,” but the preservation of freer enterprise vs. the command economy failures from Cairo to Kinshasa, and from Havana to Moscow, that were spreading in Angola and Mozambique.

nate-m March 3, 2012 at 12:29 pm

“The Whites” are the ones that developed and perfected the modern forms of “State Government”. It’s a very uniquely European militaristic institution.

The European state is a self-perpetuating organizational entity that loves nothing more then to see copies of itself propagate all over the planet so that it can carry out it’s games of diplomacy, tariffs, fear, control, taxation, and war as it terrorizes the populations of the planets to submit to it’s domination. Sure there is a history of Empires in other regions of the planet, but nothing with the same level of success as the European model. Nothing with the same amount of blood on it’s hands either. The State Governments of the world are responsible for more bloodshed, death, famine, depravity, and lies then any other institution that ever existed.

Marxist/Socialist/Democratic State! The White Man’s gift to the world.

This is the result of the ‘White Man’s gift of civilization’. This is the mark that the Europeans left on history with their world wide empires and world wide wars. When small pockets of repressed minorities around the world talk about ‘White Devil’, or ‘White Satan’… they have a good point. People like “Zimbabwe’s Empowerment Minister Saviour Kasukuwere” are just the pathological remnants of the European empires. He is supported and protected by the various European (and probably North American) States _to_this_day_.

Where do you think this talk of the ‘Platinum Valley’ due to ‘Green Energy Initiatives’ stuff comes from? It certainly didn’t come from the tribes of Africa!!

El Tonno March 5, 2012 at 6:33 am

I’m sure Tony Blair will fly in to support this stuff.

Artisan March 3, 2012 at 6:14 am

Why the whites? Because they understand economy better? Because they understand better the need of education? If it were so, there would have been no von Mises, and even (talking of ore) no Ayn Rand to write the score for this actual piece, 50 years ago.

Bob March 4, 2012 at 6:13 am

http://direct.mises.org/journals/jls/12_2/12_2_4.pdf

This is about black vs. whites, not Jews vs. Gentiles. Michael Levin makes the case for discrimination on grounds other than pure bigotry in Why Race Matters.

nate-m March 4, 2012 at 2:57 pm

> This is about black vs. whites, not Jews vs. Gentiles.

I don’t see the difference. Also, why did you choose to make a distinction? Nobody else brought up anything about the Jews.

Also Africa is a big big place. There are all sorts of different ‘races’ in Africa. Just like there are variations between Portuguese versus Welsh versus Greece versus Italians versus Russians.

A easy example to understand is how blacks tend to dominate certain Olympic sports involving running and jumping. This is because there is a slight difference in how muscles are attached in the lower leg that is a racial trait that aides in these sort of activities. On the flip side the same difference in white people will have a tendency to turn out better swimmers. But this is not true for all ‘people of color’. There are significant portions of ‘black Africans’ that have the same muscle structure that White folks tend to have. These muscle structure differences is a racial trait that vary just as much between different regions of black peoples as it does between black people and white people. And the same thing goes with most racial traits.

What is happening in SA happens everywhere you have significant natural resources that make up the bulk of the economic output of the country and the politicians decide to ‘nationalize’ it and make a mess of things. Venezuela is another example of it. But the same thing has happened all over the world.

Bob March 4, 2012 at 5:33 pm

See Artisan’s comment above.

Bob March 4, 2012 at 5:49 pm

In fact, I’d agree with pretty much all of what you said, except the quotation marks around race. Without getting out the phrenology calipers it’s apparent to all there are obvious physical differences, and possibly differences in behaviour between peoples of different locations.

And as I’ve laboured to point out, theft and knavery are not unique to one group or another, but I’d point out that Scandinavian socialism hasn’t turned it into Venezuela, which was backward prior to Chavez, too. I believe the outcome is a mix of the political system and the country’s ethnic make-up.

victor March 3, 2012 at 6:36 am

100% correct on calling it “theft.” If the Zimbabwe government cronies want a piece of mining, nothing prevents them from buying shares of the various mining groups on global bourses, including Zimbabwe’s own stock market. However, confiscation is there MO.

The mining industry in Zimbabwe is dying from Mugabe and his cronies meddling and 30+ year assault on capitalism and the marketplace. They have this grand belief that by nationalizing everything, suddenly they’ll have great wealth, at the stroke of a pen. They don’t understand the delicate balance of market forces including cash prices demand, the rigours of mining ore bodies, raising capital. Two or three decades of investment are at stake. The Zimbabwe government will run mining into the ground… like it did to Agriculture.

Rhodesia WAS Super! Now, it is mostly an economic disaster.

Let’s hope SA’s government is wiser.

PGM prices are going higher as a result of labor issues and government nationalization in Southern Africa.

Ohhh Henry March 3, 2012 at 3:30 pm

This has nothing to do with whites vs blacks. The same tragedy is taking place in most other cities and countries. The skin color and the rhetoric may be different depending on where you live, but it’s the same struggle.

When government looting gets to the point where it has nearly exhausted its ability to tax, borrow and inflate in order to keep the rackets going, it naturally becomes more creative and bold in its attempts to find more revenue. There are plenty of rumblings in other countries about how they should “nationalize” (steal) whatever is their local equivalent of SA’s platinum mines. There is plenty of labor and social unrest and violence is never far below the surface. How could it be otherwise? Violent criminal acts provoke violence.

GWil March 6, 2012 at 11:29 pm

^^^^^
This is nothing more than naive egalitarianism and not thinking deep enough. Governments exist everywhere, yet none are as corrupt as the ones in Zimbabwe, Sudan, S. Africa, and New Orleans. Why haven’t Sweden, Denmark, or Vermont become places of social unrest and violence, considering all are run by incredibly liberal, pro-big-government types? Why did Rhodesia turn from a food exporter to importer once it became Zimbabwe?

Schalk Dormehl March 3, 2012 at 4:17 pm

Atlas ought to shrug. There are only an estimated 380,000 business owners in the whole of the country who employ 4 or more people. If they all simply go on leave without notice during the same time all economic activity would halt. Also people around here jump through all sorts of hoops to become “BEE compliant” and get strict tax clearances so that they can go hat in hand to the government for stolen tax money. If people stop investing in their own oppression this type of thing will stop.

Bob Glenister March 3, 2012 at 4:20 pm

Colouring this into a skin pigmentation issue is counter productive. The damage done by governments of many hues, with their focus on redistributing the efforts of those who apply themselves and produce, to those who don’t, will simply force those who make the effort to give up. What will be left is unturned soil and thousands standing in line waiting for handouts that can no longer be sustained. When the last productive individual falls victim and stops producing, who will these politicians turn on, the ultimate result is wide spread poverty.

The use of skin pigmentation as an excuse by politicians, to rape and plunder the productive, (transformation) is no better than saying someone who dresses sexily, deserves to be raped.

To fall into their trap of using pigmentation as a counter argument is to be lured by a seductress into a spiders web that will tie you up in knots.

Stick to the knitting, free markets create jobs for those that wish to apply themselves, and is self feeding and will go from strength to strength and in the long term everyone will be better off.

Over regulated markets, favor a few for a short time and collapse by virtue of the winnings been won by “might is right” ie the barrel of a gun. The gun slingers will soon run out of productive victims. Will they then beat their guns into plows, no, their intention was to rob and to avoid sweat to begin with. Skin pigmentation is a smoke screen.

Craig March 3, 2012 at 6:44 pm

“there is a difference in social time preference between sub-Saharan Africans and Europeans”

That’s a pretty good Austrian-like term to describe the problem. In fact, you could leave out “social” and just “time preference” would do perfectly. The indigenous Africans are understandably desperate to achieve the better living standards of the European descendents and are very likely to attempt to cut corners to get there. It isn’t a racial matter; it’s a matter of fact.

We can all understand how a largely-uneducated group of people would think political power could substitute for the generations-long process of accumulating capital. Of course, it won’t. I, too, fear that the departure of the Europeans will hasten the economic destruction of South Africa. It’s the sequel to a film we’ve seen before.

Doughtyman March 3, 2012 at 7:44 pm

Another variation on the cargo cults.

Bob March 4, 2012 at 10:10 pm

http://streetknowledge.files.wordpress.com/2008/03/moderndaywarrior.jpg

On cargo-cults and modern accoutrements; the picture to save one thousand words.

Bob March 4, 2012 at 2:56 am

Cargo-cults are unique to places like sub-Saharan Africa and PNG, where apparently there is no difficulty in replicating the form of European lifestyle, but not the wherewithal to repeat the feat for its substance. And where life, for the indigenous people themselves, is violent, as has always been the case. I’m less dismayed by Africa’s reversion to type than the brain-washing of the Westerners who are surprised.

Michael A. Clem March 5, 2012 at 5:25 pm

I think we can understand how a supposedly educated group of people would think that political power could substitute for the accumulation of capital. Or rather, we know of plenty of educated people who think that, even if we don’t understand why they thing that. How many white people actually know or understand Austrian economics, after all?

Keith March 4, 2012 at 5:03 pm

As others have commented before, this is yet another remake of a very, very old film.

Britain did exactly the same in the 1940s and 1950s:

National Coal Board, British Steel Corporation, British Leyland (motor vehicles), British Rail, British Aerospace, British Airways, Post Office, Road Transport…

Zambia nationalized the copper belt in the 70s, and had to de-nationalize it in the 90s, Tanzania nationalized its mines and they all closed, they liberalised in the 1990s and mining began again.

I had lunch with Kenya’s minister for mines in 2007, they were talking about liberalizing then, as virtually all mining had ceased, despite continuations of the potentially gold bearing “greenstone belt” from Tanzania, and excellent prospectivity for coal, gemstones, fluorspar and rare earths in other parts of the country.

The likes of Anglo, knew this was coming in RSA, they’d established holdings in London (Charter Consolidated) after Krying Kenneth, stole their operations in Zambia. They moved their whole base from JoBurg to London in the 1990s, in expectation of this day. The loss of “Old Order” prospecting licenses was a warning shot in the mid 2000s.

It is tempting to say “This is Africa”, but this is only the latest remake of the socialist story of theft.

Keith March 4, 2012 at 5:15 pm

Forgot to add,

it isn’t worth watching it all the way through, there may be one or two slightly different characters and scenes, but the ending is just the same as all the previous versions.

Bob March 4, 2012 at 5:55 pm

What about “This is Africa” mixed with “Behold socialism”?

Keith March 5, 2012 at 4:27 pm

We used to say T.I.A to the power of A, for Angola, but again, it was more accurately “Behold Socialism”.

ps
Was the tower above the mausoleum for the first MPLA President of Angola, the inspiration for the Mordor tower in the “Lord of The Rings” films?

The Anti-Gnostic March 4, 2012 at 8:23 pm

Libertarianism is a political philosophy of lower time preference individuals. Bottom line, there is a reason that Ron Paul rallies and Mises Circle meet-ups are whiter than an Alabama country club.

Libertarianism’s opponents forthrightly describe it as a philosophy of angry white guys. There are significant debates raging over evolutionary psychology and human biodiversity which the Institute’s scholars will at some point be unable to avoid.

Michael A. Clem March 6, 2012 at 11:58 am

I’m afraid I don’t understand. People with higher time preference are somehow justified in initiating coercion?? I don’t see how time-preference is a racial issue.

nate-m March 6, 2012 at 12:15 pm

There is a Mark Levin pdf available on this website called ‘Race Matters’ were he claims that impatience is a racial trait discovered by scientific surveys or some such thing.

Sounds like junk science to me, but I guess people like hearing that sort of thing.

nate-m March 6, 2012 at 12:18 pm

Sorry. ‘Why Race Matters’ is the title.

Bob March 5, 2012 at 5:14 am

Hoppe said as much here:
http://mises.org/media/4691

I don’t imagine he’ll be invited to elaborate further.

mikey March 6, 2012 at 12:57 pm

Imagine how awful things would be in a country where everyone was both black and gay.

Bob March 6, 2012 at 8:25 pm

Hmm, could be an interesting one-generation demography experiment.

Keith March 5, 2012 at 4:19 pm

I’ve worked with some pretty libertarian minded guys (and a couple of like minded girls :-) ) in Africa, some of whom, not to put too sharp a point on it, could have carried pencils around in their hair all day long.

Not many, that is true, but they do exist, and they inhabit the same part of the bell curve as somewhat straighter haired libertarians do.

I hadn’t discovered the Austrian School for myself at that time, so I can’t call them Austrians

-not yet anyway.

But, if I’m back around those places (including the Portuguese speaking ones (plural)), I’ll be looking the guys up, and hopefully sharing a few beers and a good bitch about the parasites.

I never got to visit any overtly Commie countries in Europe, just plenty of covertly commie ones, so I don’t know whether the contradictions and the problems were as easy to point out to others, as they are in African commie countries.

I’m not going to dispute the reported average IQ scores by nation (I think Equatorial Guinea is something like 59!!!), but Guatemala with an average of about 78 (placing it in the middle of the Sahara, in African terms) has a deeply ingrained Misesian thread in its popular culture. If Austrianism can catch on generally there, then, Africa is not completely lost, and Africa’s problems are so easy to see from an Austrian view point, that teaching it should not be difficult.

Bob March 5, 2012 at 8:24 pm

Re: Guatemala – there is small libertarian enclave (like everywhere, a minority of the minority) amongst the white, Spanish-descendent “aristocracy”, those who run the show and always have. The majority – los indios – couldn’t give a toss, they’re the ones giving you the median IQ of 78. Hence the country is a backward mess, and no Human Action insights are going to remedy that. That’s a eugenics problem.

Ray March 5, 2012 at 7:43 pm

It could very well be argued that those assets where stolen assets in the first place! I can see how they believe that Chinese investment could easily offset the threat of withdrawal of western capital and how they can view the western model as a failed one given the chaos that currently reigns in the west.

As for some of the commentators’ attempt at explaining their attitude by their inbred racial inferiority flies in the face of a libertarian attitude! If white South-Africans really believed in their inherent racial superiority why did they have to promulgate discriminatory laws in order to protect skilled white people’s jobs during the apartheid era and before. Liberty is a pathway to racial harmony like no other and libertarianism would suffer immeasurably if a greater standard of reasoning is not applied in our discourse.

Keith March 5, 2012 at 9:35 pm

Ray,

How stolen?

Stolen implies from a prior owner.

Ownership implies first use, gift or purchase.

I will concede that the “old order” did tie up mining and prospecting rights in favour of a few large companies which they approved of, but:

was there first use before the ancestors of those whom you refer to as having “inbred racial inferiority” arrived?

if you think that is so, please enlighten us on where you think might be good places to look for pre colonial working of platinum, diamonds, coal, chromite, fluorspar, uranium…

Or where we might find anything more than the most superficial stream workings or picking up of loose surface material for the likes of gold, iron, manganese, copper… and other materials well known for thousands of years, dating from the pre colonial period?

I did some work on two new coal mining projects in Botswana, which are now producing. For family reasons, I missed out on seeing the incredibly thick and previously untouched coal seams now being explored in Mozambique.

Please enlighten me on how these, or any of the examples in RSA, were of any value prior to discovery, quantification and exploitation?

STEPHEN RAMBAU March 5, 2012 at 10:54 pm

To say that “Africa without whites will remain a dark continent is a racist statement. Its not like that. Whites have been only participant of economic power ever since, espeacially in South Africa where appartheid was institutionalised. The denial of blacks into the economy have resulted this problem. We in South Africa have advocated equal participation of whites and blacks in the economy and to deracialised the economy. Lets not forget that Blacks where rob of their Lands by White British Colonialists and the Afrikaners of the Dutch East Indian Company. Blacks where previously forces into Slavery by colonial masters. America and Britain have strive through the benefits of Slavery. Let us be realistic. There is nothing wrong when the Blacks demand equil share in the economy. I would like to see the Black Captains of IndustriaL REVOLOTION then I will know that Mises hope and wishes where achived. Racism is a desease in the heart. A white man is not better than a Black Man , neither an Arab is better than a Non Arab, A jew is not better than a non Jew. All men are equal is the eyes of God. What makes man supiriour to the other is his faith and good practice. Not stealing African menirals and eslaving Blacks. But good human labour relation, motivating those who have produce hard whether whites or black. Remember that Creek / western civilization was achives through the eyes of Egyptians and the Muslims.

Regards
Stephen Rambau

Paul Trombley March 6, 2012 at 3:51 pm

Blacks where previously forces into Slavery by colonial masters. America and Britain have strive through the benefits of Slavery. Let us be realistic.

Ok, let’s be realistic. Were blacks in Africa involved in the slave trade as sellers? In fact, were most of the people taken captive not under the rule of “colonial masters” but of local, subsaharan masters, i.e. of blacks?

Bob March 6, 2012 at 8:18 pm

What, racist like the Hutu and Tutsi? LOL!

Dagnytg March 7, 2012 at 5:10 am

Stephen,

The thing I’ve learned over the years blogging is this site tends to attract (only a few) highly motivated wanna-be libertarians who discredit the Libertarian movement and the name of the Mises Institute to promote their concepts of white cultural supremacy. They do this as a way to disguise their personal insecurities (whether they’re physical, intellectual, or both I’m not sure).

Needless to say, any respecting libertarian understands that libertarianism is about ethics. Those ethics embrace the concept non-aggression (non-violence) towards others and their property.

Concepts of IQ and culturalism are not part of the discussion. One’s personal views on these issues have nothing to do with libertarianism or Austrian economics. Why one wishes to promote their personal biases and prejudices on an intellectual site like Mises.org is beyond me, but I refer to the last sentence of my first paragraph.

Africa’s problems have only to do with lack of capital and government. Eliminate the latter and the former will follow.

Then again, the U.S. seems to be rapidly following the same prescription for disaster, but in our case, high IQ white males with PhD’s, mostly from elite East Coast universities, are leading us to ruin.

I wonder what irrational racial conclusion could come from that observation.

The Anti-Gnostic March 7, 2012 at 9:30 am

“Concepts of IQ and culturalism are not part of the discussion. One’s personal views on these issues have nothing to do with libertarianism or Austrian economics.”

The Third World’s “big man” cultures and high time preference associated with lower IQ are a part of the discussion whether you like it or not. Libertarianism (like classical liberalism) is a political philosophy of Western Europe and the British Isles. These ideas have traction here because of the higher mean IQ of the residents. Population groups muddling along with an average 85 IQ are simply not going to grasp the abstract points. If power to appropriate resources is available for the taking, they are going to take it, not sit down and draft a charter based on Lockean principles.

There is no denying the US elites have adopted the rational attitude of gettin’ while the gettin’s good, but Africa will never be libertarian in the way you envision absent a high degree of colonialism, on an even larger scale than the Chinese are currently practicing. Ironically, that is Africa’s bright future: entire polities will sell their territorial administration and resources to foreign investors.

Dagnytg March 8, 2012 at 5:46 am

Wow, I didn’t realize so many would reply to my curt and cheeky comment, but I’m glad to see it inspired some thought.

The Anti-Gnostic,

High time preferences are an outcome of scarcity and in many circumstances may be the most intelligent use of resources. There is no correlation between intellect and high/low time preferences because time preferences are a response to externalities.

Your understanding of libertarianism is flawed because is not a political philosophy. I repeat – it is an ethical standard. I do not believe this standard is unique to Western Europe or the U.K. because non-aggression towards people and property is a universally understood axiom.

This axiom has been practiced in some form by all cultures throughout history. It is essentially the foundation of cooperation. Without cooperation, there is no society. IQ has nothing to do with cooperation. Cooperation satisfies the desire to alleviate scarcity.

Your assumption that a society is only successful if it can grasp abstract concepts is also flawed. The theory of comparative advantage eliminates this need. Furthermore, a freed market is not an abstract concept. That is why we find markets and trade throughout history and cultures. It does not require a great IQ to trade something I have in abundance for something (scarce) that I need.

Last, I am incredibly confused by your comment on the Chinese that implies foreign investment (capital) is a form of colonialism. Capital is capital…nothing more. Its origins are inconsequential but capital is the backbone for the development of higher order goods that eventually lead to the development of lower order goods. All this is a benefit to society. (Need I mention capital is the foundation of Austrian economics?)

I think we may benefit from some introspection. The concept of IQ and abstract thinking (both incredibly subjective terms) and the need to justify the success or failure of a society based on those concepts is derived not from libertarian thought but progressive thought of the late 19th century. Essentially, it was (and still is) their belief that a society benefits if those with the highest IQ and ability (i.e. abstract thought) are in charge and through social engineering can create a better world.

The Anti-Gnostic, I know you are a longtime blogger here and a sincere libertarian, but I think your comment (subconsciously) implies sympathies with the aforementioned progressives at some level. As libertarians, we must be careful not to be duped into adopting elitist versions of progressivism (ethnocentric or otherwise) disguised as libertarianism.

Keith March 7, 2012 at 11:11 am

Dantyg wrote:
“Then again, the U.S. seems to be rapidly following the same prescription for disaster, but in our case, high IQ white males with PhD’s, mostly from elite East Coast universities, are leading us to ruin.”

That sounds a lot like a cultural problem, you’ve identified a population and their common cultural features.

Contrary to your assertion, that:
“Concepts of IQ and culturalism are not part of the discussion. One’s personal views on these issues have nothing to do with libertarianism or Austrian economics.”

So long as IQ affects how long it takes a person to grasp a new concept, how complicated a concept they can grasp, and thus what tasks they can perform and so the level they can rise to within the division of labour… (and I don’t see that changing any time soon), then IQ is firmly within the boundary fence of Praxeology, the study of human action.

Likewise, if culture says that you should say, share all of your produce amongst your neighbours without seeking payment, or that you should keep cattle on the traditional common grazing, rather than dirty yourself in growing crops or working in a shop…

Just two relatively common cultural viewpoints on the continent,

Then why should discussion of that and its affects be taboo for economics – of any flavour?

Let us then take a little closer look at the issue of IQ:

Mises has given probably the clearest explanation available of the differences between class probability and case probability.

Let’s assume that I have a randomly selected individual from Equatorial Guinea (national average iq of around 59) stood in front of me.

What does that average figure tell me about the intelligence of that individual?

Absolutely nothing!

I could well have the entire population of a small Equatorial Guinean town, say a couple of thousand people stood in front of me, and that figure may still tell me nothing of my sample’s average IQ, which could perhaps be 107 to 109(the same average as Hong Kong, Shanghai, or the worshippers at an average British or US synagogue, and a bit below an average university lecture hall), without being inconsistent with the national average.

True, that may comprise a substantial part of the entire smart fraction of the country, but it is, nevertheless possible.

We have not touched upon what environmental factors may be contributing to the low average, things like traditional diets which result in children being deficient in say iodine, or certain fatty acids and amino acids,

or, perhaps a culture where for centuries, the local overlords searched out the nails which stood proud, those with sufficeint intelligence to threaten the peace, and killed them, or sold them to the slavers, next time they called around…

However the low average IQs arose, or higher ones failed to arise, they are there.

Are we going to discuss them, or do we by keeping silent, grant a default monopoly on that conversation, to the racists?

Bob March 7, 2012 at 6:26 pm

By “racists” I assume you mean those of European extraction who dare to claim some racial identity, accepted, or rather celebrated for all others, Asians, blacks, Jews, indigenous peoples and so forth.
Also, apartheid, another classic example of government failure, didn’t arise in a vacuum, but in response to an ANC tactic. Strategies employed by the ANC to win by demography were hardly libertarian, and no very woman-friendly either.
goo.gl/5Ybv4

Clare Krishan March 7, 2012 at 11:22 am

“Concepts of IQ and culturalism are not part of the discussion. ” – sorry Dagnytg, but you’re mistaken.
Listen in on the Hoppe podcast linked above, where he quoted Mises characterization of Malthus in terms of natural selection of human intellect as eugenic in effect (making a methodological subjective value statement on the “good” of breeding). We armchair scholars really do have to defend the actual facts, not merely our own or others PC perception of them. Personally, raw intellect (without the concommitant social competencies needed to exploit it) seems to me to be a very thin argument to base a gens root for human social and cultural goods. I prefer the much broader original 19thC Menger/Darwinian use of the derived term genetic to refer to associations of persons, a people aka gens in Latin, the social marketplace contingent in a certain time or place if you will, where the generation of techne applied through peosie comes into play. Empiricist biological determinancy cannot explain how such huge delta’s in flourishing arrived in a relatively (in evolution terms) tiny time frame for fecundity. Tribes of southern origin had been relocating all over the continent (Hibernians and Iberians both came from the Iberi tribes on the Bosporous, Irish and Spanish celts in other words are the same genetic raw material, north and south. West (visigoth) and Eastern (austrogoths) goths were Gaets first, harking from the Caucasus mountains of Persia, present day Iran.

No, eugenics cannot explain the rapid economic development of the past two centuries. The refinement in cooperation of techne (science, travel via road,rail, sail and printed page) and poesie (political and cultural transmission via ambitious social entrepreneurs such as mutual beneficent societies particularly in religious communities) may be better places to look for explanatory robustness worthy of the maturity of Austrian ideas. Mises was mistaken about population, but no more than most men of that age, in his scienticism. Greater population may mean a lower average wealth for certain segments of the social marketplace, but there is no correlation that it limits TOTAL wealth creation, rather the opposite – Africa needs many more people to construct the social commerce capital (roads, industry, manufacturing, services) to enrich its people, see
http://catholiceducation.org/articles/population/pc0005.html “Population Politics and the Shambles of Africa” by JIM PERON
“Lord Bauer, in The Development Frontier, suggests that the lack of people in Africa may be the cause of some of the problems:

“… population growth can have favourable external effects. It can facilitate the more effective division of labour and thereby increase real incomes. In fact, in much of Southeast Asia, Africa, and Latin America, sparseness of population inhibits economic advance. It retards the development of transport facilities and communications, and thus inhibits the movement of people and goods and the spread of new ideas and methods. These obstacles to enterprise and economic advance are particularly difficult to overcome.”

Bauer isn’t alone in making this observation. A growing number of authorities believe that Africa is actually underpopulated. Africa is now the world’s most sparsely populated continent (although it now has the most rapid population growth rate) and many parts of it are so sparsely populated that it is unable to support anything more than very rudimentary communications and transportation networks. The result is that the distribution and diffusion of goods, services, and ideas are severely retarded.

Its another of those confounded issues that makes being Roman Catholic AND a proponent of Austrian school economics so challenging, but I’m not conceding defeat by a long shot, and neither should you. Its not irresolvable – we need our raw intellect certainly, but also docile gentlemanly ‘gens’, that form of cultivated, civilized, unmisbegotten integral human development of all that is good …
[Middle English gentil, courteous, noble, from Old French, from Latin gentlis, of the same clan, from gens, gent-, clan; see gen- in Indo-European roots. ]

Keith March 7, 2012 at 2:40 pm

Clare,
It is refreshing to come across someone else who thinks that many areas (perhaps even most) of Africa would benefit from having more people.

The cooperative behaviour is more paradoxical.

Visit an African village and the people are almost without exception, well mannered, hospitable and will go out of their way to be helpful. Introduce yourself to the local leader, ask him to recommend a local guide, and you can wander at will without hindrance.

That contrasts with the homicide rate. I spent quite some time in the medium sized coal mining town of Vryheid, in Kwa Zulu – Natal.

There was an average of about 4 homicides a week. In one report in the local paper, the cops were quoted as believing that the victim had been killed for his car radio.

There were unsupported, but believable local anecdotes of people being killed for their smart shoes to be stolen.

In some of the more northerly areas of South Africa, the homicide rate for white farmers, made the immediate post war Iraqi insurgency look tame.

Dagnytg March 10, 2012 at 1:18 pm

Clare,

I appreciate your comment and insight. The reference to Bauer is very compelling. Actually, his observation of under-population seems obvious.

I would like to take this opportunity to show that Hoppe (in the podcast) is not quoting Mises but taking his words and ideas out of context to promote his own highly misguided (if not embarrassing) view of human eugenics.

At 5:14, Hoppe mentions the Misean term “supernumerary specimens” which he says Mises describes as a consequence of overpopulation to whom there was no place in the division of labor and had to be weeded out due to lack of sustenance. However, in the original text…Mises says:

Nonhuman beings are entirely subject to the operation of the biological law described by Malthus. [4]For them the statement that their numbers tend to encroach upon the means of subsistence and that the supernumerary specimens are weeded out by want of sustenance is valid without any exception. With reverence to the nonhuman animals, the notion of minimum sustenance has an unequivocal, uniquely determined sense. But the case is different with man. [Emphasis added]

At 6:04, Hoppe uses the term “iron law of wages” to support his eugenics theory but Mises says:

The fundamental error implied in the iron law of wages was precisely the fact that it looked upon men–or at least upon the wage earners–as beings exclusively driven by animal impulses. Its champions failed to realize that man differs from the beasts as far as he aims also at specifically human ends, which one may call higher or more sublime ends.

At 6:25, he denounces the Misean and Rothbardian concepts of property rights in the role of industrialization.

Intellect and eugenics Hoppe implies at (11:45) stating mankind became smarter around 1800 due to breeding. This conclusion is at odds with the study of Anthropology and Genetics (and thus, makes him look like a second rate intellectual.)

What we have is Hoppe misinterpreting Mises solely to support his cockamamie theory.

My conclusion that IQ and culturalism are not part of the discussion is due to the observation that these concepts are nowhere in the realm of libertarian ethics and are completely out of context based on the writings of Mises.

Claire, you are right. We have to “defend the actual facts” especially when agenda-minded or ignorant people embrace one man’s words without question (i.e. If Hoppe said it, it must be true.)

Note:
Mises quotes: http://mises.org/humanaction/chap24sec2.asp
(See paragraphs 4 and 2 respectively.)
Podcast- http://mises.org/media/4691

Bob March 7, 2012 at 5:42 pm

Oh, with regard to the last question, there is nothing irrational about those high-IQ whites and their loyalties. There is an agenda, and that’s what concerns me, and why I am motivated, as you correctly observe.
goo.gl/1Qr42

Bob March 7, 2012 at 6:10 pm

My above comment was directed at Dagnytg.

Keith March 6, 2012 at 9:10 am

There appear to be suggestions that two wrong actions will somehow make a “right” action.

Taking ownership of something nature given by first use is entirely consistent with liberty and free markets.

Rothbard, in M,E&S is also very clear in his argument, that even IF the present owners had achieved ownership by violent means…

On a free market, then their continued ownership is dependent upon their efficient use of that resource or property in the service of others. As Rothbard clearly says, this is something for which their previous activity as robbers, has done little to equip them for.

I’ll give an example from England. A friend has just bought the latest trance of agricultural land from the heir to a landed estate, originally granted his ancestors in the armed robbery of 1066.

The current heir is unable to manage the property, or recruit employees who can manage it efficiently enough to yield the income which his freely chosen lifestyle requires.

I could also phrase that, to say that the heir is incapable of managing his lifestyle to stay within his available means, without consuming his inherited capital.

Such are the costs of fast cars, fine wines, fast women and slow horses.

My friend, by contrast, is able to manage his land (all bought by him out of savings from the little of his earned income that is left after paying British taxes), efficiently enough that he expects to be able to profit by paying his former feudal lord, a freely arrived at price (arrived at in an openly advertised and well attended public auction).

Oh, sure, some of his neighbours hate him, his success is seen as unfair by them, as they bitch over their beers while he is still outside, working and saving… If only the government would recognise their self perceived greater merit?

Thus, productive assets and resources, even those which had been obtained by violence, are transferred to those who use them most efficiently use them to serve others.

The 1068 “Harrying of the North” an event which is not taught in British schools, consisted of the destruction of all buildings, crops and livestock in large areas of England, resulting in a famine from which the population of many areas of England did not recover for around 8 centuries.

I will now proceed to slaughter a few sacred cows.

The “Harrying” could easily be used by unscrupulous politicians to justify expropriating the few remaining landed descendants of the side which came first at Hastings in 1066, in favour of the descendants of the side which came second.

Except, who are the pure descendants? they are thoroughly mixed. The same is partially true in Africa, some places more than others, obviously. The areas visited by the Portuguese over five centuries ago, often have a “Mulatto” professional and administrative class, should they be expropriated, or propriated?

I know that this is an uncomfortably sensitive issue, but compare many Afrikaans “whites” with the “white” population of the low countries… one is somewhat darker haired and eyed, and less pointy featured, and more curly haired than the other, no?

expropriate, or propriate?

what of those who freely traded with the first users of the resources to obtain them, do they owe some blood debt for sins of “their race”, in the distant past? (by the way, just what colour were those who captured slaves in the African interior and took them to the coasts to sell? did only one race ever use slaves? and did all races unite to stop slave trading and free the majority of those who were in bondage? and what credits and debits should accrue?)

And what of the politicians themselves?

Who created the violent apparatus which they plan to use for theft in favour of their constituency and cronies?

If the distribution of resources is illegitimate, what then, of the apparatus and boundaries of state?

Come to that, what of the whites expropriated by the Apartheid regime allong the Skei River for the creation of the Transkei “Bantu-stan”, or the San, expropriated by the newly arriving Bantu peoples.

Is the whole process not ill founded and illegitimate?

The lesson, the whole world over, is;

Everyone is a looser when violent expropriation is used, as those put in charge of the stolen resources are not those best able to use them to serve others.

Look at the private companies now working Tanzania’s gold mines, Zambia’s copper belt, or Britain’s coal mines, now that those whom the governments tasked with their operation have been seen to fail so miserably.

Guess what; we can all share in their success, as we can all choose to invest the money we earn by serving others, and save by our own good management of our affairs, in those whom we see as successful in using scarce resources in efficiently serving others, and who thus earn profits.

Paul Trombley March 6, 2012 at 4:00 pm

After six weeks, about half the the dismissed workers had been replaced, but workers are being prevented from entering the mine by striking workers.

Just a little quibble: A person who is on strike, and not working elsewhere, is not a worker at all. In fact, such a person, while usu. demonstrating under a sign that reads “ON STRIKE”, has announced “I quit” to his or her employer.

Also, that striker’s sign means, “I quit my job, but I demand that my former employer do business again with me on terms more favorable to me. If I can’t get my way, I’ll smear his reputation, obstruct his business, and intimidate my own competition.”

Michael A. Clem March 7, 2012 at 12:32 pm

I’m convinced that there’s a flaw in this racist thinking that some commentators have. One point would be that the South African strikers and the South African government don’t really seem to be doing anything different than strikers and governments in any other nation do or have done. So where does race come into it?

Bob March 7, 2012 at 8:39 pm

French explicitly mentions the “indigenisation policy” in his post. If that’s not a reference to race, I don’t know what is.

Michael A. Clem March 8, 2012 at 12:21 pm

Okay, so someone mentioned something to do with race. That doesn’t mean that they’re right. Explain how race is actually tied into the economics of the situation. Not omeone’s attempt to obfuscate the issue.

Keith March 10, 2012 at 8:58 am

South Africa has government quotas for what proportions of what races are required in each organizational level of businesses of certain sizes.

This also includes the “ownership” of the business, which often means donating a share of the business to an individual or a group who have the correct skin colour, curliness of hair and other associated characteristics (as defined by apartheid…)

These are enforced by only allowing those meeting the highest standard for employing; I think the term is something like “those most disadvantaged by the apartheid regime…”, to bid for government contracts or obtain things like mineral exploration licences.

I seem to remember business taxation also being rated on this basis.

given that a significant proportion of “Black” people who were of school age in the 1980s never attended because of ANC school boycotts, and you can understand that there is a very small number of functionally literate black people in their mid careers.

Add in the absolutely appalling mortality rate due to AIDS, and I’ll give an example of that:

a pal who worked in Rustenburg in the 90s said that about 20% of the new intake of migrant workers tested positive and was sent home. Of those who were negative and were taken on, it was only permissible to re-test those who had suffered an injury requiring medical attention. That sample gave a rate of around 78% positives!

I know that access to antivirals has improved (we can debate the ethics of the South African Government stealing the “intellectual property” of the drug companies, and the likely effects of that action on new AIDS drug development…), but, you are still going to be loosing about 1/5th of your trained work force every five years.

I know that all racial groups can develop AIDS, but, it is firstly, most widely distributed in the “black” population of South Africa, and secondly, there is some evidence to suggest that the genotype most susceptible to infection and developing the syndrome is absent from the white population (speculation is that they were also the susceptible to plague and so died out due to that cause in the 1300s).

What this adds up to, is a shortage of educated mid career “blacks”,

So, while whites and to some extent “coloureds” are discriminated against, and are therefore leaving South Africa to follow their careers. There are some very competent “blacks” rising to their true potential, unobstructed, and there are also a lot more mediocre and downright marginal people, being competed for, to make up numbers.

Now,
go back to the figures of who pays tax,

Only the companies with the most of X races get government contracts,

All companies are competing (with money) for the limited (reasons for the limited size given above) pool of competent blacks.

This money comes from taxes on the most productive.

Now add in the government, like so many African governments before them, eyeing the most remunerative businesses in the country, for expropriation, with the pretext of correcting past racial wrongs (and developing the economy).

Looking at past examples of this, let’s say the “Africanization” of Kenya’s tourist industry ( Mr B H O’Bama’s father was one of the architects of that),

The practical side of it consisted of a bureaucrat ( in a Mercedes paid for by UNICEF) would show up at a hotel, and inform the owners that;

“This really belongs to the African people*. You have one hour to pack a bag and leave.”

Usually the new management consisted of the bureaucrat’s direct family members. Fawlty Towers has nothing to match Kenyan hotels in the late 70s and early 80s! It was reflected by the drop in tourist business as the word spread.

Apartheid may have been the oppression of other races by one

it looks like the new South Africa is turning into the exact opposite.

_________________________________________—-
* being able to trace your family history in Africa back to around 1700, matters not one iota, when a bureaucrat is coming to expropriate you.

Keith March 7, 2012 at 3:42 pm

South Africa’s demagogues, old and new, have sown the seeds of fear of hobbesian racial conflict, and reaped the harvest of electoral rewards, for around 2 centuries or more.

I’ve just lost a long comment explaining some of the background, so I’ll try to give a brief summary.

The National Party was, like some of the pre Boer War republics, into Prussian Pattern central planning, and your race determined where you were born, who was allowed to legally raise you, where, and which school you could attend, then later, what jobs you could do, even where you were buried when you died…

And most disgustingly, the crimminal law even wanted to control who you made love to!

Add in the Two major Black Groups (Zulu and Xhosa), several smaller ones,

Whites, some with family histories in Southern Africa going back to the beginning of the 18th century!

of Afrikaans, British, German, later Dutch, Jewish and other European origins (look at how many wars the countries of origin fought and who burned out whose farms and who put whose great grandma into concentration camps in 1900, 1914 or 1940…).

Several million of Indian, Chinese and Malay origin,

and last, but certainly not least, several million people of various mixed race ancestry.

All of these, were and are played off against each other, and used as hobbesgoblins to instil fear and envy in others.

Those who have spent more time in South Africa than I did, will probably clarify this, but it is a pretty safe bet, that some politician will make any South African issue into a racial issue.

Bob March 7, 2012 at 9:02 pm

Keith,
I don’t think any of the comments here have defended state discrimination, unfortunate and inhuman as are other dictates from Big Brother. But it’s this doesn’t knock over the case for discriminating privately, especially where differences are substantiated by a weight of scientific evidence. And even if they were no differences, bigotry is moral choice and libertarianism is merely a code of non-aggression, not of fraternal love.

Dagnytg March 10, 2012 at 5:41 am

Bob,

You’re absolutely right. Bigotry is a choice…so is polygamy, drug use, prostitution, and an infinite amount of other personal choices people can make with their free will.

Funny though, I rarely see libertarians voice the virtues of their personal choices. I’ve never read a comment extolling how great it is to get high or why one should experience a prostitute. I don’t see Christian libertarians boasting how we’d be better off with God nor have I have read comments by homosexual libertarians suggesting I should switch to the other side.

No Bob, the only so-called libertarians who frequently boast their personal choices at mises.org are bigots. Why, I have no idea. Maybe because they’re ignored and like children they need attention. Maybe they’re ignorant libertarians or maybe they’re trolls sent to discredit our message.

Bottom-line, keep your personal choices to yourself. If you can converse in the areas of ethics and economics, by all means attempt an intelligent comment. Otherwise, I can search for an appropriate Klan blog where you can voice your personal choices among friends.

Bob March 10, 2012 at 6:31 pm

I don’t consider myself a bigot in the slightest, but I’m not hypocritical enough to extol the virtues of association, whilst at the same time living a life of disassociation in my nice, safe virtually ethnically homogeneous neighbourhood.

By the way, no one forces you to read comments, or indeed retort. And thanks for the invite to decamp, which I will disregard until you take over ownership of the blog.

Interesting that you reflexively caste me in the KKK mold, without knowing whether I’m Asian or Jewish. Isn’t that being a little presumptuous?

augusto March 11, 2012 at 3:35 am

“Funny though, I rarely see libertarians voice the virtues of their personal choices. I’ve never read a comment extolling how great it is to get high or why one should experience a prostitute.”

I think this might help: http://academy.mises.org/courses/defending/

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