Posted on 04/10/2003 9:45:18 AM PDT by B. A. Conservative
"... Most would agree that the function of government is to safeguard the property and freedom of citizens. Yet, it must be clear by now that the single greatest threat to any citizen's property is its own government. In the United States, the combined burden of local, state and federal tax immediately confiscates between 30% and 60% of our annual incomes, and hits anything a person saves again at the point of death. And that's just the beginning..." --------------------------------------------------------------------------------
"To be controlled in our economic pursuits, means to be...controlled in everything."--F. A. Hayek
The feelings that drive us to defend ourselves against government oppression are an expression of our innate compulsion to control our own property. Each of us shares the feeling that it is unjust and an outrage for our hard-earned wealth to be taken from us without our consent.
The drive to control our own property is not unique to modern man. Studies of animal species, observations of hunter-gatherer groups still in existence, and the written history of civilization leave no question that territorialism is a biological imperative. As sociobiologist E. O. Wilson argues, "The biological formula of territorialism translates easily into the ritual of modern property ownership." By the time our early hominid ancestors were wandering the African savannah millions of years ago, the genes that expressed the "property" instinct were firmly wired into mammalian DNA.
The Declaration of Independence suggests that the Founding Fathers sensed this aspect of human nature. It argued that all men "are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." Life, liberty and the pursuit of happiness, of course, are all aspects of property.
The long train of abuses and usurpations that drove the founding fathers to rebel were triggered by the same genes that give rise to your rage when someone burglarizes your home, steals your car or defrauds you. Those genes are equally activated when that attack comes from government.
Most would agree that the function of government is to safeguard the property and freedom of citizens. Yet, it must be clear by now that the single greatest threat to any citizen's property is its own government. In the United States, the combined burden of local, state and federal tax immediately confiscates between 30% and 60% of our annual incomes, and hits anything a person saves again at the point of death. And that's just the beginning.
Governments also hold monopolies on licenses and permits which, in many countries, prohibit rather than encourage business enterprise and wealth creation. Peruvian economist Hernando de Soto in his brilliant book The Mystery of Capital provides numerous examples of how governments around the world discourage private ownership and enterprise. "An Egyptian who wants to acquire and legally register a lot on state-owned desert land (which means, most land) must wend his way through at least 77 bureaucratic procedures at 31 public and private agencies" which can take from 5 to 14 years. "To build a legal dwelling on former agricultural land would require 6 to 11 years of bureaucratic wrangling."
"In Haiti," writes De Soto, "one way an ordinary person can settle legally on government land is first to lease it from the government for five years and then buy it. Working with associates in Haiti, our researchers found that to obtain such a lease took 65 bureaucratic steps requiring, on average, a little more than two years. All for the privilege of merely leasing the land for five years."
Of course, such government restrictions have given rise to tremendous amounts of underground activity, but people are seldom able to do as well as they could if the activity were legal. "Extra legal businesses," De Soto explains, "are taxed by the lack of good property law and continually have to hide their operations from the authorities. Because they are not incorporated, extralegal entrepreneurs cannot lure investors by selling shares; they cannot get low-interest formal credit because they do not have legal addresses. They cannot reduce risks by declaring limited liability or obtaining insurance coverage...moreover, because extralegal entrepreneurs live in constant fear of government detection and extortion from corrupt officials, they are forced to split and compartmentalize their production facilities between many locations, thereby rarely achieving economies of scale."
Moreover, because illegal businesses are always on the lookout for police, they can forget about openly advertising to build their customer base or making less costly bulk deliveries. Underground businesses are also easy prey for local mafias who know they don't have to fear official police protection of the illegal operation.
Failure to comply with the myriad laws, regulations, rules, codes and policies levies an additional cost. Fail to pay your taxes, allow a permit or license to expire, find your property in the way of a new public project, have any illegal drug found on your premises, violate a building code, deposit an unusual amount of cash into your bank account, have inadequate toilet facilities for handicapped employees, or paint your building a shocking color, and you may be fined, arrested, and have your property taken away by city, county, state, or federal authorities. Attempt to resist and they'll take your "primordial property" (you). They will throw you in prison or even kill you.
Ultimately, protection of your property rests on protecting yourself from all threats, the biggest of which is government itself. The United States is considered by many the freest nation on earth and one in which private property is held in the highest regard. In fact, there are many nations in the Western world, the Pacific Basin, and elsewhere that recognize and respect private property to a much higher degree than the United States
Prudent individuals diversify their financial portfolios to protect against market fluctuations, inflation, deflation, recession, depression, currency devaluation and even war. In the same way, they diversify internationally to protect against the abuses of government.
The function of The Sovereign Society is to help identify those political jurisdictions that offer the most effective and cost-efficient methods of property protection. Using offshore bank accounts, trusts, and real estate, as well as spreading business holdings among different countries, are practical ways to accomplish your primal need to defend and protect your property.
John Pugsley is chairman of The Sovereign Society, author of numerous books and reports on economics, investment and politics, and former editor of John Pugsley's Journal. Mr. Pugsley is the author of two best-sellers: Common Sense Economics and The Alpha Strategy.
Who poses the greater danger to your property, Osama and Sadam or the Democratic Party?
Living in Texas, the state takes 8.75% of what I spend, and 3% of my property annually. The more I invest in property and the better my choice of property investments the greater my share of the tax burden. And the more neglect poor property managers practice, the less they are taxed. Why does government feel the need for incentives in the economy? And why are the incentives applied by governments always backward. Penalize the productive and reward the inefficient, is this the government's formula for growing the wealth of all and the economy in general? Who exactly, is the Enemy of the State?
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On the other hand, if you have a society where the poor look at the rich and say "if I work hard I can be rich too"; and if you have laws that protect the property rights of everyone, rich and poor, then you will have a healthy society that can produce wealth. The healthier the social and legal infrastructure, the more wealth will be generated. It is really that simple.
But beware, for if you allow your society to be subverted from above or below, if you allow criminals to prosper and frauds to go unpunished and the defrauded are left to suffer without compensation, then you can lose that social infrastructure. When the poor look at the rich and say "if I were as good of a thief as him then I could be rich too" then your society is on its way to Hades.
In the Rationalist State, whether of the left or not, there is no settled scheme. Anytime a whole new examination of ownership and "Rights" can take place. Hence de Soto's explanation of why Free Markets alone do little to raise the economy of many states. The conversion of personal wealth and property to capital that can be expanded or traded can't take place with assurance.
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