The productivity of public capital

 The productivity of public capital

[Does this qualify as an oxymoron?]

The term ‘productivity’ is often assumed to apply mainly to labour.

The term ‘capital’  appears synonymous with “investments made”.

In business, ‘ROI’ stands for “return on investment”. A businessman, contemplating an investment decision, will carefully assess the prospect of an acceptable ROI in making that decision. In some circumstances, the businessman may even have several investment options, and will compare and select the best based on prospective ROI.

An investment decision may require several ‘inputs’, or “factors of production”, in order for the investment to achieve its ROI. For example, investments in computer systems are considered "capital investments", and are normally made in order to leverage greater, more profitable  ‘outputs’ from labour in the production process. In this case, the various 'inputs' would include the money spent on the equipment, the salaries and benefits paid to the employees, as well as the cost to train the employees on the new productivity-enhancing technology. Lets label these inputs as: return on capital [ROC], return on training [ROT], and return on employee compensation [ROEC].

In government, the concepts of 'profit' and 'loss' rarely come into play when considering investment decisions. The ROEC remains fixed under the terms of union contracts and every union employee will receive the same level of position-related, seniority-adjusted compensation irrespective of individual employee 'output' performance. The ROT is never discussed or measured and, along with capital spending, they are both simply assumed to be the cost of running the government operation. In essence, the ROC is of little interest to public service managers; they are more interested in increasing the size of their future budgets than measuring productivity returns from past capital spending.

Why do these different views of investments exist between business and government? 
Government leaders are always referring to the "investments" they have made on behalf of all citizens yet when was the last time one of these leaders reported on their actual, measurable ROI? Never!   

Do government leaders not expect greater productivity with investment such as these, or do they simply pay lip service to these concepts?

Of course, this conundrum is not new and these differences are unlikely to ever change without substantial changes in our democratic institutions and the governance of their operations.

However, by contemplating the "productivity of public capital" [or lack thereof] , it reinforces the Ontario Libertarian Party's belief that much of government operations should be privatized. One thing is clear: the productivity of public capital spending will never match the productivity of private capital spending.

Is slavery our best option?

You had better hope so because it may be the only one remaining after our creeping statism completes its assaults on our liberties.  Be careful what you vote for!

Friedrich Hayek in his famous book - the Road to Serfdom - which was  published over 60 years ago, vividly portrayed the erosion of human rights and liberties that inevitably coincides  with the growth of central governments and their powers. This book was the first one to raise alarm bells in my head regarding these risks. I have become a wary observer and student of these trends ever since, and certain questions continue to dog me about our society: 

1. Are we afraid to choose what's best for ourselves and our families? 
2. Has life become so complex that we have lost the confidence to chart our own course in life? 
3. Why do we persistently elect politicians and empower bureaucrats to decide our fate when it is so blatantly clear that their interests do not align with our own?

It frightens me to think that our central governments have been so successful at brainwashing our citizens to the extent that, like the Stepford wives,  they continue to sleepwalk into more and more conditions of slavery.

The Dashboard and the Ant

Yesterday, I was driving my car south along Highway 400 returning home from cross-country skiing.

While driving, I imagined observing an ant traversing my dashboard.

Then I decided to imagine what it would be like to be that ant and observe that event from its perspective. Of course, and ant doesn't know what the dashboard is. It likely perceives the dashboard as a large , reasonably-flat space along which to travel.

Next, I decided to imagine placing awareness into a quark existing in the same general area as the ant. From reading that I have done concerning sub atomic particles, I learned that there exists vast amounts of empty space between these particles. This space would be roughly comparable in scope to the dimensions of outer space  and analogous to the moving bodies within a solar system. At the subatomic level, particles such as quarks have very little mass and generally have some electrical charge. Therefore, in my imagining, I perceived the quark within the ant as moving within a vast empty domain which would manifest strange characteristics compared to what I experience as a human being living on earth.

Finally, I imagined my consciousness being able to observe the ant crossing my dashboard from a point somewhere within our solar system other than earth. Of course, my ability to observe the ant from that point would be just as challenging as my current ability to observe a quark without some extraordinary piece of technology.

This exercise of experiencing the same event of the ant walking across the dashboard from different perspectives reminds me of the Heisenberg Principle where a scientist observed the same subatomic particle at 2 different locations simultaneously. This was only possible, he reasoned, because the only thing that these 2 apparent events had in common was his consciousness and its ability to observe.

Later, I asked my wife if she had ever seen the face of God. When she appeared confused by the question, I explained that if consciousness is the only reality, then God is must be consciousness.  Every sentient being sees the face of God in every sentient moment.

In praise of Ideology

It seems that having an ideological point of view is a ‘bad’ thing these days [ unless, of course, the person’s ideological point of view supports your own J ].

To me, someone with an ideologically slanted argument is the same thing as someone expressing their personal vision as to how they wish to live their life and how they wish to be treated by others in society.

‘Vision’ seems to be a good thing in business circles. A leader, of course,  cannot lead successfully and convince others to follow their vision unless it hangs together in a meaningful way for the followers .

I have a vision for my life and this vision has been shaped by my life experiences, lots of reading, and many instances where I responded with angry or indignant reactions to people who have tried to interfer with my freedom to choose how to make my own way in life.

I consider myself a strong, self-reliant and self-made man who owes less to others for my success than I do to my own efforts and choices. Maybe I have been more fortunate than others in what life has provided me in terms of talent and circumstances … and maybe not. 

Some people may point their finger at me and claim that I "had it easy"  because I was “dealt better cards” at birth. But if this is true, how do you explain successful lives of Stephen Hawking or Oprah Winfrey?

None of us can change our life endowments — we can only exploit them to our advantage through effort and choice. Given this truth, we are all equal in our ability to make prudent choices and apply our best efforts towards  every opportunity and obstacle that life chooses to throw at us.

For someone to hold an ideological point of view, it means that life has challenged them in ways that have elicited this emotional and intellectual response in them. The fact that they can articulate their ideology  -  whether religious, philosophical  or political – is to be respected because it summates their  collection of efforts and choices in a way that is nothing less than the fingerprint of their soul and the vision for which their bell tolls. 

To join, or not to join - THAT should be the question!

The time has come to repeal the legislation that mandates all Ontario teachers be a union member. Give each teacher the right to choose whether or not to be associated in any manner whatsoever with a union — a right that is the real basis of democracy. 

Our best teachers are the ones who truly put children first over union politics. These professionals are the the ones to whom we entrust with much of the responsibility to guide and shape out children into future productive citizens. They deserve our support to help them to re-gain the respect and trust of every citizen - and this cannot be achieved when they are not free to choose between union representation or no union representation. Furthermore, our best teachers should never not be forced to pay union dues as a condition of employment if they choose not to join the union.

Finally, we must support “safe workplace” policies for teachers so that those who execcise their Right to Choose and orgo union representation will be protected from the bullying tactics that union members often use to alienate and punish non-union supporters. 

Constitution Act, 1867

I can give you my opinion, but I am not sure it is correct.

Canada's federal government began to collect income taxes in 1917 as a temporary measure that has never been revoked. This tax, and other forms of tax that have following it, became the source of funding that has been used to build up the assets of government. In property rights terms, all taxes begin as property of wealth producers and original asset owners but become property of the state once that are received by the government as tax receipts. In other words, there is a change in ownership. If income tax was initially a temporary wartime measure, then when did it become a permanent and legal measure?  Or has it? 

The constitutional authority for the federal income tax is found in section 91 paragraph 3 of the Constitution Act, 1867, which assigns to the federal Parliament power over "The raising of Money by any Mode or System of Taxation".

The constitutional authority for the various provincial income taxes is found in section 92 paragraph 2 of the Constitution Act, 1867, which assigns to the legislature of each province the power of "Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes". The courts have held that "an income tax is the most typical form of direct taxation".

Canada levies personal income tax on the worldwide income of individuals resident in Canada and on certain types of Canadian-source income earned by non-resident individuals.

Quoted from the Income Tax Act R.S.C. 1985: "An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year".

The above implies that Canadian governments have the power to take the property from its citizens, but does not indicate who owns these assets. It is implied that our elected officials have the power to control all tax receipts. To 'control' is different that to 'own'.  You can sell something that you own  for personal gain. You can control the disposition of an asset that you do not own, but not necessarily for personal gain [although politicians often get away with this]. 

With income taxes, this is a transfer of current wealth production to control by governments.

With the selling of government bonds [ and other forms of debt-financing] , this is a transfer of future wealth production to control by governments.

How is it the governments have the power to write IOUs [plus interest] of wealth that has not yet been created? 

With monetary policy, a planned inflation rate of 2% is a retractive transfer of past wealth production[savings] to control by governments.

How is it the governments have the power to continually tax wealth that was created in the past ? 

The answer to the question is complex because the government seems too have control over our past, present and future wealth production and has the power to redistribute this wealth to its political supporters  with the stroke of a pen.

Some may claim that we, the people, may not own our government assets but that we control their allocation by the power of the vote. However if you survey all Canadians, I bet that 

a very few would approve of giving the power to governments that they have today when it is described to them as I have above.