David Seymour: Govt has given us a 'philosophical ding-dong'

Opinion 05/03/2019
David Seymour. Photo: Mediaworks.

By David Seymour, ACT Party leader.

OPINION: If nothing else, our government has given us a good old philosophical ding-dong. No more of good old John ‘aw shucks’ Key shrugging his shoulders and saying “y’know, at the end of the day, I reckon, most Kiwis…”

As I wrote a few blogs ago, this Government has deep red ideological conviction. Not enough houses? The Government will build them. Failing polytechnics? Centralise them into one big organisation. Concern about the regions? Give out $3 billion of taxpayer-funded political pork. Education? Close charter schools, and centralise control of state schools. Inequality? Tax capital gains. Need to get elected? Give billions of dollars to already-privileged tertiary students.

Don’t like something? Ban it.

Labour still haven’t found a problem that can’t be solved with more government ownership, more government spending (and therefore taxes) and more rules and regulations. They make it easy to forget that free markets have done more for human welfare than any single idea. Not just by a small margin, decisively.

What do we mean by free markets?

A place where you own yourself and your property. You are free to invest in your property and exchange with others. The role of government is to prevent people taking advantage of others through force or fraud.

Of course there is nowhere in the world where government restricts itself to only those activities. Even Hong Kong, the freest economy in the world, still has taxes, even if they are only fifteen per cent. At the other end of the spectrum, even communist countries were kept going by black markets that operated in spite of draconian rules and regulations. There are, though, countries right along the spectrum from those who practice free markets and those who don’t.

Thankfully, the Fraser Institute from Vancouver, Canada, has been measuring how free people are in different countries are since 1974. We now have 45 years of evidence about whether free markets work.

Specifically, they measured how free people are to own property, trade internationally, use currency that is free of political interference, make and spend their own money with reasonable taxes, and be free of onerous government regulations.

On all the important measures, there is no contest. Compare the top twenty per cent of countries in this index with the bottom twenty per cent. Free market countries are much wealthier. People in free market countries live longer. Civil liberties and political rights are better in free market countries.

Even for things that the current New Zealand government thinks are important, free markets are better for. This Government wants to have a ‘Wellbeing Budget.’ Well, happiness is demonstrably higher in free market countries. This Government is very hot on gender equality. Men and women are more equal in free market countries. If you are worried about poverty, free markets are for you. If you are ‘poor’ in a free market country, you earn eight times more than someone who is poor in an unfree country.

Put another way, the five freest countries are Hong Kong, Singapore, New Zealand, Switzerland and Ireland. The five least free countries are Syria, Algeria, Argentina, Libya, and lastly Venezuela. Where would you rather live?

Unfortunately, this Government's instincts are to push us towards the policies of the bottom five, not the top.

Political left-wingers like to talk a lot about being evidence-based and love to think of themselves as the clever kids on the political block.

One of their starting points should be this: When in doubt, freedom works.

David Seymour is leader of the ACT Party.