Today our lesson will be short. We need to make a clarification because we are getting tired of defending our views against people mixing apples with oranges. Their typical complaint is that when governments adopt Austro-Libertarian measures, misery follows. There are two confusions here. The first is that most measures are not Austro-Libertarian; they only look so. The second is that when countries do adopt them, a transition period follows. This transition period is not Austro-Libertarian and cannot be described as such. The road is not the destination, keep your eyes in the goal if you want to see the big picture.
As Absolute Austro-Libertarians we always talk about what the final state of our system is going to look like. Allow us to enumerate:
- freedom is at its maximum
- countries do not exist
- standards of living are high and uniform throughout the world
- money is hard money which cannot be counterfeited (based on some sort of commodity, probably gold and silver)
- business is growing at an acceptable real rate of about 2% to 3% per year
- there is low unemployment and
- there is peace throughout the world
This is the final goal that we are seeking.
However, as we explained before in the lesson When Countries Dissolve, we are not there yet, not by a long shot; and because we are not there yet the situations that we encounter may seem confusing.
In typical transitions from the current systems to a more Austro-Libertarian ones there seems to be a great deal of injustice and unfairness is going on. But that is just the transition stage.
The classic example is when people in western counties complain about losing jobs to developing countries and how unfair that is. The issue that needs to be understood is that unfairness comes from the fact that governments opposed Austro Libertarian systems to begin with. And so, every time one of those governments moves towards more Austro-Libertarian concepts, new markets open and those markets have depressed wages and manufacturing costs simply because the supply of labour outstrips the demand by a lot.
Let us be clear. The opening of new markets is an Austro-Libertarian concept, but what’s caused those markets to be closed to our ideas was not us; it was their governments. All the previous decades of economic misery were caused by these very same governments for not embracing our ways sooner. They are to be blamed, not us.
However, politicians being politicians want to have it both ways. They want to have prosperity so that they may stay in power but also to appear being “social”. The only problem is that prosperity, true, lasting prosperity, can only come from Austro-Libertarian concepts. So they hijack a few selected concepts and place them into practice. If they work, they take the credit, if they don’t, they blame the “free market”.
Typical examples are Brazil, India and China were many companies were or are migrating into, because manufacturing was and is so cheap. In the beginning yes, manufacturing was taken away from first world countries where manufacturing costs are high and moved into low cost manufacturing countries.
However, if you look at what's happening in those countries with medium wages, you will notice that they are rising. As the cost of manufacturing in those low cost manufacturing countries increases, the equation doesn't work any longer. The world will reach a point at which manufacturing costs will be the same regardless of which country you manufacture in. This is roughly what happened in the European Union. Nowadays in the EU it doesn't matter which country you manufacture in because they have roughly similar manufacturing costs.
This process of manufacturing cost equalization happens every time a country adopts more Austro-Libertarian economic measures. It is the same process that took place in EU but it is happening at the world-wide level. What we need to keep in mind is that this is only a transition period, but people do not see that. People see this process as unjust in the sense that jobs that used to exist in their countries are now gone, and why should they be?
The reason why they should be is because other people in the other countries, they have the same rights than the people in the first ones. There is no difference.
Those screaming that this practice is unfair they never look at the problem from the other point of view; they don't further understand that this is a transition period. As a transition period, it is difficult and painful but it is a transition nevertheless, and it is a step forward. Eventually all manufacturing costs will be the same no matter which country you set shop in. And this is good because at that time the vast majority of the world with have reached the same high living standards that only few -in first world countries- enjoy today.
The question that remains to be answered is: is this fair? This is, if fairness can even be compared. Is it fair that first world countries suffer now a little bit for a better world, for a better future for everybody? Or is it fair that first world countries close their borders and essentially try to maintain misery throughout the world? This is the question that each person needs to answer because it is a moral question, an ethical question. The absolute Absolute Austro-Libertarian system does not answer those questions because it is neither a moral or an ethical system, nor it purports to be. It simply provides facts and a way forward.
What the Absolute Austro-Libertarian system tells you is that if you wish to achieve the best possible outcome, which is to maximize standards of living throughout the entire world, then you have to go Absolute Austro-Libertarian.
Not going there is also your choice. Choose wisely.
Note: please see the Glossary if you are unfamiliar with certain words.