It is easy to confuse the coexistence with causation.
In his SMH column last Saturday Michael Duffy advanced the view that investing in sports and sports infrastucture might help develop democratic institutions in the nation states now struggling - notably in the Pacific.
Duffy points to the high correlation between participation in team sports and thriving democracies. He considers for a moment that both might have a common cause in the British Empire, but then identifies European democracies with the same feature.
There is a sense in which Duffy is right. In most team sports people volunarily "play by the rules", which is ultimately what you need to make democracy work. You need the (up to) 49% of people who didn't win to respect the decision, largely get on with life, protest occassionally and plan for the next occassion (or at least some of them). You don't need them rioting.
But it is my contention that both behaviours are ultimately driven by a value, one that is sometimes called the Golden Rule (also known as the principle of reciprocity) that says treat others as you would like to be treated. This rule is actually essential to get economies/societies to develop the "rule of law" seen as a precondition to the operation of capitalism. Yet your average "economic libertarian" will sign up to the "objectivist" ethos espoused by Ayn Rand that an individual should only act in the individual's own interest.
To make these states thrive they need to first be able to consistently meet the economic needs of their people. The creation of individual rather than collective rights in land may be an essential, though unpalatable, solution.
But also let us not forget that the trigger point in the Solomons was an accusation of corruption. As Wolfgang Kasper discusses in his January paper for CIS corruption is at the core of much misery in the developing world. One of the greatest outrages in the whole sorry tale of AWB has been the near universal "nod and wink" in Australia that paying bribes is OK to make exports happen. They never are, they should be outlawed.
The fight against corruption is far more important than developing sports - and we can begin at home.
Showing posts with label Duffy. Show all posts
Showing posts with label Duffy. Show all posts
Tuesday, May 02, 2006
Monday, January 09, 2006
What are "property rights"?
Michael Duffy wrote an opinion piece on property rights for the SMH on Saturday. ("Safe as Houses? Don't Count On It" at http://smh.com.au/news/opinion/safe-as-houses-dont-count-on-it/2006/01/06/1136387622255.html. )
The fundamental flaw in the Duffy piece is the assumption that on acquiring "real property" one can, does and should acquire an unfettered right to do anything you like with that land.
This is clearly not the case. At all times you acquire land with the full realisation that there are other processes, run by Government as representative of the people, that can change your use of the land. Indeed the property "rights" that have been acquired are only those that are explicitly stated. The property rights lobby is at times guilty of the same failing as the free speech lobby, that is the extent to which the right should be unfettered, irrespective of land use policy (offensive language in the case of free speech) or intrusion on neighbours (defamation).
Yes, property rights are important for the functioning of a capitalist market economy. But what is important is that there is a set of rules for allocation which are followed. To claim all the unspecified "rights" as accruing to the property owner is just as wrong - when you buy a suburban residential building block you do not buy the "right" to build a ten story office tower.
And while real property rights are a means of "wealth" creation - asset price bubbles are just as damaging to the economy in residential housing prices as they are elsewhere, potentially more so as housing mortgages receive a 100% risk weighting in the calculation of lending institutions capital adequacy. What that means is that a sustained drop in the value of residential property would put real strains on the entire banking system.
There is clear justification for compensation when a property right is acquired - that is why the Federal Constitution guarantees compensation "on just terms". But this needs to be clearly understood as being different from the risk that Government policy on building materials or fire ordinances might change. Similarly, property owners do not owe Government compensation when changes result in appreciating values, such as rezoning to allow a commercial development or the improvement in value due to better transport links.
Finally, the core case on which Duffy wrote was a potential heritage listing of former display villages is really a case of an inappropriate policy. There are plenty of ways of "recording" these villages without having to preserve them. However, it should be noted that what attracts residents to these kinds of areas remains the amount of open space - because the houses really were "poky" compared to the land blocks. But if every resident goes and builds a block filling "McMansion" these areas will become indistinguishable from the newer developments further West.
The fundamental flaw in the Duffy piece is the assumption that on acquiring "real property" one can, does and should acquire an unfettered right to do anything you like with that land.
This is clearly not the case. At all times you acquire land with the full realisation that there are other processes, run by Government as representative of the people, that can change your use of the land. Indeed the property "rights" that have been acquired are only those that are explicitly stated. The property rights lobby is at times guilty of the same failing as the free speech lobby, that is the extent to which the right should be unfettered, irrespective of land use policy (offensive language in the case of free speech) or intrusion on neighbours (defamation).
Yes, property rights are important for the functioning of a capitalist market economy. But what is important is that there is a set of rules for allocation which are followed. To claim all the unspecified "rights" as accruing to the property owner is just as wrong - when you buy a suburban residential building block you do not buy the "right" to build a ten story office tower.
And while real property rights are a means of "wealth" creation - asset price bubbles are just as damaging to the economy in residential housing prices as they are elsewhere, potentially more so as housing mortgages receive a 100% risk weighting in the calculation of lending institutions capital adequacy. What that means is that a sustained drop in the value of residential property would put real strains on the entire banking system.
There is clear justification for compensation when a property right is acquired - that is why the Federal Constitution guarantees compensation "on just terms". But this needs to be clearly understood as being different from the risk that Government policy on building materials or fire ordinances might change. Similarly, property owners do not owe Government compensation when changes result in appreciating values, such as rezoning to allow a commercial development or the improvement in value due to better transport links.
Finally, the core case on which Duffy wrote was a potential heritage listing of former display villages is really a case of an inappropriate policy. There are plenty of ways of "recording" these villages without having to preserve them. However, it should be noted that what attracts residents to these kinds of areas remains the amount of open space - because the houses really were "poky" compared to the land blocks. But if every resident goes and builds a block filling "McMansion" these areas will become indistinguishable from the newer developments further West.
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