Liberty is the Basis of Wealth Creation

Today I have something a little different for you. It’s a reminder of why we do what we do, and what The Rum Rebellion is all about.

Yes, we write about stocks and money most of the time. But as I tweeted this week (@gcanavan2) without basic rights and freedoms, there will be no excess wealth to invest, or, if you’re so inclined to punt on ‘buy now, pay later’ stocks.

The problem, as I saw it, was an increasing move to regulate every facet of our lives. A noisy minority cheered this on, while the silent majority grumbled but just got on with it.

So in 2018, I started up The Rum Rebellion newsletter to (hopefully) give voice to this silent majority (you) when necessary. For the rest of the time, I simply wanted to try and figure out what was going on in the market!

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At that time, Australia seemed to be going downhill fast. And we lacked political leaders to stop the slide. That’s why The Rum Rebellion Mission Statement reads this way:

‘The Rum Rebellion is a uniquely Australian voice commenting on the nexus between money, stocks, politics and economics. We have a libertarian view of the world and believe in free speech, individual freedom and personal responsibility.

While we also believe in the virtues of free trade and sound money, we recognise that most of the world’s players don’t share this view. We therefore seek to tell you about how the world IS, not how we wish it to be.

As a libertarian voice, The Rum Rebellion believes in small government. It laments the increasing intrusion of government into our lives…

For that reason, The Rum Rebellion is an outspoken critic of governments, government spending and politicians talking out of the corner of their mouths.

Successive governments have sold Australia out to the highest bidder, selling off critical energy infrastructure, agriculture and water assets, while encouraging speculation in property that has left us with net foreign debt of $1 trillion!

But it’s not only government that needs a clip across the ears. The Rum Rebellion will call out all forms of power mongering and unethical behaviour that hurts the average Aussie. So captains of industry and the fake news media will also come under our microscope.

The basic principles of Australia’s Liberal economy

With all our state premiers — in particular dictator Dan Andrews — and their health bureaucrat sidekicks becoming drunk on power recently, it’s time to remind ourselves of the basic principles of Australia’s Liberal economy.

Because this is the foundation that allowed Australia to become one of the wealthiest nations in the world.

As David Kemp writes in A Free Country:

In late nineteenth-century Australasia…Freedom under law, and the culture of personal responsibility and empowerment that it had fostered, in the circumstances of Australasian settlement, had created possibly the wealthiest and most materially and culturally egalitarian and moral societies the world had ever seen. From the perspective of the supporters of classical liberalism, liberty was having its expected effects.’

Of course, nothing stays the same for long.

Soon enough, a ‘new liberalism’ started agitating for change. As Kemp writes:

With the incentives of democracy, the new liberalism empowered interest-based politics, as its willingness to regulate provided strong incentives for a variety of interests to seek regulation that would help their own private causes. It thereby set in train a political process that would tend towards an ever increasing regulation of society at the behest of those who saw their values being advanced by doing so, albeit almost always argued for on humanitarian and public interest grounds.

More than a hundred years of this trend to take the piss out of democracy, and you end up with a political class as weak and spineless as the one we have now. The states have lost the plot completely, shutting down cities and borders, while the Federal government is threatening to take away basic freedoms (of movement and association) unless we take a rushed through vaccine with unknown long-term consequences and efficacy.

WTF is going on Australia!

Removal of basic liberties is wealth destruction

Well, for a start, the pathways to political success are much grubbier than they used to be.

In the age of the state and Federal constitutions, principles, conviction, and the power of oratory were held in high regard. The political players had skin in the game. They had come from a class-based society that wasn’t fair, and they wanted to genuinely make a better society.

And most participated on their own coin.

These days, there are few genuine people in the political game. It’s just a mosh pit of power-hungry reserve graders, who couldn’t hope to make much of themselves in the real world. Certainly not with the same standard of living, anyway.

It goes for swathes of the public sector too. Adam Creighton, writing in The Australian yesterday, points out just how out of touch they have become. This really does beggar belief:

As if the coronavirus hasn’t foisted enough change on us, NSW and Victoria are about to unleash more. Last week alone, during the ­biggest economic downturn in a ­century, the two states were advertising 20 high-paid jobs variously requiring skills in “change, culture, transformation and strategy”, with total salaries above $3.5m.

Pick of the bunch was the $249,000 director of intersectionality and inclusion role at the Victoria Department of Justice, who must, naturally, “provide authoritative, strategic and innovative advice in relation to inclusion and intersectionality”.

All while the state of Victoria is at a standstill and Dan Andrews is trying to grab another 12 months of emergency powers!

If liberty is the basis of wealth creation, overpowering government regulation and removal of basic liberties is the stuff of wealth destruction. And you’re seeing it play out all around the country right now.

On a positive note, we’re still a liberal democracy. We can request change at the ballot box. Unfortunately for Victorians, that’s still another two years away.

But Queenslanders have an election coming up. It will be interesting to see whether they want an authoritarian government to protect them while they binge-watch Netflix, or whether they want to restore basic rights and freedoms and the risks and responsibilities that come with that.

Meanwhile, our diplomatic relations with China continue to deteriorate. There is a lot going on in this front. I’ll save it for tomorrow. But it couldn’t have come at a worse time for Australia.


Greg Canavan Signature

Greg Canavan,
Editor, The Rum Rebellion

Greg Canavan approaches the investment world with an ‘ignorance is bliss’ philosophy. In a world where all the information is just a click away at all times, Greg believes we ingest too much of it. As a result, we forget how to think for ourselves, and let other people’s thoughts cloud our own.

Or worse, we only seek out the voices who are confirming our biases and narrowminded views of the truth. Either situation is not ideal. With regards to investing, this makes us follow the masses rather than our own gut instincts.

At The Rum Rebellion, fake news and unethical political persuasion are not in the least bit tolerated. It denounces the heavy amount of government influence which the public accommodates.

Greg will help The Rum Rebellion readers block out all the nonsense and encourage personal responsibility…both in the financial and political world.

Learn more about Greg Canavan's Investment Advisory Service.

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